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EXHIBIT 10.35
DRAFT
August 13, 1998
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated
as of August ___, 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 ___, 1998 among the Borrower, the
Lenders and the Agent.
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"Indenture" shall mean that certain Indenture dated as of
August ____, 1998 between Xxxxxxx Exploration, as the issuer of the
Subordinated Debt, and Chase Bank of Texas, National Association, as
the trustee.
"Securities Purchase Agreement" shall mean that certain
Securities Purchase Agreement dated August ___, 1998 among Xxxxxxx
Exploration, the purchasers named therein and ___, as agent for such
purchasers regarding $50,000,000 Senior Subordinated Secured Notes due
2003.
"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 agreements in form and
substance satisfactory to the Lenders.
"Subordination Agreement" shall mean that certain
Intercreditor and Subordination Agreement dated as of August _____,
1998, and from time to time amended, ___, ___, 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, (ii) $65,000,000, or (iii) 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 redetermination 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 15 days after such First
Borrowing Base determination if such deficiency is ten
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percent (10%) or more of the Borrowing Base and (ii) if a Borrowing
Base deficiency remains after prepaying all of the Loans ause 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."
(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, and the Indenture), 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 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 are subordinated on terms satisfactory to the Agent
consistent with the Subordination Agreement."
(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
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(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).
(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 and the documents described in
Section 4.01(a) through (d) of the Indenture) 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."
Section 3. Conditions Precedent. This Amendment shall ome 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;
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(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) A security agreement executed by Xxxxxxx Holdings II, LLC
in favor of the Agent granting a first-priority security interest in
all of Xxxxxxx Holdings II, LLC's right, title and interest in and to
the partnership interests in Borrower;
(h) A security agreement executed by Xxxxxxx Holdings I, LLC
in favor of the Agent granting a first priority security interest in
all of Xxxxxxx Holdings I, LLC's right, title and interest in and to
the partnership interests in Borrower;
(i) such other documents as Agent or its counsel may
reasonably request.
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 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 Xxxxx xx Xxxxx xxx xxx Xxxxxx
Xxxxxx of America.
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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.
BORROWER: XXXXXXX OIL & GAS, L.P.
By: Xxxxxxx, Inc., its General Partner
By:
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Xxxxxx X. Xxxxxxx
Vice President & Secretary
LENDER AND AGENT: BANK OF MONTREAL
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Director, U.S. Corporate Banking
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