EXHIBIT 10.1

 

EXECUTION VERSION

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

This THIRD AMENDMENT TO CREDIT AGREEMENT is made and entered into effective as
of July 1, 2005, (this “Amendment”) between MISSION RESOURCES CORPORATION, a
Delaware corporation (the “Borrower”); each of the lenders party hereto (the
“Lenders”); and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association as administrative agent (“Administrative Agent”) for the Lenders.

 

R E C I T A L S

 

A. The Borrower, the Lenders and the Administrative Agent previously entered
into that certain Credit Agreement dated as of April 8, 2004, as amended by that
certain First Amendment to Credit Agreement made and entered into and effective
as of April 8, 2004, and as further amended by that certain Second Amendment to
Credit Agreement dated as of March 18, 2005 (as amended, restated, supplemented,
and/or otherwise modified, the “Credit Agreement”), pursuant to which the
Lenders agreed to make certain loans to the Borrower upon the terms and
conditions as provided therein.

 

B. The Borrower has requested that the Lenders waive its compliance with certain
covenants for a specific transaction and amend the Credit Agreement and the
Lenders desire to make such waivers and amendments to the Credit Agreement.

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration and the mutual benefits, covenants and agreements herein
expressed, the parties hereto now agree as follows:

 

1. Definitions. All capitalized terms used in this Amendment and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.

 

2. Waiver. (a) The application of Section 9.17 of the Credit Agreement
(prohibiting the Borrower and any Subsidiary from transferring any Mortgaged
Property, Oil and Gas Property or any interest in any Mortgaged Property or Oil
and Gas Property, except for Permitted Transfers) are hereby waived only as to
any breach of Section 9.17, or any default or event of default caused by Mission
E&P Limited Partnership, a Texas limited partnership (“Mission E&P”), selling
the “Assets” (as defined in that certain Purchase and Sale Agreement (the
“Purchase Agreement”) dated of even date herewith by and between Mission E&P and
XTO Energy, Inc. (“XTO”), a copy of which is attached hereto as Exhibit “A”,
such Assets also being herein called, the “Properties”), which Properties
include, without limitation, Mission E&P’s 25% WI/ 25% NRI in the Goldsmith
Field, Ector County, Texas, operated by XTO and its 36% WI/ 31% NRI in the
Wasson Field, Yoakum County, Texas, operated by Apache Corp., to XTO for an
aggregate gross sales price of $56,500,000.00 effective May 1, 2005, as more
particularly described in and pursuant to the Purchase Agreement, provided that:
$30,000,000.00 of the proceeds of such sale will be pledged as cash or Cash
Equivalents as collateral to secure the Obligations under the Credit Agreement
on or before the date of execution of this Amendment. Guggenheim Corporate
Funding, LLC shall have a second lien security interest in such cash and/or Cash
Equivalents. Cash Equivalents, as used herein, shall mean:

 

(i) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within 30 days from the date of the sale of the Properties;

 

Third Amendment to Credit Agreement

   

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(ii) commercial paper maturing within 30 days of the date of sale of the
Properties rated in the highest grade by Standard & Poor’s Corporation or
Moody’s Investors Service, Inc.;

 

(iii) deposits maturing within 30 days of the date of sale of the Properties
with, including certificates of deposit issued by, Wells Fargo Bank, National
Association; and

 

(iv) money market mutual funds consisting of items described in clauses (i),
(ii), and (iii) above.

 

(b) Simultaneously with the receipt by Administrative Agent of the cash or Cash
Equivalents discussed in Section 2 of this Amendment, the Administrative Agent
will execute and deliver to the Borrower a partial release of its mortgage,
lien, and security interest with respect to the Properties being sold pursuant
to Section 2 of this Amendment in the form attached hereto as Exhibit “B”.

 

(c) Administrative Agent and the Lenders hereby waive compliance with Section
9.17 of the Credit Agreement as to the specified transactions discussed in
Section 2 of this Amendment only. Except as otherwise provided herein, all terms
of the Credit Agreement shall remain in full force and effect. Neither the
execution by Administrative Agent and the Lenders of this Amendment, nor any
other act or omission by Administrative Agent and/or the Lenders or their
officers in connection herewith, shall be deemed a waiver by Administrative
Agent and/or the Lenders of any other defaults which may exist or which may
occur in the future under the Credit Agreement, or any future defaults of the
same provisions waived hereunder (collectively “Other Violations”). Similarly,
nothing contained in this Amendment shall directly or indirectly in any way
whatsoever either: (i) impair, prejudice, or otherwise adversely affect
Administrative Agent’s and the Lenders’ right at any time to exercise any right,
privilege, or remedy in connection with the Credit Agreement with respect to any
Other Violations, (ii) amend or alter any provision of the Credit Agreement or
any other contract or instrument, or (iii) constitute any course of dealing or
other basis for altering any obligation of the Borrower or any right, privilege,
or remedy of Administrative Agent and/or the Lenders under the Credit Agreement
or any other contract or instrument. Nothing in this Amendment shall be
construed to be a consent by Administrative Agent and/or the Lenders to any
Other Violations.

 

3. Amendment to the Credit Agreement. Section 2.08(a) and Schedule 2.08 of the
Credit Agreement are hereby amended to provide that the Borrowing Base has been
amended to be $35,000,000.00 as of the date hereof.

 

4. Ratification of the Credit Agreement. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the

 

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Credit Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Credit Agreement are ratified and
confirmed and shall continue in full force and effect. The Borrower and the
Lenders agree that the Credit Agreement as amended hereby shall continue to be
legal, valid, binding and enforceable in accordance with its terms.

 

5. Authorization; Representations and Warranties. The Borrower hereby represents
and warrants to the Lenders that (i) the execution, delivery and performance of
this Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of the Borrower and will not violate the articles of incorporation or
bylaws of the Borrower, (ii) the representations and warranties contained in the
Credit Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the date
hereof, (iii) no Event of Default has occurred and is continuing and no event or
condition has occurred that with the giving of notice or lapse of time or both
would be an Event of Default, and (iv) the Borrower is in full compliance with
all covenants and agreements contained in the Credit Agreement as amended
hereby.

 

6. Survival. All representations and warranties made in this Amendment or any
other Loan Document including any Loan Document furnished in connection with
this Amendment shall survive the execution and delivery of this Amendment and
the other Loan Documents, and no investigation by the Lenders or any closing
shall affect the representations and warranties or the right of the Lenders to
rely upon them.

 

7. Amendment of Loan Documents. Each of the Loan Documents, including the Credit
Agreement and any and all other agreements, documents, or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Credit Agreement as amended hereby, are hereby amended so that any
reference in such Loan Documents to the Credit Agreement shall mean a reference
to the Credit Agreement as amended hereby.

 

8. Costs and Fees. As provided in the Credit Agreement, the Borrower agrees to
pay on demand all costs and expenses incurred by Administrative Agent in
connection with the preparation, negotiation, and execution of this Amendment
and the other Loan Documents executed pursuant hereto and any and all
amendments, modifications, and supplements thereto including, without
limitation, the costs and fees of Administrative Agent’s legal counsel, and all
costs and expenses incurred by Administrative Agent and all the Lenders in
connection with the enforcement or preservation of any rights under the Credit
Agreement, as amended hereby, or any other Loan Document including, without
limitation, the costs and fees of all the Lenders’ legal counsel.

 

9. Severability of Provisions. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

 

10. Governing Law. This Amendment and all other Loan Documents executed pursuant
hereto shall be deemed to have been made and to be performable in Houston,
Harris

 

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County, Texas and shall be governed by and construed in accordance with the laws
of the State of Texas.

 

11. Successors; Assignment. This Amendment is binding upon and shall inure to
the benefit of Administrative Agent, the Lenders, and the Borrower and their
respective successors and assigns, except the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Lenders.

 

12. Counterparts. This Amendment may be executed in one or more counterparts,
each of which when so executed shall be deemed to be an original, but all of
which when taken together shall constitute one and the same instrument.
Signature by facsimile shall also bind the parties hereto.

 

13. No Waiver. No consent or waiver, express or implied, by the Lenders to or
for any breach of or deviation from any covenant, condition or duty by the
Borrower or any Guarantor shall be deemed a consent or waiver to or of any other
breach of the same or any other covenant, condition, or duty.

 

14. Non-Application. The provisions of Chapter 346 of the Texas Finance Code are
specifically declared by the parties not to be applicable to this Amendment or
any of the Loan Documents or the transactions contemplated hereby.

 

15. Expiration of Offer. This offer of waiver and amendment by the
Administrative Agent and the Lenders is available for acceptance by the Borrower
and the Guarantors only until the close of business on the date hereof. If not
accepted by then by the Borrower and the Guarantors, this offer will be void and
of no further force and effect.

 

16. Captions. Captions and section headings appearing herein are included solely
for convenience of reference and are not intended to affect the interpretation
of any provision of this Amendment.

 

17. NO ORAL AGREEMENTS. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS AND
AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.

 

18. WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN

 

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DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT
OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

 

[SIGNATURE PAGE FOLLOWS]

 

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

 

BORROWER: MISSION RESOURCES CORPORATION

By:

 

 

/s/ Ann Kaesermann

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Ann Kaesermann

Vice President

 

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

 

LENDER AND AGENT: WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Jeff Dalton

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Jeff Dalton

Vice President

 

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

 

LENDER: MACQUARIE BANK LIMITED – OBU By:  

 

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Name:  

 

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Title:  

 

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

 

LENDER: STERLING BANK By:  

 

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Name:  

 

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Title:  

 

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Each Guarantor hereby consents and agrees to this Amendment and agrees that each
Guaranty executed by such Guarantor shall remain in full force and effect and
shall continue to be the legal, valid, and binding obligation of such Guarantor
enforceable against such Guarantor in accordance with its terms.

 

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

 

GUARANTOR: BLACK HAWK OIL COMPANY By:  

/s/ Ann Kaesermann

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Ann Kaesermann

Vice President

GUARANTOR: MISSION HOLDINGS LLC By:  

/s/ Robert L. Cavnar

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Robert L. Cavnar

Manager

GUARANTOR: MISSION E&P LIMITED PARTNERSHIP By:  

Black Hawk Oil Company

its sole general partner

    By:  

/s/ Ann Kaesermann

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Ann Kaesermann

Vice President

 

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