SECOND AMENDMENT TO
THIRD RESTATEMENT OF CREDIT AGREEMENT
THIS SECOND AMENDMENT TO THIRD RESTATEMENT OF CREDIT
AGREEMENT (herein called this "Amendment") made as of the 6th day
of November, 1996, by and among Forcenergy Inc, a Delaware
corporation formerly known as Forcenergy Gas Exploration, Inc.
("Borrower"), Internationale Nederlanden (U.S.) Capital
Corporation, a Delaware corporation, as Agent ("Agent"), and the
financial institutions which are signatories to this Amendment
(collectively, "Lenders"),
RECITALS
1. Borrower, Agent and Lenders have entered into that
certain Third Restatement of Credit Agreement dated as of April
26, 1996, as amended by a First Amendment to Third Restatement of
Credit Agreement dated July 11, 1996 between Borrower and Agent
on behalf of Lenders (as so amended, the "Original Agreement"),
for the purpose and consideration therein expressed, whereby
Lenders became obligated to make loans to Borrower as therein
provided.
2. Borrower intends to issue its 9.5% Senior Subordinated
Notes due 2006 in the original principal amount of up to
$175,000,000 (the "Senior Subordinated Notes") and has requested
that Lenders amend the Original Agreement to permit the
incurrence by Borrower of the indebtedness evidenced by the
Senior Subordinated Notes.
3. In connection with the issuance by Borrower of the
Senior Subordinated Notes, Borrower and Lenders desire to
redetermine the Borrowing Base on the terms provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein and in the
Original Agreement and in consideration of the loans which may
hereafter be made by Lenders to Borrower, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as
follows:
ARTICLE I.
Definitions and References
Section 1.1 Terms Defined in the Original Agreement.
Unless the context otherwise requires or unless otherwise
expressly defined herein, the terms defined in the Original
Agreement shall have the same meanings whenever used in this
Amendment.
Section 1.2 Other Defined Terms. Unless the context
otherwise requires, the following terms when used in this
Amendment shall have the meanings assigned to them in this
Section 1.2.
"Amendment" shall mean this Second Amendment to Third
Restatement of Credit Agreement.
"Credit Agreement" shall mean the Original Agreement as
amended hereby.
ARTICLE II.
Amendments to Original Agreement
Section 2.1 Defined Terms. Section 1.1 of the Original
Agreement is hereby amended by adding the following definition of
"Indenture" immediately after the definition of "Highest Lawful
Rate" where it appears in such Section:
"Indenture" means that certain Indenture dated as of
November , 1996 between Borrower and Bankers Trust
Company, as trustee, pursuant to which the Senior
Subordinated Notes were issued, as such instrument is in
effect on the date hereof.
Section 1.1 of the Original Agreement is hereby further
amended by adding the following definition of "Senior
Subordinated Notes" immediately after the definition of "Security
Documents" where it appears in such Section:
"Senior Subordinated Notes" means the 9.5% Senior
Subordinated Notes due 2006 in an original principal amount
not to exceed $175,000,000 issued by Borrower pursuant to
the Indenture.
Section 2.2 Restricted Debt. Paragraph (a) of Section
5.2 of the Original Agreement is hereby amended by deleting the
word "and" at the end of subparagraph (6) thereof, by changing
the period to a semicolon where it appears at the end of
subparagraph (7) thereof and adding the word "and" at the end of
such subparagraph, and by adding the following subparagraph "(8)"
immediately after such subparagraph (7):
"(8) Debt evidenced by the Senior Subordinated Notes;
provided that (i) the Senior Subordinated Notes shall not be
repurchased or redeemed in whole or in part prior to their
stated maturity date, whether at the option of Borrower or
pursuant to a mandatory redemption requirement under the
Indenture; (ii) the principal amount of such Debt shall not
be increased, refinanced, or refunded prior to its stated
maturity date; (iii) the interest rate thereon shall not be
increased above its stated rate; (iv) any prepayment
charges, fees, expenses or other amounts payable with
respect to such Debt shall not be increased; and (v) such
Debt shall not be defeased in whole or in part by Borrower
pursuant to an election under Article 8 of the Indenture or
otherwise."
Section 2.3 Certain Contracts; Amendments; Multiemployer
ERISA Plans. Paragraph (j) of Section 5.2 of the Original
Agreement is hereby amended by adding the following sentence at
the end of such paragraph:
"No Related Person will amend or modify or permit any
amendment or modification to any contract or instrument
governing the Debt evidenced by the Senior Subordinated
Notes the effect of which would be to change any of the
material terms of such contract or instrument, including
without limitation, any amendment or modification that (i)
would increase the amount of, or shorten the maturity of,
any payment of any principal amount of the Senior
Subordinated Notes; (ii) would change the terms of
subordination of such Debt to the Obligations; or (iii)
would be, in the opinion of Majority Lenders, materially
more burdensome to Borrower than the obligations and
requirements imposed by the Senior Subordinated Notes and
the Indenture."
ARTICLE III.
Redetermination of Borrowing Base
Section 3.1 Borrowing Base Redetermination.
Contemporaneously with the execution and delivery of this
Amendment by the parties hereto, the Borrowing Base is hereby
reduced to $50,000,000, such redetermination to remain in effect
until the next Determination Date.
ARTICLE IV.
Conditions of Effectiveness
Section 4.1 Effective Date. This Amendment shall become
effective as of the date first above written when, and only when,
(i) Agent shall have received, at Agent's office, a counterpart
of this Amendment executed and delivered by Borrower, and (ii)
Majority Lenders shall have executed and delivered a counterpart
of this Amendment to Agent.
Section 4.2 Continuing Effectiveness. After giving
effect to the terms of this Amendment and upon the issuance of
the Senior Subordinated Notes, Borrower shall within one Business
Day thereafter prepay the Loans in an amount equal to not less
than the excess of the outstanding principal balance of the Loans
over the Borrowing Base as redetermined pursuant to Article III
hereof. In the event Lenders do not receive such prepayment
within the time period provided above, this Amendment shall be
deemed void and of no force or effect and the issuance of the
Senior Subordinated Notes by Borrower shall constitute an Event
of Default under the Credit Agreement.
ARTICLE V.
Representations and Warranties
Section 5.1 Representations and Warranties of Borrower.
In order to induce Lenders to enter into this Amendment, Borrower
represents and warrants to Agent for the benefit of each Lender
that:
(a) The representations and warranties contained in
Section 4.1 of the Original Agreement are true and correct
in all material respects at and as of the time of the
effectiveness hereof.
(b) Borrower is duly authorized to execute and deliver
this Amendment and is and will continue to be duly
authorized to borrow monies and to perform its obligations
under the Credit Agreement. Borrower has duly taken all
corporate action necessary to authorize the execution and
delivery of this Amendment and to issue the Senior
Subordinated Notes.
(c) The execution and delivery by Borrower of this
Amendment and the performance by Borrower of its obligations
hereunder and the issuance of the Senior Subordinated Notes
by Borrower do not and will not conflict with any provision
of law, statute, rule or regulation or of the certificate of
incorporation and bylaws of Borrower, or of any material
agreement, judgment, license, order or permit applicable to
or binding upon Borrower, or result in the creation of any
lien, charge or encumbrance upon any assets or properties of
Borrower. Except for those which have been obtained, no
consent, approval, authorization or order of any court or
governmental authority or third party is required in
connection with the execution and delivery by Borrower of
this Amendment or the issuance of the Senior Subordinated
Notes.
(d) When duly executed and delivered, each of this
Amendment and the Credit Agreement will be a legal and
binding obligation of Borrower, enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency
or similar laws of general application relating to the
enforcement of creditors' rights and by equitable principles
of general application.
(e) The audited Consolidated financial statements of
Borrower dated as of December 31, 1995 and the unaudited
financial statements of Borrower dated as of June 30, 1996
fairly present the Consolidated financial position at such
dates and the Consolidated statement of operations and the
changes in Consolidated financial position for the periods
ending December 31, 1995 and June 30, 1996 for Borrower.
Copies of such financial statements have heretofore been
delivered to each Lender. Since June 30, 1996, no material
adverse change has occurred in the financial condition or
businesses of Borrower except for changes in oil and gas
prices that affect the industry in which Borrower operates.
(f) Borrower has provided Agent true and complete
copies of the form of the Senior Subordinated Notes and the
Indenture governing such notes and such forms have not been
modified in any respect since being provided to Agent.
ARTICLE VI.
Miscellaneous
Section 6.1 Ratification of Agreements. The Original
Agreement as hereby amended is hereby ratified and confirmed in
all respects and shall remain in full force and effect. Any
reference to the Credit Agreement in any Loan Document shall be
deemed to be a reference to the Original Agreement as hereby
amended. The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein or
therein, operate as a waiver of any right, power or remedy of
Lenders under the Credit Agreement or any other Loan Document nor
constitute a waiver of any provision of the Credit Agreement or
any other Loan Document.
Section 6.2 Loan Documents. This Amendment is a Loan
Document, and all provisions in the Credit Agreement pertaining
to Loan Documents apply hereto and thereto.
Section 6.3 Governing Law. This Amendment shall be
governed by and construed in accordance with the laws of the
State of New York and any applicable laws of the United States of
America in all respects, including construction, validity and
performance.
Section 6.4 Counterparts. This Amendment may be
separately executed in counterparts and by the different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to constitute one and the same Amendment.
IN WITNESS WHEREOF, this Amendment is executed as of the
date first above written.
FORCENERGY INC (formerly known as
Forcenergy Gas Exploration, Inc.)
By:
Name:
Title:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION, as Agent and
Lender
By:
Name:
Title:
MEESPIERSON N.V.
By:
Name:
Title:
BANK OF SCOTLAND
By:
Name:
Title:
DEN NORSKE BANK AS
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By:
Name:
Title:
