EXHIBIT 10.2
SECOND AMENDMENT TO
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(the "Amendment") is made and entered into as of the 9th day of June, 1999 (the
"Effective Date"), by and among CROSS TIMBERS OIL COMPANY, a Delaware
corporation ("Company"), the Banks that are signatories hereto (collectively,
the "Banks"), XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent
for Banks, NATIONSBANK, N.A. D/B/A BANK OF AMERICA, N.A., as Syndication Agent
for Banks and CHASE BANK OF TEXAS, N.A., as Documentation Agent for Banks.
W I T N E S S E T H:
WHEREAS, Company, Xxxxxx Guaranty Trust Company of New York, as
Administrative Agent for Banks, NationsBank, N.A. d/b/a Bank of America N.A., as
Syndication Agent for Banks, Chase Bank of Texas, N.A., as Documentation Agent
for Banks, and Banks have entered into that certain Amended and Restated
Revolving Credit Agreement dated as of November 16, 1998, which amends and
restates in its entirety that certain Revolving Credit Agreement dated August
28, 1998, which amends and restates in its entirety that certain Revolving
Credit Agreement dated as of April 17, 1998, as amended (as amended by the
foregoing, as amended by that certain First Amendment to Amended and Restated
Revolving Credit Agreement dated as of May 17, 1999 among Company and Banks and
as in effect as of the Effective Date, as amended hereby and as amended from
time to time hereafter, the "Loan Agreement").
WHEREAS, the parties hereto desire to amend the Loan Agreement as set forth
herein.
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, agree as follows:
ARTICLE I
Definitions and References
1.01 Unless otherwise specifically defined herein, each term used herein
which is defined in the Loan Agreement as in effect immediately prior to the
Effective Date shall have the meaning assigned to such term in the Loan
Agreement as so in effect. Each reference to "hereof," "hereunder," "herein"
and "hereby" and each other similar reference and each reference to "this Loan
Agreement" and each other similar reference contained in the Loan Agreement
shall from and after the Effective Date refer to the Loan Agreement as amended
hereby.
ARTICLE II
Amendments
2.01. Amendments to Article I; Additional Defined Terms. Effective as of
the Effective Date, Article I of the Loan Agreement is amended by including the
following defined terms:
(i) "Xxxxxx Agreement" shall mean that certain Commitment Letter dated
May 17, 1999 between Company and Xxxxxx Brothers, Inc. pursuant to
which, among other things, Xxxxxx Brothers, Inc. or an affiliated
entity shall acquire a 50% equity interest in Spring Acquisition
Company and thereby fund 50% of the costs required to acquire the
Capital Stock of Spring Holding pursuant to the terms of the Spring
Holding Acquisition Agreement, together with the definitive
agreement that is to be entered into between Company and Xxxxxx
Brothers, Inc. as set forth in such Commitment Letter.
(ii) "Spring Acquisition Company" shall mean a limited liability company
or corporation to be formed pursuant to the terms of the Xxxxxx
Agreement, the members of which shall be Cross Timbers Trading
Company or the Spring Subsidiary, to the extent of a 50% equity
interest, and Xxxxxx Brothers, Inc. or an affiliated entity, to the
extent of a 50% equity interest. The assets and properties of Spring
Acquisition Company shall consist of all of the Capital Stock of
Spring Holding that is to be acquired pursuant to the Spring Holding
Acquisition Agreement.
(iii) "Spring Companies" shall mean Spring Holding, Spring Resources,
Inc., an Oklahoma corporation, and Mega Natural Gas Company, L.L.C.,
an Oklahoma limited liability company.
(iv) "Spring Holding" shall mean Spring Holding Company, a Delaware
corporation.
(v) "Spring Holding Acquisition Agreement" shall mean that certain Stock
Purchase Agreement dated as of May 17, 1999 among the shareholders
of Spring Holding and Company, pursuant to which Company has agreed
to acquire all of the Capital Stock of Spring Holding. Pursuant to
the terms of the Xxxxxx Agreement, Company's rights and interests in
the Spring Holding Acquisition Agreement shall be assigned and
transferred to Spring Acquisition Company.
(vi) "Spring Subsidiary" shall mean a Subsidiary that may be formed by
Company, which Subsidiary would own a 50% equity interest in Spring
Acquisition Company pursuant to the Xxxxxx Agreement.
2.02. Amendment to Article I; Subsidiary. Effective as of the Effective
Date, the defined term "Subsidiary" or "Subsidiaries" as it appears in Article I
of the Loan Agreement is amended by including the following sentence at the
conclusion of such defined term:
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"Notwithstanding the foregoing, so long as none of the assets or
properties of the Spring Companies are included in the Borrowing
Base, Spring Acquisition Company shall not be deemed a Subsidiary,
either at its formation or if Company or any Subsidiary acquires any
additional equity interests in Spring Acquisition Company or Capital
Stock of Spring Holding. If formed, the Spring Subsidiary shall be a
Subsidiary."
2.03. Amendment to Article 6. Effective as of the Effective Date, the
phrase "Company, CT Operating and each Gas Marketing Subsidiary" and the phrase
"Company, CT Operating or any Gas Marketing Subsidiary " wherever such phrases
appear throughout Article 6 of the Loan Agreement are amended in their entirety
and the phrase "Company, CT Operating, Cross Timbers Trading Company, Spring
Subsidiary and each Gas Marketing Subsidiary " or the phrase "Company, CT
Operating, Cross Timbers Trading Company, Spring Subsidiary or any Gas Marketing
Subsidiary " (as the case may be) are substituted therefor.
2.04. Amendment to Sections 8.01(a) and (b). Effective as of the
Effective Date, the phrase "(exclusive of WTW Properties, Inc., CT Operating and
Cross Timbers Trading Company)" wherever such phrase appears throughout Sections
8.01(a) and (b) of the Loan Agreement is amended in its entirety and the phrase
"(exclusive of WTW Properties, Inc. and CT Operating)" is substituted therefor.
2.05. Amendment to Sections 8.01(c). Effective as of the Effective Date,
Section 8.01(c) of the Loan Agreement is amended by including the following
sentence at the conclusion of such Section:
"Contemporaneous with the delivery to the lenders to the Spring Companies,
Company shall deliver to Banks each reserve report evaluating the oil and
gas reserves of the Spring Companies that is required to be delivered to
such lenders pursuant to any credit agreement among the Spring Companies
and such lenders, provided, however, if such credit agreement is no longer
in effect, Company shall deliver to Banks a reserve report evaluating the
oil and gas reserves of the Spring Companies in the same manner and at such
times as a Reserve Report is required to be delivered to Banks according to
Section 5.03 hereof."
2.06. Amendment to Sections 8.01(n). Effective as of the Effective Date,
Section 8.01(n) of the Loan Agreement is amended in its entirety and the
following is substituted therefor:
"(n) Financial Information Concerning the Spring Companies.
Contemporaneous with the delivery to the lenders to the Spring Companies,
Company shall provide to Banks copies of all financial statements of the
Spring Companies that are required to be delivered to such lenders pursuant
to any credit agreement among the Spring Companies and such lenders,
provided, however, if such credit agreement is no longer in effect, Company
shall deliver to Banks such financial statements of the Spring Companies in
the same manner and at such
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times as the financial statements are required to be delivered to Banks
according to Section 8.01(a) and (b) hereof."
2.07. Inclusion of Section 8.01(o). Effective as of the Effective Date,
Section 8.01(o) of the Loan Agreement is amended by including following Section
8.01(o):
"(o) Other Information. All information concerning the April 1997
Indenture, the October 1997 Indenture, the Subordinated Indebtedness and
such other information concerning the business, properties or financial
condition of Company, any Subsidiary, the Proposed Royalty Trust, Spring
Acquisition Company or any of the Spring Companies as Administrative Agent
or any Bank shall reasonably request."
2.08. Amendment to Sections 8.06. Effective as of the Effective Date, the
last sentence of Section 8.06 of the Loan Agreement is amended in its entirety
and the following is substituted therefor:
"Cross Timbers Trading Company, each Gas Marketing Subsidiary and, if
formed, Spring Subsidiary will promptly comply with any and all covenants
and provisions of the Guaranty and all other Loan Papers executed by Cross
Timbers Trading Company, such Gas Marketing Subsidiary or Spring
Subsidiary."
2.09. Amendment to Section 8.19. Effective as of the Effective Date,
Section 8.19 of the Loan Agreement is amended in its entirety and the following
is substituted therefor:
"8.19. Pledge of Properties. In addition to the other rights and
remedies of Banks provided herein, upon the occurrence of a
Borrowing Base Deficiency, Majority Banks may require (i) Company to
grant to Banks as security for the performance by Company of the
Notes and the Obligation of Company hereunder, a valid, enforceable,
perfected, first priority and the only Lien in the Mineral
Properties (subject to Permitted Liens), and in all mineral
production therefrom or attributable thereto and in all related
accounts, wells, pipes, personal property and fixtures, to the
extent of Company's right, title and interest in such Mineral
Properties, (ii) the Gas Marketing Subsidiaries to grant to Banks as
security for the performance by Company of the Notes and Obligation
hereunder, a valid, enforceable, perfected, first priority and only
Lien (subject to Permitted Liens) in the properties, assets,
contracts, contract rights, accounts and accounts receivables of the
Gas Marketing Subsidiaries, (iii) Company and any Subsidiary to
grant to Banks as security for the performance by Company of the
Notes and the Obligation of Company hereunder, a valid, enforceable,
perfected, first priority and the only Lien in the units in the
Proposed Royalty Trust and (iv) Company and any Subsidiary to grant
to Banks as security for the performance by Company of the Notes and
the Obligation of Company hereunder, a valid, enforceable,
perfected, first priority and the only Lien in its equity interests
in Spring Acquisition
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Company and/or the Capital Stock of Spring Holding. Such Liens
described in the foregoing sentence shall be granted pursuant to,
and more fully described in, deeds of trust, mortgages, security
agreements, pledge agreements, assignments of production, financing
statements and other documents (herein called the "Collateral
Documents") which are in form and substance satisfactory to Banks
and which will be executed by Company, the Gas Marketing
Subsidiaries and any other applicable Subsidiary and delivered to
Agents within 30 days following Agents' written notice requesting
Company's, the Gas Marketing Subsidiaries' and any other applicable
Subsidiary's execution and delivery of such Collateral Documents."
2.10. Amendment to Section 9.04. Effective as of the Effective Date,
Section 9.04 of the Loan Agreement is amended in its entirety and the following
is substituted therefor:
"9.04. Limitation on Investments. Company will not, and will not permit
any Subsidiary to, make or have outstanding any Investments in any Person,
except for (i) Investments in CRT Units; (ii) Company's ownership of the
Capital Stock of the Subsidiaries, (iii) Company's ownership of units in
the Proposed Royalty Trust, (iv) Cross Timbers Trading Company's and/or
Spring Subsidiary's 50% equity ownership interest in Spring Acquisition
Company to the extent that it is acquired pursuant to the Xxxxxx Agreement,
(v) Investments in Capital Stock of publicly traded companies engaged
primarily in the oil and gas industry and Non-CT Royalty Trust Units that
are owned or held by Company as of June 9, 1999 (for the purpose of this
Section 9.04, the type of Investments referred to in this sub-clause (v)
shall be called "Energy Stocks") (vi) Investments in Non-CT Royalty Trust
Units to the extent that such Non-CT Royalty Trust Units are not included
in the Investments permitted in this sub-clause (v), provided that the
aggregate cost of all Investments which are outstanding pursuant to this
sub-clause (vi) shall not exceed $15,000,000, (vii) Investments in
additional equity interests in Spring Acquisition Company and/or the
Capital Stock of Spring Holding if (1) such Investments (a) are made
pursuant to the terms of the Xxxxxx Agreement and (b) the consideration
paid for such Investments is the Capital Stock of Company and/or proceeds
directly derived from the public offering of the Capital Stock of Company
or (2) Majority Banks consent to such Investments to the extent that such
Investments are not acquired by the manner specified in sub-clause (1)
immediately above, (viii) Temporary Cash Investments, and (ix) such other
"cash equivalent" investments as Majority Banks may from time to time
approve. With respect to the Investments in Energy Stocks that are
permitted under sub-clause (v) above, if Company should sell or dispose of
any such Energy Stocks, no additional Investments in Energy Stocks shall be
permitted until such time that the aggregate cost of all Energy Stocks then
owned or held does not exceed $30,000,000, and at such time that the
aggregate cost of all Energy Stocks then owned or held does not exceed
$30,000,000, additional Investments in Energy Stocks may be made, provided
that the aggregate cost of all Investments in Energy Stocks that are then
outstanding under sub-clause (v) above shall not exceed $30,000,000.
Notwithstanding any of
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the foregoing, Company will not, and will not permit any Subsidiary to,
make any Investments otherwise permitted by this Section 9.04 if (i) an
Event of Default exists hereunder or, with the lapse of time and the giving
of notice or both, an Event of Default would exist hereunder, (ii) the
making of such Investment would cause an Event of Default hereunder, or
(iii) a Borrowing Base Deficiency exists hereunder."
2.11. Amendment to Section 9.16. Effective as of the Effective Date,
Section 9.16 of the Loan Agreement is amended in its entirety and the following
is substituted therefor:
"9.16. Restriction on Loans. Without the prior written consent of
Majority Banks, which consent shall not be unreasonably withheld, neither
Company nor any Subsidiary shall make any loans or advances to any Person,
including any Subsidiary or Affiliate of Company, provided, however, that
Company or a Subsidiary (a) may make loans or advances to any Person other
than Spring Acquisition Company, any of the Spring Companies or any Person
who is an officer or director of Company if such loans or advances are in
the ordinary course of Company's business, (b) Company or a Subsidiary may
make loans or advances to officers and directors of Company up to an
aggregate amount of $12,000,000 for all of such loans or advances and (c)
Company or a Subsidiary may make loans or advances to Spring Acquisition
Company and any of the Spring Companies up to an aggregate amount of
$5,000,000 for all of such loans or advances."
2.12. Amendment to Section 10.01(o) Effective as of the Effective Date,
Section 10.01(o) of the Loan Agreement is amended in its entirety and the
following is substituted therefor:
"(o) Company and/or any of the applicable Subsidiaries shall fail to
execute and deliver to Agents the Collateral Documents within 30 days
following Agents' written notice to Company and/or the applicable
Subsidiaries requesting Company to execute and deliver the Collateral
Documents;"
ARTICLE III
Condition Precedent; Guaranty
3.01. Counterparts; Conditions to Effectiveness. Subject to the other
conditions precedent set forth in this Article III, this instrument shall become
effective (and the Loan Agreement shall be amended with the amendments referred
to herein) as of the Effective Date when Administrative Agent shall have
received a duly executed counterpart hereof signed by Company and Majority Banks
(or, in the case of any Bank included within Majority Banks as to which an
executed counterpart shall not have been received, Administrative Agent shall
have received telegraphic, telex or other written confirmation from such party
of execution of a counterpart hereof by such Bank).
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3.02. Guaranty. If Spring Subsidiary is formed, the Loan shall be
unconditionally guaranteed by Spring Subsidiary pursuant to the form of Guaranty
previously executed by CT Operating, Cross Timbers Trading Company and each Gas
Marketing Subsidiary, with such Guaranty to be delivered to Agents within 10
days following Agents' written notice requesting such Guaranty.
ARTICLE IV
Ratifications, Representations and Warranties
4.01. Ratifications. The terms and provisions set forth herein shall
modify and supersede all inconsistent terms and provisions set forth in the Loan
Agreement immediately before giving effect hereto and the other Loan Papers,
and, except as expressly modified, amended, and superseded herein, the terms and
provisions of the Loan Agreement and the other Loan Papers are ratified and
confirmed and shall continue in full force and effect. Company and Banks agree
that the Loan Agreement, as amended hereby, and the other Loan Papers shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms.
4.02. Representations, Warranties and Agreements. Company hereby
represents and warrants to Banks that (a) the execution, delivery and
performance of the Loan Agreement as amended hereby has been authorized by all
requisite corporate action on the part of Company and will not violate the
Articles/Certificate of Incorporation or Bylaws of Company; (b) the
representations and warranties contained in the Loan Agreement, as amended
hereby, and any other Loan Papers are true and correct on and as of the date
hereof and on and as of the date of execution hereof as though made on and as of
each such date; (c) no Default or Event of Default under the Loan Agreement, as
amended hereby, has occurred and is continuing; and (d) Company is in full
compliance with all covenants and agreements contained in the Loan Agreement and
the other Loan Papers, as amended hereby.
4.03. Representations and Warranties Concerning Spring Acquisition Company
and Spring Holding. Company hereby represents and warrants to Banks that
neither Spring Acquisition Company's acquisition of the Capital Stock of Spring
Holding nor Company's nor any Subsidiary's subsequent acquisition of any
additional equity interests in Spring Acquisition Company or the Capital Stock
of Spring Holding will cause Company or any Subsidiary (a) to incur, assume or
otherwise become liable for any Indebtedness of the Spring Companies or any
other Person or (b) to become responsible or liable for any presently existing
breach or violation, in any material respect, of any Environmental Laws
applicable to the assets of any of the Spring Companies.
ARTICLE V
Miscellaneous Provisions
5.01. Reference to Loan Agreement. The other Loan Papers, and any and all
other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Loan
Agreement, as amended hereby, are hereby amended so that any reference in the
Loan Agreement and such other Loan Papers to the Loan Agreement shall mean a
reference to the Loan Agreement as amended hereby.
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5.02. Expenses of Agents. As provided in the Loan Agreement, Company
agrees to pay on demand all reasonable costs and expenses incurred by Agents in
connection with the preparation, negotiation and execution of this Amendment,
including, without limitation, the costs and fees of Agent's legal counsel, and
all reasonable costs and expenses incurred by Banks in connection with the
enforcement or preservation of any rights under the Loan Agreement, as amended
hereby, or any other Loan Papers, including, without, limitation, the reasonable
costs and fees of Agents' legal counsel. Company shall not be responsible for
the cost or expense of legal counsel of any other Bank in connection with the
preparation, execution and delivery of this Amendment.
5.03. Counterparts. This instrument 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.
5.04. Headings. The headings, captions, and arrangements used herein are
for convenience only and shall not affect the interpretation of this instrument.
5.05. Applicable Law. THE LOAN AGREEMENT AS AMENDED HEREBY AND ALL OTHER
LOAN PAPERS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS UNLESS THE LAWS GOVERNING NATIONAL BANKS SHALL HAVE
APPLICATION.
5.06. Final Agreement. THE LOAN AGREEMENT AS AMENDED HEREBY AND THE OTHER
LOAN PAPERS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE EFFECTIVE DATE THIS
AMENDMENT IS EXECUTED. THE LOAN AGREEMENT AS AMENDED HEREBY AND THE OTHER LOAN
PAPERS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION,
WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THE LOAN AGREEMENT OR THE OTHER
LOANS PAPERS SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY COMPANY AND
EITHER BANKS OR MAJORITY BANKS, AS PROVIDED IN THE LOAN AGREEMENT.
IN WITNESS WHEREOF, this Amendment has been executed in multiple originals
and is effective as of the date first above-written.
[SIGNATURE PAGES TO FOLLOW]
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COMPANY:
CROSS TIMBERS OIL COMPANY,
a Delaware corporation
By: XXXX O'REAR
---------------------------------
Xxxx O'Rear, Vice President and
Treasurer
BANKS:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: XXXX XXXXXXXXX
---------------------------------
Name: Xxxx Xxxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
NATIONSBANK, N.A., dba Bank of America,
N.A.
By: J. XXXXX XXXXXX
---------------------------------
J. Xxxxx Xxxxxx, Vice President
CHASE BANK OF TEXAS, N.A.
By: XXXX XXXX
---------------------------------
Xxxx Xxxx, Managing Director
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BANKBOSTON, N.A.
By: XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------
Title: Managing Director
---------------------------------
XXXXX FARGO BANK (TEXAS), N.A.
By: XXXXXXX X. XXXXXXX
---------------------------------
Xxxxxxx X. Xxxxxxx,
Vice President
FROST NATIONAL BANK, as the surviving
bank by merger of Xxxxxxx Bank and
Trust, N.A., effective May 29, 1998
By: W.H. (XXXX) XXXXX, III
---------------------------------
W.H. (Xxxx) Xxxxx, III, Senior
Vice President
ABN-AMRO BANK N.V.
By: XXXXX X. XXXX
---------------------------------
Name: Xxxxx X. Xxxx
---------------------------------
Title: Vice President
---------------------------------
By: XXXXXX X. XXXXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Group Vice President
---------------------------------
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BANK OF MONTREAL
By: XXXXXXX XXXXXX
---------------------------------
Name: Xxxxxxx Xxxxxx
---------------------------------
Title: Director
---------------------------------
THE BANK OF NEW YORK
By: XXXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
PARIBAS
By: XXXX XXXXXX
---------------------------------
Xxxx Xxxxxx, Vice President
By: XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
Title: Director
---------------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By: PHILLIPPE SOUSTRA
---------------------------------
Name: Phillippe Soustra
---------------------------------
Title: Senior Vice President
---------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: J. XXXXX XXXXXX
---------------------------------
J. Xxxxx Xxxxxx, Vice President
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FIRST UNION NATIONAL BANK
By: XXXXXX X. XXXXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: Senior Vice President
---------------------------------
BANK ONE, TEXAS, N.A.
By: WM. XXXX XXXXXXX
---------------------------------
Name: Wm. Xxxx Xxxxxxx
---------------------------------
Title: Vice President
---------------------------------
NATEXIS Banque
By: XXXXXXX X. XXXXXXX
---------------------------------
Xxxxxxx X. Xxxxxxx,
Vice President
By: XXXX XXXXXX
---------------------------------
Xxxx Xxxxxx, Assistant Vice
President
THE BANK OF NOVA SCOTIA
By: F.C.H. XXXXX
---------------------------------
Name: F.C.H. Xxxxx
---------------------------------
Title: Senior Manager
---------------------------------
Loan Operations
COMERICA BANK-TEXAS
By: XXXXX X. XXXXXXXXXX
---------------------------------
Xxxxx X. Xxxxxxxxxx,
Vice President
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