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EXHIBIT 10.36.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated as of
August 20, 1998 is among: XXXXXXX OIL & GAS, L.P., a Delaware limited
partnership (the "Borrower"); each of the Lenders (as defined in the Credit
Agreement as hereinafter defined); and BANK OF MONTREAL, a Canadian bank (in
its individual capacity, "BMO"), as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Agent").
R E C I T A L S
A. The Borrower, the Agents, and the Lenders have entered into that
certain Credit Agreement dated as of January 26, 1998 (the "Credit Agreement"),
pursuant to which the Lenders have agreed to make certain loans and extensions
of credit to the Borrower upon the terms and conditions as provided therein;
and
B. The Borrower, the Agents, and the Lenders now desire to make certain
amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration and the mutual benefits, covenants and agreements herein
expressed, the parties hereto now agree as follows:
Section 1. Certain Definitions. Unless otherwise defined herein, all
terms beginning with a capital letter which are defined in the Credit Agreement
shall have the same meanings herein as therein unless the context hereof
otherwise requires.
Section 2. Amendments to Credit Agreement.
(a) Additional Defined Terms. Section 1.02 of the Credit Agreement is
hereby amended and supplemented by adding the following new definitions, which
are read in their entirety as follows:
"First Amendment" shall mean that certain First Amendment to Credit
Agreement dated as of August 20, 1998 among the Borrower, the Lenders
and the Agent.
"Indenture" shall mean that certain Indenture dated as of August 20,
1998 between Xxxxxxx Exploration, as the issuer of the Subordinated
Debt, and Chase Bank of Texas, National Association, as the trustee.
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"Securities Purchase Agreement" shall mean that certain Securities
Purchase Agreement dated August 20, 1998 among Xxxxxxx Exploration,
Enron Capital & Trade Resources Corp., and Joint Energy Development
Investments II Limited Partnership, as agent for such purchasers
regarding the Subordinated Debt.
"Subordinated Debt" shall mean the Debt in the principal amount not
to exceed $40,000,000 (plus up to an additional $10,000,000 for
interest paid in kind pursuant to Section 9.02 of the Indenture) of
Xxxxxxx Exploration incurred under the Indenture and expressly
subordinated to the Indebtedness pursuant to the Subordination
Agreement.
"Subordination Agreement" shall mean that certain Intercreditor and
Subordination Agreement dated as of August 20, 1998, and from time to
time amended, among Enron Capital & Trade Resources Corp., Joint Energy
Development Investments 11 Limited Partnership, and Bank of Montreal.
(b) Section 2.03. Section 2.03 (a) is hereby deleted in its entirety,
and the following is substituted therefor:
"(a) The Aggregate Commitments shall at all times be equal to
$65,000,000 until January 31, 1999 after which date it shall be equal
to the lesser of (i) the Aggregate Maximum Credit Amounts after
adjustments resulting from reductions pursuant to Section 2.03(b)
hereof or (ii) the Borrowing Base as determined from time to time."
(c) Section 2.07. Section 2.07(c) of the Credit Agreement is hereby
deleted in its entirety, and the following is substituted therefor:
"(c) Upon any redeterinination of the amount of the Borrowing Base
in accordance with Section 2.08, if the redetermined Borrowing Base is
less than the aggregate outstanding principal amount of the Loans plus
the LC Exposure, then the Borrower shall within ninety (90) days (or
such shorter period as hereinafter provided) of receipt of written
notice thereof. (i) prepay the Loans in an aggregate principal amount
equal to such excess, together with interest on the principal amount
paid accrued to the date of such prepayment, provided however, that
upon the first Borrowing Base determination such required prepayment
shall be made on or before 30 days after such first Borrowing Base
determination if such deficiency is ten percent (10%) or more of the
Borrowing Base and (ii) if a Borrowing Base deficiency remains after
prepaying all of the Loans because of LC Exposure, the Borrower shall
pay to the Agent on behalf of the Lenders an amount equal to such
Borrowing Base deficiency to be held as cash collateral as provided in
Section 2.10(b) hereof."
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(d) Section 7.21. Section 7.21 of the Credit Agreement is hereby
deleted in its entirety, and the following is substituted therefor:
"Restriction on Liens. Neither the Borrower nor any Subsidiary is a
party to or subject to any agreement or arrangement (other than the
Loan Documents, the documents described in Section 4.01 (a) through (d)
of the Indenture, the Indenture, and any other documents permitted
under Section 9.02(f)), or subject to any order, judgment, writ or
decree, which either restricts or purports to restrict its ability to
grant Liens to other Persons on or in respect of their respective
assets or Properties."
(e) Section 9.01. Section 9.01 of the Credit Agreement is hereby amended
by adding the following new clause (i):
"(i) Guarantees of the Borrower and its Subsidiaries which have
executed prior and senior guarantees of the Indebtedness in form and
substance satisfactory to the Agent, of the Subordinated Debt, which
Guarantees are subordinated and otherwise in form and substance
satisfactory to the Agent consistent with the Subordination Agreement."
(f) Section 9.02. Section 9.02 of the Credit Agreement is hereby
amended by adding the following new clause (f):
"(f) Liens securing the Subordinated Debt or Guarantees permitted
under Section 9.01(i) on Properties upon which prior Liens have been
granted to secure the Indebtedness pursuant to documents in form and
substance satisfactory to the Agent, provided such Liens (i) are
subordinated and are otherwise in form. and substance satisfactory to
the Agent consistent with the Subordination Agreement and (ii) do not
directly or indirectly secure any Hedging Agreements."
(g) Section 9.03. Section 9.03(j)(a) of the Credit Agreement is hereby
deleted in its entirety and the following is substituted therefor:
"(a) to Xxxxxxx Exploration, Xxxxxxx, Inc., Xxxxxxx Holdings I, LLC
and/or Xxxxxxx Holdings II, LLC
(i) to pay Federal or State taxes owing by any of them, payroll
and payroll related taxes and other reasonable general and
administrative expenses, or consisting of forgiveness of
indebtedness, and
(ii) so long as no Borrowing Base deficiency exists or will be
created thereby, no Event of Default or, with respect to Section
5.2(q), (r), (s) or (u) of the Guaranty Agreement of Xxxxxxx
Exploration, Default, is in existence or will be created thereby,
to enable Xxxxxxx Exploration to pay accrued and unpaid interest
owing on the "Notes" (as defined in the Indenture)."
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(h) Section 9.17. Section 9.17 of the Credit Agreement is hereby
deleted in its entirety, and the following is substituted therefor:
"Section 9.17 Negative Pledge Agreements. The Borrower will not and
will not permit any Subsidiary to create, incur, assume or suffer to
exist any contract, agreement or understanding (other than the Loan
Documents) which in any way prohibits or restricts (i) the granting,
conveying, creation or imposition of any Lien on any of its Property
(other than the Indenture, the documents described in Section 4.01(a)
through (d) of the Indenture, and any other documents permitted under
Section 9.02 (f)) or (ii) any Subsidiary from paying dividends or
making any other distribution to the Borrower or which requires the
consent of or notice to other Persons in connection with any of the
foregoing."
(i) Article IX. Article IX is hereby supplemented by adding the
following new section:
"Section 9.19 Borrower as Operator. The Borrower will not and will
not permit any of the Subsidiaries to voluntarily resign as operator of
more than twenty-five percent (25%) of their currently operated Oil and
Gas Properties unless the new operator is acceptable to the Majority
Lenders."
(j) Section 10.02 Section 10.02(a) of the Credit Agreement is hereby
deleted in its entirety, and the following is substituted therefor:
"(a) At any time during the continuance of an Event of Default
other than one referred to in clauses (f), (g) or (h) of Section 10.01
or in clause (m) to the extent it relates to clauses (f), (g) or (h),
the Agent, upon request of the Majority Lenders, shall, by notice to
the Borrower, cancel the Commitments and/or declare the principal
amount then outstanding of, and the accrued interest on, the Loans and
all other amounts payable by the Borrower hereunder and under the Notes
(including without limitation the payment of cash collateral to secure
the LC Exposure as provided in Section 2.10(b) hereof) to be forthwith
due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Borrower. Once an
acceleration has been declared pursuant to the foregoing, no subsequent
cure of the Event of Default shall negate such acceleration or the
rights and remedies of the Agent and the Lenders with respect thereto
without the express written consent of all of the Lenders."
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Section 3. Conditions Precedent. This Amendment shall become binding
upon the receipt by the Agent of the following documents and satisfaction of
the other conditions provided in this Section 3, each of which must be
satisfactory to the Agent in form and substance:
(a) counterparts of this Amendment executed by the Borrower and the
Lenders;
(b) certificates of the Secretary or an Assistant Secretary of the
Borrower and of the Guarantor setting forth for each of them (i) the
resolutions of its board of directors with respect to the authorization
to execute, deliver and perform this Amendment; (ii) the officer of
such entity authorized to sign this Amendment, and (iii) the signature
of such authorized officer of such entity;
(c) evidence of the closing and concurrent funding of the
Subordinated Debt pursuant to the Indenture and the equity issuance
pursuant to the Securities Purchase Agreement;
(d) a copy of the Securities Purchase Agreement and the Indenture
and all documents executed with respect to the Subordinated Debt all in
form and substance acceptable to the Lenders; and
(e) A security agreement executed by Xxxxxxx Exploration in favor
of the Agent granting a first-priority security interest in all of
Xxxxxxx Exploration's right, title and interest to the ownership
interests of Xxxxxxx Holdings I, LLC;
(f) A security agreement executed by Xxxxxxx Inc. in favor of the
Agent granting a first-priority security interest in all of Xxxxxxx
Inc.'s right, title and interest in and to the ownership interests of
Xxxxxxx Holdings II, LLC and the Borrower;
(g) such other documents as Agent or its counsel may reasonably
request.
Upon performance of such conditions satisfactory to the Agent, the Agent shall
be deemed to have consented, on behalf of the Lenders, to the matters described
in the preceding subsections (c), (d), (e) and (f).
Section 4. Representations and Warranties. The Borrower hereby
reaffirms that as of the effective date of this Amendment, the representations
and warranties made by the Borrower in the Credit Agreement will be true and
correct as though made on and as of the effective date of this Amendment, and
further, the Borrower represents that no Default or Material Adverse Effect
shall have occurred and be continuing on such date.
Section 5. Limitations. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or waiver
or modification of, any other term or
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condition of the Credit Agreement or any of the other Loan Documents, or (b)
prejudice any right or rights which the Lenders may now have or may have in the
future under or in connection with the Credit Agreement or any of the other
Loan Documents. Except as expressly supplemented, amended or modified hereby,
the terms and provisions of the Credit Agreement or any other Loan Documents
are and shall remain in full force and effect. In the event of a conflict
between this Amendment and any of the foregoing documents, the terms of this
Amendment shall be controlling.
Section 6. Governing Law. This Amendment and the rights and obligations
of the parties hereunder and under the Credit Agreement shall be construed in
accordance with and be governed by the laws of the State of Texas and the
United States of America.
Section 7. Descriptive Headings. etc. The descriptive headings of the
several Sections of this Amendment are inserted for convenience only and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.
Section 8. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts and all of such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SECTION 26.02
THIS AMENDMENT AND OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE PARTIES
BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF TOGETHER
CONSTITUTE A WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENT BETWEEN THE PARTIES.
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BORROWER: XXXXXXX OIL & GAS, L.P.
By: Xxxxxxx, Inc., its General Partner
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Vice President & Chief
Financial Officer
LENDER AND AGENT: BANK OF MONTREAL
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Director, U.S. Corporate Banking
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