SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
This Second Amendment ("Second Amendment") to Fourth Amended and Restated
Credit Agreement dated as of March 28, 2002, as amended by the First Amendment
to Fourth Amended and Restated Credit Agreement dated as of June 12, 2003 (the
"Credit Agreement"), originally by and among CONTINENTAL RESOURCES, INC., an
Oklahoma corporation (the "Borrower"), UNION BANK OF CALIFORNIA, N.A., as LC
Issuer, Bank, Lead Arranger, Fronting Bank and Administrative Agent (in such
latter capacity and together with its successors and permitted assigns in such
capacity the "Administrative Agent"), GUARANTY BANK, FSB, as Co-Arranger, Bank
and Collateral/Documentation Agent (in such latter capacity and together with
its successors and permitted assigns in such capacity the "Collateral Agent"),
FORTIS CAPITAL CORP., as Co-Arranger, Bank and Syndication Agent (in such latter
capacity and together with its successors and permitted assigns in such capacity
the "Syndication Agent"), and the several banks and financial institutions from
time to time parties to the Credit Agreement (the "Banks") is entered into this
22nd day of October 2003.
W I T N E S S E T H:
WHEREAS, in consideration of Borrower reducing the outstanding balance
under the Credit Agreement by the sum of $17,000,000.00, which sum is being made
available to Borrower by a distribution from its subsidiary, Continental Gas,
Inc. (herein sometimes called "CGI"), the Banks are willing to (i) assign to the
lenders (or their agent) who are entering into a credit facility with CGI, under
which CGI will obtain the funds used to make the aforesaid distribution from CGI
to Borrower (hereinafter called the "CGI Credit Agreement"), all of the liens
and security interests heretofore granted by CGI to Collateral Agent covering
the Borrowing Base Oil & Gas Properties owned by CGI and (ii) release CGI from
the Guaranty that it executed on March 28, 2003 in connection with the Credit
Agreement; and
WHEREAS, Borrower and the Bank Parties desire to amend the Credit Agreement
as set forth herein;
NOW, THEREFORE, in consideration of the premises and for Ten Dollars
($10.00) and other good and valuable consideration received by each party
hereto, and each intending to be legally bound hereby, the parties agree as
follows:
I. Amendments to Credit Agreement.
Article I, DEFINITIONS, of the Credit Agreement is hereby amended by adding
thereto the following defined terms:
"CGI" means Continental Gas, Inc., an Oklahoma corporation.
"CGI Credit Agreement" has the meaning prescribed for such term in the
Second Amendment.
"consolidated" and "consolidating," as used throughout this Agreement in
reference to balance sheets, Financial Statements, GAAP, and/or within
other defined terms and covenants relating to Borrower and/or the
Guarantors shall be deemed in every case to exclude any and all information
relating to Continental Gas, Inc.
"Second Amendment" means the Second Amendment to Credit Agreement dated
October 22, 2003 among Bank Parties and Borrower.
Article I, DEFINITIONS, of the Credit Agreement is hereby further amended
by revising the definition of "Guarantor(s)" to read as follows:
"Guarantor(s)" means, individually and collectively, Continental Resources
of Illinois, Inc., Continental Crude Co. and all other Subsidiaries of
Borrower, except and excluding Continental Gas, Inc.
Section 2.06, Borrowing Base Determination, is hereby amended by adding the
following sentence immediately after the second sentence of such section:
"The Borrowing Base in effect as of the date of the Second Amendment is One
Hundred Forty Five Million Dollars ($145,000,000.00)."
Section 4.01, Existence, is hereby amended by revising the final clause in
next to the last sentence of such section to read as follows:
"and Borrower has no Subsidiaries other than Guarantors and Continental
Gas, Inc."
Section 5.35, Required Hedging Transaction, as added to the Agreement by
the First Amendment, is hereby amended to substitute "50%" in place of "30%" in
such Section.
Article VI, NEGATIVE COVENANTS, is hereby amended by adding thereto the
following new Section 6.20:
6.20 Amendment, Termination or Waiver of Contracts with CGI. (a) Terminate
or allow any contract with CGI to be terminated prior to the scheduled
expiration of its stated term; or (b) waive noncompliance with the material
terms of any material contract with CGI, or amend in any material respect
any material contract with CGI, if after giving effect to the amendment,
the terms of the amended contract would be less favorable to Borrower than
prior to such amendment.
Section 7.01, Enumeration of Events of Default, is hereby amended by
relabeling subsections (i) and (j) thereof to become subsections (j) and (k),
and by inserting the following new subsection (i):
"(i) Default shall be made by CGI under the CGI Credit Agreement at a time
when CGI continues to be a Subsidiary of Borrower, or a default shall be
made by CGI with respect to its guaranty of the Senior Subordinated Notes,
and any such default shall remain unremedied for in excess of the period of
grace, if any, with respect thereto."
The Guarantor's signature page to the Credit Agreement is hereby amended by
deleting the signature block for Continental Gas, Inc.
Exhibit A attached to the Credit Agreement is hereby amended by deleting
all Borrowing Base Oil and Gas Properties pledged by Continental Gas, Inc.
All Schedules to the Credit Agreement are hereby amended by deleting all
information relating to Continental Gas, Inc.
II. Conditions Precedent in Connection with the Second Amendment. The
Second Amendment shall not be binding on the Banks until satisfaction of the
following conditions precedent:
A. Administrative Agent shall have received fully executed counterparts, in
the number of multiple originals requested by Administrative Agent, of the
Second Amendment, duly executed by an authorized officer for Borrower.
B. Borrower (or Continental Gas, Inc. on behalf of Borrower) shall have
paid to the Administrative Agent for credit to the Banks the sum of
$17,000,000.00 to reduce the outstanding balance of the Loan.
C. Borrower shall have paid to Administrative Agent, for subsequent credit
to the Banks in accordance with the further provisions hereof, the cash sum
of $90,000.00 as partial consideration for this Second Amendment including,
without limitation, for the release of Continental Gas, Inc., as a
Guarantor; and promptly following receipt of such payment Administrative
Agent shall pay to each Bank $15,000.00 out of such $90,000.00 sum.
D. The representations and warranties contained in Article IV of the Credit
Agreement shall be true and correct in all material respects on the date of
the Second Amendment with the same effect as though such representations
and warranties had been made on such date; and no Event of Default shall
have occurred and be continuing or will have occurred upon the execution of
the Second Amendment.
E. All legal matters incident to the consummation of the transactions
contemplated by the Second Amendment shall be satisfactory to special
counsel for the Banks.
F. All reasonable and documented legal fees owed by the Banks to Porter &
Hedges, L.L.P. in connection with the Second Amendment shall have been paid
by Borrower.
III. Obligations of the Collateral Agent and the Banks. Contemporaneously
with this Second Amendment becoming effective, the Bank Parties agree that they
shall perform or cause to be performed each of the following covenants:
A. The Guaranty heretofore executed by Continental Gas, Inc. shall be
terminated in writing and Continental Gas, Inc. shall be released from all
of its obligations and liabilities under such Guaranty.
B. Collateral Agent shall execute and deliver to the Administrative Agent
designated in the CGI Credit Agreement (the "CGI Administrative Agent"), an
Assignment of Liens in form and substance mutually satisfactory to the
Collateral Agent and the CGI Administrative Agent transferring to the CGI
Administrative Agent all liens and security interests arising under and
pursuant to the Security Instruments heretofore executed by CGI to secure
the Obligations of Borrower under the Credit Agreement.
IV. Certain Waivers. The Bank Parties hereby grant a one-time waiver of
Borrower's failure to be in compliance with the Current Ratio covenant set forth
in Section 6.15 of the Credit Agreement for the quarter ended September 30,
2003. This one-time waiver is not intended to establish any course of dealing
between the Bank Parties and Borrower, or to indicate any intention or agreement
to grant future waivers of any non-compliance by Borrower with any of the terms
of the Credit Agreement. Any future waivers must be in writing and signed by the
Bank Parties, and any alleged waiver that is not in writing and signed by the
Bank Parties shall be subject to the provisions of Section 9.07 of the Credit
Agreement.
V. Reaffirmation of Representations and Warranties. To induce the Banks to
enter into this Second Amendment, the Borrower hereby reaffirms, as of the date
hereof, its representations and warranties contained in Article IV 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 Second Amendment and the performance
by the Borrower of its obligations under this Second Amendment are within
the Borrower's power, have been duly authorized by all necessary corporate
action, 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 the charter or by-laws of the Borrower or of any
agreement binding upon the Borrower.
B. The Credit Agreement as amended by this Second 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.
D. Since the date of the Agreement, Borrower has not formed or created any
new Subsidiaries.
VI. Defined Terms. Except as amended hereby, terms used herein that are
defined in the Credit Agreement shall have the same meanings herein.
VII. Reaffirmation of Credit Agreement. This Second Amendment shall be
deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as
further 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.
VIII. Entire Agreement. The Credit Agreement, as hereby amended, embodies
the entire agreement between the Borrower 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 in the other documents previously executed or executed of
even date herewith.
IX. Governing Law. THIS SECOND 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 Second Amendment has been entered into in Harris
County, Texas, and it shall be performable for all purposes in Harris County,
Texas. Courts within the State of Texas shall have jurisdiction over any and all
disputes between the Borrower and the Banks, whether in law or equity,
including, but not limited to, any and all disputes arising out of or relating
to this Second Amendment or any other Security Instrument; and venue in any such
dispute whether in federal or state court shall be laid in Harris County, Texas.
X. Severability. Whenever possible each provision of this Second Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Second 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
Second Amendment.
XI. Execution in Counterparts. This Second 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.
XII. Section Captions. Section captions used in this Second Amendment are
for convenience of reference only, and shall not affect the construction of this
Second Amendment.
XIII. Successors and Assigns. This Second Amendment shall be binding upon
the Borrower and the Banks and their respective successors and assigns, and
shall inure to the benefit of the Borrower and the Banks, and the respective
successors and assigns of the Banks.
XIV. Non-Application of Chapter 346 of Texas Finance Codes. In no event
shall Chapter 346 of the Texas Finance Code (which regulates certain revolving
loan accounts and revolving tri-party accounts) apply to this Credit Agreement
as hereby further amended or any other Loan Documents or the transactions
contemplated hereby.
XV. Notice. THIS SECOND AMENDMENT TOGETHER WITH THE LOAN AGREEMENT, AND THE
OTHER SECURITY INSTRUMENTS 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 WRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed as of the day and year first above written.
BORROWER:
CONTINENTAL RESOURCES, INC.
By: ROGER CLEMENT
Roger Clement
Senior Vice President and Chief
Financial Officer
ADMINISTRATIVE AGENT, LEAD ARRANGER,
LC ISSUER, FRONTING BANK AND BANK:
UNION BANK OF CALIFORNIA, N.A.
By: RANDALL OSTERBERG
Randall Osterberg,
Senior Vice President
By: JOHN CLARK
John Clark,
Vice President
COLLATERAL/DOCUMENTATION
AGENT, CO-ARRANGER AND BANK:
GUARANTY BANK, FSB
By: RICHARD MENCHACA
Richard Menchaca,
Vice President
SYNDICATION AGENT, CO-ARRANGER AND BANK:
FORTIS CAPITAL CORP.
By: DARRELL W. HOLLEY
Darrell W. Holley,
Managing Director
By: CHRISTOPHER S. PARADA
Christopher S. Parada,
Vice President
BANKS:
COMPASS BANK
By: KATHLEEN J. BOWEN
Kathleen J. Bowen
Vice President
WELLS FARGO BANK TEXAS, N.A.
By: DUSTIN S. HANSEN
Dustin S. Hansen
Assistant Vice President
COMERICA BANK
By: PETER L. SEFZIK
Peter L. Sefzik
Assistant Vice President