EXHIBIT 10.2
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CREDIT AGREEMENT
among
WESTPORT RESOURCES CORPORATION,
as Borrower
The Several Lenders
from Time to Time Parties Hereto
Credit Suisse First Boston
and
Fleet National Bank,
as Syndication Agents
Fortis Capital Corp.
and
U.S. Bank National Association,
as Documentation Agents
and
THE CHASE MANHATTAN BANK,
as Issuing Bank and Administrative Agent
Dated as of August 21, 2001
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................................. 1
1.1 Defined Terms.......................................................................................... 1
1.2 Other Definitional Provisions..........................................................................19
SECTION 2 AMOUNT AND TERMS OF COMMITMENTS.........................................................................20
2.1 Commitments............................................................................................20
2.2 Procedure for Borrowing................................................................................21
2.3 Repayment of Loans; Evidence of Debt...................................................................22
SECTION 3 LETTERS OF CREDIT.......................................................................................22
3.1 The L/C Commitment.....................................................................................22
3.2 Procedure for Issuance of Letters of Credit............................................................23
3.3 Fees, Commissions and Other Charges....................................................................23
3.4 L/C Participations.....................................................................................24
3.5 Reimbursement Obligation of the Borrower...............................................................25
3.6 Obligations Absolute...................................................................................25
3.7 Letter of Credit Payments..............................................................................26
3.8 L/C Applications.......................................................................................26
SECTION 4 GENERAL PROVISIONS......................................................................................26
4.1 Interest Rates and Payment Dates.......................................................................26
4.2 Computation of Interest and Fees.......................................................................27
4.3 Conversion and Continuation Options....................................................................27
4.4 Minimum Amounts; Maximum Number of Tranches............................................................28
4.5 Prepayments and Commitment Reductions..................................................................28
4.6 Commitment Fee; Administrative Agent's Fee; Other Fees.................................................29
4.7 Inability to Determine Interest Rate...................................................................30
4.8 Pro Rata Treatment and Payments........................................................................30
4.9 Application and Computation of Borrowing Base..........................................................31
4.10 Borrowing Base Compliance..............................................................................33
4.11 Illegality.............................................................................................33
4.12 Requirements of Law....................................................................................34
4.13 Taxes..................................................................................................35
4.14 Indemnity..............................................................................................36
4.15 Change of Lending Office...............................................................................37
SECTION 5 REPRESENTATIONS AND WARRANTIES..........................................................................37
5.1 Financial Condition....................................................................................38
5.2 No Change..............................................................................................39
5.3 Existence; Compliance with Law.........................................................................39
5.4 Power; Authorization; Enforceable Obligations..........................................................39
5.5 No Legal Bar...........................................................................................40
5.6 No Material Litigation.................................................................................40
5.7 No Default.............................................................................................40
5.8 Ownership of Property; Liens...........................................................................40
5.9 Intellectual Property..................................................................................41
5.10 No Burdensome Restrictions.............................................................................41
5.11 Taxes..................................................................................................41
5.12 Federal Reserve Regulations............................................................................41
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5.13 ERISA..................................................................................................41
5.14 Investment Company Act; Other Regulations..............................................................42
5.15 Subsidiaries...........................................................................................42
5.16 Purpose of Loans.......................................................................................42
5.17 Environmental Matters..................................................................................42
5.18 No Material Misstatements..............................................................................43
5.19 Insurance..............................................................................................43
5.20 Future Commitments.....................................................................................43
5.21 Pledge Agreement.......................................................................................44
5.22 Subordinated Indebtedness..............................................................................44
5.23 Merger Documents.......................................................................................44
5.24 Solvency...............................................................................................45
SECTION 6 CONDITIONS PRECEDENT....................................................................................45
6.1 Conditions to Initial Extensions of Credit.............................................................45
6.2 Conditions to Each Extension of Credit.................................................................48
SECTION 7 AFFIRMATIVE COVENANTS...................................................................................48
7.1 Financial Statements...................................................................................49
7.2 Certificates; Other Information........................................................................49
7.3 Payment of Obligations.................................................................................51
7.4 Conduct of Business and Maintenance of Existence; Compliance with Law and Contractual Obligations......51
7.5 Maintenance of Property; Insurance.....................................................................51
7.6 Inspection of Property; Books and Records; Discussions.................................................51
7.7 Notices................................................................................................51
7.8 Environmental Laws.....................................................................................52
7.9 Additional Collateral; Guarantors......................................................................53
7.10 Maintenance and Operation of Property..................................................................54
7.11 Further Assurances.....................................................................................54
SECTION 8 NEGATIVE COVENANTS......................................................................................54
8.1 Financial Covenants....................................................................................55
8.2 Limitation on Indebtedness.............................................................................55
8.3 Limitation on Liens....................................................................................56
8.4 Limitation on Guarantee Obligations....................................................................58
8.5 Limitation on Fundamental Changes......................................................................59
8.6 Limitation on Sale of Assets...........................................................................59
8.7 Limitation on Restricted Payments......................................................................60
8.8 Limitation on Investments, Loans and Advances..........................................................61
8.9 Limitation on Optional Payments and Modifications of Debt Instruments, Other Material Agreements.......62
8.10 Limitation on Transactions with Affiliates.............................................................63
8.11 Limitation on Sale and Leasebacks......................................................................64
8.12 Limitation on Changes in Fiscal Year; Use of Proceeds..................................................64
8.13 Limitation on Negative Pledge Clauses..................................................................64
8.14 Limitation on Lines of Business........................................................................64
8.15 Forward Sales..........................................................................................64
8.16 Hedging Agreements.....................................................................................64
8.17 Unrestricted Subsidiaries..............................................................................65
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SECTION 9 EVENTS OF DEFAULT.......................................................................................65
SECTION 10 THE AGENTS.............................................................................................68
10.1 Appointment............................................................................................68
10.2 Delegation of Duties...................................................................................69
10.3 Exculpatory Provisions.................................................................................69
10.4 Reliance by Agents.....................................................................................69
10.5 Notice of Default......................................................................................70
10.6 Non-Reliance on Agents and Other Lenders...............................................................70
10.7 Indemnification........................................................................................70
10.8 Agents in Their Individual Capacity....................................................................71
10.9 Successor Agents.......................................................................................71
10.10 Enforcement of Loan Documents..........................................................................71
10.11 Issuing Bank...........................................................................................72
SECTION 11 MISCELLANEOUS..........................................................................................72
11.1 Amendments and Waivers.................................................................................72
11.2 Notices................................................................................................73
11.3 No Waiver; Cumulative Remedies.........................................................................73
11.4 Survival of Representations and Warranties.............................................................74
11.5 Payment of Expenses and Taxes..........................................................................74
11.6 Successors and Assigns; Participations and Assignments.................................................75
11.7 Adjustments; Set-off...................................................................................77
11.8 Counterparts...........................................................................................78
11.9 Severability...........................................................................................78
11.10 Integration............................................................................................78
11.11 GOVERNING LAW..........................................................................................78
11.12 Submission To Jurisdiction; Waivers....................................................................78
11.13 Acknowledgments........................................................................................79
11.14 WAIVERS OF JURY TRIAL..................................................................................79
11.15 Confidentiality........................................................................................79
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EXHIBITS AND SCHEDULES
Exhibit A - form of Promissory Note
Exhibit B-1 - form of Pledge Agreement
Exhibit B-2 - form of Subsidiary Guarantee
Exhibit C - Omitted.
Exhibit D - form of Borrowing Certificate
Exhibit E - form of Assignment and Acceptance
Exhibit F-1 - form of New Lender Supplement
Exhibit F-2 - form of Increased Facility Activation Notice
Exhibit G - form of Non-U.S. Lender Statement
Schedule 1.1(a) - Lender Commitments
Schedule 5.1 - Material Liabilities
Schedule 5.2 - Restricted Payments
Schedule 5.15 - List of Unrestricted Subsidiaries
Schedule 5.20 - Future Commitments
Schedule 5.21 - Filing Offices
Schedule 8.2(e) - Indebtedness
Schedule 8.3 - Liens
Schedule 8.4 - Guarantee Obligations
Schedule 8.8 - Investments
Schedule 8.10 - Transactions with Affiliates
Schedule 11.2 - Notices
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CREDIT AGREEMENT, dated as of August 21, 2001, is among WESTPORT
RESOURCES CORPORATION, a Nevada corporation (the "Borrower"), the several banks,
financial institutions and other entities from time to time parties to this
Agreement (the "Lenders"), each of Fortis Capital Corp. and U.S. Bank National
Association, as a documentation agent for the Lenders (in such capacity, the
"Documentation Agents"), each of Credit Suisse First Boston and Fleet National
Bank as a syndication agent for the Lenders (in such capacity, the "Syndication
Agents"), and THE CHASE MANHATTAN BANK, as administrative agent for the Lenders
(in such capacity, the "Administrative Agent") and Issuing Bank.
RECITALS
A. The Borrower has requested that the Lenders, and the Lenders have
agreed to, make certain loans to and make credit available on behalf of the
Borrower and the Restricted Subsidiaries on the terms and conditions set forth
herein.
B. Now, therefore, in consideration of the above premises and the
mutual covenants hereinafter set forth, the parties hereto hereby agree as
follows:
SECTION 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Administrative Agent": as defined in the preamble to this Agreement.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the securities having ordinary voting power for the election
of directors (or persons performing similar functions) of such Person or (b)
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise; provided that no Person shall be deemed to be
an Affiliate of a Person solely by virtue of being a director of such Person.
"Agents": the collective reference to the Syndication Agents, the
Documentation Agents and the Administrative Agent.
"Aggregate Commitments": a collective reference to the aggregate
Commitments of all Lenders.
"Aggregate Exposure": as to any Lender at any time, an amount equal to
the sum of (a) the aggregate principal amount of all Loans made by such Lender
then outstanding and (b) such Lender's Commitment Percentage of the Letter of
Credit Outstandings at such time.
"Agreement": this
Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for any day with respect to any Type of Loan, the
applicable per annum rate set forth below in the column for such Type of Loan
and opposite the Total Debt Leverage Ratio in effect on such day:
TOTAL DEBT LEVERAGE RATIO
-------------------------
Type of Loan >2.0
------------
less than or = to 2.0 less than or = to 3.0 >3.0
ABR Loans 0.000% 0.000% 0.125%
Eurodollar Loans 1.250% 1.375% 1.500%
For purposes of the foregoing, any change in the Applicable Margin will
occur automatically without prior notice upon any change in the Total Debt
Leverage Ratio. Each change in the Applicable Margin shall apply during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change.
"Assignee": as defined in subsection 11.6(c).
"Assignment and Acceptance": an assignment and acceptance in
substantially the form of Exhibit E, duly completed and executed by the parties
thereto.
"Available Commitment": as to any Lender at any time, an amount equal
to the excess, if any, of (a) such Lender's Commitment or, if the Borrowing Base
is then in effect, an amount equal to the lesser of (i) such Lender's Commitment
or (ii) such Lender's Commitment Percentage of the then effective Borrowing Base
over (b) such Lender's Aggregate Exposure.
"Base CD Rate": the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the C/D Reserve Percentage and (b) the C/D
Assessment Rate.
"Board": the Board of Governors of the Federal Reserve System of the
United States.
"Borrower": as defined in the recitals to this Agreement.
"Borrower Redetermination Notice": a notice from the Borrower under
subsection 4.9(d) to the Administrative Agent requesting that the Agents and the
Supermajority Lenders redetermine the Borrowing Base.
"Borrowing Base": at any time of determination, the amount then in
effect as determined in accordance with subsection 4.9.
"Borrowing Base Deficiency": as defined in subsection 4.10.
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"Borrowing Base Period": (a) initially, the period commencing on the
Closing Date and ending on the next succeeding Re-determination Date and (b)
thereafter, each period commencing on the day after the last day of the
immediately preceding Borrowing Base Period (or if no Borrowing Base had
previously been in effect, the day on which a new Borrowing Base becomes
effective in accordance with subsection 4.9 following either the Borrower's
election to have availability under this Agreement governed by a borrowing base
or a change in the Borrower's senior unsecured debt rating) and ending on the
next succeeding Re-determination Date.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 or 3.2 as a date on which the Borrower requests the Lenders to
make Loans or the Issuing Bank to issue a Letter of Credit hereunder.
"Business Day": any day that is not a Saturday, Sunday or other day on
which commercial banks in
New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in Dollar deposits in the London interbank market.
"Capital Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation and any and
all equivalent ownership interests in a limited liability company, partnership,
joint venture or other Person (other than a corporation).
"Cash Equivalents": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial bank
(i) having capital and surplus in excess of $500,000,000 or (ii) which has a
short-term commercial paper rating which satisfies the requirements set forth in
clause (d) below, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a term
of not more than 30 days with respect to securities issued, fully guaranteed or
insured by the United States government or any agency thereof, (d) commercial
paper of a domestic issuer rated at least A-2 by S&P or P-2 by Xxxxx'x, (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Xxxxx'x, (f) securities with maturities of one year or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day which is payable by a member of the
Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the
3
meaning of 12 C.F.R. Section 327.4 (or any successor provision) to the FDIC (or
any successor) for the FDIC's (or such successor's) insuring time deposits at
offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Change of Control": the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Borrower and its Subsidiaries taken as a whole to any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) or group of related persons
(a "Group");
(ii) the consummation of any transaction (including, without
limitation, any purchase, sale, acquisition, disposition, merger or
consolidation) the result of which is that any "person" (as defined
above) or Group, other than one or more Designated Persons, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act) of more than 40% of the aggregate voting
power of all classes of Capital Stock of the Borrower having the right
to elect directors under ordinary circumstances;
(iii) the adoption of a plan relating to the liquidation or
dissolution of the Borrower; and
(iv) during any period of two consecutive years, individuals
who at the beginning of such period constituted the board of directors
of the Borrower (together with (a) individuals becoming directors
following the Merger as contemplated in the Merger Documents and (b)
any new directors whose election by such board of directors or whose
nomination for election by the shareholders of the Borrower was
approved by a vote of a majority of the directors of the Borrower then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors then in office.
"Chase": The Chase Manhattan Bank.
"Closing Date": the date on which the conditions precedent set forth in
subsection 6.1 shall have been satisfied or waived by all Lenders.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment": as to any Lender, the obligation of such Lender to make
Loans to the Borrower hereunder and participate in Letters of Credit in an
aggregate principal amount at any one time outstanding not to exceed the lesser
of (i) the amount set forth opposite such Lender's name on Schedule 1.1(a), as
such amount may be changed from time to time in accordance with the provisions
4
of this Agreement and (ii) if a borrowing base is then in effect, such Lender's
Commitment Percentage of the then effective Borrowing Base.
"Commitment Percentage": as to any Lender at any time, the percentage
which such Lender's Commitment then constitutes of the Aggregate Commitments
(or, at any time after the Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Loans then
outstanding constitutes of the aggregate principal amount of the Loans then
outstanding).
"Commitment Period": the period from and including the Closing Date to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"Commodity Price Risk Management Agreement": a commodity price risk
management or purchase agreement or similar arrangement.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated Interest Expense": with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis for any period, the sum of (i)
gross interest expense (including all cash and accrued interest expense) of the
Borrower and its Restricted Subsidiaries for such period on a consolidated
basis, including to the extent included in interest expense in accordance with
GAAP (x) the amortization of debt discounts and (y) the portion of any payments
or accruals with respect to Capital Leases allocable to interest expense and
(ii) capitalized interest of the Borrower and its Restricted Subsidiaries on a
consolidated basis.
"Consolidated Net Income": for any period, net income of the Borrower
and its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP, provided that "Consolidated Net Income" shall not include (without
duplication) any (i) non-cash gains, losses or charges under FAS 133 resulting
from the net change in value of the Borrower's (or any Restricted Subsidiary's)
xxxx-to-market portfolio of commodity price risk management activities for that
period, (ii) any extraordinary or nonrecurring gain or loss together with any
related provision for taxes on such extraordinary or nonrecurring gain or loss
and (iii) all non-cash extraordinary expenses.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 9, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Designated Persons": (1) Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxxxxxx
X. Xxxxxx, Xxxx Xxxxx, Xxxxxxx X. Xxxx, Xxxxxx X. Xxxx, Xxxxx von Liechtenstien
and Xxxxxx Xxxxxx, (2) The Xxxxxx X. and Xxxxx X. Xxxxxx Family Foundation,
Xxxxx Investment Group LLC, Westport Energy LLC and ERI Investments, Inc., (3)
the direct and indirect beneficial owners of the Persons described in clause
(2), (4) the spouses or descendants of such individuals described or listed
above, (5) the estates or
5
legal representatives of the individuals described or listed above, (6) trusts
created for the benefit of such Persons and (7) entities directly or indirectly
owned by any of the preceding Persons.
"Disqualified Stock": any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than Capital Stock, pursuant to a sinking
fund obligation or otherwise, is convertible or is exchangeable for Indebtedness
or Disqualified Stock or redeemable for any consideration other than Capital
Stock at the option of the holder thereof, in whole or in part on or prior to
the date that is ninety-one days after the earlier of (x) the Termination Date
or (y) the date on which there are no Loans, Reimbursement Obligations or other
obligations hereunder outstanding and the Aggregate Commitments are terminated.
"Documentation Agents": as defined in the preamble to this Agreement.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Restricted Subsidiary organized under the
laws of any jurisdiction within the United States of America (including
territories thereof).
"EBITDAX": with respect to the Borrower, for any period, Consolidated
Net Income for that period, plus (a) to the extent deducted from revenues in
determining Consolidated Net Income for that period, (i) the aggregate amount of
Consolidated Interest Expense for that period, (ii) the aggregate amount of
letter of credit fees paid during that period, (iii) the aggregate amount of
income tax expense for that period and (iii) all amounts attributable to
depreciation, depletion, exploration, amortization and other non-cash charges
and expenses for that period, minus (b) to the extent included in revenues in
determining Consolidated Net Income for that period, all non-cash extraordinary
income during that period, in each case determined in accordance with GAAP and
without duplication of amounts.
For the purposes of calculating EBITDAX for any period of four
consecutive fiscal quarters (each, a "Reference Period") pursuant to any
determination of the covenants set forth in subsection 8.1 and the Total Debt
Leverage Ratio for purposes of determining the Applicable Margin, (i) if at any
time after the first day of such Reference Period the Borrower or any Restricted
Subsidiary shall have made any Material Disposition, the EBITDAX for such
Reference Period shall be reduced by an amount equal to the EBITDAX (if
positive) attributable to the Property that is the subject of such Material
Disposition for such Reference Period and (ii) if at any time after the first
day of such Reference Period the Borrower or any Restricted Subsidiary shall
have made a Material Acquisition, EBITDAX for such Reference Period shall be
calculated after giving pro forma effect thereto as if such Material Acquisition
occurred on the first day of such Reference Period.
"Environmental Laws": with respect to any Person, any and all laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, or other
legally enforceable requirement (including, without limitation, common law) of
any foreign government, the United States, or any state, local, municipal or
other Governmental Authority, having jurisdiction over such Person or its
Properties and regulating, relating to or imposing liability or standards of
conduct concerning protection of the environment or of human health, as has
been, is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, registrations,
notifications, approvals, exemptions and any other authorization required under
any Environmental Law.
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"Equity Interests": Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate per
annum for Dollar deposits with a maturity comparable to such Interest Period
which appears on the Telerate British Bankers Assoc. Interest Settlement Rates
Page at approximately 10:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period; provided that if there shall no longer
exist a Telerate British Bankers Assoc. Interest Settlement Rates Page (or such
page is not available on the relevant Business Day), the Eurodollar Base Rate
shall mean an interest rate per annum equal to the average (rounded upward, if
necessary, to the next 1/100th of 1%) of the respective rates per annum notified
to the Administrative Agent by each of the Reference Banks as the average of the
rates at which Dollar deposits (in an amount comparable to the amount of Chase's
Eurodollar Loan to be outstanding during such Interest Period and for a maturity
comparable to such Interest Period) are offered to such Reference Bank in
immediately available funds by prime banks in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. "Telerate British Bankers Assoc. Interest
Settlement Rates Page" shall mean the display designated as Page 3750 on
Teleratesystem Incorporated (or such other replacement page thereof used to
display London interbank offered rates of major banks).
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Existing Credit Facilities": (a) the Amended and Restated
Credit
Agreement dated as of September 23, 1997, as amended and restated as of June 30,
2000 among the Borrower, the Administrative Agent and others as lenders and
agents; and (b) the
Credit Agreement dated as of March 31, 2000 among Old
Westport, as borrower, Bank of America, N.A., as Administrative Agent
7
and others as lenders and agents, as in each case, the same may have been
amended, modified, supplemented or waived.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of
New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it in good
faith.
"Foreign Subsidiary": any Restricted Subsidiary which is organized and
existing under the laws of any jurisdiction outside of the United States of
America.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time; provided that for purposes of
determining compliance with the covenants contained in Section 8, "GAAP" shall
mean generally accepted accounting principles in the United States of America as
in effect on the date hereof and applied on a basis consistent with the
application used in the financial statements referred to in subsection 5.1;
provided further that if changes are made to or required by GAAP which
materially alter the calculations required under subsection 8.1 hereof, the
Borrower may request that the Administrative Agent and the Required Lenders
amend such subsection to reflect such changes in GAAP and to apply such new
accounting principles in the preparation of its subsequent financial statements.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, and any securities exchange or self-regulatory
organization.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee
8
Obligation shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.
"Guarantors": each of the Restricted Subsidiaries which is a party to
the Subsidiary Guarantee on the Closing Date or which becomes a party thereto
pursuant to subsection 7.9(c), in each case unless and until released in
accordance with the terms hereof or thereof.
"Hedging Agreement": any Interest Rate Protection Agreement, Commodity
Price Risk Management Agreement, foreign currency exchange agreement, commodity
price protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement.
"Hydrocarbon Interests": all rights, titles, interests and estates now
owned or hereafter acquired in and to oil and gas leases, oil, gas and mineral
leases, or other liquid or gaseous hydrocarbon leases, mineral fee or lease
interests, farm-outs, overriding royalty and royalty interests, net profit
interests, oil payments, production payment interests and similar mineral
interests, including any reserved or residual interest of whatever nature.
"Hydrocarbons": oil, gas, casinghead gas, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons, all products refined, separated,
settled and dehydrated therefrom and all products refined therefrom, including,
without limitation, kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other
minerals.
"Increased Facility Activation Notice": a notice substantially in the
form of Exhibit F-2.
"Increased Facility Closing Date": any Business Day designated as such
in an Increased Facility Activation Notice.
"Indebtedness": of any Person at any date (without duplication) (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices and accrued current liabilities incurred in the ordinary course of
business), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under Capital Leases, (d) all obligations of such Person in respect of letters
of credit and acceptances issued or created for the account of such Person, (e)
all obligations of such Person under Hedging Agreements, (f) all obligations of
others of the type referred to in clauses (a) through (e) above and which are
secured by any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof, except that
the amount of any nonrecourse obligation shall be deemed to be the lesser of the
value of the property securing such obligation and the amount of such obligation
so secured and (g) all Guarantee Obligations with respect to the items described
in clauses (a) through (e) above; provided that, for purposes of calculating the
covenants set forth in subsection 8.1 and the Total Debt Leverage Ratio for
purposes of determining the Applicable Margin, "Indebtedness" shall exclude
obligations of the type referred to in clause (e) above.
"Initial Reserve Report": collectively, (i) the Reserve Report prepared
by the Borrower and audited by Xxxxxx & Xxxxx, Ltd as of July 16, 2001,
evaluating the Oil and Gas Properties of the Borrower and its Subsidiaries as of
June 30, 2001, and (ii) the Reserve Reports prepared by Old Westport and audited
by Netherland, Xxxxxx & Associates, Inc. as of July 12, 2001 and by Ryder
9
Xxxxx Company as of June 26, 2001, evaluating the Oil and Gas Properties of Old
Westport and its Subsidiaries as of June 30, 2001.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 5.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December, commencing September 30, 2001, and the
Termination Date, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each day
which is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six (or, to the extent available to
all Lenders, nine or twelve) months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six (or, to the extent available to all
Lenders, nine or twelve) months thereafter, as selected by the Borrower
by irrevocable notice to the Administrative Agent not later than 11:00
a.m.
New York City time on the date that is three Business Days prior
to the last day of the then current Interest Period with respect
thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(2) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(3) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Interest Rate Protection Agreement": an interest rate swap, cap or
collar agreement or similar arrangement entered into with the intent of
protecting against fluctuations in interest rates or the exchange of notional
interest obligations, either generally or under specific contingencies.
10
"Investments": as defined in subsection 8.8.
"Issuing Bank": Chase or any of its respective Affiliates, in its
capacity as issuer of a Letter of Credit hereunder.
"L/C Application": as defined in subsection 3.2.
"L/C Commitment": the Issuing Bank's obligation to issue Letters of
Credit pursuant to Section 3 of this Agreement.
"Lenders": as defined in the preamble to this Agreement.
"Letter of Credit Outstandings": at any time, the sum of (a) the
aggregate amount available for drawing under Letters of Credit then outstanding
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to subsection 3.5.
"Letters of Credit": as defined in subsection 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"Loan": as defined in subsection 2.1(a).
"Loan Documents": this Agreement, any Note, the Pledge Agreement, the
Subsidiary Guarantee and the L/C Applications.
"Loan Parties": the Borrower, the Guarantors and the Pledgors.
"Material Acquisition": the Merger and any acquisition of Property or
series of related acquisitions of Property that involves the payment of
consideration (including, without limitation, the issuance of Equity Interests
of the Borrower) by the Borrower and its Restricted Subsidiaries in excess of
$25,000,000.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or prospects of
the Borrower and its Restricted Subsidiaries taken as a whole, (b) the ability
of the Loan Parties to perform their material obligations under the Loan
Documents taken as a whole or (c) the validity or enforceability of this or any
of the other Loan Documents or the rights and remedies of the Administrative
Agent and the Lenders hereunder or thereunder.
"Material Disposition": any sale, transfer or other disposition of
Property or series of related sales, transfers or other dispositions of Property
that yields gross proceeds to the Borrower or any Restricted Subsidiaries in
excess of $25,000,000.
"Material Domestic Subsidiary": as of any date, any Domestic Subsidiary
(i) that is a Wholly-Owned Restricted Subsidiary and (ii) that, together with
its Restricted Subsidiaries, owns assets having a fair market value of
$5,000,000 or more.
11
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials, or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos
or asbestos containing material, polychlorinated biphenyls, urea-formaldehyde
insulation, and any other substance that is regulated pursuant to or could give
rise to liability under any Environmental Law.
"Merger": the merger of Old Westport with and into the Borrower
pursuant to the terms and conditions of the Merger Documents.
"Merger Agreement": that certain Agreement and Plan of Merger, dated as
of June 8, 2001 between the Borrower and Old Westport.
"Merger Documents": (i) the Merger Agreement, (ii) those certain Voting
Agreements, each dated as of June 8, 2001, among the Borrower, Old Westport and
certain of their shareholders signatory thereto, and (iii) each other agreement,
document or instrument executed in connection with the foregoing, in each case,
as amended, supplemented, restated or otherwise modified from time to time.
"Moody's": Xxxxx'x Investors Service, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"New Lender": as defined in subsection 2.1(d).
"New Lender Supplement": as defined in subsection 2.1(d).
"96 Indenture": the Indenture, dated as of March 18, 1996, among the
Borrower (formerly known as Belco Oil & Gas Corp., as successor to Coda Energy,
Inc.), as issuer, its Subsidiaries, as subsidiary guarantors, and Chase (as
successor to Texas Commerce Bank National Association), as trustee, pursuant to
which the 96 Senior Subordinated Notes were issued, as supplemented by the First
Supplemental Indenture dated as of April 25, 1996, the Second Supplemental
Indenture dated as of February 25, 1998, the Third Supplemental Indenture dated
as of February 25, 1998, and the Fourth Supplemental Indenture dated as of the
Closing Date.
"96 Senior Subordinated Notes": the 10 1/2% senior subordinated notes
of the Borrower (formerly known as Belco Oil & Gas Corp., as successor to Coda
Energy, Inc.) due 2006, issued pursuant to the 96 Indenture.
"97 Indenture": the Indenture, dated as of September 23, 1997, between
the Borrower (formerly known as Belco Oil & Gas Corp.) and The Bank of
New York,
as trustee, pursuant to which the 97 Senior Subordinated Notes were issued, as
supplemented by the Supplemental Indenture dated as of February 25, 1998 and as
further supplemented by the Second Supplemental Indenture dated as of the
Closing Date.
"97 Senior Subordinated Notes": the 8-7/8% senior subordinated notes of
the Borrower (formerly known as Belco Oil & Gas Corp.) due 2007, issued pursuant
to the 97 Indenture.
"Non-Excluded Taxes": as defined in subsection 4.13(a).
12
"Non-Recourse Debt": Indebtedness (i) as to which neither the Borrower
nor any of its Restricted Subsidiaries (a) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness), or (b) is directly or
indirectly liable (as guarantor or otherwise); (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time, or both) any holder of any other Indebtedness of the
Borrower or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) the explicit terms of which provide that
there is no recourse against any of the assets of the Borrower or its Restricted
Subsidiaries.
"Non-U.S. Lender": as defined in subsection 4.13(b).
"Notes": as defined in subsection 2.3(e).
"Oil and Gas Business": (a) the acquisition, exploration, exploitation,
development, operation and disposition of interests in Oil and Gas Properties
and Hydrocarbons, including the acquisition, ownership and disposition of
interests in Persons engaged in the Oil and Gas Business; (b) the gathering,
marketing, treating, processing, storage, selling and transporting of any
production from such interests or Properties, including, without limitation, the
marketing of Hydrocarbons obtained from unrelated Persons; (c) any business
relating to or arising from exploration for or development, production,
treatment, processing, storage, transportation or marketing of Hydrocarbons; (d)
any business relating to oilfield sales and service, and (e) any activity that
is ancillary or necessary or desirable to facilitate the activities described in
clauses (a) through (d) of this definition.
"Oil and Gas Properties": 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 having jurisdiction)
which may affect all or any portion of the Hydrocarbon Interests; all pipelines,
gathering lines, compression facilities, tanks and processing plants; all
interests held in royalty trusts whether presently existing or hereafter
created; all Hydrocarbons in and under and which may be produced, saved,
processed or attributable to the Hydrocarbon Interests, the lands covered
thereby and all Hydrocarbons in pipelines, gathering lines, tanks and processing
plants 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 way appertaining, belonging,
affixed or incidental to the Hydrocarbon Interests, and all rights, titles,
interests and estates described or referred to above, including any and all real
property, now owned or hereafter acquired, used or held for use in connection
with the operating, working or development of any of such Hydrocarbon Interests
or Property and including any and all surface leases, rights-of-way, easements
and servitude together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing; all oil, gas and
mineral leasehold and fee interests, all overriding royalty interests, mineral
interests, royalty interests, net profits interests, net revenue interests, oil
payments, production payments, carried interests and any and all other interests
in Hydrocarbons; in each case whether now owned or hereafter acquired directly
or indirectly.
"Old Westport": Westport Resources Corporation, a Delaware corporation.
13
"Participants": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Business Acquisition": the formation of a new Subsidiary or
any acquisition of all or substantially all the assets of, or of all Equity
Interests in, a Person or division or line of business of a Person, if: (a) no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, (b) such acquired or newly formed corporation, partnership,
association or other business entity shall be a Restricted Subsidiary and all of
the Equity Interest of such acquired or newly formed Person are owned directly
by the Borrower or a Domestic Wholly-Owned Restricted Subsidiary and all actions
required to be taken, if any, with respect to such acquired or newly formed
Subsidiary under subsection 7.9 shall have been taken, (c) the Borrower shall be
in compliance, on a pro forma basis after giving effect to such acquisition or
formation, with the covenants contained in subsection 8.1 recomputed as at the
last day of the most recently ended fiscal quarter of the Borrower as if such
acquisition had occurred on the first day of each relevant period for testing
such compliance, and the Borrower shall have delivered to the Administrative
Agent a certificate from a Responsible Officer to such effect, together with all
relevant financial information for such Person or assets and (d) any acquired or
newly formed Subsidiary shall not have (except for Indebtedness and Guarantee
Obligations permitted by subsections 8.2 and 8.4) any liabilities (contingent or
otherwise), including, without limitation, liabilities under Environmental Laws
and liabilities with respect to any Plan, that could reasonably be expected to
have a Material Adverse Effect and the Borrower shall have delivered to the
Administrative Agent a certificate, signed by a Responsible Officer, that to the
best of such officer's knowledge, no such liabilities exist.
"Permitted Business Investments": investments made in the ordinary
course of, and of a nature that is or shall have become customary in, the Oil
and Gas Business as a means of actively exploiting, exploring for, acquiring,
developing, processing, gathering, marketing, storing, treating, selling or
transporting oil and gas through agreements, transactions, interests or
arrangements which permit one to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives customarily
achieved through the conduct of Oil and Gas Business jointly with third parties,
including, without limitation, the entry into or acquisition of operating
agreements, working interests, royalty interests, mineral leases, processing
agreements, farm-out and farm-in agreements, division orders, contracts for the
sale, transportation or exchange of oil or natural gas, unitization and pooling
declarations and agreements and area of mutual interest agreements, production
sharing agreements or other similar or customary agreements, transactions,
properties, interests, and investments and expenditures in connection therewith;
provided that an investment in Equity Interests in a Person shall not constitute
a Permitted Business Investment.
"Permitted Subordinated Refinancing Debt": Indebtedness of the Borrower
(and Guarantee Obligations of the Guarantors in respect thereof) issued in
exchange for, or the net proceeds of which are used to refinance, replace,
defease or refund, any Subordinated Indebtedness; provided that (a) the
principal amount of such Permitted Subordinated Refinancing Debt does not exceed
the principal amount (or accreted value, if applicable) of the Subordinated
Indebtedness so refinanced, replaced, defeased or refunded, plus the amount of
premiums, prepayment penalties and other amounts required to be paid in
connection therewith and the reasonable and customary fees and expenses incurred
in connection therewith, (b) the subordination provisions in such Permitted
Subordinated Refinancing Debt are either (i) no less favorable to the Lenders
than the subordination provisions contained in the Subordinated Indebtedness
being refinanced, replaced, defeased or refunded or (ii)
14
substantially identical to the subordination provisions contained in the 97
Indenture, (c) the interest rate on such Permitted Subordinated Refinancing Debt
is no higher than the interest rate on the Subordinated Indebtedness being
refinanced, replaced, defeased or refunded, and (d) the timing and amounts of
principal repayments (including any sinking fund therefor) on, and final
maturity of, such Permitted Subordinated Refinancing Debt are no sooner and
greater, respectively, than the timing and amounts of principal repayments
under, and final maturity of, the Subordinated Indebtedness being refinanced,
replaced, defeased or refunded.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
subject to Title IV of ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pledge Agreement": the Pledge Agreement, to be executed and delivered
on the date hereof by each of the Pledgors, substantially in the form of Exhibit
B-1, as amended, modified or supplemented from time to time pursuant to
subsection 7.9 or otherwise.
"Pledged Securities": all Capital Stock that is pledged to the Lenders
pursuant to the Pledge Agreement, including without limitation, the Pledged
Stock and all Capital Stock pledged in accordance with subsection 7.9.
"Pledged Stock": as defined in the Pledge Agreement.
"Pledgors": the Borrower and each of its Restricted Subsidiaries which
is a party to the Pledge Agreement on the Closing Date or which becomes a party
to a pledge agreement pursuant to subsections 6.1(i) and 7.9, in each case
unless and until released in accordance with the terms hereof or thereof.
"Prime Rate": the rate of interest per annum publicly announced from
time to time by Chase as its prime rate in effect at its principal office in
New
York City (the Prime Rate not being intended to be the lowest rate of interest
charged by Chase in connection with extensions of credit to debtors).
"Properties": any kind of facility, fixture, property or asset, whether
real, personal or mixed, or tangible or intangible owned, leased or operated by
the Borrower or any Restricted Subsidiary.
"Proved Reserves": the estimated quantities of crude oil, condensate,
natural gas and natural gas liquids that adequate geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years
from proved reservoirs under existing economic and operating conditions (i.e.,
prices and costs as of the date the estimate is made).
"PV": as of any April 1 or October 1, the calculation of the present
value of future cash flows from Proved Reserves utilizing, at the Borrower's
discretion, either (i) the average of the Agents' customary discount rate and
price deck as of such date or (ii) the average of the five-year strip for crude
oil (WTI) and natural gas (Xxxxx Hub), in each case quoted on the
New York
Mercantile Exchange (or its successor), as of such date of determination and a
10% discount rate
15
from the Oil and Gas Properties comprising the Borrowing Base (as adjusted for
basis differentials) based upon the most recently delivered Reserve Report. For
purposes of calculating the PV, a minimum of 65% of the PV value will be
required to be contributed by proved developed producing reserves and the PV
under either clauses (i) or (ii) shall be adjusted to give effect to the
Borrower's Commodity Price Risk Management Agreements then in effect. PV as of
any date other than April 1 or October 1 shall mean the PV as of the most recent
April 1 or October 1, as applicable.
"Re-determination Date": each date that the redetermined Borrowing Base
becomes effective subject to the notice requirements specified in subsection
4.9.
"Reference Banks": four major banks in the London interbank market
selected by the Administrative Agent in good faith.
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligations": the obligation of the Borrower to
reimburse the Issuing Bank pursuant to subsection 3.5 for amounts drawn under
Letters of Credit issued by the Issuing Bank in accordance with the terms of
this Agreement and the related L/C Applications.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under regulations issued by the PBGC.
"Required Lenders": at any time, Lenders the Commitment Percentages of
which aggregate greater than 50%.
"Requirement of Law": as to any Person, the certificate or articles of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Reserve Report": a report prepared by the Borrower in form and with
attachments consistent with the Initial Reserve Report with respect to the Oil
and Gas Properties of the Borrower and the Restricted Subsidiaries and, for any
reserve report dated as of January 1, audited by Xxxxxx & Xxxxx, Ltd., Xxxxx
Xxxxx Company, Netherland, Xxxxxx & Associates, Inc. or another independent
engineering firm selected by the Borrower and reasonably acceptable to the
Administrative Agent. Each Reserve Report shall be certified as materially
accurate by a Responsible Officer of the Borrower.
"Responsible Officer": of any Loan Party, the chief executive officer,
the president or any vice president of such Loan Party or, with respect to
financial matters, the chief financial officer or treasurer of such Loan Party
and, in either case, any other officer having substantially similar authority.
"Restricted Payments": as defined in subsection 8.7.
16
"Restricted Subsidiaries": the collective reference to any direct or
indirect Subsidiary of the Borrower that is not an Unrestricted Subsidiary under
this Agreement.
"S&P": Standard and Poor's Ratings Group.
"Senior Debt": as of any date of determination, all Indebtedness other
than Subordinated Indebtedness of the Borrower and the Restricted Subsidiaries
on a consolidated basis.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvent": with respect to any Person at any time, a condition under
which (a) the fair saleable value of such Person's assets is, on the date of
determination, greater than the total amount of such Person's liabilities
(including contingent and unliquidated liabilities) at such time and (b) such
Person is able to pay all of its liabilities as such liabilities mature. For
purposes of this definition: (i) the amount of a Person's contingent or
unliquidated liabilities at any time shall be that amount which, in light of all
the facts and circumstances then existing, represents the amount which can
reasonably be expected to become an actual or matured liability, (ii) the "fair
saleable value" of an asset shall be the amount which may be realized within a
reasonable time either through collection or sale of such asset at its regular
market value and (iii) the "regular market value" of an asset shall be the
amount which a capable and diligent business person could obtain for such asset
from an interested buyer who is willing to purchase such asset under ordinary
selling conditions.
"Subordinated Indebtedness": the 96 Senior Subordinated Notes, the 97
Senior Subordinated Notes, any other Indebtedness of the Borrower contractually
subordinated to the prior payment in full of the Loans, Reimbursement
Obligations and any other obligations hereunder either in a manner reasonably
acceptable to the Required Lenders as evidenced by their written approval or on
terms substantially identical to those contained in the 97 Indenture and any
Permitted Subordinated Refinancing Debt in respect of any of the foregoing.
"Subordinated Note Documents": the collective reference to the 96
Senior Subordinated Notes, 97 Senior Subordinated Notes, the 96 Indenture, the
97 Indenture and each agreement, instrument and document delivered in connection
therewith or relating thereto or any other Subordinated Indebtedness.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which more than 50% of the total voting
power of shares of stock or other equity ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to vote in the election
of directors, a managing general partner, or majority of general partners or
other managers or trustees thereof, is at the time owned or controlled, directly
or indirectly by such Person or one or more of the other Subsidiaries of such
Person (or a combination thereof). Unless otherwise qualified, all references to
a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to any direct
or indirect Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantee": the Subsidiary Guarantee, to be executed and
delivered on the date hereof by each of the Guarantors, substantially in the
form of Exhibit B-2, as amended, modified or supplemented from time to time
pursuant to subsection 7.9 or otherwise.
17
"Supermajority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 66-2/3%.
"Syndication Agents": as defined in the preamble to this Agreement.
"Termination Date": July 1, 2005.
"Three-Month Secondary CD Rate": for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on such day
(or, if such day shall not be a Business Day, the next preceding Business Day)
by the Board through the public information telephone line of the Federal
Reserve Bank of
New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in
New York City received at approximately 10:00 A.M.,
New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three
New York City negotiable
certificate of deposit dealers of recognized standing selected by it in good
faith.
"Total Debt": as of any date of determination, all Indebtedness of the
Borrower and the Restricted Subsidiaries on a consolidated basis.
"Total Debt Leverage Ratio": as of any date of determination, the ratio
of Total Debt as of such date of determination (including any Indebtedness
proposed to be incurred on such date of determination and the use of proceeds
thereof) to (b) EBITDAX as of the last day of the most recently ended period of
four consecutive fiscal quarters preceding such date of determination for which
financial statements under subsection 7.1(a) or 7.1(b) are available.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day); Tranches may be identified as "Eurodollar Tranches".
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended, replaced or superceded from time to time.
"Unrestricted Subsidiary": (i) each Subsidiary listed on Schedule 5.15
hereof and designated an "Unrestricted Subsidiary", so long as such Subsidiary
satisfies the requirements of an Unrestricted Subsidiary set forth in the
proviso below, (ii) any Subsidiary of the Borrower which at the time of
determination shall be an Unrestricted Subsidiary (as designated by the board of
directors of the Borrower, as provided below) and (iii) any Subsidiary of an
Unrestricted Subsidiary; provided, that the board of directors of the Borrower
may designate any Subsidiary of the Borrower (including any newly acquired or
newly formed Subsidiary or a Person becoming a Subsidiary through merger or
consolidation or Investment therein) to be an Unrestricted Subsidiary or the
Borrower may designate
18
a Subsidiary as an Unrestricted Subsidiary on Schedule 5.15 hereof only if (a)
such Subsidiary does not own or hold any Lien on any Property of any other
Subsidiary of the Borrower which is not a Subsidiary of the Subsidiary to be so
designated an "Unrestricted Subsidiary"; (b) all the Indebtedness of such
Subsidiary shall, at the date of designation, and will at all times thereafter,
consist of Non-Recourse Debt; (c) the Borrower certifies that such designation
complies with the limitations of the covenants contained in subsection 8.8 and
subsection 8.17; (d) such Subsidiary, either alone or in the aggregate with all
other Unrestricted Subsidiaries, does not operate, directly or indirectly, all
or substantially all of the business of the Borrower and its Subsidiaries; (e)
such Subsidiary does not, directly or indirectly, own any Indebtedness of or
Equity Interests in, and has no Investments in, the Borrower or any Restricted
Subsidiary; (f) such Subsidiary is a Person with respect to which neither the
Borrower nor any of its Restricted Subsidiaries has any direct or indirect
obligation to maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels of operating results; and (g) on the
date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary
is not a party to any agreement, contract, arrangement or understanding with the
Borrower or any Restricted Subsidiary with terms substantially less favorable to
the Borrower or such Restricted Subsidiary than those that might have been
obtained from Persons who are not Affiliates of the Borrower. After the Closing
Date, any such designation by the board of directors of the Borrower shall be
evidenced to the Administrative Agent by filing with the Administrative Agent a
resolution of the board of directors of the Borrower giving effect to such
designation and a certificate of a Responsible Officer certifying that such
designation complied with the foregoing conditions. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Agreement and any Indebtedness of such
Subsidiary shall be deemed to be incurred as of such date.
"Wholly-Owned Restricted Subsidiary": a Restricted Subsidiary of the
Borrower, all of the outstanding Equity Interests of which (other than
directors' qualifying shares) are owned, directly or indirectly, by the Borrower
or one or more other Wholly-Owned Restricted Subsidiaries of the Borrower.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any Loan Document or any
certificate or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in any Loan Document, and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower or any Subsidiary not defined in subsection 1.1 and
accounting terms partly defined in subsection 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP. References in this
Agreement or any other Loan Document to financial statements shall be deemed to
include all related schedules and notes thereto.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
19
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) References in this Agreement or any other Loan Document to
knowledge of any Loan Party of events or circumstances shall be deemed to refer
to events or circumstances of which a Responsible Officer has actual knowledge
or through the use of reasonable and customary diligence should have had
knowledge.
(f) For purposes of this Agreement, references to the ratings of either
S&P or Xxxxx'x are the references to their ratings levels as in effect on the
date hereof. If the rating system of either Xxxxx'x or S&P shall change, or if
any such rating agency shall cease to be in the business of rating corporate
debt obligations, the Borrower and the Lenders shall negotiate in good faith to
amend the references in subsection 4.9(a) and subsection 8.1 to reflect such
changed rating system or the unavailability of ratings from such rating agency
and, pending the effectiveness of any such amendment, the rights and obligations
of the parties under subsection 4.9(a) and subsection 8.1 shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.
SECTION 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments.
(a) Subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("Loans") to the Borrower from time to
time during the Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed the amount of such Lender's Commitment, provided
that no Lender shall make any Loans if the sum of such Lender's Loans and
Commitment Percentage of Letter of Credit Outstandings (in each case, after
giving effect to the Loans requested to be made and the Letters of Credit
requested to be issued on such date) exceeds (i) if the Borrowing Base is in
effect on the date such Loan is to be made, the lesser of (x) such Lender's
Commitment and (y) such Lender's Commitment Percentage of the Borrowing Base
then in effect or (ii) if the Borrowing Base is not in effect on the date such
Loan is to be made, such Lender's Commitment. During the Commitment Period, the
Borrower may use the Aggregate Commitments by borrowing, prepaying the Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans or (iii) a combination thereof, as determined by the Borrower and notified
to the Administrative Agent in accordance with subsections 2.2, 4.3 or 4.4,
provided that no Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Termination Date.
(c) The Borrower and any one or more Lenders (including New Lenders)
may, with the consent of the Administrative Agent (provided that such consent
shall not be unreasonably withheld or delayed), at any time after the Closing
Date agree that any existing Lender may increase the amount of its Commitment or
any New Lender may obtain a Commitment by executing and delivering to the
Administrative Agent an Increased Facility Activation Notice specifying the
amount thereof and the applicable Increased Facility Closing Date.
Notwithstanding the foregoing, (i) the Aggregate Commitments in respect of all
Lenders (including New Lenders) may not be increased by more than $100,000,000
and (ii) each increase effected pursuant to this paragraph shall be in a
20
minimum amount of at least $25,000,000. No Lender shall have any obligation to
participate in any increase described in this paragraph unless it agrees to do
so in its sole discretion.
(d) Any additional bank, financial institution or other entity which,
with the consent of the Borrower and the Administrative Agent (which consent
shall not be unreasonably withheld or delayed), elects to become a "Lender"
under this Agreement in connection with any transaction described in subsection
2.1(c) shall execute a New Lender Supplement (each, a "New Lender Supplement"),
substantially in the form of Exhibit F-1, whereupon such bank, financial
institution or other entity (a "New Lender") shall become a Lender for all
purposes and to the same extent as if originally a party hereto and shall be
bound by and entitled to the benefits of this Agreement and the other Loan
Documents.
(e) On any Increased Facility Closing Date, no Eurodollar Loans shall
be outstanding (or if any Eurodollar Loans are outstanding, either (i) such
Increased Facility Closing Date shall be the last day of the Interest Period of
all such outstanding Eurodollar Loans or (ii) all such outstanding Eurodollar
Loans shall be deemed to have been prepaid with new Eurodollar Loans having an
initial Interest Period commencing on such Increased Facility Closing Date and
allocated among all Lenders as contemplated in subsection 4.8(a) and the
Borrower shall pay all amounts, if any, due under subsection 4.14). In addition,
on any Increased Facility Closing Date, if ABR Loans are outstanding on the
relevant Increased Facility Closing Date, the Borrower shall borrow additional
ABR Loans in an amount that will result in each such Lender participating in the
increased facility having ABR Loans outstanding in a principal amount equal to
its Commitment Percentage of the aggregate outstanding principal amount of ABR
Loans. Such new Commitment shall be recorded in the Register and the
Administrative Agent shall furnish to the Borrower and each Lender a revised
Schedule 1.1(a) reflecting such new Commitment and Commitment Percentage of each
Lender.
2.2 Procedure for Borrowing. The Borrower may borrow under the
Aggregate Commitments during the Commitment Period on any Business Day, provided
that the Borrower shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to 11:00 a.m., New
York City time, (a) three Business Days prior to the requested Borrowing Date,
if all or any part of the requested Loans initially are to be Eurodollar Loans
or (b) on the requested Borrowing Date, otherwise), specifying (i) the amount to
be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Aggregate Commitments shall
be in an amount consistent with the requirements set forth in subsection 4.4.
Upon receipt of any such notice from the Borrower, the Administrative Agent
shall promptly notify each Lender thereof. Each Lender will make the amount of
its pro rata share of each borrowing available to the Administrative Agent for
the account of the Borrower at the office of the Administrative Agent specified
in subsection 11.2 prior to 12:00 (noon), New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
no later than 2:00 p.m. New York City time by the Administrative Agent crediting
the account of the Borrower on the books of such office with the aggregate of
the amounts made available to the Administrative Agent by the Lenders and in
like funds as received by the Administrative Agent.
21
2.3 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan of such Lender on the Termination Date (or such earlier date
on which the Loans become due and payable pursuant to Section 9). The Borrower
hereby further agrees to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the Closing Date to but not including
the date the Loans are paid in full at the rates per annum, and on the dates,
set forth in subsection 4.1.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of the Administrative Agent or any Lender to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) On the Closing Date and on any later date on which a New Lender
Supplement or an assignment under subsection 11.6 occurs, the Borrower will
execute and deliver to each Lender a promissory note in an aggregate principal
amount equal to the Commitment of such Lender as then in effect, substantially
in the form of Exhibit A, with appropriate insertions as to date (each a
"Note").
SECTION 3
LETTERS OF CREDIT
3.1 The L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Bank, in
reliance on the agreements of the other Lenders set forth in subsection 3.4,
agrees to issue letters of credit ("Letters of Credit") for the account of the
Borrower or any Restricted Subsidiary on any Business Day during the Commitment
Period in such form as may be approved from time to time by the Issuing Bank;
provided that the Issuing Bank shall not issue any Letter of Credit if, after
giving effect to such issuance and after giving effect to any Loans requested to
be made or Letters of Credit requested to be issued on such date: (i) the Letter
of Credit Outstandings would exceed $75,000,000 or (ii) the sum of the Loans and
Letter of Credit Outstandings would exceed (A) if the Borrowing Base is in
effect on the date such Letter of Credit is to be issued, the lesser of (x) the
Aggregate Commitments
22
and (y) the Borrowing Base then in effect or (B) if the Borrowing Base is not in
effect on the date such Letter of Credit is to be issued, the Aggregate
Commitments.
Each Letter of Credit shall (i) be issued to support obligations of the
Borrower or any of its Restricted Subsidiaries, contingent or otherwise, which
finance the working capital and business needs of the Borrower and its
Restricted Subsidiaries, and (ii) expire no later than the earlier of (x) one
year after the date of issuance and (y) five Business Days prior to the
Termination Date, provided that any Letter of Credit with a one-year tenor may
provide for the extension thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in clause (y) above). Each Letter
of Credit shall be denominated in Dollars.
(b) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(c) The Issuing Bank shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Bank or any other Lender to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The Borrower may from
time to time request that the Issuing Bank issue a Letter of Credit by
delivering to the Issuing Bank and the Administrative Agent at their respective
addresses for notices specified herein a letter of credit application in the
Issuing Bank's then customary form (an "L/C Application") completed to the
satisfaction of the Issuing Bank and such other certificates, documents and
other papers and information as may be customary and as the Issuing Bank may
reasonably request. Upon receipt of any L/C Application, the Issuing Bank will
process such L/C Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and, upon receipt by the Issuing Bank of confirmation from
the Administrative Agent that issuance of such Letter of Credit will not
contravene subsection 3.1, the Issuing Bank shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Bank be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the L/C Application therefor and all such other certificates, documents and
other papers and information relating thereto) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Bank and the Borrower. The Issuing Bank shall furnish a copy of such
Letter of Credit to the Borrower and the Administrative Agent promptly following
the issuance thereof, and, thereafter, the Administrative Agent shall promptly
furnish a copy thereof to the Lenders.
3.3 Fees, Commissions and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the account
of (i) the Issuing Bank and the Lenders, a letter of credit commission with
respect to each Letter of Credit, computed for the period from the date such
Letter of Credit is issued to the date upon which the next payment is due under
this subsection (and, thereafter, from the date of payment under this subsection
to the date upon which the next payment is due under this subsection) at the
rate per annum equal to the Applicable Margin in effect from time to time for
Eurodollar Loans of the daily aggregate amount available to be drawn under such
Letter of Credit for the period covered by clause (i) above during such period,
and (ii) the Issuing Bank, a letter of credit commission with respect to each
Letter of Credit in an amount equal to the greater of (A) 0.125% per annum of
the stated amount of such Letter of Credit and (B) $500. The letter of credit
commissions payable pursuant to clause (i) above shall
23
be payable quarterly in arrears on the last day of each March, June, September
and December, commencing September 30, 2001, and on the Termination Date. The
letter of credit commissions payable pursuant to clause (ii) above shall be
payable on the date of issuance and on each anniversary of such date for so long
as such Letter of Credit is outstanding.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending, negotiating or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the Lenders all fees and commissions
received by the Administrative Agent for their respective accounts pursuant to
this subsection.
3.4 L/C Participations.
(a) Effective on the date of issuance of each Letter of Credit, the
Issuing Bank irrevocably agrees to grant and hereby grants to each Lender, and
each Lender irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Bank, on the terms and conditions hereinafter stated,
for such Lender's own account and risk an undivided interest equal to such
Lender's Commitment Percentage in the Issuing Bank's obligations and rights
under each Letter of Credit issued by the Issuing Bank and the amount of each
draft paid by the Issuing Bank thereunder. Each Lender unconditionally and
irrevocably agrees with the Issuing Bank that, if a draft is paid under any
Letter of Credit for which such Issuing Bank is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such Lender shall pay
to the Administrative Agent, for the account of the Issuing Bank, upon demand at
the Administrative Agent's address specified in subsection 11.2, an amount equal
to such Lender's Commitment Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed. On each Increased Facility Closing Date,
participating interests in any outstanding Letters of Credit held by the Lenders
shall be proportionately reallocated among the Lenders, including any New
Lender, in accordance with their respective Commitments. On the date that any
Assignee becomes a Lender party to this Agreement in accordance with subsection
11.6, participating interests in any outstanding Letters of Credit held by the
transferor Lender from which such Assignee acquired its interest hereunder shall
be proportionately reallocated between such Assignee and such transferor Lender.
Each Lender hereby agrees that its obligation to participate in each Letter of
Credit, and to pay or to reimburse the Issuing Bank for its participating share
of the drafts drawn or amounts otherwise paid thereunder, is absolute,
irrevocable and unconditional and shall not be affected by any circumstances
whatsoever (including, without limitation, the occurrence or continuance of any
Default or Event of Default), and that each such payment shall be made without
offset, abatement, withholding or other reduction whatsoever.
(b) If any amount required to be paid by any Lender to the Issuing Bank
pursuant to subsection 3.4(a) is paid to the Issuing Bank within three Business
Days after the date such payment is due, such Lender shall pay to the
Administrative Agent, for the account of the Issuing Bank, on demand, an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such draft is
paid to the date on which such payment is immediately available to the Issuing
Bank, times (iii) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. If any such
amount required to be paid by any Lender pursuant to subsection 3.4(a) is not in
fact
24
made available to the Administrative Agent, for the account of the Issuing Bank,
within three Business Days after the date such payment is due, the Issuing Bank
shall be entitled to recover from such Lender, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to ABR Loans hereunder. A certificate of the Issuing Bank submitted to any
Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has paid a draft under
any Letter of Credit and has received from any Lender its pro rata share of such
payment in accordance with subsection 3.4(a), the Issuing Bank receives any
reimbursement on account of such unreimbursed portion, or any payment of
interest on account thereof, the Issuing Bank will pay to the Administrative
Agent, for the account of such Lender, its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Bank
shall be required to be returned by the Issuing Bank, such Lender shall return
to the Administrative Agent for the account of the Issuing Bank, the portion
thereof previously distributed to it.
3.5 Reimbursement Obligation of the Borrower. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Bank shall notify
the Borrower and the Administrative Agent of the date and the amount thereof.
The Borrower agrees to reimburse the Issuing Bank (whether with its own funds
or, subject to the limitations on amounts set forth in subsection 2.2, with
proceeds of the Loans) on each date on which the Issuing Bank pays a draft so
presented under any Letter of Credit for the amount of (i) such draft so paid
and (ii) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Bank in connection with such payment. Each such payment shall be made to
the Issuing Bank at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest shall
be payable on any and all amounts remaining unpaid by the Borrower under this
subsection from the date of payment of the applicable draft until payment in
full thereof, (x) for the period commencing on the date of payment of the
applicable draft to the date which is three days thereafter, at the ABR plus the
Applicable Margin for ABR Loans and (y) thereafter, at the ABR plus the
Applicable Margin for ABR Loans plus 2%.
3.6 Obligations Absolute.
(a) The Borrower's obligations under this Section 3 shall be absolute
and unconditional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment which the Borrower or any other
Person may have or have had against the Issuing Bank or any other Lender or any
beneficiary of a Letter of Credit. The Borrower also agrees with the Issuing
Bank that the Issuing Bank shall not be responsible for, and the Borrower's
obligations under subsection 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among the Borrower and any beneficiary of any Letter
of Credit or any other party to which such Letter of Credit may be transferred
or any claims whatsoever of the Borrower against any beneficiary of such Letter
of Credit or any such transferee. The Issuing Bank shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Bank's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Bank under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform
25
Commercial Code of the State of New York, including, without limitation, Article
V thereof, shall be binding on the Borrower and shall not result in any
liability of such Issuing Bank to the Borrower.
(b) Without limiting the generality of the foregoing, it is expressly
agreed that the absolute and unconditional nature of the Borrower's obligations
under this Section 3 to reimburse the Issuing Bank for each drawing under a
Letter of Credit will not be excused by the gross negligence or willful
misconduct of the Issuing Bank. However, the foregoing shall not be construed to
excuse the Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank's gross negligence
or willful misconduct in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.
3.7 Letter of Credit Payments. Without limitation of subsection 3.6,
the responsibility of the Issuing Bank to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
3.8 L/C Applications. To the extent that any provision of any L/C
Application, including any reimbursement provisions contained therein, related
to any Letter of Credit is inconsistent with the provisions of this Section 3,
the provisions of this Section 3 shall prevail.
SECTION 4
GENERAL PROVISIONS
4.1 Interest Rates and Payment Dates.
(a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such Interest Period plus the Applicable Margin in effect on
such day.
(b) Each ABR Loan shall bear interest for each day such Loan is
outstanding at a rate per annum equal to the ABR in effect on such day plus the
Applicable Margin in effect on such day.
(c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2% or (y) in the case of any such overdue interest, commitment fee or other
amount, the ABR plus the effective Applicable Margin plus 2%, in each case from
the date of such non-payment until such overdue principal, interest, commitment
fee or other amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to subsection 4.1(c) shall be payable
from time to time on demand.
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4.2 Computation of Interest and Fees.
(a) Fees and interest, in the case of ABR Loans calculated on the basis
of the Prime Rate, shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed; and, otherwise, interest
shall be calculated on the basis of a 360-day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the ABR (as a result of any
change in the in the Prime Rate or the Federal Funds Effective Rate or any
component of the Three-Month Secondary CD Rate) or the Eurodollar Rate (as a
result of any change in the Eurocurrency Reserve Requirements) shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations and calculations used by the
Administrative Agent in determining any interest rate pursuant to subsection
4.2(a).
4.3 Conversion and Continuation Options.
(a) The Borrower may elect from time to time to convert Eurodollar
Loans to ABR Loans by giving the Administrative Agent at least one Business
Day's prior irrevocable notice of such election (which notice must be received
by the Administrative Agent prior to 11:00 a.m., New York City time), provided
that any such conversion of Eurodollar Loans is subject to the terms of
subsection 4.14. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice (which notice must be received by the
Administrative Agent prior to 11:00 a.m., New York City time) of such election.
Any such notice of conversion to Eurodollar Loans shall specify the length of
the initial Interest Period or Interest Periods therefor. Upon receipt of any
such notice the Administrative Agent shall promptly notify each Lender thereof.
All or any part of outstanding Eurodollar Loans and ABR Loans may be converted
as provided herein, provided that (i) no Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined that such a
conversion is not appropriate and (ii) no Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with clause (ii) of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a continuation is not appropriate or (ii) after the date
that is one month prior to the Termination Date and provided, further, that if
the Borrower shall fail to give such notice or if such continuation is not
permitted, such Loans shall be automatically converted to ABR Loans on the last
day of such then expiring Interest Period.
27
4.4 Minimum Amounts; Maximum Number of Tranches. Each borrowing under
the Aggregate Commitments shall be in an amount equal to (x) in the case of ABR
Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if the
then Available Commitments are less than $1,000,000, such lesser amount) and (y)
in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $500,000 in
excess thereof. All conversions into and continuations of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of the Loans comprising each Eurodollar
Tranche shall be equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof. In no event shall there be more than eight Eurodollar Tranches
outstanding at any time.
4.5 Prepayments and Commitment Reductions.
(a) The Borrower may, at any time and from time to time, prepay the
Loans, in whole or in part, without premium or penalty, by giving irrevocable
notice to the Administrative Agent, in the case of prepayments of ABR Loans, not
later than 11:00 a.m., New York City time on the date of prepayment, and in the
case of prepayments of Eurodollar Loans, not later than 11:00 a.m., New York
City time on the date three Business Days prior to the date of prepayment, in
each case specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and, in
each case if of a combination thereof, the amount allocable to each; provided
that any prepayment of a Eurodollar Loan is subject to the terms of subsection
4.14 hereof. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with all interest accrued and unpaid on such amount and any amounts
payable pursuant to subsection 4.14. Partial prepayments shall be in an
aggregate principal amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof; provided that if outstanding principal amount of a Loan is less
than $500,000, the Borrower may prepay the full amount of such Loan.
(b) Subject to subsection 4.5(c), the Borrower shall have the right,
upon not less than three Business Days' notice to the Administrative Agent, to
terminate the Aggregate Commitments or, from time to time, to reduce the amount
of the Aggregate Commitments. Any such reduction shall be in an amount equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof and shall reduce
permanently the Aggregate Commitments then in effect, subject to the rights of
the Borrower under subsection 2.1(c). Termination of the Aggregate Commitments
shall also terminate the obligation of the Issuing Bank to issue Letters of
Credit.
(c) In the event of any termination of the Aggregate Commitments, the
Borrower shall on the date of such termination repay or prepay all of its
outstanding Loans (together with accrued and unpaid interest on the Loans so
prepaid), reduce the Letter of Credit Outstandings to zero and cause all Letters
of Credit to be canceled and returned to the Issuing Bank (or shall cash
collateralize the Letter of Credit Outstandings on terms and pursuant to
documentation reasonably satisfactory to the Issuing Bank and the Administrative
Agent). In the event of any partial reduction of the Aggregate Commitments, then
(i) at or prior to the effective date of such reduction, the Administrative
Agent shall notify the Borrower and the Lenders of the Aggregate Exposure of all
the Lenders and (ii) if the Aggregate Exposure of all the Lenders would exceed
the Aggregate Commitments after giving effect to such reduction, then, prior to
giving effect to such reduction, the Borrower shall, on the date of such
reduction, first, repay or prepay Loans (together with accrued and unpaid
interest on the Loans) and, second, reduce the Letter of Credit Outstandings (or
cash
28
collateralize the Letter of Credit Outstandings on terms and pursuant to
documentation reasonably satisfactory to the Issuing Bank and the Administrative
Agent), in an aggregate amount sufficient to eliminate such excess.
(d) In the event of a Borrowing Base Deficiency, the Loans shall be
repaid, and the Letter of Credit Outstandings shall be reduced or cash
collateralized, to the extent required by and in accordance with subsection
4.10.
(e) (i) In the event the amount of any prepayment of the Loans required
to be made above shall exceed the aggregate principal amount of the outstanding
ABR Loans (the amount of any such excess being called the "Excess Amount"), the
Borrower shall have the right, in lieu of making such prepayment in full, to
prepay all the outstanding applicable ABR Loans and to deposit an amount equal
to the Excess Amount with, and (ii) in the event that Letter of Credit
Outstandings are required to be cash collateralized, the Borrower shall deposit
an amount equal to the aggregate amount of Letter of Credit Outstandings to be
cash collateralized with the Administrative Agent in a cash collateral account
maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent for the ratable benefit of the Lenders. Any amounts so
deposited shall be held by the Administrative Agent as collateral for the
obligations of the Borrower under this Agreement and applied to the prepayment
of the applicable Eurodollar Loans at the end of the current Interest Periods
applicable thereto or Letter of Credit Outstandings, as the case may be, or,
during an Event of Default, to payment of any obligations under this Agreement
(including obligations in respect of the Letters of Credit). On any Business Day
on which (i) collected amounts remain on deposit in or to the credit of such
cash collateral account after giving effect to the payments made on such day
pursuant to this subsection 4.5(e) and (ii) the Borrower shall have delivered to
the Administrative Agent a written request or a telephonic request (which shall
be promptly confirmed in writing) that such remaining collected amounts be
invested in the Cash Equivalent specified in such request, the Administrative
Agent shall use its reasonable efforts to invest such remaining collected
amounts in such Cash Equivalent, provided, however, that the Administrative
Agent shall have continuous dominion and full control over any such investments
(and over any interest that accrues thereon) to the same extent that it has
dominion and control over such cash collateral account and no Cash Equivalent
shall mature after the end of the Interest Period for which it is to be applied.
The Borrower shall not have the right to withdraw any amount from such cash
collateral account until the applicable Eurodollar Loans and accrued interest
thereon and Letter of Credit Outstandings are paid in full or if a Default or
Event of Default then exists or would result. Any prepayment or
collateralization pursuant to this subsection 4.5(e) shall be applied in the
order set forth in clause (ii) of the second sentence of subsection 4.5(c).
4.6 Commitment Fee; Administrative Agent's Fee; Other Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee for the period from and including, for
each Lender, the Closing Date to but not including the Termination Date,
computed at a rate per annum of 0.375% on the average daily amount of the
Available Commitment of such Lender, during the period for which payment is
made, payable quarterly in arrears on the last day of each March, June,
September and December (commencing on September 30, 2001) and on the Termination
Date or such earlier date as the Aggregate Commitments shall terminate as
provided herein. Commitment fees shall be nonrefundable when paid.
29
(b) The Borrower shall pay to the Administrative Agent the fees set
forth in the fee letter agreement, dated as of July 9, 2001, among the Borrower,
Chase and X.X. Xxxxxx Securities Inc., on the dates specified therein.
(c) The Borrower shall pay to the Administrative Agent for the account
of each Lender agreeing to increase its Commitment under subsection 2.1(c) such
additional fees as may be mutually agreed between the Borrower and such Lender.
4.7 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted on the last day of their current Interest Period to ABR Loans. Until
such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert Loans to Eurodollar Loans.
4.8 Pro Rata Treatment and Payments.
(a) Each borrowing by the Borrower from the Lenders hereunder, each
payment by the Borrower on account of any commitment fee hereunder and any
reduction of the Aggregate Commitments shall be made pro rata according to the
respective Commitment Percentages of the Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Loans then held by the Lenders. All payments (including prepayments) to
be made by the Borrower hereunder, whether on account of principal, interest,
fees or otherwise, shall be made without set off or counterclaim and shall be
made prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in subsection 11.2, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. Subject to the proviso
in clause (1) of the definition of "Interest Period", if any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.
(b) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its
30
Commitment Percentage of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this subsection shall be conclusive in the absence of
manifest error. If such Lender's Commitment Percentage of such borrowing is not
made available to the Administrative Agent by such Lender within three Business
Days after such Borrowing Date, the Administrative Agent shall also be entitled
to recover such amount with interest thereon at the rate per annum applicable to
ABR Loans plus the then Applicable Margin (if any) hereunder, on demand, from
the Borrower.
4.9 Application and Computation of Borrowing Base.
(a) If either (i) the Borrower's senior unsecured debt rating is BB or
less (or there is no rating) by S&P or Ba2 or less (or there is no rating) by
Xxxxx'x, or (ii) the Borrower has otherwise elected in accordance with
subsection 4.9(f) to have availability under this Agreement governed by a
borrowing base as contemplated in subsections 4.9(b) and 4.10, then availability
under this Agreement shall be equal to the lesser of the Aggregate Commitments
or the then effective Borrowing Base. If the Borrower's senior unsecured debt
rating is BB+ or better by S&P and Ba1 or better by Xxxxx'x, then (unless the
Borrower has elected in accordance with subsection 4.9(f) to have availability
under this Agreement governed by a Borrowing Base) no Borrowing Base shall be in
effect and availability under the Credit Facility shall equal the Aggregate
Commitments.
(b) If the Borrowing Base is then applicable to govern availability
under this Agreement, the Borrowing Base in effect during such period shall
represent the maximum principal amount (subject to the Aggregate Commitments) of
Loans and Letter of Credit Outstandings that the Lenders will allow to remain
outstanding during the Commitment Period. The Borrowing Base shall be determined
in accordance with this subsection 4.9, subject to interim adjustment under
subsection 8.2(i) and subsection 8.6(f). The Borrowing Base will be based upon
the value of certain Proved Reserves attributable to the Oil and Gas Properties
of the Borrower and its Restricted Subsidiaries and other assets of the Borrower
and its Restricted Subsidiaries acceptable to the Agents in their sole
discretion, and will be determined by the Agents in accordance with subsection
4.9(d), subject to approval by the Supermajority Lenders. During the period from
and after the Closing Date until the first Re-determination Date, but subject to
interim adjustment under subsection 8.2(i) and subsection 8.6(f), the amount of
the Borrowing Base shall be $400,000,000.
(c) Whether or not availability under this Agreement is to be governed
by a Borrowing Base, prior to April 1 and October 1 of each year (commencing
April 1, 2002), the Borrower shall furnish to the Agents and to each Lender a
Reserve Report, which Reserve Report shall be dated as of the immediately
preceding January 1 (in the case of the Reserve Report due on April 1) and July
1 (in the case of the Reserve Report due on October 1), and shall set forth,
among other things, (i) the Oil and Gas Properties, then owned by the Borrower
and its Restricted Subsidiaries, (ii) the Proved Reserves attributable to such
Oil and Gas Properties and (iii) a projection of the rate of production and net
income of the Proved Reserves as of the date of such Reserve Report, all in
accordance with the guidelines published by the Securities and Exchange
Commission and such assumptions as the
31
Agents shall provide. Concurrently with the delivery of each Reserve Report, the
Borrower shall furnish to the Agents and to each Lender a certificate of a
Responsible Officer showing any additions to or deletions from the Oil and Gas
Properties listed in the Reserve Report, which additions or deletions were made
by the Borrower and its Restricted Subsidiaries since the date of the previous
Reserve Report.
(d) If availability under this Agreement is to be governed by a
borrowing base as provided by subsection 4.9(a) or the Borrower has given the
Agents and the Lenders a notice electing to have availability under this
Agreement governed by a borrowing base under subsection 4.9(f), the Borrowing
Base shall be re-determined in the manner set forth in this subsection 4.9: (i)
after receipt by the Agents of each scheduled Reserve Report, (ii) upon the
delivery of a Borrower Redetermination Notice to the Agents together with a
Reserve Report dated as of the most recent date practicable, provided no more
than one such notice may be delivered by the Borrower during any period of 12
consecutive months and (iii) upon any change in the Borrower's senior unsecured
debt rating which results in availability under this Agreement being subject to
a borrowing base as required by subsection 4.9(a). In the case of a
redetermination under clause (iii) of this paragraph, the Agents shall utilize
the Reserve Report most recently delivered under subsection 4.9(c), with any
such adjustments and taking into account any additional information as the
Agents may deem appropriate, in their sole discretion.
On or before the date which is: (i) 30 days after receipt of a
scheduled semi-annual Reserve Report, (ii) 30 days after receipt of a Reserve
Report in connection with a Borrower Redetermination Notice or (iii) as soon as
practicable, but in no event later than 30 days after any change in the
Borrower's senior unsecured debt rating which results in availability under this
Agreement being subject to a borrowing base as required by subsection 4.9(a),
the Agents shall evaluate the Oil and Gas Properties of the Borrower and the
Restricted Subsidiaries and propose to the Borrower and the Lenders a new
Borrowing Base. Within 10 days after receipt from the Agents of their proposal,
each Lender shall notify the Administrative Agent stating whether or not such
Lender agrees with that proposal. Failure of any Lender to give such notice
within such period of time shall be deemed to constitute an acceptance of such
proposal. If the Supermajority Lenders agree with that proposal, then the
Administrative Agent promptly shall notify the Borrower and the Lenders of the
Borrowing Base as so re-determined. If the Supermajority Lenders have not
approved or are not deemed to have approved the Borrowing Base within the 10 day
period following their receipt of the proposed amount, the Administrative Agent
shall poll the Lenders to ascertain the highest Borrowing Base then acceptable
to a number of Lenders sufficient to constitute the Supermajority Lenders and
such amount shall then become the Borrowing Base. Upon such approval, the
Administrative Agent promptly shall notify the Borrower and the Lenders of the
Borrowing Base as so re-determined. Each re-determination provided for by this
subsection 4.9(d) shall be made in accordance with the provisions of subsection
4.9(e). It is the intention of the Borrower and the Lenders that the Borrowing
Base be redetermined within 45 days after the furnishing of each Reserve Report
in the case of clauses (i) and (ii) of this paragraph and within 30 days after
the change in the Borrower's senior unsecured debt rating(s) under clause (iii)
of this paragraph, subject to the provisions of this subsection 4.9(d).
(e) (i) All determinations and re-determinations by the Agents provided
for in this subsection 4.9 (and any determinations and decisions by either or
both of the Agents and the Supermajority Lenders in connection therewith,
including effecting any re-determination of the value of any component contained
in a Reserve Report) shall be made by the Agents and the Lenders in their sole
discretion and shall be made on a reasonable basis and in good faith based upon
the
32
application by the Agents and the Lenders of their respective normal oil and gas
lending criteria as they exist at the time of determination.
(ii) All re-determinations in the Borrowing Base referred to in this
subsection 4.9 shall become effective immediately upon the delivery of notice by
the Administrative Agent to the Borrower and the Lenders of the approval or
deemed approval of an amount proposed as the new Borrowing Base, (and shall
remain effective until the Borrowing Base is again re-determined as provided in
subsection 4.9(d), subject to interim adjustments as contemplated by this
Agreement) or availability under this Agreement shall not be governed by a
borrowing base as contemplated by subsection 4.9(a).
(f) If availability under this Agreement is not governed by a borrowing
base as required by subsection 4.9(a), the Borrower may nevertheless elect to
have availability under this Agreement governed by the Borrowing Base for the
period between the next two successive scheduled Re-determination Dates by
giving the Agents and the Lenders written notice of its election no later than
30 days prior to the delivery under subsection 4.9(c) of the next scheduled
semi-annual Reserve Report. Once such election is made, the Borrower may not opt
out of its election until the end of such Borrowing Base Period.
4.10 Borrowing Base Compliance. If, upon any redetermination of the
Borrowing Base pursuant to subsection 4.9, the Aggregate Exposure of the Lenders
exceeds the Borrowing Base then in effect (any such excess, the "Borrowing Base
Deficiency"), the Borrower shall prepay the Loans and then cash collateralize
the Letter of Credit Outstandings in an amount equal to 50% of the Borrowing
Base Deficiency within 90 days after the effective date of the redetermination
resulting in such Borrowing Base Deficiency, and within the next 90 days prepay
the Loans and then cash collateralize the Letter of Credit Outstandings in an
amount equal to the balance of such Borrowing Base Deficiency in each case
together with interest accrued to the date of such payment or prepayment and any
amounts payable under subsection 4.14; provided that if the Borrowing Base has
been redetermined pursuant to subsection 4.9 as the result of a change in the
Borrower's senior unsecured debt rating(s), the Borrower shall prepay the Loans
and then cash collateralize the Letter of Credit Outstandings in an amount equal
to 50% of the Borrowing Base Deficiency within 75 days after the effective date
of the redetermination resulting in such Borrowing Base Deficiency, and within
the next 75 days prepay the Loans and then cash collateralize the Letter of
Credit Outstandings in an amount equal to the balance of such Borrowing Base
Deficiency in each case together with interest accrued to the date of such
payment or prepayment and any amounts payable under subsection 4.14. If at any
other time there exists a Borrowing Base Deficiency as the result of an interim
adjustment under subsection 8.2(i), subsection 8.6(f) or otherwise, the Borrower
shall immediately prepay the Loans and then cash collateralize the Letter of
Credit Outstandings in an amount equal to 100% of such Borrowing Base Deficiency
together with interest accrued to the date of such payment or prepayment and any
amounts payable under subsection 4.14. Prepayments and collateralization
pursuant to this subsection 4.10 shall be made as set forth in subsection
4.5(c).
4.11 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof after the date hereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, then:
(a) the commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with
33
respect to such Loans or within such earlier period as required by law. If any
such conversion of a Eurodollar Loan occurs on a day which is not the last day
of the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to subsection
4.14.
4.12 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof after the date hereof or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any L/C
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 4.13, changes in the rate or
computation of tax on the overall net income of such Lender, franchise
taxes imposed in lieu of net income taxes and doing business taxes);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly, following receipt
of the certificate required in subsection 4.12(c), pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Borrower shall
promptly, following receipt of the certificate required in subsection 4.12(c),
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection 4.12, it shall promptly notify the Borrower (with a
copy to the Administrative Agent) of
34
the event by reason of which it has become so entitled, such notice to include a
description, in reasonable detail, of the event giving rise to its claim for
such additional amounts; provided that the Borrower shall not be required to
compensate a Lender pursuant to this subsection for any additional costs
incurred more than six months prior to the date on which such Lender notifies
the Borrower of such event giving rise to such additional costs and of such
Lender's intention to claim compensation therefor; and provided, further, that,
if any adoption or change of any Requirement of Law or other event giving rise
to such claim for additional compensation is retroactive, then the six-month
period referred to above shall be extended to include the period of retroactive
effect thereof. A certificate as to any additional amounts payable pursuant to
this subsection submitted by such Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection 4.12 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
4.13 Taxes.
(a) All payments made by the Borrower or any Loan Party under this
Agreement, any Note or any other Loan Document shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding taxes based upon income,
receipts or capital, franchise taxes and doing business taxes imposed on the
Administrative Agent or any Lender as a result of a present or former connection
between the Administrative Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under any Note, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Non-U.S. Lender if such Non-U.S. Lender
fails to comply with the requirements of subsection 4.13(b). Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If, when the Borrower is required by this subsection 4.14(a) to pay any
Non-Excluded Taxes, the Borrower fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure.
(b) Each Lender (or Transferee) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax
35
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a statement substantially in the form of Exhibit G and a
Form W-8BEN, or any subsequent versions thereof or successors thereto, properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. federal withholding tax on all payments by the
Borrower under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of this
subsection 4.13(b), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this subsection that such Non-U.S. Lender is not legally able to
deliver.
(c) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(d) The agreements in this subsection 4.13 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
4.14 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of or conversion of Eurodollar Loans on a day which is not the last
day of an Interest Period with respect thereto. To be entitled to such
indemnity, such Lender shall provide the Borrower with a certificate showing in
reasonable detail calculations utilized to ascertain the amount of such Lender's
losses (which calculations shall be conclusive, absent manifest error) and the
Borrower shall, promptly following receipt of such certificate, pay the Lender
the amounts calculated therein; provided that the Borrower shall not be required
to compensate a Lender pursuant to this subsection for any loss incurred more
than six months prior to the date on which such Lender notifies the Borrower of
such event giving rise to such additional costs and of such Lender's intention
to claim compensation therefor. Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or converted, or not so borrowed, converted or continued,
for the period from the date of such prepayment or conversion or of such failure
to borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such
36
Eurodollar Loans provided for herein (excluding, however, the percentage added
to the Eurodollar Rate pursuant to subsection 4.1(a) to the extent included
therein) over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. This subsection 4.14 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
4.15 Change of Lending Office.
(a) Each Lender agrees that if it makes any demand for payment under
subsection 4.12 or 4.13(a), or if any adoption or change of the type described
in subsection 4.11 shall occur with respect to it, it will use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its sole discretion) to designate a different lending office if
the making of such a designation would reduce or obviate the need for the
Borrower to make payments under subsection 4.12 or 4.13(a), or would eliminate
or reduce the effect of any adoption or change described in subsection 4.11.
(b) If any Lender shall assert that any adoption or change of the type
described in subsection 4.11 hereof has occurred with respect to it, or if any
Lender requests compensation under subsection 4.12, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to subsection 4.13, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to, and such Lender promptly shall,
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in subsection 11.6), all its interests, rights and
obligations under this Agreement and the other Loan Documents to an assignee who
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) if such assignee is not a Lender or
an Affiliate thereof, the Borrower shall have received the prior written consent
of the Administrative Agent and Issuing Bank which consents shall not
unreasonably be withheld or delayed, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and funded
participations in Letters of Credit not yet reimbursed by the Borrower or funded
as Loans under subsection 3.5, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (at least to the extent
of such outstanding principal) and the Borrower (in the case of all other
amounts) and (iii) in the case of any such assignment resulting from a claim for
compensation under subsection 4.12 or payments required to be made pursuant to
subsection 4.13, such assignment will result in a reduction in such compensation
or payments compared to the compensation or payments payable to the assigning
Lender. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation no longer exist or cease to apply.
SECTION 5
REPRESENTATIONS AND WARRANTIES
To induce the Agents, the Issuing Bank and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Agents, the Issuing
Bank and each Lender that:
37
5.1 Financial Condition.
(a) The consolidated balance sheets of the Borrower (formerly known as
Belco Oil & Gas Corp.) and its consolidated Subsidiaries at December 31, 1999
and December 31, 2000 and the related consolidated statements of operations, of
stockholders' equity and of cash flows for the respective fiscal years ended on
such dates, together with the related notes and schedules thereto, reported on
by Xxxxxx Xxxxxxxx LLP, copies of which have heretofore been furnished to each
Lender, present fairly in all material respects the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at such dates,
and the consolidated results of their operations and their consolidated cash
flows for the respective fiscal years then ended.
(b) The unaudited condensed consolidated balance sheet of the Borrower
(formerly known as Belco Oil & Gas Corp.) and its consolidated Subsidiaries at
March 31, 2001 and the related unaudited condensed consolidated statements of
operations, of stockholders' equity and of cash flows for the 3-month period
ended on such date, together with the related notes and schedules thereto,
copies of which have heretofore been furnished to each Lender, present fairly in
all material respects the consolidated financial condition of each of the
Borrower and its consolidated Subsidiaries as at such dates, and the
consolidated results of their respective operations and their consolidated cash
flows for the 3-month period then ended (subject to normal year-end audit
adjustments).
(c) The consolidated balance sheets of Old Westport and its
consolidated Subsidiaries at December 31, 1999 and December 31, 2000 and the
related consolidated statements of operations, of stockholders' equity and of
cash flows for the respective fiscal years ended on such dates, together with
the related notes and schedules thereto, reported on by Xxxxxx Xxxxxxxx LLP,
copies of which have heretofore been furnished to each Lender, present fairly in
all material respects the consolidated financial condition of Old Westport and
its consolidated Subsidiaries as at such dates, and the consolidated results of
their operations and their consolidated cash flows for the respective fiscal
years then ended.
(d) The unaudited consolidated balance sheet of Old Westport and its
consolidated Subsidiaries at March 31, 2001 and the related unaudited
consolidated statements of operations, of stockholders' equity and of cash flows
for the 3-month period ended on such date, together with the related notes and
schedules thereto, copies of which have heretofore been furnished to each
Lender, present fairly in all material respects the consolidated financial
condition of each of Old Westport and its consolidated Subsidiaries as at such
dates, and the consolidated results of their respective operations and their
consolidated cash flows for the 3-month period then ended (subject to normal
year-end audit adjustments).
(e) The summary unaudited pro forma financial and operating data and
notes thereto of the Borrower and its consolidated Subsidiaries for the fiscal
year ending December 31, 2000 and the three months ended March 31, 2001, in each
case, giving pro forma effect to the Merger as of January 1, 2000 and March 31,
2001, respectively, copies of which have heretofore been furnished to each
Lender, (i) have been prepared in good faith in accordance with GAAP, (ii) are
based on assumptions believed to be reasonable, and (iii) present fairly, in all
material respects, the summary pro forma financial position of Borrower and its
consolidated Subsidiaries as of such dates.
(f) All such financial statements referred to in this subsections 5.1,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein). On the Closing Date, except for this Agreement,
the other Loan Documents and the matters disclosed in Schedule 5.1 and 5.20,
neither the Borrower nor any of
38
its consolidated Subsidiaries have, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any Hedging Agreements, which is not
reflected in the financial statements referred to in subsection 5.1(a), (b), (c)
or (d) or in the notes thereto to the extent required by GAAP. During the period
from January 1, 2001 to and including the date hereof, there has been no sale,
transfer or other disposition by the Borrower or any of its consolidated
Subsidiaries (or for the avoidance of doubt, Old Westport or any of its
consolidated Subsidiaries) of any material part of its business or Property and
no purchase or other acquisition of any business or Property (including any
Equity Interests of any other Person) material in relation to the pro forma
consolidated financial condition of the Borrower and its consolidated
Subsidiaries at January 1, 2001, other than the Merger or as set forth on
Schedule 5.1.
5.2 No Change. Since January 1, 2001, (a) there has been no
development, circumstance or event which has had or could reasonably be expected
to have a Material Adverse Effect, and (b) no dividends or other distributions
have been declared, paid or made upon the Capital Stock of the Borrower nor has
any of the Equity Interests of the Borrower been redeemed, retired, purchased or
otherwise acquired for value by the Borrower or any of its Subsidiaries, other
than, in each case, as set forth in Schedule 5.2.
5.3 Existence; Compliance with Law. Each of the Borrower and its
Restricted Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate, partnership or limited liability company (as the case may be) power
and authority, and the legal right, to own and operate its Property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification except to the extent that
the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect and (d) is in compliance with all applicable
Requirements of Law except to the extent that the failure to comply with such
Requirements of Law could not reasonably be expected to have, in the aggregate,
a Material Adverse Effect.
5.4 Power; Authorization; Enforceable Obligations. The Borrower and
each of the other Loan Parties has the corporate, partnership or limited
liability company (as the case may be) power and authority, and the legal right,
to make, deliver and perform the Loan Documents to which it is a party and, in
the case of the Borrower, to borrow hereunder and has taken all necessary
corporate, partnership or limited liability company (as the case may be) action
to authorize the execution, delivery and performance of the Loan Documents to
which it is a party. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or the delivery,
performance, validity or enforceability of the Loan Documents to which each Loan
Party is a party other than those which have been obtained and are in full force
and effect. This Agreement has been, and each other Loan Document to which any
Loan Party is a party will be, duly executed and delivered on behalf of such
Loan Party. This Agreement constitutes, and each other Loan Document to which
any Loan Party is a party when executed and delivered will constitute, a legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent transfer or conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
39
5.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents, the borrowings hereunder and the use of the proceeds thereof will not
violate any applicable Requirement of Law or Contractual Obligation of the
Borrower or of any of its Restricted Subsidiaries, to the extent such violation
could reasonably be expected to have a Material Adverse Effect and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective Properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation, other than the Liens created pursuant to the Pledge
Agreement.
5.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or any of its
Restricted Subsidiaries or against any of its or their respective Properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
5.7 No Default. Neither the Borrower nor any of its Restricted
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens.
(a) Except for the Oil and Gas Properties, the Borrower and its
Restricted Subsidiaries each has good title in fee simple to, or a valid
leasehold interest in, all its material real Property and material interests in
real Property, and good title to, or a valid leasehold interest in, all its
other material Property, and none of such Property is subject to any Lien except
as permitted by subsection 8.3.
(b) The Borrower and its Restricted Subsidiaries each has good and
defensible title to all of its material Oil and Gas Properties included in the
most recent Reserve Report which are not personal property and good title to all
such Oil and Gas Properties which are personal property and material to the
Borrower and its Restricted Subsidiaries taken as a whole, except for (i) such
imperfections of title as do not in the aggregate materially detract from the
value thereof to, or the use thereof in, the business of the Borrower or any of
its Restricted Subsidiaries, (ii) Oil and Gas Properties disposed of since the
date of the most recent Reserve Report as permitted by subsection 8.6 hereof,
and (iii) Liens permitted by subsection 8.3 hereof. The quantum and nature of
the interest of the Borrower and its Restricted Subsidiaries in and to the Oil
and Gas Properties as set forth in each Reserve Report (including the Initial
Reserve Report) includes the entire interest of the Borrower and its Restricted
Subsidiaries in such Oil and Gas Properties as of the date of such Reserve
Report and are complete and accurate in all material respects as of the date of
such Reserve Report; and there are no "back-in" or "reversionary" interests held
by third parties which could materially reduce the interest of the Borrower and
its Restricted Subsidiaries in such Oil and Gas Properties except as expressly
set forth in such Reserve Report. The ownership of the Oil and Gas Properties by
the Borrower and its Restricted Subsidiaries shall not in any material respect
obligate any such Person to bear the costs and expenses relating to the
maintenance, development or operations of each such Oil and Gas Property in an
amount materially in excess of the working interest of such Person in each Oil
and Gas Property set forth in the most recent Reserve Report.
40
5.9 Intellectual Property. Each of the Borrower and its Restricted
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim which could reasonably be
expected to have a Material Adverse Effect. The use of such Intellectual
Property by the Borrower and its Restricted Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not be reasonably expected to have a Material Adverse Effect.
5.10 No Burdensome Restrictions. No applicable Requirement of Law or
Contractual Obligation of the Borrower or any of its Restricted Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
5.11 Taxes. Each of the Borrower and its Subsidiaries has filed all
material tax returns which, to the knowledge of such Person, are required to be
filed by it and has paid or caused to be paid all taxes shown on said returns
and all material assessments, fees and other governmental charges levied upon it
or upon any of its Property or income which are due and payable, other than such
taxes, assessments, fees and other governmental charges, if any, as are being
diligently contested in good faith and by appropriate proceedings and with
respect to which there have been established adequate reserves on the books of
the Borrower or its Subsidiaries, as the case may be, in accordance with GAAP.
No tax Lien has been filed and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such taxes or material assessments, fees or
other governmental charges, other than claims which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are being maintained on the books of the Borrower or the applicable
Subsidiary, as the case may be, in conformity with GAAP.
5.12 Federal Reserve Regulations. No part of the proceeds of any Loans,
and no proceeds of any Letter of Credit issued hereunder, will be used for
"buying" or "carrying" any "margin stock" within the respective meanings of each
of the quoted terms under Regulation U as now and from time to time hereafter in
effect or for any purpose that violates the provisions of the regulations of the
Board. If requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
5.13 ERISA. Except where the liability, failure or event described
below could not reasonably be expected to have a Material Adverse Effect: (a)
neither a Reportable Event nor an "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during
the five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied with the
applicable provisions of ERISA and the Code; (b) no termination of a Single
Employer Plan has occurred, and no Lien on property of the Borrower or any
Commonly Controlled Entity in favor of the PBGC or a Plan has arisen, during
such five-year period; (c) the present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits; (d) neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer
41
Plan, and neither the Borrower nor any Commonly Controlled Entity would become
subject to any liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made; and (e) no such Multiemployer Plan is in Reorganization
or Insolvent.
5.14 Investment Company Act; Other Regulations. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
Neither the Borrower nor any of its Restricted Subsidiaries is subject to
regulation under any Federal or State statute or regulation (other than
Regulation X of the Board) which limits its ability to incur Indebtedness under
this Agreement or the other Loan Documents.
5.15 Subsidiaries. The Persons listed on Schedule 5.15 constitute all
the Subsidiaries of the Borrower at the date hereof. Such Schedule sets forth
the status of such Subsidiaries, as of the date hereof, as Restricted
Subsidiaries or Unrestricted Subsidiaries and sets forth the net book value of
the assets owned by each of the Unrestricted Subsidiaries listed on such
Schedule.
5.16 Purpose of Loans. The proceeds of the Loans and the Letters of
Credit will be used to refinance the Existing Credit Facilities and other
existing Indebtedness of the Borrower and Old Westport (including, without
limitation, the 96 Senior Subordinated Notes and the 97 Senior Subordinated
Notes, in each case, to the extent permitted by the terms hereof), to purchase,
redeem, defease or otherwise acquire or retire the Borrower's 6 1/2% Convertible
Preferred Stock to the extent permitted by the terms hereof, to pay for expenses
related to the Merger, for working capital and for the general corporate
purposes of the Borrower and its Restricted Subsidiaries in the ordinary course
of business.
5.17 Environmental Matters. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect:
(a) each of the Borrower and its Restricted Subsidiaries: (i) is, and
within the period of all applicable statutes of limitation has been, in
compliance with all applicable Environmental Laws; (ii) holds or is entitled to
the benefits of all Environmental Permits (each of which is in full force and
effect) required for any of its current operations and holds or will hold or
otherwise be entitled to the benefits of all Environmental Permits for all of
its planned operations prior to the time at which such Environmental Permit is
necessary for such operation or for any Property owned, leased, or otherwise
operated by it; (iii) is, and within the period of all applicable statutes of
limitation has been, in compliance with all of its Environmental Permits; and
(iv) reasonably believes that the costs of complying with renewal or additional
Environmental Permits and any other Environmental Laws applicable to or
reasonably expected to apply to the Borrower and its Restricted Subsidiaries
will not exceed the Borrower's and its Subsidiaries' existing costs of complying
with Environmental Permits and Environmental Laws.
(b) Materials of Environmental Concern have not been transported,
disposed of, emitted, discharged, or otherwise released or threatened to be
released in violation of applicable Environmental Laws, to or at any real
property presently or formerly owned, leased or operated by the Borrower or any
Restricted Subsidiary during such time as the Borrower or any or its Restricted
42
Subsidiaries owned, leased or operated such real property or, to the best
knowledge of the Borrower, from any such real property to or at any other
location.
(c) no judicial, administrative, or arbitral proceeding (including any
notice of violation or alleged violation) under or relating to any Environmental
Law to which the Borrower or any Restricted Subsidiary is, or to the knowledge
of the Borrower will be, named as a party is pending or, to the knowledge of the
Borrower, threatened.
(d) the Borrower has not received any written request for information,
or been notified that it or any Restricted Subsidiary is a potentially
responsible party under the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental Law, or with
respect to any Materials of Environmental Concern.
(e) neither the Borrower nor any Restricted Subsidiary has entered into
or agreed to any consent decree, order, or settlement or other agreement, nor is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law.
(f) neither the Borrower nor any Restricted Subsidiary has assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed,
contingent or otherwise, under any Environmental Law.
5.18 No Material Misstatements.
(a) All written information, reports, financial statements, exhibits
and schedules furnished to any Agent or any Lender by or on behalf of the
Borrower or any of its Affiliates in connection with the negotiation of any Loan
Document or included therein or delivered pursuant thereto, including the Merger
Documents and the Form S-4 of the Borrower filed with Securities and Exchange
Commission on June 29, 2001, as amended, when taken as a whole, do not contain,
and as they may be amended, supplemented or modified from time to time, will not
contain, as of the date such statements will be made, any untrue statements of a
material fact and do not omit, and as they may be amended, supplemented or
modified from time to time, will not omit, to state as of the date such
statements will be made, any material fact necessary in order to make the
statements contained therein, in the light of the circumstances under which they
were, are or will be made, not materially misleading.
(b) All projections and estimates concerning the Borrower and its
Subsidiaries that are or have been made available to any Agent or any Lender by
or on behalf of the Borrower or any of its Subsidiaries, have been or will be
prepared based on good faith estimates and based upon assumptions provided to
the Agents and the Lenders which were either required by applicable Requirements
of Law or believed by the Borrower to be reasonable at the time of such
preparation.
5.19 Insurance. Each of the Borrower and its Restricted Subsidiaries
carries and maintains with respect to its insurable properties insurance
(including, to the extent consistent with past practices, self-insurance) with
financially sound and reputable insurers of the types, to such extent and
against such risks as is customary with companies in the same or similar
businesses.
5.20 Future Commitments. As of the date hereof and as of the Closing
Date, except as set forth on Schedule 5.20, on a net basis there are no material
gas imbalances, take-or-pay or other
43
prepayments with respect to any Oil and Gas Property of the Borrower or any
Restricted Subsidiary which would require the Borrower or any Restricted
Subsidiary to deliver Hydrocarbons produced from Oil and Gas Properties at some
future time without then or thereafter receiving full payment therefor.
5.21 Pledge Agreement.
(a) The provisions of the Pledge Agreement are effective to create in
favor of the Administrative Agent, for the ratable benefit of the Lenders, a
legal, valid and enforceable lien on, and security interest in, the Pledged
Securities and proceeds thereof; and with respect to the Pledged Stock, upon
delivery to the Administrative Agent of the stock certificates evidencing the
Pledged Stock, and with respect to the other collateral described therein, upon
the filing of UCC-1 financing statements in the offices set forth in Schedule
5.21, the Lien created pursuant to the Pledge Agreement will constitute a
perfected first priority lien on, and security interest in, all right, title and
interest of the Pledgor party therein in such Pledged Securities and the
proceeds thereof, enforceable in each case in accordance with its terms against
all creditors of such Pledgor and any Persons purporting to purchase any
Collateral from such Pledgor.
(b) As of the Closing Date, the shares of Capital Stock listed on
Schedule I to the Pledge Agreement will constitute all the issued and
outstanding Equity Interests of the issuers thereof listed on said Schedule
owned by the Loan Parties; all such shares have been duly and validly issued and
are fully paid and nonassessable; and the relevant Pledgor of said shares is the
record and beneficial owner of said shares.
5.22 Subordinated Indebtedness. The execution, delivery and performance
of the Loan Documents, the incurrence of Indebtedness hereunder and the use of
the proceeds thereof have not violated and will not violate any applicable
provision of any Subordinated Note Document. The Notes, the Indebtedness
evidenced hereby, the Subsidiary Guarantee and the other obligations evidenced
by the other Loan Documents are, and are hereby designated as, "Senior Debt",
"Designated Senior Debt" and "Guarantor Senior Indebtedness" as such terms are
defined in each of the 96 Indenture and the 97 Indenture, as applicable, for
purposes of such Subordinated Note Documents and any other Subordinated Note
Documents evidencing other Subordinated Indebtedness.
5.23 Merger Documents.
(a) Each of the parties to the Merger Documents has (or had) the
corporate, partnership or limited liability company (as the case may be) power
and authority, and the legal right, to make, deliver and perform the Merger
Documents to which it is a party and has taken all necessary corporate,
partnership or limited liability company (as the case may be) action to
authorize the execution, delivery and performance of the Merger Documents to
which it is a party. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Merger or the delivery, performance, validity or
enforceability of the Merger Documents which has not been obtained and is in
full force and effect. Each Merger Document was duly executed and delivered on
behalf of the parties and constitutes a legal, valid and binding obligation of
each such Person enforceable against it in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent transfer or conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally,
44
general equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(b) The execution, delivery and performance of the Merger Documents
does not violate any applicable Requirement of Law or Contractual Obligation of
the Borrower or of any of its Restricted Subsidiaries or Old Westport or any of
its Subsidiaries which have been designated as Restricted Subsidiaries under
this Agreement, to the extent such violation could reasonably be expected to
have a Material Adverse Effect.
(c) No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or any of its Restricted
Subsidiaries or Old Westport or any of its Subsidiaries which have been
designated as Restricted Subsidiaries under this Agreement or against any of
their respective Properties or revenues which seeks to enjoin or prevent the
Merger or any of the transactions contemplated hereby or by the Merger
Documents.
(d) No party to the Merger Documents is in default thereunder and the
performance of the transactions contemplated by the Merger Documents will not
violate or result in a default with respect to any Contractual Obligation of the
Borrower or any of its Restricted Subsidiaries, in each case, which could
reasonably be expected to have a Material Adverse Effect.
(e) The Borrower has delivered to the Lenders copies, certified by a
Responsible Officer as true and complete, of each material Merger Document.
5.24 Solvency. Immediately after the consummation of the Merger and
immediately following the making of each Loan to be made on the Closing Date and
after giving effect to the application of the proceeds of such Loans: (a) each
Loan Party will not have unreasonably small capital with which to conduct the
business in which such Loan Party is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date; and (b) the Borrower
and the Restricted Subsidiaries, on a consolidated basis, will be Solvent.
SECTION 6
CONDITIONS PRECEDENT
6.1 Conditions to Initial Extensions of Credit. The agreement of each
Lender to make the initial Loan requested to be made by it and of the Issuing
Bank to issue the initial Letter of Credit to be issued by it is subject to the
satisfaction, immediately prior to or concurrently with the making of such Loan
and the issuance of such Letter of Credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (with
the number of original counterparts requested by the Administrative Agent) (i)
this Agreement, executed and delivered by a duly authorized Responsible Officer
of the Borrower and each Agent, with a counterpart for each Lender, (ii) the
Pledge Agreement, executed and delivered by a duly authorized Responsible
Officer of each Loan Party thereto and (iii) the Subsidiary Guarantee, executed
and delivered by a duly authorized Responsible Officer of each Loan Party
thereto.
(b) Proceedings of the Loan Parties. The Administrative Agent shall
have received (with the number of original counterparts requested by the
Administrative Agent), a copy of the resolutions
45
or other equivalent authorization, in form and substance satisfactory to the
Administrative Agent, of the board of directors (or partners or members, as
appropriate) of each Loan Party authorizing (i) the execution, delivery and
performance of this Agreement and the Loan Documents to which it is a party and
(ii) in the case of the Borrower, the borrowings contemplated hereunder,
certified by the Secretary or an Assistant Secretary of such Loan Party (or of
its general partner or managing member, as appropriate) as of the Closing Date,
which certificate shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall state that the resolutions (or other equivalent
authorization) thereby certified have not been amended, modified, revoked or
rescinded.
(c) Loan Party Incumbency Certificates. The Administrative Agent shall
have received (with the number of original counterparts requested by the
Administrative Agent), a certificate of each Loan Party, dated as of the Closing
Date, as to the incumbency and signature of the officers of such Loan Party (or
of its general partner or managing member, as appropriate), executing any Loan
Document reasonably satisfactory in form and substance to the Administrative
Agent, executed by the President or any Vice President and the Secretary or any
Assistant Secretary (or by its general partner or managing member, as
appropriate) of such Loan Party.
(d) Constitutional Documents. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), true and complete copies of the constitutional documents
of each Loan Party, certified as of the Closing Date as complete and correct
copies thereof by the Secretary or an Assistant Secretary (or by its general
partner or managing member, as appropriate) of such Loan Party.
(e) Borrowing Certificate. The Administrative Agent shall have received
(with the number of original counterparts requested by the Administrative
Agent), a certificate of the Borrower, dated the Closing Date, substantially in
the form of Exhibit D, with appropriate insertions and attachments, satisfactory
in form and substance to the Administrative Agent, executed by a Responsible
Officer of the Borrower.
(f) Consents, Licenses and Approvals. All governmental and third party
approvals (including consents) necessary or, in the discretion of the
Administrative Agent, advisable in connection with (i) the Merger and the
transactions to occur in connection therewith, (ii) the continuing operations of
the Borrower and its Restricted Subsidiaries and (iii) the execution, delivery
and performance of the Loan Documents, shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose material and adverse conditions on the
Merger, the Merger Documents, this Agreement and the other Loan Documents and
the transactions contemplated hereby and thereby. The Administrative Agent shall
have received a certificate of a Responsible Officer of the Borrower as to the
foregoing.
(g) Fees. Each of the Lenders and the Agents shall have received all
fees and expenses required to be paid on or before the Closing Date for which
invoices have been presented.
(h) Legal Opinions. The Administrative Agent shall have received (i) an
executed legal opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel to
the Borrower and each Loan Party, in form and substance reasonably satisfactory
to the Administrative Agent, and (ii) such other legal opinions as the
Administrative Agent may reasonably require, each satisfactory in form and
substance to the Administrative Agent. Such legal opinions shall cover all
matters incident to the transactions contemplated by this Agreement, as the
Administrative Agent may reasonably require.
46
(i) Pledged Securities. The Administrative Agent shall have received:
(i) the certificates representing the Pledged Stock, together with an undated
stock power for each such certificate executed in blank by a duly authorized
Responsible Officer of the Pledgor thereof, (ii) a control agreement in form and
substance reasonably satisfactory to the Administrative Agent for all
uncertificated Pledged Securities and (iii) a UCC-1 financing statement in
respect of all such Pledged Securities. It is contemplated that the Pledged
Securities will represent all of the Equity Interests of each Domestic
Subsidiary and 65% of the Equity Interests of each Foreign Subsidiary directly
owned by either the Borrower or a Domestic Subsidiary.
(j) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form UCC-1, necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Liens created by
the Pledge Agreement shall have been completed.
(k) UCC Searches. The Administrative Agent shall have received (i) the
UCC searches in such jurisdictions as it may reasonably request, each dated
reasonably close to the Closing Date and (ii) evidence reasonably satisfactory
to the Administrative Agent that the Liens indicated by the financing statements
(or similar documents) in such UCC searches are permitted by subsection 8.3 or
have been released.
(l) Subordinated Note Documents. The Administrative Agent shall have
received true and correct copies, certified as such by a Responsible Officer of
the Borrower, of each Subordinated Note Document to which the Borrower and its
Restricted Subsidiaries is a party on the Closing Date.
(m) Merger Documents; Consummation of Merger. The Administrative Agent
shall have received copies of the Merger Documents in form and substance
satisfactory to the Administrative Agent. The Merger shall have been, or
substantially simultaneously with the initial funding of Loans on the Closing
Date shall be, consummated as contemplated by and pursuant to the Merger
Documents and applicable law (without any amendment to or waiver of any material
terms or conditions of the Merger Documents not approved by the Required
Lenders), and evidence therefor shall have been or shall be contemporaneously
provided to the Administrative Agent in form and substance satisfactory to the
Administrative Agent. In connection with the foregoing, the Administrative Agent
shall have received a certificate of a Responsible Officer certifying: (i) as to
the preceding two sentences, (ii) that attached thereto is a true and complete
copy of the Certificate of Merger filed with the Nevada Secretary of State and
any equivalent documents or certificates filed with the Delaware Secretary of
State by Old Westport and (iii) that attached thereto is a true and complete
copy of the Amendment to the Articles of Incorporation of the Borrower filed
with the Nevada Secretary of State reflecting its change of name from Belco Oil
& Gas Corp.
(n) Existing Credit Facilities. The Administrative Agent shall have
received a certificate, signed by a Responsible Officer of Borrower, stating
that Borrower or its Subsidiaries have repaid in full and terminated the
Existing Credit Facilities contemporaneously with the proceeds of the initial
Loans under this Agreement. The Administrative Agent shall have received
evidence satisfactory to it that all Liens associated with the Existing Credit
Facilities have been released or terminated contemporaneously with the making of
such payments and that arrangements satisfactory to the Administrative Agent has
been made for recording and filing of such releases.
47
(o) Insurance Certificate. The Administrative Agent shall have received
a certificate of insurance demonstrating that the Borrower is in compliance with
subsection 7.5 as of the Closing Date.
(p) Title Matters. The Administrative Agent shall be reasonably
satisfied with the status of title of the Oil and Gas Properties of the Borrower
and the Restricted Subsidiaries.
(q) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents in respect
of any aspect or consequence of the transactions contemplated hereby or thereby
as it shall reasonably request.
The Administrative Agent shall notify the Borrower, the other Agents and the
Lenders of the satisfaction (or waiver by all Lenders) of the foregoing
conditions, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank
to issue Letters of Credit hereunder shall not become effective unless each of
the foregoing conditions is satisfied (or waived by all Lenders) at or prior to
3:00 p.m., New York City time, on December 31, 2001 (and, in the event such
conditions are not so satisfied or waived, notwithstanding any other provision
of this Agreement, the Aggregate Commitments shall terminate at such time).
6.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any Loan requested to be made by it on any date (including,
without limitation, its initial Loan on the Closing Date) or of the Issuing Bank
to issue any Letter of Credit (and the Lenders agreement to participate in such
Letter of Credit Outstandings) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by each Loan Party in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of such date as if made on
and as of such date (unless such representations and warranties are stated to
relate to a specific earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date).
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or would occur after giving effect to Loans requested
to be made on such date or the Letters of Credit requested to be issued.
Each borrowing by, and Letter of Credit issued on behalf of, the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date thereof that the conditions contained in (a) and (b) of
this subsection have been satisfied.
SECTION 7
AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Aggregate Commitments
remain in effect, any Loan, Note or Letter of Credit remains outstanding and
unpaid or any amount is owing to any Lender or Agent hereunder or under any
other Loan Document, the Borrower shall and (except in the
48
case of delivery of financial information, reports and notices) shall cause each
of its Restricted Subsidiaries to:
7.1 Financial Statements. Furnish to the Administrative Agent and to
each of the Lenders:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, (i) a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
year and the related consolidated statements of operations, stockholders' equity
and cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by Xxxxxx Xxxxxxxx LLP or other independent certified public accountants
of nationally recognized standing reasonably acceptable to the Required Lenders
and (ii) a copy of the consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as at the end of such year and the related consolidated
statements of operations, stockholders' equity and cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as fairly presenting such information
in all material respects; and
(b) as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly fiscal periods of each fiscal year
of the Borrower and its consolidated Subsidiaries, (i) the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such quarter and the related unaudited consolidated statements of
operations, stockholders' equity and cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter and (ii) the unaudited consolidated balance
sheet of the Borrower and its Restricted Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows of the Borrower and its Restricted
Subsidiaries for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as fairly presenting such
information in all material respects (subject to normal year-end and audit
adjustments and the absence of footnotes);
all such financial statements shall be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).
7.2 Certificates; Other Information. Furnish to the Administrative
Agent and to each of the Lenders:
(a) concurrently with the delivery of the financial statements referred
to in subsections 7.1(a) and (b), a certificate of a Responsible Officer stating
that, to the best of such officer's knowledge, during such period (i) no
Subsidiary has been formed or acquired (or, if any Restricted Subsidiary has
been formed or acquired, the Borrower and such Restricted Subsidiary complied
with the requirements of subsection 7.9 with respect thereto) and (ii) the
Borrower has observed or performed all of its covenants (and setting forth the
calculations used to determine compliance with the covenants set forth in
subsection 8.1) and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate;
49
(b) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its stockholders, and within
five days after the same are filed, copies of all financial statements and
reports, if any, which the Borrower may make to, or file with, the Securities
and Exchange Commission or any successor or analogous Governmental Authority;
(c) promptly upon receipt thereof, copies of all reports and management
letters submitted to the Borrower or any Restricted Subsidiary by independent
public accountants in connection with any interim or special audit of the books
or operations of the Borrower or such Restricted Subsidiary made by such
accountants;
(d) together with any Reserve Report delivered pursuant to subsection
4.9, a schedule identifying the pricing and notional volumes on the open
Commodity Price Risk Management Agreements of the Borrower and its Restricted
Subsidiaries as of the fiscal quarter ending on the date of such Reserve Report;
(e) deliver to the Administrative Agent within 30 days of obtaining any
renewal or replacement insurance policies as and when required by subsection
7.5, certificates of insurance evidencing the Borrower's compliance with
subsection 7.5;
(f) promptly, such additional financial and other information
concerning the Borrower and its Subsidiaries as any Lender (acting through the
Administrative Agent) may from time to time reasonably request;
(g) concurrently with the delivery of the financial statements referred
to in subsections 7.1(a) and (b), a certificate of a Responsible Officer stating
that, to the best of such officer's knowledge, all Loans made and Letters of
Credit issued during such period were permitted to be incurred under the terms
of the Subordinated Note Documents, and setting forth in reasonable detail any
calculations necessary to determine compliance with such covenant;
(h) whether or not availability under this Agreement is to be governed
by a borrowing base, deliver semi-annual Reserve Reports as contemplated by
subsection 4.9(c);
(i) any announcement by Xxxxx'x or S&P of, or any change in, the
senior, unsecured long-term debt rating of the Borrower or the rating of any
other Indebtedness of the Borrower or any of its Restricted Subsidiaries;
(j) if, at any time, all of the consolidated Subsidiaries of the
Borrower are not Restricted Subsidiaries and EBITDAX for all Unrestricted
Subsidiaries will exceed $1,000,000 during the fiscal quarter for which
financial information is being delivered under subsection 7.1(b) or during the
fourth fiscal quarter in the case of the financial information being delivered
under subsection 7.1(a), then with the delivery of such financial information,
consolidating spreadsheets that show all consolidated Unrestricted Subsidiaries
and the eliminating entries, in such form as would be presentable to the
auditors of the Borrower;
(k) in the event the Borrower intends to issue additional Indebtedness
or to refinance any existing Subordinated Indebtedness with Permitted
Subordinated Refinancing Debt as contemplated by subsection 8.2(c), (h) or (i),
not less than five (5) Business Days prior written notice of such intended
offering therefor, the amount thereof and the anticipated date of closing,
together with a
50
copy of the preliminary offering memorandum (if any) and, when completed, the
final offering memorandum; and
(l) on any day on which the Borrower or any Restricted Subsidiary
incurs or otherwise becomes liable in respect of any Indebtedness or makes any
payment of principal on any Indebtedness, furnish to the Administrative Agent,
with a copy to the Lenders, a certificate of a Responsible Officer setting forth
calculations to determine its Total Debt Leverage Ratio as of such date and
setting forth the resulting Applicable Margin.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or the applicable Restricted Subsidiary, as the case
may be.
7.4 Conduct of Business and Maintenance of Existence; Compliance with
Law and Contractual Obligations. Continue to engage in business of the same
general type as now conducted by it and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business, except as otherwise permitted by subsection 8.5; comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not reasonably be expected to have, in
the aggregate, a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all material Property
owned or leased by it that is useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted; maintain with
financially sound and reputable insurance companies insurance of such types, in
such amounts and against such risks as is customary to be maintained by
companies engaged in the same or a similar business in the same general area;
and furnish to the Administrative Agent, upon written request, full information
as to the insurance carried.
7.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit, upon
reasonable prior notice, representatives of any Lender to visit, subject to
compliance with the terms of any applicable Requirements of Law or corporate
policy, and inspect any of its properties and examine and make abstracts from
any of its books and records during normal business hours and as often as may
reasonably be requested through the Administrative Agent and to discuss the
business, operations, Properties and financial and other condition of the
Borrower and its Subsidiaries with officers of the Borrower and its Subsidiaries
and with its independent certified public accountants.
7.7 Notices. Promptly give notice to the Administrative Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Restricted Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Borrower or any of its Restricted Subsidiaries and any Governmental
51
Authority, which in each case could reasonably be expected to have, in the
opinion of a Responsible Officer, a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Restricted Subsidiaries which could reasonably be expected, in the opinion of a
Responsible Officer, to result in (i) an adverse judgment of $2,500,000 or more
not covered by insurance or (ii) injunctive or similar relief against the
Borrower or any of its Restricted Subsidiaries that could reasonably be expected
to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof to the extent any
such event could reasonably be expected to have a Material Adverse Effect: (i)
the occurrence or expected occurrence of any Reportable Event with respect to
any Single Employer Plan, a failure by the Borrower or any Commonly Controlled
Entity to make any required contribution to a Plan, the creation of any Lien on
the property of the Borrower or any Commonly Controlled Entity in favor of the
PBGC or a Plan or any withdrawal by the Borrower or any Commonly Controlled
Entity from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal by the Borrower or any
Commonly Controlled Entity from, or the terminating, Reorganization or
Insolvency of, any Plan; and
(e) any other event which could reasonably be expected to have or has
had, in the opinion of a Responsible Officer, a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what the Borrower and its Restricted Subsidiaries have taken or
propose to take with respect thereto.
7.8 Environmental Laws.
(a) (i) Comply with all Environmental Laws, and obtain, comply with and
maintain any and all Environmental Permits necessary for its operations as
conducted and as planned; and (ii) take commercially reasonable efforts to
ensure that all of its tenants, subtenants, contractors, subcontractors, and
invitees comply with all Environmental Laws, and obtain, comply with and
maintain any and all Environmental Permits, applicable to any of them insofar as
any failure to so comply, obtain or maintain reasonably could be expected to
have a Material Adverse Effect. For purposes of this subsection 7.8(a),
noncompliance by the Borrower or any of its Restricted Subsidiaries with any
applicable Environmental Law or Environmental Permit shall be deemed not to
constitute a breach of this covenant provided that, upon learning of any actual
or suspected noncompliance, the Borrower and its Restricted Subsidiaries shall
promptly undertake all reasonable efforts to achieve compliance, and provided
further that, in any case, such non-compliance, and any other noncompliance with
Environmental Law, individually or in the aggregate, could not reasonably be
expected to give rise to a Material Adverse Effect or materially and adversely
affect the value of any material Property considered for calculation of the
Borrowing Base.
(b) Comply with all orders and directives of all Governmental
Authorities regarding Environmental Laws, other than such orders and directives
as to which an appeal or other appropriate action to contest such order or
directive has been timely and properly taken in good faith, or where
non-compliance could not reasonably be expected to give rise to a Material
Adverse Effect.
52
(c) Prior to acquiring any ownership or leasehold interest in real
property or other interest in any real property that could give rise to the
Borrower being subject to potential significant liability under or violations of
any Environmental Law which potential liability or violations, if incurred,
could reasonably be expected to have a Material Adverse Effect: (i) notify the
Administrative Agent; and (ii) if requested by the Administrative Agent, provide
to the Administrative Agent a written report by an environmental consultant
reasonably acceptable to the Administrative Agent assessing the presence or
potential presence of significant levels of any Materials of Environmental
Concern on, under, in, or about the property, or of other conditions that could
give rise to potentially significant liability or violations of any
Environmental Law.
7.9 Additional Collateral; Guarantors.
(a) With respect to any Person that, subsequent to the Closing Date,
becomes a Restricted Subsidiary (other than a Foreign Subsidiary), promptly: (i)
cause all of the Equity Interests of such Person owned by the Borrower and any
Restricted Subsidiary to be pledged to the Administrative Agent, for the ratable
benefit of the Lenders, pursuant to a supplement to the Pledge Agreement, and
take all actions reasonably necessary or advisable to cause the Lien thereon to
be duly perfected in accordance with all applicable Requirements of Law, and
deliver any certificates representing such Equity Interests to the
Administrative Agent, together with undated stock powers executed and delivered
in blank by a duly authorized Responsible Officer of the Borrower or such
Restricted Subsidiary, as the case may be, and (ii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described in clause (i) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Restricted Subsidiary and is a Foreign Subsidiary that is directly
owned by the Borrower or a Domestic Subsidiary, promptly: (i) execute and
deliver to the Administrative Agent a supplement to the Pledge Agreement to
grant to the Administrative Agent, for the benefit of the Lenders, a Lien on the
Equity Interests of such Subsidiary which is owned by the Borrower or any
Domestic Subsidiary (provided that in no event shall more than 65% of the Equity
Interests of any such Foreign Subsidiary be required to be so pledged), (ii)
deliver to the Administrative Agent any certificates representing such Equity
Interests, together with undated stock powers executed and delivered in blank by
a duly authorized Responsible Officer of the Borrower or such Restricted
Subsidiary, as the case may be, and take or cause to be taken all such other
actions under the law of the jurisdiction of organization of such Foreign
Subsidiary as may be reasonably necessary or advisable to perfect such Lien on
such Equity Interests and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described in clauses (i) and (ii) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) In the event that (i) the Borrower determines that any Restricted
Subsidiary is a Material Domestic Subsidiary, (ii) any Wholly-Owned Restricted
Subsidiary which is a Domestic Subsidiary becomes the owner of a Foreign
Subsidiary which has total assets in excess of $5,000,000 or (iii) any
Wholly-Owned Restricted Subsidiary which is a Domestic Subsidiary incurs or
guarantees any Indebtedness, the Borrower shall promptly cause such Restricted
Subsidiary to guarantee the obligations of the Borrower under this Agreement. In
connection with any such guaranty, the Borrower shall, or shall cause such
Restricted Subsidiary to, (A) execute and deliver a supplement to the Subsidiary
Guarantee executed by a duly authorized Responsible Officer of such
53
Subsidiary and (B) execute and deliver such other additional closing documents,
certificates and legal opinions as shall reasonably be requested by the
Administrative Agent.
7.10 Maintenance and Operation of Property. To the extent that the
failure to comply could reasonably be expected to have a Material Adverse Effect
and consistent with the standards of a reasonably prudent operator:
(a) Maintain, develop, and operate Borrower's and its Restricted
Subsidiaries' Oil and Gas Properties, and oil and gas gathering assets in a good
and workmanlike manner, and observe and comply with all of the terms and
provisions, express or implied, of all oil and gas leases relating to the
Properties so long as the oil and gas leases are capable of producing
Hydrocarbons in quantities and at prices providing for continued efficient and
profitable operation of business;
(b) Comply in all material respects with all contracts and agreements
applicable to or relating to Borrower's and its Restricted Subsidiaries' Oil and
Gas Properties or the production and sale of Hydrocarbons therefrom;
(c) At all times, maintain, preserve, and keep all operating equipment
used with respect to Borrower's and its Restricted Subsidiaries' Oil and Gas
Properties, and oil and gas gathering assets in proper repair, working order and
condition, and make all necessary or appropriate repairs, renewals,
replacements, additions and improvements thereto so that the efficiency of the
operating equipment shall at all times be properly preserved and maintained,
provided that no item of operating equipment need be so repaired, renewed,
replaced, added to or improved, if Borrower or its Subsidiaries shall in good
faith determine that the action is not necessary or desirable for its continued
efficient and profitable operation of business.
(d) With respect to Borrower's and its Restricted Subsidiaries' Oil and
Gas Properties, and oil and gas gathering assets which are operated by operators
other than Borrower or a Restricted Subsidiary, use reasonable efforts to
enforce in a manner consistent with the industry practice the operators'
contractual obligations to maintain, develop, and operate such Properties
subject to the applicable operating agreements.
7.11 Further Assurances. Upon the request of the Administrative Agent,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Administrative Agent, for the benefit of
the Lenders, Liens on the Collateral (as defined in the Pledge Agreement) that
are duly perfected in accordance with all applicable Requirements of Law or to
correct any error or omission in any of the Loan Documents.
SECTION 8
NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or any Letter of Credit remains outstanding and unpaid or
any amount is owing to any Lender or Agent hereunder or under any other Loan
Document, the Borrower shall not, and shall not (except with respect to
subsection 8.1) permit any Restricted Subsidiary to, directly or indirectly:
54
8.1 Financial Covenants.
(a) While Borrowing Base is in Effect: At all times while availability
under this Agreement is to be governed by a borrowing base as required by
subsection 4.9(a) (and whether or not a borrowing base has then been established
and approved by the Supermajority Lenders),
(i) Interest Coverage Ratio. Permit, for any period of four consecutive
fiscal quarters ending after the date hereof, the ratio of EBITDAX to
Consolidated Interest Expense of the Borrower and its Restricted Subsidiaries
for such four consecutive fiscal quarters to be less than 3.0 to 1.0; and
(ii) Current Ratio. Permit the ratio of current assets to current
liabilities at any time to be less than 1.0 to 1.0. For purposes of this
calculation, (i) current assets will include an amount equal to the Available
Commitments of the Lenders and (ii) both current assets and current liabilities
will exclude gains and losses resulting from the xxxx-to-market of commodity
price risk management transactions in accordance with FAS 133, but to the extent
cash collateral is provided for under any Commodity Price Risk Management
Agreement, associated losses will be included in current liabilities and such
cash collateral will be included in current assets.
(b) While Borrowing Base is not in Effect: At all times while
availability under this Agreement is not then being governed by a borrowing
base,
(i) Interest Coverage Ratio. Fail to comply with clause (i) of
subsection 8.1(a);
(ii) Total Debt Leverage Ratio. Permit, as of any date of
determination, its Total Debt Leverage Ratio to be greater than 3.5 to 1.0;
(iii) Senior Debt Leverage Ratio. Permit, as of any date of
determination, the ratio of Senior Debt (as of such date of determination) to
EBITDAX for any most recently ended period of four consecutive fiscal quarters
ending prior to such date of determination for which financial statements under
subsection 7.1(a) or 7.1(b) are available to be greater than 2.5 to 1.0;
(iv) PV to Total Debt Ratio. Subject to clause (vi) of this subsection
8.1(b), permit as of any date of determination, the ratio of PV to Total Debt as
of such date of determination to be less than 1.3 to 1.0; and
(v) PV to Senior Debt Ratio. Subject to clause (vi) of this subsection
8.1(b), permit as of any date of determination, the ratio of PV to Senior Debt
as of such date of determination to be less than 2.0 to 1.0.
(vi) Inapplicability of PV Ratios. Notwithstanding the foregoing, in
the event that the Borrower's senior, unsecured long-term debt rating is BBB- or
greater by S&P and Baa3 or greater by Xxxxx'x, then the Borrower shall not be
obligated to comply with clauses (iv) and (v) of this subsection 8.1(b).
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower and the Loan Parties under the Loan
Documents;
55
(b) Indebtedness of the Borrower issued to any Wholly-Owned Restricted
Subsidiary and Indebtedness of any Wholly-Owned Restricted Subsidiary issued to
the Borrower or any other Wholly-Owned Restricted Subsidiary;
(c) Indebtedness of the Borrower evidenced by the 96 Senior
Subordinated Notes, the 97 Senior Subordinated Notes and any Permitted
Subordinated Refinancing Debt;
(d) Guarantee Obligations permitted by subsection 8.4;
(e) Indebtedness of the Borrower and its Wholly-Owned Restricted
Subsidiaries existing on the Closing Date and listed on Schedule 8.2(e), but not
any extensions, renewals or replacements of such Indebtedness;
(f) Indebtedness of the Borrower or any Guarantor under Interest Rate
Protection Agreements permitted by subsection 8.16;
(g) Indebtedness of the Borrower or any Guarantor under Commodity Price
Risk Management Agreements permitted by subsection 8.16;
(h) if availability under this facility is not governed by a borrowing
base, other Indebtedness of the Borrower, provided that (i) after giving effect
to the incurrence of such Indebtedness (and any concurrent repayment of
Indebtedness with the proceeds of such incurrence), the Borrower is in
compliance with subsection 8.1 hereof, (ii) the final maturity of such
Indebtedness is no earlier than 90 days after the Termination Date and the
average life of such Indebtedness is no shorter than the average life of the
Loans hereunder and (iii) if such Indebtedness is Subordinated Indebtedness, its
subordination terms are either reasonably acceptable to the Required Lenders as
evidenced by their written approval or substantially identical to those
contained in the 97 Indenture;
(i) if availability under this facility is governed by a borrowing
base, other Indebtedness of the Borrower, provided that (i) after giving effect
to the incurrence of such Indebtedness (and any concurrent repayment of
Indebtedness with the proceeds of such incurrence), the Borrower is in
compliance with subsection 8.1 hereof and (ii) if (A) prior to April 1, 2002,
after giving effect to the incurrence of such Indebtedness (and any concurrent
repayment of Indebtedness with the proceeds of such incurrence), the Total Debt
of the Borrower (minus (1) the amount of any Indebtedness incurred for premiums,
prepayment penalties and other amounts (other than principal) required to be
paid in connection with the Indebtedness being repaid, (2) the reasonable and
customary fees and expenses incurred in connection with the issuance of such new
Indebtedness and (3) the amount of any Indebtedness the proceeds of which are
incurred to purchase, redeem, defease or otherwise acquire or retire any of the
Borrower's 6 1/2% Convertible Preferred Stock) is greater than the Total Debt of
the Borrower immediately prior to such incurrence or (B) such Indebtedness is
incurred on or after April 1, 2002, then, in each such case, the Supermajority
Lenders shall have the right to immediately adjust the amount of the Borrowing
Base to reflect such incurrence; and
(j) additional Indebtedness of the Borrower or any Guarantor not to
exceed $30,000,000 in aggregate principal amount at any one time outstanding.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its Property, assets or revenues, whether now owned or
hereafter acquired, except for:
56
(a) Liens for taxes, assessments, fees and other governmental charges
and claims that are not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or the applicable Restricted
Subsidiary, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, suppliers' mechanics', materialmen's,
vendors', repairmen's, landlords' and other like Liens arising in the ordinary
course of business securing obligations which are not overdue for a period of
more than 120 days or which are being contested in good faith by appropriate
proceedings;
(c) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance or other kinds
of social security, or to secure the payment or performance of tenders,
statutory or regulatory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business (including lessee or operator obligations under statutes, governmental
regulations or instruments related to the ownership, exploration and production
of oil, gas and minerals on state or federal lands or waters);
(d) Liens constituting survey exceptions, encumbrances, easements and
reservations of, or rights of others for, rights-of-way, zoning and other
restrictions as to the use of real properties and other similar encumbrances
incurred in the ordinary course of business which, with respect to all of the
foregoing, do not secure the payment of Indebtedness of the type described in
clauses (a)-(d) of the definition thereof and which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value and use of the Property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any Restricted Subsidiary;
(e) Liens existing on the date of this Agreement and listed on Schedule
8.3, provided that no such Lien is amended after the date of this Agreement to
cover any additional Property (other than additions and accessions thereto and
proceeds thereof) or to secure additional Indebtedness;
(f) Liens arising under operating agreements, joint venture agreements,
partnership agreements, oil and gas leases, farm-out and farm-in agreements,
division orders, contracts for the sale, transportation or exchange of oil or
natural gas, unitization and pooling declarations and agreements, area of mutual
interest agreements and other agreements that are customary in the Oil and Gas
Business; provided that the amount of any obligations secured thereby that are
delinquent, that are not diligently contested in good faith and for which
adequate reserves are not maintained by the Borrower or the applicable
Restricted Subsidiary, as the case may be, do not exceed, at any time
outstanding, the amount owing by the Borrower or any Restricted Subsidiary, as
applicable, for one month's billed operating expenses or other expenditures
attributable to such entity's interest in the Property covered thereby; and
further provided that such obligations secured thereby do not constitute
obligations in respect of borrowed money;
(g) Liens reserved in oil and gas mineral leases for bonus or rental
payments and for compliance with the terms of such leases, provided that the
amount of any obligations secured thereby that are delinquent, that are not
diligently contested in good faith and for which adequate reserves are not
maintained by the Borrower or the applicable Restricted Subsidiary, as the case
may be, do not exceed, at any time outstanding, the amount owing by the Borrower
or any Restricted Subsidiary, as applicable, for one month's payments as due
thereunder;
57
(h) Liens on pipeline or pipeline facilities that arise under operation
of law;
(i) Liens created pursuant to any Loan Document;
(j) Liens securing Indebtedness otherwise permitted by subsection 8.2
not to exceed $10,000,000 in aggregate amount at any time outstanding; provided
that no such Liens under this subsection 8.3(j) shall encumber any Equity
Interest of any Restricted Subsidiary;
(k) Liens created pursuant to any Hedging Agreement, provided that:
(i) such Lien is in the form of amounts on deposit in
cash-collateralized margin accounts; and
(ii) the aggregate amount of (A) all such deposits and (B) any
Letter of Credit Outstandings under Letters of Credit issued to support
obligations under any Hedging Agreement does not exceed $35,000,000;
(l) set-off, charge back and other rights of depositary and collection
banks and other regulated financial institutions with respect to money or
instruments of the Borrower or its Restricted Subsidiaries on deposit with or in
the possession of such institutions;
(m) Liens arising out of judgments or decrees not constituting an Event
of Default; provided that no action to enforce such Lien has commenced;
(n) Liens arising under indentures or other similar instruments
governing Indebtedness issued thereunder in favor of the trustees, agents or
representatives thereunder in their capacities as such (and not for the benefit
of the holders of such Indebtedness); provided that such Lien covers only
property constituting the trust estate or such property as may be collected or
held by such trustee, agent or representative in enforcing the payment of such
Indebtedness; and
(o) Liens arising from the deposit of money or securities in trust for
the purpose of defeasing Indebtedness of the Borrower or any Restricted
Subsidiary; provided that at the time such money or securities are deposited and
after giving effect thereto, the Borrower is in compliance with subsection 8.9.
8.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations of any Guarantor with respect to the 96
Senior Subordinated Notes, the 97 Senior Subordinated Notes and any Permitted
Subordinated Refinancing Debt;
(b) Guarantee Obligations in existence on the date hereof and listed on
Schedule 8.4;
(c) other Guarantee Obligations of the Borrower or any Guarantor of
Indebtedness permitted by subsection 8.2, provided that if the Indebtedness
guaranteed is Subordinated Indebtedness, then such Guarantee Obligation shall
also be subordinated either in a manner reasonably acceptable to the Required
Lenders as evidenced by their written approval or on terms substantially
identical to those contained in the guarantees of the 97 Indenture; and
(d) Guarantee Obligations arising under the Loan Documents.
58
8.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation as a constituent party, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
Property, business or assets, or make any material change in its present method
of conducting business except:
(a) (i) any Restricted Subsidiary of the Borrower (including a Foreign
Subsidiary) may be merged or consolidated with or into the Borrower (provided
that the Borrower shall be the continuing or surviving corporation) or with or
into any one or more Wholly-Owned Restricted Subsidiaries which are Domestic
Subsidiaries (provided that such Wholly-Owned Restricted Subsidiary or
Subsidiaries shall be the continuing or surviving Person) and (ii) any Foreign
Subsidiary of the Borrower may be merged or consolidated with or into any one or
more Wholly-Owned Restricted Subsidiaries which are Foreign Subsidiaries
(provided that such Wholly-Owned Restricted Subsidiary or Subsidiaries shall be
the continuing or surviving Person);
(b) (i) any Wholly-Owned Restricted Subsidiary (including a
Wholly-Owned Restricted Subsidiary which is a Foreign Subsidiary) of the
Borrower may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Wholly-Owned Restricted Subsidiary which is a Domestic Subsidiary and (ii) any
Wholly-Owned Restricted Subsidiary of the Borrower which is a Foreign Subsidiary
may sell, lease, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to any Wholly-Owned Restricted Subsidiary
which is a Foreign Subsidiary; and
(c) any Wholly-Owned Restricted Subsidiary may be merged or
consolidated with any Person acquired in connection with a Permitted Business
Acquisition made in the ordinary course of the Oil and Gas Business, provided
the continuing or surviving Person shall be a Wholly-Owned Restricted
Subsidiary.
8.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, receivables and leasehold interests), whether now owned or
hereafter acquired, or issue or sell any shares of any Restricted Subsidiary's
Equity Interests to any Person other than the Borrower or any Domestic
Wholly-Owned Restricted Subsidiary, except:
(a) the sale or discount without recourse of any accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(b) the sale of Hydrocarbons in the ordinary course of business as and
when produced or after the production thereof;
(c) as permitted by subsection 8.5(b) or subsection 8.15;
(d) the abandonment, farm-out, exchange, lease or sublease of Oil and
Gas Properties not containing Proved Reserves in the ordinary course of
business;
(e) the sale of Oil and Gas Properties in connection with tax credit
transactions complying with Section 29 of the Code or any other analogous
provision whether now existing or hereafter enacted, which sale does not result
in a reduction in the Borrower's or its Restricted Subsidiaries', as
59
the case may be, right to receive the cash flow from such Oil and Gas Properties
and which sale is on terms reasonably acceptable to the Administrative Agent;
(f) sales or other dispositions of Proved Reserves or Equity Interests
in any Restricted Subsidiary owning Proved Reserves, provided that (i) if
availability under this Agreement is to be governed by a borrowing base, the
amount of all sales or other dispositions of Proved Reserves or of Equity
Interests in Restricted Subsidiaries owning Proved Reserves made pursuant to
this subsection 8.6(f) during any Borrowing Base Period may not exceed
$25,000,000, unless, simultaneously with any such sale or disposition which
(together with prior sales or other dispositions made pursuant to this
subsection 8.6(f) during such Borrowing Base Period) exceeds the foregoing
limit, the Borrowing Base is adjusted by an amount agreed to at the time by the
Supermajority Lenders pursuant to the procedures set forth in subsection 4.9,
and if availability under this Agreement is not then being governed by a
borrowing base, the amount of all sales and other dispositions of Proved
Reserves or of Equity Interests in Restricted Subsidiaries owning Proved
Reserves made pursuant to this subsection 8.6(f) during any twelve-month period
may not exceed $30,000,000; (ii) any sale or disposition of Equity Interests in
a Restricted Subsidiary must be of all Equity Interests owned, directly or
indirectly, by the Borrower; and (iii) any conversion of a Restricted
Subsidiary, which owns, directly or indirectly, Proved Reserves, to an
Unrestricted Subsidiary in conformity with subsection 8.17 shall be deemed to be
a sale of such Proved Reserves for purposes of this subsection 8.6;
(g) sales or other dispositions of Property not constituting Oil and
Gas Properties, accounts receivable or Equity Interests in any Restricted
Subsidiaries; and
(h) dispositions occurring as the result of a casualty event, event of
loss, condemnation or expropriation.
8.7 Limitation on Restricted Payments. Declare or pay any dividend on
(other than dividends payable solely in Equity Interests of the Borrower other
than Disqualified Stock), or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Equity Interests
of the Borrower or any Restricted Subsidiary, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or Property or in obligations of the Borrower or
any Restricted Subsidiary (such declarations, payments, setting apart,
purchases, redemptions, defeasance, retirements, acquisitions and distributions
being herein called "Restricted Payments"), except that:
(a) the Borrower or any Restricted Subsidiary may declare and pay
dividends to or make other Restricted Payments to the Borrower or to any
Wholly-Owned Restricted Subsidiary;
(b) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, the Borrower or any Restricted Subsidiary
may make a Restricted Payment if such Restricted Payment, together with the
aggregate of all other Restricted Payments made by the Borrower and its
Restricted Subsidiaries after the Closing Date pursuant to this subsection
8.7(b), is less than the sum of:
(i) 50% of the Consolidated Net Income of the Borrower and its
Restricted Subsidiaries for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing after the
Closing Date to the end of the Borrower's most recently
60
ended fiscal quarter for which financial statements have been delivered
to the Administrative Agent and the Lenders pursuant to subsection 7.1
at or prior to the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus
(ii) 50% of (A) the aggregate net cash proceeds received from
the issue or sale after the Closing Date of Equity Interests in the
Borrower (other than Equity Interests sold to a Subsidiary of the
Borrower and other than Disqualified Stock) minus (B) the amount of any
Restricted Payment made under subsection 8.7(c)(ii)(B)(2) and any
Subordinated Indebtedness repaid, repurchased, redeemed or otherwise
defeased under subsection 8.9(a)(ii)(D), minus
(iii) the amount of Subordinated Indebtedness previously
redeemed or repurchased pursuant to subsection 8.9(a)(ii)(B) and minus
(iv) the amount by which the sum of all Investments previously
made in Unrestricted Subsidiaries pursuant to subsection 8.8(g) exceeds
$10,000,000;
provided, however, that the foregoing provisions of this paragraph shall not
prohibit Restricted Payments, which together with the aggregate of all other
Restricted Payments made by the Borrower and its Restricted Subsidiaries after
the Closing Date pursuant to this subsection 8.7(b) (in addition to all amounts
which are included in clauses (iii) and (iv) immediately preceding) do not
exceed $50,000,000. The amount of all Restricted Payments (other than cash)
under this subsection 8.7(b) shall be the fair market value (as determined in
good faith by the board of directors of the Borrower or certified to the
Administrative Agent by a Responsible Officer of the Borrower) on the date of
the proposed Restricted Payment.
(c) without limitation of the ability of the Borrower to purchase,
redeem, defease or otherwise acquire or retire any of its 6 1/2% Convertible
Preferred Stock under subsection 8.7(b),
(i) prior to April 1, 2002, the Borrower may purchase, redeem,
defease or otherwise acquire or retire any of its 6 1/2% Convertible
Preferred Stock if no Default or Event of Default has occurred and is
continuing or would result therefrom; and
(ii) on or after April 1, 2002, the Borrower may purchase,
redeem, defease or otherwise acquire or retire any of its 6 1/2%
Convertible Preferred Stock if (A) no Default or Event of Default has
occurred and is continuing or would result therefrom and (B) either (1)
the Borrower's senior unsecured debt rating is BB+ or better by S&P and
Ba1 or better by Xxxxx'x or (2) such purchase, redemption, defeasance
or other acquisition or retirement is made with the proceeds of any
issue or sale after April 1, 2002 of Equity Interests (other than
Equity Interests sold to a Subsidiary of the Borrower and other than
Disqualified Stock).
8.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or incur any Guarantee
Obligation on behalf or for the benefit of, or purchase any stock, bonds, notes,
debentures or other securities of or any assets constituting a business unit of,
or make any other investment (including by the issuance of letters of credit) in
(collectively, "Investments"), any Person except:
(a) extensions of trade credit in the ordinary course of business;
61
(b) Investments in Cash Equivalents;
(c) loans and advances to officers and employees of the Borrower or any
Restricted Subsidiary for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and its
Restricted Subsidiaries not to exceed $2,000,000 at any one time outstanding;
(d) Investments constituting Permitted Business Investments made or
entered into in the ordinary course of the Oil and Gas Business;
(e) Investments constituting Permitted Business Acquisitions made or
entered into in the ordinary course of the Oil and Gas Business;
(f) Investments by the Borrower in any Restricted Subsidiary and
Investments by any Restricted Subsidiary in the Borrower or in other Restricted
Subsidiaries or, if no Default or Event of Default has occurred and is
continuing or would result from such Investment, by either the Borrower or a
Restricted Subsidiary in a Person who after giving effect to such Investment
becomes a Restricted Subsidiary, provided that the net book value of Investments
made after the Closing Date in any Restricted Subsidiaries which (i) are
Domestic Subsidiaries but not Wholly-Owned Restricted Subsidiaries shall not
exceed $25,000,000 and (ii) are Foreign Subsidiaries shall not exceed 25% of the
net book value of the assets of the Borrower and its Restricted Subsidiaries in
the aggregate at any time outstanding after taking into account any return after
the Closing Date from dividends, distributions and repayments in respect of such
Investment;
(g) Investments by the Borrower or any Restricted Subsidiary in
Unrestricted Subsidiaries; provided that the aggregate amount of such
Investments (net of any cash received as dividends or distributions on such
Investments or from the sale of such Investments) does not exceed, at any one
time outstanding, $10,000,000, unless (after deducting that excess, pursuant to
subsection 8.7(b)(iv), from the amount of Restricted Payments permitted by
subsection 8.7(b)) the Borrower would be able to make, at such time, an
additional Restricted Payment pursuant to subsection 8.7(b); provided further
that the cumulative outstanding investment in any Restricted Subsidiary on the
date that such Restricted Subsidiary is converted to an Unrestricted Subsidiary
in conformity with subsection 8.17 shall be deemed an investment made on such
conversion date in an Unrestricted Subsidiary for purposes of determining
compliance with this subsection 8.8(g); and
(h) Investments by the Borrower or any Restricted Subsidiary in
securities which trade on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ Stock Market (including Investments existing on the
Closing Date and listed on Schedule 8.8 hereof, but excluding Investments in
Unrestricted Subsidiaries) in an aggregate amount (valued at cost) not to exceed
$25,000,000 at any one time outstanding.
The amount of all Investments (other than cash) (including, without
limitation, the re-characterization of a Restricted Subsidiary) to be an
Unrestricted Subsidiary shall be the fair market value (as determined in good
faith by the board of directors of the Borrower or certified to the
Administrative Agent by a Responsible Officer of the Borrower) on the date of
the proposed Investment.
8.9 Limitation on Optional Payments and Modifications of Debt
Instruments, Other Material Agreements.
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(a) Make any voluntary or optional payment or prepayment on or
redemption, defeasance or purchase of any Subordinated Indebtedness; provided
that as long as no Default or Event of Default has occurred or is continuing or
would exist after giving effect thereto, the Borrower may:
(i) prior to April 1, 2002, redeem or repurchase any or all of
the 96 Senior Subordinated Notes and the 97 Senior Subordinated Notes;
and
(ii) on or after April 1, 2002, redeem or repurchase any
Subordinated Indebtedness,
(A) through an incurrence of Permitted Subordinated
Refinancing Debt,
(B) to the extent that, after deducting the amount of the
proposed payment, prepayment, redemption, defeasance or repurchase,
pursuant to subsection 8.7(b)(iii), from the amount of Restricted
Payments permitted by subsection 8.7(b), the Borrower would be able to
make an additional Restricted Payment at such time pursuant to
subsection 8.7(b),
(C) if the Borrower's senior unsecured debt rating is BB+ or
better by S&P and Ba1 or better by Xxxxx'x, or
(D) through the issue or sale on or after April 1, 2002 of
Equity Interests in the Borrower (other than Equity Interests sold to a
Subsidiary of the Borrower and other than Disqualified Stock).
(b) Amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms (including the subordination
provisions) of any Subordinated Note Document other than (i) any amendment,
modification or change that, subject to the concurrence of the Administrative
Agent, causes such Subordinated Note Document to have terms generally less
restrictive than its terms immediately prior thereto; (ii) any amendment,
modification or change to a then-existing Subordinated Note Document to conform
the provisions thereof to the corresponding provisions of any Subordinated Note
Document governing newly issued Subordinated Indebtedness permitted by this
Agreement; and (iii) any amendment, modification or change that may be approved
by the Borrower and the trustee under the indenture governing such Subordinated
Indebtedness without the consent of any holders of such Subordinated
Indebtedness (other than changes to provide additional rights or benefits to
such holders).
(c) Designate any Indebtedness as "Designated Senior Debt" or any other
similar or analogous designation under any Subordinated Note Document or
designate any Guarantee Obligation as "Designated Guarantor Senior Debt" or any
other similar or analogous designation under any Subordinated Note Document.
8.10 Limitation on Transactions with Affiliates. Except as described in
Schedule 8.10, 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 transactions between or among the Borrower and
its Restricted Subsidiaries) unless such transaction is (a) otherwise permitted
under this Agreement, (b) in the ordinary course of the Borrower's or the
applicable Restricted Subsidiary's business and (c) upon fair and reasonable
terms no less favorable to the Borrower or the applicable Restricted Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate or, in the event no
comparable transaction with an unaffiliated Person is available, on terms that
are fair from a financial
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point of view to the Borrower or the applicable Restricted Subsidiary. For
purposes of this subsection 8.10, "Affiliate" shall include any Unrestricted
Subsidiary.
8.11 Limitation on Sale and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by the Borrower or any Restricted
Subsidiary of real or personal Property which has been or is to be sold or
transferred by the Borrower or such Restricted Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the Borrower or any
Restricted Subsidiary.
8.12 Limitation on Changes in Fiscal Year; Use of Proceeds. Permit the
fiscal year of the Borrower and its Restricted Subsidiaries to end on a day
other than December 31; or use the proceeds of any Loan or any Letter of Credit
for a purpose not contemplated by subsection 5.16.
8.13 Limitation on Negative Pledge Clauses. Enter into with any Person
any agreement which prohibits or limits the ability of the Borrower or any
Restricted Subsidiary to create, incur, assume or suffer to exist any Lien in
favor of any of the Administrative Agent, the Lenders under the Loan Documents
and their respective assignees under the Loan Documents or any Person
refinancing all or a portion of the Commitments hereunder (each, a "Negative
Pledge Clause"), upon any of its Property, assets or revenues, whether now owned
or hereafter acquired; provided that the foregoing shall not apply to a Negative
Pledge Clause to the extent such Negative Pledge Clause (i) (A) is contained in
an agreement which creates a Lien permitted by subsections 8.3(c), (f), (j), (k)
or (o) and (B) only applies to the Property encumbered by such Lien, or (ii) is
contained in a lease, license, asset sale agreement or other customary agreement
(not related to Indebtedness) that is entered into in the ordinary course of
business and relates only to the property subject of such lease, license, asset
sale agreement or other customary agreement.
8.14 Limitation on Lines of Business. Enter into any business, either
directly or through any Restricted Subsidiary, except for the Oil and Gas
Business and those businesses in which the Borrower and its Restricted
Subsidiaries are engaged on the date of this Agreement or which are directly
related thereto.
8.15 Forward Sales. Except in accordance with usual and customary
practice in the Oil and Gas Business and except for gas imbalances not in excess
of 5.0 billion cubic feet, enter into or permit to exist any advance payment
agreement or other arrangement pursuant to which the Borrower or any of its
Restricted Subsidiaries, having received full or substantial payment of the
purchase price for a specified quantity of Hydrocarbons upon entering such
agreement or arrangement, is required to deliver, in one or more installments
subsequent to the date of such agreement or arrangement, such quantity of
Hydrocarbons pursuant to and during the terms of such agreement or arrangement.
8.16 Hedging Agreements. Enter into any Hedging Agreement, other than
Hedging Agreements with Lenders, Affiliates of Lenders or other counterparties
having a long-term unsecured debt rating from S&P of BBB- or better (or its
equivalent) entered into in the ordinary course of business to achieve more
predictable revenues and cash flows and reduce exposure to fluctuations in
interest rates and oil and gas prices to which the Borrower and its Restricted
Subsidiaries are exposed in the conduct of their business or the management of
their liabilities, provided that the aggregate amount of Hedging Agreements
which are Commodity Price Risk Management Agreements may not exceed the
following: (i) for oil, the total volumes to be hedged for any period shall not
exceed 80% of the aggregate expected oil production of the Borrower and its
Restricted Subsidiaries for the
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period during which such Hedging Agreement is in effect, and (ii) for gas, the
total volumes to be hedged for any period shall not exceed 80% of the aggregate
expected gas production of the Borrower and its Restricted Subsidiaries for the
period during which such Hedging Agreement is in effect.
8.17 Unrestricted Subsidiaries.
(a) Create or otherwise designate any Subsidiary as an Unrestricted
Subsidiary unless the terms set forth in the definition of Unrestricted
Subsidiary are complied with respect to such Subsidiary and no Default would
result from the designation, creation and operation of such Unrestricted
Subsidiary.
(b) Without the prior written consent of the Supermajority Lenders,
change the characterization of a Subsidiary from a Restricted Subsidiary to an
Unrestricted Subsidiary or an Unrestricted Subsidiary to a Restricted
Subsidiary; provided however, the prior written consent of the Supermajority
Lenders shall not be required to (i) change the characterization of an
Unrestricted Subsidiary to a Restricted Subsidiary if (A) no Default or Event of
Default shall have occurred and be continuing at such time or would result
therefrom, (B) after giving effect to such re-characterization, each of the
representations and warranties made by each Loan Party in or pursuant to the
Loan Documents shall be true and correct in all material respects as of the date
of such re-characterization, (C) such Subsidiary shall have complied with the
provisions of subsection 7.9 and (D) the Borrower provides the Administrative
Agent five days advance written notice of its intent to re-characterize such
Subsidiary or (ii) change the characterization of a Restricted Subsidiary to an
Unrestricted Subsidiary if (A) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, assuming that such
re-characterization constitutes an Investment in an Unrestricted Subsidiary and
(B) the Borrower provides the Administrative Agent five days advance written
notice of its intent to re-characterize such Subsidiary. If any Restricted
Subsidiary is designated as an Unrestricted Subsidiary in accordance with the
terms of this Agreement, the Administrative Agent shall, and the Lenders hereby
instruct the Administrative Agent to, release, upon the written request of the
Borrower, such Subsidiary from any Guarantee Obligations arising under the Loan
Documents and the Equity Interests of such Subsidiary from the Liens created
under the Pledge Agreement; provided that such Subsidiary shall not have any
Guarantee Obligations with respect to, or Liens in favor of, any Subordinated
Indebtedness that are not so released. The Administrative Agent, at the
Borrower's request and expense, shall execute such releases, termination
statements or agreements as may be reasonably necessary to effect the release of
Guarantee Obligations under the Loan Documents or Liens created under the Pledge
Agreement.
(c) Permit any Unrestricted Subsidiary to fail to comply with the
requirements set forth in the definition of "Unrestricted Subsidiary."
(d) Permit the aggregate amount of Indebtedness outstanding at all
Unrestricted Subsidiaries to exceed at any time $25,000,000.
SECTION 9
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
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(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within three Business Days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) The Borrower or any of its Restricted Subsidiaries shall default in
the observance or performance of any agreement applicable to it contained in
subsection 4.10 or Section 8 of this Agreement; or
(d) The Borrower or any of its Restricted Subsidiaries shall default in
the observance or performance of any other agreement applicable to it contained
in this Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section 9), and such default shall continue
unremedied for a period of 30 consecutive days after the earlier of (i) the
Borrower's obtaining knowledge of such default or (ii) the receipt by the
Borrower of notice thereof from the Administrative Agent or any Lender; or
(e) The Borrower or any of its Restricted Subsidiaries shall (i)
default in any payment of principal of or interest of any Indebtedness (other
than the Loans), or in the payment of any Guarantee Obligation, in excess, in
the aggregate, of $10,000,000, beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required and the expiration of any
applicable grace period, such Indebtedness to become due prior to its stated
maturity or such Guarantee Obligation to become payable, provided that the
aggregate principal amount of all such Indebtedness and Guarantee Obligations
which would then become due and payable would equal or exceed $10,000,000; or
(f) (i) The Borrower or any of its Restricted Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Restricted Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Restricted Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
90 days; or (iii) there shall be commenced
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against the Borrower or any of its Restricted Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 90 days from
the entry thereof; or (iv) the Borrower or any of its Restricted Subsidiaries
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its Restricted Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Single Employer Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any Restricted Subsidiary involving in the aggregate a liability (to
the extent not paid or covered by insurance) of $5,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days after the entry thereof; or
(i) Either (i) the Pledge Agreement or the Subsidiary Guarantee shall
cease, for any reason, to be in full force and effect or the Lien created by the
Pledge Agreement shall cease to be enforceable and of the same effect and
priority purported to be created thereby and such cessation, in either case,
shall continue for a period of five days after the earlier of the Borrower's
obtaining knowledge of such cessation or the receipt by the Borrower of notice
thereof from the Administrative Agent or any Lender or (ii) any Pledgor or
Guarantor shall so assert in writing; or
(j) Either (i) the subordination provisions contained in any
Subordinated Note Document shall cease, for any reason, to be in full force and
effect and such cessation shall continue for a period of five days after the
earlier of the Borrower's obtaining knowledge of such cessation or the receipt
by the Borrower of notice thereof from the Administrative Agent or any Lender or
(ii) any Person that is a party thereto or holders of at least 25% of the
aggregate principal amount of such Subordinated Indebtedness shall so assert in
writing; or
(k) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (f) of this Section 9, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued and unpaid interest
thereon) and all other amounts owing under this Agreement
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(including, without limitation, all Letter of Credit Outstandings, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and the other Loan Documents shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by written
notice to the Borrower, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by written notice to the
Borrower, declare the Loans hereunder (with accrued and unpaid interest thereon)
and all other amounts owing under this Agreement (including, without limitation,
all amounts of Letter of Credit Outstandings, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents
required thereunder) and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then unexpired amount that is available to be drawn under such Letters
of Credit. The Borrower hereby grants to the Administrative Agent, for the
benefit of the Issuing Bank and the Lenders, a security interest in such cash
collateral to secure all obligations of the Borrower under this Agreement and
the other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired, been canceled or been fully drawn upon, if any, shall
be applied to repay other obligations of the Borrower hereunder and under the
Notes. After all such Letters of Credit shall have expired, been canceled or
been fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the Administrative Agent is hereby
authorized to, and shall, release the balance, if any, in such cash collateral
account to the Borrower. The Borrower shall execute and deliver to the
Administrative Agent, for the account of the Issuing Bank and the Lenders, such
further documents and instruments as the Administrative Agent may reasonably
request to evidence the creation and perfection of the within security interest
in such cash collateral account. Except as expressly provided above in this
Section 9, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 10
THE AGENTS
10.1 Appointment.
(a) Each Lender hereby irrevocably designates and appoints Chase as
Administrative Agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly 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. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement, the Administrative Agent shall
not have any duties or responsibilities, except those
68
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
(b) Each Lender hereby designates and appoints each of Credit Suisse
First Boston and Fleet National Bank as a Syndication Agent and each of Fortis
Capital Corp. and U.S. Bank National Association as a Documentation Agent, and
each such Lender irrevocably authorizes each such Agent, in such capacity, to
take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to such
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement, none of the Syndication Agents or the
Documentation Agents shall have any duties or responsibilities, except those
expressly set forth herein nor any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against such
Agents.
10.2 Delegation of Duties. Any Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
10.3 Exculpatory Provisions. No Agent nor any officer, director,
employee, agent, attorney-in-fact or Affiliate of any Agent shall be (i) liable
for any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement or any other Loan Document (except for its
or such Person's own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by any Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. No Agent
shall be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.
10.4 Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Loan Parties), independent accountants and other
experts selected by such Agent. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. Each Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders,
Supermajority Lenders or, where unanimous consent of the Lenders is expressly
required hereunder, all Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or
69
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders, the
Supermajority Lenders or, where unanimous consent of the Lenders is expressly
required hereunder, all Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
10.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; 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 or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that no Agent nor any officer, director, employee, agent,
attorney-in-fact or Affiliate of any Agent has made any representations or
warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of any Loan Party, shall be deemed to constitute any
representation or warranty by any such Agent to any Lender. Each Lender
represents to each Agent that it has, independently and without reliance upon
any Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of each Loan Party and made its own decision to make its Loans,
participate in Letters of Credit issued hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon any 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 credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of each Loan Party. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by an Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party which may come into
the possession of such Agent or any officer, director, employee, agent,
attorney-in-fact or Affiliate of such Agent.
10.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the obligations under this Agreement) be
imposed on, incurred by or asserted against such Agent in any way relating to or
arising out of, the Commitments, this Agreement, any of the other Loan Documents
or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from such Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the payment
of all obligations under this Agreement and all other amounts payable hereunder.
10.8 Agents in Their Individual Capacity. Each Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent hereunder
and under the other Loan Documents. With respect to the extensions of credit
made by it, each Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include such Agent in its individual capacity.
10.9 Successor Agents. Each Agent may resign from its position as an
Agent upon 30 days' notice to the Borrower and the Lenders. If any Agent shall
resign as such under this Agreement and the other Loan Documents, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent, with the consent of the Borrower (such consent
not to be unreasonably withheld or delayed), shall succeed to the rights, powers
and duties of its predecessor hereunder; provided that if any Default or Event
of Default shall have occurred and be continuing, the Borrower's consent shall
not be required to appoint a successor agent. Effective upon such appointment
and approval, all references to any Agent shall mean such successor agent, and
the retiring Agent's rights, powers and duties as such shall be terminated,
without any other or further act or deed on the part of such retiring Agent or
any of the parties to this Agreement or any holders of the Loans. After any
retiring Agent's resignation from its position as an Agent, the provisions of
this Section 10 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Agent under this Agreement and the other Loan
Documents.
10.10 Enforcement of Loan Documents.
(a) The Required Lenders may direct the time, method and place of
conducting any proceeding for any remedy available to the Administrative Agent
under any Loan Document or of exercising any power conferred on the
Administrative Agent. However, the Administrative Agent may refuse to follow any
direction that conflicts with law or this Agreement or would involve the
Administrative Agent in personal liability; provided, however, that the
Administrative Agent may take any other action deemed proper by the
Administrative Agent that is not inconsistent with such direction. Each Lender
shall have the independent right to enforce the right to receive payment of
principal or interest when due (or other amounts due to a Lender hereunder),
provided that no Lender shall have the right to enforce the Liens granted to the
Administrative Agent under the Loan Documents. A Lender may not use this
Agreement or any other Loan Document to prejudice the rights of another Lender
or to obtain a preference or priority over another Lender and the right of each
Lender to receive payment of principal of and interest on the Loans made by such
Lender, on or after the Termination Date or to bring suit for the enforcement of
any such payment shall not be impaired or affected without the consent of such
Lender.
(b) The Administrative Agent may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding.
The Administrative Agent may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Agents and the Lenders allowed in any judicial proceedings relative to the
Borrower or any Restricted Subsidiary or their respective creditors or
properties and, unless
71
prohibited by law or applicable regulations, may vote on behalf of the Lenders
in any election of a trustee in bankruptcy or other Person performing similar
functions, and any custodian in any such judicial proceeding is hereby
authorized by each Lender to make payments to the Administrative Agent. In the
event that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due it
for the compensation, expenses, disbursements and advances of the Administrative
Agent, its agents and its counsel, and any other amounts due the Administrative
Agent under subsection 10.7.
10.11 Issuing Bank. The provisions of this Section 10 applicable to the
Administrative Agent shall apply to the Issuing Bank in the performance of its
duties under the Loan Documents, mutatis mutandis.
SECTION 11
MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the applicable
Loan Parties written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the applicable Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the principal amount of any Loan or
extend the Termination Date, or reduce the stated rate of any interest or fee
payable hereunder or extend the scheduled date of any payment thereof
(including, without limitation, any payment required under subsection 4.10) or
increase the amount or extend the expiration date of any Lender's Commitment, in
each case without the consent of each Lender affected thereby, or (ii) amend,
modify or waive any provision of this subsection or reduce the percentage
specified in the definition of Required Lenders or Supermajority Lenders (or
modify any provision of this Agreement or any other Loan Document to provide
that an action currently requiring the approval of or consent by the
Supermajority Lenders or all Lenders may be taken with the consent or approval
by a lower percentage of Lenders), or consent to the assignment or transfer by
any Loan Party of any of its rights and obligations under this Agreement and the
other Loan Documents or release of any of the Pledged Securities or any
Guarantor, other than in accordance with the terms of the applicable Loan
Documents, in each case without the written consent of all the Lenders and the
Borrower, or (iii) change subsection 4.8(a) or subsection 11.7(a) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, or (iv) amend, modify or waive any provision of
Section 10 without the written consent of the then Administrative Agent and
Issuing Bank and any other Agent then affected by such action. Any such waiver
and any such amendment, supplement or modification shall be binding upon the
Loan Parties, the Lenders, the Agents and all future holders of the Loans. In
the case of any waiver, the Loan Parties, the Lenders and the Administrative
Agent shall be restored to their former positions and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
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11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by courier service, when delivered, (b) in the case of delivery by mail, three
Business Days after being deposited in the mails, postage prepaid, or (c) in the
case of delivery by facsimile transmission, when sent and receipt has been
confirmed, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in Schedule 11.2 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto in writing:
the Borrower: Westport Resources Corporation
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx XxXxxx
Fax: (000) 000-0000
Tel.: (000) 000-0000
the Administrative
Agent: The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Loan and Agency Services,
Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
Tel.: (000) 000-0000
With a copy to:
The Chase Manhattan Bank
000 Xxxxxx Xxxxxx, 00xx xxxxx
Xxxxxxx, Xxxxx 00000
Attention: June Brand
Fax: (000) 000-0000
Tel.: (000) 000-0000
and for other correspondence other than borrowings, continuation, conversion and
Letter of Credit requests:
The Chase Manhattan Bank
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxxxxx
Fax: (000) 000-0000
Tel.: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or any Lender pursuant to subsection 2.2, 4.3, 4.5 or 4.8 shall not be effective
until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent, the Issuing Bank or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single
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or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
11.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and its Affiliates for all their reasonable
and documented out-of-pocket costs and expenses incurred in connection with the
development, syndication, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of one counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the Administrative
Agent for all its reasonable and documented costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and the Lenders, (c) to pay, indemnify, and hold each
Lender and each Agent (and their respective Affiliates and their respective
directors, officers, employees and agents) (each an "Indemnitee") harmless from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and other taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Indemnitee harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents or the use or the proposed use of proceeds contemplated by
this Agreement, including, without limitation, any of the foregoing relating to
the Merger or any violation of, noncompliance with or liability under, any
Environmental Law applicable to any Loan Party or any of the Properties (all the
foregoing in this subsection 11.5(d), collectively, the "indemnified
liabilities"); provided that the Borrower shall have no obligation under
subsection 11.5(d) to any Indemnitee with respect to indemnified liabilities to
the extent such liabilities (A) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (B) are asserted by any
Indemnitee against another Indemnitee; provided further that the Borrower shall
not be liable under this subsection 11.5(d) for the legal expenses of more than
one primary firm or more than one local counsel in each state or other
jurisdiction in which an indemnifiable action is brought unless the use of one
primary firm or one local counsel by the indemnified parties would present such
firm or counsel with a conflict of interest. Without limiting the foregoing, and
to the extent permitted by applicable law, the Borrower agrees not to assert,
and hereby waives, and to cause each of its Restricted Subsidiaries not to
assert and to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee.
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The agreements in this subsection shall survive repayment of the Loans and all
other amounts payable hereunder and the termination of this Agreement.
11.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, each Lender, each Agent, all future holders of the Loans and any
Notes hereunder and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking or
lending business and in accordance with applicable law and at no cost or expense
to the Borrower, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, (i) such Lender's obligations under
this Agreement to the other parties to this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible for the performance thereof,
(iii) such Lender shall remain the holder of any such Loan (and any Note
evidencing such Loan) for all purposes under this Agreement and the other Loan
Documents, (iv) the Borrower and each Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents, and (v) in any
proceeding under the Bankruptcy Code, the Lender shall be, to the extent
permitted by law, the sole representative with respect to the obligations held
in the name of such Lender, whether for its own account or for the account of
any Participant. No Lender shall be entitled to create in favor of any
Participant, in the participation agreement pursuant to which such Participant's
participating interest shall be created or otherwise, any right to vote on,
consent to or approve any matter relating to this Agreement or any other Loan
Document except for those specified in clauses (i) and (ii) of the proviso to
subsection 11.1. The Borrower agrees that each Participant shall be entitled to
the benefits of subsections 4.13 and 4.14 with respect to its participation in
the Commitments and the Loans and Letters of Credit outstanding from time to
time as if it was a Lender; provided that, in the case of subsection 4.13, such
Participant shall have complied with the requirements of said subsection and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its commercial banking or
lending business and in accordance with applicable law, at any time and from
time to time, assign to any Lender or (with the prior written consent of each
Issuing Bank) any Affiliate thereof or (with the prior written consent of the
Administrative Agent and, so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower, which consent, in each case, shall not
be unreasonably withheld or delayed), to an additional bank or financial
institution or other entity (an "Assignee") all or any part of its rights and
obligations under this Agreement and the other Loan Documents including, without
limitation, its Commitments, Loans and any participation interests in Letters of
Credit, pursuant to an Assignment and Acceptance executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender, by
the Borrower, the Administrative Agent and each Issuing Bank) and delivered to
the Administrative Agent for its acceptance and recording in the Register,
provided that (i) (unless the Borrower and the Administrative Agent otherwise
consent in writing) no such transfer to an Assignee (other than a
75
Lender or any Affiliate thereof) shall be in an aggregate principal amount less
than $5,000,000 in the aggregate (or, if less, the full amount of such assigning
Lender's Commitments, Loans and participation interests in Letters of Credit)
and (ii) if any Lender assigns all or any part of its rights and obligations
under this Agreement to one of its Affiliates in connection with or in
contemplation of the sale or other disposition of its interest in such
Affiliate, the Borrower's prior written consent shall be required for such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and L/C Commitment as set forth therein, and (y) the
assigning Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Notwithstanding any provision of this
paragraph (c) and paragraph (e) of this subsection, the consent of the Borrower
shall not be required, and, unless requested by the Assignee and/or the
assigning Lender, new Notes shall not be required to be executed and delivered
by the Borrower, for any assignment which occurs at any time when any of the
events described in paragraph (f) of Section 9 shall have occurred and be
continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall maintain
at the address of the Administrative Agent referred to in subsection 11.2 a copy
of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names, addresses and banking offices of
the Lenders and the Commitments of, and principal amounts of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective against third
parties only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Notwithstanding anything in this Agreement to the contrary, no
assignment under subsection 11.6(c) of any rights or obligations under or in
respect of the Loans, the Notes or the Letters of Credit shall be effective
unless and until the Administrative Agent shall have recorded the assignment
pursuant to subsection 11.6(d). Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the Borrower and the
Administrative Agent) together with payment to the Administrative Agent of a
registration and processing fee of $3,500 (other than in the case of an
assignment by a Lender to an affiliate of such Lender), the Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower and furnish to the Borrower and each Lender a
revised Schedule 1.1(a) reflecting the Commitment and Commitment Percentage of
each Lender. On or prior to such effective date, the assigning Lender shall
surrender any outstanding Notes held by it all or a portion of which are being
assigned, and the Borrower, at its own expense, shall, upon the request to the
Administrative Agent by the assigning Lender or the Assignee, as applicable,
execute and deliver to the Administrative Agent (in exchange for the outstanding
Notes of the assigning
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Lender) a new Note to the order of such Assignee in an amount equal to the
lesser of (A) the amount of such Assignee's Commitment and (B) the aggregate
principal amount of all Loans made by such Assignee, after giving effect to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder, a new Note to the order of the assigning Lender in an amount equal to
the lesser of (A) the amount of such Lender's Commitment and (B) the aggregate
principal amount of all Loans made by such Lender, after giving effect to such
Assignment and Acceptance. Any such new Notes shall be dated the Closing Date
and shall otherwise be in the form of the Note replaced thereby. The assigning
Lender shall promptly return its old Note to the Borrower marked "canceled".
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, any and all
financial information in such Lender's possession concerning the Loan Parties
and their Affiliates which has been delivered to such Lender by or on behalf of
the Borrower pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Loan Parties and their Affiliates prior to becoming a party to
this Agreement; provided such Person agrees to maintain the confidentiality of
such information in accordance with subsection 11.15.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
11.7 Adjustments; Set-off.
(a) If any Lender (a "Benefited Lender") shall at any time receive any
payment of all or part of its Loans or Reimbursement Obligations, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in paragraph (f) of Section 9 or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans or Reimbursement Obligations, or interest
thereon, such Benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans or
Reimbursement Obligations, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such Benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, during the continuation of an Event of
Default, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final but excluding deposits held by the Borrower as a fiduciary
for others), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or
77
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower, as the case may be. Each Lender agrees promptly to notify the Borrower
and the Administrative Agent after any such set-off and application made by such
Lender, provided that, to the extent permitted by applicable law, the failure to
give such notice shall not affect the validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
11.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the other Loan Parties, the Agents and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
78
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
11.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) no Agent nor any Lender has any fiduciary relationship with or duty
to the Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Agents and the
Lenders, on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Agents and the Lenders or among the Borrower, the Agents and the Lenders.
11.14 WAIVERS OF JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. Each of the Agents, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this subsection 11.15, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this subsection 11.15 or (ii) becomes available to
any Agent, the Issuing Bank or any Lender on a nonconfidential basis from a
source other than the Borrower. For the purposes of this subsection 11.15,
"Information" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
an Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to
disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this subsection 11.15 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
WESTPORT RESOURCES CORPORATION
By: /s/ XXX XXXXXX
-------------------------------------
Name: Xxx XxXxxx
Title: Vice President and Chief
Financial Officer
SIGNATURE PAGE TO
CREDIT AGREEMENT
1
THE CHASE MANHATTAN BANK, as
Administrative Agent, Issuing Bank
and as a Lender
By: /s/ XXXXXX X. XXXXXXXXXXX
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
------------------------------------------
Title: Managing Director
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
Xxx Xxxxx Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Address for Notices:
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
with copy to:
The Chase Manhattan Bank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: June Brand
SIGNATURE PAGE TO
CREDIT AGREEMENT
2
CREDIT SUISSE FIRST BOSTON, as
Syndication Agent and as a Lender
By: /s/ XXXXX X. XXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxx
------------------------------------------
Title: Director
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Address for Notices:
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxx
with copy to:
0 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxxx
SIGNATURE PAGE TO
CREDIT AGREEMENT
3
FLEET NATIONAL BANK, as
Syndication Agent and as a Lender
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
000 Xxxxxxx Xxxxxx
XX XX 00000X
Xxxxxx, XX 00000
Address for Notices
Global Energy
000 Xxxxxxx Xxxxxx
XX XX 00000X
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
With a copy to:
Global Energy
000 Xxxxxxx Xxxxxx
XX XX 00000X
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
SIGNATURE PAGE TO
CREDIT AGREEMENT
4
FORTIS CAPITAL CORP., as
Documentation Agent and as a Lender
By: /s/ XXXXXXX XXXXXXX
----------------------------------------------
Name: Xxxxxxx Xxxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
By: /s/ XXXXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Managing Director
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Address for Notices
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
With copy to:
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx
SIGNATURE PAGE TO
CREDIT AGREEMENT
5
U.S. BANK NATIONAL ASSOCIATION, as
Documentation Agent and as a Lender
By: /s/ XXXXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
000 00xx Xxxxxx, XXXX0000
Xxxxxx, XX 00000
Address for Notices:
000 00xx Xxxxxx, XXXX0000
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxx XxXxxxx
with copy to:
000 XX Xxx
Xxxxxxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxx Xxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
6
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ XXXXXX XXXXXXX
----------------------------------------------
Name: Xxxxxx Xxxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Address for Notices
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
With copy to:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
7
TORONTO DOMINION (TEXAS), INC., as a Lender
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Address for Notices
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
With copy to:
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
8
UNION BANK OF CALIFORNIA, N.A., as a Lender
By: /s/ XXX XXXXX
----------------------------------------------
Name: Xxx Xxxxx
------------------------------------------
Title: Assistant Vice President
-----------------------------------------
By: /s/ XXXXXXX XXXXXXXXX
----------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
------------------------------------------
Title: Senior Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
000 Xxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Address for Notices:
000 Xxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (214) 4200
Attention: Xxx Xxxxx
with copy to:
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
9
THE BANK OF NEW YORK, as a Lender
By: /s/ XXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Address for Notices
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
With copy to:
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxxxxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
10
COMERICA BANK - TEXAS, N.A., as a Lender
By: /s/ XXXXXX X. XXXXX
----------------------------------------------
Name: Xxxxxx X. Xxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
0000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Teas 75201
Address for Notices
0000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
11
THE FUJI BANK, LIMITED, as a Lender
By: /s/ XXXXXXXXX XXX
----------------------------------------------
Name: Xxxxxxxxx Xxx
------------------------------------------
Title: Vice President and Manager
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Address for Notices:
0 Xxxxxxx Xxxxxx, Xxxxx 0000
0000 XxXxxxxx Xx., Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxx
with copy to:
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
12
CHRISTIANIA BANK OG KREDITKASSE ASA, as a Lender
By: /s/ XXXXX X. XXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxx
------------------------------------------
Title: Senior Vice President
-----------------------------------------
By: /s/ XXXXXX XXXXXXXX
----------------------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
00 Xxxx 00 Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Address for Notices:
00 Xxxx 00 Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxx
with copy to:
00 Xxxx 00 Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxxxx XX
SIGNATURE PAGE TO CREDIT AGREEMENT
13
THE SANWA BANK LIMITED, as a Lender
By: /s/ XXXXX XXXXXXX
----------------------------------------------
Name: Xxxxx Xxxxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Address for Notices
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: C. Xxxxxxxx Xxxxxx
With copy to:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
14
XXXXX FARGO BANK, N.A., as a Lender
By: /s/ XXXXXXX X. XXXXX
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------
Title: Vice President
-----------------------------------------
Lending Office for Eurodollar and Base Rate Loans:
0000 Xxxxxxxx
Xxxxxx, XX 00000
Address for Notices:
0000 Xxxxxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxxx
with copy to:
0000 Xxxxxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxx-Xxxxxxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
15
NATEXIS BANQUES POPULAIRES,
as a Lender
By: /s/ XXXXXXX XXXXXXXXX
-----------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
By: /s/ XXXXXX X'XXXXXX
-----------------------------------------------
Name: Xxxxxx x'Xxxxxx
Title: Senior Vice President and Regional Manager
Lending Office for Eurodollar and Base Rate Loans:
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Address for Notices
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx XxXxxxxxxx
With copy to:
Natexis Banques Populaires
New York Branch
000 0xx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx Xxxx
SIGNATURE PAGE TO CREDIT AGREEMENT
16
