1
EXHIBIT 10.09
▇▇▇▇▇▇ OIL CORPORATION
FIRST AMENDMENT TO CREDIT AGREEMENT
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement dated as of March 25,
1998 (said Credit Agreement being referred to herein as the "Credit Agreement")
currently in effect by and between, ▇▇▇▇▇▇ Oil Corporation, a Delaware
corporation (the "Company"), and you (the "Bank"). All capitalized terms used
herein without definition shall have the same meanings herein as such terms have
in the Credit Agreement.
The Company hereby applies to the Bank to extend the Termination Date,
decrease the Revolving Credit and make certain other amendments to the Credit
Agreement, and the Bank is willing to do so under the terms and conditions set
forth in this Amendment.
1. AMENDMENT.
Upon the satisfaction of the conditions precedent set forth in Section
2 hereof, effective as of the date set forth in such Section, the Credit
Agreement shall be and hereby is amended as follows:
1.01. Revolving Credit. Section 1.1 of the Credit Agreement is hereby
amended by deleting the amount of "$20,000,000" appearing in the eighth line
thereof and inserting the amount of "$15,000,000" in its stead.
1.02. Unused Line Fee. Section 3.2 of the Credit Agreement is hereby
amended and as so amended is restated in its entirety to read as follows:
"Section 3.2. Unused Line Fee. For the period from
and including the date hereof to but not including the
Termination Date, the Company shall pay to the Bank a fee at
the rate of one quarter of one percent (1/4 of 1%) per annum
on the average daily unused portion of the Revolving Credit
Commitment as follows: (i) if and so long as the outstanding
principal amount of the Revolving Credit Loans is less than
$10,000,000, such fee during such period shall be payable on
the average daily unused portion of the first $10,000,000 of
the Revolving Credit Commitment, and (ii) at all other times,
such fee during such period shall be payable on the average
daily unused portion of the entire Revolving Credit
Commitment. Such fee shall be payable monthly in arrears on
the
2
last day of each calendar month (commencing April 30, 1999)
and on the Termination Date."
1.03. Term. Section 3.7 of the Credit Agreement is hereby amended by
deleting the dates "March 24, 1999" and "May 1, 2000" appearing in the first and
second sentences, respectively, thereof and inserting the dates "March 24, 2001"
and "May 1, 2002", respectively, in their stead.
1.04. Restated Definitions. The following definitions appearing in Section
5.1 of the Credit Agreement are hereby amended and as so amended shall be
restated in their entirety to read as follows:
"Termination Date" means March 24, 2001, or such later date to
which the Revolving Credit Commitment is automatically
extended pursuant to Section 3.7 hereof, or such earlier date
on which the Revolving Credit Commitment is terminated in
whole pursuant to Section 3.7, 9.2 or 9.3 hereof.
"Present Excise Tax Reserve" means a continuing reserve in the
amount of $6,000,000.
1.05. Amended Definition. The definition of "Borrowing Base" appearing in
Section 5.1 of the Credit Agreement is hereby amended by adding the following
new sentence at the end thereof:
"Notwithstanding anything contained herein to the contrary,
not more than $9,500,000 of the Borrowing Base shall be
attributable to the Eligible Kaneb MLP Units."
1.06. New Definition. Section 5.1 of the Credit Agreement is hereby
amended by adding the following new definition at the end thereof:
"Year 2000 Problem" means any significant risk that computer
hardware, software, or equipment containing embedded
microchips essential to the business or operations of the
Company or any of its Subsidiaries will not, in the case of
dates or time periods occurring after December 31, 1999,
function at least as efficiently and reliably as in the case
of times or time periods occurring before January 1, 2000,
including the making of accurate leap year calculations.
1.07. New Representation. Section 6 of the Credit Agreement shall be
amended by adding the following new Section 6.20 at the end thereof:
"Section 6.20. The Company is conducting a
comprehensive review and assessment of the computer
applications of the Company and its Subsidiaries and is making
-2-
3
inquiry of their material suppliers, service vendors
(including data processors) and customers, with respect to any
defect in computer software, data bases, hardware, controls
and peripherals related to the occurrence of the year 2000 or
the use at any time of any date which is before, on and after
December 31, 1999, in connection therewith. Based on the
foregoing review, assessment and inquiry, the Company believes
that no such defect could reasonably be expected to have a
material adverse effect on the business or financial affairs
of the Company (or of the Company and its Subsidiaries taken
on a consolidated basis)."
1.08. Borrowing Base Certificate. Section 8.5(a) of the Credit Agreement
is hereby amended and as so amended is restated in its entirety to read as
follows:
"(a) as soon as available, and in any event no later
than the last Business Day of each calendar week, a Borrowing
Base certificate in the form attached hereto as Exhibit B
showing the computation of the Borrowing Base in reasonable
detail as of the close of business on the last day of the
immediately preceding week, together with such other
information as is therein required, prepared by the Company
and certified to by the President or chief financial officer
of the Company (provided however, if and so long as excess
availability under the Revolving Credit has been greater than
or equal to $4,000,000 at all times since the beginning of the
then most recently completed calendar week, then the Company
need not furnish a Borrowing Base Certificate for such week's
close, but shall instead furnish the Bank as soon as
available, and in any event no later than fifteen (15) days
after the last day of the month in which such week was
completed, a Borrowing Base Certificate showing the
computation of the Borrowing Base as of the close of business
on the last day of such month);"
1.09. New Covenant. Section 8 of the Credit Agreement shall be amended by
adding the following new Section 8.24 at the end thereof:
"Section 8.24. Year 2000 Assessment. The Company
shall take all actions necessary and commit adequate resources
to assure that its computer-based and other systems (and those
of all Subsidiaries) are able to effectively process dates,
including dates before, on and after January 1, 2000, without
experiencing any Year 2000 Problem that could cause a material
adverse effect on the business or financial affairs of the
Company (or of the Company and its Subsidiaries taken on a
consolidated basis). At the request of the Banks, the Company
will provide the Banks with written assurances and
substantiations (including, but not limited to, the results of
internal or external audit reports prepared in the
-3-
4
ordinary course of business) reasonably acceptable to the
Banks as to the capability of the Company and its Subsidiaries
to conduct its and their businesses and operations before, on
and after January 1, 2000, without experiencing a Year 2000
Problem causing a material adverse effect on the business or
financial affairs of the Company (or of the Company and its
Subsidiaries taken on a consolidated basis)."
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
2.01. The Company and the Bank shall have executed and delivered this
Amendment.
2.02. The Bank shall have received copies of resolutions of the Company's
Board of Directors authorizing the execution, delivery and performance of this
Amendment to which it is a party and the consummation of the transactions
contemplated hereby and thereby, all certified in each instance by its Secretary
or Assistance Secretary.
2.03. No Default or Event of Default shall have occurred and be continuing
as of the date this Amendment would otherwise take effect.
2.04. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Bank and its counsel.
Upon the satisfaction of the above conditions precedent, Sections 1.03
and 1.04 of this Amendment shall be effective as of March 24, 1999 and the
remainder of the amendments made by Section 1 of this Amendment shall be
effective as of April 1, 1999.
3. REPRESENTATIONS.
In order to induce the Bank to execute and deliver this Amendment, the
Company hereby represents to the Bank that as of the date hereof, the
representations and warranties set forth in Section 6 of the Credit Agreement
are and shall be and remain true and correct (except that for purposes of this
paragraph, (i) the representations contained in Section 6.3 shall be deemed to
include this Amendment as and when it refers to Loan Documents and (ii) the
representations contained in Section 6.5 shall be deemed to refer to the most
recent financial statements of the Company delivered to the Bank) and the
Company is in full compliance with all of the terms and conditions of the Credit
Agreement and no Default or Event of Default has occurred and is continuing
under the Credit Agreement or shall result after giving effect to this
Amendment.
4. MISCELLANEOUS.
4.01. The Company acknowledges and agrees that all of the Collateral
Documents to which it is a party remain in full force and effect for the benefit
and security of, among other
-4-
5
things, the Revolving Credit as modified hereby. The Company further
acknowledges and agrees that all references in such Collateral Documents to the
Revolving Credit shall be deemed a reference to the Revolving Credit as so
modified. The Company further agrees to execute and deliver any and all
instruments or documents as may be required by the Bank to confirm any of the
foregoing.
4.02. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Revolving Credit Note, or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued or
made pursuant to or with respect to the Credit Agreement, any reference in any
of such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.
4.03. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
-5-
6
Dated as of March 18, 1999 but effective as set forth in Section 2
above.
▇▇▇▇▇▇ OIL CORPORATION
By
Its
------------------------------------
Accepted and agreed to in Chicago, Illinois as of the date and year
last above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By
Its Vice President
-6-
