THIRD AMENDMENT TO FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is made as of the 28th day of June, 1996, by and among CAIRN
ENERGY USA, INC., a Delaware corporation ("Borrower"), INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL CORPORATION, as agent ("Agent"), and INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL CORPORATION and MEESPIERSON N.V., as lenders
("Lenders").
RECITALS:
Borrower, Agent and Lenders entered into that certain First Amended and
Restated Credit Agreement dated as of December 20, 1994, as amended by a First
Amendment to First Amended and Restated Credit Agreement dated December 12, 1995
and a Second Amendment to First Amended and Restated Credit Agreement dated
January 15, 1996 (the "Original Agreement"), for the purposes and consideration
therein expressed, pursuant to which Lenders made and became obligated to make
loans to Borrower as therein provided; and Borrower, Agent and Lenders desire to
amend the Original Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement, in
consideration of the loans which may hereafter be made by Lenders to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I - Definitions and References
ss. 1.1. Terms Defined in the Original Agreement. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment, and the following terms when used in this Amendment shall have
the following meanings:
"Amendment" means this Third Amendment to First Amended and
Restated Credit Agreement.
"Credit Agreement" means the Original Agreement as amended hereby.
ARTICLE II - Amendments to Original Agreement
ss. 2.1. Defined Terms. The definition of "Fixed Rate" set forth in
Section 1.1 of the Original Agreement is hereby amended in its entirety to read
as follows:
"Fixed Rate" means, with respect to each particular Fixed Rate
Portion and the associated Eurodollar Rate and Reserve Percentage, the
rate per annum
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calculated by Agent (rounded upwards, if necessary, to the next higher
0.01%) determined on a daily basis pursuant to the following formula:
Fixed Rate =
Eurodollar Rate + Fixed Rate Spread
100.0% - Reserve Percentage
where Fixed Rate Spread means for any day:
(i) if the aggregate unpaid principal balance of the Loans at
the end of such day plus the amount of all LC Obligations outstanding
at the end of such day is less than seventy-five percent (75%) of the
Borrowing Base, one and one-quarter percent (1.25%) per annum; and
(ii) if the aggregate unpaid principal balance of the Loans
at the end of such day plus the amount of all LC Obligations
outstanding at the end of such day is equal to or greater than
seventy-five percent (75%) of the Borrowing Base, one and one half
percent (1.5%) per annum.
If the Reserve Percentage changes during the Interest Period for a
Fixed Rate Portion, Agent may, at its option, either change the Fixed
Rate for such Fixed Rate Portion or leave it unchanged for the duration
of such Interest Period. If the Fixed Rate Spread changes during the
Interest Period for a Fixed Rate Portion, the Fixed Rate shall change
for such Fixed Rate Portion. The Fixed Rate shall in no event, however,
exceed the Highest Lawful Rate.
ss. 2.2. Letters of Credit. Clause (b) of Section 2A.1. of the
Original Agreement is hereby amended in its entirety to read as follows:
(b) the aggregate amount of LC Obligations at such time does
not exceed $10,000,000; and
ss. 2.3. Borrowing Base. As contemplated in and pursuant to Section
2.11 of the Credit Agreement, Agent hereby designates the new Borrowing Base
under the Credit Agreement as $50,000,000, effective as of the date hereof and
continuing until but not including the next date as of which the Borrowing Base
is redetermined.
ARTICLE III - Conditions of Effectiveness
ss. 3.1. Effective Date. This Amendment shall become effective as of
the date first above written when (i) Agent shall have received this Amendment
at Agent's office duly authorized, executed and delivered by Borrower and each
Lender, and (ii) Agent shall have additionally received all of the following
documents each being duly authorized, executed and delivered, and in form and
substance satisfactory to Lender:
(a) Omnibus Certificate. An Omnibus Certificate of the
Secretary and of the Chairman of the Board or President of Borrower of even date
with this
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Amendment, which shall contain the names and signatures of the officers
authorized to execute this Amendment and which shall certify to the
truth, correctness and completeness of: (i) all of the exhibits
attached to that certain Omnibus Certificate dated as of December 20,
1994, made by such officers of Borrower, and (ii) a copy of resolutions
duly adopted by the Board of Directors of Borrower and in full force
and effect at the time this Amendment is entered into, authorizing the
execution of this Amendment.
(b) Compliance Certificate. A Compliance Certificate of the
Chief Financial Officer of Borrower, of even date with this Amendment,
in which such officer shall certify, to the best of his knowledge and
belief after due inquiry, to the satisfaction of the conditions set out
in subsections (a) through (d), inclusive, of Section 3.2 of the
Original Agreement as of the date hereof.
ARTICLE IV - Representations, Warranties and Covenants
ss. 4.1.Representations, Warranties and Covenants of Borrower. In order
to induce Agent and Lenders to enter into this Amendment, Borrower represents,
warrants and covenants to Agent and each Lender that:
(a) The representations and warranties contained in Section
4.1 of the Original Agreement are true and correct at and as of the
time of the effectiveness hereof, except to the extent that such
representations and warranties are made in the Original Agreement only
in reference to a specific date and except to the extent that the facts
upon which such representations are based have been changed by the
extension of credit under the Credit Agreement.
(b) Borrower is duly authorized to execute and deliver this
Amendment and is and will continue to be duly authorized to borrow and
to perform its obligations under the Credit Agreement. Borrower has
duly taken all corporate action necessary to authorize the execution
and delivery of this Amendment and to authorize the performance of the
obligations hereunder.
(c) The execution and delivery by Borrower of this Amendment
and the performance by it of its obligations hereunder and under the
Credit Agreement and the consummation of the transactions contemplated
hereby and thereby do not and will not conflict with any provision of
law, statute, rule or regulation or of the articles of incorporation or
bylaws of Borrower or of any material agreement, judgment, license,
order or permit applicable to or binding upon Borrower or result in the
creation of any lien, charge or encumbrance upon any assets or
properties of Borrower, except as expressly contemplated in the Loan
Documents. Except for those which have been duly obtained, no consent,
approval, authorization or order of any court or governmental authority
or third party is required in connection with the execution and
delivery by Borrower of this Amendment or to consummate the
transactions contemplated hereby.
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(d) When this Amendment is duly executed and delivered, each
of this Amendment and the Credit Agreement will be a legal and binding
instrument and agreement of Borrower, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency and similar laws
and by general principles of equity.
(e) The audited annual Consolidated financial statements of
Borrower dated as of December 31, 1995 and the unaudited quarterly
Consolidated financial statements of Borrower dated as of March 31,
1996 fairly present the Consolidated financial position at such dates
and the Consolidated statement of operations and cash flows for the
periods ending on such dates for Borrower. Copies of such financial
statements have heretofore been delivered to Lender. Since March 31,
1996, no material adverse change has occurred in the financial
condition or businesses or in the Consolidated financial condition or
businesses of Borrower.
ARTICLE V - Miscellaneous
ss. 5.1. Ratification of Agreements. The Original Agreement as hereby
amended is hereby ratified and confirmed in all respects. The Loan Documents, as
they may be amended or affected by this Amendment, are hereby ratified and
confirmed in all respects. Any reference to the Credit Agreement in any Loan
Document shall be deemed to refer to this Amendment also and any reference in
any Loan Document to any other document or instrument amended, renewed, extended
or otherwise affected by this Amendment shall also refer to such Amendment. The
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of Agent or any Lender under the Credit
Agreement or any other Loan Document nor constitute a waiver of any provision of
the Credit Agreement or any other Loan Document.
ss. 5.2. Survival of Agreements. All representations, warranties,
covenants and agreements of Borrower herein shall survive the execution and
delivery of this Amendment and the performance hereof, including without
limitation the making or granting of the Loans, and shall further survive until
all of the Obligations are paid in full. All statements and agreements contained
in any certificate or instrument delivered by Borrower hereunder or under the
Credit Agreement to Agent or any Lender shall be deemed to constitute
representations and warranties by, or agreements and covenants of, Borrower
under this Amendment and under the Credit Agreement.
ss. 5.3. Loan Documents. This Amendment is a Loan Document, and all
provisions in the Credit Agreement pertaining to Loan Documents apply hereto.
ss. 5.4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA IN
ALL RESPECTS, INCLUDING CONSTRUCTION, VALIDITY AND PERFORMANCE.
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ss. 5.5. Counterparts. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.
IN WITNESS WHEREOF, this Amendment is executed as of the date first
above written.
CAIRN ENERGY USA, INC.
By:
X. Xxxxx X. Xxxxxxxxxx
Senior Vice President
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By:
Xxxxx X. Xxxxxxx, Vice President
MEESPIERSON N.V.
By:
Xxxxxxx X. Xxxxxx, Vice President
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