FIRST AMENDMENT
dated as of March 15, 1999
to
Amended and Restated Credit Agreement
dated as of August 31, 1998
and Notes dated August 31, 1998
This FIRST AMENDMENT dated as of March 15, 1999 is among Midcoast Energy
Resources, Inc., a Nevada corporation (the "Borrower"), the subsidiaries of the
Borrower listed on the signature pages hereof under the caption "Guarantors",
CIBC, Inc., individually as a Lender and as syndication agent, NationsBank,
N.A., individually as a Lender and as documentation agent, and Bank One, Texas,
National Association, individually and as administrative agent.
R E C I T A L S
A. The Borrower, the subsidiaries of the Borrower party thereto as
guarantors, CIBC, Inc., NationsBank, N.A. and Bank One, Texas, National
Association, individually and as administrative agent, are parties to that
certain Amended and Restated Credit Agreement dated as of August 31, 1998 (the
"Existing Agreement").
B. The Borrower has requested that the Aggregate Initial Commitment be
increased to $125,000,000.
C. The Borrower has also requested that the Lenders agree to make Canadian
Dollar loans and various other amendments to the Existing Agreement in
connection with its pending acquisition of certain Canadian assets.
D. The Lenders are willing to agree to the requested amendments to the
Existing Agreement.
NOW THEREFORE, the parties hereto agree as follows:
Section 1. DEFINITIONS. Unless the context otherwise requires, each
term used herein which is defined in the Existing Agreement shall have the
meaning assigned to it therein.
Section 2. AGGREGATE INITIAL COMMITMENT INCREASE. Pursuant to Section 2.4
of the Existing Agreement, but effective only when the conditions precedent set
forth in Section 7 of this First Amendment are satisfied, the parties hereto
agree that for all purposes of the Existing Agreement as amended hereby and the
other Loan Documents:
(i) On and as of the date hereof, a $125,000,000 Aggregate Increased
Commitment will be effective under the Existing Agreement as amended
hereby, and
(ii) On and as of the date hereof, an Increased Commitment will be
effective under the Existing Agreement as amended hereby for each Lender
in the amount set forth below opposite the name of such Lender:
LENDER INCREASED COMMITMENT
Bank One, Texas, $41,666,666.67
National Association
CIBC, Inc. $41,666,666.67
NationsBank, N.A. $41,666,666.66
Section 3. AMENDMENTS TO THE EXISTING AGREEMENT. Upon satisfaction of the
conditions precedent set forth in Section 7 of this First Amendment, but
effective as of the date of this First Amendment, the Existing Agreement shall
be amended as follows:
(i) Section 1.2 of the Existing Agreement is hereby amended by
deleting therefrom in their entirety the existing definitions of
"Available Commitment", "Borrowing Request", "Business Day", "Default
Rate", "Insolvency Proceeding", "Interest Period", "L/C Exposure", "Loan"
and "Subsidiary", and substituting in lieu thereof the following new
definitions of "Available Commitment", "Borrowing Request", "Business
Day", "Default Rate", "Insolvency Proceeding", "Interest Period", "L/C
Exposure", "Loan" and "Subsidiary":
"'AVAILABLE COMMITMENT' shall mean, at any time, an amount
equal to (a) the Aggregate Initial Commitment or the Aggregate
Increased Commitment, as the case may be, less (b) the sum of (i)
the Dollar Equivalent of the total Loan Balance, plus (ii) the L/C
Exposure at such time."
"'BORROWING REQUEST' shall mean each written request, in
substantially the form attached hereto as EXHIBIT II, by the
Borrower to the Administrative Agent for a borrowing, conversion, or
prepayment pursuant to SECTIONS 2.1 or 2.9, each of which shall:
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(a) be signed by a Responsible Officer of the Borrower;
(b) specify the amount and type of Loan requested, and, as
applicable, the Loan to be converted or prepaid and the
date of the borrowing, conversion, or prepayment (which
shall be a Business Day);
(c) when requesting a Floating Rate Loan or a Canadian
Floating Rate Loan , be delivered to the Administrative
Agent no later than 10:00 a.m., Central Standard or
Daylight Savings Time, as the case may be, on the
Business Day of the requested borrowing, conversion, or
prepayment; and
(d) when requesting a LIBO Rate Loan or a Canadian LIBO Rate
Loan, be delivered to the Administrative Agent no later
than 10:00 a.m., Central Standard or Daylight Savings
Time, as the case may be, three (3) Business Days
preceding the requested borrowing, conversion, or
prepayment and designate the Interest Period requested
with respect to such Loan."
"'BUSINESS DAY' shall mean (a) for all purposes other than as
covered by clause (b) of this definition, a day other than a
Saturday, Sunday, legal holiday for commercial banks under the laws
of the State of Texas, or any other day when banking is suspended in
the State of Texas, and (b) with respect to all requests, notices,
and determinations in connection with, and payments of principal and
interest on, Canadian Floating Rate Loans, LIBO Rate Loans or
Canadian LIBO Rate Loans, a day which is (i) a Business Day
described in clause (a) of this definition, (ii) a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago and
New York for the conduct of substantially all of their commercial
lending activities, (iii) in the case of LIBO Rate Loans, a day for
trading by and between banks for Dollar deposits in the London
interbank market, and (iv) in the case of Canadian Floating Rate
Loans and Canadian LIBO Rate Loans, a day for trading by and between
banks for Canadian Dollar deposits in the London interbank market."
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"'DEFAULT RATE' shall mean (i) with respect to any Loan or any
portion of the Loan Balance denominated in Dollars, a per annum
interest rate equal to the Base Rate plus five percent (5%), but in
no event exceeding the Highest Lawful Rate, and (ii) with respect to
any Loan or any portion of the Loan Balance denominated in Canadian
Dollars, a per annum interest rate equal to the Canadian Base Rate
plus five percent (5%), but in no event exceeding the Highest Lawful
Rate."
"'INSOLVENCY PROCEEDING' shall mean application (whether
voluntary or instituted by another Person) for, or the consent to
the appointment of, a receiver, trustee, conservator, custodian, or
liquidator of any Person or of all or a substantial part of the
Property of such Person, or the filing of a petition (whether
voluntary or instituted by another Person) commencing a case under
Title 11 of the United States Code, the Bankruptcy and Insolvency
Act (Canada) or any similar law, seeking liquidation,
reorganization, or rearrangement or taking advantage of any
bankruptcy, insolvency, debtor's relief, or other similar law of
Canada, the United States, the State of Texas, or any other
jurisdiction, or the commission of an act of bankruptcy as such term
is defined in Section 42 of the Bankruptcy and Insolvency Act
(Canada)."
"'INTEREST PERIOD' shall mean, subject to the limitations set
forth in SECTION 2.21, with respect to any LIBO Rate Loan or
Canadian LIBO Rate Loan, a period commencing on the date such Loan
is made or converted from a Loan of another type pursuant to this
Agreement or the last day of the next preceding Interest Period with
respect to such Loan and ending on the numerically corresponding day
in the calendar month that is one, two, three, or six months
thereafter, as the Borrower may request in the Borrowing Request for
such Loan."
"'L/C EXPOSURE' shall mean, at any time, the SUM of (a) the
Dollar Equivalent of the total face amount of all issued, undrawn
and uncancelled Letters of Credit, PLUS (b) the Dollar Equivalent of
the total unpaid reimbursement obligations of the Borrower under
drawings under any Letter of Credit."
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"'LOAN' individually shall mean any loan made in either
Dollars or Canadian Dollars by any Lender to or for the benefit of
the Borrower pursuant to this Agreement up to the Dollar Equivalent
of $150,000,000 which shall include up to the Dollar Equivalent of
$15,000,000 of Letters of Credit issued in Dollars or Canadian
Dollars and any payment made by the Issuing Lender under a Letter of
Credit, and "LOANS" collectively shall mean all loans made in either
Dollars or Canadian Dollars by the Lenders to or for the benefit of
the Borrower pursuant to this Agreement and all payments made by
Issuing Lender under all Letters of Credit issued in either Dollars
or Canadian Dollars."
"'SUBSIDIARY' shall mean, as to any Person, (i) any
corporation more than 50% of the outstanding securities having
ordinary voting power of which shall at the time be owned or
controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more
than 50% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a `Subsidiary' shall
mean a Subsidiary of the Borrower."
(i) Section 1.2 of the Existing Agreement is hereby amended by
inserting therein in the appropriate alphabetical order the following new
definitions:
"CANADIAN ADJUSTED LIBO RATE" shall mean, for any Canadian
LIBO Rate Loan, an interest rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of l%) to be equal to the sum of the
Canadian LIBO Rate for such Loan plus the Applicable Margin, but in
no event exceeding the Highest Lawful Rate."
"'CANADIAN BASE RATE' shall mean the interest rate per annum
announced from time to time by First Chicago NBD Bank, Canada as its
"Canadian Prime Rate", which rate shall change upon any change in
such "Canadian Prime Rate" and which rate may not be the lowest
interest rate charged by First Chicago NBD Bank, Canada."
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"'CANADIAN DOLLARS' and "C$" shall mean the lawful currency
of Canada."
"'CANADIAN DOLLAR EQUIVALENT' of any amount of any currency at
any date shall mean (i) if such currency is Canadian Dollars, the
amount of such currency, or (ii) if such currency is Dollars, the
equivalent in Canadian Dollars of such amount of such currency,
calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of The First National Bank of Chicago for
Canadian dollars on the London market at approximately 11:00 a.m.,
London time, on the date on or as of which such amount is to be
determined."
"'CANADIAN FLOATING RATE' shall mean the Canadian Base
Rate, but in no event exceeding the Highest Lawful Rate."
"'CANADIAN FLOATING RATE LOAN' shall mean any Loan and any
portion of the Loan Balance which the Borrower has requested, in the
initial Borrowing Request for such Loan or a subsequent Borrowing
Request for such portion of the Loan Balance, be made in or
converted to Canadian Dollars and bear interest at the Canadian Base
Rate, or which pursuant to the terms hereof is denominated in
Canadian Dollars and otherwise required to bear interest at the
Canadian Base Rate."
"'CANADIAN LIBO RATE' shall mean, with respect to any Interest
Period for any Canadian LIBO Rate Loan, the lesser of (a) the rate
per annum (rounded upwards, if necessary, to the nearest 1/16th of
1%) equal to the average of the offered quotations for Canadian
Dollars appearing on Telerate Page 3740 (or if such Telerate Page
shall not be available, any successor or similar service selected by
the Administrative Agent and the Borrower) as the London interbank
offered rate as of approximately 11:00 a.m., Central Standard or
Daylight Savings Time, as the case may be, on the day two Business
Days prior to the first day of such Interest Period for Dollar
deposits in an amount comparable to the principal amount of such
Canadian LIBO Rate Loan and having a term comparable to the Interest
Period for such Canadian LIBO Rate Loan, or (b) the Highest Lawful
Rate. If neither such Telerate Page 3740 nor any successor or
similar service is available, the term "CANADIAN LIBO RATE" shall
mean, with respect to any Interest Period for any Canadian LIBO Rate
Loan, the lesser of (a) the rate per annum (rounded upwards if
necessary, to the nearest 1/16th of 1%) determined by the
Administrative Agent at approximately 11:00 a.m., London time (or as
soon thereafter as practicable) two Business Days prior to the first
day of the Interest Period for such Canadian LIBO Rate Loan to be
the rate quoted by The First National Bank of Chicago for the
offering by The First National Bank of Chicago to leading banks in
the London interbank market of Canadian Dollar deposits in an amount
comparable to the principal amount of such Canadian LIBO Rate Loan
and having a term comparable to the Interest Period for such
Canadian LIBO Rate Loan, or (b) the Highest Lawful Rate."
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"'CANADIAN LIBO RATE LOAN' shall mean any Loan and any portion
of the Loan Balance which the Borrower has requested, in the initial
Borrowing Request for such Loan or a subsequent Borrowing Request
for such portion of the Loan Balance, be made in or converted to
Canadian Dollars and bear interest at the Canadian Adjusted LIBO
Rate and which is permitted by the terms hereof to bear interest at
the Canadian Adjusted LIBO Rate."
"'CANADIAN SUBSIDIARY' shall mean MCCI or MCOC."
"'DOLLAR EQUIVALENT' of any amount of any currency at any date
shall mean (i) if such currency is Dollars, the amount of such
currency, or (ii) if such currency is any currency other than
Dollars, the equivalent in Dollars of such amount of such currency,
calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of The First National Bank of Chicago for
such currency on the London market at approximately 11:00 a.m.,
London time, on the date on or as of which such amount is to be
determined."
"'DOMESTIC SUBSIDIARY' shall mean any Subsidiary of the
Borrower other than a Canadian Subsidiary."
"'EXCLUDED TAXES' means, in the case of each Lender or
Applicable Lending Office and the Administrative the Agent, taxes
imposed on its overall net income, and franchise taxes imposed on
it, by (i) the jurisdiction under the laws of which such Lender or
the Administrative Agent is incorporated or organized or (ii) the
jurisdiction in which the Administrative Agent's or such Lender's
principal executive office or such Lender's Applicable Lending
Office is located."
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"'MCCI' shall mean Midcoast Canada Capital, Inc., a
corporation formed under the Business Corporation Act of the
Province of Alberta, Canada."
"'MCOC' shall mean Midcoast Canada Operating Corporation, a
corporation formed under the Business Corporation Act of the
Province of Alberta, Canada."
"'MCOC BANK DEBT' shall mean Indebtedness for borrowed money
of MCOC incurred by MCOC in Canadian Dollars for the purpose of
financing or refinancing the acquisition of assets located in Canada
and payable to a Lender or an affiliate of a Lender."
"'PRO RATA SHARE' shall mean, with respect to each Lender, a
portion equal to a fraction the numerator of which is such Lender's
Initial Commitment and the denominator of which is the Aggregate
Initial Commitment."
"'TAXES' means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and any and
all liabilities with respect to the foregoing, but EXCLUDING
Excluded Taxes."
"'TYPE' means, with respect to any Loan, its nature as a
Floating Rate Loan, a LIBO Rate Loan, a Canadian Floating Rate Loan
or a Canadian LIBO Rate Loan."
(iii) The first sentence of Section 2.1(a) of the Existing Agreement
is hereby amended by deleting it in its entirety and substituting in lieu
thereof the following new sentence:
"Upon the terms and conditions (including, without limitation, the
right of the Lenders to decline to make any Loan so long as any
Default or Event of Default exists) and relying on the
representations and warranties contained in this Agreement, each
Lender severally agrees, during the Commitment Period, to make Loans
to the Borrower from time to time in an aggregate principal amount
that will not result in (a) the sum of the Dollar Equivalent of such
Lender's Loans, plus such Lender's Pro Rata Share of the Dollar
Equivalent of the aggregate outstanding principal amount of the MCOC
Bank Debt (after giving effect to any reduction of such aggregate
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outstanding principal amount to be effected with the proceeds of the
Loans being made by the Lenders), exceeding such Lender's Initial
Commitment (or, if the Initial Commitment of such Lender has been
increased pursuant to SECTION 2.4, such Lender's Increased
Commitment), (b) the sum of the Dollar Equivalent of the total Loans
plus the L/C Exposure, plus the Dollar Equivalent of the aggregate
outstanding principal amount of the MCOC Bank Debt (after giving
effect to any reduction of such aggregate outstanding principal
amount to be effected with the proceeds of the Loans being made by
the Lenders) exceeding the Aggregate Initial Commitment (or, if the
Aggregate Initial Commitment has been increased pursuant to SECTION
2.4, the Aggregate Increased Commitment), or (c) the aggregate
outstanding principal amount of the Canadian Floating Rate Loans and
the Canadian LIBO Rate Loans exceeding an amount equal to (A) Fifty
Million Canadian Dollars (C$50,000,000), minus (B) the aggregate
outstanding principal amount of the MCOC Bank Debt (after giving
effect to any reduction of the MCOC Bank Debt to be effected with
the proceeds of the Loans being made by the Lenders)."
(iv) Section 2.1(c) of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 2.1(c):
"(c) Subject to the terms of this Agreement, during the
Commitment Period, the Borrower may borrow, repay, and reborrow and
convert Loans of one type or with one Interest Period into Loans of
another type or with a different Interest Period. If any Floating
Rate Loan or LIBO Rate Loan is converted into a Canadian Floating
Rate Loan or a Canadian LIBO Rate Loan, the amount of the resulting
Loan shall be equal to the Canadian Dollar Equivalent of such
converted Floating Rate Loan or LIBO Rate Loan; and, if any Canadian
Floating Rate Loan or Canadian LIBO Rate Loan is converted into a
Floating Rate Loan or LIBO Rate Loan, the amount of the resulting
Loan shall be equal to the Dollar Equivalent of such converted
Canadian Floating Rate Loan or Canadian LIBO Rate Loan. Each
borrowing, conversion, and prepayment of principal of Loans shall be
in an amount the Dollar Equivalent of which is at least equal to
$1,000,000. Each borrowing, prepayment, or conversion of or into a
Loan of a different type or, in the case of a LIBO Rate Loan or a
Canadian LIBO Rate Loan, having a different Interest Period, shall
9
be deemed a separate borrowing, conversion, and prepayment for
purposes of the foregoing, one for each type of Loan or Interest
Period. Anything in this Agreement to the contrary notwithstanding,
(i) the aggregate principal amount of LIBO Rate Loans having the
same Interest Period shall be at least equal to $1,000,000, (ii) if
any LIBO Rate Loan would otherwise be in a lesser principal amount
for any period, such Loan shall be a Floating Rate Loan during such
period, (iii) the aggregate principal amount of Canadian LIBO Rate
Loans having the same Interest Period shall be at least equal to
$1,000,000, and (iv) if any Canadian LIBO Rate Loan would otherwise
be in a lesser principal amount for any period, such Loan shall be a
Canadian Floating Rate Loan during such period."
(v) Clause (b) of the PROVISO that appears at the end of Section
2.2(a) of the Existing Agreement is hereby amended by deleting it in its
entirety and substituting in lieu thereof the following new clause (b):
"(b) the Issuing Lender shall not be obligated to issue any Letter
of Credit in any currency other than Dollars or Canadian Dollars, or
if (i) the Dollar Equivalent of the face amount thereof plus the
Dollar Equivalent of the aggregate outstanding principal amount of
the MCOC Bank Debt would exceed the Available Commitment, or (ii)
after giving effect to the issuance thereof, (A) the L/C Exposure,
when added to the sum of the Dollar Equivalent of the Loan Balance
then outstanding, plus the Dollar Equivalent of the aggregate
outstanding principal amount of the MCOC Bank Debt, would exceed the
Aggregate Initial Commitment (or, if the Aggregate Initial
Commitment has been increased pursuant to SECTION 2.4, the Aggregate
Increased Commitment), or (B) the L/C Exposure would exceed Fifteen
Million Dollars ($15,000,000)."
(vi) Section 2.5 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 2.5:
"'2.5 INTEREST. Subject to the terms of this Agreement
(including, without limitation, SECTION 2.17), interest on the Loans
shall accrue and be payable at a rate per annum equal to the
Floating Rate for each Floating Rate Loan, the Adjusted LIBO Rate
for each LIBO Rate Loan, the Canadian Floating Rate for each
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Canadian Floating Rate Loan and the Canadian Adjusted LIBO Rate for
each Canadian LIBO Rate Loan. Interest on all Floating Rate Loans
and all Canadian Floating Rate Loans shall be computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day) during
the period for which payable. Interest on all LIBO Rate Loans and
all Canadian LIBO Rate Loans shall be computed on the basis of a
year of 360 days, and actual days elapsed (including the first day
but excluding the last day) during the period for which payable.
Notwithstanding the foregoing, interest on past due principal and,
to the extent permitted by applicable law, past due interest, shall
accrue at the Default Rate, computed on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed (including
the first day but excluding the last day) during the period for
which payable, and shall be payable upon demand by a Lender at any
time as to all or any portion of such interest. In the event that
the Borrower fails to select the duration of any Interest Period for
any LIBO Rate Loan within the time period and otherwise as provided
herein, such Loan (if outstanding as a LIBO Rate Loan) will be
automatically converted into a Floating Rate Loan on the last day of
the then current Interest Period for such Loan or (if outstanding as
a Floating Rate Loan) will remain as, or (if not then outstanding)
will be made as, a Floating Rate Loan. In the event that the
Borrower fails to select the duration of any Interest Period for any
Canadian LIBO Rate Loan within the time period and otherwise as
provided herein, such Loan (if outstanding as a Canadian LIBO Rate
Loan) will be automatically converted into a Canadian Floating Rate
Loan on the last day of the then current Interest Period for such
Loan or (if outstanding as a Canadian Floating Rate Loan) will
remain as, or (if not then outstanding) will be made as, a Canadian
Floating Rate Loan. Interest provided for herein shall be calculated
on unpaid sums actually advanced and outstanding pursuant to the
terms of this Agreement and only for the period from the date or
dates of such advances until repayment."
(vii) Section 2.6 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 2.6:
"2.6 REPAYMENT OF LOANS AND INTEREST. Accrued and unpaid
interest on each outstanding Floating Rate Loan and each outstanding
Canadian Floating Rate Loan shall be due and payable monthly
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commencing on the first day of October, 1998, and continuing on the
first day of each calendar month thereafter while any Floating Rate
Loan or Canadian Floating Rate Loan remains outstanding, the payment
in each instance to be the amount of interest which has accrued and
remains unpaid in respect of the relevant Loan. Accrued and unpaid
interest on each outstanding LIBO Rate Loan and each outstanding
Canadian LIBO Rate Loan shall be due and payable on the last day of
the Interest Period for such LIBO Rate Loan or Canadian LIBO Rate
Loan, as the case may be, and, in the case of any Interest Period in
excess of three months, on the day of the third calendar month
following the commencement of such Interest Period corresponding to
the day of the calendar month on which such Interest Period
commenced, the payment in each instance to be the amount of interest
which has accrued and remains unpaid in respect of the relevant
Loan. The Loan Balance together with all accrued and unpaid interest
thereon, shall be due and payable at Final Maturity. At the time of
making each payment hereunder or under the Notes, the Borrower shall
specify to the Administrative Agent the Loans or other amounts
payable by the Borrower hereunder to which such payment is to be
applied. In the event the Borrower fails to so specify, or if an
Event of Default has occurred and is continuing, the Administrative
Agent may apply such payment as it may elect in its sole discretion;
PROVIDED, HOWEVER, the Administrative Agent will apply the payments
to the Loans in the descending order of interest costs.
"(b) If at any time the sum of the Dollar Equivalent of the
Loan Balance then outstanding, plus the L/C Exposure, plus the
Dollar Equivalent of the aggregate outstanding principal amount of
the MCOC Bank Debt, would exceed the Aggregate Initial Commitment
(or, if the Aggregate Initial Commitment has been increased pursuant
to SECTION 2.4, the Aggregate Increased Commitment), the Borrower
shall immediately prepay the Loans, ratably among the Lenders, by
the amount of such excess."
(viii) Sections 2.8 and 2.9 of the Existing Agreement are hereby
amended by deleting each of them in its entirety and substituting in lieu
thereof the following new Sections 2.8 and 2.9:
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"2.8 TIME, PLACE AND METHOD OF PAYMENT. All payments required
pursuant to this Agreement or the Notes shall be deemed received by
the Administrative Agent on the next Business Day following receipt
if such receipt is after 2:00 p.m., Central Standard or Daylight
Savings Time, as the case may be, on any Business Day, and shall be
made at the Principal Office. All payments of principal or interest
required pursuant to this Agreement or the Notes on or with respect
to Canadian Floating Rate Loans or Canadian LIBO Rate Loans shall be
made in Canadian Dollars and in such funds as may then be customary
for the settlement of international transactions in Canadian
Dollars, and all other payments required pursuant to this Agreement
or the Notes shall be made in Dollars and in immediately available
funds. Except as provided to the contrary herein, if the due date of
any payment hereunder or under the Notes would otherwise fall on a
day which is not a Business Day, such date shall be extended to the
next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.
Notwithstanding the foregoing provisions of this Section 2.8, if,
after the making of any Loan in Canadian Dollars, currency control
or exchange regulations are imposed in Canada with the result that
Canadian Dollars no longer exist or the Borrower is not able to make
payment to the Administrative Agent for the account of the Lenders
in Canadian Dollars, then all payments to be made by the Borrower
hereunder in Canadian Dollars shall instead be made when due in
Dollars in an amount equal to the Dollar Equivalent (as of the date
of repayment) of such payment due, it being the intention of the
parties hereto that the Borrower takes all risks of the imposition
of any such currency control or exchange regulations.
"2.9 VOLUNTARY PREPAYMENTS AND CONVERSIONS OF LOANS. (a)
Subject to applicable provisions of this Agreement, the Borrower
shall have the right at any time or from time to time to prepay
Loans and to convert Loans of one type or with one Interest Period
into Loans of another type or with a different Interest Period;
PROVIDED, HOWEVER, that (i) the Borrower shall give the
Administrative Agent notice of each such prepayment or conversion of
all or any portion of a LIBO Rate Loan or Canadian LIBO Rate Loan no
less than three (3) Business Days prior to prepayment or conversion,
(ii) any LIBO Rate Loan or Canadian LIBO Rate Loan may be prepaid or
converted only on the last day of an Interest Period for such Loan,
(iii) the Borrower shall pay all accrued and unpaid interest on the
amounts prepaid or converted, and (iv) no such prepayment or
conversion shall serve to postpone the repayment when due of any
Obligation.
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"(b) The Borrower may prepay all or any portion of the
principal amount of a Loan bearing interest at a LIBO Rate or a
Canadian LIBO Rate, provided that if the Borrower makes any such
prepayment other than on the last day of the applicable Interest
Period, the Borrower (i) with such prepayment, shall pay all accrued
interest on the principal amount prepaid (unless less than all of
the principal amount of the Loan is being prepaid, in which case
such interest shall be due and payable on the next scheduled
interest payment date), and (ii) on demand, shall reimburse the
Lenders and hold the Lenders harmless from all losses and expenses
incurred by the Lenders as a result of such prepayment, including,
without limitation, any losses and expenses arising from the
liquidation or reemployment of deposits acquired to fund or maintain
the principal amount prepaid. Such reimbursement with respect to the
prepayment of LIBO Rate Loans shall be calculated as though the
Lenders funded the principal amount prepaid through the purchase of
Dollar deposits in the London, England interbank market having a
maturity corresponding to such Interest Period and bearing an
interest rate equal to the LIBO Rate for such Interest Period,
whether in fact that is the case or not. Such reimbursement with
respect to the prepayment of Canadian LIBO Rate Loans shall be
calculated as though the Lenders funded the principal amount prepaid
through the purchase of Canadian Dollar deposits in the London,
England interbank market having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Canadian
LIBO Rate for such Interest Period, whether in fact that is the case
or not. Each Lender's determination of the amount of any such
reimbursement shall be conclusive in the absence of manifest error."
(ix) Section 2.14 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 2.14:
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"LETTER OF CREDIT FEES. The Borrower agrees to pay to the
Issuing Lender, on the date of issuance of each Letter of Credit, a
fee equal to the greater of (i) $400 and (ii) one percent (1%) per
annum, calculated on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but
excluding the last day), on the Dollar Equivalent of the face amount
of such Letter of Credit during the period for which such Letter of
Credit is issued; PROVIDED, HOWEVER, in the event such Letter of
Credit is canceled prior to its original expiry date or a payment is
made by the Issuing Lender with respect to such Letter of Credit,
the Issuing Lender shall, within ten days after such cancellation or
the making of such payment, rebate to the Borrower the unearned
portion (calculated in the case of any Letter of Credit denominated
in Canadian Dollars by taking into account the daily fluctuations in
the Dollar Equivalent of the face amount of such Letter of Credit)
of such fee. The Borrower also agrees to pay to the Issuing Lender
on demand its customary letter of credit transactional fees,
including, without limitation, amendment fees, payable with respect
to each Letter of Credit."
(x) Sections 2.18 and 2.19 of the Existing Agreement are hereby
amended by deleting each of them in its entirety and substituting in lieu
thereof the following new Sections 2.18 and 2.19:
"2.18 LIMITATION ON TYPES OF LOANS. (a) Anything herein to the
contrary notwithstanding, no more than eight (8) separate Loans
shall be outstanding at any one time, with, for purposes of this
Section, all Floating Rate Loans constituting one Loan, all Canadian
Floating Rate Loans constituting one Loan, each borrowing consisting
of LIBO Rate Loans made by the Lenders at one time and for a
particular Interest Period constituting one Loan and each borrowing
consisting of Canadian LIBO Rate Loans made by the Lenders at one
time and for a particular Interest Period constituting one Loan.
"(b) Anything herein to the contrary notwithstanding, if, on
or prior to the determination of any interest rate for any LIBO Rate
Loan for any Interest Period therefor:
(i) any Lender determines (which determination shall be
conclusive) that quotations of interest rates for the deposits
referred to in the definition of "LIBO RATE" in SECTION 1.2
are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of
interest for such Loan as provided in this Agreement; or
15
(ii) any Lender determines (which determination shall be
conclusive) that the rates of interest referred to in the
definition of "LIBO RATE" in SECTION 1.2 upon the basis of
which the rate of interest for such Loan for such Interest
Period is to be determined do not accurately reflect the cost
to such Lender of making or maintaining such Loan for such
Interest Period,
then such Lender shall give the Administrative Agent and the
Borrower prompt notice thereof; and so long as such condition
remains in effect, such Lender shall be under no obligation to make
LIBO Rate Loans or to convert Loans of any other type into LIBO Rate
Loans, and the Borrower shall, on the last day of the then current
Interest Period for each outstanding LIBO Rate Loan, either prepay
such LIBO Rate Loan or convert such Loan into another type of Loan
in accordance with SECTION 2.9. Before giving such notice pursuant
to this Section, the affected Lender will designate a different
available Applicable Lending Office for LIBO Rate Loans or take such
other action as the Borrower may request if such designation or
action will avoid the need to suspend the obligation of such Lender
to make LIBO Rate Loans hereunder and will not, in the opinion of
such affected Lender, be disadvantageous to such Lender.
"(c) Anything herein to the contrary notwithstanding, if, on
or prior to the determination of any interest rate for any Canadian
LIBO Rate Loan for any Interest Period therefor:
(i) any Lender determines (which determination shall be
conclusive) that quotations of interest rates for the deposits
referred to in the definition of "CANADIAN LIBO RATE" in
SECTION 1.2 are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining the
rate of interest for such Loan as provided in this Agreement;
or
(ii) any Lender determines (which determination shall be
conclusive) that the rates of interest referred to in the
definition of "CANADIAN LIBO RATE" in SECTION 1.2 upon the
basis of which the rate of interest for such Loan for such
Interest Period is to be determined do not accurately reflect
the cost to such Lender of making or maintaining such Loan for
such Interest Period,
16
then such Lender shall give the Administrative Agent and the
Borrower prompt notice thereof; and so long as such condition
remains in effect, such Lender shall be under no obligation to make
Canadian LIBO Rate Loans or to convert Loans of any other type into
Canadian LIBO Rate Loans, and the Borrower shall, on the last day of
the then current Interest Period for each outstanding Canadian LIBO
Rate Loan, either prepay such Canadian LIBO Rate Loan or convert
such Loan into another type of Loan in accordance with SECTION 2.9.
Before giving such notice pursuant to this Section, the affected
Lender will designate a different available Applicable Lending
Office for Canadian LIBO Rate Loans or take such other action as the
Borrower may request if such designation or action will avoid the
need to suspend the obligation of such Lender to make Canadian LIBO
Rate Loans hereunder and will not, in the opinion of such affected
Lender, be disadvantageous to such Lender."
"2.19 ILLEGALITY. (a) Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Lender
or its Applicable Lending Office to (a) honor its obligation to make
LIBO Rate Loans hereunder, or (b) maintain LIBO Rate Loans
hereunder, then such Lender shall promptly notify the Administrative
Agent and the Borrower thereof; and the obligation of such Lender
hereunder to make LIBO Rate Loans and to convert other types of
Loans into LIBO Rate Loans shall be suspended until such time as
such Lender may again make and maintain LIBO Rate Loans, and the
outstanding LIBO Rate Loans of such Lender shall be converted into
Floating Rate Loans in accordance with SECTION 2.9. Before giving
such notice pursuant to this Section, such Lender will designate a
different available Applicable Lending Office for its LIBO Rate
Loans or take such other action as the Borrower may request if such
designation or action will avoid the need to suspend the obligation
of such Lender to make LIBO Rate Loans and will not, in the opinion
of the affected Lender, be disadvantageous to such Lender.
17
"(b) Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender or its Applicable
Lending Office to (a) honor its obligation to make Canadian Floating
Rate Loans or Canadian LIBO Rate Loans hereunder, or (b) maintain
Canadian Floating Rate Loans or Canadian LIBO Rate Loans hereunder,
then such Lender shall promptly notify the Administrative Agent and
the Borrower thereof; and the obligation of such Lender hereunder to
make Canadian Floating Rate Loans or Canadian LIBO Rate Loans, as
the case may be, and to convert other types of Loans into Canadian
Floating Rate Loans or Canadian LIBO Rate Loans, as the case may be,
shall be suspended until such time as such Lender may again make and
maintain Canadian Floating Rate Loans or Canadian LIBO Rate Loans,
as the case may be, and, in the case of a Lender's notice pursuant
to this Section 2.19(b) with respect to its Canadian LIBO Rate
Loans, the Canadian LIBO Rate Loans of such Lender shall be
converted into Canadian Floating Rate Loans in accordance with
SECTION 2.9. Before giving such notice pursuant to this Section,
such Lender will designate a different available Applicable Lending
Office for Canadian Floating Rate Loans or Canadian LIBO Rate Loans,
as the case may be, or take such other action as the Borrower may
request if such designation or action will avoid the need to suspend
the obligation of such Lender to make Canadian Floating Rate Loans
or Canadian LIBO Rate Loans, as the case may be, and will not, in
the opinion of the affected Lender, be disadvantageous to such
Lender."
(xi) Section 2.21 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 2.21:
"2.21 LIMITATIONS ON INTEREST PERIODS. Each Interest Period
selected by the Borrower (a) which commences on the last Business
Day of a calendar month (or, with respect to any LIBO Rate Loan or
Canadian LIBO Rate Loan, any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent
calendar month, (b) which would otherwise end on a day which is not
a Business Day shall end on the next succeeding Business Day (or, if
such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day), (c) which would
otherwise commence before and end after Final Maturity shall end on
Final Maturity, and (d) shall have an Interest Period no shorter
than one month, and if shorter than one month, the relevant Loan
shall be (i) a Floating Rate Loan during such period if it is
denominated in Dollars and (ii) a Canadian Floating Rate Loan during
such period if it is denominated in Canadian Dollars."
18
(xii) Article II of the Existing Agreement is hereby amended by
adding at the end thereof the following new Sections 2.22, 2,23, 2.24,
2.35, 2.26 and 2.27:
"2.22 MARKET DISRUPTION. Notwithstanding the satisfaction of
all conditions referred to in Article II and Article IV with respect
to any Loans to be made in Canadian Dollars, if there shall occur on
or prior to the date of such Loans any change in national or
international financial, political or economic conditions or
exchange controls which would in the reasonable opinion of the
Administrative Agent or the Majority Lenders make it impracticable
for such Loans to be denominated in Canadian Dollars, then the
Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, and such Loans shall not be denominated in
Canadian Dollars but shall be made in Dollars, in an aggregate
principal amount equal to the Dollar Equivalent of the aggregate
principal amount of Canadian Dollars specified in the related
Borrowing Request, as Floating Rate Loans, unless the Borrower
notifies the Administrative Agent at least one Business Day before
such date that it elects not to borrow on such date.
"2.23. JUDGMENT CURRENCY. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from the
Borrower or any Guarantor hereunder in Canadian Dollars into
Dollars, the parties hereto agree, to the fullest extent that they
may effectively do so, that the rate of exchange used shall be that
at which in accordance with normal banking procedures the
Administrative Agent could purchase Canadian Dollars with Dollars at
the Administrative Agent's main Chicago office on the Business Day
preceding that on which final, non-appealable judgment is given. The
obligations of the Borrower and each Guarantor in respect of any sum
due to any Lender or the Administrative Agent hereunder in Canadian
Dollars shall, notwithstanding any judgment in Dollars, be
discharged only to the extent that on the Business Day following
receipt by such Lender or the Administrative Agent (as the case may
be) of any sum adjudged to be so due in Dollars such Lender or the
Administrative Agent (as the case may be) may in accordance with
normal, reasonable banking procedures purchase Canadian Dollars with
Dollars. If the amount of Canadian Dollars so purchased is less than
the sum originally due to such Lender or the Administrative Agent,
as the case may be, in Canadian dollars, the Borrower and each
Guarantor agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment,
to indemnify such Lender or the Administrative Agent, as the case
may be, against such loss, and if the amount of Canadian Dollars so
purchased exceeds (a) the sum originally due to any Lender or the
Administrative Agent, as the case may be, in Canadian Dollars, and
(b) any amounts shared with other Lenders as a result of allocations
of such excess as a disproportionate payment to such Lender under
Section 11.14, such Lender or the Administrative Agent, as the case
may be, agrees to remit such excess to the Borrower or the
applicable Guarantor.
19
"2.24 YIELD PROTECTION. If, on or after the date of this
Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any change in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Lender or Applicable Lending Office with any
request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) subjects any Lender or any Applicable Lending Office to
any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect
of its LIBO Rate Loans, its Canadian Floating Rate Loans or
its Canadian LIBO Rate Loans, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
Applicable Lending Office, or
20
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any Applicable Lending
Office of making, funding or maintaining its LIBO Rate Loans,
its Canadian Floating Rate Loans or its Canadian LIBO Rate
Loans or reduces any amount receivable by any Lender or any
Applicable Lending Office in connection with its LIBO Rate
Loans, its Canadian Floating Rate Loans or its Canadian LIBO
Rate Loans, or requires any Lender or any Applicable Lending
Office to make any payment calculated by reference to the
amount of LIBO Rate Loans, Canadian Floating Rate Loans or
Canadian LIBO Rate Loans held or interest received by it, by
an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to
such Lender or Applicable Lending Office of making or maintaining
its LIBO Rate Loans, its Canadian Floating Rate Loans or its
Canadian LIBO Rate Loans or its commitment to make LIBO Rate Loans,
Canadian Floating Rate Loans or Canadian LIBO Rate Loans or to
reduce the return received by such Lender or Applicable Lending
Office in connection with its LIBO Rate Loans, its Canadian Floating
Rate Loans or its Canadian LIBO Rate Loans or commitment to make
LIBO Rate Loans, Canadian Floating Rate Loans or Canadian LIBO Rate
Loans, then, within 15 days of demand by such Lender, the Borrower
shall pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction in
amount received.
"2.25 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender
determines the amount of capital required or expected to be
maintained by such Lender, any Applicable Lending Office of such
Lender or any corporation controlling such Lender is increased as a
result of a Change, then, within 15 days of demand by such Lender,
the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of
such increased capital which such Lender determines is attributable
to this Agreement, its LIBO Rate Loans, its Canadian Floating Rate
Loans, its Canadian LIBO Rate Loans or its commitment to make LIBO
Rate Loans, Canadian Floating Rate Loans or Canadian LIBO Rate Loans
hereunder (after taking into account such Lender's policies as to
21
capital adequacy). "Change" means (i) any change after the date of
this Agreement in the Risk-Based Capital Guidelines, or (ii) any
adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of
law) after the date of this Agreement which affects the amount of
capital required or expected to be maintained by any Lender or any
Applicable Lending Office or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital
Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
"2.26 TAXES. (a) All payments by the Borrower to or for the
account of any Lender or the Administrative Agent hereunder or under
any Note shall be made free and clear of and without deduction for
any and all Taxes. If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to
any Lender or the Administrative Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 2.26) such Lender or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant authority in accordance with applicable
law, and (iv) the Borrower shall furnish to the Administrative Agent
the original copy of a receipt evidencing payment thereof within 30
days after such payment is made.
"(b) In addition, the Borrower hereby agrees to pay any
present or future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or any
Note ("Other Taxes").
22
"(c) The Borrower hereby agrees to indemnify the
Administrative Agent and each Lender for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed on amounts payable under this Section 2.26) paid by the
Administrative Agent or such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made
within 30 days of the date the Administrative Agent or such Lender
makes demand therefor pursuant to Section 2.27.
"(d) Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed
by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
"(e) If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country or
any political subdivision thereof asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed
to notify the Administrative Agent of a change in circumstances
which rendered its exemption from withholding ineffective, or for
any other reason), such Lender shall indemnify the Administrative
Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax, withholding therefor, or otherwise,
including penalties and interest, and including taxes imposed by any
jurisdiction on amounts payable to the Administrative Agent under
this subsection, together with all costs and expenses related
thereto (including attorneys fees and time charges of attorneys for
the Administrative Agent, which attorneys may be employees of the
Administrative Agent). The obligations of the Lenders under this
Section 2.26 shall survive the payment of the Obligations and
termination of this Agreement.
23
"2.27 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. Each Lender
shall deliver a written statement of such Lender to the Borrower
(with a copy to the Administrative Agent) as to the amount due, if
any, under Section 2.24, 2.25 or 2.26. Such written statement shall
set forth in reasonable detail the calculations upon which such
Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection
with a Canadian LIBO Rate Loan shall be calculated as though each
Lender funded its Canadian LIBO Rate Loan through the purchase of a
deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Canadian LIBO Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise
provided herein, the amount specified in the written statement of
any Lender shall be payable on demand after receipt by the Borrower
of such written statement. The obligations of the Borrower under
Sections 2.24, 2.25 or 2.26 shall survive payment of the Obligations
and termination of this Agreement."
(xiii) Section 6.17 of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 6.17:
"6.17 ADDITIONAL SUBSIDIARIES. The Borrower will immediately
cause any Person that becomes a Subsidiary of the Borrower
subsequent to the Closing Date to (i) execute a Subsidiary Guarantor
Counterpart and to deliver same to the Administrative Agent and (ii)
deliver such other Security Instruments as the Administrative Agent
requests; PROVIDED, HOWEVER, that the Borrower shall not be
obligated to comply with the terms of this Section 6.17 with respect
to any such Subsidiary until the Dollar Equivalent of the aggregate
book value of the assets of such Subsidiary equals $500,000) or
more."
(xiv) Section 7.1 of the Existing Agreement is hereby amended by
deleting everything after the words "Administrative Agent" that appear at
the end of clause (e) thereof and substituting in lieu thereof the
following:
24
", (f) inter-company Indebtedness (i) incurred by the Borrower or
any Guarantor and payable to the Borrower or another Guarantor, or
(ii) incurred by a Canadian Subsidiary and payable to the Borrower,
a Guarantor or another Canadian Subsidiary, including any
extensions, renewals and replacements of any thereof, and (g) MCOC
Bank Debt, PROVIDED that, after giving effect to the incurrence of
any MCOC Bank Debt, the sum of (i) the Canadian Dollar Equivalent of
the aggregate outstanding principal amount of all loans and advances
made by the Borrower and the Guarantors to the Canadian
Subsidiaries, plus (ii) the Canadian Dollar Equivalent of the
aggregate amount of all equity Investments made by the Borrower and
the Guarantors in the Canadian Subsidiaries, plus (iii) the
aggregate outstanding principal amount of the MCOC Bank Debt, does
not exceed Fifty Million Canadian Dollars (C$50,000,000), including
any extensions, renewals and replacements of any thereof."
(xv) Section 7.2 of the Existing Agreement is hereby amended by
deleting everything after the comma that appears at the end of clause (c)
thereof and substituting in lieu thereof the following new clauses (d) and
(e):
"(d) guaranties by the Borrower of Indebtedness of its Domestic
Subsidiaries permitted under SECTION 7.1, or (e) guaranties of, or
commitments to buy, MCOC Bank Debt entered into by the Borrower."
(xvi) Section 7.6 of the Existing Agreement is hereby amended by
deleting everything after the comma that appears at the end of clause (c)
thereof and substituting in lieu thereof the following new clauses (d),
(e) and (f):
"(d) loans or advances to joint ventures in amounts not to exceed
Ten Million Dollars ($10,000,000) in the aggregate PROVIDED that
within three (3) Business Days of the making of such a loan or
advance, the Borrower provides the Administrative Agent with written
notice thereof which shall include a detailed explanation of the
business purpose for such loan or advance, (e) loans or advances
made by one Canadian Subsidiary to another Canadian Subsidiary, or
(f) loans or advances made by the Borrower or a Guarantor to a
Canadian Subsidiary PROVIDED that, after giving effect to the making
by the Borrower or a Guarantor of any loan or advance to a Canadian
Subsidiary, the sum of (i) the Canadian Dollar Equivalent of the
aggregate outstanding principal amount of all loans and advances
made by the Borrower and the Guarantors to the Canadian
Subsidiaries, plus (ii) the Canadian Dollar Equivalent of the
aggregate amount of all equity Investments made by the Borrower and
the Guarantors in the Canadian Subsidiaries, plus (iii) the
aggregate outstanding principal amount of the MCOC Bank Debt, does
not exceed Fifty Million Canadian Dollars (C$50,000,000)."
25
(xvii) Section 7.7 of the Existing Agreement is hereby amended by
deleting clause (a) thereof and substituting in lieu thereof the following
new clause (a):
"(a) assets of hydrocarbon trucking operations, pipelines,
processing plants, gathering lines or oil and gas properties
(PROVIDED that all such assets and properties acquired by the
Borrower or a Guarantor are located in the United States of
America), the stock of any Canadian Subsidiary owning any such
assets or properties located in Canada, and the stock of any other
Person owning any such assets or properties located in the United
States of America,"
(xviii) Section 7.7 of the Existing Agreement is hereby further
amended by deleting everything after the comma that appears at the end of
clause (e) thereof and substituting in lieu thereof the following new
clauses (f), (g), (h) and (i):
"(f) interests in joint ventures doing business solely in the United
States of America as to which the Borrower or any of its
Subsidiaries is a venturer, so long as such joint venture is engaged
in the same line of business as the Borrower (or such Subsidiary) as
of the date hereof, (g) equity Investments by a Canadian Subsidiary
in another Canadian Subsidiary, (h) MCOC Bank Debt by MCCI, or (i)
equity Investments by the Borrower or a Guarantor in a Canadian
Subsidiary PROVIDED that, after giving effect to the making by the
Borrower or any Guarantor of any equity Investment in a Canadian
Subsidiary, the sum of (i) the Canadian Dollar Equivalent of the
aggregate outstanding principal amount of all loans and advances
made by the Borrower and the Guarantors to the Canadian
Subsidiaries, plus (ii) the Canadian Dollar Equivalent of the
aggregate amount of all equity Investments made by the Borrower and
the Guarantors in the Canadian Subsidiaries, plus (iii) the
aggregate outstanding principal amount of the MCOC Bank Debt, does
not exceed Fifty Million Canadian Dollars (C$50,000,000)."
26
(xix) Section 7.13 of the Existing Agreement is hereby amended by
deleting the first sentence thereof and substituting in lieu thereof the
following new sentence):
"Permit Cash Flow for any four consecutive fiscal quarters (plus the
Cash Flow of any acquired Company for such period) to be less than
1.25 times the sum of (i) the Borrower's consolidated interest
expense for such period, plus (ii) the greater of (A) current
maturities of funded long term bank debt, or (B) 1/10th of the sum
of (1) the aggregate outstanding principal balance of the Loans,
plus (2) the Dollar Equivalent of the aggregate outstanding
principal balance of the MCOC Bank Debt."
(xx) Section 9.1(d) of the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the following
new Section 9.1(d):
"(d) the Borrower or any of its Subsidiaries shall fail to pay
when due any of its Indebtedness; or the Borrower or any of its
Subsidiaries shall default in the performance (beyond the applicable
grace period with respect thereto, if any) of any term, provision or
condition contained in any bond, debenture, note, instrument, credit
agreement, loan agreement, indenture or other agreement under which
any such Indebtedness was created or is governed, or any other event
shall occur or condition exist, the effect of which default or event
is to cause, or to permit the holder or holders of any such
Indebtedness to cause, such Indebtedness to become due prior to its
stated maturity; or any Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required to
be prepaid or repurchased (other than by a regularly scheduled
payment) prior to the stated maturity thereof; or the Borrower or
any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due."
(xxi) Section 9.1 of the Existing Agreement is hereby amended by (A)
deleting the word "and" that appears at the end of subsection 9.1(l)
thereof, (B) deleting the period that appears at the end of subsection
9.1(m) thereof and substituting in lieu thereof a semi-colon, and (C)
adding at the end thereof the following new subsections (n) and (o):
27
"(n) The Borrower shall fail to comply with any of the terms
or conditions of any agreement pursuant to which it has committed or
agreed to purchase, guaranty or otherwise assure any holder of any
of the MCOC Bank Debt against loss with respect to any of the MCOC
Bank Debt; and
"(o) MCOC shall fail to pay when due any amount payable on or
with respect to any MCOC Bank Debt; or MCOC shall default in the
performance of any term, provision or condition contained in any
note or agreement under which any MCOC Bank Debt was created or is
governed, or any other event shall occur or condition exist, the
effect of which default or event is to cause, or to permit the
holder or holders of any MCOC Bank Debt to cause, any part or all of
the MCOC Bank Debt to become due prior to its stated maturity; or
any part or all of the MCOC Bank Debt shall be declared to be due
and payable or required to be prepaid or repurchased (other than by
a regularly scheduled payment) prior to the stated maturity
thereof."
(xxii) Exhibit II to the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the form of
Borrowing Request attached hereto as Exhibit II.
(xxiii) Exhibit V to the Existing Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof the list of
Disclosures attached hereto as Exhibit V.
Section 4. AMENDMENTS TO NOTES. Upon satisfaction of the conditions
precedent set forth in Section 7 of this First Amendment, but effective as of
the date of this First Amendment, each of the Notes shall be amended by (i)
deleting the reference to "$50,000,000.00" which appears at the upper left of
each of the Notes, and (ii) deleting the words "the sum of FIFTY MILLION AND
NO/100 DOLLARS ($50,000,000.00) or so much thereof as may be advanced against
this Note" which appear in the paragraph of each of the Notes which begins with
the words "FOR VALUE RECEIVED" and substituting in lieu thereof the words "the
aggregate unpaid principal amount of all Loans made in either Dollars or
Canadian Dollars by the Payee to the Borrower". The foregoing constitutes an
amendment and modification, but not a novation of the Notes.
28
Section 5. WAIVERS WITH RESPECT TO SECTIONS 6.17 AND 7.3. Notwithstanding
anything to the contrary set forth in Section 6.17 or Section 7.3 of the
Existing Agreement as amended hereby, the Borrower, the Guarantors, the
Administrative Agent and the Lenders hereby agree as follows:
(a) Each of the Lenders hereby specifically waives any violation of
Section 6.17 of the Existing Agreement or the Existing Agreement as amended
hereby and any Default or Event of Default caused thereby to the extent such
violation or Default or Event of Default is caused by the failure to satisfy at
any time before or after the date hereof any of the requirements of said Section
6.17 with respect to DPI/Midcoast, Inc. ("DPI"), SeaCrest Company, L.L.C.
("SeaCrest"), MCCI or MCOC; PROVIDED, HOWEVER, that the Borrower, DPI and
SeaCrest fully comply with all of the terms and conditions of Sections 5(b) and
5(c) of this First Amendment.
(b) Promptly after the date hereof, but in any event on or before March
31, 1999, the Borrower will satisfy all of the requirements of Section 6.17 of
the Existing Agreement as amended hereby with respect to each of DPI and
SeaCrest (collectively, the "New Domestic Subsidiaries") and will cause each of
the New Domestic Subsidiaries to satisfy all of the requirements of Section 6.17
of the Existing Agreement as amended hereby.
(c) Promptly after the date hereof, but in any event on or before March
31, 1999, the Borrower will pledge 66% of the capital stock of both MCCI and
MCOC to the Administrative Agent to secure the Obligations pursuant to such
Security Instruments as the Administrative Agent requests.
(d) Each of the Lenders hereby specifically waives any violation of
Section 7.3 of the Existing Agreement or the Existing Agreement as amended
hereby and any Default or Event of Default caused thereby to the extent such
violation or Default or Event of Default is caused by SeaCrest granting a Lien
on any or all of its assets to Mid Louisiana Gas Transmission Company ("Mid
Louisiana") to secure up to $3,500,000 of loans made to SeaCrest by Mid
Louisiana; PROVIDED, HOWEVER, that Mid Louisiana fully complies with all of the
terms and conditions of Section 5(e) of this First Amendment.
(e) Promptly after the date hereof, but in any event on or before March
31, 1999, Mid Louisiana will pledge all loans made by it to SeaCrest and all
collateral securing any of them to the Administrative Agent to secure the
Obligations pursuant to such Security Instruments as the Administrative Agent
requests.
29
(f) Any violation of any of the foregoing provisions of this Section 5
shall constitute an Event of Default under the Existing Agreement as amended
hereby.
(g) The specific waivers set forth in Sections 5(a) and 5(d) of this First
Amendment are limited to the express circumstances described therein and shall
not be construed to constitute (i) a waiver of any other event, circumstance or
condition or of any other right or remedy available to the Administrative Agent
or any Lender pursuant to the Existing Agreement or the Existing Agreement as
amended hereby, or (ii) a consent to any departure by the Borrower or any
Guarantor from any other term or requirement under the Existing Agreement or the
Existing Agreement as amended hereby.
Section 6. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders
to execute and deliver this First Amendment, the Borrower hereby confirms,
reaffirms and restates as of the date hereof the representations and warranties
set forth in Article V of the Existing Agreement provided that such
representations and warranties shall be and hereby are amended as follows: each
reference therein to "this Agreement", including, without limitation, such a
reference included in the term "Loan Documents", shall be deemed to be a
collective reference to the Existing Agreement, this First Amendment and the
Existing Agreement as amended by this First Amendment. An Event of Default under
and as defined in the Existing Agreement as amended by this First Amendment
shall be deemed to have occurred if any representation or warranty made pursuant
to the foregoing sentence of this Section 6 shall be materially false as of the
date on which made.
Section 7. CONDITIONS PRECEDENT. This First Amendment, the Increased
Commitments provided for herein and the amendments to the Existing Agreement and
the Notes provided for herein shall become effective as of the date (the "First
Amendment Closing Date") on which all of the following conditions precedent
shall have been satisfied:
(i) This First Amendment shall have been duly executed and delivered
by the Administrative Agent, the Borrower and the Guarantors on one
counterpart and all of the Lenders shall have signed a counterpart or
counterparts hereof and notified the Administrative Agent by telex or
telephone that such action has been taken and that such executed
counterpart or counterparts will be mailed or otherwise delivered to the
Administrative Agent.
30
(ii) The Administrative Agent shall have received $37,500 from the
Borrower in payment of the additional facility fees payable to the Lenders
pursuant to Section 2.13(b) of the Credit Agreement in connection with the
Increased Commitments provided for in Section 2 of this First Amendment.
(iii) Each of the representations and warranties of the Borrower
contained in the Credit Agreement shall be true and correct on and as of
the First Amendment Closing Date as if made on and as of the First
Amendment Closing Date.
(iv) No Default or Event of Default shall exist.
(v) Each of DPI/Midcoast, Inc. and SeaCrest Company, L.L.C.
shall have executed and delivered to the Administrative Agent a
Subsidiary Guarantor Counterpart.
Section 8. EFFECT ON THE EXISTING AGREEMENT. Except as expressly amended
hereby, all of the representations, warranties, terms, covenants and conditions
of the Existing Agreement and the other Loan Documents (a) shall remain
unaltered, (b) shall continue to be, and shall remain, in full force and effect
in accordance with their respective terms, and (c) are hereby ratified and
confirmed in all respects. Upon the effectiveness of this First Amendment, all
references in the Existing Agreement (including references in the Existing
Agreement as amended by this First Amendment) to "this Agreement" (and all
indirect references such as "hereby", "herein", "hereof" and "hereunder") shall
be deemed to be references to the Existing Agreement as amended by this First
Amendment.
SECTION 9. ENTIRE AGREEMENT. THIS FIRST AMENDMENT, THE EXISTING AGREEMENT
AS AMENDED BY THIS FIRST AMENDMENT AND THE OTHER LOAN DOCUMENTS EMBODY THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDE ANY
AND ALL PRIOR AGREEMENTS AND UNDERSTANDINGS BETWEEN THE PARTIES HERETO RELATING
TO THE SUBJECT MATTER HEREOF.
SECTION 10. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT 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; EXCEPT THAT, (A) CHAPTER 346 OF THE TEXAS FINANCE
CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING
TRIPARTY ACCOUNTS) SHALL NOT APPLY AND (B) IF AT ANY TIME THE LAWS OF THE UNTIED
STATES OF AMERICA OR ANY STATE THEREOF APPLICABLE TO A LENDER PERMIT SUCH LENDER
TO CONTRACT FOR, TAKE, RESERVE, CHARGE OR RECEIVE A HIGHER RATE OF INTEREST THAN
IS ALLOWED BY THE LAWS OF THE STATE OF TEXAS, THEN SUCH OTHER LAWS SHALL TO SUCH
EXTENT GOVERN AS TO THE RATE OF INTEREST WHICH SUCH LENDER IS ALLOWED TO
CONTRACT FOR, TAKE, RESERVE, CHARGE OR RECEIVE UNDER THIS FIRST AMENDMENT AND
THE AGREEMENT AS AMENDED HEREBY AND SUCH LENDER'S NOTE.
31
Section 11. HEADINGS. The headings, captions, and arrangements used
in this First Amendment are for convenience only and shall not affect the
interpretation of this First Amendment.
Section 12. COUNTERPARTS. This First Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this First Amendment by
signing any such counterpart.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
32
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed as of the date first above written.
BORROWER: MIDCOAST ENERGY RESOURCES, INC.
By:________________________________
Xxxxxxx X. Xxxxxx
Chief Financial Officer
and Treasurer
ADMINISTRATIVE AGENT
AND LENDERS: BANK ONE, TEXAS,
NATIONAL ASSOCIATION,
individually and as Administrative Agent
By:________________________________
Title:____________________________
CIBC, INC.,
individually and as Syndication Agent
By:________________________________
Title:____________________________
NATIONSBANK, N.A.,
individually and as Documentation Agent
By:________________________________
Title:____________________________
23
GUARANTORS:
MAGNOLIA PIPELINE CORPORATION H&W PIPELINE CORPORATION
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
MAGNOLIA RESOURCES, INC. MAGNOLIA GATHERING, INC.
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
MIDCOAST HOLDINGS NO. ONE, INC. MIDCOAST GAS PIPELINE, INC.,
a Texas corporation
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
NUGGET DRILLING CORPORATION MIDCOAST MARKETING, INC.
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
MIDCOAST GAS PIPELINE, INC., TENNESSEE RIVER INTRASTATE
a Delaware corporation GAS COMPANY, INC.
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
34
MID LOUISIANA GAS COMPANY CREOLE GAS PIPELINE CORPORATION
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
MID LOUISIANA GAS TRANSMISSION MIDCOAST INTERSTATE
COMPANY TRANSMISSION, INC.
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
MIDCOAST GAS SERVICES, INC. MIDCOAST ENERGY MARKETING, INC.
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
SEACREST COMPANY, L.L.C. DPI/MIDCOAST, INC.
By:____________________________ By:___________________________
Xxxxxxx X. Xxxxxx Xxxxxxx A. Xxxxxx
Treasurer Treasurer
35
EXHIBIT II
[FORM OF BORROWING REQUEST]
Bank One, Texas, National Association,
Administrative Agent
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Energy Group, 6th Floor
Re: Amended and Restated Credit Agreement dated as of August 31, 1998,
by and among Midcoast Energy Resources, Inc. ("BORROWER"), Bank One,
Texas, National Association, individually and as administrative
agent, and the lenders party thereto (as amended, restated, or
supplemented from time to time, the "CREDIT Agreement")
Ladies and Gentlemen:
Pursuant to the Credit Agreement, the Borrower hereby makes the requests
indicated below:
1. Dollar Loans
(a) Amount of new Loan: $
(b) Requested funding date: _______________, 19___
(c) $_________ of such Loan is to be a Floating Rate Loan;
(d) $_________ of such Loan is to be a LIBO Rate Loan;
and
(e) Requested Interest Period for LIBO Rate Loan: __ months;
2. Canadian Dollar Loans
(a) Amount of new Loan: C$
(b) Requested funding date: _______________, 19___
(c) C$_________ of such Loan is to be a Canadian Floating Rate Loan;
(d) C$_________ of such Loan is to be a Canadian LIBO Rate Loan;
and
(e) Requested Interest Period for Canadian LIBO Rate Loan: __
months;
? 3. $_______________ of such Loan is to be a LIBO Rate Loan maturing
on ________________:
(a) Amount to be continued as a LIBO Rate Loan is
$_________________, with an Interest Period of ___ months;
(b) Amount to be converted to a Floating Rate Loan is $_________;
? 4. C$_______________ of such Loan is to be a Canadian LIBO Rate Loan
maturing on ________________:
(a) Amount to be continued as a Canadian LIBO Rate Loan is
C$_________________, with an Interest Period of ___ months;
(b) Amount to be converted to a Canadian Floating Rate Loan is
C$________;
5. Conversion of Floating Rate Loan:
(a) Requested conversion date: __________________, 19___.
(b) Amount to be converted to a LIBO Rate Loan is $______________
with an Interest Period of ____ months.
? 6. Conversion of Canadian Floating Rate Loan:
(a) Requested conversion date: __________________, 19___.
(b) Amount to be converted to a Canadian LIBO Rate Loan is
C$______________ with an Interest Period of ____ months.
The undersigned certifies that [s]he is the [_________________] of the
Borrower, has obtained all consents necessary, and as such [s]he is authorized
to execute this request on behalf of the Borrower. The undersigned further
certifies, represents, and warrants on behalf of the Borrower that the Borrower
is entitled to receive the requested borrowing, continuation, or conversion
under the terms and conditions of the Credit Agreement.
Each capitalized term used but not defined herein shall have the meaning
assigned to such term in the Credit Agreement.
Very truly yours,
MIDCOAST ENERGY RESOURCES, INC.
By:_________________________________
Printed Name:_______________________
Title:______________________________
2
EXHIBIT V
DISCLOSURES
Section 5.8 LIABILITIES
None
LITIGATION
None
Section 5.10 COMPLIANCE
Section 5.12 ENVIRONMENTAL MATTERS
None
Section 5.17 REFUNDS
None
Section 5.19 CASUALTIES
None
Section 5.21 SUBSIDIARIES
Magnolia Pipeline Corporation
H&W Pipeline Corporation
Magnolia Resources, Inc.
Magnolia Gathering, Inc.
Midcoast Holdings No. One, Inc.
Midcoast Gas Pipeline, Inc.,
a Texas corporation
Midcoast Gas Pipeline, Inc.,
a Delaware corporation
Midcoast Marketing, Inc. (inactive)
Nugget Drilling Corporation (inactive)
Tennessee River Intrastate Gas Company, Inc.
Mid Louisiana Gas Company
Creole Gas Pipeline Corporation
Mid Louisiana Gas Transmission Company
Midcoast Interstate Transmission, Inc.
Midcoast Gas Services, Inc.
Midcoast Energy Marketing, Inc.
SeaCrest Company, L.L.C.
DPI/Midcoast, Inc.
Midcoast Canada Capital, Inc.
Midcoast Canada Operating Corporation
