1
Exhibit 10.27
SECOND AMENDMENT TO
FIFTH RESTATEMENT OF CREDIT AGREEMENT
THIS SECOND AMENDMENT TO FIFTH RESTATEMENT OF CREDIT
AGREEMENT (herein called this "AMENDMENT") made as of the 12th day of November,
1998, by and among Forcenergy Inc, a Delaware corporation (formerly known as
Forcenergy Gas Exploration, Inc. and herein called "BORROWER"), ING (U.S.)
Capital Corporation, a Delaware corporation (formerly known as Internationale
Nederlanden (U.S.) Capital Corporation and herein called "AGENT"), as agent, and
the financial institutions which are signatories to this Amendment
(collectively, "LENDERS"),
RECITALS
1. Borrower, Agent and certain Lenders have entered into a Fifth
Restatement of Credit Agreement dated as of April 13, 1998, as amended by a
First Amendment to Fifth Restatement of Credit Agreement dated June 22, 1998 (as
so amended, the "ORIGINAL AGREEMENT"), for the purpose and consideration therein
expressed, whereby such Lenders became obligated to make loans to Borrower as
therein provided.
2. Borrower and Lenders desire to make certain modifications to the
Original Agreement as provided herein and to redetermine the Borrowing Base on
the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement and in
consideration of the loans which may hereafter be made by Lenders to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS AND REFERENCES
Section 1.1 TERMS DEFINED IN THE ORIGINAL AGREEMENT. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.
Section 1.2 OTHER DEFINED TERMS. Unless the context otherwise requires,
the following terms when used in this Amendment shall have the meanings assigned
to them in this Section 1.2.
"AMENDMENT" shall mean this Second Amendment to Fifth
Restatement of Credit Agreement.
"CREDIT AGREEMENT" shall mean the Original Agreement as
amended hereby.
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ARTICLE II.
AMENDMENTS TO ORIGINAL AGREEMENT
Section 2.1 DEFINED TERMS.
(a) The definition of "Applicable Margin" in Section 1.1 of the
Original Agreement is hereby amended in its entirety to read as follows:
"APPLICABLE MARGIN" means, from November 9, 1998 until the
next redetermination of the Applicable Margin, the per annum interest
rate set forth in the table below based upon the Borrowing Base
Utilization Percentage of Borrower as of November 9, 1998. The
Applicable Margin shall be redetermined on each date on which an
Advance is made hereunder or a payment of principal is made on the
Notes which, after giving effect thereto, results in an adjustment to
the Applicable Margin based upon the Borrowing Base Utilization
Percentage of Borrower determined by Agent as of such date; PROVIDED
that the Applicable Margin shall never be a negative number. Once
determined as set forth above, the Applicable Margin shall remain in
effect until the next redetermination thereof resulting from the making
of an Advance hereunder or the repayment of any principal on the Notes.
Borrowing Base Utilization Percentage Applicable Margin
------------------------------------- -----------------
Greater than or equal to 90% 1.875%
Greater than or equal to 75% but 1.500%
less than 90%
Greater than or equal to 50% but 1.375%
less than 75%
Greater than or equal to 25% but 1.125%
less than 50%
Less than 25% 1.000%
(b) The following definition of "Borrowing Base Utilization Percentage"
is hereby added to Section 1.1 of the Original Agreement immediately after the
definition of "Borrowing Base" where it appears in such Section:
"BORROWING BASE UTILIZATION PERCENTAGE" means, on the date in
question, the percentage obtained by dividing (i) the outstanding
Obligations on such date by (ii) the Borrowing Base in effect on such
date.
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(c) The definition of "Change of Control" in Section 1.1 of the
Original Agreement is hereby amended by deleting clause (i) thereof in its
entirety and substituting therefor the following:
"(i) any Person or two or more Persons acting as a group (other than
Madison Dearborn Partners, Inc. and Oaktree Capital Managment, LLC and
their Affiliates) shall acquire shall acquire beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, and
including holding proxies to vote for the election of directors) of 33
1/3% or more of the outstanding shares of voting common stock of
Borrower, or more than 50% of the outstanding shares of voting common
stock of Borrower in the case of Madison Dearborn Partners, Inc. and
Oaktree Capital Management, LLC and their Affiliates,"
and by adding the phrase "as such Subordinated Debt Documents may be amended or
modified from time to time" at the end of clause (iii) of such definition.
(d) The following definition of "Commitment Fee Margin" is hereby added
to Section 1.1 of the Original Agreement immediately after the definition of
"Collateral" where it appears in such Section:
"COMMITMENT FEE MARGIN" means, from November 9, 1998 until the
next redetermination of the Commitment Fee Margin, the per annum
commitment fee rate set forth in the table below based upon the
Borrowing Base Utilization Percentage of Borrower as of November 9,
1998. The Commitment Fee Margin shall be redetermined on each date on
which an Advance is made hereunder or a payment of principal is made on
the Notes which, after giving effect thereto, results in an adjustment
to the Commitment Fee Margin based upon the Borrowing Base Utilization
Percentage of Borrower determined by Agent as of such date; PROVIDED
that the Commitment Fee Margin shall never be a negative number. Once
determined as set forth above, the Commitment Fee Margin shall remain
in effect until the next redetermination thereof resulting from the
making of an Advance hereunder or the repayment of any principal on the
Notes.
Borrowing Base Utilization Percentage Commitment Fee Margin
------------------------------------- ---------------------
Greater than or equal to 75% 0.500%
Less than 75% 0.375%
(e) The definition of "Lenders" in Section 1.1 of the Original
Agreement is hereby amended in its entirety to read as follows:
"LENDERS" means each signatory hereto other than Borrower,
including ING, in its capacity as a lender hereunder rather than as
Agent, and each Person that becomes a lender party to the Agreement
pursuant to any amendment, assignment or other instrument which
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expressly adds such Person as a lender hereunder, substitutes or
replaces any Lender hereunder or assigns to any Lender an interest in a
Lender's Note, and the successors and assigns of each as holder of a
Note.
(f) The definition of "Maximum Loan Amount" in Section 1.1 of the
Original Agreement is hereby amended in its entirety to read as follows:
"MAXIMUM LOAN AMOUNT" has the following meaning:
(a) From November 9, 1998 until and including April
30, 1999, the Maximum Loan Amount means the amount of
$320,000,000.
(b) From May 1, 1999 until and including December 31,
1999, the Maximum Loan Amount means the amount of
$300,000,000.
(c) From and after January 1, 2000, the Maximum Loan
Amount means the amount of $275,000,000.
Notwithstanding the foregoing, in the event Borrower issues
preferred or common shares of capital stock for an aggregate
price of not less than $80,000,000 on or before April 30,
1999, the Maximum Loan Amount shall be $320,000,000 until
Lenders have no further obligations to make Advances hereunder
and the Obligations have been paid in full.
(g) The definition of "Percentage Share" in Section 1.1 of the Original
Agreement is hereby amended in its entirety to read as follows:
"PERCENTAGE SHARE" means, with respect to any Lender (a) when
used in Sections 2.1, 2.5 or 2.A.2(b), in any Request for Advance or
when no Loans are outstanding hereunder, the percentage set forth
opposite such Lender's name on the signature pages of this Agreement or
as set forth on any amendment, assignment or other instrument that
expressly designates the Percentage Share of a Lender that is a party
thereto, and (b) when used otherwise, the percentage equal to the
unpaid principal balance of such Lender's Loan at the time in question
divided by the aggregate unpaid principal balance of all Loans at such
time.
Section 2.2 COMMITMENT AND FACILITY FEES. The first sentence of Section
2.5 of the Original Agreement is hereby amended in its entirety to read as
follows:
"In consideration of each Lender's commitment to make Advances
up to the amount of the Borrowing Base in effect from time to
time, Borrower will pay to Agent for the account of each
Lender a commitment fee determined on a daily basis by
applying the Commitment Fee Margin in effect at such time to
such Lender's Percentage Share of the unused portion of the
Borrowing Base on each day during
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the Commitment Period, determined for each such day by
deducting from the Borrowing Base the aggregate unpaid
principal balance of the Loans and outstanding LC Obligations
at the end of such day."
Section 2.3 CURRENT RATIO. Section 5.2(k) of the Original Agreement is
hereby deleted in its entirety and paragraphs (l), (m), and (n) of such Section
are hereby amended by designating such paragraphs as "(k), (l), and (m),"
respectively.
ARTICLE III.
REDETERMINATION OF BORROWING BASE
AND WAIVER OF EXISTING DEFAULT
Section 3.1 BORROWING BASE REDETERMINATION. Contemporaneously with the
execution and delivery of this Amendment by the parties hereto, the Borrowing
Base is hereby redetermined to be $320,000,000, such redetermination to remain
in effect until the next Determination Date.
Section 3.1 WAIVER OF CURRENT RATIO DEFAULT. Section 5.2(k) of the
Original Agreement provides that the ratio of Borrower's Consolidated Current
Assets to Borrower's Consolidated Current Liabilities (the "CURRENT RATIO") will
never be less than 1.0 to 1.0. Borrower has informed Agent that at September 30,
1998 Borrower's Current Ratio was not in compliance with Section 5.2(k) of the
Original Agreement. Such noncompliance constitutes a Default under the Original
Agreement (herein called the "SUBJECT DEFAULT"), and Borrower has requested that
Lenders waive the Subject Default. Based upon the representations and warranties
set forth in Section 5.1 of this Amendment, Lenders hereby waive the Subject
Default. The waiver provided herein shall be effective only in this specific
instance and for the purpose described herein and shall in no event be construed
to be a waiver of any other Default or Event of Default now existing or
hereafter arising under, or any other violation by Borrower of, the Credit
Agreement or any other Loan Document or any other waiver of any of Agent's or
any Lender's rights or remedies under the Credit Agreement or any other Loan
Document.
ARTICLE IV.
CONDITIONS OF EFFECTIVENESS
Section 4.1 EFFECTIVE DATE. This Amendment shall become effective as of
the date first above written when, and only when:
(a) DELIVERY OF THIS AMENDMENT. Agent shall have received, at Agent's
office, a counterpart of this Amendment executed and delivered by Borrower, and
all Lenders shall have executed and delivered a counterpart of this Amendment to
Agent.
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(b) UP-FRONT FEES. Lenders shall have received payment in full from
Borrower in immediately available funds of the amendment fee described in the
letter of even date herewith between Borrower and Agent, and Agent shall have
received the agent's fee described in the letter of even date herewith between
Borrower and Agent.
(c) OTHER DOCUMENTS. Agent shall have additionally received (i) a
certificate of the Secretary of Borrower dated the date of this Amendment
certifying that attached thereto is a true and complete copy of resolutions
adopted by the Board of Directors of Borrower authorizing the execution,
delivery and performance of this Amendment and certifying the names and true
signatures of the officers of Borrower authorized to sign this Amendment and
(ii) such supporting documents as Agent may reasonably request.
(d) REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in Section 4.1 of the Original Agreement shall be true and correct in
all material respects.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 REPRESENTATIONS AND WARRANTIES OF BORROWER. In order to
induce Lenders to enter into this Amendment, Borrower represents and warrants to
Agent for the benefit of each Lender that:
(a) The representations and warranties contained in Section
4.1 of the Original Agreement are true and correct in all material
respects at and as of the time of the effectiveness hereof.
(b) Borrower is duly authorized to execute and deliver this
Amendment and is and will continue to be duly authorized to borrow
monies and to perform its obligations under the Credit Agreement.
Borrower has duly taken all corporate action necessary to authorize the
execution and delivery of this Amendment.
(c) The execution and delivery by Borrower of this Amendment
and the performance by Borrower of its obligations hereunder do not and
will not conflict with any provision of law, statute, rule or
regulation or of the certificate of incorporation and bylaws of
Borrower, or of any material agreement, judgment, license, order or
permit applicable to or binding upon Borrower, or result in the
creation of any lien, charge or encumbrance upon any assets or
properties of Borrower. Except for those which have been obtained, no
consent, approval, authorization or order of any court or governmental
authority or third party is required in connection with the execution
and delivery by Borrower of this Amendment.
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(d) When duly executed and delivered, each of this Amendment
and the Credit Agreement will be a legal and binding obligation of
Borrower, enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and by equitable
principles of general application.
(e) The audited Consolidated financial statements of Borrower
dated as of December 31, 1997 and the unaudited financial statements of
Borrower dated as of June 30, 1998 fairly present the Consolidated
financial position at such dates and the Consolidated statement of
operations and the changes in Consolidated financial position for the
periods ending on such dates for Borrower. Copies of such financial
statements have heretofore been delivered to each Lender. Since June
30, 1998, no material adverse change has occurred in the financial
condition or businesses of Borrower except for changes in oil and gas
prices that affect the industry in which Borrower operates.
(f) Set forth on the signature pages to this Amendment is each
Lender's Percentage Share and share of the Maximum Loan Amount in
effect as of the date of this Amendment.
ARTICLE VI.
MISCELLANEOUS
Section 6.1 RATIFICATION OF AGREEMENTS. The Original Agreement as
hereby amended is hereby ratified and confirmed in all respects and shall remain
in full force and effect. Any reference to the Credit Agreement in any Loan
Document shall be deemed to be a reference to the Original Agreement as hereby
amended. The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein or therein, operate as a waiver of any
right, power or remedy of Lenders under the Credit Agreement or any other Loan
Document nor constitute a waiver of any provision of the Credit Agreement or any
other Loan Document.
Section 6.2 LOAN DOCUMENTS. This Amendment is a Loan Document, and all
provisions in the Credit Agreement pertaining to Loan Documents apply hereto and
thereto.
Section 6.3 GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.
Section 6.4 COUNTERPARTS. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.
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IN WITNESS WHEREOF, this Amendment is executed as of the date
first above written.
FORCENERGY INC (formerly
known as Forcenergy Gas
Exploration, Inc.)
By: /s/ E. Xxxxxx Xxxxx
-----------------------------------
E. Xxxxxx Xxxxx, Vice President
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
ING (U.S.) CAPITAL CORPORATION (formerly
known as Internationale Nederlanden (U.S.)
Capital Corporation), Agent and Lender
By:
------------------------------------
X. Xxxx Xxxxx, Senior Vice President
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
14.062500% $45,000,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
DEN NORSKE BANK ASA, Lender
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
14.06250% $45,000,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
MEESPIERSON CAPITAL CORP., Lender
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
14.48375% $47,500,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
BANK OF SCOTLAND, Lender
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
14.062500% $45,000,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
HIBERNIA NATIONAL BANK, Lender
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
9.37500% $30,000,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
PNC BANK, NATIONAL ASSOCIATION,
Lender
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
10.15625% $32,500,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
CREDIT AGRICOLE INDOSUEZ, Lender
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
6.25000% $20,000,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
GENERAL ELECTRIC CAPITAL
CORPORATION, Lender
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
7.81250% $25,000,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
SOCIETE GENERALE, SOUTHWEST AGENCY,
Lender
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
6.250000% $20,000,000
*****
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[Signature Page to Second Amendment
to Fifth Restatement of Credit Agreement]
NATEXIS BANQUE BFCE, Lender
By
------------------------------------
Name:
Title:
SHARE OF
PERCENTAGE MAXIMUM
SHARE LOAN AMOUNT
---------- -----------
3.125000% $10,000,000
*****
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CONSENT AND AGREEMENT OF GUARANTORS
Each of the undersigned hereby acknowledges and consents to the
provisions of this Amendment and the transactions contemplated herein, and
hereby ratifies and confirms the Second Restated Subsidiary Guarantee dated as
of April 13, 1998 made by each of the undersigned in favor of Agent for the
benefit of Lenders, and agrees that the guaranty of the payment and performance
of the Obligations is unimpaired hereby and shall remain in full force and
effect.
FORCENERGY ONSHORE INC.
By:
----------------------------------
E. Xxxxxx Xxxxx, Vice President
FORCENERGY INTERNATIONAL INC.
By:
----------------------------------
E. Xxxxxx Xxxxx, Vice President
FORCENERGY RESOURCES INC.
By:
----------------------------------
E. Xxxxxx Xxxxx, Vice President
FORCENERGY GOM INC.
By:
----------------------------------
E. Xxxxxx Xxxxx, Vice President
*****
