EXHIBIT 10(b)
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
This Second Amendment to Third Amended and Restated Credit Agreement
(this "SECOND AMENDMENT") is entered into effective as of the 11th day of
August, 2003 (the "EFFECTIVE DATE"), by and among Denbury Resources Inc., a
Delaware corporation ("BORROWER"), Bank One, NA, as Administrative Agent
("ADMINISTRATIVE AGENT"), and the financial institutions parties hereto as Banks
("BANKS").
W I T N E S S E T H
WHEREAS, Borrower, Administrative Agent, the other agents a party
thereto and Banks are parties to that certain Third Amended and Restated Credit
Agreement dated as of September 12, 2002 (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, Banks have made a Revolving
Loan to Borrower and provided certain other credit accommodations to Borrower;
and
WHEREAS, Borrower has requested that Banks (a) amend certain terms of
the Credit Agreement in certain respects, and (b) waive the Specified Default
(as hereinafter defined) which has occurred and which is continuing; and
WHEREAS, subject to and upon the terms and conditions set forth
herein, 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, Administrative Agent and each Bank hereby agree as follows:
SECTION 1. AMENDMENTS. In reliance on the representations, warranties, covenants
and agreements contained in this Second Amendment, and subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, the
Credit Agreement shall be amended effective as of the Effective Date in the
manner provided in this Section 1.
1.1 ADDITIONAL DEFINITION. Section 2.1 of the Credit Agreement shall be
amended to add thereto in alphabetical order the definition of "SECOND
AMENDMENT" which shall read in full as follows:
"SECOND AMENDMENT" means that certain Second Amendment to Third
Amended and Restated Credit Agreement dated as of August 11, 2003 among
Borrower, Administrative Agent and Banks.
1.2 AMENDMENT TO DEFINITION. The definition of "LOAN PAPERS" contained in
Section 2.1 of the Credit Agreement shall be amended to read in full as follows:
"LOAN PAPERS" means this Agreement, the First Amendment, the Second
Amendment, the Notes, each Facility Guaranty which may now or hereafter be
executed, each Borrower Pledge Agreement which may now or hereafter be
executed, each Subsidiary Pledge Agreement which may now or hereafter be
executed, the Existing Mortgages (as amended by the Assignments and
Amendments to Mortgages), all Mortgages now or at any time hereafter
delivered pursuant to Section 6.1, the Assignments and Amendments to
Mortgages, and all other certificates, documents or instruments delivered
in connection with this Agreement, as the foregoing may be amended from
time to time. In addition, the term "LOAN PAPERS," as used in Article XIII
hereof, shall also include the Bond Documents.
1.3 AMENDMENT TO HEDGE TRANSACTIONS COVENANT. Section 10.11 of the Credit
Agreement shall be amended to read in full as follows:
"SECTION 10.11 HEDGE TRANSACTIONS.
(a) Borrower will not, nor will Borrower permit any other Credit Party
to, hedge (which hedges shall not have a tenor of greater than four (4)
years) more than the following percentages of its "forecasted production
from Proved Mineral Interests" (as defined below) during any applicable
calendar year (a "MEASUREMENT PERIOD"), as measured from the current date
(a "MEASUREMENT date"):
Calendar Year Hedged Percentage Limitation
-------------------- ---------------------
(relative to measurement date)
Oil Gas
--- ---
Current Year 85% 85%
First Subsequent Year 70% 70%
Second Subsequent Year 55% 55%
Third Subsequent Year 40% 40%
provided, that, and notwithstanding anything to the contrary contained
herewith, with respect to, but only with respect to, the last two (2)
Fiscal Quarters of the Fiscal Year ending December 31, 2003, the percentage
limitation with respect to oil shall be deemed to be 90%; provided,
further, that, if any measurement date occurs in the final two Fiscal
Quarters of any measurement period, for the purpose of determining the
appropriate percentage limitation from the table above (which determination
shall be made without giving effect to the first proviso above [i.e. the
current year percentage limitation for oil shall be deemed to be 85%]), the
limitations of the current year
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shall apply to both the remaining portion of that current year and the
entire subsequent year, and the limitations of the first subsequent year
shall apply to the second subsequent year, and so forth (as an example
only, and for the avoidance of doubt, for any measurement date occurring
during the first two Fiscal Quarters of 2003, an Oil and Gas Hedge
Transaction for 2004 would have a 70% limitation; provided, however, for
any measurement date occurring during the last two Fiscal Quarters of 2003,
an Oil and Gas Hedge Transaction for 2004 would have an 85% limitation);
provided, further, that, Borrower may enter into Hedge Transactions
consisting solely of a floor price (i.e. floor, put or option) so long as
the amount of Hydrocarbons which are the subject of any such Hedge
Transaction in existence at any such time do not exceed one-hundred percent
(100%) of Borrower's anticipated production from Proved Mineral Interests
during the term of any such existing Hedge Transaction; and
(b) Borrower will not permit its (i) production of oil during any
Fiscal Quarter to be less than the aggregate amount of oil which is the
subject of Oil and Gas Hedge Transactions during such Fiscal Quarter, or
(ii) production of gas during any Fiscal Quarter to be less than the
aggregate amount of gas which is the subject of Oil and Gas Hedge
Transactions during such Fiscal Quarter.
As used in Section 10.11(a) above, "forecasted production from Proved
Mineral Interests" shall mean the forecasted production for oil and gas, each
taken individually, for the applicable calendar year as reflected in the most
recent Reserve Report delivered to Administrative Agent pursuant to Section 5.1
hereof, after giving effect to any pro forma adjustments for the consummation of
any "material acquisitions or dispositions" between the effective date of such
Reserve Report and the measurement date. "Material acquisitions or dispositions"
means any acquisition or disposition of any asset with a Recognized Value in
excess of $10,000,000, or any cumulative total of all immaterial acquisitions or
dispositions which in the aggregate have a Recognized Value in excess of
$10,000,000."
SECTION 2. SPECIFIED DEFAULT; LIMITED WAIVER. Borrower has failed to comply with
the provisions set forth in Section 10.11 of the Credit Agreement prohibiting
Borrower from hedging more than 85% of its anticipated production with respect
to oil for the Fiscal Year ending December 31, 2003 (the "SPECIFIED Default"),
which Specified Default constitutes an Event of Default under the Credit
Agreement. In reliance on the representations, warranties, covenants and
agreements contained in this Second Amendment, and subject to the satisfaction
of the conditions precedent set forth in Section 3 hereof, Banks hereby waive
the Specified Default; provided, that, such waiver is expressly limited as
follows: (i) such waiver is limited solely to the non-compliance by Borrower
with the provisions of Section 10.11 of the Credit Agreement prior to the
Effective Date, and (ii) such waiver is a limited, one-time waiver, and nothing
contained herein shall obligate Banks to grant any additional or future waiver
with respect to, or in connection with, any provision of any Loan Paper.
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SECTION 3. CONDITIONS PRECEDENT TO AMENDMENTS. The amendments contained in
Section 1 hereof and the limited waiver contained in Section 2 hereof are
subject to the satisfaction of each of the following conditions precedent:
3.1 NO DEFAULT. Other than the Specified Default, no Default or Event of
Default shall have occurred which
is continuing.
3.2 OTHER DOCUMENTS. Administrative Agent shall have been provided with
such other documents, instruments and agreements, and Borrower shall have taken
such actions, as Administrative Agent may reasonably require in connection with
this Second Amendment and the transactions contemplated hereby.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BORROWER. To induce Banks and
Administrative Agent to enter into this Second Amendment, Borrower hereby
represents and warrants to Banks and Administrative Agent as follows:
4.1 REAFFIRM 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 and the waiver set
forth in Section 2 hereof.
4.2 DUE AUTHORIZATION; NO CONFLICT. The execution, delivery and performance
by Borrower of this Second Amendment are within Borrower's corporate powers,
have been duly authorized by all necessary action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
violate or constitute a default under any 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.
4.3 VALIDITY AND ENFORCEABILITY. 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.
4.4 NO DEFAULT OR EVENT OF DEFAULT. Other than the Specified Default, no
Default or Event of Default has occurred which is continuing.
4.5 ACKNOWLEDGMENT OF SPECIFIED DEFAULT. Borrower acknowledges that the
Specified Default has occurred and is continuing, and that Borrower has no
defense thereto or any other defense to (i) Borrower's obligation to pay the
Obligations when due, or (ii) the validity, enforceability or binding effect
against Borrower or any other Credit Party of the Credit Agreement or any of the
other Loan Papers (to the extent a party thereto) or any Liens intended to be
created thereby.
4.6 INACTION BY ADMINISTRATIVE AGENT OR BANKS. No failure or delay on the
part of Administrative Agent or Banks to exercise any right or remedy under the
Credit Agreement, any other Loan Paper or applicable law shall operate as a
waiver thereof, nor shall any single
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or partial exercise of any right or remedy preclude any other or further
exercise of any right or remedy, all of which are cumulative and may be
exercised without notice except to the extent notice is expressly required (and
has not been waived) under the Credit Agreement, the other Loan Papers and
applicable law.
SECTION 5. MISCELLANEOUS.
5.1 REAFFIRMATION OF LOAN PAPERS. 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. The amendments contemplated
hereby shall not limit or impair any Liens securing the Obligations, each of
which are hereby ratified, affirmed and extended to secure the Obligations as
they may be increased pursuant hereto.
5.2 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.
5.3 LEGAL EXPENSES. Borrower hereby agrees to pay on demand all reasonable
fees and expenses of counsel to Administrative Agent incurred by Administrative
Agent in connection with the preparation, negotiation and execution of this
Second Amendment and all related documents.
5.4 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 Borrower and Required Banks have
executed a counterpart. Facsimiles shall be effective as originals.
5.5 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 OR AMONG THE PARTIES.
5.6 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.
5.7 EFFECTIVENESS. This Second Amendment shall be effective automatically
and without necessity of any further action by Borrower, Administrative Agent or
Banks when counterparts hereof have been executed by Borrower and Required
Banks, and all conditions to the effectiveness hereof set forth herein have been
satisfied.
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.
[Signature Pages to Follow]
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SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
[Signature Page]
BORROWER:
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DENBURY RESOURCES INC.,
a Delaware corporation
By:
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Phil Rykhoek,
Senior Vice President and
Chief Financial Officer
[Signature Page]
SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
ADMINISTRATIVE AGENT:
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BANK ONE, NA, as Administrative Agent
By:
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Name:
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Title:
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BANKS:
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BANK ONE, NA
By:
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Name:
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Title:
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[Signature Page]
SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
FORTIS CAPITAL CORP.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
CREDIT LYONNAIS NEW YORK BRANCH
By:
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Name:
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Title:
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[Signature Page]
SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
COMERICA BANK - TEXAS
By:
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Name:
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Title:
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[Signature Page]
SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
WELLS FARGO BANK TEXAS, N.A.
By:
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Name:
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Title:
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SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
FLEET NATIONAL BANK
By:
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Name:
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Title:
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[Signature Page]
SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
BANK OF SCOTLAND
By:
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Name:
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Title:
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SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
BANK OF AMERICA, N.A.
By:
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Name:
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Title:
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[Signature Page]
SIGNATURE PAGE TO
SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
COMPASS BANK
By:
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Name:
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Title:
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[Signature Page]