EXHIBIT 10.56
EXECUTION COPY
FIRST AMENDMENT AND WAIVER
TO CREDIT AGREEMENT
This FIRST AMENDMENT AND WAIVER TO FIRST LIEN CREDIT AGREEMENT (this
"AMENDMENT") is dated as of January 22, 2008 and is entered into by and among
PACIFIC ENERGY ALASKA OPERATING LLC, a limited liability company organized under
the laws of the State of Delaware ("BORROWER"), PACIFIC ENERGY ALASKA HOLDINGS,
LLC, a limited liability company organized under the laws of the state of
Delaware ("HOLDINGS"), as a Credit Support Party, CERTAIN FINANCIAL INSTITUTIONS
listed on the signature pages hereto (the "LENDERS"), SILVER POINT FINANCE, LLC
("SILVER POINT"), as administrative agent (together with its permitted successor
in such capacity, "ADMINISTRATIVE AGENT") and collateral agent, and X. XXXX &
COMPANY, as counterparty to Borrower under the ISDA Master Agreement, dated as
of August 27, 2007 (as amended, supplemented or restated to the date hereof, and
together with all confirmations issued thereunder, the "ISDA AGREEMENT") (in
such capacity, the "FIRST LIEN HEDGE COUNTERPARTY"), and is made with reference
to that certain FIRST LIEN CREDIT AGREEMENT, dated as of August 24, 2007 (as
amended through the date hereof, the "CREDIT AGREEMENT"), by and among Borrower,
Holdings, the lenders party thereto, and Silver Point, as Sole Lead Arranger,
Sole Bookrunner, Syndication Agent, Administrative Agent and Collateral Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement after giving effect to this
Amendment.
RECITALS
WHEREAS, pursuant to Section 5.14 of the Credit Agreement, the Borrower
is to maintain in effect, one or more Hedging Agreements, the effect of which is
to fix or cap the interest rates applicable to at least 50% of the Indebtedness
that is projected to be outstanding under the Loan Documents and the Second Lien
Loan Documents, in each case on terms and conditions reasonably acceptable,
taking into account current market conditions, to the Agent;
WHEREAS, the Borrower has informed the Administrative Agent, the
Lenders and the First Lien Hedge Counterparty that such Hedging Agreements are
not in place, that such failure to maintain such Hedging Agreements in place is
an Event of Default (the "EXISTING EVENT OF DEFAULT") and has requested 60 days
following the effective date of this Amendment to put Hedging Agreements in
place in accordance with Section 5.14 of the Credit Agreement;
WHEREAS, the Borrower and each other Loan Party have requested that
Required Lenders and the First Lien Hedge Counterparty waive the Existing Event
of Default and agree to amend certain provisions of the Credit Agreement as
provided for herein; and
WHEREAS, subject to certain conditions set forth herein, Required
Lenders and the First Lien Hedge Counterparty are willing to consent to such
actions and agree to such amendments.
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NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION I. LIMITED WAIVER AND AGREEMENT
(a) The Required Lenders and the First Lien Hedge Counterparty hereby
waive, effective as of the First Amendment Effective Date the Existing Event of
Default; provided that such waiver shall remain in effect only so long as the
Borrower satisfies the requirements of Section I(b). If the Borrower fails to
satisfy the requirements of Section I(b) hereof, such failure shall constitute
an Event of Default.
(b) The Borrower shall, as promptly as practicable and in any event
within 60 days after the First Amendment Effective Date, enter into, and for a
period of not less than three years after the Closing Date maintain in effect,
one or more Hedging Agreements, the effect of which is to fix or cap the
interest rates applicable to at least 50% of the Indebtedness that is projected
to be outstanding under the Loan Documents and the Second Lien Loan Documents,
in each case on terms and conditions reasonably acceptable, taking into account
current market conditions, to the Agent. Each such Hedging Agreement shall be
entered into with a person that is reasonably acceptable to the Agent.
SECTION II. AMENDMENT TO CREDIT AGREEMENT
2.1 AMENDMENT TO SECTION 6.11
Section 6.11 is hereby amended by (x) inserting "(a)" immediately
following the caption "LEVERAGE RATIO." and (y) replacing the table set forth
therein with the following table:
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Fiscal Quarter Maximum Ratio
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4th Fiscal Quarter 2007 8.00 to 1.00
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1st and 2nd Fiscal Quarters 2008 6.00 to 1:00
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3rd and 4th Fourth Fiscal Quarters 2008 5.50 to 1.00
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0xx, 0xx, 0xx and 4th Fiscal Quarters 2009 4.00 to 1.00
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0xx, 0xx, 0xx and 4th Fiscal Quarters 2010 and thereafter 3.50 to 1.00
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Section 6.11 is hereby further amended to add the following as a new clause (b)
thereunder:
"(b) (i) With respect to the 4th Fiscal Quarter 2007, Holdings shall
have (x) cash receipts from the sale of production in an amount no less than
$40,000,000 and (y) Consolidated EBIDTA in an amount no less than $20,000,000;
(ii) with respect to the 1st Fiscal Quarter 2008, Holdings
shall have (x) cash receipts from the sale of production in an amount
no less than $42,000,000 and (y) Consolidated EBITDA in an amount no
less than $23,000,000."
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SECTION III. CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of January 18, 2008 only upon
the satisfaction of all of the following conditions precedent (such date, the
"FIRST AMENDMENT EFFECTIVE DATE"):
A. EXECUTION. Administrative Agent shall have received a counterpart
signature page of this Amendment duly executed by each of the Loan Parties,
Required Lenders and the First Lien Hedge Counterparty.
B. PAYMENTS AND EXPENSES. The Administrative Agent and X. Xxxx shall
have received all invoiced payments and other amounts due and payable on or
prior to the First Amendment Effective Date, including, payments required under
the Letter Agreement (as defined below) and, to the extent invoiced,
reimbursement or other payment of all out-of-pocket expenses required to be
reimbursed or paid by Borrower hereunder.
C. NECESSARY CONSENTS. Each Loan Party shall have obtained all material
consents necessary or advisable in connection with the transactions contemplated
by this Amendment.
D. NO DEFAULT. After giving effect to the waiver set forth in Section I
hereof, no event shall have occurred and be continuing that would constitute an
Event of Default or a Default.
E. ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties as set forth herein shall be true and correct in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true and correct in all material respects on and as of such earlier date
F. OTHER DOCUMENTS. Administrative Agent and Lenders shall have
received (i) a fully executed copy of that certain letter agreement, dated the
date hereof (the "LETTER AGREEMENT"), among the Borrower, Holdings and the
Lenders party to the Credit Agreement and (ii) such other documents, information
or agreements regarding Loan Parties as Administrative Agent or Collateral Agent
may reasonably request.
SECTION IV. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, each Loan Party which is a
party hereto represents and warrants to each Lender executing and delivering
this Amendment that the following statements are true and correct in all
material respects:
A. CORPORATE POWER AND AUTHORITY. Each Loan Party which is party hereto
has all requisite power and authority to enter into this Amendment and to carry
out the transactions contemplated by, and perform its obligations under, the
Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT") and the
other Loan Documents.
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B. AUTHORIZATION OF AGREEMENTS. Each Loan Party has duly taken all
company action necessary to authorize the execution and delivery by it of the
Amendment, the Amended Agreement and the other Loan Documents to which it is a
party and to authorize the consummation of the transactions contemplated thereby
and the performance of its obligations thereunder. The Borrower is duly
authorized to borrow funds under the Credit Agreement.
C. NO CONFLICT. The execution and delivery by the Loan Parties of this
Amendment and the Amended Agreement and the other Loan Documents, the
performance by each of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby do not and will
not (i) conflict with any provision of (A) any Governmental Requirement, (B) the
certificate or articles of incorporation or other constitutive documents or
by-laws of any Loan Party, or (C) any agreement, judgment, license, order or
permit applicable to or binding upon any Loan Party, (ii) result in the
acceleration of any Indebtedness owed by any Loan Party, or (iii) result in or
require the creation of any Lien upon any assets or properties of any Loan Party
except as expressly contemplated in the Loan Documents. Except as expressly
contemplated in the Loan Documents no consent, approval, authorization or order
of, and no notice to or filing with, any Governmental Authority or third party
is required in connection with the execution, delivery or performance by any
Loan Party of any document executed in connection with this Amendment or to
consummate any transactions contemplated by the Amended Agreement and the other
Loan Documents.
D. GOVERNMENTAL CONSENTS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the execution and delivery by each Loan
Party of this Amendment and the performance by Borrower of the Amended Agreement
and the other Loan Documents, except for such actions, consents and approvals
the failure to obtain or make which could not reasonably be expected to result
in a Material Adverse Effect or which have been obtained and are in full force
and effect.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have
been duly executed and delivered by each of the Loan Parties party thereto and
are legal, valid and binding obligations of each Loan Party which is a party
hereto or thereto, enforceable in accordance with their terms except as such
enforcement may be limited by bankruptcy, insolvency or similar Requirement of
Law of general application relating to the enforcement of creditors' rights and
by general principles of equity.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Article III of the
Amended Agreement are and will be true and correct in all material respects on
and as of the First Amendment Effective Date to the same extent as though made
on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and correct
in all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute a Default or Event of Default.
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SECTION V. ACKNOWLEDGMENT AND CONSENT
Each Guarantor is referred to herein as a "CREDIT SUPPORT PARTY" and
collectively as the "CREDIT SUPPORT PARTIES", and the Loan Documents to which
they are a party are collectively referred to herein as the "CREDIT SUPPORT
DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guarantee or secure, as the case may be, to the fullest extent
possible in accordance with the Credit Support Documents the payment and
performance of all "Obligations" (and, if applicable, all "Secured Obligations"
or "Loan Document Obligations") under each of the Credit Support Documents to
which is a party (in each case as such terms are defined in the applicable
Credit Support Document).
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true and correct in all material respects on and as of the
First Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true and correct in all
material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Credit Support Document to consent to the amendments to the Credit
Agreement effected pursuant to this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Credit Support Document shall be deemed
to require the consent of such Credit Support Party to any future amendments to
the Credit Agreement.
SECTION VI. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Amendment", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended by this Amendment.
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(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not constitute a waiver of any provision of, or operate as a
waiver of any right, power or remedy of any Agent or Lender under, the
Credit Agreement or any of the other Loan Documents.
B. HEADINGS. Section and Subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
C. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
D. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER: PACIFIC ENERGY ALASKA OPERATING LLC
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: President
CREDIT SUPPORT PARTIES: PACIFIC ENERGY ALASKA HOLDINGS, LLC
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: President
SILVER POINT FINANCE, LLC,
as Administrative Agent
By: /s/ Xxxxxxx Xxxxxxxx
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Authorized Signatory
LENDERS: X. XXXX & COMPANY, as Lender
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Attorney In Fact
SPF CDO I, LTD., as Lender
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
SPCP GROUP, L.L.C., as Lender
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
FIRST LIEN HEDGE
COURNTERPARTY; X. XXXX & COMPANY,
as First Lien Hedge Counterparty
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Attorney In Fact
