EXHIBIT 10.11.2
SECOND AMENDMENT TO FIFTH RESTATED CREDIT AGREEMENT
This Second Amendment to Fifth Restated Credit Agreement (this
"Second Amendment") is entered into as of the 30th day of June, 1995,
by and among Snyder Oil Corporation ("Borrower"), NationsBank of
Texas, N.A., as Agent ("Agent"), and NationsBank of Texas, N.A., Bank
One, Texas, N.A., Wells Fargo Bank, N.A. and Texas Commerce Bank
National Association as Banks (the "Banks").
W I T N E S E T H:
WHEREAS, Borrower, Agent and the Banks are parties to that
certain Fifth Restated Credit Agreement dated as of June 30, 1994, as
amended by that certain letter agreement by and among Borrower and
the Banks dated as of May 1, 1995 (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 the Agent has issued certain Letters of
Credit on behalf of Borrower; and
WHEREAS, Borrower has requested that certain provisions of the
Credit Agreement, including, without limitation, Sections 9.5 and
10.4 and related definitions be amended in certain respects; 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 2 hereof and in reliance on
the representations, warranties, covenants and agreements contained
in this Second Amendment, the Credit Agreement shall be amended
effective June 30, 1995 (the "Effective Date") in the manner provided
in this Section 1.
1.1. Amendment to Definitions. The definitions of "Adjusted
Consolidated Cash Flow," "Consolidated Total Covered Debt" and "Loan
Papers" contained in Section 1.1 of the Credit Agreement shall be
amended to read in full as follows:
"Adjusted Consolidated Cash Flow" means, with respect to
Borrower for any time period, Consolidated Cash Flow of Borrower
for such time period, adjusted, however, to (a) reflect all
revenues and expenses (including lease operating expense,
severance taxes, additional overhead and other expenses)
attributable to material oil and gas properties purchased by
Borrower or any of its Subsidiaries after the first day of such
period as if such properties had been owned by Borrower or such
Subsidiary on the first day of such period, (b) exclude all (i)
expenses in an amount not exceeding $4,341,000 incurred by
Borrower in its fiscal quarters ending June 30, 1995 and March
31, 1996 in connection with the settlement of certain litigation
pending against Borrower in the District Court of Harris County,
Texas styled Jerry Wayne Roberson, et al. v. Snyder Oil
Corporation, et al., and (ii) recoveries made of such expenses
by Borrower or any of its Subsidiaries under insurance policies.
As used in this definition, "material oil and gas properties"
means oil and gas properties purchased for a purchase price of
not less than $25,000,000.
"Consolidated Total Covered Debt" means with respect to Borrower
at any time, (a) the consolidated Debt of Borrower and its
Consolidated Subsidiaries at such time, plus (b) Consolidated
Current Liabilities of Borrower and its Consolidated
Subsidiaries in excess of Consolidated Current Assets of
Borrower and its Consolidated Subsidiaries at such time, minus
(c) Debt of Borrower at such time under the NBL Lease.
"Loan Papers" means this Agreement, the Letter Agreement, the
Second 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.
1.2. Additional Definitions. Section 1.1 of the Credit
Agreement shall be amended to add the following definitions to such
Section:
"Letter Agreement" means that certain letter agreement dated as
of May 1, 1995 by and between Borrower and the Banks, pursuant
to which, among other things, Section 4.2 was amended in certain
respects.
"NBL Lease" means, collectively, (a) that certain Master
Equipment Lease Agreement dated November 3, 1994 by and between
NationsBanc Leasing Corporation and Borrower, and (b) that
certain Equipment Lease Schedule No. 1 dated November 3, 1994,
by and between NationsBanc Leasing Corporation and Borrower, as
amended by that certain First Amendment to Equipment Lease
Schedule No. 1 dated December 30, 1994, pursuant to which
Borrower leases certain equipment comprising a part of the West
Plant more particularly described therein.
"Second Amendment" means that certain Second Amendment to Fifth
Restated Credit Agreement dated as of June 30, 1995, by and
among Borrower, Agent and the Banks.
"West Plant" means that certain 80 MMSCFD Gas Processing Plant,
associated inlet system, and high pressure gas pipeline commonly
known as the "West Plant", and located in the SE/4 of Section 8,
Township 3 North, Range 66 West, Weld County, Colorado.
"West Plant Documents" means (a) that certain Purchase and Sale
Agreement dated June 30, 1995 by and between Borrower and Amoco
Production Company, (b) that certain Asset Sale and Purchase
Contract dated June 30, 1995, by and between Borrower and KN Gas
Gathering, Inc., and (c) that certain Consent and Agreement
dated June 30, 1995, by and among Borrower, NationsBanc Leasing
Corporation, Amoco Production Company and KN Gas Gathering, Inc.
1.3. Sale of the West Plant. Section 9.5 of the Credit
Agreement shall be amended to read in full as follows:
SECTION 9.5. Asset Dispositions. Except as herein provided,
neither Borrower, any Restricted Subsidiary nor DJ Partners,
L.P. shall sell, lease, abandon or otherwise transfer any of its
assets to any other Person other than pursuant to an Exempt
Transfer. Borrower, the Restricted Subsidiaries and DJ
Partners, L.P. shall be permitted to sell or otherwise dispose
of any asset other than (a) oil and gas properties, (b) Related
Assets, (c) debt and equity securities issued by any Restricted
Subsidiary, and (d) Other Borrowing Base Property. Borrower,
the Restricted Subsidiaries and DJ Partners, L.P. may sell oil
and gas assets, Related Assets and Other Borrowing Base
Property; provided, that (x) during the period between the
Periodic Determination occurring as of May 1, 1995 and the
Periodic Determination occurring on or around November 1, 1995,
Borrower, the Restricted Subsidiaries and DJ Partners, L.P. may
only sell (i) Borrower's interest in the West Plant pursuant to
the West Plant Documents as in effect on June 30, 1995, (ii) oil
and gas properties, Related Assets (in addition to the West
Plant) and Other Borrowing Base Properties with an aggregate
value of $5,000,000, and (iii) oil and gas properties, Related
Assets and other Borrowing Base Properties in addition to assets
sold pursuant to clauses (i) and (ii) preceding provided, that
(A) prior to selling any such additional assets, Borrower shall
give Banks fifteen (15) days written notice prior to the
effective date of any such sale, (B) Banks shall be permitted to
make a Special Determination (in addition to Banks' right to
make a Special Determination pursuant to Section 4.3 hereof) of
the Borrowing Base in connection with any such sale, and (C)
simultaneously with the completion of such sale, Borrower shall
be required to reduce the outstanding principal balance of the
Loans by an amount sufficient to eliminate any Borrowing Base
Deficiency resulting from such Special Determination, and (y)
the aggregate value of all oil and gas properties, Related
Assets and Other Borrowing Base Property sold by Borrower, the
Restricted Subsidiaries and DJ Partners, L.P. in transactions
which are not Exempt Transfers during any period between
Periodic Determinations commencing with the period between the
Periodic Determinations scheduled to occur on or around November
1, 1995 and May 1, 1996 shall not exceed the sum of (i) the
greater of (A) $10,000,000, or (B) five percent (5%) of the
Recognized Value of all oil and gas properties and Related
Assets held by Borrower and the Restricted Subsidiaries as
reflected on the most recent Reserve Report and Related Asset
Report delivered to the Banks prior to the commencement of such
period, plus (z) the Recognized Value of all proved, developed,
producing oil and gas reserves acquired by Borrower and
Restricted Subsidiaries during such period. The Recognized Value
of all proved, developed, producing reserves acquired by
Borrower during any period between Periodic Determinations shall
be determined by Borrower; provided that such value shall be
subject to verification and adjustment by Required Banks if the
value asserted by Borrower exceeds $5,000,000. For purposes of
determining compliance with this Section 9.5, the value of oil
and gas properties, Related Assets and Other Borrowing Base
Property sold for cash shall be the sales price of the
properties sold. The value of oil and gas properties sold for
consideration other than cash shall be the amount which should
be reflected on Borrower's books in accordance with GAAP as
"proceeds from the sale of properties". Farmouts of undeveloped
properties will not be considered sales or dispositions for
purposes of this Section 9.5 until the farmee earns a right to
an assignment of the underlying property.
1.4. Adjusted Consolidated Cash Flow Coverage of Borrower.
Section 10.4 of the Credit Agreement shall be amended to read in full
as follows:
SECTION 10.4. Adjusted Consolidated Cash Flow Coverage of
Borrower. If as of March 31, 1995, June 30, 1995 or September
30, 1995, Borrower's Adjusted Consolidated Cash Flow for (a) the
fiscal quarter then ending, is less than four percent (4%) of
Borrower's Consolidated Total Covered Debt as of such date
exclusive of such portion of Consolidated Total Covered Debt
with respect to which Exempt Subsidiaries are the only obligors,
or (b) any period of four (4) fiscal quarters then ending is
less than nineteen percent (19%) of Borrower's Consolidated
Total Covered Debt as of such date exclusive of such portion of
Consolidated Total Covered Debt with respect to which Exempt
Subsidiaries are the only obligors, then, in either event,
Borrower will, prior to the expiration of the applicable Special
Cash Flow Cure Period, reduce the principal balance of the Loans
to an amount which would cause Borrower's Adjusted Consolidated
Cash Flow for such quarter and period of four fiscal quarters to
exceed the percentages set forth herein of Borrower's
Consolidated Total Covered Debt as so reduced. If, as of the
end of any fiscal quarter ending on or after December 31, 1995,
the aggregate Adjusted Consolidated Cash Flow of Borrower for
(y) the fiscal quarter then ended is less than five percent (5%)
of Borrower's Consolidated Total Covered Debt as of the end of
such fiscal quarter exclusive of such portion of Consolidated
Total Covered Debt with respect to which Exempt Subsidiaries are
the only obligors, or (z) the four (4) fiscal quarters then
ended is less than twenty five percent (25%) of Borrower's
Consolidated Total Covered Debt as of the end of such fiscal
quarter exclusive of such portion of Consolidated Total Covered
Debt with respect to which Exempt Subsidiaries are the only
obligors, then, in either event, Borrower will, prior to the
expiration of the applicable Special Cash Flow Cure Period,
reduce the principal balance of the outstanding Loans to an
amount which would cause Borrower's Adjusted Consolidated Cash
Flow for such quarter and period of four fiscal quarters to
exceed the percentages set forth herein of Borrower's
Consolidated Total Covered Debt as so reduced.
SECTION 2. Conditions Precedent to Effectiveness of Amendments.
The amendments to the Credit Agreement contained in Section 1 of
this Second Amendment shall be effective only upon the satisfaction
of each of the conditions set forth in this Section 2. If each
condition set forth in this Section 2 has not been satisfied by the
Effective Date, this Second Amendment and all obligations of the
Banks and Agent contained herein shall, at the option of Majority
Banks, terminate.
2.1 Corporate Existence and Authority. Borrower shall have
delivered to Agent such resolutions, certificates and other documents
as Agent shall request relative to the authorization, execution and
delivery by Borrower of this Second Amendment and the West Plant
Documents.
2.2 Certificate Regarding Representations and Warranties.
Borrower shall have delivered to Agent a certificate of its vice
president of finance, chief financial officer or chief accounting
officer certifying that each representation and warranty contained in
(a) the Credit Agreement, (b) this Second Amendment, (c) each of the
other Loan Papers, and (d) the West Plant Documents is true and
correct and will be true and correct after giving effect to the
amendments contained in Section 1 hereof.
2.3 West Plant Documents. Borrower shall have delivered to
Agent a copy of each West Plant Document, together with a certificate
from an authorized officer of Borrower certifying that such copies
are accurate and complete and represent the final understanding and
agreement of the parties with respect to the subject matter thereof.
SECTION 3. Representations and Warranties of Borrower. To
induce the Banks and Agent to enter into this Second Amendment,
Borrower hereby represents and warrants to Agent as follows:
(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) The execution, delivery and performance by Borrower of this
Second 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.
(c) This Second 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.
(d) Borrower has provided the Agent with a true and correct copy
of all of the West Plant Documents including all amendments and
modifications thereto. No rights or obligations of any party to any
of such West Plant Documents have been waived, and no party to any of
such West Plant Documents is in default of its obligations
thereunder. Each of such West Plant Documents is a valid, binding
and enforceable obligation of the parties thereto in accordance with
its terms and is in full force and affect.
SECTION 4. Miscellaneous.
4.1 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.
4.2 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
ad performance thereof.
4.3 Parties in Interest. All of the terms and provisions of
this Second Amendment shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
4.4 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 Second Amendment and all related documents.
4.5 Counterparts. This Second Amendment may be executed in
counterparts, and all parties need not execute the same counterpart.
However, no party shall be bound by this Second Amendment until all
parties have executed a counterpart. Facsimiles shall be effective
as originals.
4.6 Complete Agreement. THIS SECOND 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.
4.7 Headings. The headings, captions and arrangements used in
this Second Amendment are, unless specified otherwise, for
convenience only and shall not be deemed to limit, amplify or modify
the terms of this Second Amendment, nor affect the meaning thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed by their respective authorized officers
on the date and year first above written.
BORROWER:
SNYDER OIL CORPORATION,
a Delaware corporation
By: /s/ James H. Shonsey
---------------------------
James H. Shonsey
Vice President, Finance
AGENT:
NATIONSBANK OF TEXAS, N.A.
By: /s/ E. Murphy Markham IV
---------------------------
Its: Senior Vice President
BANKS:
NATIONSBANK OF TEXAS, N.A.
By: /s/ Emurphy Markham IV
--------------------------
Its: Senior Vice President
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ Timothy E. Perry
--------------------------
Its: Senior Vice President
BANK ONE, TEXAS, N.A.
By: /s/ Brad Bartek
--------------------------
Its: Vice President
WELLS FARGO BANK, N.A.
By: /s/ Charles D. Kirkhman
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Its: Vice President