EXHIBIT 10
SECOND AMENDMENT TO CREDIT
AGREEMENT
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SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "Second Amendment") is
entered into as of the 15th day of October, 1997, by and among Denbury
Management, Inc. ("Borrower"), Denbury Resources, Inc., ("Resources"), Denbury
Holdings, Ltd., ("Holdings", together with Resources, the "Guarantors"),
NationsBank of Texas, N.A., as Agent ("Agent"), and NationsBank of Texas, N.A.,
Bankers Trust Company and Internationale Nederlanden (U.S.) Capital Corporation,
as Banks (the "Banks").
W I T N E S E T H
WHEREAS, Borrower, Guarantors, Agent and the Banks are parties to that
certain Credit Agreement dated as of May 31, 1996, as amended by that certain
First Amendment to Credit Agreement dated as of April 1, 1997 (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 collateral requirements and
certain covenants in 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 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, 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, the Credit
Agreement shall be amended effective October 15, 1997 (the "Effective
Date") in the manner provided in this Section 1.
1.1. Additional Definitions. Section 1.1 of the Credit Agreement shall be
amended to add the definitions of "First Amendment", "Second Amendment" and
"Unproved Reserves" as follows:
"First Amendment" means that certain First Amendment to Credit Agreement
dated as of April 1, 1997 among Borrower, Guarantors, Agent and Banks.
"Second Amendment" means that certain Second Amendment to Credit
Agreement dated as o October 15, 1997 among Borrower, Guarantors, Agent
and Banks.
"Unproved Reserves" means Mineral Interests which do not constitute
Proved Mineral Interests.
1.2 Amendment to Definition. The definition of "Loan Papers" in Section 1.1
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, the Facility Guarantees, the Parent Pledge
Agreement, the Holdings Pledge Agreement, the Borrower Pledge Agreement,
the Assignment and Amendment to Mortgages, all Mortgages now or at any
time hereafter delivered pursuant to Section 5.1, and all other
certificates, documents or instruments delivered in connection with this
Agreement, as the foregoing may be amended from time to time.
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1.3 Security. Section 5.1 of the Credit Agreement shall be amended to read
in full as follows:
SECTION 5.1 Security. The Obligations shall be secured by (a) those
Mortgages granted by Borrower in favor of Agent as of the date of the
Second Amendment which Mortgages create first and prior Liens (subject only
to Permitted Encumbrances) covering and encumbering the Mineral Interests
described therein, and (b) one hundred percent (100%) of the issued and
outstanding capital stock of every class of Holdings and Borrower.
1.4 Asset Disposition. Section 9.5 of the Credit Agreement shall be amended
to add the following subsection (c) to the end of the first sentence of
such Section:
", and (c) the sale, lease, transfer, abandonment or the disposition of
Unproved Reserves."
Section 2. Representations and Warranties of Borrower. To induce the Banks
and Agent to enter into this First Amendment, Borrower and Guarantors
hereby represent and warrant to Agent as follows:
(a) Each representation and warranty of Borrower and Guarantors
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.
(b) The execution, delivery and performance by Borrower and Guarantors
of this Second Amendment are within the Borrower's and each Guarantor'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, the Subsidiaries of Borrower or the Guarantors or result in
the creation or imposition of any Lien upon any of the assets of
Borrower or the Subsidiaries of Borrower or the Guarantors except
Permitted Encumbrances.
(c) This Second Amendment constitutes the valid and binding obligations
of Borrower and the Guarantors 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.
(d) Borrower and Guarantors have no defenses to payment, counterclaim or
rights of set-off with respect to the Obligations existing on the date
hereof.
Section 3.Miscellaneous.
3.1 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 and Guarantors hereby extend the Liens securing the Obligations
until the Obligations have been paid in full or are specifically released
by Agent and Banks prior thereto, and agree that the amendments and
modifications herein contained shall in no manner affect or impair the
Obligations or the Liens securing payment and performance thereof.
Notwithstanding the foregoing, each Bank hereby authorizes Agent to release
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the Mineral Interests held by Borrower in the Lirette Field from the Liens
securing the Obligations solely to the extent of depths below 11,600 feet
in connection with the disposition by Borrower of certain Unproved Reserves
held by Borrower in such field (each Bank acknowledges that, in addition to
such Unproved Reserves, the Mineral Interests released will include certain
Proved Mineral Interests).
3.2 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.
3.3 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 Second Amendment and all
related documents.
3.4 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 all parties have executed a
counterpart. Facsimiles shall be effective as originals.
3.5 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
THE PARTIES.
3.6 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.
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.
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BORROWER:
DENBURY MANAGEMENT, INC.,
a Texas corporation
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
GUARANTORS:
DENBURY HOLDINGS, LTD.,
a corporation incorporated under
the Business Corporations Act
(Alberta)
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
DENBURY RESOURCES, INC.,
a corporation incorporated under
the Canada Business Corporations
Act
By:_______________________________________
Name:_____________________________________
Title:____________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
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AGENT:
NATIONSBANK OF TEXAS, N.A.
By:_______________________________________
J. Scott Fowler
Vice President
BANKS:
NATIONSBANK OF TEXAS, N.A.
By:_______________________________________
J. Scott Fowler
Vice President
BANKERS TRUST COMPANY
By:_______________________________________
Name:_____________________________________
Title:____________________________________
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By:_______________________________________
Name:_____________________________________
Title:____________________________________
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