EXHIBIT 10.11.6
SIXTH AMENDMENT TO FIFTH RESTATED CREDIT AGREEMENT
This Sixth Amendment to Fifth Restated Credit Agreement (this "SIXTH
AMENDMENT") is entered into as of the 19th day of May, 1997, by and among Xxxxxx
Oil Corporation ("BORROWER"), NationsBank of Texas, N.A., as Agent ("AGENT"),
and NationsBank of Texas, N.A. ("NATIONSBANK"), Bank One, Texas, N.A. ("BANK
ONE"), Xxxxx Fargo Bank, N.A. ("XXXXX FARGO"), Texas Commerce Bank National
Association ("TCB," and together with NationsBank, Bank One and Xxxxx Fargo,
collectively referred to herein as the "ORIGINAL BANKS") and Credit Lyonnais New
York Branch as Banks (the "BANKS").
W I T N E S E T H:
WHEREAS, the Banks, Borrower and Agent are parties to that certain Fifth
Restated Credit Agreement dated as of June 30, 1994, as amended by that certain
(i) letter agreement by and among Borrower and the Original Banks dated as of
May 1, 1995, (ii) Second Amendment to Fifth Restated Credit Agreement by and
among Borrower, Agent and the Original Banks dated as of June 30, 1995, (iii)
Third Amendment to Fifth Restated Credit Agreement by and among Borrower, Agent
and the Original Banks dated as of November 1, 1995, (iv) Fourth Amendment to
Fifth Restated Credit Agreement by and among Borrower, Agent and Original Banks
dated as of April 4, 1996, and (v) Fifth Amendment to Fifth Restated Credit
Agreement by and among Borrower, Agent and the Original Banks dated as of
November 1, 1996 (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, the Banks have made certain
Loans to Borrower, and Agent has issued certain Letters of Credit on behalf of
Borrower; and
WHEREAS, Borrower has advised the Banks that Borrower intends to issue
certain ten year non-amortizing Senior Subordinated Notes (the "SENIOR
SUBORDINATED NOTES"), in an aggregate principal amount up to $200,000,000; such
Senior Subordinated Notes being more particularly described in that certain
Preliminary Prospectus Supplement (To Prospectus Dated August 4, 1994) dated May
__, 1997, a copy of which has been delivered to each Bank; and
WHEREAS, Borrower has requested that the Credit Agreement be amended in
certain respects in connection with the proposed issuance of such Senior
Subordinated Notes; and
WHEREAS, subject to the terms and conditions herein contained, the Banks
have agreed to Borrower's requests.
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 each Bank hereby agree as follows:
SECTION 1. AMENDMENTS. Subject to the satisfaction of each condition
precedent set forth in SECTION 3 hereof and in reliance on the representations,
warranties, covenants and agreements contained in this Sixth Amendment, the
Credit Agreement shall be amended effective May __, 1997 (the "EFFECTIVE DATE")
in the manner provided in this SECTION 1.
1.1. AMENDMENT TO DEFINITIONS. The definition of "Loan Papers" and
"Restricted Payment" contained in Section 1.1 of the Credit Agreement shall be
amended to read in full as follows:
"Loan Papers" means this Agreement, the Letter Agreement, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment,
the Sixth Amendment, the Notes, the Mortgages, the Restricted Subsidiary
Guarantees and all other certificates, documents or instruments delivered
in connection with this Agreement, as the foregoing may be amended from
time to time.
"Restricted Payment" means (a) any Distribution by Borrower, (b) any
capital contribution, loan or advance by Borrower or any Restricted
Subsidiary to any Unrestricted Subsidiary of Borrower, (c) the issuance of
a Guarantee by Borrower or any Restricted Subsidiary with respect to any
Debt or other obligation of any Unrestricted Subsidiary, (d) the
retirement, redemption or prepayment prior to the scheduled maturity by
Borrower or a Restricted Subsidiary of Debt of Borrower or such Restricted
Subsidiary which is subordinate to the Obligations, including without
limitation, the Fourth Debentures and the Convertible Debentures (and, in
the case of the Third Convertible Debentures and the Fourth Debentures,
any redemption payments required as a result of any asset sale or change
of control), and (e) any Investment by Borrower which is a Permitted
Investment pursuant to subsection (e) of the definition of Permitted
Investment. For purposes of this definition, at the time Borrower or any
Restricted Subsidiary issues any Guarantee of any Debt or other obligation
of any Unrestricted Subsidiary, Borrower or such Restricted Subsidiary
will be deemed to have made a Restricted Payment in an amount equal to the
maximum potential liability of Borrower or such Restricted Subsidiary
under such Guarantee (not to exceed, however, the aggregate outstanding
Debt [including accrued but unpaid interest and fees] and other
obligations which are guaranteed pursuant to any such Guarantee).
1.2. ADDITIONAL DEFINITIONS. Section 1.1 of the Credit Agreement shall be
amended to add the following definitions to such Section:
"Draft Prospectus" means that certain Preliminary Prospectus
Supplement (To Prospectus Dated August 4, 1994) dated May __, 1997, which
is in draft form and subject to completion, a copy of which has been
previously provided by Borrower to the Banks.
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"Fourth Debentures" means Borrower's Senior Subordinated Notes in an
aggregate amount not to exceed $200,000,000 and which shall be on the
terms and conditions set forth in the Draft Prospectus.
"Fourth Indenture Trustee" means Texas Commerce Bank National
Association and any successor trustee appointed pursuant to the Fourth
Indenture.
"Fourth Indenture" means an Indenture entered into by and between
Borrower and the Fourth Indenture Trustee setting forth certain terms of
the Fourth Debentures and which shall contain the terms and conditions set
forth in the Draft Prospectus.
"Sixth Amendment" means that certain Sixth Amendment to Fifth
Restated Credit Agreement dated as of May ___, 1997, by and among
Borrower, Agent and the Banks.
1.3. DEBT COVENANT. Section 9.1 of the Credit Agreement shall be amended to
read in full as follows:
SECTION 9.1. TOTAL ADDITIONAL DEBT OF BORROWER AND RESTRICTED
SUBSIDIARIES. Neither Borrower nor any Restricted Subsidiary will incur
any Debt other than (a) Debt secured by Permitted Encumbrances described
in subpart (1) of the definition of Permitted Encumbrances, (b)
Nonrecourse Debt, (c) Third Party Letters of Credit permitted by SECTION
2.1 hereof, (d) the Loans, (e) margin accounts with brokers and dealers
relating to Margin Stock and other securities, and (f) Guarantees of Debt
and other liabilities of other Restricted Subsidiaries and of Borrower
provided that such Debt and other liabilities are permitted pursuant to
this Agreement; PROVIDED, THAT, the Debt permitted pursuant to SECTION
9.1(A) and (B) shall not exceed $15,000,000 in the aggregate; PROVIDED,
FURTHER THAT, the Third Party Letter of Credit Exposure under Cash Secured
Third Party Letters of Credit shall not exceed at any time five percent
(5%) of the Borrowing Base in effect at such time; and PROVIDED, FURTHER
THAT, the maximum aggregate outstanding balance of Borrower's and its
Subsidiaries' margin accounts shall not exceed one percent (1%) of
Borrower's Consolidated Tangible Net Worth at any time. In addition to the
foregoing, Borrower may issue (i) the Second Convertible Debentures in
exchange for the Second Preferred Stock, (ii) the Third Convertible
Debentures, and (iii) the Fourth Debentures provided that (A) the Third
Convertible Debentures are called for redemption within 30 days following
issuance of the Fourth Debentures, and (B) the proceeds of the issuance of
the Fourth Debentures are used, in part and within 90 days following such
issuance, to redeem the Third Convertible Debentures in full; provided,
that Borrower shall give each Bank ninety (90) days advance notice of
Borrower's intention to complete any exchange of Convertible Debentures
for Preferred Stock, and if Majority Banks require that Borrower and the
Restricted Subsidiaries grant Liens on their oil and gas properties and
Related Assets pursuant
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to SECTION 5.1(B), Borrower will not complete such exchange until all
requisite Mortgages have been executed and delivered by Borrower and the
Restricted Subsidiaries and Agent has notified Borrower that all such
Mortgages have been filed of record and that all other steps necessary to
perfect (and confirm perfection) of the Liens created by such Mortgages
have been taken.
1.4. RESTRICTED PAYMENTS COVENANT. Section 9.2 of the Credit Agreement
shall be amended to read in full as follows:
SECTION 9.2. RESTRICTED PAYMENTS. Neither Borrower nor any
Restricted Subsidiary will declare or make any Restricted Payment;
provided, that, so long as no Default or Event of Default, Borrowing Base
Deficiency or noncompliance with SECTION 10.4 exists (without giving
effect to the cure periods provided by SECTION 4.4 or 10.4), and provided
further that no Default or Event of Default, Borrowing Base Deficiency or
non compliance with SECTION 10.4 would result from such Restricted Payment
(without giving effect to the cure periods provided by SECTION 4.4 or
10.4), Borrower and Restricted Subsidiaries may (a) make Restricted
Payments in an aggregate amount (measured cumulatively from January 1,
1996) not to exceed the sum of the following (i) $75,000,000, plus (ii)
the net cash proceeds to Borrower from all equity offerings completed by
Borrower of Borrower's equity securities after January 1, 1996, plus (iii)
all cash Distributions actually received by Borrower or any Restricted
Subsidiary from Unrestricted Subsidiaries after January 1, 1996, plus (iv)
fifty percent (50%) of Borrower's Consolidated Cash Flow earned on or
after January 1, 1996 to the date of determination, (b) declare and make a
Qualified Redemption of the Second Issue, (c) issue the Second Convertible
Debentures in exchange for the Second Preferred Stock, and (d) redeem the
Third Convertible Debentures with the proceeds of the issuance of the
Fourth Debentures.
1.5. AMENDMENTS TO MATERIAL COVENANTS. SECTION 9.6 of the Credit Agreement
shall be amended to read in full as follows:
SECTION 9.6. AMENDMENTS TO MATERIAL DOCUMENTS. Neither Borrower nor
any Restricted Subsidiary shall enter into or permit any modifications or
amendment of, or waive any material right or obligation of any Person
under, (a) its certificate or articles of incorporation, bylaws or other
organizational document other than amendments, modifications and waivers
which are not, individually or in the aggregate, material, (b) the First
Preferred Stock Designation, the Second Preferred Stock Designation, the
First Indenture, the Second Indenture, the Third Indenture, the Fourth
Indenture, the Convertible Debentures, or the Fourth Debentures, (c) the
DJ Transaction Documents, or (d) the Patina Transaction Documents other
than, in the case of clauses (c) and (d) preceding, amendments,
modifications and waivers which are not, individually or in the aggregate
material; provided, that Borrower shall provide Agent and each Bank
written notice of each immaterial amendment,
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modification or waiver of any DJ Transaction Documents or Patina
Transaction Documents not later than fifteen (15) days after the date
Borrower or its Restricted Subsidiary enters into such amendment,
modification, or waiver specifying in detail the subject thereof.
1.6. USE OF PROCEEDS COVENANT. Section 9.7 of the Credit Agreement shall be
amended to read in full as follows:
SECTION 9.7. USE OF PROCEEDS. The proceeds of Borrowings will not be
used for any purpose other than (a) working capital, (b) to finance the
acquisition, exploration and development of oil and gas properties and
Related Assets and the transportation, processing and marketing of
hydrocarbons by Borrower and Restricted Subsidiaries, (c) Restricted
Payments permitted pursuant to SECTION 9.2 and Investments permitted
pursuant to SECTION 9.8 provided, that none of such proceeds (including,
without limitation, proceeds of Letters of Credit issued hereunder) will
be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any Margin Stock, and
none of such proceeds will be used in violation of applicable law
(including, without limitation, the Margin Regulations). Notwithstanding
anything to the contrary contained herein, from and after the issuance of
the Fourth Debentures and continuing until the next Determination Date
thereafter, the proceeds of any Borrowing (any "proposed Borrowing") which
is made at any time when the sum of (a) the aggregate Letter of Credit
Exposure of all Banks at such time, plus (b) the aggregate outstanding
principal balance of all Loans at such time (collectively, the
"outstanding credit") exceeds Seventy Million and No/100 Dollars
($70,000,000) (such computation to be made after giving effect to such
proposed Borrowing) shall, to the extent the outstanding credit exceeds
Seventy Million and No/100 Dollars ($70,000,000) after giving effect to
such proposed Borrowing, be used only by Borrower and its Restricted
Subsidiaries and only to finance substantially contemporaneous capital
expenditures for the acquisition, exploration and development of oil and
gas properties and the acquisition and improvement of Related Assets.
SECTION 2. MANDATORY REDUCTIONS IN BORROWING BASE. Borrower acknowledges
and agrees that notwithstanding anything to the contrary contained herein or in
the Credit Agreement, simultaneously with the issuance of the Senior Subordinate
Notes, the Total Borrowing Base then in effect under the Credit Agreement will
reduce by eighty percent (80%) of the amount by which the aggregate principal
amount of the Senior Subordinate Notes so issued exceeds $150,000,000. All of
such reduction shall be allocated to the Borrowing Base for Facility A. Borrower
shall be required to immediately make a mandatory prepayment of principal of the
Facility A Notes in an amount sufficient to eliminate any Borrowing Base
Deficiency resulting from such reduction. Borrower acknowledges that the maximum
amount of Senior Subordinate Notes Borrower is permitted to issue under the
Credit Agreement is $200,000,000.
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SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENTS. The
amendments to the Credit Agreement contained in SECTION 1 of this Sixth
Amendment shall be effective only upon, and are conditioned upon, the delivery
to Agent and each Bank of such resolutions, certificates and other documents as
Agent or any Bank shall request relative to the Note Issuance and the
authorization, execution and delivery by Borrower of this Sixth Amendment. If
the foregoing condition has not been satisfied by the Effective Date, this Sixth
Amendment and all obligations of the Banks and Agent contained herein shall, at
the option of Majority Banks, terminate.
SECTION 4. REDESIGNATION OF CERTAIN SUBSIDIARIES. Notwithstanding anything
to the contrary contained herein or in the Credit Agreement, Borrower, Agent and
each Bank hereby acknowledge and agree that, from and after the Effective Date,
(i) Xxxxxx Acquisition Corporation, (ii) Institutional Services, Inc., (iii)
SOCO Thomasville, Inc. and the Subsidiaries of SOCO Thomasville, Inc., (iv) SOCO
California Properties, Inc., and (v) SOCO Technologies, Inc. (the Subsidiaries
listed in clauses (i) through (v) above are collectively referred to herein as
the "REDESIGNATED SUBSIDIARIES"), shall each be automatically redesignated as
Unrestricted Subsidiaries for purposes of the Credit Agreement and the other
Loan Papers without the necessity of any further act on the part of Borrower,
Agent, any such Redesignated Subsidiary or any Bank. In connection with the
foregoing, Banks and Agent hereby release and discharge (a) each of the
Redesignated Subsidiaries from all obligations and liabilities of each under,
and with respect to, that certain Amended and Restated Guaranty dated as of July
1, 1993 (as amended through the date hereof), and (b) the Liens in favor of
Agent encumbering the capital stock of each Redesignated Subsidiary pledged
under, and pursuant to, that certain Amended and Restated Pledge Agreement dated
as of July 1, 1993 (as amended through the date hereof), and Agent is hereby
authorized to execute, deliver and file of record appropriate releases of such
Liens and to take such other action as shall be necessary to evidence such
release, including, without limitation, the release to Borrower of all
certificates in Agent's possession evidencing the issued and outstanding capital
stock of each Redesignated Subsidiary.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER. To induce the Banks
and Agent to enter into this Sixth Amendment, Borrower hereby represents and
warrants to Agent as follows:
5.1 Each representation and warranty of Borrower and each Restricted
Subsidiaries 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.
5.2 The execution, delivery and performance by Borrower of this Sixth
Amendment are within the Borrower's corporate powers, have been duly authorized
by necessary 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.
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5.3 This Sixth Amendment constitutes 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.
5.4 (a) The aggregate fair market value of all assets owned by the
Redesignated Subsidiaries (taken as a whole) as of the date hereof is less than
$1,000,000, and (b) the aggregate amount of Consolidated Cash Flow attributable
to the Redesignated Subsidiaries (taken as a whole) during the four (4) fiscal
quarters immediately preceding the date hereof is less than $1,000,000.
SECTION 6. MISCELLANEOUS.
6.1 NO DEFENSES. Borrower hereby represents and warrants to the Banks that
there are no defenses to payment, counterclaims or rights of set-off with
respect to the Loans existing on the date hereof.
6.2 REAFFIRMATION OF LOAN PAPERS; EXTENSION OF LIENS. 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. Borrower hereby
extends the Liens securing the Obligations until the Obligations have been paid
in full, and agrees that the amendments and modifications herein contained shall
in no manner affect or impair the Obligations or the Liens securing payment and
performance thereof.
6.3 PARTIES IN INTEREST. All of the terms and provisions of this Sixth
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.
6.4 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 Sixth Amendment and all related
documents.
6.5 COUNTERPARTS. This Sixth Amendment may be executed in counterparts,
and all parties need not execute the same counterpart; however, no party shall
be bound by this Sixth Amendment until all parties have executed a counterpart.
Facsimiles shall be effective as originals.
6.6 COMPLETE AGREEMENT. THIS SIXTH 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 ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
6.7 HEADINGS. The headings, captions and arrangements used in this Sixth
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Sixth Amendment, nor affect
the meaning thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to
be duly executed by their respective authorized officers on the date and year
first above written.
BORROWER:
XXXXXX OIL CORPORATION,
a Delaware corporation
By:/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Its:Vice President
AGENT:
NATIONSBANK OF TEXAS, N.A.
By:/s/ J.Xxxxx Xxxxxx
J.Xxxxx Xxxxxx
Its:Vice President
BANKS:
NATIONSBANK OF TEXAS, N.A.
By:/s/ J. Xxxxx Xxxxxx
J. Xxxxx Xxxxxx
Its:Vice President
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By:/s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Its:Senior Vice President
BANK ONE, TEXAS, N.A.
By:/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Its:Vice President
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XXXXX FARGO BANK, N.A.
By:/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
Its:Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:/s/ Xxxxxxx-Xxxx Xxxxxxx
Xxxxxxx-Xxxx Xxxxxxx
Its:Senior Vice President
1/234135.4
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