UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 2004
PARALLEL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-13305 75-1971716
(Commission file number) (IRS employer identification number)
1004 N. Big Spring, Suite 400, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
(432) 684-3727 (Registrant's telephone number
including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
On December 30, 2004, Parallel Petroleum Corporation and its
subsidiaries, Parallel, L.P. and Parallel, L.L.C., entered into a First
Amendment to Second Amended and Restated Credit Agreement, dated as of December
27, 2004, with First American Bank, SSB and the other financial institutions
parties thereto. This First Amendment amended Section 13(c) of Parallel's Second
Amended and Restated Credit Agreement, which required that Parallel Petroleum
Corporation and its consolidated subsidiaries maintain a specified ratio of
consolidated funded debt (as defined in the Second Amended and Restated Credit
Agreement) to consolidated EBITDA (as defined in the Second Amended and Restated
Credit Agreement).
Prior to the First Amendment, Section 13(c) of the Second Amended and
Restated Credit Agreement read in its entirety as follows:
(c) Funded Debt Ratio. PPC will not allow its ratio of
Consolidated Funded Debt to Consolidated EBITDA to exceed 3.00 to 1.00.
This ratio shall be calculated at the end of each fiscal quarter of PPC
beginning on September 30, 2004, using the results of the twelve-month
period immediately preceding the end of each such fiscal quarter.
As amended by the First Amendment to Second Amended and Restated Credit
Agreement, Section 13(c) of the Second Amended and Restated Credit Agreement now
reads as follows:
(c) Funded Debt Ratio. PPC will not allow its ratio of
Consolidated Funded Debt to Consolidated EBITDA to exceed (i) 3.70 to
1.00, calculated at the end of the fiscal quarter of PPC ending
December 31, 2004, with Consolidated EBITDA to be calculated on an
annualized basis based on the results of such fiscal quarter, (ii) 3.70
to 1.00, calculated at the end of the fiscal quarter of PPC ending
March 31, 2005, with Consolidated EBITDA to be calculated on an
annualized basis based on the results of the six month period
immediately preceding March 31, 2005, (iii) 3.70 to 1.00, calculated at
the end of the fiscal quarter of PPC ending June 30, 2005, with
Consolidated EBITDA to be calculated on an annualized basis based on
the results of the nine month period immediately preceding June 30,
2005, (iv) 3.70 to 1.00, calculated at the end of the fiscal quarters
of PPC ending September 30, 2005 and December 31, 2005, using the
results of the twelve month period immediately preceding the end of
each such fiscal quarter, (v) 3.60 to 1.00 during the year 2006, and
(vi) 3.50 to 1.00 during the year 2007 and thereafter during the term
hereof. Except as specifically provided above, this ratio shall be
calculated at the end of each fiscal quarter of PPC using the results
of the twelve month period immediately preceding the end of each such
fiscal quarter.
The above summary of the material provisions of the First Amendment
does not purport to be complete and is qualified in its entirety by reference to
the terms of the First Amendment, which is attached to this Current Report on
From 8-K as Exhibit 10.1.
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Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
10.1 First Amendment to Second Amended and
Restated Credit Agreement, dated
as of December 27, 2004
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 30, 2004
PARALLEL PETROLEUM CORPORATION
By:/s/ Larry C. Oldham
----------------------------------------
Larry C. Oldham, President
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EXHIBIT INDEX
Exhibit No. Description
- ---------- -------------------------------------
10.1 First Amendment to Second Amended and
Restated Credit Agreement, dated
as of December 27, 2004
Exhibit 10.1
FIRST AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
This First Amendment to Second Amended and Restated Credit Agreement
(this "First Amendment") dated as of December 27, 2004, is by and among PARALLEL
PETROLEUM CORPORATION, a Delaware corporation, and PARALLEL, L.P., a Texas
limited partnership (collectively, the "Borrowers"), and PARALLEL, L.L.C., a
Delaware limited liability company ("Guarantor"), and FIRST AMERICAN BANK, SSB,
BNP PARIBAS, CITIBANK, F.S.B. AND WESTERN NATIONAL BANK (collectively,
"Lenders"), and FIRST AMERICAN BANK, SSB, as Joint Lead Arranger and as
Administrative Agent ("Agent") and BNP PARIBAS, as Joint Lead Arranger and as
Syndication Agent.
RECITALS:
WHERAS, Borrowers, Guarantor and Lenders in the capacities stated
above, entered into that Second Amended and Restated Credit Agreement dated as
of September 27, 2004 (the "Credit Agreement"); and
WHEREAS, Borrowers, Guarantor and Lenders desire to amend the Credit
Agreement in certain respects.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, the parties hereto
agree as follows:
Agreement
Section 1. Definitions. Except as otherwise expressly provided herein,
all terms defined in the Credit Agreement shall have the same meanings herein.
Section 2. Amendment to Funded Debt Ratio Covenant. Section 13(c) of
the Credit Agreement is hereby amended in its entirety to read as follows:
(c) Funded Debt Ratio. PPC will not allow its ratio of
Consolidated Funded Debt to Consolidated EBITDA to exceed (i) 3.70 to
1.00, calculated at the end of the fiscal quarter of PPC ending
December 31, 2004, with Consolidated EBITDA to be calculated on an
annualized basis based on the results of such fiscal quarter, (ii) 3.70
to 1.00, calculated at the end of the fiscal quarter of PPC ending
March 31, 2005, with Consolidated EBITDA to be calculated on an
annualized basis based on the results of the six month period
immediately preceding March 31, 2005, (iii) 3.70 to 1.00, calculated at
the end of the fiscal quarter of PPC ending June 30, 2005, with
Consolidated EBITDA to be calculated on an annualized basis based on
the results of the nine month period immediately preceding June 30,
2005, (iv) 3.70 to 1.00, calculated at the end of the fiscal quarters
of PPC ending September 30, 2005 and December 31, 2005, using the
results of the twelve month period
immediately preceding the end of each such fiscal quarter, (v) 3.60 to
1.00 during the year 2006, and (vi) 3.50 to 1.00 during the year 2007
and thereafter during the term hereof. Except as specifically provided
above, this ratio shall be calculated at the end of each fiscal quarter
of PPC using the results of the twelve month period immediately
preceding the end of each such fiscal quarter.
Section 3. Representations and Warranties of Borrowers and Guarantor.
Borrowers and Guarantor hereby jointly and severally represent and warrant to
Lenders as follows:
(a) The representations and warranties contained in Section 10
of the Credit Agreement are true and correct on and as of the date hereof as
though made on and as of the date hereof, except for those representations and
warranties which address matters only as of a particular date (which remain true
and correct as of such date).
(b) No Event of Default or Default has occurred and is
continuing under the Credit Agreement.
(c) The execution, delivery and performance by Borrowers and
Guarantor of this First Amendment are within the Borrowers' and Guarantor's
partnership, corporate and limited liability company powers, have been duly
authorized by all 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 provisions of applicable law or any material
agreement binding upon Borrowers, Guarantor or their respective Subsidiaries or
result in the creation or imposition of any Lien upon any of the assets of
Borrowers, Guarantor or their respective Subsidiaries, except Permitted Liens.
(d) This First Amendment constitutes the valid and binding
obligation of Borrowers and Guarantor 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. Conditions Precedent. This First Amendment shall be
effective as of the date upon which all of the following conditions have been
satisfied:
(a) the Agent shall have received counterparts of this First
Amendment duly executed by Borrowers, Guarantor and Lenders;
(b) the Borrowers and Guarantor shall have provided to Agent
(i) a copy of resolutions, in form and substance satisfactory to Agent, of the
Board of Directors of PPC authorizing the execution, delivery and performance of
this First Amendment and any other Loan Documents to be executed or delivered
pursuant hereby, certified by the secretary or an assistant secretary of PPC,
which certificate shall be in form and substance satisfactory to Agent and
Agent's counsel and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded, (ii) a copy of the resolutions, in
form and substance satisfactory to Agent,
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duly adopted by the respective partners of PLP authorizing the execution,
delivery and performance of this First Amendment and any other Loan Documents to
be executed or delivered by PLP pursuant hereto, certified by PLP's general
partner, which certificate shall be in form and substance satisfactory to Agent
and Agent's counsel and shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded, and (iii) resolutions, in form
and substance satisfactory to Agent, of the managers of Guarantor authorizing
the execution, delivery and performance of this First Amendment and any other
Loan Documents to be executed or delivered pursuant hereto, certified by its
secretary or assistant secretary, which certificate shall be in form and
substance satisfactory to Agent and Agent's counsel and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded; and
(c) Agent shall have received any other documents,
certificates and opinions in connection with this First Amendment that may be
requested by Agent, in form and substance satisfactory to Agent.
Section 5. Ratification of Credit Agreement and Other Loan Documents.
Except as expressly amended hereby, the Credit Agreement and all of the other
Loan Documents are and shall be unchanged and all of the terms, provisions,
covenants, conditions, schedules and exhibits thereof shall remain and continue
in full force and effect and are hereby ratified and confirmed by Borrowers,
Guarantor and Lenders as of the date of this First Amendment as if the Credit
Agreement and the other Loan Documents were executed by Borrowers, Guarantor and
the other parties thereto as of the date of this First Amendment. The amendments
contemplated hereby shall not limit or impair any Liens securing the Loans, each
of which are hereby ratified, affirmed and extended to secure the Loans as they
may be increased pursuant hereto.
Section 6. No Waiver. Neither the execution by Lenders of this First
Amendment nor anything contained herein shall in anywise be construed or operate
as a waiver by Lenders of any Default of Event of Default (whether now existing
or that may occur hereafter) or of any of Lenders' or Agent's rights under the
Credit Agreement as amended hereby or under any of the other Loan Documents.
Section 7. Miscellaneous.
7.1 Legal Expenses. The Borrowers hereby agree to pay on
demand all reasonable fees and expenses of counsel to the Agent
incurred by the Agent in connection with the preparation, negotiation
and execution of this First Amendment and all related documents.
7.2 Multiple Counterparts. This First Amendment may be
executed in a number of identical separate counterparts (including by
facsimile transmission), each of which for all purposes is to be deemed
an original but all of which shall constitute, collectively, one
agreement. No party to this First Amendment shall be bound hereby until
a counterpart of this First Amendment has been executed by all parties
hereto.
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7.3 Reference to Agreement. Each of the Loan Documents is
hereby amended so that any reference in the Loan Documents to the
Credit Agreement shall mean a reference to the Credit Agreement as
amended hereby.
7.4 Governing Law. This First Amendment is being executed and
delivered, and is intended to be performed, in Midland, Midland County,
Texas, and the substantive laws of Texas shall govern the validity,
construction, enforcement and interpretation of this First Amendment
and all other documents and instruments referred to herein, unless
otherwise specified therein.
7.5 Plural and Singular Forms. The definitions given to terms
defined hereby shall be equally applicable to both the singular and
plural forms of such terms.
7.6 Final Agreement. THIS FIRST AMENDMENT, 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 UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS THEREOF, Borrowers, Guarantor and Lenders have caused this
First Amendment to be duly executed as of the day and year first above written.
BORROWERS: PARALLEL PETROLEUM CORPORATION,
a Delaware corporation
By: /s/ Steven D. Foster
------------------------------
Steven D. Foster
Chief Financial Officer
PARALLEL, L.P., a Texas limited partnership
By: Parallel Petroleum Corporation,
Its General Partner
By: /s/ Steven D. Foster
--------------------------------
Steven D. Foster
Chief Financial Officer
GUARANTOR: PARALLEL, L.L.C., a Delaware limited liability
company
By: /s/ Steven D. Foster
--------------------------------
Steven D. Foster
Chief Financial Officer
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LENDERS: FIRST AMERICAN BANK, SSB, a state savings
bank, as Joint Lead Arranger and
Administrative Agent and as a Lender
By: /s/ Frank K. Stowers
--------------------------------
Frank K. Stowers
Executive Vice President
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT]
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BNP PARIBAS, as Joint Lead Arranger and
Syndication Agent and as a Lender
By: /s/ Brian M. Malone
----------------------------------
Name: Brian M. Malone
Title: Managing Director
By: /s/ Betsy Jocher
----------------------------------
Name: Betsy Jocher
Title: Vice President
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT]
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CITIBANK, F.S.B.,
as a Lender
By: /s/ Zachary Mayo
----------------------------------
Name: Zachary Mayo
Title: Senior Vice President
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT]
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WESTERN NATIONAL BANK,
as a Lender
By: /s/ Wesley D. Bownds
----------------------------------
Wesley D. Bownds
President
[SIGNATURE PAGE TO FIRST AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT]
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