EXHIBIT 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this "Third Amendment"), dated
as of June 30, 2005 (the "Effective Date"), is by and among DELTA PETROLEUM
CORPORATION, a Colorado corporation ("Borrower"), JPMORGAN CHASE BANK, N.A.,
successor by merger to Bank One, NA (Main Office Chicago), a national banking
association, as Administrative Agent ("Administrative Agent"), and each of the
financial institutions a party hereto as Banks (hereinafter collectively
referred to as "Banks," and individually, "Bank").
W I T N E S S E T H:
WHEREAS, Borrower, Administrative Agent, JPMorgan Chase Bank, N.A.,
successor by merger to Bank One, NA (Main Office Chicago), and the financial
institutions party thereto as Banks are parties to that certain Credit
Agreement dated as of November 5, 2004 (as heretofore amended, the "Credit
Agreement") (unless otherwise defined herein, all terms used herein with their
initial letter capitalized shall have the meaning given such terms in the
Credit Agreement, as amended hereby); and
WHEREAS, Borrower has requested that Banks (i) amend certain terms of the
Credit Agreement in certain respects, (ii) establish a Borrowing Base of
$75,000,000 to be effective as of the Effective Date and continuing until the
next Redetermination or other adjustment (as provided in the Credit Agreement)
of the Borrowing Base thereafter, and (iii) provide a limited waiver of
certain existing Defaults and Events of Defaults more particularly described
in Section 3 hereof; and
WHEREAS, subject to and upon the terms and conditions set forth herein,
Banks have agreed to Borrower's requests.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed,
Borrower, Administrative Agent and each Bank hereby agree as follows:
Section 1. Amendments. In reliance on the representations, warranties,
covenants and agreements contained in this Third Amendment, and subject to the
satisfaction of each condition precedent set forth in Section 4 hereof, the
Credit Agreement is hereby amended effective as of the Effective Date in the
manner provided in this Section 1.
1.1 Amendment to Definitions. The definitions of "Consolidated
Subsidiary," "Consolidated Subsidiaries," "Loan Papers," "Permitted
Investments," "Redetermination Date" and "Unrestricted Subsidiary" contained
in Section 1.1 of the Credit Agreement shall be amended to read in full as
follows:
"Consolidated Subsidiary" or "Consolidated Subsidiaries" means,
for any Person, any Subsidiary or other entity the accounts of which
would be consolidated with those of such Person in its consolidated
financial statements; provided, that, for the purpose of determining
Consolidated Current Assets, Consolidated Current Liabilities,
Consolidated EBITDAX, Consolidated Net Income, Consolidated Net
Interest Expense and Consolidated Total Debt, the terms Consolidated
Subsidiary and Consolidated Subsidiaries shall be deemed to exclude
DHS.
"Loan Papers" means this Agreement, the First Amendment, the
Second Amendment, the Third Amendment, the Notes, each Facility
Guaranty which may now or hereafter be executed, each Borrower
Pledge Agreement which may now or hereafter be executed, each
Subsidiary Pledge Agreement which may now or hereafter be executed,
the Existing Mortgages (as amended by the Assignment and Amendment
to Mortgages), the Assignments and Amendments to Mortgages, all
Mortgages now or at any time hereafter delivered pursuant to Section
5.1, all Letters of Credit, and all other certificates, documents or
instruments delivered in connection with this Agreement, as the
foregoing may be amended from time to time.
"Permitted Investments" means (a) readily marketable direct
obligations of the United States of America (or investments in mutual
funds or similar funds which invest solely in such obligations),
(b) fully insured demand or time deposits and certificates of deposit
with maturities of one year or less of any commercial bank operating
in the United States having capital and surplus in excess of
$500,000,000, (c) commercial paper of a domestic issuer if at the
time of purchase such paper is rated in one of the two highest
ratings categories of Standard and Poor's Corporation or Xxxxx'x
Investors Service, (d) Investments by any Credit Party in a
Subsidiary of Borrower that has provided a Facility Guaranty and
the Equity of which has been pledged to Administrative Agent
pursuant to a Borrower Pledge Agreement or a Subsidiary Pledge
Agreement, (e) Investments in Crystal Energy, LLC existing on the
Closing Date, (f) Investments in DHS in an aggregate amount
outstanding at any time not to exceed $18,500,000 (measured on a cost
basis), and (g) other Investments; provided, that, the aggregate
amount of all other Investments made pursuant to this clause (g)
outstanding at any time shall not exceed $500,000 (measured on a cost
basis).
"Redetermination Date" means (a) with respect to any Scheduled
Redetermination, each April 1 and October 1, commencing October 1,
2005, (b) with respect to any Special Redetermination, the first day
of the first month which is not less than twenty (20) Domestic
Business Days following the date of a request for a Special
Redetermination, (c) with respect to any redetermination of the
Borrowing Base pursuant to Section 4.4, the date of the consummation
of any applicable Asset Disposition, and (d) with respect to any
Manti Redetermination, each Manti Redetermination Date. The Closing
Date, the Effective Date (as defined in the Second Amendment) and the
Effective Date (as defined in the Third Amendment) shall also
constitute Redetermination Dates for purposes of this Agreement.
"Unrestricted Subsidiary" means any Subsidiary of Borrower
which is not a Restricted Subsidiary and shall include, as of the
Effective Date (as defined in the Third Amendment), Amber and DHS.
1.2 Additional Definitions. Section 1.1 of the Credit Agreement
shall be amended to add the following definitions to such Section:
"DHS" means DHS Drilling Company, a Colorado corporation.
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"Third Amendment" means that certain Third Amendment to Credit
Agreement dated as of June 30, 2005, among Borrower, Administrative
Agent and Banks party thereto.
1.3 Deletion of Definitions. Section 1.1 of the Credit Agreement
shall be amended to delete the following definitions from such Section: "Big
Dog" "and "Shark."
1.4 Amendment to Borrowing Base Provision. Section 4.7 of the
Credit Agreement shall be amended and restated in its entirety to read in full
as follows:
Section 4.7 Borrowing Base As of Third Amendment Effective
Date. Notwithstanding anything to the contrary contained herein,
the Borrowing Base in effect during the period commencing on the
Effective Date (as defined in the Third Amendment) and ending
on the effective date of the first Redetermination after such
Effective Date shall be $75,000,000.
1.5 Amendment to Representations and Warranties. Section 7.13 of
the Credit Agreement shall be amended and restated in its entirety to read in
full as follows:
Section 7.13 Organizational Structure; Nature of Business.
As of the Effective Date (as defined in the Third Amendment), (a)
Borrower has no direct, wholly-owned Subsidiaries, other than Castle,
DEC and Piper, (b) Borrower, Castle, DEC and Piper are primarily
engaged in the business of acquiring, exploring, developing and
operating Mineral Interests and the production, processing and
marketing of Hydrocarbons therefrom and related activities, (c)
Borrower owns approximately ninety-two percent (92%) of the issued
and outstanding Equity of Amber, (d) Amber has no assets other
than a right to receive a portion of the proceeds from certain
litigation against the Federal Government relative to offshore
California, (e) Borrower owns a forty nine and one half percent
(49.5%) membership interest in DHS, (f) DHS is engaged in the
drilling business and, as of the Effective Date (as defined in
the Third Amendment), owns four (4) operating drilling rigs and is
in the process of acquiring or assembling six (6) additional
drilling rigs, and (g) Borrower is the general partner of Castle,
which general partnership interest was acquired by Borrower at the
time it acquired all of the domestic oil and gas properties of
Castle Energy Corporation. Schedule 7.13 attached hereto accurately
reflects (i) the jurisdiction of incorporation or organization of
each Credit Party, (ii) each jurisdiction in which each Credit
Party is qualified to transact business as a foreign corporation,
foreign partnership or foreign limited liability company, (iii) the
authorized, issued and outstanding Equity of each Credit Party,
and (iv) all outstanding warrants, options, subscription rights,
convertible securities or other rights to purchase Equity of each
Credit Party.
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1.6 Amendment to Asset Disposition Covenant. The last sentence of
Section 9.5 of the Credit Agreement shall be amended and restated in its
entirety to read in full as follows:
In no event will Borrower sell, transfer or dispose of any Equity
in any Subsidiary nor will any Credit Party (other than Borrower)
issue or sell any Equity or any option, warrant or other right to
acquire such Equity or security convertible into such Equity to
any Person other than the Credit Party which is the direct parent
of such issuer on the Closing Date.
1.7 Amendment to Obligations to Unrestricted Subsidiaries Covenant.
Section 9.14 of the Credit Agreement shall be amended and restated in its
entirety to read in full as follows:
Section 9.14 Obligations to Unrestricted Subsidiaries.
Borrower will not, nor will Borrower permit any other Credit
Party to, incur any liability, Debt or obligation to any
Unrestricted Subsidiary of any nature, or have any liability
(whether by operation of law or otherwise) for any liability,
Debt or obligation of any Unrestricted Subsidiary.
1.8 Schedule 9.8. Schedule 9.8 to the Credit Agreement is hereby
deleted in its entirety.
1.9 Schedule 9.14. Schedule 9.14 to the Credit Agreement is hereby
deleted in its entirety.
Section 2. Borrowing Base. In reliance on the representations,
warranties, covenants and agreements contained in the Credit Agreement and
this Third Amendment, and subject to the satisfaction of each condition
precedent set for in Section 4 hereof, Borrower, Administrative Agent and each
Bank agree that the Borrowing Base in effect for the period from and after the
Effective Date until the next Redetermination thereafter shall be $75,000,000.
Borrower, Administrative Agent and Banks agree that the Redetermination
provided for in this Section 2 shall not be construed or deemed to be a
Special Redetermination for purposes of Section 4.3 of the Credit Agreement.
Section 3. Limited Waiver. Borrower hereby acknowledges the existence
of the following Defaults and Events of Default (collectively, the "Specified
Defaults"): Borrower's violation of Sections 9.2 and 9.8 of the Credit
Agreement caused by Borrower's (x) acquisition of Equity interests in Big Dog
Drilling Co., LLC not owned by Borrower on the Closing Date, and (y) making
Investments in DHS that were not permitted under the terms and provisions of
the Credit Agreement, in each case occurring after the Closing Date but prior
to the Effective Date (collectively, the "Big Dog/DHS Transactions").
Borrower has requested that Banks waive the Specified Defaults and any
provision of the Credit Agreement and the other Loan Papers to the extent such
provisions were violated by the consummation of the Big Dog/DHS Transactions.
In reliance on the representations, warranties, covenants and agreements
contained in the Credit Agreement and this Third Amendment, and subject to the
satisfaction of the conditions precedent set forth in Section 4 hereof (and in
the Credit Agreement, as amended through and including the Effective Date),
Banks hereby waive the Specified Defaults and any provision of the Credit
Agreement and the other Loan Papers to the extent such provisions were
violated solely by the Big Dog/DHS Transactions. The limited waivers
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contained in this Section 3 are limited solely to the Big Dog/DHS
Transactions, and the applicable provisions of the Credit Agreement to the
extent they were violated by the consummation of the Big Dog/DHS Transactions,
and solely for violations occurring during the time period set forth above.
Nothing contained herein shall be deemed (i) a consent to or waiver of any
action other than the Big Dog/DHS Transactions within the applicable time
period set forth above, or (ii) a waiver of the Specified Defaults and any
provisions of the Credit Agreement or any other Loan Paper except to the
extent any such provision was violated by the consummation of the Big Dog/DHS
Transactions.
Section 4. Conditions Precedent. The effectiveness of the amendments to
the Credit Agreement contained in Section 1 hereof is subject to the
satisfaction of each condition precedent set forth in this Section 4:
4.1 No Defaults. After giving effect to the amendments contained
in Section 1 hereof and the limited waivers granted in Section 3 hereof, no
Default, Event of Default or Borrowing Base Deficiency shall exist.
4.2 Fees and Expenses. Borrower shall have paid (a) all fee and
amounts as Borrower shall be required to pay to Administrative Agent and its
Affiliates pursuant to any separate agreement between or among Borrower,
Administrative Agent and/or its Affiliates, and (b) all reasonable fees and
expenses incurred by Administrative Agent in connection with the preparation,
negotiation and execution of this Third Amendment, including, without
limitation, all reasonable fees and expenses of Xxxxxx & Xxxxxx L.L.P.,
counsel to Administrative Agent.
4.3 Other Documentation. Administrative Agent shall have received
such other documents, instruments and agreements as it or any Bank may
reasonably request, all in form and substance reasonably satisfactory to
Administrative Agent and Banks.
Section 5. Representations and Warranties of Borrower. To induce Banks
and Administrative Agent to enter into this Third Amendment, Borrower hereby
represents and warrants to Banks and Administrative Agent as follows:
5.1 Due Authorization; No Conflict. The execution, delivery and
performance by Borrower of this Third Amendment are within Borrower's
corporate powers, have been duly authorized by all necessary action, require
no action by or in respect of, or filing with, any governmental body, agency
or official and do not violate or constitute a default under any provision of
applicable law or any Material Agreement binding upon Borrower or result in
the creation or imposition of any Lien upon any of the assets of Borrower
except Permitted Encumbrances.
5.2 Validity and Enforceability. This Third Amendment constitutes
the valid and binding obligation of Borrower enforceable in accordance with
its terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditor's rights generally,
and (b) the availability of equitable remedies may be limited by equitable
principles of general application.
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5.3 Accuracy of Representations and Warranties. Each
representation and warranty of each Credit Party contained in the Loan Papers
is true and correct in all material respects as of the date hereof (except to
the extent such representations and warranties are expressly made as of a
particular date, in which event such representations and warranties were true
and correct as of such date).
5.4 Absence of Defaults. After giving effect to the amendments
contained in Section 1 hereof and the limited waivers granted in Section 3
hereof, no Default or Event of Default has occurred which is continuing.
5.5 No Defense. Borrower has no defense to payment of, or any
counterclaim or rights of set-off with respect to, all or any portion of the
Obligations.
Section 6. Miscellaneous.
6.1 Reaffirmation of Loan Papers. Any and all of the terms and
provisions of the Credit Agreement and the Loan Papers shall, except as
amended and modified hereby, remain in full force and effect, and are hereby
ratified and confirmed. The amendments contemplated hereby shall not limit or
impair any Liens securing the Obligations, each of which are hereby ratified,
affirmed and extended to secure the Obligations.
6.2 Confirmation of Loan Papers and Liens. As a material
inducement to Banks to make the agreements and grant the consents, waivers and
amendments set forth herein, Borrower hereby (a) acknowledges and confirms the
continuing existence, validity and effectiveness of the Loan Papers and the
Liens granted thereunder, (b) agrees that the execution, delivery and
performance of this Third Amendment and the consummation of the transaction
contemplated hereby shall not in any way release, diminish, impair, reduce or
otherwise adversely affect such Loan Papers and Liens, and (c) acknowledges
and agrees that the Liens granted under the Loan Papers secure, and after the
consummation of the transactions contemplated hereby will continue to secure,
the payment and performance of the Obligations as first priority perfected
Liens.
6.3 Parties in Interest. All of the terms and provisions of this
Third Amendment shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
6.4 Legal Expenses. Borrower hereby agrees to pay on demand all
reasonable fees and expenses of counsel to Administrative Agent incurred by
Administrative Agent in connection with the preparation, negotiation and
execution of this Third Amendment.
6.5 Counterparts. This Third Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however,
no party shall be bound by this Third Amendment until Borrower and Required
Banks have executed a counterpart. Facsimiles shall be effective as
originals.
6.6 Complete Agreement. THIS THIRD AMENDMENT, THE CREDIT AGREEMENT
AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR
AMONG THE PARTIES.
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6.7 Headings. The headings, captions and arrangements used in this
Third Amendment are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify or modify the terms of this Third
Amendment, nor affect the meaning thereof.
6.8 Effectiveness. This Third Amendment shall be effective
automatically and without necessity of any further action by Borrower,
Administrative Agent or Banks when counterparts hereof have been executed by
Borrower, Administrative Agent and Required Banks, and all conditions to the
effectiveness hereof set forth herein and in the Credit Agreement have been
satisfied (including, without limitation, all conditions precedent set forth
in Section 4 hereof).
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed by their respective Authorized Officers on the date and
year first above written.
[Signature pages to follow]
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SIGNATURE PAGE TO
THIRD AMENDMENT TO CREDIT AGREEMENT
BY AND AMONG
DELTA PETROLEUM CORPORATION, AS BORROWER,
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
AND THE BANKS PARTY THERETO
BORROWER:
DELTA PETROLEUM CORPORATION,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
Each of the undersigned (i) consent and agree to this Third Amendment,
and (ii) agree that the Loan Papers to which it is a party shall remain in
full force and effect and shall continue to be the legal, valid and binding
obligation of such Person, enforceable against it in accordance with its
terms.
ACKNOWLEDGED AND AGREED TO BY:
DELTA EXPLORATION COMPANY, INC.,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
PIPER PETROLEUM COMPANY,
a Colorado corporation
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
CASTLE TEXAS EXPLORATION LIMITED PARTNERSHIP,
a Texas limited partnership
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
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SIGNATURE PAGE TO
THIRD AMENDMENT TO CREDIT AGREEMENT
BY AND AMONG
DELTA PETROLEUM CORPORATION, AS BORROWER,
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
AND THE BANKS PARTY THERETO
ADMINISTRATIVE AGENT:
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By: /s/ J. Xxxxx Xxxxxx
J. Xxxxx Xxxxxx,
Vice President
BANKS:
JPMORGAN CHASE BANK, N.A.
By: /s/ J. Xxxxx Xxxxxx
J. Xxxxx Xxxxxx,
Vice President
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SIGNATURE PAGE TO
THIRD AMENDMENT TO CREDIT AGREEMENT
BY AND AMONG
DELTA PETROLEUM CORPORATION, AS BORROWER,
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
AND THE BANKS PARTY THERETO
BANK OF OKLAHOMA, N.A.
By: /s/ Xxxxx Rheem
Xxxxx Rheem,
Vice President
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SIGNATURE PAGE TO
THIRD AMENDMENT TO CREDIT AGREEMENT
BY AND AMONG
DELTA PETROLEUM CORPORATION, AS BORROWER,
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
AND THE BANKS PARTY THERETO
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx,
Vice President
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SIGNATURE PAGE TO
THIRD AMENDMENT TO CREDIT AGREEMENT
BY AND AMONG
DELTA PETROLEUM CORPORATION, AS BORROWER,
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
AND THE BANKS PARTY THERETO
HIBERNIA NATIONAL BANK
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx,
Vice President
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SIGNATURE PAGE TO
THIRD AMENDMENT TO CREDIT AGREEMENT
BY AND AMONG
DELTA PETROLEUM CORPORATION, AS BORROWER,
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
AND THE BANKS PARTY THERETO
COMERICA BANK
By: /s/ Xxxxx X. Sefvik
Name: Xxxxx X. Sefvik
Title: Vice President
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SIGNATURE PAGE TO
THIRD AMENDMENT TO CREDIT AGREEMENT
BY AND AMONG
DELTA PETROLEUM CORPORATION, AS BORROWER,
JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT
AND THE BANKS PARTY THERETO
BANK OF SCOTLAND
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Assistant Vice President
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