EXHIBIT 10-3
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement (this
"Amendment") is dated as of September 30, 1997, by and among MAGNUM HUNTER
RESOURCES, INC., a Nevada corporation (the "Borrower"), each Bank (as defined in
the Credit Agreement), BANKERS TRUST COMPANY, individually, as administrative
agent (in such capacity, together with its successors in such capacity, the
"Administrative Agent"), and as an issuing bank, and BANQUE PARIBAS, a French
bank acting through its Houston Agency, individually, as collateral agent (in
such capacity, together with its successors in such capacity, the "Collateral
Agent"), and as documentation agent (in such capacity, together with its
successors in such capacity, the "Documentation Agent").
R E C I T A L S:
WHEREAS, the Borrower, each Bank then a party, the Administrative
Agent, the Documentation Agent, and First Union National Bank ("First Union"),
as collateral agent and syndication agent, entered into that certain Amended and
Restated Credit Agreement dated as of April 30, 1997 (the "Original Credit
Agreement") pursuant to which the Banks have agreed to make revolving credit
loans available to the Borrower under the terms and provisions stated therein;
and
WHEREAS, the parties to the Original Credit Agreement entered into a
First Amendment to Amended and Restated Credit Agreement, Resignation of
Collateral Agent and Appointment of Substitute Collateral Agent dated as of May
29, 1997 (together with the Original Credit Agreement, the "Credit Agreement");
and
WHEREAS, as of October 1, 1997,CIBC,Inc. became a Bank under the Credit
Agreement; and
WHEREAS, the Borrower has requested that the Banks and the Agents (i)
increase the Borrowing Base to $65,000,000, (ii) increase the Commitment of each
Bank, (iii) amend the Consolidated Interest Coverage Ratio and (iv) amend
certain provisions of the Credit Agreement; and
WHEREAS, the Banks and the Agents are willing to amend the Credit
Agreement as hereinafter provided; and
WHEREAS, the Borrower, the Banks and the Agents now desire to amend the
Credit Agreement as herein set forth.
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 1
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meaning as in the
Credit Agreement, as amended hereby.
ARTICLE II
Amendments
Section 2.1 Additional Definitions. Section 1.1 is amended by adding the
following definitions in alphabetical order:
"Dissenting Bank" has the meaning assigned to it in Section 2.8(c) hereof.
"Unused Availability" means an amount equal to the difference between the
Borrowing Base and (a) outstanding Loans plus (b) outstanding Letter of Credit
Liabilities.
Section 2.2 Amendment to Definition of Consolidated Current Assets. The
definition of "Consolidated Current Assets" found in Section 1.1 is amended by
adding the following phrase at the end thereof: "plus Unused Availability".
Section 2.3 Amendment to Definition of Majority Banks. The definition of
"Majority Banks" found in Section 1.1 is amended by deleting each reference to
"75%" and inserting in lieu thereof references to "80%".
Section 2.4 Amendment to Section 2.8.
(a) Section 2.8(a) is amended by deleting the second and third sentences
thereof and inserting the following in lieu thereof:
"Effective October 1, 1997, the Borrowing Base shall be $65,000,000 and
shall be redetermined from time to time as provided herein."
(b) Section 2.8 is further amended by adding thereto a new subsection
reading as follows:
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 2
"(c) In the event a Bank or Banks do not approve a proposed Borrowing Base
or Borrowing Base determined after consultation, but the Required Banks do, the
Administrative Agent and the Borrower may, but shall not be required to, replace
the Dissenting Bank with an Eligible Assignee within 90 days of the applicable
Determination Date or date of special determination and upon payment to the
Dissenting Bank of all of its Loans and execution and delivery by the Eligible
Assignee of an Assignment and Acceptance, the Dissenting Bank shall no longer be
a Bank hereunder or have any Commitment or obligations to the Borrower."
Section 2.5 Amendment to Section 10.3. Section 10.3 is amended by adding
the following phrase immediately after the word "Person" found in the fourth
line thereof: "except as specifically permitted in Section 10.5 hereof" and by
changing the reference to "$1,000,000" to $1,500,000."
Section 2.6 Amendment to Section 10.5. Section 10.5 is amended by deleting
the word "The" from the first line and adding the following phrase before the
word "Borrower" in said line: "Without the prior written consent of the Majority
Banks, the" and by deleting the reference to "350,000" found in the fifth line
thereof and inserting in lieu thereof a reference to "1,500,000".
Section 2.7 Amendment to Section 11.1. Section 11.1 is amended in its
entirety to read as follows:
"Section 11.1 Consolidated Interest Coverage Ratio. The Borrower will not
permit its Consolidated Interest Coverage Ratio, measured as of the last day of
any calendar quarter for the twelve month period then ended, to be less than (a)
1.80 to 1.0 at the end of any calendar quarter through Xxxxx 00, 0000, (x) 2.0
to 1.0 at the end of any calendar quarter from April 1, 1998 through June 30,
1998, (c) 2.25 to 1.0 at the end of any calendar quarter from July 1, 1998
through September 30, 1998 and (d) 2.50 to 1.0 at the end of any calendar
quarter after September 30, 1998."
Section 2.8 Amendment to Section 11.4. Section 11.4 is amended in its
entirety to read as follows:
"Section 11.4 Debt to Capitalization Ratio. Borrower will not permit its
Debt to Capitalization Ratio, measured as of the last day of any calendar
quarter to be more than (a) 0.86 to 1.0 as of the end of any calendar quarter,
through Xxxxx 00, 0000, (x) 0.75 to 1.0 as of the last day of any calendar
quarter after March 31, 1998 through September 30, 1998 and (c) 0.70 to 1.0 as
of the last day of any calendar quarter after September 30, 1998."
Section 2.9 Increased Commitments. The Commitments listed on the signature
pages to the Credit Agreement are hereby deleted, and the new Commitments shall
be as set forth on the signature pages to this Amendment.
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 3
Section 2.10 Borrower's Area Code. The area code for the Borrower's
telephone and telecopy numbers found on the Borrower's signature page to the
Credit Agreement is changed from "214" to "972".
Section 2.11 New Notes. The Borrower agrees to execute new Notes in favor
of the Banks, in the principal amount of each such Bank's modified Commitment.
ARTICLE III
Conditions to Precedent
Section 3.1 Necessary Documentation. This Amendment shall be effective when
the Agent shall have received the following, each dated (unless otherwise noted)
the date hereof, in form and substance satisfactory to the Agents:
(a) This Amendment executed by all parties;
(b) Replacement Notes, dated October 1, 1997, executed by the Borrower in
respect of the Assignment and Acceptance from the remaining Banks under the
Original Credit Agreement to CIBC, Inc.;
(c) A Certificate of the Chief Financial Officer of the Borrower in the
form attached hereto as Annex I;
(d) Notes executed by the Borrower reflecting the Commitments set out on
the signature pages to this Amendment; and
(e) Resolutions of the Board of Directors of the Borrower and each
Obligated Party, certified by its Secretary or Assistant Secretary, that
authorized the execution and delivery of this Amendment and the replacement
Notes.
Section 3.2 Representations and Warranties. All representations and
warranties contained in the Credit Agreement shall be true and correct on and as
of the date hereof with the same force and effect as if such representations and
warranties had been made on and as of such date.
Section 3.3 Additional Documentation. The Agents shall have such additional
approvals, opinions or documents as the Agents or their counsel, Xxxxxxxx
Xxxxxxxx & Xxxxxx P.C., may reasonably request.
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 4
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 Credit 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. The Borrower, the
Banks and the Agents agree that the Credit Agreement as amended hereby shall
continue to be legal, valid, binding and enforceable in accordance with its
terms.
Section 4.2 Reference to the Credit Agreement. Each of the Loan Documents,
including the Credit 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 Credit Agreement as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Credit Agreement
shall mean a reference to the Credit Agreement as amended hereby.
Section 4.3 Expenses. The Borrower agrees to pay on demand all expenses set
forth in Section 14.1 of the Credit Agreement.
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 New York.
Section 4.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Banks, the Agents and the Borrower 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 NO ORAL AGREEMENTS. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES, AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR,
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 5
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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SECOND AMENDMENT TO CREDIT AGREEMENT - Page 6
EXECUTED as of the day and year first above written.
BORROWER:
MAGNUM HUNTER RESOURCES, INC.
By:
Name:
Title:
ADMINISTRATIVE AGENT:
BANKERS TRUST COMPANY
By
Name:
Title:
DOCUMENTATION AGENT
AND COLLATERAL AGENT:
BANQUE PARIBAS
By:
Name:
Title:
- and -
By:
Xxxxxxx X. Xxxxxx
Vice President
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 7
ISSUING BANK:
BANKERS TRUST COMPANY
By
Name:
Title:
BANKS:
Commitment: BANQUE PARIBAS
$46,875,000.00
By:
Name:
Title:
- and -
By:
Xxxxxxx X. Xxxxxx
Vice President
Commitment: BANKERS TRUST COMPANY
$46,875,000.00
By:
Name:
Title:
Commitment: CIBC, INC.
$31,250,000.00
By:
Name:
Title:
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 8
ACKNOWLEDGEMENT BY GUARANTORS
Each of the undersigned Guarantors hereby (i) consents to the terms and
conditions of the Amendment, (ii) confirms and ratifies the terms of the Amended
and Restated Subsidiary Guaranty, (iii) acknowledges and agrees that its consent
is not required for the effectiveness of the Amendment and (iv) represents and
warrants that (a) no Default or Event of Default has occurred and is continuing,
(b) it is in full compliance with all covenants and agreements pertaining to it
in the Credit Documents and (c) it has reviewed a copy of the Amendment.
Executed as of September 30, 1997.
GUARANTORS:
HUNTER GAS GATHERING, INC.
GRUY PETROLEUM MANAGEMENT CO.
MAGNUM HUNTER PRODUCTION, INC.
CONMAG ENERGY CORPORATION
RAMPART PETROLEUM, INC.
By:
Name:
Title:
SECOND AMENDMENT TO CREDIT AGREEMENT - Page 9
