EXHIBIT 10(b)
FIFTH AMENDMENT TO FIRST
RESTATED CREDIT AGREEMENT
FIFTH AMENDMENT TO FIRST RESTATED CREDIT AGREEMENT
This Fifth Amendment to First Restated Credit Agreement (this "Fifth
Amendment") is entered into as of the 21st day of April, 1999 (the "Effective
Date"), by and among Denbury Resources, Inc. ("DRI"), a corporation previously
incorporated under the Canadian Business Corporation Act which has been
domesticated in the State of Delaware and which is the successor by merger to
Denbury Management, Inc. ("Management"), a Texas corporation, NationsBank, N.A.,
successor by merger to NationsBank of Texas, N.A., as Administrative Agent
("Agent"), and the financial institutions parties hereto as Banks ("Banks").
W I T N E S S E T H:
WHEREAS, Management, DRI, Agent and Banks are parties to that certain First
Restated Credit Agreement dated as of December 29, 1997, as amended by (a) that
certain First Amendment to First Restated Credit Agreement dated as of January
27, 1998, (b) that certain Second Amendment to First Restated Credit Agreement
dated as of February 25, 1998, (c) that certain Third Amendment to First
Restated Credit Agreement dated as of August 10, 1998, and (d) that certain
Fourth Amendment to First Restated Credit Agreement dated February 19, 1999 (as
amended, "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 Management; and
WHEREAS, DRI was formerly incorporated under the Canadian Business
Corporation Act and was domesticated in the State of Delaware; and
WHEREAS, Management merged with and into DRI with DRI being the surviving
corporation (such merger is referred to herein as the "Merger"); and
WHEREAS, as a result of the Merger, DRI assumed and is primarily liable for
all of the debts, obligations and liabilities of Management under the Credit
Agreement and the other Loan Papers and DRI became the "Borrower" under and as
defined in the Credit Agreement and the other Loan Papers; and
WHEREAS, the parties desire to (a) evidence in writing the assumption by
DRI of the debts, obligations and liabilities of Management under the Credit
Agreement and the other Loan Papers, and (b) make certain conforming amendments
to the Credit Agreement.
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, DRI,
Agent and each Bank hereby agree as follows:
Section 1. Assumption. DRI acknowledges and agrees that as a result of the
Merger DRI has assumed and is directly and primarily liable for the due and
punctual payment and performance in full of the Obligations. DRI represents and
warrants that it has no counterclaim, right of set off or other defense to
payment or performance of such Obligations.
Section 2. Amendments. The Credit Agreement is hereby amended effective as
of the Effective Date in the manner provided in this Section 2.
2.1 Additional Definitions. Section 1.1 of the Credit Agreement is
amended to add thereto in alphabetical order the definitions of "Merger" and
"Fifth Amendment" which shall read in full as follows:
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"Merger" means the merger of Denbury Management, Inc. into Borrower,
in each case with Borrower being the surviving corporation.
"Fifth Amendment" means that certain Fifth Amendment to First Restated
Credit Agreement dated as of April 21, 1999 among Borrower, Administrative
Agent and Banks.
2.2 Amendment to Definitions. The definitions of "Administrative Agent,"
"Borrower," "Consolidated Current Assets," "Consolidated Current Liabilities,"
"Credit Parties," "GAAP," "Loan Papers," "Parent," and "Required Consolidated
Tangible Net Worth" set forth in Section 1.1 of the Credit Agreement are amended
to read in full as follows:
"Administrative Agent" means NationsBank, N.A., successor by merger to
NationsBank of Texas, N.A., in its capacity as Administrative Agent for
Banks hereunder or any successor thereto.
"Borrower" means Denbury Resources, Inc., a corporation previously
incorporated under the Canadian Business Corporation Act and which was
domesticated in the State of Delaware, and which is the successor by merger
to Denbury Management, Inc., a Texas corporation.
"Consolidated Current Assets" means, for any Person at any time, the
current assets of such Person and its Consolidated Subsidiaries at such
time, plus, in the case of Borrower, the Availability at such time.
"Consolidated Current Liabilities" means, for any Person at any time,
the current liabilities of such Person and its Consolidated Subsidiaries at
such time, but, in the case of Borrower, excluding the current portion (if
any) of the outstanding principal balance of the Revolving Loan.
"Credit Parties" means Borrower and any Subsidiary or Affiliate of
Borrower which Required Banks and Borrower may hereafter jointly designate
in writing as a "Credit Party" for purposes of this Agreement. Unless and
until any such designation is made, "Credit Party" and "Credit Parties"
shall refer only to Borrower.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Securities and Exchange
Commission, the American Institute of Certified Public Accountants acting
through its Accounting Principles Board or by the Financial Accounting
Standards Board or through other appropriate boards or committees thereof
and which are consistently applied for all periods after the date hereof so
as to properly reflect the financial condition, and the results of
operations and changes in financial position, of Borrower and its
Consolidated Subsidiaries, except that any accounting principle or practice
required to be changed by the said Accounting Principles Board or Financial
Accounting Standards Board (or other appropriate board or committee
thereof) in order to continue as a generally accepted accounting principle
or practice may be so changed.
"Loan Papers" means this Agreement, the Notes, the Existing Mortgages
(as amended by the Amendment to Mortgages), the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment,
and each Security Document now or at any time hereafter delivered pursuant
to Section 5.2, and all other certificates, documents or instruments
delivered in connection with this Agreement, as the foregoing may be
modified, amended, renewed, extended or restated from time to time.
"Parent" means Denbury Resources, Inc., a corporation previously
incorporated under the Canadian Business Corporations Act, which, prior to
the Merger, was the owner and holder of one hundred percent (100%) of the
issued and outstanding capital stock of Denbury Management, Inc., a Texas
corporation.
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"Required Consolidated Tangible Net Worth" means, (a) as of June 30,
1999, the sum of (i) Parent's Consolidated Tangible Net Worth as of
December 31, 1998 plus (ii) an amount equal to sixty percent (60%) of the
Net Cash Proceeds received by Parent or Borrower from any issuance by
Parent or Borrower of its equity securities after January 1, 1999 and on or
prior to June 30, 1999 (including pursuant to the Proposed Equity
Contribution) (the sum of (i) and (ii) preceding is referred to herein as
the "June 30, 1999 Required Net Worth"), and (b) from and after (but
excluding), June 30, 1999, "Required Consolidated Tangible Net Worth" shall
increase (but not decrease) above the Required Consolidated Tangible Net
Worth previously in effect pursuant to this definition (i) on each
Quarterly Date by an amount equal to fifty percent (50%) of Borrower's
Consolidated Net Income for the Fiscal Quarter then ended, and (ii) on the
date of issuance by Borrower of its equity securities by amount equal to
fifty percent (50%) of the net proceeds received by Borrower from the
issuance of such securities. Notwithstanding anything to the contrary
contained herein, in no event will Required Consolidated Tangible Net Worth
be less than $25,000,000.
2.3 Deletion of Definitions. Section 1.1 of the Credit Agreement shall
be amended to delete therefrom in their entirety the definitions of "Facility
Guaranty", and "Parent Pledge Agreement."
2.4 Amendments to Certain Interpretive Provisions. Section 1.2 of the
Credit Agreement shall be amended to read in full as follows:
"SECTION 1.2. Accounting Terms and Definitions. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be expressed in U.S. Dollars and shall be prepared
in accordance with GAAP, applied on a basis consistent with the most recent
audited consolidated financial statements of Borrower and its Consolidated
Subsidiaries delivered to Banks except for changes concurred in by Borrower's
independent certified public accountants and which are disclosed to
Administrative Agent on the next date on which financial statements are required
to be delivered to Banks pursuant to Sections 8.1(a) or (b); provided that,
unless Required Banks shall otherwise agree in writing, no such change shall
modify or affect the manner in which compliance with the covenants contained in
Article X are computed such that all such computations shall be conducted
utilizing financial information presented consistently with prior periods."
2.5 Amendment to Collateral and Guarantee Requirements. Article V of the
Credit Agreement is amended to read in full as follows:
ARTICLE V
COLLATERAL AND GUARANTEES
SECTION 5.1. Required Security. The Obligations shall be secured by first
priority perfected Liens on such Proved Mineral Interests owned by Borrower as
Administrative Agent shall require but which shall, in all events, include
Proved Mineral Interests with a Recognized Value representing not less than
eighty five percent (85%) of the Recognized Value of all Proved Mineral
Interests evaluated by Banks for purposes of determining the Borrowing Base;
provided, that, from and after the occurrence of a Borrowing Base Deficiency, a
Default or an Event of Default, the Obligations shall be secured by first
priority perfected Liens on one hundred percent (100%) of all Mineral Interests
owned by Borrower.
SECTION 5.2. Security Documents. Not later than March 1, 1999 and
thereafter simultaneously with any Redetermination or the occurrence of any
Default or Event of Default, and at such other times as Administrative Agent or
Required Banks shall request, Borrower shall execute and deliver to
Administrative Agent such deeds of trust, mortgages, security agreements,
assignments, financing statements, pledge agreements, collateral assignments and
other documents, instruments and agreements (including, without limitation, any
modifications,
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amendments, supplements, restatements, renewals or extensions of any of the
foregoing) as Administrative Agent shall request to fully create, evidence and
perfect the liens and security interests required by Section 5.1 (collectively,
the "Security Documents").
SECTION 5.3. Evidence of Existence, Authority, Proper Execution and
Delivery and Title; Opinions. At any time Borrower is required to execute and
deliver Security Documents pursuant to Section 5.2, Borrower shall also deliver
to Administrative Agent and its counsel (a) such certificates of Authorized
Officers of Borrower, certificates of Governmental Authorities, resolutions of
the Boards of Directors of Borrower, certified copies of the charter and bylaws
of Borrower and other documents, instruments and agreements as Administrative
Agent shall require to evidence (i) the valid corporate existence and authority
to transact business of Borrower, and (ii) the due authorization, execution and
delivery of the Security Documents by Borrower, (b) opinions of counsel
(addressed to Administrative Agent) or other evidence of title as Administrative
Agent shall require to verify Borrower's title to all Proved Mineral Interests
subject to the Liens of such Security Documents and the priority of such Liens,
and (c) opinions of counsel addressed to Administrative Agent favorably opining
as to the due authorization, execution, delivery and enforceability of such
Security Documents and such other matters related to Borrower or such Security
Documents as Administrative Agent shall require.
2.6 Financial Representation and Warranty. Section 7.5 of the Credit
Agreement is amended to delete the words "Parent" and "Parent's" each time such
words appear therein and substitute in lieu thereof the words "Borrower" and
"Borrower's."
2.7 Organization Structure; Nature of Business Representation and
Warranty. Section 7.14 of the Credit Agreement is amended to delete the first
two (2) sentences thereof in their entirety.
2.8 Fiscal Year Representation and Warranty. Section 7.17 of the Credit
Agreement is amended to delete the word "Parent's" where it appears therein, and
substitute in lieu thereof "Borrower's."
2.9 Financial Information Covenant. Section 8.1 of the Credit Agreement
is amended to delete the words "Parent" and "Parent's" each time they appear
therein and to substitute in lieu thereof the words "Borrower" and "Borrower's."
2.10 Business of the Credit Parties Covenant. Section 8.2 of the Credit
Agreement is amended to delete the first sentence thereof in its entirety.
2.11 Maintenance of Existence Covenant. Section 8.3 of the Credit
Agreement is amended to delete the phrase "Each of Parent and" which are the
first four
words of such covenant.
2.12 Title Data Representation and Warranty. Section 8.4 of the Credit
Agreement is hereby amended to read in full as follows:
"SECTION 8.4. Title Data. In addition to the title information required by
Sections 5.3 and 6.1(c) hereof, Borrower shall, upon the request of Required
Banks, cause to be delivered to Administrative Agent such title opinions and
other information regarding title to Mineral Interests owned by Borrower as are
appropriate to determine the status thereof; provided, however, that the Banks
may not require the Credit Parties to furnish title opinions (except pursuant to
Section 5.3 and 6.1(c)) unless (a) an Event of Default shall have occurred and
be continuing, or (b) the Required Banks have reason to believe that there is a
defect in or encumbrance upon Borrower's title to such Mineral Interests that is
not a Permitted Encumbrance."
2.13 Maintenance of Insurance Covenant. Section 8.6 of the Credit
Agreement is amended to delete the phrase "and
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Parent" in the third sentence thereof and delete the word "assign" in such
sentence and substitute in lieu of the word "assign" the word "assigns."
2.14 Merger Covenant. Section 9.4 of the Credit Agreement is amended to
read in full as follows:
"SECTION 9.4. Consolidations and Mergers. The Credit Parties will not, nor
will the Credit Parties permit any of their Subsidiaries to, consolidate or
merge with or into any other Person; provided, that so long as no Default exists
or will result any wholly owned Subsidiary of Borrower may merge or consolidate
with any other Person so long as a wholly owned Subsidiary of Borrower is the
surviving corporation."
2.15 Fiscal Year Covenant. Section 9.12 of the Credit Agreement is
amended to delete the word "Parent" where it appears therein and substitute in
lieu thereof, the word "Borrower."
2.16 Financial Covenants. Article X of the Credit Agreement is amended
to delete the words "Parent" and "Parent's" each time such words appear therein
and to substitute in lieu thereof, the words "Borrower" and "Borrower's."
2.17 Change of Control. Section 11.1(k) of the Credit Agreement is
amended to read in full as follows:
"(k) as of any date any Person or group (as defined in Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934) other than the Texas
Pacific Group shall become the direct or indirect beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of more
than 30% of the total voting power of all classes of capital stock then
outstanding of Borrower entitled (without regard to the occurrence of any
contingency) to vote in elections of directors of Borrower;" or
2.18 Miscellaneous Provisions. Article XIV of the Credit Agreement is
hereby amended to delete the word "Parent's" and the phrases "Parent and" and
"Parent or" each time such words and such phrases appear in such Article.
Section 3. Representations and Warranties of Borrower. To induce the Banks
and Administrative Agent to enter into this Fifth Amendment, DRI hereby
represents and warrants to Banks and Administrative Agent as follows:
3.1 Confirmation of Representations and Warranties. After giving effect
to the Amendments contained in Section 2 hereof, each representation and
warranty of Borrower contained in the Credit Agreement and the other Loan Papers
is true and correct on the date hereof.
3.2 Corporate Power; Due Authorization; No Conflicts. The execution,
delivery and performance by DRI of this Fourth Amendment are within DRI'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 DRI or any Subsidiary of
DRI or result in the creation or imposition of any Lien upon any of the assets
of DRI or any of the Subsidiaries of DRI except Permitted Encumbrances.
3.3 Validity of Binding Effect. This Fifth Amendment constitutes the
valid and binding obligations of DRI enforceable in accordance with its terms,
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor's rights generally, and (b) the
availability of equitable remedies may be limited by equitable principles of
general application.
3.4 No Defenses. DRI has no defenses to payment, counterclaim or rights
of set-off with respect to the Obligations existing on the date hereof.
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3.5 Merger . The domestication of DRI in Delaware and the Merger were
consummated (a) substantially in accordance with the descriptions thereof set
forth in that certain Consent Letter dated November 30, 1998, by and among
Denbury Management, Inc., Parent and Banks, and (b) in accordance with all
applicable Laws and the Articles or Certificate of Incorporation, bylaws and
other charter documents of DRI and Management. The domestication of DRI in
Delaware and the Merger did not, and do not, result in a breach or violation of
any material contract, agreement, indenture, mortgage or other instrument to
which DRI or Management is or was a party and did not and will not result in the
imposition of any Lien on any of the properties or assets of DRI or Management
or a default under or the acceleration of any Debt of DRI, Management; as a
result of the domestication of DRI in Delaware and the Merger, DRI has succeeded
to, and holds good and defensible title, to all assets of Management, subject to
no Liens other than Permitted Encumbrances.
Section 4. Miscellaneous.
4.1 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. DRI hereby
extends 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
adversely affect or impair the Obligations or the Liens securing payment and
performance thereof.
4.2 Parties in Interest. All of the terms and provisions of this Fifth
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.
4.3 Legal Expenses. DRI 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
Fifth Amendment and all related documents.
4.4 Counterparts. This Fifth Amendment may be executed in counterparts,
and all parties need not execute the same counterpart; however, no party shall
be bound by this Fifth Amendment until all parties have executed a counterpart.
Facsimiles shall be effective as originals.
4.5 Complete Agreement. THIS FIFTH 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.
4.6 Headings. The headings, captions and arrangements used in this Fifth
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Fifth Amendment, nor affect
the meaning thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to
be duly executed by their respective authorized officers on the date and year
first above written.
BORROWER:
DENBURY RESOURCES, INC.,
a Delaware corporation
By:_____________________________________
Gareth Roberts
President and Chief Executive
Officer
By:_____________________________________
Phil Rykhoek
Chief Financial Officer and
Secretary
ADMINISTRATIVE AGENT:
NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A.
By:_____________________________________
J. Scott Fowler
Vice President
BANKS:
NATIONSBANK, N.A., successor by merger to
NationsBank of Texas, N.A.
By:_____________________________________
J. Scott Fowler
Vice President
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BANKBOSTON, N.A.
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
BANK ONE, TEXAS, N.A.
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
CHRISTIANAIA BANK, OG KREDITKASSE ASA
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
PARIBAS
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
CREDIT LYONNAIS - NEW YORK BRANCH
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
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WELLS FARGO BANK (TEXAS), N.A.
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
NATEXIS BANQUE BFCE
By:_____________________________________
Name:_____________________________________
Title:_____________________________________
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