FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (herein called this
"Amendment") is made as of the 13th day of April, 1995, by and
among XCL-Texas, Inc., a Texas corporation ("Borrower"), The
Exploration Company of Louisiana, Inc., a Delaware corporation
("Parent"), Internationale Nederlanden (U.S.) Capital
Corporation, a Delaware corporation, as Agent ("Agent") , and
lenders as such term is defined in the Original Agreement
("Lenders"),
W I T N E S S E T H:
WHEREAS, Borrower, Parent, Agent and Lenders have entered
into that certain Credit Agreement dated as of January 31, 1994)
(the "Original Agreement") for the purposes and consideration
therein expressed, whereby Lenders became obligated to make loans
to Borrower as therein provided; and
WHEREAS, Borrower, Parent, Agent and Lenders desire to amend
the Original Agreement as expressly set forth 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 First Amendment to Credit
Agreement.
"Credit Agreement" shall mean the Original Agreement as
amended hereby.
ARTICLE II.
Amendments to Original Agreement
Section 2.1. Defined Terms. The definition of "Commitment
Period" in Section 1.1 of the Original Agreement is hereby
amended in its entirety to read as follows:
"Commitment Period" means the period from and including
the date of this Amendment until and including December 31,
1995 (or, if earlier, the day on which the Notes first
become due and payable in full).
Section 2.2. Amendment to Section 2.8. Section 2.8 of the
Original Agreement is hereby amended in its entirety to read as
follows:
Section 2.8. Regular Payments. Beginning January 1,
1996 and on the first day of each Fiscal Quarter thereafter,
Borrower will, in addition to paying any interest then due
on the Loans, make a mandatory payment of principal on the
Loans in accordance with the following schedule:
Payment Dates Aggregate Quarterly Payments
---------------- ----------------------------
January 1, 1996 $2,000,000
April 1, 1996 $1,625,000
July 1, 1996 $1,625,000
October 1, 1996 $1,625,000
January 1, 1997 $1,625,000
April 1, 1997 $1,625,000
July 1, 1997 $1,625,000
October 1, 1997 $1,625,000
January 1, 1998 $1,625,000
April 1, 1998 $1,625,000
July 1, 1998 $1,625,000
October 1, 1998 $1,625,000
January 1, 1999 $1,625,000
April 1, 1999 $1,125,000
July 1, 1999 $1,125,000
October 1, 1999 $1,125,000
January 1, 2000 full remaining balance
Section 2.3. Borrowing Base. During the period from the
date of this Amendment to the next Determination Date the
Borrowing Base shall be $25,200,000.
Section 2.4. Engineering Reports. Section 5.1(b)(v) of the
Original Agreement is hereby modified to provide that the
engineering report to be prepared by Netherland, Sewell &
Associates, Inc. as of December 31, 1994 and to be delivered by
March 31, 1995, shall instead be prepared as of June 30, 1995 and
delivered by September 30, 1995. Section 5.1(b)(vi) of the
Original Agreement is hereby modified to provide that the
engineering report to be prepared by Borrower's in-house
engineering staff as of June 30, 1995 and to be delivered by
September 30, 1995, shall instead be prepared as of December 31,
1994 and delivered by April 12, 1995. Lender hereby acknowledges
that it has received such engineering report by Borrower's in-
house engineering staff in a form acceptable to bender. Except
as expressly provided above with respect to engineering reports
to be delivered in 1995, Section 5.1 of the Original Agreement
remains in full force and effect.
Section 2.5. Drilling and Recompletions. The first
sentence of Section 5.1(q) of the Original Agreement is hereby
amended to read as follows:
Borrower will spend at least $7,000,000 after the date
hereof, and before March 31, 1995, to drill, complete or
recomplete or workover oil or gas wells in the Cox Field or
the Mestene Grande Field which constitute Collateral.
Section 2.6. Additional Permitted Investment.
Notwithstanding the restrictions on investments set out in
Section 5.2(g) of the Original Agreement, the Related Persons may
collectively invest up to $600,000 in a lubrication oil refining
facility for production from the Danang Field, Bohai Bay, China.
This investment may be in any form, including the purchase of an
interest in the facility or of shares, joint venture interests,
or other equity interests in a Chinese entity which will own the
facility.
Section 2.7. Current Ratio. The first sentence of Section
5.2(1) of the Original Agreement is hereby amended to read as
follows:
The ratio of Parent's Consolidated current assets to
Parent's Consolidated current liabilities:
(i) will never be less than 1.0 to 1.0 during the
period from the date hereof to and including December
31, 1994;
(ii) may be at any ratio during the period from
and including January 1, 1995 to and including
September 29, 1995; and
(iii) will never be less than 1.0 to 1.0 during
the period from and after September 30, 1995.
Section 2.8. Tangible Net Worth. The first sentence of
Section 5.2(m) of the Original Agreement is hereby amended to
read as follows:
Parent's Consolidated Tangible Net Worth will never be less
than:
(i) $80,000,000 at December 31, 1993;
(ii) $90,000,000 during the period from and
including February 15, 1994 to and including December
31, 1994; and
(iii) $80,000,000 during the period from and
after January 1, 1995.
Section 2.9. Cash Flow Coverage. The first sentence of
Section 5.2(o) of the Original Agreement is hereby amended to
read as follows:
Parent's Consolidated Cash Flow Coverage Ratio:
(i) will never be less than 1.15 to 1.0 for any
period of four consecutive Fiscal Quarters ending on
March 31, 1994, June 30, 1994, September 30, 1994 or
December 31, 1994;
(ii) may be at any ratio for any period of four
consecutive Fiscal Quarters ending on March 31, 1995 or
June 30, 1995; and
(iii) will never be less than 1.15 to 1.0 for any
period of four consecutive Fiscal Quarters ending on
September 30, 1995 or on any date thereafter.
ARTICLE III.
Conditions of Effectiveness
Section 3.1. Effective Date. This Amendment shall become
effective as of the date first above written when, and only when,
Agent shall have received, at Agent's office in New York, New
York:
(a) a counterpart of this Amendment executed and
delivered by Borrower, Parent and each Lender, with each
Consent and Agreement attached hereto similarly executed and
delivered by the Related Person named therein,
(b) payment to Agent of a $50,000 amendment fee,
and
(c) an Officer's Certificate of even date herewith,
in the form of Exhibit A hereto, duly authorized, executed
and delivered by an officer of each of Borrower and Parent.
ARTICLE IV.
Representations and Warranties
Section 4.1. Representations and Warranties of Borrower and
Parent. In order to induce Agent and Lenders to enter into this
Amendment, each of Borrower and Parent represents and warrants to
Agent and Lenders that:
(a) The representations and warranties contained in
Section 4.1 of the Original Agreement are true and correct
at and as of the time of the effectiveness hereof.
(b) Borrower and Parent are duly authorized to
execute and deliver this Amendment and each Related Person
is duly authorized to perform its obligations under the
Credit Agreement. Borrower is and will continue to be duly
authorized to borrow monies under the Credit Agreement and
each Related Person has duly taken all corporate action
necessary to authorize the execution and delivery of this
Amendment and to authorize the performance of the
obligations of each Related Person hereunder.
(c) The execution and delivery by Borrower and
Parent of this Amendment, the performance by each Related
Person of its obligations hereunder and the consummation of
the transactions contemplated hereby do not and will not
conflict with any provision of law, statute, rule or
regulation or of the articles or certificate of
incorporation and bylaws of any Related Person, or of any
material agreement, judgment, license, order or permit
applicable to or binding upon any Related Person, or result
in the creation of any lien, charge or encumbrance upon any
assets or properties of any Related Person. 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 and Parent of this
Amendment or to consummate the transactions contemplated
hereby.
(d) When duly executed and delivered, each of this
Amendment and the Credit Agreement will be a legal and
binding obligation of each of Borrower and Parent,
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.
ARTICLE V.
Miscellaneous
Section 5.1. Ratification of Agreements, The Original
Agreement as hereby amended is hereby ratified and confirmed in
all respects. 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, operate as a waiver of any right, power or
remedy of Agent or Lenders under the Credit Agreement, the Notes,
or any other Loan Document nor constitute a waiver of any
provision of the Credit Agreement, the Notes or any other Loan
Document. Each of Borrower and Parent hereby ratifies and
confirms each Loan Document which it has previously delivered,
including without limitation the Security Documents listed on
Schedule 3 to the Original Agreement.
Section 5.2. Survival of Agreements. All representations,
warranties, covenants and agreements of Borrower and Parent
herein shall survive the execution and delivery of this Amendment
and the performance hereof, including without limitation the
making or granting of the Loans, and shall further survive until
all of the Obligations are paid in full. All statements and
agreements contained in any certificate or instrument delivered
by Borrower or any Related Person hereunder or under the Credit
Agreement to Agent or any bender shall be deemed to constitute
representations and warranties by, and/or agreements and
covenants of, each of Borrower and Parent under this Amendment
and under the Credit Agreement.
Section 5.3. Loan Documents. This Amendment is a Loan
Document, and all provisions in the Credit Agreement pertaining
to Loan Documents apply hereto.
Section 5.4. Governing Law. This Amendment shall be
governed by and construed in accordance 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 5.5. 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.
IN WITNESS WHEREOF, this Amendment is executed as of the
date first above written.
XCL-TEXAS, INC.
/s/ David A. Melman
By:__________________________
Name: David A. Melman
Title: Vice President
XCL LTD.
/s/ Pam Shanks
By:___________________________
Name: Pamela G. Shanks
Title: Chief Financial Officer
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION,
Agent and Lender
/s/ Trond O. Rokholt
By:____________________________
Name: Trond 0. Rokholt
Title: Vice President