Document:

exv10w1

 

Exhibit 10.1

AMENDMENT NO. 3 AND WAIVER

     This Amendment No. 3 and Waiver dated as of June 16, 2006 (the “Agreement”) is among
Stone Energy Corporation, a Delaware corporation (“Borrower”), the banks party to the
Credit Agreement described below (“Banks”) and Bank of America, N.A., as Agent for the
Banks (“Agent”).

INTRODUCTION

     A. The Borrower, the Banks, and the Agent have entered into the Credit Agreement dated as of
April 30, 2004, as amended by Amendment No. 1 dated as of December 14, 2004 and Amendment No. 2
dated as of March 28, 2006 (as so amended, the “Credit Agreement”).

     B. Borrower has requested that the Banks (i) amend the Credit Agreement to permit the issuance
of up to $250,000,000 of unsecured senior notes (the “Senior Notes”) by the Borrower, (ii)
on the terms set forth herein, redetermine the Borrowing Base in connection with the Borrower’s
issuance of the Senior Notes and its potential acquisition of an incremental 66.7% working interest
in the Mississippi Canyon 109 field and an incremental 8.3% working interest in the Mississippi
Canyon 108 field, for a purchase price not to exceed $190.5 million from BP Exploration &
Production Inc. (the “Acquisition”) pursuant to a Purchase and Sale Agreement for
Preferential Right Holder (the “Purchase Agreement”), and (iii) waive any notice required
in connection with a prepayment of Advances to correct a Borrowing Base deficiency caused by the
Borrowing Base redetermination set forth in Section 3(a) below.

     THEREFORE, in fulfillment of the foregoing, Borrower, Agent, and the Banks hereby agree as
follows:

     Section 1. Definitions; References. Unless otherwise defined in this Agreement, each
term used in this Agreement which is defined in the Credit Agreement has the meaning assigned to
such term in the Credit Agreement.

     Section 2. Amendment. Effective as of the date specified in Section 7 of this
Agreement, the Credit Agreement is amended as follows:

     (a) Section 1.1 of the Credit Agreement is hereby amended to insert the following definitions
therein, in alphabetical order:

     “2006 Indenture” means the Indenture dated as of June, 2006
between the Borrower and JPMorgan Chase Bank, N.A., as Trustee, relating to
the issuance of up to $250 million of floating-rate unsecured senior notes
due 2010.

     “Amendment No. 3” means Amendment No. 3 to this Agreement,
dated as of June 16, 2006.

 

 

     (b) Section 2.2(e) of the Credit Agreement is hereby amended to delete clause (ii) of such
Section.

     (c) Section 2.4(d) of the Credit Agreement is hereby amended to read in its entirety as
follows:

     (d) Asset Sales. If, after giving effect to the sale, transfer
or other disposition of any of the Borrower’s or any of its Subsidiaries’
Oil and Gas Properties, the aggregate outstanding amount of Advances plus
the Letter of Credit Exposure exceeds the Borrowing Base, the Borrower shall
repay the Advances by an amount equal to such Borrowing Base deficiency,
upon receipt of the proceeds of such sale, transfer, or other disposition,
whether at closing of such sale, transfer, or other disposition or
thereafter. Each prepayment pursuant to this Section 2.4(d) shall be
accompanied by accrued interest on the amount prepaid to the date of such
prepayment and amounts, if any, required to be paid pursuant to Section 2.11
as a result of such prepayment being made on such date.

     (d) Section 6.2 of the Credit Agreement is hereby amended to delete clause (f) thereof and
replace it with the following new clause (f):

     (f) up to $250 million of unsecured indebtedness related to the
issuance of senior notes pursuant to the 2006 Indenture; provided
that (i) such notes are due no earlier than June 1, 2010 (other than by
reason of an unscheduled mandatory prepayment in connection with a Merger
(as defined in the 2006 Indenture), a Change of Control (as defined in the
2006 Indenture), or the receipt and failure to reinvest proceeds of an Asset
Sale (as defined in the 2006 Indenture), provided that the terms of the 2006
Indenture that require a mandatory prepayment with unreinvested proceeds of
an Asset Sale shall not be more restrictive in any material respect than
those contained in the 2001 Indenture or the 2004 Indenture)); (ii) the
initial rate of interest applicable to such indebtedness shall not be higher
than 10% per annum; and (iii) the terms of the 2006 Indenture are no more
restrictive in any material respect (in the opinion of the Administrative
Agent) on the Borrower than those of the 2001 Indenture and the 2004
Indenture, as in effect on the date of Amendment No. 1;

     (e) Section 6.3 of the Credit Agreement is hereby amended by replacing the parenthetical in
line two with the following parenthetical: “(other than a Credit Document, the 2001 Indenture, the
2004 Indenture, and the 2006 Indenture)”.

     (f) Section 6.3 of the Credit Agreement is further amended by adding the following proviso to
the end of such Section:

; provided that the 2001 Indenture, the 2004 Indenture, and the 2006
Indenture shall not limit the creation or existence of any Lien securing the
Obligations or contain limitations on Restricted Payments made by any
Subsidiary to the Borrower or any other Subsidiary that are more restrictive
than the limitations in Section 6.5 of this Agreement.

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     Section 3. Borrowing Base Redetermination. In accordance with Section 2.2 of the
Credit Agreement, the Banks hereby redetermine the Borrowing Base under the Credit Agreement as
follows:

     (a) if the Senior Notes are issued prior to the consummation of the Acquisition, then the
Borrowing Base shall be $250,000,000, effective upon the issuance of the Senior Notes, and if, upon
such redetermination, the aggregate outstanding amount of Advances plus the Letter of Credit
Exposure exceeds the redetermined Borrowing Base, the Borrower shall, on the date of such
redetermination, make a prepayment of Advances in the amount of such excess; and

     (b) after the issuance of the Senior Notes and the consummation of the Acquisition, the
Borrowing Base shall be $325,000,000, effective upon the later to occur of the issuance of the
Senior Notes and the consummation of the Acquisition.

     Section 4. Waiver. Notwithstanding any provisions in the Credit Agreement and the
other Credit Documents to the contrary, the Banks hereby waive any notice required in connection
with a prepayment to correct a Borrowing Base deficiency caused by the redetermination described in
Section 3(a) above. This waiver is limited to the extent described herein and shall not be
construed to be a waiver of any other default or condition under or action prohibited by the Credit
Agreement. The Agent and the Banks reserve the right to exercise any rights and remedies available
to them in connection with any future defaults or unmet conditions precedent under the Credit
Agreement or any other provision of any Credit Document.

     Section 5. Reaffirmation of Liens.

     (a) The Borrower (i) is party to certain Security Documents securing and supporting the
Borrower’s obligations under the Credit Documents, (ii) represents and warrants that it has no
defenses to the enforcement of the Security Documents and that according to their terms the
Security Documents will continue in full force and effect to secure the Borrower’s obligations
under the Credit Documents, as the same may be amended, supplemented, or otherwise modified, and
(iii) acknowledges, represents, and warrants that the liens and security interests created by the
Security Documents are valid and subsisting and create an Acceptable Security Interest in the
Collateral to secure the Borrower’s obligations under the Credit Documents, as the same may be
amended, supplemented, or otherwise modified.

     (b) The delivery of this Agreement does not indicate or establish a requirement that any
Guaranty or Security Document requires the Borrower’s or any Guarantor’s approval of amendments to
the Credit Agreement.

     Section 6. Representations and Warranties. The Borrower represents and warrants to
the Agent and the Banks that:

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     (a) as of the date of the most recently delivered engineering report, the Mortgaged Property
Value was equal to or exceeded 80% of the Oil and Gas Property Value as set forth in such
engineering report;

     (b) after giving effect to the Acquisition, the Mortgaged Property Value is equal to or
exceeds 80% of the Oil and Gas Property Value, calculated immediately after the consummation of the
Acquisition rather than as of the date of the most recent engineering report;

     (c) the representations and warranties set forth in the Credit Agreement and in the other
Credit Documents are true and correct in all material respects as of the date of this Agreement;

     (d) (i) the execution, delivery, and performance of this Agreement are within the corporate
power and authority of the Borrower and have been duly authorized by appropriate proceedings and
(ii) this Agreement constitutes a legal, valid, and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally
and general principles of equity; and

     (e) as of the effectiveness of this Agreement and after giving effect thereto, no Default or
Event of Default has occurred and is continuing.

     Section 7. Effectiveness. This Agreement shall become effective as of the date
hereof, and the Credit Agreement shall be amended as provided herein, upon the occurrence of all of
the following: (a) the Majority Banks’ and the Borrower’s duly and validly executing originals of
this Agreement and delivery thereof to the Agent, (b) the representations and warranties in this
Agreement being true and correct in all material respects before and after giving effect to this
Agreement, and (c) the Borrower shall have paid all costs, expenses, and fees which have been
invoiced and are payable pursuant to Section 9.4 of the Credit Agreement or any other
written agreement.

     Section 8. Post-Closing Covenants.

     (a) Promptly after the issuance of the Senior Notes, the Borrower shall deliver to the Agent a
certified copy of the executed 2006 Indenture, together with all exhibits and schedules thereto.

     (b) Promptly after the signing of the final Purchase Agreement, the Borrower shall deliver to
the Agent a certified copy of the executed Purchase Agreement, together with all exhibits and
schedules thereto. If the Purchase Agreement is amended prior to the consummation of the
Acquisition, the Borrower shall deliver to the Agent a certified copy of each such executed
amendment, promptly after the signing of such Amendment.

     Section 9. Effect on Credit Documents. Except as amended herein, the Credit Agreement
and the Credit Documents remain in full force and effect as originally executed, and nothing herein
shall act as a waiver of any of the Agent’s or Banks’ rights under the Credit Documents, as
amended. This Agreement is a Credit Document for the purposes of the provisions of the other
Credit Documents. Without limiting the foregoing, any breach of
representations, warranties, and covenants under this Agreement may be a Default or Event of
Default under other Credit Documents.

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     Section 10. Choice of Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas.

     Section 11. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original.

[The remainder of this page has been left blank intentionally.]

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     THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THE CREDIT AGREEMENT, REPRESENT
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 BETWEEN THE PARTIES.

     EXECUTED as of the date first set forth above.

	 	 	 	 	 
	 	BORROWER:

STONE ENERGY CORPORATION

 	 
	 	By:  	/s/ David H. Welch
 	 
	 	 	Name:  	David H. Welch 	 
	 	 	Title:  	President and Chief Executive Officer
 	 
	 
	 	 	 
	 	By:  	                                              /s/ Kenneth H. Beer
 	 
	 	 	Name:  	Kenneth H. Beer 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	AGENT: 

BANK OF AMERICA, N.A., as administrative agent

 	 
	 	By:  	/s/ Ronald E. McKaig
 	 
	 	 	Name:  	Ronald E. McKaig 	 
	 	 	Title:  	Senior Vice President
 	 
	 
	 	BANKS:

BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Ronald E. McKaig
 	 
	 	 	Name:  	Ronald E. McKaig 	 
	 	 	Title:  	Senior Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A. 

 	 
	 	By:  	/s/Jo Linda Papadakis
 	 
	 	 	Name:  	Jo Linda Papadakis 	 
	 	 	Title:  	Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	HARRIS NESBITT FINANCING, INC. 

 	 
	 	By:  	/s/ Mary Lou Allen
 	 
	 	 	Name:  	Mary Lou Allen 	 
	 	 	Title:  	Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION 

 	 
	 	By:  	/s/ Justin M. Alexander
 	 
	 	 	Name:  	Justin M. Alexander 	 
	 	 	Title:  	Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	BNP PARIBAS 

 	 
	 	By:  	/s/ Douglas H. Liftman
 	 
	 	 	Name:  	Douglas H. Liftman 	 
	 	 	Title:  	Managing Director
 	 
	 
	 	 	 
	 	By:  	                                              /s/ Polly Schott
 	 
	 	 	Name:  	Polly Schott 	 
	 	 	Title:  	Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	THE ROYAL BANK OF SCOTLAND PLC 

 	 
	 	By:  	/s/ Douglas A. Whiddon
 	 
	 	 	Name:  	Douglas A. Whiddon 	 
	 	 	Title:  	Senior Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	WHITNEY NATIONAL BANK 

 	 
	 	By:  	/s/ Trudy W. Nelson
 	 
	 	 	Name:  	Trudy W. Nelson 	 
	 	 	Title:  	Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	COMERICA BANK 

 	 
	 	By:  	/s/ Huma Vadgama
 	 
	 	 	Name:  	Huma Vadgama 	 
	 	 	Title:  	Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	MIZUHO CORPORATE BANK, LTD.

 	 
	 	By:  	/s/ Raymond Ventura
 	 
	 	 	Name:  	Raymond Ventura 	 
	 	 	Title:  	Deputy General Manager
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	HIBERNIA NATIONAL BANK 

 	 
	 	By:  	/s/ David R. Reid
 	 
	 	 	Name:  	David R. Reid 	 
	 	 	Title:  	Senior Vice President
 	 
	 

Signature Page to Amendment No. 3

 

 

	 	 	 	 	 
	 	NATEXIS BANQUES POPULAIRES 

 	 
	 	By:  	/s/ Timothy L. Polvado
 	 
	 	 	Name:  	Timothy L. Polvado 	 
	 	 	Title:  	Vice President & Group Manager
 	 
	 
	 	 	 
	 	By:  	                                              /s/ Daniel Payer
 	 
	 	 	Name:  	Daniel Payer 	 
	 	 	Title:  	Vice President
 	 
	 

Signature Page to Amendment No. 3exv4w2

 

EXHIBIT 4.2

FIRST AMENDMENT TO RIGHTS AGREEMENT

     THIS FIRST AMENDMENT TO RIGHTS AGREEMENT (the “Amendment”) is made as of June 15, 2006,
between The Allied Defense Group, Inc., formerly known as Allied Research Corporation, a Delaware
corporation (the “Company”), and Mellon Investor Services, LLC, a New Jersey limited liability
company (the “Rights Agent”).

     WHEREAS, the Company and the Rights Agent are parties to that certain Rights Agreement dated
as of June 6, 2001 (the “Original Rights Agreement”);

     WHEREAS, Section 26 of the Original Rights Agreement provides, in part, that for so long as
the Rights (as defined in the Agreement) are redeemable, the Agreement may be supplemented or
amended without the approval of holders of the Rights;

WHEREAS, the Rights are currently redeemable; and

     WHEREAS, the Board of Directors of the Company has determined in good faith that the
amendments to the Agreement set forth herein are desirable and, pursuant to Section 26 of the
Agreement, has duly authorized such amendments to the Agreement.

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Rights Agent hereby agree as follows:

     1. DEFINITIONS. Except as otherwise set forth in this Amendment, each capitalized term used
in this Amendment shall have the meaning for such term set forth in the Original Rights Agreement.

     2. DEFINITION OF AGREEMENT. From and after the date hereof, all references in the Original
Rights Agreement to the “Agreement” shall mean and refer to the Original Rights Agreement, as
modified by this Amendment.

     3. DEFINITION OF ACQUIRING PERSON. Section 1(a) of the Original Rights Agreement is hereby
amended by deleting all references therein to “15%” and replacing them with “20%.”

     4. REVIEW BY INDEPENDENT DIRECTORS. The Original Rights Agreement is hereby amended by adding
the following new Section 34:

Section 34. Review by Independent Directors. All members
of the Board of Directors of the Company who are deemed
“independent” under the rules of the AMEX shall review this
Agreement at least once every three (3) years, and prior to the
occurrence of any Distribution Date, to determine whether this
Agreement should be
continued, modified or terminated. Following each such
determination, the independent members of the Board of Directors of
the Company shall take such actions as they deem appropriate to
reflect their determination. The first such determination shall
take place no later than January 31, 2008.

 

 

     5. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute but one original;
provided, however, this Amendment shall not be effective unless and until signed by the Company and
the Rights Agent.

     6. GOVERNING LAW. This Amendment shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and construed in accordance with
the internal laws of Delaware applicable to contracts to be made and peformed entirely within
Delaware; provided, however, that all provisions regarding the rights, duties and obligations of
the Rights Agent shall be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely within such State.

     7. SEVERABILITY. If any term, provision, covenant or restriction of this Amendment is held
by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

     8. EFFECTIVE DATE. This Amendment shall become effective as of the date first written
above.

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

	 	 	 	 	 	 	 
	 	 	THE ALLIED DEFENSE GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

John J. Marcello,
	 	 
	 

	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	MELLON INVESTOR SERVICES, LLC, as Rights Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 

2

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