EXHIBIT 10.1(b)
FIRST AMENDMENT
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 1, 2004
AMONG
XXXX XXXXXXX CORPORATION,
AS BORROWER,
THE GUARANTORS,
JPMORGAN CHASE BANK,
AS ADMINISTRATIVE AGENT,
FLEET NATIONAL BANK,
AND
U.S. BANK NATIONAL ASSOCIATION,
AS CO- SYNDICATION AGENTS,
XXXXXX XXXXXXX FINANCING, INC.,
ROYAL BANK OF CANADA,
COMERICA BANK,
AND
DEUTSCHE BANK TRUST COMPANY AMERICAS,
AS CO-DOCUMENTATION AGENTS,
AND
THE LENDERS PARTY HERETO
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "First
Amendment") dated as of September 1, 2004, is among XXXX XXXXXXX CORPORATION, a
Delaware corporation (the "Borrower"); each of the undersigned guarantors (the
"Guarantors", and together with the Borrower, the "Obligors"); each of the
lenders party to the Credit Agreement referred to below (collectively, the
"Lenders"); JPMorgan Chase Bank, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"Administrative Agent"); Fleet National Bank and U.S. Bank National Association,
as Co-Syndication Agents for the Lenders; and Xxxxxx Xxxxxxx Financing, Inc.,
Royal Bank of Canada, Comerica Bank and Deutsche Bank Trust Company Americas, as
Co-Documentation Agents for the Lenders.
R E C I T A L S
A. The Borrower, the Agents and the Lenders are parties to that certain
Amended and Restated Credit Agreement dated as of February 4, 2004 (the "Credit
Agreement"), pursuant to which the Lenders have made certain credit available to
and on behalf of the Borrower.
B. The Borrower has proposed to acquire certain Properties pursuant to
that certain Purchase and Sale Agreement, dated as of August 17, 2004, by and
among Calpine Corporation, a Delaware corporation, and Calpine Natural Gas L.P.,
a Delaware limited partnership (the "Sellers"), and the Borrower (together with
the other documents and agreements relating thereto, the "Purchase Agreement";
the transactions contemplated thereby are herein referred to as the
"Acquisition"; and the Properties to be acquired by the Borrower pursuant to the
Acquisition are referred to herein as the "Acquisition Properties").
C. To finance a portion of the purchase price for the Acquisition and
related fees and expenses, the Borrower will enter into that certain
$150,000,000 Senior Subordinated Credit and Guaranty Agreement dated of even
date herewith (the "Bridge Credit Agreement") among the Borrower, the
Guarantors, as subsidiary guarantors, the several lenders from time to time
parties thereto, and Xxxxxxx Sachs Credit Partners L.P., as administrative agent
for the bridge lenders, as an unsecured senior subordinated bridge financing to
the Borrower's proposed public offering of common stock or other securities of
the Borrower.
D. The Credit Agreement restricts the Borrower from incurring indebtedness
under the Bridge Credit Agreement and from incurring indebtedness into which the
Bridge Credit Agreement Indebtedness may be converted (such indebtedness, upon
conversion being "Term Loans") or for which it may be exchanged (any such
indebtedness, upon exchange being "Exchange Notes") or other indebtedness
incurred by the Borrower to repay, in whole or in part, the aggregate amount
then outstanding under Bridge Credit Agreement, the Term Loans or the Exchange
Notes (such other indebtedness being the "Permanent Debt Securities").
E. The Borrower has requested and the Administrative Agent and the Lenders
have agreed to certain modifications as set forth herein in order to facilitate
the financing transactions contemplated above and to make certain other changes
to the Credit Agreement.
F. NOW, THEREFORE, to induce the Agents and the Lenders to enter into this
First Amendment and in consideration of the premises and the mutual covenants
herein contained, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms. Each capitalized term used herein but not
otherwise defined herein has the meaning given such term in the Credit
Agreement, as amended by this First Amendment. Unless otherwise indicated, all
section references in this First Amendment refer to sections of the Credit
Agreement.
Section 2. Amendments to Credit Agreement.
2.1 Amendments to Section 1.02.
(a) The following definitions are hereby added where alphabetically
appropriate to read as follows:
"Bridge Credit Agreement" means that certain Senior Subordinated
Credit and Guaranty Agreement, dated as of September 1, 2004, by and among
the Borrower, the Guarantors, the several lenders from time to time
parties thereto, and Xxxxxxx Xxxxx Credit Partners L.P., as administrative
agent for the lenders, as the same shall be amended, supplemented or
otherwise modified from time to time in accordance with Section 9.04(b).
"Equity Offering" means any issuance and sale by the Borrower,
whether public or private, of any Equity Interests (other than
Disqualified Capital Stock) of the Borrower or any other capital
contribution from shareholders of the Borrower; provided that issuances of
securities pursuant to employee benefit plans shall not be considered to
be "Equity Offerings".
"Exchange Indenture" means the indenture dated as of September 1,
2004 among the Borrower, certain subsidiaries of the Borrower and Xxxxx
Fargo Bank, N.A., as trustee.
"Exchange Notes" means the senior subordinated notes issued under
the Exchange Indenture.
"First Amendment" means that certain First Amendment to Amended and
Restated Credit Agreement, dated as of September 1, 2004, among the
Borrower, the Guarantors, the Agents, and the Lenders party thereto.
"Permanent Debt Securities" means any subordinated Indebtedness
constituting Permitted Refinancing Debt incurred in respect of the Bridge
Credit Agreement, the Term Loans or the Exchange Notes.
"Permitted Refinancing Debt" means Debt (for purposes of this
definition, "new Debt") incurred in exchange for, or proceeds of which are
used to refinance, in whole or
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in part, any other Debt (the "Refinanced Debt"); provided that (a) such
new Debt is in an aggregate principal amount not in excess of the sum of
(i) the aggregate principal amount then outstanding of the Refinanced Debt
(or, if the Refinanced Debt is exchanged or acquired for an amount less
than the principal amount thereof to be due and payable upon a declaration
of acceleration thereof, such lesser amount) and (ii) an amount (rounded
up to the next higher integral multiple of $5,000,000) necessary to pay
all accrued and unpaid interest, including any interest paid in kind, any
fees and expenses, including premiums, underwriting discounts and other
issuance costs, related to such exchange or refinancing; (b) such new Debt
has a stated maturity no earlier than September 1, 2010 and requires no
scheduled amortization of principal prior to September 1, 2010; (c) such
new Debt does not require the payment of interest in cash (excluding
interest paid in kind, added to principal or paid as "Permitted Junior
Securities" as defined in the Exchange Indenture) at any time prior to
September 1, 2010 at a rate per annum in excess of 18% and a total stated
rate per annum in excess of 20% (and for purposes of this clause original
issue discount and Equity Interests issued to the holders of such Debt as
consideration for the acceptance of such Debt shall not be considered
interest) plus an additional default rate not to exceed 2% per annum; (d)
such new Debt does not contain any covenants or defaults which are more
onerous to the Borrower and its Subsidiaries than those imposed by the
Refinanced Debt unless the Borrower and Guarantors shall have executed and
delivered a contemporaneous amendment to this Agreement and the other Loan
Documents to make comparable changes; and (e) such new Debt (and any
guarantees thereof) is subordinated in right of payment to the
Indebtedness (or, if applicable, the Guaranty Agreement) to at least the
same extent as the Refinanced Debt on terms that either (i) are not in any
respect less favorable to any of the Agents or Lenders than the provisions
set forth in Section 9 of the Bridge Credit Agreement or Article 10 of the
Exchange Indenture and the definitions of defined terms used therein (in
each case as in effect on the date on which the First Amendment became
effective) or (ii) are reasonably satisfactory to the Administrative
Agent.
"Subordinated Debt" means any Debt issued pursuant to Section
9.02(i) or any Debt evidenced by the Bridge Credit Agreement, the Term
Loans and/or the Exchange Notes and, in each case, any Permitted
Refinancing Debt in respect thereof.
"Subordinated Debt Documents" means: (i) in respect of the Bridge
Credit Agreement, the Bridge Credit Agreement and the other Transaction
Documents (as defined in the Bridge Credit Agreement), (ii) in respect of
the Exchange Notes, the Exchange Indenture, (iii) in respect of Debt
issued pursuant to Section 9.02(i), any document pursuant to which such
Debt is issued, and (iv) in respect of any Permanent Debt Securities
constituting Permitted Refinancing Debt, such other agreements and
documents as may be executed to evidence such Indebtedness, as the same
shall be amended, supplemented or otherwise modified from time to time in
accordance with Section 9.04(b).
"Term Loans" means the "Term Loans" referred to (and as defined in)
the Bridge Credit Agreement, as in effect on the date the First Amendment
became effective.
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(b) The following terms are amended in their entirety:
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract
or otherwise. For the purposes of this definition, no Person that owns
directly or indirectly any of the Equity Interests having ordinary voting
power for the election of the directors or other governing body of a
Person (other than as a limited partner of such other Person) will be
deemed to "control" merely by virtue of its ownership of such Equity
Interests. "Controlling" and "Controlled" have meanings correlative
thereto.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Loans and to acquire participations in Letters of
Credit hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Credit Exposure hereunder, as
such commitment may be (a) modified from time to time pursuant to Section
2.06 and (b) modified from time to time pursuant to assignments by or to
such Lender pursuant to Section 12.04(b); and "Commitments" means the
aggregate amount of the Commitments of all the Lenders. The amount
representing each Lender's Commitment shall at any time be the lesser of
(i) such Lender's Maximum Credit Amount, and (ii) such Lender's Applicable
Percentage of the then effective Tranche A Portion and Tranche B Portion,
as the case may be, of the Borrowing Base.
"Reserve Report" means the Initial Reserve Report and a report, in
form and substance reasonably satisfactory to the Administrative Agent,
setting forth, as of each December 31st or June 30th (or such other date
in the event of an Interim Redetermination) the oil and gas reserves
attributable to the Oil and Gas Properties of the Borrower and the
Subsidiaries, together with a projection of the rate of production and
future net income, taxes, operating expenses and capital expenditures with
respect thereto as of such date, consistent with SEC reporting
requirements at the time, together with a supplement indicating future net
income based upon the Administrative Agent's usual and customary pricing
assumptions for oil and gas loans then in effect, in each case reflecting
Swap Agreements in place with respect to such production.
"Tranche B Portion" means that portion of the Borrowing Base equal
to, prior to Tranche B Termination Date, $45,000,000 less (i) any optional
reductions to such amount under Section 2.07(e) and (ii) any reductions
resulting from the conversion or reclassification of existing Oil and Gas
Properties owned by the Borrower or any Subsidiary to "proved, developed
producing" with a corresponding increase in the Tranche A Portion; and,
from and after the Tranche B Termination Date, $0.
"Tranche B Termination Date" means the earlier to occur of (i) the
date on which the Borrower permanently terminates all of the Tranche B
Portion pursuant to Section 2.07(e) and pays in full all outstanding
Tranche B Loans and (ii) November 30, 2005.
(c) The term "Facility Amount" is hereby deleted.
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2.2 Amendment to Section 3.04(c). Section 3.04(c) is hereby amended by
inserting the following new clause (vi):
(vi) If, at any time, after the receipt by the Borrower or any
Subsidiary of net cash proceeds from any disposition of property which
disposition would require (whether or not such requirement is waived) the
Borrower or such Subsidiary to make a mandatory prepayment or an offer to
repurchase or redeem in respect of any Subordinated Debt, then, on the
Business Day immediately prior to the date on which such mandatory
prepayment or offer in respect of the Subordinated Debt would otherwise
become due and payable, the Borrower or such Subsidiary shall make a
prepayment (and the Aggregate Maximum Credit Amounts of the Lenders shall
automatically and permanently reduce) in an amount equal to such excess
cash proceeds.
2.3 Amendment to Section 8.01. Section 8.01 is hereby amended by inserting
the following Section 8.01(q).
(q) Acquisition Notices. In the event that after the effective date
of the First Amendment: (i) the Borrower is required or decides to
purchase any of the Properties which had previously been excluded from the
Acquisition Properties (as defined in the First Amendment) in accordance
with the terms of the Purchase Agreement (as defined in the First
Amendment), (ii) the Borrower is required to honor any preferential
purchase right in respect of any Acquisition Property which has not been
waived, (iii) any matter is disputed in accordance with the terms of the
Purchase Agreement or any such disputed matter is resolved, (iv) the
discovery of any "interest additions", (v) any material notices are
received or delivered by the Borrower pursuant to the Purchase Agreement,
or (vi) the Borrower and the Sellers (as defined in the First Amendment)
calculate and agree upon the "final recapitulation statement" and "final
recap amount" as contemplated by the Purchase Agreement, then, in each
such case, the Borrower shall promptly give the Administrative Agent
notice in reasonable detail of such circumstances.
2.4 Amendment to Section 8.12. Section 8.12 is hereby amended by (i)
deleting therefrom each reference to "January 1" and substituting therefor
"December 31" and (ii) deleting therefrom the reference to "January 1st" and
substituting therefor "December 31st".
2.5 Addition of Section 8.16. Section 8.16 is hereby added, which reads in
its entirety as follows:
Section 8.16 Swap Agreements. On or prior to September 30, 2004, the
Borrower shall furnish evidence to the Administrative Agent that the
Borrower has purchased one or more Swap Agreements (i) with one or more
Approved Counterparties, (ii) which have, if such Swap Agreements are
floors or collars, a floor strike price and if such Swap Agreements are
price swaps, a fixed price of not less than $4.75/MMBTU (Colorado
Interstate Gas Rockies), and (iii) which have aggregate notional volumes
of not less than (x) during 2005, an average of 20,000MMBTU per day, and
(y) during 2006, an average of 25,000MMBTU per day.
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2.6 Amendment to Section 9.01. Sections 9.01(b) and 9.01(c) are hereby
deleted and the following inserted in lieu thereof:
(b) Ratio of Total Debt to EBITDAX. The Borrower will not, as of any
date of determination, permit its ratio of Total Debt as of such day to
EBITDAX for the four fiscal quarters ending on the last day of the fiscal
quarter immediately preceding such date of determination for which
financial statements are available to be greater than (i) prior to
November 30, 2005, 4.0 to 1.0, and (ii) thereafter, 3.5 to 1.0.
(c) Current Ratio. The Borrower will not permit, as of the last day
of any fiscal quarter, its ratio of (i) consolidated current assets
(including the unused amount of the total Commitments, but excluding
non-cash assets under FAS 133) to (ii) consolidated current liabilities
(excluding (A) non-cash obligations under FAS 133 and (B) any amounts
under the Bridge Credit Agreement that may be classified as current
liabilities) to be less than 1.0 to 1.0.
2.7 Amendment to Section 9.02(k). Section 9.02 is hereby amended by
inserting the following Section 9.02(k):
(k) Debt under the Bridge Credit Agreement, the Term Loans, the
Exchange Notes and Permitted Refinancing Debt in respect thereof.
2.8 Amendment to Section 9.04(b). Section 9.04 is hereby deleted and the
following is inserted in lieu thereof:
(b) Redemption or Repayment of Subordinated Debt. The Borrower will
not, and will not permit any Subsidiary to, prior to the date that is one
year after the Maturity Date: (i) call, make or offer to make any
voluntary or optional Redemption of or otherwise voluntarily or optionally
Redeem (whether in whole or in part) any Subordinated Debt except with the
cash proceeds of (A) an Equity Offering (provided, that if the Borrower
receives cash proceeds from an Equity Offering to Permitted Holders at any
time when any prepayment is due under Section 3.04(c)(ii) or 3.04(c)(iii),
then a portion of such cash proceeds, in an amount equal to the least of
(x) 50% of such cash proceeds, (y) the amount due in respect of such
required prepayment and (z) $5,000,000, shall be applied to such
prepayment), (B) Permitted Refinancing Debt (including without limitation
the repayment of any Debt under the Bridge Credit Agreement with the
proceeds of the Term Loans or the Exchange Notes or any Permanent Debt
Securities constituting Permitted Refinancing Debt) or (C) any asset sale
to the extent not required by this Agreement to be applied to repayment of
Indebtedness and a concurrent reduction in the Commitments; (ii) amend,
modify, waive or otherwise change, consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any notes
evidencing any Subordinated Debt or any indenture, agreement, instrument,
certificate or other document (including the Bridge Credit Agreement, the
Indenture, any other Subordinated Debt Document and any other document or
agreement relating thereto) relating to any Subordinated Debt if (A) the
effect of such amendment, modification or waiver is (1) to shorten the
final maturity to a date earlier than September
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1, 2010, (2) to require any payment of principal thereof (except payments
permitted by Section 9.04(b)(i)) on any date earlier than September 1,
2010, or (3) to increase the rate of interest payable in cash at any time
prior to September 1, 2010 so that the aggregate of all such interest
payable in cash (excluding interest paid in kind, added to principal or
paid as "Permitted Junior Securities" as defined in the Exchange
Indenture) exceeds 18% per annum and the aggregate of all interest at any
time prior to September 1, 2010 exceeds a 20% per annum (and for purposes
of this clause original issue discount and Equity Interests issued to the
holders of such Debt as consideration for the acceptance of such Debt
shall not constitute interest) plus an additional default rate not to
exceed 2% per annum or shorten any period for payment of any such cash
interest or modify the method of calculating the interest rate, (B) such
action requires the payment of a consent, amendment, waiver or other
similar fee in excess of 2.5% in any 12-month period, (C) such action adds
covenants or defaults to the extent more restrictive than those contained
in the Bridge Credit Agreement or this Agreement and the other Loan
Documents unless the Borrower and Guarantors shall have executed and
delivered a contemporaneous amendment to this Agreement and the other Loan
Documents to make comparable changes to this Agreement or the other Loan
Documents, or (D) such action secures any such Debt, provided that the
foregoing clauses (A) through (D) shall not prohibit the execution of
agreements in connection with the issuance of Permitted Refinancing Debt
or the addition of guarantors if required by the terms thereof; or (iii)
designate any Debt (other than obligations of the Borrower and the
Subsidiaries pursuant to the Loan Documents) as "Specified Senior
Indebtedness" or "Specified Guarantor Senior Indebtedness" or give any
such other Debt any other similar designation for the purposes of any
indentures or other documents relating to any subordinated Debt permitted
hereunder..
2.9 Amendment to Section 9.16. Section 9.16 is hereby amended by deleting
the "or" prior to the beginning of subsection 9.16(e) and inserting the
following at the end thereof:
or (f) the Bridge Credit Agreement or the Term Loans or any
Permanent Debt Security to the extent such a limitation does not prevent
the granting of Liens to secure the Indebtedness in an aggregate principal
amount of less than $250,000,000 (plus interests, cost and the other
obligations contemplated by the definition thereof), as such amount may be
reduced after giving effect to permanent reductions in the Commitment
resulting from asset sale repayments.
2.10 Addition of Section 9.19. Section 9.19 is hereby added as follows:
Section 9.19 Swap Agreement Termination. The Borrower shall maintain
the hedged position established pursuant to Section 8.16 during the period
specified therein and shall neither assign, terminate or unwind any such
Swap Agreements nor sell any Swap Agreements if the effect of such action
(when taken together with any other Swap Agreements executed
contemporaneously with the taking of such action) would have the effect of
canceling its positions under such Swap Agreements required by Section
8.16; provided, however, that the foregoing shall not prevent the Borrower
from in effect canceling its position under any specific Swap Agreement if
the remaining Swap
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Agreements hedge, in the aggregate, notional volumes of not less than the
amount required by this Agreement.
2.11 Amendment to Section 11.10. Section 11.10 is hereby deleted in its
entirety and the following is inserted in lieu thereof:
Section 11.10 The Arranger, the Syndication Agents and the
Documentation Agents. The Arranger, the Syndication Agents and the
Documentation Agents shall have no duties, responsibilities or liabilities
under this Agreement and the other Loan Documents other than their duties,
responsibilities and liabilities in their capacity as Lenders hereunder.
2.12 Amendment to Section 12.02(b). Section 12.02(b)(iii) is hereby
amended by adding the following phrase at the end thereof:
or amend, without the consent of the Super-Majority Lenders, Section
9.02 to the extent the effect thereof would be to increase the amount of
Debt the Borrower and its Subsidiaries can incur without a redetermination
of the Borrowing Base
2.13 Assignments of Maximum Credit Amounts; Resignation of Agent. Pursuant
to Section 12.04(b) and in lieu of the delivery of any Assignment and
Assumption, each of the following: Bank One, NA (Main Office Chicago) and
Wachovia Bank National Association (each a "Selling Lender") hereby severally
assigns and sells, as contemplated by Section 12.04(b), and each of the Lenders
on Annex I to this First Amendment (each a "Purchasing Lender") hereby severally
assumes and purchases, as contemplated by Section 12.04(b), undivided interests
in all of the Maximum Credit Amounts, Loans and L/C Exposure of each of the
Selling Lenders so that, after giving effect to all such assignments and
assumptions, the Maximum Credit Amount of each Lender will be as set forth on
Annex I to this First Amendment. The Administrative Agent waives the fee payable
to the Administrative Agent pursuant to Section 12.04(c)(ii)(C). Bank One, NA
(Main Office Chicago) hereby resigns as Co-Documentation Agent pursuant to
Section 11.06. The Borrower and the Lenders hereby waive all notice and other
conditions to such resignation set forth in Section 11.06.
2.14 Appointment of New Agents. Each of the Lenders and each Issuing Bank
hereby irrevocably (subject to Section 11.06) appoints Xxxxxx Xxxxxxx Financing,
Inc., Royal Bank of Canada, Comerica Bank and Deutsche Bank Trust Company
Americas, as Co-Documentation Agents for the Lenders, and Fleet National Bank
and U.S. Bank National Association, as Co- Syndication Agents for the Lenders
and authorizes each to take such actions on its behalf and to exercise such
powers as are delegated to it by the terms of the Credit Agreement and the other
Loan Documents, if any, together with such actions and powers as are reasonably
incidental thereto. Each of the foregoing hereby accept such appointments.
Section 3. Redetermination of Borrowing Base; Tranche A/B Portion and PV.
Subject to adjustments pursuant to Section 4.13 of this First Amendment, the
parties hereto hereby agree that (i) the amount of the Borrowing Base shall be
$200,000,000, (ii) the Tranche A Portion shall be $155,000,000, (iii) the
Tranche B Portion shall be $45,000,000, and (iv) the
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Present Value for purposes of Section 9.01(d) shall be $525,000,000. Each of the
foregoing amounts shall be the new Borrowing Base effective and applicable to
the Borrower, the Agents, and the Lenders until the next redetermination or
adjustment to the Borrowing Base pursuant to and in accordance with the terms of
the Credit Agreement.
Section 4. Conditions Precedent. This First Amendment shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 12.02 of the Credit Agreement) (the
"Effective Date"):
4.1 The Administrative Agent shall have received from all of the Agents,
Lenders, and Obligors, counterparts (in such number as may be requested by the
Administrative Agent) of this First Amendment signed on behalf of such Person.
4.2 The Administrative Agent, the Agents and the Lenders shall have
received all fees and other amounts due and payable on or prior to the date
hereof.
4.3 The Administrative Agent shall have received duly executed Notes
payable to the order of each Lender in an amount equal to its Maximum Credit
Amount after giving effect of this First Amendment in a principal amount equal
to its Maximum Credit Amount dated as of the date hereof. Each Lender hereby
agrees to promptly deliver to the Borrower after the Effective Date the original
Note issued by such Lender as of February 4, 2004.
4.4 The Administrative Agent shall have received from each party thereto
duly executed counterparts (in such number as may be requested by the
Administrative Agent) of the Security Instruments described in Exhibit A hereto.
In connection with the execution and delivery of such Security Instruments, the
Administrative Agent shall be reasonably satisfied that the Security Instruments
create first priority, perfected Liens (subject only to Excepted Liens
identified in clauses (e), (g) and (h) of the definition thereof, but subject to
the provisos at the end of such definition) on at least 85% of the total value
of the Oil and Gas Properties evaluated in the most recently delivered Reserve
Report and the reserve report with respect to the Acquisition Properties.
4.5 The Administrative Agent shall have received title information as they
may reasonably require setting forth the status of title to at least 85% of the
total value of the Acquisition Properties, including copies of the releases of
Liens of the Seller on the Acquisition Properties and UCC and other Lien
searches related to the Sellers and the Acquisition Properties.
4.6 The Administrative Agent shall be reasonably satisfied with the
environmental condition of the Acquisition Properties.
4.7 The Agents and the Lenders shall have received the following
Engineering Reports: (i) regarding the Acquisition Properties, that certain
Reserve Report dated as of August 17, 2004 prepared by the Borrower and
evaluating the Acquisition Properties as of July 1, 2004, and (ii) regarding the
Oil and Gas Properties of the Company and its Subsidiaries, that certain Reserve
Report dated as of August 17, 2004 prepared by the Borrower and evaluating the
Oil and Gas Properties of the Company and its Subsidiaries as of June 30, 2004.
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4.8 The Administrative Agent shall have received an opinion dated as of
the date hereof of (a) Xxxxxx Xxxxx LLP, special counsel to the Borrower, in
form and substance reasonably satisfactory to the Administrative Agent and (b)
local counsel in the state of Colorado and any other jurisdictions requested by
the Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent.
4.9 The Administrative Agent shall have received a certificate of
insurance coverage of the Borrower evidencing that the Borrower is carrying
insurance in accordance with Section 7.13 of the Credit Agreement.
4.10 The Administrative Agent shall have received satisfactory evidence
that the Borrower shall have received a gross proceeds from the Bridge Credit
Agreement of not less than $150,000,000, as may be adjusted to reflect purchase
price adjustments pursuant to the Purchase Agreement with respect to the
Acquisition, provided that if such adjustment is greater than $1,500,000, then
such adjustment shall be satisfactory to the Administrative Agent.
4.11 The Administrative Agent shall have received copies of the Bridge
Credit Agreement (which shall be in form and substance reasonably satisfactory
to the Administrative Agent), certified by a Responsible Officer as true and
complete.
4.12 The Agents and the Lenders shall be reasonably satisfied that (i) the
Borrower shall have received all Governmental Approvals and other approvals of
other Persons necessary or desirable for the consummation of the Acquisition and
the operation of the Acquisition Properties by the Borrower (other than those
set forth on Schedule 3.1(f) to the Purchase Agreement with respect to the
Acquisition) and (ii) there shall be no litigation pending, or to the knowledge
of the Borrower, threatened which would impair or delay the consummation of the
Acquisition.
4.13 The Administrative Agent shall have received (a) a certificate of a
Responsible Officer of the Borrower certifying: (i) that the Borrower is
concurrently consummating the Acquisition in accordance with the terms of the
Purchase Agreement (with all of the material conditions precedent thereto having
been satisfied in all material respects by the parties thereto) and acquiring
substantially all of the Acquisition Properties contemplated thereby; (ii) as to
the final purchase price for the Acquisition Properties after giving effect to
all adjustments as of the closing date contemplated by the Purchase Agreement
and specifying, by category, the amount of such adjustment; (iii) that attached
thereto is a true and complete list of all amounts placed in escrow pursuant to
the Purchase Agreement and a description of the affected Properties and the
circumstances relating to the placement of such funds in escrow; (iv) that
attached thereto is a true and complete list of the Acquisition Properties which
have been excluded from the Acquisition pursuant to the terms of the Purchase
Agreement, specifying with respect thereto the basis of exclusion as (A) title
defect, (B) preferential purchase right or (C) environmental defects; (v) that
attached thereto is a true and complete list of all Properties for which any
Seller has elected to cure a title defect, (vi) that attached thereto is a true
and complete list of all Acquisition Properties for which the Borrower has
elected to remediate an adverse environmental condition, and (vii) that attached
thereto is a true and complete list of all Acquisition Properties which are
currently pending final decision by a third party regarding
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purchase of such property in accordance with any preferential right; (b) a true
and complete executed copy of the Purchase Agreement and each other agreement or
document relating thereto; (c) original counterparts or copies, certified as
true and complete, of the assignments, deeds and leases for all of the
Acquisition Properties; and (d) such other related documents and information as
the Administrative Agent shall have reasonably requested.
The Borrower recognizes and agrees that it shall have delivered to the
Administrative Agent a preliminary draft of the certificate described herein not
less than two (2) Business Days prior to the date hereof identifying which
Acquisition Properties will be excluded from the Acquisition. The Administrative
Agent and the Borrower shall jointly allocate a Borrowing Base value for each
such excluded Property and shall, promptly upon making such allocation, notify
the Borrower and each Lender of such allocation. If the aggregate value as
reflected in the applicable Reserve Report of Acquisition Properties excluded
under clause (iv) of the preceding paragraph is less than or equal to
$2,500,000, the Borrowing Base will not be adjusted. If either the aggregate
value as reflected in the applicable Reserve Report for the Acquisition
Properties excluded under clause (iv) of the preceding paragraph is greater than
$2,500,000 or any Acquisition Properties are excluded for other reasons or any
Seller in respect thereof makes any adjustment to the purchase price under the
Acquisition Documents, then the Administrative Agent shall suggest to the
Lenders a Borrowing Base value for each such excluded Property or such Property
subject of such adjustment and the Required Lenders shall reach a consensus as
to all allocation of value for such Property. Promptly upon the making by the
Required Lenders of such allocation, the Administrative Agent shall notify the
Borrower and each Lender of such allocation.
4.14 No Default shall have occurred and be continuing as of the date
hereof, after giving effect to the terms of this First Amendment.
4.15 The Administrative Agent shall have received such other documents as
the Administrative Agent or its special counsel may reasonably require.
The Administrative Agent is hereby authorized and directed to declare this
First Amendment to be effective when it has received documents confirming or
certifying, to the satisfaction of the Administrative Agent, compliance with the
conditions set forth in this Section 4 or the waiver of such conditions as
permitted hereby. Such declaration shall be final, conclusive and binding upon
all parties to the Credit Agreement for all purposes.
Section 5. Miscellaneous.
5.1 Confirmation. The provisions of the Credit Agreement, as amended by
this First Amendment, shall remain in full force and effect following the
effectiveness of this First Amendment.
5.2 Ratification and Affirmation; Representations and Warranties. Each
Obligor hereby (a) acknowledges the terms of this First Amendment; (b) ratifies
and affirms its obligations under, and acknowledges, renews and extends its
continued liability under, each Loan Document to which it is a party and agrees
that each Loan Document to which it is a party remains in full force and effect,
except as expressly amended hereby, notwithstanding the
11
amendments contained herein and (c) represents and warrants to the Lenders that
as of the date hereof, after giving effect to the terms of this First Amendment:
(i) all of the representations and warranties contained in each Loan Document to
which it is a party are true and correct, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, such representations and warranties shall continue to be true and
correct as of such specified earlier date, (ii) no Default or Event of Default
has occurred and is continuing and (iii) no event or events have occurred which
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect. The Borrower and each other Loan Party hereby (A) represents and
warrants to the Administrative Agent, each other Agent and each Lender that,
upon the due recording of the Security Instruments listed in Exhibit A attached
hereto, the Lenders have a first priority Lien on, and security interest in, Oil
and Gas Properties of the Borrower constituting at least 85% of the Present
Value of the Oil and Gas Properties of the Borrower and its consolidated
Subsidiaries as reflected in the Reserve Reported delivered pursuant to Section
4.7 of this First Amendment, and (B) confirms that it has heretofore provided to
the Administrative Agent a schedule listing the Mortgaged Properties and the
Present Value of each such Property.
5.3 Counterparts. This First Amendment may be executed by one or more of
the parties hereto in any number of separate counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of this First Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
5.4 No Oral Agreement. This First Amendment, the Credit Agreement and the
other Loan Documents executed in connection herewith and therewith represent the
final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous, or unwritten oral agreements of the parties. There are
no subsequent oral agreements between the parties.
5.5 GOVERNING LAW. THIS FIRST AMENDMENT (INCLUDING, BUT NOT LIMITED TO,
THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
5.6 Payment of Expenses. In accordance with Section 12.03 of the Credit
Agreement, the Borrower agrees to pay or reimburse the Administrative Agent for
all of its reasonable out-of-pocket costs and reasonable expenses incurred in
connection with this First Amendment, any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
5.7 Severability. Any provision of this First Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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5.8 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed as of the date first written above.
BORROWER: XXXX XXXXXXX CORPORATION
By: /s/ XXXXXX X. XXXXX, XX.
---------------------------------------------
Xxxxxx X. Xxxxx, Xx., Chief Financial Officer
GUARANTORS: XXXX XXXXXXX PRODUCTION COMPANY
By: /s/ XXXXXX X. XXXXX, XX.
---------------------------------------------
Xxxxxx X. Xxxxx, Xx., Chief Financial Officer
XXXX XXXXXXX PROPERTIES INC.
By: /s/ XXXXXX X. XXXXX, XX.
---------------------------------------------
Xxxxxx X. Xxxxx, Xx., Chief Financial Officer
AGENTS AND LENDERS: JPMORGAN CHASE BANK, as a Lender and as
Administrative Agent
By: /s/ XXXXXX X. XXXXXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxxxxx, Managing Director
XXXXXX XXXXXXX FINANCING, INC.,
as a Lender and as Co-Documentation Agent
By: /s/ XXXXX X. XXXXXX
-------------------------------------
Xxxxx X. Xxxxxx, Vice President
ROYAL BANK OF CANADA,
as a Lender and as Co-Documentation Agent
By: /s/ XXXXX XXXXXXX
-------------------------------------
Xxxxx Xxxxxxx, Authorized Signatory
COMERICA BANK,
as a Lender and as Co-Documentation Agent
By: /s/ XXXXX X. SELZIK
-------------------------------------
Xxxxx X. Selzik, Vice President
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as a Lender and as
Co-Documentation Agent
By: /s/ XXXXX X. XXXXX
-------------------------------------
Xxxxx X. Xxxxx, Managing Director
FLEET NATIONAL BANK,
as a Lender and as Co-Syndication Agent
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxxxx, Director
U.S. BANK NATIONAL ASSOCIATION,
as a Lender and as Co-Syndication Agent
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx, Xx. Vice President
EXITING LENDERS AND RESIGNING AGENTS:
SOLELY FOR PURPOSES OF SECTION 2.13 AND THE ASSIGNMENTS AND RESIGNATIONS
CONTEMPLATED THEREBY:
BANK ONE, NA (MAIN OFFICE CHICAGO),
as an Exiting Lender and as a Resigning
Co-Documentation Agent
By: /s/ XXXXXX X. XXXXXXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxxxxxx, Managing Director
WACHOVIA BANK, NATIONAL
ASSOCIATION, as an Exiting Lender
By: /s/ XXXXXX XXXXXXX
------------------------------
Xxxxxx Xxxxxxx, Vice President
