Exhibit 10.27
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment")
is made as of August 13, 2001 by and between North Coast Energy, Inc., a
Delaware corporation ("Borrower"), and Union Bank of California, N.A., as Agent
(herein called "Agent"), and the other Lenders from time to time parties to the
Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, Borrower, Agent and Lenders have entered into that certain Credit
Agreement dated as of September 26, 2000 (as amended, supplemented, or restated
to the date hereof, the "Original Agreement"), for the purposes and
consideration therein expressed, pursuant to which Lenders became obligated to
make loans to Borrower as therein provided; and
WHEREAS, Borrower, Agent, and Lenders desire to amend the Original
Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, in consideration
of the loans which may hereafter be made by Lenders to Borrower, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS AND REFERENCES
Section 1.1 TERMS DEFINED IN THE ORIGINAL AGREEMENT. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.
Section 1.2. OTHER DEFINED TERMS. Unless the context otherwise requires,
the following terms when used in this Amendment shall have the meanings assigned
to them in this section 1.2.
"AMENDMENT" means this Second Amendment to Credit Agreement.
"CREDIT AGREEMENT" means the Original Agreement as amended hereby.
ARTICLE II.
AMENDMENTS TO ORIGINAL AGREEMENT; BORROWING BASE; DISCLOSURE BY BORROWER
Section 2.1. Defined Terms. The following defined terms in Section 1.1 of
the Original Agreement are hereby amended to read in their entirety as follows:
"BASE RATE MARGIN" means, on any date, with respect to each Base
Rate portion of a Loan, the number of basis points per annum set forth
below based on the Applicable Utilization Level on such date:
Applicable Utilization Level Base Rate Margin
---------------------------- ----------------
Xxxxx X 0
Xxxxx XX 0
Xxxxx XXX 12.5
"EURODOLLAR MARGIN" means, on any date, with respect to each
Eurodollar portion of a Loan, the number of basis points per annum set
forth below based on the Applicable Utilization Level on such date:
Applicable Utilization Level Eurodollar Margin
---------------------------- -----------------
Level I 137.5
Level II 162.5
Level III 187.5
"'EVALUATION DATE' means each of the following:
(a) December 31 and June 30 of each year, beginning with December
31, 2001;
(b) Each date which either Borrower or Required Lenders, at their
respective options, specifies as a date as of which the Borrowing Base is
to be redetermined, provided that each such date must be the first or last
date of a current calendar month and that neither Borrower nor Required
Lenders shall be entitled to request any such redetermination more than
once during any six (6) month period."
"'Fiscal Year' means a twelve-month period ending on December 31 of
any year."
"'Guarantor' means North Coast Energy Eastern, Inc., a Delaware
corporation, and any other Person who has guaranteed some or all of the
Obligations."
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"'PARI PASSU LENDER HEDGING OBLIGATIONS' means the amount of each
Lender Hedging Obligation which is specified in a written notice by
Borrower to Agent as being secured on a pari passu basis with the
Obligations incurred pursuant to commitments under this Agreement;
provided, however, the maximum amount which Borrower may specify as Pari
Passu Lender Hedging Obligations may not exceed $10,000,000 in the
aggregate at any one time outstanding."
Section 2.2. SUBSEQUENT DETERMINATIONS OF BORROWING BASE. The first
sentence of Section 2.9 of the Original Agreement is hereby amended in its
entirety to read as follows:
"By each March 15 and September 15, of each year, beginning
September 15, 2001, Borrower shall furnish to each Lender all information,
reports and data which Agent has then reasonably requested concerning
Restricted Persons' businesses and properties (including their oil and gas
properties and interests and the reserves and production relating
thereto), together with the Engineering Reports described in Section
6.2(d) or (e) as applicable."
Section 2.3. LETTERS OF CREDIT. Section 2.11(b) of the Original Agreement
is hereby amended in its entirety to read as follows:
"(b) the aggregate amount of LC Obligations at such time does not
exceed $15,000,000; and"
Section 2.4. BOOKS, FINANCIAL STATEMENTS, AND REPORTS.
(a) The first sentence of Section 6.2(d) of the Original Agreement is
hereby amended in its entirety to read as follows:
"By March 15 of each year, an engineering report (as of the
December 31 Evaluation Date) prepared by X. X. Xxxxxxxx and
Associates, or other independent petroleum engineers chosen by
Borrower and acceptable to Majority Lenders, concerning all oil and
gas properties and interests owned by any Restricted Person which
are located in or offshore of the United States and which have
attributable to them proved oil or gas reserves."
(b) The first sentence of Section 6.2(e) of the Original Agreement is
hereby amended in its entirety to read as follows:
"By September 15 of each year, an engineering report (as of
the June 30 Evaluation Date) prepared by petroleum engineers
employed by Borrower, concerning all oil and gas properties and
interests owned by any Restricted Person which are located in or
offshore of the United States and which have attributable to them
proved oil and gas reserves."
Section 2.5. BORROWING BASE. Agent hereby notifies Borrower that from and
after the date hereof until the next Evaluation Date, the Borrowing Base shall
be $65,000,000.
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Section 2.6. DISCLOSURE BY BORROWER. The Disclosure Schedule is hereby
amended to reflect that the officers and directors of Borrower are the following
persons:
Name Title
---- -----
Carel X. X. Xxx Chairman of the Board of Directors
Xxxx Xxxxx Chief Executive Officer and Director
Xxxxx Xxxxx Director
Cok van der Xxxxx Director
Xxx X. Xxxxxxxxxx Director
Xxxxx X. Xxxxxxx Director
X. Xxxx Michaels Director
Xxxx X. Xxxxx Chief Financial Officer and Treasurer
Xxxx X. Xxxxx General Counsel and Secretary
Xxxxxx X. Xxxxxxxxxx Vice President for Exploration and
Production
Xxxxxx X. Xxxxxxx Controller
Xxxxx X. Xxx Director of Energy Marketing
Xxxxxxx X. Xxxxx Director of Corporate Development
ARTICLE III.
CONDITIONS OF EFFECTIVENESS
Section 3.1. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective as of the date first above written when and only when each of the
following conditions shall have been satisfied:
(a) Agent shall have received, at Agent's office, each of the
following in form, substance and date satisfactory to Agent: (i) a
counterpart of this Amendment executed and delivered by Borrower and
Majority Lenders; and (ii) a certificate of a duly authorized officer of
Borrower dated the date of this Amendment certifying: (A) that all of the
representations and warranties set forth in ss. 4.1 hereof are true and
correct at and as of
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the time of such effectiveness; and (B) as to such other corporate matters
as Agent shall deem necessary; and
(b) Agent shall have additionally received such other documents as
Agent may reasonably request.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1. REPRESENTATIONS AND WARRANTIES OF BORROWER. In order to
induce Agent and Lenders to enter into this Amendment, Borrower represents and
warrants as of the date on which this Amendment becomes effective to Agent that:
(a) The representations and warranties contained in Article V of the
Credit Agreement are true and correct at and as of the time of the
effectiveness hereof.
(b) Each Restricted Person is duly authorized to execute and deliver
each Loan Document to which it is a party and Borrower is and will
continue to be duly authorized to borrow and to perform its obligations
under the Credit Agreement. Each Restricted Person has duly taken all
corporate action necessary to authorize the execution and delivery of each
Loan Document to which it is a party and to authorize the performance of
the obligations of it hereunder and thereunder.
(c) The execution and delivery by each Restricted Person of the Loan
Documents to which it is a party, the performance by each Restricted
Person of its obligations hereunder and thereunder, and the consummation
of the transactions contemplated hereby and thereby do not and will not
conflict with any provision of law, statute, rule or regulation or of the
articles of incorporation and bylaws of any Restricted Person, or of any
material agreement, judgment, license, order or permit applicable to or
binding upon any Restricted Person, or result in the creation of any lien,
charge or encumbrance upon any assets or properties of any Restricted
Person. Except for those which have been duly obtained, no consent,
approval, authorization or order of any court or governmental authority or
third party is required in connection with the execution and delivery by
any Restricted Person of the Loan Documents to which it is a party, or to
consummate the transactions contemplated hereby and thereby.
(d) When duly executed and delivered, each of this Amendment and
each Loan Document (as amended or affected by this by the Amendment) will
be a legal and binding instrument and agreement of each Restricted Person
that is a party thereto, enforceable in accordance with its terms, except
as limited by bankruptcy, insolvency and similar laws applying to
creditors' rights generally and by principles of equity applying to
creditors' rights generally.
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(e) The audited annual financial statements of Borrower dated as of
March 31, 2001 and the unaudited quarterly financial statements of
Borrower dated as June 30, 2001 fairly present the financial position at
such dates and the statement of operations and the changes in financial
position for the periods ending on such dates for Borrower. Copies of such
financial statements have heretofore been delivered to Agent. Since March
31, 2001, no material adverse change has occurred in the financial
condition or businesses of Borrower.
ARTICLE V.
MISCELLANEOUS
Section 5.1. RATIFICATION OF AGREEMENTS. Each Loan Document, as amended or
affected hereby, is hereby ratified and confirmed in all respects. Any reference
to the Credit Agreement in any Loan Document shall be deemed to refer to this
Amendment also. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein or therein, operate as a waiver
of any right, power or remedy of Agent or Lenders under the Credit Agreement or
any other Loan Document nor constitute a waiver of any provision of the Credit
Agreement or any other Loan Document.
Section 5.2. SURVIVAL OF AGREEMENTS. All representations, warranties,
covenants and agreements of Borrower herein shall survive the execution and
delivery of this Amendment and the performance hereof, including without
limitation the making or granting of the Loan, and shall further survive until
all of the Obligations are paid in full. All statements and agreements contained
in any certificate or instrument delivered by any Restricted Person hereunder or
under the Credit Agreement to Agent shall be deemed to constitute
representations and warranties by, or agreements and covenants of, Borrower
under this Amendment and under the Credit Agreement.
Section 5.3. LOAN DOCUMENTS. This Amendment is a Loan Document, and all
provisions in the Credit Agreement pertaining to Loan Documents apply hereto and
thereto.
Section 5.4 GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and any applicable
laws of the United States of America in all respects, including construction,
validity and performance.
Section 5.5. COUNTERPARTS. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.
THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
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IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
NORTH COAST ENERGY, INC.
By:/s/Xxxx Xxxxx
----------------------------------------
Xxxx Xxxxx
Chief Executive Officer
UNION BANK OF CALIFORNIA, N.A., as
Agent and Lender
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
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IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
NORTH COAST ENERGY, INC.
By:
----------------------------------------
Xxxx Xxxxx
Chief Executive Officer
UNION BANK OF CALIFORNIA, N.A., as
Agent and Lender
By:/s/Xxxxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Senior Vice President
By:/s/Xxx Xxxxx
----------------------------------------
Name: Xxx Xxxxx
Title: Assistant Vice
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BANK ONE, NA (Main Office Chicago),
Lender
By:/s/Xxxxxxx Xxxxxxxxx-Xxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxxx-Xxxxx
Title: First Vice President
COMERICA BANK-TEXAS, Lender
By:
----------------------------------------
Name:
Title:
FORTIS CAPITAL CORP., Lender
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
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BANK ONE, NA (Main Office Chicago),
Lender
By:
----------------------------------------
Name:
Title:
COMERICA BANK-TEXAS, Lender
By: /s/X. Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
Title: Corporate Banking Officer
FORTIS CAPITAL CORP., Lender
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
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BANK ONE, NA (Main Office Chicago),
Lender
By:
----------------------------------------
Name:
Title:
COMERICA BANK-TEXAS, Lender
By:
----------------------------------------
Name:
Title:
FORTIS CAPITAL CORP., Lender
By:/s/Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By:/s/Xxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
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CONSENT AND AGREEMENT
---------------------
North Coast Operating Company (the "Company") and each of the partnerships
party hereto (the "Partnerships") hereby consent to the provisions of this
Amendment and the transactions contemplated herein, and agrees that the
Company's and the Partnership's obligations and covenants under the Credit
Agreement are unimpaired hereby and shall remain in full force and effect. North
Coast Energy Eastern, Inc., f/k/a Xxxxx Energy, Inc., hereby consents to the
provisions of this Amendment and the transactions contemplated herein, and
agrees that its obligations and covenants under its Guaranty of even date with
the Original Agreement in favor of Agent are unimpaired hereby and shall remain
in full force and effect.
Date: August 13, 2001
NORTH COAST ENERGY EASTERN, INC.
By:/s/Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Chief Executive Officer
NORTH COAST OPERATING COMPANY
By:/s/Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: President
Capital Drilling Fund
1986-1 Limited Partnership
North Coast Energy 1990-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1990-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1991-1
Appalachian Private Drilling
Program L.P.
-1-
North Coast Energy 1991-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1992-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1992-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1993-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1993-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1994-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1994-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1994-3
Appalachian Private Drilling
Program L.P.
North Coast Energy 1995-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1995-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1996-1
Appalachian Private Drilling
Program L.P.
-2-
North Coast Energy 1996-2
Appalachian Private Drilling
Program L.P.
North Coast Energy 1997-1
Appalachian Private Drilling
Program L.P.
North Coast Energy 1997-2
Appalachian Private Drilling
Program L.P.
By: NORTH COAST ENERGY, INC., general partner
By:/s/Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Chief Executive Officer
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