EXHIBIT 4.24
SIXTH AMENDMENT TO CREDIT AGREEMENT
This Sixth Amendment to Amended and Restated Credit Agreement (this
"Amendment") is dated as of October 29, 1998 and is made by and among CLIFFWOOD
OIL & GAS CORP., CLIFFWOOD ENERGY COMPANY and CLIFFWOOD PRODUCTION CO. (the
"Borrowers"), COMERICA BANK-TEXAS, as Agent for itself and certain other lenders
(in such capacity, the "Agent") and as a Lender (as defined in the Agreement
described below) and FIRST UNION NATIONAL BANK, as a Lender.
R E C I T A L S:
WHEREAS, Borrowers, Agent and certain Lenders are party to the Amended and
Restated Credit Agreement dated as of August 1, 1997 (as amended through the
date hereof and as it may be further amended, extended, renewed or restated from
time to time, the "Agreement") pursuant to which Lenders made a revolving line
of credit available to Borrowers under the terms and provisions stated therein;
and
WHEREAS, Borrowers, Agent and Lenders desire to amend the Agreement to
provide for, among other things, an increase in the Commitment Amounts and the
Borrowing Base;
NOW, THEREFORE, in consideration of the premises herein contained, the
covenants and agreements set forth below and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows, intending to be legally bound:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS AND TERMS. Capitalized terms used in this
Amendment, to the extent not otherwise defined herein, shall have the same
meaning as in the Agreement, as amended hereby, and all references to
"Sections," "clauses," "Articles" and "Exhibits" are references to the
Agreement's sections, clauses, articles and exhibits.
ARTICLE II
AMENDMENTS
Section 2.1 AMENDMENTS TO SECTION 1.2.
(a) Section 1.2 is amended by adding, in alphabetical order, the following
new definitions:
"APPLICABLE MARGIN" means, for any day, (a) with respect to Loans
bearing interest based on the Eurodollar Rate, the margin of interest over
the Eurodollar Rate that is applicable when any Floating Rate based on the
Eurodollar Rate is determined under this
SIXTH AMENDMENT TO CREDIT AGREEMENT - PAGE 1
Agreement and (b) with respect to Loans bearing interest based on the
Prime Rate, the margin of interest over the Prime Rate that is applicable
when any Floating Rate based on the Prime Rate is determined under this
Agreement. The Applicable Margin is the percentages per annum set forth as
follows:
APPLICABLE MARGIN FOR LOAN APPLICABLE MARGIN FOR LOANS
BEARING INTEREST ON THE BEARING INTEREST ON THE
BORROWING BASE PERCENTAGE EURODOLLAR RATE PRIME RATE
--------------------------------------------------------------------------------
Less than 33% 1.75% 0%
33% through 66% 2.00% .25%
Greater than 66% 2.25% .50%
"BORROWING BASE PERCENTAGE" means, at any date, the aggregate of the
Loan Balance PLUS all accrued interest that is overdue and unpaid in
respect of the Loan Balance as a percentage of the Borrowing Base then in
effect.
"CASH FLOW COVERAGE" means, for each period, the ratio of EBITDA of
the Borrowers and the Guarantors to gross interest expense (including
capitalized interest).
"EBITDA" means, for each Person and for each period, the sum of the
following, without duplication:
(a) the amount of net income for such period (whether positive
or negative) before interest expense, income taxes and extraordinary
items, NET OF
(b) depreciation, amortization of goodwill and all other
non-cash charges accrued but not actually paid that, in determining
net income for such period, were deducted from (or included in)
gross income for such period.
"GUARANTORS" means Texoil, Texoil Company and Cliffwood Exploration
Company.
"GUARANTIES" means the June 12, 1998 Guaranties of Texoil and Texoil
Company and the October 29, 1998 Guaranty of Cliffwood Operating Company.
"LOMA NOVIA FIELD" is described on Exhibit VIII.
"SONAT ACQUISITION" means the acquisition of Hydrocarbons and other
Property described on Exhibit IX by COGC, which acquisition may include
the Loma Novia Field.
(b) Section 1.2 is further amended by amending the following definition
entirely so that it reads as follows:
SIXTH AMENDMENT TO CREDIT AGREEMENT - PAGE 2
"FLOATING RATE" shall mean an interest rate per annum equal to the
lesser of either (a)(i) the Base Rate from time to time in effect plus the
Applicable Margin or (ii) the Eurodollar Rate plus the Applicable Margin
(in each case as designated or deemed designated by Borrowers), as the
case may be, or (b) the Highest Lawful Rate; PROVIDED, HOWEVER, that the
Eurodollar Rate may not be selected when a Default or an Event of Default
exists.
(c) Section 1.2 is further amended as follows:
(1) the definition of "COMMITMENT AMOUNT" is amended by deleting the
reference in clause (a)(i) thereto to "$10,000,000" and inserting in lieu
thereof a reference to "$30,000,000 if the Loma Novia Field is included in
the Sonat Acquisition and $28,000,000 if the Loma Novia Field is not
included in the Sonat Acquisition";
(2) the definition of "Notes" is amended by deleting the references
to "$15,000,000" and "$10,000,000" and inserting in lieu thereof
references to "$30,000,000" and "$20,000,000" respectively; and
(3) the definition of "Obligations" is amended by adding in clause
(a) after the word "Notes" the words "and the Guaranties."
Section 2.2 AMENDMENTS TO SECTION 2.8. Section 2.8(a) is amended as
follows:
(a) by deleting the first sentence thereof and inserting the
following in lieu thereof:
"The Borrowing Base is acknowledged by the Borrowers, the Agent and
the Lenders to be $28,000,000 (after giving effect to the Sonat
Acquisition, but excluding the Loma Novia Field), which Borrowing
Base shall be increased to $30,000,000 if the Loma Novia Field is
purchased promptly at the end of the period when a preferential
right of first refusal in respect thereof expires, but in any event
no later than January 31, 1999"; and
(b) by deleting the date and dollar amount found in the second
sentence thereof and inserting the following in lieu thereof:
"February 1, 1999" and "$466,666, increasing to $500,000 if the
Borrowing Base is increased to $30,000,000 because of the inclusion
of the Loma Novia Field in the Borrowing Base."
Section 2.3 AMENDMENT TO ARTICLE V. Article V is amended by adding a new
section, numbered 5.21, reading as follows:
"Section 5.21 YEAR 2000. (a) Perform all acts reasonably necessary to
ensure that (i) it and any business in which it holds a substantial
interest and (ii) all customers, suppliers and vendors that are material
to its business become Year 2000 Compliant in a timely manner (such acts
shall include, without limitation, performing a comprehensive review and
assessment of all of each Borrower's and each Guarantor's systems and
adopting a detailed
SIXTH AMENDMENT TO CREDIT AGREEMENT - PAGE 3
plan, with itemized budget, for the remediation, monitoring and testing of
such systems); and (b) immediately upon request, provide to the Agent such
certifications or other evidence of its compliance with the terms of this
Section as the Agent may from time to time require. (As used in this
Section "Year 2000 Compliant" shall mean, in regard to any entity, that
all software, hardware, firmware, equipment, fixtures, goods or systems
utilized by or material to the business operations or financial condition
of such entity, will properly perform date sensitive functions before,
during and after the year 2000)."
Section 2.4 AMENDMENT TO ARTICLE VI. Article VI is amended by adding
thereto a new section, numbered 6.16, reading as follows:
"6.16 CASH FLOW COVERAGE. Permit, calculated as of the end of each
calendar quarter during the term hereof, its Cash Flow Coverage to be less
than 3.0 to 1.0 on a consolidated basis."
Section 2.5 AMENDMENTS TO SECTION 7.1.
(a) Section 7.1(c) is amended by deleting ", Texoil or Texoil
Company" and inserting in lieu thereof "or Guarantor."
(b) Section 7.1 is further amended by deleting clause (p) in its
entirety and substituting the following clause in lieu thereof:
"(p) Guarantors, or any or some of them, shall fail or refuse
to perform or observe all terms, covenants, and agreements contained
in Paragraph 9 of Guaranties."
Section 2.6 ADDITIONAL EXHIBITS. New Exhibits VIII and IX are added in the
form of, and all references in the Agreement to Exhibits VIII and IX shall be
deemed to be references to, the attached Exhibits VIII and IX.
Section 2.7 REPLACEMENT OF EXHIBITS. Exhibit I and II are amended in their
entirety to read as set forth in Exhibits I and II to this Amendment.
Section 2.8 COMMITMENT AMOUNTS. The Commitment Amounts for each Lender are
as set forth beside their signatures on this Amendment, which amounts replace
those referred to in clause (ii)(a) of the definition of "COMMITMENT AMOUNT"
found in Section 1.2 of the Agreement.
SIXTH AMENDMENT TO CREDIT AGREEMENT - PAGE 4
ARTICLE III
CONDITIONS PRECEDENT AND EFFECTIVENESS OF INCREASES
Section 3.1 CONDITIONS PRECEDENT. This Amendment shall be effective upon
satisfaction of the following conditions precedent:
(a) The Agent shall have received, reviewed, and approved the
following documents and other items, appropriately executed and
acknowledged when necessary, all in form and substance satisfactory to the
Agent:
(i) multiple counterparts of this Amendment, as requested by
the Agent;
(ii) the Notes (with aggregate face amounts of $50,000,000);
(iii) items (c) [to the extent different from those delivered
at the closing of the Agreement], (d) and (g) of Section 3.1 of the
Agreement;
(iv) items (c), (d) and (g) of Section 3.1 of the Agreement in
respect of each Guarantor (substituting Guarantor references for
Borrower);
(v) confirmation, acceptable to the Agent and the Lenders, of
title to the Property being purchased in the Sonat Acquisition, free
and clear of all Liens except Permitted Liens;
(vi) all Guaranties not previously delivered;
(vii) First Amendment to Subordination Agreement increasing
Senior Debt (as defined therein) to $60,000,000;
(viii)First Amendment to Note Purchase Agreement (one of the
Subordinate Loan Documents) to make it clear that the Loan Balance
is never characterized as Current Liabilities for purposes of
Section 10.3(a) thereof;
(ix) undated letters of the type specified in Section
3.1(f)(iv) of the Agreement;
(x) Security Instruments covering the Hydrocarbons and other
Property being purchased in the Sonat Acquisition; and
(xi) such other agreements, documents, instruments, opinions,
certificates, waivers, consents and evidence as the Agent and the
Lenders may require.
SIXTH AMENDMENT TO CREDIT AGREEMENT - PAGE 5
(b) The Agent shall have received $147,499 which is the fee required
by Section 2.13 of the Agreement without giving effect to inclusion of the
Loma Novia Field in the Borrowing Base.
Section 3.2 EFFECTIVENESS OF INCREASES. The increases in the Borrowing
Base and Commitment Amounts are effective when all of the conditions precedent
in Section 3.1 of the Agreement are met and the Sonat Acquisition is
consummated.
ARTICLE IV
MISCELLANEOUS
Section 4.1 RATIFICATIONS, REPRESENTATIONS AND WARRANTIES. Except as
expressly modified and superseded by this Amendment, the terms and provisions of
the Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. The representations and warranties contained
herein and in all other Loan Documents, as amended hereby, shall be true and
correct as of, and as if made on, the date hereof. Borrowers, Agent and Lenders
agree that the Agreement as amended hereby shall continue to be legal, valid,
binding and enforceable in accordance with its terms.
Section 4.2 REFERENCE TO THE AGREEMENT. Each of the Loan Documents,
including the 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 Agreement as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement as amended hereby.
Section 4.3 EXPENSES OF AGENT, ETC. As provided for in the Agreement, each
Borrower agrees, jointly and severally, to pay on demand all reasonable cost and
expenses incurred by Agent in connection with the preparation, negotiation,
execution of this Amendment, and the other Loan Documents executed pursuant
hereto and any and all amendments, modifications and supplements thereto
including, without limitation, the reasonable cost 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 Agreement, as amended
hereby, or any other Loan Documents. In addition, the Borrowers agree to pay an
additional fee of $15,000 if the Loma Novia Field is included in the Borrowing
Base.
Section 4.4 SEVERABILITY. Any provisions of this Amendment held by 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 provisions so held to be invalid or unenforceable.
Section 4.5 APPLICABLE LAW. This Amendment and all other Loan Documents
executed pursuant hereto shall be governed by and construed in accordance with
the laws of the State of Texas.
SIXTH AMENDMENT TO CREDIT AGREEMENT - PAGE 6
Section 4.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall enure to the benefit of Agent, Lenders and Borrowers and their respective
successors and assigns.
Section 4.7 COUNTERPARTS. This Amendment may be executed in one or more
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 4.8 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 4.9 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
SIXTH AMENDMENT TO CREDIT AGREEMENT - PAGE 7
EXECUTED as of the day and year first above written.
CLIFFWOOD OIL & GAS CORP.,
as a BORROWER
By: /S/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx
President
CLIFFWOOD ENERGY COMPANY,
as a BORROWER
By: /S/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx
President
CLIFFWOOD PRODUCTION CO.,
as a BORROWER
By: /S/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx
President
SIXTH AMENDMENT TO CREDIT AGREEMENT - SIGNATURE PAGE 1 OF 2
COMERICA BANK-TEXAS,
as AGENT and a LENDER
Commitment Amount: By:/S/ XXXXX XXXXXX
$16,800,000 Xxxxx X. Xxxxxx
($18,000,000 if the Vice President
Loma Novia Field is
included in the
Borrowing Base)
FIRST UNION NATIONAL BANK,
Commitment Amount: as a LENDER
$11,200,000
($12,000,000 if the
Loma Novia Field is By:/S/ XXX X. XXXXXXXXX
included in the Xxx X. Xxxxxxxxx
Borrowing Base) Senior Vice President
SIXTH AMENDMENT TO CREDIT AGREEMENT - SIGNATURE PAGE 2 OF 2
