EXHIBIT 10.1
CREDIT AGREEMENT
Dated as of October 14, 1997
Among
▇▇▇▇▇ ▇▇▇▇▇▇▇ NATURAL GAS CORP.,
as Borrower,
BANK OF MONTREAL,
as Administrative Agent,
CHASE MANHATTAN BANK,
as Syndication Agent,
NATIONSBANK OF TEXAS, N.A.,
as Documentation Agent,
and
THE LENDERS SIGNATORY HERETO
$550,000,000 Senior Unsecured
Revolving Credit Facility
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . 1
Section 1.03 Accounting Terms and Determinations. . . . . . . . . . . . . .13
ARTICLE II
COMMITMENTS
Section 2.01 Loans and Letters of Credit. . . . . . . . . . . . . . . . . .13
Section 2.02 Borrowings, Continuations and Conversions,
Letters of Credit. . . . . . . . . . . . . . . . . . . . . . .14
Section 2.03 Changes of Commitments . . . . . . . . . . . . . . . . . . . .16
Section 2.04 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 2.05 Several Obligations. . . . . . . . . . . . . . . . . . . . . .18
Section 2.06 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 2.07 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 2.08 Assumption of Risks. . . . . . . . . . . . . . . . . . . . . .19
Section 2.09 Obligation to Reimburse and to Prepay. . . . . . . . . . . . .20
Section 2.10 Lending Offices. . . . . . . . . . . . . . . . . . . . . . . .21
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . .21
Section 3.02 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . .22
Section 4.02 Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . .23
Section 4.03 Computations. . . . . . . . . . . . . . . . . . . . . . . . .23
Section 4.04 Non-receipt of Funds by the Administrative Agent . . . . . . .23
Section 4.05 Set-off, Sharing of Payments, Etc . . . . . . . . .. . . . . .24
Section 4.06 Taxes . . . . . . . . .. . . . . . . . . . . . . . . . . . . .25
ARTICLE V
CAPITAL ADEQUACY
Section 5.01 Additional Costs. . . . . . . . . . . . . . . . . . . . . . .27
Section 5.02 Limitation on LIBOR Loans. . . . . . . . . . . . . . . . . . .29
Section 5.03 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . .29
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03 . . .30
Section 5.05 Compensation . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 5.06 Replacement Lenders. . . . . . . . . . . . . . . . . . . . . .30
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding. . . . . . . . . . . . . . . . . . . . . . . .32
Section 6.02 Initial and Subsequent Loans and Letters of Credit . . . . . .32
Section 6.03 Conditions Precedent for the Benefit of Lenders. . . . . . . .33
Section 6.04 No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . .33
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 Corporate Existence. . . . . . . . . . . . . . . . . . . . . .33
Section 7.02 Financial Condition. . . . . . . . . . . . . . . . . . . . . .34
Section 7.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 7.04 No Breach. . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 7.05 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 7.06 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 7.07 Use of Loans . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 7.08 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 7.09 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 7.10 Titles, etc. . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 7.11 No Material Misstatements. . . . . . . . . . . . . . . . . . .37
Section 7.12 Investment Company Act . . . . . . . . . . . . . . . . . . . .37
Section 7.13 Public Utility Holding Company Act . . . . . . . . . . . . . .37
Section 7.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 7.15 Location of Business and Offices . . . . . . . . . . . . . . .37
Section 7.16 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 7.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . .37
Section 7.18 Compliance with the Law. . . . . . . . . . . . . . . . . . . .38
Section 7.19 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01 Reporting Requirements . . . . . . . . . . . . . . . . . . . .39
Section 8.02 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 8.03 Maintenance, Etc . . . . . . . . . . . . . . . . . . . . . . .41
Section 8.04 Environmental Matters. . . . . . . . . . . . . . . . . . . . .41
Section 8.05 Further Assurances . . . . . . . . . . . . . . . . . . . . . .41
Section 8.06 Performance of Obligations . . . . . . . . . . . . . . . . . .41
Section 8.07 ERISA Information and Compliance . . . . . . . . . . . . . . .42
Section 8.08 American Exploration Liens . . . . . . . . . . . . . . . . . .42
ARTICLE IX
NEGATIVE COVENANTS
Section 9.01 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Section 9.02 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 9.03 Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . .43
Section 9.04 Nature of Business . . . . . . . . . . . . . . . . . . . . . .43
Section 9.05 Mergers, Etc . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 9.06 Proceeds of Notes; Letters of Credit . . . . . . . . . . . . .43
Section 9.07 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . .44
Section 9.08 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . .45
Section 9.09 Funded Debt Ratio. . . . . . . . . . . . . . . . . . . . . . .45
Section 9.10 Environmental Matters. . . . . . . . . . . . . . . . . . . . .45
Section 9.11 Transactions with Affiliates . . . . . . . . . . . . . . . . .45
Section 9.12 Distribution Restrictions. . . . . . . . . . . . . . . . . . .45
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default . . . . . . . . . . . . . . . . . . . . . .46
Section 10.02 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . .48
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities. . . . . . . . . . . . . .48
Section 11.02 Reliance by Administrative Agent. . . . . . . . . . . . . . .49
Section 11.03 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . .49
Section 11.04 Rights as a Lender. . . . . . . . . . . . . . . . . . . . . .49
Section 11.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . .50
Section 11.06 Non-Reliance on Administrative Agent and other Lenders. . . .50
Section 11.07 Action by Administrative Agent. . . . . . . . . . . . . . . .50
Section 11.08 Resignation or Removal of Administrative Agent. . . . . . . .51
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Section 12.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .51
Section 12.03 Payment of Expenses, Indemnities, etc . . . . . . . . . . . .52
Section 12.04 Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . .54
Section 12.05 Successors and Assigns. . . . . . . . . . . . . . . . . . . .54
Section 12.06 Assignments and Participations. . . . . . . . . . . . . . . .54
Section 12.07 Invalidity. . . . . . . . . . . . . . . . . . . . . . . . . .56
Section 12.08 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .56
Section 12.09 References. . . . . . . . . . . . . . . . . . . . . . . . . .56
Section 12.10 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . .56
Section 12.11 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . .56
Section 12.12 No Oral Agreements. . . . . . . . . . . . . . . . . . . . . .56
Section 12.13 Governing Law; Submission to Jurisdiction . . . . . . . . . .57
Section 12.14 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . .58
Section 12.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . .59
Section 12.16 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . .59
Section 12.17 Borrowing Base. . . . . . . . . . . . . . . . . . . . . . . .60
ANNEXES, EXHIBITS AND SCHEDULES
Annex I - List of Maximum Credit Amounts and Percentage Shares
Exhibit A - Form of Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Assignment Agreement
Schedule 7.14 - Subsidiaries and Partnerships
THIS CREDIT AGREEMENT dated as of October 14, 1997 is among ▇▇▇▇▇ ▇▇▇▇▇▇▇
NATURAL GAS CORP., a corporation formed under the laws of the State of
Oklahoma (the "Borrower"); each of the lenders that is a signatory hereto or
which becomes a signatory hereto as provided in Section 12.06 (individually,
together with its successors and assigns, a "Lender" and, collectively, the
"Lenders"); BANK OF MONTREAL, a foreign bank formed under the laws of Canada
(in its individual capacity, "BMO"), as agent for the Lenders (in such
capacity, together with its successors in such capacity, the "Administrative
Agent"), CHASE MANHATTAN BANK, as syndication agent, and NATIONSBANK OF
TEXAS,
N.A., as documentation agent.
R E C I T A L S
A. The Borrower has requested that the Lenders provide certain loans to
and extensions of credit on behalf of the Borrower; and
B. The Lenders have agreed to make such loans and extensions of credit
subject to the terms and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. As used in this Agreement, the terms
"Administrative Agent," "Borrower," "Lender," "Lenders," and "BMO" shall have
the meanings indicated above.
Section 1.02 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Article I or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Additional Costs" shall have the meaning assigned such term in Section
5.01(a).
"Affected Loans" shall have the meaning assigned such term in Section
5.04.
"Affiliate" of any Person shall mean (i) any Person directly or
indirectly controlled by, controlling or under common control with such first
Person, (ii) any director or officer of such first Person or of any Person
referred to in clause (i) above and (iii) if any Person in clause (i) above is
an individual, any member of the immediate family (including parents, spouse
and children) of such individual and any trust whose principal beneficiary is
such individual or one or more members of such immediate family and any Person
who is controlled by any such member or trust. For purposes of this
definition, any Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of
such other Person) will be deemed to "control" (including, with its
correlative meanings, "controlled by" and "under common control with") such
corporation or other Person.
"Agreement" shall mean this Credit Agreement, as the same may from time
to time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the amount calculated in
accordance with Section 2.03.
"Aggregate Maximum Credit Amounts" at any time shall equal the sum of the
Maximum Credit Amounts of the Lenders ($550,000,000), as the same may be
reduced pursuant to Section 2.03(b).
"Applicable Lending Office" shall mean, for each Lender and for each Type
of Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
offices of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower as the
office by which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean (i) 0% per annum with respect to Base Rate
Loans; and (ii) with respect to LIBOR Loans, the applicable per annum
percentage set forth at the appropriate intersection in the table shown below,
based on the S&P/▇▇▇▇▇'▇ Credit Rating of the Borrower as in effect from time
to time:
Applicable
S&P/▇▇▇▇▇'▇ Credit Rating Margin
------------------------- ------
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower
is BBB+ or Baa1, as the case may be, or higher 0.18%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower
is BBB or Baa2, as the case may be 0.23%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower
is BBB- or Baa3, as the case may be 0.30%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower
is BB+ or Ba1, as the case may be 0.40%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower
is BB or Ba2, as the case may be, or less, or
when there is No Rating 0.50%
When determining the Applicable Margin, the S&P/▇▇▇▇▇'▇ Rating shall
apply.
A rating, whether public or private, by S&P or ▇▇▇▇▇'▇ shall be deemed to
be in effect on the date of announcement or publication by S&P or ▇▇▇▇▇'▇, as
the case may be, of such rating or, in the absence of such announcement or
publication, on the effective date of such rating and will remain in effect
until the date when any change in such rating is deemed to be in effect. In
the event any of the rating categories used by ▇▇▇▇▇'▇ or S&P is revised or
designated differently (such as by changing letter designations to different
letter designations or to numerical designations), then the references herein
to such rating shall be changed to the revised or redesignated rating for
which the standards are closest to, but not lower than, the standards at the
date hereof for the rating which has been revised or redesignated.
Each change in the Applicable Margin resulting from a change in the
S&P/▇▇▇▇▇'▇ Credit Rating shall take effect at the time of such change in the
S&P/▇▇▇▇▇'▇ Credit Rating.
"Assignment" shall have the meaning assigned such term in Section
12.06(b).
"Base Rate" shall mean, with respect to any Base Rate Loan, for any day,
the higher of (i) the Federal Funds Rate for any such day plus 1/2 of 1% or
(ii) the Prime Rate for such day. Each change in any interest rate provided
for herein based upon the Base Rate resulting from a change in the Base Rate
shall take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates based upon
the Base Rate.
"BMO Fee Letter" shall mean that certain letter agreement from BMO, as
Administrative Agent and arranger, addressed to the Borrower and dated of even
date with this Agreement concerning certain fees in connection with this
Agreement and any agreements or instruments executed in connection therewith,
as the same may be amended or replaced from time to time.
"Borrowing Base" shall mean at any time an amount equal to the amount
determined in accordance with Section 12.17.
"Borrowing Base Period" shall have the meaning assigned to such term in
Section 12.17.
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas, or Chicago,
Illinois, and, where such term is used in the definition of "Quarterly Date",
or if such day relates to a borrowing or continuation of a payment or
prepayment of principal of or interest on, or a conversion of or into, or the
Interest Period for, a LIBOR Loan or a notice by the Borrower with respect to
any such borrowing or continuation, payment, prepayment, conversion or
Interest Period, any day which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Closing Date" shall mean October 14, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time and any successor statute.
"Commitment" shall mean, for any Lender, its obligation to make Loans and
to participate in the Letters of Credit as provided in Section 2.01(b) up to
(i) such Lender's Maximum Credit Amount or (ii) during a Borrowing Base
Period, the lesser of such Lender's Maximum Credit Amount or the Lender's
Percentage Share of the amount equal to the then effective Facility Borrowing
Base.
"Consolidated Subsidiaries" shall mean each Subsidiary of the Borrower
(whether now existing or hereafter created or acquired) the financial
statements of which are required to be consolidated with the financial
statements of the Borrower in accordance with GAAP.
"Debt" shall mean, with respect to any Person (without duplication), (i)
all indebtedness of that Person for borrowed money and for the purchase price
of property or assets, the payment of which is deferred, (ii) all obligations
of that Person arising under letters of credit (excluding letters of credit to
support Hedging Agreements), surety or other bonds, and acceptance facilities,
including, without limitation, time drafts and bills of exchange, (iii) all
guaranties of that Person of obligations of any other Persons which are of the
types of obligations described in clauses (i) and (ii) of this definition,
(iv) all obligations of any other Person secured by any Lien other than a Lien
permitted under Section 9.02(g) on any Property of that Person (the amount of
which obligation at any time shall be the lower of the indebtedness secured
and the fair market value of that property at that time), (v) all obligations
of that Person as lessee under capital leases, (vi) the undischarged balance
of any production payment as to which such Person is obligated or its property
is dedicated, and (vii) all obligations under leases which require such Person
or its Affiliate to make payments over the term of such lease, including
payments at termination, which are substantially equal to at least eighty
percent (80%) of the purchase price of the Property subject to such lease plus
interest at an imputed rate of interest.
"Default" shall mean an Event of Default or an event which with notice or
lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDAX" shall mean, for any period, cash flows from operating
activities (before changes in working capital and before adjustments for
amortization of deferred revenue relating to production payments included in
Debt) for such period as set forth in the Borrower's consolidated statement of
cash flows for such period plus cash income and franchise taxes and interest
expense, adjusted to exclude the effect of any extraordinary items reflected
therein.
"Effective Date" shall have the meaning assigned such term in Section
12.16.
"Environmental Laws" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Borrower or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Borrower or any Subsidiary is
located, including without limitation, 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, the Hazardous Materials
Transportation Act, as amended, and other environmental conservation or
protection laws. The term "oil" shall have the meaning specified in OPA, the
terms "hazardous substance" and "release" (or "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, that (i)
in the event either OPA, 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 (ii) to the extent the
laws of the state in which any Property of the Borrower or any Subsidiary is
located 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" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Borrower or any Subsidiary would be
deemed to be a "single employer" within the meaning of section 4001(b)(1) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the
Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, (ii) the withdrawal of
the Borrower, any Subsidiary 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.
"Event of Default" shall have the meaning assigned such term in Section
10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained; (ii) Liens in connection with workmen's compensation, unemployment
insurance or other social security, old age pension or public liability
obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (iii) operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', workmen's, materialmen's, construction or other like
Liens arising by operation of law in the ordinary course of business or
incident to the exploration, development, operation and maintenance of Oil and
Gas Properties or statutory landlord's liens, each of which is in respect of
obligations that have not been outstanding more than 90 days or which are
being contested in good faith by appropriate proceedings and for which
adequate reserves have been maintained in accordance with GAAP; (iv) any Liens
reserved in leases or farmout agreements for rent or royalties and for
compliance with the terms of the farmout agreements or leases in the case of
leasehold estates, to the extent that any such Lien referred to in this clause
does not materially impair the use of the Property covered by such Lien for
the purposes for which such Property is held by the Borrower or any Subsidiary
or materially impair the value of such Property subject thereto; (v)
encumbrances (other than to secure the payment of borrowed money or the
deferred purchase price of Property or services), easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations in any
rights of way or other Property of the Borrower or any Subsidiary for the
purpose of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil, coal or other minerals or
timber, and other like purposes, or for the joint or common use of real
estate, rights of way, facilities and equipment, and defects, irregularities,
zoning restrictions and deficiencies in title of any rights of way or other
Property which in the aggregate do not materially impair the use of such
rights of way or other Property for the purposes of which such rights of way
and other Property are held by the Borrower or any Subsidiary or materially
impair the value of such Property subject thereto; (vi) deposits of cash or
securities or letters of credit to secure the performance of bids, trade
contracts, Hedging Agreements, leases, statutory obligations and other
obligations of a like nature incurred in the ordinary course of business; and
(vii) production payments payable out of Oil and Gas Properties.
"Facility Borrowing Base" shall have the meaning assigned to such term in
Section 12.17.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with a member of
the Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the date for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the
average rate charged to the Administrative Agent on such day on such
transactions as determined by the Administrative Agent.
"Financial Statements" shall mean the financial statement or statements
of the Borrower and its Consolidated Subsidiaries described or referred to in
Section 7.02.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" shall include the country, state, county, city
and political subdivisions in which any Person or such Person's Property is
located or which exercises valid jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board,
bureau or instrumentality of any of them including monetary authorities which
exercises valid jurisdiction over any such Person or such Person's Property.
Unless otherwise specified, all references to Governmental Authority herein
shall mean a Governmental Authority having jurisdiction over, where
applicable, the Borrower, its Subsidiaries or any of their Property or the
Administrative Agent, any Lender or any Applicable Lending Office.
"Governmental Requirement" shall mean any law, statute, code, ordinance,
order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or
requirement (whether or not having the force of law), including, without
limitation, Environmental Laws, energy regulations and occupational, safety
and health standards or controls, of any Governmental Authority.
"Hedging Agreements" shall mean any commodity, interest rate or currency
swap, cap, floor, collar, forward agreement or other exchange or protection
agreements or any option with respect to any such transaction.
"Highest Lawful Rate" shall mean, 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 Indebtedness under laws applicable to such Lender which are
presently in effect or, to the extent allowed by law, under such applicable
laws which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates now or hereafter acquired 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 reserved or residual interests of
whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined or separated therefrom.
"Indebtedness" shall mean any and all amounts owing or to be owing by the
Borrower to the Administrative Agent, the Issuing Bank and/or the Lenders in
connection with the Loan Documents, and all renewals, extensions and/or
rearrangements of any of the foregoing.
"Indemnified Parties" shall have the meaning assigned such term in
Section 12.03(a)(ii).
"Indemnity Matters" shall mean any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent
negligence of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Loans or issuance
of the initial Letters of Credit upon satisfaction of the conditions set forth
in Sections 6.01 and 6.02.
"Interest Period" shall mean, with respect to any LIBOR Loan, the period
commencing on the date such LIBOR Loan is made and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Borrower may select as provided in Section 2.02 (or such
longer period as may be requested by the Borrower and agreed to by the
Lenders),except that each Interest Period which commences on the last Business
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on
the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after the
Termination Date; (ii) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day (or,
if such next succeeding Business Day falls in the next succeeding calendar
month, on the next preceding Business Day); and (iii) no Interest Period shall
have a duration of less than one month and, if the Interest Period for any
LIBOR Loans would otherwise be for a shorter period, such Loans shall not be
available hereunder.
"Issuing Bank" shall mean BMO or any other Lender agreed to among such
Lender, the Borrower and the Administrative Agent to issue Letters of Credit.
"LC Commitment" at any time shall mean $75,000,000.
"LC Exposure" at any time shall mean the difference between the aggregate
face amount of all undrawn and uncancelled Letters of Credit and the aggregate
of all amounts drawn under all Letters of Credit and not yet reimbursed.
"Lenders Fee Letter" shall mean that certain letter agreement between the
Lenders and the Borrower dated of even date with this Agreement concerning
certain fees in connection with this Agreement and any agreements or
instruments executed in connection therewith, as the same may be amended or
replaced from time to time.
"Letter of Credit Agreements" shall mean the written agreements between
Borrower and the Issuing Bank, as issuing lender for any Letter of Credit,
executed in connection with the issuance by the Issuing Bank of the Letters of
Credit, such agreements to be on the Issuing Bank's customary form for letters
of credit of comparable amount and purpose as from time to time in effect or
as otherwise agreed to by the Borrower and the Issuing Bank.
"Letters of Credit" shall mean the letters of credit issued pursuant to
Section 2.01(b) and all reimbursement obligations pertaining to any such
letters of credit, and "Letter of Credit" shall mean any one of the Letters of
Credit and the reimbursement obligations pertaining thereto.
"LIBOR Loans" shall mean Loans the interest rates on which are determined
on the basis of rates referred to in the definition of "LIBOR Rate".
"LIBOR Rate" shall mean, with respect to any LIBOR Loan, the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) quoted by the
Administrative Agent at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two (2) Business Days prior to the first day of the
Interest Period for such Loan for the offering by the Administrative Agent to
leading banks in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to the
principal amount of the LIBOR Loan to be made by the Lenders for such Interest
Period.
"Lien" shall mean 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 whether such
obligation or claim is fixed or contingent, 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. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property
has been retained by or vested in some other Person in a transaction intended
to create a financing.
"Loan Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Letter of Credit Agreements, the BMO Fee Letter, the Lender Fee
Letter and any and all other agreements or instruments now or hereafter
executed and delivered by the Borrower or any other Person (other than
participation or similar agreements between any Lender and any other lender or
creditor with respect to any Indebtedness pursuant to this Agreement) in
connection with, or as security for the payment or performance of the Notes,
this Agreement, or reimbursement obligations under the Letters of Credit, as
such agreements may be amended, supplemented or restated from time to time.
"Loans" shall mean the loans as provided for by Section 2.01(a).
"Majority Lenders" shall mean at any time while no Loans are outstanding,
Lenders having at least sixty-six and two-thirds percent (66 %) of the
Aggregate Commitments and, at any time while Loans are outstanding, Lenders
holding at least sixty-six and two-thirds percent (66 %) of the outstanding
aggregate principal amount of the Loans (without regard to any sale by a
Lender of a participation in any Loan under Section 12.06(c)).
"Material Adverse Effect" shall mean any material and adverse effect on
(i) the assets, liabilities, financial condition, business, operations or
affairs of the Borrower and its Subsidiaries taken as a whole different from
those reflected in the Financial Statements or from the facts represented or
warranted in any Loan Document, or (ii) the ability of the Borrower and its
Subsidiaries taken as a whole to carry out their business as at the Closing
Date or as proposed as of the Closing Date to be conducted or meet their
obligations under the Loan Documents on a timely basis.
"Material Subsidiary" shall mean any Subsidiary with total assets greater
than or equal to $10,000,000 (valued at book value) and any other Subsidiary
with total assets (valued at book value) less than $10,000,000, but designated
in writing by the Borrower to the Administrative Agent as a "Material
Subsidiary".
"Maximum Credit Amount" shall mean, as to each Lender, the amount set
forth opposite such Lender's name on Annex I under the caption "Maximum Credit
Amounts" (as the same may be reduced pursuant to Section 2.03(b) pro rata to
each Lender based on its Percentage Share), as modified from time to time to
reflect any assignments permitted by Section 12.06(b).
"Moody's Credit Rating" shall mean, at any time, with respect to any
Person, the rating in effect at such time assigned by ▇▇▇▇▇'▇ Investors
Service, Inc. for the long term senior unsecured debt of such Person.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37)
or 4001(a)(3) of ERISA.
"No Rating" shall mean, at any time, the Borrower does not have either a
S&P Credit Rating or a Moody's Credit Rating for its long term senior
unsecured debt in effect at such time.
"Norcon Gas Sales Contract" shall mean collectively, the Gas Sale and
Purchase Agreement dated January 29, 1992, between ▇▇▇▇▇ ▇▇▇▇▇▇▇ Gas Marketing
Corp. and Northern Consolidated Power, Inc., as assigned to NorCon Power
Partners, L.P., as amended by the letter agreements each between ▇▇▇▇▇ ▇▇▇▇▇▇▇
Ultra Gas Marketing Corp. and NorCon Power Partners, L.P. and approved by
General Electric Capital Corporation, dated September 17, 1993 and December
16, 1993; an Undertaking between the Borrower and NorCon Power Partners, L.P.
dated as of December 15, 1993; and a Consent and Agreement between the
Borrower, NorCon Power Partners, L.P. and General Electric Capital Corporation
dated as of December 15, 1993.
"Notes" shall mean the Notes provided for by Section 2.06, together with
any and all renewals, extensions for any period, increases, rearrangements,
substitutions or modifications thereof.
"Oil and Gas Properties" shall mean 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 without limitation all units
created under orders, regulations and rules of any Governmental Authority)
which may affect all or any portion of the Hydrocarbon Interests; all
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, including all oil in tanks, the
lands covered thereby 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 any manner
appertaining, belonging, affixed or incidental to the Hydrocarbon Interests;
and all Properties, rights, titles, interests and estates described or
referred to above, including any and all Property, real or personal, now owned
or hereinafter 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 ▇▇▇▇▇, gas ▇▇▇▇▇, injection ▇▇▇▇▇ or other ▇▇▇▇▇, 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" shall have the meaning assigned such term in Section
4.06(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Aggregate Commitments
to be provided by a Lender under this Agreement as indicated on Annex I
hereto, as modified from time to time to reflect any assignments permitted by
Section 12.06(b).
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
"Plan" shall mean 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 Borrower, any Subsidiary or an ERISA
Affiliate or (ii) was at any time during the preceding six calendar years
sponsored, maintained or contributed to, by the Borrower, any Subsidiary or an
ERISA Affiliate.
"Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other amount payable by the Borrower under this Agreement or any other
Loan Document , a rate per annum during the period commencing on the date of
occurrence of an Event of Default until such amount is paid in full or all
Events of Default are cured or waived equal to 2% per annum above the Base
Rate as in effect from time to time plus the Applicable Margin (if any), but
in no event to exceed the Highest Lawful Rate; provided however, for a LIBOR
Loan, the "Post-Default Rate" for such principal shall be, for the period
commencing on the date of occurrence of an Event of Default and ending on the
earlier to occur of the last day of the Interest Period therefor or the date
all Events of Default are cured or waived, 2% per annum above the interest
rate for such Loan as provided in Section 3.02(a)(ii), but in no event to
exceed the Highest Lawful Rate.
"Prime Rate" shall mean the rate of interest from time to time announced
publicly by the Administrative Agent at the Principal Office as its prime
commercial lending rate. Such rate is set by the Administrative Agent as a
general reference rate of interest, taking into account such factors as the
Administrative Agent may deem appropriate, it being understood that many of
the Administrative Agent'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 the Administrative Agent may make various commercial
or other loans at rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the Administrative
Agent, presently located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean each March 31, June 30, September 30, and
December 31, in each year, the first of which shall be December 31; provided,
however, that if any such day is not a Business Day, such Quarterly Date shall
be the next succeeding Business Day.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the Closing Date in any Governmental Requirement (including Regulation
D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of lenders (including such Lender
or its Applicable Lending Office) of or under any Governmental Requirement
(whether or not having the force of law) by any Governmental Authority charged
with the interpretation or administration thereof.
"Required Payment" shall have the meaning assigned such term in Section
4.04.
"Responsible Officer" shall mean, as to any Person, the Chief Executive
Officer, the President or any Vice President of such Person and, with respect
to financial matters, the term "Responsible Officer" shall include the Chief
Financial Officer or Chief Accounting Officer of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean
a Responsible Officer of the Borrower.
"S&P Credit Rating" shall mean, at any time, with respect to any Person,
the rating in effect at such time assigned by Standard & Poor's Rating Group,
a division of McGraw Hill for the long term senior unsecured debt of such
Person. For a 90 day period from and after the Closing Date, if there is no
actual S&P Credit Rating, the implied senior debt rating shall apply.
"S&P/Moody's Credit Rating" shall mean, at any time, with respect to any
Person, the higher of the S&P Credit Rating and the Moody's Credit Rating of
such Person.
"SEC" shall mean the Securities and Exchange Commission or any successor
Governmental Authority.
"Senior Debt" shall mean all Debt that is not Subordinated Debt.
"Special Entity" shall mean any joint venture, limited liability company
or partnership, general or limited partnership or any other type of
partnership or company other than a corporation in which the Borrower or one
or more of its other Subsidiaries is a member, owner, partner or joint
venturer and owns, directly or indirectly, at least a majority of the equity
of such entity or controls such entity, but excluding any tax partnerships
that are not classified as partnerships under state law. For purposes of this
definition, any Person which owns directly or indirectly an equity investment
in another Person which allows the first Person to manage or elect managers
who manage the normal activities of such second Person will be deemed to
"control" such second Person (e.g. a sole general partner controls a limited
partnership).
"Subordinated Debt" shall mean any Debt expressly subordinated to the
indebtedness pursuant to agreements in form and substance satisfactory to the
Lenders.
"Subsidiary" shall mean (i) any corporation of which at least a majority
of the outstanding shares of stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned
or controlled by the Borrower or one or more of its Subsidiaries or by the
Borrower and one or more of its Subsidiaries and (ii) any Special Entity.
Unless otherwise indicated herein, each reference to the term "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Tangible Net Worth" shall mean, as at any date, the sum of the following
for the Borrower and its Consolidated Subsidiaries:
(i) the total amount of (x) the amount of share capital, including
preferred stock (less the cost of treasury shares) and (y) the amount of
surplus and retained earnings; minus
(ii) the sum of (without duplication of deductions in respect of items
already deducted in arriving at surplus and retained earnings) the book value
of all assets that are treated as intangibles under GAAP, including goodwill,
trademarks, trade-names and copyrights, share capital discount and expense and
any excess of cost over market value of marketable securities and other
similar investments.
"Taxes" shall have the meaning assigned such term in Section 4.06(a).
"Termination Date" shall mean the earlier to occur of (i) the fifth
anniversary of the Closing Date and (ii) the date the Commitments are sooner
terminated pursuant to Sections 2.03(b) or 10.02.
"Type" shall mean, with respect to any Loan, a Base Rate Loan or a LIBOR
Loan.
"Wholly-Owned Subsidiary" shall mean, as to the Borrower, any Subsidiary
of which all of the outstanding shares of capital stock or other equity
interests, on a fully-diluted basis, are owned by the Borrower or one or more
of the Wholly-Owned Subsidiaries or by the Borrower and one or
more of the Wholly-Owned Subsidiaries.
Section 1.03 Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Administrative Agent or the
Lenders hereunder shall be prepared, in accordance with GAAP, applied on a
basis consistent with the audited financial statements of the Borrower
referred to in Section 7.02 (except for changes concurred with by the
Borrower's independent public accountants).
ARTICLE II
COMMITMENTS
Section 2.01 Loans and Letters of Credit.
(a) Loans. Each Lender severally agrees, on the terms and conditions of
this Agreement, to make loans to the Borrower 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 12.06(b), to and up
to, but excluding, the Termination 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 principal
amount of all such Loans by all Lenders hereunder at any one time outstanding
together with the LC Exposure shall not exceed the Aggregate Commitments.
Subject to the terms of this Agreement, during the period from the Closing
Date to and up to, but excluding, the Termination Date, the Borrower may
borrow, repay and reborrow the amount described in this Section 2.01(a).
(b) Letters of Credit. During the period from and including the Closing
Date to, but excluding, the Termination Date, the Issuing Bank, as issuing
bank for the Lenders, agrees to extend credit for the account of the Borrower
or any Subsidiary at any time and from time to time by issuing, renewing,
extending or reissuing Letters of Credit; provided however, the LC Exposure at
any one time outstanding shall not exceed the lesser of (i) the LC Commitment
or (ii) the Aggregate Commitments, as then in effect, minus the aggregate
principal amount of all Loans then outstanding. The Lenders shall participate
in such Letters of Credit according to their respective Percentage Shares.
Each of the Letters of Credit shall (i) be issued by the Issuing Bank, (ii)
contain such terms and provisions as are reasonably required by the Issuing
Bank, (iii) be for the account of the Borrower or a Subsidiary and (iv) expire
upon the earlier to occur of (a) one year after the date of issuance and (b)
two (2) days before the Termination Date.
(c) Limitation on Types of Loans. Subject to the other terms and
provisions of this Agreement, at the option of the Borrower, the Loans may be
Base Rate Loans or LIBOR Loans; provided that, without the prior written
consent of the Majority Lenders, no more than ten (10) LIBOR Loans may be
outstanding at any time.
Section 2.02 Borrowings, Continuations and Conversions, Letters of
Credit.
(a) Borrowings. The Borrower shall give the Administrative Agent (which
shall promptly notify the Lenders) advance notice as hereinafter provided of
each borrowing hereunder, which shall specify (i) the aggregate amount of such
borrowing, (ii) the Type and (iii) the date (which shall be a Business Day) of
the Loans to be borrowed, and (iv) (in the case of LIBOR Loans) the duration
of the Interest Period therefor.
(b) Minimum Amounts. All Base Rate Loan borrowings shall be in amounts
of at least $3,000,000 or the remaining balance of the Aggregate Commitments,
if less, or any whole multiple of $1,000,000 in excess thereof, and all LIBOR
Loans shall be in amounts of at least $3,000,000 or any whole multiple of
$1,000,000 in excess thereof.
(c) Notices. All borrowings, continuations and conversions shall
require advance written notice to the Administrative Agent (which shall
promptly notify the Lenders) in the form of Exhibit B (or telephonic notice
promptly confirmed by such a written notice), which in each case shall be
irrevocable, from the Borrower to be received by the Administrative Agent not
later than 9:00 a.m. Houston, Texas time on the date of each Base Rate Loan
borrowing and not later than 11:00 a.m. Houston, Texas time at least three
Business Days prior to the date of each LIBOR Loan borrowing, continuation or
conversion. Without in any way limiting the Borrower'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 Borrower prior to receipt of written
confirmation. In each such case, the Borrower hereby waives the right to
dispute the Administrative Agent's record of the terms of such telephonic
notice except in the case of gross negligence or willful misconduct by the
Administrative Agent.
(d) Continuation Options. Subject to the provisions made in this
Section 2.02(d), the Borrower may elect to continue all or any part of any
LIBOR Loan beyond the expiration of the then current Interest Period relating
thereto by giving advance notice as provided in Section 2.02(c) to the
Administrative Agent (which shall promptly notify the Lenders) of such
election, specifying the amount of such Loan to be continued and the Interest
Period therefor. In the absence of such a timely and proper election, the
Borrower shall be deemed to have elected to convert such LIBOR Loan to a Base
Rate Loan pursuant to Section 2.02(e). All or any part of any LIBOR Loan may
be continued as provided herein, provided that (i) any continuation of any
such Loan shall be (as to each Loan as continued for an applicable Interest
Period) in amounts of at least $3,000,000 or any whole multiple of $1,000,000
in excess thereof and (ii) no Default shall have occurred and be continuing.
If a Default shall have occurred and be continuing, each LIBOR Loan shall be
converted to a Base Rate Loan on the last day of the Interest Period
applicable thereto.
(e) Conversion Options. The Borrower may elect to convert all or any
part of any LIBOR 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 (which shall promptly notify the Lenders) of such
election. Subject to the provisions made in this Section 2.02(e), the
Borrower may elect to convert all or any part of any Base Rate Loan at any
time and from time to time to a LIBOR Loan by giving advance notice as
provided in Section 2.02(c) to the Administrative Agent (which shall promptly
notify the Lenders) of such election. All or any part of any outstanding Loan
may be converted as provided herein, provided that (i) any conversion of any
Base Rate Loan into a LIBOR Loan shall be (as to each such Loan into which
there is a conversion for an applicable Interest Period) in amounts of at
least $3,000,000 or any whole multiple of $1,000,000 in excess thereof and
(ii) no Default shall have occurred and be continuing. If a Default shall
have occurred and be continuing, no Base Rate Loan may be converted into a
LIBOR Loan.
(f) Advances. Not later than 12:00 noon Houston, Texas time on the date
specified for each Base Rate Loan borrowing hereunder and not later than 11:00
a.m. Houston, Texas time on the date specified for each LIBOR Loan borrowing
hereunder, each Lender shall make available the amount of the Loan to be made
by it on such date to the Administrative Agent, to an account which the
Administrative Agent shall specify, in immediately available funds, for the
account of the Borrower. The amounts so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower by depositing the same, in immediately available
funds, in an account of the Borrower, designated by the Borrower and
maintained at the Principal Office.
(g) Letters of Credit. The Borrower shall give the Issuing Bank (which
shall promptly notify the Lenders of such request and their Percentage Share
of such Letter of Credit) advance notice to be received by the Issuing Bank
not later than 11:00 a.m. Houston, Texas time not less than three (3) Business
Days prior thereto of each request for the issuance, and at least thirty (30)
Business Days prior to the date of the renewal or extension, of a Letter of
Credit hereunder which request shall specify (i) the amount of such Letter of
Credit, (ii) the date (which shall be a Business Day) such Letter of Credit is
to be issued, renewed or extended, (iii) the duration thereof, (iv) the name
and address of the beneficiary thereof, (v) the type of the Letter of Credit
and (vi) such other information as the Administrative Agent may reasonably
request, all of which shall be reasonably satisfactory to the Administrative
Agent. Subject to the terms and conditions of this Agreement, on the date
specified for the issuance, renewal or extension of a Letter of Credit, the
Administrative Agent shall issue, renew or extend such Letter of Credit to the
beneficiary thereof.
In conjunction with the issuance of each Letter of Credit, the Borrower
and the Subsidiary, if the account party, shall execute a Letter of Credit
Agreement. In the event of any conflict between any provision of a Letter of
Credit Agreement and this Agreement, the Borrower, the Issuing Bank, the
Administrative Agent and the Lenders hereby agree that the provisions of this
Agreement shall govern.
The Issuing Bank will send to the Borrower and each Lender, 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. Section
2.03 Changes of Commitments.
(a) The Aggregate Commitments shall at all times be (i) equal to the
Aggregate Maximum Credit Amounts or (ii) during a Borrowing Base Period, equal
to the lesser of (A) the Aggregate Maximum Credit Amounts or (B) the Facility
Borrowing Base as and when determined pursuant to Section 12.17(b).
(b) The Borrower shall have the right to terminate or to reduce the
amount of the Aggregate Maximum Credit Amounts at any time, or from time to
time, upon not less than three (3) Business Days' prior notice to the
Administrative Agent (which shall promptly notify the Lenders) of each such
termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction (which shall not be less than
$1,000,000 or any whole multiple of $1,000,000 in excess thereof) and shall be
irrevocable and effective only upon receipt by the Administrative Agent.
(c) The Aggregate Maximum Credit Amounts once terminated or reduced may
not be reinstated.
Section 2.04 Fees.
(a) Facility Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender a facility fee on the Aggregate Commitments for
the period from and including the Closing Date up to, but excluding, the
earlier of the date the Aggregate Commitments are terminated or the
Termination Date at a rate per annum equal to the percentage set forth at the
appropriate intersection in the table shown below:
S&P/Moody's Credit Rating Facility Fee
------------------------- Percentage
-------------
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower is
BBB+ or Baa1, as the case may be, or higher 0.10%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower is
BBB or Baa2, as the case may be 0.12%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower is
BBB- or Baa3, as the case may be 0.15%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower is
BB+ or Ba1, as the case may be 0.20%
When the S&P/▇▇▇▇▇'▇ Rating of the Borrower is
BB or Ba2, as the case may be, or less, or when
there is No Rating 0.25%
When determining the facility fee percentage, the S&P/▇▇▇▇▇'▇ Rating
shall apply.
Accrued facility fees shall be payable quarterly in arrears on each
Quarterly Date and on the earlier of the date the Aggregate Commitments are
terminated or the Termination Date.
(b) Letter of Credit Fees.
(i) The Borrower agrees to pay the Administrative Agent, for the
account of each Lender, commissions for issuing the Letters of Credit on
the daily average outstanding of the maximum liability of the Issuing
Bank existing from time to time under such Letter of Credit (calculated
separately for each Letter of Credit) at the rate per annum equal to the
Applicable Margin then in effect for LIBOR Loans, provided that each
Letter of Credit shall bear a minimum commission of $500. Each Letter of
Credit shall be deemed to be outstanding up to the full face amount of
the Letter of Credit until the Issuing Bank has received the canceled
Letter of Credit or a written cancellation of the Letter of Credit from
the beneficiary of such Letter of Credit in form and substance acceptable
to the Issuing Bank, or for any reductions in the amount of the Letter of
Credit (other than from a drawing), written notification from the
beneficiary of such Letter of Credit. Such commissions are payable
quarterly in arrears on each Quarterly Date and upon cancellation or
expiration of each such Letter of Credit.
(ii) The Borrower agrees to pay the Issuing Bank, for its own
account, an issuing fee for issuing Letters of Credit on the daily
average outstanding of the maximum liability of the Issuing Bank existing
from time to time under such Letter of Credit (calculated separately for
each Letter of Credit) at the rate of .10% per annum, payable quarterly
in arrears on each Quarterly Date and upon cancellation or expiration of
each such Letter of Credit.
(c) The Borrower shall pay to (i) BMO, as Administrative Agent and
arranger for its account such other fees as are set forth in the BMO Fee
Letter on the dates specified therein to the extent not paid prior to the
Closing Date and (ii) the Lenders for their respective accounts such fees as
are set forth in the Lenders Fee Letter on the dates specified therein to the
extent not paid prior to the Closing Date.
Section 2.05 Several Obligations. The failure of any Lender to make any
Loan to be made by it or to provide funds for disbursements or reimbursements
under Letters of Credit on the date specified therefor shall not relieve any
other Lender of its obligation to make its Loan or provide funds on such date,
but no Lender shall be responsible for the failure of any other Lender to make
a Loan to be made by such other Lender or to provide funds to be provided by
such other Lender.
Section 2.06 Notes. The Loans made by each Lender shall be evidenced by
a single promissory note of the Borrower in substantially the form of Exhibit
A, dated (i) the Closing Date or (ii) the effective date of an Assignment
pursuant to Section 12.06(b), payable to the order of such Lender in a
principal amount equal to its Maximum Credit Amount as originally in effect
and otherwise duly completed and such substitute Notes as required by Section
12.06(b). The date, amount, Type, interest rate and Interest Period of each
Loan made by each Lender, and all payments made on account of the principal
thereof, shall be recorded by such Lender on its books for its Note, and,
prior to any transfer may be endorsed by such Lender on the schedule attached
to such Note or any continuation thereof or on any separate record maintained
by such Lender. Failure to make any such notation or to attach a schedule
shall not affect any Lender's or the Borrower's rights or obligations in
respect of such Loans or affect the validity of such transfer by any Lender of
its Note.
Section 2.07 Prepayments.
(a) Voluntary Prepayments. The Borrower may prepay the Base Rate Loans
upon not less than one (1) Business Day's prior notice to the Administrative
Agent (which shall promptly notify the Lenders), which notice shall specify
the prepayment date (which shall be a Business Day) and the amount of the
prepayment (which shall be at least $1,000,000 or the remaining aggregate
principal balance outstanding on the Notes) and shall be irrevocable and
effective only upon receipt by the Administrative Agent, provided that
interest on the principal prepaid, accrued to the prepayment date, shall be
paid on the prepayment date. The Borrower may prepay LIBOR Loans on the same
conditions as for Base Rate Loans (except that prior notice to the
Administrative Agent shall be not less than three (3) Business Days for LIBOR
Loans) and in addition such prepayments of LIBOR Loans shall be subject to the
terms of Section 5.05 and shall be in an amount equal to all of the LIBOR
Loans for the Interest Period prepaid.
(b) Mandatory Prepayments.
(i) If, after giving effect to any termination or reduction of the
Aggregate Maximum Credit Amounts pursuant to Section 2.03(b), the
outstanding aggregate principal amount of the Loans plus the LC
Exposure exceeds the Aggregate Maximum Credit Amounts, the Borrower
shall (i) prepay the Loans on the date of such termination or reduction
in an aggregate principal amount equal to the excess, together with
interest on the principal amount paid accrued to the date of such
prepayment and (ii) if any excess remains after prepaying all of the
Loans because of LC Exposure, pay to the Administrative Agent on behalf
of the Lenders an amount equal to the excess to be held as cash
collateral as provided in Section 2.09(b) hereof.
(ii) During a Borrowing Base Period, upon any redetermination of the
amount of the Borrowing Base in accordance with the provisions of
Section 12.17 if the redetermined Facility Borrowing Base is less than
the aggregate outstanding principal amount of the Loans plus the LC
Exposure, then the Borrower shall within thirty (30) days of receipt of
written notice thereof: (i) prepay the Loans in an aggregate principal
amount equal to such excess, together with interest on the principal
amount paid accrued to the date of such prepayment and (ii) if a Facility
Borrowing Base deficiency remains after prepaying all of the Loans
because of LC Exposure, the Borrower shall pay to the Administrative
Agent on behalf of the Lenders an amount equal to such Facility Borrowing
Base deficiency to be held as cash collateral as provided in Section
2.09(b).
(c) Generally. Prepayments permitted or required under this Section
2.07 shall be without premium or penalty, except as required under Section
5.05 for prepayment of LIBOR Loans. Any prepayments on the Loans may be
reborrowed subject to the then effective Aggregate Commitments.
Section 2.08 Assumption of Risks. The Borrower assumes all risks of the
acts or omissions of any beneficiary of any Letter of Credit or any transferee
thereof with respect to its use of such Letter of Credit. Neither the Issuing
Bank, its correspondents nor any Lender shall be responsible for the validity,
sufficiency or genuineness of certificates or other documents or any
endorsements thereon, even if such certificates or other documents should in
fact prove to be invalid, insufficient, fraudulent or forged; for errors,
omissions, interruptions or delays in transmissions or delivery of any
messages by mail, telex, or otherwise, whether or not they be in code; for
errors in translation or for errors in interpretation of technical terms; the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any 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; the failure of any beneficiary or
any transferee of any Letter of Credit to comply fully with conditions
required in order to draw upon any Letter of Credit; or for any other
consequences arising from causes beyond the Issuing Bank's control or the
control of the Issuing Bank's correspondents. In addition, neither the
Issuing Bank, the Administrative Agent nor any Lender shall be responsible for
any error, neglect, or default of any of the Issuing Bank's correspondents;
and none of the above shall affect, impair or prevent the vesting of any of
the Issuing Bank's, the Administrative Agent's or any Lender's rights or
powers hereunder or under the Letter of Credit Agreements, all of which rights
shall be cumulative. The Issuing Bank and its correspondents may accept
certificates or other documents that appear on their face to be in order,
without responsibility for further investigation of any matter contained
therein regardless of any notice or information to the contrary. In
furtherance and not in limitation of the foregoing provisions, the Borrower
agrees that any action, inaction or omission taken or not taken by the Issuing
Bank or by any correspondent for the Issuing Bank in good faith in connection
with any Letter of Credit, or any related drafts, certificates, documents or
instruments, shall be binding on the Borrower and shall not put the Issuing
Bank or its correspondents under any resulting liability to the Borrower.
Section 2.09 Obligation to Reimburse and to Prepay.
(a) If a disbursement by the Issuing Bank is made under any Letter of
Credit, the Borrower shall pay to the Administrative Agent within two (2)
Business Days after notice of any such disbursement is received by the
Borrower, the amount of each such disbursement made by the Issuing Bank under
the Letter of Credit (if such payment is not sooner effected as may be
required under this Section 2.09 or under other provisions of the Letter of
Credit), together with interest on the amount disbursed from and including the
date of disbursement until payment in full of such disbursed amount at a
varying rate per annum equal to (i) the then applicable interest rate for Base
Rate Loans through the second Business Day after notice of such disbursement
is received by the Borrower and (ii) thereafter, the Post-Default Rate for
Base Rate Loans (but in no event to exceed the Highest Lawful Rate) for the
period from and including the third Business Day following the date of such
disbursement to and including the date of repayment in full of such disbursed
amount. The obligations of the Borrower under this Agreement with respect to
each Letter of Credit shall be absolute, unconditional and irrevocable and
shall be paid or performed strictly in accordance with the terms of this
Agreement under all circumstances whatsoever, including, without limitation,
but only to the fullest extent permitted by applicable law, the following
circumstances: (i) any lack of validity or enforceability of this Agreement,
any Letter of Credit or any other Loan Document; (ii) any amendment or waiver
of (including any default), or any consent to departure from this Agreement
(except to the extent permitted by any amendment or waiver), any Letter of
Credit or any other Loan Document; (iii) the existence of any claim, set-off,
defense or other rights which the Borrower may have at any time against the
beneficiary of any Letter of Credit or any transferee of any Letter of Credit
(or any Persons for whom any such beneficiary or any such transferee may be
acting), the Issuing Bank, the Administrative Agent, any Lender or any other
Person, whether in connection with this Agreement, any Letter of Credit, any
other Loan Document, the transactions contemplated hereby or any unrelated
transaction; (iv) any statement, certificate, draft, notice or any other
document presented under any Letter of Credit proves to have been forged,
fraudulent, insufficient or invalid in any respect or any statement therein
proves to have been untrue or inaccurate in any respect whatsoever; (v)
payment by the Issuing Bank under any Letter of Credit against presentation of
a draft or certificate which appears on its face to comply, but does not
comply, with the terms of such Letter of Credit; and (vi) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
Notwithstanding anything in this Agreement to the contrary, the Borrower will
not be liable for payment or performance that results from the gross
negligence or willful misconduct of the Issuing Bank, except where the
Borrower or any Subsidiary actually recovers the proceeds for itself or the
Issuing Bank of any payment made by the Issuing Bank in connection with such
gross negligence or willful misconduct.
(b) In the event of the occurrence of any Event of Default, an excess
pursuant to Section 2.07(b) or the maturity of the Notes, whether by
acceleration or otherwise, an amount equal to the LC Exposure (or the excess
in the case of Section 2.07(b)) shall be deemed to be forthwith due and owing
by the Borrower to the Issuing Bank, the Administrative Agent and the Lenders
as of the date of any such occurrence; and the Borrower's obligation to pay
such amount shall be absolute and unconditional, without regard to whether any
beneficiary of any such Letter of Credit has attempted to draw down all or a
portion of such amount under the terms of a Letter of Credit, and, to the
fullest extent permitted by applicable law, shall not be subject to any
defense or be affected by a right of set-off, counterclaim or recoupment which
the Borrower may now or hereafter have against any such beneficiary, the
Issuing Bank, the Administrative Agent, the Lenders or any other Person for
any reason whatsoever. Such payments shall be held by the Issuing Bank on
behalf of the Lenders as cash collateral securing the LC Exposure in an
interest bearing account or accounts at the Principal Office; and the Borrower
hereby grants to and by its deposit with the Administrative Agent grants to
the Administrative Agent a security interest in such cash collateral. In the
event of any such payment by the Borrower of amounts contingently owing under
outstanding Letters of Credit and in the event that thereafter drafts or other
demands for payment complying with the terms of such Letters of Credit are not
made prior to the respective expiration dates thereof, the Administrative
Agent agrees, if no Event of Default has occurred and is continuing or if no
other amounts are outstanding under this Agreement, the Notes or any other
Loan Document, to remit to the Borrower amounts for which the contingent
obligations evidenced by the Letters of Credit have ceased.
(c) Each Lender severally and unconditionally agrees that it shall
promptly reimburse the Issuing Bank an amount equal to such Lender's
Percentage Share of any disbursement made by the Issuing Bank under any Letter
of Credit that is not reimbursed according to this Section 2.09.
(d) Notwithstanding anything to the contrary contained herein, if no
Event of Default has occurred and is continuing and subject to availability
under the Aggregate Commitments (after reduction for LC Exposure), to the
extent the Borrower has not reimbursed the Issuing Bank for any drawn upon
Letter of Credit within two (2) Business Days after notice of such
disbursement has been received by the Borrower, the amount of such Letter of
Credit reimbursement obligation shall automatically be funded by the Lenders
as a Loan hereunder and used by the Lenders to pay such Letter of Credit
reimbursement obligation. If an Event of Default has occurred and is
continuing, or if the funding of such Letter of Credit reimbursement
obligation as a Loan would cause the aggregate amount of all Loans outstanding
to exceed the Aggregate Commitments (after reduction for LC Exposure), such
Letter of Credit reimbursement obligation shall not be funded as a Loan, but
instead shall accrue interest as provided in Section 2.09(a).
Section 2.10 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans. On the Termination Date the Borrower
shall pay to the Administrative Agent, for the account of each Lender, the
outstanding aggregate principal and accrued and unpaid interest under the
Notes.
Section 3.02 Interest.
(a) Interest Rates. The Borrower will pay to the Administrative Agent,
for the account of each Lender, interest on the unpaid principal amount of
each Loan made by such Lender for the period commencing on the date such Loan
is made to, but excluding, the date such Loan shall be paid in full, at the
following rates per annum:
(i) if such a Loan is a Base Rate Loan, the Base Rate (as in effect
from time to time) plus the Applicable Margin, but in no event to exceed
the Highest Lawful Rate; and
(ii) if such a Loan is a LIBOR Loan, for each Interest Period
relating thereto, the LIBOR Rate for such Loan plus the Applicable
Margin (as in effect from time to time), but in no event to exceed the
Highest Lawful Rate.
(b) Post-Default Rate. Notwithstanding the foregoing, the Borrower will
pay to the Administrative Agent, for the account of each Lender interest at
the applicable Post-Default Rate on any principal of any Loan made by such
Lender, and (to the fullest extent permitted by law) on any other amount
payable by the Borrower hereunder, under any Loan Document or under any Note
held by such Lender to or for account of such Lender, for the period
commencing on the date of an Event of Default until the same is paid in full
or all Events of Default are cured or waived.
(c) Due Dates. Accrued interest on Base Rate Loans shall be payable on
each Quarterly Date commencing on December 31, 1997, and accrued interest on
each LIBOR Loan shall be payable on the last day of the Interest Period
therefor and, if such Interest Period is longer than three months at
three-month intervals following the first day of such Interest Period, except
that interest payable at the Post-Default Rate shall be payable from time to
time on demand and interest on any LIBOR Loan that is converted into a Base
Rate Loan (pursuant to Section 5.04) shall be payable on the date of
conversion (but only to the extent so converted).
(d) Determination of Rates. Promptly after the determination of any
interest rate provided for herein or any change therein, the Administrative
Agent shall notify the Lenders to which such interest is payable and the
Borrower thereof. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall, except in cases of manifest error, be
final, conclusive and binding on the parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made by the
Borrower under this Agreement, the Notes, and the Letter of Credit Agreements
shall be made in Dollars, in immediately available funds, to the
Administrative Agent at such account as the Administrative Agent shall specify
by notice to the Borrower from time to time, not later than 12:00 p.m. (noon)
Houston, Texas time on the date on which such payments shall become due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day). Such payments shall be made
without (to the fullest extent permitted by applicable law) defense, set-off
or counterclaim. Each payment received by the Administrative Agent under this
Agreement or any Note for account of a Lender shall be paid promptly to such
Lender in immediately available funds. Except as otherwise provided in the
definition of "Interest Period", if the due date of any payment under this
Agreement or any Note would otherwise fall on a day which is not a Business
Day such date shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period of such
extension. At the time of each payment to the Administrative Agent of any
principal of or interest on any borrowing, the Borrower shall notify the
Administrative Agent of the Loans to which such payment shall apply. In the
absence of such notice the Administrative Agent may specify the Loans to which
such payment shall apply, but to the extent possible such payment or
prepayment will be applied first to the Loans comprised of Base Rate Loans.
Section 4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein each Lender agrees that: (i) each borrowing from the Lenders
under Section 2.01 and each continuation and conversion under Section 2.02
shall be made from the Lenders pro rata in accordance with their Percentage
Share, each payment of fees under Section 2.04(a) and Section 2.04(b)(i) shall
be made for account of the Lenders pro rata in accordance with their
Percentage Share, and each termination or reduction of the amount of the
Aggregate Maximum Credit Amounts under Section 2.03(b) shall be applied to the
Commitment of each Lender, pro rata according to the amounts of its respective
Commitment; (ii) each payment of principal of Loans by the Borrower shall be
made for account of the Lenders pro rata in accordance with the respective
unpaid principal amount of the Loans held by the Lenders; (iii) each payment
of interest on Loans by the Borrower shall be made for account of the Lenders
pro rata in accordance with the amounts of interest due and payable to the
respective Lenders; and (iv) each reimbursement by the Borrower of
disbursements under Letters of Credit shall be made for account of the Issuing
Bank or, if funded by the Lenders, pro rata for the account of the Lenders, in
accordance with the amounts of reimbursement obligations due and payable to
each respective Lender.
Section 4.03 Computations. Interest on LIBOR Loans and fees shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last day) occurring in the period for which
such interest is payable, unless such calculation would exceed the Highest
Lawful Rate, in which case interest shall be calculated on the per annum basis
of a year of 365 or 366 days, as the case may be. Interest on Base Rate Loans
shall be computed on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed (including the first day but excluding the last
day) occurring in the period for which such interest is payable.
Section 4.04 Non-receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Lender or the Borrower
prior to the date on which such notifying party is scheduled to make payment
to the Administrative Agent (in the case of a Lender) of the proceeds of a
Loan or a payment under a Letter of Credit to be made by it hereunder or (in
the case of the Borrower) a payment to the Administrative Agent for the
account of one or more of the Lenders hereunder (such payment being herein
called the "Required Payment"), which notice shall be effective upon receipt,
that it does not intend to make the Required Payment to the Administrative
Agent, the Administrative Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient(s) on such date
and, if such Lender or the Borrower (as the case may be) has not in fact made
the Required Payment to the Administrative Agent, the recipient(s) of such
payment shall, on demand, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until, but excluding, the date the Administrative Agent
recovers such amount at a rate per annum which, for any Lender as recipient,
will be equal to the Federal Funds Rate, and for the Borrower as recipient,
will be equal to the Base Rate plus the Applicable Margin.
Section 4.05 Set-off, Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without limitation of)
any right of set-off, bankers' lien or counterclaim a Lender may otherwise
have, each Lender shall have the right and be entitled (after consultation
with the Administrative Agent), at its option, to offset balances held by it
or by any of its Affiliates for the account of the Borrower or any Subsidiary
at any of its offices, in Dollars or in any other currency, against any
principal of or interest on any of such Lender's Loans, or any other amount
payable to such Lender hereunder, which is not paid when due (regardless of
whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Administrative Agent thereof, provided
that such Lender's failure to give such notice shall not affect the validity
thereof.
(b) If any Lender shall obtain payment of any principal of or interest
on any Loan made by it to the Borrower under this Agreement (or reimbursement
as to any Letter of Credit) through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise, and, as a result
of such payment, such Lender shall have received a greater percentage of the
principal or interest (or reimbursement) then due hereunder by the Borrower to
such Lender than the percentage received by any other Lenders, it shall
promptly (i) notify the Administrative Agent and each other Lender thereof and
(ii) purchase from such other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans (or
participations in Letters of Credit) made by such other Lenders (or in
interest due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal and/or interest on
the Loans held by each of the Lenders (or reimbursements of Letters of
Credit). To such end all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. The Borrower agrees that any
Lender so purchasing a participation (or direct interest) in the Loans made by
other Lenders (or in interest due thereon, as the case may be) may exercise
all rights of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a direct holder
of Loans (or Letters of Credit) in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or
obligation of the Borrower. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.05 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent
with the rights of the Lenders entitled under this Section 4.05 to share the
benefits of any recovery on such secured claim.
Section 4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 4.01, 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 Issuing Bank and the
Administrative Agent, taxes imposed on its income, 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 an
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 being hereinafter referred to as
"Taxes"). If the Borrower 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 4.06) 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 Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent permitted by
applicable law, the Borrower 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 or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW,
THE BORROWER WILL INDEMNIFY EACH LENDER AND 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
GOVERNMENTAL
AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY SUCH
LENDER, 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 UNLESS
THE PAYMENT OF
SUCH TAXES WAS NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH
LENDER'S PAYMENT OF
SUCH TAXES OR OTHER TAXES WAS THE RESULT OF ITS GROSS NEGLIGENCE OR
WILLFUL
MISCONDUCT. ANY PAYMENT PURSUANT TO SUCH INDEMNIFICATION SHALL BE
MADE WITHIN
THIRTY (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 OR THE ADMINISTRATIVE AGENT RECEIVES A REFUND OR CREDIT
IN RESPECT
OF ANY TAXES OR OTHER TAXES FOR WHICH SUCH LENDER, ISSUING BANK OR
THE
ADMINISTRATIVE AGENT HAS RECEIVED PAYMENT FROM THE BORROWER IT
SHALL PROMPTLY
NOTIFY THE BORROWER OF SUCH REFUND OR CREDIT AND SHALL, IF NO
DEFAULT HAS
OCCURRED AND IS CONTINUING, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A
REQUEST
BY THE BORROWER (OR PROMPTLY UPON RECEIPT, IF THE BORROWER HAS
REQUESTED
APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT HERETO), PAY AN
AMOUNT EQUAL TO
SUCH REFUND OR CREDIT TO THE BORROWER WITHOUT INTEREST (BUT WITH
ANY INTEREST
SO REFUNDED OR CREDITED), PROVIDED THAT THE BORROWER, 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 OR
THE ADMINISTRATIVE AGENT IN THE EVENT SUCH LENDER OR THE
ADMINISTRATIVE AGENT
IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.
(d) Lender Representations.
(i) Each Lender represents that it is either (1) a banking
association or corporation organized under the laws of the United States
of America or any state thereof or (2) it is 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 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 banking association or corporation organized under the laws of the
United States of America or any state thereof agrees to provide to the
Borrower and the Administrative Agent on the Closing Date, or on the date
of its delivery of the Assignment pursuant to which it becomes a Lender,
and at such other times as required by United States law or as the
Borrower 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
Borrower 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 Borrower 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 Borrower 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 such 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) a Governmental
Requirement or (ii) its circumstances, that it is unable to submit any
form or certificate that it is obligated to submit pursuant to this
Section 4.06, or that it is required to withdraw or cancel any such form
or certificate previously submitted, it shall promptly notify the
Borrower 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 Borrower 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 Borrower shall withhold
taxes from such payments at the applicable statutory rate. Each Lender
agrees to indemnify and hold harmless the Borrower or Administrative
Agent, as applicable, 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 4.06 or (ii) the Borrower or the Administrative Agent as a result
of their reliance on any such form or certificate which such Lender
has provided to them pursuant to this Section 4.06.
(ii) For any period with respect to which a Lender has failed to
provide the Borrower with the form required pursuant to this Section
4.06, if any, (other than if such failure is due to a change in a
Governmental Requirement occurring subsequent to the date on which a form
originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 4.06 with respect to taxes
imposed by the United States which taxes would not have been imposed but
for such failure to provide such forms; provided, however, that if a
Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as
such Lender shall reasonably request to assist such Lender to recover
such taxes.
(iii) Any Lender claiming any additional amounts payable pursuant to
this Section 4.06 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by
the Borrower 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 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.
ARTICLE V
CAPITAL ADEQUACY
Section 5.01 Additional Costs.
(a) LIBOR Regulations, etc. The Borrower shall pay directly to each
Lender from time to time such amounts as such Lender may determine to be
necessary to compensate such Lender for any costs which it determines are
attributable to its making or maintaining of any LIBOR Loans or issuing or
participating in Letters of Credit hereunder or its obligation to make any
LIBOR Loans or issue or participate in any Letters of Credit hereunder, or any
reduction in any amount receivable by such Lender hereunder in respect of any
of such LIBOR Loans, Letters of Credit or such obligation (such increases in
costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change which: (i) changes the basis of
taxation of any amounts payable to such Lender under this Agreement or any
Note in respect of any of such LIBOR Loans or Letters of Credit (other than
taxes imposed on the overall net income of such Lender or of its Applicable
Lending Office for any of such LIBOR Loans by the jurisdiction in which such
Lender has its principal office or Applicable Lending Office); or (ii) imposes
or modifies any reserve, special deposit, minimum capital, capital ratio or
similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of such Lender, or the Commitment or
Loans of such Lender or the London interbank market; or (iii) imposes any
other condition affecting this Agreement or any Note (or any of such
extensions of credit or liabilities) or such Lender's Commitment or Loans.
Each Lender will notify the Administrative Agent and the Borrower of any event
occurring after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 5.01(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation, and
will designate a different Applicable Lending Office for the Loans of such
Lender affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender, provided that such Lender
shall have no obligation to so designate an Applicable Lending Office located
in the United States. If any Lender requests compensation from the Borrower
under this Section 5.01(a), the Borrower may, by notice to such Lender,
suspend the obligation of such Lender to make additional Loans of the Type
with respect to which such compensation is requested until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 shall be applicable).
(b) Regulatory Change. Without limiting the effect of the provisions of
Section 5.01(a), in the event that at any time (by reason of any Regulatory
Change or any other circumstances arising after the Closing Date affecting (A)
any Lender, (B) the London interbank market or (C) such Lender's position in
such market), the LIBOR Rate, as determined in good faith by such Lender, will
not adequately and fairly reflect the cost to such Lender of funding its LIBOR
Loans, then, if such Lender so elects, by notice to the Borrower and the
Administrative Agent, the obligation of such Lender to make additional LIBOR
Loans shall be suspended until such Regulatory Change or other circumstances
ceases to be in effect (in which case the provisions of Section 5.04 shall be
applicable).
(c) Capital Adequacy. Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the Borrower shall
pay directly to any Lender from time to time on request such amounts as such
Lender may reasonably determine to be necessary to compensate such Lender or
its parent or holding company for any costs which it determines are
attributable to the maintenance by such Lender or its parent or holding
company (or any Applicable Lending Office), pursuant to any Governmental
Requirement following any Regulatory Change, of capital in respect of its
Commitment, its Note, its Loans or any interest held by it in any Letter of
Credit, such compensation to include, without limitation, an amount equal to
any reduction of the rate of return on assets or equity of such Lender or its
parent or holding company (or any Applicable Lending Office) to a level below
that which such Lender or its parent or holding company (or any Applicable
Lending Office) could have achieved but for such Governmental Requirement.
Such Lender will notify the Borrower that it is entitled to compensation
pursuant to this Section 5.01(c) as promptly as practicable after it
determines to request such compensation. Notwithstanding anything in this
Section 5.01(c) to the contrary, none of the Lenders shall be permitted to
pass through or charge to the Borrower costs under this Section 5.01(c) on a
discriminatory basis (i.e., which are not also generally passed through or
charged by that Lender to any other customers of that Lender similarly
situated to the Borrower where that customer is subject to documents providing
for that pass through or charges). Nothing in this Section 5.01(c) is
intended to entitle any Lender to include in any pass through or charge under
this Section 5.01(c) any compensation for any increase of costs or reductions
in amounts received, receivable or suffered in respect of any commitments to
extend credit other than the Loans, the Commitments and the Letters of Credit.
(d) Compensation Procedure. Any Lender notifying the Borrower of the
incurrence of additional costs under this Section 5.01 shall in such notice to
the Borrower and the Administrative Agent set forth in reasonable detail the
basis and amount of its request for compensation. Determinations and
allocations by each Lender for purposes of this Section 5.01 of the effect of
any Regulatory Change pursuant to Section 5.01(a) or (b), or of the effect of
capital maintained pursuant to Section 5.01(c), on its costs or rate of return
of maintaining Loans or its obligation to make Loans or issue Letters of
Credit, or on amounts receivable by it in respect of Loans or Letters of
Credit, and of the amounts required to compensate such Lender under this
Section 5.01, shall be conclusive and binding for all purposes, provided that
such determinations and allocations are made on a reasonable basis. Any
request for additional compensation under this Section 5.01 shall be paid by
the Borrower within thirty (30) days of the receipt by the Borrower of the
notice described in this Section 5.01(d).
Section 5.02 Limitation on LIBOR Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any LIBOR Rate for
any Interest Period:
(i) the Administrative Agent determines (which determination shall
be conclusive, absent manifest error) that quotations of interest rates
for the relevant deposits referred to in the definition of "LIBOR Rate"
in Section 1.02 are not being provided in the relevant amounts or for
the relevant maturities for purposes of determining rates of interest for
LIBOR Loans as provided herein; or
(ii) the Administrative Agent determines (which determination shall
be conclusive, absent manifest error) that the relevant rates of interest
referred to in the definition of "LIBOR Rate" in Section 1.02 upon the
basis of which the rate of interest for LIBOR Loans for such Interest
Period is to be determined are not sufficient to adequately cover the
cost to the Lenders of making or maintaining LIBOR Loans;
then the Administrative Agent shall give the Borrower prompt notice thereof,
and so long as such condition remains in effect, the Lenders shall be under
no obligation to make additional LIBOR Loans.
Section 5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain LIBOR
Loans hereunder, then such Lender shall promptly notify the Borrower thereof
and such Lender's obligation to make LIBOR Loans shall be suspended until such
time as such Lender may again make and maintain LIBOR Loans (in which case the
provisions of Section 5.04 shall be applicable).
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03.
If the obligation of any Lender to make LIBOR Loans shall be suspended
pursuant to Sections 5.01, 5.02 or 5.03 ("Affected Loans"), all Affected Loans
which would otherwise be made by such Lender shall be made instead as Base
Rate Loans (and, if an event referred to in Section 5.01(b) or Section 5.03
has occurred and such Lender so requests by notice to the Borrower, all
Affected Loans of such Lender then outstanding shall be automatically
converted into Base Rate Loans on the date specified by such Lender in such
notice) and, to the extent that Affected Loans are so made as (or converted
into) Base Rate Loans, all payments of principal which would otherwise be
applied to such Lender's Affected Loans shall be applied instead to its Base
Rate Loans.
Section 5.05 Compensation. The Borrower shall pay to each Lender within
thirty (30) days of receipt of written request of such Lender (which request
shall set forth, in reasonable detail, the basis for requesting such amounts
and which shall be conclusive and binding for all purposes provided that such
determinations are made on a reasonable basis), such amount or amounts as
shall compensate it for any loss, cost, expense or liability which such Lender
determines are attributable to:
(i) any payment, prepayment or conversion of a LIBOR Loan properly
made by such Lender or the Borrower for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section 10.01) on a
date other than the last day of the Interest Period for such Loan; or
(ii) any failure by the Borrower for any reason (including but not
limited to, the failure of any of the conditions precedent specified in
Article VI to be satisfied) to borrow, continue or convert a LIBOR Loan
from such Lender on the date for such borrowing, continuation or
conversion specified in the relevant notice given pursuant to Section
2.02(c).
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount so paid, prepaid or converted
or not borrowed for the period from the date of such payment, prepayment or
conversion or failure to borrow to the last day of the Interest Period for
such Loan (or, in the case of a failure to borrow, the Interest Period for
such Loan which would have commenced on the date specified for such borrowing)
at the applicable rate of interest for such Loan provided for herein over (ii)
the interest component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender).
Section 5.06 Replacement Lenders.
(a) If any Lender has notified the Borrower and the Administrative Agent
of its incurring additional costs under Section 5.01 or has required the
Borrower to make payments for Taxes under Section 4.06, then the Borrower may,
unless such Lender has notified the Borrower and the Administrative Agent that
the circumstances giving rise to such notice no longer apply, terminate, in
whole but not in part, the Commitment of such Lender (other than the
Administrative Agent) (the "Terminated Lender") at any time upon five (5)
Business Days' prior written notice to the Terminated Lender and the
Administrative Agent (such notice referred to herein as a "Notice of
Termination").
(b) In order to effect the termination of the Commitment of the
Terminated Lender, the Borrower shall: (i) obtain an agreement with one or
more Lenders to increase their Commitment or Commitments and/or (ii) request
any one or more other banking institutions to become parties to this Agreement
in place and instead of such Terminated Lender and agree to accept a
Commitment or Commitments; provided, however, that such one or more other
banking institutions are reasonably acceptable to the Administrative Agent and
become parties by executing an Assignment (the Lenders or other banking
institutions that agree to accept in whole or in part the Commitment of the
Terminated Lender being referred to herein as the "Replacement Lenders"), such
that the aggregate increased and/or accepted Commitments of the Replacement
Lenders under clauses (i) and (ii) above equal the Commitment of the
Terminated Lender.
(c) The Notice of Termination shall include the name of the Terminated
Lender, the date the termination will occur (the "Lender Termination Date"),
and the Replacement Lender or Replacement Lenders to which the Terminated
Lender will assign its Commitment and, if there will be more than one
Replacement Lender, the portion of the Terminated Lender's Commitment to be
assigned to each Replacement Lender.
(d) On the Lender Termination Date, (i) the Terminated Lender shall by
execution and delivery of an Assignment assign its Commitment to the
Replacement Lender or Replacement Lenders (pro rata, if there is more than one
Replacement Lender, in proportion to the portion of the Terminated Lender's
Commitment to be assigned to each Replacement Lender) indicated in the Notice
of Termination and shall assign to the Replacement Lender or Replacement
Lenders each of its Loans (if any) then outstanding and participation
interests in Letters of Credit (if any) then outstanding pro rata as
aforesaid, (ii) the Terminated Lender shall endorse its Note, payable without
recourse, representation or warranty to the order of the Replacement Lender or
Replacement Lenders (pro rata as aforesaid), (iii) the Replacement Lender or
Replacement Lenders shall purchase the Note held by the Terminated Lender (pro
rata as aforesaid) at a price equal to the unpaid principal amount thereof
plus interest and facility and other fees accrued and unpaid to the Lender
Termination Date, and (iv) the Replacement Lender or Replacement Lenders will
thereupon (pro rata as aforesaid) succeed to and be substituted in all
respects for the Terminated Lender with like effect as if becoming a Lender
pursuant to the terms of Section 12.06(b), and the Terminated Lender will have
the rights and benefits of an assignor under Section 12.06(b). To the extent
not in conflict, the terms of Section 12.06(b) shall supplement the provisions
of this Section 5.06(d). For each assignment made under this Section 5.06,
the Replacement Lender shall pay to the Administrative Agent the processing
fee provided for in Section 12.06(b). The Borrower will be responsible for
the payment of any breakage costs associated with termination and Replacement
Lenders, as set forth in Section 5.05.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding.
The obligation of the Lenders to make the Initial Funding is subject to
the receipt by the Administrative Agent and the Lenders of all fees payable
pursuant to Section 2.04 on or before the Closing Date and the receipt by the
Administrative Agent of the following documents and satisfaction of the other
conditions provided in this Section 6.01, each of which shall be satisfactory
to the Administrative Agent in form and substance:
(a) A certificate of the Secretary or an Assistant Secretary of the
Borrower setting forth (i) resolutions of its board of directors with respect
to the authorization of the Borrower to execute and deliver the Loan Documents
to which it is a party and to enter into the transactions contemplated in
those documents, (ii) the officers of the Borrower (y) who are authorized to
sign the Loan Documents to which Borrower is a party and (z) who will, until
replaced by another officer or officers duly authorized for that purpose, act
as its representative for the purposes of signing documents and giving notices
and other communications in connection with this Agreement and the
transactions contemplated hereby, (iii) specimen signatures of the authorized
officers, and (iv) the articles or certificate of incorporation and bylaws of
the Borrower, certified as being true and complete. The Administrative Agent
and the Lenders may conclusively rely on such certificate until the
Administrative Agent receives notice in writing from the Borrower to the
contrary.
(b) Certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of the Borrower and the Material
Subsidiaries.
(c) A compliance certificate which shall be substantially in the form of
Exhibit C, duly and properly executed by a Responsible Officer and dated as of
the date of the Initial Funding.
(d) The Loan Documents, duly completed and executed.
(e) Opinions of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P., counsel to
the Borrower, in form and substance satisfactory to the Administrative Agent,
as to such matters incident to the transactions herein contemplated as the
Administrative Agent may reasonably request.
(f) The merger of American Exploration Company with and into the
Borrower, with the Borrower as the surviving entity, shall have occurred.
(g) Such other documents as the Administrative Agent or any Lender or
counsel to the Administrative Agent may reasonably request.
Section 6.02 Initial and Subsequent Loans and Letters of Credit. The
obligation of the Lenders to make Loans to the Borrower upon the occasion of
each borrowing hereunder and to issue, renew, extend or reissue Letters of
Credit for the account of the Borrower (including the Initial Funding) is
subject to the further conditions precedent that, as of the date of such Loans
and after giving effect thereto:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Borrower in Article
VII and in any other Loan Document shall be true on and as of the date of the
making of such Loans or issuance, renewal, extension or reissuance of a Letter
of Credit with the same force and effect as if made on and as of such date and
following such new borrowing, except to the extent such representations and
warranties are expressly limited to an earlier date or the Majority Lenders
may expressly consent in writing to the contrary.
Each request for a borrowing or issuance, renewal, extension or
reissuance of a Letter of Credit by the Borrower hereunder shall constitute a
certification by the Borrower to the effect set forth in Section 6.02(b) (both
as of the date of such notice and, unless the Borrower otherwise notifies the
Administrative Agent prior to the date of and immediately following such
borrowing or issuance, renewal, extension or reissuance of a Letter of Credit
as of the date thereof).
Section 6.03 Conditions Precedent for the Benefit of Lenders. All
conditions precedent to the obligations of the Lenders to make any Loan are
imposed hereby solely for the benefit of the Lenders, and no other Person may
require satisfaction of any such condition precedent or be entitled to assume
that the Lenders will refuse to make any Loan in the absence of strict
compliance with such conditions precedent.
Section 6.04 No Waiver. No waiver of any condition precedent shall
preclude the Administrative Agent or the Lenders from requiring such condition
to be met prior to making any subsequent Loan or preclude the Lenders from
thereafter declaring that the failure of the Borrower to satisfy such
condition precedent constitutes a Default.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that (each representation and warranty herein is given as of the
Closing Date and shall be deemed repeated and reaffirmed on the dates of each
borrowing and issuance, renewal, extension or reissuance of a Letter of Credit
as provided in Section 6.02):
Section 7.01 Corporate Existence. Each of the Borrower and each
Subsidiary: (i) is a corporation or partnership duly organized, legally
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization; (ii) has all requisite corporate or other
power, and has all material governmental licenses, authorizations, consents
and approvals necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (iii) is qualified to do business in
all jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure so to qualify would have a
Material Adverse Effect.
Section 7.02 Financial Condition. The audited consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as at December 31,
1996 and the related consolidated statements of income, stockholders' equity
and cash flow of the Borrower and its Consolidated Subsidiaries for the fiscal
year ended on said date, with the opinion thereon of Ernst & Young, L.L.P.
heretofore furnished to each of the Lenders and the unaudited consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as at June 30,
1997 and their related consolidated statements of income, stockholders' equity
and cash flow of the Borrower and its Consolidated Subsidiaries for the six
month period ended on such date heretofore furnished to the Administrative
Agent, are complete and correct and fairly present the consolidated financial
condition of the Borrower and its Consolidated Subsidiaries as at said dates
and the results of its operations for the fiscal year and the six month period
on said dates, all in accordance with GAAP, as applied on a consistent basis
(subject, in the case of the interim financial statements, to normal year-end
adjustments). Neither the Borrower nor any Subsidiary has on the Closing Date
any material Debt, contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for in
the Financial Statements, notes thereto and reports and registration
statements of the Borrower filed with the SEC. Since December 31, 1996, there
has been no change or event having a Material Adverse Effect.
Section 7.03 Litigation. Except as referred to or reflected or provided
for in the Financial Statements, notes thereto and reports and registration
statements of the Borrower filed with the SEC, there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Subsidiary which involves the possibility of any
judgment or liability against the Borrower or any Subsidiary not fully covered
by insurance (except for normal deductibles) and which would have a Material
Adverse Effect.
Section 7.04 No Breach. Neither the execution and delivery of the Loan
Documents, nor compliance with the terms and provisions hereof will conflict
with or result in a breach of, or require any consent which has not been
obtained as of the Closing Date under, the respective charter or by-laws of
the Borrower or any Subsidiary, or any Governmental Requirement or any
agreement or instrument to which the Borrower or any Subsidiary is a party or
by which it is bound or to which it or its Properties are subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of the
Borrower or any Subsidiary pursuant to the terms of any such agreement or
instrument other than the Liens created by the Loan Documents.
Section 7.05 Authority. The Borrower and each Subsidiary have all
necessary corporate power and authority to execute, deliver and perform its
obligations under the Loan Documents to which it is a party; and the
execution, delivery and performance by the Borrower and each Subsidiary of the
Loan Documents to which it is a party, have been duly authorized by all
necessary corporate action on its part; and the Loan Documents constitute the
legal, valid and binding obligations of the Borrower and each Subsidiary,
enforceable in accordance with their terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general
application relating to or affecting creditors' rights and general principles
of equity.
Section 7.06 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority are necessary
for the execution, delivery or performance by the Borrower or any Subsidiary
of the Loan Documents or for the validity or enforceability thereof.
Section 7.07 Use of Loans. The proceeds of the Loans shall be used to
refinance the Borrower's existing revolving credit facility, fund the
acquisition of American Exploration Company by merger, and for general
corporate purposes, excluding use for hostile takeovers of publicly traded
companies. The Borrower is not 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 G, T, U or X of the Board of Governors of
the Federal Reserve System) and no part of the proceeds of any Loan hereunder
will be used to buy or carry any margin stock.
Section 7.08 ERISA.
(a) The Borrower, each Subsidiary and each ERISA Affiliate have complied
in all material respects with ERISA and, where applicable, the Code regarding
each Plan.
(b) Each Plan is, and has been, maintained in substantial compliance
with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which could result in
imposition on the Borrower, any Subsidiary or any ERISA Affiliate (whether
directly or indirectly) of (i) either a material civil penalty assessed
pursuant to section 502(c), (i) or (l) of ERISA or a material tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages under section 409 of ERISA.
(d) No liability to the PBGC (other than for the payment of current
premiums which are not past due) by the Borrower, any Subsidiary or any ERISA
Affiliate has been or is expected by the Borrower, any Subsidiary or any ERISA
Affiliate to be incurred with respect to any Plan. No ERISA Event with
respect to any Plan has occurred.
(e) Full payment when due has been made of all amounts which the
Borrower, any Subsidiary or any ERISA Affiliate is required under the terms of
each Plan or applicable law to have paid as contributions to such Plan, and no
accumulated funding deficiency (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived, exists with respect to any Plan.
(f) The actuarial present value of the benefit liabilities under each
Plan which is subject to Title IV of ERISA does not, as of the end of the
Borrower's most recently ended fiscal year, exceed 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. The term
"actuarial present value of the benefit liabilities" shall have the meaning
specified in section 4041 of ERISA.
(g) None of the Borrower, any Subsidiary or any ERISA Affiliate
sponsors, maintains, or contributes to an employee welfare benefit plan, as
defined in section 3(1) of ERISA, including, without limitation, any such plan
maintained to provide benefits to former employees of such entities, that may
not be terminated by the Borrower, a Subsidiary or any ERISA Affiliate in its
sole discretion at any time without any material liability.
(h) None of the Borrower, any Subsidiary or any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time in the preceding six
calendar years, sponsored, maintained or contributed to, any Multiemployer
Plan.
(i) None of the Borrower, any Subsidiary or any ERISA Affiliate is
required to provide security under section 401(a)(29) of the Code due to a
Plan amendment that results in an increase in current liability for the Plan.
Section 7.09 Taxes. Each of the Borrower and its Subsidiaries has filed
all United States Federal income tax returns and all other tax returns which
are required to be filed by them and have paid all material taxes due pursuant
to such returns or pursuant to any assessment received by the Borrower or any
Subsidiary. The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of taxes and other governmental charges are,
in the opinion of the Borrower, adequate. No tax lien has been filed and, to
the knowledge of the Borrower, no claim is being asserted with respect to any
such tax, fee or other charge which would have a Material Adverse Effect.
Section 7.10 Titles, etc. Except for burdens of title and imperfections
thereto as do not in the aggregate materially detract from the value of the
Borrower's and its Subsidiaries' Properties or from the use thereof in their
business (taken as a whole):
(a) Each of the Borrower and its Subsidiaries has good and defensible
title to its material (individually or in the aggregate) Properties, free and
clear of all Liens, except Liens permitted by Section 9.02.
(b) All leases and agreements necessary for the conduct of the business
of the Borrower and its Subsidiaries are valid and subsisting, in full force
and effect and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of the Borrower and its Subsidiaries.
(c) The rights, Properties and other assets presently owned, leased or
licensed by the Borrower and its Subsidiaries including, without limitation,
all easements and rights of way, include all rights, Properties and other
assets necessary to permit the Borrower and its Subsidiaries to conduct their
business in all material respects in the same manner as its business has been
conducted prior to the Closing Date.
(d) All of the assets and Properties of the Borrower and its
Subsidiaries which are reasonably necessary for the operation of its business
are in good working condition and are maintained in accordance with prudent
business standards.
Section 7.11 No Material Misstatements. No written information,
statement, exhibit, certificate, document or report furnished to the
Administrative Agent and the Lenders (or any of them) by the Borrower or any
Subsidiary in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statement contained therein not materially misleading in
the light of the circumstances in which made and with respect to the Borrower
and its Subsidiaries taken as a whole. There is no fact peculiar to the
Borrower or any Subsidiary which has a Material Adverse Effect or in the
future is reasonably likely to have (so far as the Borrower can now foresee) a
Material Adverse Effect and which has not been set forth in this Agreement or
the other documents, certificates and statements furnished to the
Administrative Agent by or on behalf of the Borrower or any Subsidiary prior
to, or on, the Closing Date in connection with the transactions contemplated
hereby.
Section 7.12 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
Section 7.13 Public Utility Holding Company Act. Neither the Borrower
nor any Subsidiary is 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" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.14 Subsidiaries. Except as set forth on Schedule 7.14, the
Borrower has no Material Subsidiaries.
Section 7.15 Location of Business and Offices. The Borrower's principal
place of business and chief executive offices are located at the address
stated on the signature page of this Agreement. The principal place of
business and chief executive office of each Material Subsidiary are located
at the addresses stated on Schedule 7.14.
Section 7.16 Defaults. Neither the Borrower nor any Subsidiary is in
default nor has any event or circumstance occurred which, but for the
expiration of any applicable grace period or the giving of notice, or both,
would constitute a default under any material agreement or instrument to which
the Borrower or any Subsidiary is a party or by which the Borrower or any
Subsidiary is bound which default would have a Material Adverse Effect. No
Default hereunder has occurred and is continuing.
Section 7.17 Environmental Matters. Except as would not have a Material
Adverse Effect (or with respect to (c), (d) and (e) below, where the failure
to take such actions would not have a Material Adverse Effect):
(a) Neither any Property of the Borrower or any Subsidiary nor the
operations conducted thereon violate any order or requirement of any court or
Governmental Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of the Borrower
or any Subsidiary nor the operations currently conducted thereon or, to the
best knowledge of the Borrower, 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;
(c) All notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed in connection with the operation or use of
any and all Property of the Borrower and each Subsidiary, including without
limitation past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly
obtained or filed, and the Borrower and each Subsidiary are in compliance with
the terms and conditions of all such notices, permits, licenses and similar
authorizations;
(d) All hazardous substances, solid waste, and oil and gas exploration
and production wastes, if any, generated at any and all Property of the
Borrower or any Subsidiary have in the past been transported, treated and
disposed of in accordance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and, to the best knowledge of the Borrower, all such transport
carriers and treatment and disposal facilities have been and are operating in
compliance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the environment, and
are not the subject of any existing, pending or threatened action,
investigation or inquiry by any Governmental Authority in connection with any
Environmental Laws;
(e) The Borrower has taken all steps reasonably necessary to determine
and has determined that no hazardous substances, solid waste, or oil and gas
exploration and production wastes, 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 Borrower or any Subsidiary except in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment;
(f) To the extent applicable, all Property of the Borrower and each
Subsidiary currently satisfies all design, operation, and equipment
requirements imposed by the OPA or scheduled as of the Closing Date to be
imposed by OPA during the term of this Agreement, and the Borrower does not
have any reason to believe that such Property, to the extent subject to OPA,
will not be able to maintain compliance with the OPA requirements during the
term of this Agreement; and
(g) Neither the Borrower nor any Subsidiary has any known contingent
liability in connection with any release or threatened release of any oil,
hazardous substance or solid waste into the environment.
Section 7.18 Compliance with the Law. Neither the Borrower nor any
Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization necessary for
the ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
Except for such acts or failures to act as would not have a Material Adverse
Effect, the Oil and Gas Properties (and properties unitized therewith) have
been maintained, operated and developed in a good and workmanlike manner and
in conformity with all applicable laws and all rules, regulations and orders
of all duly constituted authorities having jurisdiction and in conformity with
the provisions of all leases, subleases or other contracts comprising a part
of the Hydrocarbon Interests and other contracts and agreements forming a part
of the Oil and Gas Properties.
Section 7.19 Insurance. All policies of insurance are in full force and
effect, all premiums with respect thereto covering all periods up to and
including the date of the closing have been paid, 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 Borrower or any Subsidiary 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 Borrower and each Subsidiary. Neither the
Borrower nor any Subsidiary has been refused any insurance with respect to its
assets or operations, nor has its coverage been limited below usual and
customary policy limits, by an insurance carrier to which it has applied for
any such insurance or with which it has carried insurance during the last
three years.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
are in effect and until payment in full of all Loans hereunder, all interest
thereon and all other amounts payable by the Borrower hereunder:
Section 8.01 Reporting Requirements. The Borrower shall deliver, or
shall cause to be delivered, to the Administrative Agent with sufficient
copies of each for the Lenders:
(a) Annual Financial Statements. As soon as available and in any event
within 90 days after the end of each fiscal year of the Borrower, the audited
consolidated statements of income, stockholders' equity, and cash flows of the
Borrower and its Consolidated Subsidiaries for such fiscal year, and the
related consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year, and setting forth in each case
in comparative form the corresponding figures for the preceding fiscal year,
and accompanied by the related opinion of Ernst & Young, L.L.P. or other
independent public accountants of recognized national standing acceptable to
the Administrative Agent which opinion shall state that said financial
statements fairly present the consolidated financial condition and results of
operations of the Borrower and its Consolidated Subsidiaries as at the end of,
and for, such fiscal year and that such financial statements have been
prepared in accordance with GAAP, except for such changes in such principles
with which the independent public accountants shall have concurred and such
opinion shall not contain a "going concern" or like qualification or
exception.
(b) Quarterly Financial Statements. As soon as available and in any
event within 60 days after the end of each of the first three fiscal quarterly
periods of each fiscal year of the Borrower, consolidated statements of
income, stockholders' equity, and cash flows of the Borrower and its
Consolidated Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related consolidated balance sheets as at the end of such period, and setting
forth in each case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, accompanied by the
certificate of a Responsible Officer, which certificate shall state that said
financial statements fairly present the consolidated financial condition and
results of operations of the Borrower and its Consolidated Subsidiaries in
accordance with GAAP, as at the end of, and for, such period (subject to
normal year-end audit adjustments).
(c) Notice of Default, Etc. Promptly after the Borrower knows that any
Default or any Material Adverse Effect has occurred, a notice of such Default
or Material Adverse Effect, describing the same in reasonable detail and the
action the Borrower proposes to take with respect thereto.
(d) SEC Filings, Etc. Promptly upon its becoming available, each
financial statement, report, notice or proxy statement sent by the Borrower to
stockholders generally and each regular or periodic report and any
registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by the Borrower with or received
by the Borrower in connection therewith from any securities exchange or the
SEC or any successor agency.
(e) Notices Under Other Loan Agreements. Promptly after the furnishing
thereof, copies of any statement, report or notice furnished to any Person
pursuant to the terms of any indenture, loan or credit or other similar
agreement relating to borrowed money in excess of $20,000,000, other than this
Agreement and not otherwise required to be furnished to the Lenders pursuant
to any other provision of this Section 8.01.
(f) Other Information. From time to time such other information
regarding the business, affairs or financial condition of the Borrower or any
Subsidiary (including, without limitation, any Plan or Multiemployer Plan and
any reports or other information required to be filed under ERISA) as any
Lender, through the Administrative Agent, may reasonably request.
The Borrower will furnish to the Administrative Agent, at the time it
furnishes each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate substantially in the form of Exhibit C executed by a
Responsible Officer (i) certifying as to the matters set forth therein and
stating that no Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable detail), and
(ii) setting forth in reasonable detail the computations necessary to
determine whether the Borrower is in compliance with Sections 9.01, 9.08 and
9.09 as of the end of the respective fiscal quarter or fiscal year.
Section 8.02 Litigation. The Borrower shall promptly give to the
Administrative Agent notice of: any litigation or legal or arbitral
proceedings affecting the Borrower or any Subsidiary, except litigation or
legal or arbitral proceedings which, if adversely determined, would not have a
Material Adverse Effect. The Borrower will, and will cause each of its
Subsidiaries to, promptly notify the Administrative Agent and each of the
Lenders of any claim, judgment, Lien or other encumbrance affecting any
Property of the Borrower or any Subsidiary if the value of the claim,
judgment, Lien, or other encumbrance affecting such Property shall exceed
$20,000,000.
Section 8.03 Maintenance, Etc.
(a) Generally. The Borrower shall and shall cause each Subsidiary to:
preserve and maintain its corporate existence and all of its material rights,
privileges and franchises; keep adequate books of record and account in which
true and complete entries will be made of all dealings or transactions in
relation to its business and activities in accordance with the principles used
for preparing the financial statements referred to in Sections 8.01(a) and
(b); comply with all Governmental Requirements if failure to comply with such
requirements will have a Material Adverse Effect; pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or on its income
or profits or on any of its Property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy which
would not result in a Material Adverse Effect or the payment of which is being
contested in good faith and by proper proceedings and against which adequate
reserves are being maintained; upon reasonable notice, permit representatives
of the Administrative Agent or any Lender, during normal business hours, to
examine, copy and make extracts from its books and records, to inspect its
Properties, and to discuss its business and affairs with its officers, all to
the extent reasonably requested by such Lender or the Administrative Agent (as
the case may be); and keep, or cause to be kept, insured by financially sound
and reputable insurers all Property of a character usually insured by Persons
engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against By such
Persons and carry such other insurance as is usually carried by such Persons
including, without limitation, environmental risk insurance to the extent
reasonably available.
(b) Operation of Oil and Gas Properties. The Borrower will and will
cause each Subsidiary, in all material respects, to operate its Oil and Gas
Properties (taken as a whole) or cause such Oil and Gas Properties (taken as a
whole) to be operated in a careful and efficient manner in accordance with the
practices of the industry and in compliance with all applicable contracts and
agreements and in compliance in all material respects with all Governmental
Requirements.
Section 8.04 Environmental Matters. The Borrower will promptly notify
the Administrative Agent and the Lenders in writing of any threatened action,
investigation or inquiry by any Governmental Authority of which the Borrower
has knowledge in connection with any Environmental Laws, excluding routine
testing and corrective action which, if adversely determined, could result in
a liability to the Borrower exceeding $20,000,000.
Section 8.05 Further Assurances. The Borrower will and will cause each
Subsidiary to cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of any Loan Document. The Borrower at
its expense will and will cause each Subsidiary to promptly execute and
deliver to the Administrative Agent upon request all such other documents,
agreements and instruments to comply with or accomplish the covenants and
agreements of the Borrower or any Subsidiary, as the case may be, in this
Agreement or any other Loan Document, or to make any recordings, to file any
notices or obtain any consents, all as may be necessary or appropriate in
connection therewith.
Section 8.06 Performance of Obligations. The Borrower will pay the
Notes according to the reading, tenor and effect thereof; and the Borrower
will and will cause each Subsidiary to do and perform every act and discharge
all of the obligations to be performed and discharged by them under the Loan
Documents, at the time or times and in the manner specified.
Section 8.07 ERISA Information and Compliance. The Borrower will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Administrative Agent with sufficient copies to the
Lenders (i) immediately upon becoming aware of the occurrence of any ERISA
Event or of any "prohibited transaction," as described in section 406 of ERISA
or in section 4975 of the Code, in connection with any Plan or any trust
created thereunder, a written notice signed by a Responsible Officer
specifying the nature thereof, what action the Borrower, the Subsidiary or the
ERISA Affiliate is taking or proposes to take with respect thereto, and, when
known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, and (ii) immediately
upon receipt thereof, copies of any notice of the PBGC's intention to
terminate or to have a trustee appointed to administer any Plan. With respect
to each Plan (other than a Multiemployer Plan), the Borrower will, and will
cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full and in a
timely manner, without incurring any late payment or underpayment charge or
penalty and without giving rise to any lien, all of the contribution and
funding requirements of section 412 of the Code (determined without regard to
subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii)
pay, or cause to be paid, to the PBGC in a timely manner, without incurring
any late payment or underpayment charge or penalty, all premiums required
pursuant to sections 4006 and 4007 of ERISA.
Section 8.08 American Exploration Liens. Within 90 days after the
Closing Date, the Borrower shall have caused all Liens (other than Liens
allowed by Section 9.02) encumbering Property acquired by virtue of the merger
of American Exploration Company into the Borrower to be released.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
are in effect and until payment in full of Loans hereunder, all interest
thereon and all other amounts payable by the Borrower hereunder, without the
prior written consent of the Majority Lenders:
Section 9.01 Debt.
(a) The Borrower and its Subsidiaries will not, on a consolidated basis,
incur, create, assume or permit to exist any Debt exceeding $700,000,000 in
the aggregate, of which no more than $625,000,000 shall be Senior Debt.
(b) The aggregate Debt (excluding Debt between the Borrower and any
Subsidiary and between Subsidiaries) incurred by all Subsidiaries shall not
exceed $20,000,000.
Section 9.02 Liens. Neither the Borrower nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties
(now owned or hereafter acquired), except:
(a) Excepted Liens;
(b) Liens incurred pursuant to the NorCon Gas Sales Contract or Liens
permitted under Section 8.08;
(c) Liens in existence at the time of acquisition on Properties
acquired by the Borrower or any Subsidiary after the Closing Date to secure
Debt (to the extent not prohibited by this Agreement);
(d) Liens originally created to secure purchase money Debt, which in
each case shall not exceed 100% of the lesser of the total purchase price and
the fair market value of the Property acquired as determined at the time of
acquisition; provided, that, (i) the Property to be purchased with the
proceeds of such Debt shall be purchased not more than sixty (60) days prior
to the date of the creation of such Lien and (ii) such Lien encumbers only the
Property so acquired.
(e) Other Liens securing Debt not exceeding $20,000,000 in the
aggregate.
Section 9.03 Sales and Leasebacks. Neither the Borrower nor any
Subsidiary will enter into any arrangement, directly or indirectly, with any
Person whereby the Borrower or any Subsidiary shall sell or transfer any of
its Property, whether now owned or hereafter acquired, and whereby the
Borrower or any Subsidiary shall then or thereafter rent or lease as lessee
such Property or any part thereof or other Property which the Borrower or any
Subsidiary intends to use for substantially the same purpose or purposes as
the Property sold or transferred if such transaction aggregated with all such
other transactions of such nature of the Borrower and its Subsidiaries
collectively will result in sales proceeds from all such transactions in
excess of $20,000,000.
Section 9.04 Nature of Business. Neither the Borrower nor any
Subsidiary will allow any material change to be made in the nature or
character of its business as it exists on the Closing Date.
Section 9.05 Mergers, Etc. The Borrower will not merge or consolidate
with or into any Person unless (a) the Borrower is the surviving corporation
of that merger, (b) upon completion of the merger or consolidation, the
Tangible Net Worth of the corporation that results from the merger or
consolidation is not less than the Tangible Net Worth of the Borrower before
that merger or consolidation and (c) no Default or Event of Default has
occurred and is continuing or will result from such merger or consolidation.
Neither the Borrower nor any Subsidiary will sell, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its Property or assets to any other Person, except among
the Borrower and Subsidiaries.
Section 9.06 Proceeds of Notes; Letters of Credit. The Borrower will
not permit the proceeds of the Notes or Letters of Credit to be used for any
purpose other than those permitted by Section 7.07. Neither the Borrower nor
any Person acting on behalf of the Borrower has taken or will take any action
which might cause any of the Loan Documents to violate Regulation G, T, 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 Exchange Act of 1934 or any
rule or regulation thereunder, in each case as now in effect or as the same
may hereinafter be in effect.
Section 9.07 ERISA Compliance. The Borrower will not at any time:
(a) Engage in, or permit any Subsidiary or ERISA Affiliate to engage in,
any transaction in connection with which the Borrower, any Subsidiary or any
ERISA Affiliate could be subjected to either a material civil penalty assessed
pursuant to section 502(c), (i) or (l) of ERISA or a material tax imposed by
Chapter 43 of Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA Affiliate to terminate,
any Plan in a manner, or take any other action with respect to any Plan, which
could result in any liability to the Borrower, any Subsidiary or any ERISA
Affiliate to the PBGC that could reasonably be expected to have a Material
Adverse Effect;
(c) Fail to make, or permit any Subsidiary or 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 Borrower, a Subsidiary
or any ERISA Affiliate is required to pay as contributions thereto (excluding
any such failure involving an amount that is not material);
(d) Permit to exist, or allow any Subsidiary or 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;
(e) Permit, or allow any Subsidiary or ERISA Affiliate to permit, the
actuarial present value of the benefit liabilities under any Plan maintained
by the Borrower, any Subsidiary or any ERISA Affiliate which is regulated
under Title IV of ERISA to exceed 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. The term "actuarial present value of
the benefit liabilities" shall have the meaning specified in section 4041 of
ERISA;
(f) Contribute to or assume an obligation to contribute to, or permit
any Subsidiary or ERISA Affiliate to contribute to or assume an obligation to
contribute to, any Multiemployer Plan with respect to which the potential
withdrawal liability could have a Material Adverse Effect;
(g) Acquire, or permit any Subsidiary or ERISA Affiliate to acquire, an
interest in any Person that causes such Person to become an ERISA Affiliate
with respect to the Borrower, any Subsidiary or any ERISA Affiliate 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 Multiemployer Plan with respect to which the potential withdrawal
liability could have a Material Adverse Effect, 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;
(h) Incur, or permit any Subsidiary or ERISA Affiliate to incur, a
liability to or on account of a Plan under sections 515, 4062, 4063, 4064,
4201 or 4204 of ERISA that could reasonably be expected to have a Material
Adverse Effect;
(i) Contribute to or assume an obligation to contribute to, or permit
any Subsidiary or ERISA Affiliate to contribute to or assume an obligation to
contribute to, any employee welfare benefit plan, as defined in section 3(1)
of ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by
such entities in their sole discretion at any time without any material
liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a Plan
resulting in an increase in current liability such that the Borrower, any
Subsidiary or any ERISA Affiliate is required to provide security to such Plan
under section 401(a)(29) of the Code.
Section 9.08 Tangible Net Worth. The Borrower will not at any time
permit its Tangible Net Worth to be less than $400,000,000, plus 50% of the
proceeds received from equity offerings after the Closing Date, plus 50% of
the sum of the Borrower's and its Subsidiaries' consolidated net income for
each fiscal quarter for which consolidated net income is greater than $0
beginning with the fiscal quarter ending December 31, 1997.
Section 9.09 Funded Debt Ratio. The Borrower will not permit its Funded
Debt Ratio as of the end of any fiscal quarter of the Borrower (calculated
quarterly at the end of each fiscal quarter) to be greater than 4.00 to 1.00.
For purposes of this Section 9.09, "Funded Debt Ratio" shall mean the ratio of
the long term Debt of the Borrower and its Consolidated Subsidiaries to
EBITDAX for the four fiscal quarters ending on such date. For purposes of
this Section 9.09, EBITDAX for each of the quarters ending March 31, June 30
and September 30, 1997 shall be $55,000,000.
Section 9.10 Environmental Matters. Neither the Borrower nor any
Subsidiary will cause or permit any of its Property to be in violation of, or
do anything or permit anything to be done which will subject any such Property
to any remedial obligations under any Environmental Laws, assuming disclosure
to the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations would have a Material Adverse Effect.
Section 9.11 Transactions with Affiliates. Neither the Borrower nor any
Subsidiary will enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of Property or the rendering of any service,
with any Affiliate (other than Wholly-Owned Subsidiaries) unless such
transactions are otherwise permitted under this Agreement, are in the ordinary
course of its business and are upon fair and reasonable terms no less
favorable to it than it would obtain in a comparable arm's length transaction
with a Person not an Affiliate.
Section 9.12 Distribution Restrictions. The Borrower shall not, and
shall not permit any Subsidiary to, enter into any agreement (other than the
NorCon Gas Sales Contract) that would restrict any Subsidiaries' ability to
make distributions to the Borrower.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following events
shall constitute an "Event of Default":
(a) the Borrower shall default in the payment or prepayment when due of
any principal of or interest on any Loan, or any reimbursement obligation for
a disbursement made under any Letter of Credit, or any fees or other amount
payable by it hereunder and such defaults, other than a default of a payment
or mandatory prepayment of principal (which shall have no cure period), shall
continue unremedied for a period of three (3) Business Days; or
(b) the Borrower or any Subsidiary shall default in the payment when due
of any principal of or interest or other amounts on any of its Hedging
Agreements with a marked to market value and other Debt aggregating
$10,000,000 or more, or any event specified in any note, agreement, indenture
or other document evidencing or relating to any such Debt shall occur if the
effect of such event is to cause, or (with the giving of any notice or the
lapse of time or both) to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, such Debt to
become due prior to its stated maturity; or
(c) any representation, warranty or certification made or deemed made
herein or in any other Loan Document by the Borrower or any Subsidiary, or any
certificate furnished to any Lender or the Administrative Agent pursuant to
the provisions hereof or any other Loan Document, shall prove to have been
false or misleading as of the time made or furnished in any material respect;
or
(d) the Borrower shall default in the performance of any of its
obligations under Article IX or any other Article of this Agreement other than
under Article VIII; or the Borrower shall default in the performance of any of
its obligations under Article VIII or any other Loan Document (other than the
payment of amounts due which shall be governed by Section 10.01(a)) and such
default shall continue unremedied for a period of thirty (30) days after the
earlier to occur of (i) notice thereof to the Borrower by the Administrative
Agent or any Lender (through the Administrative Agent), or (ii) the Borrower
otherwise becoming aware of such default; or
(e) the Borrower shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(f) the Borrower shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Federal Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, liquidation or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application or
consent of the Borrower, in any court of competent jurisdiction, seeking (i)
its liquidation, reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Borrower of all or any substantial
part of its assets, or (iii) similar relief in respect of the Borrower under
any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect, for a period
of 60 days; or (iv) an order for relief against the Borrower shall be entered
in an involuntary case under the Federal Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in excess of
$10,000,000 in the aggregate shall be rendered by a court against the Borrower
or any Subsidiary and the same shall not be discharged (or provision shall not
be made for such discharge), or a stay of execution thereof shall not be
procured, within thirty (30) days from the date of entry thereof and the
Borrower or such Subsidiary shall not, within said period of 30 days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(i) any Loan Document 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 in accordance with their terms,
or the Borrower shall so state in writing; or
(j) any Letter of Credit becomes the subject matter of any order,
judgment, injunction or any other such determination, or if the Borrower or
any other Person shall petition or apply for or obtain any order restricting
payment by the Administrative Agent under any Letter of Credit or extending
the Lenders' liability under any Letter of Credit beyond the expiration date
stated therein unless otherwise agreed to by the Administrative Agent; or
(k) an event having a Material Adverse Effect shall occur; or
(l) any Person or group of Persons (within the meaning of Section 13 or
14 of the Securities Exchange Act) other than S.A. ▇▇▇▇▇ ▇▇▇▇▇▇▇ et Cie shall
acquire or hold beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC under the Securities Exchange Act) of 33 % or more of
the outstanding shares of common stock of the Borrower, unless S.A. ▇▇▇▇▇
▇▇▇▇▇▇▇ et Cie shall beneficially own (within the meaning of Rule 13d-3
promulgated by the SEC under the Securities Exchange Act) more than 50% of the
outstanding shares of common stock of the Borrower; or
(m) any Material Subsidiary takes, suffers or permits to exist any of
the events or conditions referred to in paragraphs (e), (f) or (g).
Section 10.02 Remedies.
(a) In the case of an Event of Default other than one referred to in
clauses (e), (f) or (g) of Section 10.01 or in clause (m) to the extent it
relates to clauses (e), (f) or (g), the Administrative Agent, upon request of
the Majority Lenders, shall, by notice to the Borrower, cancel the Commitments
and/or declare the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by the Borrower hereunder
and under the Notes (including without limitation the payment of cash
collateral to secure the LC Exposure as provided in Section 2.09(b)) to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other formalities of any kind, all of
which are hereby expressly waived by the Borrower.
(b) In the case of the occurrence of an Event of Default referred to in
clauses (e), (f) or (g) of Section 10.01 or in clause (m) to the extent it
relates to clauses (e), (f) or (g), the Commitments shall be automatically
canceled and the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by the Borrower hereunder
and under the Notes (including without limitation the payment of cash
collateral to secure the LC Exposure as provided in Section 2.09(b)) shall
become automatically immediately due and payable without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
(c) All proceeds received after maturity of the Notes, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and any other Loan Document;
second to accrued interest on the Notes; third to fees; fourth pro rata to
principal outstanding on the Notes and other Indebtedness; fifth to serve as
cash collateral to be held by the Administrative Agent to secure the LC
Exposure; and any excess shall be paid to the Borrower or as otherwise
required by any Governmental Requirement.
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its
agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used
in this sentence and in Section 11.05 and the first sentence of Section 11.06
shall include reference to its Affiliates and its and its Affiliates'
officers, directors, employees, attorneys, accountants, experts and agents):
(i) shall have no duties or responsibilities except those expressly set forth
in the Loan Documents, and shall not by reason of the Loan Documents be a
trustee or fiduciary for any Lender; (ii) makes no representation or warranty
to any Lender and shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement, or in
any certificate or other document referred to or provided for in, or received
by any of them under, this Agreement, or for the value, validity,
effectiveness, genuineness, execution, effectiveness, legality, enforceability
or sufficiency of this Agreement, any Note or any other document referred to
or provided for herein or for any failure by the Borrower or any other Person
(other than the Administrative Agent) to perform any of its obligations
hereunder or thereunder or for the existence, value, perfection or priority of
any collateral security or the financial or other condition of the Borrower,
its Subsidiaries or any other obligor or guarantor; (iii) except pursuant to
Section 11.07 shall not be required to initiate or conduct any litigation or
collection proceedings hereunder; and (iv) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other
document or instrument referred to or provided for herein or in connection
herewith including its own ordinary negligence, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents,
accountants, attorneys and experts and shall not be responsible for the
negligence or misconduct of any such agents, accountants, attorneys or experts
selected by it in good faith or any action taken or omitted to be taken in
good faith by it in accordance with the advice of such agents, accountants,
attorneys or experts. The Administrative Agent may deem and treat the payee
of any Note as the holder thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof permitted hereunder shall
have been filed with the Administrative Agent. The Administrative Agent is
authorized to release any collateral that is permitted to be sold or released
pursuant to the terms of the Loan Documents.
Section 11.02 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier, telegram
or cable) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent.
Section 11.03 Defaults. The Administrative Agent shall not be deemed to
have knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans or of fees or failure to reimburse for
Letter of Credit drawings) unless the Administrative Agent has received notice
from a Lender or the Borrower specifying such Default and stating that such
notice is a "Notice of Default." In the event that the Administrative Agent
receives such a notice of the occurrence of a Default, the Administrative
Agent shall give prompt notice thereof to the Lenders. In the event of a
payment Default, the Administrative Agent shall give each Lender prompt notice
of each such payment Default.
Section 11.04 Rights as a Lender. With respect to its Commitments and
the Loans made by it and its participation in the issuance of Letters of
Credit, BMO (and any successor acting as Administrative Agent) in its capacity
as a Lender hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its
individual
capacity. BMO (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to and generally engage in any kind of banking,
trust or other business with the Borrower (and any of its Affiliates) as if it
were not acting as the Administrative Agent, and BMO and its Affiliates may
accept fees and other consideration from the Borrower for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
SECTION 11.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT AND THE ISSUING BANK RATABLY IN ACCORDANCE
WITH THEIR
PERCENTAGE SHARES FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION
12.03 TO
THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE BORROWER UNDER
SECTION 12.03,
BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER UNDER SAID
SECTION 12.03
AND FOR ANY AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY
KIND AND NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY
OR ASSERTED
AGAINST THE ADMINISTRATIVE AGENT OR THE ISSUING BANK IN ANY WAY
RELATING TO OR
ARISING OUT OF: (I) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY
OTHER
DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THE
TRANSACTIONS
CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED
AND IS
CONTINUING, NORMAL ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO
THE
PERFORMANCE OF ITS AGENCY DUTIES HEREUNDER OR (II) THE ENFORCEMENT
OF ANY OF
THE TERMS OF THIS AGREEMENT, ANY LOAN DOCUMENT OR OF ANY SUCH
OTHER DOCUMENTS;
WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN THIS SECTION 11.05
ARISES
FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE ADMINISTRATIVE
AGENT OR THE
ISSUING BANK, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE
FOREGOING
TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF
THE ADMINISTRATIVE AGENT OR THE ISSUING BANK.
Section 11.06 Non-Reliance on Administrative Agent and other Lenders.
Each Lender acknowledges and agrees that it has, independently and without
reliance on the Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and its decision to enter into this Agreement, and
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions
in taking or not taking action under this Agreement. The Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Agreement, the Notes, any other Loan
Document or any other document referred to or provided for herein or to
inspect the properties or books of the Borrower. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition or business of
the Borrower (or any of its Affiliates) which may come into the possession of
the Administrative Agent or any of its Affiliates. In this regard, each
Lender acknowledges that ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. is acting in this transaction
as special counsel to the Administrative Agent only, except to the extent
otherwise expressly stated in any legal opinion or any Loan Document. Each
Lender will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein.
Section 11.07 Action by Administrative Agent. Except for action or
other matters expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall (i) receive written instructions
from the Majority Lenders (or all of the Lenders as expressly required by
Section 12.04) specifying the action to be taken, and (ii) be indemnified to
its satisfaction by the Lenders against any and all liability and expenses
which may be incurred by it by reason of taking or continuing to take any such
action. The instructions of the Majority Lenders (or all of the Lenders as
expressly required by Section 12.04) and any action taken or failure to act
pursuant thereto by the Administrative Agent shall be binding on all of the
Lenders. If a Default has occurred and is continuing, the Administrative
Agent shall take such action with respect to such Default as shall be directed
by the Majority Lenders (or all of the Lenders as required by Section 12.04)
in the written instructions (with indemnities) described in this Section
11.07, provided that, unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interests of
the Lenders. In no event, however, shall the Administrative Agent be required
to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement and the other Loan Documents
or applicable law.
Section 11.08 Resignation or Removal of Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower, and the Administrative Agent
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 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 thirty (30) days after the
retiring Administrative Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent. Upon the acceptance of such appointment
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 hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Article
XI and Section 12.03 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as the
Administrative Agent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver. No failure on the part of the Administrative
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any of the Loan
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under any of the Loan Documents
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
Section 12.02 Notices. All notices and other communications provided
for herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other
Loan Documents) shall be given or made by telex, telecopy, courier or U.S.
Mail or in writing and telexed, telecopied, mailed or delivered to the
intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof or in the Loan Documents or, as to any party, at
such other address as shall be designated by such party in a notice to each
other party. Except as otherwise provided in this Agreement or in the other
Loan Documents, all such communications shall be deemed to have been duly
given when transmitted, if transmitted before 1:00 p.m. local time on a
Business Day (otherwise on the next succeeding Business Day) by telex or
telecopier and evidence or confirmation of receipt is obtained, or personally
delivered or, in the case of a mailed notice, three (3) Business Days after
the date deposited in the mails, postage prepaid, in each case given or
addressed as aforesaid.
Section 12.03 Payment of Expenses, Indemnities, etc.
(a) The Borrower agrees:
(i) whether or not the transactions hereby contemplated are
consummated, to pay all reasonable expenses of the Administrative Agent
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 negotiation, syndication, investigation, preparation,
execution and delivery of, recording or filing of, preservation of rights
under, enforcement of, and refinancing, renegotiation or restructuring
of, the Loan Documents and any amendment, waiver or consent relating
thereto (including, without limitation, travel, photocopy, mailing,
courier, telephone and other similar expenses of the Administrative
Agent, the cost of environmental audits, surveys and appraisals at
reasonable intervals, the reasonable fees and disbursements of counsel
and other outside consultants for the Administrative Agent and, in the
case of enforcement, the reasonable fees and disbursements of counsel for
the Administrative Agent and 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 Borrower under any Loan Document;
(ii) TO INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH LENDER AND
EACH OF THEIR AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND
EXPERTS
("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS AGAINST
AND
PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE
INDEMNITY
MATTERS 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 BORROWER OF THE PROCEEDS OF ANY OF THE LOANS
OR
LETTERS OF CREDIT, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF
THE
LOAN DOCUMENTS BY THE BORROWER, (III) THE OPERATIONS OF THE
BUSINESS OF
THE BORROWER AND ITS SUBSIDIARIES, (IV) THE FAILURE OF THE BORROWER
OR
ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT,
OR WITH ANY
GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY
REPRESENTATION OR ANY
BREACH OF ANY WARRANTY OF THE BORROWER SET FORTH IN ANY OF THE
LOAN
DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES
AND
DISBURSEMENTS 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 INDEMNITY MATTERS ARISING BY REASON
OF THE
ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL
INDEMNITY
MATTERS ARISING SOLELY BY REASON OF CLAIMS BETWEEN THE LENDERS
OR ANY
LENDER AND THE ADMINISTRATIVE AGENT OR A LENDER'S SHAREHOLDERS
AGAINST
THE ADMINISTRATIVE AGENT OR LENDER OR BY REASON OF THE GROSS
NEGLIGENCE
OR WILLFUL MISCONDUCT ON THE PART OF THE INDEMNIFIED PARTY; AND
(iii) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS,
COST
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES
AND
LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER
ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY
OR ANY OF
THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR
DISPOSAL
OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (II) AS A RESULT
OF
THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY
WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY,
(III) DUE
TO PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF
THEIR
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH,
THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES
OWNED OR
OPERATED BY THE BORROWER OR ANY SUBSIDIARY, OR (V) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE
LOAN
DOCUMENTS; PROVIDED, HOWEVER, NO INDEMNITY SHALL BE AFFORDED
UNDER THIS
SECTION 12.03(A)(III) IN RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE
ARISING 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).
(b) No Indemnified Party may settle any claim to be indemnified without
the consent of the indemnitor, such consent not to be unreasonably withheld;
provided, that the indemnitor may not reasonably withhold consent to any
settlement that an Indemnified Party proposes, if the indemnitor does not have
the financial ability to pay all its obligations outstanding and asserted
against the indemnitor at that time, including the maximum potential claims
against the Indemnified Party to be indemnified pursuant to this Section
12.03.
(c) In the case of any indemnification hereunder, the Administrative
Agent or Lender, as appropriate, shall give notice to the Borrower of any such
claim or demand being made against the Indemnified Party and the Borrower
shall have the non-exclusive right to join in the defense against any such
claim or demand provided that if the Borrower provides a defense, the
Indemnified Party shall bear its own cost of defense unless there is a
conflict between the Borrower and such Indemnified Party.
(d) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED
PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND
OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT
OR AN
OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT
CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON
ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN
INDEMNIFIED
PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR
WILLFUL
MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL
CONTINUE BUT
SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO
HAVE OCCURRED
BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF
THE INDEMNIFIED PARTY.
(e) The Borrower's obligations under this Section 12.03 shall survive
any termination of this Agreement and the payment of the Notes and shall
continue thereafter in full force and effect.
(f) The Borrower shall pay any amounts due under this Section 12.03
within thirty (30) days of the receipt by the Borrower of notice of the amount
due.
Section 12.04 Amendments, Etc. Any provision of this Agreement or any
other Loan Document may be amended, modified or waived with the Borrower's and
the Majority Lenders' prior written consent; provided that (i) no amendment,
modification or waiver which extends the final maturity of the Loans, extends
the due date or past due date of payment of any fees or interest, modifies pro
rata treatment pursuant to Section 4.02, changes the required number or
percentage of Lenders for any consent required hereunder, increases the
Aggregate Maximum Credit Amounts, forgives the principal amount of any
Indebtedness outstanding under this Agreement, releases any guarantor of the
Indebtedness, reduces the interest rate applicable to the Loans or the fees
payable to the Lenders generally, affects Section 2.03(a), this Section 12.04
or Section 12.06(a) or modifies the definition of "Majority Lenders" shall be
effective without consent of all Lenders; (ii) no amendment, modification or
waiver which increases the Maximum Credit Amount of any Lender shall be
effective without the consent of such Lender; and (iii) 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.
Section 12.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 12.06 Assignments and Participations.
(a) The Borrower may not assign its rights or obligations hereunder or
under the Notes or any Letters of Credit without the prior consent of all of
the Lenders and the Administrative Agent.
(b) Any Lender may, upon the written consent of the Administrative Agent
and, if no Event of Default has occurred and is continuing, the Borrower
(which consent will not be unreasonably withheld), assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
pursuant to an Assignment Agreement substantially in the form of Exhibit D (an
"Assignment"); provided, however, that (i) any such assignment shall be in the
amount of at least $15,000,000 or such lesser amount to which the Borrower has
consented and (ii) the assignee or assignor shall pay to the Administrative
Agent a processing and recordation fee of $3,500 for each assignment. Any
such assignment will become effective upon the execution and delivery to the
Administrative Agent of the Assignment and the consent of the Administrative
Agent. Promptly after receipt of an executed Assignment, the Administrative
Agent shall send to the Borrower a copy of such executed Assignment. Upon
receipt of such executed Assignment, the Borrower, 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. Upon the
effectiveness of any assignment pursuant to this Section 12.06(b), the
assignee will become a "Lender," if not already a "Lender," for all purposes
of this Agreement and the other Loan 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 except
that its rights under Sections 4.06, 5.01, 5.05 and 12.03 shall not be
affected). The Administrative Agent will prepare on the last Business Day of
each month during which an assignment has become effective pursuant to this
Section 12.06(b), a new Annex I giving effect to all such assignments effected
during such month, and will promptly provide the same to the Borrower and each
of the Lenders.
(c) Each Lender may transfer, grant or assign participations in all or
any part of such Lender's interests hereunder pursuant to this Section
12.06(c) 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
any of the Loan Documents except to the extent such amendment or waiver would
(x) forgive any principal owing on any Indebtedness or extend the final
maturity of the Loans, (y) reduce the interest rate (other than as a result of
waiving the applicability of any post-default increases in interest rates) or
fees applicable to any of the Commitments or Loans or Letters of Credit in
which such participant is participating, or postpone the payment of any
thereof, or (z) release any guarantor of the Indebtedness or release all or
substantially all of the collateral (except as provided in the Loan Documents)
supporting any of the Commitments or Loans or Letters of Credit 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 other Loan
Document (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 Borrower
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 Article V on the same basis as if it were a Lender
and be indemnified under Section 12.03 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 12.15.
(d) The Lenders may furnish any information concerning the Borrower in
the possession of the Lenders from time to time to assignees and participants
(including prospective assignees and participants); provided that, such
Persons agree to be bound by the provisions of Section 12.15.
(e) Notwithstanding anything in this Section 12.06 to the contrary, any
Lender may assign and pledge its Note to any Federal Reserve Bank 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.
(f) Notwithstanding any other provisions of this Section 12.06, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the " Blue Sky" laws of
any state.
Section 12.07 Invalidity. In the event that any one or more of the
provisions contained in any of the Loan Documents 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
Loan Documents.
Section 12.08 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement
by signing any such counterpart.
Section 12.09 References. The words "herein," "hereof," "hereunder" and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or
subsection. Any reference herein to a Section shall be deemed to refer to the
applicable Section of this Agreement unless otherwise stated herein. Any
reference herein to an exhibit or schedule shall be deemed to refer to the
applicable exhibit or schedule attached hereto unless otherwise stated herein.
Section 12.10 Survival. The obligations of the parties under Section
4.06, Article V, and Sections 11.05 and 12.03 shall survive the repayment of
the Loans and the termination of the Commitments. To the extent that any
payments on the Indebtedness or proceeds of any collateral are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, debtor in possession, receiver or other Person
under any bankruptcy law, common law or equitable cause, then to such extent,
the Indebtedness so satisfied shall be revived and continue as if such payment
or proceeds had not been received and the Administrative Agent's and the
Lenders' rights, powers and remedies under this Agreement and each other Loan
Document shall continue in full force and effect. In such event, each Loan
Document shall be automatically reinstated and the Borrower shall take such
action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement.
Section 12.11 Captions. Captions and section headings appearing herein
are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
SECTION 12.12 NO ORAL AGREEMENTS. THE LOAN DOCUMENTS EMBODY THE
ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE
ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO
THE SUBJECT
MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(A) THIS AGREEMENT AND THE NOTES (INCLUDING, BUT NOT LIMITED TO,
THE VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE
GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
EXCEPT
TO THE EXTENT THAT UNITED STATES FEDERAL LAW PERMITS ANY LENDER
TO CHARGE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH
LENDER
IS LOCATED. TEX. REV. CIV. STAT. ▇▇▇. ART. ▇▇▇▇, ▇▇. 15 (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY
ACCOUNTS)
SHALL NOT APPLY TO THIS AGREEMENT OR THE NOTES.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN
DOCUMENTS SHALL 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, EACH OF THE BORROWER,
THE
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY ACCEPTS FOR ITSELF
AND (TO
THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY
AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH
OF THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY
IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, 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. THIS SUBMISSION TO
JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE THE
ADMINISTRATIVE
AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER THE
BORROWER IN ANY
COURT OTHERWISE HAVING JURISDICTION.
(C) THE BORROWER HEREBY IRREVOCABLY DESIGNATES CT
CORPORATION
LOCATED AT ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, AS THE DESIGNEE,
APPOINTEE
AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON BEHALF OF THE
BORROWER,
SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL
ACTION
OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS. IT IS
UNDERSTOOD THAT
A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY
FORWARDED BY
OVERNIGHT COURIER TO THE BORROWER AT ITS ADDRESS SET FORTH UNDER
ITS
SIGNATURE BELOW, BUT THE FAILURE OF THE BORROWER TO RECEIVE SUCH
COPY
SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE
BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF
THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE
BORROWER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE
THIRTY
(30) DAYS AFTER SUCH MAILING.
(D) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BORROWER, 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 BORROWER IN ANY
OTHER
JURISDICTION.
(E) THE BORROWER AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY LOAN
DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE
MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; (III)
CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF
COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE
THE FOREGOING WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN
INDUCED TO
ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE
MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.13.
Section 12.14 Interest. It is the intention of the parties hereto that
each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to
any Lender under laws applicable to it (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable to such Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything
to the contrary in any of the Loan Documents or any agreement entered into in
connection with 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 Lender that is contracted for, taken, reserved, charged or
received by such Lender under any of the Loan Documents or agreements or
otherwise in connection with the Notes shall under no circumstances exceed the
maximum amount allowed by such applicable law, and any excess shall be
canceled automatically and if theretofore paid shall be credited by such
Lender on the principal amount of the Indebtedness (or, to the extent that the
principal amount of the Indebtedness shall have been or would thereby be paid
in full, refunded by such Lender to the Borrower); and (ii) in the event that
the maturity of the Notes is accelerated by reason of an election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Borrower). All sums paid or agreed to be paid
to any Lender for the use, forbearance or detention of sums due hereunder
shall, to the extent permitted by law applicable to such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans evidenced
by the Notes until payment in full so that the rate or amount of interest on
account of any Loans hereunder does not exceed the maximum amount allowed by
such applicable law. If at any time and from time to time (i) the amount of
interest payable to any Lender on any date shall be computed at the Highest
Lawful Rate applicable to such Lender pursuant to this Section 12.14 and (ii)
in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Lender would be less than the amount of
interest payable to such Lender computed at the Highest Lawful Rate applicable
to such Lender, then the amount of interest payable to such Lender in respect
of such subsequent interest computation period shall continue to be computed
at the Highest Lawful Rate applicable to such Lender until the total amount of
interest payable to such Lender shall equal the total amount of interest which
would have been payable to such Lender if the total amount of interest had
been computed without giving effect to this Section 12.14. To the extent that
Article 5069-1.04 of the Texas Revised Civil Statutes is relevant for the
purpose of determining the Highest Lawful Rate, such Lender elects to
determine the applicable rate ceiling under such Article by the indicated
weekly rate ceiling from time to time in effect.
Section 12.15 Confidentiality. In the event that the Borrower provides
to the Administrative Agent or the Lenders written confidential information
belonging to the Borrower, if the Borrower shall denominate such information
in writing as "confidential", the Administrative Agent and the Lenders shall
thereafter maintain such information in confidence in accordance with the
standards of care and diligence that each utilizes in maintaining its own
confidential information. This obligation of confidence shall not apply to
such portions of the information which (i) are in the public domain, (ii)
hereafter become part of the public domain without the Administrative Agent or
the Lenders breaching their obligation of confidence to the Borrower, (iii)
are previously known by the Administrative Agent or the Lenders from some
source other than the Borrower, (iv) are hereafter developed by the
Administrative Agent or the Lenders without using the Borrower's information,
(v) are hereafter obtained by or available to the Administrative Agent or the
Lenders from a third party who owes no obligation of confidence to the
Borrower with respect to such information or through any other means other
than through disclosure by the Borrower, (vi) are disclosed with the
Borrower's consent, (vii) must be disclosed either pursuant to any
Governmental Requirement or to Persons regulating the activities of the
Administrative Agent or the Lenders, or (viii) as may be required by law or
regulation or order of any Governmental Authority in any judicial, arbitration
or governmental proceeding. Further, the Administrative Agent or a Lender
may disclose any such information to any other Lender, any independent
petroleum engineers or consultants, any independent certified public
accountants, any legal counsel employed by such Person in connection with this
Agreement or any other Loan Document, including without limitation, the
enforcement or exercise of all rights and remedies thereunder, or any assignee
or participant (including prospective assignees and participants) in the
Loans; provided, however, that the Administrative Agent or the Lenders shall
receive a confidentiality agreement from the Person to whom such information
is disclosed such that said Person shall have the same obligation to maintain
the confidentiality of such information as is imposed upon the Administrative
Agent or the Lenders hereunder. Notwithstanding anything to the contrary
provided herein, this obligation of confidence shall cease three (3) years
from the date the information was furnished, unless the Borrower requests in
writing at least thirty (30) days prior to the expiration of such three year
period, to maintain the confidentiality of such information for an additional
three year period. The Borrower waives any and all other rights it may have
to confidentiality as against the Administrative Agent and the Lenders arising
by contract, agreement, statute or law except as expressly stated in this
Section 12.15.
Section 12.16 Effectiveness. This Agreement shall not be effective
until the date (the "Effective Date") that it is delivered to the
Administrative Agent in the State of Texas, accepted by the Lenders in such
State, and executed by the Administrative Agent in such State.
Section 12.17 Borrowing Base. The provisions of this Section 12.17
shall be in effect only during a Borrowing Base Period.
(a) Definitions. As used herein, the following terms shall have the
following meanings (all terms defined in this Section 12.17(a) in the singular
to have the same meanings when used in the plural and vice versa):
"Borrowing Base" shall mean at any time an amount equal to the
amount determined in accordance with Section 12.17(b).
"Borrowing Base Period" shall mean the period beginning at such time
as (i) the Borrower's S&P Credit Rating is less than BBB- and its ▇▇▇▇▇'▇
Credit Rating is less than Baa3 or when there is No Rating and (ii) the
Majority Lenders elect to implement a Borrowing Base, and ending at such
time as either the Borrower's S&P Credit Rating is BBB- or better or its
▇▇▇▇▇'▇ Credit Rating is Baa3 or better.
"Engineering Reports" shall have the meaning assigned such term in
Section 12.17(b).
"Facility Borrowing Base" shall mean an amount equal to the
Borrowing Base as determined from time to time pursuant to Section 12.17
less all Senior Debt (excluding Indebtedness) then outstanding, as
determined from time to time with each redetermination of the Borrowing
Base.
"Initial Reserve Report" shall mean the report prepared by Borrower
and reviewed by ▇▇▇▇▇ ▇▇▇▇▇ Company or another independent engineering
consultant acceptable to the Administrative Agent, setting forth as of
January 1 immediately preceding the beginning of a Borrowing Base Period
(i) the oil and gas reserves attributable to the Borrower's and its
Material Subsidiaries' Oil and Gas Properties together with a projection
of the rate of production and future net revenues, severance, production
and similar taxes, operating expenses and capital expenditures with
respect thereto as of such date, based upon the pricing assumptions
consistent with SEC reporting requirements at the time and (ii) such
other information as the Administrative Agent may reasonably request.
"Redetermination Date" shall have the meaning assigned such term in
Section 12.17(b)(i).
"Reserve Report" shall mean a report prepared by the Borrower and
reviewed by ▇▇▇▇▇ ▇▇▇▇▇ Company or another independent engineering
consultant acceptable to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent, setting forth, as of each
January 1 (or such other date in the event of an unscheduled
redetermination) (i) the oil and gas reserves attributable to the
Borrower's and its Material Subsidiaries' Oil and Gas Properties together
with a projection of the rate of production and future net revenues,
severance, production and similar taxes, operating expenses and capital
expenditures with respect thereto as of such date, based upon pricing
assumptions provided by the Administrative Agent and (ii) such other
information as the Administrative Agent may reasonably request.
"Scheduled Redetermination Date" shall have the meaning assigned
such term in Section 12.17(b).
(b) Borrowing Base.
(i) The Borrowing Base shall be determined in accordance with
Section 12.17(b)(ii) by the Administrative Agent with the concurrence of
the Majority Lenders and is subject to redetermination in accordance with
Section 12.17(b)(iii). Upon any redetermination of the Borrowing Base,
such redetermination shall remain in effect until the next successive
Redetermination Date. "Redetermination Date" shall mean the date that
the redetermined Borrowing Base becomes effective subject to the notice
requirements specified in Section 12.17(b)(iv) both for scheduled
redeterminations and unscheduled redeterminations. So long as any of the
Commitments are in effect or any LC Exposure or Loans are outstanding
hereunder, this facility shall be governed by the then effective
Borrowing Base.
(ii) Upon receipt of the reports required by Section 12.17(c) and
such other reports, data and supplemental information as may from time to
time be reasonably requested by the Administrative Agent (the
"Engineering Reports"), the Administrative Agent will redetermine the
Borrowing Base. Such redetermination 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. The
Administrative Agent, in its sole discretion, may make adjustments to the
rates, volumes and prices and other assumptions set forth therein 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. The Administrative Agent shall propose to the Lenders a
new Borrowing Base within 30 days following receipt by the Administrative
Agent and the Lenders of the Engineering Reports in a timely and complete
manner. After having received notice of such proposal by the
Administrative Agent, the Majority Lenders shall have 15 days to agree or
disagree with such proposal. If at the end of the 15 days, the Lenders
have not communicated their approval or disapproval, such silence shall
be deemed to be an approval and the Administrative Agent's proposal shall
be the new Borrowing Base. If however, Lenders holding more than 33 1/3%
of the aggregate principal amount of the Loans then outstanding (or while
no Loans are outstanding, Lenders having more than 33 1/3% of the
Aggregate Commitments) notify the Administrative Agent within 15 days of
their disapproval, the Majority Lenders shall, within a reasonable period
of time, agree on a new Borrowing Base.
(iii) So long as any of the Commitments are in effect and until
payment in full of all Loans hereunder, on or around 45 days after
receipt by the Administrative Agent of the Engineering Reports required
to be delivered pursuant to Sections 12.17(c)(i) and (ii) (each being a
"Scheduled Redetermination Date"), the Lenders shall redetermine the
amount of the Borrowing Base in accordance with Section 12.17(b)(ii). In
addition, the Lenders may initiate a redetermination of the Borrowing
Base at any other time as they so elect by specifying in writing to the
Borrower the date on which the Borrower is to furnish a Reserve Report in
accordance with Section 12.17(c) and the date on which such
redetermination is to occur; provided, however, that the Lenders may
initiate, only one such unscheduled redetermination during any
consecutive twelve (12) month period, except that upon any and all
increases in Subordinated Debt, the Majority Lenders may initiate a
redetermination of the Borrowing Base.
(iv) The Administrative Agent shall promptly notify in writing the
Borrower and the Lenders of the new Borrowing Base. Any redetermination
of the Borrowing Base shall not be in effect until written notice is
received by the Borrower.
(c) Engineering Reports.
(i) An Initial Reserve Report shall be delivered to the
Administrative Agent within 45 days after the first day of a Borrowing
Base Period.
(ii) On or before March 31 of each year the Borrower shall furnish
to the Administrative Agent a Reserve Report.
(iii) In the event of an unscheduled redetermination pursuant to
Section 12.17(b)(iii), the Borrower shall furnish to the Administrative
Agent a Reserve Report prepared by or under the supervision of the chief
engineer of the Borrower who shall certify such Reserve Report to be true
and accurate and to have been prepared in accordance with the procedures
used in the immediately preceding Reserve Report. For any unscheduled
redetermination requested by the Lenders or the Borrower pursuant to
Section 12.17(b)(iii), the Borrower shall provide such Reserve Report
with an "as of" date as required by the Lenders as soon as possible, but
in any event no later than 45 days following the receipt of the request
by the Administrative Agent.
(iv) With the delivery of each Reserve Report, the Borrower shall
provide to the Administrative Agent and the Lenders, a certificate from a
Responsible Officer certifying that, to the best of his knowledge and in
all material respects: (i) the information contained in the Reserve
Report and any other information delivered in connection therewith is
true and correct, (ii) the Borrower owns good and defensible title to the
Oil and Gas Properties evaluated in such Reserve Report and such
Properties are free of all Liens except for Liens permitted by Section
9.02, (iii) except as set forth on an exhibit to the certificate, on a
net basis there are no gas imbalances, take or pay or other prepayments
with respect to its Oil and Gas Properties evaluated in such Reserve
Report which would require the Borrower to deliver Hydrocarbons produced
from such Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor, (iv) none of the Borrower's
Oil and Gas Properties have been sold since the date of the last
Borrowing Base determination except as set forth on an exhibit to the
certificate, which certificate shall list all of the Borrower's Oil and
Gas Properties sold and in such detail as reasonably required by the
Majority Lenders, (v) attached to the certificate is a list of its Oil
and Gas Properties added to and deleted from the immediately prior
Reserve Report and a list showing any change in working interest or net
revenue interest in the Borrower's Oil and Gas Properties occurring and
the reason for such change, and (vi) after giving full effect to the
Excepted Liens, the Borrower owns the net interests in production
attributable to the Hydrocarbon Interests reflected in such Reserve
Report and the ownership of such Oil and Gas Properties shall not in any
material respect obligate the Borrower to bear the costs and expenses
relating to the maintenance, development and operations of each such Oil
and Gas Property in an amount in excess of the working interest of each
Property set forth in such Reserve Report.
(d) Debt Limitations. This Section 12.17(d) shall supersede Section
9.01(a). The Borrower and its Subsidiaries will not incur, create, assume or
permit to exist, on a consolidated basis, Senior Debt exceeding the amount of
the Borrowing Base.
(e) Sale of Oil and Gas Properties. The Borrower will not, and will not
permit any Subsidiary to, sell, assign, farm-out, convey or otherwise transfer
any Oil and Gas Property or any interest in any Oil and Gas Property except
for (i) the sale of Hydrocarbons in the ordinary course of business; (ii)
farmouts of undeveloped acreage and assignments in connection with such
farmouts; (iii) the sale or transfer of equipment that is obsolete or no
longer necessary for the business of the Borrower or such Subsidiary or is
replaced by equipment of at least comparable value and use; (iv) sales in the
ordinary course of business of Oil and Gas Properties which in the aggregate
in any fiscal year shall not exceed $50,000,000; and (v) sales with written
approval of the Majority Lenders.
[SIGNATURES BEGIN NEXT PAGE]
The parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
BORROWER: ▇▇▇▇▇ ▇▇▇▇▇▇▇ NATURAL GAS CORP.
By:
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Address for Notices:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: 405/749-6661
Telephone No.: 405/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
LENDER AND ADMINISTRATIVE AGENT: BANK OF MONTREAL
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director, U.S. Corporate Banking
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 312/750-6061
Telephone No.: 312/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇
With copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Director, U.S. Corporate Banking
Bank of Montreal
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 713/546-9754
Telephone No.: 713/▇▇▇-▇▇▇▇
LENDERS: CHASE MANHATTAN BANK
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Lending Office for Base Rate Loans and
LIBOR Loans:
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 212/552-5777
Telephone No.: 212/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With copy to:
▇▇▇▇▇ German
Texas Commerce Bank
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
NATIONSBANK OF TEXAS, N.A.
By:
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: 915/685-2009
Telephone No.: 915/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
With copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
NationsBank of Texas, N.A.
Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
THE BANK OF NOVA SCOTIA
By: The Bank of Nova Scotia, Atlanta
Agency
By:
------------------------------
Name: F.C.H. ▇▇▇▇▇
Title: Senior Manager Loan Operations
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 404/888-8998
Telephone No.: 404/▇▇▇-▇▇▇▇
Attention: F.C.H. ▇▇▇▇▇
With copy to:
▇▇▇▇ ▇. ▇▇▇▇▇
The Bank of Nova Scotia
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
BANK OF TOKYO-MITSUBISHI, LTD.
HOUSTON AGENCY
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: 713/655-3855
Telephone No.: 713/▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Agent
Lending Office for Base Rate Loans and
LIBOR Loans:
One First National Plaza
0634, 1FNP, 10
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 713/654-7370
Telephone No.: 713/▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
With copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇
The First National Bank of Chicago
One First National Plaza
0634, 1FNP, 10
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 312/732-4840
Telephone No.: 312/▇▇▇-▇▇▇▇
THE SANWA BANK, LIMITED
By:
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
The Sanwa Bank, Limited, New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 212/754-3084
Telephone No.: 212/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ Hara
THE FUJI BANK, LIMITED - HOUSTON AGENCY
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President & Manager
Lending Office for Base Rate Loans and
LIBOR Loans:
One Houston Center, Suite 4100
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 713/951-0590
Telephone No.: 713/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇
ROYAL BANK OF CANADA
By:
-----------------------------------
Name:
Title:
Lending Office for Base Rate Loans and
LIBOR Loans:
1 Financial Square, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Address for Notices:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: 212/428-2372
Telephone No.: 212/▇▇▇-▇▇▇▇
Attention: Assistant Manager, Loan
Processing
CIBC, INC.
By:
-----------------------------------
Name:
Title:
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 770/319-4950
Telephone No.: 770/▇▇▇-▇▇▇▇
Attention: Pluria ▇▇▇▇▇▇
ABN-AMRO BANK N.V.
By:
-----------------------------------
Name: H. ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 312/904-8840
Telephone No.: 312/▇▇▇-▇▇▇▇
Attention: Credit Administration
With copy to:
W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
ABN AMRO North America, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
THE TORONTO-DOMINION BANK
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager - Credit Administration
Lending Office for Base Rate Loans and
LIBOR Loans:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 713/951-9921
Telephone No.: 713/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With copy to:
▇▇▇▇ ▇▇▇▇▇
The Toronto-Dominion Bank
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ FARGO BANK (TEXAS), N.A.
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans and
LIBOR Loans:
Commercial Banking Service Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
Commercial Banking Service Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: 415/979-0675
Telephone No.: 415/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ANNEX I
LIST OF MAXIMUM CREDIT AMOUNTS AND PERCENTAGE SHARES
----------------------------------------------------
Name of Lender Percentage Share Maximum Credit
Amount
Bank of Montreal 18.▇▇▇▇▇▇▇▇▇% $100,000,000
Chase Manhattan Bank 13.636363636% $75,000,000
NationsBank of Texas, N.A. 13.636363636% $75,000,000
The First National Bank of Chicago 6.363636364% $35,000,000
The Fuji Bank, Limited - Houston
Agency 6.363636364% $35,000,000
Royal Bank of Canada 6.▇▇▇▇▇▇▇▇▇% $35,000,000
CIBC, Inc. 6.363636364% $35,000,000
ABN-AMRO Bank, N.V. 6.363636364% $35,000,000
The Bank of Nova Scotia 4.▇▇▇▇▇▇▇▇▇% $25,000,000
Bank of Tokyo-Mitsubishi, Ltd.
Houston Agency 4.545454545% $25,000,000
The Sanwa Bank, Limited 4.545454545% $25,000,000
The Toronto-Dominion Bank 4.▇▇▇▇▇▇▇▇▇% $25,000,000
▇▇▇▇▇ Fargo Bank (Texas), N.A. 4.545454545% $25,000,000
TOTAL 100% $550,000,000
EXHIBIT A
FORM OF NOTE
$ , 199
----------------------------- ------------------- --
FOR VALUE RECEIVED, ▇▇▇▇▇ ▇▇▇▇▇▇▇ NATURAL GAS CORP., an Oklahoma
corporation (the "Borrower") hereby promises to pay to the order of
______________________________ (the "Lender"), at the Principal Office of Bank
of Montreal (the "Administrative Agent"), at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the principal sum of _____________ Dollars
($____________) (or such lesser amount as shall equal the aggregate unpaid
principal amount of the Loans made by the Lender to the Borrower under the
Credit Agreement, as hereinafter defined), in lawful money of the United
States of America and in immediately available funds, on the dates and in the
principal amounts provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan
shall be paid in full, at the rates per annum and on the dates provided in the
Credit Agreement.
The date, amount, Type, interest rate, Interest Period and maturity of
each Loan made by the Lender to the Borrower, and each payment made on account
of the principal thereof, shall be recorded by the Lender on its books and,
prior to any transfer of this Note, endorsed by the Lender on the schedules
attached hereto or any continuation thereof.
This Note is one of the Notes referred to in the Credit Agreement dated
as of October 14, 1997 among the Borrower, the Lenders which are or become
parties thereto (including the Lender) and the Administrative Agent, and
evidences Loans made by the Lender thereunder (such Credit Agreement as the
same may be amended or supplemented from time to time, the "Credit
Agreement"). Capitalized terms used in this Note have the respective meanings
assigned to them in the Credit Agreement.
This Note is issued pursuant to the Credit Agreement and is entitled to
the benefits provided for in the Credit Agreement and any other Loan
Documents. The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events, for prepayments of Loans
upon the terms and conditions specified therein and other provisions relevant
to this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE
LAWS OF THE STATE OF TEXAS.
▇▇▇▇▇ ▇▇▇▇▇▇▇ NATURAL GAS CORP.
By:
-----------------------------------
Name:
Title:
EXHIBIT B
FORM OF BORROWING, CONTINUATION AND CONVERSION REQUEST
, 199
--------------------- --
▇▇▇▇▇ ▇▇▇▇▇▇▇ NATURAL GAS CORP., an Oklahoma corporation (the
"Borrower"), pursuant to the Credit Agreement dated as of October 14, 1997
(together with all amendments or supplements thereto, the "Credit Agreement")
among the Borrower, Bank of Montreal, as Administrative Agent for the lenders
(the "Lenders") which are or become parties thereto, and such Lenders, hereby
makes the requests indicated below (unless otherwise defined herein,
capitalized terms are defined in the Credit Agreement):
$ under the Note
-------------------------
Requested funding date .
-------------------------
1. Loans:
---
(a) Aggregate amount of new Loans to be $ ;
----------------------
(b) Requested funding date is , 199 ;
----------------- --
(c) $ of such borrowings are to be LIBOR Loans;
-----------------
$ of such borrowings are to be Base Rate Loans; and
-----------------
(d) Length of Interest Period for LIBOR Loans is:
.
-------------------------
2. LIBOR Loan Continuation for LIBOR Loans maturing on :
--- --------------
(a) Aggregate amount to be continued as LIBOR Loans is $ ;
--------------
(b) Aggregate amount to be converted to Base Rate Loans is $ ;
-----------
(c) Length of Interest Period for continued LIBOR Loans is
.
--- ------------------------
3. Conversion of Outstanding Base Rate Loans to LIBOR Loans:
Convert $ of the outstanding Base Rate Loans to LIBOR Loans
----------
on with an Interest Period of .
-------------------- ----------------
4. Conversion of outstanding LIBOR Loans to Base Rate Loans:
---
Convert $ of the outstanding LIBOR Loans with Interest
--------------
Period maturing on , 199 , to Base Rate Loans.
--------------------- -
The undersigned certifies that he is the of the
---------------------
Borrower, and that as such he is authorized to execute this certificate on
behalf of the Borrower. The undersigned further certifies, represents and
warrants on behalf of the Borrower that the Borrower is entitled to receive
the requested borrowing, continuation or conversion under the terms and
conditions of the Credit Agreement.
▇▇▇▇▇ ▇▇▇▇▇▇▇ NATURAL GAS CORP.
By:
-----------------------------------
Name:
Title:
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
------------------------------
The undersigned hereby certifies that he is the of LOUIS
----------------
DREYFUS NATURAL GAS CORP., an Oklahoma corporation (the "Borrower") and that
as such he is authorized to execute this certificate on behalf of the
Borrower. With reference to the Credit Agreement dated as of October 14, 1997
(together with all amendments or supplements thereto being the "Agreement")
among the Borrower, Bank of Montreal, as Administrative Agent for the lenders
(the "Lenders") which are or become a party thereto, and such Lenders, the
undersigned represents and warrants as follows (each capitalized term used
herein having the same meaning given to it in the Agreement unless otherwise
specified):
(a) The representations and warranties of the Borrower contained in
Article VII of the Agreement and otherwise made in writing by or on
behalf of the Borrower pursuant to the Agreement and were true and
correct when made, and are repeated at and as of the time of delivery
hereof and are true and correct at and as of the time of delivery hereof,
except as such representations and warranties are modified to give effect
to the transactions expressly permitted by the Agreement.
(b) The Borrower has performed and complied with all agreements and
conditions contained in the Agreement required to be performed or
complied with by it prior to or at the time of delivery hereof.
(c) Neither the Borrower nor any Subsidiary has incurred any m
material liabilities, direct or contingent, since December 31, 1996,
except those allowed by the terms of the Agreement or consented to by the
Lenders in writing.
(d) Since December 31, 1996, no change has occurred, either in any
case or in the aggregate, in the condition, financial or otherwise, of
the Borrower or any Subsidiary which would have a Material Adverse
Effect.
(e) There exists, and, after giving effect to the loan or loans
with respect to which this certificate is being delivered, will exist,
no Default under the Agreement or any event or circumstance which
constitutes, or with notice or lapse of time (or both) would constitute,
an event of default under any loan or credit agreement, indenture, deed
of trust, security agreement or other agreement or instrument evidencing
or pertaining to any Debt of the Borrower or any Subsidiary, or under any
material agreement or instrument to which the Borrower or any Subsidiary
is a party or by which the Borrower or any Subsidiary is bound.
(f) The financial statements furnished to the Agent with this
certificate fairly present the consolidated financial condition and
results of operations of the Borrower and its Consolidated Subsidiaries
as at the end of, and for, the [fiscal quarter] [fiscal year] ending
and such financial statements have been
--------------------
approved in accordance with the accounting procedures specified in the
Agreement.
(g) Attached hereto are the detailed computations necessary to
determine whether the Borrower and its Consolidated Subsidiaries are in
compliance with Sections 9.01, 9.08 and 9.09 (and during any Borrowing
Base Period, Section 12.17(d)) of the Agreement as of the end of the
[fiscal quarter] [fiscal year] ending .
-------------------------
EXECUTED AND DELIVERED this day of .
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▇▇▇▇▇ ▇▇▇▇▇▇▇ NATURAL GAS CORP.
By:
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Name:
Title:
EXHIBIT D
FORM OF
ASSIGNMENT AGREEMENT
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ASSIGNMENT AGREEMENT ("Agreement") dated as of , 199
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between: (the "Assignor")
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and (the "Assignee").
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RECITALS
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A. The Assignor is a party to the Credit Agreement dated as of October
14, 1997 (as amended and supplemented and in effect from time to time, the
"Credit Agreement") among ▇▇▇▇▇ ▇▇▇▇▇▇▇ Natural Gas Corp., an Oklahoma
corporation (the "Borrower"), each of the lenders that is or becomes a party
thereto as provided in Section 12.06 of the Credit Agreement (individually,
together with its successors and assigns, a "Lender", and collectively,
together with their successors and assigns, the "Lenders"), and Bank of
Montreal, in its individual capacity, ("BMO") and as agent for the Lenders (in
such capacity, together with its successors in such capacity, the "Agent").
B. The Assignor proposes to sell, assign and transfer to the Assignee,
and the Assignee proposes to purchase and assume from the Assignor, [all][a
portion] of the Assignor's Maximum Credit Amount, outstanding Loans and its
Percentage Share of the outstanding LC Exposure, all on the terms and
conditions of this Agreement.
C. In consideration of the foregoing and the mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS.
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Section 1.01 Definitions. All capitalized terms used but not defined
herein have the respective meanings given to such terms in the Credit
Agreement.
Section 1.02 Other Definitions. As used herein, the following terms
have the following respective meanings:
"Assigned Interest" shall mean all of Assignor's (in its capacity as
a "Lender") rights and obligations (i) under the Credit Agreement and the
other Loan Documents in respect of the Maximum Credit Amount of the
Assignor in the principal amount equal to $ ,
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including, without limitation, any obligation to participate pro rata in
any LC Exposure, and any obligation to participate pro rata in any LC
Exposure and (ii) to make Loans under the Maximum Credit Amount and any
right to receive payments for the Loans outstanding under the Maximum
Credit Amount assigned hereby of $ (the "Loan Balance"), plus
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the interest and fees which will accrue from and after , 19
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(the "Assignment Date").
ARTICLE II
SALE AND ASSIGNMENT.
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Section 2.01 Sale and Assignment. On the terms and conditions set forth
herein, effective on and as of the Assignment Date, the Assignor hereby sells,
assigns and transfers to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, all of the right, title and interest of the
Assignor in and to, and all of the obligations of the Assignor in respect of,
the Assigned Interest. Such sale, assignment and transfer is without recourse
and, except as expressly provided in this Agreement, without representation or
warranty.
Section 2.02 Assumption of Obligations. The Assignee agrees with the
Assignor (for the express benefit of the Assignor and the Borrower) that the
Assignee will, from and after the Assignment Date, perform all of the
obligations of the Assignor in respect of the Assigned Interest. From and
after the Assignment Date: (a) the Assignor shall be released from the
Assignor's obligations in respect of the Assigned Interest, and (b) the
Assignee shall be entitled to all of the Assignor's rights, powers and
privileges under the Credit Agreement and the other Loan Documents in respect
of the Assigned Interest.
Section 2.03 Consent by Agent. By executing this Agreement as provided
below, in accordance with Section 12.06(b) of the Credit Agreement, the Agent
hereby acknowledges notice of the transactions contemplated by this Agreement
and consents to such transactions.
ARTICLE III
PAYMENTS.
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Section 3.01 Payments. As consideration for the sale, assignment and
transfer contemplated by Section 2.01 hereof, the Assignee shall, on the
Assignment Date, assume Assignor's obligations in respect of the Assigned
Interest and pay to the Assignor an amount equal to the Loan Balance, if any.
An amount equal to all accrued and unpaid interest and fees shall be paid to
the Assignor as provided in Section 3.02 (iii) below. Except as otherwise
provided in this Agreement, all payments hereunder shall be made in Dollars
and in immediately available funds, without setoff, deduction or counterclaim.
Section 3.02 Allocation of Payments. The Assignor and the Assignee
agree that (i) the Assignor shall be entitled to any payments of principal
with respect to the Assigned Interest made prior to the Assignment Date,
together with any interest and fees with respect to the Assigned Interest
accrued prior to the Assignment Date, (ii) the Assignee shall be entitled to
any payments of principal with respect to the Assigned Interest made from and
after the Assignment Date, together with any and all interest and fees with
respect to the Assigned Interest accruing from and after the Assignment Date,
and (iii) the Agent is authorized and instructed to allocate payments received
by it for account of the Assignor and the Assignee as provided in the
foregoing clauses. Each party hereto agrees that it will hold any interest,
fees or other amounts that it may receive to which the other party hereto
shall be entitled pursuant to the preceding sentence for account of such other
party and pay, in like money and funds, any such amounts that it may receive
to such other party promptly upon receipt.
Section 3.03 Delivery of Notes. Promptly following the receipt by the
Assignor of the consideration required to be paid under Section 3.01 hereof,
the Assignor shall, in the manner contemplated by Section 12.06(b) of the
Credit Agreement, (i) deliver to the Agent (or its counsel) the Notes held by
the Assignor and (ii) notify the Agent to request that the Borrower execute
and deliver new Notes to the Assignor, if Assignor continues to be a Lender,
and the Assignee, dated the date of this Agreement in respective principal
amounts equal to the respective Maximum Credit Amounts of the Assignor (if
appropriate) and the Assignee after giving effect to the sale, assignment and
transfer contemplated hereby.
Section 3.04 Further Assurances. The Assignor and the Assignee hereby
agree to execute and deliver such other instruments, and take such other
actions, as either party may reasonably request in connection with the
transactions contemplated by this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT.
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Section 4.01 Conditions Precedent. The effectiveness of the sale,
assignment and transfer contemplated hereby is subject to the satisfaction of
each of the following conditions precedent:
(a) the execution and delivery of this Agreement by the Assignor
and the Assignee;
(b) the receipt by the Assignor of the payment required to be made
by the Assignee under Section 3.01 hereof; and
(c) the acknowledgment and consent by the Agent contemplated by
Section 2.03 hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES.
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Section 5.01 Representations and Warranties of the Assignor. The
Assignor represents and warrants to the Assignee as follows:
(a) it has all requisite power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill its
obligations under, and consummate the transactions contemplated by, this
Agreement;
(b) the execution, delivery and compliance with the terms hereof by
Assignor and the delivery of all instruments required to be delivered by
it hereunder do not and will not violate any Governmental Requirement
applicable to it;
(c) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor,
enforceable against it in accordance with its terms;
(d) all approvals and authorizations of, all filings with and all
actions by any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained;
(e) the Assignor has good title to, and is the sole legal and
beneficial owner of, the Assigned Interest, free and clear of all Liens,
claims, participations or other charges of any nature whatsoever; and
(f) the transactions contemplated by this Agreement are commercial
banking transactions entered into in the ordinary course of the banking
business of the Assignor.
Section 5.02 Disclaimer. Except as expressly provided in Section 5.01
hereof, the Assignor does not make any representation or warranty, nor shall
it have any responsibility to the Assignee, with respect to the accuracy of
any recitals, statements, representations or warranties contained in the
Credit Agreement or in any certificate or other document referred to or
provided for in, or received by any Lender under, the Credit Agreement, or for
the value, validity, effectiveness, genuineness, execution, effectiveness,
legality, enforceability or sufficiency of the Credit Agreement, the Notes or
any other document referred to or provided for therein or for any failure by
the Borrower or any other Person (other than Assignor) to perform any of its
obligations thereunder prior or for the existence, value, perfection or
priority of any collateral security or the financial or other condition of the
Borrower or the Subsidiaries [or any other obligor or guarantor], or any other
matter relating to the Credit Agreement or any other Loan Document or any
extension of credit thereunder.
Section 5.03 Representations and Warranties of the Assignee. The
Assignee represents and warrants to the Assignor as follows:
(a) it has all requisite power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill its
obligations under, and consummate the transactions contemplated by, this
Agreement;
(b) the execution, delivery and compliance with the terms hereof by
Assignee and the delivery of all instruments required to be delivered by
it hereunder do not and will not violate any Governmental Requirement
applicable to it;
(c) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignee,
enforceable against it in accordance with its terms;
(d) all approvals and authorizations of, all filings with and all
actions by any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained;
(e) the Assignee has fully reviewed the terms of the Credit
Agreement and the other Loan Documents and has independently and without
reliance upon the Assignor, and based on such information as the Assignee
has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement;
(f) the Assignee hereby affirms that the representations contained
in Section 4.06(d)(i) of the Credit Agreement are true and accurate as to
it and, the Assignee has contemporaneously herewith delivered to the
Agent and the Borrower such certifications as are required thereby to
avoid the withholding taxes referred to in Section 4.06; and
(g) the transactions contemplated by this Agreement are commercial
banking transactions entered into in the ordinary course of the banking
business of the Assignee.
ARTICLE VI
MISCELLANEOUS.
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Section 6.01 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telex or telecopy) to the intended
recipient at its "Address for Notices" specified below its name on the
signature pages hereof or, as to either party, at such other address as shall
be designated by such party in a notice to the other party.
Section 6.02 Amendment, Modification or Waiver. No provision of this
Agreement may be amended, modified or waived except by an instrument in
writing signed by the Assignor and the Assignee, and consented to by the
Agent.
Section 6.03 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. The representations and warranties made
herein by the Assignee are also made for the benefit of the Agent and the
Borrower, and the Assignee agrees that the Agent and the Borrower are entitled
to rely upon such representations and warranties.
Section 6.04 Assignments. Neither party hereto may assign any of its
rights or obligations hereunder except in accordance with the terms of the
Credit Agreement.
Section 6.05 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended
to affect the interpretation of any provision of this Agreement.
Section 6.06 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be identical and all of which, taken
together, shall constitute one and the same instrument, and each of the
parties hereto may execute this Agreement by signing any such counterpart.
Section 6.07 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Texas.
Section 6.08 Expenses. To the extent not paid by the Borrower pursuant
to the terms of the Credit Agreement, each party hereto shall bear its own
expenses in connection with the execution, delivery and performance of this
Agreement.
Section 6.09 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed and delivered as of the date first above written.
ASSIGNOR
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By:
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Name:
Title:
Address for Notices:
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Telecopier No.:
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Telephone No.:
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Attention:
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ASSIGNEE
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By:
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Name:
Title:
Address for Notices:
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Telecopier No.:
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Telephone No.:
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Attention:
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ACKNOWLEDGED AND CONSENTED TO:
BANK OF MONTREAL, as Administrative Agent
By:
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Name:
Title:
SCHEDULE 7.14
MATERIAL SUBSIDIARIES AND ADDRESSES
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Principal Place of Business/
Name Chief Executive Office
▇▇▇▇▇ ▇▇▇▇▇▇▇ Natural Gas Marketing Corp. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Stonewater Holding, Inc. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Stonewater Pipeline Company, LP ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
