Execution Copy
FIFTH AMENDMENT
TO
CREDIT AGREEMENT
among
DUNE ENERGY, INC.,
as the Borrower,
STANDARD BANK PLC,
as Administrative Agent,
and
The Lenders Signatory Hereto
Effective as of August 31, 2006
Execution Copy
FIFTH AMENDMENT TO CREDIT AGREEMENT
This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Fifth Amendment") executed
effective as of the 31st day of August, 2006 (the "Fifth Amendment Effective
Date") is among DUNE ENERGY, INC. a corporation formed under the laws of the
State of Delaware (the "Borrower"); the Guarantors signatory hereto; each of the
Lenders that is a signatory hereto; and STANDARD BANK PLC., as administrative
agent for the Lenders (in such capacity, together with its successors, the
"Administrative Agent").
Recitals
A. The Borrower, the Administrative Agent and the Lenders are parties to
that certain Credit Agreement dated as of November 17, 2005, as amended by that
certain letter agreement dated December 16, 2005, and by the Second Amendment to
Credit Agreement dated as of May 15, 2006 and Third Amendment to Credit
Agreement dated as of June 1, 2006 and Fourth Amendment to Credit Agreement
dated as of July 31, 2006 (the "Credit Agreement"), pursuant to which the
Lenders have made certain credit available to and on behalf of the Borrower.
B. The Borrower has requested, and the Borrower, the Administrative Agent
and Lenders have agreed to amend certain provisions and to waive certain other
provisions of the Credit Agreement.
C. NOW, THEREFORE, 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 which is defined in the
Credit Agreement, but which is not defined in this Fifth Amendment, shall have
the meaning ascribed such term in the Credit Agreement. Unless otherwise
indicated, all section references in this Fifth Amendment refer to the Credit
Agreement.
Section 2. Amendments to Credit Agreement.
2.1 Amendments to Section 1.02.
(a) The definition of "Agreement" is hereby amended and restated in its
entirety as follows:
" 'Agreement' means this Credit Agreement, as amended by that certain
letter agreement dated December 16, 2005, the Second Amendment to Credit
Agreement, dated May 15, 2006, the Third Amendment to Credit Agreement
dated as of June 1, 2006, the Fourth Amendment to Credit Agreement dated
as of July 31, 2006, and the Fifth Amendment to Credit Agreement dated as
of August 31, 2006 and as the same may from time to time be further
amended, modified, supplemented or restated."
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(b) The following definition of "Fifth Amendment Effective Date" is hereby
added in the appropriate alphabetical order:
" 'Fifth Amendment Effective Date' shall mean August 31, 2006."
2.2 Amendment to Section 10.01(u). Section 10.01(u) is hereby amended and
restated in its entirety as follows
"(u) Notwithstanding the provisions of Section 8.13 and 8.17, the Borrower
has not provided title opinion (which includes opinions as to any Liens
affecting the Property covered in such opinion) by September 30, 2006, in form
and substance satisfactory to the Administrative Agent and its counsel, covering
all xxxxx located on the Mortgaged Property owned or acquired through May 12,
2006."
2.3 Default Rate. In partial consideration of the waiver and amendments
contained in the Fifth Amendment, the Borrower agrees to pay the post-default
rate of interest described in Section 3.03(b) of the Credit Agreement on all
Loans outstanding commencing effective from June 1, 2006 until payment in full
of all Loans, but in no event to exceed the Highest Lawful Rate.
Section 3. Waiver of Sections 9.01(b) and (c), and Section 10.01(a).
Effective as of the Fifth Amendment Effective Date and continuing until
September 30, 2006, the Administrative Agent and the Lenders hereby waive
compliance by the Borrower with Sections 9.01(b) and (c) and Section 10.01(a)
but as to Section 10.01(a) only as such Event of Default resulted from failure
to make the voluntary prepayment as a result of a failed refinancing on August
14 or 15, 2006. This temporary limited waiver shall not be deemed to be a
consent to, or waiver or modification of, any other term or condition of the
Credit Agreement or any other loan document and shall not prejudice any right or
rights which the Administrative Agent or the Lenders may now have or may have in
the future under the Credit Agreement or any other loan document.
Section 4. Conditions Precedent. The effectiveness of this Fifth Amendment
is subject to the receipt by the Administrative Agent of the following documents
and satisfaction of the other conditions provided in this Section 4, each of
which shall be reasonably satisfactory to the Administrative Agent in form and
substance:
4.1 Execution. The Administrative Agent shall have received multiple
counterparts as requested of this Fifth Amendment and the attached confirmation
from each Lender, the Borrower and each Guarantor and Itera.
4.2 No Default. No Default or Event of Default shall have occurred and be
continuing as of the Fifth Amendment Effective Date.
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4.3 Representations and Warranties. The representations and warranties
contained in Section 5 are true and correct.
Section 5. Representations and Warranties. Each of the Borrower and each
Guarantor hereby represents and warrants that:
(a) each of the representations and warranties made by it under the
Credit Agreement and each other Loan Document is true and correct in all
material respects on and as of the date hereof, as if made on and as of such
date, except for any representations and warranties made as of a specified date,
which are true and correct in all material respects as of such specified date;
(b) the execution, delivery and performance by it of this Fifth
Amendment have been duly authorized by it;
(c) this Fifth Amendment constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms; and
(d) its execution, delivery and performance of this Fifth Amendment
(i) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority or any other third Person
(including shareholders or any class of directors, whether interested or
disinterested, of it or any other Person), nor is any such consent, approval,
registration, filing or other action necessary for the validity or
enforceability of this Fifth Amendment or any Loan Document or the consummation
of the transactions contemplated thereby, except such as have been obtained or
made and are in full force and effect, (ii) will not violate any applicable law
or regulation or the charter, by-laws or other organizational documents of it or
any of its Subsidiaries or any order of any Governmental Authority, (iii) will
not violate or result in a default under any indenture, agreement or other
instrument binding upon it or any of its Subsidiaries or its Properties, or give
rise to a right thereunder to require any payment to be made by it or such
Subsidiary and (iv) will not result in the creation or imposition of any Lien on
any of its Property or any of its Subsidiaries (other than Liens created by this
Fifth Amendment or the Loan Documents).
Section 6. Miscellaneous.
6.1 Confirmation. The provisions of the Credit Agreement (as amended by
this Fifth Amendment) shall remain in full force and effect in accordance with
its terms following the effectiveness of this Fifth Amendment.
6.2 Ratification and Affirmation of Obligors. The Borrower and each
Guarantor hereby expressly (i) acknowledge the terms of this Fifth Amendment,
(ii) ratify and affirm their obligations under the Security Instruments to which
they are a party, (iii) acknowledge, renew and extend their continued liability
under the Security Instruments to which they are a party. Without limiting the
generality of the foregoing, the Security Instruments and all of the Collateral
described therein do and shall secure the payment of all obligations under and
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in respect of the Loan Documents, as amended and otherwise modified by this
Fifth Amendment. The execution, delivery and effectiveness of this Fifth
Amendment shall not operate as a waiver of any right, power or remedy of the
Administrative Agent, the Collateral Agent or any Lender under any of the Loan
Documents, nor constitute a waiver of any provision of the Loan Documents except
as set forth in Section 3 of this Fifth Amendment. All references to the Credit
Agreement in any other document, instrument, agreement or writing shall
hereafter be deemed to refer to the Credit Agreement as modified by this Fifth
Amendment.
6.3 Counterparts. This Fifth 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 an executed counterpart of the signature page of this
Fifth Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
6.4 Entire Agreement. This Fifth Amendment and the documents referred to
herein represent the entire understanding of the parties hereto regarding the
subject matter hereof and supersede all prior and contemporaneous oral and
written agreements of the parties hereto with respect to the subject matter
hereof. This Fifth Amendment is a Loan Document executed under the Credit
Agreement.
6.5 Governing Law. THIS FIFTH AMENDMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to
be duly executed effective as of the date first written above.
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BORROWER: DUNE ENERGY, INC.
By:
-------------------------------------
Xxxx Xxxxxxx, Chief Financial Officer
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ADMINISTRATIVE AGENT & LENDER: STANDARD BANK PLC
By:_____________________________________
Name:___________________________________
Title:__________________________________
By:_____________________________________
Name:___________________________________
Title:__________________________________
LENDER: DRAWBRIDGE SPECIAL OPPORTUNITIES
FUND, L.P.
By:_____________________________________
Name:___________________________________
Title:
By:_____________________________________
Name:___________________________________
Title:__________________________________
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LENDER: X.X. XXXXX SPECIAL OPPORTUNITIES
FUND, L.P.
By:_____________________________________
Name:___________________________________
Title:__________________________________
By:_____________________________________
Name:___________________________________
Title:__________________________________
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GUARANTORS: DUNE OPERATING COMPANY
By:
-------------------------------------
Xxxx Xxxxxxx, Chief Financial Officer
VAQUERO PARTNERS LLC
By:
-------------------------------------
Xxxx Xxxxxx, Vice President
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ITERA CONFIRMATION
This Itera Confirmation is attached to and is a part of the Fifth
Amendment to Credit Agreement dated as of August 31, 2006 among Dune Energy,
Inc. Standard Bank PLC as administrative agent and the lenders party thereto,
and this confirmation adopts the definitions used therein. Itera Holdings BV
("Itera") hereby expressly (i) acknowledge the terms of this Fifth Amendment,
(ii) confirms that the Term Loan Agreement dated as of November 17, 2005 between
Dune Energy, Inc. and Itera and the Convertible Subordinated Note issued in
connection therewith are not in default and are in full force and effect, (iii)
represents that it is the sole holder of 100% of the Subordinated Debt.
ITERA HOLDINGS BV
By _________________________
Name:
Title:
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