EXHIBIT 10.1

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

This Third Amendment to Credit Agreement (this “Amendment”) dated as of May 20,
2004, is by and among VINTAGE PETROLEUM, INC., a Delaware corporation (the
“Borrower”), each Lender (as defined in the Credit Agreement referred to below),
BANK OF MONTREAL, acting through certain of its U.S. branches or agencies,
individually and as administrative agent (in such capacity, together with its
successors in such capacity, the “Agent”), DEUTSCHE BANK TRUST COMPANY AMERICAS,
as syndication agent, and FLEET NATIONAL BANK, SOCIÉTÉ GÉNÉRALE and THE BANK OF
NEW YORK, as co-documentation agents.

 

R E C I T A L S:

 

WHEREAS, the Borrower, each Lender then a party, the Agent and the Issuer have
heretofore entered into that certain Credit Agreement dated as of May 2, 2002,
as amended by (i) that certain First Amendment to Credit Agreement dated as of
May 24, 2002 (“First Amendment”) and (ii) that certain Second Amendment to
Credit Agreement dated as of May 12, 2003 (“Second Amendment”) (such Credit
Agreement, as amended by the First Amendment, Second Amendment and as otherwise
amended to the date hereof, the “Credit Agreement”) pursuant to which the
Lenders have agreed to make revolving loans available to, and to participate in
letters of credit for the benefit of, the Borrower upon the terms and provisions
stated therein; and

 

WHEREAS, the Borrower has requested that the Credit Agreement be amended as set
forth herein; and

 

NOW, THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

Section 1. Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meaning as in the Credit
Agreement.

 

Section 2. Amendments to Credit Agreement. The following amendments shall become
effective as of the date hereof upon the satisfaction of the conditions set
forth in Section 4 hereof.

 

(a) The definition of “Stated Maturity Date” in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“ “Stated Maturity Date” means May 2, 2008.”

 

(b) The definition of “LIBO Rate Applicable Margin” in Section 1.1 of the Credit
Agreement is hereby amended by replacing the existing pricing grid with the
following pricing grid:

--------------------------------------------------------------------------------

 

Ratio of Borrowing Base Debt

to Borrowing Base

--------------------------------------------------------------------------------

   LIBO Rate
Applicable Margin

--------------------------------------------------------------------------------

 

Greater than or equal to 90%

   2.000 %

Greater than or equal to 66.6% and less than 90%

   1.750 %

Greater than or equal to 33.3% and less than 66.6%

   1.500 %

Less than 33.3%

   1.250 %

 

(c) The definition of “Revolving Loan Letter of Credit Applicable Margin” in
Section 1.1 of the Credit Agreement is hereby amended by replacing the existing
pricing grid with the following pricing grid:

 

Ratio of Borrowing Base Debt

to Borrowing Base

--------------------------------------------------------------------------------

   Letter of Credit
Applicable Margin

--------------------------------------------------------------------------------

 

Greater than or equal to 90%

   2.000 %

Greater than or equal to 66.6% and less than 90%

   1.750 %

Greater than or equal to 33.3% and less than 66.6%

   1.500 %

Less than 33.3%

   1.250 %

 

(d) Section 1.1 of the Credit Agreement is hereby amended by inserting the
following definition of “Commitment Fee Rate” in appropriate alphabetical order:

 

“ “Commitment Fee Rate” means, on any date for which it is determined prior to
the Revolving Period Commitment Termination Date and on which the ratio
(expressed as a percentage) of the outstanding principal of Borrowing Base Debt,
including any Revolving Loans outstanding and Revolving Loan Letter of Credit
Outstandings, to the Borrowing Base then in effect shall equal those ratios set
forth below, the percentage set forth opposite such ratio:

 

Ratio of Borrowing Base Debt

to Borrowing Base

--------------------------------------------------------------------------------

   Commitment
Fee Rate

--------------------------------------------------------------------------------

 

Greater than or equal to 66.6%

   0.500 %

Less than 66.6%

   0.375 %

 

Changes in the Commitment Fee Rate shall occur automatically with a change in
such ratio of the Borrowing Base Debt to the Borrowing Base.

 

2

--------------------------------------------------------------------------------

(e) Section 2.1.6(ii) of the Credit Agreement is hereby amended by deleting the
reference to “$350,000,000” and replacing such reference with “$400,000,000”.

 

(f) Section 3.3.1 of the Credit Agreement is hereby amended and restated in its
entirety to provide as follows:

 

“ SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the Agent for the
account of each Lender, for the period (including any portion thereof when any
of its Commitments are suspended by reason of the Borrower’s inability to
satisfy any condition of Article V) commencing on the Effective Date and
continuing through the Revolving Period Commitment Termination Date, a
commitment fee equal to the Commitment Fee Rate multiplied by each Lender’s
Percentage of the average daily unused portion of the Maximum Commitment Amount.
Such commitment fees shall be payable by the Borrower in arrears on each
Quarterly Payment Date, commencing on June 1, 2002, and ending on the Revolving
Period Commitment Termination Date.

 

(g) Section 7.2.4 of the Credit Agreement is hereby amended and restated in its
entirety to provide as follows:

 

“ SECTION 7.2.4. Financial Condition. The Borrower will not permit: (a) its
Tangible Net Worth to be less than the sum of $300,000,000 plus 75% of the
proceeds from third parties of the sale by the Borrower and its Subsidiaries of
securities (other than securities constituting Indebtedness) occurring after
December 31, 2003 net of reasonable incidental, brokerage, underwriting and
legal costs actually paid to third parties in connection therewith, less any
after tax impairment writedowns and accumulated net charges to net income or
Comprehensive Income required by FAS 133, GAAP or by the Securities and Exchange
Commission occurring after December 31, 2003; and (b) its Current Ratio as of
the end of any Fiscal Quarter to be less than 1:1; provided that for purposes of
the Current Ratio, (x) any unused portion of the Revolving Period Commitment
Amount will be deemed a current asset and (y) liabilities required by FAS 133
shall be excluded from current liabilities.”

 

(h) Section 7.2.14 of the Credit Agreement is hereby amended and restated in its
entirety to provide as follows:

 

“ SECTION 7.2.14. Limitation on Hedging Obligations. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into Hedging Agreements in
respect of Hydrocarbons that with respect to any calendar year cover in the
aggregate more than 85% of the projected production attributable to the
Borrower’s and its Subsidiaries’ then proved Oil and Gas Properties located in
the United States and Canada.”

 

Section 3. Determination of Borrowing Base. Subject to Sections 2.7.3, 2.7.4 and
2.7.5 of the Credit Agreement, by execution of this Amendment, each of the
Agent, the Applicable Lenders and the Borrower agrees during the period from the
date hereof to the date of the next redetermination of the Borrowing Base that
the Borrowing Base will equal $325,000,000.

 

3

--------------------------------------------------------------------------------

Section 4. Conditions Precedent. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:

 

(a) Executed Amendment. The Agent shall have received a counterpart of this
Amendment duly executed by the Borrower, the Agent and the Lenders.

 

(b) Payment of Fees. The Agent shall have received: (i) an amendment fee for the
account of each Lender executing this Amendment and returning its signature page
to the Agent in the amounts set forth in that certain letter, dated April 29,
2004 from the Agent to the Vintage Petroleum, Inc. Lender Group and (ii) such
other fees otherwise agreed in writing by the Borrower.

 

Section 5. Representations and Warranties. To induce the Lenders and the Agent
to enter into this Amendment, the Borrower hereby reaffirms, as of the date
hereof, its representations and warranties contained in Article VI of the Credit
Agreement (except to the extent such representations and warranties relate
solely to an earlier date) and additionally represents and warrants as follows:

 

(a) The execution, delivery and performance by the Borrower of this Amendment
and each other Loan Document executed or to be executed by it, are within the
Borrower’s corporate powers, have been duly authorized by all necessary
corporate action, and do not (a) contravene the Borrower’s Organic Documents;
(b) contravene any contractual restriction, law or governmental regulation or
court decree or order binding on or affecting the Borrower; or (c) result in, or
require the creation or imposition of, any Lien on any of the Borrower’s
properties.

 

(b) This Amendment constitutes the legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally.

 

(c) No Default has occurred and is continuing.

 

Section 6. Reaffirmation of Credit Agreement. This Amendment shall be deemed to
be an amendment to the Credit Agreement, and the Credit Agreement, as amended
hereby, and the other Loan Documents are hereby ratified, approved and confirmed
in each and every respect and shall continue in full force and effect. All
references to the Credit Agreement in any other document, instrument, agreement
or writing shall hereafter be deemed to refer to the Credit Agreement as amended
hereby.

 

Section 7. Expenses. The Borrower agrees to pay on demand all expenses set forth
in Section 10.3 of the Credit Agreement.

 

Section 8. Miscellaneous. (a) On and after the effectiveness of this Amendment,
each reference in each Loan Document to “this Agreement”, “this Note”, “this
Mortgage”, “this Guaranty”, “hereunder”, “hereof” or words of like import,
referring to such Loan Document, and each reference in each other Loan Document
to “the Credit Agreement”, “the Notes”, “the

 

4

--------------------------------------------------------------------------------

Mortgages”, “the Guaranty”, “thereunder”, “thereof” or words of like import
referring to the Credit Agreement, the Notes, or the Mortgage, the Guaranty or
any of them, shall mean and be a reference to such Loan Document, the Credit
Agreement, the Notes, the Mortgage, the Guaranty, or any of them, as amended or
otherwise modified by this Amendment; (b) the execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any default of
the Borrower or any right, power or remedy of the Agent or the Lenders under any
of the Loan Documents, nor constitute a waiver of any provision of any of the
Loan Documents; (c) this Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement; and (d) delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this Amendment.

 

Section 9. Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Amendment
or affecting the validity or enforceability of such provision in any other
jurisdiction.

 

Section 10. Governing Law; Entire Agreement. THIS AMENDMENT, THE NOTES AND EACH
OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This Amendment, the
Credit Agreement, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.

 

Section 11. Successors and Assigns. This Amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns in the manner provided in the Credit Agreement.

 

Section 12. Headings. The various headings of this Amendment and of each other
Loan Document are inserted for convenience only and shall not affect the meaning
or interpretation of this Amendment or such other Loan Document or any
provisions hereof or thereof.

 

Section 13. No Oral Agreements. THIS WRITTEN AMENDMENT REPRESENTS THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[SIGNATURE PAGES FOLLOW]

 

5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized as of the day and year
first above written.

 

BORROWER: VINTAGE PETROLEUM, INC. By:  

/s/ William C. Barnes

--------------------------------------------------------------------------------

Name:   William C. Barnes Title:  

Executive Vice President and

Chief Financial Officer

 

S - 1

--------------------------------------------------------------------------------

 

BANK OF MONTREAL, acting through its U.S.
branches and agencies, including initially its
Chicago, Illinois branch, as Agent and Lender By  

/s/ James V. Ducote

--------------------------------------------------------------------------------

Name:   James V. Ducote Title:   Director

 

S - 2

--------------------------------------------------------------------------------

 

DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Syndication Agent and Lender By  

/s/ Marcus M. Tarkington

--------------------------------------------------------------------------------

Name:   Marcus M. Tarkington Title:   Director

 

S - 3

--------------------------------------------------------------------------------

 

FLEET NATIONAL BANK, as Co-

Documentation Agent and Lender

By  

/s/ Allison Rossi

--------------------------------------------------------------------------------

Name:   Allison Rossi Title:   Director

 

S - 4

--------------------------------------------------------------------------------

SOCIÉTÉ GÉNÉRALE, as Co-Documentation
Agent and Lender By  

/s/ Stephen W. Warfel

--------------------------------------------------------------------------------

Name:   Stephen W. Warfel Title:   Vice President

 

S - 5

--------------------------------------------------------------------------------

THE BANK OF NEW YORK, as Co-
Documentation Agent and Lender By  

/s/ Raymond J. Palmer

--------------------------------------------------------------------------------

Name:   Raymond J. Palmer Title:   Vice President

 

S - 6

--------------------------------------------------------------------------------

CALYON NEW YORK BRANCH, successor to
Credit Lyonnais New York Branch, as Lender By:  

/s/ Oliver Audemard

--------------------------------------------------------------------------------

Name:   Oliver Audemard Title:   Managing Director

 

S - 7

--------------------------------------------------------------------------------

[SIGNATURE PAGE INTENTIONALLY OMITTED]

 

S - 8

--------------------------------------------------------------------------------

BANK OF OKLAHOMA, N.A., as Lender By:  

/s/ Pam P. Schloeder

--------------------------------------------------------------------------------

Name:   Pam P. Schloeder Title:   Senior Vice President

 

S - 9

--------------------------------------------------------------------------------

FORTIS CAPITAL CORP., as Lender By:  

/s/ David Montgomery

--------------------------------------------------------------------------------

Name:   David Montgomery Title:   Senior Vice President By:  

/s/ Darrell W. Holley

--------------------------------------------------------------------------------

Name:   Darrell W. Holley Title:   Managing Director

 

S - 10

--------------------------------------------------------------------------------

UNION BANK OF CALIFORNIA, N.A.,

as Lender

By:  

/s/ Kimberly Coll

--------------------------------------------------------------------------------

Name:   Kimberly Coll Title:   Assistant Vice President By:  

/s/ Ali Ahmed

--------------------------------------------------------------------------------

Name:   Ali Ahmed Title:   Vice President

 

S - 11

--------------------------------------------------------------------------------

LOCAL OKLAHOMA BANK, as Lender By:  

/s/ Robert O. Laird

--------------------------------------------------------------------------------

Name:   Robert O. Laird Title:   Vice President

 

S - 12