FIRST AMENDMENT TO CREDIT AGREEMENT
(March 29, 1999)
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT") is made and
entered into as of March 29, 1999, among MICHAEL PETROLEUM CORPORATION, a
Texas corporation (the "BORROWER"), the entities listed on the signature
pages hereof as Lenders (collectively, the "Lenders"), and CHRISTIANIA BANK
OG KREDITKASSE ASA ("CHRISTIANIA") as administrative agent (in such capacity,
the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower, the Agent and the Lenders entered into that
certain Credit Agreement dated as of May 15, 1999 (the "CREDIT AGREEMENT");
and
WHEREAS, the Borrower, the Agent and the Lenders wish to amend the
Credit Agreement and provider for certain other matters as set forth herein;
NOW, THEREFORE, for and in consideration of the mutual promises, the
mutual agreements contained herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties
hereto do hereby agree as follows:
1. DEFINITIONS.
(a) Capitalized terms used and not defined in this Amendment shall have
the meanings specified in the Credit Agreement.
(b) The definitions of "ABR" and "EURODOLLAR RATE" in Article I of the
Credit Agreement are hereby deleted in their entirety and replaced by the
following definitions of such terms:
ABR means the highest of (i) the rate of interest publicly announced
by Agent as its prime rate in effect at its principal office in New York
City (the "Prime Rate") plus 0.5%, (ii) the secondary market rate for
three-month certificates of deposit (adjusted for statutory reserve
requirements) PLUS 1.5% and (iii) the Federal Funds Rate PLUS 1.0%.
EURODOLLAR RATE means the rate (adjusted for statutory reserve
requirements for eurocurrency liabilities) at which eurodollar deposits for
one, two, three, or six (or, if available and acceptable to Required
Lenders, nine or twelve) months (as selected by Borrower) are offered to
Agent in the Interbank eurodollar market, PLUS 2.25%.
2. WAIVER REGARDING LATE PRODUCTION REPORT. The Agent and the Lenders
acknowledge that they have received the Production Report required under the
terms of SECTION 5.1 of the Credit Agreement to be delivered no later than 45
days after (the "REQUIRED DELIVERY DATE") the last day of the calendar
quarter commencing October 1, 1998 and hereby waive any Potential Default or
Default arising from the delivery of such Production Report after the
Required Delivery Date.
3. ACKNOWLEDGMENT AND WAIVER REGARDING NON-COMPLIANCE WITH SECTION
7.17. The Agent and the Lenders acknowledge that they received timely (within
the requirements of SECTION 5.4 of the Credit Agreement) notice of the
failure by Borrower to comply with the Minimum Interest Coverage Ratio
covenant set forth in SECTION 7.17 of the Credit Agreement as of the last day
of the fiscal quarter ended December 31, 1998 and the Lenders hereby waive
the Default arising from such failure.
4. AMENDMENT TO SECTION 7.17. SECTION 7.17 of the Credit Agreement is
deleted in its entirety and replaced by the following SECTION 7.17:
"Section 7.17 MINIMUM INTEREST COVERAGE RATIO. Borrower shall
not permit the Interest Coverage Ratio to be less than 1.3 to 1.0 as
of the last day of the fiscal quarters ending March 31 and June 30,
1999, 1.4 to 1.0 as of the last day of the fiscal quarter ending
September 30, 1999; 1.5 to 1.0 for the fiscal quarter ending December
31, 1999; or 2.0 to 1.0 as of the last day of any fiscal quarter
ending after December 31, 1999."
5. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. The obligations of the
Lenders herein and the effectiveness of the other provisions of this
Amendment shall be subject to the fulfillment of the following conditions
precedent in a manner satisfactory to the Agent:
(a) The Agent shall have received all the following (each of the
following documents in form and substance satisfactory to the Agent):
(i) A copy of the resolutions of the Board of Directors of the
Borrower, dated on the date hereof, certified by the Secretary of Assistant
Secretary of the Borrower, authorizing the execution, delivery and
performance by the Borrower of this Amendment and any other document to be
delivered by the Borrower pursuant hereto;
(ii) A certificate of the Secretary or an Assistant Secretary of the
Borrower, dated on the date hereof, as to the incumbency and signature of
the officers of the Borrower authorized to sign this Amendment and any
other document to be delivered by the Borrower pursuant hereto, together
with evidence of the incumbency of such Secretary or Assistant Secretary;
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(iii) All consents, approvals, waivers, authorizations and orders of
any courts or governmental authorities (including, without limitation,
federal and state banking authorities) or third parties required in
connection with the execution, delivery and performance by the Borrower of
this Amendment and each document to be delivered by Borrower pursuant
hereto and the performance of the transaction contemplated hereby; and
(iv) All other documents the Agent may reasonably request with
respect to any matter relevant to this Amendment and the transactions
contemplated hereby;
(b) The representations and warranties contained in the Credit
Agreement, as amended hereby, shall be true and correct in all material
respects on and as of the date hereof and on and as of the date of actual
execution and delivery hereof by the Borrower; and
(c) All corporate and legal proceedings and all documents required to
be completed and executed by the provisions of, and all instruments to be
executed in connection with the transactions contemplated by, this Amendment
and any related agreements shall be satisfactory in form and substance to the
Agent, and the Agent shall have received all information and copies of all
documents, including records of corporate proceedings, required by this
Amendment and any related agreements to be executed or which the Agent may
reasonably have requested in connection therewith, such documents, where
appropriate, to be certified by proper corporate or governmental authorities.
6. DEFAULTS AND POTENTIAL DEFAULTS. The Borrower represents and
warrants that after giving effect to this Amendment no Default or Potential
Default exists under the Credit Agreement.
7. EXPENSES. The Borrower shall pay all out-of-pocket expenses of the
Agent arising in connection with the Loans and the preparation, execution
delivery and administration of this Amendment, including, but not limited to,
all reasonable legal fees and expenses incurred by the Agent.
8. CONTINUED EFFECT. Except to the extent expressly provided herein,
all terms, provisions and conditions of the Credit Agreement shall continue
in full force and effect and the Credit Agreement shall remain enforceable
and binding in accordance with its terms. The Borrower further ratifies,
affirms, renews and extends the liens and security interests in the
Collateral granted pursuant to the Security Documents.
9. CHOICE OF LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
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10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which when taken together shall constitute one and the
same document, and each party hereto may execute this Amendment by signing
any of such counterparts.
11. SUCCESSORS. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that the Borrower shall not assign any of its rights
hereunder without the prior written consent of the Lenders.
12. ENTIRE AGREEMENT. THE LOAN DOCUMENTS, INCLUDING THIS AMENDMENT,
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers, to be effective as of the date first
above written.
MICHAEL PETROLEUM CORPORATION
By: /s/ROBERT L. SWANSON
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Name:
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Title: VICE PRESIDENT - FINANCE
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CHRISTIANIA BANK OG KREDITKASSE,
ASA, as the Agent and sole Lender
By: /S/WILLIAM S. PHILLIPS
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Name:
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Title: FIRST VICE PRESIDENT
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