1
EXHIBIT 10.64
U.S. $105,000,000
CREDIT AGREEMENT
Dated as of January 16, 1996
Among
EOG COMPANY OF CANADA,
as the Borrower
and
THE BANKS NAMED HEREIN
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Administrative Agent
2
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
1.2. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
1.3. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
1.4. Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
ARTICLE II
AMOUNT AND TERMS OF THE ADVANCES
2.1. The Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
2.2. Making the Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
2.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
2.4. Repayment; Extension of Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
2.5. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
2.6. Additional Interest on Eurodollar Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
2.7. Interest Rate Determination and Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
2.8. Voluntary Conversion of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
2.9. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
2.10. Increased Costs; Capital Adequacy, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
2.11. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
2.12. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
2.14. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
2.15. Increase of Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
2.16 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
2.17. Non-Ratable Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
2.18. Replacement of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
ARTICLE III
CONDITIONS TO EACH BORROWING
3.1. Initial Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
3.2. Additional Conditions Precedent to the Borrowings . . . . . . . . . . . . . . . . . . . . . . . . -25-
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
ARTICLE V
COVENANTS OF THE BORROWER
5.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
5.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
ARTICLE VI
EVENTS OF DEFAULT
6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
ARTICLE VII
THE ADMINISTRATIVE AGENT
7.1. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -29-
7.2. Administrative Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
7.3. Administrative Agent and Its Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
7.4. Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -31-
7.5. Certain Rights of the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . -31-
7.6. Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -32-
7.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -32-
7.8. Resignation by the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33-
ARTICLE VIII
MISCELLANEOUS
8.1. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33-
8.2. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -34-
8.3. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
8.4. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-
8.5. Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
8.6. Binding Effect; Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
8.7. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -38-
8.8. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -38-
8.9. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
8.10. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
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8.11. Survival; Term; Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
8.12. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
8.13. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
8.14 Location of Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
8.15. Currency Conversion and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
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Annex I Commitments
Schedule I - Applicable Margin
Schedule II - Applicable Lending Offices
Exhibit A Form of Note
Exhibit B Notice of Borrowing
Exhibit C-1 Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., special U.S. counsel to Borrower and Guarantor
Exhibit C-2 Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere, Canadian tax counsel to Borrower and Guarantor
Exhibit C-3 Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Stirling Scales, Nova Scotia counsel to Borrower and Guarantor
Exhibit D Opinion of Vice President and General Counsel of Guarantor
Exhibit E Notice of Conversion
Exhibit F Form of Assignment and Acceptance
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CREDIT AGREEMENT
Dated as of January 16, 1996
EOG COMPANY OF CANADA, an unlimited liability company incorporated
under the laws of the province of Nova Scotia (the "Borrower"), the financial
institutions party hereto (the "Banks"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION (in its individual capacity, "TCB"), as administrative agent (in
such capacity, the "Administrative Agent") for the Banks hereunder, agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and the plural forms of the terms
defined):
"Adjusted CD Rate" means, for any Interest Period for each
Adjusted CD Rate Advance, an interest rate per annum equal to the sum of:
(a) the rate per annum obtained by dividing (1) the rate
of interest determined by the Administrative Agent to be the average
(rounded upward to the nearest whole multiple of 1/100 of 1% per
annum, if such average is not such a multiple) of the consensus bid
rate determined by each of the Reference Banks for the bid rates per
annum, at 9:00 A.M. (or as soon thereafter as practicable) on the
first day of such Interest Period, of New York certificate of deposit
dealers of recognized standing selected by such Reference Bank for the
purchase at face value of certificates of deposit of such Reference
Bank in an amount substantially equal to such Reference Bank's
Adjusted CD Rate Advance and with a maturity equal to such Interest
Period (provided that, if bid rate quotes from such dealers are not
available to any Reference Bank, such Reference Bank shall notify the
Administrative Agent of a reasonably equivalent rate determined by it
on the basis of another source or sources selected by it), by (2) a
percentage equal to 100% minus the Adjusted CD Rate Reserve Percentage
for such Interest Period, plus
(b) the Assessment Rate for such Interest Period.
The Adjusted CD Rate for the Interest Period for each Adjusted CD Rate Advance
shall be determined by the Administrative Agent on the basis of applicable
rates furnished to and received by the Administrative Agent from the Reference
Banks one Business Day before the first day of such Interest Period, subject
however, to the provisions of Section 2.7.
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"Adjusted CD Rate Advance" means an Advance which bears
interest as provided in Section 2.5(b).
"Adjusted CD Rate Reserve Percentage" for any Interest Period
for each Adjusted CD Rate Advance means the reserve percentage applicable one
Business Day before the first day of such Interest Period under regulations
issued from time to time by the Federal Reserve Board for determining the
maximum reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with deposits exceeding one billion
dollars with respect to liabilities consisting of or including (among other
liabilities) U.S. dollar nonpersonal time deposits in the United States with a
maturity equal to such Interest Period.
"Administrative Agent" shall have the meaning specified in the
first paragraph of this Agreement, together with any successor thereto pursuant
to Section 7.8.
"Advance" means an advance by a Bank to the Borrower pursuant
to Article II (and where appropriate or the context requires, each portion of
such an advance of a specific "Type" as defined below), each portion thereof
transferred to a Bank (including a Person that becomes a Bank in connection
with such transfer) pursuant to Section 2.10(e), 2.18 or 8.6(b) and each
portion remaining after any such transfer, each Advance to consist of one or
more of the following types (each of which shall be a "Type" of Advance): an
Adjusted CD Rate Advance, a Base Rate Advance or a Eurodollar Advance.
"Agreement" means this Credit Agreement, as amended,
supplemented or modified from time to time in the future.
"Applicable Lending Office" means, with respect to each Bank,
such Bank's Domestic Lending Office in the case of a Base Rate Advance, such
Bank's CD Lending Office in the case of an Adjusted CD Rate Advance and such
Bank's Eurodollar Lending Office in the case of a Eurodollar Advance.
"Applicable Margin" means, for any Interest Period for each
Adjusted CD Rate Advance and for any Interest Period for each Eurodollar
Advance, the percentage per annum applicable to such Interest Period for such
Advance as shown in Schedule I and being based on (a) the Type of Advance to
which such Interest Period relates (i.e., Adjusted CD Rate Advance or
Eurodollar Advance), and (b) the Rating Level, which for the purposes of
determining the Applicable Margin shall be the Rating Level in effect on the
first day of such Interest Period.
"Assessment Rate" for any Interest Period for each Adjusted CD
Rate Advance means the annual assessment rate estimated by the Bank which is
the Administrative Agent one Business Day before the first day of such Interest
Period for determining the then current annual assessment payable by such Bank
to the FDIC for insuring dollar deposits of such Bank at its principal office
in the United States.
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"Bankruptcy Code" means Title 11 of the United States Code, as
now or hereafter in effect, or any successor thereto.
"Banks" has the meaning specified in the first paragraph of
this Agreement, and shall include any financial institution which becomes a
Bank pursuant to Section 2.15, Section 2.18 or Section 8.6(b).
"Base Rate" at any time shall mean the higher of (a) the Prime
Commercial Lending Rate as in effect from time to time and (b) the Federal
Funds Rate plus 1/2 of 1%. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Administrative Agent to obtain sufficient bids
or publications in accordance with the terms hereof, the Base Rate shall be the
Prime Commercial Lending Rate until the circumstances giving rise to such
inability no longer exist.
"Base Rate Advance" means an Advance which bears interest as
provided in Section 2.5(a).
"Borrower" means EOG Company of Canada, an unlimited liability
company incorporated under the laws of the province of Nova Scotia, and any
successor thereto pursuant to Section 5.2(b).
"Borrowing" means a borrowing hereunder consisting of (a) the
initial Advances on January 16, 1996, and (b) any subsequent Advances made (on
the same date) after January 16, 1996 pursuant to an increase in the facility
in accordance with Section 2.15.
"Business Day" means (a) any day of the year except Saturday,
Sunday and any day on which banks are required or authorized to close in
Halifax, Nova Scotia, Houston, Texas or New York, New York, and (b) if the
applicable Business Day relates to any Eurodollar Advances, any day which is a
"Business Day" described in clause (a) and which is also a day for trading by
and between banks in the applicable interbank Eurodollar market.
"CD Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "CD Lending Office" opposite its name on
Schedule II hereto or in the document pursuant to which it became a party
hereto as contemplated by Section 2.15, 2.18 or 8.6(b) (or, if no such office
is specified, its Domestic Lending Office) or such other office of such Bank as
such Bank may from time to time specify to the Borrower and the Administrative
Agent.
"Chapter One" shall mean Chapter One of the Texas Credit Code,
as in effect on the date the document using such term was executed.
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"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor Federal tax code, and any reference to any
statutory provision of the Code shall be deemed to be a reference to any
successor provision or provisions.
"Commitment" means the commitment of each Bank to lend money
in an amount not to exceed the amount set forth opposite such Bank's name on
Annex I hereto.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of another Type pursuant to
Section 2.7, Section 2.8 or Section 2.10(b).
"Domestic Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Domestic Lending Office" opposite its
name on Schedule II or in the document pursuant to which it became a party
hereto as contemplated by Section 2.15, 2.18 or 8.6(b) or such other office of
such Bank as such Bank may from time to time specify to the Borrower and the
Administrative Agent.
"eurocurrency liabilities" has the meaning assigned to that
term in Regulation D of the Federal Reserve Board, as in effect from time to
time.
"Eurodollar Advance" means an Advance which bears interest as
provided in Section 2.5(c).
"Eurodollar Lending Office" means, with respect to any Bank,
the office of such Bank specified as its "Eurodollar Lending Office" opposite
its name on Schedule II or in the document pursuant to which it became a party
hereto as contemplated by Section 2.15, 2.18 or 8.6(b) (or, if no such office
is specified, its Domestic Lending Office) or such other office of such Bank as
such Bank may from time to time specify to the Borrower and the Administrative
Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Advance, the lesser of (a) (i) an interest rate per annum shown on
page 3750 of the Dow ▇▇▇▇▇ & Company Telerate screen or any successor page as
the composite offered rate for London interbank deposits with a period equal to
the Interest Period for such Eurodollar Advance, as shown under the heading
"USD", as of 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period, (ii) if the rate specified in clause (i) of this
definition does not appear, an interest rate per annum based on the rates at
which Dollar deposits with a period equal to such Interest Period are displayed
on page "LIBO" of the Reuters Monitor Money Rates Service or such other page as
may replace the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks as of 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period, it being
understood that if two or more rates appear on such page, the rate will be the
arithmetic average of such displayed rates and if fewer than two such rates are
displayed, this clause (ii) of this definition shall not be applicable, and
(iii) if the rate specified in clause (i) does not appear and if clause (ii) of
this definition is not applicable, an interest rate
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per annum equal to the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the rate per
annum at which dollar deposits in immediately available funds for delivery on
the first day of such Interest Period are offered by TCB to leading banks in
the interbank Eurodollar market selected by TCB at approximately 11:00 A.M.
(local time in the relevant Eurodollar market) two Business Days before the
first day of such Interest Period in an amount substantially equal to the
amount of the largest Eurodollar Advance to be outstanding during such Interest
Period and for a period equal to such Interest Period and (b) the Highest
Lawful Rate. The Eurodollar Rate for each Interest Period for each Eurodollar
Advance shall be determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the Administrative Agent from TCB
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.7.
"Events of Default" has the meaning specified in Section 6.1.
"Exchange Rate" means, in relation to the exchange of one
currency to another on a particular day for the purpose of Section 8.15 hereof,
the rate of exchange quoted by each Bank (with respect to amounts owed to such
Bank) as its noon spot rate of exchange for the conversion of one currency to
the other on such day.
"FDIC" means the Federal Deposit Insurance Corporation, or any
federal agency or authority of the United States from time to time succeeding
to its function.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any federal agency or authority of the United States
from time to time succeeding to its function.
"Guarantor" means Enron Oil & Gas Company, a Delaware
corporation, or any successor permitted by Section 4.2(d) of the Guaranty.
"Guarantor Default" shall have the meaning assigned such term
in the Guaranty.
"Guaranty" means that certain Guaranty dated of even date
herewith issued by the Guarantor in favor of the Administrative Agent and the
Banks, as the same may be supplemented, amended or modified from time to time.
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"Highest Lawful Rate" shall mean, on any day, with respect to
any Bank, the maximum nonusurious rate of interest permitted for that day by
the laws applicable to such Bank, stated as a rate per annum. On each day, if
any, that Chapter One establishes the Highest Lawful Rate, the Highest Lawful
Rate shall be the "indicated rate ceiling" (as defined in Chapter One) for that
day.
"Interest Period" means, with respect to each Adjusted CD Rate
Advance or Eurodollar Advance, the period commencing on the date of such
Advance or the date of the Conversion of any Advance into such an Advance and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below except
that any Interest Period for Eurodollar Advances which commences on 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. The duration of each such Interest Period shall be (a) in the
case of an Adjusted CD Rate Advance, 30, 60, 90 or 180 days and (b) in the case
of a Eurodollar Advance, one, two, three or six months, in each case as the
Borrower may, upon notice received by the Administrative Agent not later than
11:00 A.M. on the third Business Day (first Business Day in the case of an
Adjusted CD Rate Advance) on the first day of such Interest Period, select;
provided, however, that:
(1) Interest Periods commencing on the same date for
Adjusted CD Rate Advances or Eurodollar Advances, respectively, shall
be of the same duration;
(2) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, in the case of any Interest Period for a
Eurodollar Advance, that if such extension would cause the last day of
such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day; and
(3) no Interest Period for any Advance under a Note which
is maturing may end after the Maturity Date for such Note.
"Loan Document" means this Agreement, each Note, the Notice of
Borrowing and each other document or instrument executed and delivered in
connection with this Agreement.
"Majority Banks" means at any time Banks holding at least 66
2/3% of the then aggregate unpaid principal amount of the Notes held by Banks,
or, if no such principal amount is then outstanding, Banks having at least 66
2/3% of the Commitments.
"Maturity Date" means, (a) with respect to any Note dated
January 16, 1996, the earlier of (i) January 17, 2001, or such later date to
which the maturity of such Note has been
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extended pursuant to Section 2.4(b), or (ii) the date, if any, that the Notes
become due and payable in accordance with Section 6.1; and (b) with respect to
any Note issued pursuant to Section 2.15, the earlier of (i) five (5) years and
one (1) day from the date of such Note, or such later date to which the
maturity of such Note has been extended pursuant to Section 2.4(b), or (ii) the
date, if any, that the Notes become due and payable in accordance with Section
6.1.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Note" means a promissory note of the Borrower payable to the
order of any Bank, in substantially the form of Exhibit A, evidencing the
aggregate indebtedness of the Borrower to such Bank resulting from the Advance
owed to such Bank. The Notes evidencing the Advances made on January 16, 1996,
shall be dated January 16, 1996. The Notes evidencing Advances comprising a
Borrowing made pursuant to an increase in the facility pursuant to Section
2.15, shall be dated the date of such Advances.
"Notice of Borrowing" has the meaning specified in Section 2.2.
"Other Taxes" has the meaning specified in Section 2.13(c).
"Payment Office" means the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ or such other office as the
Administrative Agent may designate by written notice to the other parties
hereto.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, firm or other entity, or a
government or any political subdivision or agency, department or
instrumentality thereof.
"Prescribed Forms" means such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Borrower to make payments hereunder
for the account of such Bank free of deduction or withholding of income or
similar taxes (except for any deduction or withholding of income or similar
taxes as a result of any change in or in the interpretation of any such treaty,
the Code or any such rule or regulation).
"Prime Commercial Lending Rate" means that rate of interest
from time to time announced by TCB at its principal office as its prime rate
(or comparable rate, if TCB does not so designate a "prime rate"), the Prime
Commercial Lending Rate to change when and as such prime rate or comparable
rate, as the case may be, changes. The Prime Commercial Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. TCB may make commercial loans or other loans
at rates of interest at, above or
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below the Prime Commercial Lending Rate. For purposes hereof, the principal
office of TCB, as of the date hereof, is its office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇.
"Rating Level" means the applicable category of rating level
contained in Schedule I which is based on the rating of the Guarantor's senior
unsecured long-term debt as classified by Moody's and/or Standard & Poor's and
which shall be the highest applicable Rating Level I, Rating Level II, Rating
Level III, Rating Level IV, Rating Level V or Rating Level VI, as the case may
be, as set forth in Schedule I.
"Reference Banks" means Texas Commerce Bank National
Association, Commerzbank Aktiengesellschaft, Atlanta Agency, and Royal Bank of
Canada.
"Standard & Poor's" and "S&P" each means Standard & Poor's
Ratings Group.
"Taxes" has the meaning specified in Section 2.13(a).
"Texas Credit Code" shall mean Title 79, Revised Civil
Statutes of Texas, 1925, as amended.
1.2. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding". Unless otherwise indicated, all references to a
particular time are references to Houston, Texas time.
1.3. Miscellaneous. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to
Articles and Sections of and Schedules and Exhibits to this Agreement, unless
otherwise specified. The term "including" shall mean "including, without
limitation,".
1.4. Ratings. A rating, whether public or private, by
Standard & Poor's or ▇▇▇▇▇'▇ shall be deemed to be in effect on the date of
announcement or publication by Standard & Poor's or ▇▇▇▇▇'▇, as the case may
be, of such rating or, in the absence of such announcement or publication, on
the effective date of such rating and will remain in effect until the date when
any change in such rating is deemed to be in effect. In the event any of the
rating categories used by ▇▇▇▇▇'▇ or Standard & Poor's is revised or designated
differently (such as by changing letter designations to different letter
designations or to numerical designations), the references herein to such
rating shall be changed to the revised or redesignated rating for which the
standards are closest to, but not lower than, the standards at the date hereof
for the rating which has been revised or redesignated. Long-term debt
supported by a letter of credit, guaranty, insurance or other similar credit
enhancement mechanism shall not be considered as senior unsecured long-term
debt.
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14
ARTICLE II
AMOUNT AND TERMS OF THE ADVANCES
2.1. The Advances. Each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make one advance to the Borrower
on January 16, 1996 in an amount not to exceed such Bank's Commitment. If a
Borrowing is made to increase the outstanding indebtedness under this Agreement
pursuant to Section 2.15, each Bank participating in such increase shall make
an advance to the Borrower to fund its portion of such Borrowing. The
Borrower, for interest rate purposes, may elect pursuant to the terms hereof to
divide the Advance made by each Bank into one or more Types specified herein;
provided that for all Eurodollar Advances, not more than four (4) different
Interest Periods shall not be outstanding at the same time, and for all CD Rate
Advances, not more than four (4) different Interest Periods shall not be
outstanding at the same time; and provided further that all Advances made on
January 16, 1996 of any Type shall be made by the Banks ratably according to
their respective Commitments. The Advances are not revolving and the Borrower
may not reborrow amounts repaid or prepaid. On the date of each Borrowing, any
portion of the Commitments not utilized shall be terminated.
2.2. Making the Advances.
(a) Each Borrowing shall be made on notice, given not
later than 11:00 A.M. (x) if the Borrowing is to be comprised, in whole or in
part, of Eurodollar Advances, at least three (3) Business Days prior to the
date of the Borrowing, (y) if the Borrowing is to be comprised of Adjusted CD
Rate Advances, at least one (1) Business Day prior to the date of the
Borrowing, and (z) if the Borrowing is to be comprised of Base Rate Advances,
on the day of the Borrowing, by the Borrower to the Administrative Agent, which
shall give to each Bank prompt notice thereof by telecopy. Such notice of the
Borrowing (the "Notice of Borrowing") shall be by telecopy, confirmed
immediately in writing, in substantially the form of Exhibit B, specifying
therein the requested (1) Type of Advances comprising the Borrowing, (2)
aggregate amount of the Borrowing, and (3) if the Borrowing will be comprised
of Adjusted CD Rate Advances or Eurodollar Advances, the initial Interest
Period for each such Advance. If the Borrowing is comprised, in whole or in
part, of Adjusted CD Rate Advances or Eurodollar Advances, the Administrative
Agent shall promptly notify each Bank of the applicable interest rate under
Section 2.5(b) or (c). Each Bank shall, before 11:00 A.M. (2:00 P.M. if the
Borrowing is comprised of Base Rate Advances) on the date of the Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at its Payment Office, in same day funds, such Bank's
ratable portion of the Borrowing. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds available to the
Borrower in accordance with the Borrower's written instructions.
(b) The Notice of Borrowing shall be irrevocable and
binding on the Borrower. If the Notice of Borrowing specifies the Borrowing is
to be comprised, in whole or in part, of
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15
Adjusted CD Rate Advances or Eurodollar Advances, the Borrower shall, subject
to Section 8.8, indemnify each Bank against any loss, cost or expense incurred
by such Bank as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for the Borrowing the applicable
conditions set forth in Article III, or to make the Borrowing specified in such
Notice of Borrowing on the date specified in such Notice of Borrowing
including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Bank to fund the Advance to be made
by such Bank as part of the Borrowing when such Advance, as a result of such
failure, is not made on such date.
(c) Unless the Administrative Agent shall have received
notice from a Bank prior to the date of a Borrowing that such Bank will not
make available to the Administrative Agent such Bank's ratable portion of the
Borrowing, the Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of the Borrowing in
accordance with subsection (a) of this Section 2.2 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Bank shall not
have so made such ratable portion available to the Administrative Agent, such
Bank and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (1) in the case
of the Borrower, the weighted average of the respective interest rates which
would have been applicable to Advances not so made and (2) in the case of such
Bank, the Federal Funds Rate. If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Advance as part of the Borrowing for purposes of this Agreement.
(d) The failure of any Bank to make the Advance to be
made by it as part of any Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Advance on the date of the Borrowing,
but no Bank shall be responsible for the failure of any other Bank to make the
Advance to be made by such other Bank on the date of the Borrowing.
2.3. Fees. Subject to Section 8.8, the Borrower shall pay
to the Administrative Agent such fees as may be separately agreed to by it and
the Administrative Agent.
2.4. Repayment; Extension of Maturity Date.
(a) The Borrower shall repay the unpaid principal amount
of each Advance owed to each Bank in accordance with the Note or Notes
evidencing such Advance to the order of such Bank. The unpaid principal
balance of each Note, together with all accrued and unpaid interest on such
Note, shall be due and payable on the Maturity Date for such Note.
(b) Within the 90-day period ending on January 16, 1997
(or in the case of any Note issued pursuant to Section 2.15, within the 90-day
period ending on the first anniversary of
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16
the issuance of such Note), and, in either case, within the subsequent 90-day
period ending on each yearly anniversary thereafter, the Borrower may request
in writing that the Banks extend the Maturity Date for such Notes, as
appropriate, for one (1) additional year; provided, however, that any such
extension shall require the consent of all of the Banks, which consent may be
withheld in each Bank's sole discretion; and provided, further, that if any
Bank has not responded to such request in writing within 45 days after receipt
of the written request of the Borrower by the Administrative Agent, such
failure shall be deemed a denial of said request and such Bank shall be subject
to removal as provided in Section 2.18.
2.5. Interest. Subject to Section 8.8, the Borrower shall
pay interest on the unpaid principal amount of each Advance owed to each Bank
from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(a) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all times to the Base
Rate in effect from time to time, due quarterly on the last Business Day of
each January, April, July and October (commencing on the last Business Day of
April, 1996) during such periods and on the date such Base Rate Advance shall
be Converted or paid in full; provided that any amount of principal (other than
principal of Adjusted CD Rate Advances bearing interest pursuant to the proviso
to Section 2.5(b) and principal of Eurodollar Advances bearing interest
pursuant to the proviso to Section 2.5(c)) which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full, due on
demand, at a rate per annum equal at all times to 2% per annum above the Base
Rate in effect from time to time.
(b) Adjusted CD Rate Advances. During such periods as
such Advance is an Adjusted CD Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of the Adjusted
CD Rate for such Interest Period for such Advance plus the Applicable Margin
per annum for such Interest Period, due on the last day of such Interest Period
and, if such Interest Period has a duration of more than 90 days, on the day
which occurs during such Interest Period 90 days from the first day of such
Interest Period (each Adjusted CD Rate Advance to bear interest from and
including the first day of the Interest Period for such Advance to (but not
including) the last day of such Interest Period); provided that any amount of
principal of any Adjusted CD Rate Advance which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full, due on
demand, at a rate per annum equal at all times to the greater of (x) 2% per
annum above the Base Rate in effect from time to time and (y) 2% per annum
above the rate per annum required to be paid on such Advance immediately prior
to the date on which such amount became due.
(c) Eurodollar Advances. During such periods as such
Advance is a Eurodollar Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of the Eurodollar Rate for
such Interest Period for such Advance plus the Applicable Margin
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per annum for such Interest Period, due on the last day of such Interest Period
and, if such Interest Period has a duration of more than three months, on the
day which occurs during such Interest Period three months from the first day of
such Interest Period (each Eurodollar Rate Advance to bear interest from and
including the first day of the Interest Period for such Advance to (but not
including) the last day of such Interest Period); provided that any amount of
principal of any Eurodollar Advance which is not paid when due (whether at
stated maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full, due on
demand, at a rate per annum equal at all times to the greater of (x) 2% per
annum above the Base Rate in effect from time to time and (y) 2% per annum
above the rate per annum required to be paid on such Advance immediately prior
to the date on which such amount became due.
2.6. Additional Interest on Eurodollar Advances. If any
Bank is required under regulations of the Federal Reserve Board to maintain
reserves with respect to liabilities or assets consisting of or including
eurocurrency liabilities, and if as a result thereof there is an increase in
the cost to such Bank of agreeing to make or making, funding or maintaining
Eurodollar Advances, the Borrower shall, subject to Section 8.8, from time to
time, upon demand by such Bank (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Bank additional amounts, as additional interest hereunder, sufficient to
compensate such Bank for such increased cost. A certificate in reasonable
detail as to the basis for and the amount of such increased cost, submitted to
the Borrower and the Administrative Agent by such Bank, shall be conclusive and
binding for all purposes, absent manifest error.
2.7. Interest Rate Determination and Protection.
(a) Each Reference Bank agrees to furnish to the
Administrative Agent timely information for the purpose of determining each
Adjusted CD Rate. If any one or more of the Reference Banks shall not furnish
such timely information to the Administrative Agent for the purpose of
determining any such Adjustable CD Rate, the Administrative Agent shall
determine such Adjustable CD Rate on the basis of timely information furnished
by the remaining Reference Banks.
(b) The Administrative Agent shall give prompt notice to
the Borrower and the Banks of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.5(a), (b) or (c), and the
applicable rate, if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under Section 2.5(b).
(c) If fewer than two Reference Banks furnish timely
information to the Administrative Agent for determining the Adjusted CD Rate
for any Adjusted CD Rate Advances,
(1) the Administrative Agent shall forthwith notify the
Borrower and the Banks that the interest rate cannot be determined for
such Adjusted CD Rate Advances,
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(2) each such Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base
Rate Advance (or if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(3) the obligation of the Banks to make, or to Convert
Advances into, Adjusted CD Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist.
(d) If, with respect to any Adjusted CD Rate Advances or
Eurodollar Advances, the Majority Banks notify the Administrative Agent that
the applicable interest rate for any Interest Period for such Advances will not
adequately reflect the cost to such Majority Banks of making, funding or
maintaining their respective Adjusted CD Rate Advances or Eurodollar Advances,
as the case may be, for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Banks, whereupon
(1) each such Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base
Rate Advance (or, if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(2) the obligation of the Banks to make, or to Convert
Advances into, Adjusted CD Rate Advances or Eurodollar Advances, as
the case may be, shall be suspended until the Administrative Agent
shall notify the Borrower and the Banks that the circumstances causing
such suspension no longer exist.
(e) If the Borrower shall fail to select the duration of
any Interest Period for any Adjusted CD Rate Advances or Eurodollar Advances in
accordance with the provisions contained in this Agreement, the Administrative
Agent will forthwith so notify the Borrower and the Banks and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Advances.
(f) (1) On the date on which the aggregate unpaid
principal amount of all Eurodollar Advances having the same Interest
Period shall be reduced, by payment or prepayment or otherwise, to
less than $5,000,000, such Eurodollar Advances shall automatically
Convert into Base Rate Advances, and on and after such date, the right
of the Borrower to Convert Advances into Eurodollar Advances shall
terminate; provided, however, that (A) if other Eurodollar Advances
are outstanding, the Borrower shall have the right to aggregate such
Eurodollar Advances (and continue such Advances) if the aggregate
unpaid principal amount of all such Eurodollar Advances being
aggregated and continued shall equal or exceed $5,000,000, and (B) if
Adjusted CD Rate Advances are outstanding, the Borrower shall have the
right, in the case of Adjusted CD Rate Advances, on the last day of
the Interest Period for such Advance, to aggregate all or such portion
of such Adjusted CD Rate Advances with such Eurodollar Advance (and
Convert or
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continue such Advances) if the aggregate unpaid principal amount of
such resulting Eurodollar Advances having the same Interest Period
shall equal or exceed $5,000,000.
(2) On the date on which the aggregate unpaid principal
amount of all Adjusted CD Rate Advances having the same Interest
Period shall be reduced, by payment or prepayment or otherwise, to
less than $5,000,000, such Adjusted CD Rate Advances shall
automatically Convert into Base Rate Advances, and on and after such
date, the right of the Borrower to Convert Advances into Adjusted CD
Rate Advances shall terminate; provided, however, that (A) if other
Adjusted CD Rate Advances are outstanding, the Borrower shall have the
right to aggregate such Adjusted CD Rate Advances (and continue such
Advances) if the aggregate unpaid principal amount of all such
Adjusted CD Rate Advances being aggregated and continued shall equal
or exceed $5,000,000, and (B) if Eurodollar Advances are outstanding,
the Borrower shall have the right, in the case of Eurodollar Advances,
on the last day of the Interest Period for such Advance, to aggregate
all or such portion of such Eurodollar Advances with such Adjusted CD
Rate Advance (and Convert or continue such Advances) if the aggregate
unpaid principal amount of such resulting Adjusted CD Rate Advances
having the same Interest Period shall equal or exceed $5,000,000.
(g) Any Bank may, if it so elects, fulfill its Commitment
as to any Eurodollar Advance by causing a branch, foreign or otherwise, or
affiliate of such Bank to make such Advance and may transfer and carry such
Advance at, to or for the account of any branch office or affiliate of such
Bank; provided that in such event, for the purposes of this Agreement, such
Advance shall be deemed to have been made by such Bank and the obligation of
the Borrower to repay such Advance shall nevertheless be to such Bank and shall
be deemed to be held by such Bank, to the extent of such Advance, for the
account of such branch or affiliate.
2.8. Voluntary Conversion of Advances. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (x) in the case of a proposed Conversion into Eurodollar
Advances, on the third Business Day prior to the date of the proposed
Conversion, (y) in the case of a proposed Conversion into Adjusted CD Rate
Advances, on the first Business Day prior to the date of the proposed
Conversion, and (z) in the case of a proposed Conversion into Base Rate
Advances, on the date of the proposed Conversion and subject to the limitations
in Section 2.1 as to the number of permitted Interest Periods and subject to
the provisions of Sections 2.7 and 2.11, Convert Advances of one Type into
Advances of another Type; provided, however, that any Conversion of any
Eurodollar Advances shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Advances and that any Conversion of any Adjusted CD
Rate Advances shall be made on, and only on, the last day of an Interest Period
for such Adjusted CD Rate Advances. Each such notice of a Conversion (a
"Notice of Conversion") shall be by telecopy, confirmed immediately in writing,
in substantially the form of Exhibit E, and shall, within the restrictions
specified above, specify (1) the date of such Conversion, (2) the Advances to
be Converted and the Type into which they are to be
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Converted, and (3) if such Conversion is into Adjusted CD Rate Advances or
Eurodollar Advances, the duration of the Interest Period for each such Advance.
2.9. Prepayments. The Borrower may (x) in respect of
Adjusted CD Rate Advances, upon at least one Business Day's notice, (y) in
respect of Eurodollar Advances, upon at least three Business Days' notice, and,
(z) in respect of Base Rate Advances, upon notice by 11:00 A.M. on the day of
the proposed prepayment, to the Administrative Agent (which shall promptly
notify each Bank) stating the proposed date and aggregate principal amount of
the prepayment and the Types of Advances to be prepaid, and in the case of
Eurodollar Advances or Adjusted CD Rate Advances, the specific Advances being
prepaid, and if such notice is given the Borrower shall prepay the outstanding
principal amounts of the Advances, in whole or ratably in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid
without premium or penalty; provided, however, that each partial prepayment
shall be in an aggregate principal amount not less than $5,000,000, and
provided further, that if the Borrower prepays any Adjusted CD Rate Advance or
any Eurodollar Advance on any day other than the last day of an Interest Period
therefor, the Borrower shall compensate the Banks pursuant to Section 8.4(b).
2.10. Increased Costs; Capital Adequacy, Etc.
(a) Subject to Section 8.8, if, due to either (1) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the Adjusted CD Rate Reserve
Percentage) in or in the interpretation of any law or regulation by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or (2) the compliance with any
guideline or request from any governmental authority, central bank or
comparable agency (whether or not having the force of law), there shall be any
increase in the cost to any Bank of agreeing to make or making, funding or
maintaining Adjusted CD Rate Advances or Eurodollar Advances (other than
increased costs described in Section 2.6 or in clause (c) below), the Borrower
shall from time to time, upon demand by such Bank (with a copy of such demand
to the Administrative Agent), pay to the Administrative Agent for the account
of such Bank additional amounts sufficient to compensate such Bank for such
increased cost. A certificate in reasonable detail as to the basis for and the
amount of such increased cost, submitted to the Borrower and the Administrative
Agent by such Bank, shall be conclusive and binding for all purposes, absent
manifest error. Promptly after any Bank becomes aware of any such
introduction, change or proposed compliance, such Bank shall notify the
Borrower thereof. No Bank shall be permitted to recover increased costs
incurred or accrued more than 90 days prior to such notice to the Borrower.
(b) If the Borrower so notifies the Administrative Agent
within five Business Days after any Bank notifies the Borrower of any increased
cost pursuant to the provisions of Section 2.10(a), the Borrower shall Convert
all Advances of the Type affected by such increased cost of all Banks then
outstanding into Advances of another Type in accordance with Section 2.8 and,
additionally, reimburse such Bank for such increased cost in accordance with
Section 2.10(a).
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(c) If any Bank shall have determined that, after the
date hereof, the adoption of any applicable law, rule, regulation or treaty
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its lending office) with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency (except to the extent
such request or directive arises as a result of the individual creditworthiness
of such Bank), has or would have the effect of increasing the amount of capital
required or expected to be maintained as a result of its Commitment hereunder,
such Bank shall have the right to give prompt written notice thereof to the
Borrower with a copy to the Administrative Agent, which notice shall show in
reasonable detail the calculation of such additional amounts as shall be
required to compensate such Bank for the increased cost to such Bank as a
result of such increase in capital and shall certify that such costs are
generally being charged by such Bank to other similarly situated borrowers
under similar credit facilities, which notice shall be conclusive and binding
for all purposes, absent manifest error, although the failure to give any such
notice shall not, unless such notice fails to set forth the information
required above or except as otherwise expressly provided in Section 2.10(d),
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to Section 2.10(d).
(d) Each Bank agrees that, upon giving notice specified
in Section 2.10(c), at the request of the Borrower, it will promptly enter into
good faith negotiations with the Borrower with respect to the method of
reimbursement for the additional costs specified in such notice. No later than
15 days after the date of the giving of any such notice, and assuming the Bank
giving same has made itself available for the aforesaid good faith
negotiations, the Borrower shall have the option, to be exercised in writing,
to (1) subject to Section 8.8, compensate such Bank for the specified
additional costs on the basis, if any, negotiated between such Bank and the
Borrower or (2) terminate such Bank as a Bank to the extent, and on the terms
and conditions, specified in Section 2.10(e); provided that if the Borrower
fails to so exercise such option, it shall be deemed to have agreed to
reimburse such Bank from time to time on demand the additional costs specified
in the Bank's notice delivered pursuant to Section 2.10(c). Notwithstanding
the foregoing, the Borrower shall not be obligated to reimburse any Bank
pursuant to this Section 2.10(d) or Section 2.10(e) or Section 2.18 for any
additional costs under Section 2.10(c) incurred or accruing more than 90 days
prior to the date on which such Bank gave the written notice specified in
Section 2.10(c).
(e) In the event that the Borrower has given notice to a
Bank pursuant to Section 2.10(d) that it elects to terminate such Bank as a
Bank (a copy of which notice shall be sent to the Administrative Agent), such
termination shall become effective 15 days thereafter unless such Bank
withdraws its request for additional compensation. On the date of the
termination of any Bank as a Bank pursuant to this Section 2.10(e), (x) the
Borrower shall deliver notice of the effectiveness of such termination to such
Bank and to the Administrative Agent, (y) the Borrower shall pay all amounts
owed by the Borrower to such Bank under this Agreement or under each Note
payable to such Bank (including principal of and interest on each Advance owed
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to such Bank, and amounts specified in such Bank's notice delivered pursuant to
Section 2.10(c) with respect to the period prior to such termination) and (z)
upon the occurrence of the events set forth in clauses (x) and (y), such Bank
shall cease to be a "Bank" hereunder for all purposes except for rights under
Sections 2.6, 2.10, 2.13, 2.18 and 8.4 arising out of events and occurrences
before or concurrently with its ceasing to be a "Bank" hereunder. The Borrower
may elect to terminate a Bank as a Bank pursuant to Section 2.10(d) only if at
such time:
(1) no Event of Default is then in existence or would be
in existence but for requirement that notice be given or time elapse
or both; and
(2) the Borrower has elected, or is then electing, to
terminate all Banks as Banks which have made similar requests for
increased compensation under this Section 2.10, which requests have
not been withdrawn, provided, that requests may be determined by the
Borrower to be dissimilar based on the negotiation of materially
dissimilar rates of compensation under clause (1) of Section 2.10(d).
(f) Each Bank shall use its reasonable efforts
(consistent with its internal policies and legal and regulatory restrictions)
to select a jurisdiction for its Applicable Lending Office or change the
jurisdiction of its Applicable Lending Office, as the case may be, so as to
avoid the imposition of any increased costs under this Section 2.10 or to
eliminate the amount of any such increased cost which may thereafter accrue;
provided that no such selection or change of the jurisdiction for its
Applicable Lending Office shall be made if, in the reasonable judgment of such
Bank, such selection or change would be disadvantageous to such Bank.
(g) This Section 2.10 shall not apply to Taxes and Other
Taxes, which are governed by Section 2.13.
2.11. Illegality. Notwithstanding any other provision of
this Agreement, if the introduction of or any change in or in the
interpretation of or compliance with any law or regulation shall make it
unlawful, or any governmental authority, central bank or comparable agency
shall assert that it is unlawful, for any Bank or its Eurodollar Lending Office
to perform its obligations hereunder to make Eurodollar Advances or to continue
to fund or maintain Eurodollar Advances hereunder, then, on notice thereof and
demand therefor by such Bank to the Borrower through the Administrative Agent,
(a) the obligation of the Banks to make Eurodollar Advances and to Convert
Advances into Eurodollar Advances shall terminate and (b) the Borrower shall
forthwith Convert all Eurodollar Advances of all Banks then outstanding into
Advances of another Type in accordance with Section 2.8.
2.12. Payments and Computations.
(a) The Borrower shall make each payment under any Loan
Document not later than 11:00 A.M. on the day when due in dollars to the
Administrative Agent at its Payment Office in same day funds. The
Administrative Agent will promptly thereafter cause to be distributed like
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funds relating to the payment of principal or interest ratably (other than
amounts payable pursuant to Section 2.6, 2.10, 2.13, 2.17, 2.18 or 8.4(b)) to
the Banks (decreased, as to any Bank, for any taxes withheld in respect of such
Bank as contemplated by Section 2.13(b)) for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Bank to such Bank for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement.
(b) All computations of interest based on the Base Rate
(except during such times as the Base Rate is determined pursuant to clause (b)
of the definition thereof) shall be made by the Administrative Agent on the
basis of a year of 365 or 366 days, as the case may be, and, subject to Section
8.8, all computations of interest based on the Adjusted CD Rate, the Eurodollar
Rate, the Federal Funds Rate or, during such times as the Base Rate is
determined pursuant to clause (b) of the definition thereof, the Base Rate
shall be made by the Administrative Agent, and all computations of interest
pursuant to Section 2.6 shall be made by a Bank, on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable. Each determination by the Administrative Agent (or, in the case of
Section 2.6, by a Bank) of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error. For the purposes of the
Interest Act (Canada) and disclosure thereunder, whenever any interest is made
payable under any Note at any rate or percentage for or based on a period of
three hundred sixty days (360), the yearly rate or percentage of interest to
which such rate or percentage of interest is equivalent is the rate or
percentage stipulated herein multiplied by the actual number of days in the
applicable year divided by three hundred sixty (360). The foregoing sentence
is for disclosure purposes only and shall not otherwise affect the terms of any
Note as set forth herein.
(c) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest;
provided, however, if such extension would cause payment of interest on or
principal of Eurodollar Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent
the Borrower shall not have so made such payment in full to the Administrative
Agent, each Bank shall, subject to Section 8.8, repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the earlier of (a) the date such Bank repays such amount to the
Administrative Agent and (b) the date two Business Days after the date such
amount is so distributed, at the Federal Funds Rate,
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and thereafter until the date such Bank repays such amount to the
Administrative Agent at the Federal Funds Rate plus 2%.
2.13. Taxes.
(a) Subject to Section 8.8, any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with Section
2.12, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges, fees, duties or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Bank and
the Administrative Agent, (1) taxes imposed on its income, (2) franchise taxes
imposed on it by the jurisdiction under the laws of which (or under the laws of
a political subdivision of which) such Bank or Administrative Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Bank, franchise taxes imposed on it by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof and (3) any
taxes imposed by the Government of Canada by means of withholding at the source
(other than such taxes imposed on payments to a Bank whose Applicable Lending
Office at the time such payment is made is located within the United States) if
and to the extent that such taxes shall be in effect and shall be applicable,
to payments to be made to such Bank or the Administrative Agent (all such
non-excluded taxes, levies, imposts, deductions, charges, fees, duties,
withholdings and liabilities being hereinafter referred to as "Taxes").
Subject to Section 8.8, if the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Bank or the Administrative Agent, (x) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.13) such Bank 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, (y) the Borrower shall
make such deductions and (z) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(b) Notwithstanding anything to the contrary contained in
this Agreement, each of the Borrower and the Administrative Agent shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or other similar taxes imposed by the United States of America from
interest, fees or other amounts payable hereunder for the account of any Bank
(without the payment by the Borrower of increased amounts to such Bank pursuant
to clause (a) above) other than a Bank (1) which is a domestic corporation (as
such term is defined in Section 7701 of the Code) for federal income tax
purposes or (2) which has the Prescribed Forms on file with the Borrower and
the Administrative Agent for the applicable year to the extent deduction or
withholding of such taxes is not required as a result of the filing of such
Prescribed Forms, provided that if the Borrower shall so deduct or withhold any
such taxes, it shall provide a statement to the Administrative Agent and such
Bank, setting forth the amount of such taxes so deducted or withheld, the
applicable rate and any other information or documentation which such Bank or
the Administrative Agent may reasonably request for assisting such Bank or the
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Administrative Agent to obtain any allowable credits or deductions for the
taxes so deducted or withheld in the jurisdiction or jurisdictions in which
such Bank is subject to tax.
(c) In addition, subject to Section 8.8, the Borrower
agrees to pay any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under the Notes or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or the Notes
(hereinafter referred to as "Other Taxes").
(d) THE BORROWER, TO THE FULLEST EXTENT PERMITTED BY LAW,
WILL INDEMNIFY EACH BANK AND THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF
TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES
IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 2.13) PAID BY
SUCH BANK OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY
(INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO, (EXPRESSLY INCLUDING SUCH AMOUNTS PAID AS A RESULT OF THE ORDINARY,
SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH BANK OR THE ADMINISTRATIVE AGENT, BUT
EXCLUDING SUCH AMOUNTS PAID AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH BANK OR ADMINISTRATIVE AGENT), WHETHER OR NOT SUCH TAXES OR
OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED. This indemnification shall be
made within 30 days from the date such Bank or the Administrative Agent (as the
case may be) makes written demand therefor. No Bank nor the Administrative
Agent shall be indemnified for Taxes or Other Taxes incurred or accrued more
than 90 days prior to the date that such Bank or the Administrative Agent
notifies the Borrower thereof; provided that the foregoing 90-day limitation
shall not apply to the Borrower's obligations under the parenthetical contained
in clause (3) of Section 2.13(a), which shall be without limitation as to time.
(e) Within 30 days after the date of any payment of Taxes
by or at the direction of the Borrower, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 8.2, the original
or a certified copy of a receipt evidencing payment thereof. Should any Bank
or the Administrative Agent ever receive any refund, credit or deduction from
any taxing authority to which such Bank or the Administrative Agent would not
be entitled but for the payment by the Borrower of Taxes as required by this
Section 2.13 (it being understood that the decision as to whether or not to
claim, and if claimed, as to the amount of any such refund, credit or deduction
shall be made by such Bank or the Administrative Agent in its sole discretion),
such Bank or the Administrative Agent, as the case may be, thereupon shall
repay to the Borrower an amount with respect to such refund, credit or
deduction equal to any net reduction in taxes actually obtained by such Bank or
the Administrative Agent, as the case may be, and determined by such Bank or
the Administrative Agent, as the case may be, to be attributable to such
refund, credit or deduction.
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(f) Each Bank shall use its reasonable efforts
(consistent with its internal policies and legal and regulatory restrictions)
to select a jurisdiction for its Applicable Lending Office or change the
jurisdiction of its Applicable Lending Office, as the case may be, so as to
avoid the imposition of any Taxes or Other Taxes or to eliminate the amount of
any such additional amounts which may thereafter accrue; provided that no such
selection or change of the jurisdiction for its Applicable Lending Office shall
be made if, in the reasonable judgment of such Bank, such selection or change
would be disadvantageous to such Bank.
(g) Without prejudice to the survival of any other
agreement of the Borrower hereunder, but subject to the expiration of any
applicable statute of limitations, the agreements and obligations of the
Borrower contained in this Section 2.13 shall survive the payment in full of
principal and interest hereunder and under the Notes.
(h) The Administrative Agent agrees with the Borrower
that the Administrative Agent will use reasonable efforts to (i) solicit
relevant federal income tax documentation (including Form 4224 or Form 1001 as
appropriate) from each Bank necessary to allow the Administrative Agent to
properly withhold and report federal income taxes on payments made by the
Administrative Agent hereunder, (ii) report to the Internal Revenue Service all
reportable income paid hereunder by the Administrative Agent to any Bank that
is not a domestic corporation ( as such term is defined in Section 7701 of the
Code) for federal income tax purposes on Forms 1042 and 1042S or other
appropriate form, (iii) deliver to each Bank that is not a domestic corporation
(as such term is defined in Section 7701 of the Code) for federal income tax
purposes a Form 1042S or other appropriate form by March 15 following any year
in which payment is made hereunder by the Administrative Agent to such Bank,
and (iv) upon request of the Borrower, deliver copies of such forms to the
Borrower.
2.14. Sharing of Payments, Etc. If any Bank shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Advances made by it (other than
pursuant to Section 2.6, 2.10, 2.13, 2.17, 2.18 or 8.4(b)) in excess of its
ratable share of payments on account of the Advances obtained by all the Banks,
such Bank shall forthwith purchase from the other Banks such participations in
the Advances made by them as shall be necessary to cause such purchasing Bank
to share the excess payment ratably with each of them, provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such Bank
shall repay to the purchasing Bank the purchase price to the extent of its
ratable share (according to the proportion of (a) the amount of the
participation purchased from such Bank as a result of such excess payment to
(b) the total amount of such excess payment) of such recovery together with an
amount equal to such Bank's ratable share (according to the proportion of (x)
the amount of such Bank's required repayment to (y) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
The Borrower agrees that any Bank so purchasing a participation from another
Bank pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such
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participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation.
2.15. Increase of Facility. The Borrower shall have the
right, with the consent of the Administrative Agent and all of the Banks (which
consents shall not be unreasonably withheld), to effectuate from time to time
an increase in the total amount of the indebtedness outstanding under this
Agreement by issuing additional Notes under this Agreement to one or more
commercial banks or other financial institutions (who shall, upon completion of
the requirements stated in this Section 2.15, constitute Banks hereunder), or
by issuing additional Notes to one or more Banks hereunder, so that such
additional Notes shall equal the amount of the indebtedness increased pursuant
to this Section 2.15; provided that (a) no increase pursuant to this Section
2.15 shall result in the total indebtedness outstanding under this Agreement
exceeding $150,000,000, and (b) no Bank shall be required to lend additional
funds or purchase an additional Note without the consent of such Bank, given in
its sole discretion. The Borrower shall give the Administrative Agent three
(3) Business Days' notice of the Borrower's intention to increase the
indebtedness under this Agreement pursuant to this Section 2.15. Such notice
shall specify each new commercial bank or other financial institution, if any,
the amount of the Note to be issued to such Person(s), the date of the
Borrowing evidenced by such Notes, and such other information as is reasonably
requested by the Administrative Agent. Each new commercial bank or other
financial institution, and each Bank agreeing to lend additional funds, shall
execute and deliver to the Administrative Agent a document satisfactory to the
Administrative Agent pursuant to which it becomes a party hereto or agrees to
lend additional funds, as the case may be, which document, in the case of a new
commercial bank or other financial institution, shall (among other matters)
specify the CD Lending Office, Domestic Lending Office and Eurodollar Lending
Office of such new commercial bank or other financial institution. In
addition, the Borrower shall execute and deliver a Note to each new commercial
bank or other financial institution participating in the increase in the
principal amount to be advanced by such new commercial bank or other financial
institution, and an additional Note to each existing Bank participating in such
increase in the principal amount to be advanced by such existing Bank. Such
Notes and other documents of the nature referred to in Section 3.1 shall be
furnished to the Administrative Agent in form and substance as may be
reasonably required by it. Upon execution and delivery of such documents, such
new commercial bank or other financial institution shall constitute a "Bank"
hereunder, or such Bank shall be obligated to lend the additional funds
specified therein, as the case may be.
2.16 Reserved.
2.17. Non-Ratable Repayment. In addition to the Borrower's
rights pursuant to Section 2.9, the Borrower may prepay in whole (but not in
part) all Advances owed to one or more Banks, non-ratably and without the
requirement to prepay Advances owed to any other Banks, (x) in the case of
Adjusted CD Rate Advances, upon at least one Business Days' notice, (y) in the
case of Eurodollar Advances, upon at least three Business Days' notice, and (z)
in the case of Base Rate Advances, upon notice by 11:00 A.M. on the day of the
proposed prepayment, to the Administrative Agent stating the proposed date of
prepayment, the Bank or Banks to which
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such prepayment is to be made, the aggregate principal amount of the prepayment
and the principal amount to be prepaid to each Bank; provided that the Borrower
shall not give any such notice if (i) any Event of Default then exists or any
event then exists which would constitute an Event of Default but for the
requirement that notice be given or time elapse or both, and (ii) the senior
unsecured long-term debt of the Guarantor is rated BBB- or lower by Standard &
Poor's or Baa3 or lower by ▇▇▇▇▇'▇. If the Borrower gives the notice
contemplated by this Section 2.17, the Borrower shall prepay the outstanding
principal amount of the Advances described in such notice, together with
accrued interest to the date of such prepayment on the principal amount
prepaid, without premium or penalty, and all other amounts, if any, owed to
each Bank to which such prepayment is to be made (including any amount owed
pursuant to Section 8.4(b)).
2.18. Replacement of Bank. In the event that any Bank
shall either (i) refuse to the extend the Maturity Date following a request
under Section 2.4(b), or (ii) claim payment of any increased costs pursuant to
Section 2.10 or any additional amounts pursuant to Section 2.13, the Borrower
shall have the right to replace such Bank with another commercial bank or other
financial institution; provided that such replacement commercial bank or other
financial institution, (a) if it is not a Bank, shall be reasonably acceptable
to the Administrative Agent, (b) shall unconditionally offer in writing (with a
copy to the Administrative Agent) to purchase all of such Bank's rights and
assume all of such Bank's obligations hereunder and interest in the Advances
owing to such Bank and the Note or Notes held by such Bank without recourse at
the principal amount of such Note plus interest accrued thereon to the date of
such purchase on a date therein specified, and (c) shall execute and deliver to
the Administrative Agent a document satisfactory to the Administrative Agent
pursuant to which such replacement commercial bank or other financial
institution becomes a party hereto, which document, if such replacement
commercial bank or other financial institution is not already a Bank, shall
(among other matters) specify the CD Lending Office, Domestic Lending Office and
Eurodollar Lending Office of such replacement commercial bank or other financial
institution. Upon satisfaction of the requirements set forth in the first
sentence of this Section 2.18, acceptance of such offer to purchase by the Bank
to be replaced, payment to such Bank of the purchase price in immediately
available funds, and, if required, the payment by the Borrower of all requested
costs accruing to the date of purchase which the Borrower is obligated to pay
under Section 8.4 and all other amounts owed by the Borrower to such Bank (other
than the principal of and interest on the Advances of such Bank purchased by the
replacement commercial bank or other financial institution), the replacement
commercial bank or other financial institution shall constitute a "Bank"
hereunder and the Bank being so replaced shall no longer constitute a "Bank"
hereunder (with Annex I being amended to reflect same), except that the rights
under Sections 2.6, 2.10, 2.13 and 8.4 of the Bank being so replaced shall
continue with respect to matters arising out of events or occurrences before or
concurrently with its ceasing to be a "Bank" hereunder. If, however, (x) a Bank
accepts such an offer and such commercial bank or other financial institution
fails to purchase such rights and interest on such specified date in accordance
with the terms of such offer, the Borrower shall continue to be obligated to pay
the increased costs to such Bank pursuant to Section 2.10 or the additional
amounts pursuant to Section 2.13, as the case may be, or (y) the Bank proposed
to be replaced fails to accept such purchase offer, the Borrower shall not be
obligated to pay to such
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Bank such increased costs or additional amounts incurred or accrued from and
after the date of such purchase offer.
ARTICLE III
CONDITIONS TO EACH BORROWING
3.1. Initial Conditions Precedent. The obligation of each
Bank to fund its portion of the Borrowing on January 16, 1996 (or to fund any
Borrowing pursuant to Section 2.15) pursuant to the terms and conditions of
this Agreement is subject to the conditions precedent that the Administrative
Agent shall have received the following, each dated on or before the date of
such Borrowing, in form and substance satisfactory to the Administrative Agent:
(a) Loan Documents. This Agreement, the Guaranty, and
the executed Notes payable to the order of the Banks, respectively, in the
amount of such Bank's Commitment as set forth on Annex I (in the case of the
Borrowing made on January 16, 1996) and in the amount to be advanced by such
Bank (in the case of a Borrowing pursuant to Section 2.15).
(b) Corporate Documents. Certified copies of the
resolutions of the Board of Directors of each of the Guarantor and the Borrower
approving the execution, delivery and performance of, in the case of the
Guarantor, the Guaranty, and in the case of the Borrower, the Loan Documents to
which it is a party and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to each such Loan
Document or the Guaranty and certified copies of the restated certificate of
incorporation and bylaws of the Guarantor and of the memorandum and articles of
association of the Borrower.
(c) Incumbency. A certificate of the Secretary or an
Assistant Secretary of each of the Guarantor and the Borrower certifying the
names and true signatures of the officers of each authorized to sign, in the
case of the Guarantor, the Guaranty, and in the case of the Borrower, each Loan
Document to which it is a party and the other documents to be delivered
hereunder.
(d) Legal Opinions. A favorable opinion from each of the
following:
(i) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., special counsel for the
Guarantor and the Borrower, to be delivered to, and for the benefit
of, the Banks and the Administrative Agent, at the express instruction
of the Guarantor and the Borrower, substantially in the form of
Exhibit C-1 and as to such other matters as any Bank through the
Administrative Agent may reasonably request.
(ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere, special Canadian tax counsel
for the Borrower, to be delivered to, and for the benefit of, the
Banks and the Administrative Agent, at the
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express instruction of the Borrower, substantially in the form of
Exhibit C-2 and as to such other matters as any Bank through the
Administrative Agent may reasonably request.
(iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Stirling Scales, special Nova Scotia
counsel for the Borrower, to be delivered to, and for the benefit of,
the Banks and the Administrative Agent, at the express instruction of
the Borrower, substantially in the form of Exhibit C-3 and as to such
other matters as any Bank through the Administrative Agent may
reasonably request.
(iv) A favorable opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
and General Counsel of the Guarantor, to be delivered to, and for the
benefit of, the Banks and the Administrative Agent, at the express
instruction of the Guarantor, in substantially the form of Exhibit D
and as to such other matters as any Bank through the Administrative
Agent may reasonably request.
(e) Parol Certificate. A Notice of Entire Agreement,
executed by the Borrower.
3.2. Additional Conditions Precedent to the Borrowings.
The obligation of each Bank to fund its portion of the Borrowing on January 16,
1996 (or to fund any subsequent Borrowing pursuant to Section 2.15) shall be
subject to the additional conditions precedent that on the date of the
Borrowing:
(a) Absence of Default. The following statements shall
be true (and each of the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of the Borrowing shall constitute a
representation and warranty by the Borrower that on the date of the Borrowing
such statements are true):
(i) The representations and warranties contained in
Section 4.1 of this Agreement and the other Loan Documents are correct
on and as of the date of such Advance, before and after giving effect
to the Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date, and
(ii) No event has occurred and is continuing, or would
result from the Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or would constitute
an Event of Default but for the requirement that notice be given or
time elapse or both; and
(b) Notice of Borrowing. The Administrative Agent shall
have received the Notice of Borrowing required by Section 2.2 and such other
approvals, opinions or documents as any Bank through the Administrative Agent
may reasonably request.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Banks as follows:
(a) Formation; Existence. The Borrower is duly formed,
validly existing and in good standing under the laws of the jurisdiction of its
formation. The Borrower has all power and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
(b) Authority; Etc. The execution, delivery and
performance by the Borrower of each Loan Document to which it is or will be a
party are within the Borrower's powers, have been duly authorized by all
necessary action of the Borrower, require, in respect of the Borrower, no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
law or regulation (including Regulation X issued by the Federal Reserve Board)
applicable to the Borrower or Regulation U issued by the Federal Reserve Board
or the memorandum and articles of association of the Borrower or any judgment,
injunction, order, decree or material ("material" for the purposes of this
representation meaning creating a liability of $50,000,000 or more) agreement
binding upon the Borrower or result in the creation or imposition of any lien,
security interest or other charge or encumbrance on any asset of the Borrower.
(c) Validity. This Agreement and each Note are, and each
other Loan Document to which the Borrower is or will be a party, when executed
and delivered in accordance with this Agreement will be, the legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as the enforceability thereof may be limited
by the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
principles of equity.
(d) Investment Company Act. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(e) Public Utility Holding Company Act. The Borrower is
not a "holding company", a "subsidiary company" of a "holding company", an
"affiliate" of a "holding company", or an "affiliate" of a "subsidiary company"
of a "holding company", in each case as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
(f) Margin Stock. Following application of the proceeds
of each Advance, not more than 25 percent of the value of the assets (both of
the Borrower only and of the Borrower and its subsidiaries on a consolidated
basis), which are subject to any arrangement with the Administrative Agent or
any Bank (herein or otherwise) whereby the Borrower's right or ability
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to sell, pledge or otherwise dispose of assets is in any way restricted, will
be margin stock (within the meaning of Regulation U issued by the Federal
Reserve Board).
ARTICLE V
COVENANTS OF THE BORROWER
5.1. Affirmative Covenants. The Borrower covenants and
agrees that so long as any Note shall remain unpaid, the Borrower will, unless
the Majority Banks shall otherwise consent in writing:
(a) Reporting Requirements. Furnish to each Bank, as
soon as possible and in any event within five (5) days after an executive
officer of the Borrower having obtained knowledge thereof, notice of the
occurrence of any Event of Default or any event which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default,
continuing on the date of such notice, and a statement of the chief financial
officer of the Borrower setting forth details of such Event of Default or event
and the action which the Borrower (or the Guarantor) has taken and proposes to
take with respect thereto;
(b) Compliance with Laws, Etc. Comply with all
applicable laws, rules, regulations and orders to the extent noncompliance
therewith would have a material adverse effect on the Borrower, such compliance
to include, without limitation, the paying before the same become delinquent of
all taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent contested in good faith by appropriate
proceedings.
(c) Use of Proceeds. Use the proceeds of each Borrowing
for general business purposes of the Borrower and its subsidiaries. However,
no part of the proceeds of any Borrowing shall be used for the purpose of
purchasing or carrying margin stock within the meaning of Regulation U issued
by the Federal Reserve Board.
5.2. Negative Covenants. So long as any Note shall remain
unpaid, the Borrower will not at any time, without the written consent of the
Majority Banks:
(a) Disposition of Assets. Lease, sell, transfer or
otherwise dispose of, voluntarily or involuntarily, all or substantially all of
its assets; provided that the foregoing shall not apply to (i) any conversions
of currency between U.S. Dollars and Canadian Dollars that the Borrower may
undertake from time to time, or (ii) any lease, sale, transfer or other
disposition of assets by the Borrower to any Person which is wholly-owned,
directly or indirectly, by the Guarantor.
(b) Mergers, Etc. Merge, amalgamate or consolidate with
or into, any Person, unless (i) the Borrower is the survivor or (ii) the
surviving Person, if not the Borrower, assumes,
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pursuant to a written agreement in form and substance satisfactory to the
Administrative Agent, all obligations of the Borrower under this Agreement,
provided, in each case that both immediately before and after giving effect to
such proposed transaction, no Event of Default or event which, with the giving
of notice or the lapse of time, or both, would constitute an Event of Default
exists, or would exist or result.
ARTICLE VI
EVENTS OF DEFAULT
6.1. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) Payment Default. The Borrower shall fail to pay (1)
any principal on any Note when due and payable or (2) any interest on any Note
for more than five days after such interest becomes due and payable; or
(b) Failure of Representation. Any representation or
warranty made by the Borrower (or any of its officers) (including
representations and warranties deemed made pursuant to Section 3.2) under or in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made and such materiality is continuing;
or
(c) Failure to Comply with Covenants. The Borrower shall
fail to perform or observe any term, covenant or agreement contained in Section
5.2 or shall fail to perform or observe any other term, covenant or agreement
contained in any Loan Document on its part to be performed or observed if, in
the case of such other term, covenant or agreement, such failure shall remain
unremedied for 30 days after written notice thereof shall have been given to
the Borrower by the Administrative Agent at the request of any Bank; or
(d) Default on Other Indebtedness. The Borrower shall
fail to pay any principal of or premium or interest on any indebtedness for
borrowed money, which is outstanding in the principal amount of at least
$50,000,000 in the aggregate, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such indebtedness; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such indebtedness and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate the maturity of such
indebtedness; or any such indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment or as a result of the giving of notice of a voluntary prepayment),
prior to the stated maturity thereof; or
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(e) Insolvency. The Borrower shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower
seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, including without limitation, the
Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency
Act (Canada) or the Winding-up Act (Canada), or seeking the entry of an order
for relief or the appointment of a receiver, trustee or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), shall remain
undismissed or unstayed for a period of 60 days; or the Borrower shall take any
action to authorize any of the actions set forth above in this subsection (e);
or
(f) Guarantor Default. A Guarantor Default shall occur
and be continuing; then, and in any such event, the Administrative Agent shall
at the request, or may with the consent, of the Majority Banks, by notice to
the Borrower, declare the principal balance of the Notes, all interest accrued
thereon and all other accrued amounts payable under this Agreement to be
forthwith due and payable, whereupon the principal balance of the Notes, all
such accrued interest and all such accrued amounts shall become and be
forthwith due and payable, without presentment, demand, protest, notice of
intent to accelerate or further notice of any kind, all of which are, to the
extent permitted by law, hereby expressly WAIVED by the Borrower; provided,
however, that in the event of an actual or deemed entry of an order for relief
with respect to the Borrower under the Bankruptcy Code, the Companies'
Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada)
or the Winding-up Act (Canada), the principal balance of the Notes, all accrued
interest and all accrued amounts shall automatically become and be due and
payable, without presentment, demand, protest, notice of intent to accelerate
or any notice of any kind, all of which are, to the extent permitted by law,
hereby expressly WAIVED by the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT
7.1. Authorization and Action. Each Bank hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Documents or the Guaranty as
are delegated to the Administrative Agent, by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents or the Guaranty
(including enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Majority
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Banks, and such instructions shall be binding upon all Banks and all holders of
Notes; provided, however, that the Administrative Agent shall not be required
to take any action which exposes the Administrative Agent to personal liability
or which is contrary to any Loan Document, the Guaranty or applicable law and
shall not be required to initiate or conduct any litigation or other
proceedings. The Administrative Agent agrees to give to each Bank prompt
notice of each notice given to it by the Borrower pursuant to the terms of this
Agreement.
7.2. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with any Loan Document or the Guaranty, except for its or
their own gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have, by reason of this Agreement, any other
Loan Document or the Guaranty, a fiduciary relationship in respect of any Bank
or the holder of any Note; and nothing in this Agreement, any other Loan
Document or the Guaranty, expressed or implied, is intended or shall be so
construed as to impose upon the Administrative Agent any obligations in respect
of this Agreement, any other Loan Document or the Guaranty, except as expressly
set forth herein. Without limitation of the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to the
Administrative Agent; (b) may consult with legal counsel (including counsel for
the Borrower), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations made
in or in connection with any Loan Document or the Guaranty; (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document or the Guaranty on
the part of the Borrower or the Guarantor or to inspect the property (including
the books and records) of the Borrower or the Guarantor and shall not be deemed
to have knowledge of an Event of Default or of any event which with the giving
of notice or the lapse of time or both would be an Event of Default (other than
nonpayment of principal of or interest on the Notes) unless it has received
from a Bank or the Borrower a notice specifying such default and stating that
it is an "Notice of Default"; (e) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document, the Guaranty or any other instrument or document
furnished pursuant hereto; and (f) shall incur no liability under or in respect
of any Loan Document or the Guaranty by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
7.3. Administrative Agent and Its Affiliates. With
respect to its Commitment, the Advances made by it and the Note issued to it,
the Bank which is also the Administrative Agent shall have the same rights and
powers under the Loan Documents and the Guaranty as any
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other Bank and may exercise the same as though it were not the Administrative
Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include the Bank serving as the Administrative Agent in its
individual capacity. The Bank serving as the Administrative Agent and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower,
any of its subsidiaries and any Person who may do business with or own
securities of the Borrower or any of its subsidiaries, all as if such Bank were
not the Administrative Agent and without any duty to account therefor to the
Banks.
7.4. Bank Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Bank and based on the financial statements referred to in Section
4.1(a)(1) of the Guaranty and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, the other Loan Documents or the Guaranty. The Administrative
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Bank or the holder of any Note with any credit
or other information with respect thereto, whether coming into its possession
before a Borrowing or at any time or times thereafter. The Administrative
Agent shall not be responsible to any Bank or the holder of any Note for any
recitals, statements, information, representations or warranties herein, in the
Guaranty or in any document, certificate or other writing delivered in
connection herewith or therewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or sufficiency
of this Agreement, any other Loan Document or the Guaranty or the financial
condition of either the Guarantor or the Borrower or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, any other Loan Document or the
Guaranty, or the financial condition of either the Guarantor or the Borrower or
the existence or possible existence of any Event of Default or event of which
would constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
7.5. Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from all of the Banks (in the
case of matters specified in the proviso of Section 8.1) or the Majority Banks
(in all other cases) with respect to any act or action (including failure to
act) in connection with this Agreement, any other Loan Document or the
Guaranty, the Administrative Agent shall be entitled to refrain from such act
or taking such action unless and until the Administrative Agent shall have
received instructions from all of the Banks or the Majority Banks, as the case
may be; and it shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Bank or the holder of any Note
shall have any right of action whatsoever against the Administrative Agent as a
result of its acting or refraining from acting hereunder, under any other Loan
Document or under the Guaranty in accordance with the instructions of the
Majority Banks or all of the Banks, as the case may be. Furthermore, except
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for action expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall be specifically indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
7.6. Holders. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of
such Note or of any Note or Notes issued in exchange therefor.
7.7. Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Notes then held by each of
them (or if no principal of the Notes is at the time outstanding or if any
principal of the Notes is held by Persons which are not Banks, ratably
according to the respective amounts of their Commitments then existing, or, if
no such principal amounts are then outstanding and no Commitments are then
existing, ratably according to the respective amounts of the Commitments
existing immediately prior to the termination thereof), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of any of the Loan
Documents or the Guaranty or any action taken or omitted by the Administrative
Agent under the Loan Documents or the Guaranty EXPRESSLY INCLUDING ANY SUCH
LIABILITY, OBLIGATION, LOSS, DAMAGE, PENALTY, ACTION, JUDGMENT, SUIT, COST,
EXPENSE OR DISBURSEMENT ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY
NEGLIGENCE OF SUCH INDEMNIFIED PARTY; PROVIDED THAT NO BANK SHALL BE LIABLE FOR
ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE
ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IT IS THE
INTENT OF THE BANKS THAT THE ADMINISTRATIVE AGENT SHALL, TO THE EXTENT PROVIDED
IN THIS SECTION 7.7, BE INDEMNIFIED FOR ITS ORDINARY, SOLE OR CONTRIBUTORY
NEGLIGENCE. Without limitation of the foregoing, each Bank agrees to reimburse
the Administrative Agent promptly upon demand for such Bank's ratable share of
any reasonable out-of-pocket expenses (including reasonable counsel fees)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, the Loan Documents, or
any of them or the Guaranty, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower.
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7.8. Resignation by the Administrative Agent.
(a) The Administrative Agent may resign from the
performance of all its functions and duties hereunder, under the other Loan
Documents or the Guaranty at any time by giving 15 Business Days' prior written
notice to the Borrower and the Banks. Such resignation shall take effect upon
the appointment of a successor Administrative Agent pursuant to clauses (b) and
(c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Majority
Banks shall have the right to appoint a successor Administrative Agent which
shall be a commercial bank or trust company reasonably acceptable to the
Borrower.
(c) If a successor to a resigning Administrative Agent
shall not have been so appointed within such 15 Business Day period, the
resigning Administrative Agent, with the consent of the Borrower (which consent
will not be unreasonably withheld), shall have the right to then appoint a
successor Administrative Agent who shall serve as Administrative Agent until
such time, if any, as the Majority Banks appoint a successor Administrative
Agent as provided above.
(d) If no successor Administrative Agent has been
appointed pursuant to clause (b) or (c) above and shall have accepted such
appointment by the 20th Business Day after the date such notice of resignation
was given by the resigning Administrative Agent, the resigning Administrative
Agent's resignation shall become effective and the Banks shall thereafter
perform all the duties of the resigning Administrative Agent hereunder, under
any other Loan Document or the Guaranty until such time, if any, as the
Majority Banks appoint a successor Administrative Agent as provided above.
ARTICLE VIII
MISCELLANEOUS
8.1. Amendments, Etc. No amendment or waiver of any
provision of any Loan Document, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Banks, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Banks, do any of the following: (a) waive any of
the conditions specified in Article III, (b) increase the Commitments of the
Banks or subject the Banks to any additional obligations, except as provided in
Section 2.15, (c) forgive or reduce the principal of, or interest on, the Notes
or other amounts payable hereunder, (d) postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, (e) take any action which requires the consent of all the Banks
pursuant to the terms of any Loan
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Document, (f) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes which shall be required for the Banks or
any of them to take any action under any Loan Document or (g) amend this
Section 8.1; and provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Banks required above to take such action, affect the rights or duties of the
Administrative Agent under any Loan Document.
8.2. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier communication)
and mailed, telecopied or delivered, if to the Borrower, at its address or
telecopier number set forth below:
EOG Company of Canada
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President,
Chief Financial Officer and Treasurer
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
if to any Bank, at its Domestic Lending Office; if to the Administrative Agent,
at its address or telecopier number set forth below:
Texas Commerce Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager
Energy Group
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative Agent. All
such notices and communications shall be effective, if delivered, upon such
delivery; if mailed, three (3) Business Days after deposit in the mails; if
sent by overnight courier, one Business Day after delivery to the courier
company; and if sent by telecopier, when received by the receiving telecopier
equipment, respectively; provided, however, that (a) notices and communications
to the Administrative Agent shall not be effective until received by the
Administrative Agent and (b) telecopied notices received by any party after its
normal business hours (or on a day other than a Business Day) shall be
effective on the next Business Day.
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8.3. No Waiver; Remedies. No failure on the part of any
Bank or the Administrative Agent to exercise, and no delay in exercising, and
no course of dealing with respect to, any right under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies provided in the Loan Documents are cumulative
and not exclusive of any remedies provided by law or in equity.
8.4. Costs, Expenses and Taxes.
(a) Subject to Section 8.8, the Borrower agrees to pay on
demand (1) all reasonable costs and expenses in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents and the other documents to be delivered under the Loan
Documents, including the reasonable fees and out-of- pocket expenses of one law
firm as counsel for the Administrative Agent with respect to preparation,
execution and delivery of the Loan Documents and the satisfaction of the
matters referred to in Section 3.1, and (2) all legal and other costs and
expenses, if any, of the Administrative Agent and each Bank in connection with
the enforcement (whether through negotiations, legal proceedings or otherwise)
of the Loan Documents and the other documents to be delivered under the Loan
Documents or incurred in connection with any workout, restructuring or
bankruptcy.
(b) If any payment or purchase of principal of, or
Conversion of, any Adjusted CD Rate Advance or Eurodollar Advance is made other
than on the last day of an Interest Period relating to such Advance, as a
result of a payment, purchase or Conversion pursuant to Sections 2.7(f), 2.8,
2.9, 2.10, 2.11, 2.13 or 2.18 or acceleration of the maturity of the Notes
pursuant to Section 6.1 or for any other reason, the Borrower, subject to
Section 8.8, shall, upon demand by any Bank (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Bank any amounts required to compensate such Bank for any additional losses,
costs or expenses which it may reasonably incur as a result of such payment,
purchase or Conversion, including, without limitation, any loss (excluding loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Bank to fund or
maintain such Advance. A certificate in reasonable detail as to the basis for
and the amount of such loss, costs or expense, submitted to the Borrower and
the Administrative Agent by such Bank, shall be conclusive and binding for all
purposes, absent manifest error.
(c) THE BORROWER AGREES, TO THE FULLEST EXTENT NOT
PROHIBITED BY LAW, TO INDEMNIFY AND HOLD HARMLESS THE ADMINISTRATIVE AGENT AND
EACH BANK AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LIABILITIES AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND CLAIMS, DAMAGES, LIABILITIES AND EXPENSES RELATING TO ENVIRONMENTAL
MATTERS) FOR WHICH ANY OF THEM MAY BECOME LIABLE OR WHICH MAY BE INCURRED BY OR
ASSERTED AGAINST THE ADMINISTRATIVE AGENT OR SUCH BANK OR ANY SUCH DIRECTOR,
OFFICER, EMPLOYEE OR AGENT OTHER THAN BY THE ADMINISTRATIVE AGENT OR ANOTHER
BANK OR ANY OF THEIR
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RESPECTIVE SUCCESSORS OR ASSIGNS), IN EACH CASE IN CONNECTION WITH OR ARISING
OUT OF OR BY REASON OF ANY INVESTIGATION, LITIGATION, OR PROCEEDING, WHETHER OR
NOT THE ADMINISTRATIVE AGENT OR SUCH BANK OR ANY SUCH DIRECTOR, OFFICER,
EMPLOYEE OR AGENT IS A PARTY THERETO, ARISING OUT OF, RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY TRANSACTION IN
WHICH ANY PROCEEDS OF ALL OR ANY PART OF THE ADVANCES ARE APPLIED (EXPRESSLY
INCLUDING ANY SUCH CLAIM, DAMAGE, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE
ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNIFIED PARTY, BUT
EXCLUDING ANY SUCH CLAIM, DAMAGE, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY). IT IS THE
INTENT OF THE PARTIES HERETO THAT THE ADMINISTRATIVE AGENT AND EACH BANK, AND
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, SHALL, TO THE
EXTENT PROVIDED IN THIS SECTION 8.4(C), BE INDEMNIFIED FOR THEIR OWN ORDINARY,
SOLE OR CONTRIBUTORY NEGLIGENCE.
8.5. Right of Set-Off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or
the granting of the consent specified by Section 6.1 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.1, each Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Bank, irrespective of whether or not the Administrative
Agent or such Bank shall have made any demand under this Agreement or such Note
and although such obligations may be unmatured. Each Bank agrees promptly to
notify the Borrower after any such set-off and application made by such Bank;
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Bank under this Section 8.5
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Bank may have.
8.6. Binding Effect; Assignments; Participations.
(a) This Agreement shall become effective when it shall
have been executed by the Borrower and the Administrative Agent and when the
Administrative Agent shall have, as to each Bank, either received a copy of a
signature page hereof executed by such Bank or been notified by such Bank that
such Bank has executed it and thereafter shall be binding upon and inure to the
benefit of and be enforceable by the Borrower, the Administrative Agent and
each Bank and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the express prior written consent of the Banks (other than an
assignment effectuated by a merger or consolidation permitted by Section 5.2(b)
to the surviving Person referred to therein). Each Bank may assign to one or
more banks or other entities all or any part of, or may grant participations to
one or more banks or other entities in accordance with applicable law in or to
all or any part of, the Advances owing to such
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Bank and the Note held by such Bank and any such Bank's continuing obligations
with respect thereto, and to the extent of any such assignment or participation
(unless otherwise stated therein) the assignee or purchaser of such assignment
or participation shall, to the fullest extent permitted by law, have the same
rights to payment hereunder and under such Note as it would have if it were
such Bank hereunder; provided that (x) such Bank's obligations under this
Agreement, including its Commitment, shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such Bank shall remain
the holder of any such Note for all purposes under this Agreement, and the
Borrower, the other Banks and the Administrative Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement; (y) no such assignee or participant shall be
entitled to receive any greater payment pursuant to Sections 2.6, 2.10 and 2.13
than such Bank would have been entitled to receive with respect to the rights
assigned or participated except as a result of circumstances arising after the
date of such assignment or participation to the extent that such circumstances
affect other Banks and participants generally; and (z) no Bank shall assign or
grant a participation that conveys to the assignee or participant the right to
vote or consent under this Agreement, other than the right to vote upon or
consent to (1) any increase in the amount of such Bank's Commitment; (2) any
reduction of the principal amount of, or interest to be paid on, such Bank's
Advance or Advances or Note; or (3) any postponement of the due date in respect
of any amounts owed to such Bank under any Loan Document or the Guaranty.
(b) Notwithstanding anything to the contrary in Section
8.6(a), in accordance with applicable law (x) any Bank may assign a portion of
its Commitment and its rights and obligations to one or more Banks, and (y) any
Bank may assign a portion, in an amount of at least $5,000,000 of its
Commitment (provided such assignment does not result in the remaining
Commitment of the assigning Bank being less than $10,000,000), and its rights
and obligations hereunder to another commercial bank or financial institution,
in the case of assignments pursuant to clause (y) above with prior written
consents of the Administrative Agent and the Borrower, which consents shall not
be unreasonably withheld, each of which assignees pursuant to clause (y) to
become a party to this Agreement as a Bank by executing and delivering to the
Administrative Agent an Assignment and Acceptance, in substantially the form of
Exhibit F, with the assigning Bank; provided that, in the case of each such
assignment, (A) at such time Annex I shall be modified to reflect the
Commitments of such assignee Bank and of the existing Banks, (B) the Borrower
shall issue new Notes to such assignee Bank and to the assigning Bank to
reflect the revised Commitments and (C) the Administrative Agent shall receive
at the time of such assignment, from the assigning or assignee Bank, a
non-refundable assignment fee of $2,500. To the extent of any assignment
pursuant to this Section 8.6(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitment.
(c) In addition to the assignments and participations
permitted under subsections (a) and (b) of this Section 8.6, any Bank may
assign, as collateral or otherwise, any of its rights (including rights to
payments of principal of and/or interest on the Notes) under any Loan Document
to any Federal Reserve Bank without notice to or consent of the Borrower or the
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Administrative Agent; provided, that no such assignment under this subsection
(c) shall release the assigning Bank from its obligations hereunder.
8.7. Governing Law; Entire Agreement. THIS AGREEMENT AND
THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS. This Agreement, the Notes, the other Loan Documents and
any fee letter to the Administrative Agent signed by the Borrower constitute
the entire understanding among the parties hereto with respect to the subject
matter hereof and supersede any prior agreements, written or oral, with respect
thereto.
8.8. Interest. The parties to this Agreement intend to
strictly comply with all applicable laws, including applicable usury laws.
Accordingly, the provisions of this Section 8.8 shall govern and control over
every other provision of any Loan Document which conflicts or is inconsistent
with this Section 8.8, even if such other provision declares that it controls.
As used in this Section 8.8, the term "interest" includes the aggregate of all
charges, fees, benefits or other compensation which constitute interest under
applicable law; provided that, to the maximum extent permitted by applicable
law, (a) any non-principal payment shall be characterized as an expense or as
compensation for something other than the use, forbearance or detention of
money, and not as interest and (b) all interest at any time contracted for,
taken, reserved, charged or received shall be amortized, prorated, allocated
and spread during the full term of the Advances and the Commitments. In no
event shall the Borrower or any other Person be obligated to pay, or the
Administrative Agent or any Bank have any right or privilege to reserve,
receive or retain, (x) any interest in excess of the maximum amount of
nonusurious interest permitted under the laws of the State of Texas or the
applicable laws (if any) of the United States, the Government of Canada or of
any other state or province thereof or (y) total interest in excess of the
amount which the Administrative Agent or such Bank could lawfully have
contracted for, taken, reserved, received, retained or charged had the interest
been calculated for the full term of the Advances at the Highest Lawful Rate.
On each day, if any, that the interest rate (the "Stated Rate") called for
under any Loan Document exceeds the Highest Lawful Rate, the rate at which
interest shall accrue shall automatically be fixed by operation of this
sentence at the Highest Lawful Rate for that day, and shall remain fixed at the
Highest Lawful Rate for each day thereafter until the total amount of interest
accrued equals the total amount of interest which would have accrued if there
were no such ceiling rate as is imposed by this sentence. Thereafter, interest
shall accrue at the Stated Rate unless and until the Stated Rate again exceeds
the Highest Lawful Rate when the provisions of the immediately preceding
sentence shall again automatically operate to limit the interest accrual rate.
The daily interest rates to be used in calculating interest at the Highest
Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate
per annum by the number of days in the calendar year for which such calculation
is being made. None of the terms and provisions contained in any Loan Document
which directly or indirectly relate to interest shall ever be construed without
reference to this Section 8.8, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Highest Lawful Rate. If the term of any of the Notes is shortened by reason of
acceleration of maturity or by reason of any required or permitted prepayment,
and if for that (or any other) reason the
-38-
44
Administrative Agent or any Bank at any time, including the stated maturity, is
owed or receives (and/or has received) interest in excess of interest
calculated at the Highest Lawful Rate, then and in any such event all of any
such excess interest shall be cancelled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to the Administrative Agent or such Bank, it
shall be credited pro tanto against the then outstanding principal balance of
the Borrower's obligations to the Administrative Agent or such Bank, effective
as of the date or dates when the event occurs which causes it to be excess
interest, until such excess is exhausted or all of such principal has been
fully paid and satisfied, whichever occurs first, and any remaining balance of
such excess shall be promptly refunded to its payor.
8.9. Captions. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
8.10. Confidentiality. Each Bank agrees that it will use
reasonable efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors or counsel, to another Bank, or to such
Bank's own holding or parent company and its affiliates, in each case if the
disclosing Bank or its holding or parent company in its sole discretion
determines that any such party should have access to such information) any
information with respect to the Guarantor, the Borrower or its subsidiaries
which is furnished pursuant to this Agreement, any other Loan Document or the
Guaranty and which is designated by either the Guarantor or the Borrower to the
Banks in writing as confidential; provided that any Bank may disclose any such
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the FDIC or
similar organizations (whether in the United States or elsewhere), (c) as may
be required or appropriate in response to any summons or subpoena or in
connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank, and (e) to the prospective
transferee in connection with any contemplated transfer of any of the Notes or
any interest therein by such Bank; provided, further, that such prospective
transferee executes an agreement with the Borrower containing provisions
substantially identical to those contained in this Section 8.10.
8.11. Survival; Term; Reinstatement. In addition to the
other provisions of this Agreement expressly stated to survive the termination
of this Agreement, the obligations of the Borrower under Sections 2.6, 2,10,
2.13, 2.18 and 8.4 and the last sentence of this Section 8.11 and the
obligations of the Banks under Section 8.10 shall survive the termination of
this Agreement. The Borrower agrees that if at any time all or any part of any
payment previously applied by any Bank to any Advance or other sum hereunder is
or must be returned by or recovered from such Bank for any reason (including
the order of any bankruptcy court), the Loan Documents shall automatically be
reinstated to the same effect as if the prior application had not been made,
and the Borrower hereby agrees to indemnify such Bank against, and to save and
hold
-39-
45
such Bank harmless from, any required return by or recovery from such Bank of
any such payment.
8.12. Severability. Whenever possible, each provision of
the Loan Documents shall be interpreted in such manner as to be effective and
valid under applicable law. If any provision of any Loan Document shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions of such Loan
Document shall not be affected or impaired thereby.
8.13. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
8.14 Location of Transactions. The Administrative Agent
and each Bank that is a party hereto on the date hereof and which is not a
resident of Canada acknowledges: (a) that it has conducted all negotiations
with respect to the Loan Documents and the Guaranty outside of Canada, (b) that
it has made all credit decisions concerning the Loan Documents and the Guaranty
outside of Canada, and (c) that it has executed the Loan Documents to which it
is a party outside of Canada. The Borrower acknowledges: (a) that it has
conducted all negotiations with the Administrative Agent and each Bank that is
a party hereto on the date hereof and which is not a resident of Canada
concerning the Loan Documents and the Guaranty outside of Canada, and (b) that
it has executed the Loan Documents to which it is a party outside of Canada.
8.15. Currency Conversion and Indemnity. All payments made
hereunder shall be made in the currency in respect of which the obligations
requiring such payment arose. If, in connection with any action or proceeding
brought in connection with this Agreement or any of the Loan Documents or any
judgment or order obtained as a result thereof, it becomes necessary to convert
any amount due hereunder in one currency (the "first currency") into another
currency (the "second currency"), then the conversion shall be made at the
Exchange Rate on the first Business Day prior to the day on which payment is
received.
If the conversion is not able to be made in the manner contemplated by
the preceding paragraph in the jurisdiction in which the action or proceeding
is brought, then the conversion shall be made at the Exchange Rate on the day
on which the judgment is given.
If the Exchange Rate on the date of payment is different from the
Exchange Rate on such first Business Day or on the date of judgment, as the
case may be, the Borrower shall pay such additional amount (if any) in the
second currency as may be necessary to ensure that the amount paid on such
payment date is the aggregate amount in the second currency which, when
converted at the Exchange Rate on the date of payment, is the amount due in the
first currency, together with all costs, charges and expenses of conversion.
Any additional amount owing by the Borrower to the Banks pursuant to the
provisions of this Section 8.15 shall be due as a separate
-40-
46
debt and shall give rise to a separate cause of action and shall not be
affected by or merged into any judgment obtained for any other amounts due
under or in respect of this Agreement or any of the Loan Documents.
-41-
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
EOG COMPANY OF CANADA
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President, Chief
Financial Officer and Treasurer
[Signature Page 1]
48
ADMINISTRATIVE AGENT:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
[Signature Page 2]
49
COMMERZBANK AKTIENGESELLSCHAFT, ATLANTA AGENCY
By /s/ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Assistant Cashier
[Signature Page 3]
▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Manager
[Signature Page 4]
51
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
[Signature Page 5]
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
[Signature Page 6]
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By /s/ A. S. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: A. S. ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Agent
[Signature Page 7]
54
ANNEX I
COMMITMENTS
Bank Commitment Percentage Share
---- ---------- ----------------
Texas Commerce Bank $ 25,000,000 23.809523810%
Commerzbank $ 25,000,000 23.▇▇▇▇▇▇▇▇▇%
Royal Bank of Canada $ 25,000,000 23.▇▇▇▇▇▇▇▇▇%
Bank of New York $ 15,000,000 14.▇▇▇▇▇▇▇▇▇%
Bank of Nova Scotia $ 15,000,000 14.▇▇▇▇▇▇▇▇▇%
------------ -------------
$105,000,000 100%
55
SCHEDULE I
APPLICABLE MARGIN
=======================================================================
Rating Level Eurodollar Base Rate CD Rate
-----------------------------------------------------------------------
Level I .275% .000% .400%
-----------------------------------------------------------------------
Level II .300% .000% .425%
-----------------------------------------------------------------------
Level III .325% .000% .450%
-----------------------------------------------------------------------
Level IV .375% .000% .500%
-----------------------------------------------------------------------
Level V .500% .000% .625%
-----------------------------------------------------------------------
Level VI .750% .000% .875%
=======================================================================
S&P ▇▇▇▇▇'▇
Level I: ▇ ▇▇
▇▇▇▇▇ ▇▇: ▇- ▇▇
▇▇▇▇▇ ▇▇▇: BBB+ Baa1
Level IV: BBB Baa2
Level V: BBB- Baa3
Level VI: BB+ Ba1 or lower
Note: The higher of Guarantor's S&P or ▇▇▇▇▇'▇ Rating Level will apply.
56
SCHEDULE II
LENDING OFFICES
THE BANK OF NEW YORK
Domestic, CD and Eurodollar Lending Office
Eurodollar/Cayman Funding Area
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇/x7924 or x7552
with copy to:
The Energy Industries Division
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇/x7924
THE BANK OF NOVA SCOTIA
Domestic, CD and Eurodollar Lending ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
57
with copy to:
The Bank of Nova Scotia
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
COMMERZBANK AKTIENGESELLSCHAFT, ATLANTA AGENCY
Domestic, CD and Eurodollar Lending ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or
▇. ▇▇▇▇▇ - ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Commerzbank Aktiengesellschaft, Atlanta Agency
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ROYAL BANK OF CANADA
Domestic, CD and Eurodollar Lending ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
58
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Assistant Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Royal Bank of Canada
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Domestic, CD and Eurodollar Lending ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Loan Syndication Services
▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Texas Commerce Bank National Association
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ 5-TCBN-86
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
59
EXHIBIT A
PROMISSORY NOTE
U.S. $______________ Dated: _________, _____
FOR VALUE RECEIVED, the undersigned, EOG COMPANY OF CANADA, an
unlimited liability company incorporated under the laws of the province of Nova
Scotia (the "Borrower"), hereby promises to pay to the order of
________________________ (the "Bank") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referred to below) on or before the
Maturity Date, principal sum of ___________________________ U.S. dollars (U.S.
$________________) at the Payment Office of the Administrative Agent.
The Borrower promises to pay to the order of the Bank interest on the
unpaid principal amount of this Note from the date hereof until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement dated as of January 12, 1996 among the
Borrower, the Bank, certain other lenders parties thereto and Texas Commerce
Bank National Association, as Administrative Agent for the Bank and such other
lenders (such Credit Agreement, as amended from time to time being herein
referred to as the "Credit Agreement"). All capitalized terms used in this
Note which are not defined herein shall have the meaning assigned such terms in
the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Texas Commerce Bank National Association, as
Administrative Agent, at the Payment Office, in same day funds. All payments
made on account of principal of the Advance evidenced hereby shall be recorded
by the Bank and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Note; provided that the failure of the Bank to
make any such recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in, and is subject to and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for this Note to evidence the indebtedness of the
Borrower owing to the Bank in the amount of this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.
Except only for any notices which are specifically required
by the Credit Agreement, the Borrower waives notice (including, but not limited
to, notice of intent to accelerate and notice of acceleration, notice of
protest and notice of dishonor), demand, presentment, presentment for payment
and protest.
A-1
60
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS, OTHER THAN THE CONFLICT OF LAWS RULES THEREOF.
EOG COMPANY OF CANADA
By:
-------------------------------------
Name:
Title:
A-2
61
PAYMENTS OF PRINCIPAL
Amount of Unpaid
Principal Principal Notation
Date Paid or Prepaid Balance Made By
---- --------------- --------- --------
A-3
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Commerce Bank National Association,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: [Enron Account Officer]
Ladies and Gentlemen:
The undersigned, EOG Company of Canada, refers to the Credit
Agreement, dated as of January 12, 1996 (such Credit Agreement, as amended from
time to time being herein referred to as the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
certain Banks parties thereto and Texas Commerce Bank National Association, as
Administrative Agent for said Banks (in such capacity, the "Administrative
Agent"), and hereby gives you notice, irrevocably, pursuant to Section 2.2 of
the Credit Agreement that the undersigned hereby requests the Borrowing under
the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
2.2(a) of the Credit Agreement:
(i) The day of the Proposed Borrowing is January 12, 1996.
(ii) The Types of Advances comprising the Proposed Borrowing are as
follows:
[Adjusted CD Rate Advances in the aggregate amount of
$_________________ with an Interest Period of ___ days];
[Base Rate Advances in the aggregate amount of $__________________]
[Eurodollar Advances in the aggregate amount of $_________________
with an Interest Period of ___ months].
(iii) The aggregate amount of the Proposed Borrowing is
$105,000,000.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing:
_______________________________
B-1
63
(A) the representations and warranties contained in Section 4.1 of the
Credit Agreement and the other Loan Documents to which the undersigned is a
party are correct, before and after giving effect to the Proposed Borrowing and
to the application of the proceeds therefrom, as though made on and as of such
date; and
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
Very truly yours,
EOG Company of Canada
By:
-------------------------------------
Name:
Title:
For the purposes of the Proposed Borrowing, Enron Oil & Gas Company, a Delaware
corporation (the "Guarantor") certifies:
(A) the representations and warranties contained in the Guaranty are
correct, before and after giving effect to the Proposed Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date;
and
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
Enron Oil & Gas Company
By:
------------------------------------
Name:
Title:
B-2
64
EXHIBIT C-1
[▇▇▇▇▇▇ & ▇▇▇▇▇▇ LETTERHEAD]
January 16, 1996
To each of the Banks parties
to the Credit Agreement
dated as of January 12, 1996 among
EOG Company of Canada,
said Banks and Texas Commerce Bank
National Association, as Administrative
Agent for said Banks and to such
Administrative Agent
RE: EOG Company of Canada
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.1(d)(i) of the
Credit Agreement, dated as of January 16, 1996 (the "Credit Agreement"), among
EOG Company of Canada (the "Borrower"), the Banks parties thereto and Texas
Commerce Bank National Association, as Administrative Agent for said Banks.
Except as otherwise defined herein, terms defined in the Credit Agreement are
used herein as therein defined.
We have acted as counsel for the Borrower and Enron Oil & Gas Company,
a Delaware corporation (the "Guarantor"), in connection with the preparation,
execution, delivery and effectiveness of the Credit Agreement and the Guaranty
dated as of even date with the Credit Agreement made by the Guarantor in favor
of the Administrative Agent and the Banks.
In that connection, we have examined:
(1) the Credit Agreement;
(2) the Notes;
(3) the Guaranty; and
(4) the other documents furnished by the Borrower pursuant to the
conditions precedent set forth in Article III of the Credit
Agreement.
65
Page 2
January 16, 1996
In addition, we have investigated such questions of law and relied on
such certificates from officers and representatives of the Guarantor, the
Borrower, Enron Corp., and from public officials, as we have deemed necessary
or appropriate for the purposes of this opinion.
In rendering the opinions herein set forth, we have assumed (i) the
due authorization, execution and delivery of each document referred to in
clauses (1), (2) and (3) of the third paragraph of this opinion by all parties
to such documents and that each such document is valid, binding and enforceable
(subject to limitations on enforceability of the types referred to in
paragraphs (a) and (b) below) against the parties thereto other than the
Guarantor and the Borrower, (ii) the legal capacity of natural persons, (iii)
the genuineness of all signatures, (iv) the authenticity of all documents
submitted to us as originals, (v) the conformity to original documents of all
documents submitted to us as copies, and (vi) that Section 8.15 of the Credit
Agreement is valid under the laws of Canada and each Province thereof, and that
no laws of any jurisdiction (including, but not limited to, Canada, Nova Scotia
and each other Province of Canada) other than the jurisdictions specified in
the penultimate paragraph of this opinion will adversely affect the opinions
set forth herein.
Based upon the foregoing and upon such investigations as we have
deemed necessary, we are of the following opinion:
1. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required to be made or obtained by the Borrower for the
execution, delivery and performance by the Borrower of each Loan
Document to which it is a party.
2. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required to be made or obtained by the Guarantor for the
execution, delivery and performance by the Guarantor of the Guaranty.
3. The execution, delivery and performance by the
Borrower of each Loan Document to which it is a party and the
execution, delivery and performance by the Guarantor of the Guaranty,
do not contravene any provision of law or regulation (including,
without limitation, Regulation X issued by the Federal Reserve Board)
applicable to the Borrower or the Guarantor, or of Regulation U issued
by the Federal Reserve Board.
66
Page 3
January 16, 1996
4. The Credit Agreement and the Notes constitute the
legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms.
5. The Guaranty constitutes the legal, valid and binding
obligations of the Guarantor enforceable against the Guarantor in
accordance with its terms.
6. The Credit Agreement has been duly executed and
delivered by the Borrower.
7. Neither the Borrower nor the Guarantor is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
8. Neither the Borrower nor the Guarantor is a "holding
company" or a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended,
or regulated pursuant to such Act or the rules and regulations
promulgated thereunder or any order or interpretation of the
Securities and Exchange Commission promulgated thereunder.
The opinions set forth above are subject to the following qualifications:
(a) Our opinions in paragraphs 4 and 5 above are subject,
as to enforceability, to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally.
(b) Our opinions in paragraphs 4 and 5 above are subject,
as to enforceability, to the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at
law), including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, and also to the possible
unavailability of specific performance or injunctive relief. Such
principles of equity are of general application, and in applying such
principles a court, among other things, might not allow a creditor to
accelerate maturity of a debt upon the occurrence of a default deemed
immaterial or might decline to order the Borrower or the Guarantor to
perform covenants. We also express no opinion with respect to the
enforceability of provisions purporting to waive or not give effect to
rights to notice, demands, legal or equitable defenses or remedies or
statutes of limitations, that cannot be waived or rendered ineffective
under applicable law, to the extent that such provisions are contained
in the Loan Documents or the Guaranty.
(c) In rendering the opinion set forth in paragraph 4
above, we express no opinion as to the enforceability of Section 8.15
of the Credit Agreement.
67
Page 4
January 16, 1996
In rendering the opinions expressed herein, we have relied upon (A)
the opinions stated in paragraphs 1 and 2 (so far as such paragraph 2 relates
to the corporate powers of, and due authorization, execution and delivery of
the Guaranty by the Guarantor and to no contravention of, and no default under,
the Restated Certificate of Incorporation and By-laws, as amended, of the
Guarantor) of the opinion, dated today, of the Vice President and General
Counsel of the Guarantor which is being delivered to you pursuant to Section
3.1(d)(iii) of the Credit Agreement, and (B) the opinions stated in paragraphs
1, 2, 3(a) through (e), 4 and 8 of the opinion, dated today, of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Stirling Scales to the Borrower which is being delivered to you
pursuant to Section 3.1(d)(ii) of the Credit Agreement.
We have not been called upon to, and accordingly do not, express any
opinion as to the various state and Federal laws of the United States of
America regulating banks or the conduct of their business (except Regulation U
issued by the Federal Reserve Board) that may relate to the Loan Documents or
the Guaranty or the transactions contemplated thereby. Without limiting the
generality of the foregoing, we express no opinion as to the effect of the law
of any jurisdiction other than the State of Texas wherein any Bank may be
located or where any enforcement of the Loan Documents or the Guaranty may be
sought which limits the rates of interest legally chargeable or collectible.
This opinion is limited to the laws of the State of Texas, the Federal
law of the United States of America and, with respect to the Guarantor, the
General Corporation law of the State of Delaware.
The opinions herein have been furnished at your request and are solely
for your benefit and the benefit of your respective successors, assigns,
participants and other transferees in connection with the subject transaction
and may not be relied upon by any other person or by you or any other person in
any other context without the prior written consent of the undersigned.
Very truly yours,
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
68
EXHIBIT C-2
[▇▇▇▇▇▇▇ ▇▇▇▇▇ VERCHERE LETTERHEAD]
January 16, 1996
To each of the Banks (the "Banks") party
to the Credit Agreement dated as of
January 16, 1996 among EOG Company
of Canada, the Banks and Texas
Commerce Bank National Association, as
Administrative Agent for the Banks and
to such Administrative Agent
Re: EOG Company of Canada (the "Borrower")
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Article 3.1(d)(ii) of that certain
Credit Agreement, dated as of January 16, 1996 (the "Credit Agreement"), among
the Borrower, the Banks and Texas Commerce Bank National Association, as
Administrative Agent for the Banks. Except as otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined.
We have acted as special Canadian counsel to the Borrower and the Guarantor in
connection with the execution of the Credit Agreement and the Guaranty. In
that consideration and in rendering the opinions hereinafter set forth, we have
examined:
1. the Credit Agreement;
2. the Guaranty;
3. the Notes (the Credit Agreement, the Guaranty and the Notes being
collectively referred to as the "Loan Documents"); and
4. a certificate of status dated January 10, 1995 issued by the Registrar
of Joint Stock Companies for the Province of Nova Scotia with respect
to the Company.
We have also examined and relied upon originals or photostatic or certified
copies of such corporate records, certificates of officers of the Borrower
(including certificates of encumbency and delivery and the certificate of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated January 16, 1996, a copy of which is attached hereto)
and of public officials, and such other agreements, documents and instruments
as we have deemed relevant and necessary as the basis of the opinions
hereinafter expressed. In such examination, we have assumed (i) the legal
capacity of natural persons, (ii) the genuineness of all signatures, (iii) the
authenticity of all documents submitted to us as originals and (iv) the
conformity to original documents of all documents submitted to us as copies.
69
Page 2
Based upon the foregoing and upon such investigations as we have deemed
necessary, we are of the opinion that:
1. The Borrower is not required, under the Income Tax Act (Canada), to
withhold tax from interest or principal paid or credited by the
Borrower on the Notes or any other amounts which may be paid or
credited under the Credit Agreement to any non-resident of Canada with
whom the Borrower is, at all times, dealing at arm's length within the
meaning of the Income Tax ACT (Canada).
2. The Guarantor is not required, under the Income Tax Act (Canada), to
withhold tax from interest or principal paid or credited by the
Guarantor o the Guaranty or any other amounts which may be required
to be paid or credited under the Guaranty to any non-resident of
Canada with whom the Guarantor is, at all times, dealing at arm's
length within the meaning of the Income Tax Act (Canada).
3. Neither the Agents nor the Banks (except for The Bank of Nova Scotia
and the Royal Bank of Canada) will be subject to taxation under the
Income Tax Act (Canada) by virtue of executing the Loan Documents, or
making the Advances, or commencing legal proceedings to enforce their
rights, under the Loan Documents.
4. No franchise, income, sales, gross receipts or other like taxes, and
no documentary or other tax, is payable under the Income Tax Act
(Canada) by the Agent or the Banks (except for The Bank of Nova Scotia
and the Royal Bank of Canada) in connection with the execution and
delivery of the Loan Documents, or the making of the Advances, or the
commencement of legal proceedings to enforce their rights, under the
Loan Documents.
5. The execution and delivery of the Loan Documents and the making of the
Advances, the performance by the parties of their obligations under
the Loan Documents and the enforcement of the rights of the Agent and
the Banks under the Loan Documents do not contravene the Bank Act
(Canada), including section 508 thereof.
6. The execution, delivery and performance by the Borrower of each of the
Loan Documents and the borrowings thereunder (a) do not require, in
respect of the borrower, any action by or in respect of, or filing
with, any governmental body, agency or official of the Government of
Canada and (b) do not contravene or violate, or constitute a default
under, any provision of any Canadian federal law or regulation
applicable to the Borrower.
The opinion expressed in paragraph 5 above does not apply to The Bank of Nova
Scotia or the Royal Bank of Canada.
The opinions set forth above are based on the following assumptions:
(a) the Borrower is an unlimited liability company duly incorporated and
organized, validly existing and in good standing under the laws of the
Province of Nova Scotia;
(b) the Guarantor is a non-resident of Canada within the meaning of the
Income Tax Act (Canada) at the time any amounts are paid or payable by
it under the Guaranty;
(c) the Agents and the Banks (except for The Bank of Nova Scotia and the
Royal Bank of Canada) are non-residents of Canada within the meaning
of the Income Tax Act
70
Page 3
(Canada) at all times and do not, and will not, otherwise carry on
business in Canada within the meaning of the Income ax Act (Canada)
during any period up to and including the enforcement of their
rights under the Loan Documents; and
(d) the terms of the Loan Documents were negotiated and approved, and the
Credit Agreement, the Guaranty and the other Loan Documents were
executed and delivered, by the Banks (except for The Bank of Nova
Scotia and the Royal Bank of Canada) outside Canada.
This opinion is furnished in connection with the transactions evidenced by the
Credit Agreement and anticipated in connection therewith and may not be relied
upon in connection with any other transaction or by any person other than you;
or provided, however, that ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. may rely upon this opinion or
the purposes of rendering its opinion in connection with the Credit Agreement.
Yours very truly,
▇▇▇▇▇▇▇ ▇▇▇▇▇ VERCHERE
71
EXHIBIT C-3
January 16, 1996
To each of the Banks (the "Banks") party
to the Credit Agreement dated as of
January 16, 1996 among EOG Company
of Canada, the Banks and Texas
Commerce Bank National Association, as
Administrative Agent for the Banks and
to such Administrative Agent
RE: EOG Company of Canada (the "Borrower")
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Article 3.1(d)(ii) of that certain
Credit Agreement, dated as of January 16, 1996 (the "Credit Agreement"), among
the Borrower, the Banks named therein (the "Banks") and Texas Commerce Bank
National Association, as Administrative Agent for the Banks (the "Agent").
Except as otherwise defined herein, the capitalized terms defined in the Credit
Agreement are used herein as therein defined.
We have acted as special Nova Scotia counsel to the Borrower in connection with
the execution of the following documents (collectively, the "Documents"):
1. the Credit Agreement;
2. promissory notes, each dated January 16, 1996
(a) payable to the order of Texas Commerce Bank National
Association and in the principal amount of $US25,000,000;
(b) payable to the order to Commezbank Aktingesellschaft and in
the principal amount of $US25,000,000;
(c) payable to the order of Royal Bank of Canada and in the
principal amount of $US25,000,000;
72
January 16, 1996
Page 2
(d) payable to the order of Bank of New York and in the principal
amount of $US15,000,000; and
(e) payable to the order of Bank of Nova Scotia and in the
principal amount of $US15,000,000; and
3. a notice of borrowing addressed to the Agent.
In that consideration and in rendering the opinions hereinafter set forth, we
have examined:
(a) executed copies of each of the Documents;
(b) the Memorandum of Association and Articles of Association of the
Borrower;
(c) a certificate of states dated January 10, 1996 issued by the Registrar
of Joint Stock Companies for the Province of Nova Scotia with respect
to the Borrower;
(d) the corporate records of the Borrower including, in particular, a
certified copy of a resolution of Borrower dated December 14, 1995
authorizing the Borrower to borrow money and give security therefor
and a certified copy of a directors' resolution of the Borrower dated
January 10, 1996 authorizing the Borrower to enter into the Credit
Agreement and perform its obligations thereunder; and
(e) such other documents, agreements and instruments, and such questions
of law as we have deemed necessary as a basis for the opinions
hereinafter expressed.
We have also examined and relied upon originals or photostatic or certified
copies of such corporate records, certificates of officers of the Borrower
(including a certificate of encumbency, for the purposes of our opinions in
paragraph 4 below a certificate attesting to the delivery of the Documents, and
for the purposes of our opinions in paragraphs 2 and 3(c) below a certificate
describing the business of the Borrower) and of public officials, and such
other agreements, documents and instruments as we have deemed relevant and
necessary as the basis for the opinions hereinafter expressed. In such
examination, we have assumed (i) the legal capacity of natural persons, (ii)
the genuineness of all signatures, (iii) the authenticity of all documents
submitted to us as originals and (iv) the conformity to original documents of
all documents submitted to us as copies.
Based upon the foregoing and subject to the qualifications following we are of
the opinion that:
1. The Borrower is an unlimited liability company duly incorporated and
organized, validly existing and in good standing under the laws of the
Province of Nova Scotia.
73
January 16, 1996
Page 3
2. The Borrower has all power and all material governmental licenses,
authorizations, consents and approvals, if any, required to be issued
by public authorities in the Province of Nova Scotia in order to
permit the Borrower to carry on its business.
3. The execution, delivery and performance by the Borrower of each
Document and the borrowings thereunder (a) are within the Borrower's
corporate powers, (b) have been duly authorized by all necessary
action of the Borrower, (c) require, in respect of the Borrower, no
action by or in respect of, or filing with, any governmental body,
agency or official in the Province of Nova Scotia, (d) do not
contravene or violate, or constitute a default under, any provision of
law or regulation of the Province of Nova Scotia applicable to the
Borrower or the Memorandum of Association or the Articles of
Association of the Borrower or, to the best of our knowledge, any
judgment, injunction, order, decree or material agreement known to us
and binding upon the Borrower, and (e) do not result in the creation
or imposition of any lien, security interest or other charge or
encumbrance on any asset of the Borrower.
4. The Documents have each been duly executed and delivered by the
Borrower and, although the Documents contain choice of law provisions
which state that they shall be governed by and construed in accordance
with the laws of the State of Texas, in the event that any action in a
Nova Scotia Court to enforce the obligations of the Borrower under the
Documents Texas law was not provided or otherwise not applied and the
laws of Nova Scotia were applied to govern the legality, validity and
interpretation of the Documents, each of the Documents would
constitute a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms.
5. To the best of our knowledge there is no litigation or legal, arbitral
or administrative proceeding pending against Borrower.
6. The Borrower is not required, under any taxing legislation of the
Province of Nova Scotia, to withhold tax from interest or principal
paid or credited by the Borrower on the Notes or any other amounts
which may be required to be paid or credited under the Credit
Agreement to any non-resident of Canada with which the Borrower is
dealing at arm's length within the meaning of the Income Tax Act
(Canada).
7. The Guarantor is not required under any taxing legislation of the
Province of Nova Scotia, to withhold tax from interest or principal
paid or credited by the guarantor on the Guaranty or any other amounts
which may be required to be paid or credited under the Guaranty to any
non-resident of Canada with whom the Guarantor is dealing at arm's
length within the meaning of the Income Tax Act (Canada).
8. The courts of the Province of Nova Scotia will enforce the choice of
law provisions in the Documents.
74
January 16, 1996
Page 4
9. Any judgment for a fixed and definite sum of money rendered by the
courts of the State of Texas (the "Foreign Court"), which has become
final and conclusive under the judicial system of the State of Texas
in respect of any suit, action or proceeding against the Borrower for
the enforcement of its obligations under any of the Documents, in an
action to enforce such judgments in the courts of the Province of Nova
Scotia (the "Domestic Court"), be recognized as conclusive and
enforceable without reconsideration of the merits adjudicated upon,
provided that
(i) such judgment does not conflict with another final and
conclusive judgment on the same cause of action and no new
admissible evidence relevant to the action is discovered prior
to the rendering of judgment by the Domestic Court;
(ii) such judgment was not obtained by fraud or in a manner
contrary to natural justice and the claim for relief on which
the foreign judgment was based is not repugnant to the public
policy as that term is understood under the laws of the
Province of Nova Scotia;
(iii) the Foreign Court which rendered the judgment was impartial
and provided procedures compatible with the due process and
natural justice standards of the Domestic Court;
(iv) the Foreign Court which rendered the judgment had jurisdiction
over the relevant contracting parties and the subject matter
and, if jurisdiction in the foreign court was based on
personal service alone, the Foreign Court was not a seriously
inconvenient forum for the trial of the action;
(v) the proceedings in the Foreign Court were not contrary to an
agreement under which the dispute in question was to be
settled otherwise than by proceedings in that Foreign Court;
(vi) such judgment is a subsisting judgment and has not been
satisfied;
(vii) such judgment, if issued in default of appearance of a
contracting party, is not manifestly wrong;
(viii) the enforcement of the judgment would not be contrary to any
order made by the Attorney-General of Canada under the Foreign
Extraterritorial Measures Act (Canada) or the Competition
Tribunal under the Competition Act (Canada) in respect of
certain judgments, laws, and directives having effects on
competition in Canada; and
(ix) after the date of judgment in the Foreign Court, application
to the Domestic Court to enforce such judgment is made with
the six year limitation period specified by the laws of the
Province of Nova Scotia.
75
January 16, 1996
Page 5
10. Neither the Agent nor the Banks will be subject to taxation in the
Province of Nova Scotia by virtue of entering into the Documents or
making the Advances under the Documents. No franchise, income, sales,
gross receipts or other like taxes, and no documentary or other tax,
is payable in the Province of Nova Scotia in connection with the
execution and delivery of the Documents or the making of the Advances
under the Documents.
11. Neither the execution and delivery of the Documents nor the making of
the Advances under the Documents will cause the Agent or any Bank to
be transacting business within Canada or Nova Scotia so as to require
the Agent or any Bank to qualify to do business in Nova Scotia or
require the Agent or any Bank to register to carry on business
therein.
The opinions set forth above are subject in all respects to the following
qualifications:
(a) our opinions are based on and limited to the laws of the Province of
Nova Scotia and the federal laws of Canada applicable therein. We
render no opinion with respect to the laws of any other jurisdiction;
(b) the validity and enforceability of the Documents may be limited by:
i. Bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws (including court decisions) nor or
hereafter in effect and affecting the rights of creditors
generally;
ii. The qualification that specific performance and other
equitable remedies lie within the discretion of the court and
may not be available if damages are deemed to be an adequate
remedy;
iii. The qualification that a court has power to grant relief from
forfeiture, to stay proceedings before it and to stay
executions on judgments; and
iv. Applicable laws regarding limitation of actions;
(c) the costs of or incidental to all proceedings taken in a court are in
the discretion of the court and, notwithstanding any provisions of the
Credit Agreement, the court has the discretion to determine by whom
and to what extent the costs shall be paid and expenses recovered;
(d) the provisions of the Credit Agreement permitting severance of any
provision thereof which may be held to be illegal, invalid or
unenforceable in order to save other provisions thereof, will be
enforced only subject to the discretion of a court;
(e) a judgment of a Canadian court may be awarded only in Canadian
currency;
76
January 16, 1996
Page 6
(f) for the purposes of our opinion in paragraph 4 as to enforceability,
we have assumed that
i. each of the Documents has been duly authorized, and validly
executed and delivered, by each party thereto other than the
Borrower and is enforceable against each such person in
accordance with its terms;
ii. each of the Documents has been delivered by the Borrower in
accordance with the laws of the State of Texas; and
iii. the execution and delivery of the Documents and the making of
the Advances, the performance by the parties of their
obligations under the Documents and the enforcement of the
rights of the Agent and the Banks under the Documents do not
contravene the Bank Act (Canada), including section 508
thereof;
(g) our opinion that the courts of the Province of Nova Scotia would
enforce the choice of law provisions in the Documents is subject to
the assumptions that
i. such choice of law is legal under the laws of the State of
Texas;
ii. such choice of laws is bone fide (in the sense that it was not
made with a view to avoiding the consequences of the law of
the jurisdiction with which the transaction has its most real
and substantial connection);
iii. such choice of law is not contrary to public policy, public
order or good morals, as such terms are interpreted under the
laws of the Province of Nova Scotia and the federal laws of
Canada applicable therein. We have no reason from reviewing
the Documents to believe that such choice of law would be
contrary to pubic policy, public order or good morals, as such
terms are interpreted under the laws of the Province of Nova
Scotia and the federal laws of Canada applicable therein;
and is further subject to the qualifications that in any proceeding
taken in the Province of Nova Scotia to interpret and enforce any of
the Documents
iv. the choice of law set forth in the relevant Document would
only be recognized to the extent specifically pleaded and
proved as a fact by expert evidence;
v. the choice of law set forth in the relevant Document would
only be recognized with respect to issues which under conflict
of laws rules in effect in the Province of Nova Scotia are
characterized to be substantive contract issues and the laws
of Texas would not be applied to the extent such foreign laws
were found to be (i) procedural in nature, or (ii) in conflict
with the laws of the Province of Nova Scotia or the federal
laws of Canada applicable therein as determined by such court
to be of overriding or mandatory effect; and
77
January 16, 1996
Page 7
vi. a court of competent jurisdiction in the Province of Nova
Scotia may decline to hear a proceeding where such court
determines that the Province of Nova Scotia is not the
convenient forum to hear the proceeding or if concurrent
proceedings are brought elsewhere;
(h) we express no opinion as to the enforceability of any provision of the
Credit Agreement purporting to relieve any person from any liability
which they might otherwise have;
(i) the opinions expressed herein are as of the date hereof only, and we
assume no obligation to update or supplement such opinions to reflect
any fact or circumstances that may hereafter come to our attention or
any changes in law that may hereafter occur or become effective;
(j) our opinions in paragraph 6 are based upon the assumption that the
Borrower is not required, under the Income Tax Act (Canada), to
withhold tax from interest or principal paid or credited by the
Borrower on the Notes or any other amounts which may be required to be
paid under the Credit Agreement to any non-resident of Canada with
whom the Borrower is dealing at arm's length within the meaning of the
Income Tax Act (Canada);
12. our opinions in paragraphs 7 are based upon the assumption that the
Guarantor is not required, under the Income Tax Act (Canada), to
withhold tax from interest or principal paid or credited by the
Guarantor on the Guaranty or any other amounts which may be required
to be paid under the Guaranty to any non-resident of Canada with whom
the Guarantor is dealing at arm's length within the meaning of the
Income Tax Act (Canada); and
13. our opinions in paragraphs 10 are based upon the assumption that
neither the Agent nor the Banks will be subject to taxation under the
Income Tax Act (Canada) by virtue of entering into the Documents or
making the Advances under the Documents and that no franchise, income,
sales, gross receipts or other like taxes, and no documentary or other
tax, is payable under the Income Tax Act (Canada) in connection with
the execution and delivery of the Documents or the making of the
Advances under the Documents.
This opinion is furnished in connection with the transactions evidenced by the
Credit Agreement and anticipated in connection therewith and may not be relied
upon in connection with any other transaction or by any person other than you;
or provided, however, that ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. may rely upon this opinion or
the purposes of rendering its opinion in connection with the Credit Agreement.
Yours very truly,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ STIRLING SCALES
78
EXHIBIT D
[ENRON OIL & GAS COMPANY LETTERHEAD]
January 16, 1996
To each of the Banks parties
to the Credit Agreement dated
as of January 16, 1996 among
EOG Company of Canada, said Banks
and Texas Commerce Bank National
Association, as Administrative Agent
for said Banks and to such
Administrative Agent
RE: Guaranty dated as of January 16, 1996 by Enron Oil & Gas
Company, as Guarantor, in favor of the Banks named therein and
Texas Commerce Bank National Association, as Administrative
Agent
Ladies and Gentlemen:
As Vice President and General Counsel of Enron Oil & Gas Company, a
Delaware corporation (the "Company"), I am familiar with the Guaranty (the
"Guaranty") made and entered into as of January 16, 1996 by the Company in
favor of the Banks named therein and Texas Commerce Bank National Association,
as Administrative Agent. In such capacities, I am also familiar with the
Restated Certificate of Incorporation, as amended, and By-laws, as amended, of
the Company. This opinion is being furnished to you pursuant to Section
3.1(d)(iii) of that certain Credit Agreement dated as of January 16, 1996 among
EOG Company of Canada, as the Borrower, and the Banks named therein and Texas
Commerce Bank National Association, as Administrative Agent. Except as
otherwise defined herein, terms defined in the Guaranty are used herein as
therein defined.
Before rendering the opinions hereinafter set forth, I (or other
attorneys with the Company's legal department acting under my direction) have
examined the Guaranty, and have examined and relied upon originals or
photostatic or certified copies of such corporate records, certificates of
officers of the Company and of public officials, and such agreements, documents
and instruments, and made such investigations of law, as I (or such other
attorneys) have deemed relevant and necessary as the basis for the opinions
hereinafter expressed. In such examination, I (or such other attorneys) have
assumed the genuineness of all signatures (other than those of officers of the
79
January 16, 1996
Page 2
Company) and the authenticity of all documents submitted to me (or such other
attorneys) as originals, and the conformity to original documents of all
documents submitted to me (or such other attorneys) as photostatic or certified
copies.
Upon the basis of the foregoing, and subject to the assumptions,
qualifications and explanations set forth herein, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted, except to the extent
failure to obtain such licenses, authorizations, consents or
approvals would not materially adversely affect the Company
and its Principal Subsidiaries taken as a whole.
2. The execution, delivery and performance by the Company of the
Guaranty are within the Company's corporate powers, have been
duly authorized by all necessary corporate action on the part
of the Company, and do not contravene, nor constitute a
default under, (a) the Restated Certificate of Incorporation,
as amended, or the By-laws, as amended, of the Company, (b)
any contractual restriction contained in any material (meaning
for purposes of this opinion those creating a monetary
liability of $50,000,000 or more) agreement binding upon the
Company, or (c) any judgment, injunction, order or decree
known to me binding upon the Company. The execution, delivery
and performance by the Company of the Guaranty will not result
in the creation or imposition of any lien, security interest
or other charge or encumbrance on any asset of the Company or
any of its Subsidiaries. The Guaranty has been duly executed
and delivered by the Company.
3. Except as disclosed in the Company's Form 10-K for the year
ended December 31, 1994, or the Company's Form 10-Q for the
quarter ended September 30, 1995, to my knowledge, there is no
action, suit or proceeding pending or threatened against the
Company or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in
which there is a reasonable possibility of an adverse decision
which could materially adversely affect the consolidated
financial position or consolidated results of operations of
the Company and its Subsidiaries taken as a whole or which in
any manner draws into question the validity of the Guaranty.
80
January 16, 1996
Page 3
4. Neither the Company nor any Subsidiary is an "investment
company" within the meaning of the Investment Company Act of
1940, as amended.
5. Neither the Company nor any Principal Subsidiary is a "holding
company", a "subsidiary company" of a "holding company", an
"affiliate" of a "holding company", or an "affiliate" of a
"subsidiary company" of a "holding company", in each case as
such terms are defined in the Public Utility Holding Company
Act of 1935, as amended, or regulated pursuant to such Act or
the rules and regulations promulgated thereunder or any order
or interpretation of the Securities and Exchange Commission or
its staff issued pursuant thereto.
The opinions set forth above are subject in all respects to the
following qualifications:
(a) In rendering the opinions expressed in paragraph 2 above,
neither I nor any other attorney acting under my direction
have made any examination of any accounting or financial
matters related to certain of the covenants contained in
certain documents to which the Company may be subject, and I
express no opinion with respect thereto.
(b) In rendering the opinions expressed in paragraph 3 above, I
(or such other attorneys acting under my direction) have only
reviewed the files and records of the Company and the
Subsidiaries, and we have consulted with such senior officers
of the Company and the Subsidiaries as we have deemed
necessary.
(c) This opinion is limited in all respects to the laws of the
State of Texas and the General Corporation Law of the State of
Delaware and the Federal law of the United States.
(d) The opinions expressed herein are as of the date hereof only,
and I assume no obligation to update or supplement such
opinions to reflect any fact or circumstances that may
hereafter come to my attention or any changes in law that may
hereafter occur or become effective.
This opinion is furnished in connection with the Guaranty and is
solely for the benefit of the Banks, the Administrative Agent, and their
respective successors, assigns, participants and other transferees, and may not
be relied upon in connection with any other transaction or by any other person;
provided, however, that ▇▇▇▇▇▇ &
81
January 16, 1996
Page 4
▇▇▇▇▇▇ L.L.P. may rely on certain provisions of this opinion to the extent
stated in its opinion for the purposes of rendering its opinion pursuant to
Section 3.1(d)(i) of the Credit Agreement.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇
82
EXHIBIT E
NOTICE OF CONVERSION
Texas Commerce Bank
National Association
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Energy Group
5 TCB-N 86
Ladies and Gentlemen:
The undersigned, EOG Company of Canada refers to the Credit Agreement,
dated as of January 12, 1996 (such Credit Agreement, as amended from time to
tome being herein referred to as the "Credit Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, certain
Banks parties thereto and Texas Commerce Bank National Association, as
Administrative Agent for said Banks, and hereby gives you notice, irrevocably,
pursuant to Section 2.8 of the Credit Agreement that the undersigned hereby
requests a Conversion under the Credit Agreement, and in that connection sets
forth below the information relating to such Conversion (the "Proposed
Conversion") as required by Section 2.8 of the Credit Agreement:
(1) The Business Day of the Proposed Conversion is
_______________, 199__.
(2) The Advances to be converted are: ____________________
(3) The Advances are to be Converted into the following
Types and amounts of Advances:
[Base Rate Advances]
[Adjusted CD Rate Advances]
[Eurodollar Advances]
Amount:
E-1
83
*[(4) The Interest Period for each such Advance is _____
(days) (months).]
Very truly yours,
EOG COMPANY OF CANADA
By:
------------------------------------
Title:
---------------------------------
__________________________________
*To be included for a Proposed Conversion to Adjusted CD Rate Advances or
Eurodollar Advances.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
[Form of]
ASSIGNMENT AND ACCEPTANCE
Dated: ___________________, _____
Reference is made to the Credit Agreement dated as of January 16, 1996
(as restated, amended, modified, supplemented and in effect from time to time,
the "Credit Agreement"), among EOG Company of Canada, a Nova Scotia unlimited
liability company (the "Borrower"), the banks named therein (the "Banks"), and
Texas Commerce Bank National Association, as administrative agent for the Banks
(the "Administrative Agent"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Credit Agreement.
This Assignment and Acceptance between the Assignor (as defined and set forth
on Schedule I hereto and made a part hereof) and the Assignee (as defined and
set forth on Schedule I hereto and made a part hereof) is dated as of the
Effective Date (as set forth on Schedule I hereto and made a part hereof).
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date, an undivided interest (the "Assigned Interest") in and to
all the Assignor's rights and obligations under the Credit Agreement and
Assignor's Note or Notes to the extent described on Schedule I hereto the
("Assigned Facility") in a principal amount as set forth on Schedule I.
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, any other
Loan Document or the Guaranty or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document, the Guaranty or any other instrument or document furnished
pursuant thereto, other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the Guarantor or the performance or observance by the Borrower or
the Guarantor of any of its respective obligations under the Credit Agreement,
any other Loan Document, the Guaranty or any other instrument or document
furnished pursuant thereto; and (iii) attaches the Note(s) held by it
evidencing the Assigned Facility and requests that the Administrative Agent
exchange such Note(s) for a new Note or Notes payable to the Assignor (if the
Assignor has retained any interest in the Assigned Facility) and a new Note or
Notes payable to the Assignee in the respective amounts which reflect the
assignment being made hereby (and after giving effect to any other assignments
which have become effective on the Effective Date).
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit
F-1
85
Agreement and the Guaranty, together with copies of the financial statements
referred to in Section 3.1(d) of the Guaranty, or if later, the most recent
financial statements delivered pursuant to Section 4.1(a) of the Guaranty and
such other documents and information as it has deemed appropriate to make its
own credit analysis; (iii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, the Guaranty and the Loan Documents; (iv) appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement, the other Loan
Documents and the Guaranty as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will be bound by the provisions of the Credit Agreement and
will perform in accordance with its terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Bank; and
(vi) if the Assignee is organized under the laws of a jurisdiction outside the
United States, attaches the forms prescribed by the Internal Revenue Service of
the United States certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such tax at a rate reduced by an applicable
tax treaty.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance by it and the Borrower
effective as of the Effective Date (which Effective Date shall, unless
otherwise agreed to by the Administrative Agent, be at least five Business Days
after the execution of this Assignment and Acceptance).
5. Upon such acceptance, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignee, whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and Assignee shall make
all appropriate adjustments in payments for periods prior to the Effective Date
by the Administrative Agent or with respect to the making of this assignment
directly between themselves.
6. From and after the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Bank thereunder, and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, OTHER THAN THE
CONFLICT OF LAWS RULES THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective duly authorized
officers on Schedule I hereto.
F-2
86
Schedule I to Assignment and Acceptance
Legal Name of Assignor:
------------------------------------
Legal Name of Assignee:
------------------------------------
Effective Date of Assignment: ,
----------------------- -----
Percentage Assigned of
Each Note (to at least 8
Principal decimals) (Shown as percentage
Amount of aggregate original principal
Note Dated: Assigned original principal of all Banks)
----------- -------- --------------------------------
January 16, 1996: $ %
-------------- ------
: $ %
------------------- -------------- ------
: $ %
-------------------- -------------- ------
Total $
--------------
Accepted:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as the Administrative Agent
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
EOG COMPANY OF CANADA
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
FS-1
87
---------------------------------
as Assignor
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
---------------------------------
as Assignee
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
Domestic Lending Office of Assignee:
---------------------------------
---------------------------------
---------------------------------
CD Lending Office of Assignee:
---------------------------------
---------------------------------
---------------------------------
Eurodollar Lending Office of Assignee:
---------------------------------
---------------------------------
---------------------------------
Address for Notices to Assignee:
---------------------------------
---------------------------------
---------------------------------
Telephone No.:
-------------------
Facsimile No.:
-------------------
Attention:
-----------------------
FS-2
