Exhibit 10.1

 

FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

This First Amendment to Second Amended and Restated Credit Agreement (this
“Amendment”) dated as of March 3, 2011, is by and among Clayton Williams
Energy, Inc., a Delaware corporation (the “Borrower”), certain Subsidiaries of
the Borrower as Guarantors, the Lenders party hereto (the “Lenders”) and
JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”).  Unless the context otherwise requires or unless
otherwise expressly defined herein, capitalized terms used but not defined in
this Amendment have the meanings assigned to such terms in the Credit Agreement
(as defined below).

 

WITNESSETH:

 

WHEREAS, the Borrower, the Guarantors, the Administrative Agent and the Lenders
entered into that certain Second Amended and Restated Credit Agreement dated as
of November 29, 2010 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower and the Guarantors have requested that the Administrative
Agent and the Lenders (or at least the required percentage thereof) amend the
Credit Agreement in certain respects and the Administrative Agent and the
Lenders (or at least the required percentage thereof) have agreed to do so on
the terms and conditions hereinafter set forth.

 

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, the Borrower, the
Guarantors, the Administrative Agent and the Lenders party hereto, hereby agree
as follows:

 

SECTION 1.                      Amendments to the Credit Agreement.  Subject to
the satisfaction or waiver in writing of each condition precedent set forth in
Section 2 hereof, and in reliance on the representations, warranties, covenants
and agreements contained in this Amendment, the Credit Agreement shall be
amended in the manner provided in this Section 1.

 

1.1                               Additional Definition.  Section 1.01 of the
Credit Agreement shall be and it hereby is amended by inserting the following
definition in alphabetical order:

 

“First Amendment Effective Date” means March 3, 2011.

 

“Specified Period” has the meaning assigned to such term in Section 3.05.

 

1.2                               Mandatory Prepayment.  Section 2.11(d) of the
Credit Agreement shall be and it hereby is amended in its entirety to read as
follows:

 

(d)                               In the event any Borrowing Base Deficiency
occurs as a result of a reduction in the Borrowing Base pursuant to Section 3.05
upon an issuance of Senior Notes, the Borrower shall prepay the Loans (and cash
collateralize any portion of such Borrowing Base Deficiency attributable to LC
Exposure) with the Net Cash Proceeds received as a result of the issuance of
such Senior Notes

 

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within one Business Day after receipt of such Net Cash Proceeds or the next
Business Day after the end of the Specified Period, as applicable, to the extent
necessary to eliminate such Borrowing Base Deficiency.

 

1.3                               Borrowing Base Reductions.  Section 3.05 of
the Credit Agreement shall be and it hereby is amended in its entirety to read
as follows:

 

Section 3.05. Additional Reductions in Borrowing Base.  Unless otherwise waived
in writing by the Required Lenders, upon the issuance of any Senior Notes by any
Credit Party pursuant to Section 7.01(g) (other than any Permitted Refinancing
that extends, refinances, renews, replaces, defeases or refunds outstanding
Senior Notes), the Borrowing Base then in effect shall automatically be reduced
by the lesser of (a) $250 for each $1,000 in stated principal amount of such
Senior Notes on the date such Senior Notes are issued (without regard to any
initial issue discount) and (b) such other amount, if any, determined by the
Required Lenders in their sole discretion prior to the issuance of such Senior
Notes.  Notwithstanding the foregoing, (i) any reduction in the Borrowing Base
required with respect to any issuance of Senior Notes during the period from and
including the First Amendment Effective Date to but excluding September 1, 2011,
shall be effective on September 1, 2011 (the “Specified Period”), unless
otherwise waived by the Required Lenders, (ii) the amount of such reduction
shall be determined based on the difference between the stated principal amount
of Senior Notes outstanding on September 1, 2011, and the stated principal
amount of Senior Notes outstanding on the day immediately preceding the First
Amendment Effective Date and (iii) to the extent the stated principal amount of
Senior Notes retired, redeemed, defeased, repurchased or prepaid (any such
action, for purposes of this Section 3.05, a “redemption” or “redeemed”) during
the Specified Period does not exceed the stated principal amount of Senior Notes
outstanding on the day immediately preceding the First Amendment Effective Date,
such Senior Notes shall be deemed to have been redeemed pursuant to a Permitted
Refinancing.

 

1.4                               Indebtedness Under Senior Notes. 
Section 7.01(g) of the Credit Agreement shall be and it hereby is amended in its
entirety to read as follows:

 

(g)                               subject to any adjustment of the Borrowing
Base required under Section 3.05 and any mandatory prepayment required under
Section 2.11(d), unsecured Indebtedness under the Senior Notes (and any
Permitted Refinancing thereof), including any Indebtedness constituting
Guarantees thereof by the Borrower or any Restricted Subsidiary, in an aggregate
principal amount not to exceed at any time (i) during the Specified Period,
$625,000,000 and (ii) from and after September 1, 2011, $475,000,000; provided
that at the time of and immediately after giving effect to each issuance of
Senior Notes (and any Permitted Refinancing thereof), no Default shall have
occurred and be continuing;

 

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SECTION 2.                      Conditions.  The amendments to the Credit
Agreement set forth in Section 1 of this Amendment shall be effective upon the
satisfaction of each of the conditions set forth in this Section 2.

 

2.1                               Execution and Delivery.  The Borrower, each
Guarantor and the Required Lenders shall have executed and delivered this
Amendment and any other documents requested by the Administrative Agent prior to
the date hereof, all in form and substance satisfactory to the Administrative
Agent.

 

2.2                               No Default.  No Default shall have occurred
and be continuing.

 

2.3                               Other Documents.  The Administrative Agent
shall have received such other instruments and documents incidental and
appropriate to the transaction provided for herein as the Administrative Agent
or its special counsel may reasonably request prior to the date hereof, and all
such documents shall be in form and substance satisfactory to the Administrative
Agent.

 

SECTION 3.                      Representations and Warranties of the Borrower. 
To induce the Required Lenders to enter into this Amendment, the Borrower hereby
represent and warrant to the Required Lenders as follows:

 

3.1                               Reaffirmation of Representations and
Warranties/Further Assurances.  After giving effect to the amendments herein,
each representation and warranty of the Borrower or any Guarantor contained in
the Credit Agreement or in any of the other Loan Documents is true and correct
in all material respects on the date hereof (except to the extent such
representations and warranties relate solely to an earlier date).

 

3.2                               Corporate Authority; No Conflicts.  The
execution, delivery and performance by the Borrower and each Guarantor (to the
extent a party hereto or thereto) of this Amendment and all documents,
instruments and agreements contemplated herein are within the Borrower’s or such
Guarantor’s corporate or other organizational powers, have been duly authorized
by necessary action, require no action by or in respect of, or filing with, any
court or agency of government and do not violate or constitute a default under
any provision of any applicable law or other agreements binding upon the
Borrower or any Guarantor or result in the creation or imposition of any Lien
upon any of the assets of the Borrower or any Guarantor except as otherwise
permitted in the Credit Agreement.

 

3.3                               Enforceability.  This Amendment constitutes
the valid and binding obligation of the Borrower and each Guarantor 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.

 

3.4                               Outstanding Senior Notes.  As of the day
immediately preceding the date hereof, the stated principal amount of all
outstanding Senior Notes is $225,000,000.

 

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SECTION 4.                      Miscellaneous.

 

4.1                               Reaffirmation of Loan Documents and Liens. 
Any and all of the terms and provisions of the Credit Agreement and the Loan
Documents shall, except as amended and modified hereby, remain in full force and
effect.  Each Credit Party hereby agrees that the amendments and modifications
herein contained shall not impair its liabilities, duties and obligations under
the Credit Agreement and the other Loan Documents to which it is a party or,
except as expressly provided herein, the Liens granted by it securing the
payment and performance thereof.  The execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any right, power or remedy of
any Lender, the Issuing Bank or the Administrative Agent under any of the Loan
Documents, nor, except as expressly provided herein, constitute a waiver or
amendment of any provision of any of the Loan Documents.  Upon and after the
execution of this Amendment by each of the parties hereto, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as modified hereby.  This Amendment is a Loan Document, and all
provisions in the Credit Agreement pertaining to Loan Documents apply hereto.

 

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.  The Borrower hereby agrees to
pay all reasonable fees and expenses of special counsel to the Administrative
Agent incurred by the 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 one or more counterparts and by different parties hereto in separate
counterparts each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.  However, this Amendment
shall bind no party until the Borrower, the Guarantors, the Lenders (or at least
the requisite percentage thereof), and the Administrative Agent have executed a
counterpart.  Delivery of photocopies of the signature pages to this Amendment
by facsimile or electronic mail shall be effective as delivery of manually
executed counterparts of this Amendment.

 

4.5                               Complete Agreement.  THIS AMENDMENT, THE
CREDIT AGREEMENT, AND THE OTHER LOAN DOCUMENTS 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 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.

 

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4.7                               Governing Law.  This Amendment shall be
governed by, and construed in accordance with, the laws of the State of Texas.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of the date first above written.

 

 

ACCEPTED AND AGREED TO:

 

 

 

 

 

 

 

 

BORROWER:

 

 

 

 

 

CLAYTON WILLIAMS ENERGY, INC.

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michael L. Pollard

 

 

 

Michael L. Pollard, Senior Vice President

 

 

 

 

 

 

 

 

 

 

GUARANTORS:

 

 

 

 

 

 

SOUTHWEST ROYALTIES, INC.

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

 

 

 

 

 

WARRIOR GAS CO.

 

 

a Texas corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

 

 

 

 

 

 

 

 

 

CWEI ACQUISITIONS, INC.

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

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ROMERE PASS ACQUISITION L.L.C.

 

 

a Delaware limited liability company

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

 

 

 

 

 

 

 

 

 

CWEI ROMERE PASS ACQUISITION CORP.

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

 

 

 

 

 

 

 

 

 

BLUE HEEL COMPANY

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

 

 

 

 

 

 

 

 

 

TEX-HAL PARTNERS, INC.

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

 

 

 

 

 

 

 

 

 

DESTA DRILLING GP, LLC

 

 

a Texas limited liability company

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Manager

 

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DESTA DRILLING, L.P.

 

 

a Texas limited partnership

 

 

 

 

 

 

By:

Desta Drilling GP, LLC, its general partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Manager

 

 

 

 

 

 

 

 

 

 

WEST COAST ENERGY PROPERTIES GP, LLC

 

 

a Texas limited liability company

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Manager

 

 

 

 

 

 

 

 

 

 

CLAJON INDUSTRIAL GAS, INC.

 

 

a Texas corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

 

 

 

 

 

 

 

 

 

CLAYTON WILLIAMS PIPELINE CORPORATION

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mel G. Riggs

 

 

 

Mel G. Riggs, Vice President

 

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JPMORGAN CHASE BANK, N.A., as Administrative Agent, Issuing Bank and a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mark E. Olson

 

 

 

Name:

Mark E. Olson

 

 

 

Title:

Authorized Officer

 

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BANK OF SCOTLAND plc,

 

 

as Syndication Agent and a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Karen Welch

 

 

 

Name:

Karen Weich

 

 

 

Title:

Vice President

 

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BNP PARIBAS,

 

 

as Co-Documentation Agent and a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Betsy Jocher

 

 

 

Name:

Betsy Jocher

 

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Polly Schott

 

 

 

Name:

Polly Schott

 

 

 

Title:

Director

 

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NATIXIS (formerly Natexis Banques Populaires), as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Liana Tchernysheva

 

 

 

Liana Tchernysheva

 

 

 

Managing Director

 

 

 

 

 

 

 

 

 

 

By:

/s/ Louis P. Laville, III

 

 

 

Louis P. Laville, III

 

 

 

Managing Director

 

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COMPASS BANK,

 

as a Lender

 

 

 

 

 

By:

/s/ Dorothy Marchand

 

 

Name:

Dorothy Marchand

 

 

Title:

Senior Vice President

 

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THE FROST NATIONAL BANK,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ Stewart Alcorn

 

 

Name:

Stewart Alcorn

 

 

Title:

Market President

 

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BOKF, N.A. dba BANK OF TEXAS

 

fka BANK OF TEXAS, N.A.,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ J. Michael Delbridge

 

 

Name:

J. Michael Delbridge

 

 

Title:

Senior Vice President

 

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KEYBANK NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ David Morris

 

 

Name:

David Morris

 

 

Title:

Vice President

 

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UBS LOAN FINANCE LLC,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ Mary E. Evans

 

 

Name:

Mary E. Evans

 

 

Title:

Associate Director

 

 

 

 

 

 

 

By:

/s/ Iria R. Otsa

 

 

Name:

Iria R. Otsa

 

 

Title:

Associate Director

 

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THE ROYAL BANK OF SCOTLAND plc,

 

as a Lender

 

 

 

 

By:

RBS Securities Inc., as agent

 

 

 

 

 

 

 

By:

/s/ David Slye

 

 

Name:

David Slye

 

 

Title:

Director

 

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SOCIETE GENERALE,

 

as a Lender

 

 

 

 

 

 

 

By:

/s/ Scott A. Mackey

 

 

Name:

Scott A. Mackey

 

 

Title:

Director

 

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