SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.3
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter referred to
as the “Amendment”) is made and entered into as of June 17, 2010, but effective upon the date of
satisfaction of all of the conditions set forth in Article III of this Amendment, between
and among, on the one hand, the lenders identified on the signature pages hereof (such lenders,
together with their respective successors and assigns, are referred to hereinafter each
individually as a “Lender” and collectively as the “Lenders”), XXXXX FARGO CAPITAL FINANCE, INC., a
California corporation (fka Xxxxx Fargo Foothill, Inc.), as the book runner, arranger and
administrative agent for the Lenders (“Agent”), and, on the other hand, ENERGY CORPORATION OF
AMERICA, a West Virginia corporation (“Borrower”).
RECITALS
A. Agent, the lenders signatory thereto as the Lenders, and the Borrower entered into that
certain Second Amended and Restated Credit Agreement dated as of September 7, 2007, as amended by
First Amendment to Second Amended and Restated Credit Agreement dated as of August 4, 2008, among
Agent, the lenders signatory thereto as the Lenders, and the Borrower (the “Credit Agreement”).
B. ECA Marcellus Trust I was formed by Borrower on March 10, 2010, as a Delaware statutory
trust (the “Trust”) for the purpose of owning royalty interests in (1) 14 producing horizontal
natural gas xxxxx producing from the Marcellus Shale formation and located in Xxxxxx County,
Pennsylvania and (2) 52 horizontal natural gas development xxxxx to be drilled to the Marcellus
Shale formation within “Area of Mutual Interest” composed of approximately 9,300 acres held by
Borrower in Xxxxxx County, Pennsylvania (the “Royalty Interests”).
C. The Trust intends to publicly offer up to 8,802,500 common units in the Trust (the
“Offering”) and in connection therewith the Trust and the Borrower on April 1, 2010, filed with the
Securities and Exchange Commission a Registration on Form S-1 under the Securities Act of 1933, as
amended (the “Registration Statement”).
D. Borrower
intends to remit the proceeds from the Offering an amount not less
than $125,000,000.00 (the “Pay Down”) to the Agent for application to the Obligations in accordance with
the terms of a letter agreement among Borrower, Agent and Lenders.
E. As a result of the Pay Down, the Obligations owing to Bank of America, N.A. (“Bank of
America”) will be paid in full and Bank of America will no longer be a party to the Credit
Agreement nor have any rights or obligations thereunder.
F. Simultaneously with the Pay Down, Borrower has requested the Agent and the Lenders to
reduce the total Revolver Commitment for the Lenders to $125,000,000.00, and to reduce the total
Term Loan Commitment for the Lenders to $75,000,000.00.
G. Borrower has requested the Agent and the Lenders to consent to certain transactions to be
undertaken by Borrower and Eastern Marketing Corporation, a West Virginia corporation and a wholly
owned subsidiary of Borrower (the “Subsidiary”) in connection with the consummation of the
transactions contemplated by the Registration Statement including, without limitation, (1) the
conveyance by Borrower and the Subsidiary to the Trust of the Royalty Interests, (2) the creation
by the Subsidiary of certain indebtedness in an aggregate amount of approximately $161,000,000.00
owing to Borrower to be evidenced by a demand note in the principal amount of approximately
$161,000,000.00 executed by the Subsidiary and payable to the order of Borrower, (3) the hedging of
approximately 50% of the estimated
Second Amendment to Second Amended and Restated Credit Agreement — Page 1
natural gas production attributable to the Royalty Interests for the period from April 1, 2010
through March 31, 2014 with a combination of floors and swaps, and the conveyance of the floor
contracts by Borrower to the Trust, and the creation of a back-to-back swap agreement between the
Borrower and the Trust, (4) the advancement of up to $1,000,000.00 to the Trust to enable the Trust
to pay its liabilities as they come due, to the extent the Trust has not yet received sufficient
distributions related to the Royalty Interests to pay such liabilities in a timely manner, and (5)
the creation by Borrower of certain liens, which are non-recourse to Borrower, in favor of the
Trust to secure certain drilling obligations of Borrower to the Trust and the payment of royalties
(the “Proposed Transactions”).
H. Agent and Lenders are willing (1) to execute and deliver to Borrower a written consent, in
form and substance acceptable to Agent and Lenders, consenting to the Proposed Transactions, and
(2) to permanently reduce the Total Commitment to the amounts requested by Borrower subject, among
other things, to Borrower’s execution and delivery of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
Definitions
Section 1.01. Recitals. The foregoing recitals are hereby incorporated into and made
a part of this Amendment for all purposes.
Section 1.02. Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meaning as in the Credit Agreement, as amended
hereby.
ARTICLE II
Amendments and Other Agreements
Amendments and Other Agreements
Section 2.01. Amendment to Section 1.1 of the Credit Agreement.
(a) The terms “Additional Term Loan” and “Additional Term Loan Amount” are deleted from
Section 1.1 of the Credit Agreement in their entirety.
(b) The term “Applicable Margin” in Section 1.1 of the Credit Agreement is
amended and restated in its entirety to hereafter read as follows:
“‘Applicable Margin’ means, on any day and with respect to any
Obligation, the applicable per annum percentage set forth in the
table shown below, based on the average monthly Revolver Usage for
the immediately preceding month:
| Average Monthly | Base Rate Loan | LIBOR Rate Loan | ||
| Revolver Usage | Margin | Margin | ||
| 0% to 40% | 0.75% | 2.50% | ||
| 40% to 75% | 1.00% | 2.75% | ||
| 75% to 100% | 1.25% | 3.00%” |
Second Amendment to Second Amended and Restated Credit Agreement — Page 2
(c) The term “Applicable Prepayment Premium” in Section 1.1 of the Credit
Agreement is amended and restated in its entirety to hereafter read as follows:
“‘Applicable Prepayment Premium’ means, as of any date of
determination, an amount equal to (a) for the period of time from
and including the date of this Agreement up to and including July
10, 2011, one percent (1.0%) times the Maximum Loan Amount, (b)
during the period of time from and including July 11, 2011, up to,
and including, July 10, 2012, one half of one percent (0.50%) times
the Maximum Loan Amount, and (c) during the period of time from and
including July 11, 2012, up to and including July 10, 2013,
one-quarter of one percent (0.25%) times the Maximum Loan Amount.”
(d) The term “Bank Product Provider” in Section 1.1 of the Credit Agreement is
amended and restated in its entirety to hereafter read as follows:
“‘Bank Product Provider’ means (a) Xxxxx Fargo or any of its
Affiliates and (b) U.S. Bank National Association with respect to
and only to the extent of Hedging Agreements in connection with rate
swaps, rate caps, rate floors, rate collars and other rate
protection agreements between Borrower and U.S. Bank National
Association for which Agent has received such information in writing
as U.S. Bank National Association has agreed to deliver to Agent or
as otherwise may be reasonably requested by Agent.”
(e) The term “Current Assets” is added to and made a part of Section 1.1 of the
Credit Agreement and shall read as follows:
“‘Current Assets’ means, for the Borrower and its Subsidiaries as of
the date of calculation, (a) all assets of Borrower and its
Subsidiaries that, in conformity with GAAP, would be included as
assets on a consolidated balance sheet of Borrower and its
Subsidiaries, but excluding any non-cash gains for any Hedging
Agreements resulting from the requirements of FASB 133 as of such
date, plus (b) in the case of Borrower, the amount of Availability
as of such date.”
(f) The term “Current Liabilities” is added to and made a part of Section 1.1
of the Credit Agreement and shall read as follows:
“‘Current Liabilities’ means, for the Borrower and its Subsidiaries
as of the date of calculation, all liabilities of Borrower and its
Subsidiaries that in accordance with GAAP, would be classified as
current liabilities on a consolidated balance sheet of Borrower and
its Subsidiaries, excluding (a) the current portion of any
Obligation maturities, (b) the current portion of any Deferred
Revenue, (c) the current portion of any Deferred Gains, and (d)
non-cash losses or charges of any Hedging Agreements resulting from
the requirements of FASB 133.”
(g) The term “Current Ratio” is added to and made a part of Section 1.1 of the
Credit Agreement and shall read as follows:
Second Amendment to Second Amended and Restated Credit Agreement — Page 3
“‘Current Ratio’ means, for the Borrower and its Subsidiaries as of
the date of calculation, the ratio of Current Assets to Current
Liabilities of Borrower of its Subsidiaries.”
(h) The term “Deferred Gains” is added to and made a part of Section 1.1 of the
Credit Agreement and shall read as follows:
“‘Deferred Gains’ means an item that will initially be recorded as a
liability, but is expected to become realized gain over time and/or
through the normal operations of the business. For the Borrower and
its Subsidiaries this includes, but is not limited to, (a) in 2005,
the Company consummated the Black Stone Term Royalty Conveyance for
a term of 20 years. The proceeds, net of certain costs and expenses
and the carrying value of assets sold, were classified as a deferred
gain and are being recognized as production occurs, and (b) the net
proceeds from ECA Marcellus Trust I were classified as a deferred
gain and are being recognized as production occurs over a 20 year
period.”
(i) The term “Deferred Revenue” is added to and made a part of Section 1.1 of
the Credit Agreement and shall read as follows:
“‘Deferred Revenue’ means an item that will initially be recorded as
a liability, but is expected to become revenue over time and/or
through the normal operations of the business. For the Borrower and
its Subsidiaries this includes, but is not limited to, the deferred
revenue related to the Eastern American Natural Gas Trust.”
(j) The term “Fee Letter” in Section 1.1 of the Credit Agreement is amended and
restated in its entirety to hereafter read as follows:
“‘Fee Letter’ means that certain fee letter dated of even date with
the Second Amendment, between Borrower and Agent, in form and
substance satisfactory to Agent.”
(k) The term “First Amendment” is added to and made a part of Section 1.1 of
the Credit Agreement and shall read as follows:
“‘First Amendment’ means First Amendment to Second Amended and
Restated Credit Agreement dated as of August 4, 2008 among Agent,
the lenders signatory thereto as the Lenders, and Borrower.”
(l) The term “Foothill” in Section 1.1 of the Credit Agreement is amended and
restated in its entirety to hereafter read as follows:
“‘Foothill’ means Xxxxx Fargo Capital Finance, Inc., a California
corporation (fka Xxxxx Fargo Foothill, Inc.).”
(m) The terms “Initial Term Loan” and “Initial Term Loan Amount” are deleted from
Section 1.1 of the Credit Agreement in their entirety.
Second Amendment to Second Amended and Restated Credit Agreement — Page 4
(n) The term “Maximum Loan Amount” in Section 1.1 of the Credit Agreement is
amended and restated in its entirety to read as follows:
“‘Maximum Loan Amount’ means $200,000,000.00.”
(o) The term “Maximum Revolver Amount” in Section 1.1 of the Credit Agreement
is amended and restated in its entirety to read as follows:
“‘Maximum Revolver Amount’ means $125,000,000.00 as such amount may
be reduced from time to time in accordance with Section
6.23.”
(p) The term “Permitted Investments” in Section 1.1 of the Credit Agreement is
amended by adding (h) and shall read as follows:
“(h) the advancement of up to $1,000,000.00 to ECA Marcellus Trust I
to enable the Trust to pay its liabilities as they become due, to
the extent the Trust has not yet received sufficient distributions
related to the Royalty Interests to pay such liabilities in a timely
manner.”
(q) Subparagraph (d) of the term “Pro Rata Share” in Section 1.1 of the Credit
Agreement is amended and restated in its entirety to hereafter read as follows:
“(d) with respect to all other matters as to a particular Lender
(including the indemnification obligations arising under Section
16.7), the percentage obtained by dividing (i) such Lender’s
Revolver Commitment plus the outstanding principal amount of such
Lender’s portion of the Term Loan, by (ii) the aggregate amount of
Total Revolver Commitments of all Lenders plus the outstanding
principal amount of the Term Loan; provided,
however, that, in the event the Revolver Commitments have
been terminated or reduced to zero, the Pro Rata Share under this
clause shall be the percentage obtained by dividing (A) the
outstanding principal amount of such Lender’s Advances plus such
Lender’s ratable portion of the Risk Participation Liability with
respect to outstanding Letters of Credit plus the outstanding
principal amount of such Lender’s portion of the Term Loan, by (B)
the outstanding principal amount of all Advances plus the aggregate
amount of the Risk Participation Liability with respect to the
outstanding Letters of Credit plus the principal amount of the Term
Loan.”
(r) The term “Second Amendment” is added to and made a part of Section 1.1 of
the Credit Agreement and shall read as follows:
“‘Second Amendment’ means Second Amendment to Second Amended and
Restated Credit Agreement dated as of June 17, 2010, among Agent,
Lenders, and Borrower.”
(s) The term “Term Loan” in Section 1.1 of the Credit Agreement is amended and
restated in its entirety to hereafter read as follows:
“‘Term Loan’ means the term loans previously made to the Borrower
pursuant to the Credit Agreement.”
Second Amendment to Second Amended and Restated Credit Agreement — Page 5
(t) The term “Term Loan Amount” in Section 1.1 of the Credit Agreement is
amended and restated in its entirety to hereafter read as follows.
“‘Term Loan Amount’ means $75,000,000.00.”
Section 2.02. Amendments to Section 2.2 of the Credit Agreement. Section 2.2
of the Credit Agreement is amended and restated in its entirety to hereafter read as follows:
“2.2 Term Loan. Borrower hereby represents and warrants that Lenders
have made the Term Loan to Borrower for the purposes set forth in Section
6.20 hereof. Borrower represents and warrants that, as of the date of the
Second Amendment becomes effective and after giving effect to the prepayment of
principal to the Lenders with respect to the Obligations required by the Second
Amendment, the unpaid principal amount of the Term Loan is $75,000,000.00 and such
amount is unconditionally owed by Borrower to Lenders without offset, defense or
counterclaim of any kind, nature or description whatsoever. The Term Loan shall be
repaid on the following dates and in the following amounts:
| Date | Installment Amount | |||
July 10, 2011 |
$ | 1,000,000.00 | ||
July 10, 2012 |
$ | 1,000,000.00 | ||
The outstanding unpaid principal balance and all accrued and unpaid interest under
the Term Loan shall be due and payable on the earliest of (a) the Maturity Date, (b)
the date of the acceleration of the Term Loan in accordance with the terms hereof,
and (c) the date of termination of this Agreement, whether by its terms, by
prepayment, or by acceleration. All amounts outstanding under the Term Loan shall
constitute Obligations.”
Section 2.03. Amendment to Section 2.6(a) of the Credit Agreement. Section
2.6(a) of the Credit Agreement is amended and restated in its entirety to hereafter read as
follows:
“(a) Interest Rates. Except as provided in clause (c) below, all
Obligations (except for undrawn Letters of Credit and except for Bank Product
Obligations) that have been charged to the Loan Account pursuant to the terms hereof
shall bear interest on the Daily Balance thereof as follows: Section 2.04. if the
relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR
Rate plus the Applicable Margin, Section 2.05. if the relevant Obligation is a Base
Rate Loan, at a per annum rate equal to the Base Rate plus the Applicable Margin,
and (iii) otherwise, at a per annum rate equal to the Base Rate plus the Applicable
Rate Margin for Base Rate Loans; provided, however, that the
outstanding principal amount of the Term Loan shall bear interest as follows: (x)
if a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus 2.50%, and
(y) if a Base Rate Loan, at a per annum rate equal to the Base
Rate plus 0.75%.”
Second Amendment to Second Amended and Restated Credit Agreement — Page 6
Section 2.04. Amendment to Section 2.16(b) and (c) of the Credit Agreement.
Section 2.16(b)and Section 2.16(c) of the Credit Agreement are amended and
restated in their entirety to hereafter read as follows:
“(b) Annual Scheduled Determinations of the Borrowing Base. Promptly
after July 1 of each calendar year (commencing July 1, 2008), and in any event prior
to September 1 of each calendar year, the Borrower shall furnish to Lenders a report
in form and substance satisfactory to Lenders, prepared by an Approved Engineer,
which report shall be dated as of July 1 of such calendar year and shall set forth
the oil and gas reserves attributable to the Borrowing Base Properties, and a
projection of the rate of production and net operating income with respect thereto,
as of such date, together with additional data concerning pricing, hedging,
operating costs, quantities and purchasers of production, and other information and
engineering and geological data as the Agent may reasonably request. Within thirty
(30) days after receipt of such report and information and its review and approval
by Agent, Agent shall make a recommendation of the amount of credit available to
Borrower hereunder (a “Recommended Borrowing Base Determination”). Agent and the
Required Lenders shall approve or reject Agent’s Recommended Borrowing Base
Determination within twenty (20) Business Days of Agent’s notification of the
Recommended Borrowing Base Determination. If Agent and the Required Lenders fail to
approve any such determination of the Borrowing Base made by Agent hereunder in such
twenty (20)-Business Day period, then Agent shall poll all Lenders, and the
Borrowing Base shall be set at the highest amount on which Agent and the Required
Lenders can agree, it being understood that a Lender is deemed to have agreed to any
and all amounts that are lower than the amount actually determined by such Lender to
be the appropriate value of the Borrowing Base. Upon approval or deemed approval by
Agent and the Required Lenders, or all Lenders, as the case may be, of the amount of
credit to be made available to Borrower hereunder, Agent shall, by written notice to
Borrower and Lenders, designate the new Borrowing Base available to Borrower.
Notwithstanding anything contained herein to the contrary, no Lender shall be
obligated to increase its Commitment without its consent.
“(c) Semi-Annual Scheduled Determination of the Borrowing Base. In
addition, promptly after January 1 of each calendar year (commencing January 1,
2008), and in any event prior to March 1st of each calendar year, the Borrower shall
furnish to Lenders a report in form and substance satisfactory to Lenders, prepared
(i) prior to the occurrence of an Event of Default, by the Borrower’s petroleum
engineers and (ii) after the occurrence of an Event of Default, by an Approved
Engineer, and, in either case, reviewed and approved by Agent, which report shall be
dated as of January 1 of such calendar year and shall set forth the oil and gas
reserves attributable to the Borrowing Base Properties, and a projection of the rate
of production and net operating income with respect thereto, as of such date,
together with additional data concerning pricing, hedging, operating costs,
quantities and purchasers of production, and other information and engineering and
geological data as the Agent may reasonably request. Within thirty (30) days after
receipt of such report and information and its review and approval by Agent, Agent
shall make a recommendation of the amount of credit available to Borrower hereunder
(a “Recommended Borrowing Base Determination”). Agent and the Required Lenders
shall approve or reject Agent’s Recommended Borrowing Base Determination within
twenty (20) Business Days of Agent’s notification of the Recommended Borrowing Base
Determination. If Agent and the Required Lenders fail to approve any such
determination of the Borrowing Base made by Agent hereunder in such twenty
(20)-Business Day period, then Agent shall poll all Lenders, and the
Second Amendment to Second Amended and Restated Credit Agreement — Page 7
Borrowing Base shall be set at the highest amount on which Agent and the
Required Lenders can agree, it being understood that a Lender is deemed to have
agreed to any and all amounts that are lower than the amount actually determined by
such Lender to be the appropriate value of the Borrowing Base. Upon approval or
deemed approval by Agent and the Required Lenders, or all Lenders, as the case may
be, of the amount of credit to be made available to Borrower hereunder, Agent shall,
by written notice to Borrower and Lenders, designate the new Borrowing Base
available to Borrower. Notwithstanding anything contained herein to the contrary,
no Lender shall be obligated to increase its Commitment without its consent.
Section 2.05. Amendment to Section 3.4 of the Credit Agreement. Section 3.4
of the Credit Agreement is amended and restated in its entirety to hereafter read as follows:
“3.4 Term. This Agreement shall become effective upon the execution
and delivery hereof by Borrower, Agent and Lenders and shall continue in full force
and effect for a term ending on July 10, 2013 (the “Maturity Date”). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders, shall
have the right to terminate its obligations under this Agreement immediately and
without notice upon the occurrence and during the continuation of an Event of
Default.
Section 2.06. Amendment to Section 7.20(a) of the Credit Agreement. A subparagraph
(iii) is added to and made a part of Section 7.20(a) of the Credit Agreement and shall read
as follows:
“(iii) Current Ratio. A Current Ratio as of the last day each fiscal
quarter of Borrower commencing with the fiscal quarter ending June 30, 2010, of at
least 1.00 to 1.00.”
Section 2.07. Amendment to Section 12 of the Credit Agreement. Section 12 of
the Credit Agreement is amended and restated in its entirety to hereafter read as follows:
“NOTICES. Unless otherwise provided in this Agreement, all notices or demands
by Borrower or Agent to the other relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as Borrower or Agent, as applicable, may designate to each other in
accordance herewith), or telefacsimile to Borrower in care of Borrower or to Agent,
as the case may be, at its address set forth below:
If to Borrower:
|
Energy Corporation of America | |
| 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxxxx, Xxxxxxxx 00000 | ||
| Attn: Xxxxxxx X. Xxxxxxxx | ||
| Fax No. 000.000.0000 | ||
with copies to:
|
Xxxxxxx & Xxxxxxx, LLP | |
| 000 Xxxxxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxxxxxxxx, Xxxx Xxxxxxxx 00000-0000 | ||
| Attn: Xxxxx X. Xxxx, Esq. | ||
| Fax No. 000.000.0000 |
Second Amendment to Second Amended and Restated Credit Agreement — Page 8
If to Agent:
|
XXXXX FARGO CAPITAL FINANCE, INC. | |
| 0000 Xxxxxxxx Xxxxxx | ||
| Xxxxx 0000 Xxxx | ||
| Xxxxx Xxxxxx, Xxxxxxxxxx 00000 | ||
| Attn: Business Finance Division Manager | ||
| Fax No. 000.000.0000 | ||
with copies to:
|
Xxxxx Fargo Capital Finance, Inc. | |
| 0000 Xxxxxxxxx Xxxx, Xxxxx 0000 | ||
| Xxxxxxx, Xxxxxxx 00000 | ||
| Attn: Business Division Manager | ||
| Fax No. 000.000.0000 | ||
with copies to:
|
XxXxxxx, Xxxxxxxx & Xxxxxxxx, P.C. | |
| 0000 X. Xxxxxxx, Xxxxx 0000 | ||
| Xxxxxx, Xxxxx 00000 | ||
| Attn: Xxxxxxx X. Xxxx, Esq. | ||
| Fax No. 000.000.0000 |
Agent and Borrower may change the address at which they are to receive notices hereunder, by notice
in writing in the foregoing manner given to the other party. All notices or demands sent in
accordance with this Section 12, other than notices by Agent in connection with enforcement
rights against the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail.
Borrower acknowledges and agrees that notices sent by the Lender Group in connection with the
exercise of enforcement rights against Collateral under the provisions of the Code shall be deemed
sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
Section 2.08. Amendment to Section 16.20 of the Credit Agreement. Section
16.20 of the Credit Agreement is amended and restated in its entirety to hereafter read as
follows:
“16.20 Legal Representation of Agent. In connection with the negotiation,
drafting, and execution of this Agreement and the other Loan Documents, or in connection
with future legal representation relating to loan administration, amendments, modifications,
waivers, or enforcement of remedies, XxXxxxx Xxxxxxxx & Xxxxxxxx, P.C. (“XxXxxxx Xxxxxxxx”)
only has represented and only shall represent Foothill in its capacity as Agent and as a
Lender. Each other Lender hereby acknowledges that XxXxxxx Xxxxxxxx does not represent it
in connection with any such matters.”
Section 2.09. Amendment to Schedules to the Credit Agreement. Schedules C-1, 5.1(a)
and 5.28 to the Credit Agreement are amended and restated in their entirety to read as set forth as
attached to the Second Amendment.
ARTICLE III
Conditions
Conditions
Conditions Precedent. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent, unless specifically waived by Agent:
Second Amendment to Second Amended and Restated Credit Agreement — Page 9
(a) Agent shall have received this Amendment, duly executed by Borrower and each
Lender;
(b) Borrower shall have delivered evidence to Agent that all necessary corporate
authorizations and proceedings were taken by Borrower in connection with the transactions
contemplated by this Amendment;
(c) Borrower shall have delivered evidence to Agent that the Registration Statement has
been declared effective by the United States Securities and Exchange Commission, and the
transactions contemplated thereby shall have been consummated in accordance with the terms
thereof.
(d) Borrower shall have delivered to Agent, the Fee Letter duly executed by Borrower,
in form and substance satisfactory to Agent;
(e) The representations and warranties contained herein, in the Credit Agreement, as
amended hereby, and in each other Loan Document shall be true and correct as of the date
hereof, as if made on the date hereof, except to the extent such representations and
warranties relate to an earlier date;
(f) No Event of Default shall have occurred and be continuing and no Default shall
exist;
(g) Borrower shall have delivered or caused to be delivered such other documents,
agreements and instruments as Agent may require to effect the terms and provisions of this
Amendment;
(h) Agent shall have received, in good and immediately available funds, proceeds from
the Offering in an amount of at least $125,000,000.00 which shall be applied by Agent to the
Obligations in accordance with the terms of a letter agreement dated of even date with this
Amendment executed by Agent, Borrower and the Lenders (the “Pay Down Disbursement Letter”);
(i) Agent shall have received the Pay Down Disbursement Letter, in form and substance
satisfactory to the Agent, duly executed by Borrower, Agent and the Lenders; and
(j) Agent shall have received evidence satisfactory to Agent that the Obligations owing
to Bank of America have been paid in full and that Bank of America has acknowledged in
writing that its rights and obligations under the Credit Agreement are terminated.
ARTICLE IV
Ratifications, Representations and Warranties
Ratifications, Representations and Warranties
Section 4.01. Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement
and, except as expressly modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in full
force and effect. Borrower agrees that the Credit Agreement, as amended hereby, and the other Loan
Documents shall continue to be legal, valid, binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms.
Second Amendment to Second Amended and Restated Credit Agreement — Page 10
Section 4.02. Renewal and Extension of Security Interests and Liens. Borrower hereby
renews and affirms the liens and security interests created and granted in the Loan Documents.
Borrower agrees that this Amendment shall in no manner affect or impair the liens and security
interests securing the Obligations, and that such liens and security interests shall not in any
manner be waived, the purposes of this Amendment being to modify the Credit Agreement as herein
provided, and to carry forward all liens and security interests securing same, which are
acknowledged by Borrower to be valid and subsisting.
Section 4.03. Representations and Warranties. Borrower hereby represents and warrants
to Agent as follows:
(a) the execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower and do not and will not conflict with or
violate any provision of any applicable law, the Articles of Incorporation or Bylaws of
Borrower or any agreement, document, judgment, license, order or permit applicable to or
binding upon the Borrower or its Property; no consent, approval, authorization or order of
and no notice to or filing with, any court or governmental authority or third person is
required in connection with the execution, delivery or performance of this Amendment or to
consummate the transactions contemplated hereby;
(b) the representations and warranties contained in the Credit Agreement, as amended
hereby, and in each of the other Loan Documents are true and correct on and as of the date
hereof as though made on and as of the date hereof, except to the extent such
representations and warranties relate to an earlier date;
(c) Borrower is in full compliance with all covenants and agreements contained in the
Credit Agreement, as amended hereby, and in each of the other Loan Documents; and
(d) Except as has otherwise been disclosed to Agent, Borrower has not amended its
Articles of Incorporation or Bylaws or other organizational documents since the date of the
execution of the Credit Agreement.
ARTICLE V
Miscellaneous
Miscellaneous
Section 5.01. Survival of Representations and Warranties. All representations and
warranties made in the Credit Agreement and the other Loan Documents, including, without
limitation, this Amendment, shall survive the execution and delivery of this Amendment, and no
investigation by Agent or any closing shall affect the representations and warranties or the right
of Agent to rely upon them.
Section 5.02. Reference to Credit Agreement. Each of the Loan Documents, including
the Credit Agreement and any and all other agreements, documents or instruments now or hereafter
executed and delivered pursuant to the terms of the Credit Agreement, as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Credit Agreement shall mean a reference
to the Credit Agreement, as amended hereby.
Section 5.03. Expenses of Agent. As provided in the Credit Agreement, Borrower agrees
to pay on demand all reasonable costs and expenses incurred by Agent in connection with the
preparation, negotiation and execution of this Amendment and any and all amendments, modifications,
and supplements hereto, including, without limitation, the reasonable costs and fees of Agent’s
legal counsel, and all reasonable costs and expenses incurred by Agent in connection with the
enforcement or
Second Amendment to Second Amended and Restated Credit Agreement — Page 11
preservation of any rights under the Credit Agreement, as amended hereby, or any other Loan
Document, including, without limitation, the reasonable costs and fees of Agent’s legal counsel.
Section 5.04. RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE
ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO
SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR THE LENDERS. BORROWER
HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE LENDERS, THEIR
PREDECESSORS, AGENTS, ATTORNEYS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL,
AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE AGAINST THE AGENT AND THE LENDERS, THEIR
PREDECESSORS, AGENTS, ATTORNEYS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF
WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE,
AND ARISING FROM ANY OF THE OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR,
CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN
DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.
Section 5.05. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder
of this Amendment and the effect thereof shall be confined to the provision so held to be invalid
or unenforceable.
Section 5.06. APPLICABLE LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO
BE PERFORMABLE IN ATLANTA, GEORGIA, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF GEORGIA.
Section 5.07. Successors and Assigns. This Amendment is binding upon and shall inure
to the benefit of Agent, the Lenders and the Borrower and their respective successors and assigns,
except the Borrower may not assign or transfer any of its rights or obligations hereunder without
the prior written consent of Agent.
Section 5.08. Counterparts/Facsimile. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original, but all of which
when taken together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Amendment by facsimile shall be equally as effective as delivery of an original
executed counterpart of this Amendment. Any party delivering an executed counterpart of this
Amendment by facsimile shall also deliver an original executed counterpart of this Amendment but
the failure to do so shall not affect the validity, enforceability and binding effect of this
Amendment.
Second Amendment to Second Amended and Restated Credit Agreement — Page 12
Section 5.09. Effect of Waiver. No consent or waiver, express or implied, by Agent to
or for any breach of or deviation from any covenant or condition of the Credit Agreement shall be
deemed a consent or waiver to or of any other breach of the same or any other covenant, condition
or duty.
Section 5.10. Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of this Amendment.
Section 5.11. FINAL AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED HEREBY, REPRESENTS
THE FINAL AGREEMENT AMONG THE PARTIES RELATED TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Remainder of Page Intentionally Left Blank]
Second Amendment to Second Amended and Restated Credit Agreement — Page 13
IN WITNESS WHEREOF, the Borrower, Agent and the Lenders have caused this Amendment to be
executed as of the date first written above by their duly authorized officers.
| BORROWER ENERGY CORPORATION OF AMERICA |
||||
| By: | /s/ D.C. Supcoe | |||
| Name: | D.C. Supcoe | |||
| Title: | Sr. Vice President | |||
| AGENT AND LENDERS XXXXX FARGO CAPITAL FINANCE, INC., as Agent and Lender |
||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | VP | |||
| U.S. BANK NATIONAL ASSOCIATION, as Lender |
||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxxx | |||
| Title: | Vice President | |||
Second Amendment to Second Amended and Restated Credit Agreement
SCHEDULE C-1
| Revolver | Term Loan | |||||||||||
| Lender | Commitment | Commitment | Total Commitment | |||||||||
Xxxxx Fargo Capital Finance, Inc. |
$ | 75,000,000 | $ | 50,000,000 | $ | 125,000,000 | ||||||
U.S. Bank National Association |
$ | 50,000,000 | $ | 25,000,000 | $ | 75,000,000 | ||||||
All Lenders |
$ | 125,000,000 | $ | 75,000,000 | $ | 200,000,000 | ||||||
Second Amendment to Second Amended and Restated Credit Agreement
SCHEDULE 5.1(a)
BORROWING BASE PROPERTIES
Second Amendment to Second Amended and Restated Credit Agreement
SCHEDULE 5.28
HEDGING AGREEMENTS
Second Amendment to Second Amended and Restated Credit Agreement
