SECOND AMENDMENT TO
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AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
AND CONSENT
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THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT
(hereinafter referred to as the "AMENDMENT") is made and entered into as of the
10th day of June, 2005, 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 FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
("AGENT"), and, on the other hand, ENERGY CORPORATION OF AMERICA, a West
Virginia corporation ("BORROWER").
RECITALS
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A. Agent, the Lenders and the Borrower entered into that certain
Amended and Restated Credit Agreement, dated as of June 10, 2004 (as amended by
that certain First Amendment to Amended and Restated Credit Agreement dated as
of September 3, 2004, the "CREDIT AGREEMENT").
B. Agent, the Lenders and the Borrower desire to further amend the
Credit Agreement as hereinafter set forth.
C. In addition, Borrower has advised Agent and the Lenders that
Borrower and Eastern American Energy Corporation ("EAEC") intend (i) to convey
certain assets that are Borrowing Base Properties and Non-Pledged Properties to
Black Stone Minerals Company, L.P., a Delaware limited partnership or its
designees ("BLACK STONE"), as more specifically described and in accordance with
the terms set forth in the notice letter ("NOTICE LETTER") attached hereto as
EXHIBIT "A" (the "DISPOSITION") and (ii) to xxxxx x xxxx in favor of Black Stone
to secure EAEC's obligation to Black Stone to drill 180 development xxxxx over a
three (3) year period as more specifically described in the Notice Letter (the
"LIEN"). In accordance with the Credit Agreement, Borrower has requested that
Agent and the Lenders consent to Borrower's and EAEC's (the "DISPOSITION
PARTIES") departure from SECTION 7.2 and SECTION 7.4 of the Credit Agreement
(collectively, the "APPLICABLE COVENANTS") in order for the Disposition Parties
to complete the Disposition and grant the Lien. Subject to the terms of this
Amendment, Agent and the Lenders consent to the Disposition Parties completing
the Disposition and granting the Lien.
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
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Section 1.01. Definitions. Capitalized terms used in this Amendment, to
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the extent not otherwise defined herein, shall have the same meaning as in the
Credit Agreement, as amended hereby.
ARTICLE II
AMENDMENTS
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Section 2.01. Amendment to Section 6.23 of the Credit Agreement. Section
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6.23 of the Credit Agreement is hereby amended and restated in its entirety to
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read as set forth below:
6.23 COLLATERAL VALUE. Within sixty (60) days after a Reserve
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Report or other report or information is delivered pursuant to Section 6.2
that shows the Total Value is less than $160,000,000.00, either (a)
execute, and/or cause to be executed and delivered to the Agent
supplemental or additional Mortgages, in form and substance satisfactory to
the Agent and its counsel, securing payment of the Obligations and covering
other Oil and Gas Properties directly owned by Borrower, one or more of the
Pledging Subsidiaries or any other Subsidiary of Borrower which are not
then covered by any Mortgage and having a value (as determined by Agent in
its sole discretion), in addition to the other Oil and Gas Properties
already subject to a Mortgage, sufficient to cause the Total Value to
exceed $160,000,000.00, or (b) reduce the Total Usage to an amount equal to
or less than 62.5% of the newly established Total Value.
ARTICLE III
CONSENT
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Section 3.01. Consent. Subject to the terms of this Amendment, Agent and
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the Lenders consent to the Disposition Parties completing the Disposition and
granting the Lien; provided, (a) Borrower uses a portion of the proceeds
received from the Disposition to pay in full all outstanding indebtedness under
the Indenture and the other Indenture Documents; (b) each of the Disposition
Parties performs its obligations to Black Stone to close the transaction in
accordance with that certain Term Royalty Agreement, dated May 17, 2005,
executed by the Disposition Parties and Black Stone ("TERM ROYALTY AGREEMENT")
and the documents and agreements executed by the Disposition Parties and/or
Black Stone in connection therewith, including, without limitation, the
Development Agreement (as defined in the Term Royalty Agreement) (collectively,
"TERM ROYALTY AGREEMENT DOCUMENTS"); and (c) property underlying the Lien
released by Black Stone from time to time, in whole or in part, shall
automatically, without further action by the Disposition Parties, the Agent or
any Lender, become and be deemed to be Non-Pledged Properties.
Section 3.02. Limitations. The consent set forth herein shall not be
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deemed a consent to the departure from or waiver of (a) the Applicable Covenants
for any purpose other than to allow the Disposition Parties to complete the
Disposition and grant the Lien or (b) any other covenant or condition (including
without limitation, any other covenant or condition set forth in SECTION 7.2 and
SECTION 7.4 of the Credit Agreement) in any Loan Document or (c) any default or
event of default under any Loan Document that otherwise may arise as a result of
the Disposition Parties completing the Disposition, except as may be consented
to herein.
ARTICLE IV
CONDITIONS
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Section 4.01. Conditions Precedent. The effectiveness of this Amendment
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and the consent contained herein is subject to the satisfaction of the following
conditions precedent, unless specifically waived by Agent:
(a) Agent shall have received this Amendment, duly executed by
Borrower, together with the Consent and Ratification (the "RATIFICATION")
hereto, duly executed by each Pledging Subsidiary;
(b) The representations and warranties contained herein, in the
Credit Agreement, as amended hereby, the Ratification and in each other
Loan Document shall be true and correct as of the date hereof, as if made
on the date hereof;
(c) No Event of Default shall have occurred and be continuing and
no Default shall exist, unless such Event of Default or Default has been
specifically waived in writing by Agent; and
(d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments
and other legal matters incident thereto, shall be satisfactory to Agent.
Section 4.02. Conditions Subsequent.
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(a) On or before July 15, 2005, the Disposition Parties shall
execute, and/or cause to be executed and delivered to the Agent
supplemental or additional Mortgages (the "ADDITIONAL MORTGAGES"), in form
and substance satisfactory to the Agent and its counsel, securing payment
of the Obligations and covering other Oil and Gas Properties directly owned
by Borrower, one or more of the Pledging Subsidiaries or any other
Subsidiary of Borrower which are not then covered by any Mortgage as listed
on EXHIBIT "B".
(b) It shall be an Event of Default under the Credit Agreement
upon the failure by the Disposition Parties (i) to deliver the Additional
Mortgages to Agent on or before July 15, 2005; (ii) to use a portion of the
proceeds received from the Disposition to pay in full all outstanding
indebtedness under the Indenture and the other Indenture Documents on or
before June 30, 2005; (iii) to close the transaction with Black Stone in
accordance with the Term Royalty Agreement Documents; and (iv) to ensure
that the property underlying the Lien released by Black Stone from time to
time becomes Non-Pledged Properties.
ARTICLE V
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
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Section 5.01. Ratifications. The terms and provisions set forth in this
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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 and the Agent agree that the Credit Agreement, as amended
hereby, and the other Loan Documents shall continue to be legal, valid, binding
and enforceable in accordance with their respective terms.
Section 5.02. Representations and Warranties. Borrower hereby represents
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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 any of 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, the Ratification and in each of the other
Loan Document 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) 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 VI
MISCELLANEOUS
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Section 6.01. Survival of Representations and Warranties. All
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representations and warranties made in the Credit Agreement or any other
document or documents relating thereto, including, without limitation, any Loan
Document furnished in connection with this Amendment, shall survive the
execution and delivery of this Amendment and the other Loan Documents, and no
investigation by Agent or any closing shall affect the representations and
warranties or the right of Agent to rely upon them.
Section 6.02. Reference to Credit Agreement. Each of the Loan Documents,
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including the Credit Agreement 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 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 6.03. Expenses of Agent. As provided in the Credit Agreement,
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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 the other Loan Documents executed pursuant hereto 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 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 6.04. RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO
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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, 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, 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 6.05. Severability. Any provision of this Amendment held by a
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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 6.06. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
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EXECUTED PURSUANT HERETO 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 6.07. Successors and Assigns. This Amendment is binding upon and
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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 6.08. Counterparts. This Amendment may be executed in one or more
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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.
Section 6.09. Effect of Waiver. No consent or waiver, express or implied,
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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 6.10. Headings. The headings, captions, and arrangements used in
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this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 6.11. FINAL AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED HEREBY
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AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN 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 BETWEEN THE PARTIES.
[Remainder of page intentionally left blank.]
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
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ENERGY CORPORATION OF AMERICA
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Sr. Vice President
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AGENT
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XXXXX FARGO FOOTHILL, INC.,
as Agent and Lender
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: Vice President
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LENDERS
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XXXXX FARGO FOOTHILL, INC.,
as Agent and Lender
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: Vice President
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BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
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Title: Sr. Vice President
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[Consent and Ratification follows.]
CONSENT AND RATIFICATION
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The undersigned, EASTERN AMERICAN ENERGY CORPORATION, a West Virginia
corporation and ALLEGHENY & WESTERN ENERGY CORPORATION, a West Virginia
corporation (each a "PLEDGING SUBSIDIARY" and collectively the "PLEDGING
SUBSIDIARIES") have executed certain Loan Documents in favor of XXXXX FARGO
FOOTHILL, INC., a California corporation, as the arranger and administrative
agent ("AGENT") for the Lenders in connection with that certain Amended and
Restated Credit Agreement, dated as of June 10, 2004 (as amended by that certain
First Amendment to Amended and Restated Credit Agreement dated as of September
3, 2004, the "CREDIT AGREEMENT") 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"), Agent, and, on the other hand,
ENERGY CORPORATION OF AMERICA, a West Virginia corporation ("BORROWER"). The
Pledging Subsidiaries hereby consent and agree to the terms of the Second
Amendment to Amended and Restated Credit Agreement and Consent dated June 10,
2005 (the "AMENDMENT"), executed by Borrower, the Lenders and Agent, a copy of
which is attached hereto, and the undersigned agree that the Loan Documents to
which they are a party shall remain in full force and effect and shall continue
to be the legal, valid and binding obligation of the Pledging Subsidiaries in
enforceable against the Pledging Subsidiaries in accordance with their terms.
Furthermore, each Pledging Subsidiary hereby agrees and acknowledges that (a)
none of the Loan Documents to which it is a party is subject to any claims,
defenses or offsets, (b) nothing contained in this Amendment or any other Loan
Document shall adversely affect any right or remedy of Agent under the any of
the Loan Documents to which it is a party, (c) the execution and delivery of the
Amendment shall in no way reduce, impair or discharge any indebtedness,
liability or obligation of the undersigned under any of the Loan Documents to
which it is a party and shall not constitute a waiver by Agent of any of Agent's
rights against the undersigned, (d) by virtue hereof and by virtue of each of
Loan Documents to which it is a party, each Pledging Subsidiary ratifies in full
all of its indebtedness, liabilities and obligations arising under each of the
Loan Documents to which it is a party, (e) the Pledging Subsidiaries' consent is
not required to the effectiveness of the Amendment, and (f) no consent by the
Pledging Subsidiaries is required for the effectiveness of any future amendment,
modification, forbearance or other action with respect to the Credit Agreement
or any present or future Loan Document.
EASTERN AMERICAN ALLEGHENY & WESTERN ENERGY
ENERGY CORPORATION, CORPORATION,
a West Virginia Corporation a West Virginia Corporation
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
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Title: President Title: Vice President
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EXHIBIT "A"
NOTICE LETTER
[executed copy to be attached]
EXHIBIT "B"
LIST OF ADDITIONAL MORTGAGES
[see attached]
ECA EASTERN XXXXX NOT CURRENTLY MORTGAGED BY FOOTHILL
GAS PRICE OF $4.50/MMBTU ($5.225/MCF)
NET
RESERVES INTERNAL
PROP ID WELL NAME MMCF PV-10
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1 20030920 XXXXXXX #1 135.670 $ 514,396
2 20040010 PK-413 218.275 422,333
3 20040020 PK-423 148.507 333,464
4 20040030 CK #39 100.184 221,390
5 20040040 PK-421 144.604 281,606
6 20040050 CM #E05 327.251 615,186
7 20040060 CK #41 152.760 283,574
8 20040070 CK #43 132.748 276,226
9 20040080 YAWKEY #21 86.456 142,116
10 20040090 YAWKEY #38 167.307 284,264
11 20040100 YAWKEY #39 167.307 284,264
12 20040110 X X XXXXXXXX #3 121.384 291,873
13 20040120 XXXXXXX #4 51.555 117,543
14 00000000 XXXXXX #0 123.086 292,514
15 20040150 CREE #2 473.985 1,046,805
16 20040170 XXXXXXX GASHIE UNIT #1 111.940 234,521
17 20040190 CK #58 76.405 162,159
18 20040210 CK #75 88.840 189,464
19 20040230 CK #44 282.017 528,245
20 20040240 YAWKEY #34 184.900 316,647
21 20040250 YAWKEY #19 176.837 302,355
22 20040260 YAWKEY #25 255.435 441,701
23 20040270 YAWKEY #26 89.312 152,764
24 20040280 YAWKEY #40 471.571 824,891
25 20040290 XXXXXXX #1A 360.145 792,997
26 20040300 CREE #3 83.959 173,715
27 20040310 YAWKEY #35 727.004 1,277,733
28 20040330 YAWKEY #31 99.080 180,589
29 20040340 XXXXXX-XXXXXXX #1 356.242 798,358
30 20040350 GASHIE #2 316.024 676,530
31 20040380 XXXXXXX #1 319.997 690,951
32 20040390 GASHIE #1 216.651 461,237
33 20040410 YAWKEY #46 100.115 166,345
34 20040420 YAWKEY #49 392.975 685,545
35 20040430 EQUITABLE/HOLLAND 3 187.691 338,857
36 20040440 EQUITBALE/HOLLAND 4 218.973 398,010
37 20040450 GREENBRIER XXXXXXX #1 191.077 358,670
38 20040490 GREENBRIER XXXXXXX #2 150.134 279,414
39 20040500 EQUITABLE/HOLLAND 5 375.385 693,841
40 00000000 XXXXXXXX #0 32.617 59,943
41 20040550 ATR #72 75.004 151,228
42 20040560 XXXXXX #3 77.820 158,779
43 20040930 CK #86 235.015 439,282
44 20040950 YAWKEY #28 294.732 511,363
45 20040960 YAWKEY #11 275.084 476,540
46 20040980 YAWKEY #30 235.785 406,863
47 20040990 YAWKEY #33 58.943 93,347
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TOTAL 9,669 $18,830,438
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