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EXHIBIT 10.18
FIRST AMENDMENT
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
Among
QUEEN SAND RESOURCES, INC.,
a Delaware corporation,
as Guarantor,
QUEEN SAND RESOURCES, INC.,
a Nevada corporation
as Borrower,
BANK OF MONTREAL,
as Agent,
and
The Lenders Signatory Hereto
Effective as of July 1, 1998
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FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "First Amendment") executed effective as of the 1st of July, 1998 (the
"Effective Date") is among QUEEN SAND RESOURCES, INC., a Delaware corporation
("QSRD"), QUEEN SAND RESOURCES, INC., a corporation formed under the laws of the
State of Nevada (the "Borrower"); NORTHLAND OPERATING CO., a Nevada corporation
("Northland"), CORRIDA RESOURCES, INC., a Nevada corporation ("Corrida"), each
of the lenders that is a signatory hereto or which becomes a signatory hereto as
provided in Section 12.06 (individually, together with its successors and
assigns, a "Lender" and, collectively, the "Lenders"); and BANK OF MONTREAL, as
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Agent").
RECITALS
A. QSRD, the Borrower, the Agent and the Lenders are parties to that
certain Amended and Restated Credit Agreement dated as of April 17, 1998 (the
"Credit Agreement"), pursuant to which the Lenders have made certain credit
available to and on behalf of the Borrower.
B. The Borrower has requested and the Agent and the Lenders have agreed
to amend certain provisions of the Credit Agreement.
C. NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms. All capitalized terms which are defined in
the Credit Agreement, but which are not defined in this First Amendment, shall
have the same meanings as defined in the Credit Agreement. Unless otherwise
indicated, all section references in this First Amendment refer to the Credit
Agreement.
Section 2. Amendments to Credit Agreement.
2.1 Amendments to Section 1.01.
(a) The definitions of "Agreement" and "Revolving Credit Termination
Date" are hereby amended to read as follows:
"Agreement" shall mean this Credit Agreement, as amended by
the First Amendment and as further amended from time to time.
"Revolving Credit Termination Date" shall mean, unless the
Commitments are sooner terminated pursuant to Sections 2.03(b) or 10.02
hereof, April 16, 1999.
(b) The following definitions are hereby added where alphabetically
appropriate:
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"First Amendment" shall mean that certain First Amendment to
Amended and Restated Credit Agreement dated as of July 1, 1998 among
the Obligors, the Agent and the Lenders.
"First Amendment Effective Date" shall mean the "Effective
Date" as such term is defined in the First Amendment.
"Senior Indenture" shall mean the Indenture, dated as of the
First Amendment Effective Date, among QSRD, as issuer, the Borrower,
Northland and Corrida, as initial subsidiary guarantors, and Harris
Trust & Savings Bank, as trustee, pursuant to which the Senior Notes,
if any, are to be issued with terms substantially similar to those
contained in the Senior Note Offering Memorandum.
"Senior Indenture Indebtedness" shall mean the Senior Notes,
the guarantees thereof and any other Indebtedness of any Obligor under
the Senior Indenture, together with any refinancings thereof permitted
by the terms of Section 9.22(a).
"Senior Note Documents" shall mean the collective reference to
the Senior Notes, the Senior Indenture, the Senior Note Offering
Memorandum and each agreement, instrument and document delivered in
connection therewith or relating thereto.
"Senior Note Offering Memorandum" shall mean the Offering
Memorandum, dated June 30, 1998, related to the issuance of the Senior
Notes, as amended or supplemented from time to time.
"Senior Notes" shall mean the 12-1/2% $125,000,000 Senior
Notes due 2008 of QSRD issued pursuant to the Senior Indenture.
2.2 Section 2.08. The last sentence of Section 2.08(a) is hereby
deleted in its entirety and the following is inserted in lieu thereof:
During the period from and after the First Amendment Effective Date
until the first Redetermination Date to occur after the First Amendment
Effective Date, unless redetermined pursuant to Section 2.08(d) or
adjusted pursuant to Sections 2.08(c), 8.08(b) or 9.15, the amount of
the Borrowing Base shall be $25,000,000.
2.3 Section 6.02. Section 6.02 is hereby amended to add the following
new paragraph which reads in its entirety as follows:
CERTIFICATE REGARDING INCURRENCE OF DEBT UNDER SENIOR
INDENTURE. The obligation of the Lenders to make Loans to the Borrower
or of the Agent to issue Letters of Credit in an aggregate amount in
excess of $35,000,000 is subject to the further condition precedent
that QSRD deliver a certificate from an authorized officer, in form and
substance reasonably satisfactory to the Agent, certifying that,
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as of the date of incurrence, QSRD and the Borrower are permitted to
incur such Indebtedness under the Senior Indenture (because either (i)
such Indebtedness will constitute "Permitted Indebtedness" under the
Senior Indenture or (ii) such Indebtedness may be incurred without
violation of the then applicable Consolidated Interest Coverage Ratio
set forth in the Senior Indenture) and setting forth in reasonable
detail calculations to support the certification.
2.4 Section 8.12. Section 8.12 is hereby deleted in its entirety.
2.5 Section 9.1. Section 9.1(k) is hereby deleted in its entirety and
the following is inserted in lieu thereof:
(k) Debt of QSRD and its Subsidiaries, including the Borrower,
incurred pursuant to (i) the Senior Note Documents and (ii) any
subsequent Hi- Yield Offering; provided that (A) such Debt under this
Section 9.01(k)(ii) is issued on terms reasonably satisfactory to the
Majority Lenders with respect to principal amount, maturity, interest
rate, covenants and, if applicable, subordination language, and (B) in
connection with the issuance of any such Debt under this Section
9.01(k)(ii), the Lenders may cause the Borrowing Base to be
redetermined.
2.6 Section 9.22. Sections 9.22(a), (b), (c) and (f) are hereby deleted
in their entirety and the following is inserted in lieu thereof:
(a) QSRD and the Borrower shall not, and shall not permit any
Subsidiary to, amend, supplement or modify any Senior Note Document or
repay the principal of, or make any other payment in relation to, the
Senior Notes; provided, so long as no Borrowing Base deficiency then
exists under Section 2.07(c) and Default or Event of Default has
occurred and is continuing, the foregoing shall not prohibit (i) the
payment of interest on the Senior Notes, or (ii) the repayment of the
Senior Notes with the proceeds of any refinancing thereof (provided
that such refinancing Debt is on terms substantially similar to the
Senior Notes).
(b) Omitted.
(c) Omitted.
(f) Omitted.
Section 3. Conditions Precedent. The effectiveness of this First
Amendment is subject to the receipt by the Agent of the following documents and
satisfaction of the other conditions provided in this Section 3, each of which
shall be reasonably satisfactory to the Agent in form and substance:
3.1 Loan Documents. The Agent shall have received multiple counterparts
as requested of this First Amendment.
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3.2 No Default. No Default or Event of Default shall have occurred and
be continuing as of the Effective Date.
3.3 Issuance of Senior Notes. The Senior Notes shall have been issued
and purchased by the initial holder(s) thereof as contemplated in the Senior
Note Offering Memorandum.
3.4 Repayment of Bridge Loans. The Agent shall have received evidence
that all outstanding principal, accrued and unpaid interest and other fees and
compensation owed in connection with the Bridge Loans shall have been paid in
full.
Section 4. Representations and Warranties; Etc. Each Obligor hereby
affirms: (a) that as of the date of execution and delivery of this First
Amendment, all of the representations and warranties contained in each Loan
Document to which such Obligor is a party are true and correct in all material
respects as though made on and as of the Effective Date; and (b) that after
giving effect to this First Amendment and to the transactions and waivers
contemplated hereby, no Defaults exist under the Loan Documents or will exist
under the Loan Documents.
Section 5. Miscellaneous.
5.1 Confirmation. The provisions of the Credit Agreement (as amended by
this First Amendment) shall remain in full force and effect in accordance with
its terms following the effectiveness of this First Amendment.
5.2 Ratification and Affirmation of Obligors. Each of the Obligors
hereby expressly (i) acknowledges the terms of this First Amendment, (ii)
ratifies and affirms its obligations under the Loan Documents to which it is a
party, (iii) acknowledges, renews and extends its continued liability under its
respective Guaranty Agreement, if applicable, and the other Security Instruments
to which it is a party and agrees that its respective Guaranty Agreement, if
applicable, and the other Security Instruments to which it is a party remains in
full force and effect with respect to the Indebtedness as amended hereby.
5.3 Counterparts. This First Amendment may be executed by one or more
of the parties hereto in any number of separate counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
5.4 No Oral Agreement. THIS WRITTEN FIRST AMENDMENT, THE CREDIT
AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND
THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
5.5 GOVERNING LAW. THIS FIRST AMENDMENT (INCLUDING, BUT NOT LIMITED TO,
THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
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5.6 Approval of Senior Notes; Hedging Program. Each Lender hereby
acknowledges its satisfaction with the terms of the Senior Notes as described in
the Senior Note Offering Memorandum. Each Lender hereby further acknowledges its
satisfaction with the hedging program which the Borrower has put in place and
that such program satisfies the requirements of Section 8.11 of the Credit
Agreement.
[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed effective as of the date first written above.
BORROWER: QUEEN SAND RESOURCES, INC., a Nevada corporation
By: /s/ ROBERT P. LINDSAY
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Robert P. Lindsay
Vice President
By: /s/ EDWARD J. MUNDEN
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Edward J. Munden
President
QSRD: QUEEN SAND RESOURCES, INC., a Delaware corporation
By: /s/ ROBERT P. LINDSAY
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Robert P. Lindsay
Chief Operating Officer
By: /s/ EDWARD J. MUNDEN
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Edward J. Munden
President
GUARANTORS: NORTHLAND OPERATING CO.
By: /s/ ROBERT P. LINDSAY
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Robert P. Lindsay
Vice President
By: /s/ EDWARD J. MUNDEN
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Edward J. Munden
President
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CORRIDA RESOURCES, INC.
By: /s/ ROBERT P. LINDSAY
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Robert P. Lindsay
Vice President
By: /s/ EDWARD J. MUNDEN
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Edward J. Munden
President
AGENT: BANK OF MONTREAL, as Agent
By: /s/ ROBERT L. ROBERTS
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Robert L. Roberts
Director, U.S. Corporate Banking
LENDER: BANK OF MONTREAL
By: /s/ MELISSA A. BAUMAN
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Melissa A. Bauman
Director, U.S. Corporate Banking
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ MARK A. COX
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Mark A. Cox
Director
ENRON CAPITAL & TRADE RESOURCES CORP.
By: /s/ STEVEN M. EMSHOFF
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Steven M. Emshoff
Agent and Attorney-in-fact
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JOINT ENERGY DEVELOPMENT INVESTMENTS II LIMITED
PARTNERSHIP
By: Enron Capital Management II Limited
Partnership, its sole general partner
By: Enron Capital II Corp., its sole
general partner
By: /s/ STEVEN M. EMSHOFF
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Steven M. Emshoff
Agent and Attorney-in-fact