EXHIBIT 10.1
SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement (this
"SECOND AMENDMENT") dated as of July 16, 2004, to be effective as set forth in
Section 4 hereof, is among ▇▇▇▇▇▇▇▇ Resources, Inc., a Nevada corporation
("BORROWER"), the financial institutions party hereto, and Bank of Montreal, as
administrative agent and as letter of credit issuing bank.
PRELIMINARY STATEMENT
A. The Borrower has entered into a certain Amended and Restated Credit
Agreement dated as of February 25, 2004, among Borrower, the lenders party
thereto (the "LENDERS"), Bank of Montreal, as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") and as issuing bank (in such capacity, the
"ISSUING BANK"), Bank of America, N.A., as syndication agent, and Comerica Bank,
Fortis Capital Corp., and Union Bank of California, N.A., as co-documentation
agents, as amended by that certain First Amendment to Amended and Restated
Credit Agreement dated as of March 31, 2004 (such Amended and Restated Credit
Agreement, as so amended and as otherwise amended, restated or supplemented from
time to time until the date hereof, the "CREDIT AGREEMENT").
B. The Borrower and ▇▇▇▇▇▇▇▇ Offshore, LLC ("COL") intend to enter into
(i) a certain Contribution Agreement dated as of July 1, 2004 (the "BDA
CONTRIBUTION AGREEMENT"), and (ii) a certain Operating Agreement of Bois d'Arc
Energy, LLC dated as of July 1, 2004 (the "BDA OPERATING AGREEMENT"; and
together with the BDA Contribution Agreement and all other documents
contemplated thereby, collectively, the "BDA FORMATION DOCUMENTS"), each by and
among Bois d'Arc Energy, LLC, a Nevada limited liability company ("BOIS D'ARC
ENERGY"), Bois d'Arc Properties, LP, a Nevada limited partnership ("BOIS D'ARC
PROPERTIES"), Bois d'Arc Resources, Ltd., a Texas limited partnership, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ Investments, LLC, a Texas limited liability
company and the other persons listed on the signature pages thereto
(collectively, the "BDA CONTRIBUTORS"), COL, and Borrower.
C. Pursuant to the terms of the BDA Formation Documents, (i) COL will
contribute its interest in certain oil and gas properties described on Schedule
I attached hereto to Bois d'Arc Properties, (ii) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ will contribute their respective partnership interests in Bois d'Arc
Offshore, Ltd., a Texas limited partnership and their membership interests in
Bois d'Arc Oil & Gas Company, LLC, a Texas limited liability company, to Bois
d'Arc Energy, and (iii) the BDA Contributors will contribute their respective
interests in certain oil and gas properties to Bois d'Arc Properties.
D. The Borrower intents to enter into (i) a certain Services Agreement
with Bois d'Arc Energy pursuant to which the Borrower will provide certain
general and administrative services to the Bois d'Arc Entities and (ii) a
certain Loan Agreement dated as of July 1, 2004, among the Borrower, as lender,
and Bois d'Arc Energy, Bois d'Arc Properties and Bois d'Arc Offshore, Ltd., as
borrowers, (the "BOIS D'ARC LOAN AGREEMENT") pursuant to which the Borrower may
advance loans from time to time.
E. The Borrower, COL and the BDA Contributors intend for Bois d'Arc Energy
to obtain financing independent of the Credit Agreement and the Bois d'Arc Loan
Agreement by conducting an initial public offering of Bois d'Arc Energy's equity
interests or by causing Bois d'Arc Energy to enter into a debt financing,
provided that if neither transaction has been consummated prior to a date
specified in the BDA Operating Agreement, the Borrower, COL and the BDA
Contributors have agreed to cause the Bois d'Arc Entities to reconvey all of
their properties to the Person that originally contributed such property to the
applicable Bois d'Arc Entity and to take such further action as may be necessary
to return each of the Borrower, COL and each BDA Contributor to a position as
near as possible to the same economic position that each such Person would have
been in had the original contributions by each such Person never occurred and
Bois d'Arc Energy never been formed.
F. Borrower has requested that the Lenders, the Administrative Agent and
the Issuing Bank consent to the transactions contemplated by the BDA Formation
Documents and modify the Credit Agreement in certain respects to facilitate such
transactions.
G. Subject to the terms and conditions of this Second Amendment, the
Lenders, the Administrative Agent and the Issuing Bank have agreed to enter into
this Second Amendment in order to effectuate such amendments and modifications.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties agree as follows:
Section 1. DEFINITIONS. Unless otherwise defined in this Second Amendment,
each capitalized term used in this Second Amendment (including in the
preliminary statement above) has the meaning assigned to such term in the Credit
Agreement.
Section 2. AMENDMENT OF CREDIT AGREEMENT.
(a) Section 1.1 of the Credit Agreement is hereby amended by
inserting the following definitions of "BDA Contribution Agreement", "BDA
Contributors", "BDA Formation Documents", "BDA Operating Agreement", "BDA
Services Agreement", "BDA Unwind Transaction", "Bois d'Arc Energy", "Bois
d'Arc Entities", "COL Contributed Properties", "Restricted Subsidiary" and
"Unrestricted Subsidiary" in the alphabetically appropriate places
therein.
" "BDA Contribution Agreement" means that certain Contribution
Agreement dated as of July 1, 2004 by and among the BDA
Contributors, COL, and Borrower."
" "BDA Contributors" means, collectively, Bois d'Arc Resources,
Ltd., a Texas limited partnership, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇ Investments LLC, a Texas limited liability company, and the
other persons listed on the signature pages thereto as BDA
Contributor."
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" "BDA Formation Documents" means, collectively, the BDA
Contribution Agreement, the BDA Operating Agreement and all other
documents contemplated thereby."
" "BDA Operating Agreement" means that certain Operating Agreement
of Bois d'Arc Energy, LLC dated as of July 1, 2004."
" "BDA Services Agreement" means that certain Services Agreement
dated as of July 1, 2004, entered into between Bois d'Arc Energy and
the Borrower with respect to the provision of certain general and
administrative services by the Borrower to the Bois d'Arc Entities."
" "BDA Unwind Transaction" means the dissolution and liquidation of
Bois d'Arc Energy and the reversal or unwinding of the transactions,
conveyances, contributions, payments, assumptions of indebtedness
and other actions or events set forth in the BDA Contribution
Agreement, all in accordance with, and pursuant to, the terms of
Section 17.7 of the BDA Operating Agreement."
" "Bois d'Arc Energy" means Bois d'Arc Energy, LLC, a Nevada limited
liability company."
" "Bois d'Arc Entities" means Bois d'Arc Energy, Bois d'Arc
Properties, LP, a Nevada limited partnership, Bois d'Arc Holdings,
LLC, a Nevada limited liability company, Bois d'Arc Offshore, Ltd.,
a Texas limited partnership, Bois d'Arc Oil & Gas Company, LLC, a
Texas limited liability company, and any other Subsidiary of Bois
d'Arc Energy."
" "COL Contributed Properties" means those Oil and Gas Properties
described in Schedule 1.1 to the BDA Contribution Agreement."
" "Restricted Subsidiary" means (a) each of COGI GP, COGI LP, COGI,
COGH, COGLA, COL and, prior to the sooner to occur of (i) the
satisfaction of each of the conditions set forth in Section 2.15 and
(ii) the consummation of the BDA Unwind Transaction and the
satisfaction of each of the conditions set forth in Section 2.16,
Bois d'Arc Energy and each of the other Bois d'Arc Entities, and (b)
each other Subsidiary of the Borrower that is not designated as an
Unrestricted Subsidiary pursuant to Section 1.6."
" "Unrestricted Subsidiary" means (a) from and after the
satisfaction of each of the conditions set forth in Section 2.15,
Bois d'Arc Energy and each of the other Bois d'Arc Entities, and (b)
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each other Subsidiary of the Borrower designated by the Borrower as
an Unrestricted Subsidiary in accordance with, and subject to the
satisfaction of the conditions set forth in, Section 1.6."
(b) Section 1.1 of the Credit Agreement is hereby further amended by
amending and restating the definition of "Guarantor" to provide:
" "Guarantors" means each of the Subsidiaries listed in Part (b) of
Schedule 5.13 and each other Subsidiary of the Borrower that shall
have executed and delivered a Guaranty to the Administrative Agent
for the benefit of the Lenders; provided that upon the release of
any Subsidiary's Guaranty in accordance with this Agreement, such
Subsidiary shall thereafter be excluded from the definition of
"Guarantors" (unless and until such Subsidiary shall thereafter
deliver another Guaranty)."
(c) The definition of "Material Adverse Effect" in Section 1.1 of
the Credit Agreement is hereby amended by deleting the word "Subsidiaries"
each place such word appears therein and inserting in place thereof the
words "Restricted Subsidiaries".
(d) The Credit Agreement is hereby amended by inserting the
following new Section 1.6 immediately following the existing Section 1.5:
"SECTION 1.6 DESIGNATION AND CONVERSION OF RESTRICTED AND
UNRESTRICTED SUBSIDIARIES.
(a) As of July 1, 2004 and, unless designated in writing to the
Administrative Agent by the Borrower and approved by the
Administrative Agent and the Majority Lenders in accordance with
clause (b) below or, with respect to Bois d'Arc Energy and the other
Bois d'Arc Entities only, as provided in Section 2.15, at all times
thereafter, any Person that becomes a Subsidiary of the Borrower or
any of its Restricted Subsidiaries shall be classified as a
Restricted Subsidiary.
(b) Any Subsidiary of the Borrower (including a newly formed or
newly acquired Subsidiary) may be designated (or redesignated) as an
Unrestricted Subsidiary if (i) the Administrative Agent shall have
received (1) a written request from the Borrower specifying the
applicable Subsidiary and such other information as the
Administrative Agent may reasonably request, (2) the written consent
of the Administrative Agent and the Majority Banks approving such
designation, and (3) a certificate of a Responsible Officer of the
Borrower that no Default or Event of Default shall then exist or
would result from such designation (after giving effect to such
designation), and (ii) such designation is deemed to be an
Investment in an amount equal to the fair market value of
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Borrower's direct and indirect ownership interest in such Subsidiary
and such Investment would be permitted under Section 7.2 to be made
at the time of such designation. Except as provided in this Section
1.6(b) or, with respect to Bois d'Arc Energy and the other Bois
d'Arc Entities only, as provided in Section 2.15, no Subsidiary may
be designated (and no Restricted Subsidiary may be redesignated) as
an Unrestricted Subsidiary.
(c) Borrower may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if after giving effect to such designation,
(i) the representations and warranties of Borrower and its
Restricted Subsidiaries contained in each of the Loan Documents are
true and correct on and as of such date as if made on and as of the
date of such redesignation (or, if stated to have been made
expressly as of an earlier date, were true and correct as of such
date), (ii) no Default or Event of Default then exists or would
result from such redesignation (after giving effect to such
redesignation), and (iii) the Borrower complies, or causes such
Subsidiary to comply, with the requirements of Sections 6.16 and
6.18."
(e) Clause (i) of Section 2.3.1 of the Credit Agreement is hereby
amended and restated in its entirety to provide as follows:
"(i) Subject to the terms and conditions set forth herein, (A) the
Issuing Bank agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.3, (1) from time to time on any
Business Day during the period from the Closing Date until the
Letter of Credit Availability Expiration Date, to issue Letters of
Credit for the account of the Borrower and in the name of the
Borrower or any of its Restricted Subsidiaries, and to amend or
renew Letters of Credit previously issued by it, in accordance with
subsection 2.3.2 below, and (2) to honor drafts under the Letters of
Credit; and (B) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrower; provided
that the Issuing Bank shall not be obligated to make any L/C Credit
Extension with respect to any Letter of Credit, and no Lender shall
be obligated to participate in, any Letter of Credit if as of the
date of such L/C Credit Extension, (w) with respect to any renewal,
extension or amendment to any previously issued Letter of Credit,
the Restricted Subsidiary in whose name such Letter of Credit was
originally issued (or was most recently renewed, extended or
amended, if applicable) has become, or been redesignated as, an
Unrestricted Subsidiary, (x) the Outstanding Amount of all L/C
Obligations and all Loans would exceed the lesser of (A) the
Aggregate Commitments on such date and (B) the Borrowing Base then
in effect, (y) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender's Percentage Share of the
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Outstanding Amount of all L/C Obligations would exceed the lesser of
(A) such Lender's Commitment or (B) such Lender's Percentage Share
of the Borrowing Base then in effect, or (z) the Outstanding Amount
of the L/C Obligations would exceed the Letter of Credit Sublimit.
Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrower's ability to obtain Letters of Credit shall be
fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and
reimbursed."
(f) The Credit Agreement is hereby amended by inserting the
following new Sections 2.15 and 2.16 immediately following the existing
Section 2.14:
"SECTION 2.15 CONVERSION OF BOIS D'ARC ENTITIES TO UNRESTRICTED
SUBSIDIARIES. Upon and concurrently with receipt by the
Administrative Agent of each of the following:
(a) all loans owed by Bois d'Arc Energy or any other Bois d'Arc
Entity to the Borrower or any Restricted Subsidiary of the Borrower
(other than Bois d'Arc Energy or any other Bois d'Arc Entity) have
been repaid in cash in full; and
(b) no Default or Event of Default then exists or would result from
the redesignation of Bois d'Arc Energy and the other Bois d'Arc
Entities as Unrestricted Subsidiaries; and
(c) the sum of the Outstanding Amount of all Loans plus the
Outstanding Amount of all L/C Obligations does not exceed 66 2/3% of
the Borrowing Base then in effect; and
(d) a Certificate of a Responsible Officer of the Borrower
certifying that each of the conditions set forth in the foregoing
clauses (a), (b) and (c) of this Section 2.15 has been satisfied and
further certifying that Bois d'Arc Energy and each other Bois d'Arc
Entity is redesignated as an Unrestricted Subsidiary from and as of
the date of such Certificate; and
(e) to the extent not previously delivered, a reserve report as of
the most recent January 1 or July 1, prepared by, as applicable in
accordance with Section 6.2(g), an independent engineering firm of
recognized standing acceptable to the Majority Lenders or the
Borrower, in either case in accordance with accepted industry
practices and otherwise acceptable and in form and substance
satisfactory to the Majority Lenders, with respect to all
Hydrocarbons attributable to the Oil and Gas Properties of the
Borrower and the Guarantors but excluding all Hydrocarbons
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attributable to the Oil and Gas Properties of the Bois d'Arc
Entities, and including without limitation all assets included in
the Borrowing Base;
then (A) Bois d'Arc Energy and each of the other Bois d'Arc Entities
shall automatically and without further action be redesignated as
Unrestricted Subsidiaries, (B) notwithstanding anything to the
contrary in this Credit Agreement (including, without limitation,
Section 2.1), the Borrower covenants and agrees that the aggregate
Outstanding Amount of all Loans plus all L/C Obligations shall not
exceed an amount equal to 66 2/3% of the Borrowing Base then in
effect until such time as the Borrowing Base shall have been
redetermined in accordance with Section 2.8 of this Agreement based
on the reserve report delivered to the Administrative Agent and the
Lenders pursuant to clause (b) above, (C) each Guaranty delivered by
a Bois d'Arc Entity shall automatically be released, and (D) each
Lender and the Issuing Bank hereby authorize the Administrative
Agent to release all Security Documents encumbering any properties
owned by any Bois d'Arc Entity, return all stock certificates
evidencing equity interests of Bois d'Arc Energy and each other Bois
d'Arc Entity then held by the Administrative Agent, if any, securing
the Obligations of the Loan Parties and to do all things reasonably
necessary to effectuate the release of all Liens in favor of the
Administrative Agent for the benefit of itself, the Lenders and the
Issuing Bank. For the avoidance of doubt, the Borrower, the
Administrative Agent and the Lenders acknowledge that the
redetermination of the Borrowing Base in accordance with clause (B)
above in connection with the redesignation of the Bois d'Arc
Entities as Unrestricted Subsidiaries shall not constitute a
discretionary redetermination of the Borrowing Base by either the
Borrower, on the one hand, or the Administrative Agent and the
Lenders, on the other hand, pursuant to clause (a) of the definition
of "Evaluation Date" and that the date of the redesignation of Bois
d'Arc Entities as Unrestricted Subsidiaries in accordance with this
Section 2.15 shall constitute the "Evaluation Date" for purposes of
the redetermination of the Borrowing Base in accordance with clause
(B) above.
SECTION 2.16 BOIS D'ARC UNWIND TRANSACTION.
Upon and concurrently with receipt by the Administrative Agent of
each of the following:
(a) each of the conditions set forth in Section 17.7 of the BDA
Operating Agreement have occurred (and have not been waived or
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suspended in accordance with the BDA Operating Agreement); and
(b) a Certificate of a Responsible Officer of the Borrower
certifying that the condition set forth in the foregoing clause (a)
of this Section 2.16 has been satisfied and further certifying that
no Default or Event of Default then exists or would result from the
implementation of the BDA Unwind Transaction in accordance with the
provisions of the BDA Operating Agreement; and
(c) evidence reasonably satisfactory to the Administrative Agent
that all of the properties contributed to any of the Bois d'Arc
Entities by the Borrower or COL (including all Oil and Gas
Properties contributed by, and all cash payments made by, the
Borrower or COL) shall have been reconveyed or returned to the
Borrower or COL, as applicable;
then (A) each Guaranty delivered by a Bois d'Arc Entity shall
automatically be released, and (B) each Lender and the Issuing Bank
hereby authorize the Administrative Agent to release all Liens
encumbering any properties owned by any Bois d'Arc Entity that were
contributed by a BDA Contributor (but not Liens encumbering the COL
Contributed Properties or any other properties contributed by the
Borrower or COL), return all stock certificates evidencing equity
interests of Bois d'Arc Energy and each other Bois d'Arc Entity then
held by the Administrative Agent, if any, securing the Obligations
of the Loan Parties and to do all things reasonably necessary to
effectuate the foregoing."
(g) Section 5.8 of the Credit Agreement is hereby amended by
deleting the words "Subsidiary" and "Subsidiaries" each place such words
appear therein and inserting in place thereof the words "Restricted
Subsidiary" or "Restricted Subsidiaries", respectively.
(h) Section 5.13(a) of the Credit Agreement is hereby amended and
restated in its entirety to provide:
"The Borrower has no Subsidiaries other than those specifically
disclosed in Part (a) of Schedule 5.13. All Restricted Subsidiaries
of Borrower are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
organization and are duly qualified to do business in each
jurisdiction where failure to so qualify would have an Material
Adverse Effect. All outstanding shares of stock of each class of
each Restricted Subsidiary of Borrower have been and will be validly
issued and are and will be fully paid and nonassessable. Except as
otherwise set forth on Schedule 5.13, all outstanding
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shares of stock of each class of each Restricted Subsidiary of
Borrower are and will be owned, beneficially and of record, by
Borrower or a wholly-owned Subsidiary of Borrower. All outstanding
shares of stock of each class of (i) Bois d'Arc Energy owned by the
Borrower or any Restricted Subsidiary and (ii) each Restricted
Subsidiary of Borrower, are and will be free and clear of any Liens
(other than Liens permitted by Section 7.1).
(i) The preliminary statement set forth at the beginning of Article
VI of the Credit Agreement is hereby amended by deleting the word
"Subsidiaries" each place such word appears therein and inserting in place
thereof the words "Restricted Subsidiaries".
(j) The introductory paragraph of clause (d) of Section 6.16 of the
Credit Agreement and subclause (i) of Section 6.16(d) are hereby amended
and restated in their entirety to provide:
" (d) Additional Restricted Subsidiaries. Within thirty (30)
Business Days after the Borrower or any Restricted Subsidiary
creates, acquires or otherwise forms any other Subsidiary (other
than a Subsidiary designated as an Unrestricted Subsidiary in
accordance with Section 1.6(b)), the Borrower shall:
(i) execute and deliver, or cause each such Subsidiary owning
any of the outstanding equity interests in such other Restricted
Subsidiary to execute and deliver, as applicable, to the
Administrative Agent on behalf of the Lenders, a Pledge Agreement,
or an amendment or supplement to an existing Pledge Agreement, if
appropriate, pursuant to which all of the outstanding equity
interests in such other Restricted Subsidiary owned by the Borrower
or such Restricted Subsidiary shall be pledged to the Administrative
Agent on behalf of the Lenders, together with any certificates
representing all equity interests so pledged, if any, and for each
such certificate representing shares of stock, a stock power
executed in blank;"
(k) The Credit Agreement is hereby amended by inserting the
following new Section 6.18 immediately following the existing Section
6.17:
"SECTION 6.18 UNRESTRICTED SUBSIDIARIES. The Borrower:
(a) will cause the management, business and affairs of each of
Borrower and its Subsidiaries to be conducted in such a manner
(including, without limitation, by keeping separate books of
account, maintaining separate policies of insurance and by not
permitting Properties of Borrower and its respective Subsidiaries to
be commingled) so that each Unrestricted Subsidiary will be
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treated as an entity separate and distinct from Borrower and the
Restricted Subsidiaries (except (i) with respect to the treatment
for tax purposes of the Borrower or any Restricted Subsidiary
holding any interest in an Unrestricted Subsidiary that is regarded
as a partnership and (ii) for the common management/directorship
between the Borrower and any Unrestricted Subsidiary);
(b) except as permitted by Section 7.3(e), will not, and will not
permit any of the Restricted Subsidiaries to, incur, assume or
suffer to exist Guaranty Obligations or be or become liable for any
Indebtedness of any Unrestricted Subsidiary; and
(c) will not permit any Unrestricted Subsidiary to hold any equity
interest in, or any Indebtedness of, the Borrower or any Restricted
Subsidiary."
(l) The preliminary statement set forth at the beginning of Article
VII of the Credit Agreement is hereby amended by deleting the word
"Subsidiaries" each place such word appears therein and inserting in place
thereof the words "Restricted Subsidiaries".
(m) Clause (h) of Section 7.1 of the Credit Agreement is hereby
amended and restated in its entirety to provide:
"(h) Liens existing pursuant to a Subordinate Mortgage to the
extent, but only to the extent, that the properties subject to such
Subordinate Mortgage are then, or will be prior to the recordation
of such Subordinate Mortgage, mortgaged to the Administrative Agent
for the benefit of the Lenders pursuant to a Mortgage."
(n) Clauses (a), (b), (c) and (d) of Section 7.2 of the Credit
Agreement are hereby amended and restated in their entirety to provide:
"(a) Investments other than those permitted by subsections (b)
through (i) existing on the date hereof and listed on Schedule 7.2;
(b) Investments held by the Borrower or such Restricted Subsidiary
in the form of cash equivalents;
(c) advances to officers, directors and employees of the Borrower or
any Restricted Subsidiary in an aggregate amount not to exceed
$50,000 at any time outstanding, for travel, entertainment,
relocation and analogous ordinary business purposes;
(d) Investments constituting (1) contributions of capital (but not
loans or advances) made by the Borrower in any Guarantor other than
Bois d'Arc Energy or any other Bois d'Arc Entity or by any Guarantor
in any other Guarantor other than Bois d'Arc
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Energy or any other Bois d'Arc Entity, (2) loans or advances by the
Borrower in any Guarantor, provided that such Investment
constituting a loan or advance shall be evidenced by a Pledged Note
pledged to the Administrative Agent pursuant to a Pledge Agreement
and (3) loans or advances deemed to have been made by Bois d'Arc
Energy to its members in lieu of the distribution of "Tax
Distributions" (as defined in the BDA Operating Agreement) owed to
such members by Bois d'Arc Energy;"
(o) Section 7.2 of the Credit Agreement is hereby further amended by
deleting the word "and" at the end of the existing clause (g) thereof,
deleting the period at the end of the existing clause (h) thereof and
inserting in its place "; and" and inserting the following new clause (i)
immediately following the existing clause (h):
"(i) Investments in Bois d'Arc Energy and the other Bois d'Arc
Entities pursuant to the BDA Contribution Agreement."
(p) Clauses (c) and (d) of Section 7.3 of the Credit Agreement are
hereby amended by deleting the word "Subsidiary" each place such word
appears therein and inserting in place thereof the words "Restricted
Subsidiary".
(q) Clauses (a) and (b) of Section 7.4 of the Credit Agreement are
hereby amended by deleting the words "Subsidiary" or "Subsidiaries" each
place such words appear therein and inserting in place thereof the words
"Restricted Subsidiary" or "Restricted Subsidiaries" as applicable.
(r) Section 7.4 of the Credit Agreement is hereby further amended by
deleting the word "and" at the end of the existing clause (b) thereof,
deleting the period at the end of the existing clause (c) thereof and
inserting the following new clauses (d) and (e) immediately following the
existing clause (c):
"(d) COL may contribute the COL Contributed Properties to one
or more of the Bois d'Arc Entities pursuant to and in accordance
with the terms of the BDA Contribution Agreement; and,
(e) Bois d'Arc Energy and the other Bois d'Arc Entities may
reconvey all properties contributed to any of them by Borrower, COL
and the BDA Contributors in accordance with the terms of the BDA
Unwind Transaction and Section 2.16."
(s) Clause (c) of Section 7.5 of the Credit Agreement is hereby
amended by deleting the words "Subsidiary" each place such word appears
therein and inserting in place thereof the words "Restricted Subsidiary".
(t) Section 7.5 of the Credit Agreement is hereby further amended by
deleting the word "and" at the end of the existing clause (d) thereof,
inserting the word "and"
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immediately following the end of the existing clause (e) and inserting the
following new clause (f) immediately following the existing clause (e):
"(f) Dispositions by COL of the COL Contributed Properties to
the Bois d'Arc Entities pursuant to the terms of the BDA Formation
Documents; provided that such assets of COL shall remain subject to
any Liens created by Security Documents delivered pursuant to this
Agreement until such Liens shall be released in accordance with
Section 2.15 or Section 10.1."
(u) Clauses (a) and (c) of Section 7.6 of the Credit Agreement are
hereby amended by deleting the word "Subsidiary" each place such word
appears therein and inserting in place thereof the words "Restricted
Subsidiary".
(v) Section 7.6 of the Credit Agreement is hereby further amended by
inserting the word "and" immediately following the existing clause (d) and
inserting the following new clause (e) immediately following the existing
clause (d):
"(e) Restricted Payments (i) by Bois d'Arc Energy or any of
the Bois d'Arc Entities, as applicable, to one or more of the BDA
Contributors (and to the Borrower or any of its Restricted
Subsidiaries to the extent not otherwise permitted) pursuant to the
BDA Unwind Transaction and (ii) so long as Bois d'Arc Energy is
treated as a partnership for tax purposes, Restricted Payments by
Bois d'Arc Energy that are made solely for the purpose of paying tax
liabilities arising from Bois d'Arc Energy's net income (which tax
liability distributions shall not exceed the net income of Bois
d'Arc for the periods for which such tax distributions are to be
made multiplied by the maximum marginal tax rate under federal
and/or state income tax laws that is applicable to any of Bois d'Arc
Energy's members), provided that the Borrower shall give
Administrative Agent at least 10 Business Days' prior written notice
of each proposed distribution, together with the amount of the Bois
d'Arc Energy's Net Income."
(w) Section 7.10 of the Credit Agreement is hereby amended and
restated in its entirety to provide:
"SECTION 7.10 BURDENSOME AGREEMENTS. Enter into any Contractual
Obligation that limits the ability (a) of any Restricted Subsidiary
to make Restricted Payments to the Borrower or any Guarantor or to
otherwise transfer property to the Borrower or any Guarantor other
than Contractual Obligations imposed on Bois d'Arc Energy pursuant
to the BDA Operating Agreement, or (b) of the Borrower or any
Restricted Subsidiary to create, incur, assume or suffer to exist
Liens on property of such Person,
12
in each case, other than Contractual Obligations pursuant to the
Indenture Debt Documents to the extent listed in Schedule 7.10."
(x) Section 7.12 of the Credit Agreement is hereby amended by
deleting the word "Subsidiary" each place such word appears therein and
inserting in place thereof the words "Restricted Subsidiary".
(y) Section 7.14 of the Credit Agreement is hereby amended and
restated in its entirety to provide:
"SECTION 7.14 LIMITATION ON ▇▇▇▇▇▇. Enter into any commodity hedging
or derivative transactions except Hedge Agreements related to bona
fide hedging activities of the Borrower or any of its Restricted
Subsidiaries in an aggregate notional amount not to exceed, with
respect to any future calendar quarter, 100% of the Borrower's and
its Restricted Subsidiaries' projected production of oil (for oil
related transactions) and 100% of the Borrower's and its Restricted
Subsidiaries' projected production of natural gas (for natural gas
related transactions), in each case from the Oil and Gas Properties
of the Borrower and its Restricted Subsidiaries."
(z) The Credit Agreement is hereby amended by inserting the
following new Section 7.15 immediately following Section 7.14 (as amended
pursuant to this Second Amendment):
"SECTION 7.15 AMENDMENT OF BDA FORMATION DOCUMENTS OR BOIS D'ARC
LOAN AGREEMENT. Amend, restate, modify, supplement, waive or consent
to any amendment, restatement, modification, supplement or waiver of
the BDA Contribution Agreement, the BDA Operating Agreement, the BDA
Services Agreement or the other BDA Formation Documents or the Bois
d'Arc Loan Agreement, in each case without the consent of the
Administrative Agent and the Majority Lenders; provided, however,
that the consent of the Administrative Agent and the Majority
Lenders shall not be required to the extent that any such amendment,
restatement, modification, supplement, waiver or consent does not
(a) have an adverse effect on the Borrower, any other Loan Party,
the Administrative Agent or the Lenders (taking into account any
effect that may occur or be realized after Bois d'Arc Energy has
been redesignated as an Unrestricted Subsidiary pursuant to Section
2.15), or (b) materially change the economic terms of such
agreements. The Borrower shall deliver notice to the Administrative
Agent (with sufficient copies for the Administrative Agent to
distribute the same to the other Lenders) of any amendment,
restatement, modification, supplement, waiver or consent to the BDA
Contribution Agreement, the BDA
13
Operating Agreement, the BDA Services Agreement or the other BDA
Formation Documents or the Bois d'Arc Loan Agreement for which the
consent of the Administrative Agent and the Majority Lenders is not
required pursuant to the foregoing proviso, as applicable, promptly
following its effectiveness."
(aa) Clause (l) of Section 8.1 of the Credit Agreement is hereby
amended by deleting the word "Subsidiary" each place such word appears
therein and inserting in place thereof the words "Restricted Subsidiary".
(bb) Clause (h) of Section 10.1 of the Credit Agreement is hereby
amended and restated in its entirety to provide:
"(h) release any collateral under any of the Security Documents, or
permit any termination, amendment, modification, waiver or release
of any Security Document or an provision thereof, provided that,
notwithstanding the foregoing, the consent of the Lenders shall not
be required for any release of any collateral under any of the
Security Documents pursuant to Sections 2.15 or 2.16 or in
connection with a Disposition by the Borrower or any Guarantor if
such Disposition is permitted by Section 7.5 hereof as Section 7.5
is in effect on the Closing Date;"
(cc) Schedule 5.13 to the Credit Agreement is hereby amended and
restated as set forth in Attachment 1 hereto.
Section 3. RATIFICATION. The Borrower hereby ratifies and confirms all of
the Obligations under the Credit Agreement and the other Loan Documents.
Section 4. EFFECTIVENESS OF SECOND AMENDMENT. This Second Amendment shall
become effective as of the date first written above upon satisfaction of each of
the conditions set forth in this Section 4:
(a) The Administrative Agent shall have received duly executed
counterparts of this Second Amendment from the Borrower, the Issuing
Bank and each Lender, and duly acknowledged by each of the
Guarantors.
(b) Unless waived by all the Lenders (or by the Administrative
Agent with respect to immaterial matters or items specified in
clause (v) or (vii) below with respect to which the Borrower has
given assurances satisfactory to the Administrative Agent that such
items shall be delivered promptly following the Effective Date), the
Administrative Agent's receipt of the following, each of which shall
be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer
of the signing Loan Party, each dated the Effective Date (or, in the
case of certificates of governmental officials, a recent date before
the Closing Date) and each in form and substance satisfactory to the
Administrative Agent and its legal counsel:
14
(i) executed counterparts from each of the Bois
d'Arc Entities of a Guaranty, a ratification of the Subordination
Agreement previously delivered by the Loan Parties, and a Security
Agreement;
(ii) from (1) COL, a Pledge Agreement pursuant to
which all of the outstanding equity interests of Bois d'Arc Energy
owned by COL shall be pledged to the Administrative Agent on behalf
of the Lenders, and (2) each of Bois d'Arc Energy and each other
Bois d'Arc Entity that owns any equity interest in any other Bois
d'Arc Entity, a Pledge Agreement, pursuant to which all of the
outstanding equity interests in each Bois d'Arc Entity shall be
pledged to the Administrative Agent on behalf of the Lenders,
together in each case with stock certificates, membership interest
certificates or such other certificated security as may be part of
the collateral covered by the Pledge Agreement and stock powers or
other transfer powers or instruments executed in blank for each such
certificate, interest or security;
(iii) from the Borrower, an amendment or
supplement to the existing Pledge Agreement of the Borrower,
pursuant to which the Borrower shall pledge to the Administrative
Agent its interest in, to and under the Bois d'Arc Loan Agreement,
the revolving promissory note evidencing indebtedness thereunder and
any other documents related thereto, together with the original
revolving promissory note bearing an appropriate endorsement in
favor of the Administrative Agent;
(iv) such certificates of resolutions or other
action, incumbency certificates and/or other certificates of
Responsible Officers of each Bois d'Arc Entity as the Administrative
Agent may require to establish the identities of and verify the
authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Bois d'Arc
Entity is a party;
(v) such evidence as the Administrative Agent may
reasonably require to verify that each Bois d'Arc Entity is duly
organized or formed, validly existing, in good standing and
qualified to engage in business in each jurisdiction in which it is
required to be qualified to engage in business, including certified
copies of each Bois d'Arc Entities' Organization Documents,
certificates of good standing and/or qualification to engage in
business and, if applicable, tax clearance certificates;
(vi) a certificate signed by a Responsible Officer
of the Borrower certifying (A) that the conditions specified in
Sections 4.2(a) and (b) are satisfied as of the Effective Date, and
(B) that there has been no event or circumstance since the date of
the Initial Audited
15
Financial Statements which has or could be reasonably expected to
have a Material Adverse Effect;
(vii) an opinion of counsel to each of the Bois
d'Arc Entities substantially in the form of Exhibits F-1 and F-2 to
the Credit Agreement;
(viii) evidence that all existing credit
facilities to which any Bois d'Arc Entity is a party or a guarantor
(including, without limitation, all credit facilities between or
among any Bois d'Arc Entity or BDA Contributor, as borrower(s), and
AmSouth Bank, as lender, but expressly excluding the Bois d'Arc Loan
Agreement) have been, or concurrently with the Effective Date are
being, terminated and all Liens securing obligations under any such
existing credit facilities have been, or concurrently with the
Effective Date are being, released;
(ix) a certificate of insurance of the Borrower
and its Subsidiaries (including each of the Bois d'Arc Entities)
evidencing that the Borrower and its Subsidiaries (including each of
the Bois d'Arc Entities) are carrying insurance in accordance with
Section 6.7 of the Credit Agreement and that such insurance is in
full force and effect;
(x) a certificate from an Responsible Officer of
each of Borrower and Bois d'Arc Energy, dated as of the Effective
Date, certifying that attached thereto is a true and correct copy of
the BDA Formation Documents and the Bois d'Arc Loan Agreement and
certifying that:
(1) On and as of the Effective Date, and except as
otherwise previously disclosed pursuant to the provisions
hereof, there does not exist any judgment, order or injunction
or other restraint issued or filed, or any government,
corporate, contractual or legal restriction that could
reasonably be expected to impair materially the right or
ability of each of Borrower, COL, Bois d'Arc Energy and the
BDA Contributors to effect the BDA Formation Transaction
substantially in accordance with the terms and conditions of
the BDA Formation Documents; and
(2) Each of Borrower, COL, Bois d'Arc Energy, each other
Bois d'Arc Entity and each BDA Contributor, as the case may
be, have received all governmental and third party approvals
necessary in connection with the DBA Formation Transaction and
such approvals are in full force and effect;
(c) search reports in such jurisdictions as the Administrative Agent
may reasonably request, listing all effective financing statements or
other Lien filings that name any of the Bois d'Arc Entities or any of Bois
d'Arc Resources,
16
Ltd., a Texas limited partnership, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or
▇▇▇▇ Investments LLC, a Texas limited liability company, as a debtor; and
(d) The Borrower shall have confirmed and acknowledged to the
Administrative Agent, the Issuing Bank and the Lenders, and by its
execution and delivery of this Second Amendment the Borrower does hereby
confirm and acknowledge to the Administrative Agent, the Issuing Bank and
the Lenders, that (i) the execution, delivery and performance of this
Second Amendment has been duly authorized by all requisite corporate
action on the part of the Borrower; (ii) the Credit Agreement and each
other Loan Document to which it is a party constitute valid and legally
binding agreements enforceable against the Borrower in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws relating to or affecting the enforcement of creditors'
rights generally and by general principles of equity, (iii) the
representations and warranties by the Borrower contained in the Credit
Agreement and in the other Loan Documents are true and correct on and as
of the date hereof in all material respects as though made as of the date
hereof, and (iv) no Default or Event of Default exists under the Credit
Agreement or any of the other Loan Documents.
Section 5. GOVERNING LAW. This Second Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the principles thereof relating to conflicts of law except section
5-1401 of the New York General Obligations Law).
Section 6. MISCELLANEOUS. (a) On and after the effectiveness of this
Second Amendment, each reference in each Loan Document to "this Agreement",
"this Note", "this Mortgage", "hereunder", "hereof" or words of like import,
referring to such Loan Document, and each reference in each other Loan Document
to "the Credit Agreement", "the Notes", "the Mortgages", "thereunder", "thereof"
or words of like import referring to the Credit Agreement, the Notes, or the
Mortgage or any of them, shall mean and be a reference to such Loan Document,
the Credit Agreement, the Notes, the Mortgage or any of them, as amended or
otherwise modified by this Second Amendment; (b) each reference in each
Guaranty, Security Agreement or Pledge Agreement executed prior to the date
hereof to a "Subsidiary" or "Subsidiaries" of the Borrower shall be amended to
be a reference to a "Restricted Subsidiary" or "Restricted Subsidiary" of the
Borrower (except with respect to Sections 3.4 and 3.10 in each Pledge Agreement
executed prior to the date hereof, with respect to which such reference shall
not be so amended); (c) the execution, delivery and effectiveness of this Second
Amendment shall not, except as expressly provided herein, operate as a waiver of
any default of the Borrower or any other Loan Party or any right, power or
remedy of the Administrative Agent, the Issuing Bank and the Lenders under any
of the Loan Documents, nor constitute a waiver of any provision of any of the
Loan Documents; (d) this Second Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement; and (e) delivery of an
executed counterpart of a signature page to this Second Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this Second
Amendment.
17
Section 7. FINAL AGREEMENT. THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
18
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be executed by its officers thereunto duly authorized as of the date first
above written.
BORROWER:
▇▇▇▇▇▇▇▇ RESOURCES, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
ADMINISTRATIVE AGENT, ISSUING BANK
AND LENDERS:
BANK OF MONTREAL,
as Administrative Agent, Issuing Bank and Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
BANK OF AMERICA, N.A.,
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
FORTIS CAPITAL CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
S - 1
COMERICA BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Title: Vice President - Texas Division
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Senior Manager
BANK OF SCOTLAND
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
COMPASS BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
S - 2
CALYON NEW YORK BRANCH, as Successor
by Consolidation to Credit Lyonnais New York
Branch
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
HIBERNIA NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
NATEXIS BANQUES POPULAIRES
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President & Manager
WASHINGTON MUTUAL BANK, FA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
S - 3
ACKNOWLEDGMENT BY GUARANTORS
Each of the undersigned Guarantors hereby (i) consents to the terms and
conditions of that certain Second Amendment to Credit Agreement dated as of July
16, 2004 (the "Second Amendment"), (ii) acknowledges and agrees that its consent
is not required for the effectiveness of the Second Amendment, (iii) ratifies
and acknowledges its respective Obligations under each Loan Document to which it
is a party, 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 Loan Documents, and (c) it has
reviewed a copy of the Second Amendment.
▇▇▇▇▇▇▇▇ OIL & GAS HOLDINGS, INC.
▇▇▇▇▇▇▇▇ OIL & GAS - LOUISIANA, LLC
▇▇▇▇▇▇▇▇ OFFSHORE, LLC
▇▇▇▇▇▇▇▇ OIL & GAS GP, LLC,
By ▇▇▇▇▇▇▇▇ Resources, Inc., its sole member
▇▇▇▇▇▇▇▇ OIL & GAS, LP,
By ▇▇▇▇▇▇▇▇ Oil & Gas GP, LLC,
its general partner,
By ▇▇▇▇▇▇▇▇ Resources, Inc., its sole member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇▇▇▇▇▇ OIL & GAS INVESTMENTS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
S - 4
