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EXHIBIT 10.3
SECOND AMENDMENT TO FINANCING AGREEMENT
Second Amendment to Financing Agreement dated as of this 31st day of
August 1998 (the "Amendment"), by and among Energy Partners, Ltd., a Delaware
corporation (the "Borrower"), and Energy Income Fund, L.P., a Delaware limited
partnership ("EIF"), to that certain Financing Agreement dated as of April 15,
1998, as amended by the First Amendment to Financing Agreement dated as of June
19, 1998 (as amended, the "Agreement").
RECITALS
WHEREAS, pursuant to the Agreement, EIF agreed to make loans to
Borrower for the purposes and subject to the terms and conditions set forth
therein;
WHEREAS, Section 11.2(a) of the Agreement provides that the parties
thereto may amend or modify the Agreement by a written instrument duly executed
by the parties;
WHEREAS, Borrower has entered into that certain Exploration Agreement
and Agreement to Assign Bay Marchand Field OCS-Gulf of Mexico, dated as of
August 15, 1998, between Borrower and Hughes-Rawls;
WHEREAS, Borrower and EIF desire to amend the Agreement in certain
other respects.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. All capitalized terms used herein shall have the meanings assigned
to them in the Agreement unless expressly defined otherwise in this Amendment.
2. Except as otherwise specifically provided herein, all terms and
conditions of the Agreement shall apply to the interpretation and enforcement of
this Amendment as if explicitly set forth herein.
3. The preamble of the Agreement is amended by adding the following
after the first "WHEREAS" clause:
WHEREAS, Borrower intends to enter into an Exploration
Agreement and Agreement to Assign Bay Marchand Field OCS-Gulf of Mexico
with Hughes-Rawls, L.L.C. ("Hughes-Rawls") as well as that certain
Consent to Assignment of Farmout Agreement effective August 15, 1998
covering Bay Marchand Block 2 Field between Borrower, Hughes-Rawls and
Chevron U.S.A. Inc.
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4. Section 1.1 of the Agreement is amended by including the following
definitions, inserted in the appropriate alphabetical order:
"Hughes-Rawls" shall mean Hughes-Rawls, L.L.C., a Delaware
limited liability company whose principal office is in Jackson,
Mississippi.
"Hughes-Rawls Agreement" shall mean that certain Exploration
Agreement and Agreement to Assign Bay Marchand Field OCS-Gulf of
Mexico, dated as of August 15, 1998, between Borrower and Hughes-Rawls
as described on Exhibit N, under the terms of which Borrower acquired
an undivided 30% interest in that certain Farmout Agreement, effective
August 15, 1998, between Chevron U.S.A. Inc. and Hughes-Rawls, attached
hereto as Exhibit O as further evidenced in that certain Assignment and
Bill of Sale dated effective August 15, 1998 from Hughes-Rawls to
Borrower and attached hereto as Exhibit P.
"Hughes-Rawls Financing" shall have the meaning set forth in
Section 2.1(c).
"Hughes-Rawls Properties" shall mean those properties
described on Exhibit O.
5. Section 1.1 of the Agreement is amended by replacing the following
definition with the definition below:
"Additional Financings" shall have the meaning set forth in
Section 2.1(d).
6. Section 2.1 is amended to read as follows:
2.1 The Development Loan.
(a) Subject to the terms and conditions set forth in
this Agreement, EIF agrees to make a loan to Borrower (the
"Chevron Financing") in the principal amount of up to Nine
Million Seven Hundred Forty-Nine Thousand Five Hundred
Ninety-Nine Dollars ($9,749,599) for the following purposes:
(i) up to Two Hundred Seventy-Four Thousand
Dollars ($274,000) to finance Main Pass 133 rig
mobilization;
(ii) up to One Million Nine Hundred Five
Thousand Dollars ($1,905,000) to sidetrack and
complete the Main Pass 133 A-6 well;
(iii) up to Two Million Three Hundred Eighty
Thousand Dollars ($2,380,000) to workover the Main
Pass 133 A-10 well;
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(iv) up to Two Million Six Hundred
Eighty-Four Thousand Dollars ($2,684,000) to workover
the Main Pass 133 A-7 well;
(v) up to Two Million Two Hundred Thirty-One
Thousand Dollars ($2,231,000) to workover the Main
Pass 133 A-9 well;
(vi) up to One Hundred Seventy-Two Thousand
Dollars ($172,000) to finance Main Pass 133 rig
demobilization; and
(vii) up to One Hundred Three Thousand Five
Hundred Ninety-Nine Dollars ($103,599) for payment
of insurance premiums; and
(viii) up to Thirty Thousand Dollars
($30,000) for working capital.
(b) Subject to the terms and conditions set forth in
this Agreement, EIF agrees to make a loan to Borrower (the
"Bay Marchand Financing") in the aggregate principal amount of
up to Ten Million Dollars ($10,000,000) for the following
purposes:
(i) up to Nine Million Three Hundred
Thousand Dollars ($9,300,000) to finance the
acquisition of a 20% interest in the Bay Marchand
Properties;
(ii) up to Five Hundred Thousand Dollars
($500,000) for working capital; and
(iii) up to Two Hundred Thousand Dollars
($200,000) to finance payment of costs and expenses
to EIF.
(c) Subject to the terms and conditions set forth in
this Agreement, EIF agrees to make a loan to Borrower (the
"Hughes-Rawls Financing") in the principal amount of up to Two
Hundred Fifty Thousand Four Hundred One Dollars ($250,401) to
finance certain costs associated with Borrower's obligations
under the Hughes-Rawls Agreement.
(d) In the event that the Chevron Financing, Bay
Marchand Financing and Hughes-Rawls Financing do not fund an
amount equal to the entire principal amount of Twenty Million
Dollars ($20,000,000) and subject to the terms and conditions
set forth in this Agreement, EIF agrees to make additional
loans to Borrower ("Additional Financings") to finance costs
relating to Borrower's obligations under the Proposed Oil and
Gas Agreements that satisfy certain conditions set forth in
Section 6.2 ("Approved Transactions"); provided, however,
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that the aggregate principal amount funded under this
Agreement shall not exceed Twenty Million Dollars
($20,000,000). The Chevron Financing, Bay Marchand Financing,
Hughes-Rawls Financing and any Additional Financings are
collectively referred to as the "Development Loan" herein.
(e) Upon (i) satisfaction of each of the conditions
set forth in Article 6, and (ii) providing EIF with written
notice not less than twenty (20) days prior to any Funding,
the Development Loan may be funded through one or more
Fundings to finance one or more Approved Transactions;
provided however, that any amounts under the Development Loan
which are not funded by April 1, 2000, will be canceled
effective April 1, 2000. Each Additional Funding shall be
documented by either an amendment to this Agreement or by a
side letter between EIF and Borrower, at the discretion of
EIF.
7. Section 6.2(i) is amended by replacing it with the following:
(i) Loan Documents. EIF shall have received the
following instruments, each duly and validly executed and
delivered by Borrower:
(i) the Development Note;
(ii) the Escrow Agreement;
(iii) the Stockholders' Agreement in
substantially the form of Exhibit
K;
(iv) the Stock Purchase Agreement in
substantially the form of Exhibit
G;
(v) the Limited Personal Recourse
Agreement in substantially the form
of Exhibit F;
(vi) the letter of intent for Farmout
Agreement -- Workover Package Main
Pass 133 "A" Platform, Offshore
Louisiana between Borrower and
Chevron;
(vii) Farmout Agreement between Borrower
and Chevron;
(viii) blank letters in lieu of transfer
order;
(ix) the Bay Marchand Agreement;
(x) the Bay Marchand Purchase
Agreement;
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(xi) the Hughes-Rawls Agreement;
(xii) the Amended and Restated
Stockholders' Agreement; and
(xi) such other agreements,
certificates, instruments or other
documents as EIF may reasonably
request to evidence or carry out
the transactions contemplated by
this Agreement.
8. The Exhibit Index is amended by adding "Exhibit N Exploration
Agreement and Agreement to Assign Bay Marchand Field OCS-Gulf of Mexico,"
"Exhibit O Farmout Agreement between Chevron U.S.A. Inc. and Hughes-Rawls,"
"Exhibit P Assignment and Bill of Sale from Hughes-Rawls to Borrower" and
"Exhibit Q" Description of Hughes-Rawls Properties" and Exhibits N, O, P, and Q,
which are attached hereto, shall be attached to the Agreement.
9. THIS AMENDMENT IS TO BE CONSTRUED UNDER THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS.
10. Except as expressly amended hereby, the Agreement remains in full
force and effect. Any references to the Agreement in the Loan Documents shall
refer to the Agreement as amended hereby.
11. This Amendment shall be of no force and effect until receipt and
execution of this Amendment by EIF in its offices in Longmeadow, Massachusetts.
(Signature page follows.)
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
ENERGY PARTNERS, LTD.
By: /s/ RICHARD A. BACHMANN
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Richard A. Bachmann
President and Chief Executive Officer
ENERGY INCOME FUND, L.P.
By: EIF General Partner, L.L.C.,
its General Partner
By: /s/ ROBERT D. GERSHEN
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Robert D. Gershen
A Managing Director
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