EXHIBIT 4.13a
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "First Amendment") is
entered into as of the 30th day of September, 1998, by and among The Wiser Oil
Company, a Delaware corporation ("Borrower"), NationsBank, N.A. (successor by
merger to NationsBank of Texas, N.A.), as Agent ("Agent"), and NationsBank, N.A.
(successor by merger to NationsBank of Texas, N.A.) and Bank of Montreal, as
Banks ("Banks").
W I T N E S S E T H
WHEREAS, Borrower, Agent and Banks are parties to that certain Credit
Agreement dated as of December 23, 1997 (as amended, the "Credit Agreement")
(unless otherwise defined herein, all terms used herein with their initial
letter capitalized shall have the meaning given such terms in the Credit
Agreement); and
WHEREAS, pursuant to the Credit Agreement, Banks have made a certain Loan
to Borrower and provided certain other credit accommodations to Borrower; and
WHEREAS, the Borrower has requested that certain of the financial covenants
in the Credit Agreement be amended to relax the Company's obligations
thereunder; and
WHEREAS, the Borrower has advised the Banks that Borrower is preparing a
written plan identifying and analyzing certain strategic actions Borrower
intends to undertake to enhance Borrower's financial condition; and
WHEREAS, the Banks have agreed to amend the financial covenants pursuant to
Borrower's request but on the conditions that, among other things, (a) certain
other provisions of the Credit Agreement be amended in certain respects, (b)
Borrower agrees to provide Banks with a copy of the strategic plan referenced in
the preceding paragraph, and (c) the Borrower and each Subsidiary of Borrower
execute and deliver to Agent for the ratable benefit of Banks, deeds of trust,
mortgages and other security documents creating first and prior liens and
security interest on certain oil and gas properties owned by Borrower and its
Subsidiaries; and
WHEREAS, Borrower and Banks intend to establish the Borrowing Base in
effect under the Credit Agreement.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed,
Borrower, Agent and Banks hereby agree as follows:
Section 1. Amendments. In reliance on the representations, warranties,
covenants and agreements contained in this First Amendment, the Credit Agreement
shall be amended effective September 30, 1998 (the "Effective Date") in the
manner provided in this Section 1.
1.1. Additional Definitions. Section 1.1 of the Credit Agreement shall be
amended to add the definitions of "First Amendment," "Initial Mortgaged
Properties," "Redetermination," "Reserve Update," "Scheduled Redetermination,"
"Security Documents," "Special Redetermination," "Secondary Mortgaged
Properties," and "Strategic Plan" which shall read in full as follows:
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"First Amendment" means that certain First Amendment to Credit
Agreement dated as of September 30, 1998 among Borrower, Agent and Banks.
"Initial Mortgaged Properties" means all right, title and interest of
Borrower and the Subsidiary Guarantors in and to the oil and natural gas
fields described on Schedule 1 to the First Amendment.
"Redetermination" means any redetermination of the Borrowing Base
pursuant to Section 3.2 or 3.3.
"Reserve Update" means a report to be delivered by Borrower to each
Bank pursuant to Section 3.1 hereof which shall be prepared by Borrower's
in-house engineering staff and which shall set forth in reasonable detail
any material changes to the reserve information set forth in the Reserve
Report most recently delivered to Banks pursuant to Section 3.1 hereof,
including (a) the results of Borrower's and its Subsidiaries' drilling
activity, and (b) any material deviation in actual results from the
information projected in such Reserve Report with respect to production
volumes, product prices and operating costs.
"Scheduled Redetermination" means any redetermination of the Borrowing
Base pursuant to Section 3.2.
"Secondary Mortgaged Properties" means all right, title and interest
of Borrower and the Subsidiary Guarantors in and to the oil and natural gas
fields described in Schedule 2 to the First Amendment.
"Security Documents" has the meaning assigned to such term in Section
3A.1(a).
"Special Redetermination" means any redetermination of the Borrowing
Base pursuant to Section 3.3.
"Strategic Plan" means a written plan which Borrower has advised the
Banks Borrower is preparing which, when complete, will set forth certain
strategic actions Borrower intends to pursue to enhance Borrower's
financial position and operating results.
1.2 Amendment to Definitions. The definitions of "Agent," "Determination
Date," and "Loan Papers," contained in Section 1.1 of the Credit Agreement shall
be amended to read in full as follows:
"Agent" means NationsBank, N.A., successor by merger to NationsBank of
Texas, N.A., in its capacity as agent for Banks hereunder or any successor
thereto.
"Determination Date" means (a) each November 30, February 28, May 31
and August 31 commencing November 30, 1998, and (b) with respect to any
Special Redetermination, the effective date of any redetermination of the
Borrowing Base made pursuant to a Special Redetermination as specified in
any notice of such redetermination delivered by Agent to Borrower pursuant
to Section 3.2 hereof.
"Loan Papers" means this Agreement, the First Amendment, the Notes,
each Subsidiary Guaranty, all Security Documents now or at any time
hereafter delivered pursuant to Article IIIA, and all other certificates,
documents or instruments delivered in connection with this Agreement, as
the foregoing may be amended from time to time.
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1.3 Amendment to Cross Reference. Section 2.5 shall be amended to change
the reference to "Section 3.3" therein from Section 3.3 to Section 3.4.
1.4 Borrowing Base. Article III of the Credit Agreement shall be amended
to read in full as follows:
"ARTICLE III
Borrowing Base
SECTION 3.1. Reserve Report; Reserve Update; Proposed Borrowing Base.
As soon as available and in any event by February 20 and August 20 of each
year, Borrower shall deliver to each Bank a Reserve Report prepared as of
the immediately preceding January 1 and July 1 respectively. In addition
to the foregoing, as soon as available and in any event by April 15 and
October 15 of each year commencing October 15, 1998, Borrower shall deliver
to each Bank a Reserve Update prepared as of the immediately preceding
April 1 and October 1, respectively, which shall set forth the information
described in the definition of such term contained in Section 1.1 hereof.
Simultaneously with the delivery to Agent and each Bank of each Reserve
Report and Reserve Update, Borrower shall notify each Bank of the amount of
the Borrowing Base which Borrower requests become effective on or prior to
the next Determination Date (or such date promptly following such
Determination Date as Required Banks shall elect)."
SECTION 3.2. Scheduled Redeterminations of the Borrowing Base;
Procedures and Standards. Based in part on the Reserve Reports and Reserve
Updates made available to Banks pursuant to Section 5.1, Banks shall
redetermine the Borrowing Base on or prior to the next Determination Date
(or such date promptly thereafter as reasonably possible based on the
engineering and other information available to Banks). Any Borrowing Base
which becomes effective as a result of any Redetermination of the Borrowing
Base shall be subject to the following restrictions: (a) such Borrowing
Base shall not exceed the Borrowing Base requested by Borrower pursuant to
Sections 3.1 or 3.3 (as applicable), (b) such Borrowing Base shall not
exceed the Total Commitment then in effect, (c) such Borrowing Base shall
not exceed the Maximum Borrowing Base at any time after the Conversion
Date, (d) to the extent such Borrowing Base represents an increase from the
Borrowing Base in effect prior to such Redetermination, such Borrowing Base
shall be approved by all Banks, and (e) any Borrowing Base which represents
a decrease in the Borrowing Base in effect prior to such Redetermination,
or a reaffirmation of such prior Borrowing Base, shall be approved by Banks
holding seventy five percent (75%) of the Total Commitment. Each
Redetermination shall be made by Banks in their sole discretion. Without
limiting such discretion, Borrower acknowledges and agrees that Banks (i)
may make such assumptions regarding appropriate existing and projected
pricing for Hydrocarbons as they deem appropriate in their sole discretion,
(ii) may make such assumptions regarding projected rates and quantities of
future production of Hydrocarbons from the Mineral Interests owned by
Borrower and the Subsidiaries as they deem appropriate in their sole
discretion, (iii) may consider the projected cash requirements of Borrower
and its Subsidiaries, (iv) will not consider any asset other than Proved
Mineral Interests owned by Borrower and its Subsidiary Guarantors which are
subject to first and prior Liens in favor of Agent for the ratable benefit
of Banks to the extent required by Article IIIA hereof, and (v) may make
such other assumptions, considerations and exclusions as Banks deem
appropriate in the exercise of their sole discretion. It is further
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acknowledged and agreed that each Bank may consider such other credit
factors as it deems appropriate in the exercise of its sole discretion and
shall have no obligation in connection with any Redetermination to approve
any increase from the Borrowing Base in effect prior to such
Redetermination. Promptly following any Redetermination of the Borrowing
Base, Agent shall notify Borrower of the amount of the Borrowing Base as
redetermined, which Borrowing Base shall be effective as of the date
specified in such notice, and shall remain in effect for all purposes of
this Agreement until the next Redetermination."
SECTION 3.3 Special Redetermination. (a) In addition to Scheduled
Redeterminations, Required Banks shall be permitted to make a Special
Redetermination of the Borrowing Base once in each calendar year. Any
request by Required Banks pursuant to this Section 3.3(a) shall be
submitted to Agent and Borrower.
(b) In addition to Scheduled Redeterminations, Borrower shall be
permitted to request a Special Redetermination of the Borrowing Base once
in each calendar year. Such request shall be submitted to Agent and
Required Banks and at the time of such request Borrower shall deliver to
each Bank a Reserve Report. Together with such request, Borrower shall
also notify each Bank of the Borrowing Base requested by Borrower in
connection with such Special Redetermination.
(c) Any Special Redetermination shall be made by Banks in accordance
with the procedures and standards set forth in Section 3.2; provided, that,
no Reserve Report will be required to be delivered to Banks in connection
with any Special Redetermination requested by Required Banks pursuant to
clause (a) above.
SECTION 3.4. Borrowing Base Deficiency. (a) If a Borrowing Base
Deficiency exists as a result of a Redetermination of the Borrowing Base,
Borrower shall either (i) on or before the thirtieth (30th) day following
the effective date of such Redetermination, make a prepayment of principal
on the Loan in an amount equal to the amount of such Borrowing Base
Deficiency, or (ii) make six (6) equal consecutive monthly prepayments of
principal on the Loan, each of which shall be in the amount of one sixth
(1/6th) of such Borrowing Base Deficiency. The first of such six (6)
prepayments shall be due on the thirtieth (30th) day following the
effective date of such Redetermination and each subsequent prepayment shall
be due on the same day of each month thereafter (or if there is no
corresponding day of any subsequent month, then on the last day of such
month).
(b) If a pre-existing Borrowing Base Deficiency increases as a result
of any Redetermination of the Borrowing Base, then, in addition to any
mandatory prepayments required pursuant to this Section 3.4 as a result of
such preexisting Borrowing Base Deficiency, Borrower shall either (i) on or
before the thirtieth (30th) day following the effective date of such
Redetermination, make a principal payment on the Loan in an amount equal to
the amount of such increase in such Borrowing Base Deficiency, or (ii) make
six equal consecutive monthly prepayments of principal of the Loan, each of
which shall be in an amount equal to one sixth (1/6th) of the increase in
such Borrowing Base Deficiency. The first of such six (6) prepayments
shall be due on the thirtieth (30th) day following the effective date of
such Redetermination and each subsequent prepayment shall be due on the
same day of each month thereafter (or if there is no corresponding day of
any subsequent month, then on the last day of such month).
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(c) If a Borrowing Base Deficiency occurs or an existing Borrowing
Base Deficiency increases as a result of any quarterly reduction of the
Maximum Borrowing Base, then, on the date of such quarterly reduction in
the Maximum Borrowing Base, Borrower shall make a prepayment of principal
on the Loan in the amount of such Borrowing Base Deficiency. For purposes
of this Section 3.4(c) and Section 3.4(a) and (b) above, if (i) the
effective date of any Redetermination is also the date of any quarterly
reduction in the Maximum Borrowing Base, and (ii) the Borrowing Base in
effect immediately prior to such Redetermination is higher than the amount
of the Maximum Borrowing Base as reduced on the effective date of any
Redetermination, then the reduction in the Borrowing Base which becomes
effective as a result of such Redetermination will be deemed to have
resulted from the reduction in the Maximum Borrowing Base to the extent of
the difference between the Borrowing Base in effect immediately prior to
the effective date of any Redetermination and the Maximum Borrowing Base in
effect as reduced on the effective date of such Redetermination.
SECTION 3.5. Borrowing Base in Effect from Effective Date of First
Amendment. Notwithstanding anything to the contrary contained herein, the
Borrowing Base shall be $25,000,000 for the period commencing on the
Effective Date of the First Amendment and continuing until the first
Redetermination thereafter."
1.5 Collateral. The Credit Agreement shall be amended to add a new
Article IIIA thereto which shall read in full as follows:
"ARTICLE IIIA
Collateral and Guarantees
SECTION 3A.1. Security. (a) The Obligations shall be secured by
first and prior Liens (subject only to Permitted Encumbrances) covering and
encumbering the Initial Mortgaged Properties, the Secondary Mortgaged
Properties and such other Mineral Interests owned by Borrower and its
Subsidiaries which are specified by Required Banks from time to time.
Promptly following the Effective Date of the First Amendment, and in all
events not later than October 16, 1998 (in the case of the Initial
Mortgaged Properties) and October 23, 1998 (in the case of the Secondary
Mortgaged Properties), Borrower shall execute and deliver and shall cause
each of the Subsidiary Guarantors to execute and deliver, to Agent for the
ratable benefit of each Bank, mortgages, deeds of trust, security
agreements, assignments of production and financing statements and such
other documents, instruments, agreements, assignments, conveyances,
amendments and other writings, including, without limitation, UCC-1
financing statements (each duly authorized and executed) (the "Security
Documents") as Agent shall deem necessary or appropriate all in form and
substance acceptable to Agent to grant, evidence and perfect first and
prior Liens in all Initial Mortgaged Properties and Secondary Mortgaged
Properties.
(b) In addition to the Security Documents required by Section 3A.2(a),
Borrower shall execute and deliver to Agent, for the ratable benefit of
each Bank, such additional Security Documents granting, evidencing and
perfecting the Liens required by Section 6.1(a) preceding with respect to
such other Mineral Interests as Agent or Required Banks shall specify from
time to time.
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(c) Any time Borrower is required to execute and deliver or cause its
Subsidiaries to execute and deliver Security Documents to Agent pursuant to
this Section 6.1, Borrower shall also deliver to Agent (i) such evidence of
title as Agent shall deem necessary or appropriate to verify Borrower's and
its Subsidiaries' title to the Mineral Interests which are subject to such
Security Document (including, to the extent so requested by Agent, title
opinions issued to Agent by title attorneys acceptable to Agent in is sole
discretion, and (ii) opinions of counsel addressed to Agent and each Bank
with respect to the validity, perfection and enforceability of the Liens
created by such Security Documents and such other matters regarding such
Security Documents as Agent shall reasonably request.
SECTION 3A.2. Guarantees. Payment and performance of the Obligations
shall be fully guaranteed by each Subsidiary Guarantor pursuant to a
Subsidiary Guaranty."
1.6 Reporting Requirements. Section 8.1 of the Credit Agreement shall be
amended to add a new clause (1) thereto which shall read in full as follows:
"(1) as soon as available, and in all events not later than November
30, 1998, a copy of the Strategic Plan."
1.7 Financial Covenants. Sections 10.2 and 10.3 of the Credit Agreement
shall be amended to read in full as follows:
"Section 10.2 Ratio of Consolidated Funded Debt to Consolidated Total
Capital of Borrower. Borrower's Consolidated Funded Debt will not exceed
(a) seventy percent (70%) of Borrower's Consolidated Total Capital at any
time through and including March 30, 1999, or (b) sixty five percent (65%)
of Borrower's Consolidated Total Capital at any time on or after March 31,
1999.
Section 10.3 Consolidated Interest Coverage Ratio. Borrower will not
permit its Consolidated Interest Coverage Ratio (as defined in the
Subordinate Note Indenture) to be less than (a) 2.0 to 1 as of the end of
any fiscal quarter through and including, December 31, 1998, or (b) 2.5 to
1 as of the end of any fiscal quarter ending after December 31, 1998."
1.8 Amendment to Default Section. Section 11.1 of the Credit Agreement
shall be amended to (a) delete the word "or" at the end of clause (i) thereof,
(b) to insert the word "or" after the semicolon at the end of clause (j)
thereof, and (c) to add a new clause (k) which shall read in full as follows:
"(k) this Agreement or any other Loan Paper shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Credit
Party, or any Credit Party shall deny that it has any further liability or
obligation under any of the Loan Papers to which it is a party, or any Lien
created by the Loan Papers shall for any reason (other than the release
thereof in accordance with the Loan Papers) cease to be a valid, first
priority, perfected Lien upon any of the Proved Mineral Interests purported
to be covered thereby;"
Section 2. Borrowing Base. The Borrowing Base shall be $25,000,000 from
the Effective Date of this First Amendment until the next Redetermination.
Section 3. Representations and Warranties of Borrower. To induce Banks
and Agent to enter into this First Amendment, Borrower hereby represents and
warrants to Banks and Agent as follows:
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(a) Each representation and warranty of Borrower contained in the
Credit Agreement and the other Loan Papers is true and correct on the date
hereof and will be true and correct after giving effect to the amendments
set forth in Section 1 hereof.
(b) After giving effect to this Amendment, no Default or Event of
Default has occurred which is continuing.
(c) The execution, delivery and performance by Borrower of this First
Amendment and each Security Document to be executed pursuant hereto are
within Borrower's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not violate
or constitute a default under any provision of applicable law or any
Material Agreement binding upon Borrower or the Subsidiaries of Borrower or
result in the creation or imposition of any Lien upon any of the assets of
Borrower or the Subsidiaries of Borrower except Permitted Encumbrances.
(d) This First Amendment constitutes the valid and binding obligation
of Borrower enforceable in accordance with its terms and, when executed and
delivered pursuant hereto, each Security Document delivered hereunder will
constitute the valid and binding obligation of Borrower enforceable in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditor's
rights generally, and (ii) the availability of equitable remedies may be
limited by equitable principles of general application.
Section 4. Post Closing Conditions. On or before October 16, 1998,
Borrower shall deliver to Agent, for the benefit of the Banks, in addition to
the Security Documents, opinions and evidence of title required by Section
3A.1(a), (a) such certificates of officers and Governmental Authorities,
certified charter documents, resolutions of directors and other documents as
Agent shall require to evidence the valid organization and existence of Borrower
and the Subsidiary Guarantors and the due authorization, execution and delivery
of this Amendment and the Security Documents to be executed and delivered
pursuant hereto, and (b) an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to Borrower
and the Subsidiary Guarantors with respect to the due authorization, execution,
delivery and enforceability of this Amendment and the Security Documents and
such other matters related thereto as Agent shall require. The failure of
Borrower to timely comply with this Section 4 shall constitute an Event of
Default under and for all purposes of this Agreement and the other Loan Papers.
Section 5. Miscellaneous.
5.1 Reaffirmation of Loan Papers. Any and all of the terms and provisions
of the Credit Agreement and the Loan Papers shall, except as amended and
modified hereby, remain in full force and effect.
5.2 Parties in Interest. All of the terms and provisions of this First
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.
5.3 Legal Expenses. Borrower hereby agrees to pay on demand all
reasonable fees and expenses of counsel to Agent incurred by Agent in connection
with the preparation, negotiation and execution of this First Amendment and all
related documents.
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5.4 Counterparts. This First Amendment may be executed in counterparts,
and all parties need not execute the same counterpart; however, no party shall
be bound by this First Amendment until all parties have executed a counterpart.
Facsimiles shall be effective as originals.
5.5 Complete Agreement. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND
THE OTHER LOAN PAPERS 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 UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
5.6 Headings. The headings, captions and arrangements used in this First
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this First Amendment, nor affect
the meaning thereof.
[signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed by their respective authorized officers on the date and year
first above written.
BORROWER:
THE WISER OIL COMPANY,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
AGENT:
NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A., as Agent
By:
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇,
Senior Vice President
BANK OF MONTREAL:
By:
-------------------------------------
Its:
------------------------------------
BANK:
NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A., as Agent
By:
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇,
Senior Vice President
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SCHEDULE 1
Field Summary
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Field State County
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Grayburg ▇▇▇▇▇▇▇ New Mexico Eddy
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Maljamar New Mexico Lea
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Dimmit Cherry Canyon Texas Loving
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▇▇▇▇▇▇▇ Texas ▇▇▇▇▇
--------------------------------------------------------------------------------
Dimmit NE Delaware Texas Loving
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SCHEDULE 2
--------------------------------------------------------------------------------
Field State County
--------------------------------------------------------------------------------
Blue Creek West Virginia Kahawha
--------------------------------------------------------------------------------
Basin Fruitland Coal New Mexico Rio Arriba
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇ Texas Refugio
--------------------------------------------------------------------------------
▇▇▇▇▇▇ Mesaverde New Mexico Rio Arriba
--------------------------------------------------------------------------------
Viejos Devonian Texas Pecos
--------------------------------------------------------------------------------
Utility Gas Kentucky ▇▇▇▇
--------------------------------------------------------------------------------
Basin Dakota New Mexico Rio Arriba
--------------------------------------------------------------------------------
Slash Ranch Pennsylvanian Texas Loving
--------------------------------------------------------------------------------
Utility Gas Kentucky Clay
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇-▇▇▇▇▇ Ellenburger Texas ▇▇▇▇▇▇
--------------------------------------------------------------------------------
Utility Gas Kentucky ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇▇▇ Kentucky ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ Gap Kentucky ▇▇▇▇
--------------------------------------------------------------------------------
Various Texas Various
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Various North Dakota Various
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Texas Refugio
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Various New Mexico Various
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ New Mexico Lea
--------------------------------------------------------------------------------
Slash Ranch Fusselman Texas Loving
--------------------------------------------------------------------------------
Slash Ranch Ellenburger Texas Loving
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Deep Fusselman Texas ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Southwest Texas Goliad
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇ Texas Goliad
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