EXHIBIT 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
RANGE RESOURCES CORPORATION
AS BORROWER,
AND
BANK ONE, NA
AND THE INSTITUTIONS NAMED HEREIN
AS LENDERS,
BANK ONE, NA,
AS ADMINISTRATIVE AGENT
AND
BANC ONE CAPITAL MARKETS, INC.
AS JOINT LEAD ARRANGER AND JOINT BOOKRUNNER
AND
JPMORGAN CHASE BANK, AS JOINT LEAD
ARRANGER AND JOINT BOOKRUNNER
MAY 2, 2002
$225,000,000 REVOLVING CREDIT
TABLE OF CONTENTS
PAGE NO.
1. Definitions..............................................................................................1
2. Commitments of the Lenders..............................................................................13
(a) Terms of Commitment............................................................................13
(b) Procedure for Borrowing........................................................................13
(c) Letters of Credit..............................................................................14
(d) Procedure for Obtaining Letters of Credit......................................................15
(e) Voluntary Reduction of Commitment..............................................................15
(f) Mandatory Commitment Reductions................................................................15
(g) Several Obligations............................................................................15
(h) Type and Number of Advances....................................................................16
3. Notes Evidencing Loans..................................................................................16
(a) Form of Notes..................................................................................16
(b) Issuance of Additional Notes...................................................................16
(c) Interest Rates.................................................................................16
(d) Payment of Interest............................................................................16
(e) Payment of Principal...........................................................................16
(f) Payment to Lenders.............................................................................17
(g) Sharing of Payments, Etc.......................................................................17
(h) Non-Receipt of Funds by the Agent..............................................................17
4. Interest Rates..........................................................................................18
(a) Options........................................................................................18
(b) Interest Rate Determination....................................................................19
(c) Conversion Option..............................................................................19
(d) Recoupment.....................................................................................19
(e) Interest Rates Applicable After Default........................................................19
5. Special Provisions Relating to Loans....................................................................20
(a) Unavailability of Funds or Inadequacy of Pricing...............................................20
(b) Change in Laws.................................................................................20
(c) Increased Cost or Reduced Return...............................................................20
(d) Discretion of Lender as to Manner of Funding...................................................22
(e) Breakage Fees..................................................................................23
6. Collateral Security.....................................................................................23
7. Borrowing Base..........................................................................................24
(a) Initial Hydrocarbon Borrowing Base.............................................................24
(b) Subsequent Determinations of Hydrocarbon Borrowing Base........................................24
(c) Additional Borrowing Base......................................................................26
8. Fees....................................................................................................26
(a) Unused Commitment Fee..........................................................................26
9. Prepayments.............................................................................................27
(a) Voluntary Prepayments..........................................................................27
(b) Mandatory Prepayment For Borrowing Base Deficiency.............................................27
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10. Representations and Warranties..........................................................................27
(a) Creation and Existence.........................................................................27
(b) Power and Authority............................................................................28
(c) Binding Obligations............................................................................28
(d) No Legal Bar or Resultant Lien.................................................................28
(e) No Consent.....................................................................................28
(f) Financial Condition............................................................................28
(g) Liabilities....................................................................................29
(h) Litigation.....................................................................................29
(i) Taxes; Governmental Charges....................................................................29
(j) Titles, Etc....................................................................................29
(k) Defaults.......................................................................................29
(l) Casualties; Taking of Properties...............................................................29
(m) Use of Proceeds; Margin Stock..................................................................30
(n) Location of Business and Offices...............................................................30
(o) Compliance with the Law........................................................................30
(p) No Material Misstatements......................................................................30
(q) Not A Utility..................................................................................31
(r) ERISA..........................................................................................31
(s) Public Utility Holding Company Act.............................................................31
(t) Subsidiaries...................................................................................31
(u) Environmental Matters..........................................................................31
(v) Liens..........................................................................................31
(w) Solvency.......................................................................................32
(x) Insurance......................................................................................32
11. Conditions of Lending...................................................................................32
12. Affirmative Covenants...................................................................................34
(a) Financial Statements and Reports...............................................................34
(b) Certificates of Compliance.....................................................................35
(c) Accountants' Certificate.......................................................................35
(d) Taxes and Other Liens..........................................................................36
(e) Compliance with Laws...........................................................................36
(f) Further Assurances.............................................................................36
(g) Performance of Obligations.....................................................................36
(h) Insurance......................................................................................36
(i) Accounts and Records...........................................................................37
(j) Right of Inspection............................................................................37
(k) Notice of Certain Events.......................................................................37
(l) ERISA Information and Compliance...............................................................38
(m) Environmental Reports and Notices..............................................................38
(n) Compliance and Maintenance.....................................................................38
(o) Operation of Properties........................................................................39
(p) Compliance with Leases and Other Instruments...................................................39
ii
(q) Certain Additional Assurances Regarding Maintenance and Operations of
Properties.....................................................................................39
(r) Sale of Certain Assets/Prepayment of Proceeds..................................................40
(s) Title Matters..................................................................................40
(t) Curative Matters...............................................................................40
(u) Change of Principal Place of Business..........................................................41
(v) Additional Collateral..........................................................................41
(w) Retirement of Certain Preferred Equity.........................................................41
13. Negative Covenants......................................................................................42
(a) Negative Pledge................................................................................42
(b) Current Ratio..................................................................................42
(c) Senior Debt Coverage Ratio.....................................................................42
(d) Total Debt Coverage Ratio......................................................................42
(e) Senior Debt Leverage Ratio.....................................................................42
(f) Total Debt Leverage Ratio......................................................................43
(g) Consolidations and Mergers.....................................................................43
(h) Debts, Guaranties and Other Obligations........................................................43
(i) Restricted Payments............................................................................44
(j) Loans, Advances and Investments................................................................44
(k) Receivables and Payables.......................................................................45
(l) Nature of Business.............................................................................45
(m) Transactions with Affiliates...................................................................45
(n) Hedging Transactions...........................................................................45
(o) Amendment to Articles of Incorporation or Bylaws...............................................45
(p) Issuance of Preferred Stock....................................................................45
(q) Payment or Prepayment of Other Indebtedness....................................................45
14. Events of Default.......................................................................................46
15. The Agent and the Lenders...............................................................................48
(a) Appointment and Authorization..................................................................48
(b) Note Holders...................................................................................49
(c) Consultation with Counsel......................................................................49
(d) Documents......................................................................................49
(e) Resignation or Removal of Agent................................................................49
(f) Responsibility of Agent........................................................................50
(g) Independent Investigation......................................................................51
(h) Indemnification................................................................................51
(i) Benefit of Section 15..........................................................................52
(j) Pro Rata Treatment.............................................................................52
(k) Assumption as to Payments......................................................................52
(l) Other Financings...............................................................................53
(m) Interests of Lenders...........................................................................53
(n) Investments....................................................................................53
(o) Delegation to Affiliates.......................................................................53
(p) Execution of Collateral Documents..............................................................54
iii
(q) Collateral Releases............................................................................54
(r) Co-Agents, Documentation Agent, Syndication Agent, etc.........................................54
16. Exercise of Rights......................................................................................54
17. Notices.................................................................................................54
18. Expenses................................................................................................55
19. Indemnity...............................................................................................55
20. Non-Liability of Lenders................................................................................56
21. Governing Law...........................................................................................56
22. Invalid Provisions......................................................................................56
23. Maximum Interest Rate...................................................................................57
24. Amendments..............................................................................................57
25. Multiple Counterparts...................................................................................58
26. Conflict................................................................................................58
27. Survival................................................................................................58
28. Parties Bound...........................................................................................58
29. Assignments and Participations..........................................................................58
30. Choice of Forum: Consent to Service of Process and Jurisdiction.........................................60
31. Waiver of Jury Trial....................................................................................61
32. Other Agreements........................................................................................61
33. Financial Terms.........................................................................................61
34. Tri-Party Loan..........................................................................................61
EXHIBITS
Exhibit "A" - Form of Notice of Borrowing
Exhibit "B" - Form of Note
Exhibit "C" - Form of Guaranty
Exhibit "D" - Form of Certificate of Compliance
Exhibit "E" - Form of Assignment and Acceptance Agreement
SCHEDULES
Schedule 1 - Liens
Schedule 2 - Financial Condition
Schedule 3 - Liabilities
Schedule 4 - Litigation
Schedule 5 - Subsidiaries
Schedule 6 - Environmental Matters
Schedule 7 - Title Matters
Schedule 8 - Curative Matters
Schedule 9 - Note Amount/Initial Commitment Amounts
iv
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED
CREDIT AGREEMENT (hereinafter referred to as
the "Agreement") executed as of the 2nd day of May, 2002, by and among
RANGE
RESOURCES CORPORATION, a Delaware corporation ("Borrower") and BANK ONE, NA, a
national banking association ("Bank One"), and each of the financial
institutions which is a party hereto (as evidenced by the signature pages to
this Agreement) or which may from time to time become a party hereto pursuant to
the provisions of Section 29 hereof or any successor or assignee thereof
(hereinafter collectively referred to as "Lenders", and individually, "Lender")
and Bank One, as Administrative Agent ("Agent"), Fleet National Bank, as
Co-Documentation Agent, Fortis Capital Corp., as Co-Documentation Agent,
JPMorgan Chase Bank, as Co-Syndication Agent, Credit Lyonnais, New York Branch,
as Co-Syndication Agent, Banc One Capital Markets, Inc., as Joint Lead Arranger
and Joint Bookrunner and JPMorgan Chase Bank, as Joint Lead Arranger and Joint
Bookrunner.
WITNESSETH:
WHEREAS, as of February 14, 1997, Borrower, Agent and certain of the
Lenders entered into a
Credit Agreement pursuant to which the Lenders made a
credit facility available to Borrower; and
WHEREAS, as of September 30, 1999, Borrower, Agent and certain of the
Lenders entered into an Amended and Restated
Credit Agreement (the "Existing
Credit Agreement"); and
WHEREAS, Borrower has requested that the Lenders agree to make certain
changes to the Existing
Credit Agreement and the Lenders have agreed to make
certain changes to the Existing
Credit Agreement, restate the Existing
Credit
Agreement, reallocate the Commitments of the Lenders and purchase the interests
of certain Lenders who are exiting the Facility;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereby agree as follows:
1. DEFINITIONS. When used herein the terms "Agent", "Agreement", "Bank
One", "Borrower", "Lender", "Lenders" and "Range", shall have the meanings
indicated above. When used herein the following terms shall have the following
meanings:
Advance means a borrowing hereunder (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same type and, in the
case of LIBOR Loans, for the same Interest Period.
Affiliate means any Person which, directly or indirectly, controls, is
controlled by or is under common control with the relevant Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as used with respect
to any Person, shall mean a member of the board of directors, a partner or an
officer of such Person, or any other Person with possession, directly or
indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, through the ownership (of record, as trustee, or by proxy) of
voting shares, partnership interests or voting rights, through a management
contract or otherwise. Any Person owning or controlling directly or indirectly
ten percent or more of the voting shares, partnership interests or voting
rights, or other equity interest of another Person shall be deemed to be an
Affiliate of such Person.
Assignment and Acceptance means a document substantially in the form of
Exhibit "E" hereto.
Available Commitment means, at any time, the Commitment then in effect
minus the Total Outstandings.
Base Rate shall mean, as of any date, a rate of interest per annum
equal to the higher of (A) the Prime Rate for such date, or (B) the sum of the
Federal Funds Effective Rate for such date plus one-half of one percent (.50%)
per annum.
Base Rate Loans shall mean any loan during any period which bears
interest based upon the Base Rate or which would bear interest based upon the
Base Rate if the Maximum Rate ceiling was not in effect at that particular time.
Base Rate Margin shall be:
(i) one percent (1.0%) per annum whenever the Borrowing Base
Usage is equal to or greater than 90%; or
(ii) three-quarters of one percent (.75%) per annum whenever
the Borrowing Base Usage is equal to or greater than 75%, but less than
90%; or
(iii) one-half of one percent (.50%) per annum whenever the
Borrowing Base Usage is equal to or greater than 50% but less than 75%;
or
(iv) one-quarter of one percent (.25%) per annum whenever the
Borrowing Base Usage is less than 50%.
Borrowing Base shall mean, as of any date, the sum of (i) the
Hydrocarbon Borrowing Base plus (ii) the Increased Amount.
Borrowing Base Deficiency is used herein as defined in Section 9(b)
hereof.
Borrowing Base Usage shall mean, as of any date, the Total Outstandings
divided by the Borrowing Base.
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Borrowing Date means the date elected by Borrower pursuant to Section
2(c) hereof for an Advance on the Loan.
Business Day shall mean (i) with respect to any borrowing, payment or
note selection of LIBOR Loans, a day (other than Saturdays or Sundays) on which
banks are legally open for business in Dallas,
Texas and New York, New York and
on which dealings in United States dollars are carried on in the London
interbank market, and (ii) for all other purposes a day (other than Saturdays
and Sundays) on which banks are legally open for business in Dallas,
Texas.
Capital Lease means any lease of property, real or personal, which
would be capitalized on a balance sheet of the lessee prepared in accordance
with GAAP.
Cash Dividends means cash dividends paid on common equity.
Collateral is used herein as defined in Section 6 hereof.
Commitment means (A) for all Lenders, the lesser of (i) $225,000,000 or
(ii) the Borrowing Base, as reduced or increased from time to time pursuant to
Sections 2 and 7 hereof, and (B) as to any Lender, its obligation to make
Advances hereunder in amounts not exceeding, in the aggregate, an amount equal
to such Lender's Commitment Percentage times the total Commitment as of any
date. The Commitment of each Lender hereunder shall be adjusted from time to
time to reflect assignments made by such Lender pursuant to Section 29 hereof.
Each reduction in the Commitment shall result in a Pro Rata reduction in each
Lender's Commitment.
Commitment Percentage means for each Lender the percentage set forth
opposite the Lender's name on Schedule 9 attached hereto. The Commitment
Percentage of each Lender hereunder shall be adjusted from time to time to
reflect assignments made by such Lender pursuant to Section 29 hereof.
Convertible Junior Debentures means the 5.75% Convertible Junior
Debentures issued pursuant to an Indenture, dated as of October 22, 1997 as
supplemented by the First Supplemental Indenture dated as of October 22, 1997
between Borrower and The Bank of New York as Trustee.
Current Assets means the total of the Borrower's current assets
determined in accordance with GAAP, including as of any date, the Available
Commitment and excluding any accounting entries made as a result of the
application of FASB 133.
Current Liabilities means the total of current obligations as
determined in accordance with GAAP, excluding therefrom, as of any date, (i)
current maturities due on the Loans and the Junior Securities, and (ii) any
accounting entries as a result of the application of FASB 133.
Current Ratio means the ratio of Current Assets for the date or period
being measured to the Current Liabilities for such date or period.
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Debt means, without duplication, all obligations and liabilities of a
Person to any other person, including, without limitation, all debts, claims and
indebtedness, heretofore, now and/or from time to time hereafter owing, due or
payable, however evidenced, created, incurred, acquired or owing and however
arising, whether under written or oral agreement, operation of law, or
otherwise. Debt includes, without limiting the foregoing, (i) indebtedness for
borrowed money (including without duplication obligations to reimburse the
issuer of any letter of credit or any guarantor or surety), (ii) indebtedness
for the deferred purchase price of property or services, excluding trade
accounts payable within ninety (90) days and arising in the ordinary course of
business, (ii) indebtedness evidenced by bonds, debentures, notes or other
similar instruments, including, without limitation, all indebtedness evidenced
by the Junior Securities, (iv) obligations and liabilities secured by a Lien on
property owned by such Person whether or not such Person has assumed such
obligations and liabilities and the amount of which Debt shall not exceed the
fair market value of the property subject to the Lien if such Person has not
assumed such obligations and liabilities, (v) obligations or liabilities created
or arising under any capitalized lease, (vi) all net payments or amounts owing
by such Person in respect of interest rate protection agreements, foreign
currency exchange agreements, commodity swap agreements or other interests,
exchange rate or commodity hedging arrangements and (vii) liabilities in respect
of unfunded vested benefits under any Plan. Debt shall not include accounts
payable and expense accruals incurred or assumed in the ordinary course of
business.
Dollar or $ means United States dollars.
Default means all the events specified in Section 14 hereof, regardless
of whether there shall have occurred any passage of time or giving of notice, or
both, that would be necessary in order to constitute such event as an Event of
Default.
Default Rate shall mean a default rate of interest determined in
accordance with Section 4(e) hereof.
EBITDAX shall mean Net Income (excluding gains and losses from asset
sales, extraordinary and non-recurring gains and losses) plus the sum of (i)
income tax expense (but excluding income tax expense relating to the sales or
other disposition of assets, including capital stock, the gains and losses from
which are excluded in the determination of Net Income), plus (ii) Interest
Expense, plus (iii) depreciation, depletion and amortization expense, plus (iv)
any other non-cash expenses, plus (v) all non-cash losses resulting from the
application of FASB 121 and 133, minus (vi) any non-cash gains resulting from
the application of FASB 133, all as determined in accordance with GAAP and
calculated as of the end of each fiscal quarter on a trailing four-quarter
basis.
Effective Date means the date of this Agreement.
Eligible Assignee means any of (i) a Lender or any Affiliate of a
Lender; (ii) a commercial bank organized under the laws of the United States, or
any state thereof, and having
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a combined capital and surplus of at least $100,000,000; (iii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and surplus of at
least $100,000,000.00, provided that such bank is acting through a branch or
agency located in the United States; (iv) a Person that is primarily engaged in
the business of commercial lending and that (A) is a subsidiary of a Lender, (B)
a subsidiary of a Person of which a Lender is a subsidiary, or (C) a Person of
which a Lender is a subsidiary; (v) any other entity (other than a natural
person) which is an "accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans as one of its businesses,
including, but not limited to, insurance companies, mutual funds, investments
funds and lease financing companies; and (vi) with respect to any Lender that is
a fund that invests in loans, any other fund that invests in loans and is
managed by the same investment advisor of such Lender or by an Affiliate of such
investment advisor (and treating all such funds so managed as a single Eligible
Assignee); provided, however, that no Affiliate of Borrower shall be an Eligible
Assignee.
Engineered Value is used herein as defined in Section 6 hereof.
Environmental Laws means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C.A. Section 9601, et seq., the Resource
Conservation and Recovery Act, as amended by the Hazardous Solid Waste Amendment
of 1984, 42 U.S.C.A. Section 6901, et seq., the Clean Water Act, 33 U.S.C.A.
Section 1251, et seq., the Clean Air Act, 42 U.S.C.A. Section 1251, et seq., the
Toxic Substances Control Act, 15 U.S.C.A. Section 2601, et seq., The Oil
Pollution Act of 1990, 33 U.S.G. Section 2701, et seq., and all other laws,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, orders, permits and restrictions of any federal, state,
county, municipal and other governments, departments, commissions, boards,
agencies, courts, authorities, officials and officers, domestic or foreign,
relating to in any way the environment, preservation or reclamation of natural
resources, oil pollution, air pollution, water pollution, noise control and/or
the management, release or threatened release, handling, discharge, disposal or
recovery of on-site or off-site asbestos, radioactive materials, spilled or
leaked petroleum products, distillates or fractions and industrial solid waste
or "hazardous substances" as defined by 42 U.S.C. Section 9601, et seq., as
amended, as each of the foregoing may be amended from time to time.
Environmental Liability means any claim, demand, obligation, cause of
action, order, violation, damage, injury, judgment, penalty or fine, cost of
enforcement, cost of remedial action or any other costs or expense whatsoever,
contingent or otherwise, including reasonable attorneys' fees and disbursements
and any liability for cleanups, costs of environmental remediation, fines or
penalties, resulting from the violation or alleged violation of any
Environmental Law or the release of any substance into the environment which is
required to be remediated by a regulatory agency or governmental authority or
the imposition of any Environmental Lien (as hereinafter defined), which could
reasonably be expected to individually or in the aggregate have a Material
Adverse Effect.
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Environmental Lien means a Lien in favor of any court, governmental
agency or instrumentality or any other Person (i) for any Environmental
Liability or (ii) for damages arising from or cost incurred by such court or
governmental agency or instrumentality or other person in response to a release
or threatened release of asbestos or "hazardous substance" into the environment,
the imposition of which Lien could reasonably be expected to have a Material
Adverse Effect.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
Event of Default is used herein as defined in Section 14 hereof.
Federal Funds Effective Rate shall mean, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Dallas,
Texas time) on such day on such transactions received by the Agent from three
(3) Federal funds brokers of recognized standing selected by the Agent in its
sole discretion.
Financial Statements means balance sheets, income statements,
statements of cash flow, stockholder equity and appropriate footnotes and
schedules, prepared in accordance with GAAP.
Funded Debt means, as of any date, without duplication, (i) all
obligations for borrowed money or for the purchase price of property, (ii) all
obligations evidenced by bonds, debentures, notes, or other similar instruments,
(iii) all other indebtedness (including obligations under capital leases, other
than usual and customary oil and gas leases) on which interest charges are
customarily paid or accrued, (iv) all guarantees, (v) the unfunded or
unreimbursed portion of all letters of credit, (vi) any indebtedness or other
obligation secured by a Lien on assets, whether or not assumed, and (vii) all
liability as a general partner of a partnership for obligations of that
partnership of the nature described in (i) through (vii) preceding.
GAAP means United States generally accepted accounting principles,
consistently applied.
GLEP means Great Lakes Energy Partners, L.L.C.
Guaranties means the Guaranty Agreement in the form of Exhibit "C"
hereto.
Guarantor means GulfStar Energy, Inc., Range Energy I, Inc., Range
HoldCo, Inc., Range Production Company and Range Energy Ventures Corporation.
Hydrocarbon Borrowing Base shall mean the value assigned by the Lenders
from time to time to the Oil and Gas Properties pursuant to Section 7 hereof.
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Increase Limit is used herein as defined in Section 7(c) hereof.
Increased Amount is used herein as defined in Section 7(c) hereof.
Interest Expense shall mean the aggregate amount of interest expense of
Borrower as determined in accordance with GAAP.
Interest Payment Date shall mean the last day of each calendar month in
the case of Base Rate Loans and, in the case of LIBOR Loans, the last day of the
applicable Interest Period, and if such Interest Period is longer than three (3)
months, at three (3) month intervals following the first day of such Interest
Periods.
Interest Period shall mean with respect to any LIBOR Loan (i)
initially, the period commencing on the date such LIBOR Loan is made and ending
one (1), two (2), three (3), six (6), nine (9) or twelve (12) months (if, at the
date of any such election, a nine (9) or twelve (12) month placement is
available to the Agent) thereafter as selected by the Borrower pursuant to
Section 4(a)(ii), and (ii) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period applicable to such
LIBOR Loan and ending one (1), two (2), three (3), six (6), nine (9) or twelve
(12) months (if, at the date of any such election, a nine (9) or twelve (12)
month placement is available to the Agent) thereafter, as selected by the
Borrower pursuant to Section 4(a)(ii); provided, however, that (i) if any
Interest Period would otherwise expire on a day which is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day unless the
result of such extension would be to extend such Interest Period into the next
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day, (ii) if any Interest Period 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) such
Interest Period shall end on the last Business Day of a calendar month, and
(iii) any Interest Period which would otherwise expire after the Maturity Date
shall end on such Maturity Date.
Junior Securities shall mean collectively the 8.75% Senior Subordinated
Notes due January 15, 2007 issued pursuant to an Indenture dated as of March 14,
1997 by and between Borrower and Fleet National Bank, as Trustee, the 6%
Convertible Subordinated Debentures due 2007, issued pursuant to an Indenture by
and between Borrower and Key Corp. Shareholder Services, Inc., as Trustee and
the Trust Convertible Preferred Securities.
Letters of Credit is used herein as defined in Section 2(c) hereof.
LIBOR Base Rate shall mean the offered rate for the period equal to or
greater than the Interest Period for U.S. dollar deposits of not less than
$1,000,000 as of 11:00 a.m. City of London, England time two (2) Business Days
prior to the first day of the Interest Period as shown on the display designated
as "British Bankers Association Interest Settlement Rates" on Xxxxxx'x for the
purpose of displaying such rate. In the event such rate is not available on
Xxxxxx'x, then such offered rate shall be otherwise independently determined by
the Agent from
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an alternate, substantially independent source available to Agent or shall be
calculated by Agent by substantially similar methodology as that theretofore
used to determine such offered rate.
LIBOR Loans means any Loans during any period which bear interest at
the LIBOR Rate, or which would bear interest at such rate if the Maximum Rate
ceiling was not in effect at a particular time.
LIBOR Margin shall be:
(i) two and one-quarter percent (2.25%) per annum whenever the
Borrowing Base Usage is equal to or greater than 90%; or
(b) two percent (2.0%) per annum whenever the Borrowing Base
Usage is equal to or greater than 75%, but less than 90%; or
(c) one and three-quarters percent (1.75%) per annum whenever
the Borrowing Base Usage is equal to or greater than 50% but less than
75%; or
(d) one and one-half percent (1.50%) per annum whenever the
Borrowing Base Usage is less than 50%.
LIBOR Rate means, with respect to a LIBOR Loan for the relevant
Interest Period, the sum of (i) the quotient of (A) the LIBOR Base Rate
applicable to such Interest Period, divided by (B) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
the (ii) LIBOR Margin. The LIBOR Rate shall be rounded to the next higher
multiple of 1/100th of one percent if the rate is not such a multiple.
Lien means any mortgage, deed of trust, pledge, security interest,
assignment, encumbrance or lien (statutory or otherwise) of every kind and
character.
Loan Documents means this Agreement, the Notes, the Guaranties, the
Security Instruments and all other documents executed by Borrower or any of its
Subsidiaries with Agent or the Lenders in connection with the transaction
described in this Agreement.
Loans means the Revolving Loans.
Material Adverse Effect shall mean a material adverse effect on (i) the
assets or properties, liabilities, financial condition, business, operations,
affairs or circumstances of the Borrower, (ii) the ability of the Borrower to
carry out its businesses as of the date of this Agreement or as proposed at the
date of this Agreement to be conducted, (iii) the ability of Borrower to perform
fully and on a timely basis its obligations under any of the Loan Documents,
(iv) the validity or enforceability of any of the Loan Documents or the rights
and remedies of the Agent or the Lenders thereunder or (v) the Collateral, the
Liens on the Collateral created pursuant to the Loan Documents or the priority
of any such Lien.
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Maturity Date shall mean July 1, 2005.
Maximum Rate is used herein as defined in Section 23 hereof.
Net Income shall mean Borrower's net income after income taxes
calculated in accordance with GAAP.
Notes means the Notes, substantially in the form of Exhibit "B" hereto
issued or to be issued hereunder to each Lender, respectively, to evidence the
indebtedness to such Lender arising by reason of the Advances on the Commitment,
together with all modifications, renewals and extensions thereof or any part
thereof.
Oil and Gas Properties means all oil, gas and mineral properties and
interests and related personal properties, in which Borrower or any Guarantor
owns an interest.
Other Financing is used herein as defined in Section 15(l) hereof.
Payor is used herein as defined in Section 3(h)hereof.
Permitted Liens shall mean (i) royalties, overriding royalties,
reversionary interests, production payments and similar burdens; (ii) sales
contracts or other arrangements for the sale of production of oil, gas or
associated liquid or gaseous hydrocarbons which would not (when considered
cumulatively with the matters discussed in clause (i) above) deprive Borrower of
any material right in respect of Borrower's assets or properties (except for
rights customarily granted with respect to such contracts and arrangements);
(iii) statutory Liens for taxes or other assessments that are not yet delinquent
(or that, if delinquent, are being contested in good faith by appropriate
proceedings, levy and execution thereon having been stayed and continue to be
stayed and for which Borrower has set aside on its books adequate reserves in
accordance with GAAP); (iv) easements, rights of way, servitudes, permits,
surface leases and other rights in respect to surface operations, pipelines,
grazing, logging, canals, ditches, reservoirs or the like, conditions, covenants
and other restrictions, and easements of streets, alleys, highways, pipelines,
telephone lines, power lines, railways and other easements and rights of way on,
over or in respect of Borrower's assets or properties and that do not
individually or in the aggregate cause a Material Adverse Effect; (v)
materialmen's, mechanic's, repairman's, employee's, vendor's laborer's
warehousemen's, landlord's, carrier's, pipeline's, contractor's,
sub-contractor's, operator's, non-operator's (arising under operating or joint
operating agreements), and other Liens (including any financing statements filed
in respect thereof) incidental to obligations incurred by Borrower in connection
with the construction, maintenance, development, transportation, processing,
storage or operation of Borrower's assets or properties to the extent not
delinquent (or which, if delinquent, are being contested in good faith by
appropriate proceedings and for which Borrower has set aside on its books
adequate reserves in accordance with GAAP); (vi) all contracts, agreements and
instruments, and all defects and irregularities and other matters affecting
Borrower's assets and properties which were in existence at the time Borrower's
assets and properties were originally acquired by Borrower and
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all routine operational agreements entered into in the ordinary course of
business, which contracts, agreements, instruments, defects, irregularities and
other matters and routine operational agreements are not such as to,
individually or in the aggregate, interfere materially with the operation, value
or use of Borrower's assets and properties, considered in the aggregate; (vii)
liens in connection with workmen's compensation, unemployment insurance or other
social security, old age pension or public liability obligations; (viii) legal
or equitable encumbrances deemed to exist by reason of the existence of any
litigation or other legal proceeding or arising out of a judgment or award with
respect to which an appeal is being prosecuted in good faith and levy and
execution thereon have been stayed and continue to be stayed; (ix) rights
reserved to or vested in any municipality, governmental, statutory or other
public authority to control or regulate Borrower's assets and properties in any
manner, and all applicable laws, rules and orders from any governmental
authority; (x) landlord's liens; (xi) Liens incurred pursuant to the Security
Instruments and Liens (other than Liens on Collateral) that secure obligations
under Rate Management Transactions permitted pursuant to Section 13(n) hereof;
and (xii) Liens existing at the date of this Agreement which are identified in
Schedule "1" hereto.
Person means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
Plan means any plan subject to Title IV of ERISA and maintained by
Borrower, or any such plan to which Borrower is required to contribute on behalf
of its employees.
Pre-Approved Contracts as used herein shall mean any contracts or
agreements entered into in connection with any Rate Management Transaction which
are (i) designed to hedge, provide a price floor for, or swap crude oil or
natural gas or otherwise sell up to (A) 90% of Borrower's anticipated production
from proved, developed producing reserves of crude oil, and/or (B) 90% of
Borrower's anticipated production from proved, developed producing reserves of
natural gas, during the period from the immediately preceding settlement date
(or the commencement of the term of such hedge transactions if there is no prior
settlement date) to such settlement date, (ii) interest rate xxxxxx in an
aggregate notional amount of not more than eighty percent (80%) of the total
Funded Debt of Borrower projected to be outstanding for any period covered by
such xxxxxx, and (iii) with a maturity of thirty-six (36) months or less.
Prime Rate means the rate per annum equal to the Prime Rate announced
from time to time by Agent or its parent (which is not necessarily the lowest
rate charged to any customer), changing when and as said Prime Rate changes.
Pro Rata or Pro Rata Part means for each Lender, (i) for all purposes
where no Loan is outstanding, such Lender's Commitment Percentage and (ii)
otherwise, the proportion which the portion of the outstanding Loans owed to
such Lender bears to the aggregate outstanding Loans owed to all Lenders at the
time in question.
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Rate Management Transaction means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by
Borrower or any of its Subsidiaries which is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, forward
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
REFC means Range Energy Finance Corporation.
Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
and other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
Reimbursement Obligations means, at any time, the obligations of the
Borrower in respect of all Letters of Credit then outstanding to reimburse
amounts paid by any Lender in respect of any drawing or drawings under a Letter
of Credit.
Release Price is used herein as defined in Section 12(r) hereof.
Required Lenders means Lenders holding 75% or more of the Commitments
or if one or more of the Commitments have been terminated, Lenders holding 75%
of the outstanding Loans.
Required Payment is used herein as defined in Section 3(h) hereof.
Reserve Requirement means, with respect to any Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
Revolving Loan or Loans means an Advance or Advances made pursuant to
Section 2(a) hereof.
Security Instruments is used collectively herein to mean this
Agreement, all Deeds of Trust, Mortgages, Security Agreements, Assignments of
Production and Financing Statements and other collateral documents covering
certain of the Oil and Gas Properties and related personal property, equipment,
oil and gas inventory and proceeds of the foregoing, the Guaranties, all pledge
agreements and all collateral assignments of notes and liens, all such documents
to be in form and substance reasonably satisfactory to Agent.
Senior Debt means, as of any date, the Total Outstandings.
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Subsidiary means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by Borrower or another Subsidiary.
Super Majority Lenders means Lenders holding 66-2/3% or more of the
Commitments or if one or more of the Commitments have been terminated, Lenders
holding 66-2/3% of the outstanding Loans.
Total Outstandings means the total principal balance outstanding on the
Notes at any time plus (ii) the total face amount of all outstanding Letters of
Credit, plus (iii) the total amount of all unpaid Reimbursement Obligations.
Tranche means a set of LIBOR Loans made by the Lenders at the same time
and for the same Interest Period.
Trust Convertible Preferred Securities the 5.75% Trust Convertible
Preferred Securities issued pursuant to a Declaration of Trust, dated as of
October 8, 1997, as amended by the Amended and Restated Declaration of Trust
dated as of October 22, 1997 between Borrower and The Bank of New York
Unscheduled Redeterminations means a redetermination of the Borrowing
Base made at any time other than on the dates set for the regular semi-annual
redetermination of the Borrowing Base which are made (A) at the request of
Borrower (but only one between Borrowing Base redeterminations) (B) at the
request of Super Majority Lenders (but only twice between Borrowing Base
redeterminations), provided, however, that (i) Super Majority Lenders may
require an Unscheduled Redetermination at any time it appears to Administrative
Agent or Super Majority Lenders, in the exercise of their reasonable discretion,
that either (a) there has been a material decrease in the value of the Oil and
Gas Properties, or (b) an event has occurred which is reasonably expected to
have a Material Adverse Effect, or (ii) Super Majority Lenders may require an
Unscheduled Redetermination if Borrower terminates any material agreements
entered into in connection with a Rate Management Transaction used by Lenders in
determining the Hydrocarbon Borrowing Base or if the counterparty to any such
material agreement commences, or has commenced against it any proceeding under
any bankruptcy, insolvency or similar law now or hereafter in effect.
Unused Commitment Fee Rate shall be:
(i) one-half of one percent per annum (.50%) whenever the
Borrowing Base Usage is equal to or greater than 90%; or
(ii) three-eighths of one percent per annum (.375%) whenever
the Borrowing Base Usage is less than 90%.
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2. COMMITMENTS OF THE LENDERS.
(a) Terms of Commitment. On the terms and conditions
hereinafter set forth, each Lender agrees severally to make Advances to
the Borrower from time to time during the period beginning on the
Effective Date and ending on the Maturity Date in such amounts as the
Borrower may request up to an amount not to exceed, in the aggregate
principal amount advanced at any time, its Pro Rata Part of the
Available Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the
Maturity Date. The obligation of the Borrower hereunder shall be
evidenced by this Agreement and the Notes issued in connection
herewith, said Notes to be as described in Section 3 hereof.
Notwithstanding any other provision of this Agreement, no Advance shall
be required to be made hereunder if any Default or Event of Default (as
hereinafter defined) has occurred and is continuing. Each Advance under
the Commitment shall be an aggregate amount of at least $1,000,000 or
any whole multiples of $100,000 in excess thereof. Irrespective of the
face amount of the Note or Notes, the Lenders shall never have the
obligation to Advance any amount or amounts in excess of the
Commitment.
(b) Procedure for Borrowing. Whenever the Borrower desires an
Advance under the Commitment, it shall give Agent telegraphic, telex,
facsimile or telephonic notice ("Notice of Borrowing") of such
requested Advance, which in the case of telephonic notice, shall be
promptly confirmed in writing. Each Notice of Borrowing shall be in the
form of Exhibit "A" attached hereto and shall be received by Agent not
later than 11:00 a.m. Dallas,
Texas time, on (i) the Borrowing Date in
the case of the Base Rate Loan, or (ii) three Business Days prior to
any proposed Borrowing Date in the case of LIBOR Loans. Each Notice of
Borrowing shall specify (i) the Borrowing Date (which shall be a
Business Day), (ii) the principal amount to be borrowed, (iii) the
portion of the Advance constituting Base Rate Loans and/or LIBOR Loans
and (iv) if any portion of the proposed Advance is to constitute LIBOR
Loans, the initial Interest Period selected by Borrower pursuant to
Section 4 hereof to be applicable thereto. Upon receipt of such Notice,
Agent shall advise each Lender thereof; provided, that if the Lenders
have received at least one (1) day's notice of such Advance prior to
funding of a Base Rate Loan , or at least three (3) days' notice of
each Advance prior to funding in the case of a LIBOR Loan, each Lender
shall provide Agent at its office at 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx
00000, not later than 1:00 p.m., Dallas,
Texas time, on the Borrowing
Date, in immediately available funds, its pro rata share of the
requested Advance, but the aggregate of all such fundings by each
Lender shall never exceed such Lender's Commitment. Not later than 2:00
p.m., Dallas,
Texas time, on the Borrowing Date, Agent shall make
available to the Borrower at the same office, in like funds, the
aggregate amount of such requested Advance. Neither Agent nor any
Lender shall incur any liability to the Borrower in acting upon any
Notice of Borrowing referred to above which Agent or such Lender
believes in good faith to have been given by a duly authorized officer
or other person authorized to borrow on behalf of Borrower or for
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otherwise acting in good faith under this Section 2(b). Upon funding of
Advances by Lenders and such funds being made available to Borrower in
accordance with this Agreement, pursuant to any such Notice, the
Borrower shall have effected Advances hereunder.
(c) Letters of Credit. On the terms and conditions hereinafter
set forth, the Agent shall from time to time during the period
beginning on the Effective Date and ending on the Maturity Date upon
request of Borrower issue standby and/or commercial Letters of Credit
for the account of Borrower (the "Letters of Credit") in such face
amounts as Borrower may request, but not to exceed in the aggregate
face amount at any time outstanding the sum of Ten Million Dollars
($10,000,000.00). The face amount of all Letters of Credit issued and
outstanding hereunder shall be considered as Advances on the Commitment
for Borrowing Base purposes and all payments made by the Agent on such
Letters of Credit shall be considered as Advances under the Notes. Each
Letter of Credit issued for the account of Borrower hereunder shall (i)
be in favor of such beneficiaries as specifically requested by
Borrower, (ii) have an expiration date not exceeding the earlier of (a)
one year or (b) the Maturity Date, and (iii) contain such other terms
and provisions as may be required by issuing Lender. Each Lender (other
than Agent) agrees that, upon issuance of any Letter of Credit
hereunder, it shall automatically acquire a participation in the
Agent's liability under such Letter of Credit in an amount equal to
such Lender's Commitment Percentage of such liability, and each Lender
(other than Agent) thereby shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and shall be
unconditionally obligated to Agent to pay and discharge when due, its
Commitment Percentage of Agent's liability under such Letter of Credit.
The Borrower hereby unconditionally agrees to pay and reimburse the
Agent for the amount of each demand for payment under any Letter of
Credit that is in substantial compliance with the provisions of any
such Letter of Credit at or prior to the date on which payment is to be
made by the Agent to the beneficiary thereunder, without presentment,
demand, protest or other formalities of any kind. Upon receipt from any
beneficiary of any Letter of Credit of any demand for payment under
such Letter of Credit, the Agent shall promptly notify the Borrower of
the demand and the date upon which such payment is to be made by the
Agent to such beneficiary in respect of such demand. Forthwith upon
receipt of such notice from the Agent, Borrower shall advise the Agent
whether or not it intends to borrow hereunder to finance its
obligations to reimburse the Agent, and if so, submit a Notice of
Borrowing as provided in Section 2(b) hereof. If Borrower fails to so
advise Agent and thereafter fails to reimburse Agent, the Agent shall
notify each Lender of the demand and the failure of the Borrower to
reimburse the Agent, and each Lender shall reimburse the Agent for its
Commitment Percentage of each such draw paid by the Agent and
unreimbursed by the Borrower. All such amounts paid by Agent and/or
reimbursed by the Lenders shall be treated as an Advance or Advances
under the Commitment, which Advances shall be immediately due and
payable and shall bear interest at the Maximum Rate.
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(d) Procedure for Obtaining Letters of Credit. The amount and
date of issuance, renewal, extension or reissuance of a Letter of
Credit pursuant to the Commitments shall be designated by Borrower's
written request delivered to Agent at least three (3) Business Days
prior to the date of such issuance, renewal, extension or reissuance.
Concurrently with or promptly following the delivery of the request for
a Letter of Credit, Borrower shall execute and deliver to the Agent an
application and agreement with respect to the Letters of Credit, said
application and agreement to be in the form used by the Agent. The
Agent shall not be obligated to issue, renew, extend or reissue such
Letters of Credit if (A) the amount thereon when added to the face
amount of the outstanding Letters of Credit plus any Reimbursement
Obligations exceeds Ten Million Dollars ($10,000,000.00) or (B) the
amount thereof when added to the Total Outstandings would exceed the
Commitment. Borrower agrees to pay the Agent for the benefit of the
Lenders commissions for issuing the Letters of Credit (calculated
separately for each Letter of Credit) in an amount equal to the
Eurodollar Margin multiplied by the maximum face amount of the Letter
of Credit. Borrower further agrees to pay Agent for its own account an
additional fronting fee equal to one-eighth of one percent (.125%) per
annum multiplied times the maximum face amount of each Letter of
Credit. Such commissions shall be payable prior to the issuance of each
Letter of Credit and thereafter on each anniversary date of such
issuance while such Letter of Credit is outstanding. Such commissions
and fronting fee will be calculated based on the basis of a year
consisting of 360 days.
(e) Voluntary Reduction of Commitment. Subject to the
provisions of Section 5(e) hereof, the Borrower may at any time, or
from time to time, upon not less than three (3) Business Days' prior
written notice to Agent, reduce or terminate the Commitment; provided,
however, that (i) each reduction in the Commitment must be in the
amount of $1,000,000 or more, in increments of $1,000,000 and (ii) each
reduction must be accompanied by a prepayment of the Notes in the
amount by which the outstanding principal balance of the Notes exceeds
the Commitment as reduced pursuant to this Section 2(e).
(f) Mandatory Commitment Reductions. The Commitment shall be
reduced from time to time by an amount of any prepayment required by
Section 12(r) hereof upon the sale of assets. If, as a result of any
such reduction in the Borrowing Base, the Total Outstandings ever
exceed the Borrowing Base then in effect, the Borrower shall make the
mandatory prepayment of principal required pursuant to Section 9(b)
hereof.
(g) Several Obligations. The obligations of the Lenders under
the Commitments are several and not joint. The failure of any Lender to
make an Advance required to be made by it shall not relieve any other
Lender of its obligation to make its Advance, and no Lender shall be
responsible for the failure of any other Lender to make the Advance to
be made by such other Lender. No Lender shall be required to lend
hereunder any amount in excess of its legal lending limit.
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(h) Type and Number of Advances. Any Advance on the Commitment
may be a Base Rate Loan or a LIBOR Loan, or a combination thereof, as
selected by the Borrower pursuant to Section 4 hereof. The total number
of Tranches which may be outstanding at any time shall never exceed ten
(10).
3. NOTES EVIDENCING LOANS. The loans described above in Section 2 shall
be evidenced by promissory notes of Borrower as follows:
(a) Form of Notes. The Loans shall be evidenced by a Note or
Notes in the aggregate face amount of $225,000,000, and shall be in the
form of Exhibit "B" hereto with appropriate insertions. Notwithstanding
the face amount of the Notes, the actual principal amount due from the
Borrower to Lenders on account of the Notes, as of any date of
computation, shall be the sum of Advances then and theretofore made on
account thereof, less all principal payments actually received by
Lenders in collected funds with respect thereto. Although the Notes may
be dated as of the Effective Date, interest in respect thereof shall be
payable only for the period during which the loans evidenced thereby
are outstanding and, although the stated amount of the Notes may be
higher, the Notes shall be enforceable, with respect to Borrower's
obligation to pay the principal amount thereof, only to the extent of
the unpaid principal amount of the Loans. Irrespective of the face
amount of the Notes, no Lender shall ever be obligated to advance on
the Commitment any amount in excess of its Commitment then in effect.
(b) Issuance of Additional Notes. At the Effective Date there
shall be outstanding Notes in the aggregate face amount of $225,000,000
payable to the order of Lenders. From time to time new Notes may be
issued to other Lenders as such Lenders become parties to this
Agreement. Upon request from Agent, the Borrower shall execute and
deliver to Agent any such new or additional Notes. From time to time as
new Notes are issued the Agent shall require that each Lender exchange
its Note(s) for newly issued Note(s) to better reflect the extent of
each Lender's Commitments hereunder.
(c) Interest Rates. The unpaid principal balance of the Notes
shall bear interest from time to time as set forth in Section 4 hereof.
(d) Payment of Interest. Interest on the Notes shall be
payable on each Interest Payment Date unless earlier due in whole or in
part as a result of an acceleration of the amount due as a result of an
Event of Default or pursuant to the mandatory prepayment provisions of
Section 9(b) hereof.
(e) Payment of Principal. Principal of the Loans shall be due
and payable to the Agent for the ratable benefit of the Lenders on the
Maturity Date unless earlier due in whole or in part as a result of an
acceleration of the amount due or pursuant to the mandatory prepayment
provisions of Section 9(b) hereof.
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(f) Payment to Lenders. Each Lender's Pro Rata Part of payment
or prepayment of the Loans shall be directed by wire transfer to such
Lender by the Agent at the address provided to the Agent for such
Lender for payments no later than 2:00 p.m., Dallas,
Texas, time on the
Business Day such payments or prepayments are deemed hereunder to have
been received by Agent; provided, however, in the event that any Lender
shall have failed to make an Advance as contemplated under Section 2
hereof (a "Defaulting Lender") and the Agent or another Lender or
Lenders shall have made such Advance, payment received by Agent for the
account of such Defaulting Lender or Lenders shall not be distributed
to such Defaulting Lender or Lenders until such Advance or Advances
shall have been repaid in full to the Lender or Lenders who funded such
Advance or Advances. Any payment or prepayment received by Agent at any
time after 12:00 noon, Dallas,
Texas, time on a Business Day shall be
deemed to have been received on the next Business Day. Interest shall
cease to accrue on any principal as of the end of the day preceding the
Business Day on which any such payment or prepayment is deemed
hereunder to have been received by Agent. If Agent fails to transfer
any principal amount to any Lender as provided above, then Agent shall
promptly direct such principal amount by wire transfer to such Lender.
(g) Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, or otherwise) on account of
the Loans, (including, without limitation, any set-off) which is in
excess of its Pro Rata Part of payments on either of the Loans, as the
case may be, obtained by all Lenders, such Lender shall purchase from
the other Lenders such participation as shall be necessary to cause
such purchasing Lender to share the excess payment pro rata with each
of them; provided that, if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of the
recovery. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of offset) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
(h) Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Lender or the Borrower (the "Payor") prior to
the date on which such Lender is to make payment to the Agent of the
proceeds of a Loan to be made by it hereunder or the Borrower is to
make a payment to the Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt, that
the Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make
the amount thereof available to the intended recipient on such date
and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment shall, on demand, pay to the Agent
the amount made available to it
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together with interest thereon in respect of the period commencing on
the date such amount was made available by the Agent until the date the
Agent recovers such amount at the rate applicable to such portion of
the applicable Loan.
4. INTEREST RATES.
(a) Options.
(i) Base Rate Loans. On all Base Rate Loans the
Borrower agrees to pay interest on the Notes calculated on the
basis of the actual days elapsed in a year consisting of 365
days, or if appropriate, 366 days with respect to the unpaid
principal amount of each Base Rate Loan from the date the
proceeds thereof are made available to Borrower until maturity
(whether by acceleration or otherwise), at a varying rate per
annum equal to the lesser of (i) the Maximum Rate (defined
herein), or (ii) the Base Rate plus the Base Rate Margin.
Subject to the provisions of this Agreement as to prepayment,
the principal of the Notes representing Base Rate Loans shall
be payable as specified in Section 3(e) hereof and the
interest in respect of each Base Rate Loan shall be payable on
each Interest Payment Date applicable thereto. Past due
principal and, to the extent permitted by law, past due
interest in respect to each Base Rate Loan, shall bear
interest, payable on demand, at a rate per annum equal to the
Default Rate.
(ii) LIBOR Loans. On all LIBOR Loans the Borrower
agrees to pay interest calculated on the basis of a year
consisting of 360 days with respect to the unpaid principal
amount of each LIBOR Loan from the date the proceeds thereof
are made available to Borrower until maturity (whether by
acceleration or otherwise), at a varying rate per annum equal
to the lesser of (i) the Maximum Rate, or (ii) the LIBOR Rate.
Subject to the provisions of this Agreement with respect to
prepayment, the principal of the Notes shall be payable as
specified in Section 3(e) hereof and the interest with respect
to each LIBOR Loan shall be payable on each Interest Payment
Date applicable thereto. Past due principal and, to the extent
permitted by law, past due interest shall bear interest,
payable on demand, at a rate per annum equal to the Default
Rate. Upon three (3) Business Days' written notice prior to
the making by the Lenders of any LIBOR Loan (in the case of
the initial Interest Period therefor) or the expiration date
of each succeeding Interest Period (in the case of subsequent
Interest Periods therefor), Borrower shall have the option,
subject to compliance by Borrower with all of the provisions
of this Agreement, as long as no Event of Default exists, to
specify whether the Interest Period commencing on any such
date shall be a one (1), two (2), three (3), six (6),
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nine (9) or twelve (12) month period, subject to availability.
If Agent shall not have received timely notice of a
designation of such Interest Period as herein provided,
Borrower shall be deemed to have elected to convert all
maturing LIBOR Loans to Base Rate Loans.
(b) Interest Rate Determination. The Agent shall determine
each interest rate applicable to the Loans hereunder. The Agent shall
give prompt notice to the Borrower and the Lenders of each rate of
interest so determined and its determination thereof shall be
conclusive absent error.
(c) Conversion Option. Borrower may elect from time to time
(i) to convert all or any part of its LIBOR Loans to Base Rate Loans by
giving Agent irrevocable notice of such election in writing prior to
10:00 a.m. (Dallas,
Texas time) on the conversion date and such
conversion shall be made on the requested conversion date, provided
that any such conversion of LIBOR Loan shall only be made on the last
day of the Interest Period with respect thereof, (ii) to convert all or
any part of its Base Rate Loans to LIBOR Loans by giving the Agent
irrevocable written notice of such election no later than three (3)
Business Days prior to the proposed conversion and such conversion
shall be made on the requested conversion date or, if such requested
conversion date is not a Business Day, on the next succeeding Business
Day. Any such conversion shall not be deemed to be a prepayment of any
of the loans for purposes of this Agreement or the Notes.
(d) Recoupment. If at any time the applicable rate of interest
selected pursuant to Sections 4(a)(i) or 4(a)(ii) above shall exceed
the Maximum Rate, thereby causing the interest on the Notes to be
limited to the Maximum Rate, then any subsequent reduction in the
interest rate so selected or subsequently selected shall not reduce the
rate of interest on the Notes below the Maximum Rate until the total
amount of interest accrued on the Note equals the amount of interest
which would have accrued on the Notes if the rate or rates selected
pursuant to Sections 4(a)(i) or (ii), as the case may be, had at all
times been in effect.
(e) Interest Rates Applicable After Default. Notwithstanding
anything to the contrary contained in this Section 4, during the
continuance of a Default or an Event of Default the Super Majority
Lenders may, at their option, by notice from Agent to the Borrower
(which notice may be revoked at the option of the Super Majority
Lenders notwithstanding the provisions of Section 15 hereof, which
requires all Lenders to consent to changes in interest rates) declare
that no Advance may be made as, converted into, or continued as a LIBOR
Loan. During the continuance of an Event of Default, the Super Majority
Lenders, may, at their option, by notice from Agent to the Borrower
(which notice may be revoked at the option of Super Majority Lenders
notwithstanding the provisions of Section 15 hereof, which requires all
Lenders to consent to changes in interest rates) declare that (i) each
LIBOR Loan shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest
Period plus
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two percent (2%) per annum and (ii) each Base Rate Loan shall bear
interest at the rate otherwise applicable to such Interest Period plus
two percent (2%), provided that, during the continuance of an Event of
Default under Section 14(f) or 14(g), the interest rate set forth in
clauses (i) and (ii) above shall be applicable to all outstanding Loans
without any election or action on the part of the Agent or any Lender.
5. SPECIAL PROVISIONS RELATING TO LOANS.
(a) Unavailability of Funds or Inadequacy of Pricing. In the
event that, in connection with any proposed LIBOR Loan, the Agent
reasonably determines, which determination shall, absent manifest
error, be final, conclusive and binding upon all parties, due to
changes in circumstances since the date hereof, adequate and fair means
do not exist for determining the LIBOR Rate or such rate will not
accurately reflect the costs to the Lenders of funding LIBOR Loan for
such Interest Period, the Agent shall give notice of such determination
to the Borrower and the Lenders, whereupon, until the Agent notifies
the Borrower and the Lenders that the circumstances giving rise to such
suspension no longer exist, the obligations of the Lenders to make,
continue or convert Loans into LIBOR Loan shall be suspended, and all
Loans to Borrower shall be Base Rate Loans during the period of
suspension.
(b) Change in Laws. If at any time any new law or any change
in existing laws or in the interpretation of any new or existing laws
shall make it unlawful for any Lender to make or continue to maintain
or fund LIBOR Loans hereunder, then such Lender shall promptly notify
Borrower in writing and such Lender's obligation to make, continue or
convert Loans into LIBOR Loans under this Agreement shall be suspended
until it is no longer unlawful for such Lender to make or maintain
LIBOR Loans. Upon receipt of such notice, Borrower shall either repay
the outstanding LIBOR Loans owed to such Lender, without penalty, on
the last day of the current Interest Periods (or, if any Lender may not
lawfully continue to maintain and fund such LIBOR Loans, immediately),
or Borrower may convert such LIBOR Loans at such appropriate time to
Base Rate Loans.
(c) Increased Cost or Reduced Return.
(i) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender with any request or directive (whether or not having
the force of law) of any such governmental authority, central
bank, or comparable agency:
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(A) shall subject such Lender to any tax,
duty, or other charge with respect to any LIBOR
Loans, its Notes, or its obligation to make LIBOR
Loans, or change the basis of taxation of any amounts
payable to such Lender under this Agreement or its
Notes in respect of any LIBOR Loan (other than
franchise taxes and taxes imposed on or measured by
the overall net income of such Lender);
(B) shall impose, modify, or deem applicable
any reserve, special deposit, assessment, or similar
requirement (other than reserve requirements, if any,
taken into account in the determination of the LIBOR
Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities
or commitments of, such Lender, including the
Commitment of such Lender hereunder; or
(C) shall impose on such Lender or on the
London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions
of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost
to such Lender of making, converting into, continuing, or
maintaining any LIBOR Loan or to reduce any sum received or
receivable by such Lender under this Agreement or its Notes
with respect to any LIBOR Loan, then Borrower shall pay to
such Lender on demand such amount or amounts as will
reasonably compensate such Lender for such increased cost or
reduction. If any Lender requests compensation by Borrower
under this Section 5(c), Borrower may, by notice to such
Lender (with a copy to Agent), suspend the obligation of such
Lender to make or continue LIBOR Loans, or to convert all or
part of the Base Rate Loans owing to such Lender to LIBOR
Loans, until the event or condition giving rise to such
request ceases to be in effect (in which case the provisions
of Section 5(c) shall be applicable); provided that such
suspension shall not affect the right of such Lender to
receive the compensation so requested.
(ii) If, after the date hereof, any Lender shall have
reasonably determined that the adoption of any applicable law,
rule, or regulation regarding capital adequacy or any change
therein or in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether
or
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not having the force of law) of any such governmental
authority, central bank, or comparable agency, has or would
have the effect of reducing the rate of return on the capital
of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder to a level
below that which such Lender or such corporation could have
achieved but for such adoption, change, request, or directive
(taking into consideration its policies with respect to
capital adequacy), then from time to time upon demand Borrower
shall pay to such Lender such additional amount or amounts as
will reasonably compensate such Lender for such reduction.
(iii) Each Lender shall promptly notify Borrower and
Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to
compensation pursuant to this Section 5(c) and will designate
a separate lending office, if applicable, if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be
otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 5(c) shall furnish to Borrower
and Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive
in the absence of manifest error. In determining such amount,
such Lender may use any reasonable averaging and attribution
methods.
(iv) Any Lender giving notice to the Borrower through
the Agent pursuant to Section 5(c) shall give to the Borrower
a statement signed by an officer of such Lender setting forth
in reasonable detail the basis for, and the calculation of
such additional cost, reduced payments or capital
requirements, as the case may be, and the additional amounts
required to compensate such Lender therefor.
(v) Within five (5) Business Days after receipt by
the Borrower of any notice referred to in Section 5(c), the
Borrower shall pay to the Agent for the account of the Lender
issuing such notice such additional amounts as are required to
compensate such Lender for the increased cost, reduced
payments or increased capital requirements identified therein,
as the case may be.
(vi) Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not
constitute a waiver of any such Lender's right to demand such
compensation.
(d) Discretion of Lender as to Manner of Funding.
Notwithstanding any provisions of this Agreement to the contrary, each
Lender shall be entitled to fund and
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maintain its funding of all or any part of its Loan in any manner it
sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if each Lender
had actually funded and maintained each LIBOR Loan through the purchase
of deposits having a maturity corresponding to the last day of the
Interest Period applicable to such LIBOR Loan and bearing an interest
rate at the applicable interest rate for such Interest Period.
(e) Breakage Fees. Without duplication under any other
provision hereof, if any Lender incurs any loss, cost or expense
including, without limitation, any loss of profit and loss, cost,
expense or premium reasonably incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Lender to
fund or maintain any LIBOR Loan or the relending or reinvesting of such
deposits or amounts paid or prepaid to the Lenders as a result of any
of the following events other than any such occurrence as a result in
the change of circumstances described in Sections 5(a) and (b):
(i) any payment, prepayment or conversion of a LIBOR
Loan on a date other than the last day of its Interest Period
(whether by acceleration, prepayment or otherwise);
(ii) any failure to make a principal payment of a
LIBOR Loan on the due date thereof; or
(iii) any failure by the Borrower to borrow,
continue, prepay or convert to a LIBOR Loan on the dates
specified in a notice given pursuant to Section 2(b) or 4(c)
hereof;
then the Borrower shall pay to such Lender such amount as will
reimburse such Lender for such loss, cost or expense. If any Lender
makes such a claim for compensation, it shall furnish to Borrower and
Agent a statement setting forth the amount of such loss, cost or
expense in reasonable detail (including an explanation of the basis for
and the computation of such loss, cost or expense) and the amounts
shown on such statement shall be conclusive and binding absent manifest
error.
6. COLLATERAL SECURITY. To secure the performance by Borrower and the
Guarantors of their obligations hereunder, and under the Notes and Security
Instruments, whether now or hereafter incurred, matured or unmatured, direct or
contingent, joint or several, or joint and several, including extensions,
modifications, renewals and increases thereof, and substitutions therefor,
Borrower and certain of the Guarantors have heretofore granted and shall
herewith or hereafter grant and assign to Agent for the ratable benefit of the
Lenders a first and prior Lien or Liens on certain of their Oil and Gas
Properties, certain related equipment, oil and gas inventory and proceeds of the
foregoing. The Oil and Gas Properties herewith assigned and mortgaged to the
Agent by the Borrower and certain of the Guarantors shall represent not less
than 80% of the Engineered Value (as hereinafter defined) of Borrower's and such
Guarantor's Oil and Gas
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Properties as of the Effective Date. In addition to the mortgaging of the Oil
and Gas Properties, Borrower shall pledge to the Agent for the benefit of the
Lenders, (i) 100% of the stock of each of Borrower's wholly-owned Subsidiaries,
(ii) all of its membership interest in GLEP and (iii) shall cause each Guarantor
to provide the Lenders with the Guaranty. Range Energy Ventures Corporation, a
Guarantor, shall secure its Guaranty with a pledge of all of the issued and
outstanding shares of the common stock of REFC. Obligations arising from
agreements arising from Rate Management Transactions between Borrower, any
Guarantor, and one or more of the Lenders or an Affiliate of any of the Lenders
shall be secured by the Collateral (as hereinafter defined) on a pari passu
basis with the indebtedness and obligations of the Borrower under the Loan
Documents. Once agreements arising from Rate Management Transactions involving
one or more of the Lenders, or an Affiliate of any of the Lenders, is entered
into, and pursuant to this provision becomes secured by the Collateral on a pari
passu basis, said Collateral shall continue to secure such obligations until
such agreements are no longer in force and effect, irrespective of whether the
Lender involved in such agreement ceases to be a Lender under this Agreement.
All Oil and Gas Properties, stock, membership interest and other collateral in
which Borrower and certain of the Guarantors herewith grants or hereafter grants
to Agent for the ratable benefit of the Lenders a first and prior Lien (to the
satisfaction of the Agent) in accordance with this Section 6, as such properties
and interests are from time to time constituted, are hereinafter collectively
called the "Collateral".
The granting and assigning of such security interests and Liens by
Borrower and certain of the Guarantors shall be pursuant to Security Instruments
in form and substance reasonably satisfactory to the Agent. Concurrently with
the delivery of each of the Security Instruments or within a reasonable time
thereafter, Borrower shall have furnished or caused to be furnished to the Agent
mortgage and title opinions and other title information reasonably satisfactory
to Agent with respect to the title and Lien status of Borrower's and certain of
the Guarantor's interests in not less than 80% of the Engineered Value of the
Borrower's and certain of the Guarantor's mortgaged Oil and Gas Properties .
"Engineered Value" for this purpose shall mean future net revenues discounted at
the discount rate being used by the Agent as of the date of any such
determination utilizing the pricing parameters used in the engineering report
furnished to the Agent pursuant to Sections 7 and 12 hereof. Borrower will cause
to be executed and delivered to the Agent, in the future, additional Security
Instruments if the Agent reasonably deems such are necessary to insure
perfection or maintenance of Lenders' security interests and Liens in not less
than 80% of the Engineered Value of the Oil and Gas Properties or any part
thereof.
7. BORROWING BASE.
(a) Initial Hydrocarbon Borrowing Base. At the Effective Date,
the Hydrocarbon Borrowing Base shall be $135,000,000.
(b) Subsequent Determinations of Hydrocarbon Borrowing Base.
Subsequent determinations of the Hydrocarbon Borrowing Base shall be
made by the Lenders
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semi-annually on April 1 and October 1 of each year beginning October
1, 2002 or as Unscheduled Redeterminations. By March 1 each year,
beginning March 1, 2003, Borrower shall furnish to the Lenders an
engineering report in form and substance reasonably satisfactory to
Agent prepared by an independent petroleum engineering firm acceptable
to Agent, said engineering report to utilize economic and pricing
parameters used by the Agent as established from time to time, together
with such other information, reports and data concerning the value of
the Oil and Gas Properties as Agent shall deem reasonably necessary to
determine the value of such Oil and Gas Properties. By September 1 of
each year beginning September 1, 2002, or within thirty (30) days after
either (i) receipt of notice from Agent that the Lenders require an
Unscheduled Redetermination, or (ii) the Borrower gives notice to Agent
of its desire to have an Unscheduled Redetermination performed, in each
case the Borrower shall furnish to the Lenders an engineering report in
form and substance reasonably satisfactory to Agent, said engineering
report to utilize economic and pricing parameters used by the Agent as
established from to time, together with such other information, reports
and data concerning the value of such Oil and Gas Properties. Agent
shall by written notice to the Borrower no later than April 1 and
October 1 of each year, or within a reasonable time thereafter (herein
called the "Determination Date"), notify the Borrower of the
designation by the Lenders of the new Hydrocarbon Borrowing Base for
the period beginning on such Determination Date and continuing until,
but not including, the next Determination Date. If an Unscheduled
Redetermination is to be made by the Lenders, the Agent shall notify
the Borrower within a reasonable time after receipt of all requested
information of the new Hydrocarbon Borrowing Base, and such new
Hydrocarbon Borrowing Base shall continue until the next Determination
Date. If the Borrower does not furnish all such information, reports
and data by any date specified in this Section 7(b), unless such
failure is reasonably determined by the Agent to be of no fault of the
Borrower, the Lenders nonetheless designate the Hydrocarbon Borrowing
Base at any amounts which the Lenders in their reasonable discretion
determine and redesignate the Hydrocarbon Borrowing Base from time to
time thereafter until the Lenders receive all such information, reports
and data, whereupon the Lenders shall designate a new Hydrocarbon
Borrowing Base as described above. The procedure for determining the
Hydrocarbon Borrowing Base at each redetermination shall be that the
Agent shall determine the Hydrocarbon Borrowing Base and submit the
same to the Lenders. Increases in the Hydrocarbon Borrowing Base will
require approval of all Lenders, but other reaffirmation or changes in
the Hydrocarbon Borrowing Base will be subject to the approval of
Required Lenders. If any redetermined Hydrocarbon Borrowing Base is not
approved by Required Lenders within twenty (20) days after submission
to the Lenders by the Agent, the Agent shall notify each of the Lenders
that the proposed Hydrocarbon Borrowing Base has not been approved and
each Lender will submit within ten (10) days thereafter its proposed
Hydrocarbon Borrowing Base. The redetermined Hydrocarbon Borrowing Base
shall be then determined (in all cases except those involving an
increase of the Borrowing Base which requires approval of all Lenders)
based upon the weighted arithmetic average of the proposed amounts
submitted by each Lender, said proposals to
-25-
be weighted according to each Lender's Commitment. Each Lender shall
determine the amount of the Hydrocarbon Borrowing Base based upon the
loan collateral value which such Lender in its sole discretion (using
such methodology, assumptions and discount rates as such Lender
customarily uses in assigning collateral value to oil and gas
properties, oil and gas gathering systems, gas processing and plant
operations) assigns to such Oil and Gas Properties of the Borrower at
the time in question and based upon such other credit factors
consistently applied (including, without limitation, the assets,
liabilities, cash flow, business, properties, prospects, management and
ownership of the Borrower and its affiliates) as such Lender
customarily considers in evaluating similar oil and gas credits. If at
any time any of the Oil and Gas Properties are sold, the Hydrocarbon
Borrowing Base then in effect shall automatically be reduced by a sum
equal to the amount of prepayment, if any, required to be made pursuant
to Section 12(r) hereof. It is expressly understood that the Lenders
have no obligation to designate the Hydrocarbon Borrowing Base at any
particular amounts, except in the exercise of their discretion, whether
in relation to the Commitments or otherwise. Provided, however, that
the Lenders shall not have the obligation to designate a Hydrocarbon
Borrowing Base in an amount in excess of the Commitment.
(c) Additional Borrowing Base. The Borrowing Base will
increase, in increments of not less than $1,000,000 (the "Increased
Amount") from time to time between Determination Dates by an amount
equal to 35% of the face amount of all Junior Securities acquired by
the Borrower during such period; provided, however, that such Increased
Amount may not exceed $10,000,000 during any six (6) month period
between Determination Dates (the "Increase Limit") and, provided
further, that the first such period shall include the period of time
from January 1, 2002 to October 1, 2002. Borrower shall give the Agent
notice of any such acquisition of Junior Securities by Borrower and
upon receipt of such notice by Agent, the Borrowing Base (if requested
by Borrower in writing during the same Borrowing Base period) shall be
increased by the Increased Amount covered by such notice. Provided,
further, that at no time may the Borrowing Base exceed the Commitment.
8. FEES.
(a) Unused Commitment Fee. The Borrower shall pay to Agent for
the ratable benefit of the Lenders an unused commitment fee (the
"Unused Commitment Fee") equivalent to the Unused Commitment Fee Rate
times the daily average of the sum of the (i) Hydrocarbon Borrowing
Base, plus (ii) the Increase Limit minus Total Outstandings. Such
Unused Commitment Fee shall be calculated on the basis of a year
consisting of 360 days. The Unused Commitment Fee shall be payable in
arrears on the last day of each calendar quarter beginning June 30,
2002 with the final fee payment due on the Maturity Date for any period
then ending for which the Unused Commitment Fee shall not have been
theretofore paid. In the event the Commitment terminates on any date
prior to the end of any such quarterly period, the Borrower shall pay
to the Agent for
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the ratable benefit of the Lenders, on the date of such termination,
the total Unused Commitment Fee due for the period in which such
termination occurs. If a date for payment of the Unused Commitment Fee
shall be other than a Business Day such payment shall be made on the
next succeeding Business Day.
9. PREPAYMENTS.
(a) Voluntary Prepayments. Subject to the provisions of
Section 5(e) hereof, the Borrower may at any time and from time to
time, without penalty or premium, prepay the Notes, in whole or in
part. Each such prepayment shall be made on at least three (3) Business
Days' notice to Agent in the case of LIBOR Loan Tranches and without
notice in the case of Base Rate Loans and shall be in a minimum amount
of (i) $100,000 or any whole multiple of $100,000 in excess thereof (or
the unpaid balance of the Notes, whichever is less), for Base Rate
Loans, plus accrued interest thereon and (ii) $1,000,000 or any
integral multiple thereof (or the unpaid balance on the Notes,
whichever is less) for LIBOR Loans, plus accrued interest thereon to
the date of prepayment.
(b) Mandatory Prepayment For Borrowing Base Deficiency. In the
event the Total Outstandings ever exceed the Borrowing Base as
determined by Lenders pursuant to Section 7(b) and 7(c) hereof (a
"Borrowing Base Deficiency"), the Borrower shall, within ninety (90)
days after written notification from the Agent, either (A) by
instruments reasonably satisfactory in form and substance to the
Lender, provide the Agent with collateral with value and quality in
amounts satisfactory to all of the Lenders in their discretion in order
to increase the Borrowing Base by an amount at least equal to such
excess, or (B) prepay, without premium or penalty, the principal amount
of the Notes in an amount at least equal to such excess plus accrued
interest thereon to the date of prepayment, or (C) prepay, without
premium or penalty, the principal amount of such excess in not more
than two (2) equal installments to be applied to principal plus accrued
interest thereon with the first such monthly payment being due upon the
90th day after receipt of notice of such deficiency with the remaining
payment being due in one hundred eighty (180) days of receipt of notice
of such deficiency.
10. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to
enter into this Agreement, Borrower represents and warrants to the Lenders
(which representations and warranties will survive the delivery of the Notes)
that:
(a) Creation and Existence. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
of the State of Delaware and is duly qualified in all jurisdictions
wherein failure to qualify may result in a Material Adverse Effect. The
Guarantors are each a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which they were
formed and is duly qualified to do business in all jurisdictions
wherein failure to qualify may result in a Material Adverse Effect.
Borrower and each Guarantor have all corporate power and
-27-
authority to own their respective properties and assets and to transact
the business in which they are engaged.
(b) Power and Authority. Borrower is duly authorized and
empowered to create and issue the Notes; and Borrower and each
Guarantor is duly authorized and empowered to execute, deliver and
perform their respective Loan Documents, including this Agreement; and
all corporate action on Borrower's and each Guarantor's part requisite
for the due creation and issuance of the Notes and for the due
execution, delivery and performance of the Loan Documents, including
this Agreement, has been duly and effectively taken.
(c) Binding Obligations. This Agreement does, and the Notes
and other Loan Documents upon their creation, issuance, execution and
delivery will, constitute valid and binding obligations of Borrower and
each Guarantor, respectively, enforceable in accordance with its
respective terms (except that enforcement may be subject to general
principles of equity and any applicable bankruptcy, insolvency, or
similar debtor relief laws now or hereafter in effect and relating to
or affecting the enforcement of creditors' rights generally).
(d) No Legal Bar or Resultant Lien. The Notes and the Loan
Documents, including this Agreement, do not and will not, to the best
of Borrower's or each Guarantor's knowledge violate or conflict with or
result in a default under any provisions of Borrower's or any
Guarantor's charter, bylaws or other organizational documents or any
contract, agreement, law, regulation, order, injunction, judgment,
decree or writ to which Borrower or either Guarantor is subject, or
result in the creation or imposition of any lien or other encumbrance
upon any assets or properties of Borrower or any Guarantor, other than
those contemplated by this Agreement.
(e) No Consent. The execution, delivery and performance by
Borrower of the Notes and the execution, delivery and performance by
Borrower and each Guarantor of the other Loan Documents, including this
Agreement, does not require the consent or approval of any other person
or entity, including without limitation any regulatory authority or
governmental body of the United States or any state thereof or any
political subdivision of the United States or any state thereof except
for consents required for federal, state and, in some instances,
private leases, right of ways and other conveyances or encumbrances of
oil and gas leases all of which shall have been obtained.
(f) Financial Condition. The audited consolidated Financial
Statements of Borrower dated as of December 31, 2001 which have been
delivered to Lenders by Borrower are complete and correct in all
material respects and fully and accurately reflect in all material
respects the financial conditions and the results of the operations of
Borrower as of such date and for the period stated and no change has
occurred between such date and the Effective Date in the condition,
financial or otherwise of Borrower or
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any Guarantor which is reasonably expected to have a Material Adverse
Effect, except as disclosed to Lenders in Schedule "2" attached hereto.
(g) Liabilities. Neither Borrower nor any Guarantor has any
material liability, direct or contingent on the Effective Date, except
as disclosed to the Lenders in the Financial Statements or on Schedule
"3" attached hereto. No unusual or unduly burdensome restrictions,
restraint, or hazard exists by contract, law or governmental regulation
or otherwise relative to the business, assets or properties of Borrower
or either Guarantor which is reasonably expected to have a Material
Adverse Effect or which involve any of the Loan Documents.
(h) Litigation. Except as described in the Financial
Statements, or as otherwise disclosed to the Lenders in Schedule "4"
attached hereto, on the Effective Date there is no litigation, legal or
administrative proceeding, investigation or other action of any nature
pending or, to the knowledge of any directors or the officers of
Borrower or any Guarantor, threatened against or affecting Borrower or
any Guarantor which involves the possibility of any judgment or
liability not fully covered by insurance, and which is reasonably
expected to have a Material Adverse Effect.
(i) Taxes; Governmental Charges. Borrower and each Guarantor
has filed all tax returns and reports required to be filed and has paid
all taxes, assessments, fees and other governmental charges levied upon
it or its assets, properties or income which are due and payable,
including interest and penalties, the failure of which to pay could
reasonably be expected to have a Material Adverse Effect, except such
as are being contested in good faith by appropriate proceedings and for
which adequate reserves for the payment thereof as required by GAAP has
been provided and levy and execution thereon have been stayed and
continue to be stayed.
(j) Titles, Etc. Borrower and each Guarantor has good and
defensible title to all of their material assets, including without
limitation, the Oil and Gas Properties, free and clear of all Liens
except Permitted Liens.
(k) Defaults. Neither Borrower nor any Guarantor is in default
and no event or circumstance has occurred which, but for the passage of
time or the giving of notice, or both, would constitute a default under
any loan or
credit agreement, indenture, mortgage, deed of trust,
security agreement or other agreement or instrument to which Borrower
or any Guarantor is a party in any respect that would be reasonably
expected to have a Material Adverse Effect. No Default or Event of
Default hereunder has occurred and is continuing.
(l) Casualties; Taking of Properties. Since the dates of the
latest Financial Statements of the Borrower or any Guarantor delivered
to Lenders, neither the business nor the assets or properties of
Borrower has been affected (to the extent it is reasonably
-29-
expected to cause a Material Adverse Effect), as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by any domestic or
foreign government or any agency thereof, riot, activities of armed
forces or acts of God or of any public enemy.
(m) Use of Proceeds; Margin Stock. The proceeds of the
Commitment may be used by the Borrower solely for the purposes of (i)
acquisition, exploration and development of oil and gas properties, and
(ii) working capital and letters of credit, and (iii) other general
corporate purposes including the purchase of Junior Securities.
Borrower is not engaged principally or as one of its important
activities in the business of extending credit for the purpose of
purchasing or carrying any "margin stock " as defined in Regulation U
of the Board of Governors of the Federal Reserve System (12 C.F.R. Part
221), or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry a margin stock or for any
other purpose which might constitute this transaction a "purpose
credit" within the meaning of said Regulation U.
Neither Borrower nor any person or entity acting on behalf of
Borrower has taken or will take any action which might cause the loans
hereunder or any of the Loan Documents, including this Agreement, to
violate Regulation U or any other regulation of the Board of Governors
of the Federal Reserve System or to violate the Securities Exchange Act
of 1934 or any rule or regulation thereunder, in each case as now in
effect or as the same may hereafter be in effect.
(n) Location of Business and Offices. The principal place of
business and chief executive offices of the Borrower is located at the
address as stated in Section 17 hereof.
(o) Compliance with the Law. To the best of Borrower's
knowledge, neither Borrower nor any Guarantor:
(i) is in violation of any law, judgment, decree,
order, ordinance, or governmental rule or regulation to which
Borrower, or any of its assets or properties are subject; or
(ii) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of any of its assets or properties or the conduct of
its business;
which violation or failure is reasonably expected to have a Material
Adverse Effect.
(p) No Material Misstatements. No information, exhibit or
report furnished by Borrower or any Guarantor to the Lenders in
connection with the negotiation of this
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Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statements
contained therein not materially misleading.
(q) Not A Utility. Borrower is not a utility subject to
regulation under the laws of in the State of
Texas as a result of being
engaged in the (i) generation, transmission, or distribution and sale
of electric power; (ii) transportation, distribution and sale through a
local distribution system of natural or other gas for domestic,
commercial, industrial, or other use; (iii) provision of telephone or
telegraph service to others; (iv) production, transmission, or
distribution and sale of steam or water; (v) operation of a railroad;
or (vii) provision of sewer service to others.
(r) ERISA. Borrower is in compliance in all material respects
with the applicable provisions of ERISA, and no "reportable event", as
such term is defined in Section 403 of ERISA, has occurred with respect
to any Plan of Borrower.
(s) Public Utility Holding Company Act. Borrower is not a
"holding company", or "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(t) Subsidiaries. Borrower's Subsidiaries are listed on
Schedule "5" hereto.
(u) Environmental Matters. Except as disclosed on Schedule
"6", as of the Effective Date neither the Borrower nor any Guarantor
(i) has received notice or otherwise learned or is otherwise aware of
any Environmental Liability which would be reasonably expected to
individually or in the aggregate have a Material Adverse Effect arising
in connection with (A) any non-compliance with or violation of the
requirements of any Environmental Law or (B) the release or threatened
release of any toxic or hazardous waste into the environment, (ii) has
received notice or otherwise is aware of any threatened or actual
liability in connection with the release or notice of any threatened
release of any toxic or hazardous waste into the environment which
would be reasonably expected to individually or in the aggregate have a
Material Adverse Effect or (iii) has received notice or otherwise
learned of or is otherwise aware of any federal or state investigation
evaluating whether any remedial action is needed to respond to a
release or threatened release of any toxic or hazardous waste into the
environment for which Borrower or any Guarantor is or may be liable
which would reasonably be expected to result in a Material Adverse
Effect.
(v) Liens. Except (i) as disclosed on Schedule "1" hereto and
(ii) for Permitted Liens, the assets and properties of Borrower and
each Guarantor are free and clear of all liens and encumbrances.
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(w) Solvency. Immediately after the consummation of the
transactions to occur on the Effective Date and immediately following
the making of each Loan made on the Effective Date and after giving
effect to the application of the proceeds of such Loans, (a) the fair
value of the assets of Borrower and each Guarantor, at a fair
valuation, will exceed their respective debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable
value of the property of Borrower and each Guarantor will be greater
than the amount that will be required to pay the probable liability of
their respective debts and other liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and
matured; (c) Borrower and each Guarantor will be able to pay their
respective debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured;
and (d) Borrower and each Guarantor will not have unreasonably small
capital with which to conduct the business in which they are engaged as
such business is now conducted and is proposed to be conducted
following the Effective Date.
(x) Insurance. All insurance reasonably necessary in the
ordinary course of the Borrower's and any Guarantor's business is
maintained by or on behalf of the Borrower and any such Guarantor and
all premiums in respect of such insurance have been paid.
11. CONDITIONS OF LENDING.
(a) The effectiveness of this Agreement, and the obligation to make the
initial Advance under the Commitment shall be subject to satisfaction of the
following conditions precedent:
(i) Borrower's Execution and Delivery. Borrower shall have
executed and delivered the Agreement, the Notes and other required Loan
Documents, all in form and substance satisfactory to the Agent;
(ii) Guarantor's Execution and Delivery. Each Guarantor shall
have executed and delivered its Guaranty in the form of Exhibit "C";
(iii) Legal Opinions. The Agent shall have received from
Borrower's and each Guarantor's legal counsel one or more favorable
legal opinions in form and substance reasonably satisfactory to the
Agent;
(iv) Corporate Resolutions. The Agent shall have received
appropriate certified corporate resolutions of Borrower and each
Guarantor;
(v) Good Standing. The Agent shall have received evidence of
existence and good standing for Borrower and each Guarantor;
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(vi) Incumbency. The Agent shall have received a signed
certificate of Borrower and each Guarantor, certifying the names of the
officers of Borrower and each Guarantor authorized to sign loan
documents on behalf of Borrower and each Guarantor, together with the
true signatures of each such officer. The Agent may conclusively rely
on such certificate until the Agent receives a further certificate of
Borrower and any Guarantor canceling or amending the prior certificate
and submitting signatures of the officers named in such further
certificate;
(vii) Certificates of Incorporation and Bylaws. The Agent
shall have received copies of Certificates of Incorporation for
Borrower and each Guarantor together with all amendments thereto,
appropriately certified by governmental authority in the jurisdiction
of incorporation of Borrower and each Guarantor, and a copy of the
Bylaws of Borrower and each Guarantor, and all amendments thereto,
certified by one or more officers of Borrower or each Guarantor, as the
case may be, as being true, correct and complete;
(viii) Payment of Fees. The Agent shall have received for the
benefit of Lenders the Fees required pursuant to any Fee Letter among
Borrower and Agent, and any Arranger;
(ix) Representation and Warranties. The representations and
warranties of Borrower and each Guarantor under this Agreement and the
other Loan Documents shall be true and correct in all material respects
as of such date, as if then made (except to the extent that such
representations and warranties related solely to an earlier date);
(x) Mortgage and Title. The Agent shall have received the
mortgage and title information required to be delivered by Borrower
pursuant to Section 6 of this Agreement; provided, however, that for
the purposes of satisfying this closing condition, the Borrower shall
only be required to have mortgaged Oil and Gas Properties representing
not less than 65% of the Engineered Value of its Oil and Gas Properties
as of the Effective Date. Within thirty (30) days of the date hereof,
the Borrower shall have increased the percentage of properties
mortgaged from 65% to 80%;
(xi) No Event of Default. No Default or Event of Default shall
have occurred and be continuing;
(xii) Other Documents. Agent shall have received such other
instruments and documents incidental and appropriate to the transaction
provided for herein as Agent or its counsel may reasonably request, and
all such documents shall be in form and substance reasonably
satisfactory to the Agent; and
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(xiii) Legal Matters Satisfactory. All legal matters incident
to the consummation of the transactions contemplated hereby shall be
reasonably satisfactory to special counsel for Agent retained at the
expense of Borrower.
(b) The obligation of the Lenders to make any Advance under the
Commitment (other than the initial Advance) shall be subject to the following
additional conditions precedent that, at the date of making each such Advance
and after giving effect thereto:
(i) Representations and Warranties. The representations and
warranties of Borrower and each Guarantor under this Agreement and the
other Loan Documents are true and correct in all material respects as
of such date, as if then made (except to the extent that such
representations and warranties related solely to an earlier date); and
(ii) No Event of Default. No Default or Event of Default shall
have occurred and be continuing;
(iii) Legal Matters Satisfactory. All legal matters incident
to the consummation of the transactions contemplated hereby shall be
reasonably satisfactory to special counsel for Agent retained at the
expense of Borrower
Each Borrowing Notice shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 11(b)(i) and (ii) have been
satisfied.
12. AFFIRMATIVE COVENANTS. A deviation from the provisions of this
Section 12 shall not constitute a Default or an Event of Default under this
Agreement if such deviation is expressly consented to in writing by Super
Majority Lenders prior to the date of deviation. Borrower will at all times
comply, and will cause each Guarantor to comply, with the covenants contained in
this Section 12 from the date hereof and for so long as the Commitments are in
existence or any amount is owed to the Agent or the Lenders under this Agreement
or the other Loan Documents.
(a) Financial Statements and Reports. Borrower shall promptly
furnish to the Agent from time to time upon request such information
regarding the business and affairs and financial condition of Borrower
and each Guarantor, as the Agent may reasonably request, and will
furnish to the Agent:
(i) Annual Audited Financial Statements. As soon as
available, and in any event within ninety (90) days after the
close of each fiscal year, the annual audited consolidated and
unaudited consolidating Financial Statements of Borrower,
prepared in accordance with GAAP accompanied by an unqualified
opinion on such consolidated statements rendered by an
independent accounting firm reasonably acceptable to the
Agent;
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(ii) Quarterly Financial Statements. As soon as
available, and in any event within forty-five (45) days after
the end of each fiscal quarter of each year, the quarterly
unaudited, (i) consolidated and consolidating Financial
Statements of Borrower and each Guarantor, and (ii) the
unconsolidated quarterly Financial Statements of Borrower, all
such Financial Statements to be prepared in accordance with
GAAP;
(iii) Report on Properties. As soon as available and
in any event on or before March 1 and September 1 of each
calendar year, and at such other times as any Lender, in
accordance with Section 7 hereof, may request, the engineering
reports required to be furnished to the Agent under such
Section 7 on the Oil and Gas Properties;
(iv) Additional Information. Promptly upon request of
the Agent from time to time any additional financial
information or other information that the Agent may reasonably
request.
All such reports, information, balance sheets and Financial Statements
referred to in Subsection 12(a) above shall be in such detail as the
Agent may reasonably request and shall be prepared in a manner
consistent with the Financial Statements.
(b) Certificates of Compliance. Concurrently with the
furnishing of the annual audited Financial Statements pursuant to
Subsection 12(a)(i) hereof and the quarterly unaudited Financial
Statements pursuant to Subsection 12(a)(ii) hereof for the months
coinciding with the end of each calendar quarter, Borrower will furnish
or cause to be furnished to the Agent a certificate in the form of
Exhibit "D" attached hereto, signed by the President or Chief Financial
Officer of Borrower and each Guarantor, (i) stating that Borrower and
each Guarantor have fulfilled in all material respects their respective
obligations under the Notes and the Loan Documents, including this
Agreement, and that all representations and warranties made herein and
therein continue (except to the extent they relate solely to an earlier
date) to be true and correct in all material respects (or specifying
the nature of any change), or if a Default has occurred, specifying the
Default and the nature and status thereof; (ii) to the extent requested
from time to time by the Agent, specifically affirming compliance of
Borrower in all material respects with any of its representations
(except to the extent they relate solely to an earlier date) or
obligations under said instruments; (iii) setting forth the
computation, in reasonable detail as of the end of each period covered
by such certificate, of compliance with Sections 13(b), (c), (d), (e)
and (f); and (iv) containing or accompanied by such financial or other
details, information and material as the Agent may reasonably request
to evidence such compliance.
(c) Accountants' Certificate. Concurrently with the furnishing
of the annual audited Financial Statement pursuant to Section 12(a)(i)
hereof, Borrower will furnish a
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statement from the firm of independent public accountants which audited
such Financial Statement to the effect that nothing has come to their
attention to cause them to believe that there existed on the date of
such statements any Event of Default and specifically calculating
Borrower's compliance with Sections 13(b), (c), (d), (e) and (f) of
this Agreement.
(d) Taxes and Other Liens. Borrower will pay, and will cause
each Guarantor to pay, and discharge promptly all taxes, assessments
and governmental charges or levies imposed upon Borrower, or upon the
income or any assets or property of Borrower or any Guarantor, as well
as all claims of any kind (including claims for labor, materials,
supplies and rent) which, if unpaid, might become a Lien or other
encumbrance upon any or all of the assets or property of Borrower or
any Guarantor and which could reasonably be expected to result in a
Material Adverse Effect; provided, however, that neither the Borrower
nor any Guarantor shall be required to pay any such tax, assessment,
charge, levy or claim if the amount, applicability or validity thereof
shall currently be contested in good faith by appropriate proceedings
diligently conducted, levy and execution thereon have been stayed and
continue to be stayed and if Borrower shall have set up adequate
reserves therefor, if required, under GAAP.
(e) Compliance with Laws. Borrower will observe and comply,
and will cause each Guarantor to observe and comply, in all material
respects, with all applicable laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, orders and
restrictions relating to environmental standards or controls or to
energy regulations of all federal, state, county, municipal and other
governments, departments, commissions, boards, agencies, courts,
authorities, officials and officers, domestic or foreign.
(f) Further Assurances. Borrower will cure promptly any
defects in the creation and issuance of the Notes and the execution and
delivery of the Notes and the Loan Documents, including this Agreement.
Borrower at its sole expense will, and will cause each Guarantor to,
promptly execute and deliver to Agent upon its reasonable request all
such other and further documents, agreements and instruments in
compliance with or accomplishment of the covenants and agreements in
this Agreement, or to correct any omissions in the Notes or more fully
to state the obligations set out herein.
(g) Performance of Obligations. Borrower will pay the Notes
and other obligations incurred by it hereunder according to the
reading, tenor and effect thereof and hereof; and Borrower will do and
perform every act and discharge all of the obligations provided to be
performed and discharged by the Borrower under the Loan Documents,
including this Agreement, at the time or times and in the manner
specified.
(h) Insurance. Borrower now maintains and will continue to
maintain, and will cause each Guarantor to maintain, insurance with
financially sound and reputable
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insurers with respect to its assets against such liabilities, fires,
casualties, risks and contingencies and in such types and amounts as is
customary in the case of persons engaged in the same or similar
businesses and similarly situated. Upon request of the Agent, Borrower
will furnish or cause to be furnished to the Agent from time to time a
summary of the respective insurance coverage of Borrower and each
Guarantor in form and substance reasonably satisfactory to the Agent,
and, if requested, will furnish the Agent copies of the applicable
policies. Upon demand by Agent any insurance policies covering any such
property shall be endorsed (i) to provide that such policies may not be
canceled, reduced or affected in any manner for any reason without
fifteen (15) days prior notice to Agent, (ii) to provide for insurance
against fire, casualty and other hazards normally insured against, in
the amount of the full value (less a reasonable deductible not to
exceed amounts customary in the industry for similarly situated
business and properties) of the property insured, and (iii) to provide
for such other matters as the Agent may reasonably require. Borrower
shall, and shall cause each Guarantor to, at all times maintain
adequate insurance with respect to all of its other assets and xxxxx in
accordance with prudent business practices.
(i) Accounts and Records. Borrower will, and will cause each
Guarantor to, keep proper books, records and accounts in which full,
true and correct entries will be made of all dealings or transactions
in relation to its business and activities, prepared in a manner
consistent with prior years, subject to changes suggested by Borrower's
auditors.
(j) Right of Inspection. Borrower will permit, and will cause
each Guarantor to permit, any officer, employee or agent of the Lenders
to examine Borrower's books, records and accounts, and take copies and
extracts therefrom, all at such reasonable times during normal business
hours and as often as the Lenders may reasonably request. The Lenders
will use best efforts to keep all Confidential Information (as herein
defined) confidential and will not disclose or reveal the Confidential
Information or any part thereof other than (i) as required by law, and
(ii) to the Lenders', and the Lenders' subsidiaries', Affiliates,
officers, employees, legal counsel and regulatory authorities or
advisors to whom it is necessary to reveal such information for the
purpose of effectuating the agreements and undertakings specified
herein or as otherwise required in connection with the enforcement of
the Lenders' and the Agent's rights and remedies under the Notes, this
Agreement and the other Loan Documents. As used herein, "Confidential
Information" means information about Borrower or any Guarantor
furnished by Borrower to the Lenders, but does not include information
(i) which was publicly known, or otherwise known to the Lenders, at the
time of the disclosure, (ii) which subsequently becomes publicly known
through no act or omission by the Lenders, or (iii) which otherwise
becomes known to the Lenders, other than through disclosure by Borrower
or any Guarantor.
(k) Notice of Certain Events. Borrower shall promptly notify
the Agent if Borrower learns of the occurrence of (i) any event which
constitutes a Default or Event of
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Default together with a detailed statement by Borrower of the steps
being taken to cure such Default or Event of Default; (ii) any legal,
judicial or regulatory proceedings affecting Borrower or any of the
assets or properties of Borrower or any Guarantor which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect; (iii) any dispute between Borrower or any Guarantor and any
governmental or regulatory body or any other Person or entity which, if
adversely determined, would reasonably be expected to cause a Material
Adverse Effect; (iv) any other matter which in Borrower's reasonable
opinion could have a Material Adverse Effect.
(l) ERISA Information and Compliance. Borrower will, and will
cause each Guarantor to, promptly furnish to the Agent upon becoming
aware of the occurrence of any "reportable event", as such term is
defined in Section 4043 of ERISA, or of any "prohibited transaction",
as such term is defined in Section 4975 of the Internal Revenue Code of
1954, as amended, in connection with any Plan or any trust created
thereunder, a written notice signed by the chief financial officer of
the Borrower specifying the nature thereof, what action such party is
taking or proposes to take with respect thereto, and, when known, any
action taken by the Internal Revenue Service with respect thereto.
(m) Environmental Reports and Notices. Borrower will, and will
cause each Guarantor to, deliver to the Agent (i) promptly upon its
becoming available, one copy of each report (other than routine
informational filings) sent by Borrower or any Guarantor to any court,
governmental agency or instrumentality pursuant to any Environmental
Law, (ii) notice, in writing, promptly upon Borrower's or any
Guarantor's receipt of notice or otherwise learning of any claim,
demand, action, event, condition, report or investigation indicating
any potential or actual liability arising in connection with (x) the
non-compliance with or violation of the requirements of any
Environmental Law which reasonably could be expected to have a Material
Adverse Effect; (y) the release or threatened release of any hazardous
substance, toxic or hazardous waste into the environment which
reasonably could be expected to have a Material Adverse Effect or which
release Borrower or any Guarantor would have a duty to report to any
court or government agency or instrumentality, or (iii) the existence
of any Environmental Lien on any properties or assets of Borrower or
any Guarantor and Borrower shall promptly deliver a copy of any such
notice to Agent.
(n) Compliance and Maintenance. Borrower will, and will cause
each Guarantor to, (i) observe and comply in all material respects with
all Environmental Laws; (ii) except as provided in Subsections 12(p)
and 12(q) below, maintain the Oil and Gas Properties and other assets
and properties in good and workable condition at all times and make all
repairs, replacements, additions, betterments and improvements to the
Oil and Gas Properties and other assets and properties as are needed
and proper so that the business carried on in connection therewith may
be conducted properly and efficiently at all times in the opinion of
the Borrower, or any Guarantor, exercised in good faith; (iii) take or
cause to be taken whatever actions are necessary or desirable to
prevent an event
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or condition of default by Borrower or any Guarantor under the
provisions of any gas purchase or sales contract or any other contract,
agreement or lease comprising a part of the Oil and Gas Properties or
other collateral security hereunder which default could reasonably be
expected to result in a Material Adverse Effect; and (iv) furnish Agent
upon request evidence reasonably satisfactory to Agent that there are
no Liens, claims or encumbrances on the Oil and Gas Properties, except
Permitted Liens.
(o) Operation of Properties. Except as provided in Subsections
12(p) and (q) below, Borrower will, and will cause each Guarantor to,
operate, or use reasonable efforts to cause to be operated, all Oil and
Gas Properties in a careful and efficient manner in accordance with the
practice of the industry and in compliance in all material respects
with all applicable laws, rules, and regulations, and in compliance in
all material respects with all applicable proration and conservation
laws of the jurisdiction in which the properties are situated, and all
applicable laws, rules, and regulations, of every other agency and
authority from time to time constituted to regulate the development and
operation of the properties and the production and sale of hydrocarbons
and other minerals therefrom; provided, however, that Borrower or any
such Guarantor shall have the right to contest in good faith by
appropriate proceedings, the applicability or lawfulness of any such
law, rule or regulation and pending such contest may defer compliance
therewith, as long as such deferment shall not subject the properties
or any part thereof to foreclosure or loss.
(p) Compliance with Leases and Other Instruments. Borrower
will, and will cause each Guarantor to, pay or cause to be paid and
discharge all rentals, delay rentals, royalties, production payment,
and indebtedness required to be paid by such party (or required to keep
unimpaired in all material respects the rights of such party in Oil and
Gas Properties) accruing under, and perform or cause to be performed in
all material respects each and every act, matter, or thing required of
such party by each and all of the assignments, deeds, leases,
subleases, contracts, and agreements in any way relating to such party
or any of the Oil and Gas Properties and do all other things necessary
of such party to keep unimpaired in all material respects the rights of
such party thereunder and to prevent the forfeiture thereof or default
thereunder; provided, however, that nothing in this Agreement shall be
deemed to require Borrower or any Guarantor to perpetuate or renew any
oil and gas lease or other lease by payment of rental or delay rental
or by commencement or continuation of operations nor to prevent
Borrower or any Guarantor from abandoning or releasing any oil and gas
lease or other lease or well thereon when, in any of such events, in
the opinion of the affected Borrower or Guarantor exercised in good
faith, it is not in the best interest of the Borrower to perpetuate the
same.
(q) Certain Additional Assurances Regarding Maintenance and
Operations of Properties. With respect to those Oil and Gas Properties
which are being operated by operators other than the Borrower or a
Guarantor, neither Borrower nor any Guarantor shall be obligated to
perform any undertakings contemplated by the covenants and
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agreement contained in Subsections 12(n) or 12(o) hereof which are
performable only by such operators and are beyond the control of
Borrower or such Guarantor; however, Borrower agrees to promptly take,
or cause to be taken, all reasonable actions available under any
operating agreements or otherwise to bring about the performance of any
such material undertakings required to be performed thereunder.
(r) Sale of Certain Assets/Prepayment of Proceeds. Borrower
will immediately pay over to the Agent for the ratable benefit of the
Lenders as a prepayment of principal on the Notes and a reduction of
the Commitments, an amount equal to 100% of the "Release Price" from
the sale of Oil and Gas Properties by Borrower or any Guarantor in
excess of $10,000,000 in the aggregate received from such sales between
Borrowing Base Redetermination, which sale has been either (i) made in
compliance with the provisions of Section 13(a)(ii) hereof, or (ii)
approved in advance by Required Lenders. Provided, however, that in
lieu of making any such payment the Borrower may elect to provide, or
cause to be provided by a Guarantor, additional Oil and Gas Properties
with value and quality satisfactory to all Lenders in their discretion
in substitution for the Oil and Gas Properties sold pursuant to the
provisions of this Section 12(r). The term "Release Price" means the
price determined by the Required Lenders in their discretion based on
the loan value of the Oil and Gas Properties being sold by the Borrower
or a Guarantor that the Required Lenders in their discretion (using
such methodology, assumptions and discount rates as such Lenders
customarily use in assigning loan value to oil and gas properties)
assigned to such Oil and Gas Properties as of the date of such
determination by the Lenders. Any such prepayment of principal on the
Notes required by this Section 12(r), shall not be in lieu of, but
shall be in addition to, any mandatory prepayment of principal required
to be paid pursuant to Section 9(b) hereof.
(s) Title Matters. Within sixty (60) days after the Effective
Date with respect to the Oil and Gas Properties listed on Schedule "7"
hereto, Borrower shall furnish Agent with title information reasonably
satisfactory to Agent showing good and defensible title of Borrower or
a Guarantor to such Oil and Gas Properties subject only to the
Permitted Liens. As to any Oil and Gas Properties hereafter mortgaged
to Agent, Borrower will promptly (but in no event more than sixty (60)
days following such mortgaging), furnish, or cause to be furnished, if
requested, Agent with title information reasonably satisfactory to
Agent showing good and defensible title of Borrower or a Guarantor to
such Oil and Gas Properties subject only to Permitted Liens.
(t) Curative Matters. Within sixty (60) days after the
Effective Date with respect to matters listed on Schedule "8" and,
thereafter, within sixty (60) days after receipt by Borrower from Agent
or its counsel of written notice of title defects the Agent reasonably
requires to be cured, Borrower shall, or shall cause a Guarantor to,
either (i) provide such curative information, in form and substance
satisfactory to Agent, or (ii) substitute Oil and Gas Properties of
value and quality satisfactory to the Agent for all
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of Oil and Gas Properties for which such title curative was requested
but upon which Borrower elected not to provide such title curative
information, and, within sixty (60) days of such substitution, provide
title information satisfactory to the Agent covering the Oil and Gas
Properties so substituted. If the Borrower fails to satisfy (i) or (ii)
above within the time specified, the loan collateral value assigned by
the Lenders to the Oil and Gas Properties for which such curative
information was requested shall be deducted from the Borrowing Base
resulting in a reduction thereof.
(u) Change of Principal Place of Business. Borrower shall give
Agent at least thirty (30) days prior written notice of its intention
to move its principal place of business from the address set forth in
Section 17 hereof.
(v) Additional Collateral. Borrower agrees to regularly
monitor engineering data covering all producing oil and gas properties
and interests owned or acquired by Borrower and the Guarantors on or
after the date hereof and to mortgage or cause to be mortgaged such of
the same to Agent for the ratable benefit of the Lenders in
substantially the form of the Security Instruments, as applicable, to
the extent that the Lenders shall at all times during the existence of
the Commitment be secured by perfected Liens and security interests
covering not less than eighty percent (80%) of the Engineered Value of
all producing Oil and Gas Properties of Borrower or the Guarantors. In
addition, the Borrower agrees that in connection with the mortgaging of
such additional Oil and Gas Properties, it shall within a reasonable
time thereafter, deliver or cause to be delivered to the Agent such
mortgage and title opinions and other title information with respect to
the title and Lien status of such Oil and Gas Properties as may be
necessary to maintain at all times a level of such title information
(showing good and defensible title) of not less than eighty percent
(80%) of the Engineered Value of all Oil and Gas Properties mortgaged
to the Agent for the ratable benefit of the Lenders. In order to assist
Borrower in monitoring its mortgage coverage, Agent agrees to notify
Borrower if the Lenders determine that the coverage required by this
paragraph ever falls below 80%. Failure of the Agent to notify the
Borrower of any such deficiency shall in no way affect Borrower's
obligations under this Section 12(v) to monitor and pledge, or cause to
be pledged, additional Oil and Gas Properties from time to time. Upon
receipt of any such notice from the Agent, the Borrower shall, within
thirty (30) days of receipt of such notice, execute and deliver, or
cause to be executed and delivered, Security Instruments in form and
substance satisfactory to the Agent covering sufficient additional Oil
and Gas Properties to bring the coverage to at least 80%.
(w) Retirement of Certain Preferred Equity. Upon the purchase
by Borrower of any of its Convertible Junior Debentures, Borrower will
retire or cause to be retired an equivalent dollar amount of the Trust
Convertible Preferred Securities and will provide notice thereof to
Agent.
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13. NEGATIVE COVENANTS. A deviation from the provisions of this Section
13 shall not constitute an Event of Default under this Agreement if such
deviation is consented to in writing by Super Majority Lenders prior to the date
of deviation. Borrower will at all times comply with the covenants contained in
this Section 13 from the date hereof and for so long as the Commitment is in
existence or any amount is owed to the Agent or the Lenders under this Agreement
or the other Loan Documents.
(a) Negative Pledge. Neither Borrower nor any Guarantor shall
without the prior written consent of Super Majority Lenders:
(i) create, incur, assume or permit to exist any
Lien, security interest or other encumbrance on any of its
assets or properties except Permitted Liens; or
(ii) sell, lease, transfer or otherwise dispose of,
in any fiscal year, any of its assets including any equity
interests owned by it except for (A) sales, leases, transfers
or other dispositions made in the ordinary course of
Borrower's oil and gas businesses, (B) sales, leases,
transfers or other dispositions of Oil and Gas Properties
which do not exceed $10,000,000 in the aggregate between
Borrowing Base redeterminations (C) sales or other
dispositions of Borrower's interests in GLEP or REFC; and (D)
other sales, leases, transfers or other dispositions made with
the consent of Required Lenders;
(b) Current Ratio. Borrower shall not allow its Current Ratio
to be less than 1.0 to 1.0 as of the end of any fiscal quarter
beginning with the fiscal quarter ending March 31, 2002.
(c) Senior Debt Coverage Ratio. Borrower will not allow its
ratio of EBITDAX to Interest Expense on the Senior Debt calculated on a
rolling four quarter basis to be less than 3.0 to 1.0 as of the end of
any fiscal quarter beginning with the fiscal quarter ending March 31,
2002.
(d) Total Debt Coverage Ratio. Borrower will not allow its
ratio of EBITDAX to the sum of (i) Borrower's total Interest Expense
plus (ii) Cash Dividends, plus (iii) interest on the Convertible Junior
Debentures, calculated as of the end of each fiscal quarter on a
rolling four-quarter basis, to be less than 2.5 to 1.0 as of the end of
any fiscal quarter beginning with the fiscal quarter ending March 31,
2002.
(e) Senior Debt Leverage Ratio. The Borrower will not allow
its ratio of Senior Debt to EBITDAX to be greater than 3.0 to 1.0 as of
the end of any fiscal quarter beginning with the fiscal quarter ending
March 31, 2002.
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(f) Total Debt Leverage Ratio. Borrower will not allow its
ratio of Debt to EBITDAX to be greater than 4.0 to 1.0 as of the end of
any fiscal quarter beginning with the fiscal quarter ending March 31,
2002.
(g) Consolidations and Mergers. Neither Borrower nor any
Guarantor will consolidate or merge with or into any other Person,
except that Borrower or any Guarantor may merge with another Person if
Borrower or such Guarantor is the surviving entity in such merger or
if, after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing.
(h) Debts, Guaranties and Other Obligations. Neither Borrower
nor any Subsidiary will incur, create, assume or in any manner become
or be liable in respect of any indebtedness, nor will Borrower
guarantee or otherwise in any manner become or be liable in respect of
any indebtedness, liabilities or other obligations of any other person
or entity, whether by agreement to purchase the indebtedness of any
other person or entity or agreement for the furnishing of funds to any
other person or entity through the purchase or lease of goods, supplies
or services (or by way of stock purchase, capital contribution, advance
or loan) for the purpose of paying or discharging the indebtedness of
any other person or entity, or otherwise, except that the foregoing
restrictions shall not apply to:
(i) the Notes and Letters of Credit, and any renewal
or increase thereof, or other indebtedness of the Borrower
outstanding at the Effective Date which has heretofore
disclosed to Lenders in the Borrower's Financial Statements or
on Schedule "4" hereto; or
(ii) taxes, assessments or other government charges
which are not yet due or are being contested in good faith by
appropriate action promptly initiated and diligently
conducted, if such reserve as shall be required by GAAP shall
have been made therefor and levy and execution thereon have
been stayed and continue to be stayed; or
(iii) indebtedness (other than in connection with a
loan or lending transaction) incurred in the ordinary course
of business, including, but not limited to indebtedness for
drilling, completing, leasing and reworking oil and gas xxxxx;
or
(iv) obligations under Rate Management Transactions
permitted pursuant to Section 13(n) hereof; or
(v) indebtedness on Capital Leases not to exceed
$10,000,000 in the aggregate; or
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(vi) indebtedness of REFC or GLEP with respect to
which there is no recourse to Borrower or any other
Subsidiary;
(vii) other indebtedness of any nature not in excess
of $10,000,000 in outstanding principal amount in the
aggregate; or
(viii) any renewals or extensions of (but, other than
in the case of the Notes, not increases in) any of the
foregoing.
(i) Restricted Payments. The Borrower will not declare or pay
any cash dividend, or distribution (whether in cash, securities or
other property) purchase, redeem or otherwise acquire for value any of
its stock now or hereafter outstanding, return any capital to its
stockholders or make any distribution of its assets to its stockholders
and such, except that the foregoing shall not apply to:
(i) subject to the inclusion of any dividend or
interest payment permitted by this Subsection 13(i)(i) in the
basket provided in subsection (ii) below, dividends with
respect to common equity, and preferred stock and interest on
its Convertible Junior Debentures if, and only if, immediately
before and after giving effect to such payment of dividends or
interest no Default or Event of Default shall exist under the
provision of Section 13(d) hereof; further provided, that no
cash dividends may be paid on Borrower's common stock during
fiscal 2002 without the consent of Super Majority Lenders; or
(ii) total distributions, Cash Dividends, purchases
and payments (including purchases or redemptions of Junior
Securities) in aggregate amounts of up to $20,000,000 plus (a)
50% of cumulative Net Income after December 31, 2001 (which
Net Income shall exclude (i) Net Income attributable to REFC
and GLEP and (ii) any non-cash gains or losses associated with
the application of FASB 121 or 133) plus (b) 66-2/3% of net
cash proceeds from the issuance of Borrower's common stock,
plus (c) 66-23/% of any distributions, dividends, payments of
debt from, or sales or equity interests of, GLEP or REFC;
provided, however, that immediately before and after giving
effect to any such distribution, dividend, purchase or payment
no Default or Event of Default shall exist;
(j) Loans, Advances and Investments. Borrower shall not make
or permit to remain outstanding any loans or advances to, or
investments in, any person or entity, except that the foregoing
restriction shall not apply to:
(i) loans or advances to any person, the material
details of which have been set forth in the Financial
Statements of the Borrower and each Guarantor heretofore
furnished to Lenders; or
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(ii) loans or advances to a Guarantor; or
(iii) other loans, advances or investments up to
$5,000,000 in the aggregate.
(k) Receivables and Payables. Borrower will not discount or
sell with recourse, or sell for less than the market value thereof, any
of its notes receivable or accounts receivable.
(l) Nature of Business. Neither Borrower nor any Guarantor
will permit any material change to be made in the character of its
businesses as carried on at the date hereof.
(m) Transactions with Affiliates. Borrower will not enter into
any transaction with any Affiliate, except transactions upon terms that
are no less favorable to it than would be obtained in a transaction
negotiated at arm's length with an unrelated third party.
(n) Hedging Transactions. Neither Borrower nor any Guarantor
will enter into any Rate Management Transactions, except the foregoing
prohibitions shall not apply to (x) transactions consented to in
writing by the Super Majority Lenders which are on terms acceptable to
the Super Majority Lenders, or (y) Pre-Approved Contracts. Once
Borrower or any Guarantor enters into a Rate Management Transaction,
the terms and conditions of such Rate Management Transaction may not be
materially amended or modified, nor may such Rate Management
Transaction be cancelled without the Borrower having given the Agent
written notice of such amendment, modification or cancellation on the
date not later than three (3) Business Days after the date such action
takes place. Borrower further agrees to give the Agent written notice
of any bankruptcy, insolvency or similar proceeding commenced by or
against any counterparty to any agreement entered into any such Rate
Management Transaction.
(o) Amendment to Articles of Incorporation or Bylaws. Neither
Borrower nor any Guarantor will permit any material amendment to, or
any alteration of, its Articles of Incorporation or its Bylaws.
(p) Issuance of Preferred Stock. Borrower shall not issue any
preferred stock after the Effective Date except Borrower may issue PIK
preferred stock on terms acceptable to Super Majority Lenders.
(q) Payment or Prepayment of Other Indebtedness. Except for
purchase or redemptions of Junior Securities and payments permitted
pursuant to Section 13(i)(ii) hereof, Borrower shall not make any
interest or principal payment, redeem any indebtedness (other than
indebtedness owed the Lenders hereunder), or redeem any of its equity
if immediately before and after giving effect to any payment, purchase
or
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redemption a Default or Event of Default shall exist or shall result
from such payment, purchase or redemption.
14. EVENTS OF DEFAULT. Any one or more of the following events shall be
considered an "Event of Default" as that term is used herein:
(a) The Borrower shall fail to pay when due or declared due
the principal of, and the interest on, the Notes or any fee or any
other indebtedness of the Borrower secured pursuant to this Agreement
or any of the other Loan Documents; or
(b) Any representation or warranty made by Borrower under this
Agreement, or in any certificate or statement furnished or made to the
Lenders pursuant hereto, or in connection herewith, or in connection
with any document furnished hereunder, shall prove to be untrue in any
material respect as of the date on which such representation or
warranty is made (or deemed made), or any representation, statement
(including financial statements), certificate, report or other data
furnished or to be furnished or made by Borrower or any Guarantor under
any Loan Document, including this Agreement, proves to have been untrue
in any material respect, as of the date as of which the facts therein
set forth were stated or certified; or
(c) Default shall be made in the due observance or performance
of any of the covenants or agreements of the Borrower or any Guarantor
contained in the Loan Documents, including this Agreement (excluding
covenants contained in Section 13 of the Agreement for which there is
no cure period), and such default shall continue for more than thirty
(30) days after written notice from Agent is received by Borrower; or
(d) Default shall be made in the due observance or performance
of the covenants of Borrower contained in Section 13 of this Agreement;
or
(e) Default shall be made in respect of any obligation for
borrowed money other than the Notes, for which Borrower is liable
(directly, by assumption, as guarantor or otherwise), or any
obligations secured by any mortgage, pledge or other consensual
security interest with respect thereto, on any asset or property of
Borrower or in respect of any agreement relating to any such
obligations, and if such default shall continue beyond the applicable
grace period, if any; or
(f) Borrower or any Guarantor shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking an appointment
of a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the
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benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action authorizing the
foregoing; or
(g) An involuntary case or other proceeding, shall be
commenced against Borrower or any Guarantor seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order
for relief shall be entered against Borrower or any Guarantor under the
federal bankruptcy laws as now or hereinafter in effect;
(h) A final judgment or order for the payment of money in
excess of $1,000,000 (or judgments or orders aggregating in excess of
$1,000,000) shall be rendered against Borrower or any Guarantor and
such judgments or orders shall continue unsatisfied and unstayed for a
period of thirty (30) days; or
(i) In the event the Total Outstandings shall at any time
exceed the Borrowing Base established for the Notes, and the Borrower
shall fail to comply with the provisions of Section 9(b) hereof; or
(j) An Event of Default (as defined therein) shall occur as a
result of action of the Borrower under any agreement entered into in
connection with any Rate Management Transaction; or
(k) The Liens securing the Loans cease to be in place and/or
effective.
Upon occurrence of any Event of Default specified in Subsections 14(f)
and (g) hereof, the entire principal amount due under the Notes and all interest
then accrued thereon, and any other liabilities of the Borrower hereunder, shall
become automatically and immediately due and payable all without notice and
without presentment, demand, protest, notice of protest or dishonor or any other
notice of default of any kind, all of which are hereby expressly waived by the
Borrower. Upon the occurrence of any other Event of Default, the Agent, upon
request of Super Majority Lenders, shall by written notice to the Borrower
declare the principal of, and all interest then accrued on, the Notes and any
other liabilities hereunder to be forthwith due and payable, whereupon the same
shall forthwith become due and payable without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other notice of any
kind, all of which the Borrower hereby expressly waives, anything contained
herein or in the Note to the contrary notwithstanding.
Upon the occurrence and during the continuance of any Event of Default,
the Lenders are hereby authorized at any time and from time to time, without
notice to the Borrower or any Guarantor (any such notice being expressly waived
by the Borrower and the Guarantors), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at
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any time held and other indebtedness at any time owing by any of the Lenders to
or for the credit or the account of the Borrower or any Guarantor against any
and all of the indebtedness of the Borrower under the Notes and the Loan
Documents, including this Agreement, irrespective of whether or not the Lenders
shall have made any demand under the Loan Documents, including this Agreement or
the Notes and although such indebtedness may be unmatured. Any amount set-off by
any of the Lenders shall be applied against the indebtedness owed the Lenders by
the Borrower pursuant to this Agreement and the Notes. The Lenders agree
promptly to notify the Borrower and the affected Guarantor after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Lender under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Lenders may have.
15. THE AGENT AND THE LENDERS.
(a) Appointment and Authorization. Each Lender hereby appoints
Agent as its nominee and agent, in its name and on its behalf: (i) to
act as nominee for and on behalf of such Lender in and under all Loan
Documents; (ii) to arrange the means whereby the funds of Lenders are
to be made available to the Borrower under the Loan Documents; (iii) to
take such action as may be requested by any Lender under the Loan
Documents (when such Lender is entitled to make such request under the
Loan Documents); (iv) to receive all documents and items to be
furnished to Lenders under the Loan Documents; (v) to be the secured
party, mortgagee, beneficiary, and similar party in respect of, and to
receive, as the case may be, any collateral for the benefit of Lenders;
(vi) to promptly distribute to each Lender all material information,
requests, documents and items received from the Borrower under the Loan
Documents; (vii) to promptly distribute to each Lender such Lender's
Pro Rata Part of each payment or prepayment (whether voluntary, as
proceeds of insurance thereon, or otherwise) in accordance with the
terms of the Loan Documents and (viii) to deliver to the appropriate
Persons requests, demands, approvals and consents received from
Lenders. Each Lender hereby authorizes Agent to take all actions and to
exercise such powers under the Loan Documents as are specifically
delegated to Agent by the terms hereof or thereof, together with all
other powers reasonably incidental thereto. With respect to its
Commitment hereunder and the Notes issued to it, Agent and any
successor Agent shall have the same rights under the Loan Documents as
any other Lender and may exercise the same as though it were not the
Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Agent and any successor Agent in its
capacity as a Lender. Agent and any successor Agent and its Affiliates
may accept deposits from, lend money to, act as trustee under
indentures of and generally engage in any kind of business with the
Borrower, and any person which may do business with the Borrower, all
as if Agent and any successor Agent was not Agent hereunder and without
any duty to account therefor to the Lenders; provided that, if any
payments in respect of any property (or the proceeds thereof) now or
hereafter in the possession or control of Agent which may be or become
security for the obligations of the Borrower arising under the Loan
Documents by reason
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of the general description of indebtedness secured or of property
contained in any other agreements, documents or instruments related to
any such other business shall be applied to reduction of the
obligations of the Borrower arising under the Loan Documents, then each
Lender shall be entitled to share in such application according to its
pro rata part thereof. Each Lender, upon request of any other Lender,
shall disclose to all other Lenders all indebtedness and liabilities,
direct and contingent, of the Borrower to such Lender as of the time of
such request.
(b) Note Holders. From time to time as other Lenders become a
party to this Agreement, Agent shall obtain execution by Borrower of
additional Notes in amounts representing the Commitments of each such
new Lender, up to an aggregate face amount of all Notes not exceeding
$225,000,000. The obligation of such Lender shall be governed by the
provisions of this Agreement, including but not limited to, the
obligations specified in Section 2 hereof. From time to time, Agent may
require that the Lenders exchange their Notes for newly issued Notes to
better reflect the Commitments of the Lenders. Agent may treat the
payee of any Note as the holder thereof until written notice of
transfer has been filed with it, signed by such payee and in form
satisfactory to Agent.
(c) Consultation with Counsel. Lenders agree that Agent may
consult with legal counsel selected by Agent and shall not be liable
for any action taken or suffered in good faith by it in accordance with
the advice of such counsel. LENDERS ACKNOWLEDGE THAT GARDERE XXXXX
XXXXXX LLP IS COUNSEL FOR BANK ONE, BOTH AS AGENT AND AS A LENDER, AND
THAT SUCH FIRM DOES NOT REPRESENT ANY OF THE OTHER LENDERS IN
CONNECTION WITH THIS TRANSACTION.
(d) Documents. Agent shall not be under a duty to examine or
pass upon the validity, effectiveness, enforceability, genuineness or
value of any of the Loan Documents or any other instrument or document
furnished pursuant thereto or in connection therewith, and Agent shall
be entitled to assume that the same are valid, effective, enforceable
and genuine and what they purport to be.
(e) Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below,
Agent may resign at any time by giving written notice thereof to
Lenders and the Borrower, and Agent may be removed at any time with or
without cause by Super Majority Lenders (excluding the Agent). If no
successor Agent has been so appointed by Super Majority Lenders (and
approved by the Borrower) and has accepted such appointment within
thirty (30) days after the retiring Agent's giving of notice of
resignation or removal of the retiring Agent, then the retiring Agent
may, on behalf of Lenders, appoint a successor Agent. Any successor
Agent must be approved by Borrower, which approval will not be
unreasonably withheld. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor
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Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent, as the case
may be, shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section 15 shall continue in effect for its
benefit in respect to any actions taken or omitted to be taken by it
while it was acting as Agent. To be eligible to be an Agent hereunder
the party serving, or to serve, in such capacity must own a Pro Rata
Part of the Commitments equal to the level of Commitment required to be
held by any Lender pursuant to Section 29 hereof.
(f) Responsibility of Agent. It is expressly understood and
agreed that the obligations of Agent under the Loan Documents are only
those expressly set forth in the Loan Documents as to each and that
Agent, shall be entitled to assume that no Default or Event of Default
has occurred and is continuing, unless Agent has actual knowledge of
such fact or has received notice from a Lender or the Borrower that
such Lender or the Borrower considers that a Default or an Event of
Default has occurred and is continuing and specifying the nature
thereof. Neither Agent nor any of its directors, officers, attorneys or
employees shall be liable for any action taken or omitted to be taken
by them under or in connection with the Loan Documents, except for its
or their own gross negligence or willful misconduct. Agent shall not
incur liability under or in respect of any of the Loan Documents by
acting upon any notice, consent, certificate, warranty or other paper
or instrument believed by it to be genuine or authentic or to be signed
by the proper party or parties, or with respect to anything which it
may do or refrain from doing in the reasonable exercise of its
judgment, or which may seem to it to be necessary or desirable. The
Syndication Agents, the Documentation Agents and the Arrangers shall
have no responsibilities as an agent hereunder.
Agent shall not be responsible to Lenders for any of the
Borrower's recitals, statements, representations or warranties
contained in any of the Loan Documents, or in any certificate or other
document referred to or provided for in, or received by any Lender
under, the Loan Documents, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of or any of the Loan
Documents or for any failure by the Borrower to perform any of its
obligations hereunder or thereunder. Agent may employ agents and
attorneys-in-fact and shall not be answerable, except as to money or
securities received by it or its authorized agents, for the negligence
or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
The relationship between Agent and each Lender is only that of
agent and principal and has no fiduciary aspects. Nothing in the Loan
Documents or elsewhere shall be construed to impose on Agent any duties
or responsibilities other than those for which express provision is
therein made. In performing its duties and functions hereunder, Agent
does not assume and shall not be deemed to have assumed, and hereby
expressly disclaims, any obligation or responsibility toward or any
relationship of agency or trust with or for the Borrower or any of its
beneficiaries or other creditors. As to any
-50-
matters not expressly provided for by the Loan Documents, Agent shall
not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions
of all Lenders and such instructions shall be binding upon all Lenders
and all holders of the Notes; provided, however, that Agent shall not
be required to take any action which is contrary to the Loan Documents
or applicable law.
Agent shall have the right to exercise or refrain from
exercising, without notice or liability to the Lenders, any and all
rights afforded to Agent by the Loan Documents or which Agent may have
as a matter of law; provided, however, Agent shall not (i) except as
provided herein and in Section 7(b) hereof, without the consent of
Required Lenders designate the amount of the Borrowing Base, or approve
the sale, release or substitution of Collateral other than the sale of
Collateral permitted pursuant to Section 13(a)(ii) hereof, or (ii)
without the consent of Super Majority Lenders, take any other action
with regard to amending the Loan Documents, waiving any default under
the Loan Documents, or taking any other action with respect to the Loan
Documents. Agent shall not have liability to Lenders for failure or
delay in exercising any right or power possessed by Agent pursuant to
the Loan Documents or otherwise unless such failure or delay is caused
by the gross negligence of the Agent, in which case only the Agent
responsible for such gross negligence shall have liability therefor to
the Lenders.
(g) Independent Investigation. Each Lender severally
represents and warrants to Agent that it has made its own independent
investigation and assessment of the financial condition and affairs of
the Borrower in connection with the making and continuation of its
participation hereunder and has not relied exclusively on any
information provided to such Lender by Agent in connection herewith,
and each Lender represents, warrants and undertakes to Agent that it
shall continue to make its own independent appraisal of the credit
worthiness of the Borrower while the Notes are outstanding or its
commitments hereunder are in force. Agent shall not be required to keep
itself informed as to the performance or observance by the Borrower of
this Agreement or any other document referred to or provided for herein
or to inspect the properties or books of the Borrower. Other than as
provided in this Agreement, Agent shall not have any duty,
responsibility or liability to provide any Lender with any credit or
other information concerning the affairs, financial condition or
business of the Borrower which may come into the possession of Agent.
(h) Indemnification. Lenders agree to indemnify Agent, the
Syndication Agents and the Documentation Agents (the "Indemnified
Agents") ratably according to their respective Commitments on a Pro
Rata basis, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any proper and reasonable kind or nature whatsoever
which may be imposed on, incurred by or asserted against Agent in any
way relating to or arising out of the Loan Documents or any action
taken or omitted by any Indemnified
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Agent under the Loan Documents, provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from any Indemnified Agent's gross negligence or willful
misconduct. Each Lender shall be entitled to be reimbursed by any such
Indemnified Agent for any amount such Lender paid to such Indemnified
Agent under this Section 15(h) to the extent the such Indemnified Agent
has been reimbursed for such payments by the Borrower or any other
Person. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION TO APPLY
TO AND PROTECT THE AGENT FROM THE CONSEQUENCES OF ANY LIABILITY
INCLUDING STRICT LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON ANY
INDEMNIFIED AGENT AS WELL AS FROM THE CONSEQUENCES OF ITS OWN
NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING OR
CONCURRING CAUSE OF ANY SUCH LIABILITY.
(i) Benefit of Section 15. The agreements contained in this
Section 15 are solely for the benefit of Agent and the Lenders and are
not for the benefit of, or to be relied upon by, the Borrower, any
affiliate of the Borrower or any other person.
(j) Pro Rata Treatment. Subject to the provisions of this
Agreement, each payment (including each prepayment) by the Borrower and
each collection by Lenders (including offsets) on account of the
principal of and interest on the Notes and fees provided for in this
Agreement, that are payable by the Borrower, shall be made Pro Rata;
provided, however, in the event that any Defaulting Lender shall have
failed to make an Advance as contemplated under Section 2 hereof and
Agent or another Lender or Lenders shall have made such Advance,
payment received by Agent for the account of such Defaulting Lender or
Lenders shall not be distributed to such Defaulting Lender or Lenders
until such Advance or Advances shall have been repaid in full to the
Lender or Lenders who funded such Advance or Advances.
(k) Assumption as to Payments. Except as specifically provided
herein, unless Agent shall have received notice from the Borrower prior
to the date on which any payment is due to Lenders hereunder that the
Borrower will not make such payment in full, Agent may, but shall not
be required to, assume that the Borrower has made such payment in full
to Agent on such date and Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to Agent, each Lender shall
repay to Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays
such amount to Agent, at the interest rate applicable to such portion
of the Loan.
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(l) Other Financings. Without limiting the rights to which any
Lender otherwise is or may become entitled, such Lender shall have no
interest, by virtue of this Agreement or the Loan Documents, in (a) any
present or future loans from, letters of credit issued by, or leasing
or other financial transactions by, any other Lender to, on behalf of,
or with the Borrower (collectively referred to herein as "Other
Financings") other than the obligations hereunder; (b) any present or
future guarantees by or for the account of the Borrower which are not
contemplated by the Loan Documents; (c) any present or future property
taken as security for any such Other Financings; or (d) any property
now or hereafter in the possession or control of any other Lender which
may be or become security for the obligations of the Borrower arising
under any loan document by reason of the general description of
indebtedness secured or property contained in any other agreements,
documents or instruments relating to any such Other Financings.
(m) Interests of Lenders. Nothing in this Agreement shall be
construed to create a partnership or joint venture between Lenders for
any purpose. Agent, Lenders and the Borrower recognize that the
respective obligations of Lenders under the Commitments shall be
several and not joint and that neither Agent nor any of Lenders shall
be responsible or liable to perform any of the obligations of the other
under this Agreement. Each Lender is deemed to be the owner of an
undivided interest in and to all rights, titles, benefits and interests
belonging and accruing to Agent under the Security Instruments,
including, without limitation, liens and security interests in any
collateral, fees and payments of principal and interest by the Borrower
under the Commitments on a Pro Rata basis. Each Lender shall perform
all duties and obligations of Lenders under this Agreement in the same
proportion as its ownership interest in the Loans outstanding at the
date of determination thereof.
(n) Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Lenders any funds which it
has received, or whenever Agent in good faith determines that there is
any dispute among the Lenders about how such funds should be
distributed, Agent may choose to defer distribution of the funds which
are the subject of such uncertainty or dispute. If Agent in good faith
believes that the uncertainty or dispute will not be promptly resolved,
or if Agent is otherwise required to invest funds pending distribution
to the Lenders, Agent may invest such funds pending distribution (at
the risk of the Borrower). All interest on any such investment shall be
distributed upon the distribution of such investment and in the same
proportions and to the same Persons as such investment. All monies
received by Agent for distribution to the Lenders (other than to the
Person who is Agent in its separate capacity as a Lender) shall be held
by the Agent pending such distribution solely as Agent for such
Lenders, and Agent shall have no equitable title to any portion
thereof.
(o) Delegation to Affiliates. The Borrower and the Lenders
agree that the Agent may delegate any of its duties under this
Agreement to any of its Affiliates. Any such Affiliate (and such
Affiliate's directors, officers, agents and employees) which
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perform duties in connection with this Agreement shall be entitled to
the same benefits of the indemnification, waiver and other protective
provisions to which the Agent is entitled under Sections 15 and 18.
(p) Execution of Collateral Documents. The Lenders hereby
empower and authorize the Agent to execute and deliver the Security
Instruments and all related financing statements and other financing
statements, agreements, documents or instruments that shall be
necessary or appropriate to effect the purposes of the Security
Instruments.
(q) Collateral Releases. The Lenders hereby empower and
authorize the Agent to execute and deliver to the Borrower on its
behalf any agreements, documents, or instruments as shall be necessary
or appropriate to reflect any releases of Collateral which shall be
permitted by the terms hereof (including, without limitation, the
release of Collateral that Borrower is permitted to sell pursuant to
Section 13(a)(ii) hereof) or of any other Loan Document or which shall
otherwise have been approved by the Required Lenders pursuant to
Section 15 hereof.
(r) Co-Agents, Documentation Agent, Syndication Agent, etc.
Neither any of the Lenders identified in this Agreement as the
Co-Documentation Agents or Co-Syndication Agents shall have any right,
power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of such Lenders shall have or be deemed to
have a fiduciary relationship with any Lender. Each Lender hereby makes
the same acknowledgments with respect to such Lenders as it makes with
respect to the Agent in such Section 15(g).
16. EXERCISE OF RIGHTS. No failure to exercise, and no delay in
exercising, on the part of the Agent or the Lenders, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right. The rights of the Agent and the Lenders hereunder shall be in addition to
all other rights provided by law.
17. NOTICES. Any notices or other communications required or permitted
to be given by this Agreement or any other documents or instruments referred to
herein must be given in writing (which may be by bank wire, telecopy or similar
writing) and shall be given to the party to whom such notice or communication is
directed at the address or telecopy number of such party as follows: (a)
BORROWER AND GUARANTOR: c/o
RANGE RESOURCES CORPORATION, 000 Xxxx Xxxxxx, Xxxxx
000, Xxxx Xxxxx, Xxxxx 00000, Attention: Xxxxx XxXxxxx, Chief Financial Officer,
(b) AGENT and LENDERS: c/o BANK ONE, NA, 0000 Xxxx Xxxxxx, XX0-0000, Xxxxxx,
Xxxxx 00000, Facsimile No. (000) 000-0000, Attention: Wm. Xxxx Xxxxxxx, Director
Capital Markets. Any such notice or other communication shall be effective (a)
if given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section 17 and the appropriate answerback is received or
receipt is otherwise confirmed,
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(b) if given by mail, three (3) days after deposit in the mails with first-class
postage, prepaid, as addressed as aforesaid or (c) if given by any other method,
when delivered at the address specified in this Section 17; provided, however,
that notices to the Agent under Sections 2, 3, 4 or 5 hereof shall not be
effective until received. Any notice required to be given to the Lenders shall
be given to the Agent and distributed to all Lenders by the Agent.
18. EXPENSES. The Borrower shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Agent, including reasonable fees and disbursements
of special counsel for the Agent, in connection with the preparation of this
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or Event of Default or alleged Default or Event of Default hereunder,
(ii) all reasonable and necessary out-of-pocket expenses of the Agent, including
reasonable fees and disbursements of special counsel for the Agent in connection
with the preparation of any participation agreement for a participant or
participants requested by the Borrower or any amendment thereof and (iii) if a
Default or an Event of Default occurs, all reasonable and necessary
out-of-pocket expenses incurred by the Lenders, including reasonable fees and
disbursements of counsel, in connection with such Default and Event of Default
and collection and other enforcement proceedings resulting therefrom. THE
BORROWER HEREBY ACKNOWLEDGES THAT GARDERE XXXXX XXXXXX LLP IS SPECIAL COUNSEL TO
BANK ONE, AS AGENT AND AS A LENDER, UNDER THIS AGREEMENT AND THAT IT IS NOT
COUNSEL TO, NOR DOES IT REPRESENT THE BORROWER IN CONNECTION WITH THE
TRANSACTIONS DESCRIBED IN THIS AGREEMENT. The Borrower is relying on separate
counsel in the transaction described herein. The Borrower shall indemnify the
Lenders against any transfer taxes, document taxes, assessments or charges made
by any governmental authority by reason of the execution, delivery and filing of
the Loan Documents. The obligations of this Section 18 shall survive any
termination of this Agreement, the expiration of the Loans and the payment of
all indebtedness of the Borrower to the Lenders hereunder and under the Notes.
19. INDEMNITY. The Borrower hereby agrees to indemnify the Agent, the
Documentation Agents, the Syndication Agents, the Arrangers, each Lender, their
respective Affiliates, and each of their directors, officers, and employees (the
"Indemnified Parties") against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor of any Indemnified Party, the Agent, the
Arranger, any Lender or any Affiliate that is a party thereto) which any of them
may pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any loan hereunder even
if any of the foregoing arises out of the ordinary negligence of the party
seeking indemnification except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The indemnity set forth herein shall be in addition to any
other obligations or liabilities of the Borrower to any Indemnified Party, the
Agent, the Arranger and each of the Lenders hereunder or at common law or
otherwise, and shall survive any termination of this Agreement, the expiration
of the Loans
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and the payment of all indebtedness of the Borrower to the Lenders hereunder and
under the Notes. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION TO APPLY
TO AND PROTECT EACH INDEMNIFIED PARTY FROM THE CONSEQUENCES OF ANY LIABILITY
INCLUDING STRICT LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON AGENT AS WELL
AS FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE
IS THE SOLE, CONTRIBUTING, OR CONCURRING CAUSE OF ANY CLAIM.
20. Non-Liability of Lenders. The relationship between the Borrower on
the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender. Neither the Agent, the Arranger nor any Lender
shall have any fiduciary responsibility to the Borrower. Neither the Agent, the
Arranger nor any Lender undertakes any responsibility to the Borrower to review
or inform the Borrower of any matter in connection with any phase of the
Borrower's businesses or operations. The Borrower agrees that neither the Agent,
the Arranger nor any Lender shall have any liability to the Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by this Agreement and the other
Loan Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such loss resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agent, the Arranger nor any Lender shall have any liability with respect to, and
the Borrower hereby waive, release and agree not to xxx for, any special,
indirect, consequential or punitive damages suffered by the Borrower in
connection with, arising out of, or in any way related to this Agreement, the
Loan Documents or any transaction contemplated thereby.
21. GOVERNING LAW. THIS AGREEMENT IS BEING EXECUTED AND DELIVERED, AND
IS INTENDED TO BE PERFORMED, IN DALLAS, DALLAS COUNTY, TEXAS, AND THE
SUBSTANTIVE LAWS OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT
AND INTERPRETATION OF THIS AGREEMENT AND ALL OTHER DOCUMENTS AND INSTRUMENTS
REFERRED TO HEREIN, UNLESS OTHERWISE SPECIFIED THEREIN.
22. INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provisions shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of the Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
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23. MAXIMUM INTEREST RATE. Regardless of any provisions contained in
this Agreement or in any other documents and instruments referred to herein, the
Lenders shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Notes any amount in excess of the Maximum
Rate, and in the event any Lender ever receives, collects or applies as interest
any such excess, or if an acceleration of the maturities of any Notes or if any
prepayment by the Borrower results in the Borrower having paid any interest in
excess of the Maximum Rate, such amount which would be excessive interest shall
be applied to the reduction of the unpaid principal balance of the Notes for
which such excess was received, collected or applied, and, if the principal
balance of such Note is paid in full, any remaining excess shall forthwith be
paid to the Borrower. All sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of the indebtedness evidenced by the Notes and/or
this Agreement shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Rate. In determining whether or not the
interest paid or payable under any specific contingency exceeds the Maximum Rate
of interest permitted by law, the Borrower and the Lenders shall, to the maximum
extent permitted under applicable law, (i) characterize any non-principal
payment as an expense, fee or premium, rather than as interest; and (ii) exclude
voluntary prepayments and the effect thereof; and (iii) compare the total amount
of interest contracted for, charged or received with the total amount of
interest which could be contracted for, charged or received throughout the
entire contemplated term of the Note at the Maximum Rate.
For purposes of Section 303 of the Texas Finance Code, to the extent
applicable to any Lender or Agent, Borrower agrees that the Maximum Rate shall
be the "weekly ceiling" as defined in said Chapter, provided that such Lender or
Agent, as applicable, may also rely, to the extent permitted by applicable laws
of the State of Texas and the United States of America, on alternative maximum
rates of interest under the Texas Finance Code or other laws applicable to such
Lender or Agent from time to time if greater (the "Maximum Rate").
24. AMENDMENTS. This Agreement may be amended only by an instrument in
writing executed by an authorized officer of the party against whom such
amendment is sought to be enforced. No modification or waiver of any provision
of the Loan Documents, including this Agreement, or the Notes nor consent to
departure therefrom, shall be effective unless in writing signed by Borrower and
Super Majority Lenders; provided, however, that no amendment, waiver, or other
action shall be effected pursuant to this Section 24 (ii) without the consent of
all Lenders which: (a) would increase the Hydrocarbon Borrowing Base, (b) would
reduce any fees hereunder, or the principal of, or the interest on, any Lender's
Note or Notes, (c) would postpone any date fixed for any payment of any fees
hereunder, or any principal or interest of any Lender's Note or Notes, (d) would
increase the aggregate Commitments or any Lender's individual Commitment
hereunder or would materially alter Agent's obligations to any Lender hereunder,
(e) would release Borrower from its obligation to pay any Lender's Note or
Notes, (f) would release any Guarantor from its obligations under any Guaranty,
(g) would change the definition of Super Majority Lenders or Required Lenders,
or (h) would amend this
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sentence. No such consent or waiver shall extend beyond the particular case and
purpose involved. No notice or demand given in any case shall constitute a
waiver of the right to take other action in the same, similar or other
circumstances without such notice or demand. No amendment of any provision of
this Agreement relating to the Agent shall be effective without the written
consent of the Agent.
25. MULTIPLE COUNTERPARTS. This Agreement may be executed in a number
of identical separate counterparts, each of which for all purposes is to be
deemed an original, but all of which shall constitute, collectively, one
agreement. No party to this Agreement shall be bound hereby until a counterpart
of this Agreement has been executed by all parties hereto. Delivery of an
executed counterpart of a signature page of the Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
26. CONFLICT. In the event any term or provision hereof is inconsistent
with or conflicts with any provision of the Loan Documents, the terms or
provisions contained in this Agreement shall be controlling.
27. SURVIVAL. All covenants, agreements, undertakings, representations
and warranties made in the Loan Documents, including this Agreement, the Notes
or other documents and instruments referred to herein shall survive all closings
hereunder and shall not be affected by any investigation made by any party.
28. PARTIES BOUND. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns,
heirs, legal representatives and estates, provided, however, that the Borrower
may not, without the prior written consent of all of the Lenders, assign any
rights, powers, duties or obligations hereunder.
29. ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender shall have the right to sell, assign or
transfer all or any part of its Note or Notes, its Commitment and its
rights and obligations hereunder to one or more Affiliates, Lenders,
financial institutions, pension plans, insurance companies, investment
funds, or similar Persons who are Eligible Assignees or to a Federal
Reserve Bank; provided, that each sale, assignment or transfer (other
than to an Affiliate or a Federal Reserve Bank) shall require the
consent of Agent and the Borrower, which consents will not be
unreasonably withheld; provided, however, that if an Event of Default
has occurred and is continuing, the consent of the Borrower shall not
be required. Any such assignee, transferee or recipient shall have, to
the extent of such sale, assignment, or transfer, the same rights,
benefits and obligations as it would if it were such Lender and a
holder of such Note, Commitment and rights and obligations, including,
without limitation, the right to vote on decisions requiring consent or
approval of all Lenders or Super Majority Lenders and the obligation to
fund its Commitment; provided, that (1) each such sale, assignment, or
transfer (other than to an Affiliate or a Federal Reserve
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Bank) shall be in an aggregate principal amount not less than
$5,000,000, (2) each remaining Lender shall at all times maintain
Commitment then outstanding in an aggregate principal amount at least
equal to $5,000,000; (3) each such sale, assignment or transfer shall
be of a Pro Rata portion of such Lender's Commitment, (4) no Lender may
offer to sell its Note or Notes, Commitment, rights and obligations or
interests therein in violation of any securities laws; and (5) no such
assignments (other than to a Federal Reserve Bank) shall become
effective until the assigning Lender and its assignee delivers to Agent
and Borrower an Assignment and Acceptance and the Note or Notes subject
to such assignment and other documents evidencing any such assignment.
An assignment fee in the amount of $3,500 for each such assignment
(other than to an Affiliate, a Lender or the Federal Reserve Bank) will
be payable to Agent by assignor or assignee. Within five (5) Business
Days after its receipt of copies of the Assignment and Acceptance and
the other documents relating thereto and the Note or Notes, the
Borrower shall execute and deliver to Agent (for delivery to the
relevant assignee) a new Note or Notes evidencing such assignee's
assigned Commitment and if the assignor Lender has retained a portion
of its Commitment, a replacement Note in the principal amount of the
Commitment retained by the assignor (except as provided in the last
sentence of this paragraph (a) such Note or Notes to be in exchange
for, but not in payment of, the Note or Notes held by such Lender). On
and after the effective date of an assignment hereunder, the assignee
shall for all purposes be a Lender, party to this Agreement and any
other Loan Document executed by the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party thereto, and no further
consent or action by Borrower, Lenders or the Agent shall be required
to release the transferor Lender with respect to its Commitment
assigned to such assignee and the transferor Lender shall henceforth be
so released.
(b) Each Lender shall have the right to grant participations
in all or any part of such Lender's Notes and Commitment hereunder to
one or more pension plans, investment funds, insurance companies,
financial institutions or other Persons, provided, that:
(i) each Lender granting a participation shall retain
the right to vote hereunder, and no participant shall be
entitled to vote hereunder on decisions requiring consent or
approval of Lender or Super Majority Lenders (except as set
forth in (iii) below);
(ii) in the event any Lender grants a participation
hereunder, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any
such Note or Notes for all purposes under the Loan Documents,
and Agent, each Lender and Borrower shall be entitled
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to deal with the Lender granting a participation in the same
manner as if no participation had been granted; and
(iii) no participant shall ever have any right by
reason of its participation to exercise any of the rights of
Lenders hereunder, except that any Lender may agree with any
participant that such Lender will not, without the consent of
such participant (which consent may not be unreasonably
withheld) consent to any amendment or waiver requiring
approval of all Lenders.
(c) It is understood and agreed that any Lender may provide to
assignees and participants and prospective assignees and participants
financial information and reports and data concerning Borrower's
properties and operations which was provided to such Lender pursuant to
this Agreement, provided, that each recipient thereto has first agreed,
for the benefit of Borrower, to hold such information, reports and data
in confidence on the terms set out in Section 12(j) hereof.
(d) Upon the reasonable request of either Agent or Borrower,
each Lender will identify those to whom it has assigned or participated
any part of its Notes and Commitment, and provide the amounts so
assigned or participated.
30. CHOICE OF FORUM: CONSENT TO SERVICE OF PROCESS AND JURISDICTION.
THE OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS
COUNTY, TEXAS. ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT
TO THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF,
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS, COUNTY OF DALLAS, OR IN THE
UNITED STATES COURTS LOCATED IN DALLAS COUNTY, TEXAS AND THE BORROWER HEREBY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY
SUCH SUIT, ACTION OR PROCEEDING. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURT BY THE
MAILING THEREOF BY LENDER BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE BORROWER, AT THE ADDRESS FOR NOTICES AS PROVIDED IN SECTION 17. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENT BROUGHT IN THE COURTS LOCATED IN THE STATE OF TEXAS, COUNTY
OF DALLAS, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
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31. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
32. OTHER AGREEMENTS. THIS WRITTEN CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
33. FINANCIAL TERMS. All accounting terms used in this Agreement which
are not specifically defined herein shall be construed in accordance with GAAP.
34. TRI-PARTY LOAN. Texas Finance Code, Section 346 shall not apply to
loans evidenced by this Agreement or the Notes.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWER:
RANGE RESOURCES CORPORATION
a Delaware corporation
By:
--------------------------------------
Xxxxx XxXxxxx, Chief Financial Officer
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LENDERS:
BANK ONE, NA, a national
banking association (Main Office Chicago)
as a Lender and Administrative Agent
By:
--------------------------------------
Wm. Xxxx Xxxxxxx
Director, Xxxxxxx Xxxxxxx
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XXXX XX XXXXXXXX
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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JPMORGAN CHASE BANK
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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COMPASS BANK
By:
--------------------------------------
Xxxxxxxx X. Xxxxx, Vice President
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CREDIT LYONNAIS, NEW YORK BRANCH
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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FLEET NATIONAL BANK
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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FORTIS CAPITAL CORP.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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NATEXIS BANQUES POPULAIRES
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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