SECOND AMENDMENT TO RESTATED LOAN AGREEMENT
THIS SECOND AMENDMENT TO RESTATED LOAN AGREEMENT (hereinafter referred
to as the "Agreement") executed the 7th day of March, 1997, by and among
NATIONAL ENERGY GROUP, INC., a Delaware corporation ("Borrower"), NATIONAL
ENERGY GROUP OF OKLAHOMA, INC. (formerly known as NEG-OK, Inc.), a Delaware
corporation ("OK"), BOOMER MARKETING CORPORATION, an Oklahoma corporation
("Boomer") (OK and Boomer are hereinafter collectively referred to as
"Guarantors") and BANK ONE, TEXAS, N.A., a national banking association
("Bank One") and CREDIT LYONNAIS NEW YORK BRANCH ("Credit Lyonnais") and each
of the financial institutions which may from time to time become a party
hereto or any successor or assignee thereof (hereinafter collectively
referred to as "Banks", and individually as "Bank") and Bank One, as
"Administrative Agent" and Credit Lyonnais as "Syndication Agent."
W I T N E S S E T H:
WHEREAS, Borrower, Guarantors, Banks and Agent entered into a Restated
Loan Agreement, dated as of August 29, 1996 (the "Loan Agreement") under the
terms of which the Banks agreed to provide the Borrower with a reducing
revolving line of credit facility in an amount of up to $100,000,000 and a
term loan in an amount of up to $5,000,000; and
WHEREAS, Borrower, Guarantors, Banks and Agent entered into a First
Amendment to Restated Loan Agreement dated October 31, 1996; and
WHEREAS, the Borrower, the Guarantors and the Banks have agreed to amend
the Loan Agreement to make certain changes thereto.
NOW, THEREFORE, the parties hereto agree to amend the Loan Agreement as
follows:
1. Section 1 of the Loan Agreement is hereby amended in the following
respects:
(a) By adding the following new definitions thereto:
"LETTERS OF CREDIT" is used herein as defined in
Section 2(e) hereof."
"REIMBURSEMENT OBLIGATIONS" shall mean at any time the
obligation of Borrower in respect of all Letters of Credit then
outstanding to reimburse amounts paid by any Bank in respect of
any drawing or drawings under a Letter of Credit."
(b) By deleting the definition of "Total Outstandings" and inserting
the following new definition of "Total Outstandings" in lieu thereof:
"TOTAL OUTSTANDINGS" shall mean as of any date, the sum of
(i) the total principal balance outstanding on the Notes, plus
(ii) the total face
amount of all outstanding Letters of Credit plus (iii) the total
amount of all unpaid Reimbursement Obligations."
2. Section 2 of the Loan Agreement is hereby amended by the addition of
the following new subsections to the end thereof:
"(e) LETTERS OF CREDIT. On the terms and conditions hereinafter
set forth, the Agent shall from time to time during the period
beginning on the Effective Date and ending on the Maturity Date upon
request of Borrowers issue standby and/or commercial Letters of Credit
for the account of Borrowers (the "Letters of Credit") in such face
amounts as Borrowers may request, but not to exceed in the aggregate
face amount at any time outstanding the sum of Ten Million Dollars
($10,000,000.00). The face amount of all Letters of Credit issued and
outstanding hereunder shall be considered as Advances for Borrowing
Base purposes and all payments made by the Agent on such Letters of
Credit shall be considered as Advances under the Note. Each Letter of
Credit issued for the account of Borrowers hereunder shall (i) be in
favor of such beneficiaries as specifically requested by Borrowers,
(ii) have an expiration date not exceeding the Maturity Date, and
(iii) contain such other terms and provisions as may be required by
Bank. Each Bank (other than Agent) agrees that, upon issuance of any
Letter of Credit hereunder, it shall automatically acquire a
participation in the Agent's liability under such Letter of Credit in
an amount equal to such Bank's Revolving Commitment Percentage of such
liability, and each Bank (other than Agent) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and shall be unconditionally obligated to Agent to pay and
discharge when due, its Revolving Commitment Percentage of Agent's
liability under such Letter of Credit. The Borrowers, and each of
them, hereby unconditionally agree to pay and reimburse the Agent for
the amount of each demand for payment under any Letter of Credit that
is in substantial compliance with the provisions of any such Letter of
Credit at or prior to the date on which payment is to be made by the
Agent to the beneficiary thereunder, without presentment, demand,
protest or other formalities of any kind. Upon receipt from any
beneficiary of any Letter of Credit of any demand for payment under
such Letter of Credit, the Agent shall promptly notify the Borrowers
of the demand and the date upon which such payment is to be made by
the Agent to such beneficiary in respect of such demand. Forthwith
upon receipt of such notice from the Agent, Borrowers shall advise the
Agent whether or not they intend to borrow hereunder to finance their
obligations to reimburse the Agent, and if so, submit a Notice of
Borrowing as provided in Section 2(b) hereof.
(f) PROCEDURE FOR OBTAINING LETTERS OF CREDIT. The amount and date
of issuance, renewal, extension or reissuance of a Letter of Credit
pursuant to the Banks'
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commitment above in Section 2(e) shall be designated by Borrowers' written
request delivered to Agent at least three (3) Business Days prior to the
date of such issuance, renewal, extension or reissuance. Concurrently with
or promptly following the delivery of the request for a Letter of Credit,
Borrowers shall execute and deliver to the Agent an application and
agreement with respect to the Letters of Credit, said application and
agreement to be in the form used by the Agent. The Agent shall not be
obligated to issue, renew, extend or reissue such Letters of Credit if
(A) the amount thereon when added to the amount of the outstanding Letters
of Credit exceeds Ten Million Dollars ($10,000,000.00) or (B) the amount
thereof when added to the Total Outstandings would exceed the Revolving
Commitment. Borrowers agree to pay the Agent for the benefit of the Banks
a commission for issuing the Letter of Credit to Applied Drilling
Technology, Inc. dated March 7, 1997 in the amount of $5,272,000 equal to
$52,720 (one percent (1%) of the face amount of such Letter of Credit).
For all other Letters of Credit, Borrowers agree to pay the Agent for the
benefit of the Banks commissions for issuing the Letters of Credit
(calculated separately for each Letter of Credit) in an amount equal to
the greater of (i) one and three-quarters percent (1-3/4%) per annum on
the maximum face amount of the Letter of Credit or (ii) $500.00. Such
commissions shall be payable prior to the issuance of each Letter of Credit
and thereafter on each anniversary date of such issuance while such Letter
of Credit is outstanding. Borrowers further agree to pay to the Agent an
amendment fee for any amendment to any Letter of Credit issued hereunder,
said fee to be in the amount of $50 per amendment and shall be due and
payable upon the issuance of any such amendment."
3. Except to the extent its provisions are specifically amended, modified
or superseded by this Agreement, the representations, warranties and affirmative
and negative covenants of the Borrower contained in the Loan 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 Loan Agreement, as amended, including, without limitation, all
representations, warranties and affirmative and negative covenants. Except to
the extent its provisions are specifically amended, modified or superseded by
this Agreement, the Loan 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 Banks.
4. The obligations of Banks under this Agreement shall be subject to the
following conditions precedent:
(a) EXECUTION AND DELIVERY. The Borrower and Guarantors shall have
executed and delivered this Agreement, and other required documents, all in
form and substance satisfactory to Banks;
(b) CORPORATE RESOLUTIONS. Agent shall have received appropriate
certified corporate resolutions of Borrower and Guarantors;
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(c) OTHER DOCUMENTS. Banks shall have received such other
instruments and documents incidental and appropriate to the transaction
provided for herein as Bank One or its counsel may reasonably request, and
all such documents shall be in form and substance satisfactory to Banks;
and
(d) LEGAL MATTERS SATISFACTORY. All legal matters incident to the
consummation of the transactions contemplated hereby shall be satisfactory
to special counsel for Banks retained at the expense of Borrower.
5. Unless otherwise defined herein, all defined terms used herein shall
have the same meaning ascribed to such terms in the Loan Agreement.
6. Each of the Guarantors hereby consents to the provisions of this
Agreement and the transactions contemplated herein, and hereby ratifies and
confirms their respective Guaranty Agreements, each dated as of August 29, 1996,
and agrees that their respective obligations and covenants thereunder are
unimpaired hereby and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Second Amendment to
Restated Loan Agreement to be duly executed as of the date first above written.
BORROWER:
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NATIONAL ENERGY GROUP, INC.
a Delaware corporation
By:
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Miles X. Xxxxxx
President
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GUARANTORS:
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NATIONAL ENERGY GROUP OF
OKLAHOMA, INC.
a Delaware corporation
By:
-----------------------------
Miles X. Xxxxxx
President
BOOMER MARKETING CORPORATION
an Oklahoma corporation
By:
-----------------------------
Name:
---------------------------
Title:
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BANKS:
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BANK ONE, TEXAS, N.A.
By:
-----------------------------
Wm. Xxxx Xxxxxxx
Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:
-----------------------------
Name:
---------------------------
Title:
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ADMINISTRATIVE AGENT:
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BANK ONE, TEXAS, N.A.
By:
-----------------------------
Wm. Xxxx Xxxxxxx
Vice President
SYNDICATION AGENT:
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CREDIT LYONNAIS NEW YORK BRANCH
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
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