EXHIBIT 4.9 and 10.27
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (hereinafter referred to as the
"Second Amendment") executed as of the 14th of November, 2001, by and between
ADDISON ENERGY INC. ("Borrower") and XXXX XXX, XX, XXXXXX BRANCH (successor by
merger to Bank One Canada) ("Bank One"), and each of the financial institutions
which is a party thereto (as evidenced by the signature pages to the Agreement)
or which may from time to time become a party thereto pursuant to the provisions
of Section 28 of the Credit Agreement or any successor or assignee thereof
(hereinafter collectively referred to as "Lenders", and individually, "Lender")
and Bank One, as Administrative Agent (the "Agent") and BNP Paribas (Canada), as
Documentation Agent and Banc One Capital Markets, Inc., as Lead Arranger and
Bookrunner ("Arranger").
WITNESSETH:
WHEREAS, as of April 26, 2001, Borrower, the Lenders and the Agent entered
into a Credit Agreement pursuant to which the Lenders made available to the
Borrower a revolving credit facility of up to $77,500,000 Canadian (the "Credit
Agreement"); and
WHEREAS, as of April 26, 2001, Borrower, the Lenders and the Agent entered
into a First Amendment to Credit Agreement (the "First Amendment"); and
WHEREAS, the Borrower has requested that Majority Lenders agree to make
certain amendments to the Credit Agreement and Majority Lenders have agreed to
do so on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties agree to amend the Credit Agreement as
follows:
1. Unless otherwise defined herein all defined terms used herein shall
have the same meaning as ascribed to such terms in the Credit Agreement.
2. Section 1 of the Credit Agreement is hereby amended in the following
respects:
(a) The definition of "Consolidated Current Assets" is hereby
deleted and the following inserted in lieu thereof:
"Consolidated Current Assets means the total of the
consolidated current assets determined in accordance with GAAP,
plus, as of any date, the unused availability on the Revolving
Commitment, less any amount required to be included in Consolidated
Current Assets as a result of the application of FASB Statement
133."
(b) The definition of "Consolidated Current Liabilities" is hereby
deleted and the following inserted in lieu thereof:
"Consolidated Current Liabilities means the total of
consolidated current obligations as determined in accordance with
GAAP, excluding
therefrom any amount required to be included in Consolidated Current
Liabilities as a result of the application of FASB Statement 133."
(c) The definition of "Consolidated Debt" is hereby deleted and the
following inserted in lieu thereof:
"Consolidated Debt means, without duplication, all obligations
and liabilities of a Person on a consolidated basis to any other
person, including, without limitation, all debts, claims and
indebtedness, heretofore, now and/or from time to time hereafter
owing, due or payable, however evidenced, created, incurred,
acquired or owing and however arising, whether under written or oral
agreement, operation of law, or otherwise. Debt includes, without
limiting the foregoing, (i) indebtedness for borrowed money
(including without duplication obligations to reimburse the issuer
of any letter of credit or any guarantor or surety), (ii)
indebtedness for the deferred purchase price of property or
services, excluding trade accounts payable within ninety (90) days
and arising in the ordinary course of business, (ii) indebtedness
evidenced by bonds, debentures, notes or other similar instruments,
(iv) obligations and liabilities secured by a Lien on property owned
by such Person whether or not such Person has assumed such
obligations and liabilities and the amount of which Debt shall not
exceed the fair market value of the property subject to the Lien if
such Person has not assumed such obligations and liabilities, (v)
obligations or liabilities created or arising under any capitalized
lease, (vi) all net payments or amounts owing by such Person in
respect of interest rate protection agreements, foreign currency
exchange agreements, commodity swap agreements or other interests,
exchange rate or commodity hedging arrangements and (vii)
liabilities in respect of unfunded vested benefits under any Plan.
Debt shall not include accounts payable and expense accruals
incurred or assumed in the ordinary course of business nor shall it
include liabilities required to be included as balance sheet
liabilities as a result of the application of FASB Statement 133."
(d) The definition of "Consolidated Net Income" is hereby deleted
and the following inserted thereof:
"Consolidated Net Income shall mean Borrower's consolidated
net income after income taxes calculated in accordance with GAAP,
but excluding (i) any non-cash gains or losses as a result of the
application of FASB Statement 133, and (ii) the effect of ceiling
test write downs."
(e) By addition of the following new definition:
"Plan means any plan subject to Title IV of ERISA and
maintained by Borrower, or any such Plan in which Borrower is
required to contribute on behalf of its employees."
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3. Section 6(b) of the Credit Agreement is hereby amended by deleting the
first two sentences thereof in their entirety and substituting the following one
sentence in lieu thereof:
"Subsequent determinations of the Borrowing Base shall be made by
Lenders semi-annually on May 1 and November 1 of each year beginning
November 1, 2001 or as Unscheduled Redeterminations."
4. Section 13 of the Credit Agreement is hereby amended in the following
respects:
(a) Subsection 13(d) of the Credit Agreement is hereby deleted in
its entirety and the following inserted in lieu thereof:
"(d) Minimum Consolidated Tangible Net Worth. The Borrower
will not allow the Consolidated Tangible Net Worth to ever be less
than the sum of (i) $48,000,000 U.S., plus (ii) as of the end of
each fiscal quarter, 50% of Consolidated Net Income for such fiscal
quarter then ended (but only if positive) and (iii) 75% of the net
proceeds from the issuance of any equity securities after the
Effective Date by Borrower's parent, excluding, in each instance,
the effect of ceiling test write downs."
(b) Subsection 13(e) of the Credit Agreement is hereby deleted in
its entirety and the following inserted in lieu thereof:
"(e) Leverage Ratio. Borrower will not allow the ratio of
Consolidated Debt to Consolidated Total Capital to ever be greater
than 0.7 to 1.0 tested at the end of each fiscal quarter beginning
with the fiscal quarter ending June 30, 2001, excluding the effect
of ceiling test write downs."
(c) Subsection 13(h) of the Credit Agreement is hereby deleted in
its entirety and the following inserted in lieu thereof:
"(h) Restrictive Payments. Borrower will not declare or pay
any cash dividend, purchase, redeem or otherwise acquire for value
any of its stock now or hereafter outstanding, return any capital to
its stockholders, or make any distribution of its assets to its
stockholders except that Borrower may pay cash dividends to EXCO
Resources, Inc. if, and only if, (i) immediately before and giving
effect to any such dividend payment no Default or Event of Default
shall exist, and (ii) the total amount of all such dividends are
used by EXCO Resources, Inc. to purchase additional common stock
issued by Borrower. Borrower will not retire, redeem or prepay prior
to scheduled maturity any indebtedness other than obligations under
this Agreement."
5. The Borrower has requested a waiver of the Events of Default under the
terms of Sections 13(g) and (l) of the Credit Agreement which occurred as a
result of the loan made to
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Borrower by its parent, EXCO Resources, Inc., to allow Borrower to repay
indebtedness owed the Lenders under the Credit Agreement and the Notes. Majority
Lenders hereby agree to waive any Events of Default that may have occurred under
Sections 13(g) and (l) of the Credit Agreement as a result of EXCO Resources,
Inc. loaning monies to prepay Borrower's obligations under the Credit Agreement
and the Note. This waiver is a waiver of the specific sections referred to
herein and is not a waiver of any other Default or Event of Default that may
have occurred under the provisions of the Credit Agreement.
6. Except to the extent its provisions are specifically amended, modified
or superseded by this Second Amendment, the representations, warranties and
affirmative and negative covenants of the Borrower contained in the Credit
Agreement are incorporated herein by reference for all purposes as if copied
herein in full. The Borrower hereby restates and reaffirms each and every term
and provision of the Credit Agreement, as amended, including, without
limitation, all representations, warranties and affirmative and negative
covenants (except to the extent that such representations and warranties related
solely to an earlier date). Except to the extent its provisions are specifically
amended, modified or superseded by this Second Amendment, the Credit Agreement,
as amended, and all terms and provisions thereof shall remain in full force and
effect, and the same in all respects are confirmed and approved by the Borrower
and the Lenders.
7. This Second Amendment shall be effective as of the date first above
written, but only upon the satisfaction of the conditions precedent set forth in
Paragraph 8 hereof (the "Second Amendment Effective Date").
8. The obligations of Lenders under this Second Amendment shall be subject
to the following conditions precedent:
(a) Execution and Delivery. The Borrower shall have executed and delivered this
Second Amendment and other required documents, all in form and substance
satisfactory to the Agent;
(b) Representations and Warranties. The representations and
warranties of the Borrowers under this Second Amendment are true and
correct in all material respects as of such date, as if then made (except
to the extent that such representations and warranties related solely to
an earlier date);
(c) No Event of Default. No Event of Default shall have occurred and
be continuing nor shall any event have occurred or failed to occur which,
with the passage of time or service of notice, or both, would constitute
an Event of Default.
(d) Other Documents. The Agent shall have received such other
instruments and documents incidental and appropriate to the transaction
provided for herein as the Agent or its counsel may reasonably request,
and all such documents shall be in form and substance satisfactory to the
Agent;
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(e) Legal Matters. All legal matters incident to the consummation of
the transactions contemplated hereby shall be reasonably satisfactory to
special counsel for the Agent retained at the expense of Borrower.
9. Borrower hereby represents and warrants that all factual information
heretofore and contemporaneously furnished by or on behalf of Borrower to Agent
for purposes of or in connection with this Second Amendment does not contain any
untrue statement of a material fact or omit to state any material fact necessary
to keep the statements contained herein or therein from being materially
misleading. Each of the foregoing representations and warranties shall
constitute a representation and warranty of Borrower made under the Credit
Agreement, and it shall be an Event of Default if any such representation and
warranty shall prove to have been incorrect or false in any material respect at
the time given. Each of the representations and warranties made under the Credit
Agreement (including those made herein) shall survive and not be waived by the
execution and delivery of this Second Amendment or any investigation by Lenders.
10. The Borrower agrees to indemnify and hold harmless the Lenders and
their respective officers, employees, agents, attorneys and representatives
(singularly, an "Indemnified Party", and collectively, the "Indemnified
Parties") from and against any loss, cost, liability, damage or expense
(including the reasonable fees and out-of-pocket expenses of counsel to the
Lender, including all local counsel hired by such counsel) ("Claim") incurred by
the Lenders in investigating or preparing for, defending against, or providing
evidence, producing documents or taking any other action in respect of any
commenced or threatened litigation, administrative proceeding or investigation
under any federal securities law, federal or state environmental law, or any
other statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon any acts, practices
or omissions or alleged acts, practices or omissions of the Borrower or its
agents or arises in connection with the duties, obligations or performance of
the Indemnified Parties in negotiating, preparing, executing, accepting,
keeping, completing, countersigning, issuing, selling, delivering, releasing,
assigning, handling, certifying, processing or receiving or taking any other
action with respect to the Loan Documents and all documents, items and materials
contemplated thereby even if any of the foregoing arises out of an Indemnified
Party's ordinary negligence. The indemnity set forth herein shall be in addition
to any other obligations or liabilities of the Borrower to the Lenders hereunder
or at common law or otherwise, and shall survive any termination of this Second
Amendment, the expiration of the Loan and the payment of all indebtedness of the
Borrower to the Lenders hereunder and under the Notes, provided that the
Borrower shall have no obligation under this section to the Lenders with respect
to any of the foregoing arising out of the gross negligence or willful
misconduct of the Lenders. If any Claim is asserted against any Indemnified
Party, the Indemnified Party shall endeavor to notify the Borrower of such Claim
(but failure to do so shall not affect the indemnification herein made except to
the extent of the actual harm caused by such failure). The Indemnified Party
shall have the right to employ, at the Borrower's expense, counsel of the
Indemnified Parties' choosing and to control the defense of the Claim. The
Borrower may at its own expense also participate in the defense of any Claim.
Each Indemnified Party may employ separate counsel in connection with any Claim
to the extent such Indemnified Party believes it reasonably prudent to protect
such Indemnified Party. The parties intend for the provisions of this Section to
apply to and protect each Indemnified Party from the consequences of strict
liability imposed or threatened to be imposed on any
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Indemnified Party as well as from the consequences of its own negligence,
whether or not that negligence is the sole, contributing, or concurring cause of
any Claim.
11. This Second Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
12. Guarantor's Execution. EXCO Resources, Inc. is executing this Second
Amendment in its capacity as the Guarantor for the purpose of acknowledging the
existence of this Second Amendment and consenting to the execution thereof by
Borrower. EXCO Resources, Inc. hereby acknowledges that the execution and
delivery of this Second Amendment shall in no way effect its liability under its
Guaranty and hereby ratifies and affirms its obligations under its Guaranty.
13. WRITTEN CREDIT AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS
SECOND AMENDMENT REPRESENTS THE FINAL AGREEMENT BETWEEN AND AMONG 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
AND AMONG THE PARTIES.
IN WITNESS WHEREOF, the parties have caused this Second Amendment to
Credit Agreement to be duly executed as of the date first above written.
BORROWER:
ADDISON ENERGY INC.
By: /s/ J. XXXXXXX XXXXXX
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J. Xxxxxxx Xxxxxx, Vice President
GUARANTOR:
EXCO RESOURCES, INC.
By: /s/ J. XXXXXXX XXXXXX
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J. Xxxxxxx Xxxxxx, Vice President
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LENDERS:
BANK ONE, NA, CANADA BRANCH (successor
by merger to Bank One Canada) as a
Lender and as Administrative Agent
By: /s/ XXXXXXX X. XXX
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Name: Xxxxxxx X. Xxx
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Title: VP
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BNP PARIBAS (CANADA)
as a Lender and as Documentation Agent
By: /s/ XXXXXXX XXXXXXX
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Name: Xxxxxxx Xxxxxxx
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Title: Vice President, Energy & Project Finance
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By: /s/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
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Title: Director, Energy & Project Finance
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COMERICA BANK - CANADA
By: /s/ XXXXXX XXXXX
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Name: Xxxxxx Xxxxx
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Title: VP
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