EXHIBIT 4.23
FIFTH AMENDMENT TO CREDIT AGREEMENT
This Fifth Amendment to Amended and Restated Credit Agreement (this
"Amendment") is dated as of June 12, 1998 and is made by and among CLIFFWOOD OIL
& GAS CORP., CLIFFWOOD ENERGY COMPANY and CLIFFWOOD PRODUCTION CO. (the
"Borrowers"), COMERICA BANK-TEXAS, as Agent for itself and certain other lenders
(in such capacity, the "Agent") and as a Lender (as defined in the Agreement
described below) and FIRST UNION NATIONAL BANK, as a Lender.
R E C I T A L S:
WHEREAS, Borrowers, Agent and certain Lenders are party to the Amended and
Restated Credit Agreement dated as of August 1, 1997 (as amended through the
date hereof and as may be further amended, extended, renewed or restated from
time to time, the "Agreement") pursuant to which Lenders made a revolving line
of credit available to Borrowers under the terms and provisions stated therein;
and
WHEREAS, Borrowers, Agent and Lenders desire to amend the Agreement to
provide for, among other things, alternative pricing options for Borrowers and
modifications to certain payment provisions in connection therewith.
NOW, THEREFORE, in consideration of the premises herein contained, the
covenants and agreements set forth below and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS AND TERMS. Capitalized terms used in this
Amendment, to the extent not otherwise defined herein, shall have the same
meaning as in the Agreement, as amended hereby, and all references to
"Sections," "clauses," "Articles" and "Exhibits" are references to the
Agreement's sections, clauses, articles and exhibits.
ARTICLE II
AMENDMENTS
Section 2.1 AMENDMENTS TO SECTION 1.2.
(a) Section 1.2 is amended by adding, in alphabetical order, the following
new definitions:
"CONVERSION NOTICE" means a request, subject to Section 2.27,
substantially in the form of Exhibit VII.
FIFTH AMENDMENT TO CREDIT AGREEMENT - PAGE 1
"EURODOLLAR RATE" means, for the relevant Interest Period, the
annual interest rate (rounded upward, if necessary, to the nearest 0.01%)
equal to the quotient obtained by dividing (a) the rate that deposits in
United States dollars are offered to Agent in the London interbank market
at approximately 11:00 a.m. London time two Business Days before the first
day of that Interest Period in an amount comparable to the applicable Loan
and having a maturity approximately equal to that Interest Period, by (b)
one minus the Reserve Requirement (expressed as a decimal) applicable to
the relevant Interest Period.
"INTEREST PERIOD" is determined under Section 2.26 .
"RESERVE REQUIREMENT" means, for any Loan bearing interest based on
the Eurodollar Rate and for the relevant Interest Period, the total
reserve amount prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for "Eurocurrency Liabilities" (as defined in
Regulation D of the Federal Reserve Board, as amended), adjusted by Agent
for expected changes in such reserve amount during the applicable Interest
Period.
(b) Section 1.2 is further amended by amending the following definitions
entirely so that they read as follows:
"BUSINESS DAY" shall mean (a) for purposes of any Loan bearing
interest based on the Eurodollar Rate, a day when commercial banks are
open for international business in London, England, and (b) for all
purposes, a day other than a Saturday, Sunday, legal holiday for
commercial banks under the laws of the State of Texas, or any other day
when banking is suspended in the State of Texas.
"FLOATING RATE" shall mean an interest rate per annum equal to the
lesser of either (a)(i) the Base Rate from time to time in effect plus
one-half of one percent or (ii) the Eurodollar Rate plus two and
one-quarter of one percent (in each case as designated or deemed
designated by Borrowers), as the case may be, or (b) the Highest Lawful
Rate; PROVIDED, HOWEVER, that the Eurodollar Rate may not be selected when
a Default or an Event of Default exists.
Section 2.2 AMENDMENTS TO SECTION 2.1.
(a) Section 2.1(a) is entirely amended so that it reads as follows:
(a) Upon the terms and conditions (including, without
limitation, the right of the Lenders to decline to make any Loan so
long as any Default or Event of Default exists) and relying on the
representations and warranties contained in this Agreement, each
Lender severally agrees, during the Commitment Period, to make Loans
not to exceed such Lender's Commitment Amount, in immediately
available funds at the Principal Office, to or for the benefit of
the Borrowers, from time to time on any Business Day designated by
the Borrowers following receipt by the Agent of a written request
(each, a "Borrowing Request") for such Loan; provided, however,
FIFTH AMENDMENT TO CREDIT AGREEMENT - PAGE 2
(i) each Borrowing Request must be received by Lender no later than
(A) 11:00 a.m. on the third Business Day before the date on which
funds are requested (the "Borrowing Date") for any Loan bearing
interest based on the Eurodollar Rate, or (B) 11:00 a.m. on the
Borrowing Date for any Loan bearing interest based on the Base Rate,
and (ii) no Loan shall exceed the aggregate amount of the then
existing Available Commitment for such Lender as then in effect and
the Borrowers agree to immediately repay any Loan Balance
outstanding in excess of the aggregate amount of the Available
Commitment (including those necessary to meet the Commitment
Reduction Schedule). The Borrowers jointly and severally agree to
repay to the Lenders the Obligations pursuant to the terms hereof.
(b) Section 2.1(b) is entirely amended so that it reads as follows:
(b) Subject to the terms of this Agreement, during the
Commitment Period, the Borrowers may borrow, repay, and reborrow.
Except for prepayments made pursuant to Section 2.9, each borrowing
and prepayment of principal of Loans shall be in an amount at least
equal to (i) for any Loan bearing interest based on the Eurodollar
Rate, $1,000,000 or a greater integral multiple thereof, and (ii)
for any Loan bearing interest based on the Base Rate, $50,000 or a
greater integral multiple thereof.
Section 2.3 AMENDMENTS TO SECTION 2.3. The second sentence of Section 2.3
of the Agreement is amended by adding the following immediately after the word
"Loans":
"bearing interest based on the Base Rate."
Section 2.3 is further amended by adding thereto (inserted immediately after the
second sentence thereof) the following:
Interest on Loans bearing interest based on the Eurodollar Rate
shall be computed on the basis of a year of 360 days, and actual days
elapsed during the relevant Interest Period.
Section 2.4 AMENDMENT TO SECTION 2.5. Section 2.5 is amended by deleting
the first sentence thereof and substituting the following in lieu thereof:
Accrued and unpaid interest on each Loan bearing interest based on
the Eurodollar Rate shall be due and payable on the last day of its
respective Interest Period; PROVIDED, HOWEVER, if any Interest Period is a
period greater than one month, then accrued and unpaid interest shall also
be due and payable on the first day of each calendar month during such
Interest Period. Accrued and unpaid interest on each Loan bearing interest
based on the Base Rate shall be due and payable monthly on the first day
of each calendar month.
Section 2.5 ADDITIONS TO ARTICLE II. The following new sections are added
to Article II:
FIFTH AMENDMENT TO CREDIT AGREEMENT - PAGE 3
2.26 INTEREST PERIODS. When Borrowers request any Loan bearing
interest based on the Eurodollar Rate, Borrowers may elect the applicable
interest period (each an "Interest Period"), which may be, at Borrowers'
option, one, two or three months, subject to the following conditions: (a)
the initial Interest Period for a Loan bearing interest based on the
Eurodollar Rate commences on the applicable Borrowing Date or conversion
date, and each subsequent Interest Period applicable to such Loan
commences on the day when the next preceding applicable Interest Period
expires; (b) if any Interest Period for a Loan bearing interest based on
the Eurodollar Rate begins on a day for which no numerically corresponding
Business Day in the calendar month at the end of the Interest Period
exists, then the Interest Period ends on the last Business Day of that
calendar month; (c) if Borrowers are required to pay any portion of a Loan
bearing interest based on the Eurodollar Rate before the end of its
Interest Period in order to comply with the payment provisions of the Loan
Documents, Borrowers shall also pay any related loss, expense, or
reduction in yield that any Lender incurs because of such payment; (d) no
Interest Period may end on a day after the Commitment Termination Date;
and (e) no more than three Interest Periods may be in effect at one time.
2.27 CONVERSIONS. Subject to the limitations of Section 2.1 and
provided that Borrowers may not convert to or select a new Interest Period
for a Loan bearing interest based on the Eurodollar Rate at any time when
a Default or Event of Default exists, Borrowers may (a) convert a Loan
bearing interest based on the Eurodollar Rate on the last day of the
applicable Interest Period to a Loan bearing interest based on the Base
Rate, (b) convert a Loan bearing interest based on the Base Rate at any
time to a Loan bearing interest based on the Eurodollar Rate, and (c)
elect a new Interest Period for a Loan bearing interest based on the
Eurodollar Rate. Such election may be made by telephonic request to Agent
no later than 11:00 a.m. on the third Business Day before the conversion
date or the last day of the Interest Period, as the case may be, for
conversion to a Loan bearing interest based on the Eurodollar Rate or
election of a new Interest Period, and no later than 11:00 a.m. on the
last day of the Interest Period for conversion to a Loan bearing interest
based on the Base Rate. Borrowers shall provide a Conversion Notice to
Agent no later than two days after the date of the telephonic request for
conversion or election. Absent Borrowers' telephonic request for
conversion or election of a new Interest Period or if a Default or Event
of Default exists, then, a Loan bearing interest based on the Eurodollar
Rate shall be deemed converted to a Loan bearing interest based on the
Base Rate effective when the applicable Interest Period expires.
2.28 BASIS UNAVAILABLE OR INADEQUATE FOR EURODOLLAR RATE. If, on or
before any date when a Eurodollar Rate is to be determined for a Loan,
Agent reasonably determines that the basis for determining the applicable
rate is not available or any Lender reasonably determines that the
resulting rate does not accurately reflect the cost to such Lender of
making or converting Loans at that rate for the applicable Interest
Period, then Agent shall promptly notify Borrowers of that determination
(which is conclusive and binding on Borrowers absent manifest error) and
the
FIFTH AMENDMENT TO CREDIT AGREEMENT - PAGE 4
applicable Loan shall bear interest at the sum of the Base Rate plus
one-half of one percent. Until Agent notifies Borrowers that those
circumstances no longer exist, Lenders' commitments under this Agreement
to make, or to convert to, Loans bearing interest based on the Eurodollar
Rate, as the case may be, is suspended.
2.29 RESERVES. With respect to any Loan bearing interest based on
the Eurodollar Rate (a) if any change in any present Requirement of Law,
any change in the interpretation or application of any present Requirement
of Law, or any future Requirement of Law imposes, modifies, or deems
applicable (or if compliance by any Lender with any requirement of any
Governmental Authority results in) any requirement that any reserves
(including, without limitation, any marginal, emergency, supplemental, or
special reserves) be maintained (other than any reserve included in the
Reserve Requirement), and if (b) those reserves reduce any sums receivable
by such Lender under this Agreement or increase the costs incurred by such
Lender in advancing or maintaining any portion of any Loan bearing
interest based on the Eurodollar Rate, then (c) such Lender (through
Agent) shall deliver to Borrowers a certificate setting forth in
reasonable detail the calculation of the amount necessary to compensate it
for its reduction or increase (which certificate is conclusive and binding
absent manifest error), and (d) Borrower shall pay that amount to such
Lender within 10 Business Days after demand. The provisions of and
undertakings and indemnification in this Section 2.29 survive the
satisfaction and payment of the Obligations and termination of this
Agreement.
2.30 CHANGE IN REQUIREMENTS OF LAW. If any Requirement of Law makes
it unlawful for any Lender to make or maintain Loans bearing interest
based on the Eurodollar Rate, then such Lender shall promptly notify
Borrowers and Agent, and (a) as to undisbursed funds, such requested Loan
shall be made as a Loan bearing interest based on the Base Rate, and (b)
as to any outstanding Loan (i) if maintaining the Loan until the last day
of the applicable Interest Period is unlawful, the Loan shall be converted
to a Loan bearing interest based on the Base Rate as of the date of
notice, in which event Borrowers will not be required to pay any related
loss, expense, or reduction in yield that Lenders incur because of such
conversion, or (ii) if not prohibited by Requirements of Law, the Loan
shall be converted to a Loan bearing interest based on the Base Rate as of
the last day of the applicable Interest Period, or (iii) if any conversion
will not resolve the unlawfulness, Borrowers shall promptly prepay the
Loan, without penalty but with related loss, expense, or reduction in
yield that Lenders incur because of such conversion.
Section 2.6 AMENDMENT TO SECTION 5.20. Section 5.20 is amended by deleting
the word "May" and inserting in lieu thereof the word "July."
Section 2.7 AMENDMENTS TO SECTION 7.1.
(a) Section 7.1(c) is amended by adding after the word "Borrower"
found therein, the words ", Texoil or Texoil Company."
FIFTH AMENDMENT TO CREDIT AGREEMENT - PAGE 5
(b) Section 7.1 is further amended by deleting the word "or" from
the end of clause (n), deleting the period (".") from the end of clause
(o) and replacing it with a semicolon (";") and the word "or," and adding
the following clause thereto:
(p) Texoil or Texoil Company shall fail or refuse to perform
or observe all terms, covenants, and agreements contained in
Paragraph 9 of its certain Guaranty dated as of June 12, 1998,
executed for the benefit of Lenders.
Section 2.8 ADDITIONAL EXHIBIT. A new Exhibit VII is added in the form of,
and all references in the Agreement to Exhibit VII shall be deemed to be
references to, the attached Exhibit VII.
ARTICLE III
MISCELLANEOUS
Section 3.1 RATIFICATIONS, REPRESENTATIONS AND WARRANTIES. Except as
expressly modified and superseded by this Amendment, the terms and provisions of
the Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. The representations and warranties contained
herein and in all other Loan Documents, as amended hereby, shall be true and
correct as of, and as if made on, the date hereof. Borrowers, Agent and Lenders
agree that the Agreement as amended hereby shall continue to be legal, valid,
binding and enforceable in accordance with its terms.
Section 3.2 REFERENCE TO THE AGREEMENT. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement as amended hereby.
Section 3.3 EXPENSES OF AGENT. As provided for in the Agreement, each
Borrower agrees, jointly and severally, to pay on demand all reasonable cost and
expenses incurred by Agent in connection with the preparation, negotiation,
execution of this Amendment, and the other Loan Documents executed pursuant
hereto and any and all amendments, modifications and supplements thereto
including, without limitation, the reasonable cost of Agent's legal counsel, and
all reasonable costs and expenses incurred by Agent in connection with the
enforcement or preservation of any rights under the Agreement, as amended
hereby, or any other Loan Documents.
Section 3.4 SEVERABILITY. Any provisions of this Amendment held by court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provisions so held to be invalid or unenforceable.
Section 3.5 APPLICABLE LAW. This Amendment and all other Loan Documents
executed pursuant hereto shall be governed by and construed in accordance with
the laws of the State of Texas.
FIFTH AMENDMENT TO CREDIT AGREEMENT - PAGE 6
Section 3.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall enure to the benefit of Agent, Lenders and Borrowers and their respective
successors and assigns.
Section 3.7 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
but all of which when taken together shall constitute one and the same
instrument.
Section 3.8 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 3.9 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
FIFTH AMENDMENT TO CREDIT AGREEMENT - PAGE 7
EXECUTED as of the day and year first above written.
CLIFFWOOD OIL & GAS CORP.,
as a BORROWER
By: /S/ FRANK A. LODZINSKI
Frank A. Lodzinski
President
CLIFFWOOD ENERGY COMPANY, COMERICA BANK-TEXAS,
as a BORROWER as AGENT and a LENDER
By: /S/ FRANK A. LODZINSKI By: /S/ JAMES KIMBLE
Frank A. Lodzinski James Kimble
President Vice President
CLIFFWOOD PRODUCTION CO., FIRST UNION NATIONAL BANK,
as a BORROWER as a LENDER
By: /S/ FRANK A. LODZINSKI By: /S/
Frank A. Lodzinski Name:
President Title:
FIFTH AMENDMENT TO CREDIT AGREEMENT - SIGNATURE PAGE