AGREEMENT AND AMENDMENT NO. 3
Exhibit 10.20
AGREEMENT AND AMENDMENT NO. 3
This
AGREEMENT AND AMENDMENT NO. 3 (“Agreement”) dated as of
May 23, 2011 (“Effective Date”)
is among Xxxx Xxxx Holdings, LP, a Texas limited partnership (“Borrower”), the affiliates of the
Borrower party hereto (the “Guarantors”), the Lenders (as defined below), and Xxxxx Fargo Bank,
N.A. as administrative agent for such Lenders (in such capacity, the “Administrative Agent”) and as
issuing lender (in such capacity, the “Issuing Lender”).
RECITALS
A. The Borrower is party to that certain Sixth Amended and Restated Credit Agreement dated as
of May 13, 2010 among the Borrower, the lenders party thereto from time to time (the “Lenders”),
the Administrative Agent, and the Issuing Lender, as amended by that certain Amendment No. 1 dated
as of September 2, 2010 among the Borrower, the Guarantors, the Lenders, the Administrative Agent
and the Issuing Lender and that certain Agreement and Amendment No. 2 dated as of December 6, 2010
among the Borrower, the Guarantors, the Lenders, the Administrative Agent and the Issuing Lender
(as so amended, the “Credit Agreement”).
B. The parties hereto wish to, subject to the terms and conditions of this Agreement, (i)
redetermine and increase the Borrowing Base (as defined in the Credit Agreement) and (ii) make
certain other amendments to the Credit Agreement as provided herein.
NOW THEREFORE, in consideration of the benefits to be derived by the parties hereto and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Defined Terms; Other Provisions. As used in this Agreement, each
of the terms defined in the opening paragraph and the Recitals above shall have the meanings
assigned to such terms therein. Each term defined in the Credit Agreement and used herein without
definition shall have the meaning assigned to such term in the Credit Agreement, unless expressly
provided to the contrary. Article, Section, Schedule, and Exhibit references are to Articles and
Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified. The words
“hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement. The term
“including” means “including, without limitation,”. Paragraph headings have been inserted in this
Agreement as a matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the interpretation of any
provision of this Agreement.
Section 2. Agreement — Borrowing Base. Subject to the terms of this
Agreement, as of the Effective Date, the Borrowing Base shall be increased to $260,000,000. Such
Borrowing Base shall remain in effect at such level until the Borrowing Base is redetermined in
accordance with Section 2.02 of the Credit Agreement, as amended hereby. The Borrower and the
Lenders hereby acknowledge and agree that the redetermination of the Borrowing Base set forth in
this Section 2 is the scheduled semi-annual redetermination of the Borrowing Base scheduled for
Spring, 2011 under Section 2.02 of the Credit Agreement. Each Lender’s Pro Rata Share of the
redetemined Borrowing Base, after giving effect to the increase in the Borrowing Base set forth in
this Section 2, is set forth in Annex I attached hereto
Section 3. Amendments to Credit Agreement.
(a) Section 1.01 (Certain Defined Terms) of the Credit Agreement is hereby amended
by deleting the terms “Applicable Margin” and “Maturity Date”, and replacing them with the
following corresponding terms:
“Applicable Margin” means (i) with respect to any Advance, (a) during any
time when an Event of Default under Section 7.01(a) or Section 7.01(e) exists, 3%
per annum plus the rate per annum set forth in the pricing grid set forth below for
the relevant Type of such Advance based on the present Utilization Level applicable
at such time, (b) during any time when any other Event of Default exists and upon
election by the Required Lenders (or the Administrative Agent at the direction of
the Required Lenders), 3% per annum plus the rate per annum set forth in the pricing
grid set forth below for the relevant Type of such Advance based on the present
Utilization Level applicable at such time, and (c) at any other time, the rate per
annum set forth in the pricing grid set forth below for the relevant Type of such
Advance based on the relevant Utilization Level applicable at such time, and (ii)
with respect to the commitment fees, the rate per annum set forth in the pricing
grid set forth below based on the relevant Utilization Level applicable at such
time. The Applicable Margin for any Advance and the commitment fees shall change
when and as the relevant Utilization Level changes.
| Applicable Margin | ||||||||||||
| Borrowing Base Utilization |
Eurodollar Rate Advance |
Reference Rate Advance |
Commitment Fee |
|||||||||
Less than 50% |
2.00 | % | 1.00 | % | 0.375 | % | ||||||
Greater than or equal to 50% but less than 75% |
2.25 | % | 1.25 | % | 0.500 | % | ||||||
Greater than or equal to 75% but less than 90% |
2.50 | % | 1.50 | % | 0.500 | % | ||||||
Greater than or equal to 90% |
2.75 | % | 1.75 | % | 0.500 | % | ||||||
“Maturity Date” means May 23, 2016.
(b) The definition for “Additional Subordinated Debt” found in Section 1.01 (Certain
Defined Terms) of the Credit Agreement is hereby amended replacing clause (a)(vi) therein in its
entirety with the following:
(vi) a scheduled maturity date that is earlier than May 23, 2017,
(c) Section 2.02(e) (Mandatory Reductions in the Borrowing Base) of the Credit
Agreement is hereby amended by replacing the phrase “...the issuance of Senior Unsecured Notes...”
with the phrase “...each issuance of Senior Unsecured Notes...”
(d) Section 2.08(a) (Commitment Fees) of the Credit Agreement is replaced in its
entirety with the following:
(a) Commitment Fees. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender having a Commitment a commitment
fee in an amount equal to the Applicable Margin on the daily Unused Commitment
Amount of such Lender, from the date of this Agreement until the Commitment
Termination Date; provided that, no commitment fee shall accrue on the Commitment of
a Defaulting Lender during the
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period such Lender remains a Defaulting Lender. The
commitment fees shall be due and payable quarterly in arrears on the last day of
each March, June, September, and December commencing on June 30, 2010 and continuing thereafter through and including
the Commitment Termination Date.
(e) Section 6.01 (Liens, Etc.) of the Credit Agreement is hereby amended (i) by
deleting the word “and” at the end of clause (n), (ii) by replacing the period at the end of clause
(o) with a semicolon and the word “and”; and (iii) adding the following new clause (p) to the end
thereof:
(p) Liens not otherwise permitted in this Section 6.01 so long as (i) such Liens do
not encumber Oil and Gas Properties and (ii) the aggregate amount of obligations
secured thereby shall not exceed $1,000,000.
(f) Section 6.02 (Debts, Guaranties, and Other Obligations) of the Credit Agreement
is hereby amended by replacing clause (j) found therein in its entirety with the following:
(j) Senior Unsecured Notes and the guaranties given by Restricted Subsidiaries with
respect thereto; provided that (i) the principal amount of such Debt shall not
exceed $700,000,000 in the aggregate, (ii) the Borrowing Base is reduced if and to
the extent required by Section 2.02(e), and (iii) the Debt Incurrence Proceeds
thereof shall be applied to make the payments, if any, required under Section
2.05(b)(ii);
(g) Section 6.06 (Investments) of the Credit Agreement is hereby amended by
replacing clause (f) in its entirety with the following:
(f) other investments, loans or advances not otherwise permitted by this Section
6.06 in an aggregate amount not to exceed $10,000,000 at any time.
Section 4. Representations and Warranties. Each of the Guarantors and the
Borrower hereby represents and warrants that: (a) after giving effect to this Agreement, the
representations and warranties contained in the Credit Agreement, as amended hereby, and the
representations and warranties contained in the other Loan Documents are true and correct in all
material respects (except that such materiality qualifier shall not be applicable to any
representation or warranty that already is qualified or modified by materiality in the text
thereof) on and as of the Effective Date as if made on and as of such date except to the extent
that any such representation or warranty expressly relates solely to an earlier date, in which case
such representation or warranty is true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representation or warranty that already is
qualified or modified by materiality in the text thereof) as of such earlier date; (b) no Default
has occurred which is continuing; (c) the execution, delivery and performance of this Agreement are
within the corporate, limited liability company, or partnership power and authority of such Person
and have been duly authorized by appropriate corporate and governing action and proceedings; (d)
this Agreement constitutes the legal, valid, and binding obligation of such Person enforceable in
accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the rights of creditors generally and general principles of
equity; (e) there are no governmental or other third party consents, licenses and approvals
required in connection with the execution, delivery, performance, validity and enforceability of
this Agreement; and (f) the Liens under the Security Instruments are valid and subsisting and
secure Borrower’s and the Guarantors’ obligations under the Loan Documents.
Section 5. Conditions to Effectiveness. This Agreement shall become
effective on the Effective Date and enforceable against the parties hereto upon the occurrence of
the following conditions precedent:
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(a) The Administrative Agent shall have received multiple original counterparts, as
requested by the Administrative Agent, of this Agreement duly and validly executed and delivered by
duly authorized officers of the Borrower, the Guarantors and all the Lenders.
(b) The Administrative Agent shall have received executed mortgage amendments from
the Borrower and each Guarantor, as applicable and as requested by the Administrative Agent, in any
event, evidencing the intent of the parties as set forth in Section 8 below.
(c) The representations and warranties in this Agreement made by the Guarantors and
the Borrower shall be true and correct in all material respects.
(d) The Borrower shall have paid (i) all reasonable fees and expenses of the
Administrative Agent’s outside legal counsel and other consultants pursuant to all invoices
presented for payment on or prior to the Effective Date, (ii) to the Administrative Agent such
other fees as agreed to between the Administrative Agent and the Borrower and (iii) for the account
of each Lender, an amendment, extension and borrowing base increase fee equal to 0.45% of such
Lender’s Pro Rata Share of the Borrowing Base (after giving effect to the increase effected
hereby).
Section 6. Acknowledgments and Agreements.
(a) The Borrower and each Guarantor acknowledges that on the date hereof all
outstanding Obligations are payable in accordance with their terms and the Borrower and each
Guarantor hereby waives any defense, offset, counterclaim or recoupment with respect thereto.
(b) The Administrative Agent and the Lenders hereby expressly reserve all of their
rights, remedies, and claims under the Loan Documents. Nothing in this Agreement shall constitute
a waiver or relinquishment of (i) any Default or Event of Default under any of the Loan Documents,
(ii) any of the agreements, terms or conditions contained in any of the Loan Documents, (iii) any
rights or remedies of the Administrative Agent or any Lender with respect to the Loan Documents, or
(iv) the rights of the Administrative Agent or any Lender to collect the full amounts owing to them
under the Loan Documents.
(c) Each of the parties hereto hereby adopt, ratify, and confirm the Credit
Agreement, as amended hereby, and acknowledges and agrees that the Credit Agreement, as amended
hereby, is and remains in full force and effect, and the Borrower and the Guarantors acknowledge
and agree that their respective liabilities and obligations under the Credit Agreement, as amended
hereby, and the Guaranties, are not impaired in any respect by this Agreement.
(d) From and after the Effective Date, all references to the Credit Agreement and
the Loan Documents shall mean such Credit Agreement and such Loan Documents as amended by this
Agreement.
(e) This Agreement is a Loan Document for the purposes of the provisions of the
other Loan Documents. Without limiting the foregoing, any breach of representations, warranties,
and covenants under this Agreement shall be a Default or Event of Default, as applicable, under the
Credit Agreement.
Section 7. Reaffirmation of the Guaranty. Each Guarantor hereby ratifies,
confirms, acknowledges and agrees that its obligations under its respective Guaranty are in full
force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the
full and punctual
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payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all
of the Guaranteed Obligations (as defined in the Guaranties), as such Guaranteed Obligations may
have been amended by this Agreement, and its execution and delivery of this Agreement does not
indicate or establish an approval or consent requirement by such Guarantor under its respective
Guaranty in connection with the execution and delivery of amendments, consents or waivers to the
Credit Agreement, the Notes or any of the other Loan Documents.
Section 8. Flood Insurance Regulations. Each party hereto acknowledges and
agrees that, unless otherwise required by the Administrative Agent (and in the absence of an Event
of Default, agreed to by the Borrower), in no event shall any Mortgage encumber any Building (as
defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in
the applicable Flood Insurance Regulation). To the extent that any Mortgage may have ever covered
or affected any such Buildings or Manufactured (Mobile) Homes, such property shall be released and
discharged from the Lien of the Mortgage. Each Secured Party hereby authorizes the Administrative
Agent to execute and deliver any amendment or partial release or such other document necessary to
evidence such release and discharge. As used herein, “Flood Insurance Regulations” shall
mean (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor
statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or
any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42
USC 4001, et seq.), as the same may be amended or recodified from time to time, and (iv) the Flood
Insurance Reform Act of 2004 and any regulations promulgated thereunder. By accepting the benefit
of the Liens granted pursuant to the Security Instruments, each Secured Party not party hereto
hereby agrees to the terms of this Section 8.
Section 9. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original and all of which, taken together, constitute a
single instrument. This Agreement may be executed by facsimile signature or other similar
electronic means and all such signatures shall be effective as originals.
Section 10. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns
permitted pursuant to the Credit Agreement.
Section 11. Invalidity. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other provision of
this Agreement.
Section 12. Governing Law. This Agreement shall be deemed to be a contract
made under and shall be governed by and construed in accordance with the laws of the State of
Texas.
Section 13. Entire Agreement. THIS AGREEMENT, THE CREDIT AGREEMENT AS
AMENDED BY THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[SIGNATURES BEGIN ON NEXT PAGE]
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EXECUTED effective as of the date first above written.
| BORROWER: | XXXX XXXX HOLDINGS, LP | |||||||
| By: | Xxxx Xxxx Holdings GP, LLC | |||||||
| its general partner | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Name: | ||||||||
| Title: | Chief Financial Officer | |||||||
| GUARANTORS: | XXXX XXXX FINANCE SERVICES CORP. | |||||||
| XXXX XXXX GP, LLC | ||||||||
| ARI DEVELOPMENT, LLC | ||||||||
| XXXX XXXX ACQUISITION SUB, LLC | ||||||||
| XXXXXXX MANAGEMENT GP, LLC | ||||||||
| XXXXXXX MANAGEMENT XX XX, LLC | ||||||||
| CAIRN ENERGY USA, LLC | ||||||||
| LOUISIANA ONSHORE PROPERTIES LLC | ||||||||
| THE MERIDIAN PRODUCTION, LLC | ||||||||
| THE MERIDIAN RESOURCE, LLC | ||||||||
| THE MERIDIAN RESOURCE & EXPLORATION LLC | ||||||||
| TMR DRILLING, LLC | ||||||||
| VIRGINIA OIL AND GAS, LLC | ||||||||
| XXXX XXXX HOLDINGS GP, LLC | ||||||||
| XXXX XXXX ENERGY LLC | ||||||||
| Each by: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Xxxxxxx X. XxXxxx | ||||||||
| Chief Financial Officer | ||||||||
| XXXX XXXX SERVICES, LP | ||||||||
| ARANSAS RESOURCES, LP | ||||||||
| BUCKEYE PRODUCTION COMPANY, LP | ||||||||
| LOUISIANA EXPLORATION & ACQUISITIONS, LP | ||||||||
| NAVASOTA RESOURCES, LTD., LLP | ||||||||
| NUECES RESOURCES, LP | ||||||||
| OKLAHOMA ENERGY ACQUISITIONS, LP | ||||||||
| TEXAS ENERGY ACQUISITIONS, LP | ||||||||
| GALVESTON BAY RESOURCES, XX | ||||||||
| XXXXX ACQUISITIONS, XX | ||||||||
| XXXXX OPERATING COMPANY, LP | ||||||||
| ORION OPERATING COMPANY, LP | ||||||||
| Each by: Xxxx Xxxx GP, LLC | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Chief Financial Officer | ||||||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| XXXXXXX RESOURCES, LP, | ||||||||
| By: Xxxxxxx Management GP, LLC, its general partner | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Chief Financial Officer | ||||||||
| XXXXXXX RESOURCES II, L.P., | ||||||||
| By: Xxxxxxx Management XX XX, LLC, its general partner | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Chief Financial Officer | ||||||||
| XXXX XXXX RESOURCES, LP, | ||||||||
| By: | Xxxx Xxxx Resources GP, LLC, | |||||||
| its sole general partner | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Chief Financial Officer | ||||||||
| PETRO ACQUISITIONS HOLDINGS, LP, | ||||||||
| By: | Petro Acquisitions Holdings GP, LLC, | |||||||
| its sole general partner | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Chief Financial Officer | ||||||||
| PETRO OPERATING COMPANY HOLDINGS, INC., | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Xxxxxxx X. XxXxxx | ||||||||
| Chief Financial Officer | ||||||||
| GALVESTON BAY RESOURCES HOLDINGS, LP, | ||||||||
| By: | Galveston Bay Resources Holdings GP, LLC | |||||||
| its sole general partner | ||||||||
| By: | /s/ Xxxxxxx X. XxXxxx | |||||||
| Xxxxxxx X. XxXxxx, | ||||||||
| Chief Financial Officer | ||||||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
ADMINISTRATIVE AGENT/ |
||||||
ISSUING LENDER/ |
||||||
| LENDER: | XXXXX FARGO BANK, N.A. | |||||
| By: | /s/ Xxxxxx Xxxxxx | |||||
| Vice President | ||||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | UNION BANK, N.A. | |||||
| By: | /s/
Xxxxx Xxxxxxx |
|||||
| Name: | Xxxxx Xxxxxxx
|
|||||
| Title: | Assistant
Vice President
|
|||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | TORONTO DOMINION (NEW YORK) LLC | |||||
| By: | /s/ Xxxx Xxxxx | |||||
| Name: | Xxxx Xxxxx |
|||||
| Title: | Authorized Signatory |
|||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | ING CAPITAL LLC | |||||
| By: | /s/ Xxxxxxx Xxxx | |||||
| Name: | Xxxxxxx
Xxxx |
|||||
| Title: | Managing
Director |
|||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | CITIBANK, N.A. | |||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||||
| Name: | ||||||
| Title: | ||||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | CAPITAL ONE, NATIONAL ASSOCIATION | |||||
| By: | /s/ Xxxxx X. Xxx | |||||
| Name: | ||||||
| Title: | ||||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | BOKF, NA DBA BANK OF TEXAS | |||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxx |
|||||
| Title: | Senior Vice President |
|||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | AMEGY BANK NATIONAL ASSOCIATION | |||||
| By: | /s/
Xxxx Xxxxxx |
|||||
| Name: | Xxxx
Xxxxxx
|
|||||
| Title: | Senior
Vice President
|
|||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
| LENDER: | TEXAS CAPITAL BANK, N.A. | |||||
| By: | /s/
W. Xxxxx XxXxxxxx XX |
|||||
| Name: | W. Xxxxx XxXxxxxx XX
|
|||||
| Title: | Vice
President
|
|||||
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
ANNEX I
BORROWING BASE AS OF MAY 23, 2011*
BORROWING BASE AS OF MAY 23, 2011*
| PRO RATA SHARE OF THE | PERCENTAGE OF | |||||||
| LENDERS | BORROWING BASE* | TOTAL | ||||||
Xxxxx Fargo Bank, N.A.
|
$ | 63,859,649.12 | 24.561403509 | % | ||||
Union Bank, N.A.
|
$ | 41,052,631.58 | 15.789473684 | % | ||||
Toronto Dominion (New York) LLC
|
$ | 31,017,543.86 | 11.929824561 | % | ||||
ING Capital LLC
|
$ | 25,543,859.65 | 9.824561404 | % | ||||
Citibank, N.A.
|
$ | 25,543,859.65 | 9.824561404 | % | ||||
Capital One, N.A.
|
$ | 22,807,017.54 | 8.771929824 | % | ||||
Bank of Texas, NA
|
$ | 22,807,017.54 | 8.771929824 | % | ||||
Amegy Bank National Association
|
$ | 13,684,210.53 | 5.263157895 | % | ||||
Texas Capital Bank, N.A.
|
$ | 13,684,210.53 | 5.263157895 | % | ||||
TOTAL
|
$ | 260,000,000.00 | 100 | % | ||||
| * | Borrowing Base is subject to redetermination pursuant to the terms of the Credit Agreement, as amended. |
Signature Page to Agreement and Amendment No. 3
(Xxxx Xxxx Holdings, LP)
(Xxxx Xxxx Holdings, LP)
