EXHIBIT 10.1.2
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "Amendment") is entered
into effective as of the 8th day of October, 1996, by and among Patina Oil & Gas
Corporation ("Patina"), SOCO Wattenberg Corporation ("SWAT"), Gerrity Oil & Gas
Corporation ("Gerrity"), (Patina, SWAT and Gerrity are each individually
referred to herein as "Borrower" and collectively as "Borrowers"), Texas
Commerce Bank National Association, as Administrative Agent ("Administrative
Agent"), NationsBank of Texas, N.A., as Documentary Agent ("Documentary Agent"),
Wells Fargo Bank, N.A., CIBC, Inc. and Credit Lyonnais New York Branch, as
Co-Agents ("Co-Agents") and the financial institutions listed on Schedule 1 to
the Credit Agreement (as hereinafter defined) as Banks (individually a "Bank"
and collectively "Banks").
W I T N E S E T H:
WHEREAS, Borrowers, Administrative Agent, Documentary Agent, Co-Agents and
Banks are parties to that certain Credit Agreement dated as of May 2, 1996 (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 Borrowers; and
WHEREAS, pursuant to that certain First Amendment to Credit Agreement,
dated as of June 28, 1996, by and among Borrowers, Agents and Banks, the parties
amended and revised certain provisions of the Credit Agreement, all as more
particularly described therein; and
WHEREAS, subject to the terms and conditions set forth herein, Borrowers,
Agents and Banks desire to further amend and waive certain provisions of the
Credit Agreement, all as more fully described herein.
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,
Borrowers, each Agent, and each Bank hereby agree as follows:
SECTION 1. Amendments. In reliance on the representations, warranties,
covenants and agreements contained in this Amendment, the Credit Agreement shall
be amended effective October 8, 1996 (the "Effective Date") in the manner
provided in this Section 1.
1.1. Amendment to Definitions. The definition of "Loan Papers" contained in
Section 1.1 of the Credit Agreement shall be amended to read in full as follows:
"Loan Papers" means this Agreement, the Notes, the Patina
Guarantees, the Collateral Assignment of Intercompany Loan, the Tax Credit
Transaction Agreement, the Patina Pledge Agreement, the Gerrity Pledge
Agreement, the First Amendment, the Second Amendment, all Mortgages now or
at any time hereafter delivered pursuant to Section 5.1, and all other
certificates, documents or instruments
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delivered in connection with this Agreement, as the foregoing may be
amended from time to time.
1.2. Additional Definitions. Section 1.1 of the Credit Agreement shall be
amended to add the following definition to such Section:
"Second Amendment" means the Second Amendment to Credit Agreement
dated effective as of October 8, 1996, entered into by and among
Borrowers, Agents, and Banks.
1.3. Restricted Payments Covenant. Section 9.2 of the Credit Agreement
shall be amended to read in full as follows:
SECTION 9.2. Restricted Payments. Neither any Borrower nor any
Restricted Subsidiary of any Borrower will declare or make any Restricted
Payment; provided, that, so long as no Default, Event of Default or
Borrowing Base Deficiency then exists, and provided that no Default or
Event of Default would result therefrom (a) Patina shall be permitted to
(i) declare and pay accrued dividends on the Preferred Stock, and (ii)
repurchase any of its Common Stock or Preferred Stock or warrants, options
or other rights to acquire such Common Stock or Preferred Stock, so long
as, at any date, the sum of (A) the aggregate amount of all such dividends
declared and paid pursuant to clause (a)(i) above during the period
commencing on the Closing Date to and including such date, plus (B) the
aggregate amount of all such Common Stock or Preferred Stock or warrants,
options or other rights to acquire such Common Stock or Preferred Stock
repurchased by Patina pursuant to clause (a)(ii) above, plus (C) the
aggregate amount of all Investments made by Patina to purchase Gerrity
Preferred Stock from the Closing Date to and including the date of such
declaration or payment (excluding Investments in Gerrity Preferred Stock
made in the form of Preferred Stock or Common Stock) shall not exceed the
Patina Restricted Payment Limit in effect at such time, and (b) Gerrity
shall be permitted to (i) repurchase or redeem Subordinate Notes (A)
tendered to Gerrity for redemption on the Subordinate Note Redemption Date
pursuant to Section 4.08 of the Indenture, and (B) after the Subordinate
Note Redemption Date, and (ii) declare and pay accrued dividends on the
Gerrity Preferred Stock, so long as, at any date, the sum of (A) the
aggregate amount of all dividends declared and paid on the Gerrity
Preferred Stock during the period commencing on the Closing Date to and
including such date (excluding any such dividends paid to Patina), plus
(B) the excess of the aggregate repurchase or redemption price paid by
Gerrity for all Subordinate Notes repurchased or redeemed by Gerrity
subsequent to the Closing Date over the sum of (1) 101% of the aggregate
principal balance of all such Subordinate Notes on the date of
redemption or repurchase, plus (2) accrued but unpaid interest on all such
Subordinate Notes redeemed on the date of redemption or repurchase, shall
not exceed the Gerrity Restricted Payment Limit in effect on such date.
Nothing
contained in this Section 9.2 shall limit or impair the right and ability
of Gerrity to make Distributions to Patina or the right and ability of the
Restricted Subsidiaries of each Borrower to make Distributions to such
Borrower or to other Restricted Subsidiaries of such Borrower.
1.4. Hedge Transactions Covenant. Section 9.11 of the Credit Agreement
shall be amended to read in full as follows:
SECTION 9.11. _____ Oil and Gas Hedge Transactions. No Borrower
will, and no Borrower will permit any of its Restricted Subsidiaries to,
enter into Oil and Gas Hedge Transactions which would cause the volume of
(a) (i) the aggregate notional volume of oil which is the subject of oil
Oil and Gas Hedge Transactions in existence at any time to exceed
seventy-five percent (75%) of any such Borrower's and its Restricted
Subsidiaries' anticipated production of oil from proved, developed
producing reserves during the entire term of such existing Oil and Gas
Hedge Transactions, and (ii) the notional volume of oil with respect to
which a settlement is required on a particular settlement date under such
oil Oil and Gas Hedge Transactions to exceed (A) [ninety percent (90%)] of
any such Borrower's and its Restricted Subsidiaries' anticipated
production of oil from proved, developed producing reserves for the period
(a "Settlement Period") from the immediately preceding settlement date
under any oil Oil and Gas Hedge Transaction (or the commencement of such
Oil and Gas Hedge Transaction in the event there is no prior settlement
date) to such settlement date in the case of any Settlement Period ending
on or prior to January 31, 1997, and (B) seventy five percent (75%) of any
such Borrower's and its Restricted Subsidiaries' anticipated production of
oil from proved, developed producing reserves for any Settlement Period
thereafter, and (b) (i) the aggregate notional volume of gas which is the
subject of gas Oil and Gas Hedge Transactions in existence at any time to
exceed seventy-five percent (75%) of any such Borrower's and its
Restricted Subsidiaries' anticipated production of gas from proved,
developed producing reserves during the entire term of such existing Oil
and Gas Hedge Transactions, and (ii) the notional volume of gas with
respect to which a settlement is required on a particular settlement date
under such gas Oil and Gas Hedge Transactions to exceed (A) [ninety
percent (90%)] of any such Borrower's and its Restricted Subsidiaries'
anticipated production of gas from proved, developed producing reserves
for the Settlement Period ending on such settlement date in the case of
any Settlement Period ending on or prior to January 31, 1997, and (B)
seventy-five percent (75%) of any such Borrower's and its Restricted
Subsidiaries' anticipated production of gas from proved, developed
producing reserves for any Settlement Period thereafter.
SECTION 2. Waiver Regarding September 15 Reserve Report. Banks hereby
waive Borrowers' obligation to comply with Section 4.1 of the Credit Agreement
to the extent, but only to the extent, that Section 4.1 requires Borrowers to
deliver to each Bank, by September 15, 1996, a Patina Reserve Report, Patina
Related Asset Report, Gerrity Reserve Report and Gerrity Related Asset Report
prepared as of June 30, 1996 (collectively, the "September 96 Reports"). Each
Borrower hereby acknowledges that such waiver is limited solely to Section 4.1
of the Credit Agreement, and solely to the September 96 Reports. Nothing
contained herein shall obligate Banks to grant any additional or future waiver
of Section 4.1 of the Credit Agreement or any other provision of any other Loan
Paper.
SECTION 3. Representations and Warranties. In order to induce Agents and
Banks to enter into this Amendment and grant the waiver contained in Section 2
hereof, each Borrower hereby represents and warrants to each Agent and each Bank
that:
(a) each representation and warranty of each Borrower and the Restricted
Subsidiaries contained in the Loan Papers are true and correct in all material
respects as of the date hereof (except to the extent that such representations
and warranties are expressly made as of a particular date, in which event such
representations and warranties were true and correct as of such date);
(b) neither a Default nor an Event of Default has occurred which is
continuing; and
(c) Borrowers have no defenses to payment, counterclaims or rights of
set-off with respect to the Obligations on the date hereof.
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. Each Borrower
hereby extends the Liens securing the Obligations until the Obligations have
been paid in full, and agrees that the amendments and modifications herein
contained shall in no manner 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 Amendment
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns.
4.3 Legal Expenses. Each 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 Amendment and all related documents.
4.4 Counterparts. This Amendment may be executed in counterparts, and all
parties need not execute the same counterpart; however, no party shall be bound
by this Amendment
until this Amendment has been executed by Borrowers and Required Banks at which
time this Amendment shall be binding on, enforceable against and inure to the
benefit of Borrowers, Agents and all Banks. Facsimiles shall be effective as
originals.
4.5 COMPLETE AGREEMENT. THIS AMENDMENT, THE CREDIT AGREEMENT
AND THE OTHER
LOAN PAPERS REPRESENT THE FINAL AGREEMENT AMONG 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
Amendment are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify or modify the terms of this Amendment, nor affect the
meaning thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective Authorized Officers on October __, 1996, but
effective as of the date and year first above written.
BORROWERS:
PATINA OIL & GAS CORPORATION,
a Delaware corporation
By:
Its:
SOCO WATTENBERG CORPORATION,
a Delaware corporation
By:
Its:
GERRITY OIL & GAS CORPORATION,
a Delaware corporation
By:
Its:
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ADMINISTRATIVE AGENT:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By:
Its:
DOCUMENTARY AGENT:
NATIONSBANK OF TEXAS, N.A.
By:
Its:
CO-AGENTS:
CIBC, INC.
By:
Its:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Its:
BANKS:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By:
Its:
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NATIONSBANK OF TEXAS, N.A.
By:
Its:
CIBC, INC.
By:
Its:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Its:
WELLS FARGO BANK, N.A.
By:
Its:
1/209116.5
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