SECOND AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT AND AMENDMENT TO LIMITED GUARANTY
Exhibit
10.2
SECOND
AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT
AND
AMENDMENT TO LIMITED GUARANTY
THIS
SECOND AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT AND AMENDMENT TO LIMITED
GUARANTY (this "Amendment")
is
dated effective as of March 15, 2007, among LARCLAY, L.P. ("Borrower"),
XXXXXXX XXXXXXXX ENERGY, INC. ("Guarantor"),
the
lenders listed on the signature pages hereof as Lenders (the "Lenders")
and
XXXXXXX XXXXX CAPITAL, a division of Xxxxxxx Xxxxx Business Financial Services
Inc., as Administrative Agent for the benefit of the Lenders (the "Administrative
Agent").
RECITALS:
Pursuant
to that certain Term Loan and Security Agreement (as amended by letter agreement
dated February 28, 2007, and including a letter from Borrower authorizing
substitution of corrected pages, the "Loan
Agreement")
among
Borrower, Lenders and Administrative Agent dated as of April 21, 2006, the
Lenders extended the credit facilities referred to therein to
Borrower.
Borrower,
Guarantor, Administrative Agent and Lenders now agree to modify the Loan
Agreement as set forth in the succeeding provisions of this Amendment (which
shall control over any conflicting or inconsistent recitals above). Each
capitalized term used but not otherwise defined herein shall have the meaning
given to such term in the Loan Agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth, and further good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower, Administrative Agent and Lenders do hereby agree as
follows:
THE
AGREEMENT:
1. Amendments
to Loan Agreement.
(a) Section
1.1 is hereby amended to add a definition, in alphabetical order, and amend
and
restate certain others, all as set forth below:
"Commitment
Expiration Date"
means
May 31, 2007, at 2:00 p.m. CDT.
"CWEI
Guaranty"
means
the Guaranty delivered by CWEI pursuant to Section 3.4(l).
"L/C"
means
the letter of credit, with an expiry date not earlier than June 13, 2007,
in the face amount of $5,000,000, in form and substance and from a financial
institution reasonably satisfactory to Administrative Agent, for the account
of
CWEI and for the benefit of Administrative Agent acting on behalf of itself
and
the Lenders.
"Maturity
Date"
means
June 1, 2011.
(b) Section
2.3(a) is amended and restated in its entirety to read as follows:
"(a) Borrower
shall pay to Administrative Agent, for the account of each Lender, the
outstanding principal amount of the Loan, in monthly principal installments
on
each Payment Date that occurs on or after July 1, 2007, as
follows:
"(i) for
each
Payment Date occurring during the period from and including July 1, 2007,
through and including June 1, 2008, an equal monthly principal installment
equal to 1/12 of 35% of the outstanding principal amount of the Loan on
July 1, 2007;
"(ii) for
each
Payment Date occurring during the period from and including July 1, 2008,
through and including June 1, 2010, an equal monthly principal installment
equal to 1/24 of 50% of the outstanding principal amount of the Loan on
July 1, 2007; and
"(iii) for
each
Payment Date occurring during the period from and including July 1, 2010,
through and including June 1, 2011, an equal monthly principal installment
equal to 1/12 of 15% of the outstanding principal amount of the Loan on
July 1, 2007."
(c) Section
2.3(d) is amended by deleting therefrom the date "March 15, 2007," and
inserting in lieu thereof the date "June 1, 2007."
(d) Section
3.2(b) is amended by changing the reference therein to "3.3" to a reference
to
"3.2".
(e) Section
3.4 is amended by adding a new subsection, lettered "m," reading as
follows:
"(m) L/C
Matters.
(i)
Provided no Event of Default has occurred and is then continuing, Administrative
Agent will contemporaneously release the L/C to Borrower once
(x) Administrative Agent has established that the outstanding principal
balance of the Loan is less than seventy-five percent (75%) of the Net OLV
of
the Operating Rigs or (y) the Commitment Expiration Date shall have
occurred, and Borrower shall have prepaid the principal of the Loan as and
to
the extent required under Section
2.3(d).
"(ii)
Notwithstanding anything herein, in the L/C, or in any other Loan Document
to
the contrary, Administrative Agent shall only have the right (which right may
be
exercised without notice, opportunity to cure or other restraint) to draw on
the
L/C (x) if an Event of Default has occurred and is then continuing (to the
extent necessary to pay amounts in respect of Obligations that are then due
and
payable hereunder), (y) in the event the Borrower has not timely prepaid the
principal of the Loan as and to the extent required under Section
2.3(d),
and (z)
upon the occurrence of a Bankruptcy Event, in which cases the amounts so drawn
shall be applied to prepay the Loan as provided in Section
2.5 (c).
"(iii)
Notwithstanding anything herein, in the L/C, or in any other Loan Document
to
the contrary, (x) for so long as the L/C is outstanding (but not
thereafter), the Maximum Guaranteed Amount (as such term is used in the CWEI
Guaranty) shall be reduced by the undrawn amount of the L/C and (y) to the
extent the L/C is drawn upon as contemplated in clauses (x) or (z) of
Section
3.4(m)(ii),
the
Maximum Guaranteed Amount in effect at any time thereafter shall be reduced
by
the amount so drawn on the L/C."
2. Amendment
to CWEI Guaranty.
The
CWEI Guaranty is hereby amended by adding the following parenthetical after
the
words "in such table" in clause (1) of the first paragraph thereof: "(provided
that, notwithstanding anything to the contrary contained herein or in any other
Loan Document, (A) so long as the L/C is outstanding (but not thereafter),
the
Maximum Guaranteed Amount in effect at any time shall be reduced by the undrawn
face amount of the L/C and (B) to the extent the L/C is drawn upon as
contemplated in clauses (x) or (z) of Section
3.4(m)(ii)
of the
Loan Agreement, the Maximum Guaranteed Amount in effect at any time thereafter
shall be reduced by the amount so drawn on the L/C)".
3. Conditions
of Effectiveness.
This
Amendment shall become effective when, and only when, the Administrative Agent
shall have received (i) counterparts of this Amendment executed by Borrower,
the
Guarantor and the Lenders and (ii) the original L/C, and all other matters
shall
be satisfactory to the Administrative Agent.
4. Representations
and Warranties of Borrower.
Borrower represents and warrants as follows:
(a) Borrower
is duly authorized and empowered to execute, deliver and perform this Amendment
and all other instruments referred to or mentioned herein to which it is a
party, and all action on its part requisite for the due execution, delivery
and
the performance of this Amendment has been duly and effectively taken. This
Amendment, when executed and delivered, will constitute valid and binding
obligations of Borrower enforceable in accordance with its terms. This Amendment
does not violate any provisions of Borrower's operating agreement or any
contract, agreement, law or regulation to which Borrower is subject, and does
not require the consent or approval of any regulatory authority or governmental
body of the United States or any state.
(b) The
representations and warranties made by Borrower in the Loan Agreement are true
and correct as of the date of this Amendment.
(c) Borrower
has no knowledge of any event which has occurred and is continuing which
constitutes a Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
5. Reference
to and Effect on the Loan Documents.
(a) Upon
the
effectiveness of Section 1 hereof, on and after the date hereof, each reference
in the Loan Agreement to "this Agreement", "hereunder", "hereof", "herein"
or
words of like import, and each reference in the Loan Documents to the "Loan
Agreement" shall mean and be a reference to the Loan Agreement as amended
hereby.
(b) Except
as
specifically amended herein, the Loan Agreement, the Notes, the CWEI Guaranty,
and all other instruments securing or guaranteeing Borrower's obligations to
the
Administrative Agent and the Lenders (the "Security
Instruments")
shall
remain in full force and effect and are hereby ratified and confirmed. Without
limiting the generality of the foregoing, the Security Instruments and all
collateral described therein do and shall continue to secure the payment of
all
obligations of Borrower under the Notes and the Loan Agreement, as amended
hereby, and under the other Security Instruments. For avoidance of doubt, the
parties confirm and agree that once the L/C is released pursuant to Section 3.4(m)(i)
of the
Loan Agreement, is drawn upon as contemplated in Section 3.4(m)(ii)
of the
Loan Agreement, or is otherwise no longer outstanding, the temporary reduction
of the CWEI Guaranty by the undrawn face amount of the L/C shall cease and
no
longer be of force or effect and the CWEI Guaranty shall be legally binding
and
enforceable in accordance with its terms as originally written except as
specifically amended herein.
(c) The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy
of
Administrative Agent or Lenders under any of the Security Instruments, nor
constitute a waiver of any provision of any of the Security
Instruments.
6. Costs
and Expenses.
Borrower agrees to pay on demand all costs and expenses of Administrative Agent
and the Lenders in connection with the preparation, reproduction, execution
and
delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including the reasonable fees and out-of-pocket expenses
of
counsel for Administrative Agent. In addition, Borrower shall pay any and all
fees payable or determined to be payable in connection with the execution and
delivery, filing or recording of this Amendment and the other instruments and
documents to be delivered hereunder, and agrees to save Administrative Agent
and
the Lenders harmless from and against any and all liabilities with respect
to or
resulting from any delay in paying or omission to pay such fees.
7. Execution
in Counterparts.
This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.
8. Governing
Law.
This
Amendment shall be governed by and construed in accordance with the laws of
the
State of Illinois without regard to its conflict of laws
provisions.
9. Final
Agreement.
THIS
WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
[REMAINDER
OF PAGE INTENTIONALLY BLANK]
EXECUTED
effective as of the date first set forth above.
BORROWER:
LARCLAY,
L.P.
By: Larclay
GP, LLC,
its
General Partner
By: /s/
Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx
X. Xxxxxxx
Title: Manager
GUARANTOR:
XXXXXXX
XXXXXXXX ENERGY, INC.
By: /s/
Xxx X. Xxxxx
Name: Xxx
X.
Xxxxx
Title: Senior
Vice President and
Chief
Financial Officer
ADMINISTRATIVE
AGENT:
XXXXXXX
XXXXX CAPITAL, a
division of Xxxxxxx Xxxxx Business Financial Services Inc., as Administrative
Agent
By: /s/
Xxxxx Xxxxx
Name: Xxxxx
Xxxxx
Title: Vice
President
THE
LENDERS:
XXXXXXX
XXXXX CAPITAL, a division of Xxxxxxx Xxxxx Business Financial Services Inc.,
as
a Lender
By: /s/
Xxxxx Xxxxx
Name: Xxxxx
Xxxxx
Title: Vice
President
CATERPILLAR
FINANCIAL SERVICES
CORPORATION
By: /s/
Xxxxxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxxxxx
X. Xxxxxxxxx
Title: Global
Operations Manager -
Capital
Markets