FOURTH AMENDMENT TO FIFTH RESTATED CREDIT AGREEMENT
This Fourth Amendment to Fifth Restated Credit Agreement (this
"Fourth Amendment") is entered into as of the 4th day of April, 1996
to be effective as of the Effective Date (as herein defined), 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 (i) letter agreement by and among Borrower
and the Banks dated as of May 1, 1995, (ii) Second Amendment to Fifth
Restated Credit Agreement by and among Borrower, Agent and the Banks
dated as of June 30, 1995, and (iii) Third Amendment to Fifth
Restated Credit Agreement by and among Borrower, Agent and the Banks
dated as of November 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 Agent has issued certain Letters of
Credit on behalf of Borrower; and
WHEREAS, Borrower has requested that the Credit Agreement be
amended in certain respects; and
WHEREAS, subject to the terms and conditions herein contained,
the Banks have agreed to Borrower's request.
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 Fourth Amendment, the Credit Agreement shall be amended
effective as of April 15, 1996 (the "Effective Date") in the manner
provided in this Section 1.
1.1. Modification of Article I - Definitions.
1.1.1. Section 1.1 of Article I of the Credit
Agreement shall be amended by amending the definitions therein of the
following terms to read in their entirety as set forth below:
"Consolidated Cash Flow" means, with respect to Borrower
for a time period, consolidated net income of Borrower for such time
period as set forth in the financial statements delivered pursuant to
Section 8.1 (a) exclusive of net gain or loss (after provision for
Taxes) on the sale of assets, other than production sold in the
ordinary course of business, during such time period, (b) exclusive
of income attributable to any Subsidiary which is an Exempt
Subsidiary as of the last day of such time period, except to the
extent of dividends actually received by Borrower or a Restricted
Subsidiary from such Exempt Subsidiary during such time period, (c)
exclusive of income attributable to assets which are not owned
beneficially and of record by Borrower or a Restricted Subsidiary as
of the last day of such time period, (d) plus or minus, as
appropriate, changes in deferred Taxes with respect to such time
period, and (e) plus depreciation, depletion, amortization of
principal and other non-cash charges for such time period.
"Consolidated Subsidiary" or "Consolidated Subsidiaries"
means, for any Person at any time, subject to Section 1.2 hereof, any
Subsidiary or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial
statements at such time.
"Debt" of any Person means, without duplication (a) all
obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (c) all other indebtedness (including capital lease
obligations, other than usual and customary oil and gas leases) of
such Person on which interest charges are customarily paid or
accrued, (d) all Guarantees by such Person, (e) the unfunded or
unreimbursed portion of all letters of credit issued for the account
of such Person, and (f) all liability of such Person as a general
partner of a partnership for obligations of such partnership of the
nature described in (a) through (e) preceding. "Debt" shall not
include (i) economic interests which are to be received by third
parties in the future after recovery of a fixed amount of
hydrocarbons and accompanying elements or the proceeds therefrom so
long as such economic interests are properly deducted from the
calculation of reserves contained in the Reserve Report, (ii)
obligations under the WYGAP Lease, (iii) obligations under Guarantees
of Debt and other obligations of Unrestricted Subsidiaries which are
permitted pursuant to Section 9.2, including to the extent permitted
under Section 9.2, obligations under the OPIC Guaranty, and (iv)
obligations of the type described in clause (a) through (f) preceding
with respect to which Patina and its Subsidiaries are the only
obligors.
"Facility A Termination Date" means December 31, 2000;
provided, that the Facility A Termination Date may be extended by
Banks from time to time in their sole discretion pursuant to Section
2.8 hereof.
"Facility B Termination Date" means April 3, 1997; provided
that the Facility B Termination Date may be extended by Banks from
time to time in their sole discretion pursuant to Section 2.9 hereof.
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"Loan Papers" means this Agreement, the Letter Agreement,
the Second Amendment, the Third Amendment, the Fourth 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 Subsidiaries" means, initially, the
Subsidiaries of Borrower listed on Schedule 1 attached hereto other
than SOCO International, Inc. and Thomasville Energy Corporation and
the Subsidiaries of SOCO International, Inc. and Thomasville Energy
Corporation; provided, that, from and after the consummation of the
Patina Transaction, SWAT shall not be a Restricted Subsidiary for
purposes of this Agreement and the other Loan Papers. "Restricted
Subsidiary" shall also refer to any other Subsidiary of Borrower
which Required Banks and Borrower have, in their sole discretion,
designated in writing a Restricted Subsidiary.
1.1.2. Section 1.1 of Article I of the Credit
Agreement shall be amended by adding, in alphabetical order, the
following new definitions:
"DJ Dissolution Agreement" means that certain Agreement for
Dissolution of Limited Partnership Agreement dated as of March 12,
1996 by and among SWAT, SSB Investments, Inc. and Fidelity
Properties, Inc. regarding the dissolution and termination of DJ
Partners, L.P.
"DJ Properties" means the oil and gas properties owned
beneficially or of record by DJ Partners, L.P. as of March 11, 1996
which are to be (a) conveyed to SWAT pursuant to the DJ Dissolution
Agreement, (b) conveyed in part, from SWAT to SOCO, and (c) conveyed
from SWAT and SOCO to DJGI pursuant to the DJ Purchase Agreements
(subject to the reservation in favor of Borrower and SWAT of the DJ
Production Payments).
"DJ Production Payments" means the SWAT/DJ Production
Payment and the SOCO/DJ Production Payment.
"DJ Purchase Agreements" means the SWAT/DJGI Purchase
Agreement and the SOCO/DJGI Purchase Agreement.
"DJ Transaction Documents" means the DJ Dissolution
Agreement, the DJ Purchase Agreements and all other material
documents, instruments and agreements executed and delivered, or to
be executed and delivered by, among or between Borrower, SWAT, DJ
Partners, L.P., DJGI, Fidelity Properties, Inc., SSB Investments,
Inc., Bald Prairie, Inc., Fontenelle, Inc., or FMR Corp. pursuant to
the DJ Dissolution Agreement or either DJ Purchase Agreement or in
connection with the transactions contemplated thereby.
3
"DJ Transactions" means collectively, (a) the dissolution
and termination of DJ Partners, L.P. pursuant to the DJ Dissolution
Agreement including the conveyance of the DJ Properties to SWAT, (b)
the conveyance by SWAT to Borrower of part of the DJ Properties, and
(c) the sale by SWAT and Borrower to DJGI of the DJ Properties
pursuant to the DJ Purchase Agreements, subject to the reservation in
favor of SWAT and Borrower of the DJ Production Payments.
"DJGI" means DJ Gas Investments, LLC, a Delaware limited
liability company.
"Fourth Amendment" means that certain Fourth Amendment to
Fifth Restated Credit Agreement dated as of April 4, 1996, by and
among Borrower, Agent and the Banks.
"Gerrity" means Gerrity Oil & Gas Corporation, a Delaware
corporation.
"Patina" means Patina Oil & Gas Corporation, a Delaware
corporation and a Subsidiary of Borrower. Patina is an Unrestricted
Subsidiary and an Exempt Subsidiary for purposes of this Agreement
and the other Loan Papers.
"Patina Ancillary Agreements" means the Registration Rights
Agreement, the Cross-Indemnification Agreement, the Corporate
Services Agreement and the Business Opportunity Agreement to be
entered into between Borrower and Patina pursuant to the Patina
Merger Agreement, each of which shall be substantially in the form of
the applicable exhibit attached to the Patina Merger Agreement.
"Patina Contribution" shall mean the contribution by
Borrower to Patina pursuant to the Patina Merger Agreement of (a) the
issued and outstanding capital stock of SWAT, and (b) the other
assets owned by Borrower and its Subsidiaries which constitute the
"Business" as such term is defined in the Patina Merger Agreement,
including, without limitation, the SWAT/DJ Production Payment.
"Patina Merger Agreement" means the Amended and Restated
Agreement and Plan of Merger dated as of March 20, 1996 by and among
Borrower, Patina, Gerrity and Patina Merger Corporation, a Delaware
corporation which is a wholly owned Subsidiary of Patina.
"Patina Transaction Documents" means the Patina Merger
Agreement, the Patina Ancillary Agreements and all other material
documents, instruments and agreements executed and delivered, or to
be executed and delivered by, among or between Patina, Borrower,
SWAT, Gerrity or any of their respective Subsidiaries pursuant to the
Patina Merger Agreement or in connection with the transactions
contemplated thereby.
4
"SOCO/DJ Production Payment" means the production payment
and other rights with respect to the SOCO/DJ Properties to be
reserved in favor of SOCO pursuant to the SOCO/DJGI Purchase
Agreement.
"SOCO/DJ Properties" means the DJ Properties to be conveyed
by SOCO to DJGI pursuant to the SOCO/DJGI Purchase Agreement, subject
to the reservation in favor of SOCO of the SOCO/DJ Production
Payment.
"SOCO/DJGI Guaranty" means the SOCO Guaranty Agreement to
be executed by SOCO in favor of DJGI pursuant to the SWAT/DJGI
Purchase Agreement.
"SOCO/DJGI Purchase Agreement" means that certain Purchase
and Sale Agreement dated as of March 12, 1996 by and between SOCO and
DJGI.
"SWAT/DJ Production Payment" means the production payment
and other rights with respect to the SWAT/DJ Properties to be
reserved in favor of SWAT pursuant to the SWAT/DJGI Purchase
Agreement.
"SWAT/DJ Properties" means the DJ Properties to be conveyed
by SWAT to DJGI pursuant to the SWAT/DJGI Purchase Agreement, subject
to the reservation in favor of SWAT of the SWAT/DJ Production
Payment.
"SWAT/DJGI Purchase Agreement" means that certain Purchase
and Sale Agreement dated as of March 12, 1996 by and between SWAT and
DJGI.
1.2. Modification of Section 1.2. Section 1.2 of the Credit
Agreement shall be amended to read in full as follows:
"SECTION 1.2. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time, applied on a
basis consistent with the most recent audited consolidated financial
statements of Borrower and its Consolidated Subsidiaries delivered to
the Banks except for changes concurred in by Borrower's independent
certified public accountants and which are disclosed to the Agent on
the next date on which financial statements are required to be
delivered to the Banks pursuant to Section 8.1(a) or (b); provided
that, unless Required Banks shall otherwise agree in writing, no such
change shall modify or affect the manner in which compliance with the
covenants contained in Article X are computed such that all such
computations shall be conducted utilizing financial information
presented consistently with prior periods; and provided, further
that, notwithstanding that generally accepted accounting principles
may require or permit the consolidation of the accounts of Patina and
its Subsidiaries with those of Borrower, (a) Patina and its
Subsidiaries shall not be considered Consolidated Subsidiaries for
purposes of this Agreement, and (b) no amount attributable to the
assets, liabilities or results of operations of Patina shall be
considered for purposes of the provisions of Article X hereof or the
definitions related thereto other than the value of Borrower's
investment in the capital stock of Patina (determined in accordance
with the equity method) which may be considered an asset of Borrower
solely for purposes of calculating Borrower's Consolidated Tangible
Net Worth.
5
1.3. Modification of Section 4.6. Section 4.6. of the
Credit Agreement shall be amended to read in its entirety as follows:
"SECTION 4.6. Borrowing Base Effective Upon Effectiveness
of the Fourth Amendment. Notwithstanding anything to the contrary
contained herein, the Facility A Borrowing Base and the Facility B
Borrowing Base in effect during the period commencing on April 15,
1996 and continuing until the first Determination thereafter shall be
$125,000,000 and $100,000,000 respectively; provided, that the
Facility A Borrowing Base and the Facility B Borrowing Base otherwise
in effect pursuant to this Section 4.6 shall reduce by (a) an amount
determined by the Banks (in accordance with the procedures for
redetermining the Facility A and Facility B Borrowing Bases set forth
in Section 4.2) in connection with any sale of any of the Rockies
Properties permitted pursuant to Section 9.5, and (b) by $50,000,000
and $50,000,000, respectively, upon consummation of the Patina
Contribution. Simultaneously with the consummation of any sale of
any of the Rockies Properties, Borrower shall make a mandatory
prepayment of the principal of the Facility A Loans and the Facility
B Loans in an amount sufficient to reduce the aggregate outstanding
principal balance of all Facility A Loans and Facility B Loans to an
amount equal to or less than the Facility A Borrowing Base and
Facility B Borrowing Base as hereby reduced. Simultaneously with the
consummation of the Patina Contribution, Borrower shall make a
mandatory prepayment of the principal of the Facility A Loans and
Facility B Loans in an amount sufficient to reduce the aggregate
outstanding principal balance of all Facility A Loans and all
Facility B Loans to an amount equal to or less than the Facility A
Borrowing Base and the Facility B Borrowing Base, respectively, as
hereby reduced.
1.4. Addition of Sections 5.4 and Section 5.5. Article V of
the Credit Agreement shall be amended to include new Sections 5.4 and
5.5 which shall read in their entirety as follows:
"SECTION 5.4 Release of DJ Partners Collateral. Each
Bank agrees that from and after the earlier of the consummation of DJ
Transactions or the Patina Contribution, and provided that such
transactions and/or contribution are consummated on or before June
30, 1996, the Liens in favor of Agent required by clauses
(a)(i)(A)(D)(E) and (F) of Section 5.1 shall no longer be required,
and Agent is hereby authorized to execute, deliver and file of record
appropriate releases of such Liens.
6
"SECTION 5.5 Release of SWAT Stock and Guaranty. Upon
consummation of the Patina Contribution and satisfaction of each
condition set forth in Section 9.2(g), (a) SWAT shall be
automatically designated an Unrestricted Subsidiary and an Exempt
Subsidiary without the necessity of any further act on the part of
Borrower, SWAT or any Bank, (b) the Guarantee of the Obligations
executed by SWAT pursuant to Section 5.3 shall be canceled and
released, and (c) the Lien in favor of Agent encumbering the capital
stock of SWAT pursuant to Section 5.1(a)(i)(C) shall be released (and
Agent is hereby authorized to execute, deliver and file of record
appropriate releases of such Lien 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
SWAT).
1.5. Modification of Section 9.2. Section 9.2 of the Credit
Agreement shall be amended to read in its entirety as follows:
"SECTION 9.2. Restricted Payments. Neither Borrower nor
any Restricted Subsidiary, nor DJ Partners, L.P. 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, Restricted Subsidiaries and DJ
Partners, L.P. may (a) make Restricted Payments in an aggregate
amount (measured cumulatively from March 31, 1993) not to exceed the
sum of the following (i) $10,000,000, plus (ii) the net cash proceeds
to Borrower from all equity offerings completed by Borrower of
Borrower's equity securities after March 31, 1993, plus (iii) all
cash Distributions actually received by Borrower or any Restricted
Subsidiary from Unrestricted Subsidiaries after March 31, 1993, plus
(iv) fifty percent (50%) of Borrower's Consolidated Cash Flow earned
on or after March 31, 1993, (b) declare and make a Qualified
Redemption of the First Issue, (c) declare and make a Qualified
Redemption of the Second Issue, (d) declare and make a Qualified
Redemption of the Third Convertible Debentures, (e) issue the First
Convertible Debentures in exchange for the First Preferred Stock, (f)
issue the Second Convertible Debentures in exchange for the Second
Preferred Stock, and (g) make the Patina Contribution pursuant to the
Patina Merger Agreement; provided, that (i) simultaneously with the
consummation of the Patina Contribution, Borrower shall be released
from the SOCO/DJ Guaranty, (ii) simultaneously with the Patina
Contribution, Patina shall assume and repay in full $75,000,000 of
the principal amount of Loans outstanding hereunder, (iii) the Patina
Contribution shall be completed on or before June 30, 1996, and (iv)
Patina and Gerrity shall have entered into financing agreements
necessary to refinance all indebtedness of Patina and Gerrity
required to be refinanced in connection with the transactions
contemplated by the Patina Merger Agreement (including the Debt of
Borrower required to be assumed and repaid by Patina pursuant hereto)
and all conditions precedent to the funding of such refinancing shall
have been satisfied; and provided, further that simultaneously with
the consummation of the Patina Contribution, subsection (a) of this
Section 9.2 shall be automatically amended, without the necessity of
any further action by Borrower, Agent or any Bank to (i) delete"
$10,000,000" in clause (i) of such Subsection (a) and replace such
amount with "$75,000,000" and (iii) delete the date "March 31, 1993"
in each place it appears in such subsection (a) and replace such date
each time it appears with "January 1, 1996."
7
1.6. Modification of Section 9.5. Section 9.5 of the Credit
Agreement shall be amended to read in its entirety 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 the aggregate value of
all oil and gas properties, Related Assets and Other Borrowing Base
Property sold by Borrower, DJ Partners, L.P. and the Restricted
Subsidiaries in transactions which are not Exempt Transfers during
(y) the period commencing on April 15, 1996 and continuing until the
Periodic Determination scheduled to occur on or around November 1,
1996, and (z) any period between Periodic Determinations commencing
with the period between the Periodic Determinations scheduled to
occur on or around November 1, 1996, and May 1, 1997 shall not exceed
the sum of (i) the greater of (A) $7,500,000, or (B) five percent
(5%) of the Recognized Value of all oil and gas properties and
Related Assets held by Borrower, the Restricted Subsidiaries and DJ
Partners, L.P. as reflected on the most recent Reserve Report and
Related Asset Report delivered to the Banks prior to the commencement
of such period, plus (ii) the Recognized Value of all proved,
developed, producing oil and gas reserves acquired by Borrower and
the Restricted Subsidiaries during such period; provided, further,
that so long as no Event of Default or Borrowing Base Deficiency then
exists or would result therefrom during the period commencing on
April 15, 1996, and continuing until the Periodic Determination
scheduled to occur on or around November 1, 1996, Borrower and the
Restricted Subsidiaries may consummate (i) the sale of an undivided
interest of up to forty five percent (45%) in those Rockies
Properties described in clause (a) of the definition of Rockies
Properties set forth in Section 1.1 hereof, and (b) undivided
interests of up to twenty five percent (25%) of all other Rockies
Properties; provided, that Borrower shall give each Bank written
notice of any proposed sale of Rockies Properties not less than
fifteen (15) days prior to the closing of such sale and Required
Banks shall be permitted to reduce the Facility A and Facility B
Borrowing Bases then in effect pursuant to Section 4.6, (ii) subject
to the satisfaction of the conditions set forth in Section 9.2(g),
the Patina Contribution, and (iii) the DJ Transactions provided that
such DJ Transactions are consummated on or before June 30, 1996. 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 shall 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."
8
1.7. Modification to Section 9.6. Section 9.6 of the Credit
Agreement shall be amended to read in its entirety as follows:
"SECTION 9.6. Amendments to Material Documents.
Neither Borrower nor any Restricted Subsidiary shall enter into or
permit any modification 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 or the
Convertible Debentures, (c) except as expressly contemplated by the
DJ Transaction Documents, the Partnership Agreement, the Intercompany
Loan Documents, the Management Agreement, or any other related
document (collectively, the "DJ Documents"), (d) the DJ Transaction
Documents, or (e) the Patina Transaction Documents other than, in the
case of clauses (c), (d) and (e) 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, modification or waiver of any DJ
Documents, 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.
1.8. Deletion to Section 10.1. Section 10.1 of the Credit
Agreement shall be deleted in its entirety.
9
1.9. Modification of Section 10.4. Section 10.4 of the
Credit Agreement shall be amended to read in its entirety as follows:
"SECTION 10.4. Adjusted Consolidated Cash Flow Coverage of
Borrower. (a) If as of the last day of any fiscal quarter, through
and including March 31, 1996 and thereafter, provided that the Patina
Contribution has not occurred, Borrower's Adjusted Consolidated Cash
Flow for (i) 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
(ii) the 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 (4) fiscal quarters to exceed the percentages set
forth herein of Borrower's Consolidated Total Covered Debt as so
reduced. Borrower will not be required to comply with this Section
10.4(a) as of the last day of and for any period ending on or after
June 30, 1996 if the Patina Contribution has then occurred (in lieu
of this Section 10.4(a), Section 10.4(b) shall apply).
(b) If, as of the end of any fiscal quarter ending on or
after September 30, 1996, and provided that the Patina Contribution
has been consummated, the aggregate Adjusted Consolidated Cash Flow
of Borrower for the period specified in the table below ending on the
last day of such fiscal quarter is less than the percentage of
Borrower's Consolidated Total Covered Debt set forth opposite the
last day of such fiscal quarter in the table below (exclusive of such
portion of Consolidated Total Covered Debt with respect to which
Exempt Subsidiaries are the only obligors), then 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
period to exceed the applicable percentage of Borrower's Consolidated
Total Covered Debt as thereby reduced.
10
Adjusted Consolidated Quarter Ending Required Percentage
Cash Flow Measurement of Consolidated
Period Total Covered Debt
- ---------------------------------------------------------------
Fiscal Quarter Ending September 30, 1996 4.5%
September 30, 1996
Two Fiscal Quarters December 31, 1996 9.5%
ending
December 31, 1996
Three Fiscal Quarters March 31, 1997 15%
ending
March 31, 1997
Period of Four Fiscal June 30, 1997 or 20%
Quarters ending the last day of
June 30, 1997 or the any fiscal quarter
last day of any thereafter
Fiscal Quarter
thereafter
Borrower shall not be required to comply with this Section
10.4(b) prior to the consummation of the Patina Contribution (in lieu
of this Section 10.4(b), Section 10.4(a) shall apply).
1.10. Modification of Section 12.3. Section 12.3 of the
Credit Agreement shall be amended to read in its entirety as follows:
"SECTION 12.3. Action by the Agent. The obligations of
the Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Agent shall not
be required to take any action with respect to any Default, except as
expressly provided in Article XI. Notwithstanding the administrative
authority delegated to the Agent, the Agent shall not, without the
prior written approval of all Banks, cause or permit any modification
of the Loan Papers which would (a) increase the aggregate Commitments
or subject any Bank to any additional obligations, (b) forgive any of
the principal or reduce the rate of interest on any Loan or any fees
hereunder (c) postpone the date fixed for payment of principal of or
interest on any Loan or any fees hereunder including the Facility A
Termination Date and/or the Facility B Termination Date, (d) change
the percentage of the Commitments except as otherwise provided for in
this Agreement or of the aggregate unpaid principal amount of the
Notes, or the number of Banks, which shall be required for the Banks
or any of them to take any action under Section 14.5 or any other
provision of this Agreement, (e) permit Borrower to assign any of its
rights hereunder, (f) amend or waive any of the provisions of Section
2.8(b), Section 2.9(b) or Article IV of the definitions contained in
Section 1.1 applicable thereto, or (g) provide for the release or
substitution of collateral for the Loans other than releases required
pursuant to sales of collateral which are expressly permitted under
Section 9.5 and releases expressly contemplated by Section 5.1(a),
5.4 and 5.5. Subject to the foregoing, the Agent shall make such
requests or take such actions in respect of Borrower as the Required
Banks shall direct. Further, subject to the foregoing, the Agent
shall grant such waivers, consents or approvals in favor of Borrower
as the Required Banks shall direct.
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1.11. Modification of Section 14.5. Section 14.5 of the
Credit Agreement shall be amended to read in its entirety as follows:
"SECTION 14.5. Amendments and Waivers. Any provision
of this Agreement, the Notes or the other Loan Papers may be amended
or waived if, but only if such amendment or waiver is in writing and
is signed by Borrower and the Required Banks (and, if the rights or
duties of the Agent are affected thereby, by the Agent); provided
that no such amendment or waiver shall, unless signed by all the
Banks, (a) increase the total aggregate Commitments of the Banks or
any subject any Bank to any additional obligation, (b) forgive any of
the principal of or reduce the rate of interest on any Loan or any
fees hereunder, (c) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder including
the Facility A Termination Date and/or the Facility B Termination
Date, (d) change the percentage of the Commitments except as
otherwise provided for in this Agreement or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this
Section 14.5 or any other provision of this Agreement, (e) permit
Borrower to assign any of its rights hereunder, (f) amend or waive
any of the provisions of Section 2.8(b), Section 2.9(b) or Article IV
or the definitions contained in Section 1.1 applicable thereto, or
(g) provide for release or substitution of collateral for the
Obligations other than releases required pursuant to sales of
collateral which are expressly permitted by Section 9.5 hereof and
releases expressly contemplated by Sections 5.1(a), 5.4 and 5.5
hereof. Borrower, Agent and each Bank acknowledge that Agent and/or
one or more Banks and/or their Affiliate may extend loans or other
credit to, or enter into other transactions with, Affiliates of
Borrower, including without limitation, Patina and other Unrestricted
Subsidiaries of Borrower. Borrower, Agent and each Bank further
acknowledge that any decision by Agent or any Bank to enter into any
amendment, waiver or consent pursuant hereto shall be made by such
Bank or Agent in its sole discretion, and in making any such decision
Agent and each such Bank shall be permitted to give due consideration
to any credit or other relationship Agent or any such Bank may have
with any Affiliate of Borrower, including, without limitation, any
credit or other relationship with Patina or any other Unrestricted
Subsidiary of Borrower.
SECTION 2. Amendments Effective Upon Consummation of the
earlier of the DJ Transactions or the Patina Contribution. Subject
to the satisfaction of each condition precedent set forth in Section
3 hereof, upon the earlier of the consummation of the DJ Transactions
or the Patina Contribution, and provided that such transactions
and/or contribution are consummated on or before June 30, 1996, the
Credit Agreement shall be automatically amended without the necessity
of any further act by Borrower, Agent or any Bank to (a) delete the
following definitions (the "DJ Partners Defined Terms") from Section
1.1 of Article I of the Credit Agreement: "DJ Partners, L.P.," "DJ
Project Model," "Intercompany Loan," "Intercompany Loan Documents,"
"Management Agreement," and "Partnership Agreement," and (b) delete
each reference in the Credit Agreement and the other Loan Papers to
each DJ Partners Definition, such that, from and after the
consummation of the DJ Transactions, each provision of the Credit
Agreement shall be read and interpreted without giving effect to DJ
Partners Defined Terms.
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SECTION 3. Conditions Precedent to Effectiveness of Amendments.
The amendments to the Credit Agreement contained in Section 1 and 2
of this Fourth Amendment shall be effective only upon the
satisfaction of each of the conditions set forth in this Section 3
(and, in the case of the amendments set forth in Section 2, the
further condition that the DJ Transactions shall have been
consummated on or before June 30, 1996). If each condition set forth
in this Section 3 has not been satisfied by the Effective Date, this
Fourth Amendment and all obligations of the Banks and Agent contained
herein shall, at the option of Majority Banks, terminate.
3.1 Execution and Delivery. Borrower and each Bank shall
have executed a counterpart hereof and delivered the same to the
Agent or, in the case of any Bank as to which an executed counterpart
hereof shall not have been so delivered, the Agent shall have
received written confirmation by telecopy or other similar writing
from such Bank of execution of a counterpart hereof by such Bank.
3.2 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 Fourth Amendment.
3.3 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 Fourth Amendment, and (c) each of
the other Loan Papers is true and correct and will be true and
correct after giving effect to the amendments contained in Section 1
hereof.
3.4 Legal Opinion. The Agent shall have received a
favorable legal opinion addressed to all of the Banks in form and
substance satisfactory to the Agent.
SECTION 4. Representations and Warranties of Borrower. To
induce the Banks and Agent to enter into this Fourth Amendment,
Borrower hereby represents and warrants to Agent as follows:
4.1. Accuracy of Existing Representations and Warranties.
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.
4.2. No Conflicts. The execution, delivery and performance
by Borrower of this Fourth 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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4.3. Validity and Enforceability. This Fourth 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.
4.4. DJ and Patina Transaction Documents. Borrower has
provided Agent and each Bank with a true and correct copy of (a) all
material DJ Transaction Documents, including, without limitation, the
DJ Dissolution Agreement and each of the DJGI Purchase Agreements,
and (b) all material Patina Transaction Documents, including, without
limitation, the Patina Merger Agreement and the Patina Ancillary
Documents. No rights or obligations of any party to any of the DJ
Transaction Documents or any of the Patina Transaction Documents have
been waived and no party to any of the DJ Transaction Documents or
Patina Transaction Documents is in default of its obligations
thereunder. Each of the DJ Transaction Documents and the Patina
Transaction Documents is a valid, binding and enforceable obligation
of the parties thereto in accordance with its terms and is in full
force and effect 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.
4.5. SWAT Properties. As of the date hereof, SWAT does not
hold legal or beneficial title to any assets other than (a) assets
comprising part of the Business (as such term is defined in the
Patina Merger Agreement), and (b) rights under the DJ Transaction
Documents.
4.6. Investments in Patina and Subsidiaries. As of the date
hereof, Borrower's and its Restricted Subsidiaries' Investments in
Patina and in Subsidiaries of Patina consist solely of (a)
contributions of capital in the minimum amount necessary to permit
Patina to conduct business in accordance with applicable law, and (b)
advances to or on behalf of Patina to pay transaction costs related
to the Patina Contribution and the other transactions contemplated by
the Patina Merger Agreement, which advances do not exceed, in the
aggregate, $2,000,000.
4.7. Investments in Gerrity. As of the date hereof, neither
Borrower nor any of its Restricted Subsidiaries has made any
Investment in Gerrity or any Subsidiary of Gerrity.
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SECTION 5. Covenants Regarding Investments in Patina and
Gerrity. From and after the date of this Agreement until
consummation of the Patina Contribution, notwithstanding any contrary
term or condition set forth in the Credit Agreement or any other Loan
Paper, Borrower shall not, and shall not permit any Restricted
Subsidiary to, make any Investment in SWAT, Patina, Gerrity or any of
their respective Subsidiaries other than (a) advances made to or on
behalf of Patina to pay transaction costs related to the Patina
Contribution and the other transactions contemplated by the Patina
Merger Agreement, which advances shall not exceed, in the aggregate
(including all such advances previously made) $6,000,000, and (b)
Investments in Patina necessary to cause Patina's working capital to
equal the amounts required by Section 7.23 of the Patina Merger
Agreement.
SECTION 6. Agreements Regarding Prior Draft of Fourth
Amendment. Reference is hereby made to that certain Letter Agreement
dated March 12, 1996, by and among Borrower, Agent and Banks pursuant
to which the Banks consented to the consummation of the DJ
Transactions (the "DJ Consent Letter"). Pursuant to the DJ Consent
Letter, Borrower and Banks agreed, upon the consummation of the DJ
Transactions, to enter into a this Fourth Amendment to Credit
Agreement substantially in the form attached as Exhibit A thereto
(the "Prior Draft Fourth Amendment"). Borrower, Agent and each Bank
agree that this Fourth Amendment supersedes the DJ Consent Letter and
the Prior Draft Fourth Amendment in their entirety, and the
agreements of Borrower, Agent and Banks set forth in the DJ Consent
Letter, including, without limitation, the agreements to enter into
the Prior Draft Fourth Amendment are hereby rescinded in their
entirety.
SECTION 7. Miscellaneous.
7.1 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.
7.2 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, except as expressly provided herein, the amendments and
modifications herein contained shall in no manner affect or impair
the Obligations or the Liens securing payment and performance
thereof.
7.3 Parties in Interest. All of the terms and provisions of
this Fourth Amendment shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
7.4 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 Fourth Amendment and all related documents and the closing of
the transactions contemplated hereby.
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7.5 Counterparts. This Fourth Amendment may be executed in
counterparts, and all parties need not execute the same counterpart;
however, no party shall be bound by this Fourth Amendment until all
parties have executed a counterpart. Facsimiles shall be effective
as originals.
7.6 Complete Agreement. THIS FOURTH 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.
7.7 Headings. The headings, captions and arrangements used
in this Fourth Amendment are, unless specified otherwise, for
convenience only and shall not be deemed to limit, amplify or modify
the terms of this Fourth Amendment, nor affect the meaning thereof.
(Remainder of page intentionally left blank)
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth
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
Its: Vice President
AGENT:
NATIONSBANK OF TEXAS, N.A.
By:/s/ E. Murphy Markham
Its: Vice President
BANKS:
NATIONSBANK OF TEXAS, N.A.
By:/s/ J. Scott Fowler
Its: Vice President
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By:/s/ Tim Perry
Its: Senior Vice President
BANK ONE, TEXAS, N.A.
By: Brad Bartek
Its: Vice President
WELLS FARGO BANK, N.A.
By: /s/ Chad Kirkham
Its: Vice President
To induce Agent and each Bank to enter into this Fourth
Amendment, the undersigned, each a Restricted Subsidiary of Borrower,
jointly and severally (a) consent and agree to the execution,
delivery and effectiveness of this Fourth Amendment, (b) ratify and
confirm that all guarantees and assurances granted, conveyed or
otherwise provided to Agent or any Bank under the Loan Papers -- as
they may have been renewed, increased, extended, restated or replaced
- -- are not released, diminished, impaired, reduced, or otherwise
adversely affected by this Fourth Amendment and continue to guarantee
and assure the full payment and performance of all present and future
Obligations as renewed, increased, extended, restated or replaced
pursuant to this Fourth Amendment or as the same may hereafter be
renewed, increased, extended, restated or replaced, (c) agree to
perform such acts and duly authorize, execute, acknowledge and
deliver such additional guarantees, assurances and other documents,
instruments and agreements as Agent may reasonably deem necessary or
appropriate in order to create, perfect, preserve and protect those
guarantees and assurances, and (d) waives notice of acceptance of
this consent and agreement, which consent and agreement binds the
undersigned and their successors and assigns and inures to Agent, the
Banks, and their respective successors and assigns.
SOCO Holdings, Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
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Mexican Flats Service Company, Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
Western Transmission Corporation
By:/s/ Peter E. Lorenzen
Its: Vice President
Wyoming Gathering and Production Company
By:/s/ Peter E. Lorenzen
Its: Vice President
Snyder Acquisition Corporation
By:/s/ Peter E. Lorenzen
Its: Vice President
Snyder Gas Marketing, Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
Institutional Services, Inc.
By: /s/ David W. Hays
Its: President
SOCO Thomasville Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
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SOCO Wattenberg Corporation
By:/s/ Peter E. Lorenzen
Its: Vice President
SOCO California Properties, Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
SOCO Technologies, Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
Snyder Fluid Technologies, Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
SOCO Gas Systems, Inc.
By:/s/ Peter E. Lorenzen
Its: Vice President
20