Derivative Contracts. The Borrower shall not enter into or in any manner be liable under any Derivative Contract except: (a) Derivative Contracts as required under Section 5.21; (b) Derivative Contracts entered into with the purpose and effect of hedging prices on hydrocarbons attributable to the Borrowing Base Properties and expected to be produced by the Borrower provided that at all times: (i) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of no more than twenty-four (24) months; (ii) no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent (75%) of total estimated hydrocarbons to be produced for any month from the proved developed producing Oil and Gas Properties as so designated in the most recent reserve report furnished by the Borrower under this Agreement; (iii) each such contract shall be with an Acceptable Counter-party; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower to put up money, letters of credit, assets, or any other security against the event of its nonperformance prior to actual default by the Borrower in performing obligations thereunder; and (c) Derivative Contracts entered into with the purpose and effect of hedging interest rates on a principal amount of Debt of the Borrower that is accruing interest at a variable rate, provided that (i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt of Borrower to be hedged by such contract and in no event shall the term of such contract extend beyond the Termination Date; (ii) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower to put up money, letters of credit, assets, or any other security against the event of its nonperformance prior to actual default by the Borrower in performing obligations thereunder.
Appears in 1 contract
Samples: Credit Agreement (Cubic Energy Inc)
Derivative Contracts. (a) The Borrower Company and each Guarantor shall not, and shall not permit any of its respective Subsidiaries to, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(bi) Derivative Contracts entered into with the purpose and effect of hedging fixing prices on hydrocarbons attributable to the Borrowing Base Properties and oil or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of no more than twenty-four (24) monthsspeculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent 8.10(a)(i), but excluding Derivative Contracts described in clause (75%v) of this Section 8.10, shall cover a notional volume in excess of the Applicable Percentage of the total estimated hydrocarbons Projected Oil and Gas Production to be produced for in any month from the proved developed producing Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent reserve report furnished by the Borrower under this AgreementReserve Report; (iii) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with an Acceptable Counterthe Administrative Agent, or any of the Lenders, the First Lien Credit Agent or any First Lien Lender or with a counterparty or have a guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Mxxxx’x; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, assets, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the Collateral Trustee for the benefit of the Secured Parties under the Security Documents or the First Liens; andand (v) with respect to Derivative Contracts under which the Company’s, a Guarantor’s or any of their respective Subsidiaries’ only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) either (1) there exists no deferred obligation to pay the related premium or other purchase price or (2) if there exists any deferred obligation to pay the related premium or other purchase price, the Company’s, such Guarantor’s or such Subsidiary’s aggregate net exposure does not exceed at any time prior to April 30, 2006, $15,000,000, and at any time thereafter until April 30, 2007, $5,000,000, following which date no such contracts are permitted to exist and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(cii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent; or
(iii) Derivative Contracts entered into with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate; provided, provided however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract, (iii) no event shall the term of such contract extend beyond requires the Termination Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement as in effect on the Effective Date; ) during any Borrowing Base Period (iias defined in the First Lien Credit Agreement as in effect on the Effective Date), and (v) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract a Lender or with a counter-party other than the Lender counterparty or Affiliate have a guarantor of the Lender requires obligation of the Borrower to put up moneycounterparty who, letters of creditat the time the contract is made, assetshas long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Moody’s.
(b) In the event the Company enters into a Derivative Contract with any other security Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the event Effective Amount. The benefits of its nonperformance prior the Security Documents and of the provisions of the Loan Documents relating to actual default by the Borrower Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in performing obligations thereunderrespect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Samples: Term Loan Agreement (Venoco, Inc.)
Derivative Contracts. The Borrower shall not No Loan Party shall, or permit any of its Subsidiaries to, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(b) Derivative Contracts entered into by the Company with the purpose and effect of hedging prices on hydrocarbons attributable to limiting or reducing the Borrowing Base Properties market price risk of Oil and Gas expected to be produced by the Borrower Company and each Subsidiary provided that at all times: (i) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of no more than twenty-four sixty (2460) months; (ii) no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 8.10(a) (but excluding put option contracts that are not related to corresponding calls, collars or swaps) requires the Borrower Loan Parties to deliver more than seventy-five percent (75%) 85% of the reasonably anticipated production for each month for the total estimated hydrocarbons to be produced for any month from the Oil and Gas classified as either “proved producing” or “proved developed producing non-producing” on (x) the Company’s Oil and Gas Properties as so designated in covered under the most recent reserve report furnished Reserve Report delivered to the Administrative Agent and (y) any Oil and Gas Properties acquired by the Borrower under this Agreement; Company after the effective date of such Reserve Report classified as “proved producing” or “proved developed non-producing,” (provided however, the “proved developed non-producing” reserves included in such calculation shall not exceed 20% of the “proved producing” reserves) and (iii) each such contract shall be between the Company or a Subsidiary and any of the Lenders or their Affiliates, or with an Acceptable Counterunsecured counterparty or have a guarantor of the obligation of the unsecured counterparty who, at the time the contract is made, has long-party; term obligations rated BBB+ or Baal or better, respectively, by Standard & Poor’s Corporation or Xxxxx’x Investors Services, Inc. (or a successor credit rating agency) (excluding (x) Derivative Contracts offered by national commodity exchange for which no credit rating is required and (ivy) no the Florida Crude Oil Purchase Contracts for so long as such contract contracts are with Plains Marketing, L.P. or a counter-party other than the Lender or Affiliate wholly owned subsidiary of the Lender requires the Borrower to put up moneyPlains All American Pipeline, letters of credit, assets, or any other security against the event of its nonperformance prior to actual default by the Borrower in performing obligations thereunder; andL.P.);
(cb) Derivative Contracts entered into by the Company with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate, provided that (i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in no event shall the term of such contract extend beyond the Termination Date; contract, (ii) no such contract, except those with a Lender or its Affiliate, when aggregated with all Derivative Contracts permitted under Sections 8.10(a) and (b), requires the Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing obligations thereunder, and (iii) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract with a counter-party other than the Lender or Affiliate its Affiliate, or with an unsecured counterparty or have a guarantor of the Lender requires obligation of an unsecured counterparty who, at the Borrower to put up moneytime the contract is made, letters of credithas long-term obligations rated A+ or A1 or better, assetsrespectively, by Standard & Poor’s Corporation or any other security against Xxxxx’x Investors Services, Inc. (or a successor credit rating agency);
(c) In the event of a Derivative Contract between the Company and any of the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. Any Indebtedness to any Lender or its nonperformance prior Affiliate incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 11.11; and
(d) The Company shall not modify in any material respect or terminate any Derivative Contracts to actual default by which it is currently a party or subsequently becomes a party without the Borrower consent of the Majority Lenders, except that Derivative Contracts with a party who ceases to be a Lender (or an Affiliate of a Lender) may be terminated in performing obligations thereunderconnection with the assignment, amendment or other transaction pursuant to which such party ceases to be a Lender or an Affiliate of a Lender.
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Derivative Contracts. The Borrower shall not No Loan Party shall, or permit any of its Subsidiaries to, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(b) Derivative Contracts entered into by the Company with the purpose and effect of hedging prices on hydrocarbons attributable to limiting or reducing the Borrowing Base Properties market price risk of Oil and Gas expected to be produced by the Borrower Company and its Subsidiaries provided that at all times: (i) the aggregate of all each such Derivative Contracts Contract limits or reduces such market price risk for a term of no more than twenty-four sixty (2460) months; (ii) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 8.10(a) (but excluding put option contracts or similar “floor” arrangements) requires the Borrower Loan Parties and BEP I, collectively, to deliver more than seventy-five percent (75%) 85% of the reasonably anticipated production for each month for the total estimated hydrocarbons to be produced for any month from the Oil and Gas classified as either “proved producing” or “proved developed producing non-producing” on (x) the Oil and Gas Properties as so designated in covered under the most recent reserve report furnished Reserve Report delivered to the Administrative Agent and (y) any Oil and Gas Properties acquired by the Borrower under this Agreement; Loan Parties or BEP I after the effective date of such Reserve Report classified as “proved producing” or “proved developed non-producing,” (provided however, the “proved developed non-producing” reserves included in such calculation shall not exceed 20% of the “proved producing” reserves), provided, however, that with regard to a "costless collar" that involves the purchase of a put and the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be included in calculating the 85% threshold, and (iii) each such contract shall be between the Company and a Lender Derivative Provider, or with an Acceptable Counterunsecured counterparty or have a guarantor of the obligation of the unsecured counterparty who, at the time the contract is made, has long-party; term obligations rated BBB+ or Baal or better, respectively, by Standard & Poor’s Corporation or Xxxxx’x Investors Services, Inc. (or a successor credit rating agency) (excluding (x) Derivative Contracts offered by national commodity exchange for which no credit rating is required and (ivy) no the Florida Crude Oil Purchase Contracts for so long as such contract contracts are with Plains Marketing, L.P. or a counter-party other than the Lender or Affiliate wholly owned subsidiary of the Lender requires the Borrower to put up moneyPlains All American Pipeline, letters of credit, assets, or any other security against the event of its nonperformance prior to actual default by the Borrower in performing obligations thereunder; andL.P.);
(cb) Derivative Contracts entered into by the Company with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate, provided that (i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in no event shall the term of such contract extend beyond the Termination Date; contract, (ii) no such contract, except those with a Lender or its Affiliate, when aggregated with all Derivative Contracts permitted under Sections 8.10(a) and (b), requires the Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing obligations thereunder, and (iii) each such contract shall be with a Lender Derivative Provider, or with an Acceptable Counter-party; and (iii) no such contract with unsecured counterparty or have a counter-party other than the Lender or Affiliate guarantor of the Lender requires obligation of an unsecured counterparty who, at the Borrower to put up moneytime the contract is made, letters of credithas long-term obligations rated A+ or A1 or better, assetsrespectively, by Standard & Poor’s Corporation or any other security against Xxxxx’x Investors Services, Inc. (or a successor credit rating agency);
(c) In the event of its nonperformance a Derivative Contract between the Company and any of the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. Any obligation of a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all other Obligations as more particularly provided under Section 9.02 and 11.11; and
(d) The Company shall not modify in any material respect to the extent it adversely affects the then-current Borrowing Base or terminate any Derivative Contracts to which it is currently a party or subsequently becomes a party without the consent of the Administrative Agent, except that (i) Derivative Contracts with a party who ceases to be a Lender (or an Affiliate of a Lender) may be terminated in connection with the assignment, amendment or other transaction pursuant to which such party ceases to be a Lender or an Affiliate of a Lender, and (ii) so long as no Default or Event of Default exists, Derivative Contracts may be modified or terminated, provided that, the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to actual default or in connection with, such modification or termination), as determined by the Borrower Administrative Agent, plus the aggregate value (as determined by the value assigned to such properties under the most recent Reserve Report) of all Dispositions of Oil and Gas Properties made by the Loan Parties during such period, together, shall not exceed in performing obligations thereunderany Borrowing Base Period five percent (5%) of the Borrowing Base then in effect; further provided that, the Borrowing Base shall be automatically reduced by an amount equal to the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination) and to the extent a Borrowing Base Deficiency results from such reduction, up to one-hundred (100%) of the cash and cash equivalent proceeds of such modifications or terminations of Derivative Contracts received by the Loan Parties, net of payment of, or provisions for reasonable out-of-pocket fees, expenses and taxes incurred by the Company in connection with such transaction, shall be applied, as necessary, to cure such Borrowing Base Deficiency.
Appears in 1 contract
Derivative Contracts. (a) The Borrower Company and each Guarantor shall not not, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(bi) Derivative Contracts entered into with the purpose and effect of hedging fixing prices on hydrocarbons attributable to the Borrowing Base Properties and oil or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of no more than twenty-four (24) monthsspeculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent 8.10(a)(i), but excluding Derivative Contracts described in clause (75%v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total estimated hydrocarbons Projected Oil and Gas Production to be produced for in any month from the proved developed producing Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent reserve report furnished by the Borrower under this AgreementReserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with an Acceptable Counterthe Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the Second Lien Credit Agent or any Second Lien Credit Lender (or Affiliate of a Second Lien Credit Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx’x; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, Property, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents or the Liens securing Obligations (as defined in the Second Lien Term Loan Agreement); andand (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(cii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iii) Derivative Contracts entered into with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate; provided, provided however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract; (iii) no event shall the term of such contract extend beyond requires the Termination DateCompany to put up money, Property, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iiiv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base during any Borrowing Base Period; and (v) each such contract shall be with a Lender (or an Acceptable Counter-party; and (iiiAffiliate of a Lender) no such contract or with a counter-party other than the Lender counterparty or Affiliate have a guarantor of the Lender requires obligation of the Borrower to put up moneycounterparty who, letters of creditat the time the contract is made, assetshas long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx’x.
(b) In the event the Company enters into a Derivative Contract with any other security Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the event Effective Amount. The benefits of its nonperformance prior the Security Documents and of the provisions of the Loan Documents relating to actual default by the Borrower Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in performing obligations thereunderrespect to all Obligations with respect to the related Qualifying Derivative Contract.
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Derivative Contracts. (a) The Borrower Company and each Guarantor shall not, and shall not permit any of its respective Subsidiaries to, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(bi) Derivative Contracts entered into with the purpose and effect of hedging fixing prices on hydrocarbons attributable to the Borrowing Base Properties and oil or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of no more than twenty-four (24) monthsspeculative purposes; (ii) as of any date (the "Calculation Date") no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent 8.10(a)(i), but excluding Derivative Contracts described in clause (75%v) of this Section 8.10, shall cover a notional volume in excess of the Applicable Percentage of the total estimated hydrocarbons Projected Oil and Gas Production to be produced for in any month from the proved developed producing Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent reserve report furnished by the Borrower under this AgreementReserve Report; (iii) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with an Acceptable Counterthe Administrative Agent, or any of the Lenders, the First Lien Credit Agent or any First Lien Lender or with a counterparty or have a guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx'x; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, assets, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the Collateral Trustee for the benefit of the Secured Parties under the Security Documents or the First Liens; andand (v) with respect to Derivative Contracts under which the Company's, a Guarantor's or any of their respective Subsidiaries' only interest is a "put" right or which is a commodity price hedge by means of a price "floor" (A) either (1) there exists no deferred obligation to pay the related premium or other purchase price or (2) if there exists any deferred obligation to pay the related premium or other purchase price, the Company's, such Guarantor's or such Subsidiary's aggregate net exposure does not exceed at any time prior to April 30, 2006, $15,000,000, and at any time thereafter until April 30, 2007, $5,000,000, following which date no such contracts are permitted to exist and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(cii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Required Lenders; or
(iii) Derivative Contracts entered into with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate; provided, provided however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract, (iii) no event shall the term of such contract extend beyond requires the Termination Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement as in effect on the Effective Date; ) during any Borrowing Base Period (iias defined in the First Lien Credit Agreement as in effect on the Effective Date), and (v) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract a Lender or with a counter-party other than the Lender counterparty or Affiliate have a guarantor of the Lender requires obligation of the Borrower to put up moneycounterparty who, letters of creditat the time the contract is made, assetshas long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx'x.
(b) In the event the Company enters into a Derivative Contract with any other security Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender's Commitment nor against the event Effective Amount. The benefits of its nonperformance prior the Security Documents and of the provisions of the Loan Documents relating to actual default by the Borrower Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in performing obligations thereunderrespect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Samples: Term Loan Agreement (Venoco, Inc.)
Derivative Contracts. The Borrower shall not No Loan Party shall, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(b) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of hedging fixing or setting a floor for prices on hydrocarbons attributable to the Borrowing Base Properties and oil or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of no more than twenty-four (24) monthsspeculative purposes; (ii) as of any date no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires 8.10(a), shall cover a notional volume in excess of the Borrower to deliver more than seventy-five percent (75%) Applicable Percentage of the total estimated hydrocarbons Projected Oil and Gas Production to be produced for in any month from the proved developed producing Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent reserve report furnished by Reserve Report; provided, however, for purposes of the Borrower foregoing calculation, that any Derivative Contract under this Agreementwhich the Company’s or any Guarantor’s interest is solely a put or an option to purchase a put shall not be considered when calculating the Applicable Percentage; (iii) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with an Acceptable Counterthe First Lien Administrative Agent, or any of the First Lien Lenders or their Affiliates, or with a counterparty or have a guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx’x; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, assets, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the First Lien Administrative Agent for the benefit of the First Lien Secured Parties under the First Lien Security Documents; andor
(cb) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of hedging (i) fixing or capping interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate, provided the notional amount of which does not exceed (when aggregated with all other Derivative Contracts of the Company then in effect and effectively converting interest rates from floating to fixed) 100% of the outstanding principal amount of Indebtedness which bears interest at a floating rate or (ii) converting the interest rate on a principal amount of Indebtedness of the Company that is accruing interest at a fixed rate to a floating rate the notional amount of which does not exceed (when aggregated with all Derivative Contracts of the Company then in effect effectively converting interest rates from fixed to floating) 100% of the outstanding principal amount of Indebtedness which bears interest at a fixed rate; provided, however, that, in each case, (A) no such contract shall be for speculative purposes; (B) in the case of clause (i) above, the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract, (C) no event shall the term of such contract extend beyond requires the Termination Date; Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, (iiD) each such contract shall be with an Acceptable Counterthe First Lien Administrative Agent, or any of the First Lien Lenders or their Affiliates, or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-party; term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx’x, and (iiiE) such Derivative Contracts shall correspond to the tenor of the corresponding Indebtedness and (F) no such contract Derivative Contract shall remain in effect after the corresponding Indebtedness with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower respect to put up money, letters of credit, assets, or any other security against the event of its nonperformance prior to actual default by the Borrower which such Derivative Contract was originally entered into has been repaid in performing obligations thereunderfull.
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Derivative Contracts. The Borrower Company, each Guarantor and their respective Subsidiaries shall not enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(b) Derivative Contracts entered into with the purpose and effect of hedging fixing prices on hydrocarbons attributable to the Borrowing Base Properties and oil and/or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces contract shall be for speculative purposes; (ii) no such market contract fixes a price risk for a term of no more than twenty-four (24) months; (iiiii) no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent (75%) 8.10(a), shall cover a notional volume in excess of 80% of total estimated hydrocarbons Oil and Gas to be produced for in any month from the proved developed producing Oil and Gas Properties classified as so designated in proved developed producing on the most recent reserve report furnished by the Borrower under this Agreement; Reserve Report, (iiiiv) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with an Acceptable Counterthe Administrative Agent, or any of the Lenders, or with a counterparty or have a guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx'x; and (ivv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, assets, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents.
(b) The Existing Derivative Contracts; andprovided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Required Lenders.
(c) Derivative Contracts entered into with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate; provided, provided however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract, (iii) no event shall the term of such contract extend beyond requires the Termination Date; Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, (iiiv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base during any Borrowing Base Period, and (v) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract a Lender or with a countercounterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-party other than term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx'x.
(d) In the event the Company enters into a Derivative Contract with any of the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender's Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Lender and its Affiliates (or former Lender or Affiliate its Affiliates) in respect to all Indebtedness, advances, debts, liabilities, obligations, covenants and duties, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising, of the Lender requires the Borrower to put up money, letters of credit, assets, Company or any other security against the event of its nonperformance prior Subsidiaries owed to actual default by such Lender or its Affiliates or former Lender or its Affiliates under any Derivative Contract; provided, however, that such former Lender was a Lender hereunder at the Borrower in performing obligations thereundertime it entered into such Derivative Contract.
Appears in 1 contract
Samples: Credit Agreement (BMC, Ltd.)
Derivative Contracts. (a) The Borrower Company and each Guarantor shall not not, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(bi) Derivative Contracts entered into with the purpose and effect of hedging fixing prices on hydrocarbons attributable to the Borrowing Base Properties and oil or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of no more than twenty-four (24) monthsspeculative purposes; (ii) as of any date (the "Calculation Date") no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent 8.10(a)(i), but excluding Derivative Contracts described in clause (75%v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total estimated hydrocarbons Projected Oil and Gas Production to be produced for in any month from the proved developed producing Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent reserve report furnished Reserve Report (unless and solely to the extent such an excess occurs in a month falling within a period covered by a Derivative Contract entered into by the Borrower under this AgreementCompany to maintain compliance with Section 7.16); (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with an Acceptable Counterthe Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx'x; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, Property, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; andand (v) with respect to Derivative Contracts under which the Company's or a Guarantor's only interest is a "put" right or which is a commodity price hedge by means of a price "floor" (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(cii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iii) Derivative Contracts entered into with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate; provided, provided however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract; (iii) no event shall the term of such contract extend beyond requires the Termination DateCompany to put up money, Property, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iiiv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (v) each such contract shall be with a Lender (or an Acceptable Counter-party; and (iiiAffiliate of a Lender) no such contract or with a counter-party other than the Lender counterparty or Affiliate have a guarantor of the Lender requires obligation of the Borrower to put up moneycounterparty who, letters of creditat the time the contract is made, assetshas long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Moody's.
(b) In the event the Company enters into a Derivative Contract with any other security Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender's Commitment nor against the event Effective Amount. The benefits of its nonperformance prior the Security Documents and of the provisions of the Loan Documents relating to actual default by the Borrower Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in performing obligations thereunderrespect to all Obligations with respect to the related Qualifying Derivative Contract.
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Derivative Contracts. (a) The Borrower Company and each Guarantor shall not not, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(bi) Derivative Contracts entered into with the purpose and effect of hedging fixing prices on hydrocarbons attributable to the Borrowing Base Properties and oil or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of no more than twenty-four (24) monthsspeculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent 8.10(a)(i), but excluding Derivative Contracts described in clause (75%v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total estimated hydrocarbons Projected Oil and Gas Production to be produced for in any month from the proved developed producing Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent reserve report furnished by the Borrower under this AgreementReserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with an Acceptable Counterthe Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx’x; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, Property, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; andand (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(cii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iii) Derivative Contracts entered into with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate; provided, provided however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract; (iii) no event shall the term of such contract extend beyond requires the Termination DateCompany to put up money, Property, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iiiv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (v) each such contract shall be with a Lender (or an Acceptable Counter-party; and (iiiAffiliate of a Lender) no such contract or with a counter-party other than the Lender counterparty or Affiliate have a guarantor of the Lender requires obligation of the Borrower to put up moneycounterparty who, letters of creditat the time the contract is made, assetshas long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx’x.
(b) In the event the Company enters into a Derivative Contract with any other security Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the event Effective Amount. The benefits of its nonperformance prior the Security Documents and of the provisions of the Loan Documents relating to actual default by the Borrower Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in performing obligations thereunderrespect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Samples: Term Loan Agreement (Exploration Co of Delaware Inc)
Derivative Contracts. (a) The Borrower Company and each Guarantor shall not, and shall not permit any of its respective Subsidiaries to, directly or indirectly, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(bi) Derivative Contracts entered into with the purpose and effect of hedging fixing prices on hydrocarbons attributable to the Borrowing Base Properties and oil or gas expected to be produced by the Borrower provided such Person; provided, however, that at all times: times (i) the aggregate of all no such Derivative Contracts limits or reduces such market price risk contract shall be for a term of no more than twenty-four (24) monthsspeculative purposes; (ii) as of any date (the "Calculation Date") no such contract, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent 8.10(a)(i), but excluding Derivative Contracts described in clause (75%v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total estimated hydrocarbons Projected Oil and Gas Production to be produced for in any month from the proved developed producing Oil and Gas Properties as so designated Proved Developed Producing Reserves reflected in the most recent reserve report furnished by the Borrower under this AgreementReserve Report; (iii) each such contract (excluding Derivative Contracts offered by national commodity exchange) shall be with an Acceptable Counterthe Administrative Agent, or any of the Lenders, or with a counterparty or have a guarantor of the obligation of the counterparty which, at the time the contract is made, has long-partyterm obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx'x; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower Company to put up money, assets, letters of credit, assets, credit or any other security against the event of its nonperformance non-performance prior to actual default by the Borrower Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents; andand (v) with respect to Derivative Contracts under which the Company's, a Guarantor's or any of their respective Subsidiaries' only interest is a "put" right or which is a commodity price hedge by means of a price "floor" (A) either (1) there exists no deferred obligation to pay the related premium or other purchase price or (2) if there exists any deferred obligation to pay the related premium or other purchase price, the Company's, such Guarantor's or such Subsidiary's aggregate net exposure does not exceed at any time prior to April 30, 2006, $15,000,000, and at any time thereafter until April 30, 2007, $5,000,000, following which date no such contracts are permitted to exist and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(cii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Required Lenders; or
(iii) Derivative Contracts entered into with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate; provided, provided however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in contract, (iii) no event shall the term of such contract extend beyond requires the Termination Date; Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, (iiiv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base during any Borrowing Base Period, and (v) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract a Lender or with a counter-party other than the Lender counterparty or Affiliate have a guarantor of the Lender requires obligation of the Borrower to put up moneycounterparty who, letters of creditat the time the contract is made, assetshas long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or Xxxxx'x.
(b) In the event the Company enters into a Derivative Contract with any other security Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender's Commitment nor against the event Effective Amount. The benefits of its nonperformance prior the Security Documents and of the provisions of the Loan Documents relating to actual default by the Borrower Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in performing obligations thereunderrespect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Samples: Credit Agreement (Venoco, Inc.)
Derivative Contracts. The Borrower shall not No Loan Party shall, or permit any of its Subsidiaries to, enter into or in any manner be liable under on any Derivative Contract except:
(a) Derivative Contracts as required under Section 5.21;
(b) Derivative Contracts entered into by the Company with the purpose and effect of hedging prices on hydrocarbons attributable to limiting or reducing the Borrowing Base Properties market price risk of Oil and Gas expected to be produced by the Borrower Company and its Subsidiaries provided that at all times: (i) the aggregate of all each such Derivative Contracts Contract limits or reduces such market price risk for a term of no more than twenty-four sixty (2460) months; (ii) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 6.2 and/or required under Section 5.21 8.10(a) (but excluding put option contracts or similar “floor” arrangements) requires the Borrower Loan Parties, collectively, to deliver more than seventy-five percent volumes in excess of the greater of (75%x) 80% of total estimated hydrocarbons Total Proved Reserves or (y) 90% of Proved Producing Reserves; provided, however, that with regard to a "costless collar" that involves the purchase of a put and the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be produced for any month from included in calculating the proved developed producing Oil applicable percentage threshold, and Gas Properties as so designated in the most recent reserve report furnished by the Borrower under this Agreement; (iii) each such contract shall be with an Acceptable Counter-party; between the Company and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower to put up money, letters of credit, assets, or any other security against the event of its nonperformance prior to actual default by the Borrower in performing obligations thereunder; andDerivative Provider;
(cb) Derivative Contracts entered into by the Company with the purpose and effect of hedging fixing interest rates on a principal amount of Debt Indebtedness of the Borrower Company that is accruing interest at a variable rate, provided that (i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Debt Indebtedness of Borrower the Company to be hedged by such contract and in no event shall the term of such contract extend beyond the Termination Date; (ii) each such contract shall be with an Acceptable Counter-party; and a Lender Derivative Provider;
(iiic) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Borrower to put up money, letters of credit, assets, or any other security against In the event of its nonperformance prior to actual default by a Derivative Contract between the Borrower in performing obligations thereunder.Company and any of the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. Any obligation of a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all other Obligations as more particularly provided under Section 9.02
Appears in 1 contract
