EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment") dated
effective as of June 5, 2003 (the "First Amendment Effective Date"), among THE
HOUSTON EXPLORATION COMPANY, a Delaware corporation (the "Company"); the lenders
party hereto (the "Lenders"); WACHOVIA BANK, NATIONAL ASSOCIATION, as Issuing
Bank and as Administrative Agent (in its capacity as Administrative Agent, the
"Administrative Agent"); THE BANK OF NOVA SCOTIA and FLEET NATIONAL BANK, as
Co-Syndication Agents; and BNP PARIBAS, as Documentation Agent.
R E C I T A L S:
A. The Company, the Lenders, the Administrative Agent, the
Co-Syndication Agents and the Documentation Agent are parties to that certain
Credit Agreement dated as of July 15, 2002 (the "Credit Agreement").
B. The parties to the Credit Agreement intend to amend the Credit
Agreement to, among other things, permit the Company to issue the "2003 Senior
Subordinated Notes" pursuant to the "2003 Indenture" (as such terms are
hereinafter defined).
C. Therefore, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
SECTION 1. Defined Terms. Except as amended hereby, terms used
herein when defined in the Credit Agreement shall have the same meanings herein
unless the context otherwise requires.
SECTION 2. Amendments to Credit Agreement.
(a) Definitions. The term "Agreement", defined in Section
1.02 of the Credit Agreement, is hereby amended in its entirety to read as
follows:
"Agreement" shall mean this Credit Agreement, as amended by
the First Amendment, and as the same may be further amended, supplemented,
waived or otherwise modified from time to time in accordance herewith.
(b) New Definitions. Section 1.02 of the Credit Agreement
is hereby further amended by adding thereto the following new definitions in
their appropriate alphabetical order:
"First Amendment" shall mean that certain First
Amendment to Credit Agreement dated effective as of June 5, 2003 (the
"First Amendment Effective Date"), among the Company, the Lenders party
thereto, the Administrative Agent, the Issuing Bank, the Co-Syndication
Agents and the Documentation Agent.
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"2003 Indenture" shall mean that certain Indenture to
be entered into by and between the Company and Bank of New York,
individually, as Trustee, pursuant to which the Company will issue the
2003 Senior Subordinated Notes, as the same may from time to time be
amended or supplemented and as otherwise permitted by the terms of this
Agreement including, without limitation, the provisions of Section
9.01(m).
"2003 Senior Subordinated Notes" shall mean the
Senior Subordinated Notes of the Company issued pursuant to the 2003
Indenture, as the same may from time to time be renewed, rearranged,
modified, increased or replaced and as otherwise permitted by the terms
of this Agreement including, without limitation, the provisions of
Section 9.01(m).
(c) Borrowing Base. Section 2.09(b) of the Credit
Agreement is hereby amended in its entirety to read as follows:
"(b) Scheduled and Interim Redeterminations. Subject to
Section 2.09(d), the Borrowing Base shall be redetermined (a
"Scheduled Redetermination") on April 1st and October 1st of
each year, commencing October 1, 2002. In addition (i) the
Company may, by notifying the Administrative Agent thereof,
and the Administrative Agent may, at the direction of the
Required Lenders, by notifying the Company thereof, one time
during any 12-month period, elect to cause, and (ii) if any
refinancing of the Debt of the Company under or in respect of
(X) the Indenture or any Senior Subordinated Note permitted by
the terms of this Agreement results in the Company receiving
net proceeds in excess of the aggregate principal amount of
the Senior Subordinated Notes outstanding on the Closing Date
or (Y) the 2003 Indenture or any 2003 Senior Subordinated Note
permitted by the terms of this Agreement results in the
Company receiving net proceeds in excess of the aggregate
principal amount of the 2003 Senior Subordinated Notes
outstanding on the first Business Day following the First
Amendment Effective Date, the Administrative Agent shall
cause, the Borrowing Base to be redetermined between Scheduled
Redeterminations (a redetermination pursuant to clause (i) or
(ii) of this Section 2.09(b), called an "Interim
Redetermination") in accordance with this Section. The
Borrowing Base shall be subject to further adjustments from
time to time pursuant to Section 9.15."
(d) Affirmative Covenants. Article VIII of the Credit
Agreement is hereby amended by adding a new section, to be Section 8.07, to read
in its entirety as follows:
"Section 8.07 Redemption of Senior Subordinated
Notes. Promptly upon, but in any event within five (5)
Business Days after, the issuance of the 2003 Senior
Subordinated Notes, the
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Company will, by written notice to each "Holder" (as defined
in the Indenture), call for redemption of all outstanding
Senior Subordinated Notes in accordance with the terms of the
Indenture, and the Company will redeem, at the applicable
"Redemption Price" (as defined in the Indenture), all
outstanding Senior Subordinated Notes on the "Redemption Date"
(as defined in the Indenture) set forth in such written
notice, which shall be a date not more than 60 days following
such written notice."
(e) Negative Covenants. Article IX of the Credit
Agreement is hereby amended as follows:
(i) Section 9.01(l) of the Credit Agreement is
hereby amended by deleting the period (".") from the end thereof and
substituting therefor a semi-colon (";").
(ii) Section 9.01 of the Credit Agreement is
hereby further amended by adding thereto a new clause, to be clause
(m), to read in its entirety as follows:
"(m) Debt of the Company under or in respect of the 0000
Xxxxxxxxx and the 2003 Senior Subordinated Notes issued
thereunder, and all amendments, supplements, renewals,
extensions or refinancings thereof; provided, however, that
(i) the aggregate principal amount of the 2003 Senior
Subordinated Notes shall not exceed $175,000,000, (ii)
interest on the unpaid aggregate principal amount of the 2003
Senior Subordinated Notes shall accrue at a rate per annum not
greater than 8 5/8%, (iii) the final maturity of the 2003
Senior Subordinated Notes shall be a date not less than seven
(7) years from the date of the issuance thereof, (iv) payment
of principal of, premium, if any, interest and other amounts
owing or to be owing under, in connection with or evidenced by
the 2003 Indenture or the 2003 Senior Subordinated Notes shall
be subordinated to the payment of the Indebtedness on terms
substantially as those set forth in the Indenture as of the
First Amendment Effective Date or otherwise reasonably
satisfactory to the Administrative Agent, (v) the terms of the
2003 Indenture, taken as a whole, shall be no more restrictive
to the Company than the terms of the Indenture and (vi) any
amendment, supplement, renewal, extension or refinancing of
the 2003 Indenture or any 2003 Senior Subordinated Note shall
be on terms, taken as a whole, no more restrictive to the
Company than the terms of the 2003 Indenture and the 2003
Senior Subordinated Notes as they exist on the First Amendment
Effective Date, provided, further, however, with respect to
subclause (iv) hereof, the 2003 Indenture and the 2003 Senior
Subordinated Notes may be prepaid with net proceeds of an
equity offering, provided, further, however, if any
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refinancing of the Debt of the Company under or in respect of
the 0000 Xxxxxxxxx or any 2003 Senior Subordinated Note
permitted by the terms of this Agreement results in the
Company receiving net proceeds in excess of the aggregate
principal amount of the 2003 Senior Subordinated Notes
outstanding on the First Amendment Effective Date, the
Borrowing Base shall be redetermined in accordance with
Section 2.09."
(iii) Section 9.14 of the Credit Agreement is
hereby amended in its entirety as follows:
"Section 9.14 Negative Pledge Agreements. The Company will not
create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any
contract, agreement or understanding (other than this
Agreement, the Security Instruments, the provisions of Section
4.7 of the Indenture, the provisions of Section 4.7 of the
2003 Indenture, and any contract or agreement evidencing an
Excepted Lien, but only with respect to the Property covered
by such Excepted Lien) which in any way prohibits or restricts
the granting, conveying, creation or imposition of any Lien on
any Property of the Company or any Subsidiary, or which
requires the consent of or notice to other Persons in
connection therewith, except customary consents to assignment
provisions contained in any instrument to which the Company or
a Subsidiary is a party, and in any conveyance thereof in the
Company's or any Subsidiaries' chain of title."
(f) Events of Default. Section 10.01 of the Credit
Agreement is hereby amended by adding thereto a new clause, to be clause (p), to
read in its entirety as follows:
"(p) An "Event of Default" (as defined in the 2003
Indenture) occurs and is continuing under the 2003 Indenture
(including, without limitation, failure to pay when due any
amount owing under or in connection with the 2003 Indenture or
a breach of any other covenant or provision thereof);"
(g) Schedule 7.22. Schedule 7.22 to the Credit Agreement
is hereby amended to include the 2003 Indenture, providing for the issuance of
the Company's 2003 Senior Subordinated Notes.
SECTION 3. Use of Proceeds. The proceeds received by the Company
from the issuance of the 2003 Senior Subordinated Notes shall be used by the
Company first, to redeem all outstanding Senior Subordinated Notes pursuant to
Section 8.07 of the Credit Agreement, as amended hereby, provided that until
such proceeds are required to be used to redeem the outstanding Senior
Subordinated Notes, such proceeds shall, at the Company's option, be (i)
invested as permitted by Section 9.05 of the Credit Agreement or (ii) used to
prepay Loans
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pursuant to Section 2.08 of the Credit Agreement, and second, to prepay Loans
pursuant to Section 2.08 of the Credit Agreement.
SECTION 4. Conditions Precedent; Effectiveness. (a) This First
Amendment shall become effective as of the date hereof when the Administrative
Agent shall have received:
(i) Counterparts hereof duly executed by the Company and
the Required Lenders (or, in the case of any party as to which an
executed counterpart shall not have been received, telegraphic, telex,
or other written confirmation from such party of execution of a
counterpart hereof by such party).
(ii) The Administrative Agent shall have received such
other documents as the Administrative Agent or special counsel to the
Administrative Agent may reasonably request.
(b) This First Amendment shall cease to be effective on July 15,
2003, if each of the following events shall not have occurred on or before such
date:
(i) The Administrative Agent shall have received a fully
executed and completed copy of the 2003 Indenture.
(ii) The 2003 Senior Subordinated Notes shall have been
issued pursuant to the 2003 Indenture and as otherwise permitted by the
Credit Agreement, as amended hereby.
SECTION 5. Reaffirmation of Representations and Warranties. To
induce the Lenders, the Administrative Agent and the Issuing Bank to enter into
this First Amendment, the Company hereby reaffirms, as of the date hereof, its
representations and warranties in their entirety contained in Article VII of the
Credit Agreement and in all other documents executed pursuant thereto (except to
the extent such representations and warranties relate solely to an earlier
date).
SECTION 6. Reaffirmation of Credit Agreement. This First
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement herein and in
any other document, instrument, agreement or writing shall hereafter be deemed
to refer to the Credit Agreement, as amended hereby.
SECTION 7. Governing Law; Entire Agreement. This First Amendment
shall be governed by, and construed in accordance with, the laws of the State of
Texas. The Credit Agreement, as amended by this First Amendment, 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.
SECTION 8. Severability of Provisions. Any provision in this
First Amendment that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions
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in that jurisdiction or the operation, enforceability, or validity of that
provision in any other jurisdiction, and to this end the provisions of this
First Amendment are declared to be severable.
SECTION 9. Counterparts. This First Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this First Amendment by
signing any such counterpart.
SECTION 10. Headings. Article and section headings in this First
Amendment are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of this First Amendment.
SECTION 11. Successors and Assigns. This First Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
[Signatures begin on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment effective as of the First Amendment Effective Date.
COMPANY: THE HOUSTON EXPLORATION
COMPANY
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
AGENTS AND LENDERS: WACHOVIA BANK, NATIONAL
ASSOCIATION, Individually, as Issuing
Bank and as Administrative Agent
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
Individually and as Co-Syndication Agent
By: /s/ X. Xxxx
Name: X. Xxxx
Title: Senior Manager
FLEET NATIONAL BANK, Individually
and as Co-Syndication Agent
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Director
[Signature Page to First Amendment]
BNP PARIBAS, Individually and as
Documentation Agent
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
COMERICA BANK-TEXAS
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
FORTIS CAPITAL CORP.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
WASHINGTON MUTUAL BANK, F.A.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
[Signature Page to First Amendment]
XXXXX FARGO BANK TEXAS, N.A.
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
NATEXIS BANQUES POPULAIRES
By: /s/ Philippe A. Xxxxx
Name: Philippe A. Xxxxx
Title: Senior Vice President
By: /s/ Xxxxx X. Xxxxxxx, III
Name: Xxxxx X. Xxxxxxx, III
Title: Vice President & Group Manager
HIBERNIA NATIONAL BANK
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Senior Vice President
COMPASS BANK
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President, Energy Lending
[Signature Page to First Amendment]
