EXHIBIT 10.7
AMENDMENT NO. 1
TO
AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT
DATED JUNE 23, 1995
BY AND BETWEEN CONVEST ENERGY CORPORATION AND
EDISTO EXPLORATION & PRODUCTION CO.
AND
BANK ONE, TEXAS, NA
This Amendment No. 1 to Amended and Restated Secured Revolving
Credit Agreement dated June 23, 1995 (this "First Amendment") by and among
CONVEST ENERGY CORPORATION and EDISTO EXPLORATION & PRODUCTION CO. (collectively
"Borrower"), BANK ONE, TEXAS, NA, a national banking association (the "Agent"),
and the several banks from time to time parties to the "Credit Agreement"
defined below (the "Banks") is entered into this 8th day of January 1997, to be
effective as of September 30, 1996.
W I T N E S S E T H:
Borrower, Banks and Agent entered into an Amended and Restated
Secured Revolving Credit Agreement dated June 23, 1995 (as such may be further
amended, modified, supplemented or restated, the "Credit Agreement").
Borrower has requested that the Banks: (a) reestablish the
Hydrocarbon Borrowing Base at $20,500,000 effective November 1, 1996 and at
$19,150,000 effective December 1, 1996; (b) reestablish the amount of the
monthly reduction to the Hydrocarbon Borrowing Base to $1,000,000 per month
beginning January 1, 1997; (c) extend the Drawdown Termination Date; (d) amend
certain financial covenants and ratios; (e) change the due date for various
Commitment Fee payments; and (f) make certain other technical modifications; and
the Banks have agreed to such request, subject to the terms and conditions of
the Credit Agreement, as amended by this First Amendment.
NOW, THEREFORE, in consideration of the promises herein
contained, and each intending to be legally bound hereby, the parties agree as
follows:
I. AMENDMENTS TO CREDIT AGREEMENT.
ARTICLE I, DEFINITIONS, is amended by adding the following definition:
"FIRST AMENDMENT" means Amendment No. 1 to this Credit
Agreement, executed by Borrower and the Banks on
January 8, 1997.
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ARTICLE I, DEFINITIONS, is further amended by revising the definition of
Drawdown Termination Date to read as follows:
"DRAWDOWN TERMINATION DATE" shall mean the earlier to occur of
(i) the date on which the Commitments shall terminate in
accordance with ARTICLE 6 hereof or (ii) January 1, 1999.
SECTION 2.02, DETERMINATION OF HYDROCARBON BORROWING BASE, is amended by
adding the following text at the end of the first grammatical paragraph of such
Section:
Effective as of November 1, 1996, the Hydrocarbon Borrowing Base
is hereby established at $20,500,000, and effective as of
December 1, 1996, the Hydrocarbon Borrowing Base is hereby
reestablished at $19,150,000; and thereafter, the Hydrocarbon
Borrowing Base shall be reduced by $1,000,000 monthly as of the
first day of each month beginning January 1997, until the
Hydrocarbon Borrowing Base and the monthly reduction amount are
again redetermined pursuant to this SECTION 2.02.
SECTION 2.05(B), COMMITMENT FEE, is amended by deleting the last
sentence thereof and adding the following text in its place:
The accrued and unpaid commitment fees shall be due and payable
in arrears on the first Business Day of each calendar quarter, on
the date of each reduction or termination of the Commitment on
the amount of the Commitment so reduced or terminated, and on the
Drawdown Termination Date.
SECTION 5.11(A), MINIMUM CONSOLIDATED TANGIBLE NET WORTH, is hereby
amended by deleting the text thereof in its entirety, and replacing it with the
following:
(a) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Parent
Co-Borrower will not permit at any time its Consolidated Tangible
Net Worth as at the end of any calendar quarter beginning with
the quarter ended September 30, 1996, to be less than
$34,600,000, plus 60% of net income (if positive) subsequent to
September 30, 1996, and 80% of increases in shareholder's equity
resulting from the sale or issuance of equity subsequent to
September 30, 1996, PROVIDED, HOWEVER, that any increase in
shareholder's equity resulting from the issuance of equity for
any asset other than cash shall be excluded when determining
compliance with this covenant.
EXHIBIT 1.01(A), SCHEDULE OF THE BANKS, COMMITMENT AMOUNTS AND
PERCENTAGE SHARES, is hereby amended by: (a) changing the Commitment Amount set
forth thereon for Bank One, Texas, National Association to $13,453,125.00, (b)
changing the Commitment Amount set forth thereon for Compass Bank (formerly
Compass Bank -
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Houston) to $7,046,875.00, and (c) changing the total under the Commitment
Amount column thereon to $20,500,000.00.
II. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce the Banks
to enter into this First Amendment, the Borrower hereby reaffirms, as of the
date hereof, its representations and warranties contained in Article 3 of the
Credit Agreement and in all other documents executed pursuant thereto, and
additionally represents and warrants as follows:
A. The execution and delivery of this First Amendment and the
performance by the Borrower of its obligations under this First
Amendment are within the Borrower's power, have received all necessary
governmental approval (if any shall be required), and do not and will
not contravene or conflict with any provision of law or of any agreement
binding upon the Borrower.
B. The Credit Agreement as amended by this First Amendment
represents the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective
terms subject as to enforcement only to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally.
C. No Event of Default or Unmatured Event of Default has occurred
and is continuing as of the date hereof.
III. DEFINED TERMS. Except as amended hereby, terms used herein that are
defined in the Credit Agreement shall have the same meanings herein.
IV. REAFFIRMATION OF CREDIT AGREEMENT. This First Amendment shall be
deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as
amended hereby, is hereby ratified, approved and confirmed in each and every
respect. All references to the Credit Agreement herein and in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
V. ENTIRE AGREEMENT. The Credit Agreement, as hereby amended, embodies
the entire agreement between the Borrower, the Agent and the Banks and
supersedes all prior proposals, agreements and understandings relating to the
subject matter hereof. The Borrower certifies that it is relying on no
representation, warranty, covenant or agreement except for those set forth in
the Credit Agreement as hereby amended and the other documents previously
executed or executed of even date herewith.
VI. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. This First Amendment has been entered into
in Harris County, Texas, and it shall be performable for all purposes in Harris
County, Texas.
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Courts within the State of Texas shall have jurisdiction over any and all
disputes between the Borrower, the Agent and the Banks, whether in law or
equity, including, but not limited to, any and all disputes arising out of or
relating to this First Amendment or any other Loan Document; and venue in any
such dispute whether in federal or state court shall be laid in Harris County,
Texas.
VII. SEVERABILITY. Whenever possible each provision of this First
Amendment shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this First Amendment shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this First Amendment.
VIII. EXECUTION IN COUNTERPARTS. This First Amendment may be executed in
any number of counterparts and by the different parties on separate
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same agreement.
IX. SECTION CAPTIONS. Section captions used in this First Amendment are
for convenience of reference only, and shall not affect the construction of this
First Amendment.
X. SUCCESSORS AND ASSIGNS. This First Amendment shall be binding upon
the Borrower and the Bank and their respective successors and assigns, and shall
inure to the benefit of the Borrower, the Agent and the Banks, and the
respective successors and assigns of the Agent and the Banks.
XI. NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODES. The provisions
of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil Statutes, Article
5069-15) are specifically declared by the parties hereto not to be applicable to
the Credit Agreement as hereby amended or any of the other Loan Documents or to
the transactions contemplated hereby.
XII. NOTICE. THIS FIRST AMENDMENT TOGETHER WITH 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.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed as of the day and year first above written.
BORROWERS:
CONVEST ENERGY CORPORATION
By: /s/ STEVEN G. IVES
Steven G. Ives
Assistant Controller
EDISTO EXPLORATION & PRODUCTION CO.
By: /s/ STEVEN G. IVES
Steven G. Ives
Assistant Controller
AGENT:
BANK ONE, TEXAS, NA
By: /s/ JOHN B. LANE
John B. Lane
Vice President
BANKS:
BANK ONE, TEXAS, NA
By: /s/ JOHN B. LANE
John B. Lane
Vice President
COMPASS BANK
By: /s/ KATHLEEN J. BOWEN
Kathleen J. Bowen
Vice President
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