PLAINS EXPLORATION & PRODUCTION CO - FORM 8-K - EX-4.1 - CONSENT AND AMENDMENT NO. 1 TO CREDIT AGREEMENT

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8-K - PXP FORM 8K DATED OCTOBER 12, 2010 - PLAINS EXPLORATION & PRODUCTION CO	pxpform8k_10122010.htm

Exhibit 4.1

CONSENT AND AMENDMENT NO. 1 TO

AMENDED AND RESTATED CREDIT AGREEMENT

THIS CONSENT AND AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) dated as of October 8, 2010, is among Plains Exploration & Production Company, a Delaware corporation (the “Borrower”), the several banks and other financial institutions signatories hereto (the “Lenders”), and JPMorgan Chase Bank, N.A., a national banking association, as Administrative Agent for the Lenders (the “Administrative Agent”).

RECITALS

A. The Borrower, the Lenders and the Administrative Agent are parties to an Amended and Restated Credit Agreement dated as of August 3, 2010 (as amended, modified or supplemented prior to the date hereof, the “Credit Agreement”).

B. Pursuant to an Agreement and Plan of Merger dated as of September 19, 2010 (the “Merger Agreement”), among the Borrower, PXP Gulf Properties LLC (“PXP Gulf”), PXP Offshore LLC (“PXP Offshore”), McMoRan Exploration Co. (“McMoRan”), McMoRan Oil & Gas LLC, McMoRan GOM, LLC (“McMoRan GOM”), and McMoRan Offshore LLC (“McMoRan Offshore”), the Borrower has agreed to transfer the oil and gas properties described in the Merger Agreement to PXP Gulf and PXP Offshore and then exchange its Equity Interests in PXP Gulf and PXP Offshore for cash and shares of common stock of McMoRan. This exchange will be effected by means of a merger of McMoRan GOM into PXP Gulf and a merger of McMoRan Offshore into PXP Offshore.

C. The Borrower has requested the Lenders to consent to the transactions contemplated by the Merger Agreement and approve an amendment to the Credit Agreement permitting the Borrower to hold the common stock of McMoRan acquired in those transactions.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Amendment, the Borrower and the Super-majority Lenders agree as follows:

1. Defined Terms. Unless otherwise defined in this Amendment, capitalized terms used in this Amendment have the meanings assigned to those terms in the Credit Agreement.

2. Consents. The Super-majority Lenders hereby consent to the following actions by the Borrower and its Restricted Subsidiaries:

(a) The Borrower may be the owner of PXP Gulf and PXP Offshore without complying with Sections 8.13(b) and (c) of the Credit Agreement;

(b) The Borrower and its Subsidiaries may make the following Investments in PXP Gulf and PXP Offshore without complying with Section 9.06 of the Credit Agreement: (i) the transfer of the Gulf Assets (as defined in the Merger Agreement) to PXP Gulf and (ii) the transfer of the Offshore Assets (as defined in the Merger Agreement) to PXP Offshore, and the amount of such Investments shall not be applied towards the maximum amount of such Investments permitted by such Section 9.06;

(c) The Borrower may permit PXP Gulf to merge with McMoRan GOM and PXP Offshore LLC to merge with McMoRan Offshore, each in accordance with the terms of the Merger Agreement, as in effect on the date hereof or as modified with the approval of the Administrative Agent, without complying with Section 9.11 of the Credit Agreement; and

(d) The Borrower may effect the transactions contemplated by the Merger Agreement, as in effect on the date hereof or as modified with the approval of the Administrative Agent, without complying with Section 9.12.

Accordingly, the actions described in clauses (a), (b), (c) and (d) above will not result in a Default or an Event of Default. Notwithstanding the foregoing, if (i) the Merger Agreement is terminated or (ii) the transactions contemplated by the Merger Agreement have not been consummated by March 31, 2011, then the consents described in clauses (c) and (d) above will expire, and the Borrower shall comply, and cause PXP Gulf and PXP Offshore to comply, with the requirements of Section 8.13(b) and (c) of the Credit Agreement within 30 days of the occurrence of that event, and any failure of the Borrower, PXP Gulf or PXP Offshore to comply with this sentence will be an Event of Default.

3. Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

(a) The definition of “Loan Documents” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:

“Loan Documents” means this Agreement, the Notes, all Letter of Credit Agreements, the Letters of Credit, the Security Instruments, and each other document that is identified as a Loan Document.

(b) Section 1.1 of the Credit Agreement is hereby amended by adding the following definitions after the definition of Maximum Credit Amount:

“McMoRan” means McMoRan Exploration Co., a Delaware corporation.

“McMoRan Common Stock” means the common stock, par value $0.01 per share, of McMoRan.

“McMoRan Merger Agreement” means the Agreement and Plan of Merger dated as of September 19, 2010 among the Borrower, PXP Gulf Properties LLC, PXP Offshore LLC, McMoRan, McMoRan Oil & Gas LLC, McMoRan GOM, LLC, and McMoRan Offshore LLC, as amended, modified or supplemented from time to time; provided, however, that such agreement shall not be amended, modified, waived or supplemented in a manner materially adverse to the Lenders unless otherwise approved by the Administrative Agent.

(c) Section 9.06 of the Credit Agreement is hereby amended by redesignating clause (u) as clause (v) and inserting the following new clause (u) immediately after clause (t):

(u) Any Investment by the Borrower in McMoRan Common Stock acquired pursuant to the mergers effected pursuant to McMoRan Merger Agreement.

(d) Clause (ii) of Section 9.12(d) of the Credit Agreement is hereby amended to read as follows:

(ii) if (A) such Oil and Gas Property (or any portion of such Oil and Gas Property) is included in the Borrowing Base and (B) the value for that Oil and Gas Property (or that portion, as the case may be) set forth in the most recently delivered Reserve Report , together with the value of other Oil and Gas Properties sold or disposed of since the most recent Scheduled Redetermination Date, is greater than 10% of the Borrowing Base then in effect, individually or in the aggregate, the Borrowing Base shall be reduced, effective immediately upon such sale or disposition, by an amount equal to the value, if any, assigned such Property in the most recently delivered Reserve Report, except that there will be no reduction in the Borrowing Base with respect to any disposition pursuant to the McMoRan Merger Agreement and the value of the Oil and Gas Properties disposed of pursuant to the McMoRan Merger Agreement will be disregarded in determining any other reduction in the Borrowing Base required by this Section 9.12(d);

4. Conditions to Effectiveness. This Amendment will become effective on the date on which the following conditions have been satisfied or waived:

(a) The representations and warranties of the Borrower in Section 5 hereof shall be true and correct; and

(b) The Administrative Agent shall have received this Amendment, executed and delivered by the Borrower, the Guarantors, the Administrative Agent and the Super-majority Lenders.

5. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and each of the Lenders as follows:

(a) This Amendment has been duly authorized by all necessary corporate action and constitutes the binding obligation of the Borrower.

(b) Each of the representations and warranties made by the Borrower and the Guarantors in or pursuant to the Credit Agreement and the other Loan Documents is true and correct in all material respects as of the date hereof, as if made (after giving effect to this Amendment) on and as of such date, except for any representations and warranties made as of a specified date, which were true and correct in all material respects as of such specified date.

(c) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing as of the date hereof.

(d) Since the date of the most recent audited financial statements of the Borrower and its Subsidiaries delivered to the Lenders pursuant to Section 8.01(a) of the Credit Agreement, there has been no material adverse effect on the business, operations, Property or financial condition of the Borrower and its Restricted Subsidiaries taken as a whole, excluding the effect of events, developments and circumstances affecting the oil and gas exploration and production industry generally.

6. Continuing Effect of the Credit Agreement. This Amendment does not constitute a waiver of any provision of the Credit Agreement and, except as expressly provided herein, is not to be construed as a consent to any action on the part of the Borrower that would require a waiver or consent of the Lenders or an amendment or modification to any term of the Loan Documents. The Borrower hereby confirms and ratifies the Credit Agreement as amended hereby and each of the other Loan Documents to which it is a party and acknowledges and agrees that the same continue in full force and effect as amended hereby (as applicable).

7. Reference to the Credit Agreement. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “herein” or words of like import refer to the Credit Agreement, as amended and affected hereby.

8. Designation as Loan Document. This Amendment is a Loan Document.

9. Counterparts. This Amendment may be executed by all parties hereto in any number of separate counterparts each of which may be delivered in original, facsimile or other electronic (e.g., “.pdf”) form and all of such counterparts taken together constitute one instrument.

10. References. The words “hereby,” “herein,” “hereinabove,” “hereinafter,” “hereinbelow,” “hereof,” “hereunder” and words of similar import when used in this Amendment refer to this Amendment as a whole and not to any particular article, section or provision of this Amendment. References in this Amendment to a section number are to such sections of the Credit Agreement unless otherwise specified.

11. Headings Descriptive. The headings of the several sections of this Amendment are inserted for convenience only and do not in any way affect the meaning or construction of any provision of this Amendment.

12. Governing Law. This Amendment is governed by and will be construed in accordance with the law of the State of New York.

13. Payment of Expenses. The Borrower shall pay or reimburse the Administrative Agent for all of its out-of-pocket costs and reasonable expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.

14. Final Agreement of the Parties. THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS 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 AMONG THE PARTIES.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties are signing this Amendment as of the date first above written.

		PLAINS EXPLORATION & PRODUCTION COMPANY


		By: /s/ Winston M. Talbert
		Name: Winston M. Talbert
		Title: Executive Vice President and Chief Financial Officer