EXHIBIT 10.24
FIRST AMENDMENT TO
CREDIT AGREEMENT
between
MIDCOAST ENERGY RESOURCES, INC.
MAGNOLIA PIPELINE CORPORATION
H & W PIPELINE CORPORATION
MAGNOLIA RESOURCES, INC.
MAGNOLIA GATHERING, INC.
MIDCOAST HOLDINGS NO. ONE, INC.
MIDCOAST GAS PIPELINE, INC.
NUGGET DRILLING CORPORATION
MIDCOAST MARKETING, INC.
ALATENN ENERGY MARKETING COMPANY
TENNESSEE RIVER INTRASTATE GAS CO.
and
BANK ONE, TEXAS, NATIONAL ASSOCIATION
Effective as of
May 30, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS............................................... 1
1.01 Terms Defined Above............................................ 1
1.02 Terms Defined in Agreement..................................... 2
1.03 References..................................................... 2
1.04 Articles and Sections.......................................... 2
1.05 Number and Gender.............................................. 2
ARTICLE II. AMENDMENTS............................................... 2
2.01 Amendment of Section 2.8...................................... 2
2.02 Amendment of Section 2.13..................................... 3
2.03 Amendment of Section 2.22..................................... 3
2.04 Amendment of Section 6.13..................................... 3
2.05 Amendment of Section 6.14..................................... 4
ARTICLE III. CONDITIONS.............................................. 4
3.01 Receipt of Documents........................................... 4
3.02 Accuracy of Representations and Warranties..................... 4
3.03 Matters Satisfactory to Lender................................. 5
ARTICLE IV. REPRESENTATIONS AND WARRANTIES........................... 5
ARTICLE V. RATIFICATION.............................................. 5
ARTICLE VI. MISCELLANEOUS............................................ 5
6.01 Scope of Amendment............................................. 5
6.02 Agreement as Amended........................................... 5
6.03 Parties in Interest............................................ 5
6.04 Rights of Third Parties........................................ 5
6.05 ENTIRE AGREEMENT............................................... 6
6.06 GOVERNING LAW.................................................. 6
6.07 JURISDICTION AND VENUE......................................... 6
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FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "FIRST AMENDMENT") is
made and entered into effective as of May 30, 1997, between MIDCOAST ENERGY
RESOURCES, INC., a Nevada corporation ("MIDCOAST"), MAGNOLIA PIPELINE
CORPORATION, an Alabama corporation ("MAGNOLIA PIPELINE"), H&W PIPELINE
CORPORATION, an Alabama corporation ("H&W"), MAGNOLIA RESOURCES, INC., a
Mississippi corporation ("MAGNOLIA RESOURCES"), MAGNOLIA GATHERING, INC., an
Alabama corporation ("MAGNOLIA GATHERING"), MIDCOAST HOLDINGS NO. ONE, INC., a
Delaware corporation ("MIDCOAST HOLDINGS"), MIDCOAST GAS PIPELINE, INC., a Texas
corporation ("MIDCOAST GAS PIPELINE"), NUGGET DRILLING CORPORATION, a Minnesota
corporation ("NUGGET"), MIDCOAST MARKETING, INC., a Texas corporation ("MIDCOAST
MARKETING"), ALATENN ENERGY MARKETING COMPANY, an Alabama corporation
("ATEMCO"), TENNESSEE RIVER INTRASTATE GAS CO., an Alabama corporation
("TRIGAS", together with Midcoast, Magnolia Pipeline, H&W, Magnolia Resources,
Magnolia Gathering, Midcoast Holdings, Midcoast Gas Pipeline, Nugget, Midcoast
Marketing, and Atemco, collectively the "BORROWER") and BANK ONE, TEXAS,
NATIONAL ASSOCIATION, a national banking association (the "LENDER").
W I T N E S S E T H:
WHEREAS, the above named parties did execute and exchange
counterparts of that certain Credit Agreement dated August 22, 1996 (the
"AGREEMENT"), to which reference is here made for all purposes;
WHEREAS, the parties subject to and bound by the Agreement are
desirous of amending the Agreement in the particulars hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties to the Agreement, as set forth therein, and the mutual
covenants and agreements of the parties hereto, as set forth in this First
Amendment, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.01 TERMS DEFINED ABOVE. As used herein, each of the terms
"AGREEMENT," "BORROWER," "FIRST AMENDMENT," and "LENDER" shall have the meaning
assigned to such term hereinabove.
1.02 TERMS DEFINED IN AGREEMENT. As used herein, each term defined
in the Agreement shall have the meaning assigned thereto in the Agreement,
unless expressly provided herein to the contrary.
1.03 REFERENCES. References in this First Amendment to Article or
Section numbers shall be to Articles and Sections of this First Amendment,
unless expressly stated herein to the contrary. References in this First
Amendment to "hereby," "herein," "hereinafter," "hereinabove," "hereinbelow,"
"hereof," and "hereunder" shall be to this First Amendment in its entirety and
not only to the particular Article or Section in which such reference appears.
1.04 ARTICLES AND SECTIONS. This First Amendment, for convenience
only, has been divided into Articles and Sections and it is understood that the
rights, powers, privileges, duties, and other legal relations of the parties
hereto shall be determined from this First Amendment as an entirety and without
regard to such division into Articles and Sections and without regard to
headings prefixed to such Articles and Sections.
1.05 NUMBER AND GENDER. Whenever the context requires, reference
herein made to the single number shall be understood to include the plural and
likewise the plural shall be understood to include the singular. Words denoting
sex shall be construed to include the masculine, feminine, and neuter, when such
construction is appropriate, and specific enumeration shall not exclude the
general, but shall be construed as cumulative. Definitions of terms defined in
the singular and plural shall be equally applicable to the plural or singular,
as the case may be.
ARTICLE II.
AMENDMENTS
The Borrower and the Lender hereby amend the Agreement in the
following particulars:
2.01 AMENDMENT OF SECTION 1.2. Section 1.2 of the Agreement is
hereby amended as follows:
The following definition is amended to read as follows:
"OBLIGATIONS" shall mean, without duplication, (a) all Indebtedness
evidenced by the Note, (b) the Reimbursement Obligations, (c) the
undrawn, amount of all outstanding, unexpired Letters of Credit, (d)
the obligation of the Borrower for the payment of Commitment Fees,
Facility Fees, Letter of Credit Fees, and Engineering Fees, any
other agreements with the Lender, including, but not limited to ISDA
Master Agreement, dated as of May 30, 1997, and (e) all other
obligations and liabilities of
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the Borrower to the Lender, now existing or hereafter incurred,
under, arising out of or in connection with any Loan Document, and
to the extent that any of the foregoing includes or refers to the
payment of amounts deemed or constituting interest, only so much
thereof as shall have accrued, been earned and which remains unpaid
at each relevant time of determination.
The following definitions are added to read as follows:
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean the Accounts Receivable of
Borrower related to gas marketing activities, only, not in excess of
30 days past invoice due date, but excluding all accounts receivable
to one customer if fifteen percent (15%) of the total accounts
receivable to such customer are more than 30 days past invoice due
date and provided further that no one customer's accounts receivable
shall constitute more than twenty percent (20%) of the eligible
accounts receivable, but such limitation shall not apply to
Westlake, Mapco, Champions International, Amoco Oil Co. and Xxxxxxxx
Metal Co., or their successors.
"'ISDA MASTER AGREEMENT" shall mean that certain ISDA Master
Agreement dated as of May 30, 1997, between Midcoast and Lender.
2.02 AMENDMENT OF SECTION 2.8. Section 2.8(a) of the Agreement is
amended to read as follows:
"(a) The Borrowing Base as of May 1, 1997, is acknowledged by the
Borrower and the Lender to be $13,000,000 for the Revolving Line of
Credit of which up to $3,000,000 is available for cash advances and
up to $10,000,000 may be used for L/C's and $38,500,000 for the
Reducing Revolving Line of Credit. The Borrowing Base for the
Revolving Line of Credit is limited to 80% of Eligible Accounts
Receivable of the Borrower and acceptable to the Lender in its sole
discretion although this limit will not apply until 120 days after
May 30, 1997. The Borrowing Base for the Reducing Revolving Line of
Credit is determined by the Lender in its sole discretion and based
on contracts that are acceptable to the Lender. Commencing on July
1, 1997, and continuing on August 1, 1997, the amount of the
Borrowing Base on the Reducing Revolving Line of Credit shall be
reduced by $321,000, provided, however, that such amount is subject
to redetermination under Section 2.8(b). In addition to the above,
the amount of the Borrowing Base on the Reducing Revolving Line of
Credit shall be reduced by $7,000,000 on August 31, 1997. Commencing
on
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September 1, 1997, and continuing thereafter on the first day of
each calendar month through the Commitment Termination Date, the
amount of the Borrowing Base on the Reducing Revolving Line of
Credit shall be reduced by $262,500, provided, however, that such
amount is subject to redetermination under Section 2.8(b)."
2.03 AMENDMENT OF SECTION 2.13. Section 2.13 of the Agreement is
amended to add the following sentence:
"... A facility fee in the amount of $325,000 for both the Revolving
Line of Credit and the Reducing Revolving Line of Credit is owed by
the Borrower. The Borrower has paid the Lender the sum of $150,000
and the balance of $175,000 is payable to the Lender upon the
execution of this First Amendment to the Credit Agreement. In
addition, there is owed by Borrower to the Lender the sum of
$100,000 as a fee for the funding of the $7,000,000 portion of the
increase in the Borrowing Base for the Reducing Revolving Line of
Credit payable to the Lender upon the execution of this First
Amendment."
2.04 AMENDMENT OF SECTION 2.22. Section 2.22 PREPAYMENT PENALTY
shall be added to the Agreement as follows:
"In the event this facility is refinanced by a credit facility of
another commercial bank or is cancelled prior to the Commitment
Termination Date, the Borrower shall pay the Lender a fee of
$250,000 during the calendar year 1997, $175,000 for 1998 and
$75,000 for 1999."
2.05 AMENDMENT OF SECTION 5.16. Section 5.16 of the Agreement is
amended to delete in the sixth line after the word Lender, "and, naming the
Lender as loss payee".
2.06 AMENDMENT OF SECTION 6.13. Section 6.13 of the Agreement is
amended to add the following sentence:
"... After the purchase of Atrion Corporation's subsidiaries, the
ratio shall be 1.25 and shall revert back to 1.40 on August 31,
1997."
2.07 AMENDMENT OF SECTION 6.14. Section 6.14 of the Agreement is
amended to add the following sentence:
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"... The percentage of 60% shall be 76.5% until August 31, 1997,
at which time it will revert back to 60%."
2.08 AMENDMENT OF SECTION 6.16(C). Section 6.16(c) of the Agreement
is amended to read as follows:
"(c) the net proceeds of all equity offerings..."
2.09 AMENDMENT OF SECTION 7.1. Section 7.1(d) of the Agreement is
amended to read as follows:
"(d) default shall be made by the Borrower (as principal or
guarantor or other surety) in the payment or performance of any
bond, debenture, note, or other Indebtedness or under any credit
agreement, including the credit agreement dated effective May 30,
1997, between the Lender and Alabama Tennessee Natural Gas Co., loan
agreement, indenture, promissory note, or similar agreement or
instrument executed in connection with any of the foregoing, and
such default shall remain unremedied for in excess of the period of
grace, if any, with respect thereto;"
ARTICLE III.
CONDITIONS
The obligation of the Lender to amend the Agreement as provided
herein is subject to the fulfillment of the following conditions precedent:
3.01 RECEIPT OF DOCUMENTS. The Lender shall have received, reviewed,
and approved the following documents and other items, appropriately executed
when necessary and in form and substance satisfactory to the Lender:
(a) multiple counterparts of this First Amendment, as requested by
the Lender;
(b) Notice of Final Agreement;
(c) Ratification of Mortgages;
(d) Security Agreement and Stock Pledge from Midcoast pledging ___
shares of capital stock of Alabama Tennessee Natural Gas Co.;
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(e) Security Agreement from Atemco and Trigas pledging all accounts
and general intangibles;
(f) such other agreements, documents, items, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may
reasonably request.
3.02 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in Article IV of the Agreement and this First Amendment
shall be true and correct.
3.03 MATTERS SATISFACTORY TO LENDER. All matters incident to the
consummation of the transactions contemplated hereby shall be satisfactory to
the Lender.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby expressly re-makes, in favor of the Lender, all
of the representations and warranties set forth in Article IV of the Agreement,
and represents and warrants that all such representations and warranties remain
true and unbreached.
ARTICLE V.
RATIFICATION
Each of the parties hereto does hereby adopt, ratify, and confirm
the Agreement and the other Loan Documents, in all things in accordance with the
terms and provisions thereof, as amended by this First Amendment.
ARTICLE VI.
MISCELLANEOUS
6.01 SCOPE OF AMENDMENT. The scope of this First Amendment is
expressly limited to the matters addressed herein and this First Amendment shall
not operate as a waiver of any past, present, or future breach, Default, or
Event of Default under the Agreement, except to the extent, if any, that any
such breach, Default, or Event of Default is remedied by the effect of this
First Amendment.
6.02 AGREEMENT AS AMENDED. All references to the Agreement in any
document heretofore or hereafter executed in connection with the transactions
contemplated in the Agreement shall be deemed to refer to the Agreement as
amended by this First Amendment.
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6.03 PARTIES IN INTEREST. All provisions of this First Amendment
shall be binding upon and shall inure to the benefit of the Borrower, the Lender
and their respective successors and assigns.
6.04 RIGHTS OF THIRD PARTIES. All provisions herein are imposed
solely and exclusively for the benefit of the Lender and the Borrower, and no
other Person shall have standing to require satisfaction of such provisions in
accordance with their terms and any or all of such provisions may be freely
waived in whole or in part by the Lender at any time if in its sole discretion
it deems it advisable to do so.
6.05 ENTIRE AGREEMENT. THIS FIRST AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, BETWEEN SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS FIRST AMENDMENT,
THE AGREEMENT, THE NOTE, THE SECURITY INSTRUMENTS, AND THE OTHER WRITTEN
DOCUMENTS REFERRED TO IN THE AGREEMENT OR EXECUTED IN CONNECTION WITH OR AS
SECURITY FOR THE NOTE REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE
PARTIES THERETO 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.
6.06 GOVERNING LAW. THIS FIRST AMENDMENT, THE AGREEMENT AND THE NOTE
SHALL BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT
VERNON'S TEXAS CIVIL STATUTES, ARTICLE 5069, CHAPTER 15 (WHICH REGULATES CERTAIN
REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT APPLY.
6.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT
TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR
FROM THIS FIRST AMENDMENT, THE AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
LITIGATED IN COURTS HAVING SITUS IN XXXXXX COUNTY, TEXAS. EACH OF THE BORROWER
AND THE LENDER HEREBY SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR
FEDERAL COURT LOCATED IN XXXXXX COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT
MAY HAVE TO TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION
BROUGHT AGAINST IT BY THE BORROWER OR THE LENDER IN ACCORDANCE WITH THIS
SECTION.
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IN WITNESS WHEREOF, this First Amendment to Credit Agreement is
executed effective the date first hereinabove written.
BORROWER:
MIDCOAST ENERGY RESOURCES, INC.
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Chief Financial Officer and
Treasurer
MAGNOLIA PIPELINE CORPORATION
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
H & W PIPELINE CORPORATION
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
MAGNOLIA RESOURCES, INC.
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
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MAGNOLIA GATHERING, INC.
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
MIDCOAST HOLDINGS NO. ONE, INC.
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
MIDCOAST GAS PIPELINE, INC.
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
NUGGET DRILLING CORPORATION
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
MIDCOAST MARKETING, INC.
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
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ALATENN ENERGY MARKETING
COMPANY
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
TENNESSEE RIVER INTRASTATE
GAS CO.
By:/s/XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Treasurer
LENDER:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION
By: /s/XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
Vice President
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