WAIVER REGARDING AMENDED AND RESTATED FIRST LIEN CREDIT AGREEMENT
Exhibit
10.1
WAIVER
REGARDING AMENDED AND RESTATED
This WAIVER
REGARDING AMENDED AND RESTATED FIRST LIEN CREDIT AGREEMENT (“Waiver”), dated
effective as of December 1, 2010 (the “Effective Date”), is
by and among Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Borrower”), the
lenders party to the First Lien Credit Agreement described below (the “Lenders”), and The
Royal Bank of Scotland plc, as administrative agent for the Lenders (in such
capacity, the “Administrative
Agent”).
WHEREAS,
the Borrower, the Lenders, the Administrative Agent and certain other Persons
are parties to the Amended and Restated First Lien Credit Agreement, dated as of
June 8, 2007, as modified by the Consent Regarding Amended and Restated
First Lien Credit Agreement dated as of July 27, 2007, as amended by that
certain First Amendment to Amended and Restated First Lien Credit Agreement
dated effective as of November 19, 2007, as amended by that certain Waiver,
Consent and Second Amendment to Amended and Restated First Lien Credit Agreement
dated effective as of December 1, 2008, as amended by the Third Amendment to
Amended and Restated First Lien Credit Agreement dated as of April 6, 2009,
as modified by the Waiver and Consent to Amended and Restated First Lien Credit
Agreement dated as of June 30, 2009, as amended and modified by the Waiver,
Consent and Fourth Amendment to Amended and Restated First Lien Credit Agreement
dated as of September 11, 2009 and as amended and modified by the
Fifth Amendment to Amended and Restated First Lien Credit Agreement dated as of
December 11, 2009, as amended and modified by the Sixth Amendment to
Amended and Restated First Lien Credit Agreement dated as of February 5,
2010, and as amended and modified by the Seventh Amendment to Amended and
Restated First Lien Credit Agreement dated as of October 15, 2010 (as so
modified, and as amended, supplemented and amended, and restated or otherwise
modified from time to time, the “First Lien Credit
Agreement”);
WHEREAS,
the Borrower, the Lenders, the Administrative Agent and certain other Persons
are parties to an Eighth Amendment to Amended and Restated First Lien Credit
Agreement dated as of November 17, 2010 (the “Eighth Amendment”),
the effectiveness of which Eighth Amendment is subject to the terms and
conditions provided therein;
WHEREAS,
Section 7.2.2 of the First Lien Credit Agreement imposes certain limitations on
the Borrower’s ability to create, incur or permit to exist
Indebtedness;
WHEREAS,
Section 7.2.4 of the First Lien Credit Agreement requires the Borrower to
maintain certain financial ratios;
WHEREAS,
Section 7.2.13 of the First Lien Credit Agreement imposes certain limitations on
the Borrower’s ability to enter into certain restrictive
agreements;
WHEREAS,
the Borrower has requested that the Lenders waive the requirements of Sections
7.2.2 and 7.2.13 of the First Lien Credit Agreement so that the Borrower can
incur Indebtedness in an amount not to exceed an aggregate outstanding principal
amount of up to $1,000,000,000; provided that such Indebtedness (x) is
unsecured, (y) does not have a maturity date that is prior to the date that is
six (6) months after the Stated Maturity Date (as defined in the Eighth Amendment) and (z) can only be used for
certain specified purposes and to waive the requirements of Section 7.2.4(a) and
(b) in certain circumstances;
WHEREAS,
the undersigned Secured Parties are willing to agree to such waiver and to
provide certain other consents as provided herein, on the terms and conditions
set forth herein.
NOW THEREFORE,
in consideration of the premises and the mutual covenants, representations and
warranties contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
AGREEMENT
Section
1. Definitions. Capitalized
terms used herein but not defined herein shall have the meanings as given them
in the First Lien Credit Agreement, unless the context otherwise
requires.
Section
2. Waiver.
(a) Subject
to the other terms and conditions of this Waiver, the Administrative Agent, the
Swing Line Lender, the Issuers and the undersigned Lenders hereby
(i) waive the
limitations of Section 7.2.2 of the First Lien Credit Agreement that restrict
the Borrower’s ability to create, incur or permit to exist Indebtedness, but
only to the extent that in addition to Indebtedness that the Borrower is
permitted to create, incur or permit to exist as provided in Section 7.2.2 of
the First Lien Credit Agreement, the Borrower incurs Indebtedness in an amount
not to exceed an aggregate outstanding principal amount of up to $1,000,000,000;
provided, that
(A) such Indebtedness (x) is unsecured, (y) does not have a maturity date
that is prior to the date that is six (6) months after the Stated Maturity Date (as defined
in the Eighth Amendment),
and (z) will be used solely to (I) pay for the redemption, exchange or
refinancing, including any premiums associated therewith, of the Second Lien
Notes and the PP Notes that have not been previously paid, prepaid, redeemed,
defeased, purchased, acquired or otherwise retired (provided that such
$1,000,000,000 amount of such Indebtedness shall be reduced by the amount of any
refinancing of the Second Lien Notes or the PP Notes accomplished otherwise
pursuant to the terms of Section 7.2.2(g) of the First Lien Credit Agreement),
(II) pay amounts owed in connection with the consummation of the Exxon
Acquisition (as defined in the Eighth Amendment), (III) repay outstanding
Indebtedness under the First Lien Credit Agreement, and (IV) pay for the
purchase price and any fees and expenses associated with the Exxon Acquisition
and financings, refinancing and the payments contemplated in this clause (i);
(B) notwithstanding the foregoing clause (A), unless and until the
Effective Date (as defined in the Eighth Amendment) shall have occurred in
accordance with the terms of the Eighth Amendment, all of the proceeds of such
Indebtedness referred to in this clause (i) shall be held in escrow (which
escrow will not be collateral for the First Lien Credit Agreement) upon terms
satisfactory to the Administrative Agent in its sole discretion and on and after
such Effective Date may be used
for the purposes provided in the foregoing clause (A)(z); and (C) in the
event the Effective Date of the Eighth Amendment shall have occurred in
accordance with the terms of the Eighth Amendment, then the Indebtedness
referred to in this clause (i) shall be “Permitted Unsecured Indebtedness”
referred to in such Eighth Amendment,
(ii) waive the
requirement of Section 7.2.4(a) of the First Lien Credit Agreement for the
Fiscal Quarter ending December 31, 2010, to the extent, but only to the extent,
that Total Debt as used to determine the Total Leverage Ratio in respect of such
Fiscal Quarter includes Indebtedness incurred under the foregoing clause (i) to
the extent, but only to the extent, the proceeds of such Indebtedness are held
in the escrow referred to in the foregoing clause (i) on such date,
(iii) waive the
requirement of Section 7.2.4(b) of the First Lien Credit Agreement for the
Fiscal Quarter ending December 31, 2010, to the extent, but only to the extent,
that Interest Expense as used to determine the Interest Coverage Ratio in
respect of such Fiscal Quarter includes Interest Expense on Indebtedness
incurred under the foregoing clause (i) to the extent, but only to the extent,
the proceeds of such Indebtedness are held in the escrow referred to in the
foregoing clause (i) on such date,
(iv) waive the
limitations of Section 7.2.13 of the First Lien Credit Agreement to the extent
but only to the extent that the indenture, the note purchase agreement or
similar financing documents governing the issuance of the Indebtedness referred
to in the foregoing clause (i) restrict the Borrower in a manner that would
otherwise be prohibited by such Section 7.2.13, and
(v) agree
that (A) the Borrower’s incurrence of the Indebtedness referred to in the
foregoing clause (i) in accordance with and as contemplated by this Waiver shall
not constitute a Default or Event of Default as a result of a violation of such
Sections 7.2.2 and 7.2.13 of the First Lien Credit Agreement; (B) outstanding
Indebtedness incurred as permitted pursuant to the foregoing clause (i) shall
not cause a Default or Event of Default as a result of a violation of Section
7.2.4(a) of the First Lien Credit Agreement in respect of the Fiscal Quarter
ending December 31, 2010, to the extent, but only to the extent Total Debt
includes Indebtedness incurred under the foregoing clause (i) but only to the
extent the proceeds of such Indebtedness are held in the escrow referred to in
the foregoing clause (i) on such date; and (C) Interest Expense on Indebtedness
incurred as permitted pursuant to the foregoing clause (i) shall not cause a
Default or Event of Default as a result of a violation of Section 7.2.4(b) of
the First Lien Credit Agreement in respect of the Fiscal Quarter ending December
31, 2010, to the extent, but only to the extent Interest Expense includes
Interest Expense on Indebtedness incurred under the foregoing clause (i) but
only to the extent proceeds of such Indebtedness are held in the escrow referred
to in the foregoing clause (i) on such date.
(b) The
express waivers set forth in this Section 2 are limited
to the extent and for the periods described herein and shall not be construed to
be a consent to or a waiver of any terms, provisions, covenants, warranties or
agreements contained in the First Lien Credit Agreement or in any of the other
Loan Documents or for any other period, unless expressly provided so
herein. The Lenders reserve the right to exercise any rights and
remedies available to them in connection with any present or future defaults
with respect to the First Lien Credit Agreement or any other provision of any
Loan Document.
Section
3. Conditions to Effectiveness;
Expiration. This Waiver shall be deemed effective as of the
Effective Date set forth in the first paragraph of this Waiver when the
Administrative Agent shall have received counterparts hereof duly executed by
the Borrower, the Administrative Agent, the Swing Line Lender, the Issuers and
the Required Lenders. This Waiver shall expire and be of no further
force or effect upon the earlier of (i) the Effective Date of the Eighth
Amendment and (ii) January 31, 2011.
Section
4. Representations and
Warranties. The Borrower hereby represents and warrants that
after giving effect hereto:
(a) the
representations and warranties of the Obligors contained in the Loan Documents
are true and correct in all material respects, other than those representations
and warranties that expressly relate solely to a specific earlier date, which
shall remain correct in all material respects as of such earlier
date;
(b) the
execution, delivery and performance by the Borrower and each other Obligor of
this Waiver have been duly authorized by all necessary corporate or other action
required on their part and this Waiver, along with the First Lien Credit
Agreement and other Loan Documents, constitutes the legal, valid and binding
obligation of each Obligor a party thereto enforceable against them in
accordance with its terms, except as its enforceability may be affected by the
effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights or remedies
of creditors generally;
(c) neither
the execution, delivery and performance of this Waiver by the Borrower and each
other Obligor, the performance by them of the First Lien Credit Agreement nor
the consummation of the transactions contemplated hereby does or shall
contravene, result in a breach of, or violate (i) any provision of any Obligor’s
certificate or articles of incorporation or bylaws or other similar documents,
or agreements, (ii) any law or regulation, or any order or decree of any court
or government instrumentality, or (iii) any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which any Obligor or any of its
Subsidiaries is a party or by which any Obligor or any of its Subsidiaries or
any of their property is bound, except in any such case to the extent such
conflict or breach has been waived by a written waiver document, a copy of which
has been delivered to Administrative Agent on or before the date
hereof;
(d) no
Material Adverse Effect has occurred since June 30, 2010; and
(e) no
Default or Event of Default or Borrowing Base Deficiency has occurred and is
continuing.
Section
5. Loan Document;
Ratification.
(a) This
Waiver is a Loan Document.
(b) The
Borrower and each other Obligor hereby ratifies, approves and confirms in every
respect all the terms, provisions, conditions and obligations of the First Lien
Credit Agreement and each of the other Loan Documents, including without
limitation all Mortgages, Security Agreements, Guaranties, Control Agreements
and other Security Documents, to which it is a party.
Section
6. Costs And
Expenses. As provided in Section 10.3 of the First Lien Credit
Agreement, the Borrower agrees to reimburse Administrative Agent for all fees,
costs, and expenses, including the reasonable fees, costs, and expenses of
counsel or other advisors for advice, assistance, or other representation, in
connection with this Waiver and any other agreements, documents, instruments,
releases, terminations or other collateral instruments delivered by the
Administrative Agent in connection with this Waiver.
Section
7. GOVERNING
LAW. THIS WAIVER SHALL BE DEEMED A CONTRACT AND INSTRUMENT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE
LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW.
Section
8. Severability. Any
provision of this Waiver that is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Waiver or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section
10. No
Waiver. The express waivers set forth herein are limited to
the extent expressly provided in this Waiver and, except as expressly set forth
in this Waiver, the execution, delivery and effectiveness of this Waiver shall
not operate as a waiver of any default of the Borrower or any other Obligor or
any right, power or remedy of the Administrative Agent or the other Secured
Parties under any of the Loan Documents, nor constitute a waiver of (or consent
to departure from) any terms, provisions, covenants, warranties or agreements of
any of the Loan Documents. The parties hereto reserve the right to
exercise any rights and remedies available to them in connection with any
present or future defaults with respect to the First Lien Credit Agreement or
any other provision of any Loan Document
Section
11. Successors and
Assigns. This Waiver shall be binding upon the Borrower and
its successors and permitted assigns and shall inure, together with all rights
and remedies of each Lender Party hereunder, to the benefit of each Lender Party
and the respective successors, transferees and assigns.
Section
12. Entire
Agreement. THIS WAIVER, THE FIRST LIEN CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT OF THE PARTIES WITH
RESPECT 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
BETWEEN THE PARTIES.
[Signature
Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have caused this Waiver to be duly executed and delivered by
their respective duly authorized officers as of the Effective Date.
BORROWER:
ENERGY
XXI GULF COAST, INC.
By: /s/ Xxxx
Xxx
Name: Xxxx
Xxx
Title: Chief
Financial Officer
ADMINISTRATIVE AGENT,
ISSUERS AND LENDERS:
THE ROYAL
BANK OF SCOTLAND plc, as Administrative Agent, Issuer and Lender
By: /s/ Xxxxxxx X.
Xxxxxxx
Name: Xxxxxxx
X. Xxxxxxx
Title: Managing
Director
BNP PARIBAS, as Issuer and
Lender
By: /s/ Xxxxx
Xxxxxx
Name: Xxxxx
Xxxxxx
Title: Director
By: /s/ Xxxx
Xxxxxxxx
Name: Xxxx
Xxxxxxxx
Title: Director
AMEGY
BANK NATIONAL ASSOCIATION, as Lender
By: /s/ Xxxxxxx X.
Xxxxxxxxx
Name: Xxxxxxx
X. Xxxxxxxxx
Title: Senior
Vice President
THE BANK
OF NOVA SCOTIA, as Lender
By: /s/ W. Xxxxx
Xxxxxxxx
Name: W.
Xxxxx Xxxxxxxx
Title:
Managing Director
TORONTO
DOMINION (TEXAS) LLC, as Lender
By: /s/ Xxxxx X.
Xxxxx
Name: Xxxxx
X. .Brito
Title: Authorized
Signatory
CAPITAL
ONE, NATIONAL ASSOCIATION, as Lender
By: /s/ Xxxxx
Xxxx
Name: Xxxxx
Xxxx
Title:
Vice President
NATIXIS,
as Lender
By: /s/ Liana
Tchernysheva
Name: Liana
Tchernysheva
Title: Director
By: /s/ Xxxxxxx
Xxxxxxxxx
Name: Xxxxxxx
Xxxxxxxxx
Title: Managing
Director
ALLIED
IRISH BANKS p.l.c., as Lender
By: /s/ Xxxxxx
Xxxx
Name: Xxxxxx
Xxxx
Title: Vice
President
By: /s/ Xxxxxx
Xxxx
Name: Xxxxxx
Xxxx
Title: Director
CREDIT
SUISSE AG, CAYMAN ISLANDS BRANCH, as Lender
By: /s/ Xxxxxx
Xxxxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxxxx
Title:
Vice President
CREDIT
SUISSE AG, CAYMAN ISLANDS BRANCH, as Lender
By: /s/ Xxxxxxxxxxx
Xxx
Name:
Xxxxxxxxxxx Xxx
Title:
Associate
UBS LOAN
FINANCE LLC, as Lender
By: /s/ Xxxx X.
Xxxx
Name:
Xxxx X. Xxxx
Title:
Associate Director
By: /s/ Xxxx X.
Xxxxx
Name: Xxxx
X. Xxxxx
Title:
Associate Director
ING
CAPITAL LLC, as Lender
By: /s/ Xxxx
Xxxxxx
Name: Xxxx
Xxxxxx
Title: Director
REGIONS
BANK, as Lender and
as Swing
Line Lender
By: /s/ Xxxxx X Xxxxxx
III
Name: Xxxxx
X. Xxxxxx III
Title: Senior
Vice President
ACKNOWLEDGED
AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN:
ENERGY
XXI GOM, LLC
By: /s/ Xxxx
Xxx
Name: Xxxx
Xxx
Title: Chief
Financial Officer
ENERGY
XXI TEXAS ONSHORE, LLC
By: /s/ Xxxx
Xxx
Name: Xxxx
Xxx
Title: Chief
Financial Officer
ENERGY
XXI ONSHORE, LLC
By: /s/ Xxxx
Xxx
Name: Xxxx
Xxx
Title: Chief
Financial Officer
ACKNOWLEDGED
AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN IN ITS CAPACITY AS GUARANTOR UNDER
ITS LIMITED RECOURSE GUARANTY AND GRANTOR UNDER ITS PLEDGE AGREEMENT AND
IRREVOCABLE PROXY DELIVERED IN CONNECTION WITH THE FIRST LIEN CREDIT
AGREEMENT:
ENERGY
XXI USA, INC.
By: /s/ Xxxx
Xxx
Name: Xxxx
Xxx
Title: Chief
Financial Officer
