Exhibit No. 10.1
SECOND AMENDMENT
TO
CREDIT AGREEMENT
among
XXXXXX & XXXXX, INC.,
as the Borrower,
THE CHASE MANHATTAN BANK,
as Agent,
and
THE LENDERS SIGNATORY HERETO
Effective as of August 14, 1996
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment")
executed effective as of August 14, 1996 (the "Effective Date"), is among XXXXXX
& XXXXX, INC., a corporation duly organized and validly existing under the laws
of the State of Louisiana (the "Borrower"); each of the lenders under the Credit
Agreement (hereinafter defined) (individually, a "Lender" and, collectively, the
"Lenders"); and THE CHASE MANHATTAN BANK ( formerly The Chase Manhattan Bank,
N.A.)., as agent for the Lenders under the Credit Agreement (in such capacity,
together with its successors in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower, the Agent and the Lenders are parties
to that certain Credit Agreement dated as of December 7, 1994 (as amended by
that certain First Amendment to Credit Agreement dated as of December 31, 1994,
the "Credit Agreement"), pursuant to which the Lenders have made certain credit
available to and on behalf of the Borrower; and
WHEREAS, the Borrower has requested and the Agent and the
Lenders have agreed to amend certain provisions of the Credit Agreement; and
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Defined Terms. All capitalized terms which are
defined in the Credit Agreement, but which are not defined in this Second
Amendment, shall have the same meanings as defined in the Credit Agreement.
Unless otherwise indicated, all section references in this Second Amendment
refer to the Credit Agreement.
Section 2. Amendments to Credit Agreement.
2.1 Section 1.02. Section 1.02 is hereby amended as follows:
(a) The definition of "Applicable Hydrocarbon Price" is hereby
deleted in its entirety.
(b) The definition of "Indebtedness" is hereby amended to read
as follows:
"Indebtedness" shall mean any and all amounts owing or to be owing by
the Borrower to the Agent and/or Lenders in connection with the Loan
Documents and the Letter of Credit Agreements, and any Hedging
Agreements now or hereafter arising between the Borrower and any Lender
or its Affiliate and permitted by the terms of Section 9.01(e), and all
renewals, extensions and/or rearrangements of any of the above."
(c) The definition of "Net Production Revenue" is hereby
deleted in its entirety.
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2.2 Section 2.07. Section 2.07(d) of the Credit Agreement is
hereby amended to read as follows:
"(d) If either (i) (x) the Borrowing Base or the Aggregate
Maximum Credit Amounts have been reduced as the result of any sale or
other disposition described in Section 2.03(d), and (y) either the
Borrowing Base or the Aggregate Maximum Credit Amounts, as reduced is
less than the aggregate outstanding principal amount of the Loans plus
the LC Exposure ("Deficiency"), or (ii) the then effective Adjusted
Consolidated Net Tangible Assets minus $25,000,000 are less than 110%
of the aggregate amount of all Indenture Indebtedness (excluding
Subordinated Indebtedness of the Company as defined in the Indenture)
then outstanding at any time after May 31, 1996 ("Deficiency"), in
either case, the Borrower shall (x) prepay the Loans in an aggregate
principal amount equal to the greater of the Deficiency from Section
2.07(d)(i) or (ii), together with interest on the principal amount paid
accrued to the date of such prepayment and (y) if any part of the
Deficiency remains after prepaying all of the Loans because of LC
Exposure, pay to the Agent on behalf of the Lenders an amount equal to
such remaining Deficiency to be held as cash collateral as provided in
Section 2.10(b) hereof."
2.3 Section 2.08(d). Section 2.08(d) is hereby amended to read
as follows:
"(d) So long as any of the Commitments are in effect and until
payment in full of all Loans hereunder, on or around the first day of
each May and November, commencing November 1, 1996 (each being a
"Scheduled Redetermination Date"), the Lenders shall redetermine the
amount of the Borrowing Base in accordance with Section 2.08(b). In
addition, the Majority Lenders may initiate only one unscheduled
redetermination of the Borrowing Base during any consecutive twelve
(12) month period by specifying in writing to the Borrower the date on
which the Borrower is to furnish a Reserve Report in accordance with
Section 8.07(b) and the date on which such redetermination is to
occur, and the Borrower may request one unscheduled redetermination
during any consecutive twelve (12) month period at no charge."
2.4 Section 2.08(f). Section 2.08 is hereby amended to add a
new clause (f) as follows:
"(f) On the fifteenth day of each May, August, November, and
February the Borrowing Base shall automatically reduce or increase
(but not above the latest Borrowing Base determined under Section
2.08(d)) to the amount of the Adjusted BB set forth on the schedule
below corresponding to the XXX/XXX set forth in the information to be
provided by Borrower on or before such date in compliance with Section
8.07(d). If the applicable Adjusted BB in the schedule is greater than
the then outstanding Borrowing Base, the Borrowing Base shall not be
adjusted upwards in excess of the latest Borrowing Base determined
under Section 2.08(d). "XXX/BOE" shall mean the Borrower's total lease
operating expense for the immediately preceding calendar quarter
determined using the same methodology as consistently applied over
time as used by the independent petroleum engineers who prepared the
latest Reserve Report divided by total production of Hydrocarbons on a
barrel of oil equivalent basis
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for the same period.For purposes of this Section and Section 8.07(d)
6,000cubic feet of gas shall equal one barrel of oil.
XXX/XXX ADJUSTED BB
------- -----------
$4.50 $50,000,000
$4.75 $43,000,000
$5.00 $36,000,000
$5.25 $29,000,000
$5.50 $22,000,000
$5.75 $15,000,000
$6.00 $8,000,000
$6.25 0
2.5 Section 6.02. Section 6.02 is hereby amended by deleting
the first paragraph of such section and inserting in lieu thereof the following:
"The obligation of the Lenders to make Loans to the Borrower upon the
occasion of each borrowing hereunder and to issue, renew, extend or
reissue Letters of Credit for the account of the Borrower (including
the Initial Funding) is subject to the further conditions precedent
that, as of the date of such Loans or such issuance, renewal, extension
or reissuance, and after giving effect thereto: (i) no Default shall
have occurred and be continuing; (ii) no event or circumstance shall
exist which with the giving of any notice or the lapse of time or both
would obligate the Parent Borrower to redeem or offer to buy all or any
of the Senior Notes under the Indenture; (iii) the then effective
Adjusted Consolidated Net Tangible Assets minus $25,000,000 are not
less than 110% of the aggregate amount of all Indenture Indebtedness
(excluding Subordinated Indebtedness of the Company as defined in the
Indenture); (iv) no Material Adverse Effect shall have occurred; and
(v) the representations and warranties made by the Borrower in Article
VII and by the Borrower and the Parent Company in the Security
Instruments shall be true on and as of the date of the making of such
Loans or issuance, renewal, extension or reissuance with the same force
and effect as if made on and as of such date and following such new
borrowing or such issuance, renewal, extension or reissuance, except to
the extent such representations and warranties are expressly limited to
an earlier date or the Majority Lenders may expressly consent in
writing to the contrary."
2.6 Section 8.07. Section 8.07(d) is hereby amended to read as follows:
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"(d) As soon as available and in any event within 45 days
after the end of fiscal quarter, the Borrower shall provide production
reports and general and administrative cost summaries for its Oil and
Gas Properties, which reports shall include quantities or volume of
production, revenue, realized product prices, operating expenses,
taxes, capital expenditures and lease operating costs which have
accrued to the Borrower's accounts in such period and a calculation of
XXX/BOE, and such other information with respect thereto as the Agent
or any Lender may reasonably require. Such reports shall be accompanied
by a certificate in substantially the form of Exhibit H hereto executed
by a Responsible Officer certifying as to Adjusted Consolidated Net
Tangible Assets as of the last day of such quarter and showing the
calculations thereof in reasonable detail."
2.7 Section 9.02. Section 9.02(a) is hereby amended by adding
the words "pursuant to the Security Instruments" to the end of such Section.
2.8 Section 9.12. Section 9.12 is hereby amended to read as
follows:
"Section 9.12 Current Ratio. The Parent Company's ratio of (i)
consolidated current assets plus unused availability under the
Aggregate Commitments to (ii) consolidated current liabilities
(excluding current maturities of the Notes) shall not be less than 1.0
to 1.0 as of the last day of two consecutive fiscal quarters of the
Borrower."
2.9 Exhibit H. Exhibit H to the Credit Agreement is hereby
deleted in its entirety and the revised Exhibit H (attached hereto) is inserted
in lieu thereof.
Section 3. Conditions Precedent. The effectiveness of this
Second Amendment is subject to the receipt by the Agent of the following
documents and satisfaction of the conditions provided in this Section 3, each of
which shall be satisfactory to the Agent in form and substance:
3.1 Loan Documents. The Agent shall have received multiple
counterparts, as requested of this Second Amendment, executed and delivered by a
duly authorized officer of each party.
3.2 Representations and Warranties. Each of the
representations and warranties made by the Borrower and the Parent Company in or
pursuant to the Security Instruments shall be true and correct in all material
respects as of the Effective Date, as if made on and as of such date.
3.3 No Default. No Default or Event of Default shall have
occurred and be continuing as of the Effective Date.
3.4 No Change. No event shall have occurred since December 31,
1995 which, in the reasonable opinion of the Majority Lenders, could have a
Material Adverse Effect on the condition (financial or otherwise), business,
operations or prospects of the Borrower or the Parent Company.
3.5 Security Instruments. All of the Security Instruments
shall be in full force and effect.
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Section 4. Representations and Warranties. The Borrower and
the Parent Company hereby affirms that as of the date of execution and delivery
of this Second Amendment, all of the representations and warranties contained in
the Credit Agreement are true and correct in all material respects as though
made on and as of the Effective Date and after giving effect to this Second
Amendment and to the transactions contemplated hereby and that no Defaults exist
under the Credit Agreement or will exist under the Credit Agreement after giving
effect to the aforesaid transactions.
Section 5. Miscellaneous.
5.1 Confirmation. The provisions of the Credit Agreement (as
amended by this Second Amendment) shall remain in full force and effect in
accordance with their terms following the effectiveness of this Second
Amendment.
5.2 Ratification and Affirmation of Parent Company. The Parent
Company hereby expressly (i) acknowledges the terms of this Second Amendment,
(ii) ratifies and affirms its obligations under the Guaranty Agreement, (iii)
acknowledges, renews and extends its continued liability under the Guaranty
Agreement and agrees that said Guaranty Agreement remains in full force and
effect with respect to the Indebtedness.
5.3 Counterparts. This Second Amendment may be executed by one
or more of the parties hereto in any number of separate counterparts, and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.
5.4 No Oral Agreement. THIS WRITTEN SECOND AMENDMENT, THE
CREDIT AGREEMENT AND THE OTHER SECURITY INSTRUMENTS EXECUTED IN CONNECTION
THEREWITH 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 AGREEMENTS BETWEEN THE
PARTIES.
5.5 GOVERNING LAW. THIS SECOND AMENDMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN THE
CONFLICTS OF LAWS RULES THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed effective as of the date first written above.
BORROWER: XXXXXX & XXXXX, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------
Xxxxxx X. Xxxx
Senior Vice President and
Chief Financial Officer
AGENT: THE CHASE MANHATTAN BANK, AS AGENT
By: /s/ Xxxxxx Xxx Xxxxxx
----------------------------
Xxxxxx Xxx Xxxxxx
Vice President
LENDER: THE CHASE MANHATTAN BANK
By: /s/ Xxxxxx Xxx Xxxxxx
----------------------------
Xxxxxx Xxx Xxxxxx
Vice President
LENDER: FIRST NATIONAL BANK OF COMMERCE
By:
----------------------------
Xxxxx X. Xxxx
Senior Vice President
PARENT COMPANY: XXXXXX & XXXXX, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------
Xxxxxx X. Xxxx
Senior Vice President and
Chief Financial Officer
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