SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (herein called the "AMENDMENT")
made as of April 2, 1999 by and among Energy Corporation of America, a West
Virginia corporation (herein called "BORROWER"), General Electric Capital
Corporation, individually and as agent (herein called "AGENT"), and the Lenders
named on Schedule 3 to the Original Agreement ("LENDERS").
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 May 20, 1997, as amended by a First Amendment to Credit
Agreement and Assignment and Waiver dated as of September 26, 1997 (the
"Original Agreement"), for the purpose and consideration therein expressed,
whereby Lenders became obligated to make loans to Borrower as therein provided;
and
WHEREAS, Borrower, Agent and Lenders desire to amend the Original Agreement
to modify certain covenants to allow for additional Investments (as defined in
the Original Agreement) and to waive the failure by Borrower to comply with
certain covenants;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement and 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 1.
Definitions and References
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Section 1.1. Terms Defined in the Original Agreement. Unless the context
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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,
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the following terms when used in this Amendment shall have the meanings assigned
to them in this Section 1.2.
"AMENDMENT" shall mean this Second Amendment to Credit Agreement.
"CREDIT AGREEMENT" shall mean the Original Agreement as amended hereby.
ARTICLE II.
Amendments to Original Agreement
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Section 2.1. Tangible Net Worth. Section 7.7 of the Original Agreement is
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hereby
amended in its entirety to read as follows:
"Section 7.7. Limitation on Investments and New Businesses. No
Restricted Person will:
(a) make any expenditure or commitment or incur any obligation or
enter into or engage in any transaction except in the ordinary course of
business or except as otherwise expressly permitted hereunder;
(b) engage directly or indirectly in any business or conduct any
operations except the energy business;
(c) make any acquisitions of or Investments in any Person, except
for the following Investments made by any Restricted Person other than Eastern
Capital:
(i) Investments in Cash Equivalents;
(ii) Investments in Wholly-owned Subsidiaries of Borrower;
(iii) Investments in Capital Stock of any Person; provided:
(A) such Person or is engaged primarily in owning and/or operating oil and gas
properties or in the energy utility business and (B) such Investments do not
exceed $1,000,000, in the aggregate; and
(iv) Investments in Capital Stock of any Person (in this
subsection called a "Target"); provided (A) the Target is engaged primarily in
owning and/or operating oil and gas properties or in the energy utility business
and (B) the Target shall become a Wholly-owned Subsidiary within the Acquisition
Period (as defined below in this section); provided that: the Investments
described in the immediately preceding clause (iii) and in this clause (iv)
shall not exceed $5,000,000 in the aggregate; provided further: that Borrower
shall give written notice to Agent when the Investments described in the
immediately preceding clause (iii) and in this clause (iv) exceed $1,000,000 in
the aggregate;
(d) make any significant acquisition of or Investments in any
properties except properties used in the energy business;
(e) make Investments by Eastern Capital Corporation in an aggregate
amount in excess of $5,000,000.
Notwithstanding the foregoing, no acquisition or Investment permitted under
the immediately preceding clauses (c) and (d) and under this subsection (e) may
be made if a Default, Event of Default or Borrowing Base Deficiency exists at
the time such acquisition or Investment is made or will occur as a result
thereof.
As used in this subsection "Acquisition Period" means (1) a period of
eighteen months beginning on the date of the original Investment by any
Restricted Person in the Target or (2) if by the end of such eighteen-month
period, (x) the Target and such Restricted Person have executed a letter of
intent for such Restricted Person to purchase the Target and Borrower has
delivered a copy of such letter to Agent or (y) such Restricted Person is
negotiating in good faith to acquire the Target and has provided to Agent a
written summary of the status of such negotiations, "Acquisition Period" shall
mean a period of twenty-four months from the date of such Restricted Person's
first Investment in the Target."
Section 2.2. Limitation on Credit Extensions. Section 7.8 of the Original
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Agreement is hereby amended by deleting the "and" immediately prior to
subsection (iii) thereof and adding the following at the end of such section:
"and (iv) extensions of credit to key employees of Borrower for the
purchase of Class A Stock of Borrower pursuant to a Resolution of the Board of
Directors dated December 10, 1998."
ARTICLE III.
Conditions of Effectiveness
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Section 3.1. Effective Date. This Amendment shall become effective as of
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the date first above written when, and only when Agent shall have received all
of the following documents in form and substance satisfactory to Agent:
(a) this Amendment;
(b) the Consent of the Subsidiaries of Borrower which have executed and
delivered Security Documents;
(c) the written opinion of Xxxxxxx and Xxxxxxx, LLP dated as of the
date of this Amendment, addressed to Agent, to the effect that this Amendment
has been duly authorized, executed and delivered by Borrower and that the Credit
Agreement and the Notes constitute the legal, valid and binding obligation of
Borrower, enforceable in accordance with their terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency and similar
laws and to moratorium laws and other laws affecting creditors' rights generally
from
time to time in effect);
(d) a certificate of the Secretary of Borrower dated the date of this
Amendment certifying: (i) that resolutions adopted by the Board of Directors of
the Borrower authorize the execution, delivery and performance of this Amendment
by Borrower; (ii) the names and true signatures of the officers of the Borrower
authorized to sign this Amendment; and (iii) that all of the representations and
warranties set forth in Article V hereof are true and correct at and as of the
time of such effectiveness; and
(e) such other supporting documents as Agent may reasonably request.
ARTICLE IV.
Representations and Warranties
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Section 4.1. Representations and Warranties of Borrower. In order to
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induce each
Lender to enter into this Amendment, Borrower represents and warrants to each
Lender that:
(a) All representations and warranties made by any Restricted Person in
any Loan Document delivered on or before the date hereof are true on and as of
the date hereof (except to the extent that the facts upon which such
representations are based have been changed by the transactions contemplated
herein) as if such representations and warranties had been made as of the date
hereof.
(b) Borrower is duly authorized to execute and deliver this Amendment
and is and will continue to be duly authorized to borrow monies and to perform
its obligations under the Credit Agreement. Borrower has duly taken all
corporate action necessary to authorize the execution and delivery of this
Amendment and to authorize the performance of the obligations of
Borrower hereunder.
(c) The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations hereunder and the consummation of the
transactions contemplated hereby does not and will not conflict with any
provision of law, statute, rule or regulation or of the articles of
incorporation and bylaws of Borrower, or of any material agreement, judgment,
license, order or permit applicable to or binding upon Borrower, or result in
the creation of any lien, charge or encumbrance upon any assets or properties of
Borrower. Except for those which have been 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 Borrower of this
Amendment or to consummate the transactions contemplated hereby.
(d) When duly executed and delivered, each of this Amendment and the
Credit Agreement will be a legal and binding obligation of Borrower, enforceable
in accordance with its terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the enforcement of creditors'
rights and by equitable principles of general application.
(e) The audited annual Consolidated financial statements of Borrower
dated as of June 30, 1998 and the unaudited quarterly Consolidated financial
statements of Borrower dated as of December 31, 1998 fairly present the
Consolidated financial position at such dates and the Consolidated statement of
operations and the changes in Consolidated financial position for the periods
ending on such dates for Borrower. Copies of such financial statements have
heretofore been delivered to each Lender. Since such dates, no material adverse
change has occurred in the financial condition or businesses or in the
Consolidated financial condition or businesses of Borrower.
ARTICLE V.
Miscellaneous
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Section 5.1. Ratification of Agreements. The Original Agreement as hereby
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amended is hereby ratified and confirmed in all respects. Any reference to the
Credit Agreement in any Loan Document shall be deemed to be a reference to the
Original Agreement as hereby amended. The execution, delivery and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of Lenders under the Credit Agreement, the
Notes, or any other Loan Document nor constitute a waiver of any provision of
the Credit Agreement, the Notes or any other Loan Document.
Section 5.2. Survival of Agreements. All representations, warranties,
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(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 Loans 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 Borrower any Restricted
Person hereunder or under the Credit Agreement to any Lender shall be deemed to
constitute representations and warranties by, and/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
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provisions in the Credit Agreement pertaining to Loan Documents apply hereto.
Section 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED A CONTRACT AND
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INSTRUMENT MADE UNDER THE LAWS OF THIS STATE OF NEW YORK AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
Section 5.5. Counterparts: Fax. This Amendment may be separately executed
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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 may be validly executed and delivered by facsimile or
other electronics transmission.
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.
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
BORROWER:
ENERGY CORPORATION OF AMERICA
By: /s/ I. M. Xxxxx
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Xxxxxx X. Xxxxx
Vice President Finance
AGENT:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By: /s/ Xxxx X. Xxxxxxxx
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Manager - Operations
THE BANK OF NOVA SCOTIA, as
Documentation Agent and Lender
By: /s/ F.C.H. Xxxxx-
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Name: F.C. H. Xxxxx
Title: Sr. Mgr. Loan Operations
UNION BANK OF CALIFORNIA, N.A., as
Lender
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A., as
Lender
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Sr. Vice President
and Manager
