FIRST AMENDING AGREEMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT DATED JANUARY 30, 1996
THIS AGREEMENT made effective as of the 30th day of September, 1996
AMONG:
WAINOCO OIL CORPORATION, a body corporate having offices in the City
of Houston, in the State of Texas, as Borrower
- and -
J.P. MORGAN CANADA, a Canadian chartered bank having offices in the
City of Toronto, in the Province of Ontario, as a Bank and in its
capacity as Agent
- and -
PARIBAS BANK OF CANADA, a Canadian chartered bank having offices in
the City of Toronto, in the Province of Ontario, as a Bank and in its
capacity as Fronting Bank
WHEREAS the parties hereto have entered into an Amended and Restated
Credit Agreement dated January 30, 1996 (the "Credit Agreement") which provides
for a revolving credit facility in the maximum principal amount of Cdn.
$18,000,000;
AND WHEREAS the parties hereto wish to amend the Credit Agreement as
hereinafter provided;
NOW THEREFORE, in consideration of the sum of one dollar ($1.00) and
other good and valuable consideration, receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Interpretation
(a) Capitalized terms used herein shall, unless otherwise defined,
have the meanings given to them in the Credit Agreement.
(b) In this Agreement, words importing the singular number include
the plural and vice-versa and words importing gender include
masculine, feminine and neuter.
(c) The division of this Agreement into Sections and paragraphs and
the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation hereof.
(d) The terms "this Agreement", "hereof", "herein", "hereunder" and
similar expressions refer, unless otherwise stated, to this
Agreement taken as a whole and not to any particular Section or
paragraph.
2. Amendments
2.1 The definitions of "Net Proceeds from Petroleum Operations",
"Principal Repayment Date", "Projected Cash Flow Available for Fixed Charges"
and "Termination Date" are deleted from Section 1.1 of the Credit Agreement.
2.2 The following definition is added to Section 1.1 of the Credit
Agreement immediately after the definition of "Assignee":
"Available Cash Flow" means, as at the end of any fiscal quarter, the
sum of:
(i) the net income of the Borrower (determined by excluding any
amounts of FHI EBITDA which would otherwise be included therein)
for the period of four consecutive fiscal quarters of the
Borrower then ended plus, to the extent deducted in determining
such net income for such period, the aggregate amount of (A)
interest expense, (B) provision for income taxes and (C)
depletion, depreciation, amortization and other similar non-cash
charges, less all non-cash gains added in computing such net
income for such period;
(ii) the FHI EBITDA calculated using any four fiscal quarters in the
period of five consecutive fiscal quarters of FHI then ended,
less (A) all non-cash gains added in computing such net income
for such four fiscal quarters, and (B) U.S. $5,000,000
(representing a notional deduction for capital costs of FHI
incurred during such four fiscal quarters).".
2.3 The definition of "Fixed Charges" contained in Section 1.1 of the
Credit Agreement is deleted and the following is substituted therefor:
""Fixed Charges" means, for any period of four consecutive fiscal
quarters, the sum of:
(i) interest payments required to be made on Debt of the Borrower or
any Subsidiary during such period, provided that,
(A) subject to paragraph (B) immediately below, if the rate of
interest applicable to any Debt is an unknown or variable
rate, then the rate to be used for the purpose of such
determination shall be the rate per annum equal to the
weighted average applicable rate of interest paid by such
Person on such Debt during the then most recently ended
calendar month prior to such period,
(B) with respect to Debt under the FHI Credit Agreement and
Debt hereunder, the rate of interest to be used for the
purposes of a determination shall be the rate per annum
equal to the rate of interest that was in effect for such
Debt as at the last day of the fiscal quarter of the
Borrower immediately prior to such period,
(C) the principal amount of Debt outstanding during such period
shall be assumed to be the amount outstanding at the last
day of the fiscal quarter of the Borrower immediately prior
to such period, reduced as contemplated by clause (iii)
below;
(ii) any scheduled sinking fund payments required to be made by the
Borrower on account of the Subordinated Debentures during such
period; and
(iii) any other scheduled payments of principal required to be made on
Debt of the Borrower or any Subsidiary during such period.".
2.4 The definition of "Loan Limit" contained in Section 1.1 of the Credit
Agreement is deleted and the following is substituted therefor:
""Loan Limit" means, (a) during the Revolving Credit Period, the
lesser of (i) the aggregate of each Bank's Commitment as reduced
pursuant to Section 2.7 and (ii) the Borrowing Base, and (b) from and
after the Maturity Date, zero.".
2.5 The definition of "Margin" contained in Section 1.1 of the Credit
Agreement is deleted and the following is substituted therefor:
""Margin" means, with respect to any Interest Period relating to a
Euro-Dollar Loan or, if such Interest Period is longer than three
months, each three month interval comprising such Interest Period:
(i) 2%, provided that the Outstanding Principal is equal to or less
than $5,000,000 at all times during such Interest Period or
three month interval, as the case may be; or
(ii) 2 1/4%, in the event that the Outstanding Principal is at any
time during such Interest Period or three month interval, as the
case may be, greater than $5,000,000.".
2.6 The definition of "Maturity Date" contained in Section 1.1 of the
Credit Agreement is amended by deleting "1999" and substituting in its place
"1998".
2.7 The definition of "Revolving Credit Period" contained in Section 1.1
of the Credit Agreement is amended by deleting "Termination Date" and
substituting in its place "the day immediately prior to the Maturity Date".
2.8 Section 2.1(a) of the Credit Agreement is amended by deleting
"Termination Date and the credit facility of each of the Banks under this
Section 2.1(a) shall be converted to a non-revolving term facility" and
substituting in its place "last day of the Revolving Credit Period".
2.9 Section 2.4(a) of the Credit Agreement is deleted and the following
is substituted therefor:
"(a) On the Maturity Date the Loan Limit shall be automatically
reduced to zero, and the Borrower shall repay in full all
outstanding Loans hereunder and all other Outstandings due or
accrued pursuant hereto.".
2.10 Section 2.5(a) of the Credit Agreement is amended by deleting "3/4 of
1%" and substituting in its place "1%".
2.11 Section 2.5 (b) of the Credit Agreement is amended by deleting "3/4
of 1%" and substituting in its place "1%".
2.12 Section 2.5(c) of the Credit Agreement is amended by deleting ", for
the Interest Period applicable thereto, at a rate per annum equal to the sum of
1 3/4% (the "Margin")" and substituting in its place "at a rate per annum equal
to the sum of the Margin".
2.13 Section 2.6(a) of the Credit Agreement is amended by deleting
"Termination Date" and substituting in its place "Maturity Date".
2.14 Section 2.9(d) of the Credit Agreement is amended by deleting ", and
the Loan Limit shall be reduced by an amount equal to the principal amount of
each such prepayment (or the Canadian Equivalent thereof as of the date of
prepayment) made after the Termination Date".
2.15 Section 2.10(b) of the Credit Agreement is amended by deleting ", and
the Loan Limit shall be reduced by an amount equal to the amount of such
prepayment (or the Canadian Equivalent thereof as of the date of prepayment)
made after the Termination Date".
2.16 Section 2.14(c) of the Credit Agreement is amended by deleting "1
3/4%" and substituting in its place "(i) 2% if on the date the Letter of Credit
is issued the Outstanding Principal (including the face amount of such Letter
of Credit) is equal to or less than $5,000,000, or (ii) 2 1/4% if on the date
the Letter of Credit is issued the Outstanding Principal (including the face
amount of such Letter of Credit) is greater than $5,000,000, in each case".
2.17 Section 5.13 of the Credit Agreement is amended by deleting
"Mortgaged Properties" wherever it appears in such section and substituting in
its place "Engineered Properties specifically subject to the Lien of and
specifically identified in the Security Documents".
2.18 Section 5.17 of the Credit Agreement is deleted and the following is
substituted therefor:
"5.17 Minimum Fixed Charge Coverage
(a) (i) As at the end of each of the Borrower's fiscal quarters
ending December 31, 1996 and March 31, 1997, the Available
Cash Flow shall be greater than 125% of the Fixed Charges
for the next four fiscal quarters; provided that, for the
purposes of determining Fixed Charges as at March 31, 1997,
the sinking fund payment required to be made by the
Borrower on October 1, 1997 in the amount of U.S.
$2,500,000 on account of the Subordinated Debentures shall
be excluded.
(ii) As at the end of each of the Borrower's fiscal quarters
ending after March 31, 1997, the Available Cash Flow shall
be greater than 150% of the Fixed Charges for the next four
fiscal quarters.
(b) In determining Fixed Charges, all currencies other than U.S.
Dollars shall be converted into U.S. Dollars at a rate of
exchange equal to the average Spot Rate for the calendar month
ending on or immediately prior to the date as of which such
determination is being made.".
2.19 Section 5.18 of the Credit Agreement is deleted and the following is
substituted therefor:
"5.18 Minimum Consolidated Net Worth
Consolidated Tangible Net Worth shall at no time be less than:
(a) during the Borrower's fiscal quarter ending December 31,
1996, U.S. $19,500,000;
(b) during the Borrower's fiscal quarter ending March 31, 1997,
U.S. $10,000,000; and
(b) after March 31, 1997, the greater of (i) U.S. $10,000,000
and (ii) 85% of the actual Consolidated Tangible Net Worth
as set forth in the compliance certificate delivered by the
Borrower to each of the Banks pursuant to Section 5.1 (c)
for the fiscal quarter ending March 31, 1997, subject to
the confirmation by and approval of the Agent, acting
reasonably.".
2.20 Section 5.19 of the Credit Agreement is deleted and the following is
substituted therefor:
"5.19 Interest Coverage Ratio
Consolidated EBITDA shall:
(a) for any four fiscal quarters within each period of five
consecutive fiscal quarters ending on December 31, 1996 and
March 31, 1997, be greater than or equal to 140% of the
consolidated interest expense of the Borrower and its
Consolidated Subsidiaries for such four fiscal quarters;
and
(b) for any four fiscal quarters within all periods of five
consecutive fiscal quarters ending after March 31, 1997, be
greater than or equal to 160% of the consolidated interest
expense of the Borrower and its Consolidated Subsidiaries
for such four fiscal quarters.".
3. Waiver
At the request of the Borrower, the Banks hereby irrevocably waive
compliance with Section 5.17 of the Credit Agreement as at the end of, and
Section 5.18 of the Credit Agreement during, the fiscal quarter of the Borrower
ending September 30, 1996. This waiver shall be limited precisely as written,
and shall not extend to (i) any non-compliance with or breach of any other
provision of the Credit Agreement, (ii) any non-compliance with or breach of
Section 5.17 as at the end of any other fiscal quarter, (iii) any
non-compliance with or breach of Section 5.18 at any other time or (iv) any
Default under the Credit Agreement other than a Default as a result of the
non-compliance with Sections 5.17 or 5.18 hereinbefore waived.
4. Amendment Fee
In consideration for the Banks amending the terms and provisions of
the Credit Agreement as herein provided, the Borrower hereby agrees to pay to
the Banks an amendment fee of U.S. $100,000. Upon the execution of this
Agreement, such fee shall be paid by the Borrower in full to the Agent for the
account of the Banks ratably in proportion to their respective Commitments.
5. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Alberta and the laws of Canada applicable therein,
and shall be treated as an Alberta contract.
6. Counterpart Execution
This Agreement may be executed in any number of counterparts and all
executed counterparts shall be read together and shall form one and the same
instrument.
7. Ratification
The Credit Agreement as amended by this Agreement is hereby ratified
and confirmed in all respects as being in full force and effect.
8. Enurement
Subject to Section 9.6 of the Credit Agreement, this Agreement shall
enure to the benefit of and be binding upon each of the parties hereto and its
permitted successors and assigns.
WAINOCO OIL CORPORATION, as Borrower
By: /s/ Julie H. Edwards
Julie H. Edwards
Title: Senior Vice President - Finance
& Chief Financial Officer
J.P. MORGAN CANADA, as Agent and as a Bank
By: /s/ David B. Weir
David B. Weir
Title: President
PARIBAS BANK OF CANADA, as Fronting Bank
and as a Bank
By: /s/ John Plant
John Plant
Title: Vice President