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EXHIBIT 10.13
AMENDED AND RESTATED CREDIT AGREEMENT
Among
TITAN RESOURCES, L.P.,
as the Company
and
THE CHASE MANHATTAN BANK
Individually, as Issuing Bank and as Administrative Agent,
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
Individually and as Documentation Agent,
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
Individually and as Syndication Agent,
and
FINANCIAL INSTITUTIONS
NOW OR HEREAFTER PARTIES HERETO
$250,000,000 Credit Facility
October 31, 1996
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Accounting Terms and Determinations . . . . . . . . . . . . 16
Section 1.03 Other Definitional Terms . . . . . . . . . . . . . . . . . 16
ARTICLE II AMOUNT AND TERMS OF LOANS
Section 2.01 Commitments . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.02 Borrowing Requests. . . . . . . . . . . . . . . . . . . . . 17
Section 2.03 Letters of Credit . . . . . . . . . . . . . . . . . . . . . 17
Section 2.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . 22
Section 2.05 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.06 Interest . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.07 Interest Periods . . . . . . . . . . . . . . . . . . . . . 24
Section 2.08 Repayment of Loans . . . . . . . . . . . . . . . . . . . . 25
Section 2.09 Termination or Reduction of Commitments . . . . . . . . . . 25
Section 2.10 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.11 Continuation and Conversion Options . . . . . . . . . . . . 26
Section 2.12 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.13 Payments, etc . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.14 Interest Rate Not Ascertainable, etc . . . . . . . . . . . 29
Section 2.15 Illegality . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.16 Increased Costs . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.17 Change of Lending Office . . . . . . . . . . . . . . . . . 32
Section 2.18 Funding Losses . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.19 Sharing of Payments, etc . . . . . . . . . . . . . . . . . 32
Section 2.20 Borrowing Base . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.21 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.22 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . 37
Section 2.23 Disposition of Proceeds . . . . . . . . . . . . . . . . . . 37
Section 2.24 Additional Collateral . . . . . . . . . . . . . . . . . . . 37
ARTICLE III CONDITIONS TO BORROWINGS AND TO PURCHASE,
RENEWAL AND REARRANGEMENT
Section 3.01 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.02 Conditions Precedent to Initial Loan . . . . . . . . . . . 38
Section 3.03 Conditions Precedent to Each Loan . . . . . . . . . . . . . 40
Section 3.04 Recordings . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.01 Existence . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.02 Power and Authorization . . . . . . . . . . . . . . . . . . 41
Section 4.03 Binding Obligations . . . . . . . . . . . . . . . . . . . . 41
Section 4.04 No Legal Bar or Resultant Lien . . . . . . . . . . . . . . 41
Section 4.05 No Consent . . . . . . . . . . . . . . . . . . . . . . . . 41
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Section 4.06 Financial Information . . . . . . . . . . . . . . . . . . . 42
Section 4.07 Investments and Guaranties . . . . . . . . . . . . . . . . 42
Section 4.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.09 Federal Reserve Regulations. . . . . . . . . . . . . . . 42
Section 4.10 Compliance with ERISA . . . . . . . . . . . . . . . . . . . 42
Section 4.11 Taxes; Governmental Charges . . . . . . . . . . . . . . . . 43
Section 4.12 Title and Liens . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.13 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.14 Casualties; Taking of Properties . . . . . . . . . . . . . 43
Section 4.15 Compliance with the Law . . . . . . . . . . . . . . . . . . 43
Section 4.16 No Material Misstatements . . . . . . . . . . . . . . . . . 44
Section 4.17 Investment Company Act . . . . . . . . . . . . . . . . . . 44
Section 4.18 Public Utility Holding Company Act . . . . . . . . . . . . 44
Section 4.19 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.21 Mortgaged Property . . . . . . . . . . . . . . . . . . . . 44
Section 4.22 Gas Imbalances . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.23 Environmental Matters . . . . . . . . . . . . . . . . . . . 45
ARTICLE V COVENANTS
Section 5.01 Certain Affirmative Covenants . . . . . . . . . . . . . . . 46
(a) Maintenance and Compliance, etc. . . . . . . . . . . . . . 47
(b) Payment of Taxes and Claims, etc. . . . . . . . . . . . . . 47
(c) Further Assurances. . . . . . . . . . . . . . . . . . . . . 47
(d) Performance of Obligations . . . . . . . . . . . . . . . . 47
(e) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 47
(f) Accounts and Records . . . . . . . . . . . . . . . . . . . 48
(g) Right of Inspection . . . . . . . . . . . . . . . . . . . . 48
(h) Operation and Maintenance of Property and
Compliance with Leases. . . . . . . . . . . . . . . . . . . 48
(i) Certain Additional Assurances Regarding Maintenance
and Operation of Properties . . . . . . . . . . . . . . . . 48
(j) Designation of Subsidiaries as Additional Guarantors. . . . 48
(k) Payment of Charters and Tariffs . . . . . . . . . . . . . . 49
(l) Environmental Covenant . . . . . . . . . . . . . . . . . . 49
Section 5.02 Reporting Covenants . . . . . . . . . . . . . . . . . . . . 49
(a) Annual Financial Statements . . . . . . . . . . . . . . . . 49
(b) Quarterly Financial Statements . . . . . . . . . . . . . . 49
(c) No Default/Compliance Certificate . . . . . . . . . . . . . 50
(d) Auditors' No Default Certificate; Management Letters . . . 50
(e) Engineering Reports . . . . . . . . . . . . . . . . . . . . 50
(f) Notice of Certain Events . . . . . . . . . . . . . . . . . 51
(g) Communications . . . . . . . . . . . . . . . . . . . . . . 51
(h) Litigation . . . . . . . . . . . . . . . . . . . . . . . . 51
(i) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(j) Other Information . . . . . . . . . . . . . . . . . . . . . 52
Section 5.03 Certain Negative Covenants . . . . . . . . . . . . . . . . 52
(a) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 52
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(b) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(c) Mergers, Sales, etc . . . . . . . . . . . . . . . . . . . . 55
(d) Distribution, etc . . . . . . . . . . . . . . . . . . . . . 55
(e) Investments, Loans, etc . . . . . . . . . . . . . . . . . . 55
(f) Lease Payments . . . . . . . . . . . . . . . . . . . . . . 56
(g) Sales and Leasebacks . . . . . . . . . . . . . . . . . . . 57
(h) Nature of Business . . . . . . . . . . . . . . . . . . . . 57
(i) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . 57
(j) Proceeds of Loans. . . . . . . . . . . . . . . . . . . . . 58
(k) Transactions with Affiliates . . . . . . . . . . . . . . . 58
(l) Unconditional Purchase Obligations . . . . . . . . . . . . 59
(m) Change in Management . . . . . . . . . . . . . . . . . . . 59
(n) Creation of Subsidiaries . . . . . . . . . . . . . . . . . 59
(o) Current Ratio . . . . . . . . . . . . . . . . . . . . . . . 59
(p) Debt Coverage Ratio . . . . . . . . . . . . . . . . . . . . 59
(q) Interest Coverage Ratio . . . . . . . . . . . . . . . . . . 59
(r) Amendments to Partnership Agreement . . . . . . . . . . . . 59
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES
Section 6.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.02 Covenants Without Notice . . . . . . . . . . . . . . . . . 60
Section 6.03 Other Covenants . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.04 Other Financing Document Obligations . . . . . . . . . . . 60
Section 6.05 Representations . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.06 Non-Payments of Other Indebtedness . . . . . . . . . . . . 61
Section 6.07 Defaults Under Other Agreements . . . . . . . . . . . . . . 61
Section 6.08 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.09 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.10 Money Judgment . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.11 Security Instruments . . . . . . . . . . . . . . . . . . . 62
Section 6.12 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . 62
Section 6.13 Change in Control . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VII THE ADMINISTRATIVE AGENT
Section 7.01 Appointment of Administrative Agent . . . . . . . . . . . . 62
Section 7.02 Nature of Duties of Administrative Agent . . . . . . . . . 63
Section 7.03 Lack of Reliance on the Administrative Agent . . . . . . . 63
Section 7.04 Certain Rights of the Administrative Agent . . . . . . . . 63
Section 7.05 Reliance by Administrative Agent . . . . . . . . . . . . . 63
Section 7.06 INDEMNIFICATION OF ADMINISTRATIVE AGENT . . . . . . . . . . 64
Section 7.07 The Administrative Agent in its Individual Capacity . . . . 64
Section 7.08 May Treat Lender as Owner . . . . . . . . . . . . . . . . . 64
Section 7.09 Successor Administrative Agent . . . . . . . . . . . . . . 64
ARTICLE VIII MISCELLANEOUS
Section 8.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 8.02 Amendments, etc . . . . . . . . . . . . . . . . . . . . . . 65
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Section 8.03 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . 66
Section 8.04 Payment of Expenses, Indemnities, etc . . . . . . . . . . . 66
Section 8.05 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.06 Benefit of Agreement . . . . . . . . . . . . . . . . . . . 69
Section 8.07 Assignments and Participations. . . . . . . . . . . . . . . 69
Section 8.08 Governing Law; Submission to Jurisdiction; Etc . . . . . . 71
Section 8.09 Independent Nature of Lenders' Rights . . . . . . . . . . . 71
Section 8.10 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.11 Survival of Agreements . . . . . . . . . . . . . . . . . . 72
Section 8.12 Renewal, Extension or Rearrangement . . . . . . . . . . . . 72
Section 8.13 Interest . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.14 Confidential Information. . . . . . . . . . . . . . . . . . 73
Section 8.15 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . 73
Section 8.16 Attachments . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.17 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.18 Survival of Indemnities . . . . . . . . . . . . . . . . . . 74
Section 8.19 Headings Descriptive . . . . . . . . . . . . . . . . . . . 74
Section 8.20 Satisfaction Requirement . . . . . . . . . . . . . . . . . 74
Section 8.21 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.22 Conflict with Mortgage . . . . . . . . . . . . . . . . . . 74
Section 8.23 EXCULPATION PROVISIONS . . . . . . . . . . . . . . . . . . 74
ANNEXES
Annex I - Commitments
Annex II - Outstanding Letters of Credit
SCHEDULES
Schedule 4.05 - Consents
Schedule 4.07 - Investment and Guaranties
Schedule 4.08 - Litigation
Schedule 4.10 - ERISA
Schedule 4.13 - Defaults
Schedule 4.20 - Insurance
Schedule 4.22 - Gas Imbalances
Schedule 5.03(a) - Existing Indebtedness
Schedule 5.03(b) - Liens
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Subsidiaries/Guarantors
Exhibit C - Form of Borrowing Request
Exhibit D - Form of Assignment and Acceptance
Exhibit E - Form of Letter to Hydrocarbon Purchasers
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made and entered into as
of the 31st day of October, 1996, among TITAN RESOURCES, L.P., a Texas limited
partnership (the "Company"); THE CHASE MANHATTAN BANK, individually, as the
Issuing Bank and as Administrative Agent (in such capacity, the "Administrative
Agent"), FIRST UNION NATIONAL BANK OF NORTH CAROLINA, individually and as
Documentation Agent, XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, individually
and as Syndication Agent, and each of the lenders that is a signatory hereto or
which becomes a party hereto as provided in Section 8.07 (individually, a
"Lender" and, collectively, the "Lenders").
RECITALS
A. On December 11, 1995, the Company, Texas Commerce Bank
National Association ("TCB"), individually and as Agent (in such capacity, the
"Former Agent") for itself and First Union National Bank of North Carolina
(together with TCB, the "Former Lenders"), and the Former Lenders entered into
a certain Credit Agreement (the "Prior Credit Agreement") whereby, upon the
terms and conditions therein stated, the Former Lenders agreed to make certain
loans and extend certain credit to the Company.
B. By separate Assignments of Notes and Liens of even date
herewith, each of the Former Lenders have assigned their respective "Notes" (as
defined in the Prior Credit Agreement, and herein called the "Prior Notes") and
all liens securing the payment thereof to the Former Agent.
C. By Assignment of Undivided Interest in Notes and Liens of even
date herewith (the "Assignments"), the Former Agent has assigned to each of the
Lenders and, to the extent set forth therein, to the Administrative Agent, an
undivided interest in the Prior Notes and a corresponding undivided interest in
and to all liens securing the payment thereof.
D. The Company, the Administrative Agent, and the Lenders
mutually desire to make certain amendments to the Prior Credit Agreement and to
restate the Prior Credit Agreement in its entirety.
E. In consideration of the mutual covenants and agreements herein
contained, the Company, the Administrative Agent, and the Lenders hereby agree
that the Prior Credit Agreement shall be and hereby is amended and restated in
its entirety to read herein and as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions. As used herein, the following terms
have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined). Reference to any party to a
Financing Document means that party and its successors and assigns.
"Administrative Agent" means The Chase Manhattan Bank, acting
in the manner and to the extent described in Article VII.
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"Advance Notice" means written or telecopy notice (or
telephonic notice promptly confirmed in writing), which in each case
shall be irrevocable, from the Company to be received by the
Administrative Agent before 12:00 p.m. (New York time), by the number
of Business Days in advance of any borrowing, conversion, continuation
or prepayment of any Loan pursuant to this Agreement as respectively
indicated below:
(i) Eurodollar Loans - 3 Business Days; and
(ii) Base Rate Loans - same Business Day.
For the purpose of determining the respectively applicable
Loan in the case of the conversion from one type of Loan into another,
the Loan into which there is to be a conversion shall control. The
Administrative Agent, the Issuing Bank and each Lender are entitled to
rely upon and act upon telecopy notice made or purportedly made by the
Company, and the Company hereby waives the right to dispute the
authenticity and validity of any such telecopy once the Administrative
Agent or any Lender has advanced funds or the Issuing Bank has issued
Letters of Credit, absent manifest error.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with,
such Person, whether through the ownership of voting securities, by
contract or otherwise; provided that, such term shall not include any
Person which would otherwise be deemed to be an Affiliate hereunder
solely as a result of NGP's or First Union Capital Partners', Enron
Capital & Trade Resources Corp.'s or Selma International Investment
Limited's investment in such Person, or such Person's investment in,
or control of, NGP, First Union Capital Partners, Enron Capital &
Trade Resources Corp. or Selma International Investment Limited.
"Aggregate Credit Exposure" means the sum of each Lender's
Credit Exposure.
"Agreement" means this Amended and Restated Credit Agreement,
as amended, supplemented or modified from time to time.
"Applicable Margin" means, on any day and with respect to any
Loan, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Maximum Available
Amount Utilization Percentage on such day:
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Max. Available
Amount Utilization Base Rate Loan Eurodollar Loan
Percentage Margin Percentage Margin Percentage
------------------ ----------------- -----------------
Greater than 66% 0.00% 1.50%
Less than or equal to
66% but greater than 33% 0.00% 1.25%
Less than or equal to
33% but greater than 0% 0.00% 1.00%
As used in this definition of Applicable Margin, "Maximum Available
Amount Utilization Percentage" means, as of any day, the fraction, expressed as
a percentage, the numerator of which is the Aggregate Credit Exposure on such
day, and the denominator of which is the Borrowing Base in effect on such day.
"Application" means an "Application and Agreement for Letters
of Credit," or similar instruments or agreements, entered into between
the Company and the Issuing Bank in connection with any Letter of
Credit.
"Assignment" has the meaning assigned such term in the opening
recitals of this Agreement.
"Assignment and Acceptance" has the meaning assigned such term
in Section 8.07(b).
"BB Properties" means at any time the Oil and Gas Properties
and other assets of the Company or a Subsidiary of the Company
evaluated by the Lenders and to which the Lenders gave loan value in
determining the most recent Borrowing Base.
"Bankruptcy Code" has the meaning provided in Section 6.08.
"Base Rate" has the meaning provided in Section 2.06(a).
"Base Rate Loan" means a Loan bearing interest at the rate
provided in Section 2.06(a).
"Borrowing" means a borrowing pursuant to a Borrowing Request
or a continuation or a conversion pursuant to Section 2.11 consisting,
in each case, of the same Type of Loans and having, in the case of
Eurodollar Loans, the same Interest Period (except as otherwise
provided in Sections 2.16 and 2.18) and made previously or being made
concurrently by all of the Lenders.
"Borrowing Base" means the amount of Aggregate Credit Exposure
that the Determining Lenders shall determine, pursuant to Section
2.20, can be supported by the BB Properties.
"Borrowing Request" means a request for a Borrowing pursuant
to Section 2.02, substantially in the form attached as Exhibit C.
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"Business Day" means any day excluding Saturday, Sunday and
any other day on which banks are required or authorized to close in
New York, New York or Houston, Texas and, if the applicable Business
Day relates to Eurodollar Loans, on which trading is carried on by and
between banks in Dollar deposits in the applicable interbank
Eurodollar market.
"Capital Expenditures" means capital expenditures for capital
or fixed assets, whether by way of acquisition or otherwise.
"Capital Lease Obligations" means, as to any Person, the
obligations of such person to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) real and/or
personal property which obligations are required to be classified and
accounted for as a liability for a capital lease on a balance sheet of
such Person and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof.
"Change of Control" means the occurrence of any of the
following:
(a) Parent at any time ceases to own, directly or
indirectly through one or more Subsidiaries, all of the
partnership interests of the Company, or
(b) prior to the consummation of the IPO,
Xxxxxxxxx and NGP cease to own, directly or indirectly, on a
combined basis, more than 50% of the issued and outstanding
shares of Parent, or
(c) at or after the consummation of the IPO, any
Other Group becomes the beneficial owner, directly or
indirectly, of voting stock of Parent which has aggregate
voting power that at the time in question both (i) exceeds the
aggregate voting power of all stock of Parent then owned by
the Xxxxxxxxx/NGP Group, and (ii) exceeds thirty percent (30%)
of the total voting power of all then outstanding voting stock
of Parent.
As used in this definition, "person" has the meaning applied to such
term in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Act"), "group" of persons has the meaning
applied to such term in Rule 13d-5 under the Act, and "beneficial
owners" has the meaning applied to such term in Rule 13d-3 under the
Act, in each case as the Act and the aforementioned Rules thereunder
are in effect on the Closing Date. "Xxxxxxxxx/NGP Group" means
Xxxxxxxxx, NGP, Joint Energy Development Investments Limited
Partnership, First Union Corporation, Selma International Investment
Limited and their respective Affiliates, and the directors, officers
and employees of the Company and Parent.
"Other Group" means any group made up of one or more persons who are
not part of the Xxxxxxxxx/NGP Group.
"Chase" means The Chase Manhattan Bank, in its individual
capacity or as Issuing Bank, as the case may be, and not as
Administrative Agent.
"Closing Date" means the as of date of this Agreement set
forth in the first paragraph.
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"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute.
"Commitment" means, with respect to each Lender, the
obligation of such Lender to make loans to the Company under Section
2.01, up to the maximum amount set forth opposite such Lender's name
on Annex I under the caption "Commitment."
"Company" means Titan Resources, L.P., a Texas limited
partnership.
"Consolidated Net Income" means with respect to Parent and its
Consolidated Subsidiaries, for any period, the aggregate of the net
income (or loss) of Parent and its Consolidated Subsidiaries after
allowances for taxes for such period, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded
from such net income (to the extent otherwise included therein) the
following: (i) the net income (but not loss) of any Consolidated
Subsidiary of Parent to the extent that the declaration or payment of
dividends or similar distributions or transfers or loans by that
Consolidated Subsidiary is not at the time permitted by operation of
the terms of its charter or any agreement, instrument or Governmental
Requirement applicable to such Consolidated Subsidiary, or is
otherwise restricted or prohibited in each case determined in
accordance with GAAP; (ii) the net income (or loss) of any Person
acquired in a pooling-of-interests transaction for any period prior to
the effective date of such transaction; (iii) any extraordinary gains
or losses, including gains or losses attributable to Property sales
not in the ordinary course of business; and (iv) the cumulative effect
of a change in accounting principles and any gains or losses
attributable to writeups or writedowns of assets; provided further
that until October 31, 1997, the net income attributable to the
Properties purchased under the Mobil Purchase and Sale Agreement for
any relevant period occurring before November 1, 1996 shall be
determined on a pro-forma basis using the oil and gas revenues
attributed to the production from such properties less the direct
operating expenses, severance and ad valorem taxes incurred with
respect to such properties during the relevant period.
"Consolidated Subsidiaries" means, as to any Person, each
Subsidiary of such Person (whether now existing or hereafter created
or acquired) the financial statements of which shall be (or should
have been) consolidated with the financial statements of such Person
in accordance with GAAP.
"Cover" for LC Liabilities shall be effected by paying to the
Administrative Agent in immediately available funds, to be held by the
Administrative Agent in a collateral account maintained by the
Administrative Agent at its Payment Office and collaterally assigned
as security for the financial accommodations extended pursuant to this
Agreement using documentation satisfactory to the Administrative
Agent, an amount equal to the maximum amount of each applicable Letter
of Credit available for drawing at any time on or after the date of
such assignment.
"Credit Exposure" means, at any time and as to each Lender,
the sum of (a) the aggregate principal amount of the Loans made by
such Lender as of such date plus (b) such Lender's Percentage Share of
the aggregate amount of all LC Liabilities as of such date.
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"Default" means an Event of Default or any condition or event
which, with notice or lapse of time or both, would constitute an Event
of Default.
"Designated Borrowing Base" shall have the meaning assigned to
that term in Section 2.20(e).
"Determining Lenders" means, collectively, Chase, First Union
National Bank of North Carolina and Xxxxxx Guaranty Trust Company of
New York.
"Dollar" and the sign "$" each means lawful money of the
United States of America.
"EBITDA" means, for any period, the sum of Consolidated Net
Income for such period plus the following expenses or charges to the
extent deducted from Consolidated Net Income in such period: interest,
taxes, depreciation, depletion, amortization and other non-cash
charges.
"Effective Date" means the date on which (i) each of the
conditions precedent set forth in Article III have been satisfied or
waived by each of the Lenders, (ii) the conditions to effectiveness
set forth in Section 8.21 have been satisfied and (iii) the initial
Loans have been made, or the initial Letter of Credit has been issued.
Subject to Section 3.01, the Effective Date and Closing Date may be
the same date.
"Eligible Transferee" means any financial institution which is
a Lender as of the Effective Date or which is a commercial bank, a
financial institution or an "accredited investor" (as defined in
Regulation D) which makes loans in the ordinary course of its business
and that makes or acquires Loans for its own account in the ordinary
course of its business and which has capital, surplus and undivided
profits aggregating at least $250,000,000 (as of the date of its most
recent financial statements).
"Environmental Laws" means any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any
Governmental Authority pertaining to public health or the environment
in effect in any and all jurisdictions in which the Company or its
Subsidiaries are conducting or at any time have conducted business, or
where any Property of the Company or its Subsidiaries is located, or
where any hazardous substances generated by or disposed of by the
Company or its Subsidiaries are located, including but not limited to
the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as amended,
the Comprehensive Environmental, Response, Compensation, and Liability
Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of
1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the
Toxic Substances Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, and other environmental
conservation or protection laws. For Environmental Law purposes, the
term "oil" has the meaning specified in OPA; the terms "hazardous
substance," "release" and "threatened release" have the meanings
specified in CERCLA, and the terms "solid waste" and "disposal" (or
"disposed") have the meanings specified in RCRA; provided, however, in
the event either CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment, and provided,
further, that, to the extent the laws of the state in which any
Property of the Company or its Subsidiaries is located
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establish a meaning for "oil," "hazardous substance," "release,"
"solid waste" or "disposal" which is broader than that specified in
either OPA, CERCLA or RCRA, such broader meaning shall apply.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Company or a Subsidiary of the
Company would be deemed to be a "single employer" within the meaning
of Section 4001(b)(1) of ERISA or Sections 414(b), (c), (m) or (o) of
the Code.
"ERISA Termination Event" means (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the
provision for 30-day notice to the PBGC under Sections .14, .18, .19
or .20 of Part 2615 of the PBGC regulations), (ii) the withdrawal of
the Company, a Subsidiary of the Company or any ERISA Affiliate from a
Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as
a termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate a Plan by the PBGC, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer,
any Plan.
"Eurodollar Loan" means a Loan bearing interest at the rate
provided in Section 2.06(b).
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If for any reason such rate
is not available, the term "Eurodollar Rate" means, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates.
"Event of Default" has the meaning provided in Article VI.
"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
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by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Financial Statements" means the consolidated financial
statements of the Company and its Consolidated Subsidiaries described
or referred to in Section 4.06(a).
"Financing Documents" means this Agreement, the Notes, the
Guaranty Agreement, the Security Instruments, the Applications, the
Letters of Credit, Borrowing Requests, and the other documents,
instruments or agreements described in Section 3.02(d), together with
any other document, instrument or agreement (other than participation,
agency or similar agreements among the Lenders or between any Lender
and any other bank or creditor with respect to any indebtedness or
obligations of the Company hereunder) now or hereafter entered into by
the Company or any Guarantor with the Administrative Agent, the
Issuing Bank, the Lenders, or their respective Affiliates in
connection with the Loans, any LC Liabilities, the Notes, this
Agreement or the Mortgaged Properties, as such documents, instruments
or agreements may be amended, modified or supplemented from time to
time.
"Fiscal Quarter" means a three-month period ending on March
31, June 30, September 30, or December 31 of any year.
"Fiscal Year" means a twelve month period ending on December
31 of any year.
"Form 1001 Certification" has the meaning provided in Section
2.21(f).
"Form 4224 Certification" has the meaning provided in Section
2.21(f).
"Former Agent" has the meaning assigned such term in the
opening recitals of this Agreement.
"Funded Indebtedness" means, without duplication, all
Indebtedness for borrowed money, any Capital Lease Obligations and any
guaranty with respect to Funded Indebtedness of another Person.
"GAAP" means generally accepted accounting principles as
applied in accordance with Section 1.02.
"General Partner" means Titan Resources I, Inc., as general
partner of the Company, or any substitute general partner of the
Company (which shall be a wholly-owned Subsidiary of the Parent or
Titan Resources I, Inc.)
"Governmental Authority" means any (domestic or foreign)
federal, native American Indian, state, province, county, city,
municipal or other political subdivision or government, department,
commission, board, bureau, court, agency or any other instrumentality
of any of them, which exercises jurisdiction over the Company or any
of its Property or any Subsidiary of the Company or any of such
Subsidiary's Property.
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"Governmental Requirement" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other
direction or requirement (including but not limited to any of the
foregoing which relate to Environmental Laws, energy regulations and
occupational, safety and health standards or controls) of any
Governmental Authority.
"Guaranty Agreement" means the guaranty agreements dated the
date of execution executed by each of the Guarantors, as the same may
be amended from time to time, guaranteeing prompt payment of the
Lender Indebtedness and otherwise being in form and substance
satisfactory to the Administrative Agent and the Majority Lenders.
"Guarantors" means (a) the Parent, (b) the General Partner,
and (c) those Subsidiaries of the Company designated as Guarantors on
Exhibit B and any other Subsidiary of the Company, designated as a
Guarantor by (i) the Company with the approval of the Administrative
Agent, or (ii) the Majority Lenders, in each case pursuant to Section
5.01(j).
"Hedge Agreement" means (i) any Hydrocarbon Swap Agreement or
(ii) any Interest Rate Swap Agreement.
"Highest Lawful Rate" means, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or
received on the Notes or on other Lender Indebtedness, as the case may
be, owed to it under the law of any jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding other provisions
of this Agreement, or law of the United States of America applicable
to such Lender and the Transactions which would permit such Lender to
contract for, charge, take, reserve or receive a greater amount of
interest than under such jurisdiction's law.
"Xxxxxxxxx" means Xxxx X. Xxxxxxxxx, an individual presently
residing in Midland, Texas.
"Hydrocarbon Interests" means all rights, titles, leasehold
and other interests and estates in and to oil and gas leases, oil, gas
and mineral leases, or other liquid or gaseous hydrocarbon leases,
mineral fee interests, overriding royalty and royalty interests, net
profit interests and production payment interests, including any
reserve or residual interest of whatever nature.
"Hydrocarbon Swap Agreement" means any contract for sale for
future delivery of Hydrocarbons (whether or not the subject
Hydrocarbons are to be delivered), hedging contract, forward contract,
swap agreement, futures contract or other hydrocarbon pricing
protection agreement or option with respect to any such transaction,
which is, in each case, designed to hedge against fluctuations in
Hydrocarbon prices.
"Hydrocarbons" means oil, gas, casinghead gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products
refined therefrom.
"Indebtedness" of any Person means, without duplication:
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(i) all obligations of such Person for borrowed
money and obligations evidenced by bonds, debentures, notes or
other similar instruments;
(ii) all obligations of such Person (whether
contingent or otherwise) in respect of bankers' acceptances,
letters of credit, surety bonds and similar instruments;
(iii) all obligations of such Person to pay the
deferred purchase price of Property or services (other than
for borrowed money), excluding trade accounts payable arising
in the ordinary course of business which are not in excess of
90 days past the invoice or billing date, or if in excess of
90 days past the invoice or billing date are being currently
contested in good faith by appropriate actions or proceedings
diligently conducted; provided, however, in no event shall the
aggregate net invoice or ledger amount owing on all trade
accounts payable exceed prudent industry standards.
(iv) all Capital Lease Obligations in respect of
which such Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which
obligations such Person otherwise assures a creditor against
loss;
(v) all guaranties (direct or indirect), and
other contingent obligations of such Person in respect of, or
obligations to purchase or otherwise acquire or to assure
payment of, Indebtedness of others;
(vi) Indebtedness of others secured by any Lien
upon Property owned by such Person, whether or not assumed;
(vii) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial
position or covenants of other Persons;
(viii) the undischarged balance of any production
payment created by such Person or for the creation of which
such Person directly or indirectly received payment;
(ix) obligations to deliver goods or services
including Hydrocarbons in consideration of advance payments;
and
(x) the net amount of obligations of such Person
under agreements of the types described in the definitions of
Hydrocarbon Swap Agreement and Interest Rate Swap Agreement.
"Interest Period" means, with respect to each Borrowing of
Eurodollar Loans, an interest period complying with the terms and
provisions of Section 2.07.
"Interest Rate Swap Agreement" means any rate swap, rate cap,
rate floor, rate collar, forward rate agreement or other rate
protection agreement or option with respect to any such transaction,
designed to hedge against fluctuations in interest rates.
"IPO" means a public offering and sale of Parent's equity
securities which results in Parent's receipt of gross cash proceeds of
at least $125,000,000.
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"Issuing Bank" means, for each Letter of Credit, Chase (or any
Affiliate of Chase, as the case may be) as the issuing bank for such
Letter of Credit.
"Lender" has the meaning assigned such term in the opening
paragraph of this Agreement.
"Lender Indebtedness" means any and all amounts owing or to be
owing by the Company to the Administrative Agent, the Issuing Bank or
the Lenders with respect to or in connection with the Loans, any LC
Liabilities, the Notes, this Agreement, or any other Financing
Document.
"Lending Office" means for each Lender the office specified
opposite such Lender's name on the signature pages, or in the
Assignment and Acceptance pursuant to which it became a Lender, with
respect to each Type of Loan, or such other office as such Lender may
designate in writing from time to time to the Company and the
Administrative Agent with respect to such Type of Loan.
"Letters of Credit" has the meaning assigned such term in
Section 2.03(a) and shall include the Outstanding Letters of Credit,
which are hereby deemed to be issued under this Agreement.
"LC Liabilities" means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings
under such Letter of Credit as of the date of determination plus (ii)
the aggregate unpaid amount of all Reimbursement Obligations due and
payable as of the date of determination in respect of previous
drawings made under such Letter of Credit.
"Lien" means any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Company or any
Subsidiary of the Company shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale
agreement, financing lease or other arrangement pursuant to which
title to the Property has been retained by or vested in some other
Person for security purposes.
"Loan" means the loans as provided for by Section 2.01.
"Loan Parties" means the Company and the Guarantors and "Loan
Party" means any one of them.
"Majority Lenders" means at any time (a) prior to the
Commitments expiring or being terminated in full, Lenders holding at
least 66-2/3% of the Commitments in effect at such time, or (b)
thereafter, Lenders holding at least 66-2/3% of the sum of the then
unpaid principal amount of the Loans at such time.
"Margin Stock" has the meaning provided in Regulation U and
Regulation X.
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"Material Adverse Effect" means any material and adverse
effect on (i) the assets, liabilities, financial condition or
operations of the Company, individually, or the Company and its
Subsidiaries, taken as a whole, or (ii) the ability of the Company or
the Guarantors to carry out their respective business or meet their
respective obligations under the Notes, this Agreement or the other
Financing Documents to which each such Person is a party, on a timely
basis.
"Maturity Date" means January 1, 2001.
"Maximum Available Amount" means, at any date, an amount equal
to the lesser of (a) the aggregate Commitments as of such date and (b)
the Borrowing Base as of such date.
"Maximum Loan Available Amount" means, at any date, an amount
equal to the difference between (a) Maximum Available Amount as of
such date and (b) the aggregate amount of all LC Liabilities as of
such date.
"Mobil" means Mobil Producing Texas & New Mexico Inc., a
Delaware corporation.
"Mobil Purchase and Sale Agreement" means that certain
Purchase and Sale Agreement dated July 12, 1996, between Mobil, as
seller, and the Company, as purchaser.
"Mortgage" means, collectively (a) the Mortgage, Deed of
Trust, Assignment, Security Agreement, Fixture Filing and Financing
Statement dated as of December 11, 1995, as supplemented and amended
by supplements and amendments to mortgage dated of even date herewith,
granted by the Company to Xxxxxxx X. Xxxx, as Trustee, and (b) the
Mortgage, Deed of Trust, Assignment, Security Agreement, Fixture
Filing and Financing Statement dated as of the Closing Date granted by
the Company to Xxxxxxx X. Xxxx, as Trustee, each granting a Lien on
certain Oil and Gas Properties of the Company, as security for the
indebtedness defined therein as "secured indebtedness."
"Mortgaged Property" means the Company's and the Guarantors'
Properties described in and subject to the Liens, privileges,
priorities and security interests existing and to exist under the
terms of the Security Instruments, including but not limited to the
Oil and Gas Properties owned by the Company or the Guarantors which
have been or are hereafter mortgaged to the Administrative Agent for
the benefit of the Lenders pursuant to the Security Instruments.
"NGP" means collectively Natural Gas Partners L.P. and Natural
Gas Partners II, L.P., each a Delaware limited partnership.
"Note" means a promissory note of the Company described in
Section 2.05 payable to any Lender and being substantially in the form
of Exhibit A, evidencing the aggregate Indebtedness of the Company to
such Lender resulting from Loans made by such Lender.
"Oil and Gas Properties" means Hydrocarbon Interests; the
properties now or hereafter pooled or unitized with Hydrocarbon
Interests; all presently existing or future unitization, pooling
agreements and declarations of pooled units and the units created
thereby (including, but not limited to, units created under orders,
regulations and rules of any Governmental Authority having
jurisdiction) which may affect all or any portion of the Hydrocarbon
Interests; all
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operating agreements, contracts and other agreements which relate to
any of the Hydrocarbon Interests or the production, sale, purchase,
exchange or processing of Hydrocarbons from or attributable to such
Hydrocarbon Interests; all Hydrocarbons in and under and which may be
produced and saved or attributable to the Hydrocarbon Interests, the
lands covered thereby and all oil in tanks and all rents, issues,
profits, proceeds, products, revenues and other incomes from or
attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and Properties in anywise appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests,
Properties, rights, titles, interests and estates described or
referred to above, including any and all Property, real or personal,
now owned or hereafter acquired and situated upon, used, held for use
or useful in connection with the operating, working or development of
any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be on
such premises for the purpose of drilling a well or for other similar
temporary uses) and including any and all oil xxxxx, gas xxxxx,
injection xxxxx or other xxxxx, buildings, structures, fuel
separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries,
fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables,
wires, towers, casing, tubing and rods, surface leases, rights-of-way,
easements and servitudes together with all additions, substitutions,
replacements, accessions and attachments to any and all of the
foregoing.
"Other Taxes" has the meaning provided in Section 2.21(b).
"Outstanding Letters of Credit" shall mean the outstanding
letters of credit issued under and pursuant to the terms of the Prior
Credit Agreement, and being more particularly described on attached
Annex II.
"Parent" means Titan Exploration, Inc., a Delaware
corporation.
"Partners" means the General Partner and the Parent, as
limited partner, or any substitute limited partner (which shall be a
wholly-owned Subsidiary of the Parent).
"Partnership Agreement" means the written partnership
agreement of the Company among the Partners dated March 31, 1995, as
amended from time to time in compliance herewith.
"Payment Office" means the Administrative Agent's office
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Percentage Share" means, as to any Lender, the fraction,
expressed as a percentage, the numerator of which is the amount of
such Lender's Commitment and the denominator of which is the amount of
the aggregate Commitments.
"Permitted Dividends" means those dividends and distributions
that the Company is permitted to declare and pay pursuant to Section
5.03(d).
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"Person" means any individual, partnership, firm, corporation
(including, but not limited to the Company), association, joint
venture, trust or other entity, or any government or political
subdivision or agency, department or instrumentality thereof.
"Plan" means any employee pension benefit plan, as defined in
Section 3(2) of ERISA, which (i) is currently or hereafter sponsored,
maintained or contributed to by the Company, any Subsidiary of the
Company or an ERISA Affiliate, or (ii) was at any time during the six
calendar years preceding the date of this Agreement sponsored,
maintained or contributed to by the Company, any Subsidiary of the
Company or an ERISA Affiliate.
"Prime Rate" means the rate of interest from time to time
announced publicly by Chase as its prime commercial lending rate.
Such rate is set by Chase as a general reference rate of interest,
taking into account such factors as Chase may deem appropriate, it
being understood that many of Chase's commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest
or best rate actually charged to any customer and that Chase may make
various commercial or other loans at rates of interest having no
relationship to such rate.
"Prior Notes" has the meaning assigned such term in the
opening recitals of this Agreement.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Proved Developed Hydrocarbon Reserves" means "proved
developed oil and gas reserves" as specified under Rule 4-10(a)(3) of
Regulation S-X of the Securities and Exchange Commission.
"Proved Hydrocarbon Reserves" means Proved Developed
Hydrocarbon Reserves and Proved Undeveloped Hydrocarbon Reserves.
"Proved Undeveloped Hydrocarbon Reserves" means "proved
undeveloped oil and gas reserves" as specified under Rule 4-10(a)(4)
of Regulation S-X of the Securities and Exchange Commission.
"Quarterly Dates" means the last day of each March, June,
September, and December, in each year, the first of which shall be
December 31, 1996; provided, however, that if any such day is not a
Business Day, such Quarterly Date shall be the next succeeding
Business Day.
"Redetermination Date" has the meaning assigned such term in
Section 2.20(a).
"Register" means the register maintained by the Administrative
Agent at its Payment Office showing the name and address of each
Lender, its Commitment, and the principal amount of the Loans owing to
each Lender from time to time.
"Regulation D", "Regulation U" and "Regulation X" means,
respectively, Regulation D under the Securities and Exchange Act of
1933, as amended or modified from time to time, and
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Regulation U and Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor
thereto.
"Reimbursement Obligations" means, at any date, the
obligations of the Company then outstanding in respect of the Letters
of Credit, to reimburse the Administrative Agent for the account of
the Issuing Bank for the amount paid by the Issuing Bank in respect of
any drawings under the Letters of Credit.
"Reserve Report" means an engineering report meeting the
requirements set forth in Section 5.02(e)(i) (and as to scheduled
redeterminations, provided by the dates set forth in such Section) and
such other reports, data and supplemental information as may from time
to time be reasonably requested by the Administrative Agent in
connection with any redetermination of the Borrowing Base.
"Responsible Officer" means, with respect to any corporation,
the chairman of the board, the president, any vice president, the
chief executive officer or the chief operating officer, or any
equivalent officer (regardless of his or her title), and, in respect
of financial or accounting matters, the chief financial officer, the
vice president of finance, the treasurer, the controller, or any
equivalent officer (regardless of his or her title); and, with respect
to any partnership, the chairman of the board, the president, any vice
president, the chief executive officer or the chief operating officer,
or any equivalent officer (regardless of his or her title), and, in
respect of financial or accounting matters, the chief financial
officer, the vice president of finance, the treasurer, the controller,
or any equivalent officer (regardless of his or her title), of any
general partner. Unless otherwise specified, all references to a
Responsible Officer herein means a Responsible Officer of the Company.
"Required Lenders" means at any time (i) Lenders holding at
least 75% of the sum of the then unpaid principal amount of the Loans
at such time or (ii) if no Loans are outstanding, Lenders holding at
least 75% of the Commitments in effect at such time.
"Scheduled Redetermination Date" has the meaning assigned such
term in Section 2.20(d).
"Security Instruments" means the agreements or instruments
described or referred to in Sections 3.02(d)(i) through (iii) and any
and all other agreements or instruments now or hereafter executed and
delivered by Parent, the Company, any Subsidiary of the Company or any
other Person as security for the payment or performance of the Lender
Indebtedness.
"Standby Letter of Credit" means a letter of credit
denominated in Dollars (i) the terms of which are in the reasonable
judgment of the Issuing Bank for such Letter of Credit standard in the
petroleum industry, (ii) which is used in lieu or in support of
performance guarantees or performance, surety or other similar bonds
(but expressly excluding stay and appeal bonds) arising in the
ordinary course of business, (iii) which is used in lieu or in support
of stay or appeal bonds; provided all such letters of credit used in
lieu or in support of stay or appeal bonds shall not exceed
$10,000,000 in aggregate amount at any time outstanding, (iv) which
supports the payment of insurance premiums for reasonably necessary
casualty insurance carried by the
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Company or any of its consolidated Subsidiaries, or (v) which supports
payment or performance for identified purchases or exchanges of crude
oil, condensate and/or petroleum products.
"Subsidiary" of any Person means (i) a corporation of which a
majority of the outstanding shares of stock of each class having
ordinary voting power is, or (ii) any partnership, association, joint
venture, trust or other entity of which a majority of the equity is,
in the case of either clause (i) or (ii), owned by such Person, by one
or more Subsidiaries of such Person, or by such Person and one or more
of its Subsidiaries.
"Taxes" has the meaning provided in Section 2.21(a).
"Transactions" means the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
"Type" of Loan means a Base Rate Loan or Eurodollar Loan.
Section 1.02 Accounting Terms and Determinations. Unless
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be prepared and all
financial records shall be maintained in accordance with GAAP applied on a
basis consistent with the Financial Statements.
Section 1.03 Other Definitional Terms. 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, exhibit and like
references are to this Agreement unless otherwise specified.
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01 Commitments.
(a) Loans. Subject to the terms and conditions and
relying on the representations and warranties contained herein, each
Lender severally agrees, on any Business Day, to make Loans (each a
"Loan") to the Company during the period from and including (i) the
Closing Date or (ii) such later date that such Lender becomes a party
to this Agreement as provided in Section 8.07(b), to and up to, but
excluding, the Maturity Date in an aggregate principal amount at any
one time outstanding up to but not exceeding the amount of such
Lender's Commitment as then in effect; provided, however, that the
Aggregate Credit Exposure at any one time outstanding shall not exceed
the Maximum Available Amount in effect at such time; and, provided,
further, the aggregate principal amount of all Loans at any one time
outstanding shall not exceed the Maximum Loan Available Amount in
effect at such time. There may be more than one Borrowing with
respect to Loans on any Business Day. Within the foregoing limits and
subject to the conditions set out in Article III, the Company may
obtain Borrowings of Loans, repay or prepay such Loans, and reborrow
such Loans. Any portion of each Lender's Commitment not utilized on
or before the Maturity Date shall be permanently cancelled.
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(b) Types of Loans. The Loans made pursuant hereto by
each Lender shall, at the option of the Company, be either Base Rate
Loans or Eurodollar Loans and may be continued or converted pursuant
to Section 2.11, provided that, except as otherwise specifically
provided herein, all Loans made pursuant to the same Borrowing shall
be of the same Type.
(c) Commitments. Each Lender's Credit Exposure shall not
exceed at any one time the amount set forth opposite such Lender's
name on Annex I under the caption "Commitment" (as the same may be
reduced pursuant to Section 2.09 or otherwise from time to time
modified pursuant to Section 8.07(b), its "Commitment," and
collectively for all Lenders, the "Commitments").
(d) Amounts of Borrowings, etc. The aggregate principal
amount of each Borrowing (i) of Eurodollar Loans shall be not less
than $3,000,000 and shall be in an integral multiple of $1,000,000,
and (ii) of Base Rate Loans shall be not less than $1,000,000 and
shall be in an integral multiple of $100,000, except that any
Borrowing of Loans that are Base Rate Loans may be in the aggregate
amount of the unused Maximum Loan Available Amount in effect at such
time. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Company shall not be entitled to
request any Borrowing that, if made, would result in an aggregate of
more than five separate Borrowings of Eurodollar Loans being
outstanding at any one time. For purposes of the foregoing,
Borrowings having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate
Borrowings.
Section 2.02 Borrowing Requests.
(a) Borrowing Requests. Whenever the Company desires to
make a Borrowing hereunder, it shall give Advance Notice in the form
of a Borrowing Request, specifying, subject to the provisions hereof,
(i) the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, (ii) the date of Borrowing (which shall be a Business
Day), (iii) whether the Loans being made pursuant to such Borrowing
are to be Base Rate Loans or Eurodollar Loans, and (iv) in the case of
Eurodollar Loans, the Interest Period to be applicable thereto.
(b) Notice by Administrative Agent. The Administrative
Agent shall promptly give each Lender telecopy or telephonic notice
(and, in the case of telephonic notices, confirmed by telecopy or
otherwise in writing) of the proposed Borrowing, of such Lender's
Percentage Share thereof and of the other matters covered by the
Advance Notice. Without in any way limiting the Company's obligation
to confirm in writing any telephonic notice, the Administrative Agent
may act without liability upon the basis of telephonic notice believed
by the Administrative Agent in good faith to be from the Company prior
to receipt of written confirmation. In each such case, the Company
hereby waives the right to dispute the Administrative Agent's record
of the terms of such telephonic notice, absent manifest error.
Section 2.03 Letters of Credit.
(a) Issuance of Letters of Credit. Subject to the terms
and conditions hereof, the Issuing Bank agrees to issue and the
Company shall have the right, in addition to Loans provided for in
Section 2.01, to utilize the Commitments from time to time prior to
the Maturity Date by
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obtaining the issuance of Standby Letters of Credit for the account of
any Loan Party by the Issuing Bank if the Company shall so request in
the notice referred to in Section 2.03(b)(i) (such letters of credit
being collectively referred to as the "Letters of Credit"); provided,
however, that the aggregate amount of all Letters of Credit at any one
time outstanding shall not exceed the lesser of (A) $15,000,000, or
(B) the Maximum Available Amount in effect at such time, minus the
aggregate principal amount of all Loans then outstanding. The Letters
of Credit shall be denominated in Dollars and may be issued to support
the obligations of the Company or any of its Subsidiaries. Upon the
date of the issuance of a Letter of Credit, the Issuing Bank shall be
deemed, without further action by any party hereto, to have sold to
each Lender, and each Lender shall be deemed, without further action
by any party hereto, to have purchased from the Issuing Bank, a
participation, to the extent of such Lender's Percentage Share, in
such Letter of Credit and the related LC Liabilities. No Letter of
Credit issued pursuant to this Agreement shall have an expiry date
later than one year from its date of issuance; provided, however, any
Letter of Credit may give the beneficiary thereof either the right to
draw on such Letter of Credit upon its expiry date or the right to
automatically extend the expiry date thereof for periods of up to one
year per extension; provided, further, however, no Letter of Credit
issued pursuant to this Agreement shall ever have an expiry date
beyond the Maturity Date and no such extension shall extend an expiry
date beyond the Maturity Date. The Company and the Lenders agree
that, as of the Effective Date, the Outstanding Letters of Credit
shall be deemed for all purposes of this Agreement to be Letters of
Credit issued under and pursuant to the terms of this Agreement.
(b) Additional Letter of Credit Provisions. The
following additional provisions shall apply to each Letter of Credit:
(i) The Company shall give the Administrative Agent and the
Issuing Bank at least five Business Days' prior notice (effective upon
receipt), or in each case, such shorter period as may be agreed to by
the Administrative Agent and the Issuing Bank, specifying the date
such Letter of Credit is to be issued (which shall be a Business Day)
by the Issuing Bank and describing (A) the face amount of the Letter
of Credit, (B) the expiry date of the Letter of Credit, (C) the name
and address of the beneficiary, (D) information concerning the
transaction proposed to be supported by such Letter of Credit as the
Administrative Agent or the Issuing Bank may reasonably request, (E)
such other information and documents relating to the Letter of Credit
as the Administrative Agent or the Issuing Bank may reasonably
request, and (F) a precise description of documents and the verbatim
text of any certificate to be presented by the beneficiary, which, if
presented on or prior to the expiry date of the Letter of Credit,
would require the Issuing Bank to make payment under the Letter of
Credit; provided that the Issuing Bank, in its reasonable judgment,
may require changes in such documents and certificates; and provided
further that the Issuing Bank shall not be required to issue any
Letter of Credit that on its terms requires payment thereunder prior
to the next Business Day following receipt by the Issuing Bank of such
documents and certificates. Each such notice shall be accompanied by
the Issuing Bank's Application (which shall be deemed to be subject to
the last sentence of clause (v) below, whether or not expressly stated
in such Application) and by a certificate executed by a Responsible
Officer setting forth calculations evidencing availability for such
Letter of Credit pursuant to Section 2.03(b)(ii) and stating that all
conditions precedent to such issuance have been satisfied. Each
Letter of Credit shall, to the extent not inconsistent with the
express terms hereof or the applicable Application, be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (together with
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any subsequent revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the Issuing Bank,
the "UCP"), and shall, as to matters not governed by the UCP, be
governed by, and construed and interpreted in accordance with, the
laws of the State of New York.
(ii) No Letter of Credit may be issued if after giving effect
thereto the Aggregate Credit Exposure would exceed the Maximum
Available Amount. On each day during the period commencing with the
issuance of any Letter of Credit and until such Letter of Credit shall
have expired or have been terminated, the Commitment of each Lender
shall be deemed to be utilized for all purposes hereof in an amount
equal to such Lender's Percentage Share of the amount of the LC
Liabilities related to such Letter of Credit.
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand (by draft or otherwise) for payment thereunder
(each such payment by the Issuing Bank is herein called a "drawing"),
the Issuing Bank shall promptly notify the Company and the
Administrative Agent of such demand (provided that the failure of the
Issuing Bank to give such notice shall not affect the Reimbursement
Obligations of the Company hereunder) and the Company shall
immediately, and in any event no later than 12:00 p.m. (New York time)
on the date of such drawing, reimburse the Administrative Agent for
the account of the Issuing Bank for the amount of such drawing,
without presentment, demand, protest or other formalities of any kind
in an amount, in same day funds, equal to the amount of such drawing.
Unless prior to 12:00 p.m. (New York time) on the date of such
drawing, the Company shall have either (i) notified the Issuing Bank
and the Administrative Agent that the Company will on such date and by
12:00 p.m. (New York time) reimburse the Administrative Agent for the
account of the Issuing Bank for the amount of such drawing with funds
other than the proceeds of a Loan (in which case the Company's
obligation to make such reimbursement by such date and time shall be
absolute and unconditional) or (ii) delivered to the Administrative
Agent a Borrowing Request for Loans (which shall be Base Rate Loans
unless there is sufficient Advance Notice to permit the Company to
elect Eurodollar Loans) in an amount equal to such drawing, the
Company will be deemed to have given a Borrowing Request to the
Administrative Agent requesting that the Lenders make Loans which
shall be Base Rate Loans on the date on which such drawing is honored
in an amount equal to the amount of such drawing. Such Loans shall be
subject to satisfaction of the conditions in Article III and to
existence of Maximum Loan Available Amount (after giving effect to the
reduction of the LC Liabilities by virtue of such Loan). Subject to
the preceding sentence, if so requested by the Administrative Agent,
the Lenders shall, on the date of such drawing, make such Loans in an
amount equal to such Lender's Percentage Share of such drawing, the
proceeds of which shall be applied directly by the Administrative
Agent to reimburse the Issuing Bank for the amount of such drawing.
(iv) If the Company fails to reimburse the Issuing Bank as
provided in clause (iii) above (because of the Company's inability to
receive Loans due to a failure to satisfy the conditions of Article
III or for any other reason), the Issuing Bank shall promptly notify
the Administrative Agent and the Administrative Agent shall notify
each Lender of the unreimbursed amount of such drawing and of such
Lender's respective participation therein based on such Lender's
Percentage Share. Each Lender will pay to the Administrative Agent
for the account of the Issuing Bank on the date of such notice an
amount equal to such Lender's Percentage Share of such unreimbursed
drawing on such date (or, if such notice is made after 12:00 p.m., New
York time, on the next
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succeeding Business Day). If any Lender fails to make available to
the Issuing Bank the amount of such Lender's participation in such
Letter of Credit as provided in this clause (iv), the Issuing Bank
shall be entitled to recover such amount on demand from such Lender
together with interest at the Federal Funds Rate for one Business Day
and thereafter at the Base Rate. Nothing in this clause (iv) shall be
deemed to prejudice the right of any Lender to recover from the
Issuing Bank any amounts made available by such Lender to the Issuing
Bank pursuant to this clause (iv) if it is determined by a court of
competent jurisdiction that the payment with respect to a Letter of
Credit by the Issuing Bank was wrongful and such wrongful payment was
the result of gross negligence or willful misconduct on the part of
the Issuing Bank. The Issuing Bank shall pay to the Administrative
Agent, whereupon the Administrative Agent shall forward to each Lender
such Lender's Percentage Share of all amounts received from the
Company for payment, in whole or in part, of the Reimbursement
Obligation in respect of any Letter of Credit, but only to the extent
such Lender has made payment to the Issuing Bank in respect of such
Letter of Credit pursuant to this clause (iv).
(v) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article
III, be subject to the conditions precedent that such Letter of Credit
shall be in such form and contain such terms as shall be reasonably
satisfactory to the Issuing Bank, and that the Company shall have
executed and delivered such other instruments and agreements relating
to such Letter of Credit as the Issuing Bank shall have reasonably
requested and that are not inconsistent with the terms of this
Agreement including the Issuing Bank's Application therefor. In the
event of a conflict between the terms of this Agreement and the terms
of any Application, the terms of this Agreement shall control.
(vi) AS BETWEEN THE COMPANY AND THE ISSUING BANK, THE COMPANY
ASSUMES ALL RISKS OF THE ACTS AND OMISSIONS OF OR MISUSE OF THE
LETTERS OF CREDIT ISSUED BY THE ISSUING BANK BY THE RESPECTIVE
BENEFICIARIES OF SUCH LETTERS OF CREDIT. IN FURTHERANCE AND NOT IN
LIMITATION OF THE FOREGOING, THE ISSUING BANK SHALL NOT BE RESPONSIBLE
(EXCEPT TO THE EXTENT ARISING FROM THE ISSUING BANK'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT): (A) FOR THE FORM, VALIDITY, SUFFICIENCY,
ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY DOCUMENT SUBMITTED BY ANY
PERSON IN CONNECTION WITH THE APPLICATION FOR OR ISSUANCE OF SUCH
LETTERS OF CREDIT, EVEN IF IT SHOULD IN FACT PROVE TO BE IN ANY OR ALL
RESPECTS INVALID, INSUFFICIENT, INACCURATE, FRAUDULENT OR FORGED;
PROVIDED, HOWEVER, ISSUING BANK SHALL REMAIN RESPONSIBLE AS AN ISSUER
OF A LETTER OF CREDIT FOR ASSURING THAT PAYMENT ON A LETTER OF CREDIT
IS MADE ONLY ON DOCUMENTS WHICH ON THEIR FACE COMPLY WITH THE
REQUIREMENTS OF THE LETTER OF CREDIT; (B) FOR THE VALIDITY OR
SUFFICIENCY OF ANY INSTRUMENT TRANSFERRING OR ASSIGNING OR PURPORTING
TO TRANSFER OR ASSIGN ANY SUCH LETTER OF CREDIT OR THE RIGHTS OR
BENEFITS THEREUNDER OR PROCEEDS THEREOF, IN WHOLE OR IN PART, WHICH
MAY PROVE TO BE INVALID OR INEFFECTIVE FOR ANY REASON; (C) FOR FAILURE
OF THE BENEFICIARY OF ANY SUCH LETTER OF CREDIT TO COMPLY FULLY WITH
CONDITIONS REQUIRED IN ORDER TO DRAW UPON SUCH LETTER OF CREDIT, TO
THE EXTENT SUCH FAILURE IS NOT THE RESULT OF GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE ISSUING BANK; (D) FOR ERRORS, OMISSIONS,
INTERRUPTIONS OR DELAYS IN TRANSMISSION OR DELIVERY OF ANY MESSAGES,
BY MAIL, CABLE, TELEGRAPH, TELEX OR OTHERWISE, WHETHER OR NOT THEY ARE
IN CIPHER; (E) FOR ERRORS IN INTERPRETATION OF TECHNICAL TERMS; (F)
FOR ANY LOSS OR DELAY IN THE TRANSMISSION OR OTHERWISE
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OF ANY DOCUMENT REQUIRED IN ORDER TO MAKE A DRAWING UNDER ANY SUCH
LETTER OF CREDIT OR OF THE PROCEEDS THEREOF; (G) FOR THE
MISAPPLICATION BY THE BENEFICIARY OF ANY SUCH LETTER OF CREDIT OF THE
PROCEEDS OF ANY DRAWING UNDER SUCH LETTER OF CREDIT; AND (H) FOR ANY
CONSEQUENCES ARISING FROM CAUSES BEYOND THE CONTROL OF THE ISSUING
BANK, INCLUDING, WITHOUT LIMITATION, THE ACTIONS OF ANY GOVERNMENTAL
AUTHORITY. NONE OF THE ABOVE SHALL AFFECT, IMPAIR, OR PREVENT THE
VESTING OF ANY OF THE ISSUING BANK'S RIGHTS OR POWERS HEREUNDER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS CLAUSE
(VI), THE COMPANY SHALL HAVE NO OBLIGATION TO INDEMNIFY THE ISSUING
BANK IN RESPECT OF ANY LIABILITY INCURRED BY THE ISSUING BANK TO THE
EXTENT ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE ISSUING BANK.
(vii) The Issuing Bank will send to the Company and the
Administrative Agent immediately upon issuance of any Letter of
Credit, or an amendment thereto, a true and complete copy of such
Letter of Credit, or such amendment thereto. Upon issuance of any
Letter of Credit or an amendment thereto, the Administrative Agent
shall promptly notify each Lender of the terms of such Letter of
Credit or amendment thereto, of the Issuing Bank for such Letter of
Credit or amendment thereto, and of such Lender's Percentage Share of
the amount of such Letter of Credit or amendment thereto, and the
Administrative Agent shall provide to each Lender a copy of such
Letter of Credit or such amendment thereto. Upon cancellation or
termination of any Letter of Credit, the Issuing Bank shall promptly
notify the Administrative Agent and the Company, and the
Administrative Agent will then promptly notify each Lender, of such
cancellation or termination.
(viii) The obligation of the Company to reimburse the Issuing
Bank for Reimbursement Obligations with regard to the Letters of
Credit issued by it and the obligations of Lenders under clause (iv)
shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement and under all
circumstances including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of
any Letter of Credit;
(B) the existence of any claim, set-off, defense
or other right that the Company may have at any time against a
beneficiary or any assignee or transferee of any Letter of
Credit (or any Persons for whom any such assignee or
transferee may be acting), any Lender or any other Person,
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including
any underlying transaction between the Company or one of its
Subsidiaries and the beneficiary for which the Letter of
Credit was procured) other than a defense based on the gross
negligence or willful misconduct of the Issuing Bank;
(C) any draft, demand, certificate or any other
document presented under any Letter of Credit is proved to be
forged, fraudulent, invalid or insufficient in any respect or
any statement therein is untrue or inaccurate in any respect;
(D) any adverse change in the condition
(financial or otherwise) of the Company;
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(E) any breach of this Agreement or any other
Financing Document by the Company, Administrative Agent or any
Lender (other than the Issuing Bank);
(F) any other circumstance or happening
whatsoever which is similar to any of the foregoing; provided
that such other occurrence or happening is not the result of
the gross negligence or willful misconduct of the Issuing
Bank; or
(G) the fact that a Default shall have occurred
and be continuing.
(ix) Whenever Cover has been provided for any Letter of
Credit, the Administrative Agent shall continue to hold funds for such
Letter of Credit in its collateral account for so long as the event or
condition requiring such Cover continues, provided that (A) so long as
no Default has occurred which is continuing, the Administrative Agent
shall release to the Company all of such funds whenever such event or
condition ceases to exist or whenever such Letter of Credit has
expired or terminated and all Reimbursement Obligations, if any, with
respect thereto have been fully satisfied, and (B) so long as no
Default has occurred which is continuing, the Administrative Agent
shall release to the Company any excess funds if the LC Liabilities
with respect to such Letter of Credit decrease and the funds held in
such deposit account therefore exceed such LC Liabilities.
Section 2.04 Disbursement of Funds.
(a) Availability. No later than 12:00 p.m. (New York
time) on the date of each Borrowing, each Lender will make available
to the Administrative Agent such Lender's Percentage Share of the
amount (if any) by which the principal amount of the Borrowing
requested to be made on such date exceeds the principal amount of
Loans (if any) maturing or Reimbursement Obligations (if any) due and
owing on such date, in Dollars and in immediately available funds at
the Payment Office. The Administrative Agent will make available to
the Company at the Payment Office the aggregate of the amounts (if
any) so made available by the Lenders by depositing such amounts, in
immediately available funds, to an account of the Company at the
Administrative Agent designated by the Company for such purpose. To
the extent that Loans mature or Reimbursement Obligations are due and
owing on the date of a requested Borrowing of Loans, the Lenders shall
apply the proceeds of the Loans then being made, to the extent
thereof, to the repayment of such maturing Loans or Reimbursement
Obligations, such Loans and repayments intended to be a
contemporaneous exchange.
(b) Funds to the Administrative Agent. Unless the
Administrative Agent shall have been notified by any Lender prior to
the date of a Borrowing that such Lender does not intend to make
available to the Administrative Agent such Lender's Percentage Share
of the Borrowing to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the
Administrative Agent on such date, and the Administrative Agent may
make available to the Company a corresponding amount. If such
corresponding amount is not in fact made available to the
Administrative Agent by such Lender on the date of a Borrowing, the
Administrative Agent shall be entitled to recover such corresponding
amount on demand from such Lender together with interest at the
Federal Funds Rate. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the Company, and the
Company shall immediately
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pay such corresponding amount to the Administrative Agent together
with interest at the rate specified for the Borrowing which includes
such amount paid. Nothing in this Section shall be deemed to relieve
any Lender from its obligation to fulfill its Commitment hereunder or
to prejudice any rights which the Company may have against any Lender
as a result of any default by such Lender hereunder.
(c) Lenders' Responsibilities. No Lender shall be
responsible for any default by any other Lender in its obligation to
make Loans hereunder, and each Lender shall be obligated to make the
Loans provided to be made by it hereunder, regardless of the failure
of any other Lender to fulfill its Commitment hereunder.
Section 2.05 Notes. The Company's obligation to pay the principal
of, and interest on, the Loans made by each Lender shall be further evidenced
by the Company's issuance, execution and delivery of a Note payable to the
order of each such Lender in the amount of such Lender's Commitment and shall
be dated as of the date of issuance of such Note. The principal amount of each
Note shall be payable on or before the Maturity Date. Each Lender's Note
represents, in part, a renewal, rearrangement and modification of the portion
of the outstanding principal balance owing under the Prior Notes assigned to
such Lender pursuant to the Assignment.
Section 2.06 Interest. In all cases subject to Section 8.13:
(a) Base Rate Loans. Subject to Section 2.06(c), the
Company agrees to pay interest in respect of the unpaid principal
amount of each Base Rate Loan from the date thereof until payment in
full thereof at a rate per annum which shall be, for any day, equal to
the sum of the Applicable Margin plus the Base Rate in effect on such
day, but in no event to exceed the Highest Lawful Rate. The term
"Base Rate" means the higher of (i) the Prime Rate in effect on such
day or (ii) one-half of one percent ( 1/2%) plus the Federal Funds
Rate in effect for such day (rounded upwards, if necessary, to the
nearest 1/16th of 1%), but in no event to exceed the Highest Lawful
Rate. For purposes of this Agreement, any change in the Base Rate due
to a change in the Federal Funds Rate or the Prime Rate shall be
effective on the effective date of such change in the Federal Funds
Rate or the Prime Rate, as the case may be. If for any reason the
Administrative Agent shall have determined (which determination shall
be conclusive and binding, absent manifest error) that it is unable to
ascertain the Federal Funds Rate for any reason, including but not
limited to the inability of the Administrative Agent to obtain
sufficient bids or publications in accordance with the terms hereof,
the Base Rate shall be the Prime Rate until the circumstances giving
rise to such inability no longer exist.
(b) Eurodollar Loans. Subject to Section 2.06(c), the
Company agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Loan from the date thereof until payment in
full thereof at a rate per annum which shall be the sum of the
Applicable Margin plus the relevant Eurodollar Rate, but in no event
to exceed the Highest Lawful Rate.
(c) Default Interest. Overdue principal and, to the
extent permitted by law, overdue interest in respect of each Loan and
all other amounts owing hereunder shall bear interest for each day
that such amounts are overdue at a rate per annum equal to two percent
(2%) in excess of the Eurodollar Rate plus the Applicable Margin or
the Base Rate, as applicable to such Loan, in effect for each such
day, and all other amounts owing hereunder shall bear interest for
each
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day that such amounts are overdue at a rate per annum equal to two
percent (2%) in excess of the Base Rate, but in no event shall any
such rate exceed the Highest Lawful Rate.
(d) Interest Payment Dates. Interest on each Loan shall
accrue from and including the date of such Loan to but excluding the
date of payment in full thereof. Interest on each Eurodollar Loan
shall be payable on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three
months, on each day which occurs every three months after the initial
date of such Interest Period, and on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise) and,
after maturity, on demand. Interest on Base Rate Loans shall be
payable on each Quarterly Date, commencing on the first of such days
to occur after such Loan is made, at maturity (whether by acceleration
or otherwise) and, after maturity, on demand.
(e) Notice by the Administrative Agent. The
Administrative Agent, upon determining the Eurodollar Rate for any
Interest Period, shall promptly notify by telephone (confirmed in
writing) or in writing the Company and the Lenders thereof.
Section 2.07 Interest Periods. In connection with each Borrowing
of Eurodollar Loans, the Company shall elect an Interest Period to be
applicable to such Borrowing, which Interest Period shall begin on and include,
as the case may be, the date selected by the Company as of the date of the
Borrowing pursuant to Section 2.02(a), or at conversion from one Type of Loan
to another pursuant to Section 2.11(e), or the date of expiration of the then
current Interest Period applicable thereto, and end on but exclude the date
which is either one, two, three, six or 12 months thereafter, as selected by
the Company; provided that:
(a) Business Days. If any Interest Period would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day, provided,
further, that if any Interest Period (other than in respect of a
Borrowing of Eurodollar Loans the Interest Period of which is expiring
pursuant to Section 2.15(b) hereof) would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(b) Month End. Any Interest Period which begins on the
last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to Section 2.07(c) below, end on
the last Business Day of a calendar month;
(c) Payment Limitations. No Interest Period shall extend
beyond any date that any principal payment or prepayment is scheduled
to be due unless the aggregate principal amount of Borrowings which
are Borrowings of Base Rate Loans or which have Interest Periods which
will expire on or before such date, less the aggregate amount of any
other principal payments or prepayments due during such Interest
Period, is equal to or in excess of the amount of such principal
payment or prepayment; and
(d) Maturity Dates. No Interest Period with regard to
Loans shall extend beyond the Maturity Date.
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Section 2.08 Repayment of Loans. The Company will pay to the
Administrative Agent for account of each Lender the outstanding principal
amount of each Loan made by such Lender on or before the Maturity Date.
Section 2.09 Termination or Reduction of Commitments. The Company
may, upon at least 10 Business Days' notice to the Administrative Agent,
terminate entirely at any time the unused portions of the Commitments, or
proportionately reduce from time to time by an aggregate amount of $1,000,000
or any larger multiple thereof, the unused portions of the Commitments,
provided that any such reduction shall apply proportionately to the Commitment
of each Lender. If the Commitments are terminated in their entirety, all
accrued commitment fees with respect thereto shall be payable on the effective
date of such termination. The unused portions of the Commitments once
terminated or reduced may not be reinstated.
Section 2.10 Prepayments.
(a) Mandatory Borrowing Base Prepayments. If, after
giving effect to any reduction of the Maximum Loan Available Amount as
a result of a redetermination or reduction of the Borrowing Base as
provided in Section 2.20, the Aggregate Credit Exposure exceeds the
amount of such redetermined Borrowing Base, the Company shall:
(A) within 90 days of the Company's receipt of
written notice from the Administrative Agent, either (i)
provide additional collateral pursuant to Section 2.24 as
security for the Lender Indebtedness, or (ii) pay or prepay
the Loans or provide Cover for LC Liabilities, or a
combination thereof, in an amount equal to at least 50% of
such excess; and
(B) within 180 days of the Company's receipt of
the written notice referred to in Clause (A) of this Section
2.10(a), either (i) provide additional collateral pursuant to
Section 2.24 as security for the Lender Indebtedness, or (ii)
pay or prepay the Loans or provide cover for LC Liabilities,
or a combination thereof, in an amount equal to the remainder
of such excess.
All prepayments pursuant to this Section 2.10(a) shall be applied
first to Base Rate Loans and second to such Eurodollar Loans as the
Company may designate.
(b) Voluntary Prepayments. The Company may, at its
option, at any time and from time to time, prepay Loans, in whole or
in part, without premium or penalty (other than funding losses, if
any, resulting from such prepayment being made other than on the last
day of an Interest Period with respect to any Eurodollar Loan as
provided in Section 2.18), upon giving, in the case of a Eurodollar
Loan, three Business Days' prior written notice to the Administrative
Agent, and, in the case of a Base Rate Loan, one Business Day's prior
written notice to the Administrative Agent. Such notice shall be
irrevocable and specify the date and amount of prepayment and the Loan
or Loans (including the Type thereof) to which such prepayment is to
be applicable. The payment amount specified in such notice shall be
due and payable on the date specified. Each prepayment of Loans shall
be in the minimum principal amount of $1,000,000 or any larger
multiple thereof or the aggregate balance outstanding on the
applicable Notes. Each prepayment made pursuant to this Section shall
be accompanied by any funding losses resulting
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from such prepayment being made other than on the last day of an
Interest Period with respect to any Eurodollar Loan as provided in
Section 2.18. Each prepayment shall be applied ratably to prepay the
Loans of the several Lenders.
(c) Notice by Administrative Agent. Upon receipt of a
notice of prepayment pursuant to this Section, the Administrative
Agent shall promptly notify each Lender of the contents thereof and of
such Lender's ratable share of such prepayment.
Section 2.11 Continuation and Conversion Options.
(a) Continuation. The Company may elect to continue all
or any part of any Borrowing of Eurodollar Loans beyond the expiration
of the then current Interest Period relating thereto by giving Advance
Notice to the Administrative Agent of such election, specifying the
Eurodollar Loan or portion thereof to be continued and the Interest
Period therefor. In the absence of such a timely and proper election
with regard to Eurodollar Loans, the Company shall be deemed to have
elected to convert such Eurodollar Loan to a Base Rate Loan pursuant
to Section 2.11(d).
(b) Amounts of Continuations. All or part of any
Eurodollar Loan may be continued as provided herein, provided that any
continuation of such Loan shall not be (as to each Loan as continued
for an applicable Interest Period) less than $3,000,000.
(c) Continuation or Conversion Upon Default. If no
Default shall have occurred and be continuing, each Eurodollar Loan
may be continued or converted as provided in this Section. If a
Default shall have occurred and be continuing, the Company shall not
have the option to elect to continue any such Eurodollar Loan pursuant
to Section 2.11(a) or to convert Base Rate Loans pursuant to Section
2.11(e).
(d) Conversion to Base Rate. The Company may elect to
convert any Eurodollar Loan on the last day of the then current
Interest Period relating thereto to a Base Rate Loan by giving Advance
Notice to the Administrative Agent of such election.
(e) Conversion to Eurodollar Rate. The Company may elect
to convert any Base Rate Loan at any time or from time to time to a
Eurodollar Loan by giving Advance Notice to the Administrative Agent
of such election, specifying each Interest Period therefor.
(f) Amounts of Conversions. All or any part of the
outstanding Loans may be converted as provided herein, provided that
any conversion of such Loans shall not result in a Borrowing of
Eurodollar Loans in an amount less than $3,000,000 and in integral
multiples of $1,000,000.
Section 2.12 Fees.
(a) Commitments. The Company shall pay Administrative
Agent for the account of and distribution to each Lender in accordance
with its Percentage Share the following commitment fees:
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(i) A commitment fee, which commitment fee shall
accrue for the period commencing on the Closing Date to and
including the Maturity Date (or such earlier date as the
Commitments shall have been terminated entirely). The
commitment fee payable pursuant to this Section 2.12(a) shall
be the product of the applicable Commitment Fee Rate from the
table below and the average daily excess amount of the
Designated Borrowing Base over the Aggregate Credit Exposure.
Such commitment fees shall be payable in arrears on the
Quarterly Dates, commencing on the first Quarterly Date to
occur after the Closing Date. The rates set forth in the
table below are based upon the Company's Maximum Available
Amount Utilization Percentage as of any day, where the term
"Maximum Available Amount Utilization Percentage" means as of
any day, the fraction, expressed as a percentage, the
numerator of which is the Aggregate Credit Exposure on such
day, and the denominator of which is the Borrowing Base in
effect on such day:
Maximum Available Amount Commitment Fee
Utilization Percentage Rate
------------------------ ---------------
Greater than 66% 0.375%
Less than or equal to
66% but greater than 33% 0.325%
Less than or equal to
33% but greater than 0% 0.300%
(ii) An unavailable commitment fee on the daily
average difference between the Designated Borrowing Base and
the lesser of (A) the Commitments or (B) the Borrowing Base
for the period from and including the last Borrowing Base
determination date to the earlier of the date the Commitments
are terminated or the date of the next Borrowing Base
determination at a rate per annum equal to 50% of the
applicable rate per annum outlined in clause (i) above.
(iii) If the Designated Borrowing Base is increased
pursuant to the proviso of Section 2.20(e), an additional
commitment fee for the period beginning on the most recent
regularly scheduled Borrowing Base determination date
(pursuant to Section 2.20) to the date on which the Designated
Borrowing Base is so increased at the applicable rate per
annum set forth in clause (i) above; provided, however, in
cases under this clause (iii), the Company shall receive
credit for applicable amounts already paid pursuant to clause
(ii) above.
(b) Letters of Credit. As consideration for the issuance
of any Letter of Credit, the Company will pay to the Issuing Bank a
fee on the daily average amount available for drawings under each
Letter of Credit, in each case for the period from and including the
date of issuance of such Letter of Credit to and excluding the date of
expiration or termination thereof. The letter of credit fee payable
pursuant to this Section 2.12(b) shall be the product of the
applicable Letter of Credit Fee Rate from the table below and the
average daily amount available for drawings under each Letter of
Credit, provided that each Letter of Credit shall bear a minimum fee
of
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$400. Such letter of credit fees shall be payable in arrears on each
Quarterly Date. The rates set forth in the table below are based upon
the Company's Maximum Available Amount Utilization Percentage as of
any day, where the term "Maximum Available Amount Utilization
Percentage" means as of any day, the fraction, expressed as a
percentage, the numerator of which is the Aggregate Credit Exposure on
such day, and the denominator of which is the Borrowing Base in effect
on such day:
Maximum Available Amount Letter of Credit Fee
Utilization Percentage Rate
------------------------ ---------------------
Greater than 66% 1.50%
Less than or equal to
66% but greater than 33% 1.25%
Less than or equal to
33% but greater than 0% 1.00%
In addition to the fees set forth above for the benefit of the
Lenders, the Company shall pay to the Issuing Bank for its own account
(i) a fronting fee in an amount equal to 1/8 of 1% per annum of the
face amount of the Letters of Credit outstanding as consideration for
capital costs incurred for retaining the full amount of each Letter of
Credit issued hereunder on its books, and (ii) with respect to any
amendment or transfer of any Letter of Credit and for each drawing
made thereunder, documentary and processing charges in accordance with
the Issuing Bank's standard schedule for such charges as disclosed to
the Company in a letter of even date herewith, as the case may be.
Such fees shall be due and payable in arrears on each Quarterly Date.
(c) Incremental Borrowing Base Increase. The Company
shall pay Administrative Agent for the account of and distribution to
each Lender in accordance with its Percentage Share a redetermination
fee in an amount equal to 0.100% of each incremental increase in the
Borrowing Base (resulting from a redetermination of the Borrowing Base
pursuant to Section 2.20); provided, however, such redetermination fee
shall be payable only on that portion of such redetermined Borrowing
Base which exceeds the highest previous Borrowing Base of $165,000,000
or more.
Section 2.13 Payments, etc.
(a) Without Setoff, etc. Except as otherwise
specifically provided herein, all payments under this Agreement shall
be made to the Administrative Agent on behalf of the Lenders without
defense, set-off or counterclaim to the Administrative Agent not later
than 12:00 noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office. The
Administrative Agent will promptly thereafter distribute funds in the
form received relating to the payment of principal or interest or
commitment fees ratably to the Lenders for the account of their
respective Lending Offices, and funds in the form received relating to
the payment of any other amount payable to any Lender to such Lender
for the account of its Lending Office.
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(b) Non-Business Days. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day (except as otherwise provided in Section
2.07) and, with respect to payments of principal, interest thereon
shall be payable at the applicable rate during such extension.
(c) Computations. All computations of interest shall be
made on the basis of a year of 360 days (unless such calculation would
result in a usurious rate, in which case interest shall be calculated
on the basis of a year of 365 or 366 days, as the case may be) in the
case of Base Rate Loans when determined by Section 2.06(a)(ii) and in
the case of Eurodollar Loans, and 365 or 366 days (as the case may be)
in the case of Base Rate Loans when determined by Section 2.06(a)(i),
and all computations of fees shall be made on the basis of a year of
360 days (unless such calculation would result in a usurious rate, in
which case interest shall be calculated on the basis of a year of 365
or 366 days, as the case may be), 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 or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee
hereunder shall, except for manifest error, be final, conclusive and
binding for all purposes, provided that such determination shall be
made in good faith in a manner generally consistent with the
Administrative Agent's standard practice. If the Administrative Agent
and the Company determine that manifest error exists, such parties
shall correct such error by way of an adjustment to the payment due on
the next Quarterly Date.
Section 2.14 Interest Rate Not Ascertainable, etc. In the event
that the Administrative Agent shall have determined (which determination shall
be reasonably exercised and shall, absent manifest error, be final, conclusive
and binding upon all parties) that on any date for determining the Eurodollar
Rate for any Interest Period, by reason of any changes arising after the date
of this Agreement affecting the interbank Eurodollar market, or any Lender's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate, then, and in any such event, the Administrative Agent shall
forthwith give notice (by telephone confirmed in writing) to the Company and to
the Lenders of such determination. Until the Administrative Agent notifies the
Company that the circumstances giving rise to the suspension described herein
no longer exist, the obligations of the Lenders to make Eurodollar Loans shall
be immediately suspended; any Eurodollar Loan that is requested (by
continuation, conversion or otherwise) shall instead be made as a Base Rate
Loan, and any outstanding Eurodollar Loan shall be converted, on the last day
of the then current Interest Period applicable thereto, to a Base Rate Loan.
Section 2.15 Illegality.
(a) Determinations of Illegality. In the event that any
Lender shall have determined (which determination shall be reasonably
exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) at any time that the making or continuance
of any Eurodollar Loan has become unlawful by compliance by such
Lender in good faith with any applicable law, governmental rule,
regulation, guideline or order (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful),
then, in any such event, the Lender shall give prompt notice (by
telephone confirmed in writing) to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly
transmit to the Company and the other Lenders).
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(b) Eurodollar Loans Suspended. Upon the giving of the
notice to the Company referred to in Section (a) above, (i) the
Company's right to request (by continuation, conversion or otherwise)
and such Lender's obligation to make Eurodollar Loans shall be
immediately suspended, and any such requested Eurodollar Loan shall
instead be made as a Base Rate Loan, and (ii) if the affected
Eurodollar Loan or Loans are then outstanding, the Company shall
immediately, or if permitted by applicable law, no later than the date
permitted thereby, upon at least one Business Day's written notice to
the Administrative Agent and the affected Lender, convert each such
Eurodollar Loan into a Base Rate Loan, provided that if more than one
Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section.
Section 2.16 Increased Costs.
(a) Eurodollar Regulations, etc. If, by reason of (x)
after the date hereof, the introduction of or any change (including,
but not limited to, any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request made
after the date hereof by any central bank or other governmental
authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the
force of law):
(i) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with respect
to its Eurodollar Loans or its obligation to make Eurodollar
Loans, or shall change the basis of taxation of payments to
any Lender of the principal of or interest on its Eurodollar
Loans or its obligation to make Eurodollar Loans (except for
changes in the rate of tax on the overall net income or gross
receipts of such Lender or its applicable Lending Office
imposed by the jurisdiction in which such Lender's principal
executive office or applicable Lending Office is located); or
(ii) any reserve (including, but not limited to,
any imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended
by, any Lender's applicable Lending Office shall be imposed or
deemed applicable or any other condition affecting its
Eurodollar Loans or its obligations to make Eurodollar Loans
shall be imposed on any Lender or its applicable Lending
Office or the interbank Eurodollar market or the secondary
certificate of deposit market;
and as a result thereof there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining
Eurodollar Loans (except to the extent already included in the
determination of the applicable Eurodollar Rate) or there shall be a
reduction in the amount received or receivable by such Lender or its
applicable Lending Office, then the Company shall from time to time,
upon written notice from and demand by such Lender (with a copy of
such notice and demand to the Administrative Agent), pay to such
Lender, within 30 days after the date specified in such notice and
demand, additional amounts determined by such Lender in a reasonable
manner to be sufficient to indemnify such Lender against such
increased cost. A certificate as to the amount of such increased cost
and the calculation thereof, submitted to the Company and the
Administrative Agent by such Lender, shall, except for manifest error,
be final,
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conclusive and binding for all purposes, provided that the
determination of such amount shall be made in good faith in a manner
generally consistent with such Lender's standard practice.
(b) Costs. If any Lender shall advise the Administrative
Agent that at any time, because of the circumstances described in
clauses (x) or (y) in Section 2.16(a) or any other circumstances
arising after the Effective Date affecting such Lender or the
interbank Eurodollar market or such Lender's position in such market,
the Eurodollar Rate, as determined in good faith by the Administrative
Agent, will not adequately and fairly reflect the cost to such Lender
of funding its Eurodollar Loans, then, and in any such event:
(i) the Administrative Agent shall forthwith give
notice (by telephone confirmed in writing) to the Company and
to the Lenders of such advice; and
(ii) the Company's right to request and such
Lender's obligation to make Eurodollar Loans shall be
immediately suspended, any such Eurodollar Loan that is
requested (by continuation, conversion or otherwise) shall
instead be made as a Base Rate Loan, and any such outstanding
Eurodollar Loan shall be converted, on the last day of the
then current Interest Period applicable thereto, to a Base
Rate Loan.
(c) Capital Adequacy. If, by reason of (i) after the
date hereof, the introduction of or any change (including, but not
limited to, any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation, or
(ii) the compliance with any guideline or request made after the date
hereof by any central bank or other governmental authority or
quasi-governmental authority exercising control over banks or
financial institutions generally (whether or not having the force of
law) affects or would affect the amount of capital required to be
maintained by any Lender or any corporation controlling such Lender,
and the amount of such capital is increased by or based upon the
existence of such Lender's Commitment to lend hereunder and other
commitments of this type or of the Letters of Credit (or similar
contingent obligations), then, within 30 days after written request
therefor by such Lender (with a copy of such request to the
Administrative Agent), the Company shall pay to such Lender, from time
to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for the increased cost of such additional
capital in light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the
existence of such Lender's Commitment to lend hereunder or to the
issuance or maintenance of the Letters of Credit. A certificate as to
such amounts and the calculation thereof, submitted to the Company and
the Administrative Agent by such Lender, shall be conclusive and
binding for all purposes, absent manifest error, provided that the
determination of such amount shall be made in good faith in a manner
generally consistent with such Lender's standard practice.
(d) Issuing Bank. The rights and benefits of the Lenders
under this Section 2.16 shall also apply to the Issuing Bank in its
capacity as such.
(e) Notice. The Company shall not be obligated to
compensate any Lender pursuant to this Section 2.16 for any amounts
attributable to a period more than 90 days prior to the giving of
notice by such Lender to the Company of its intention to seek
compensation under this Section 2.16.
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Section 2.17 Change of Lending Office. Each Lender agrees that it
will use reasonable efforts to designate an alternate Lending Office with
respect to any of its Eurodollar Loans affected by the matters or circumstances
described in Sections 2.14, 2.15 or 2.16 to reduce the liability of the Company
or avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion.
Section 2.18 Funding Losses. The Company shall compensate each
Lender, upon its written request (which request shall set forth the basis for
requesting such amounts and which request shall be reasonably exercised and
shall, absent manifest error, be final, conclusive and binding upon all of the
parties hereto), for all losses, expenses and liabilities (including, but not
limited to, any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Loans to the extent not recovered by the Lender
in connection with the re-employment of such funds and including loss of
anticipated profits), which the Lender may sustain (i) if for any reason (other
than a default by such Lender) a Borrowing of Eurodollar Loans does not occur
on the date specified therefor in a Borrowing Request (whether or not
withdrawn), (ii) if any repayment (or conversion pursuant to Section 2.15 or
otherwise) of any of its Eurodollar Loans occurs on a date which is not the
last day of an Interest Period applicable thereto, or (iii) if, for any reason,
the Company defaults in its obligation to repay its Eurodollar Loans when
required by the terms of this Agreement.
Section 2.19 Sharing of Payments, etc. If any Lender shall obtain
any payment or reduction (including, but not limited to, any amounts received
as adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code) of any obligation of the Company hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share of payments or reductions on account of such
obligations obtained by all the Lenders, such Lender shall forthwith (i) notify
each of the other Lenders and the Administrative Agent of such receipt, and
(ii) purchase from the other Lenders such participations in the affected
obligations as shall be necessary to cause such purchasing Lender to share the
excess payment or reduction, net of costs incurred in connection therewith,
ratably with each of them, provided that if all or any portion of such excess
payment or reduction is thereafter recovered from such purchasing Lender or
additional costs are incurred, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery or such additional costs, but
without interest. The Company agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section may, to the fullest
extent permitted by law, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Company in the amount of such participation.
Section 2.20 Borrowing Base.
(a) Redetermination Date; Initial Borrowing Base. The
Borrowing Base shall be determined in accordance with Section 2.20(b)
by the Determining Lenders and is subject to redetermination in
accordance with Section 2.20(d). Upon any redetermination of the
Borrowing Base, such redetermination shall remain in effect until the
next successive Redetermination Date. "Redetermination Date" means
the date that the redetermined Borrowing Base becomes effective
subject to the notice requirements specified in Section 2.20(f) both
for scheduled redeterminations and unscheduled redeterminations. The
amount of the initial Borrowing Base during the period from and after
the Closing Date until the first scheduled redetermination of the
Borrowing Base, shall be $165,000,000.
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(b) Redetermination. Upon receipt of the Reserve Report
by the Determining Lenders, the Determining Lenders will redetermine
the Borrowing Base. Such redetermination by the Determining Lenders
will be in accordance with its normal and customary procedures for
evaluating oil and gas reserves and other related assets as such exist
at that particular time and will otherwise be in their sole
discretion. The Determining Lenders shall propose such redetermined
Borrowing Base to the Lenders within 30 days following receipt by the
Determining Lenders and the Lenders of the complete Reserve Report.
After having received notice of such proposal by the Determining
Lenders, the Required Lenders shall have 15 days to agree or disagree
with such proposal. If at the end of the 15 days, the Required
Lenders have not communicated their approval or disapproval, such
silence shall be deemed to be an approval and the Determining Lenders'
proposal shall be the new Borrowing Base. If however, the Required
Lenders notify Determining Lenders within 15 days of their
disapproval, the Required Lenders shall, within a reasonable period of
time, agree on a new Borrowing Base. In taking the above actions,
each Determining Lender shall act in accordance with its normal and
customary procedures for evaluating oil and gas reserves and other
related assets as such exist at that particular time and will
otherwise act in their sole discretion.
(c) Exclusion of Certain Property. Without limiting the
provisions of this Section 2.20 with respect to scheduled and
unscheduled Borrowing Base redeterminations, if at any time, any
Determining Lender receives information not previously available to
any of the Determining Lenders which could reasonably cause a
deterioration in the PV10 value (as stated in the most recent Reserve
Report furnished to the Lenders pursuant to Section 5.02(e)) of the BB
Properties (or any part thereof) in an amount equal to or greater than
$10,000,000, or such Property is not assignable, then the Determining
Lenders may exclude any such Property or portion of production
therefrom or any income from such Property from the Borrowing Base
(thereby reducing the Borrowing Base).
(d) Time of Redetermination, etc. So long as any of the
Commitments are in effect and so long as there remains any Credit
Exposure as to any Lender, on or around the first Business Day of each
April, commencing April 1, 1997 (each being a "Scheduled
Redetermination Date"), the Determining Lenders shall redetermine the
amount of the Borrowing Base in accordance with Section 2.20(b). The
Company may from time to time request additional redeterminations of
the Borrowing Base from the Determining Lenders, whereupon the
Determining Lenders shall redetermine the Borrowing Base in accordance
with Section 2.20(b); provided, however, in no event shall the
Determining Lenders be obligated to grant more than two (2) such
requests in any fiscal year of the Company. In the event of any such
unscheduled redetermination, the Determining Lenders shall redetermine
the amount of the Borrowing Base in accordance with Section 2.20(b).
At the reasonable request of the Required Lenders, the Determining
Lenders shall redetermine the Borrowing Base; provided, however, only
one (1) such request may be made in any fiscal year of the Company
(exclusive of any reduction in the Borrowing Base pursuant to Section
2.20(c)). In the event of any such unscheduled redetermination, the
Determining Lenders shall redetermine the amount of the Borrowing Base
in accordance with Section 2.20.
(e) Designated Borrowing Base. Upon the Company's
receipt of written notice (each a "Borrowing Base Notice") from the
Administrative Agent of the amount of the Borrowing Base then in
effect, the Company may accept all or a lesser amount of such
Borrowing Base (the
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"Designated Borrowing Base") by providing written notice to the
Administrative Agent (which notice the Administrative Agent shall
promptly transmit to the Determining Lenders) of the amount of the
Designated Borrowing Base within 5 Business Days following receipt of
a Borrowing Base Notice from the Administrative Agent; provided,
however, the Designated Borrowing Base shall not be less than the
lower of (i) the amount of the Borrowing Base then in effect, or (ii)
$75,000,000, and shall not be greater than the lower of (i) the
Borrowing Base then in effect, or (ii) the aggregate amount of the
Commitments. If the Company does not provide written notice to the
Administrative Agent within 5 Business Days following receipt of a
Borrowing Base Notice, the Designated Borrowing Base shall be equal to
the Borrowing Base as set forth in such Borrowing Base Notice;
provided, however, that during each Borrowing Base period and after
the expiration of such 5 Business Day period, the Company may adjust
the Designated Borrowing Base (subject to the limitations set forth in
the first sentence of this Section 2.20(e)) by providing the
Administrative Agent with written notice (which notice the
Administrative Agent shall promptly transmit to the Determining
Lenders) at least 5 Business Days in advance of the effective date of
a different Designated Borrowing Base. During the period from and
after the Closing Date to and including the effective date of the next
designation of the Designated Borrowing Base in accordance with this
Section 2.20, the amount of the Designated Borrowing Base shall be
$165,000,000.
(f) Notice by Administrative Agent. The Administrative
Agent shall promptly notify in writing the Company of the new
Borrowing Base. Any redetermination of the Borrowing Base shall not
be in effect until written notice is received by the Company.
Section 2.21 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Company under this Agreement or any other Financing Document shall be
made, in accordance with Section 2.13, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender, the Administrative
Agent and the Issuing Bank, taxes imposed on or measured by its income
or receipts, and franchise or similar taxes imposed on it, by (i) any
jurisdiction (or political subdivision thereof) of which the
Administrative Agent, the Issuing Bank or such Lender, as the case may
be, is a citizen or resident or in which such Lender has a permanent
establishment (or is otherwise engaged in the active conduct of its
banking business through an office or a branch) which is such Lender's
applicable Lending Office, (ii) the jurisdiction (or any political
subdivision thereof) in which the Administrative Agent, the Issuing
Bank or such Lender is organized, or (iii) any jurisdiction (or
political subdivision thereof) in which such Lender, the Issuing Bank
or the Administrative Agent is presently doing business which taxes
are imposed solely as a result of doing business in such jurisdiction
(all such non- excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities so arising out of payments by the Company
being hereinafter referred to as "Taxes"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Lenders, the Issuing Bank or the
Administrative Agent (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.21) such Lender, the Issuing Bank or the Administrative
Agent (as the case may be) shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company
shall make such deductions, and (iii) the Company shall
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pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(b) Other Taxes. In addition, the Company agrees to pay
any present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement, any Assignment and
Acceptance or any other Financing Document (hereinafter referred to as
"Other Taxes").
(C) INDEMNIFICATION. THE COMPANY WILL INDEMNIFY EACH
LENDER, THE ISSUING BANK AND THE ADMINISTRATIVE AGENT FOR THE FULL
AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, BUT NOT LIMITED TO, ANY
TAXES OR OTHER TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE
UNDER THIS SECTION 2.21) PAID BY SUCH LENDER OR THE ISSUING BANK OR
THE ADMINISTRATIVE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY LENDER),
AS THE CASE MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST
AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR
NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED. ANY
PAYMENT PURSUANT TO SUCH INDEMNIFICATION SHALL BE MADE WITHIN 30 DAYS
AFTER THE DATE ANY LENDER, THE ISSUING BANK OR THE ADMINISTRATIVE
AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND THEREFOR. IF ANY
LENDER, THE ISSUING BANK OR THE ADMINISTRATIVE AGENT RECEIVES A REFUND
OR CREDIT IN RESPECT OF ANY TAXES OR OTHER TAXES FOR WHICH SUCH
LENDER, THE ISSUING BANK OR THE ADMINISTRATIVE AGENT HAS RECEIVED
PAYMENT FROM THE COMPANY HEREUNDER IT SHALL PROMPTLY NOTIFY THE
COMPANY OF SUCH REFUND OR CREDIT AND SHALL, WITHIN 30 DAYS AFTER
RECEIPT OF A REQUEST BY THE COMPANY (OR PROMPTLY UPON RECEIPT, IF THE
COMPANY HAS REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT
HERETO), PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE COMPANY
WITHOUT INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR CREDITED),
PROVIDED THAT THE COMPANY, UPON THE REQUEST OF SUCH LENDER, THE
ISSUING BANK OR THE ADMINISTRATIVE AGENT, AGREES TO RETURN SUCH REFUND
OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER,
THE ISSUING BANK OR THE ADMINISTRATIVE AGENT IN THE EVENT SUCH LENDER,
THE ISSUING BANK OR THE ADMINISTRATIVE AGENT IS REQUIRED TO REPAY SUCH
REFUND OR CREDIT.
(d) Receipts. Within 30 days after the date of any
payment of Taxes or Other Taxes withheld by the Company in respect of
any payment to any Lender, the Issuing Bank or the Administrative
Agent, the Company will furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof.
(e) Survival. Without prejudice to the survival of any
other agreement contained herein, the agreements and obligations
contained in this Section 2.21 shall survive the payment in full of
principal and interest hereunder.
(f) Lender Representations. Each Lender represents that
it is either (i) a corporation organized under the laws of the United
States of America or any state thereof or (ii) entitled to complete
exemption from United States withholding tax imposed on or with
respect to any payments, including fees, to be made to it pursuant to
this Agreement (A) under an applicable
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provision of a tax convention to which the United States of America is
a party or (B) because it is acting through a branch, agency or office
in the United States of America and any payment to be received by it
hereunder is effectively connected with a trade or business in the
United States of America. Each Lender that is not a corporation
organized under the laws of the United States of America or any state
thereof agrees to provide to the Company and the Administrative Agent
on the Effective Date, or on the date of its delivery of the
Assignment and Acceptance pursuant to which it becomes a Lender, and
at such other times as required by United States law or as the Company
or the Administrative Agent shall reasonably request, two accurate and
complete original signed copies of either (A) Internal Revenue Service
Form 4224 (or successor form) certifying that all payments to be made
to it hereunder will be effectively connected to a United States trade
or business (the "Form 4224 Certification") or (B) Internal Revenue
Service Form 1001 (or successor form) certifying that it is entitled
to the benefit of a provision of a tax convention to which the United
States of America is a party which completely exempts from United
States withholding tax all payments to be made to it hereunder (the
"Form 1001 Certification"). In addition, each Lender agrees that if
it previously filed a Form 4224 Certification it will deliver to the
Company and the Administrative Agent a new Form 4224 Certification
prior to the first payment date occurring in each of its subsequent
taxable years; and if it previously filed a Form 1001 Certification,
it will deliver to the Company and the Administrative Agent a new
certification prior to the first payment date falling in the third
year following the previous filing of such certification. Each Lender
also agrees to deliver to the Company and the Administrative Agent
such other or supplemental forms as may at any time be required as a
result of changes in applicable law or regulation in order to confirm
or maintain in effect its entitlement to exemption from United States
withholding tax on any payments hereunder, provided that the
circumstances of the Lender at the relevant time and applicable laws
permit it to do so. If a Lender determines, as a result of any change
in either (i) applicable law, regulation or treaty, or in any official
application thereof or (ii) its circumstances, that it is unable to
submit any form or certificate that it is obligated to submit pursuant
to this Section, or that it is required to withdraw or cancel any such
form or certificate previously submitted, it shall promptly notify the
Company and the Administrative Agent of such fact. If a Lender is
organized under the laws of a jurisdiction outside the United States
of America, unless the Company and the Administrative Agent have
received a Form 1001 Certification or Form 4224 Certification
satisfactory to them indicating that all payments to be made to such
Lender hereunder are not subject to United States withholding tax, the
Company shall withhold taxes from such payments at the applicable
statutory rate, provided that such withholding shall not increase the
amount of payments for the account of such Lender to be made by the
Company pursuant to Section 2.21(a). Each Lender agrees to indemnify
and hold harmless from any United States taxes, penalties, interest
and other expenses, costs and losses incurred or payable by (i) the
Administrative Agent as a result of such Lender's failure to submit
any form or certificate that it is required to provide pursuant to
this Section or (ii) the Company or the Administrative Agent as a
result of their reliance on any such form or certificate which it has
provided to them pursuant to this Section.
(g) Efforts to Avoid or Reduce. Any Lender claiming any
additional amounts payable pursuant to this Section 2.21 shall use
reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document requested by the Company or the
Administrative Agent or to change the jurisdiction of its applicable
Lending Office or to contest any tax imposed if the making of such a
filing or change or contesting such tax would avoid the
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need for or reduce the amount of any such additional amounts that may
thereafter accrue and would not, in the sole determination of such
Lender, be otherwise disadvantageous to such Lender.
Section 2.22 Pro Rata Treatment. Except as required under Section
2.15, 2.16 or 2.18, each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of interest on the Loans, each payment of the fees,
each reduction of the Commitments, and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated ratably and pro rata among the Lenders in
accordance with their respective Percentage Shares. Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's portion of
such Borrowing to the next higher or lower whole dollar amount.
Section 2.23 Disposition of Proceeds. The Mortgage contains (and
other Security Instruments may contain) an assignment by the Company to the
Administrative Agent of all production and all proceeds attributable thereto
which may be produced from or allocated to the Oil and Gas Properties described
therein and further provides in general for the application of such proceeds to
the satisfaction of the indebtedness, liabilities and obligations described
therein and secured thereby. Notwithstanding such assignments, the
Administrative Agent, the Issuing Bank and the Lenders hereby grant to the
Company a license to receive, collect and use the proceeds attributable to such
production and agree not to notify the purchaser or purchasers of such
production and not to take any other action to cause such proceeds to be
remitted to the Administrative Agent, the Issuing Bank or the Lenders, in each
case unless and until an Event of Default has occurred and is continuing;
provided that so long as no Event of Default has occurred and is continuing,
the Administrative Agent shall execute and deliver a letter in the form of
Exhibit F to such Persons as the Company may direct; provided, further, if the
Administrative Agent, the Issuing Bank or any Lender shall receive any such
proceeds directly from any such purchaser prior to the occurrence and
continuation of an Event of Default, then such Person so receiving such
proceeds shall notify the Company thereof and upon request of the Company and
pursuant to its written instructions shall promptly remit such proceeds to the
Company.
Section 2.24 Additional Collateral. If at any time the Aggregate
Credit Exposure exceeds the Borrowing Base then in effect, and the Company does
not make the mandatory principal prepayment pursuant to Section 2.10(a), the
Company shall, as provided in Section 2.10(a), grant to the Administrative
Agent, as security for the Lender Indebtedness, a first-priority Lien on such
additional Properties of the Company or its Subsidiaries as is acceptable to
the Administrative Agent and the Lenders and having a fair market value equal
to or greater than the amount of such excess. Such Liens will be created and
perfected by and in accordance with the provisions of security agreements,
deeds of trust, mortgages, financing statements or other Security Instruments,
all in form and substance satisfactory to the Administrative Agent and in
sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes.
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ARTICLE III
CONDITIONS TO BORROWINGS AND TO
PURCHASE, RENEWAL AND REARRANGEMENT
The obligation of each Lender to make a Loan or the Issuing Bank to
issue a Letter of Credit hereunder is subject to the satisfaction of the
following conditions:
Section 3.01 Closing. Unless the Effective Date occurs on the
Closing Date, The Company shall have delivered to the Administrative Agent
(unless waived by the Administrative Agent) at least two (2) Business Days'
advance written notice of the proposed Effective Date, which shall be a
Business Day after the Closing Date, for the delivery of all instruments,
certificates and opinions referred to in Section 3.02 not theretofore
delivered.
Section 3.02 Conditions Precedent to Initial Loan. At the time of
the making by such Lender of its initial Loan hereunder or the issuance by the
Issuing Bank of the initial Letter of Credit (including, but not limited to,
the assumption by the Lenders of the Outstanding Letters of Credit), all
obligations of the Company hereunder to the Administrative Agent or any Lender
incurred prior to such initial Loan or Letter of Credit (including, but not
limited to, the Company's obligation to reimburse the reasonable fees and
disbursements of counsel to the Administrative Agent), shall have been paid in
full, and the Administrative Agent shall have received the following, each
dated as of the Closing Date, in form and substance satisfactory to the
Administrative Agent, with an original thereof for the Administrative Agent and
with sufficient copies thereof for each Lender (except that in the case of the
Notes, the originals thereof will be delivered to the respective Lenders):
(a) Notes. A duly completed and executed Note for each
Lender and in each case payable to the order of the
Administrative Agent for the benefit of such Lender.
(b) Resolutions and Incumbency Certificates.
(i) Certified copies of the resolutions of the
Board of Directors (or equivalent body) of the Company and its
Subsidiaries that are parties to any Financing Document
approving, as appropriate, the Loans, the Notes, this
Agreement and the other Financing Documents, and all other
documents, if any, to which the Company or such Subsidiary is
a party evidencing partnership or corporate authorization, as
the case may be, with respect to such documents;
(ii) a certificate of the Secretary or an
Assistant Secretary or other appropriate officer of the
Company certifying (A) the name, title and true signature of
each officer of such Person authorized to execute the Notes,
this Agreement, Applications and the other Financing Documents
to which it is a party, (B) the name, title and true signature
of each officer of such Person authorized to provide the
certifications required pursuant to this Agreement including,
but not limited to, certifications required pursuant to
Section 5.02, and Borrowing Requests, and (C) that attached
thereto is a true and complete copy of the Partnership
Agreement, as amended to date, and a recent certificate of
valid existence; and
(iii) a certificate of the Secretary or an
Assistant Secretary of each Guarantor and each Subsidiary that
is a party to any Financing Document certifying (x) the name,
title and true signature of each officer of each Guarantor and
each Subsidiary authorized to execute each such Financing
Document to which it is a party, and (y) that attached thereto
is a true and complete copy of the articles of incorporation
and bylaws of such
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Guarantor and such Subsidiary, as amended to date, and recent
certificates of good standing and valid existence.
(c) Opinion of Counsel. An opinion of counsel from
Xxxxxxxx & Xxxxxx, P.C., counsel to the Company and each Guarantor,
addressed to the Administrative Agent, the Issuing Bank and each of
the Lenders and covering such matters the Administrative Agent may
reasonably request.
(d) The Security Instruments.
(i) The Mortgage;
(ii) Financing Statements, as appropriate, to
perfect the security interests created by the Mortgage; and
(iii) The Guaranty Agreements.
(e) Insurance. A certificate of insurance coverage of
the Company evidencing that the Company is carrying insurance in
accordance with Section 5.01(e).
(f) Evidence of Title. The Administrative Agent shall
have completed a due diligence review of evidence of title
satisfactory to the Administrative Agent setting forth the status of
title to Oil and Gas Properties with a value (as determined by the
Administrative Agent) at least equal to 80% of the total value of the
Oil and Gas Properties that will constitute BB Properties.
(g) Environmental Report. The environmental site
assessment report prepared by Highlander Environmental Corporation for
the Company and such other reviews or further assessments that may be
determined to be required by the Administrative Agent, in its sole
discretion, to assess existence of any environmental items which could
reasonably be expected to have a Material Adverse Affect.
(h) Mobil Transaction.
(i) A fully executed copy of the Mobil Purchase
and Sale Agreement; and
(ii) Evidence reasonably satisfactory to the
Administrative Agent that the Company will purchase from Mobil
the assets referred to in the Mobil Purchase and Sale
Agreement concurrently with the funding of the Loan requested
by the Company for that purpose.
(i) Miscellaneous. Such other documents or conditions
precedent which the Administrative Agent may reasonably have requested
or require in its sole discretion.
Section 3.03 Conditions Precedent to Each Loan. At the time of
the making by such Lender of each Loan, including the initial Loan but not
including continuations or conversions pursuant to
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Section 2.11 (before as well as after giving effect to such Loan and to the
proposed use of the proceeds thereof):
(a) Notes. The Company shall have issued, executed and
delivered the Notes;
(b) No Default. There shall exist no Default or Event of
Default;
(c) Representations and Warranties. Except for facts
timely disclosed to the Administrative Agent from time to time in
writing, not materially more adverse to the Company and its
Subsidiaries than those existing on the Effective Date, all
representations and warranties contained herein and in the other
Financing Documents executed and delivered on or after the date hereof
shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on
and as of the date of such Loan; and
(d) Documentation. The Administrative Agent shall have
received such other documents as the Administrative Agent or any
Lender or special counsel to the Administrative Agent may reasonably
request, all in form and substance satisfactory to the Administrative
Agent.
Each Borrowing Request submitted by the Company, and the acceptance by
the Company of the proceeds of such Borrowing (but not including continuations
or conversions pursuant to Section 2.11), shall constitute a representation and
warranty by the Company, as of the date of the Loans comprising such Borrowing,
that the conditions specified in Sections 3.03(b) and (c) have been satisfied.
Section 3.04 Recordings. Within 10 days after the Closing Date,
the Security Instruments and accompanying financing statements covering the
Mortgaged Property requiring filing or recording, or other notices related
thereto if necessary or appropriate, shall have been duly sent for delivery by
the Administrative Agent or its counsel to the appropriate offices for filing
or recording.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement, the
Company represents and warrants to the Lenders (which representations and
warranties will survive the delivery of the Notes) that:
Section 4.01 Existence. (a) The Company is a limited partnership
duly formed and legally existing under the laws of the State of Texas and is
duly qualified in all jurisdictions wherein the Property owned or the business
transacted by it makes such qualification necessary, except where the failure
to be so qualified would not have a Material Adverse Effect.
(b) Each Subsidiary is a corporation duly organized, legally
existing and in good standing under the laws of the jurisdictions in which they
are incorporated and are duly qualified as foreign corporations in all
jurisdictions wherein the Property owned or the business transacted by them
makes such qualifications necessary, except where the failure to be so
qualified would not have a Material Adverse Effect.
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Section 4.02 Power and Authorization. The Company is authorized
and empowered to create and issue the Notes; the Company and each of its
Subsidiaries are duly authorized and empowered to execute, deliver and perform
the Financing Documents, including this Agreement, to which they respectively
are parties; and all partnership or corporate action, as the case may be, on
the Company's part requisite for the due creation and issuance of the Notes and
on the Company's and each of its Subsidiaries' respective part requisite for
the due execution, delivery and performance of the Financing Documents,
including this Agreement, to which the Company and each of its Subsidiaries
respectively are parties has been duly and effectively taken.
Section 4.03 Binding Obligations. This Agreement does, and the
Notes and other Financing Documents to which the Company and each of its
Subsidiaries respectively are parties upon their creation, issuance, execution
and delivery will, when issued and delivered under this Agreement, constitute
valid and binding obligations of the Company and each such Subsidiary that is a
party thereto, respectively, and will be enforceable in accordance with their
respective terms (except that enforcement may be subject to any applicable
bankruptcy, insolvency or similar laws generally affecting the enforcement of
creditors' rights and subject to the general principles of equity).
Section 4.04 No Legal Bar or Resultant Lien. The Notes and the
other Financing Documents, including this Agreement, to which the Company or
any of its Subsidiaries is a party do not and will not violate or create a
default under any provisions of the Partnership Agreement of the Company or the
articles or certificate of incorporation or bylaws or partnership agreements,
as applicable, of the Subsidiaries, or any material contract, agreement,
instrument or Governmental Requirement to which the Company or any of its
Subsidiaries is subject, or result in the creation or imposition of any Lien
upon any Properties of the Company or any of its Subsidiaries, other than those
violations and defaults that would not affect the Company's or such
Subsidiaries' use of such Properties or those permitted by this Agreement.
Section 4.05 No Consent. Except as set forth on Schedule 4.05 or
such filings as are required to perfect a Lien securing the Lender
Indebtedness, the Company's and each of its Subsidiaries' respective execution,
delivery and performance of the Notes and the other Financing Documents,
including this Agreement, to which the Company and each such Subsidiary
respectively are parties do not require notice to or filing or registration
with, or the authorization, consent or approval of or other action by any other
Person, including, but not limited to, any Governmental Authority.
Section 4.06 Financial Information.
(a) Financial Statements. The audited consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of
December 31, 1995, and the related audited consolidated statements of
income, retained earnings and cash flows for the fiscal year ended on
such date, and the unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of June 30, 1996, and the related
unaudited consolidated statements of income, retained earnings and
cash flows for the six-month period then ended, true copies of which
have been previously delivered to each of the Lenders, fairly present
the consolidated financial condition of the Company and its
Consolidated Subsidiaries as at the date thereof and the consolidated
results of operations for such period, in accordance with GAAP applied
on a consistent basis.
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(b) No Material Adverse Effect. Since December 31, 1995,
there has been no event or occurrence that could reasonably be
expected to have a Material Adverse Effect.
Section 4.07 Investments and Guaranties. At the date of this
Agreement, neither the Company nor any of its Subsidiaries has made investments
in or advances to any Person or guaranties of the obligations of any Person
that is not a Subsidiary of the Company, except those permitted by Section
5.03(e), and those reflected in the Financial Statements or described in
Schedule 4.07.
Section 4.08 Litigation. Except as set forth in Schedule 4.08,
there is no action, suit or proceeding, or any governmental investigation or
any arbitration, in each case pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any material
Property of any thereof before any court or arbitrator or any Governmental
Authority which (i) challenges the validity of this Agreement, any Note, any
Application, the Guaranty Agreement, or any of the other Financing Documents or
(ii) would reasonably be expected to have a Material Adverse Effect.
Section 4.09 Federal Reserve Regulations. Neither the Company nor
any of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock (within
the meaning of Regulation U or X) and no part of the proceeds of any Loan
hereunder will be used to buy or carry any Margin Stock. Neither the Company
nor any Person acting on behalf of the Company has taken any action which would
cause the Notes or any of the Financing Documents, including this Agreement, to
violate Regulation U or X or any other regulation of the Board of Governors of
the Federal Reserve System or to violate Section 7 of the Securities and
Exchange Act of 1934, as amended, (or any successor thereto) or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.
Section 4.10 Compliance with ERISA. Neither the Company, any of
its Subsidiaries nor any ERISA Affiliate sponsors, maintains or contributes to,
or has at any time in the six-year period preceding the date of this Agreement
sponsored, maintained or contributed to, any Plan, including, but not limited
to, any Plan which is a "multi-employer plan" as such term is defined in
Section 3(37) or 4001(a)(3) of ERISA. Except as set forth in Schedule 4.10,
each Plan described in such schedule has been terminated with no resulting
liability to the PBGC. No act, omission or transaction has occurred which
could result in imposition on the Company, any of its Subsidiaries or any ERISA
Affiliate (whether directly or directly) of (i) either a civil penalty assessed
pursuant to Sections 502(c) or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 of the Code, or (ii) breach of fiduciary duty liability damages
under Section 409 of ERISA, which in each case would have a Material Adverse
Effect.
Section 4.11 Taxes; Governmental Charges. The Company and its
Subsidiaries have filed all tax returns and reports required to be filed and
have paid all material taxes, assessments, fees and other governmental charges
levied upon any of them or upon any of their respective Properties or income
which are due and payable, including interest and penalties, or have provided
adequate reserves for the payment thereof if required in accordance with GAAP
for the payment thereof, except such interest and penalties as are being
contested in good faith by appropriate actions or proceedings and for which
adequate reserves for the payment thereof as required by GAAP have been
provided.
Section 4.12 Title and Liens. The most recently delivered Reserve
Report reflects, without material error, the aggregate net revenue interest of
the Company and its Subsidiaries in each property
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reported on therein and the aggregate share of the operating expenses
applicable to each such property for which the Company and its Subsidiaries are
liable. The Company and its Subsidiaries have indefeasible title to such
properties, in accordance with customary standards in the oil and gas business
in the relevant area of operations, subject only to defects and irregularities
which do not materially and adversely affect the value of such properties or
the ability of the Company to possess and sell the production therefrom. Such
properties are not subject to any Liens other than those permitted under this
Agreement or the other Financing Documents.
Section 4.13 Defaults. Neither the Company nor any of its
Subsidiaries is in default nor has any event or circumstance occurred which,
but for the passage of time or the giving of notice, or both, would constitute
a default under any loan or credit agreement, indenture, mortgage, deed of
trust, security agreement or other instrument or agreement evidencing or
pertaining to any Indebtedness of the Company or any of its Subsidiaries, or
under any material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound, except as disclosed to the Lenders in Schedule 4.13 or except for those
defaults which would not reasonably be expected to have a material adverse
effect. No Default hereunder has occurred and is continuing.
Section 4.14 Casualties; Taking of Properties. Since the date of
the Financial Statements, neither the business nor the Properties of the
Company or any of its Subsidiaries have been affected in a manner that has had
or would reasonably be expected to have a Material Adverse Effect as a result
of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike
or other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or acts of
God or of any public enemy.
Section 4.15 Compliance with the Law. Neither the Company nor any
of its Subsidiaries:
(a) is in violation of any Governmental Requirement; or
(b) has failed to obtain any license, permit, franchise
or other governmental authorization necessary to the ownership of any
of their respective Properties or the conduct of their respective
business;
which violation or failure would reasonably be expected to have a Material
Adverse Effect.
Section 4.16 No Material Misstatements. No information, exhibit
or report furnished to the Administrative Agent or the Lenders by or at the
direction of the Company or any of its Subsidiaries in connection with the
negotiation of this Agreement, when such statement is considered with all other
written statements furnished to the Lenders in that connection, contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statement contained therein not misleading.
Section 4.17 Investment Company Act. The Company is not an
"investment company" or a company "controlled" by an "investment company" that
is incorporated in or organized under the laws of the United States or any
"State," as those terms are defined in the Investment Company Act of 1940, as
amended. The execution and delivery by the Company and its Subsidiaries of
this Agreement and the other Financing Documents to which they respectively are
parties and their respective performance of the
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obligations provided for therein, will not result in a violation of the
Investment Company Act of 1940, as amended.
Section 4.18 Public Utility Holding Company Act. The Company is
not a "holding company," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," or a "public-utility company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
Section 4.19 Subsidiaries. The Company has no Subsidiaries except
those shown in Exhibit B hereto, which exhibit is complete and accurate. The
Company owns 100% of all stock of the Subsidiaries listed in such Exhibit.
Section 4.20 Insurance. Schedule 4.20 attached hereto contains an
accurate and complete description of all material policies of fire, liability,
workmen's compensation, casualty, flood and other forms of insurance owned or
held by the Company and each of its Subsidiaries as of the Closing Date. All
such policies are in full force and effect, all premiums with respect thereto
have been paid in accordance with their respective terms, and no notice of
cancellation or termination has been received with respect to any such policy.
Such policies are sufficient for compliance with all requirements of law and of
all agreements to which the Company or any of its Subsidiaries is a party; are
valid, outstanding and enforceable policies; provide adequate insurance
coverage in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the
same general area by companies engaged in the same or a similar business for
the assets and operations of the Company and each of its Subsidiaries; and will
not in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement. Schedule 4.20 identifies all
material risks, if any, which the Company and its Subsidiaries and their
respective Board of Directors or officers have designated as being self
insured. Neither the Company nor any of its Subsidiaries has been unable to
obtain any insurance with respect to its assets or operations, nor has its
coverage been limited below usual and customary policy limits during the last
three years.
Section 4.21 Mortgaged Property. The discounted present value of
the Mortgaged Property constitutes at least 80% of the aggregate discounted
present value (as reasonably determined by the Administrative Agent) of all Oil
and Gas Properties described in and covered by the engineering or other written
reports which have previously been delivered to and relied upon by the Lenders
in connection with this Agreement. The Company shall have the right to
designate which Oil and Gas Properties shall constitute Mortgaged Properties,
subject to the requirements in the preceding sentence.
Section 4.22 Gas Imbalances. Except as disclosed to the
Administrative Agent in Schedule 4.22, or as otherwise disclosed to the
Administrative Agent from time to time in order to be taken into account in
determining the Borrowing Base, there are no gas imbalances, take or pay or
other prepayments owed by the Company in excess of $5,000,000 in the aggregate
with respect to any of the Mortgaged Property (or in the case of any of the
Mortgaged Property operated by a Person other than the Company or its
Subsidiaries, to the best of the Company's knowledge) which would require the
Company or its Subsidiaries to deliver Hydrocarbons produced from any of the
Mortgaged Property at some future time without then or thereafter receiving
full payment therefor.
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Section 4.23 Environmental Matters.
(a) Environmental Laws, etc. Neither any Property of the
Company or its Subsidiaries nor the operations conducted thereon
violate any applicable order of any court or Governmental Authority or
Environmental Laws, which violation would reasonably be expected to
have a Material Adverse Effect or which would reasonably be expected
to result in remedial obligations having a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all
relevant facts, conditions and circumstances, if any, pertaining to
the relevant Property.
(b) No Litigation. Without limitation of Section 4.23(a)
above, no Property of the Company or its Subsidiaries nor the
operations currently conducted thereon or by any prior owner or
operator of such Property or operation, are in violation of or subject
to any existing, pending or threatened action, suit, investigation,
inquiry or proceeding by or before any court or Governmental Authority
or to any remedial obligations under Environmental Laws, which
violation, action, suit, investigation, inquiry or proceeding would
reasonably be expected to have a Material Adverse Effect or which
would reasonably be expected to result in remedial obligations having
a Material Adverse Effect assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.
(c) Notices, Permits, etc. All notices, permits,
licenses or similar authorizations, if any, required to be obtained or
filed by the Company or its Subsidiaries in connection with the
operation or use of any and all Property of the Company or its
Subsidiaries, including but not limited to past or present treatment,
storage, disposal or release of a hazardous substance or solid waste
into the environment, have been duly obtained or filed except to the
extent the failure to obtain or file such notices, permits, licenses
or similar authorizations would not reasonably be expected to have a
Material Adverse Effect or which would not reasonably be expected to
result in remedial obligations having a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all
relevant facts, conditions and circumstances, if any, pertaining to
the relevant Property.
(d) Hazardous Substances Carriers. All hazardous
substances or solid waste generated at any and all Property of the
Company or its Subsidiaries have in the past been transported, treated
and disposed of only by carriers maintaining valid permits under RCRA
and any other Environmental Law, except to the extent the failure to
have such substances or waste transported, treated or disposed by such
carriers would not reasonably be expected to have a Material Adverse
Effect, and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law,
which carriers and facilities have been and are operating in
compliance with such permits, except to the extent the failure to have
such substances or waste treated, stored or disposed at such
facilities, or the failure of such carriers or facilities to so
operate, would not reasonably be expected to have a Material Adverse
Effect or which would reasonably be expected to result in remedial
obligations having a Material Adverse Effect assuming disclosure to
the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to the relevant
Property.
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(e) Hazardous Substances Disposal. The Company and its
Subsidiaries have taken all reasonable steps necessary to determine
and have determined that no hazardous substances or solid waste have
been disposed of or otherwise released and there has been no
threatened release of any hazardous substances on or to any Property
of the Company or its Subsidiaries except in compliance with
Environmental Laws, except to the extent the failure to do so would
not reasonably be expected to have a Material Adverse Effect or which
would not reasonably be expected to result in remedial obligations
having a Material Adverse Effect assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.
(f) OPA Requirements. Except to the extent the failure
to so comply would not have a Material Adverse Effect, to the extent
applicable, the Company and its Subsidiaries have complied with all
design, operation and equipment requirements imposed by OPA or
scheduled to be imposed by OPA during the term of this Agreement, and
the Company does not have reason to believe that either it or its
Subsidiaries will not be able to maintain such compliance with OPA
requirements during the term of this Agreement.
(g) No Contingent Liability. The Company and its
Subsidiaries have no material contingent liability in connection with
any release or threatened release of any hazardous substance or solid
waste into the environment which at any one time and from time to time
would reasonably be expected to exceed by more than $5,000,000
applicable insurance coverage, indemnities, or the reserves for the
payment thereof which have been established as required by GAAP, or
which would reasonably be expected to result in remedial obligations
having a Material Adverse Effect assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such release or threatened
release.
ARTICLE V
COVENANTS
Section 5.01 Certain Affirmative Covenants. So long as any Lender
has any Commitment hereunder or any Loan remains unpaid or any Credit Exposure
remains outstanding, the Company will at all times comply with the following
covenants:
(a) Maintenance and Compliance, etc. The Company will
and will cause each of its Subsidiaries to (i) except as permitted by
Section 5.03(c), preserve and maintain its partnership or corporate,
as the case may be, existence, rights and franchises, and (ii) observe
and comply in all material respects with all Governmental
Requirements, except where failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(b) Payment of Taxes and Claims, etc. The Company will
pay, and cause each of its Subsidiaries to pay, (i) all taxes,
assessments and governmental charges imposed upon it or upon its
Property, and (ii) all claims (including, but not limited to, claims
for labor, materials, supplies or services) which might, if unpaid,
become a Lien upon its Property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate action
or
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proceedings and the Company has established adequate reserves in
accordance with GAAP with respect thereto.
(c) Further Assurances. The Company will and will cause
each of its Subsidiaries to cure promptly any defects in the creation
and issuance of the Notes, and the execution and delivery of the
Financing Documents, including this Agreement. The Company at its
expense will, as promptly as practical, execute and deliver to the
Administrative Agent or the Issuing Bank upon request all such other
and further documents, agreements and instruments (or cause any of its
Subsidiaries to take such action) in compliance with or performance of
the covenants and agreements of the Company or any of its Subsidiaries
in the Financing Documents, including this Agreement, or to further
evidence and more fully describe the collateral, if any, intended as
security for the Notes or other Lender Indebtedness, or to correct any
omissions in the Financing Documents, or more fully to state the
security obligations, if any, set out herein or in any of the
Financing Documents, or to perfect, protect or preserve any Liens
created pursuant to any of the Financing Documents, or to make any
recordings, to file any notices, or obtain any consents, all as may be
necessary or appropriate in connection therewith.
(d) Performance of Obligations. The Company will pay the
Notes according to the reading, tenor and effect thereof; and the
Company will do and perform every act and discharge all of the
obligations provided to be performed and discharged by the Company
under the Financing Documents, including this Agreement, at the time
or times and in the manner specified, and cause each of its
Subsidiaries to take such action with respect to their obligations to
be performed and discharged under the Financing Documents to which
they respectively are parties.
(e) Insurance. The Company and its Subsidiaries will
maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to their respective
Properties and business against such liabilities, casualties, risks
and contingencies and in such types and amounts (including
deductibles, co-insurance and self-insurance) as is customary in the
case of Persons engaged in the same or similar businesses and
similarly situated. Upon request of the Administrative Agent, the
Company will furnish or cause to be furnished to the Administrative
Agent from time to time a summary of the insurance coverage of the
Company and its Subsidiaries in form and substance reasonably
satisfactory to the Administrative Agent and if requested will furnish
the Administrative Agent copies of the applicable policies. In the
case of any fire, accident or other casualty causing loss or damage to
any Properties of the Company, the proceeds of such policies shall be
used, in the Company's sole discretion, (i) to reasonably promptly
repair or replace the damaged Property, or (ii) to prepay the Lender
Indebtedness. The Company will obtain endorsements to the policies
pertaining to all physical Properties in which the Administrative
Agent or the Lenders shall have a Lien under the Financing Documents,
naming the Administrative Agent as a loss payee and containing
provisions that such policies will not be cancelled without 30 days
prior written notice endeavoring to have been given by the insurance
company to the Administrative Agent.
(f) Accounts and Records. The Company will keep and will
cause each of its Subsidiaries to keep proper books of record and
account in which full, true and correct entries will be made of all
financial or business dealings or transactions in relation to their
respective business and activities.
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(g) Right of Inspection. The Company will permit and
will cause each of its Subsidiaries to permit any officer, employee or
agent of the Administrative Agent or any of the Lenders to visit and
inspect any of the Properties of the Company or any of its
Subsidiaries, examine the Company's or any such Subsidiary's books of
record and accounts, take copies and extracts therefrom, and discuss
the affairs, finances and accounts of the Company or any of its
Subsidiaries with the Company's or such Subsidiary's officers,
accountants and auditors, as often and all at such reasonable times
during normal business hours as may be reasonably requested by the
Administrative Agent or any of the Lenders.
(h) Operation and Maintenance of Property and Compliance
with Leases. Subject to Section 5.01(i), the Company will, and will
cause each of its Subsidiaries to, operate its material Properties or
cause its material Properties to be operated in accordance with
prudent industry practice and in compliance with all material terms
and provisions of all applicable leases, contracts and agreements and
in compliance with all applicable proration and conservation laws of
the jurisdiction in which such Properties may be situated, and all
applicable laws, rules and regulations of every other agency and
authority from time to time constituted to regulate the development
and operation of such Properties, and as to any Oil and Gas
Properties, the production and sale of Hydrocarbons and other minerals
therefrom.
(i) Certain Additional Assurances Regarding Maintenance
and Operation of Properties. With respect to those Properties of the
Company or a Subsidiary of the Company which are being operated by
operators other than the Company or such Subsidiary, the Company or
such Subsidiary shall not be obligated, itself, to perform any
undertakings contemplated by the covenants and agreements contained in
Sections 5.01(b), 5.01(e), and 5.01(h) which are performable only by
such operators and are beyond the control of the Company or such
Subsidiary; however, the Company agrees to promptly take and to cause
such Subsidiary to promptly take all reasonable actions available
under any operating agreements or otherwise to bring about the
performance of any such undertakings required to be performed under
such Sections.
(j) Designation of Subsidiaries as Additional Guarantors.
If at any time the Majority Lenders, in their sole discretion, or the
Company, with the approval of the Administrative Agent, designate any
one or more Subsidiaries of the Company to be additional Guarantors,
the Company shall cause any such newly designated Guarantor to
execute, within 30 days of such designation, a guaranty agreement in
substantially the same form as the Guaranty Agreement executed by the
Guarantors in connection with this Agreement.
(k) Payment of Charters and Tariffs. The Company will
pay, and will cause each of its Subsidiaries to pay before or when due
the amount owed for the time charter of any tanker or barge used to
transport feedstocks, blendstocks or refined products, unless in each
case, the validity or amount thereof is being contested in good faith
by appropriate action or proceedings and the Company has established
appropriate reserves in accordance with GAAP.
(l) Environmental Covenant. The Company shall, and shall
cause each of its Subsidiaries to, operate its Property in such a
manner that its Property and all operations conducted thereon will at
all times be in compliance with all Environmental Laws except to the
extent the failure to comply therewith would not reasonably be
expected to have a Material
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Adverse Effect. The Company shall promptly notify the Administrative
Agent in writing of any existing, pending or threatened action,
investigation or inquiry by any Governmental Authority concerning the
Company or any Subsidiary in connection with its Property under any
Environmental Laws which would reasonably be expected to have a
Material Adverse Effect.
Section 5.02 Reporting Covenants. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Credit Exposure remains
outstanding, the Company will furnish to each Lender:
(a) Annual Financial Statements. As soon as available
and in any event within 90 days after the end of each calendar year of
the Company, an audited consolidated balance sheet of the Company and
its Consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of income, retained earnings
and cash flows of the Company and its Consolidated Subsidiaries for
such calendar year, setting forth in each case in comparative form the
figures for the previous calendar year, all in reasonable detail and
accompanied by a report thereon of independent public accountants of
recognized national standing acceptable to the Administrative Agent,
which such report shall state that such consolidated financial
statements present fairly the consolidated financial condition as at
the end of such calendar year, and the consolidated results of
operations and cash flows for such calendar year, of the Company and
its Consolidated Subsidiaries in accordance with GAAP, applied on a
consistent basis. At the same time, an unaudited consolidating
balance sheet of the Company and its Consolidated Subsidiaries as at
the end of such year and related unaudited consolidating statements of
income for such calendar year, accompanied by a certification thereon
of a Responsible Officer, stating that such consolidating financial
statements form the basis of the Company's consolidated financial
statements and are fairly stated in all material respects when
considered in relation thereto.
(b) Quarterly Financial Statements. As soon as available
and in any event within 45 days after the end of each calendar quarter
of the Company, an unaudited consolidated balance sheet of the Company
and its Consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income, retained
earnings and cash flows of the Company and its Consolidated
Subsidiaries for such calendar quarter and for the portion of the
Company's calendar year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Company's
previous calendar year, all in reasonable detail and certified by a
Responsible Officer that such financial statements fairly present the
consolidated financial condition as at the end of such calendar
quarter, and the consolidated results of operations and cash flows for
such calendar quarter and such portion of the Company's calendar year,
of the Company and its Consolidated Subsidiaries in accordance with
GAAP (subject to normal, year-end adjustments). At the same time, an
unaudited consolidating balance sheet of the Company and its
Consolidated Subsidiaries at the end of such calendar quarter and
related unaudited consolidating statements of income, for the portion
of the Company's calendar year ended at such quarter accompanied by a
certification from a Responsible Officer that such consolidating
financial statements form the basis of the Company's consolidated
financial statements and are fairly stated in all material respects
when considered in relation thereto.
(c) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a) and (b)
above, a certificate of a Responsible Officer (i)
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stating that a review of such financial statements during the period
covered thereby and of the activities of the Company and its
Subsidiaries has been made under such Responsible Officer's
supervision with a view to determining whether the Company and its
Subsidiaries have fulfilled all of their obligations under this
Agreement, the other Financing Documents, and the Notes; (ii) stating
that the Company and its Subsidiaries have fulfilled their obligations
under such instruments and that all representations made in this
Agreement continue to be true and correct (or specifying the nature of
any change) in all material respects, or if there shall be a Default
or Event of Default, specifying the nature and status thereof and the
Company's proposed response thereto; and (iii) containing or
accompanied by such financial or other details, information and
material as the Administrative Agent may reasonably request to
evidence such compliance.
(d) Auditors' No Default Certificate; Management Letters.
Together with the financial statements required pursuant to subsection
(a) above and subject to any standards and restrictions imposed by the
Financial Accounting Standards Board or other similar authority, a
certificate of the independent public accountants who audited such
financial statements to the effect that their audit has not disclosed
the existence of an Event of Default or a Default under this
Agreement, or if there exists an Event of Default or a Default
hereunder, specifying the nature thereof; and copies of each
management letter issued to the Company by such accountants promptly
following consideration or review by the Board of Directors of the
Company, or any committee thereof (together with any response thereto
prepared by the Company).
(e) Engineering Reports.
(i) As soon as practicable after December 31st of
each year, commencing December 31, 1996, but in no event later
than March 1st of each year, a report (the "Reserve Report")
in form and substance satisfactory to the Majority Lenders
prepared by Xxxxxxxxxx Petroleum Consultants, or Xxxxxxx &
Associates, or Netherland & Xxxxxx or other independent
petroleum consultant(s) reasonably acceptable to the Majority
Lenders (the previous acceptability to the Majority Lenders of
an independent petroleum consultant not specified above shall
have no bearing on such consultant's present or future
acceptability), which Reserve Report shall evaluate the
Hydrocarbon reserves included in the Mortgaged Property as of
each such date and which shall, together with any other
information reasonably requested by any Lender, through the
Administrative Agent, set forth the total Proved Hydrocarbon
Reserves by accepted and customary reserve category
attributable to such Mortgaged Property, together with a
projection of the rate of production and future net income
with respect thereto as of each such date.
(ii) Promptly following the Company's receipt of a
written request from the Administrative Agent, a report in
form and substance satisfactory to the Majority Lenders
prepared by the Company evaluating the Hydrocarbon reserves
included in the Mortgaged Property as of such date and which
shall, together with any other information reasonably
requested by any Lender (through the Administrative Agent),
set forth the total Proved Hydrocarbon Reserves by accepted
and customary reserve category attributable to such Mortgaged
Property, together with a projection of the rate of production
and future net income with respect thereto as of each such
date.
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(f) Notice of Certain Events. Promptly after the Company
learns of the receipt or occurrence of any of the following, a
certificate of a Responsible Officer specifying (i) any official
notice of any violation, possible violation, non-compliance or
possible non-compliance, or claim made by any Governmental Authority
pertaining to all or any part of the Properties of the Company or any
of its Subsidiaries which would reasonably be expected to have a
Material Adverse Effect; (ii) any event which constitutes a Default or
Event of Default, together with a detailed statement specifying the
nature thereof and the steps being taken to cure such Default or Event
of Default; (iii) the receipt of any notice from, or the taking of any
other action by, the holder of any promissory note, debenture or other
evidence of indebtedness in excess of $1,000,000 of the Company or any
of its Subsidiaries with respect to a claimed default, together with a
detailed statement specifying the notice given or other action taken
by such holder and the nature of the claimed default and what action
the Company or its Subsidiary is taking or proposes to take with
respect thereto; (iv) any notice of termination or other proceedings
or actions which could reasonably be expected to adversely affect any
of the Financing Documents; (v) the creation, dissolution, merger or
acquisition of any Subsidiary of the Company with material operations;
(vi) any event or condition which violates any Environmental Law and
which would reasonably be expected to have a Material Adverse Effect
or which would reasonably be expected to result in remedial
obligations having a Material Adverse Effect, assuming disclosure to
the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to such event or
condition; or (vii) any event or condition which would reasonably be
expected to have a Material Adverse Effect.
(g) Communications. Promptly upon the mailing thereof,
copies of all financial statements, reports, notices proxy and other
statements mailed to all of Parent's shareholders or the SEC.
(h) Litigation. Promptly after (i) the occurrence
thereof, notice of the institution of or any material adverse
development in any action, suit or proceeding or any governmental
investigation or any arbitration, before any court or arbitrator or
any governmental or administrative body, agency or official, against
the Company, any Guarantor or any material Property of any thereof; or
(ii) actual knowledge thereof, notice of the threat of any such
action, suit, proceeding, investigation or arbitration, in either case
in which the amount involved is material and is not covered by
insurance or which, if adversely determined, would have a Material
Adverse Effect.
(i) ERISA. Promptly after (i) the Company's obtaining
knowledge of the occurrence thereof, notice that an ERISA Termination
Event or a "prohibited transaction," as such term is defined in
Section 406 of ERISA or Section 4975 of the Code, with respect to any
Plan has occurred, which such notice shall specify the nature thereof,
the Company's proposed response thereto and, where known, any action
taken or proposed by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto, and (ii) the Company's
obtaining knowledge thereof, copies of any notice of the PBGC's
intention to terminate or to have a trustee appointed to administer
any Plan.
(j) Other Information. With reasonable promptness, such
other information about the business and affairs and financial
condition of the Company or its Subsidiaries as the
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Administrative Agent or any Lender. acting through the Administrative
Agent, may reasonably request from time to time.
(k) Amendments to Partnership Agreement. If, subject to
the provisions of Section 5.03(r), the Partnership Agreement is
amended or restated, promptly furnish a certified true and complete
copy of the amended or restated Partnership Agreement.
Section 5.03 Certain Negative Covenants. So long as any Lender
has any Commitment hereunder or any Loan remains unpaid or any Credit Exposure
remains outstanding, neither the Company nor any Subsidiary will:
(a) Indebtedness. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Indebtedness, other than:
(i) the Lender Indebtedness;
(ii) Indebtedness outstanding on the date hereof
which is set out in the Company's financial statements
referred to in Section 4.06(a) or on Schedule 5.03(a) and any
renewal, extension, refinancing or refunding of such
Indebtedness; provided that (A) the principal amount of such
Indebtedness that renews, extends, refinances or refunds any
such Indebtedness shall not exceed the principal amount of
such renewed, extended, refunded or refinanced Indebtedness,
and (B) the Indebtedness that renews, extends, refinances or
refunds such Indebtedness is scheduled to mature no earlier
than the Indebtedness being renewed, extended, refunded or
refinanced;
(iii) in addition to that described in the other
clauses in this Section 5.03(a), unsecured Indebtedness or
Indebtedness secured by Property purchased or leased with the
proceeds of such Indebtedness (so long as such Property is not
part of the BB Properties), in an aggregate outstanding
principal amount not to exceed $5,000,000 at any time;
(iv) Indebtedness existing in connection with
Hedge Agreements, provided that any Hydrocarbon Swap
Agreements in the aggregate shall not exceed 75% of the
anticipated production from Proved Developed Hydrocarbon
Reserves during the term of the hedge transaction, and any
Interest Rate Swap Agreements in the aggregate shall not
exceed the anticipated outstanding principal balance of the
Indebtedness to be hedged by such agreements; and
(v) unsecured intercompany Indebtedness provided
by any Guarantor to the Company which is subordinated, upon
terms satisfactory to the Majority Lenders, to the payment of
the principal of and interest on the Lender Indebtedness.
(b) Liens. Create, incur, assume or suffer to exist any
Lien on any of its Property now owned or hereafter acquired to secure
any Indebtedness of any Person, other than:
(i) Liens existing on the date hereof and set out
on Schedule 5.03(b);
(ii) Liens securing the Lender Indebtedness;
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(iii) Liens for taxes, assessments or other
governmental charges or levies not yet past due or which are
being contested in good faith by appropriate action or
proceedings and with respect to which adequate reserves are
being maintained;
(iv) Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen, workmen, and
other similar Liens imposed by law or created in the ordinary
course of business for amounts which are not past due for more
than 90 days or which are being contested in good faith by
appropriate proceedings and with respect to which adequate
reserves in accordance with GAAP are being maintained;
(v) Liens (other than any inchoate Lien imposed
by ERISA) incurred or deposits or pledges made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, old
age or other similar obligations, or to secure the performance
of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(vi) easements, rights-of-way, restrictions,
servitudes, permits, reservations, exceptions, conditions,
covenants and other similar charges or encumbrances not
interfering with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(vii) any Lien securing Indebtedness, neither
assumed nor guaranteed by the Company or any of its
Subsidiaries nor on which it customarily pays interest,
existing upon real estate or rights in or relating to real
estate acquired by the Company for substation, metering
station, pump station, storage, gathering line, transmission
line, transportation line, distribution line or for
right-of-way purposes, and any Liens reserved in leases for
rent and for compliance with the terms of the leases in the
case of leasehold estates, to the extent that any such Lien
referred to in this clause (vii) does not materially impair
the use of the Property covered by such Lien for the purposes
of which such Property is held by the Company or any of its
Subsidiaries;
(viii) Liens reserved in oil, gas and/or mineral
leases for bonus or rental payments and for compliance with
the terms of such leases and Liens reserved in operating
agreements, farm-out and farm-in agreements, exploration
agreements, development agreements and other similar
agreements for compliance with the terms of such agreements;
(ix) defects, irregularities and deficiencies in
title of any rights of way or other Property of the Company or
any Subsidiary which in the aggregate do not materially impair
the use of such rights of way or other Property for the
purposes for which such rights of way and other Property are
held by the Company or any Subsidiary, and defects,
irregularities and deficiencies in title to any Property of
the Company or its Subsidiaries, which defects, irregularities
or deficiencies have been cured by possession under applicable
statutes of limitation;
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(x) royalties, overriding royalties, revenue
interests, net revenue interests, production payments (other
than production payments granted or created by the Company in
connection with the borrowing of money), advance payment
obligations (other than obligations in respect of advance
payment received by the Company in connection with the
borrowing of money) and other similar burdens now existing on
Oil and Gas Properties now owned or, as to Properties
hereafter acquired, at the time of acquisition by the Company
or any of its Subsidiaries;
(xi) Liens arising out of all presently existing
and future division and transfer orders, advance payment
agreements, processing contracts, gas processing plant
agreements, operating agreements, gas balancing or deferred
production agreements, pooling, unitization or communitization
agreements, pipeline, gathering or transportation agreements,
platform agreements, drilling contracts, injection or
repressuring agreements, cycling agreements, construction
agreements, salt water or other disposal agreements, leases or
rental agreements (but only as otherwise permitted by this
Agreement), farm-out and farm-in agreements, exploration and
development agreements, and any and all other contracts or
agreements covering, arising out of, used or useful in
connection with or pertaining to the exploration, development,
operation, production, sale, use, purchase, exchange, storage,
separation, dehydration, treatment, compression, gathering,
transportation, processing, improvement, marketing, disposal
or handling of any Property of the Company or its
Subsidiaries, provided such agreements are entered into in the
ordinary course of business and contain terms customary for
such agreements in the industry;
(xii) Liens on Properties of the Company or its
Subsidiaries (on which a Lien securing the Lender Indebtedness
does not exist) securing Indebtedness described in Sections
5.03(a)(iii); or
(xiii) Liens on Properties of the Company or its
Subsidiaries in favor of the Administrative Agent securing
indebtedness, obligations and liabilities of the Company in
favor of any Lender pursuant to any Hedge Agreement.
(c) Mergers, Sales, etc. Merge into or with or
consolidate with, or permit any of its Subsidiaries to merge into or
with or consolidate with, any other Person, or sell, lease or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease
or otherwise dispose of (whether in one transaction or in a series of
related transactions) all or a material part of its Property to any
other Person; except for:
(i) any merger or consolidation which does not
result in a Change of Control, so long as the Company is the
survivor in each such merger or consolidation, the survivor
assumes all of the Company's obligations and liabilities to
the Lenders, the Issuing Bank and the Administrative Agent
under or in connection with the Lender Indebtedness and the
Financing Documents, pursuant to written agreements in form
and substance satisfactory to the Administrative Agent;
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(ii) any merger or consolidation of one Subsidiary
of the Company with one or more other Subsidiaries of the
Company, and any merger of a Subsidiary of the Company into
the Company; or
(iii) any lease, sale or other transfer of (A)
equipment which is worthless or obsolete; (B) inventory
(including oil and gas and seismic data) sold in the ordinary
course of business; and (C) any Oil and Gas Properties sold,
leased or otherwise transferred for fair market value not to
exceed $10,000,000 in the aggregate in any fiscal year of the
Company;
provided, however, that in each case, immediately thereafter and
giving effect thereto, no event shall occur and be continuing which
constitutes a Default or an Event of Default.
(d) Distribution, etc. Make any distribution of profits
or purchase, redeem or otherwise acquire for value any of the
partnership interests in the Company now or hereafter outstanding,
return any capital to its partners, or make any distribution of its
assets to its partners as such; provided, however, so long as no
Default or Event of Default has occurred and is continuing hereunder,
the Company may make (i) distributions to its Partners for the payment
of cash taxes due and payable by the Partners as a result of their
partnership interests in the Company, and (ii) other distributions to
its Partners not to exceed $2,500,000 in the aggregate in any calendar
year, less the aggregate principal amount of Indebtedness permitted by
Section 5.03(a)(v) which is incurred and outstanding in the same
calendar year.
(e) Investments, Loans, etc. Make or permit any loans to
or investments in any Person, or permit any of its Subsidiaries to
make or permit any loans to or investments in any such Person (it is
hereby agreed to and understood that acquisitions of Oil and Gas
Properties and related assets shall not be deemed an investment in a
Person for purposes of this Agreement), other than:
(i) investments, loans or advances, the material
details of which have been set forth in the Financial
Statements or are disclosed to the Administrative Agent in
Schedule 4.07;
(ii) investments in direct obligations of the
United States of America or any agency thereof maturing within
1 year after acquisition;
(iii) investments in certificates of deposit with
maturities not later than 1 year from the date of deposit
thereof, issued by any Lender or any commercial banks in the
United States having capital and surplus in excess of
$200,000,000, and whose certificates of deposit have at least
the third highest credit rating given by either Standard &
Poor's Ratings Group or Xxxxx'x Investors Service, Inc.;
(iv) investments in commercial paper, maturing
within 270 days after acquisition thereof, rated in the
highest or second highest credit rating given by either
Standard & Poor's Ratings Group or Xxxxx'x Investors Service,
Inc.;
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(v) money market funds which are approved by the
Administrative Agent, in its discretion;
(vi) investments in the equity interests of any
Person (other than an individual) engaged in the oil and gas
business, provided that no such equity investment shall
violate 5.03(h);
(vii) investments in owner occupied real estate
used, in whole or in part, by the Company or any Subsidiary in
the conduct of its business not to exceed $5,000,000 at any
one time outstanding;
(viii) any other investments not described in the
foregoing clauses (i)-(viii), which in the aggregate do not
exceed $1,000,000;
(ix) loans made to employees of the Company or
Parent for the purposes of funding the exercise of outstanding
options to purchase equity interests in Parent not to exceed
$6,000,000 in the aggregate at any one time outstanding; and
(x) unsecured intercompany loans to any Guarantor
which do not exceed in the aggregate in each calendar year an
amount equal to the difference of (A) $2,500,000 less (B) the
aggregate amount of distributions made pursuant to Section
5.03(d)(ii) during such calendar year.
(f) Lease Payments. Except for (i) oil and gas lease
obligations permitted under Section 5.03(a), and (ii) lease
obligations (excluding Capital Lease Obligations) existing under
leases for oil field equipment and tools rented in the ordinary course
of business for a duration of less than one year; create, incur,
assume or suffer to exist, nor permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any obligation for the
payment of rent or hire of Property of any kind whatsoever (real or
personal), whether directly or as a guarantor, if, after giving effect
thereto, the aggregate amount of all payments required to be made by
the Company and its Subsidiaries on a consolidated basis pursuant to
such leases or lease agreements (excluding Capital Lease Obligations)
would exceed $2,500,000 in any calendar year.
(g) Sales and Leasebacks. Enter into, or permit any of
its Subsidiaries to enter into, any arrangement, directly or
indirectly, with any Person whereby the Company or any such Subsidiary
shall sell or transfer any Property, whether now owned or hereafter
acquired, and whereby the Company or any such Subsidiary shall then or
thereafter rent or lease as lessee such Property or any part thereof
or other Property which the Company or any such Subsidiary intends to
use for substantially the same purpose or purposes as the Property
sold or transferred.
(h) Nature of Business. Permit any material change to be
made in the character of the business of the Company and the
Guarantors, taken as a whole, as carried on at the date hereof, except
as may be permitted pursuant to this Agreement.
(i) ERISA Compliance.
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(i) Engage in, or permit any ERISA Affiliate to
engage in, any transaction in connection with which the
Company, a Subsidiary of the Company or any ERISA Affiliate
could be subjected to either a civil penalty assessed pursuant
to Sections 502(c) or 502(i) of ERISA or a tax imposed by
Section 4975 of the Code, except where such assessment or
imposition would not reasonably be expected to have Material
Adverse Effect;
(ii) Terminate, or permit any ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with
respect to any Plan, which would reasonably be expected to
result in any liability of the Company, a Subsidiary of the
Company or any ERISA Affiliate to the PBGC;
(iii) Fail to make, or permit any ERISA Affiliate
to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto
or applicable law, the Company, a Subsidiary of the Company or
any ERISA Affiliate is required to pay as contributions
thereto, except where the failure to make such payments would
not reasonably be expected to have Material Adverse Effect;
(iv) Permit to exist, or allow any ERISA Affiliate
to permit to exist, any accumulated funding deficiency within
the meaning of Section 302 of ERISA or Section 412 of the
Code, whether or not waived, with respect to any Plan, except
where the existence of such a deficiency would not reasonably
be expected to have a Material Adverse Effect;
(v) Contribute to or assume an obligation to
contribute to, or permit any ERISA Affiliate to contribute to
or assume an obligation to contribute to, any "multi-employer
plan" as such term is defined in Section 3(37) or 4001(a)(3)
of ERISA;
(vi) Acquire, or permit any ERISA Affiliate to
acquire, an interest in any Person that causes such Person to
become an ERISA Affiliate with respect to the Company or a
Subsidiary of the Company or with respect to any ERISA
Affiliate of the Company or a Subsidiary of the Company if
such Person sponsors, maintains or contributes to, or at any
time in the six-year period preceding such acquisition has
sponsored, maintained, or contributed to, (1) any
"multi-employer plan" as such term is defined in Section 3(37)
or 4001(a)(3) of ERISA, or (2) any other Plan that is subject
to Title IV of ERISA under which the actuarial present value
of the benefit liabilities under such Plan exceeds the current
value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to
such benefit liabilities;
(vii) Fail to pay, or cause to be paid, to the PBGC
in a timely manner, and without incurring any late payment or
underpayment charge or penalty, all premiums required pursuant
to Sections 4006 and 4007 of ERISA, except where such failure
would not reasonably be expected to have a Material Adverse
Effect; or
(viii) Amend, or permit any ERISA Affiliate to
amend, a Plan resulting in an increase in current liability
such that the Company, a Subsidiary of the Company or any
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ERISA Affiliate is required to provide security to such Plan
under Section 401(a)(29) of the Code.
(j) Proceeds of Loans. Use any proceeds of the Loans for
any purpose other than (i) to renew, rearrange and modify the
outstanding principal balance owing under the Prior Notes, (ii) to
acquire proven oil and gas properties, development of oil and gas
properties, and (iii) for general corporate purposes or, until the
acquisition contemplated in the Mobil Purchase and Sale Agreement has
been consummated, use funds borrowed hereunder which cause the
outstanding Loan balance to exceed $35,000,000 for any purpose other
than the consummation of such acquisition. The Letters of Credit
shall be used only for the purposes provided in Section 2.03. Neither
the Company nor any Person acting on behalf of the Company will take
any action which might cause the Notes or any of the Financing
Documents, including this Agreement, to violate Regulation U or X or
any other regulation of the Board of Governors of the Federal Reserve
System or to violate Section 7 of the Securities and Exchange Act of
1934, as amended, (or any successor thereto) or any rule or regulation
thereunder, in each case as now in effect or as the same may
hereinafter be in effect.
(k) Transactions with Affiliates. Except as otherwise
permitted in the this Agreement, enter into any transaction or series
of transactions, or permit any of its Subsidiaries to enter into any
transaction or series of transactions, with Affiliates of the Company
or its Subsidiaries (other than the Parent and its Subsidiaries) which
involve an outflow of money or other Property from the Company or its
Subsidiaries to an Affiliate of the Company or its Subsidiaries,
including but not limited to repayment of Indebtedness, management
fees, compensation, salaries, asset purchase payments or any other
type of fees or payments similar in nature, other than on terms and
conditions substantially as favorable to the Company and its
Subsidiaries as would be obtainable by the Company and its
Subsidiaries in a reasonably comparable arm's-length transaction with
a Person other than such an Affiliate of the Company or its
Subsidiaries. Notwithstanding the foregoing, the restrictions set
forth in this Section 5.03(k) shall not apply to the payment of
reasonable and customary fees to directors of Parent who are not
employees of Parent or to the payment of reasonable financial advisory
and similar fees to equity investors in the Company, who are not
employees (specifically including, the fees payable to NGP under its
existing agreement with the Company and fees payable to First Union
Capital Partners and Enron Capital & Trade Resources Corp., or any of
their respective Affiliates or designees).
(l) Unconditional Purchase Obligations. Enter into or be
a party to, or permit any of its Subsidiaries to enter into or be a
party to, any contract for the purchase of materials, supplies or
other property or services, if such contract requires that payment be
made by it regardless of whether or not delivery is ever made of such
materials, supplies or other property or services.
(m) Change in Management. Permit any change in the
current Chief Executive Officer of either the Parent or General
Partner.
(n) Creation of Subsidiaries. Except for joint ventures
and partnerships entered into in the ordinary course of the Company's
business, create or permit any Subsidiary to create, any new
Subsidiaries without prior written notice to the Administrative Agent.
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(o) Current Ratio. The Company will not permit its ratio
of (i) consolidated current assets to (ii) consolidated current
liabilities (excluding current maturities of the Notes) to be less
than 1.0 to 1.0 at any time. As used in this Section 5.03(o) "current
assets" shall mean all assets of a Person which under GAAP would be
classified as current assets, and "current liabilities" shall mean all
liabilities of a Person which under GAAP would be classified as
current liabilities.
(p) Debt Coverage Ratio. For the period from and after
the Closing Date through December 31, 1997, the Company will not
permit the Debt Ratio as of the end of any fiscal quarter of Parent
(calculated quarterly at the end of each fiscal quarter) to be greater
than 4.50 to 1.00. For the period from and after January 1, 1998,
through the Maturity Date, the Company will not permit the Debt Ratio
as of the end of any fiscal quarter of Parent (calculated quarterly at
the end of each fiscal quarter) to be greater than 3.50 to 1.00. For
purposes of this Section 5.03(p), "Debt Ratio" shall mean the ratio of
(i) Funded Indebtedness of Parent and its Consolidated Subsidiaries at
the end of each fiscal quarter of Parent, to (ii) EBITDA for the four
fiscal quarters ending on such date.
(q) Interest Coverage Ratio. For the period from and
after the Closing Date through December 31, 1997, the Company will not
permit the Interest Coverage Ratio as of the end of any fiscal quarter
of Parent (calculated quarterly at the end of each fiscal quarter) to
be less than 2.50 to 1.00. For the period from and after January 1,
1998, through the Maturity Date, the Company will not permit the
Interest Coverage Ratio as of the end of any fiscal quarter of Parent
(calculated quarterly at the end of each fiscal quarter) to be less
than 3.00 to 1.00. For the purposes of this Section 5.03(q),
"Interest Coverage Ratio" shall mean the ratio of (i) EBITDA for the
four fiscal quarters ending on such date to (ii) cash interest
payments made for such four fiscal quarters of Parent and its
Consolidated Subsidiaries.
(r) Amendments to Partnership Agreement. Amend
materially or restate, or permit any material amendment or restatement
of, the Partnership Agreement without the prior written consent of the
Majority Lenders (which consent will not be unreasonably withheld);
provided, however, the Partnership Agreement may be amended to
substitute the limited partner of the Company with a wholly-owned
Subsidiary of the Parent.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
Section 6.01 Payments. (a) The Company shall fail to pay when due
(including, but not limited to, by mandatory prepayment required pursuant to
Section 2.10) any principal of any Loan or any Note, or any Reimbursement
Obligation; or (b) the Company shall fail to pay when due any interest on any
Loan or Note, any fee or any other amount payable hereunder, and such failure
to pay shall continue unremedied for a period of three Business Days;
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Section 6.02 Covenants Without Notice. The Company shall fail to
observe or perform any covenant or agreement contained in Sections 5.02(f)(ii)
or Section 5.03;
Section 6.03 Other Covenants. The Company shall fail to observe
or perform any covenant or agreement contained in this Agreement or contained
in any Financing Document other than this Agreement, other than those referred
to in Sections 6.01 or 6.02, and, if capable of being remedied, such failure
shall remain unremedied for 30 days after the earlier of (i) the Company's
obtaining knowledge thereof, or (ii) written notice thereof shall have been
given to the Company by the Administrative Agent;
Section 6.04 Other Financing Document Obligations. Default in any
material respect is made in the due observance or performance by any Guarantor
or any Subsidiary of the Company of any of the covenants or agreements
contained in any Financing Document to which they are a party, and, if capable
of being remedied, such default continues unremedied 30 days after the earlier
of (i) such Guarantor or Subsidiary, as appropriate, obtaining knowledge
thereof, or (ii) written notice thereof shall have been given to such Guarantor
or Subsidiary, as appropriate, by the Administrative Agent;
Section 6.05 Representations. Any representation, warranty or
statement made or deemed to be made by the Company or any Subsidiary of the
Company or any of such Company's, or Subsidiary's officers herein or in any
other Financing Document, or in any certificate, request or other document
furnished pursuant to or under this Agreement or any other Financing Document,
shall have been incorrect in any material respect as of the date when made or
deemed to be made; provided that, if the incorrect representation, warranty or
statement arises as a result of a defect in the title or condition of any
Property acquired from Mobil, which at the time of acquisition was unknown to
the Company, an Event of Default will not occur if the Company, within 60 days
after such incorrectness is discovered, either (i) corrects the defect which
has caused such representation, warranty or statement to be incorrect, or (ii)
causes other Oil and Gas Properties which have a value at least equivalent to
the defective Property and are otherwise acceptable to the Administrative
Agent, to be substituted as Mortgaged Property in lieu of the defective
Property;
Section 6.06 Non-Payments of Other Indebtedness. The Company or
any of its Subsidiaries shall fail to make any payment or payments of principal
of or interest on any Indebtedness of the Company or such Subsidiary in excess
of $1,000,000 in the aggregate (other than (i) the Lender Indebtedness and (ii)
any trade account subject to a bona fide dispute and the trade creditor has
neither filed a lawsuit nor caused a Lien to be placed upon any Property of the
Company or such Subsidiary) when due (whether at stated maturity, by
acceleration, on demand or otherwise) after giving effect to any applicable
grace period;
Section 6.07 Defaults Under Other Agreements. The Company or any
of its Subsidiaries shall fail to observe or perform any covenant or agreement
contained in any agreement(s) or instrument(s) relating to Indebtedness of
$500,000 or more in the aggregate within any applicable grace period, or any
other event shall occur, if the effect of such failure or other event is to
accelerate the maturity of $500,000 or more in the aggregate of such
Indebtedness; or $1,000,000 or more in the aggregate of any such Indebtedness
shall be, as a result of such failure or other event, required to be prepaid
(other than by a regularly scheduled required prepayment) in whole or in part
prior to its stated maturity;
Section 6.08 Bankruptcy. The Company or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy" as now or hereafter
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in effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary
case is commenced against the Company or any of its Subsidiaries and the
petition is not controverted within 10 days, or is not stayed or dismissed
within 60 days, after commencement of the case; or a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or any
substantial part of the property of the Company or any of its Subsidiaries; or
the Company or any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or such Subsidiary
or there is commenced against the Company or any of its Subsidiaries any such
proceeding which remains unstayed or undismissed for a period of 60 days; or
the Company or any of its Subsidiaries is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or the Company or any of its Subsidiaries suffers any appointment of
any custodian or the like for it or any substantial part of its Property to
continue undischarged or unstayed for a period of 60 days; or the Company or
any of its Subsidiaries makes a general assignment for the benefit of
creditors; or the Company or any of its Subsidiaries shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or the Company or any of its Subsidiaries shall
by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by the
Company or any of its Subsidiaries for the purpose of effecting any of the
foregoing;
Section 6.09 ERISA. A Plan shall fail to maintain the minimum
funding standard required by Section 412 of the Code for any plan year or a
waiver of such standard is sought or granted under Section 412(d), or a Plan
is, shall have been or is likely to be, terminated or the subject of
termination proceedings under ERISA, or the Company or an ERISA Affiliate has
incurred or is likely to incur a liability to or on account of a Plan under
Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall result
from any such event or events either a liability or a material risk of
incurring a liability to the PBGC or a Plan, which will have a Material Adverse
Effect;
Section 6.10 Money Judgment. A judgment or order for the payment
of money in excess of $1,000,000 or that would otherwise have a Material
Adverse Effect shall be rendered against the Company or any of it Subsidiaries
and such judgment or order shall continue unsatisfied in accordance with the
terms of such judgment or order (in the case of a money judgment) and in effect
for a period of 30 days during which execution shall not be effectively stayed
or deferred (whether by action of a court, by agreement or otherwise);
Section 6.11 Security Instruments. The material terms of the
Security Instruments after delivery thereof shall for any reason, except to the
extent permitted by the terms thereof, cease to be in full force and effect and
valid, binding and enforceable (except as enforceability may be limited as
stated in Section 4.03) in accordance with their terms, or cease to create a
valid and perfected Lien of the priority contemplated thereby on any of the
collateral purported to be covered thereby, or the Company or any of its
Subsidiaries (or any other Person who may have granted or purported to grant
such Lien) shall so state in writing;
Section 6.12 Mandatory Prepayments. The Company shall fail to
make any mandatory prepayment required by Section 2.10; or
Section 6.13 Change in Control. The occurrence of a Change in
Control, which shall not include any merger or consolidation permitted by
Section 5.03(c);
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then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written or
telex request of the Majority Lenders, shall, by written notice to the Company,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent, any Lender or the holder of any Note, to enforce its
claims against the Company and: (i) declare the Commitment and other lending
obligations, if any, terminated, whereupon the Commitment and other lending
obligations, if any, of each Lender shall terminate immediately; or (ii)
declare the entire principal amount of and all accrued interest on all Lender
Indebtedness then outstanding to be due, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest, notice of
protest or dishonor, notice of acceleration, notice of intent to accelerate or
other notice of any kind, all of which are hereby expressly waived by the
Company, and thereupon take such action as it may deem desirable under and
pursuant to the Financing Documents; provided, that, if an Event of Default
specified in Section 6.08 shall occur with respect to the Company, the result
which would occur upon the giving of written notice by the Administrative Agent
to the Company, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice.
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01 Appointment of Administrative Agent. Each Lender and
the Issuing Bank hereby designate The Chase Manhattan Bank, as Administrative
Agent to act as herein specified. Each Lender and the Issuing Bank hereby
irrevocably authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement, the Notes, and the other
Financing Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Administrative Agent may perform any of
its duties hereunder by or through its agents or employees.
Section 7.02 Nature of Duties of Administrative Agent. The
Administrative Agent shall have no duties or responsibilities except those
expressly set forth with respect to the Administrative Agent in this Agreement.
Neither the Administrative Agent, nor any of its respective officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or
their 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 a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement except as expressly set forth
herein.
Section 7.03 Lack of Reliance on the Administrative Agent.
(a) Independent Investigation. Independently and without
reliance upon the Administrative Agent, each Lender, to the extent it
deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of
the Company in connection with the taking or not taking of any action
in connection herewith, and (ii) its own appraisal of the
creditworthiness of the Company, and, except as expressly provided in
this Agreement, the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect
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thereto, whether coming into its possession before the consummation of
the transactions contemplated herein or at any time or times
thereafter.
(b) Administrative Agent Not Responsible. The
Administrative Agent shall not be responsible to any Lender or the
Issuing Bank for any recitals, statements, information,
representations or warranties herein or in any document, certificate
or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes,
the Letters of Credit or the other Financing Documents or the
financial condition of the Company or be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Notes or the other
Financing Documents, or the financial condition of the Company, or the
existence or possible existence of any Default or Event of Default.
Section 7.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Majority Lenders with
respect to any act or action (including the failure to act) in connection with
this Agreement, the Notes and the other Financing Documents, 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 the
Majority Lenders; and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting under this
Agreement, the Notes and the other Financing Documents in accordance with the
instructions of the Majority Lenders.
Section 7.05 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cablegram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Administrative
Agent may consult with legal counsel (including counsel for the Company),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section 7.06 INDEMNIFICATION OF ADMINISTRATIVE AGENT. TO THE
EXTENT THE ADMINISTRATIVE AGENT IS NOT REIMBURSED AND INDEMNIFIED BY THE
COMPANY, EACH LENDER WILL REIMBURSE AND INDEMNIFY THE ADMINISTRATIVE AGENT AS
APPLICABLE, IN PROPORTION TO ITS PERCENTAGE SHARE, FOR AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES (INCLUDING COUNSEL FEES AND DISBURSEMENTS) OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN PERFORMING ITS
DUTIES HEREUNDER, IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT AND
BY REASON OF ORDINARY NEGLIGENCE OF THE ADMINISTRATIVE AGENT; PROVIDED THAT NO
LENDER SHALL BE LIABLE TO THE ADMINISTRATIVE AGENT FOR ANY PORTION OF SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM, AS TO THE
ADMINISTRATIVE AGENT, THE ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
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Section 7.07 The Administrative Agent in its Individual Capacity.
With respect to their obligations under this Agreement, the Loans made by it
and the Notes issued to it, the Administrative Agent shall have the same rights
and powers hereunder as any other Lender or holder of a Note and may exercise
the same as though it were not performing the duties, if any, specified herein;
and the terms "Lenders," "Majority Lenders," "holders of Notes" or any similar
terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with the Company or any
affiliate of the Company as if it were not performing the duties, if any,
specified herein, and may accept fees and other consideration from the Company
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
Section 7.08 May Treat Lender as Owner. The Administrative Agent
and the Company may deem and treat each Lender as the owner of such Lender's
Note for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Administrative
Agent. Any request, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the owner of a Note
shall be conclusive and binding on any subsequent owner, transferee or assignee
of such Note or any promissory note or notes issued in exchange therefor.
Section 7.09 Successor Administrative Agent.
(a) Administrative Agent Resignation. The Administrative
Agent may resign at any time by giving written notice thereof to the
Lenders, the Issuing Bank and the Company and may be removed at any
time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right,
subject to the reasonable approval of the Company so long as no Event
of Default then exists, to appoint a successor Administrative Agent.
If no successor Administrative Agent shall have been so appointed by
the Majority Lenders, and shall have accepted such appointment, within
30 days after the retiring Administrative Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then, upon five days' notice to the Company, the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a bank which maintains
an office in the United States, or a commercial bank organized under
the laws of the United States of America or of any State thereof, or
any Affiliate of such bank, having a combined capital and surplus of
at least $250,000,000.
(b) Rights, Powers, etc. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the
provisions of this Article VII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.
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ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including, telecopy
or similar teletransmission or writing) and shall be given to such party at its
address or telecopy number set forth on the signature pages hereof or such
other address or telecopy number as such party may hereafter specify by notice
to the Administrative Agent and the Company; provided that a copy of all
notices to the Administrative Agent (a) which are Advance Notices shall also be
sent to The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxx, telephone number: 212/000-0000,
telefax number: 212/622-0002, and (b) which are requests for the issuance of a
Letter of Credit by Chase shall also be sent to The Chase Manhattan Bank, 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxx,
telephone number: 212/000-0000, telefax number: 212/638-1834, with copies to
The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx Xxxxxxx, telephone number: 212/000-0000, telefax
number: 212/622-0002, and with copies of all such notices to Chase Securities
Inc., 707 Xxxxxx, 5N86, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx Xxxxxxx. Each
such notice, request or other communication shall be effective (i) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, or (ii) if given by any other
means (including, but not limited to, by air courier), when delivered at the
address specified in this Section; provided that notices to the Administrative
Agent shall not be effective until received.
Section 8.02 Amendments, etc. Any provision of this Agreement or
any other Financing Document may be amended, modified or waived with the
Company's and the Majority Lenders' prior written consent; provided that (a) no
amendment, modification or waiver which (i) extends the due date or maturity of
the Loans, any mandatory prepayment or the Maturity Date, (ii) except as
otherwise contemplated herein or in one of the other Financing Documents,
releases any material portion of the Collateral, (iii) reduces the principal of
or interest rate applicable to the Loans or the fees or other amounts payable
to the Lenders hereunder or under any other Financing Document, (iv) releases
the Company or any material Guarantor from its respective obligation to pay
principal or interest on the Loans, (v) waives, forgives, defers, extends or
postpones any payment of Lender Indebtedness including interest, fees or any
other amount required hereunder or under any other Financing Document, (vi)
permanently waives any material (in the Administrative Agent's reasonable
judgment) condition precedent for the initial Loan hereunder, (vii) affects
this Section 8.02 or Section 8.04, or (viii) modifies the definition of
"Majority Lenders" or "Required Lenders," shall be effective without consent of
all Lenders; (b) no amendment, modification or waiver which increases the
Commitment of any Lender shall be effective without the consent of such Lender;
(c) no amendment, modification or waiver which modifies the rights, duties or
obligations of the Administrative Agent shall be effective without the consent
of the Administrative Agent; and (d) no amendment, modification or waiver which
modifies the rights, duties or obligations of the Issuing Bank shall be
effective without the consent of the Issuing Bank. Notwithstanding anything in
this Section to the contrary, unless instructed to the contrary by the Majority
Lenders, the Issuing Bank shall extend each Letter of Credit prior to any
expiration date thereof pursuant to the terms of such Letter of Credit or its
related Application if a failure to so extend such Letter of Credit would
result in entitling the beneficiary thereof to draw thereon.
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Section 8.03 No Waiver; Remedies Cumulative. No failure or delay
on the part of the Company or the Administrative Agent or any Lender or any
holder of any Note in exercising any right or remedy under this Agreement or
any other Financing Document and no course of dealing between the Company and
the Administrative Agent or any Lender or any holder of any Note shall operate
as a waiver thereof, nor shall any single or partial exercise of any right or
remedy under the Notes, this Agreement or any other Financing Document preclude
any other or further exercise thereof or the exercise of any other right or
remedy under the Notes, this Agreement or any other Financing Document. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Company, the Administrative Agent or any
Lender would otherwise have. No notice to or demand on the Company not
required under the Notes, this Agreement or any other Financing Document in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
Section 8.04 Payment of Expenses, Indemnities, etc. The Company
agrees to (and shall be liable for):
(a) Expenses. Whether or not the transactions hereby
contemplated are consummated, pay all reasonable out-of-pocket costs
and expenses of the Administrative Agent and the Issuing Bank in the
administration (both before and after the execution hereof and
including advice of counsel as to the rights and duties of the
Administrative Agent and the Lenders with respect thereto) of, and in
connection with the preparation, execution and delivery of, recording
or filing of, preservation of rights under, enforcement of, and, after
a Default, refinancing, renegotiation or restructuring of, this
Agreement, the Notes, and the other Financing Documents and any
amendment, waiver or consent relating thereto (including, but not
limited to, the reasonable fees and disbursements of counsel for the
Administrative Agent and in the case of enforcement for any of the
Lenders) and promptly reimburse the Administrative Agent for all
amounts expended, advanced, or incurred by the Administrative Agent or
the Lenders to satisfy any obligation of the Company or the Guarantors
under this Agreement or any other Financing Document; provided that,
the amount of the legal fees of counsel to the Administrative Agent
and Lenders which are to be reimbursed by the Company in connection
with the preparation of the Financing Documents and the conduct of
title review shall not exceed $____________ plus reasonable expenses
for photocopying, long distance charges, telefaxes, courier deliveries
and filing fees;
(b) INDEMNIFICATION. INDEMNIFY THE ADMINISTRATIVE AGENT,
THE ISSUING BANK AND EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS AND AFFILIATES FROM,
HOLD EACH OF THEM HARMLESS AGAINST, AND PROMPTLY UPON DEMAND PAY OR
REIMBURSE EACH OF THEM FOR, ANY AND ALL ACTIONS, SUITS, PROCEEDINGS
(INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS,
COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY
OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS
A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR
PROPOSED USE BY THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY OF THE
PROCEEDS OF ANY OF THE LOANS; OR (II) ANY OTHER ASPECT OF THIS
AGREEMENT, THE NOTES, AND THE FINANCING DOCUMENTS, INCLUDING BUT NOT
LIMITED TO THE REASONABLE FEES AND DISBURSEMENTS
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OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR
CLAIM, AND INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES,
LIABILITIES, DAMAGES OR EXPENSES ARISING BY REASON OF ORDINARY
NEGLIGENCE OF ANY OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND
EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES; PROVIDED, HOWEVER, THE
PROVISIONS OF THIS SECTION 8.04(B) SHALL NOT APPLY TO ANY ACTION,
SUITS, PROCEEDINGS, CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES, OR
EXPENSES TO THE EXTENT, BUT ONLY TO THE EXTENT, CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION;
(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD
HARMLESS FROM TIME TO TIME THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND THE LENDERS, AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL,
EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING
FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH
RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR
ANY FINANCING DOCUMENT) TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT
AND INCLUDING ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH
RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR
ANY FINANCING DOCUMENT) ARISING BY REASON OF THE ORDINARY NEGLIGENCE
OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS, AND THE
RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, SUCCESSORS
AND ASSIGNS OF EACH OF THE FOREGOING (1) UNDER ANY ENVIRONMENTAL LAW
APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR ANY OF THEIR
RESPECTIVE PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR RESPECTIVE
PROPERTIES, (2) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (3) DUE TO PAST
OWNERSHIP BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OF ANY OF THEIR
RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE PROPERTIES
WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT
IN PRESENT LIABILITY, (4) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES PRIOR TO OR DURING THE PERIOD OWNED BY THE COMPANY OR
OPERATED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR (5) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER FINANCING DOCUMENT; PROVIDED,
HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 8.04(c) IN
RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE ARISING SOLELY AND DIRECTLY
FROM THE ACTS OR OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER
DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS
SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-
IN-POSSESSION OR OTHERWISE); AND
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(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING
PROVISIONS, THE COMPANY DOES HEREBY WAIVE, RELEASE AND COVENANT NOT TO
BRING AGAINST ANY OF THE PERSONS IDENTIFIED IN THIS SECTION 8.04 ANY
DEMAND, CLAIM, COST RECOVERY ACTION OR LAWSUIT WHICH THE COMPANY MAY
NOW OR HEREAFTER HAVE OR ACCRUE (WHICH RELATE TO OR ARISE AS A RESULT
OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) ARISING
FROM (1) ANY ENVIRONMENTAL LAW NOW OR HEREAFTER ENACTED (INCLUDING
THOSE APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES) UNLESS THE
ACTS OR OMISSIONS OF ANY SUCH PERSON OR THEIR RESPECTIVE SUCCESSORS
AND ASSIGNS ARE THE SOLE AND DIRECT CAUSE OF THE CIRCUMSTANCES GIVING
RISE TO SUCH DEMAND, COST RECOVERY ACTION OR LAWSUIT, (2) THE
PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES PRIOR TO OR DURING THE
PERIOD OWNED BY THE COMPANY OR OPERATED BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR (3) THE BREACH OR NON-COMPLIANCE BY THE COMPANY WITH
ANY ENVIRONMENTAL LAW OR ENVIRONMENTAL COVENANT APPLICABLE TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, UNLESS THE ACTS OR OMISSIONS OF
SUCH PERSON, ITS SUCCESSORS AND ASSIGNS ARE THE SOLE AND DIRECT CAUSE
OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST RECOVERY
ACTION OR LAWSUIT.
If and to the extent that the obligations of the Company under this Section are
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law. The Company's obligations under this Section
shall survive any termination of this Agreement and the payment of the Notes.
Section 8.05 Right of Setoff. In addition to and not in
limitation of all rights of offset that any Lender or the Issuing Bank may have
under applicable law, each Lender or other holder of a Note, or any other
Lender Indebtedness shall, upon the occurrence of any Event of Default and at
any time during the continuance thereof and whether or not such Lender, the
Issuing Bank or such holder has made any demand, have the right at any time and
from time to time, without notice to the Company (any such notice being
expressly waived by the Company) 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 any Lender or the Issuing Bank to or
for the credit or the account of the Company against any and all of the Lender
Indebtedness then outstanding.
Section 8.06 Benefit of Agreement.
(a) Benefit of Parties. The Notes, this Agreement and
the other Financing Documents shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto, provided that the Company may not assign or
transfer any of its interest hereunder or thereunder without the prior
written consent of the Lenders. In the event that any Lender sells
participations in the Notes or other Lender Indebtedness of the
Company incurred or to be incurred pursuant to this Agreement, to
other banks or entities, each of such other banks or entities shall
have the rights of set-off against such Lender Indebtedness and
similar rights or Liens to the same extent as may be available to the
Administrative Agent or the Lenders.
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(b) Branch Offices, Affiliates. Any Lender may make,
carry or transfer Loans at, to or for the account of, any of its
branch offices or the office of an Affiliate of such Lender.
Section 8.07 Assignments and Participations.
(a) No Company Assignments. The Company may not assign
its rights and obligations hereunder or under the Notes.
(b) Assignment by Lenders. Each Lender may, upon the
written consent of the Administrative Agent and, so long as no Event
of Default exists, the Company (which consents shall not be
unreasonably withheld), assign to one or more Eligible Transferees all
or a portion of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance Agreement substantially in
the form of Exhibit D (an "Assignment and Acceptance") provided,
however, that (i) any such assignment shall be in the aggregate amount
of at least $10,000,000 or such lesser amount to which the Company has
consented (or if the aggregate amount of any Lender's Loans and
Commitments is less than $10,000,000, then the entire amount of such
Lender's Loans and Commitments), and (ii) the assignee shall pay to
the Administrative Agent a processing and recordation fee of $2,500.
Any such assignment will become effective upon the recording by the
Administrative Agent of such assignment in the Register of the
resultant effects thereof on the Commitment of the assignor and
assignee, and the principal amount outstanding of the Loans owed to
the assignor and assignee, the Administrative Agent hereby agreeing to
effect such recordation no later than five Business Days after its
receipt of an Assignment and Acceptance executed by all parties
thereto. Promptly after receipt of an Assignment and Acceptance
executed by all parties thereto, the Administrative Agent shall send
to the Company a copy of such executed Assignment and Acceptance.
Upon receipt of such executed Assignment and Acceptance, the Company,
will, at its own expense, execute and deliver new Notes to the
assignor and/or assignee, as appropriate, in accordance with their
respective interests as they appear on the Register, whereupon the
Administrative Agent shall redeliver the Note being assigned, as
received from the Assignor, to the Company. Upon the effectiveness of
any assignment pursuant to this subsection, the assignee shall be
deemed automatically to have become a party hereto, if not already a
party hereto, and shall become a "Lender," if not already a "Lender,"
for all purposes of this Agreement and the other Financing Documents.
The assignor shall be relieved of its obligations hereunder to the
extent of such assignment (and if the assigning Lender no longer holds
any rights or obligations under this Agreement, such assigning Lender
shall cease to be a "Lender" hereunder). The Administrative Agent
will prepare on the last Business Day of each month during which an
assignment has become effective pursuant to this subsection a new
schedule giving effect to all such assignments effected during such
month, and will promptly provide the same to the Company, the Issuing
Bank and each of the Lenders.
(c) Participations. Each Lender may transfer, grant or
assign participations in all or any part of such Lender's interests
hereunder pursuant to this subsection to any Person, provided that:
(i) such Lender shall remain a "Lender" for all purposes of this
Agreement and the transferee of such participation shall not
constitute a "Lender" hereunder; and (ii) no participant under any
such participation shall have rights to approve any amendment to or
waiver of this Agreement, the Notes or any Financing Document except
to the extent such amendment or waiver would (x) extend the Maturity
Date or the Final Maturity Date of any of the Commitments or Loans in
which such participant is participating, (y) reduce the interest rate
(other than as a result
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of waiving the applicability of any post-default increases in interest
rates) or fees applicable to any of the Commitments or Loans in which
such participant is participating, or postpone the payment of any
thereof, or (z) release all or substantially all of the collateral or
guaranties (except as expressly provided in the Financing Documents)
supporting any of the Commitments or Loans in which such participant
is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of
the Financing Documents (the participant's rights against the granting
Lender in respect of such participation to be those set forth in the
agreement with such Lender creating such participation), and all
amounts payable by the Company hereunder shall be determined as if
such Lender had not sold such participation, provided that such
participant shall be entitled to receive additional amounts under
Sections 2.16 and 2.18 on the same basis as if it were a Lender. In
addition, each agreement creating any participation must include an
agreement by the participant to be bound by the provisions of Section
8.14. Notwithstanding anything in this Section 8.07(c) to the
contrary, the purchase by each Lender of a participation in the
Letters of Credit on the Effective Date and any subsequent assignment
of all or any part of any such Lender's Percentage Share in any Letter
of Credit and its related LC Liabilities pursuant to Section 8.07(b)
shall not be considered a participation pursuant to this Section
8.07(c).
(d) Registration Statements; Blue Sky Laws.
Notwithstanding any other provisions of this Section 8.07, no transfer
or assignment of the interests or obligations of any Lender hereunder
or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require the Company or any
Guarantor to file a registration statement with the Securities and
Exchange Commission or to qualify the Loans under the "Blue Sky" laws
of any state.
(e) Certain Representations. Each Lender initially party
to this Agreement hereby represents, and each Person that becomes a
Lender pursuant to an assignment permitted by subsection (b) above
will, upon its becoming party to this Agreement, represent that it is
an Eligible Transferee, and that it will make or acquire Loans only
for its own account in the ordinary course of its business; provided,
however, that subject to the preceding Sections 8.07(b) through (d),
the disposition of any promissory notes or other evidences of or
interests in Lender Indebtedness held by such Lender shall at all
times be within its exclusive control.
(f) Assignees Treated as Lenders. The entries in the
Register shall be conclusive in the absence of manifest error and the
Company, the Administrative Agent, the Issuing Bank and the Lenders
may treat each person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this
Agreement and the other Financing Documents. The Register shall be
available for inspection by the Company and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(g) Notwithstanding anything in this Section 8.07 to the
contrary, any Lender may, without the consent of the Company, assign
and pledge all or any of its Notes to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve System and/or such
Federal Reserve Bank. No such assignment and/or pledge shall release
the assigning and/or pledging Lender from its obligations hereunder.
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Section 8.08 Governing Law; Submission to Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND UNDER THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK AND TO THE EXTENT CONTROLLING, LAWS OF THE UNITED STATES
OF AMERICA.
(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER
FINANCING DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS
OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, BUT NOT
LIMITED TO, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
(c) Service of Process. Nothing herein shall affect the
right of the Administrative Agent or any Lender or any holder of a
Note to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Company in
any other jurisdiction.
Section 8.09 Independent Nature of Lenders' Rights. The amounts
payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement, and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such
purpose.
Section 8.10 Invalidity. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Financing
Document shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of the Notes, this Agreement or any other Financing
Document.
Section 8.11 Survival of Agreements. All representations and
warranties of Parent, the Company or its Subsidiaries or any other Person
herein or in the other Financing Documents, and all covenants and agreements
herein not fully performed before the Effective Date, shall survive such date
or dates.
Section 8.12 Renewal, Extension or Rearrangement. This Agreement
restates and amends in its entirety, effective as of the Effective Date, the
Prior Credit Agreement. The Notes are given, in part, to renew, rearrange and
modify the indebtedness heretofore evidenced by the Prior Notes. Effective as
of the Effective Date, references to the Prior Credit Agreement and the Prior
Notes in the Mortgage and in the other "Financing Documents" referred to in the
Prior Credit Agreement shall refer to this Agreement and to the Notes. All
provisions of this Agreement and of any other Financing Documents relating to
the Notes or other Lender Indebtedness shall hereafter apply with equal force
and effect to each and all promissory notes hereafter executed which in whole
or in part represent a renewal, extension
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for any period, increase or rearrangement of any part of the Lender
Indebtedness originally represented by the Notes, or of any part of such other
Lender Indebtedness.
Section 8.13 Interest. It is the intention of the parties hereto
to conform strictly to usury laws applicable to the Administrative Agent, the
Issuing Bank and the Lenders (collectively, the "Financing Parties") and the
Transactions. Accordingly, if the Transactions would be usurious as to any
Financing Party under laws applicable to it, then, notwithstanding anything to
the contrary in the Notes, this Agreement or in any other Financing Document or
agreement entered into in connection with the Transactions or as security for
the Notes, it is agreed as follows: (i) the aggregate of all consideration
which constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under the Notes, this Agreement or under any of such other Financing Documents
or agreements or otherwise in connection with the Transactions shall under no
circumstances exceed the maximum amount allowed by such applicable law, (ii) in
the event that the maturity of the Notes is accelerated for any reason, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (iii)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be cancelled automatically by such
Financing Party and, if theretofore paid, shall be credited by such Financing
Party on the principal amount of such Financing Party's Indebtedness (or, to
the extent that the principal amount of such Financing Party's Indebtedness
shall have been or would thereby be paid in full, refunded by such Financing
Party to the Company). The right to accelerate the maturity of the Notes does
not include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and the Financing Parties do not
intend to collect any unearned interest in the event of acceleration. All sums
paid or agreed to be paid to the Financing Parties for the use, forbearance or
detention of sums included in the Lender Indebtedness shall, to the extent
permitted by law applicable to such Financing Party, be amortized, prorated,
allocated and spread throughout the full term of the Notes until payment in
full so that the rate or amount of interest on account of the Lender
Indebtedness does not exceed the applicable usury ceiling, if any. As used in
this Section, the terms "applicable law" or "laws applicable to any Financing
Party" means the law of any jurisdiction whose laws may be mandatorily
applicable notwithstanding other provisions of this Agreement, or law of the
United States of America applicable to any Financing Party and the Transactions
which would permit such Financing Party to contract for, charge, take, reserve
or receive a greater amount of interest than under such jurisdiction's law. To
the extent that Article 5069-1.04 of the Texas Revised Civil Statutes is
relevant to any Financing Party for the purpose of determining the Highest
Lawful Rate, such Financing Party hereby elects to determine the applicable
rate ceiling under such Article by the indicated (weekly) rate ceiling from
time to time in effect, subject to such Financing Party's right subsequently to
change such method in accordance with applicable law.
Section 8.14 Confidential Information. The Administrative Agent
and each Lender agree that all documentation and other information made
available by the Company to the Administrative Agent or such Lender under the
terms of this Agreement shall (except to the extent such documentation or other
information is publicly available or hereafter becomes publicly available other
than by action of the Administrative Agent or such Lender, or was theretofore
known or hereinafter becomes known to the Administrative Agent or such Lender
independent of any disclosure thereto by the Company) be held in the strictest
confidence by the Administrative Agent or such Lender and used solely in the
administration and enforcement of the Loans from time to time outstanding from
such Lender to the Company and in the prosecution of defense of legal
proceedings arising in connection herewith; provided that (i) the
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Administrative Agent or such Lender may disclose documentation and information
to the Administrative Agent and/or to any other Lender which is a party to this
Agreement or any Affiliates thereof and (ii) the Administrative Agent or such
Lender may disclose such documentation or other information to any other bank
or other Person to which such Lender sells or proposes to make an assignment or
sell a participation in its Loans hereunder if such other bank or Person, prior
to such disclosure, agrees in writing to be bound by the terms of the
confidentiality statement customarily employed by the Administrative Agent in
connection with such potential transfers. Notwithstanding the foregoing,
nothing contained herein shall be construed to prevent the Administrative Agent
or a Lender from (a) making disclosure of any information (i) if required to do
so by applicable law or regulation or accepted banking practice, (ii) to any
governmental agency or regulatory body having or claiming to have authority to
regulate or oversee any aspect of such Lender's business or that of such
Lender's corporate parent or affiliates in connection with the exercise of such
authority or claimed authority, (iii) pursuant to any subpoena or if otherwise
compelled in connection with any litigation or administrative proceeding, (iv)
to correct any false or misleading information which may become public
concerning such Person's relationship to the Company, or (v) to the extent the
Administrative Agent or such Lender or its counsel deems necessary or
appropriate to effect or preserve its security for any Lender Indebtedness or
to enforce any remedy provided in the Financing Documents, the Notes or this
Agreement or otherwise available by law; or (b) making, on a confidential
basis, such disclosures as such Lender reasonably deems necessary or
appropriate to its legal counsel or accountants (including outside auditors).
If the Administrative Agent or such Lender is compelled to disclose such
confidential information in a proceeding requesting such disclosure, the
Administrative Agent or such Lender shall seek to obtain assurance that such
confidential treatment will be accorded such information; provided, however,
that the Lender shall have no liability for the failure to obtain such
treatment.
Section 8.15 ENTIRE AGREEMENT. THE NOTES, THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN
THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE LENDERS AND THE OTHER
RESPECTIVE PARTIES HERETO AND THERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND
UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
Section 8.16 Attachments. The exhibits, schedules and annexes
attached to this Agreement are incorporated herein and shall be considered a
part of this Agreement for the purposes stated herein, except that in the event
of any conflict between any of the provisions of such exhibits and the
provisions of this Agreement, the provisions of this Agreement shall prevail.
Section 8.17 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original
but all of which shall together constitute one and the same instrument.
Section 8.18 Survival of Indemnities. The Company's obligations
under Sections 2.16, 2.18, 2.21 and 8.04 shall survive the payment in full of
the Loans and the LC Liabilities.
Section 8.19 Headings Descriptive. The headings of the several
sections and subsections of this Agreement, and the Table of Contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
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Section 8.20 Satisfaction Requirement. If any agreement,
certificate, instrument or other writing, or any action taken or to be taken,
is by the terms of this Agreement required to be satisfactory to any party, the
determination of such satisfaction shall be made by such party in its sole and
exclusive judgment exercised reasonably and in good faith.
Section 8.21 Effectiveness. This Agreement shall not be effective
until executed by all signatories hereto and delivered to the Administrative
Agent in the State of Texas and accepted by the Administrative Agent in such
state.
Section 8.22 Conflict with Mortgage. In the event of a conflict
between the terms of the Mortgage and the terms of this Agreement, the terms of
this Agreement shall control.
Section 8.23 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS; THAT IT HAS IN
FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS
BEEN REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS
PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS;
AND HAS RECEIVED THE ADVICE OF ITS ATTORNEYS IN ENTERING INTO THIS AGREEMENT
AND THE OTHER FINANCING DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE
TERMS OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND
RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY
HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF
SUCH PROVISION OR THAT THE PROVISION IS NOT "CONSPICUOUS."
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
COMPANY: TITAN RESOURCES, L.P., a Texas limited
partnership
By: TITAN RESOURCES I, INC., its
General Partner
By: /s/ XXXX XXXXXXXXX
--------------------------------
Name: Xxxx Xxxxxxxxx
------------------------------
Title: President
-----------------------------
Address:
000 Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telephone No.: 915/000-0000
Telecopier No.: 915/687-3863
with copy to:
Xxxxxxxx & Knight, P.C.
0000 Xxxxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone No.: 214/000-0000
Telecopier No.: 214/969-1751
[Signature Page - 1]
81
ADMINISTRATIVE AGENTS, ISSUING
BANK AND THE LENDERS: THE CHASE MANHATTAN BANK
Individually, as Issuing Bank and as
Administrative Agent
By: /s/ XXXX XX XXXXXXXX
------------------------------
Name: Xxxx Xx Xxxxxxxx
----------------------------
Title: Vice President
---------------------------
Lending Office for Base Rate Loans,
Eurodollar Loans and Address for Notice:
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: 212/000-0000
Telecopier No.: 212/622-0002
Attention: Xxxxxx Xxxxxxx
with copy to:
Chase Securities Inc.
000 Xxxxxx Xxxxxx, 0X00
Xxxxxxx, Xxxxx 00000
Telephone No.: 713/000-0000
Telecopier No.: 713/216-4117
Attention: Xxxxxx Xxxxxxx
[Signature Page - 2]
82
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, Individually and as
Documentation Agent
By: /s/ XXXXXXX X. XXXXXXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
--------------------------
Title: Vice President
-------------------------
Lending Office for Base Rate Loans and
Eurodollar Loans:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone No.: 704/000-0000
Telecopier No.: 704/374-4092
Attention: Xx. Xxxxx Xxxxxxxx
Address for Notice:
x/x Xxxxx Xxxxx Xxxxxxxxxxx
xx Xxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone No.: 713/000-0000
Telecopier No.: 713/650-6354
Attention: Xxx X. Xxxxxxxxx
[Signature Page - 3]
83
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, Individually and as
Syndication Agent
By: /s/ XXXX X. XXXXXXX, XX.
------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
----------------------------
Title: Associate
---------------------------
Lending Office for Base Rate Loans, Eurodollar
Loans and Address for Notice:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: 212/000-0000
Telecopier No.: 212/648-5023
Attention: Xxxxxx XxXxxx
[Signature Page - 4]
84
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ PASCAL POUPELLE
------------------------------
Name: Pascal Poupelle
----------------------------
Title: Senior Vice President
---------------------------
Lending Office for Base Rate Loans and
Eurodollar Loans:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notice:
c/o Credit Lyonnais
Houston Representative Xxxxxx
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No.: 713/000-0000
Telecopier No.: 713/751-0307 or
713/751-0421
Attention: Xxxxx Xxxx
[Signature Page - 5]
00
XXXX XXX, XXXXX, N.A.
By: /s/ XXXXXXX XXXX XXXXXXX
------------------------------
Name: Xxxxxxx Xxxx Xxxxxxx
----------------------------
Title: Vice President
---------------------------
Lending Office for Base Rate Loans and
Eurodollar Loans:
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Address for Notice:
0000 Xxxx Xxxxxx, 0XXX
Xxxxxx, Xxxxx 00000
Telephone No.: 214/000-0000
Telecopier No.: 214/290-2627
Attention: Xxxx Xxxxxx
[Signature Page - 6]
86
BANQUE PARIBAS
By: /s/ XXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------
Title: Group Vice President
---------------------------
By: /s/ XXXXXXX FINZAT
------------------------------
Name: Xxxxxxx Finzat
----------------------------
Title: Assistant Vice President
---------------------------
Lending Office for Base Rate Loans, Eurodollar
Loans and Address for Notice:
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No.: 713/000-0000
Telecopier No.: 713/659-6915
Attention: Xxxxx Xxxxxx
[Signature Page - 7]
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By: /s/ XXXXX XXXXXX
------------------------------
Name: Xxxxx Xxxxxx
----------------------------
Title: Vice President
---------------------------
By: /s/ XXXXX XXXXXXXX
------------------------------
Name: Xxxxx Xxxxxxxx
----------------------------
Title: Vice President
---------------------------
Lending Office for Base Rate Loans, Eurodollar
Loans and Address for Notice:
0000 Xxxxxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone No.: 214/000-0000
Telecopier No.: 214/922-4209
Attention: Xxxx Xxxxx
[Signature Page - 8]
88
ANNEX I
COMMITMENTS
LENDER COMMITMENT AMOUNT
The Chase Manhattan Bank $50,000,000
First Union National Bank of North Carolina $50,000,000
Xxxxxx Guaranty Trust Company of New York $50,000,000
Credit Lyonnais New York Branch $25,000,000
Bank One, Texas, N.A. $25,000,000
Banque Paribas $25,000,000
Union Bank of California, N.A. $25,000,000
------------
Total Commitments $250,000,000