FOURTH AMENDMENT TO
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
--------------------------
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(the "Amendment") is made and entered into as of the 15th day of August, 1999
(the "Effective Date"), by and among CROSS TIMBERS OIL COMPANY, a Delaware
corporation ("Company"), the Banks that are signatories hereto (collectively,
the "Banks"), XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent
for Banks, BANK OF AMERICA, N.A., (formerly NationsBank, N.A. and surviving bank
by merger with and into Bank of America National Trust and Savings Association)
as Syndication Agent for Banks and CHASE BANK OF TEXAS, N.A., as Documentation
Agent for Banks.
W I T N E S S E T H:
-------------------
WHEREAS, Company, Xxxxxx Guaranty Trust Company of New York, as
Administrative Agent for Banks, NationsBank, N.A. d/b/a Bank of America N.A., as
Syndication Agent for Banks, Chase Bank of Texas, N.A., as Documentation Agent
for Banks, and Banks have entered into that certain Amended and Restated
Revolving Credit Agreement dated as of November 16, 1998, which amends and
restates in its entirety that certain Revolving Credit Agreement dated August
28, 1998, which amends and restates in its entirety that certain Revolving
Credit Agreement dated as of April 17, 1998, as amended (as amended by the
foregoing, as amended by that certain First Amendment to Amended and Restated
Revolving Credit Agreement dated as of May 17, 1999 among Company and Banks, as
amended by that certain Second Amendment to Amended and Restated Revolving
Credit Agreement dated as of June 7, 1999 among Company and Banks, as amended by
that certain Third Amendment to Amended and Restated Revolving Credit Agreement
dated as of June 17, 1999 among Company and Banks and as in effect as of the
Effective Date, as amended hereby and as amended from time to time hereafter,
the "Loan Agreement").
WHEREAS, the parties hereto desire to amend the Loan Agreement as set forth
herein.
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE I
Definitions and References
--------------------------
1.01 Unless otherwise specifically defined herein, each term used herein
which is defined in the Loan Agreement as in effect immediately prior to the
Effective Date shall have the meaning assigned to such term in the Loan
Agreement as so in effect. Each reference to "hereof," "hereunder," "herein"
and "hereby" and each other similar reference and each reference
to "this Loan Agreement" and each other similar reference contained in the Loan
Agreement shall from and after the Effective Date refer to the Loan Agreement as
amended hereby.
ARTICLE II
Amendments
----------
2.01. Amendments to Article I; Additional Defined Terms. Effective as of
-------------------------------------------------
the Effective Date, Article I of the Loan Agreement is amended by including the
following defined terms:
(i) "Arkoma Holding" shall mean Arkoma Holding Corporation, a Delaware
--------------
corporation that owns oil and gas properties located in the Arkoma
Basin area of Arkansas and Oklahoma.
(ii) "Arkoma Acquisition Agreement" shall mean that certain Purchase and
----------------------------
Sale Agreement dated as of July 30, 1999 between Seagull Energy E&P,
Inc. and Company, pursuant to which Company has agreed to acquire
all of the Capital Stock of Arkoma Holding. Pursuant to the terms of
the Xxxxxx Agreement, Company's rights and interests in the Arkoma
Acquisition Agreement shall be assigned and transferred to Summer
Holding.
(iii) "Hugoton Royalty Trust" shall mean that certain royalty trust
---------------------
created and evidenced by that certain Royalty Trust Indenture dated
December 1, 1998 between Company, as Grantor, and NationsBank, N.A.,
as Trustee, pursuant to which Company has conveyed to the Hugoton
Royalty Trust an overriding royalty interest of 80% of the net
proceeds attributable to Company's leasehold working interest in
certain Mineral Properties located in the Hugoton area in Kansas and
Oklahoma, the Anadarko Basin area in Oklahoma and the Green River
Basin area in Wyoming.
(iv) "HGT Units" shall mean units of beneficial interest in the Hugoton
---------
Royalty Trust.
(v) "Xxxxxx" shall mean Xxxxxx Brothers, Inc. and any Subsidiary or
------
Affiliate thereof that owns an equity interest in Xxxxxxx Holdings,
Spring Holdings, Arkoma Holding or Summer Holding.
(vi) "Xxxxxxx Holdings" shall mean Xxxxxxx Holdings LLC, a Delaware
----------------
limited liability company that was formed pursuant to the terms of
the Xxxxxx Agreement, the members of which are Cross Timbers Trading
Company, to the extent of a 50% equity interest, and LBI Group,
Inc., a Subsidiary of Xxxxxx Brothers, Inc., to the extent of a 50%
equity interest. The assets and properties of Xxxxxxx Holdings shall
consist of all the Capital Stock of Spring Holding that was acquired
pursuant to the Spring Holding Acquisition Agreement and all of the
Capital Stock of Summer Holding.
2
"Summer Holding" shall mean Summer Holding Company, a limited liability
--------------
company or corporation to be formed pursuant to the terms of the Xxxxxx
Agreement as a wholly owned subsidiary of Xxxxxxx Holdings. The assets and
properties of Summer Holding shall consist of all of the Capital Stock of Arkoma
Holding that is to be acquired pursuant to the Arkoma Acquisition Agreement.
(vii) "Texas Permian Royalty Trust" shall mean that certain royalty trust
---------------------------
to be formed by Company, pursuant to which Company shall assign and
convey to such royalty trust an 80% net profits overriding royalty
interest in primarily leasehold Mineral Properties owned by Company
in the Permian Basin area of Texas and New Mexico and the Ozona area
in Texas. The Texas Permian Royalty Trust is further described in
Section 5.05(b)(iii).
(viii) "TPT Units" shall mean units of beneficial interest in the Texas
---------
Permian Royalty Trust.
2.02. Amendment to Article I; Amendment to Certain Defined Terms.
----------------------------------------------------------
A. Effective as of the Effective Date, the defined term
"Dividends" as it appears in Article I of the Loan Agreement is amended by
including the following provision at the conclusion of such defined term:
"Notwithstanding the foregoing, Dividends of Company shall not
include any of the following:
(a) the transaction pursuant to which the proceeds used by
Company from the sale of its Capital Stock under Prospectus
Supplement to Prospectus dated April 10, 1998 to redeem or
repurchase 1,920,000 shares of Company's Capital Stock issued to
Shell Oil Company in connection with Company's acquisition of
certain Mineral Properties from Shell Oil Company located in the
Xxxx Inlet of Alaska; or
(b) any transaction in which any member of Company's management
exchanges shares of Company's Capital Stock for options to acquire
HGT Units or TPT Units."
B. Effective as of the Effective Date, the defined term "Xxxxxx
Agreement" as it appears in Article I of the Loan Agreement is deleted and
the following is substituted therefor:
"(i) "Xxxxxx Agreement" shall mean collectively that certain
----------------
Commitment Letter dated May 17, 1999 between Company and Xxxxxx
Brothers, Inc. and that certain Equity Commitment Letter dated
July 29, 1999 among Company, Xxxxxx Brothers, Inc. and Xxxxxxx
Holdings, pursuant to which, among other things, Cross Timbers
Trading Company and Xxxxxx Brothers, Inc. or an Affiliate thereof
have each acquired a 50% equity
3
interest in Xxxxxxx Holdings and thereby each funded 50% of the
costs required to acquire the Capital Stock of Spring Holding
pursuant to the terms of the Spring Holding Acquisition Agreement,
and each will fund 50% of the costs required to acquire the
Capital Stock of Arkoma Holding pursuant to the terms of the
Arkoma Acquisition Agreement, together with (i) the definitive
agreement that is to be entered into between Company and Xxxxxx
Brothers, Inc. as contemplated in such Commitment Letter and (ii)
that certain Put and Call Agreement dated as of July 1, 1999
Company and LB I Group Inc."
C. Effective as of the Effective Date, the third sentence in the
definition of "Mineral Properties" (which sentence begins with the phrase
"Upon formation of the Proposed Royalty Trust") as it appears in Article I
of the Loan Agreement is hereby deleted and the following sentences are
substituted therefor:
"Mineral Properties shall include the HGT Units and TPT Units owned
and held by Company."
D. Effective as of the Effective Date, subclause (f) in the
definition of "Net Revenue" as it appears in Article I of the Loan
Agreement is deleted and the following is substituted therefor:
"(f) the cash dividends and distributions projected to be paid to
Company or any subsidiary during such Reference Period on account of
its CRT Units, HGT Units and TPT Units"
E. Effective as of the Effective Date, the defined term "Non-CT
Royalty Trust Units" as it appears in Article I of the Loan Agreement is
deleted and the following definition is substituted therefor:
"Non-CT Royalty Trust Units" shall mean any units of beneficial or
--------------------------
direct ownership in any royalty trust other than CRT Units, HGT Units
or TPT Units."
F. Effective as of the Effective Date, the last sentence of the
defined term "Subsidiary" or Subsidiaries" as it appears in Article I of
the Loan Agreement is deleted and the following sentence is substituted
therefor:
"Notwithstanding the foregoing, so long as (a) none of the assets or
properties of the Spring Companies and/or Arkoma Holding are included
in the Borrowing Base and (b) neither Company nor any Subsidiary is
obligated to pay any of the Indebtedness of Xxxxxxx Holdings, Spring
Holding, Summer Holding, Arkoma Holding or any of the Spring
Companies, neither Xxxxxxx Holdings, Summer Holding nor any of their
subsidiaries shall be deemed a Subsidiary, either at the formation of
such entities or if Company or any Subsidiary should acquire any
additional equity interests in any of such entities or the Capital
Stock of Spring Holding or Arkoma Holding."
4
2.03. Deletion of Certain Definitions. Effective as of the Effective
-------------------------------
Date, the defined terms "Proposed Royalty Trust," "Spring Acquisition Company"
and "Spring Subsidiary" as they appear in Article I of the Loan Agreement are
deleted from the Loan Agreement.
2.04. Amendment to Section 4.02(b). Effective as of the Effective Date,
----------------------------
the last sentence of Section 4.02(b) of the Loan Agreement is deleted and the
following sentence is substituted therefor:
"In addition, if Company should make a public offering of any of its
Capital Stock, HGT Units or TPT Units or sells any of its Mineral
Properties, then Company shall make a mandatory prepayment on the Notes to
the extent required according to Section 8.23."
2.05 Amendment to Section 5.05(a). Effective as of the Effective Date,
----------------------------
the phrase "or the transfer of Mineral Properties to the Proposed Royalty Trust"
as it appears in the parenthetical of the first sentence of Section 5.05(a) of
the Loan Agreement is deleted and the phrase "or the transfer of Mineral
Properties to the Hugoton Royalty Trust or the Permian Texas Royalty Trust or
the sale or transfer of any HGT Units or TPT Units" is substituted therefor.
2.06 Amendment of Section 5.05(b). Effective as of the Effective Date,
----------------------------
Section 5.05(b) of the Loan Agreement is deleted and the following is
substituted therefor:
"(b) Borrowing Base Matters Concerning Royalty Trusts.
------------------------------------------------
(i) The Hugoton Royalty Trust. The Borrowing Base currently includes
-------------------------
an amount that is the product of (a) the entire Borrowing Base value of the
undivided interest in the Mineral Properties that were assigned and
conveyed by Company to the Hugoton Royalty Trust times (b) a percentage,
-----
(i) the numerator of which is the number of HGT Units owned or held by
Company and any Subsidiary and (ii) the denominator of which is the number
of all issued and outstanding HGT Units. If Company should sale or
transfer any additional HGT Units (by public offering or otherwise), the
Borrowing Base shall be further reduced by an amount that is the product of
(a) the entire Borrowing Base value assigned to the Mineral Properties that
were assigned and conveyed to the Hugoton Royalty Trust times (b) a
-----
percentage, (i) the numerator of which is the number of such additional HGT
Units sold or transferred by Company and (ii) the denominator of which is
the number of all issued and outstanding HGT Units.
(ii) Texas Permian Royalty Trust. Upon formation of the Texas Permian
---------------------------
Royalty Trust, the Borrowing Base shall include the entire Borrowing Base
value of the undivided interest in the Mineral Properties that are assigned
and conveyed (or are to be assigned and conveyed) by Company to the Texas
Permian Royalty Trust for so long as Company owns all of the issued and
outstanding TPT Units. Company has advised Banks that Company intends to
make a public offering of some or all of the TPT Units. If a public
offering is made of the TPT Units, the Borrowing Base shall be reduced as
of the closing date of such public offering (or, if applicable, at such
later date as provided below) by an amount that is the product of (a) the
entire Borrowing Base value assigned
5
to the Mineral Properties assigned and conveyed (or to be assigned and
conveyed) to the Texas Permian Royalty Trust times (b) a percentage, (i)
-----
the numerator of which is the number of TPT Units that are acquired by
Persons other than Company and any Subsidiary pursuant to such public
offering and (ii) the denominator of which is the number of all issued and
outstanding TPT Units. Company has also advised Banks that Company intends
to use all or a portion of the proceeds derived from the public offering of
TPT Units to fund Company's purchase of Xxxxxx'x equity interest in Arkoma
Holding (either directly or indirectly by acquiring Xxxxxx'x equity
interest in Xxxxxxx Holdings or Summer Holding) pursuant to a tax-free
exchange (of TPT Units for Xxxxxx'x equity interest in Arkoma Holding). If
Company acquires Xxxxxx'x equity interest in Arkoma Holding pursuant to a
tax-free exchange utilizing proceeds derived from a public offering of TPT
Units, the reduction in the Borrowing Base to occur on account of such
public offering of TPT Units as provided in this Section 5.05(b)(ii) shall
be deferred until the date that Company acquires Xxxxxx'x equity interest
in Arkoma Holding if (i) the proceeds derived from the public offering of
the TPT Units are deposited in an account maintained by (and in the name
of) a financial intermediary for the purpose of carrying-out the tax-free
exchange and (ii) the account and the proceeds deposited therein are
subject to an arrangement approved by Agents that assures that the proceeds
deposited in such account are restricted from transfer or withdrawal
without prior consent of Administrative Bank except to purchase Xxxxxx'x
equity interest in Arkoma Holding or otherwise applied as permitted
according to Section 8.23.
(iii) Management Options. Company has granted options to certain
------------------
members of Company's management to acquire HGT Units and TPT Units. The
Borrowing Base shall not be reduced upon the issuance of options to members
of Company's management to acquire HGT Units and/or TPT Units. If members
of Company's management exercise their options to acquire HGT Units and/or
TPT Units (such units acquired by Company's management upon exercising such
options are herein called "Option Units"), the Borrowing Base shall be
reduced by an amount that is the product of (a) the entire Borrowing Base
value assigned to the Mineral Properties respecting the Hugoton Royalty
Trust or The Texas Permian Royalty Trust for which the Option Units were
exercised (as the case may be) times (b) a percentage, (i) the numerator of
-----
which is the number Option Units respecting the Hugoton Royalty Trust or
the Texas Permian Royalty Trust for which the Option Units were exercised
by Company's management (as the case may be) and (ii) the denominator of
which is the number of all issued and outstanding units respecting the
Hugoton Royalty Trust or the Texas Permian Royalty Trust for which the
Option Units were exercised (as the case may be); provided, however, that
there shall be no such reduction to the Borrowing Base on account of the
issuance of Option Units during any 12-month period for the initial
$3,000,000 in Borrowing Base value for such Option Units issued during such
12-month period (as determined by the calculation set forth above).
6
(iv) Borrowing Base Certificates. Company shall submit a certificate
---------------------------
to Banks setting forth its proposed reduction to the Borrowing Base that is
required under this Section 5.05(b) not later than ten (10) Business Days
after the consummation of a public offering of the HGT Units or TPT Units
or (ii) as to the transfer of Option Units to Company's management, not
later than ten (10) Business Days after Company has transferred Option
Units that have a Borrowing Base value of $3,000,000 in the aggregate and
thereafter not later than ten (10) Business Days after Company has
transferred such additional Option Units that have a Borrowing Base value
of $1,000,000 in the aggregate; provided, however, that if Majority Banks,
for any reason, disapprove of the proposed Borrowing Base value certified
by Company, then Majority Banks shall determine the Borrowing Base."
2.07 Amendment to Article 6.
----------------------
A. Effective as of the Effective Date, the term "Spring Subsidiary"
wherever such term appears throughout Article 6 of the Loan Agreement is
deleted.
B. Effective as of the Effective Date, the phrase "CT Operating and
each Gas Marketing Subsidiary" wherever such phrase appears throughout
Article 6 of the Loan Agreement is deleted and the phrase "CT Operating,
Cross Timbers Trading Company and each Gas Marketing Subsidiary" is
substituted therefor.
2.08 Amendment to Section 6.24. Effective as of the Effective Date, the
-------------------------
term "Proposed Royalty Trust" as it appears in Section 6.24 of the Loan
Agreement is deleted and the term "Texas Permian Royalty Trust" is substituted
therefor.
2.09 Amendment to Sections 8.01(c). Effective as of the Effective Date,
-----------------------------
the last sentence of Section 8.01(c) of the Loan Agreement is deleted and the
following sentence is substituted therefor:
"contemporaneous with the delivery to each of the respective lenders to the
Spring Companies and Summer Holding (and/or Arkoma Holding), Company shall
deliver to Banks each reserve report evaluating the oil and gas reserves of
the Spring Companies and Arkoma Holding that is required to be delivered to
such lenders pursuant to any of the respective credit agreements among the
Spring Companies and Summer Holding (and/or Arkoma Holding) and such
lenders, provided, however, if any such credit agreement is no longer in
effect, Company shall deliver to Banks a reserve report evaluating the oil
and gas reserves of the Spring Companies and/or Arkoma Holding (as the case
may be) in the same manner and at such times as a Reserve Report is
required to be delivered to Banks according to Section 5.03 hereof;"
2.10. Amendment to Section 8.01(l). Effective as of the Effective Date,
----------------------------
the phrase "If Company forms the Proposed Royalty Trust" as it appears at the
beginning of Section 8.01(1) of the Loan Agreement is deleted and, thereafter,
the term "Proposed
7
Royalty Trust" as it appears in Section 8.01(l) of the Loan Agreement is deleted
and the term "Texas Permian Royalty Trust" is substituted therefor.
2.11. Amendment to Section 8.01(m). Effective as of the Effective Date,
----------------------------
the term "Proposed Royalty Trust" as it appears in Section 8.01(m) of the Loan
Agreement is deleted and the phrase "Hugoton Royalty Trust and Texas Permian
Royalty Trust" is substituted therefor.
2.12. Amendment to Sections 8.01(n). Effective as of the Effective Date,
-----------------------------
Section 8.01(n) of the Loan Agreement is deleted and the following is
substituted therefor:
"(n) Financial Information Concerning the Xxxxxxx Holdings, Spring
-------------------------------------------------------------
Companies and Arkoma Holding. Contemporaneous with the delivery to each of
----------------------------
the respective lenders to the Spring Companies and Summer Holding (and/or
Arkoma Holding), Company shall provide to Banks copies of all financial
statements of the Xxxxxxx Holdings, Spring Companies, Summer Holding and
Arkoma Holding that are required to be delivered to such lenders pursuant
to any of the respective credit agreements among the Spring Companies,
Summer Holding (and/or Arkoma Holding) and such lenders, provided, however,
if any such credit agreement is no longer in effect, Company shall deliver
to Banks such financial statements of the Xxxxxxx Holdings, Spring
Companies, Summer Holding and Arkoma Holding (as the case may be) in the
same manner and at such times as the financial statements are required to
be delivered to Banks according to Section 8.01(a) and (b) hereof."
2.13. Amendment to Section 8.01(o). Effective as of the Effective Date,
----------------------------
Section 8.01(o) of the Loan Agreement is deleted and the following is
substituted therefor:
"(o) Other Information. All information concerning the April 1997
-----------------
Indenture, the October 1997 Indenture, the Subordinated Indebtedness and
such other information concerning the business, properties or financial
condition of Company, any Subsidiary, the Hugoton Royalty Trust, the Texas
Permian Royalty Trust, Arkoma Holding, Summer Holding, Xxxxxxx Holdings or
any of the Spring Companies as Administrative Agent or any Bank shall
reasonably request."
2.14. Amendment to Sections 8.19.
--------------------------
A. Effective as of the Effective Date, sub-clause (iii) of Section
8.19 of the Loan Agreement is deleted and the following is substituted
therefor:
"(iii) Company and any Subsidiary to grant to Banks as security for
the performance by Company of the Notes and the Obligation of Company
hereunder, a valid, enforceable, perfected, first priority and the
only Lien in the HGT Units and the TPT Units of Company and any
Subsidiary, and"
8
B. Effective as of the Effective Date, subclause (iv) of Section 8.19
of the Loan Agreement is deleted and the following is substituted therefor:
"(iv) Company and any Subsidiary to grant to Banks as security for the
performance by Company of the Notes and the Obligation of Company
hereunder, a valid, enforceable, perfected, first priority and the
only Lien in its equity interests in Xxxxxxx Holdings and Summer
Holdings."
2.15. Amendment to Section 8.22. Effective as of the Effective Date, the
-------------------------
term "Proposed Royalty Trust" as it appears in Section 8.22 of the Loan
Agreement is deleted and the term "Texas Permian Royalty Trust" is substituted
therefor.
2.16 Inclusion of Section 8.23. Effective as of the Effective Date,
-------------------------
Article 8 of the Loan Agreement is amended by including the following Section
8.23 at the conclusion of Article 8:
"8.23 Proceeds from Public Offerings and Sale of Mineral Properties.
-------------------------------------------------------------
If Company makes a public offering of any of its Capital Stock, HGT Units
and/or TPT Units or sells any of its Mineral Properties as permitted under
Section 9.07, the net proceeds derived from such public offerings and sales
of Mineral Properties shall be utilized and applied by Company in the
following manner:
(a) first, all of such proceeds shall be applied as a mandatory
prepayment of the Notes if, at the time such proceeds are
received, (i) an Event of Default exists hereunder or, with the
lapse of time or the giving of notice or both, an Event of
Default would exist hereunder or (ii) a Borrowing Base Deficiency
exists hereunder;
(b) second, if subpart (a) above is inapplicable, such portion of
such proceeds shall be applied as a mandatory prepayment of the
Notes in such amount that will cause the then Total Outstandings
to not exceed the Borrowing Base then in effect after giving
effect to any applicable redetermination of the Borrowing Base
under Section 5.05 on account of a public offering of HGT Units
or TPT Units or a sale of Mineral Properties;
(c) third, if subpart (a) above is inapplicable and after
satisfying subpart (b) above if applicable, Company may use such
proceeds in its discretion to (i) acquire any Investments
permitted under Section 9.04(vii), and/or (ii) if and only if
Xxxxxxx Holdings, Summer Holding, Spring Holding and/or Arkoma
Holding (as the case may be) are wholly-owned by Company or a
Subsidiary, to pay the Indebtedness owed to the bank lenders of
such Person or Persons that are wholly-owned by Company or a
Subsidiary; and
9
(d) if subpart (a) above is not applicable, after satisfying
subpart (b) above if applicable and to the extent not used
according to subpart (c), any remaining proceeds shall be applied
as a mandatory prepayment of the Notes."
2.17. Amendment to Section 9.04.
-------------------------
A. Effective as of the Effective Date, sub-clause (iii) of Section 9.04 of
the Loan Agreement is deleted and the following is substituted therefor:
"(iii) Company's ownership of HGT Units and TPT Units,"
B. Effective as of the Effective Date, sub-clause (iv) of Section 9.04 of
the Loan Agreement is deleted and the following is substituted therefor:
"(iv) (a) Cross Timbers Trading Company's 50% equity ownership interest in
Xxxxxxx Holdings to the extent that it is acquired pursuant to the Xxxxxx
Agreement and (b) Cross Timbers Trading Company's and/or Xxxxxxx Holdings
50% equity interest in Summer Holding to the extent that it is acquired
pursuant to the Xxxxxx Agreement,"
C. Effective as of the Effective Date, sub-clause (vii) of Section 9.04 of
the Loan Agreement is deleted and the following is substituted therefor:
"(vii) Investments consisting of the loans and advances permitted under
Section 9.16(e) and Investments consisting of additional equity interests
in Xxxxxxx Holdings and/or the Capital Stock of Spring Holding and/or
Arkoma Holding (either directly or indirectly through Investments in equity
interests in Xxxxxxx Holdings and/or Summer Holding) if (1) such
Investments are made pursuant to the terms of the Xxxxxx Agreement
(proceeds from the Loan may be used to acquire such Investments consisting
of additional equity interests in Xxxxxxx Holdings and/or the Capital Stock
of Spring Holding and/or Arkoma Holding to the extent that proceeds
directly derived from (a) a public offering of the Capital Stock of
Company, the CRT Units, HGT Units or the TPT Units, (b) sale of Mineral
Properties and/or (c) the sale of Energy Stocks are not then available to
use as consideration to acquire such Investments) or (2) Majority Banks
consent to such Investments to the extent that such Investments are not
acquired by the manner specified in sub-clause (1) immediately above;"
2.18. Amendment to Section 9.06. Effective as of the Effective Date, the
-------------------------
term "Proposed Royalty Trust" as it appears in Section 9.06 of the Loan
Agreement is deleted and the term "Texas Permian Royalty Trust" is substituted
therefor.
2.19. Amendment to Section 9.07.
-------------------------
10
A. Effective as of the Effective Date, the amount "$35,000,000" as
set forth in sub-part (ii) of sub-clause (a) in the first sentence of
Section 9.07 of the Loan Agreement is deleted and the amount "$60,000,000"
is substituted therefor.
B. Effective as of the Effective Date, the phrase "and Company shall
pay to Banks as a mandatory principal payment on the Loan such portion of
the net proceeds derived from such sales as is necessary to cause the then
Total Outstandings to not exceed the Borrowing Base then in effect after
redetermination under Section 5.05 on account of such sales" as it appears
in sub-part (ii) of sub-clause (b) in the first sentence of Section 9.07 of
the Loan Agreement is deleted and the phrase "and Company shall use and
apply the net proceeds derived from such sales in the manner provided in
Section 8.23." is substituted therefor.
C. Effective as of the Effective Date, the last sentence of Section
9.07 is deleted and the following sentence is substituted therefor:
"The provisions of this Section 9.07 shall not apply to Company's
transfer or assignment of Mineral Properties to the Texas Permian Royalty
Trust upon formation of the Texas Permian Royalty Trust or Company's
transfer or sale of any of its HGT Units or TPT Units; provided, however,
that Section 5.05(b) and Section 8.23 shall apply upon Company's transfer
or sale of any of its HGT Units or TPT Units."
2.20. Amendment to Section 9.14.
-------------------------
A. Effective as of the Effective Date, sub-clause (iii) of Section
9.14 of the Loan Agreement is deleted and the following is substituted
therefor.
"(iii) the Guaranty by Company of the trade payables (including letters of
credit) of the Subsidiaries, Spring Holding and/or Arkoma Holding which are
incurred in the ordinary course of such Persons' business, provided
however, that the total Indebtedness guarantied by such Guaranty shall not
exceed $20,000,000 in the aggregate at any one time outstanding,"
B. Effective as of the Effective Date, the phrase "provided that the
Indebtedness respecting such other equipment leases is permitted under
Section 9.01 hereof" as it appears in sub-clause (vi) of Section 9.14 of
the Loan Agreement is deleted.
2.21. Amendment to Section 9.16.
-------------------------
A. Effective as of the Effective Date, sub-clause (a) of Section 9.16
of the Loan Agreement is deleted and the following is substituted therefor:
"(a) may make loans or advances to any Person other than Summer Holding,
Arkoma Holding, Xxxxxxx Holdings, any of the Spring Companies or any
11
Person who is an officer or director of Company if such loans or advances
are in the ordinary course of Company's business,"
B. Effective as of the Effective Date, sub-clause (c) of Section 9.16
of the Loan Agreement is deleted and the following is substituted therefor:
"(c) Company or a Subsidiary may make loans or advances to any of the
Spring Companies (either directly or indirectly through Xxxxxxx Holdings)
up to an aggregate amount of $5,000,000 for all of such loans or advances,"
C. Effective as of the Effective Date, Section 9.16 is amended by
including the following sub-clauses (d) and (e) at the conclusion of such
section:
"(d) Company or any Subsidiary may make loans or advances to Arkoma Holding
or Summer Holding (either directly or indirectly through Xxxxxxx Holdings)
up to an aggregate amount of $5,000,000 for all of such loans or advances,
and (e) in addition to the loans and advances permitted in sub-clauses (c)
and (d) above, but if and only to the extent that Xxxxxxx Holdings, Summer
Holding, Spring Holding and/or Arkoma Holding is then wholly-owned by
Company or a Subsidiary, Company or a Subsidiary may make loans or advances
to either of such Persons that is so wholly-owned if (i) the proceeds of
such loans or advances are used by such Persons to repay Indebtedness of
such Persons to its bank lenders, (ii) the source of such proceeds loaned
or advanced derive from Company's public offering of its Capital Stock, HGT
Units and/or TPT Units or the sale of Mineral Properties and (iii) such
proceeds may be used to make such loans or advances to such Persons
according to Section 8.23."
2.22. Amendment to Section 9.21.
-------------------------
A. Effective as of the Effective Date, the term "Proposed Royalty
Trust" as it appears in Section 9.21 of the Loan Agreement is deleted and
the term "Texas Permian Royalty Trust" is substituted therefor.
B. Effective as of the Effective Date, the date "December 31, 1998"
as it appears in sub-clause (iii) of Section 9.21 of the Loan Agreement is
deleted and the date "June 30, 2000" is substituted therefor.
2.23. Amendment to Section 10.04. Effective as of the Effective Date, the
--------------------------
phrase "Proposed Royalty Trust" as it appears in Section 10.04 of the Loan
Agreement is deleted and the phrase "Texas Permian Royalty Trust" is substituted
therefor.
ARTICLE III
Condition Precedent
-------------------
3.01. Counterparts; Conditions to Effectiveness. This instrument shall
-----------------------------------------
become effective (and the Loan Agreement shall be amended with the amendments
referred to herein) as
12
of the Effective Date when Administrative Agent shall have received a duly
executed counterpart hereof signed by Company and Majority Banks (or, in the
case of any Bank included within Majority Banks as to which an executed
counterpart shall not have been received, Administrative Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such Bank).
3.02. Amendment Fee. Upon Administrative Agent's receipt of duly executed
-------------
counterparts hereof signed by Company and Majority Banks, Company shall pay to
Administrative Agent a fee in the amount derived by multiplying (i) an amount
that is equal to 0.125%) of the Commitment amount in effect as of the Effective
Date by (ii) the cumulative Percentage of all Banks that sign a counterpart of
this Amendment. Administrative Agent shall distribute such fee to only those
Banks that sign a counterpart of this Amendment, with each such Bank's pro rata
share of such fee being its Percentage of the fee as determined according to
this Section 3.02. The fee payable under this Section 3.02 shall be paid by
Company to Administrative Agent within three (3) Business Days after Company's
receipt of Administrative Agent's written request or invoice for same.
ARTICLE IV
Ratifications, Representations and Warranties
---------------------------------------------
4.01. Ratifications. The terms and provisions set forth herein shall
-------------
modify and supersede all inconsistent terms and provisions set forth in the Loan
Agreement immediately before giving effect hereto and the other Loan Papers,
and, except as expressly modified, amended, and superseded herein, the terms and
provisions of the Loan Agreement and the other Loan Papers are ratified and
confirmed and shall continue in full force and effect. Company and Banks agree
that the Loan Agreement, as amended hereby, and the other Loan Papers shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms.
4.02. Representations, Warranties and Agreements. Company hereby
------------------------------------------
represents and warrants to Banks that (a) the execution, delivery and
performance of the Loan Agreement as amended hereby has been authorized by all
requisite corporate action on the part of Company and will not violate the
Articles/Certificate of Incorporation or Bylaws of Company; (b) the
representations and warranties contained in the Loan Agreement, as amended
hereby, and any other Loan Papers are true and correct on and as of the date
hereof and on and as of the date of execution hereof as though made on and as of
each such date; (c) no Default or Event of Default under the Loan Agreement, as
amended hereby, has occurred and is continuing; and (d) Company is in full
compliance with all covenants and agreements contained in the Loan Agreement and
the other Loan Papers, as amended hereby.
4.03. Representations and Warranties Concerning Investments in Arkoma
---------------------------------------------------------------
Holding and Spring Holding. Company hereby represents and warrants to Banks
---------------------------
that neither Summer Holding's acquisition of the Capital Stock of Arkoma Holding
nor Company's nor any Subsidiary's subsequent acquisition of any additional
equity interests in Summer Holding or Xxxxxxx Holdings or the Capital Stock of
Spring Holding or Arkoma Holding will cause Company or any Subsidiary (a) to
incur, assume or otherwise become liable for any Indebtedness of Summer
Holding, Arkoma Holding, Xxxxxxx Holdings, any of the Spring
13
Companies or any other Person or (b) to become responsible or liable for any
presently existing breach or violation, in any material respect, of any
Environmental Laws applicable to the assets of any of the Spring Companies or
Arkoma Holding.
ARTICLE V
Miscellaneous Provisions
------------------------
5.01. Reference to Loan Agreement. The other Loan Papers, and any
---------------------------
and all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Loan
Agreement, as amended hereby, are hereby amended so that any reference in the
Loan Agreement and such other Loan Papers to the Loan Agreement shall mean a
reference to the Loan Agreement as amended hereby.
5.02. Expenses of Agents. As provided in the Loan Agreement, Company
------------------
agrees to pay on demand all reasonable costs and expenses incurred by Agents in
connection with the preparation, negotiation and execution of this Amendment,
including, without limitation, the costs and fees of Agent's legal counsel, and
all reasonable costs and expenses incurred by Banks in connection with the
enforcement or preservation of any rights under the Loan Agreement, as amended
hereby, or any other Loan Papers, including, without, limitation, the reasonable
costs and fees of Agents' legal counsel. Company shall not be responsible for
the cost or expense of legal counsel of any other Bank in connection with the
preparation, execution and delivery of this Amendment.
5.03. Counterparts. This instrument may be executed in one or more
------------
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
5.04. Headings. The headings, captions, and arrangements used herein
--------
are for convenience only and shall not affect the interpretation of this
instrument.
5.05. Applicable Law. THE LOAN AGREEMENT AS AMENDED HEREBY AND ALL
--------------
OTHER LOAN PAPERS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND
TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS UNLESS THE LAWS GOVERNING NATIONAL BANKS SHALL
HAVE APPLICATION.
5.06. Final Agreement. THE LOAN AGREEMENT AS AMENDED HEREBY AND THE
---------------
OTHER LOAN PAPERS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF
THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE EFFECTIVE DATE THIS
AMENDMENT IS EXECUTED. THE LOAN AGREEMENT AS AMENDED HEREBY AND THE OTHER LOAN
PAPERS, AS AMENDED HEREBY, 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. NO MODIFICATION, RESCISSION,
WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THE LOAN AGREEMENT OR THE OTHER
LOANS PAPERS SHALL BE
14
MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY COMPANY AND EITHER BANKS OR
MAJORITY BANKS, AS PROVIDED IN THE LOAN AGREEMENT.
IN WITNESS WHEREOF, this Amendment has been executed in multiple
originals and is effective as of the date first above-written.
[SIGNATURE PAGES TO FOLLOW]
15
COMPANY:
-------
CROSS TIMBERS OIL COMPANY,
a Delaware corporation
By: /S/ XXXX O'REAR
-----------------------------------------
Xxxx O'Rear, Vice President and Treasurer
BANKS:
-----
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: /S/ XXXX XXXXXXXXX
-----------------------------------------
Name: Xxxx Xxxxxxxxx
-----------------------------------------
Title: Vice President
-----------------------------------------
BANK OF AMERICA, N.A.
By: /S/ J. XXXXX XXXXXX
----------------------------------------
J. Xxxxx Xxxxxx, Managing Director
CHASE BANK OF TEXAS, N.A.
By: /S/ XXXX XXXX
-----------------------------------------
Xxxx Xxxx, Managing Director
BANKBOSTON, N.A.
By: /S/ XXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------------------
Title: Managing Director
-----------------------------------------
XXXXX FARGO BANK (TEXAS), N.A.
By: /S/ XXXXXXX X. XXXXXXX
---------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
16
FROST NATIONAL BANK, as the surviving
bank by merger of Xxxxxxx Bank and Trust, N.A.,
effective May 29, 1998
By: /S/ X.X. XXXXX, III
--------------------------------------
W.H. (Xxxx) Xxxxx, III, Senior Vice
President
ABN-AMRO BANK N.V.
By: /S/ XXXXX X. XXXX
--------------------------------------
Name: Xxxxx X. Xxxx
--------------------------------------
Title: Vice President
--------------------------------------
By: /S/ XXXXXX X. XXXXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
--------------------------------------
Title: Group Vice President
--------------------------------------
BANK OF MONTREAL
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Director, U.S., Corporate Banking
--------------------------------------
THE BANK OF NEW YORK
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
PARIBAS
By: /S/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
--------------------------------------
Title: Director
--------------------------------------
By: /S/ XXXXX XXXXXX
--------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Title: Director
--------------------------------------
17
CREDIT LYONNAIS NEW YORK BRANCH
By: /S/ PHILIPPE SOUSTRA
--------------------------------------
Name: Philippe Soustra
--------------------------------------
Title: Senior Vice President
--------------------------------------
FIRST UNION NATIONAL BANK
By: /S/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
--------------------------------------
Title: Senior Vice President
--------------------------------------
BANK ONE, TEXAS, N.A.
By: /S/ W. XXXX XXXXXXX
--------------------------------------
Name: W. Xxxx Xxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
NATEXIS Banque
By: /S/ XXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
By: /S/ XXXX XXXXXX
--------------------------------------
Xxxx Xxxxxx, Assistant Vice President
THE BANK OF NOVA SCOTIA
By: /S/ F.C.H. XXXXX
--------------------------------------
Name: F.C. H. Xxxxx
--------------------------------------
Title: Senior Manager Loan Operations
--------------------------------------
COMERICA BANK-TEXAS
By: /S/ XXXXX X. XXXXXXXXXX
--------------------------------------
Xxxxx X. Xxxxxxxxxx, Vice President
18
