Credit Agreement Dated as of August 1, 2007 among McMoRan Exploration Co., As Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Lenders Party Hereto Joint Lead Arrangers and Joint Book Runners
EXECUTION
VERSION
Dated
as of
August
1, 2007
among
McMoRan
Exploration Co.,
As
Borrower,
JPMorgan
Chase Bank, N.A.,
as
Administrative Agent,
and
The
Lenders Party Hereto
Joint
Lead Arrangers and Joint Book Runners
X.X.
Xxxxxx Securities
Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
TABLE
OF CONTENTS
Page
ARTICLE
I
DEFINITIONS
AND ACCOUNTING MATTERS
|
||
Section
1.01
Section
1.02
Section
1.03
Section
1.04
Section
1.05
|
Terms
Defined Above
Certain
Defined Terms
Types
of Loans and Borrowings
Terms
Generally; Rules of Construction
Accounting
Terms and Determinations: GAAP
|
1
1
31
31
32
|
ARTICLE
II
THE
CREDITS
|
||
Section
2.01
Section
2.02
Section
2.03
|
Commitments
Procedures
for Borrowing
Presumption
of Funding by the Lenders
|
32
32
33
|
ARTICLE
III
MATURITY,
EXCHANGE NOTES; PAYMENTS OF PRINCIPAL AND
INTEREST
|
||
Section
3.01
Section
3.02
Section
3.03
Section
3.04
Section
3.05
|
Maturity
and Exchange Notes
Repayment
of Loans
Interest
Rates and Payment Dates
[Intentionally
Omitted]
Optional
and Mandatory Prepayments
|
33
33
34
34
34
|
ARTICLE
IV
PAYMENTS;
PRO RATA TREATMENT; SHARING OF SET-OFFS
|
||
Section
4.01
Section
4.02
Section
4.03
Section
4.04
|
Payments
Generally; Pro Rata Treatment; Sharing of Set-offs
Presumption
of Payment by the Borrower
Certain
Deductions by the Administrative Agent
Disposition
of Proceeds
|
36
38
38
38
|
ARTICLE
V
INCREASED
COSTS; BREAK FUNDING PAYMENTS; TAXES
|
||
Section
5.01
Section
5.02
Section
5.03
Section
5.04
Section
5.05
|
Increased
Costs
Break
Funding Payments
Taxes
Designation
of Different Lending Office
Replacement
of Lenders
|
38
39
40
41
42
|
ARTICLE
VI
CONDITIONS
PRECEDENT
|
||
Section
6.01
Section
6.02
|
Effective
Date
Each
Credit Event
|
42
44
|
ARTICLE
VII
REPRESENTATIONS
AND WARRANTIES
|
||
Section
7.01
Section
7.02
Section
7.03
|
Organization;
Powers
Authority;
Enforceability
Approvals;
No Conflicts
|
45
45
45
|
i
Section
7.04
Section
7.05
Section
7.06
Section
7.07
Section
7.08
Section
7.09
Section
7.10
Section
7.11
Section
7.12
Section
7.13
Section
7.14
Section
7.15
Section
7.16
Section
7.17
Section
7.18
Section
7.19
Section
7.20
Section
7.21
Section
7.22
|
Financial
Condition; No Material Adverse Change
Litigation
Environmental
Matters
Compliance
with the Laws and Agreements; No Defaults
Investment
Company Act
Taxes
ERISA
Disclosure;
No Material Misstatements
Insurance
Restriction
on Liens
Subsidiaries
Location
of Business and Offices
Properties;
Titles, Etc.
Maintenance
of Properties
Gas
Imbalances, Prepayments
Marketing
of Production
Swap
Agreements
Use
of Loans
Solvency
|
45
46
46
47
48
48
48
49
50
50
50
50
50
51
52
52
52
52
52
|
ARTICLE
VIII
AFFIRMATIVE
COVENANTS
|
||
Section
8.01
Section
8.02
Section
8.03
Section
8.04
Section
8.05
Section
8.06
Section
8.07
Section
8.08
Section
8.09
Section
8.10
Section
8.11
Section
8.12
Section
8.13
Section
8.14
Section
8.15
Section
8.16
Section
8.17
Section
8.18
Section
8.19
Section
8.20
Section
8.21
|
Financial Statements;
Other Information
Notices
of Material Events
Existence;
Conduct of Business
Payment
of Obligations
Performance
of Obligations under Loan Documents
Operation
and Maintenance of Properties
Insurance
Books
and Records; Inspection Rights
Compliance
with Laws
Environmental
Matters
Further
Assurances
Reserve
Reports
[Intentionally
Omitted]
Additional
Guarantors
ERISA
Compliance
Unrestricted
Subsidiaries
Marketing
activities
Swap
Agreements
Second
Lien
Exchange
Notes
Use
of Proceeds of the Take-Out Securities
|
53
55
56
56
56
56
57
57
57
57
58
58
58
58
59
59
59
60
60
60
61
|
ARTICLE
IX
NEGATIVE
COVENANTS
|
||
Section
9.01
Section
9.02
Section
9.03
Section
9.04
Section
9.05
|
[Intentionally
Omitted]
Debt
Liens
Restricted
Payments
[Intentionally
Omitted]
|
61
61
65
65
69
|
ii
Section
9.06
Section
9.07
Section
9.08
Section
9.09
Section
9.10
Section
9.11
Section
9.12
Section
9.13
Section
9.14
Section
9.15
Section
9.16
Section
9.17
Section
9.18
Section
9.19
Section
9.20
Section
9.21
|
Nature
of Business; International Operations
Proceeds
of Notes
ERISA
Compliance
[Intentionally
Omitted]
Mergers,
Etc.
Sale
of Properties and Subsidiary Stock
Environmental
Matters
Transactions
with Affiliates
Subsidiaries
Dividend
Restrictions
[Intentionally
Omitted]
[Intentionally
Omitted]
[Intentionally
Omitted]
Unrestricted
Subsidiaries
Change
of Control
Payments
for Consent
|
69
69
69
70
70
72
74
74
75
75
77
77
77
77
77
78 |
ARTICLE
X
EVENTS
OF DEFAULT; REMEDIES
|
||
Section
10.01
Section
10.02
|
Events
of Default
Remedies
|
78
80
|
ARTICLE
XI
THE
ADMINISTRATIVE AGENT
|
||
Section
11.01
Section
11.02
Section
11.03
Section
11.04
Section
11.05
Section
11.06
Section
11.07
Section
11.08
Section
11.09
Section
11.10
Section
11.11
|
Appointment;
Powers
Duties
and Obligations of Administrative Agent
Action
by Administrative Agent
Reliance
by Administrative Agent
Subagents
Resignation
of Administrative agent
Agents
as Lenders
No
Reliance
Administrative
Agent May File Proofs of Claim
Authority
of Administrative Agent to Release Collateral and Liens
The
Arrangers and the Agents
|
81
81
81
82
82
82
83
83
83
84
84
|
ARTICLE
XII
MISCELLANEOUS
|
||
Section
12.01
Section
12.02
Section
12.03
Section
12.04
Section
12.05
Section
12.06
Section
12.07
Section
12.08
Section
12.09
Section
12.10
Section
12.11
Section
12.12
|
Notices
Waivers;
Amendments
Expenses,
Indemnity; Damage Waiver
Successors
and Assigns
Survival;
Revival; Reinstatement
Counterparts;
Integration; Effectiveness
Severability
Right
of Setoff
GOVERNING
LAW; JURISDICTION; CONSENT TO SERVICE PROCESS
Headings
Confidentiality
Interest
Rate Limitation
|
84
85
86
88
91
92
92
92
93
94
94
94
|
iii
Section
12.13
Section
12.14
Section
12.15
Section
12.16
|
Intercreditor
Agreement
No
Third Party Beneficiaries
Acknowledgements
USA
Patriot Act Notice
|
95
95
95
95 |
iv
ANNEX,
EXHIBITS AND SCHEDULES
Annex
I Commitments
Exhibit
A-1 Form
of Initial Note
Exhibit
A-2 Form
of Term Note
Exhibit
B Form
of Borrowing Request
Exhibit
C [Intentionally
Omitted]
Exhibit
D Form
of Compliance Certificate
Exhibit
E Form
of Legal Opinion of Xxxxx Xxxxxx, special counsel to theBorrower
Exhibit
F Form
of Guaranty Agreement
Exhibit
G Form
of Assignment and Assumption
Exhibit
H Description
of Exchange Notes
Exhibit
I
Form of Intercreditor Agreement
Exhibit
J
Form of Exemption Certificate
Exhibit
K Form
of Exchange and Registration Rights Agreement
Schedule
1.02 Approved
Counterparties
Schedule
1.02(b) Preferential
Purchase Right Properties
Schedule
7.05 Litigation
Schedule
7.10(d) ERISA
Plan
Schedule
7.10(f) Under-funded
ERISA Plan
Schedule
7.12 Insurance
Schedule
7.14 Subsidiaries
Schedule
7.16 Title
to Properties
Schedule
7.18 Gas
Imbalances
Schedule
7.19 Marketing
Contracts
Schedule
7.20 Swap
Agreements
Schedule
9.02 Existing
Debt
Schedule
9.03 Existing
Liens
Schedule
9.05 Investments
Schedule
9.13 Existing
Affiliate Transactions
v
THIS
CREDIT AGREEMENT dated as of August 1, 2007, is among: McMoRan
Exploration Co., a Delaware corporation (the “Borrower”), each of the
Lenders from time to time party hereto; JPMorgan Chase Bank,
N.A. (in its individual capacity, “JPMorgan”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”); and
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as syndication agent for
the Lenders (in such capacity, together with its successors in such capacity,
the “Syndication Agent”).
ARTICLE
I
Definitions
and Accounting Matters
Section
1.01 Terms
Defined Above. As
used in this Agreement, each term defined above has the meaning indicated
above.
Section
1.02 Certain
Defined Terms. As
used in this Agreement, the following terms have the meanings specified
below:
“ABR”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or
the Loans comprising such Borrowing, are bearing interest at a rate determined
by reference to the Alternate Base Rate.
“Accepting
Holder” has the meaning set forth in Section 3.05(d).
“Acquired
Debt” means Debt (i) of a Person or any of its Subsidiaries existing at the
time such Person becomes a Restricted Subsidiary or (ii) assumed in connection
with the acquisition of assets from such Person, in each case whether or not
Incurred by such Person in connection with, or in anticipation or contemplation
of, such Person becoming a Restricted Subsidiary or such
acquisition. Acquired Debt shall be deemed to have been Incurred,
with respect to clause (i) of the preceding sentence, on the date such Person
becomes a Restricted Subsidiary and, with respect to clause (ii) of the
preceding sentence, on the date of consummation of such acquisition of
assets.
“Acquisition”
means the acquisition of certain oil, gas and mineral Properties pursuant to
the
terms and conditions of the Acquisition Documents.
“Acquisition
Agreement” means the Purchase and Sale Agreement between Seller and MOXY, as
Buyer, dated June 20, 2007, to be effective July 1, 2007.
“Acquisition
Documents” means (a) the Acquisition Agreement, (b) the P&A Escrow
Agreement, (c) the Transition Services Agreement, (d) the Title Indemnity
Agreement and (e) all bills of sale, assignments, agreements, instruments and
documents executed and delivered in connection therewith, in each case, as
amended from time to time.
“Acquisition
Properties” means the Oil and Gas Properties and other properties acquired
by MOXY pursuant to the Acquisition Documents.
“Additional
Assets” means (a) any property, plant or equipment to be used by the
Borrower or a Restricted Subsidiary in the Oil and Gas Business, (b) Capital
Expenditures by the Borrower or a Restricted Subsidiary in the Oil and Gas
Business, (c) the Equity Interest of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Equity Interest by the
Borrower or a Restricted Subsidiary or (d) Equity Interests constituting a
minority interest in any Person that at such time is a Restricted Subsidiary;
provided, however, that, in the case of clauses (c) and
(d), such Restricted Subsidiary is primarily engaged in the Oil and Gas
Business.
1
“Adjusted
Consolidated Net Tangible Assets” means (without duplication), as of the
date of determination, the remainder of (a) the sum of: (i) discounted future
net revenues from proved oil and gas reserves of the Borrower and its Restricted
Subsidiaries calculated in accordance with SEC guidelines before any provincial,
territorial, state, federal or foreign income taxes, as estimated by the
Borrower in a reserve report prepared as of the end of the Borrower’s most
recently completed fiscal year for which audited financial statements are
available, as increased by, as of the date of determination, the estimated
discounted future net revenues from (A) estimated proved oil and gas reserves
acquired since such year end, which reserves were not reflected in such year
end
reserve report, and (B) estimated oil and gas reserves attributable to upward
revisions of estimates of proved oil and gas reserves since such year end due
to
exploration, development or exploitation activities, in each case calculated
in
accordance with SEC guidelines(utilizing the prices for the fiscal quarter
ending prior to the date of determination), and decreased by, as of the
date of determination, the estimated discounted future net revenues from (C)
estimated proved oil and gas reserves produced or disposed of since such year
end, and (D) estimated oil and gas reserves attributable to downward revisions
of estimates of proved oil and gas reserves since such year end due to changes
in geological conditions or other factors which would, in accordance with
standard industry practice, cause such revisions, in each case calculated on
a
pre-tax basis and substantially in accordance with SEC guidelines (utilizing
the
prices for the fiscal quarter ending prior to the date of determination), in
each case as estimated by the Borrower’s petroleum engineers or any independent
petroleum engineers engaged by the Borrower for that purpose; plus (ii)
the capitalized costs that are attributable to oil and gas properties of the
Borrower and its Restricted Subsidiaries to which no proved oil and gas reserves
are attributable, based on the Borrower’s books and records as of a date no
earlier than the date of the Borrower’s latest available annual or quarterly
financial statements; plus (iii) the Net Working Capital on a date no
earlier than the date of the Borrower’s latest annual or quarterly financial
statements; plus (iv) the greater of (A) the net book value of other
tangible assets of the Borrower and its Restricted Subsidiaries, as of a date
no
earlier than the date of the Borrower’s latest annual or quarterly financial
statement, and (B) the appraised value, as estimated by independent appraisers,
of other tangible assets of the Borrower and its Restricted Subsidiaries, as
of
a date no earlier than the date of the Borrower’s latest audited financial
statements; minus (b) the sum of: (i) Minority Interests; plus
(ii) any net gas balancing liabilities of the Borrower and its Restricted
Subsidiaries reflected in the Borrower’s latest audited financial statements;
plus (iii) to the extent included in (a)(i) above, the discounted future
net revenues, calculated in accordance with SEC guidelines (utilizing the prices
utilized in the Borrower’s year end reserve report), attributable to reserves
which are required to be delivered to third parties to fully satisfy the
obligations of the Borrower and its Restricted Subsidiaries with respect to
Volumetric Production Payments (determined, if applicable, using the schedules
specified with respect thereto); plus (iv) the discounted future net
revenues, calculated in accordance with SEC guidelines, attributable to reserves
subject to Dollar-Denominated Production Payments which, based on the estimates
of production and price assumptions included in determining the discounted
future net revenues specified in (a)(i) above, would be necessary to fully
satisfy the payment obligations of the Borrower and its Subsidiaries with
respect to Dollar-Denominated Production Payments (determined, if applicable,
using the schedules specified with respect thereto). If the Borrower
changes its method of accounting from the successful efforts method of
accounting to the full cost or a similar method, ‘‘Adjusted Consolidated Net
Tangible Assets’’ will continue to be calculated as if the Borrower were still
using the successful efforts method of accounting. Until such time as the
Reserve Reports for the fiscal year ended December 31, 2007 are available,
calculations in this definition that are determined based on the most recent
year-end reserve report will be deemed to refer to the Initial Reserve Report.
For purposes of calculating the amount referred to in Section 9.02(b)(i), the
Borrower will be entitled to rely on the greater of (i) Adjusted Consolidated
Net Tangible Assets as calculated as of the date used for determining the
borrowing base from time to time under the Borrower’s Senior Credit Agreement or
(ii) Adjusted Consolidated Net Tangible Assets as determined above as of the
date of determination.
2
“Adjusted
LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/100 of 1%) equal to (a) the LIBO Rate for the Interest Period commencing
on
the Effective Date multiplied by (b) the Statutory Reserve Rate.
“Adjusted
Margin” means with respect to any Loan, 0 basis points during the three-
month period commencing on the Initial Maturity Date and for each subsequent
three-month period thereafter, 50 basis points higher than the Adjusted Margin
for the immediately preceding three-month period.
“Adjusted
Rate” means the rate equal to 50 basis points plus the interest rate borne
by the Loans on the day immediately preceding the Initial Maturity
Date.
“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.
“Affiliate”
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by
or
is under common Control with the Person specified.
“Agents”
means, collectively, the Administrative Agent and the Syndication Agent; and
“Agent” shall mean the Administrative Agent or the Syndication Agent, as the
context requires.
“Aggregated
Subsidiaries” means any group of Subsidiaries which in the aggregate would
constitute a Significant Subsidiary.
“Agreement”
means this Credit Agreement, dated as of August 1, 2007, as the same may from
time to time be amended, modified, supplemented or restated.
“Alternate
Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate
in
effect on such day plus ½ of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
“Applicable
Margin” means, with respect to any Loan, 0 basis points during the three-
month period commencing on the Effective Date and for each subsequent
three-month period thereafter until the Initial Maturity Date, 50 basis points
higher than the Applicable Margin for the immediately preceding three-month
period.
“Approved
Counterparty” means (a) any Lender or any Affiliate of a Lender, (b) any
other Person whose long term senior unsecured debt rating at the time a
particular Swap Agreement transaction is entered into is A/A2 by S&P or
Moody’s (or their equivalent) or higher, or (c) with regard to Swap Agreements
in respect of commodities, and subject to the conditions set forth therein,
any
other Person listed on Schedule 1.02.
“Arrangers”
means X.X. Xxxxxx Securities Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated., in their capacities as the joint lead arrangers and joint book
runners hereunder.
“Asset
Disposition” means any direct or indirect sale, lease (other than
an operating lease entered into in the ordinary course of the Oil and Gas
Business), transfer, issuance or other disposition (or series of related sales,
leases, transfers, issuances or dispositions that are part of a common plan)
of
shares of
3
Equity
Interests of a Subsidiary (other than directors’ qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
“disposition”) by the Borrower or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction),
other than (i) a disposition of assets by a Restricted Subsidiary to the
Borrower or by the Borrower or a Restricted Subsidiary to a Restricted
Subsidiary; provided that in the case of a sale by a Restricted
Subsidiary to another Restricted Subsidiary, the Borrower directly or indirectly
owns an equal or greater percentage of the Common Stock of the transferee than
of the transferor; (ii) the sale of Cash Equivalents in the ordinary course
of
business; (iii) disposition of Hydrocarbons, equipment, inventory, accounts
receivable or other properties or assets in the ordinary course of business,
including any abandonment, farm-in, farm-out, lease or sublease of any oil
and
gas properties or the forfeiture or other disposition of such properties
pursuant to standard form operating agreements, in each case in the ordinary
course of business in a manner customary in the Oil and Gas Business; (iv)
disposition of obsolete or worn out equipment or equipment that is no longer
useful in the conduct of the Borrower’s and/or its Restricted Subsidiaries’
business and that is disposed of in the ordinary course of
business; (v) transactions permitted under Section 9.10; (vi) an
issuance of Equity Interests by a Restricted Subsidiary of the
Borrower to the Borrower or to a Restricted Subsidiary; (vii) for
purposes of Section 9.11 only, a disposition subject to Section 9.04; (viii)
an
Asset Swap effected in compliance with Section 9.11; (ix) dispositions of assets
in a single transaction or series of related transactions with an aggregate
fair
market value during each fiscal year of the Borrower of not more than
$10,000,000; (x) the creation of a Permitted Lien or dispositions in
connection with Permitted Liens; (xi) dispositions of receivables in connection
with the compromise, settlement or collection thereof in the ordinary course
of
business or in bankruptcy or similar proceedings and exclusive of factoring
or
similar arrangements; (xii) the licensing or sublicensing of intellectual
property or other general intangibles and licenses, leases or subleases of
other
property in the ordinary course of business which do not materially interfere
with the business of the Borrower and its Restricted Subsidiaries; (xiii)
foreclosure on assets, (xiv) any Production Payments and Reserve Sales, and
(xv)
Casualty Events of Properties which are not Oil and Gas Properties.
“Asset
Disposition Offer” has the meaning set forth in Section
9.11(b).
“Asset
Swap” means concurrent purchase and sale or exchange of Additional Assets
between the Borrower or any of its Restricted Subsidiaries and another Person;
provided that any cash received must be applied in accordance with
Section 9.11.
“Assignee”
has the meaning set forth in Section 12.04(b).
“Assignment
and Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 12.04(b)), and accepted by the Administrative
Agent, in the form of Exhibit G or any other form approved by the Administrative
Agent.
“Attributable
Debt” in respect of a Sale/Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest rate implicit
in
such transaction determined in accordance with GAAP) of the total obligations
of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
“Average
Life” means, as of the date of determination, with respect to any Debt or
Preferred Stock, the quotient obtained by dividing (i) the sum of the products
of the numbers of years from the date of determination to the dates of each
successive scheduled principal payment of such Debt or redemption or similar
payment with respect to such Preferred Stock multiplied by the amount of such
payment by (ii) the sum of all such payments.
4
“Board”
means the Board of Governors of the Federal Reserve System of the United States
of America or any successor Governmental Authority.
“Board
of Directors”: means, as to any Person, the board of directors of such
Person or any committee thereof duly authorized to act on behalf of such
board.
“Borrowing”
means Loans of the same Type, made, converted or continued on the same date
and,
in the case of Eurodollar Loans, as to which a single Interest Period is in
effect.
“Borrowing
Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.02.
“Business
Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City or Houston, Texas are authorized or required
by law to remain closed; and if such day relates to a Borrowing or continuation
of, a payment or prepayment of principal of or interest on, or a conversion
of
or into, or the Interest Period for, a Eurodollar Loan or a notice by the
Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
dealings in dollar deposits are carried out in the London interbank
market.
“Capital
Expenditures” means, for any period, (a) the additions to property, plant
and equipment and other capital expenditures of Borrower and its Restricted
Subsidiaries that are (or would be) set forth in a consolidated statement of
cash flows of Borrower for such period prepared in accordance with GAAP and
(b)
that portion of principal payments on Capitalized Lease Obligations made by
Borrower and its Restricted Subsidiaries during such period that are
attributable to additions to property, plant and equipment and that have not
otherwise been reflected on the consolidated statement of cash flows as
additions to property, plant and equipment or other capital
expenditures.
“Capital
Leases” means, in respect of any Person, all leases which shall have been,
or should have been, in accordance with GAAP, recorded as capital leases on
the
balance sheet of the Person liable (whether contingent or otherwise) for the
payment of rent thereunder.
“Capitalized
Lease Obligations” means an obligation that is required to be classified and
accounted for as a capitalized lease for financial reporting purposes in
accordance with GAAP, and the amount of Debt represented by such obligation
will
be the capitalized amount of such obligation at the time any determination
thereof is to be made as determined in accordance with GAAP, and the Stated
Maturity thereof will be the date of the last payment of rent or any other
amount due under such lease prior to the first date such lease may be terminated
without penalty.
“Cash
Equivalents” means (i) securities issued or directly and fully guaranteed or
insured by the United States Government, or any agency or instrumentality
thereof, having maturities of not more than one year from the date of
acquisition; (ii) marketable general obligations issued by any state of the
United States of America or any political subdivision of any such state or
any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of “A” or better from either Standard & Poor’s Ratings Group or
Xxxxx’x Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers’ acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least “A” or the equivalent thereof by Standard &
Poor’s Rating Group, or “A” or the equivalent thereof by Xxxxx’x Investors
Service, Inc., and having capital and surplus in excess of $500,000,000; (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types
5
described
in clauses (i), (ii) and (iii) entered into with any bank meeting the
qualifications specified in clause (iii) above; (v) commercial paper rated
at
the time of acquisition thereof at least “A-2” or the equivalent thereof by
Standard & Poor’s Rating Group or “P-2” or the equivalent thereof by Xxxxx’x
Investors Service, Inc., or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of investments, and in either case maturing within one year
after the date of acquisition thereof; and (vi) interests in any investment
company which invests solely in instruments of the type specified in clauses
(i)
through (v) above.
“Casualty
Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of any Loan Party having a fair market
value
in excess of $1,000,000.
“Change
of Control” means the occurrence of any of the following
events:
(i) any
“person” or “group” of related persons (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined
in
Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group
shall be deemed to have “beneficial ownership” of all shares that any such
person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
more
than 35% of the total voting power of the Voting Stock of the Borrower (or
a
successor to the relevant entity by merger, consolidation or purchase of all
or
substantially all of its assets) (for the purposes of this clause (A), such
person or group shall be deemed to beneficially own any Voting Stock of the
Borrower held by a parent entity, if such person or group “beneficially owns”
(as defined above), directly or indirectly, more than 35% of the voting power
of
the Voting Stock of such parent entity); or
(ii) the
first day on which a majority of the members of the Board of Directors of the
Borrower are not Continuing Directors; or
(iii) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all
or
substantially all of the assets of the Borrower and its Restricted Subsidiaries
taken as a whole to any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act); or
(iv) the
adoption by the stockholders of the Borrower of a plan or proposal for the
liquidation or dissolution of the Borrower; or
(v) a
“change of control” as defined in the Senior Credit Agreement.
“Change
of Control Offer” has the meaning set forth in Section 9.20.
“Change
in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender (or, for purposes of
Section 5.01(b)), by any lending office of such Lender
or by such Lender’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.
6
“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and
any
successor statute.
“Collateral”
has the meaning set forth in the Senior Loan Security Instruments.
“Commitment”
means, as to any Lender, its obligation to make a Loan to the Borrower on the
Effective Date in an amount equal to the amount set forth opposite such Lender’s
name in Schedule 1.01 under the heading “Commitment”; collectively, as to
all such Lenders, the “Commitments”. As of the Effective Date,
the aggregate Commitments of the Lenders are $800,000,000.
“Commitment
Percentage” means, as to any Lender at any time, the percentage of the
aggregate Commitments then constituted by such Lender’s Commitment (or, after
the Loans are made on the Effective Date, the percentage of the aggregate Loans
then constituted by such Lender’s Loans).
“Commodity
Agreements” means, in respect of any Person, any forward contract, commodity
swap agreement, commodity option agreement or other similar agreement or
arrangement in respect of Hydrocarbons used, produced, processed or sold by
such
Person that are customary in the Oil and Gas Business and designed to protect
such Person against fluctuation in Hydrocarbon prices.
“Common
Stock” means, with respect to any Person, any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or nonvoting) of such Person’s common stock whether or not outstanding on
the Effective Date, and includes, without limitation, all series and classes
of
such common stock.
“Conduit
Lender” means any special purpose corporation organized and administered by
any Lender for the purpose of making Loans otherwise required to be made by
such
Lender and designated by such Lender in a written instrument delivered to the
Administrative Agent and the Borrower; provided, that the designation by
any Lender of a Conduit Lender shall not relieve the designating Lender of
any
of its obligations under this Agreement if, for any reason, its Conduit Lender
fails to meet any such obligations, and the designating Lender (and not the
Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect
to
its Conduit Lender, and provided, further, that no Conduit Lender
shall (a) be entitled to receive any greater amount pursuant to Section 5.01,
5.02, 5.03 or 12.03 than the designating Lender would have been entitled to
receive in respect of the extensions of credit made by such Conduit Lender
or
(b) be deemed to have any Commitment.
“Consolidated
Coverage Ratio” means, as of any date of determination, with respect to any
Person, the ratio of (i) the aggregate amount of Consolidated EBITDAX of such
Person for the period of the most recent four consecutive fiscal quarters ending
prior to the date of such determination for which financial statements are
in
existence to (ii) Consolidated Interest Expense for such four fiscal quarters,
provided, however, that: (1) if the Borrower or any Restricted
Subsidiary (x) has Incurred any Debt since the beginning of such period that
remains outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
of Debt, Consolidated EBITDAX and Consolidated Interest Expense for such period
will be calculated after giving effect on a pro forma basis to such Debt as
if
such Debt had been Incurred on the first day of such period (except that in
making such computation, the amount of Debt under any revolving credit facility
outstanding on the date of such calculation will be deemed to be
(A) the average daily balance of such Debt during such four fiscal
quarters or such shorter period for which such facility was outstanding
or (B) if such facility was created after the end of such four fiscal
quarters, the average daily balance of such Debt during the period from the
date
of creation of such facility to the date of such calculation) and the discharge
of any other Debt repaid, repurchased, defeased or otherwise discharged with
the
proceeds of
7
such
new
Debt as if such discharge had occurred on the first day of such period; or
(y)
has repaid, repurchased, defeased or otherwise discharged any Debt since the
beginning of the period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of Debt (in each case other
than Debt Incurred under any revolving credit facility unless such Debt has
been
permanently repaid and the related commitment terminated), Consolidated EBITDAX
and Consolidated Interest Expense for such period will be calculated after
giving effect on a pro forma basis to such discharge of such Debt, including
with the proceeds of such new Debt, as if such discharge had occurred on the
first day of such period; (2) if since the beginning of such period the Borrower
or any Restricted Subsidiary will have made any Asset Disposition or disposed
of
any company, division, operating unit, segment, business, group of related
assets or line of business or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is such an Asset Disposition, (x)
the
Consolidated EBITDAX for such period will be reduced by an amount equal to
the
Consolidated EBITDAX (if positive) directly attributable to the assets which
are
the subject of such Asset Disposition for such period or increased by an amount
equal to the Consolidated EBITDAX (if negative) directly attributable thereto
for such period and (y) Consolidated Interest Expense for such period will
be
reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Debt of the Borrower or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Borrower
and
its continuing Restricted Subsidiaries in connection with such Asset Disposition
for such period (or, if the Equity Interest of any Restricted Subsidiary is
sold, the Consolidated Interest Expense for such period directly attributable
to
the Debt of such Restricted Subsidiary to the extent the Borrower and its
continuing Restricted Subsidiaries are no longer liable for such Debt after
such
sale); (3) if since the beginning of such period the Borrower or any Restricted
Subsidiary (by merger or otherwise) will have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary
or is
merged with or into the Borrower) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all
of
a company, division, operating unit, segment, business, group of related assets
or line of business, Consolidated EBITDAX and Consolidated Interest Expense
for
such period will be calculated after giving pro forma effect thereto (including
the Incurrence of any Debt) as if such Investment or acquisition occurred on
the
first day of such period; and (4) if since the beginning of such period any
Person that subsequently became a Restricted Subsidiary or was merged with
or
into the Borrower or any Restricted Subsidiary since the beginning of such
period will have Incurred any Debt or discharged any Debt, made any Asset
Disposition or any Investment or acquisition of assets that would have required
an adjustment pursuant to clause (2) or (3) above if made by the Borrower or
a
Restricted Subsidiary during such period, Consolidated EBITDAX and Consolidated
Interest Expense for such period will be calculated after giving pro forma
effect thereto as if such Asset Disposition or Investment or acquisition of
assets occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to any calculation under
this definition, the pro forma calculations will be determined in good faith
by
a responsible financial or accounting officer of the Borrower (including
proforma expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Securities Act). If any Debt
bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Debt will be calculated as if the rate in effect on
the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Debt if such
Interest Rate Agreement has a remaining term in excess of 12
months). If any Debt that is being given pro forma effect bears an
interest rate at the option of the Borrower, the interest rate shall be
calculated by applying such optional rate chosen by the Borrower.
“Consolidated
Current Assets” means, with respect to any Person, at any date, all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP,
be
set forth opposite the caption “total current assets” (or any like caption) on a
consolidated balance sheet of such Person and its Restricted Subsidiaries at
such date.
8
“Consolidated
Current Liabilities” means, with respect to any Person, at any date, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
“total current liabilities” (or any like caption) on a consolidated balance
sheet of such Person and its Restricted Subsidiaries at such date, but excluding
the current portion of any Funded Debt of such Person and its Restricted
Subsidiaries.
“Consolidated
EBITDAX” for any period means the Consolidated Net Income for such period,
plus, without duplication, the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Interest
Expense; (ii) Consolidated Income Taxes; (iii) consolidated depletion,
depreciation and exploration expenses; (iv) consolidated amortization expense
or
impairment charges recorded in connection with the application of Financial
Accounting Standard No. 142 “Goodwill and Other Intangibles” and Financial
Accounting Standard No. 144 “Accounting for the Impairment or Disposal of Long
Lived Assets”; and (v) other non-cash charges reducing Consolidated Net Income
(excluding any such non-cash charge to the extent it represents an accrual
of or
reserve for cash charges in any future period or amortization of a prepaid
cash
expense that was paid in a prior period not included in the calculation),
less, to the extent included in calculating such Consolidated Net Income
and in excess of any costs or expenses attributable thereto that were deducted
in calculating such Consolidated Net Income, the sum of (x) the amount of
deferred revenues that are amortized during such period and are attributable
to
reserves that are subject to Volumetric Production Payments and (y) amounts
recorded in accordance with GAAP as repayments of principal and interest
pursuant to Dollar-Denominated Production Payments. Notwithstanding the
preceding sentence, clauses (ii) through (v) relating to amounts of a Restricted
Subsidiary of a Person will be added to Consolidated Net Income to compute
Consolidated EBITDAX of such Person only to the extent (and in the same
proportion) that the net income (loss) of such Restricted Subsidiary was
included in calculating the Consolidated Net Income of such Person and, to
the
extent the amounts set forth in clauses (ii) through (v) are in excess of those
necessary to offset a net loss of such Restricted Subsidiary or if such
Restricted Subsidiary has net income for such period included in Consolidated
Net Income, only if a corresponding amount would be permitted at the date of
determination to be dividended to the Borrower by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms
of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders.
“Consolidated
Income Taxes” means, with respect to any Person for any period, taxes
imposed upon such Person or other payments required to be made by such Person
by
any governmental authority which taxes or other payments are calculated by
reference to the income or profits of such Person or such Person and its
Restricted Subsidiaries (to the extent such income or profits were included
in
computing Consolidated Net Income for such period), regardless of whether such
taxes or payments are required to be remitted to any governmental
authority.
“Consolidated
Interest Expense” means, for any period, the total consolidated interest
expense of the Borrower and its Restricted Subsidiaries, whether paid or
accrued, plus, to the extent not included in such interest expense: (i) interest
expense attributable to Capitalized Lease Obligations and the interest portion
of rent expense associated with Attributable Debt in respect of the relevant
lease giving rise thereto, determined as if such lease were a capitalized lease
in accordance with GAAP and the interest component of any deferred payment
obligations; (ii) amortization of debt discount and debt issuance cost
(provided that any amortization of bond premium will be credited to
reduce Consolidated Interest Expense unless, pursuant to GAAP, such amortization
of bond premium has otherwise reduced Consolidated Interest Expense); (iii)
non-cash interest expense; (iv) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing; (v) the interest expense on Debt of another Person that is Guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries; (vi) costs
associated with Interest Rate Agreements (including amortization of fees);
provided, however, that if Interest Rate
9
Agreements
result in net benefits rather than costs, such benefits shall be credited to
reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits
are otherwise reflected in Consolidated Net Income; (vii) the consolidated
interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period; (viii) the product of (A) all dividends paid
or
payable, in cash, Cash Equivalents or Debt or accrued during such period on
any
series of Disqualified Stock of such Person or on Preferred Stock of its
Restricted Subsidiaries that are not Guarantors payable to a party other than
the Borrower or a Wholly-Owned Subsidiary, times (B) a fraction, the numerator
of which is one and the denominator of which is one minus the then current
combined federal, state, provincial and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP; and (ix) the cash contributions to any employee stock ownership
plan
or similar trust to the extent such contributions are used by such plan or
trust
to pay interest or fees to any Person (other than the Borrower and its
Restricted Subsidiaries) in connection with Debt Incurred by such plan or
trust. For the purpose of calculating the Consolidated Coverage Ratio
in connection with the Incurrence of any Debt described in the final paragraph
of the definition of “Debt,” the calculation of Consolidated Interest Expense
shall include all interest expense (including any amounts described in clauses
(i through (ix) above) relating to any Debt of the Borrower or any Restricted
Subsidiary described in the final paragraph of the definition of
“Debt.” For purposes of the foregoing, total interest expense will be
determined (i) after giving effect to any net payments made or received by
the
Borrower and its Subsidiaries with respect to Interest Rate Agreements and
(ii)
exclusive of amounts classified as other comprehensive income in the balance
sheet of the Borrower. Notwithstanding anything to the contrary
contained herein, commissions, discounts, yield and other fees and charges
Incurred in connection with any transaction pursuant to which the Borrower
or
its Restricted Subsidiaries may sell, convey or otherwise transfer or grant
a
security interest in any accounts receivable or related assets shall be included
in Consolidated Interest Expense.
“Consolidated
Net Income” means,
for any period, the consolidated net income (loss) of the Borrower and its
Restricted Subsidiaries determined in accordance with GAAP; provided,
however, that there will not be included in such Consolidated Net
Income:
(a) any net income (loss) of any Person if such Person is not a Restricted
Subsidiary, except that: (i) subject to the limitations contained in clauses
(c), (d) and (e) below, the Borrower’s equity in the net income of any such
Person for such period will be included in such Consolidated Net Income up
to
the aggregate amount of cash actually distributed by such Person during such
period to the Borrower or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (b) below) and
(ii) the Borrower’s equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period will be included in determining such
Consolidated Net Income to the extent such loss has been funded with cash from
the Borrower or a Restricted Subsidiary; (b) any net income (but not loss)
of
any Restricted Subsidiary if such Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or indirectly, to the
Borrower, except that: (i) subject to the limitations contained in clauses
(c),
(d) and (e) below, the Borrower’s equity in the net income of any such
Restricted Subsidiary for such period will be included in such Consolidated
Net
Income up to the aggregate amount of cash that could have been distributed
by
such Restricted Subsidiary during such period to the Borrower or another
Restricted Subsidiary as a dividend (subject, in the case of a dividend to
another Restricted Subsidiary, to the limitation contained in this clause)
and
(ii) the Borrower’s equity in a net loss of any such Restricted Subsidiary for
such period will be included in determining such Consolidated Net Income; (c)
any gain (loss) realized upon the sale or other disposition of any property,
plant or equipment of the Borrower or its consolidated Restricted Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) which is not sold or
otherwise disposed of in the ordinary course of business and any gain (loss)
realized upon the sale or other disposition of any Equity Interest of any
Person; (d) any after-tax extraordinary, unusual or non-recurring gain or loss;
(e) the after-tax cumulative effect of a change in accounting principles; (f)
any asset impairment writedowns on Oil and Gas Properties under GAAP or SEC
guidelines; (g) any unrealized non-cash gains or losses or charges in respect
of
Hedging Obligations (including those
10
resulting
from the application of SFAS 133); (h) non-cash charges relating to employee
stock-based compensation; (i) any net after-tax income or loss from discontinued
operations and any net after-tax gain or loss on disposal of discontinued
operations; (j) any non-cash or non recurring charges associated with any
premium or penalty paid, write-off of deferred financing costs or other
financial recapitalization charges in connection with redeeming or retiring
any
Debt prior to its Stated Maturity; and (k) fees, premiums and expenses incurred
in connection with the Transactions, this Agreement, the Loan Documents, the
Senior Loans, the Acquisition and the repayment of Debt under the Second Lien
Term Loan Agreement up to $25,000,000 in the aggregate.
“Consolidated
Subsidiaries” means each Restricted Subsidiary of the Borrower (whether now
existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of
the
Borrower in accordance with GAAP.
“Consolidated
Working Capital” means, with respect to any Person, at any date,
the excess of Consolidated Current Assets of such Person on such date
over Consolidated Current Liabilities of such Person on such
date.
“Continuing
Directors” means, as of any date of determination, any member of the Board
of Directors of the Borrower who: (1) was a member of such Board of Directors
on
the date of this Agreement; or (2) was nominated for election or elected to
such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of the relevant Board at the time of such nomination or
election.
“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or
otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.
“Covenant
Effectiveness Date”: the date on which the Borrower has issued Equity
Interests (other than Disqualified Stock and Equity Interests from conversion
of
the Existing Convertible Notes) generating gross cash proceeds of not less
than
$300,000,000.
“Currency
Agreement” means in respect of a Person any foreign exchange contract,
currency swap agreement, currency futures contract, currency option contract
or
other similar agreement as to which such Person is a party or a
beneficiary.
“Debt”
means, with respect to any Person on any date of determination (without
duplication):
(i) the
principal of and premium (if any) in respect of indebtedness of such Person
for
borrowed money;
(ii) the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments;
(iii) the
principal component of all obligations of such Person in respect of letters
of
credit, bankers' acceptances or other similar instruments (including
reimbursement obligations with respect thereto except to the extent such
reimbursement obligation relates to a trade payable and such obligation is
satisfied within 30 days of Incurrence);
(iv) the
principal component of all obligations of such Person to pay the deferred and
unpaid purchase price of property (except trade payables), which purchase
11
price
is
due more than six months after the date of placing such property in service
or
taking delivery and title thereto;
(v) Capitalized
Lease Obligations and all Attributable Debt of such Person;
(vi) the
principal component or liquidation preference of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary that is not a Guarantor,
any Preferred Stock (but excluding, in each case, any accrued
dividends);
(vii) the
principal component of all Debt of other Persons secured by a Lien on any asset
of such Person, whether or not such Debt is assumed by such Person;
provided, however, that the amount of such Debt will be
the lesser of (a) the fair market value of such asset at such date of
determination and (b) the amount of such Debt of such other
Persons;
(viii) the
principal component of Debt of other Persons to the extent Guaranteed by such
Person; and
(ix) to
the extent not otherwise included in this definition, net obligations of such
Person under Commodity Agreements, Currency Agreements and Interest Rate
Agreements (the amount of any such obligations to be equal at any time to the
termination value of such agreement or arrangement giving rise to such
obligation that would be payable by such Person at such time).
Notwithstanding
the preceding, Debt shall not include Volumetric Production
Payments. The amount of Debt of any Person at any date will be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
In
addition, “Debt” of any Person shall include Debt described in the preceding
paragraph that would not appear as a liability on the balance sheet of such
Person if:
(1) such
Debt is the obligation of a partnership or joint venture that is not a
Restricted Subsidiary (a “Joint Venture”);
(2) such
Person or a Restricted Subsidiary of such Person is a general partner of the
Joint Venture (a “General Partner”); and
(3) there
is recourse, by contract or operation of law, with respect to the payment of
such Debt to property or assets of such Person or a Restricted Subsidiary of
such Person; and then such Debt shall be included in an amount not to
exceed:
(a) the
lesser of (i) the net assets of the General Partner and (ii) the amount of
such
obligations to the extent that there is recourse, by contract or operation
of
law, to the property or assets of such Person or a Restricted Subsidiary of
such
Person; or
(b) if
less than the amount determined pursuant to clause (a) immediately above, the
actual amount of such Debt that is recourse to such Person or a Restricted
Subsidiary of such Person, if the Debt is evidenced by a writing and is for
a
determinable amount.
12
“Default”
means any event or condition which constitutes an Event of Default or which
upon
notice, lapse of time or both would, unless cured or waived, become an Event
of
Default.
“Disqualified
Stock” means, with
respect to any Person, any Equity Interest that by its terms (or by the terms
of
any security into which it is convertible or for which it is exchangeable)
or
upon the happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible or
exchangeable for Debt or Disqualified Stock (excluding Equity Interest that
is
convertible or exchangeable solely at the option of the Borrower or a Restricted
Subsidiary) or (iii) is redeemable at the option of the holder thereof, in
whole
or in part, in each case, on or prior to the date that is 91 days after the
earlier of the Final Maturity Date or the date on which there are no Loans
or
Exchange Notes outstanding, provided, that only the portion of Equity
Interest which so matures or is mandatorily redeemable, is so convertible or
exchangeable or is so redeemable at the option of the holder thereof prior
to
such date shall be deemed to be Disqualified Stock; provided,
further, that any Equity Interest that would constitute Disqualified
Stock solely because the holders thereof have the right to require the Borrower
to repurchase such Equity Interest upon the occurrence of a change of control
or
asset disposition (each defined in a substantially identical manner to the
corresponding definitions in this Agreement) shall not constitute Disqualified
Stock if the terms of such Equity Interest (and all such securities into which
it is convertible or for which it is ratable or exchangeable) provide that
the
Borrower may not repurchase or redeem any such Equity Interest (and all such
securities into which it is convertible or for which it is ratable or
exchangeable) pursuant to such provision prior to compliance by the Borrower
with Sections 9.04 and 9.20 and such repurchase or redemption complies with
Section 9.11.
“Dollar-Denominated
Production Payments” means production payment obligations recorded as
liabilities in accordance with GAAP, together with all undertakings and
obligations in connection therewith.
“dollars”
or “$” refers to lawful money of the United States of America.
“Domestic
Subsidiary” means any Restricted Subsidiary of the Borrower that is
organized under the laws of the United States of America or any state thereof
or
the District of Columbia.
“Effective
Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived in accordance with
Section 12.02). The Effective Date is
August 6, 2007.
“Environmental
Laws” means any and all Governmental Requirements pertaining in any way to
health, safety the environment or the preservation or reclamation of natural
resources, in effect in any and all jurisdictions in which the Borrower or
any
Restricted Subsidiary is conducting or at any time has conducted business,
or
where any Property of the Borrower or any Restricted Subsidiary is located,
including without limitation, the Oil Pollution Act of 1990 (“OPA”), as
amended, the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended,
the Federal Water Pollution Control Act, as amended, the Occupational Safety
and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act
of
1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the
Toxic Substances Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation
Act, as amended, and other environmental conservation or protection Governmental
Requirements. The term “oil” shall have the meaning specified in OPA,
the terms “hazardous substance” and “release” (or “threatened
release”) have the meanings specified in CERCLA, the terms “solid
waste” and “disposal” (or “disposed”) have the meanings
specified in RCRA and the term “oil and gas waste” shall have the meaning
specified in Section 91.1011 of the Texas Natural Resources Code (“Section
91.1011”); provided, however, that (a) in the event either OPA, CERCLA, RCRA
or Section 91.1011 is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the effective date
of
such amendment and (b) to the extent the
13
laws
of
the state or other jurisdiction in which any Property of the Borrower or any
Restricted Subsidiary is located establish a meaning for “oil,”
“hazardous substance,” “release,” “solid waste,”
“disposal” or “oil and gas waste” which is broader than that
specified in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning
shall apply.
“Equity
Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a Person, including Preferred Stock, and
any
warrants, options or other rights entitling the holder thereof to purchase
or
acquire any such Equity Interest.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and
any
successor statute.
“ERISA
Affiliate” means each trade or business (whether or not incorporated) which
together with the Borrower or any Subsidiary of the Borrower would be deemed
to
be a “single employer” within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
“ERISA
Event” means (a) a “Reportable Event” described in section 4043 of ERISA and
the regulations issued thereunder, (b) the withdrawal of the Borrower, any
Loan
Party or any ERISA Affiliate from a Plan during a plan year in which it was
a
“substantial employer” as defined in section 4001(a)(2) of ERISA, (c) the filing
of a notice of intent to terminate a Plan or the treatment of a Plan amendment
as a termination under section 4041 of ERISA, (d) the institution of proceedings
to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability
pursuant to Section 4202 of ERISA, (f) any other event or condition which might
constitute grounds under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or (g) on and after the
effectiveness of the Pension Act, a determination that a Plan is, or is expected
to be, in “at risk” status (as defined n 303(i)(4) of ERISA or 430(i)(4) of the
Code).
“Eurodollar”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or
the Loans comprising such Borrowing, are bearing interest at a rate determined
by reference to the Adjusted LIBO Rate.
“Event
of Default” has the meaning assigned such term in Section
10.01.
“Excess
Cash Flow” means for any fiscal year of the Borrower or a lesser period
thereof, the excess, if any, of
(a)
the
sum, without duplication, of
(i)
ECF
Consolidated Net Income with respect to the Borrower and its Restricted
Subsidiaries for such fiscal year or lesser period,
(ii)
the
amount of all non-cash charges (including depreciation and amortization)
deducted in arriving at ECF Consolidated Net Income,
(iii)
decreases in Consolidated Working Capital of the Borrower and its Restricted
Subsidiaries for such fiscal year or lesser period, and
(iv)
the
aggregate net amount of non-cash loss on the disposition of property by the
Borrower and its Restricted Subsidiaries during such fiscal year or lesser
period (other than sales
14
of
inventory in the ordinary course of business), to the extent deducted in
arriving at ECF Consolidated Net Income over
(b)
the
sum, to the extent not deducted in arriving at ECF Consolidated Net Income
and
not included in a prior period reduction of Excess Cash Flow, without
duplication, of
(i)
the
amount of all non-cash credits included in arriving at ECF Consolidated Net
Income,
(ii)
the
amount actually paid by Borrower and its Restricted Subsidiaries in cash during
such fiscal year or lesser period on account of Additional Assets in an
aggregate amount not to exceed $300,000,000 in such fiscal year (excluding
the
principal amount of Debt incurred in connection with such
expenditures),
(iii)
the
aggregate amount of all principal payments of Funded Debt of Borrower and its
Restricted Subsidiaries (A) made during such fiscal year or lesser period (other
than in respect of any revolving credit facility to the extent there is not
an
equivalent permanent reduction in commitments thereunder) or without duplication
(B) payable within 12 months of the date of determination,
(iv)
increases in Consolidated Working Capital of the Borrower and its Restricted
Subsidiaries for such fiscal year or lesser period,
(v)
Restricted Payments made by the Borrower in cash to the extent permitted under
Section 9.04 of this Agreement (other than Sections 9.04(b) (i), (ii) (iii)
or
(iv)),
(vi)
amounts actually paid by the Borrower and its Restricted Subsidiaries with
respect to costs directly related to abandonment of any Oil and Gas
Properties;
(vii)
cash payments associated with accrued post-retirement benefit obligations,
insurance and other long-term liabilities; and
(viii)
the aggregate net amount of non-cash gain on the disposition of property by
Borrower and its Restricted Subsidiaries during such fiscal year or lesser
period (other than sales of inventory in the ordinary course of business),
to
the extent included in arriving at such Consolidated Net Income.
For
purposes of this definition, “ECF Consolidated Net Income” means with
respect to Borrower and its Restricted Subsidiaries, for any period, the
aggregate of the net income (or loss) of Borrower and its Restricted
Subsidiaries after allowances for taxes for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from such net income (to the extent otherwise included therein) the
following: (a) the net income of any Person in which Borrower or any Restricted
Subsidiary thereof has an interest (which interest does not cause the net income
of such other Person to be consolidated with the net income of Borrower and
the
Restricted Subsidiaries thereof in accordance with GAAP), except to the extent
of the amount of dividends or distributions actually paid in cash during such
period by such other Person to Borrower or to a Restricted Subsidiary thereof,
as the case may be; (b) the net income (but not loss) during such period of
any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions or transfers or loans by such Restricted Subsidiary
is
not at the time permitted by operation of the terms of its charter or any
agreement, instrument or Governmental Requirement applicable to such Restricted
Subsidiary or is otherwise restricted or prohibited, in each case determined
in
accordance with GAAP; (c) any
15
extraordinary
non-cash gains or losses during such period, (d) non-cash gains or losses under
FAS 133 resulting from the net change in Borrower’s or any Restricted
Subsidiary’s xxxx to market portfolio of commodity price risk management
activities during that period, (e) any gains or losses attributable to writeups
or writedowns of assets, including ceiling test writedowns, (f) any non-cash
gains or losses attributable to any non-cash impairment charges resulting from
the application of Statement of Financial Accounting Standards No. 142 and
No.
144 and any amortization of intangibles pursuant to Statement of Financial
Accounting Standards No. 141, (g) any net after-tax income or loss from
discontinued operations and any net after-tax gain or loss on disposal of
discontinued operations, (h) the cumulative effect of a change in accounting
principles; (i) fees, premiums and expenses incurred in connection with the
Transactions, this Agreement, the Loan Documents, the Senior Loans, the Senior
Notes, the Acquisition and the repayment of Debt under the Second Lien Term
Loan
Agreement up to $25,000,000 in the aggregate, and (j) any non-cash compensation
expense under FAS 142R recognized from grants of stock appreciation or similar
rights, stock options, restricted stock, restricted stock units or other rights
to officers, directors and employees of Borrower or any of its Restricted
Subsidiaries, provided that if such non-cash expense subsequently becomes a
cash
expense, it will be included in the period during which it became a cash
expense.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exchange
and Registration Rights Agreement” means an Exchange and Registration Rights
Agreement relating to the Exchange Notes substantially in the form of Exhibit
K hereto.
“Exchange
Documents” means the Exchange Notes Indenture and the Exchange
Notes.
“Exchange
Note” means each note issued under the Exchange Notes Indenture delivered
pursuant to Section 3.01 and 8.20; collectively, the “Exchange
Notes”.
“Exchange
Notes Indenture” means the Indenture to be entered into relating to the
Exchange Notes, having terms and conditions substantially as set forth in
Exhibit H hereto (with such changes therein as the Borrower may request
and the Administrative Agent may approve, such approval not to be unreasonably
withheld), if and when executed and delivered by the Borrower and the Trustee
thereunder.
“Exchange
Request” has the meaning set forth in Section 8.20.
“Existing
Convertible Notes” means approximately $215,870,000 of outstanding
convertible notes of the Borrower consisting of (i) its $100,870,000 6% senior
convertible notes due 2008 and (ii) its $115,000,000 5 ½ % senior convertible
notes due 2011.
“Federal
Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day
by
the Federal Reserve Bank of New York, or, if such rate is not so published
for
any day that is a Business Day, the average (rounded upwards, if necessary,
to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
“Final
Maturity Date” means the seventh anniversary of the Effective
Date.
“Financial
Officer” means, for any Person, any vice president, the chief financial
officer, principal accounting officer, treasurer or controller of such
Person. Unless otherwise specified, all references herein to a
Financial Officer means a Financial Officer of the Borrower.
16
“Financial
Statements” means the financial statement or statements of the Borrower and
its Consolidated Subsidiaries referred to in Section 7.04, including all
footnotes attached thereto.
“Foreign
Subsidiary” means any Restricted Subsidiary that is not a Domestic
Subsidiary.
“Funded
Debt” means, as to any Person, all Debt of such Person that matures more
than one year from the date of its creation or matures within one year from
such
date but is renewable or extendible, at the option of such Person, to a date
more than one year from such date or arises under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit during a period
of more than one year from such date, including all current maturities and
current sinking fund payments in respect of such Indebtedness whether or not
required to be paid within one year from the date of its creation and, in the
case of the Borrower, Debt in respect of the Loans.
“GAAP”
means generally accepted accounting principles in the United States of America
as in effect from time to time subject to the terms and conditions set forth
in
Section 1.05.
“Governmental
Authority” means the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory
or
administrative powers or functions of or pertaining to government over any
Loan
Party, any of their Properties, any Agent or any Lender.
“Governmental
Requirement” means any law, statute, code, ordinance, order, determination,
rule, regulation, judgment, decree, injunction, franchise, permit, certificate,
license, authorization or other directive or requirement, whether now or
hereinafter in effect, including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls, of any
Governmental Authority.
“Guarantee”
means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt of any other Person, and any obligation, direct
or indirect, contingent or otherwise, of such Person (i) to purchase or pay
(or
advance or supply funds for the purchase or payment of) such Debt or other
obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided, however, that the term “Guarantee”
shall not include endorsements for collection or
deposit in the ordinary course
of business. The term “Guarantee” used as a verb has a corresponding
meaning.
“Guarantor
Subordinated Obligation” means, with respect to a Guarantor, any Debt of
such Guarantor (whether outstanding on the date of this Agreement or thereafter
Incurred) which is expressly subordinate in right of payment to the obligations
of such Guarantor under its Guarantee of the Loans pursuant to a written
agreement.
“Guarantors”
means:
(a) MOXY;
(b) K-Mc
Venture I LLC, a Delaware limited liability company;
(c) Freeport
Canadian Exploration Company, a Delaware corporation;
17
(d) McMoRan
International Inc., a Delaware corporation; and
(e) each
other Domestic Subsidiary which is a Wholly-Owned Subsidiary that guarantees
the
Indebtedness pursuant to Section 8.14(i).
“Guaranty
Agreement” means an agreement executed by the Guarantors in substantially
the form of Exhibit F unconditionally guarantying on a joint and several
basis, payment of the Indebtedness, as the same may be amended, modified or
supplemented from time to time.
“Hedging
Obligations” of any Person means the obligations of such Person pursuant to
any Commodity Agreement, Currency Agreement or Interest Rate
Agreement.
“Holder”
or “NoteHolder” means any Person in whose name an Exchange Note or a Loan
(and any corresponding Note(s)) is registered.
“Hydrocarbon
Interests” means all rights, titles, interests and estates now or hereafter
acquired in and to oil and gas leases, oil, gas and mineral leases, or other
liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty
and royalty interests, net profit interests and production payment interests,
including any reserved or residual interests of whatever nature.
“Hydrocarbons”
means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
or separated therefrom.
“Incur”
means issue, create, assume, Guarantee, incur or otherwise become liable for;
provided, however, that any Debt or Equity Interest of a Person
existing at the time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) will be deemed to be Incurred
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary;
and the terms “Incurred” and “Incurrence” have meanings correlative to the
foregoing.
“Indebtedness”
means any and all amounts owing or to be owing by any Loan Party (whether direct
or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising): (a) to the
Administrative Agent or any Lender under any Loan Document; and (b) all
renewals, extensions and/or rearrangements of any of the above.
“Initial
Lenders” means the collective reference to JPMorgan Chase Bank, N.A. and
Xxxxxxx Xxxxx Capital Corporation and their respective Affiliates and Approved
Funds (as defined in Section 12.04(b)) relating to such Persons.
“Initial
Loan” has the meaning set forth in Section 2.01(a).
“Initial
Loan Rate” means the rate equal to the greater of (i) the Adjusted LIBO Rate
plus 450 basis points and (ii) the Treasury Rate plus 500 basis
points.
“Initial
Maturity Date” means the first anniversary of the Effective
Date.
“Initial
Note” has the meaning set forth in Section 12.04(e).
“Initial
Reserve Report” means the engineering information provided by the Borrower
and delivered to the Administrative Agent, with respect to the value of the
Oil
and Gas Properties of the Borrower and its Restricted Subsidiaries as of
December 31, 2006 and with respect to the Acquisition
18
Properties
the merged report of Xxxxx Xxxxx Petroleum Company, L.P. and the Seller
dated as of June 30, 2007.
“Intercreditor
Agreement” means the Intercreditor Agreement to be entered into among the
Loan Parties, JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders
and/or the Holders of the Exchange Notes, and JPMorgan Chase Bank, N.A., as
administrative agent for the lenders under the Senior Secured Credit Agreement
pursuant to Section 8.19, substantially in the form of Exhibit I
hereto.
“Interest
Payment Date” means (a) with respect to Initial Loans, if any Initial Loans
are Eurodollar Loans, for all Initial Loans whether or not Eurodollar Loans,
the
last day of the Interest Period applicable to the Eurodollar Loan, (b) with
respect to Initial Loans, if no Initial Loans are Eurodollar Loans, the last
day
of each fiscal quarter following the Effective Date, (c) with respect to Term
Loans, the last day of each fiscal quarter following the Initial Maturity Date,
and (d) the date of any prepayment of any Loan.
“Interest
Period” means (a) prior to the Initial Maturity Date, as to any Initial
Loan, (i) initially, the period commencing on the Effective Date and ending
on
the numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is three months thereafter
and
(ii) thereafter, each period commencing on the last day of the next preceding
Interest Period and ending on the earlier of (A) the numerically corresponding
day (or, if there is no numerically corresponding day, on the last day) in
the
calendar month that is three months thereafter and (B) the Initial Maturity
Date, and (b) following the Initial Maturity Date, as to any Term Loan, (i)
initially, the period commencing on the Initial Maturity Date and ending on
the
last day of the fiscal quarter of the Borrower following the Initial Maturity
Date and (ii) thereafter, each period commencing on the last day of the next
preceding Interest Period and ending on the earlier of (A) the last day of
the
fiscal quarter of the Borrower following such date, and (B) the Final Maturity
Date; provided, however, that if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to
the
next succeeding Business Day unless, in the case of a Eurodollar Loan only,
such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business
Day. Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest
Period.
“Interest
Rate Agreement” means, with respect to any Person, any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
“Investment”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the form of any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business)
or
other extension of credit (including by way of Guarantee or similar arrangement,
but excluding any debt or extension of credit represented by a bank deposit
other than a time deposit) or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services
for
the account or use of others), or any purchase or acquisition of Equity
Interest, Debt or other similar instruments issued by, such Person and all
other
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP; provided that none of the following will be
deemed to be an Investment: (a) Hedging Obligations
entered into in the ordinary course of business and in compliance with this
Agreement; (b) endorsements of negotiable instruments and documents in the
ordinary course of business; and (c) an acquisition of assets, Equity Interest
or other securities by the Borrower or a Subsidiary for consideration to the
extent such consideration consists of common equity securities of the
Borrower. For purposes of Section 9.04, (i) “Investment” shall
include the portion (proportionate to the Borrower’s equity interest in a
Restricted
19
Subsidiary
to be designated as an Unrestricted Subsidiary) of the fair market value of
the
net assets of such Restricted Subsidiary of the Borrower at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Borrower shall be deemed to continue to have a permanent
“Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Borrower’s “Investment” in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Borrower’s equity
interest in such Subsidiary) of the fair market value of the net assets of
such
Subsidiary at the time that such Subsidiary is so redesignated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors
of
the Borrower.
“Lenders”
means the Persons listed on Annex I and any Person that shall have become a
party hereto pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and
Assumption; provided, that unless the context otherwise requires, each
reference herein to the Lenders shall be deemed to include any Conduit
Lender.
“LIBO
Rate” means, with respect to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in dollars for a period equal
to the Interest Period commencing on the Effective Date appearing on the Reuters
Screen LIBOR01 Page as of 11:00 A.M., London time, two Business Days prior
to
the beginning of such Interest Period. In the event that such rate
does not appear on such page (or otherwise on such screen), the “LIBO
Rate” shall be determined by reference to such other comparable publicly
available service for displaying eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability, by reference
to
the rate at which the Administrative Agent is offered dollar deposits at or
about 11:00 A.M., London time, two Business Days prior to the beginning of
such
Interest Period in the interbank eurodollar market where its eurodollar and
foreign currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days comprised
therein.
“Lien”
means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and whether such obligation
or
claim is fixed or contingent, and including but not limited to (a) the lien
or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of
Oil
and Gas Properties. The term “Lien” shall include easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations. For the purposes of this Agreement, the Borrower and its
Restricted Subsidiaries shall be deemed to be the owner of any Property which
it
has acquired or holds subject to a conditional sale agreement, or leases under
a
financing lease or other arrangement pursuant to which title to the Property
has
been retained by or vested in some other Person in a transaction intended to
create a financing.
“Loan
Documents” means this Agreement, the Notes and the Security
Instruments.
“Loan
Notes” means the collective reference to the Term Notes and the Initial
Notes.
“Loan
Party” means the Borrower and the Guarantors.
“Loans”
has the meaning set forth in Section 2.01(b).
“Majority
Lenders” means, at any time while no Loans are outstanding, Lenders having
greater than fifty percent (50%) of the Commitments; and at any time while
any
Loans are outstanding, Lenders
20
holding
greater than fifty percent (50%) of the outstanding aggregate principal amount
of the Loans (without regard to any sale by a Lender of a participation in
any
Loan under Section 12.04(c)).
“Material
Adverse Effect” means a material adverse change in, or material adverse
effect on (a) the business, operations or financial condition of the Borrower
and the Loan Parties taken as a whole, (b) the ability of any Loan Party to
perform any of its obligations under any Loan Document to which it is a party,
(c) the validity or enforceability of any Loan Document or (d) the rights and
remedies of or benefits available to the Administrative Agent, any other Agent
or any Lender under the Loan Documents.
“Material
Indebtedness” means Debt (other than the Loans), or obligations in respect
of one or more Swap Agreements, of any one or more of any Loan Party in an
aggregate principal amount exceeding $25,000,000.
“Minority
Interest” means the percentage interest represented by any shares of any
class of Equity Interest of a Restricted Subsidiary that are not owned by the
Borrower or a Restricted Subsidiary.
“Moody’s”
means Xxxxx’x Investors Service, Inc. and any successor thereto that is a
nationally recognized rating agency.
“MOXY”
means McMoRan Oil & Gas LLC, a Delaware limited liability
company.
“Multiemployer
Plan” means a Plan which is a multiemployer plan as defined in section 3(37)
or 4001 (a)(3) of ERISA.
“Net
Available Cash” from an Asset Disposition means cash payments received by
the Borrower or any Restricted Subsidiary (including any cash payments received
by way of deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring person of
Debt
or other obligations relating to the properties or assets that are the subject
of such Asset Disposition or received in any other noncash form) therefrom,
in
each case net of (i) all legal, accounting, investment banking, title and
recording tax expenses, commissions and other fees and expenses incurred, and
all Federal, state, provincial, foreign and local taxes required to be paid
or
accrued as a liability under GAAP as a consequence of such Asset Disposition,
(ii) all payments made on any Debt that is secured by any assets subject to
such
Asset Disposition, in accordance with the terms of any Lien upon such assets,
or
that must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made
to
minority interest Holders in Subsidiaries or joint ventures as a result of
such
Asset Disposition and (iv) the deduction of appropriate amounts to be provided
by the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and retained
by
the Borrower or any Restricted Subsidiary after such Asset
Disposition.
“Net
Cash Proceeds” means with respect to any issuance or sale of Equity
Interests or Debt, the cash proceeds of such issuance or sale net of attorneys’
fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale (after taking into account any available tax
credit or deductions and any tax sharing arrangements).
“Net
Working Capital” means (a) Consolidated Current Assets except current assets
from commodity price risk management activities arising in the ordinary course
of the Oil and Gas Business, less (b) Consolidated Current Liabilities except
current liabilities included in Debt and any current
21
liabilities
from commodity price risk management activities arising in the ordinary course
of the Oil and Gas Business, in each case as set forth in the consolidated
financial statements of the Borrower prepared in accordance with
GAAP.
“Non-Recourse
Debt” means Debt
of a Person:
|
(i)
|
as
to which neither the Borrower nor any Restricted Subsidiary (a) provides
any Guarantee or credit support of any kind (including any undertaking,
guarantee, indemnity, agreement or instrument that would constitute
Debt)
or (b) is directly or indirectly liable (as a guarantor or
otherwise);
|
|
(ii)
|
no
default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any
holder
of any other Debt of the Borrower or any Restricted Subsidiary to
declare
a default under such other Debt or cause the payment thereof to be
accelerated or payable prior to its stated maturity;
and
|
|
(iii)
|
the
explicit terms of which provide there is no recourse against any
of the
assets of the Borrower or its Restricted
Subsidiaries.
|
“Non-US
Lender” has the meaning set forth in Section
5.03(d).
“Notes”
means the Loan Notes and the Exchange Notes, as originally executed or as
subsequently amended from time to time pursuant to the applicable provisions
hereof.
“Officer”
means the Chairman of the Board, the Chief Executive Officer, the President,
the
Chief Operating Officer, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary of the Borrower. Officer of any Guarantor
has a correlative meaning.
“Officers'
Certificate” means a certificate signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the
Borrower.
“Oil
and Gas Business” means (a) the business of acquiring, exploring,
exploiting, developing, producing, operating and disposing of interests in
oil,
gas, liquid natural gas and other Hydrocarbon properties, (b) the business
of
gathering, marketing, treating, processing, storage, refining, selling and
transporting of any production from such interests or properties and products
produced in association therewith or providing drilling and related services
and
supplies and equipment and (c) any business or activity relating to, arising
from, or necessary, appropriate or incidental to the activities described in
the
foregoing clauses (a) and (b) of this definition.
“Oil
and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now
or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority)
which
may affect all or any portion of the Hydrocarbon Interests; (d) all
operating agreements, contracts and other agreements, including production
sharing contracts and agreements, which relate to any of the Hydrocarbon
Interests or the production, sale, purchase, exchange or processing of
Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all
Hydrocarbons in and under and which may be produced and saved or attributable
to
the Hydrocarbon Interests, including all oil in tanks, and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable
to
the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances
and
Properties in any manner appertaining, belonging, affixed or incidental to
the
Hydrocarbon Interests and (g) all Properties, rights, titles, interests and
estates described or referred
22
to
above,
including any and all Property, real or personal, now owned or hereinafter
acquired and situated upon, used, held for use or useful in connection with
the
operating, working or development of any of such Hydrocarbon Interests or
Property (excluding drilling rigs, automotive equipment, rental equipment or
other personal Property which may be on such premises for the purpose of
drilling a well or for other similar temporary uses) and including any and
all
oil xxxxx, gas xxxxx, injection xxxxx or other xxxxx, buildings, structures,
fuel separators, liquid extraction plants, plant compressors, pumps, pumping
units, field gathering systems, tanks and tank batteries, fixtures, valves,
fittings, machinery and parts, engines, boilers, meters, apparatus, equipment,
appliances, tools, implements, cables, wires, towers, casing, tubing and rods,
surface leases, rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments to any and
all of the foregoing.
“Opinion
of Counsel” means a written opinion from legal counsel who is acceptable to
the Administrative Agent. The counsel may be an employee of or counsel to the
Borrower or the Administrative Agent.
“P&A
Escrow Agreement” means that certain P&A Escrow Agreement dated as of
August 1, 2007 among the Borrower and the Seller.
“Parent
Loan” means the intercompany loan agreement by and between MOXY, as
borrower, and the Borrower, as lender, dated as of April 17, 2006.
“Pari
Passu Debt” means Debt that ranks equally in right of payment to the
Loans.
“Participant”
has the meaning set forth in Section
12.04(c)(i).
“Payment
Sharing Notice” means a written notice from the Borrower or any Lender
informing the Administrative Agent that an Event of Default has occurred and
is
continuing and directing the Administrative Agent to allocate payments
thereafter received from or on behalf of the Borrower in accordance with the
provisions of Section 4.01.
“PBGC”
means the Pension Benefit Guaranty Corporation, or any successor
thereto.
“Pension
Act”: means the Pension Protection Act of 2006, as it presently exists or as
it may be amended from time to time.
“Permitted
Business Investment” means any Investment made in the ordinary course of the
Oil and Gas Business including investments or expenditures for actively
exploiting, exploring for, acquiring, developing, producing, operating,
processing, gathering, refining, storing, marketing, selling or transporting
oil, gas and other Hydrocarbons through agreements, transactions, interests
or
arrangements which permit one to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives customarily
achieved through the conduct of the Oil and Gas Business jointly with third
parties, including (i) ownership interests in oil and gas properties, liquid
natural gas facilities, processing facilities, gathering systems, pipelines
or
ancillary real property interests, (ii) Investments in the form of or pursuant
to operating agreements, processing agreements, farm-in agreements, farm-out
agreements, development agreements, area of mutual interest agreements,
unitization agreements, pooling agreements, joint bidding agreements, service
contracts, joint venture agreements, partnership agreements (whether general
or
limited), subscription agreements, stock purchase agreements and other similar
agreements (including for limited liability companies) with third parties and
(iii) direct or indirect ownership interests in drilling rigs and related
equipment, including, without limitation, transportation equipment;
provided, however, that a ‘‘Permitted Business Investment’’ shall
not include Investments in
23
entities
that are not classified as pass-through entities for U.S. federal, state and
local and foreign income tax purposes.
“Permitted
Investment” means an Investment by the Borrower or any Restricted Subsidiary
in (i) a Restricted Subsidiary; (ii) cash and Cash Equivalents; (iii)
receivables owing to the Borrower or any Restricted Subsidiary, if created
or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that
such trade terms may include such concessionary trade terms as the Borrower
or
any such Restricted Subsidiary deems reasonable under the circumstances; (iv)
payroll, travel and similar advances to cover matters that are expected at
the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (v) loans or
advances to officers, directors and employees of the Borrower or any Restricted
Subsidiary made in the ordinary course of business consistent with past
practices of the Borrower or such Restricted Subsidiary; provided,
however, that the Borrower and its Subsidiaries will comply in all
material respects with all applicable provisions of the Xxxxxxxx-Xxxxx Act
of
2002 and the rules and regulations promulgated in connection therewith with
such
loans or advances as if the Borrower has filed a registration statement with
the
SEC; (vi) Equity Interest, obligations or securities received in settlement
of
debts created in the ordinary course of business and owing to the Borrower
or
any Restricted Subsidiary or in satisfaction of judgments or pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency
of a debtor; (vii) Commodity Agreements, Currency Agreements, Interest Rate
Agreements and related Hedging Obligations, in each case entered into in the
ordinary course of the Borrower’s or its Restricted Subsidiaries’ businesses
incurred in compliance with Section 9.02(b); (viii) the Guaranty Agreement
and
Guarantees by the Borrower of Debt otherwise permitted to be Incurred by
Restricted Subsidiaries of the Borrower under this Agreement; (ix) Investments
made as a result of non-cash consideration from Asset Dispositions effected
in
compliance with Section 9.11; (x) Investments in existence on the Effective
Date; and (xi) after the Initial Maturity Date, (A) Investments in a Person
that
will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted
Subsidiary is the Oil and Gas Business, (B) Investments in another Person if
as
a result of such Investment such other Person is merged or consolidated with
or
into, or transfers or conveys all or substantially all its assets to, the
Borrower or a Restricted Subsidiary; provided, however, that such
Person’s primary business is the Oil and Gas Business, (C) any Asset Swap made
in accordance with Section 9.11(d), (D) Permitted Business Investments, and
(E)
Investments by the Borrower or any of its Restricted Subsidiaries, together
with
all other Investments pursuant to this clause (E), in an amount not to exceed
$10,000,000 per year (with the fair market value of such Investment being
measured at the time made and without giving effect to subsequent changes in
value).
“Permitted
Liens” means, with respect to any Person, (i) (x) Liens securing Debt and
other obligations under the Senior Credit Agreement and related Hedging
Obligations and Liens on assets of Restricted Subsidiaries securing Guarantees
of Debt and other obligations of the Borrower under the Senior Credit Agreement,
and (y) any Liens securing the Indebtedness and any Exchange Notes and any
Liens
on assets of Restricted Subsidiaries securing the Guarantees under the Guaranty
Agreement; (ii) pledges or deposits by such Person under workmen's compensation
laws, unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts (other than for the payment of
Debt)
or leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits of cash or United States
government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import or customs duties
or for the payment of rent, in each case Incurred in the ordinary course of
business; (iii) Liens imposed by law, including carriers', warehousemen's and
mechanics' materialmen’s and repairmen’s Liens, in each case for sums not yet
due or being contested in good faith by appropriate proceedings if a reserve
or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made in respect thereof; (iv) Liens for taxes, assessments or other
governmental charges not yet
24
subject
to
penalties for non-payment or which are being contested in good faith by
appropriate proceedings provided that appropriate reserves required pursuant
to
GAAP have been made in respect thereof; (v) Liens in favor of issuers of surety
or performance bonds or letters of credit or bankers' acceptances issued
pursuant to the request of and for the account of such Person in the ordinary
course of its business; provided, however, that such letters of
credit do not constitute Debt; (vi) encumbrances, ground leases, easements
or
reservations of, or rights of others for, licenses, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning, building codes or other restrictions (including, without limitation,
minor defects or irregularities in title and similar encumbrances) as to the
use
of real properties or liens incidental to the conduct of the business of such
Person or to the ownership of its properties which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person; (vii) Liens securing
Hedging Obligations; (viii) leases, licenses, subleases and sublicenses of
assets (including, without limitation, real property and intellectual property
rights) which do not materially interfere with the ordinary conduct of the
business of the Borrower or any of its Restricted Subsidiaries; (ix) judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been duly initiated
for the review of such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired; (x) Liens for
the purpose of securing the payment of all or a part of the purchase price
of,
or Capitalized Lease Obligations, purchase money obligations or other payments
Incurred to finance the acquisition, lease, improvement or construction of,
assets or property acquired or constructed in the ordinary course of business;
provided that (1) the aggregate principal amount of Debt secured by such
Liens is otherwise permitted to be Incurred under this Agreement and does not
exceed the cost of the assets or property so acquired or constructed and (2)
such Liens are created within 180 days of construction or acquisition of such
assets or property and do not encumber any other assets or property of the
Borrower or any Restricted Subsidiary other than such assets or property and
assets affixed or appurtenant thereto; (xi) Liens arising solely by virtue
of
any statutory or common law provisions relating to banker's Liens, rights of
set-off or similar rights and remedies as to deposit accounts or other funds
maintained with a depositary institution; provided that (1) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Borrower in excess of those set forth by
regulations promulgated by the Federal Reserve Board and (2) such deposit
account is not intended by the Borrower or any Restricted Subsidiary to provide
collateral to the depository institution; (xii) Liens arising from Uniform
Commercial Code financing statement filings regarding operating leases entered
into by the Borrower and its Restricted Subsidiaries in the ordinary course
of
business; (xiii) Liens existing on the Effective Date and disclosed on Schedule
9.03; (xiv) Liens on property or shares of stock of a Person at the time such
Person becomes a Restricted Subsidiary; provided, however, that
such Liens are not created, Incurred or assumed in connection with, or in
contemplation of, such other Person becoming a Restricted Subsidiary;
provided further, however, that any such Lien may not extend to
any other property owned by the Borrower or any Restricted Subsidiary; (xv)
Liens on property at the time the Borrower or a Restricted Subsidiary acquired
the property, including any acquisition by means of a merger or consolidation
with or into the Borrower or any Restricted Subsidiary; provided,
however, that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such acquisition;
providedfurther, however, that such Liens may not extend to
any other property owned by the Borrower or any Restricted Subsidiary; (xvi)
Liens securing Debt or other obligations of a Restricted Subsidiary owing to
the
Borrower or a Wholly-Owned Subsidiary; (xvii) Liens securing the Loans, the
Exchange Notes, the Guaranty Agreement and other obligations under this
Agreement; (xviii) Liens securing obligations under Refinancing Debt Incurred
to
refinance, refund, replace, amend, extend or modify Debt that was previously
so
secured (other than Liens permitted pursuant to clause (i) above),
provided that any such Lien is limited to all or part of the same
property or assets (plus improvements, accessions, proceeds or dividends or
distributions in respect thereof) that secured (or, under the written
arrangements under which the original Lien arose, could secure) the Debt being
refinanced or is in respect of property that is the security for a Permitted
Lien hereunder; (xix) any interest or title of a lessor under any Capitalized
25
Lease
Obligation or operating lease; (xx) Liens in respect of Production Payments
and
Reserve Sales, which Liens shall be limited to the property that is the subject
of such Production Payments and Reserve Sales; (xxi) Liens arising under
farm-out agreements, farm-in agreements, division orders, contracts for the
sale, purchase, exchange, transportation, gathering or processing of
Hydrocarbons, unitizations and pooling designations, declarations, orders and
agreements, development agreements, operating agreements, production sales
contracts, area of mutual interest agreements, gas balancing or deferred
production agreements, injection, repressuring and recycling agreements, salt
water or other disposal agreements, seismic or geophysical permits or
agreements, and other agreements which are customary in the Oil and Gas
Business; provided, however, in all instances that such Liens are
limited to the assets that are the subject of the relevant agreement, program,
order or contract; (xxii) Liens on pipelines or pipeline facilities that arise
by operation of law; (xxiii) Liens on cash or securities pledged or subject
to
an escrow agreement to secure plugging and abandoning obligations under the
P&A Escrow Agreement, performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of like nature incurred in the ordinary course of business; (xxiv)
Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary
or
any joint venture owned by the Borrower or any Restricted Subsidiary to the
extent securing Non-Recourse Debt of such Unrestricted Subsidiary or joint
venture; (xxv) Liens on amounts not to exceed the sum of up to three years
of
regularly scheduled interest payments in respect of any convertible Debt issued
by the Borrower permitted hereby, which amounts shall have been placed in
interest reserve accounts in connection with the issuance of such convertible
Debt to secure the obligations under, such convertible Debt; and (xxvi) Liens
securing obligations under Debt (other than Subordinated Obligations and
Guarantor Subordinated Obligations) in an aggregate principal amount outstanding
at any one time not to exceed the greater of $25,000,000 and 1.5% of Adjusted
Consolidated Net Tangible Assets.
“Permitted
Refinancing Debt” means Debt (for purposes of this definition, “new
Debt”) incurred in exchange for, or proceeds of which are used to refinance,
all of any other Debt (the “Refinanced Debt”); provided that
(a) such new Debt is in an aggregate principal amount not in excess of the
sum of (i) the aggregate principal amount then outstanding of the
Refinanced Debt (or, if the Refinanced Debt is exchanged or acquired for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount) and (ii) an amount
necessary to pay interest or premiums required by the instruments governing
such
Refinanced Debt and fees and expenses Incurred in connection therewith; (b)(x)
if the Stated Maturity of the Refinanced Debt is earlier than the Final Maturity
Date, the new Debt has a Stated Maturity no earlier than the Stated Maturity
of
the Refinanced Debt or (y) if the Stated Maturity of the Refinanced Debt is
later than the Final Maturity Date, the new Debt has a Stated Maturity at least
91 days later than the Final Maturity Date; (c) the new Debt has an Average
Life
at the time such new Debt is Incurred that is equal to or greater than the
Average Life of the Refinanced Debt; (d) such new Debt (and any guarantees
thereof) is secured by no more collateral than the collateral which secured,
or
is permitted by the terms of this Agreement to secure, the Refinanced Debt;
(e)
the obligor(s) in respect of such new Debt shall be the same as the obligor(s)
in respect of such Refinanced Debt and if such Refinanced Debt is not guarantied
by any Loan Party, then such new Debt shall also not be guarantied by any Loan
Party; (f) the Liens, if any, securing such new Debt are subordinated to the
Liens securing the Indebtedness (or, if applicable, the Guaranty Agreement)
to
at least the same extent as the Liens securing the Refinanced Debt and (g)
if
the Refinanced Debt is subordinated in right of payment to the Loans or the
Guarantees under the Guaranty Agreement, such new Debt is subordinated in right
of payment to the Loans or the Guarantees under the Guaranty Agreement on terms
at least as favorable to the Holders as those contained in the documentation
governing the Refinanced Debt.
“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.
26
“Plan”
means any employee pension benefit plan, as defined in section 3(2) of ERISA,
which (a) is currently or hereafter sponsored, maintained or contributed to
by a
Loan Party or an ERISA Affiliate or (b) was at any time during the six calendar
years preceding the date hereof, sponsored, maintained or contributed to by
a
Loan Party or an ERISA Affiliate.
“Preferential
Purchase Right Properties” means each of the Oil and Gas Properties listed
in Schedule 1.02(b).
“Preferred
Stock,” as applied to the Equity Interests of any corporation, means Equity
Interests of any class or classes (however designated) which is preferred as
to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such corporation, over shares
of
Equity Interest of any other class of such corporation.
“Prime
Rate” means the rate of interest per annum publicly announced from time to
time by JPMorgan as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective. Such
rate is set by the Administrative Agent as a general reference rate of interest,
taking into account such factors as the Administrative Agent may deem
appropriate; it being understood that many of the Administrative Agent’s
commercial or other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any customer and that
the Administrative Agent may make various commercial or other loans at rates
of
interest having no relationship to such rate.
“Production
Payments and Reserve Sales” means the grant or transfer by the Borrower or a
Restricted Subsidiary to any Person of a royalty, overriding royalty, net
profits interest, production payment (whether volumetric or dollar denominated),
partnership or other interest in oil and gas properties, reserves or the right
to receive all or a portion of the production or the proceeds from the sale
of
production attributable to such properties where the holder of such interest
has
recourse solely to such production or proceeds of production, subject to the
obligation of the grantor or transferor to operate and maintain, or cause the
subject interests to be operated and maintained, in a reasonably prudent manner
or other customary standard or subject to the obligation of the grantor or
transferor to indemnify for environmental, title or other matters customary
in
the Oil and Gas Business, including any such grants or transfers pursuant to
incentive compensation programs on terms that are reasonably customary in the
Oil and Gas Business for geologists, geophysicists or other providers of
technical services to the Borrower or a Restricted Subsidiary.
“Property”
means any interest in any kind of property or asset, whether real, personal
or
mixed, or tangible or intangible, including, without limitation, cash,
securities, accounts and contract rights.
“Redemption”
means with respect to any Debt, the repurchase, redemption, prepayment,
repayment, defeasance or any other acquisition or retirement for value (or
the
segregation of funds with respect to any of the foregoing) of such
Debt. “Redeem” has the correlative meaning
thereto.
“Register”
has the meaning assigned such term in Section
12.04(b)(iv).
“Regulation
D” means Regulation D of the Board, as the same may be amended, supplemented
or replaced from time to time.
“Related
Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and
such
Person’s Affiliates.
27
“Remedial
Work” has the meaning assigned such term in Section
8.10(a).
“Reserve
Report” means the Initial Reserve Report and each other report setting forth
the oil and gas reserves attributable to the Oil and Gas Properties of the
Borrower and the Restricted Subsidiaries, together with a projection of the
rate
of production and future net income, taxes, operating expenses and capital
expenditures with respect thereto as of such date based upon the economic
assumptions consistent with the Administrative Agent’s lending requirements at
the time.
“Responsible
Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such
Person. Unless otherwise specified, all references to a Responsible
Officer herein shall mean a Responsible Officer of the Borrower.
“Restricted
Investment” means any Investment other than a Permitted
Investment.
“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in any
Person, or any payment (whether in cash, securities or other Property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests or any option, warrant or other right to acquire any such
Equity Interests.
“Restricted
Subsidiary” means any direct or indirect Subsidiary of the Borrower that is
not an Unrestricted Subsidiary.
“S&P”
means Standard & Poor’s Ratings Group, a division of The XxXxxx-Xxxx
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.
“Sale/Leaseback
Transaction” means an arrangement relating to property now owned or
hereafter acquired whereby the Borrower or a Restricted Subsidiary transfers
such property to a Person and the Borrower or a Restricted Subsidiary leases
it
from such Person.
“SEC”
means the Securities and Exchange Commission or any successor Governmental
Authority.
“Second
Lien Notes” means the $100,000,000 Second Lien Term Notes issued pursuant to
the Second Lien Term Loan Agreement.
“Second
Lien Term Loan Agreement” means that certain Second Lien Term Loan Agreement
dated as of January 19, 2007 among MOXY, JPMorgan Chase Bank, N.A., as
administrative agent and the lenders party thereto.
“Securities
Act” means the Securities Act of 1933, as amended from time to
time.
“Security
Instruments” means the Guaranty Agreement, the Intercreditor Agreement (if
and when executed) and any and all other agreements, instruments, consents
or
certificates now or hereafter executed and delivered by the Borrower or any
other Person (other than Swap Agreements with the Lenders or any Affiliate
of a
Lender or participation or similar agreements between any Lender and any other
lender or creditor with respect to any Indebtedness pursuant to this Agreement)
in connection with, or as security for the payment or performance of the
Indebtedness, the Notes and this Agreement, as such agreements may be amended,
modified, supplemented or restated from time to time.
“Seller”
means Newfield Exploration Company, a Delaware corporation.
28
“Senior
Credit Agreement” means with respect to, or guaranteed by, the Borrower, one
or more debt facilities (including, without limitation, the Senior
Secured Credit Agreement) or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to
time
(and whether or not with the original administrative agent and lenders or
another administrative agent or agents or other lenders and whether provided
under the original Senior Secured Credit Agreement or any other credit or other
agreement or indenture).
“Senior
Loan Documents” means the Senior Credit Agreement and the “Loan Documents”
as such term is defined in the Senior Credit Agreement.
“Senior
Loan Security Instruments” means the “Security Instruments” as such term is
defined in the Senior Credit Agreement.
“Senior
Loans” means the loans made in favor of MOXY under the Senior Credit
Agreement in an aggregate principal amount not to exceed
$700,000,000.
“Senior
Notes” means (a) any senior, senior subordinated or subordinated Debt issued
by the Borrower or MOXY (and any guarantees thereof by any Loan Party) on or
after the Effective Date under Section 9.02(b)(iv) which is unsecured and any
Permitted Refinancing Debt in respect thereof, and (b) any convertible Debt
issued by the Borrower (and any guarantees thereof by any Loan Party) on or
after the Effective Date under Section 9.02(b)(iv) which is unsecured and any
Permitted Refinancing Debt in respect thereof.
“Senior
Secured Credit Agreement” means the Amended and Restated Credit Agreement,
dated as of August 1, 2007, among the Borrower, as parent guarantor, MOXY,
as
borrower, the lenders party thereto from time to time, JPMorgan Chase Bank,
N.A., as administrative agent, Xxxxxxx Xxxxx Capital, a division of Xxxxxxx
Xxxxx Business Financial Services, Inc., as syndication agent, and BNP Paribas,
as documentation agent.
“Significant
Subsidiary” has the meaning set forth in the indentures relating to the
Existing Convertible Notes.
“Stated
Maturity” means, with respect to any security, the date specified in such
security as the fixed date on which the payment of principal of such security
is
due and payable, including pursuant to any mandatory redemption provision,
but
shall not include any contingent obligations to repay, redeem or repurchase
any
such principal prior to the date originally scheduled for the payment
thereof.
“Statutory
Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus
the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board to which the Administrative Agent is subject, with respect to the Adjusted
LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages
shall include those imposed pursuant to such Regulation D. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject
to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change
in
any reserve percentage.
29
“Subordinated
Obligation” means any Debt of the Borrower (whether outstanding on the date
of this Agreement or thereafter Incurred) which is subordinate or junior in
right of payment to the Loans pursuant to a written agreement.
“Subsidiary”
means: (a) any Person of which at least a majority of the outstanding Equity
Interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors, manager or other governing body of such Person
(irrespective of whether or not at the time Equity Interests of any other class
or classes of such Person shall have or might have voting power by reason of
the
happening of any contingency) is at the time directly or indirectly owned or
controlled by the Borrower and/or one or more of its Subsidiaries and (b) any
partnership of which the Borrower or any Loan Party is a general
partner. Unless otherwise indicated herein, each reference to the
term “Subsidiary” shall mean a direct or indirect Subsidiary of the
Borrower.
“Swap
Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement, whether exchange traded,
“over-the-counter” or otherwise, involving, or settled by reference to, one or
more interest rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of any Loan Party shall be a
Swap
Agreement.
“Synthetic
Leases” means, in respect of any Person, all leases which shall have been,
or should have been, in accordance with GAAP, treated as operating leases on
the
financial statements of the Person liable (whether contingently or otherwise)
for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S. federal income taxes,
if
the lessee in respect thereof is obligated to either purchase for an amount
in
excess of, or pay upon early termination an amount in excess of, 80% of the
residual value of the Property subject to such operating lease upon expiration
or early termination of such lease.
“Take-Out
Securities” means the Senior Notes and any Equity Interests that may be
issued by the Borrower or a Restricted Subsidiary after the Effective Date
to
refinance the Loans or Exchange Notes.
“Term
Loan” has the meaning set forth in Section 2.01(b).
“Term
Note” has the meaning set forth in Section 12.04(e).
“Title
Indemnity Agreement” means that certain Title Indemnity Agreement dated as
of August 1, 2007 between MOXY and the Seller.
“Total
Assets” means, with
respect to any Person, the total consolidated assets of such Person and its
Restricted Subsidiaries, as shown on the most recent balance sheet of such
Person.
“Transactions”
means, with respect to (a) the Borrower, the execution, delivery and performance
by the Borrower of this Agreement and each other Loan Document to which it
is a
party, the Acquisition and the borrowing of Loans and (b) each Guarantor, the
execution, delivery and performance by such Guarantor of each Loan Document
and
Acquisition Document to which it is a party, the Acquisition and the
guaranteeing of the Indebtedness and the other obligations under the Guaranty
Agreement by such Guarantor.
“Transferee”
means any Assignee or Participant.
30
“Transition
Services Agreement” means that certain Transition Services Agreement dated
as of August 1, 2007 between MOXY and the Seller.
“Treasury
Rate” means with respect to each day during each Interest Period, the rate
per annum determined by the Administrative Agent two days prior to the Effective
Date as (x) the rate borne by direct obligations of the United States
maturing on the seventh anniversary of the Effective Date or (y) if there
are no such obligations, the rate determined by linear interpolation between
the
rates borne by the two direct obligations of the United States maturing closest
to, but straddling, the seventh anniversary of the Effective Date, in each
case
as most recently published by the Board.
“Treasury
Rate Loan” means a Loan bearing interest at a rate determined by
reference to the Treasury Rate in accordance with the provisions of Section
2.
“Trustee”
has the meaning set forth in Section 8.20(a).
“Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate
of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Alternate Base Rate or the Adjusted LIBO Rate.
“Unrestricted
Subsidiary” means Freeport-McMoRan Energy, LLC, a Delaware limited liability
company, any other Subsidiary of the Borrower designated as such on Schedule
7.14 and each other Subsidiary of any of the foregoing.
“Volumetric
Production Payments” means production payment obligations recorded as
deferred revenue in accordance with GAAP, together with all undertakings and
obligations in connection therewith.
“Voting
Stock” of any Person as of any date, means the Equity Interests of such
Person that is as of such time entitled to vote in the election of the Board
of
Directors of such Person.
“Wholly-Owned
Subsidiary” means any Restricted Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower and/or
one
or more of the Wholly-Owned Subsidiaries.
Section
1.03 Types
of Loans and Borrowings. For
purposes of this Agreement, Loans and Borrowings, respectively, may be
classified and referred to by Type (e.g., a “Eurodollar Loan” or a
“Eurodollar Borrowing”).
Section
1.04 Terms
Generally; Rules of Construction. The
definitions of terms herein shall apply equally to the singular and plural
forms
of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”. The word
“will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth in
the
Loan Documents), (b) any reference herein to any law shall be construed as
referring to such law as amended, modified, codified or reenacted, in whole
or
in part, and in effect from time to time, (c) any reference herein to any Person
shall be construed to include such Person’s successors and assigns (subject to
the restrictions contained in the Loan Documents), (d) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this
31
Agreement
in its entirety and not to any particular provision hereof, (e) with respect
to
the determination of any time period, the word “from” means “from and including”
and the word “to” means “to and including” and (f) any reference herein to
Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Annexes, Exhibits and Schedules to, this
Agreement. No provision of this Agreement or any other Loan Document
shall be interpreted or construed against any Person solely because such Person
or its legal representative drafted such provision.
Section
1.05 Accounting
Terms and Determinations; GAAP. Unless
otherwise specified herein, all terms of an accounting or financial nature
shall
be construed in accordance with GAAP, as in effect from time to time;
provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Majority Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE
II
The
Credits
Section
2.01 Commitments. (a)
Subject to the terms and conditions hereof, each Lender severally agrees to
make
a loan (individually, an “Initial Loan” and collectively, the “Initial
Loans”) to the Borrower on the Effective Date, in an aggregate principal
amount equal to such Lender’s Commitment. Any Commitments not drawn
on the Effective Date shall terminate.
(b) Subject
to the terms and conditions hereof, the Borrower and each Lender severally
agrees, if the Initial Loans have not been repaid or exchanged for Exchange
Notes on the Initial Maturity Date, to convert the then outstanding principal
amount of its Initial Loans into a loan (individually, a “Term Loan” and
collectively, the “Term Loans”; the Initial Loans and the Term Loans,
collectively, the “Loans”) to the Borrower, on the Initial Maturity Date,
in an aggregate principal amount equal to then outstanding principal amount
of
the Initial Loans held by such Lender. Upon the making by such Lender
of such Term Loan, each Lender shall cancel on its records a principal amount
of
the Initial Loans held by such Lender corresponding to the principal amount
of
Term Loans made by such Lender, which corresponding principal amount of the
Initial Loans shall be satisfied by the conversion thereof into Term
Loans.
(c) Prior
to the Initial Maturity Date, the Initial Loans shall be comprised entirely
of
Eurodollar Loans, Treasury Rate Loans or ABR Loans. Each Lender may
at its option make any Eurodollar Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of this Agreement.
(d) The
failure of any Lender to make the Initial Loan to be made by it shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Initial Loan on the Effective Date, but no Lender shall be responsible for
the
failure of any other Lender to make the Initial Loan to be made by such other
Lender on the Effective Date.
Section
2.02 Procedure
for Borrowing. The
Borrower shall give the Administrative Agent an irrevocable Borrowing Request
(which request must be received by the Administrative Agent prior to 10:00
A.M.,
New York City time, three Business Days prior to the anticipated Effective
Date
or such
32
shorter
period agreed to by the Administrative Agent) requesting that the Lenders make
the Initial Loans on the Effective Date and specifying the amount to be
borrowed. Upon receipt of the Borrowing Request the Administrative
Agent shall promptly notify each Lender thereof. Not later than 12:00
Noon, New York City time, on the Effective Date each Lender shall make available
to the Administrative Agent at its office specified in Section 12.01 an amount
in immediately available funds equal to the Initial Loans to be made by such
Lender. The Administrative Agent shall credit the account of the
Borrower on the books of such office of the Administrative Agent with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders in immediately available funds.
Section
2.03 Presumption
of Funding by the Lenders. Unless
the Administrative Agent shall have received a written notice from a Lender
prior to the Effective Date that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date
and
may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made
its share of the Borrowing available to the Administrative Agent by the required
time on the Effective Date, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including
the
date such amount is made available to the Borrower to but excluding the date
of
payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.
ARTICLE
III
Maturity,
Exchange Notes; Payments of Principal and Interest
Section
3.01 Maturity
and Exchange Notes. (a) All
the Initial Loans will mature on the Initial Maturity Date.
(b) All
the Term Loans will mature on the Final Maturity Date.
(c) Each
Lender will have the option on or after the Initial Maturity Date at any time
or
from time to time to receive Exchange Notes in exchange for the Term Loans
or,
on the Initial Maturity Date, the Initial Loans, of such Lender then outstanding
in accordance with Section 8.20 of this Agreement. The principal
amount of the Exchange Notes will equal 100.0% of the aggregate principal amount
(including any accrued and unpaid interest not required to be paid in cash)
of
the Loans for which they are exchanged. If a Default (but not an
Event of Default) shall have occurred and be continuing on the date of such
exchange, any notices given or cure periods commenced while the Loan was
outstanding shall be deemed given or commenced (as of the actual dates thereof)
for all purposes with respect to the Exchange Note (with the same effect as
if
the Exchange Note had been outstanding as of the actual dates thereof). If
not
all Lenders holding Initial Loans elect to receive Exchange Notes in exchange
for their Initial Loans on the Initial Maturity Date, no Initial Loans shall
be
permitted to be exchanged for Exchange Notes unless Lenders holding Initial
Loans in an aggregate principal amount of at least $5,000,000 shall so
elect.
Section
3.02 Repayment
of Loans. The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for
the account of each Lender the then unpaid principal amount of each Loan in
accordance with the terms hereof and of the Loan Notes. The Borrower
hereby further agrees to pay to the Administrative Agent for the account of
each
Lender interest on the unpaid principal amount of the
33
Loans
from time to time outstanding from the date hereof until payment in full thereof
at the rates per annum, and on the dates, set forth in Section
3.03.
Section
3.03 Interest
Rates and Payment Dates. (a)
Initial Loans shall bear interest for the period from and including the date
such Initial Loans are made to, but excluding, the Initial Maturity Date on
the
unpaid principal thereof at a rate per annum equal to the Initial Loan Rate
plus
the Applicable Margin.
(b) Term
Loans shall bear interest for the period from and including the Initial Maturity
Date to, but excluding, the Final Maturity Date or date of exchange for an
Exchange Note on the unpaid principal thereof at a rate per annum equal to
the
Adjusted Rate plus the Adjusted Margin.
(c) Notwithstanding
Sections 3.03(a) and (b), the interest rate borne by the Loans shall not exceed
12% per annum nor be less than 10% per annum.
(d) If
all or a portion of (i) the principal amount of any of the Loans, (ii) any
interest payable thereon, or (iii) any fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration
or
otherwise, but taking into account any applicable grace period under Section
10.01(b)), such Loan and any such overdue amount shall, without limiting the
rights of the Lenders under Article X, bear interest at a rate per annum which
is (x) in the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus
2%
or (y) in the case of overdue interest, fees or other amounts due and payable
hereunder, the applicable rate hereunder for any Loan (but without giving effect
to the foregoing clause (x)) plus 2%.
(e) Interest
shall be payable in arrears on each Interest Payment Date and upon the maturity
date of the Loan in respect of which any such interest is accruing,
provided that interest accruing pursuant to Section 3.03(d) shall be
payable from time to time on demand.
(f) Interest,
fees and commissions payable pursuant hereto shall be calculated on the basis
of
a 360-day year for the actual days elapsed, except that, with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of an Adjusted LIBO Rate. Any
change in the interest rate on a Loan resulting from a change in the Alternate
Base Rate or the Adjusted LIBO Rate shall become effective as of the opening
of
business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.
(g) Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower
and
the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Sections 3.03(a) and (b).
Section
3.04 [Intentionally
Omitted].
Section
3.05 Optional
and Mandatory Prepayments.
(a) Optional
Prepayments. The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to
34
the
Administrative Agent at least three Business Days prior thereto or such shorter
period agreed to by the Administrative Agent, which notice shall specify the
date and amount of prepayment; provided, that if a Loan is prepaid on any
day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 5.02 and
provided, further, that on or after the Initial Maturity Date, any
prepayment shall be applied pro rata among the Loans and Exchange Notes as
provided in Section 3.05(d) below. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to such date on the amount prepaid.
(b) Mandatory
Prepayments.
(i) If,
subsequent to the Effective Date, the Borrower or any of its Subsidiaries shall
issue (A) the Take-Out Securities, (B) any other Debt (other than Debt Incurred
pursuant to Section 9.02(b) excluding the Senior Notes) or (C) Equity Interests
(other than Equity Interests of a Subsidiary issued to the Borrower or any
Wholly-Owned Subsidiary of the Borrower), an amount equal to 100% of the Net
Cash Proceeds thereof shall be promptly applied toward the prepayment of the
Loans as provided in Section 3.05(d) below.
(ii) If,
subsequent to the Effective Date, the Borrower or any of its Subsidiaries shall
have any Excess Proceeds (as defined in Section 9.11(b)), the Borrower shall
make an Asset Disposition Offer in accordance with Section 9.11(b).
(iii) Subject
to Section 3.04(c)(iv) of the Senior Credit Agreement as in effect on the date
hereof, if, for each period of six consecutive months commencing on January
1,
2008, there shall be Excess Cash Flow, the Borrower shall, on the relevant
Excess Cash Flow Application Date, apply 100% of such Excess Cash Flow toward
the prepayment principal and interest on of the Loans and the Exchange Notes
as
provided in Section 3.05(c) and (d) below. Each such prepayment shall
be made on a date (an “Excess Cash Flow Application Date”) no later than
ten days after the earlier of (i) the date on which the financial statements
of
the Borrower referred to in Section 8.01(a) or (b), as applicable, for each
quarter ending June 30 (commencing June 30, 2008) and for each fiscal year
(commencing fiscal year ending December 31, 2008), are required to be delivered
to the Lenders and (ii) the date such financial statements are actually
delivered.
(iv) The
Borrower shall give the Administrative Agent (which shall promptly notify each
Lender) at least three (3) Business Days’ prior notice (or such shorter period
agreed to by the Administrative Agent) or, telephone notice promptly confirmed
in writing of each prepayment in whole or in part pursuant to this Agreement
setting forth the date and amount thereof.
(c) Accrued
and unpaid interest on the amount of any principal of the Loans prepaid under
this Section 3.05 shall be paid to and on the date of such
prepayment.
(d) As
promptly as practicable after the Administrative Agent receives notice of a
prepayment pursuant to Section 3.05(b)(iv) in connection with Section 3.05(a),
3.05(b)(i) or 3.05(b)(iii), the Administrative Agent, in cooperation with the
Trustee, shall give notice to each Holder of an Exchange Note of the pro rata
amount that would be payable to such Holder in respect of such Holder’s Exchange
Note and the expected date of such prepayment. Any Holder of
noncallable Exchange Notes that wishes to accept such prepayment (each, an
“Accepting Holder”) shall promptly notify the Trustee and the
Administrative Agent in writing. Payments and offers to prepay the
Loans and Exchange Notes shall be made ratably among the Loans and Exchange
Notes. After the Administrative Agent receives the prepayment amount,
such prepayment amount shall be distributed by the Administrative Agent, in
35
cooperation
with the Trustee, subject to Section 4.01(c), in the following order, with
appropriate adjustments being made to account for the receipt by the Trustee
of
any prepayment in respect of the Exchange Notes: First, to
the payment of all amounts described in clauses “First” and
“Second” of Section 4.01(c)(i); Second, to the payment of
interest then due and payable on the Loans, Exchange Notes of Accepting Holders
and callable Exchange Notes, ratably among the Lenders, the Accepting Holders
and Holders of callable Exchange Notes in accordance with the aggregate amount
of interest owed to each such Lender, Accepting Holder and Holder; and
Third, to the payment of the principal amount of the Loans, the
Exchange Notes of Accepting Holders and the callable Exchange Notes that is
then
due and payable, ratably among the Lenders, the Accepting Holders and Holders
of
callable Exchange Notes in accordance with the aggregate principal amount owed
to each such Lender, Accepting Holder and Holder. Amounts offered to
and rejected by any Exchange Note Holder shall be ratably applied to prepay
the
Loans, the Exchange Notes held by Accepting Holders and callable Exchange
Notes. Any offers to prepay non-callable Exchange Notes shall be made
in accordance with the provisions relating thereto in the Exchange Notes
Indenture, and with applicable law, and the distribution of the relevant
prepayment amount hereunder shall be made promptly after the expiration of
such
offer.
(e) No
Premium or Penalty. Prepayments of Loans permitted or required
under this Section 3.05 shall be without premium or
penalty, except as required under Section
5.02.
ARTICLE
IV
Payments;
Pro Rata Treatment; Sharing of Set-offs
Section
4.01 Payments
Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Payments
by the Borrower. The Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest or fees, or of amounts
payable under Section 5.01, Section 5.02, Section
5.03 or
otherwise) prior to noon, New York, New York time, on the date when due, in
immediately available funds, without defense, deduction, recoupment, set-off
or
counterclaim. Fees, once paid, shall be fully earned and shall not be
refundable under any circumstances. Any amounts received after such
time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices specified in Section
12.01, except that payments pursuant to Section
5.01, Section 5.02, Section 5.03 and Section
12.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for
the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in
dollars.
(b) Pro
Rata Borrowings and Commitment Reductions. Except to the extent
otherwise provided herein, the borrowing of Loans by the Borrower from the
Lenders and any reduction of the Commitments of the Lenders hereunder shall
be
made prorata according to the relevant Commitment Percentages of
the Lenders with respect to the Loans borrowed or the Commitments to be
reduced.
(c) Application
of Insufficient Payments. Whenever any payment received by the
Administrative Agent under this Agreement or any Note or any Loan Document
is
insufficient to pay in full all amounts then due and payable to the
Administrative Agent and the Lenders under this Agreement:
36
(i) if
the
Administrative Agent has not received a Payment Sharing Notice (or, if the
Administrative Agent has received a Payment Sharing Notice but the Event of
Default specified in such Payment Sharing Notice has been cured or waived in
accordance with the provisions of this Agreement), such payment shall be
distributed by the Administrative Agent and applied by the Administrative Agent,
in cooperation with the Trustee (if any Exchange Notes are outstanding), and
the
Lenders in the following order, with appropriate adjustment being made to
account for any payment received by the Trustee in respect of any outstanding
Exchange Notes: First, to the payment of reasonable fees and
expenses due and payable to the Administrative Agent under and in connection
with this Agreement or the Guaranty Agreement or, if any Exchange Notes are
outstanding, due and payable to the Trustee under the Exchange Notes Indenture;
Second, to the payment of all reasonable expenses due and payable under
Section 12.03 and any equivalent section of the Exchange Notes Indenture,
ratably among the Lenders and the Exchange Note Holders (if any) in accordance
with the aggregate amount of such payments owed to each such Lender or Holder;
Third, to the payment of accrued and unpaid interest then due and
payable on the Loans and the Exchange Notes (if any) ratably among the Lenders
and the Exchange Note Holders (if any) in accordance with the aggregate amount
of interest owed to each Lender and Exchange Note Holder; and Fourth,
to the payment of the principal amount of the Loans and the Exchange Notes
(if
any) that is then due and payable, ratably among the Lenders and the Exchange
Note Holders (if any) in accordance with the aggregate principal amount owed
to
each such Lender and Exchange Note Holder (and in the case of any Exchange
Notes
that are classified as “Fixed Rate Notes” in the Exchange Notes Indenture,
subject to the provisions of Section 3.05(d)); or
(ii) if
the
Administrative Agent has received a Payment Sharing Notice that remains in
effect, all payments received by the Administrative Agent under this Agreement
or any Note shall be distributed by the Administrative Agent and applied by
the
Administrative Agent, in cooperation with the Trustee (if any Exchange Notes
are
outstanding), and the Lenders in the following order, with appropriate
adjustment being made to account for any payment received by the Trustee in
respect of any outstanding Exchange Notes: First, to the
payment of all amounts described in clauses “First” and
“Second” of the foregoing clause (i), in the order set forth therein;
Second, to the payment of the interest accrued and unpaid on all Loans
and Exchange Notes (if any), regardless of whether any such amount is then
due
and payable, ratably among the Lenders and the Exchange Note Holders (if any)
in
accordance with the aggregate accrued interest plus the aggregate principal
amount owed to such Lender and the Exchange Note Holders; and Third, to
the payment of the principal amount of all Loans and Exchange Notes (if any),
regardless of whether any such amount is then due and payable, ratably among
the
Lenders and the Exchange Note Holders (if any) in accordance with the aggregate
principal amount owed to each Lender and Exchange Note Holder (and in the case
of any Exchange Notes that are classified as “Fixed Rate Notes” in the Exchange
Notes Indenture, subject to the provisions of Section 3.05(d)).
(d) Sharing
of Payments by Lenders. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of
any
principal of or interest on any of its Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that
the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this Section 4.01(d)
37
shall
not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained
by a
Lender as consideration for the assignment of or sale of a participation in
any
of its Loans to any assignee or participant, other than to the Borrower or
any
Restricted Subsidiary or Affiliate thereof (as to which the provisions of this
Section 4.01(d) shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to
the
foregoing arrangements may exercise against the Borrower rights of set-off
and
counterclaim with respect to such participation as fully as if such Lender
were
a direct creditor of the Borrower in the amount of such
participation.
Section
4.02 Presumption
of Payment by the Borrower. Unless
the Administrative Agent shall have received notice from the Borrower prior
to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the
Lenders the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders severally agrees to repay
to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate and
a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.
Section
4.03 Certain
Deductions by the Administrative Agent. If
any Lender shall fail to make any payment required to be made by it pursuant
to
Section 4.02 then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of
such
Lender to satisfy such Lender’s obligations under such Section until all such
unsatisfied obligations are fully paid.
Section
4.04 Disposition
of Proceeds. The
Security Instruments (upon effectiveness thereof) contain an assignment by
the
Borrower and/or the Guarantors unto and in favor of the Administrative Agent
for
the benefit of the Lenders of all of the Borrower’s or each Guarantor’s interest
in and to production and all proceeds attributable thereto which may be produced
from or allocated to the Collateral. The Security Instruments further
provide in general for the application of such proceeds to the satisfaction
of
the Indebtedness and other obligations described therein and secured
thereby. Notwithstanding the assignment contained in any such
Security Instruments, until the occurrence of an Event of Default, (A) the
Administrative Agent and the Lenders agree that they will neither notify the
purchaser or purchasers of such production nor take any other action to cause
such proceeds to be remitted to the Administrative Agent or the Lenders, but
the
Lenders will instead permit such proceeds to be paid to the Borrower and its
Restricted Subsidiaries and (B) the Lenders hereby authorize the Administrative
Agent to take such actions as may be necessary to cause such proceeds to be
paid
to the Borrower and/or such Subsidiaries.
ARTICLE
V
Increased
Costs; Break Funding Payments; Taxes
Section
5.01 Increased
Costs.
(a) Eurodollar
Changes in Law. If any Change in Law shall:
38
(i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate); or
(ii) impose
on
any Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender;
and
the
result of any of the foregoing shall be to increase the cost to such Lender
of
making or maintaining any Eurodollar Loan (or of maintaining its obligation
to
make any such Loan) or to reduce the amount of any sum received or receivable
by
such Lender (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction
suffered.
(b) Capital
Requirements. If any Lender determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the
rate
of return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender to a level below that which such Lender or such Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy), then from time to time the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender or
such
Lender’s holding company for any such reduction suffered.
(c) Certificates. A
certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in Section 5.01(a) or (b)
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
(d) Effect
of Failure or Delay in Requesting Compensation. Failure or delay
on the part of any Lender to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section 5.01 for any increased costs or reductions
incurred more than 365 days prior to the date that such Lender notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions
is
retroactive, then the 365-day period referred to above shall be extended to
include the period of retroactive effect thereof.
Section
5.02 Break
Funding Payments. In
the event of (a) the payment of any principal of any Eurodollar Loan other
than
on the last day of an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any Eurodollar Loan into an
ABR
Loan other than on the last day of the Interest Period applicable thereto,
or
(c) the failure to borrow, convert, continue or prepay any Eurodollar Loan
on
the date specified in any notice delivered pursuant hereto, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had
such
event not occurred, at the Adjusted LIBO Rate that would have been applicable
to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period
for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid
39
were
it
to bid, at the commencement of such period, for dollar deposits of a comparable
amount and period from other banks in the eurodollar market.
A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
Section
5.03 Taxes.
(a) All
payments made by any Loan Party under this Agreement or any Loan Document shall
be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Administrative Agent or any Lender as a result of a present
or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under,
or
enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“Non-Excluded Taxes”) or other taxes are required to be
withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes and other taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such
Lender’s failure to comply with the requirements of Section 5.03(d) or (e) or
(ii) that are United States withholding taxes imposed on amounts payable to
such
Lender at the time such Lender becomes a party to this Agreement, except to
the
extent that such Lender’s assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to
such
Non-Excluded Taxes pursuant to this Section 5.03(a).
(b) In
addition, the Borrower shall pay any other taxes to the relevant Governmental
Authority in accordance with applicable law.
(c) Whenever
any Non-Excluded Taxes or other taxes are payable by a Loan Party, as promptly
as possible thereafter such Loan Party shall send to the Administrative Agent
for its own account or for the account of the relevant Lender, as the case
may
be, a certified copy of an original official receipt received by such Loan
Party
showing payment thereof. If such Loan Party fails to pay any
Non-Excluded Taxes or other taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties that
may
become payable by the Administrative Agent or any Lender as a result of any
such
failure.
(d) Each
Lender (or Transferee) that is not a “U.S. Person” as defined in Section
7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to
the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, a statement substantially in
40
the
form
of Exhibit J and a Form W-8BEN, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by the Loan Parties under this Agreement and the other
Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of
any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify the Borrower at any time it determines that it is no longer
in a
position to provide any previously delivered certificate to the Borrower (or
any
other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this Section
5.03(d), a Non-U.S. Lender shall not be required to deliver any form pursuant
to
this Section 5.03(d) that such Non-U.S. Lender is not legally able to
deliver.
(e) A
Lender
that is entitled to an exemption from or reduction of non-U.S. withholding
tax
under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement or any Loan Document shall deliver to the Borrower (with a copy
to the Administrative Agent), at the time or times prescribed by applicable
law
or reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to
be
made without withholding or at a reduced rate, provided that such Lender
is legally entitled to complete, execute and deliver such documentation and
in
such Lender’s judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) If
the
Administrative Agent or any Lender determines, in its sole discretion, that
it
has received a refund of any Non-Excluded Taxes or other taxes as to which
it
has been indemnified by the Borrower or with respect to which the Borrower
has
paid additional amounts pursuant to this Section
5.03, it shall pay over such refund to the Borrower (but only to the extent
of indemnity payments made, or additional amounts paid, by the Borrower under
this Section 5.03 with respect to the Non-Excluded
Taxes or other taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect
to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to
such
Governmental Authority. This Section 5.03 shall not be construed to require
the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.
(g) The
agreements in this Section 5.03 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
Section
5.04 Designation
of Different Lending Office. If
any Lender requests compensation under Section 5.01,
or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 5.03, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its
Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 5.01 or Section
5.03, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such
designation or assignment.
41
Section
5.05 Replacement
of Lenders. If
(a) any Lender requests compensation under Section
5.01, (b) the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant
to
Section 5.03, (c) any Lender defaults in its
obligation to fund Loans hereunder, or (d) any Lender has not approved a
proposed waiver or amendment requiring 100% approval or consent but which has
been approved by Lenders holding 75% or more of the then outstanding
Commitments, then the Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign
and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 12.04(b)), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that
(i)
the Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable
to
it hereunder, from the assignee (to the extent of such outstanding principal
and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 5.01 or payments required
to be made pursuant to Section 5.03, such assignment
will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation
cease to apply.
ARTICLE
VI
Conditions
Precedent
Section
6.01 Effective
Date. The
obligations of the Lenders to make Loans hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 12.02):
(a) The
Administrative Agent, the Arrangers and the Lenders shall have received all
fees
and other amounts due and payable on or prior to the Effective Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
(b) The
Administrative Agent shall have received a certificate of the Secretary or
an
Assistant Secretary of the Borrower and each Guarantor setting forth (i)
resolutions of its board of directors or other appropriate governing body with
respect to the authorization of the Borrower or such Guarantor to execute and
deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of the Borrower
or such Guarantor (y) who are authorized to sign the Loan Documents to which
the
Borrower or such Guarantor is a party and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of such authorized officers,
and
(iv) the articles or certificate of incorporation and by-laws or other
applicable organizational documents of the Borrower and such Guarantor,
certified as being true and complete. The Administrative Agent and
the Lenders may conclusively rely on such certificate until the Administrative
Agent receives notice in writing from the Borrower to the contrary.
(c) The
Administrative Agent shall have received certificates of the appropriate State
agencies with respect to the existence, qualification and good standing of
the
Borrower and each Guarantor.
42
(d) The
Administrative Agent shall have received from each party hereto counterparts
(in
such number as may be requested by the Administrative Agent) of this Agreement
signed on behalf of such party.
(e) The
Administrative Agent shall have received from each party thereto duly executed
counterparts (in such number as may be requested by the Administrative Agent)
of
the Guaranty Agreement.
(f) The
Administrative Agent shall have received an opinion of Xxxxx Xxxxxx, special
counsel to the Borrower, substantially in a form and of substance reasonably
acceptable to the Administrative Agent.
(g) The
Administrative Agent shall have received a certificate of insurance coverage
of
the Borrower evidencing that the Borrower is carrying insurance in accordance
with Section 7.12.
(h) The
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower certifying that (i) all government and third party approvals
necessary in connection with the Transactions have been obtained on satisfactory
terms and (ii) no action or proceeding is pending or threatened in any court
or
before any Governmental Authority seeking to restrain or prohibit the
consummation of the transactions contemplated by the Acquisition Documents
or to
obtain substantial damages from the Borrower related to the Acquisition
Documents.
(i) The
Administrative Agent shall have received the financial statements referred
to in
Sections 7.04(a) and 7.04(b) and the Initial Reserve Report and the officer’s
certificate relating thereto which are delivered under the Senior Credit
Agreement. The Administrative Agent and the Lenders shall have
received projections (broken down by quarter for the first year and by year
thereafter) for the Borrower and its Restricted Subsidiaries after giving effect
to the Acquisition and the other transactions contemplated hereby through the
fifth anniversary of the Effective Date.
(j) The
Administrative Agent shall have received evidence that the Borrower has
purchased one or more commodity price swaps with one or more Approved
Counterparties which have aggregate notional volumes of not less than 80% of
the
reasonably estimated projected crude oil production and not less than 80% of
the
reasonably estimated projected natural gas production, in each case, from its
proved developed, producing Oil and Gas Properties (excluding Main Pass 299)
as
determined by reference to the Initial Reserve Reports for each year during
the
calendar years 2008, 2009 and 2010; provided however, that the Swap Agreements
for production related to months during July, August, September and October
during each such calendar year shall be in the form of puts and/or
floors.
(k) The
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower certifying: (A) that the Borrower is concurrently
consummating the Acquisition in accordance with applicable law and the terms
of
the Acquisition Documents (with all of the material conditions precedent thereto
having been satisfied in all material respects or waived by the parties thereto)
and acquiring substantially all of the Acquisition Properties contemplated
by
the Acquisition Documents (other than the Preferential Purchase Right
Properties); (B) that no provision of the Acquisition Agreement has been waived,
amended, supplemented or otherwise modified in any respect materially adverse
to
the Borrower or the Lenders without the prior consent of the Arrangers; (C)
that
the terms of the other Acquisition Documents are not inconsistent in any
material respect with the terms of the Acquisition Agreement; (D) that attached
thereto is the Preliminary Closing Statement as defined in the Acquisition
Documents in such detail as may reasonably be requested by the
43
Administrative
Agent; and (E) that attached thereto are (i) a true and complete list of all
Preferential Purchase Right Properties which are currently pending final
decision by a third party regarding purchase of such property in accordance
with
such preferential right; (ii) a true and complete executed copy of each of
the
Acquisition Documents; and (iii) original counterparts or copies, certified
as
true and complete, of the bills of sale and assignment to the Borrower for
all
of the Acquisition Properties.
(l) The
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower certifying that immediately after giving effect to the
Acquisition, the Borrower and its Restricted Subsidiaries will have outstanding
no Debt for borrowed money or Disqualified Stock other than (A) the
Indebtedness under this Agreement; (B) Debt associated with the Senior
Loans in an aggregate principal amount of not less than $700,000,000; (C) the
Existing Convertible Notes and (D) the Parent Loan.
(m) The
Administrative Agent shall have received a certificate of a Financial Officer
of
the Borrower certifying that, after giving effect to the Acquisition, the
borrowings under this Agreement and the Senior Credit Agreement, the Borrower
and its Restricted Subsidiaries, taken as a whole, are solvent as contemplated
by Section 7.22.
(n) The
Administrative Agent shall have received evidence reasonably satisfactory to
Administrative Agent of the payment in full of all amounts due under the Second
Lien Term Loan Agreement and the release of all Liens securing such obligations
and any other obligations secured thereby contemporaneously with the proceeds
of
the initial funding under this Agreement.
(o) The
Administrative Agent shall have received (i) a complete and correct copy of
the
Senior Secured Credit Agreement, in form and substance satisfactory to the
Administrative Agent certified as to authenticity by the Borrower and such
agreement shall be in full force and effect and none of the provisions thereof
shall have been amended, waived, supplemented, or otherwise modified without
the
prior written consent of the Administrative Agent and (ii) satisfactory evidence
that all conditions precedent for the funding of the Senior Secured Credit
Agreement shall have been satisfied or waived contemporaneously with the
satisfaction of the conditions hereunder and such funding shall occur
contemporaneously with the funding of the Initial Loans, in each case on terms
and conditions satisfactory to the Administrative Agent, and none of the
material terms and conditions of the Senior Secured Credit Agreement shall
have
been waived without the consent of the Administrative Agent.
The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 12.02) at or prior to 1:00 p.m., New York New
York time, on August 15, 2007 (and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time).
Section
6.02 Each
Credit Event. The
obligation of each Lender to make a Loan on the Effective Date is also subject
to the satisfaction of the following conditions:
(a) At
the
time of and immediately after giving effect to such Borrowing, no Default shall
have occurred and be continuing.
(b) The
representations and warranties of the Borrower and the Guarantors set forth
in
this Agreement and in the other Loan Documents shall be true and correct on
and
as of the Effective Date; provided that with respect to the initial funding
on
the Effective Date, the Borrower is
44
not
required to make the representation contained in Section 7.04(c) and the only
representations (and related Defaults) the making of which shall be a condition
precedent under this Section 6.02(b) on the Effective Date shall be (i) with
respect to the Borrower and its Restricted Subsidiaries, those representations
contained in Sections 7.01, 7.02, 7.03(b) (but only with respect to a Loan
Party’s charter, by-laws or other organizational documents), 7.08 and 7.22 and
(ii) with respect to the Acquisition Properties, such of the representations
made by or with respect to the Assets in the Acquisition Agreement as are
material to the interests of the Lenders (but only to the extent that the
Borrower has the right to terminate its obligations under the Acquisition
Agreement as a result of a breach of such representations in the Acquisition
Agreement (determined without regard to any waiver, amendment or other
modification of the Acquisition Agreement)).
(c) The
receipt by the Administrative Agent of a Borrowing Request in accordance with
Section 2.02.
ARTICLE
VII
Representations
and Warranties
The
Borrower represents and warrants to the Lenders that:
Section
7.01 Organization;
Powers. Each
of the Borrower and each Restricted Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary, to
own
its assets and to carry on its business as now conducted, and is qualified
to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.
Section
7.02 Authority;
Enforceability. The
Transactions are within each Loan Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder
action. Each Loan Document and Acquisition Document to which a Loan
Party is a party has been duly executed and delivered by it and constitutes
its
legal, valid and binding obligation, as applicable, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
Section
7.03 Approvals;
No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
third Person, nor is any such consent, approval, registration, filing or other
action necessary for the validity or enforceability of any Loan Document or
the
consummation of the transactions contemplated thereby, except such as have
been
obtained or made and are in full force and effect other than the recording
and
filing of the Security Instruments as required by this Agreement, (b) will
not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any Loan Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Loan Party or its Properties,
or
give rise to a right thereunder to require any payment to be made by any Loan
Party and (d) will not result in the creation or imposition of any Lien on
any
Property of any Loan Party (other than the Liens created by the Loan
Documents).
Section
7.04 Financial
Condition; No Material Adverse Change.
45
(a) The
Borrower has furnished to the Lenders (i) its audited consolidated balance
sheets and related statements of income, stockholders’ equity and cash flows as
of and for the fiscal years ended December 31, 2006, December 31, 2005 and
December 31, 2004 (which audit reports for such financial statements are not
subject to any qualification), (ii) its unaudited consolidated balance sheets
and related statements of income, stockholders’ equity and cash flows for the
fiscal quarter ended Xxxxx 00, 0000, (xxx) audited statements of revenues and
operating expenses for the Assets for the fiscal year ended December 31, 2006
(which audit reports for such financial statements are not subject to any
qualification) and (iv) unaudited statements of revenues and operating expenses
for the Assets for the fiscal quarter ending March 31, 2007 (and for the
comparable period in the preceding fiscal year), which financial statements
shall be prepared in accordance with GAAP. The financial statements
in clauses (i) and (ii) present fairly, in all material respects, consolidated
financial condition of the Borrower as of the dates and for the periods set
forth above in accordance with GAAP, subject to year-end audit adjustments
and
the absence of footnotes in the case of the unaudited quarterly financial
statements. The financial statements in clauses (iii) and (iv)
present fairly, in all material respects, revenues and operating expenses for
the Assets as of the dates and for the periods set forth above in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes
in
the case of the unaudited quarterly financial statements.
(b) The
Borrower has heretofore furnished to the Lenders a pro forma
consolidated balance sheet of the Borrower as of June 30, 2007 and a pro
forma statement of operations as of December 31, 2006, and as of June 30,
2007 and 12-month period ending on June 30, 2007, in each case adjusted to
give
effect to the Acquisition and the other transactions contemplated hereby, the
other transactions related thereto and any other transactions that would be
required to be given pro forma effect by Regulation S-X promulgated
under the Securities Act and such other adjustments as are agreed between the
Borrower and the Arrangers.
(c) Since
December 31, 2006, there has been no event, development or circumstance that
has
had or could reasonably be expected to have a Material Adverse
Effect.
(d) Neither
the Borrower nor any of its Restricted Subsidiaries has on the date hereof
any
material Debt (including Disqualified Stock) or any contingent liabilities,
off-balance sheet liabilities or partnerships, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for
in
the Financial Statements.
Section
7.05 Litigation.
(a) Except
as
set forth on Schedule 7.05, there are no actions, suits, investigations or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower and its Restricted Subsidiaries or involving the Acquisition (i)
not fully covered by insurance (except for normal deductibles) as to which
there
is a reasonable possibility of an adverse determination that, if adversely
determined, could reasonably be expected, individually or in the aggregate,
to
result in a Material Adverse Effect or (ii) that involve any Loan Document,
any
Acquisition Document or the Transactions.
(b) Since
the
date of this Agreement, there has been no change in the status of the matters
disclosed in Schedule 7.05 that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
Section
7.06 Environmental
Matters. Except
as could not be reasonably expected to have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions could
not be reasonably expected to have a Material Adverse Effect):
46
(a) neither
any Property of the Borrower and its Restricted Subsidiaries nor the operations
conducted thereon violate any order or requirement of any court or Governmental
Authority or any Environmental Laws.
(b) no
Property of the Borrower and its Restricted Subsidiaries nor the operations
currently conducted thereon are in violation of or subject to any existing,
pending or threatened action, suit, investigation, inquiry or proceeding by
or
before any court or Governmental Authority or to any remedial obligations under
Environmental Laws.
(c) all
notices, permits, licenses, exemptions, approvals or similar authorizations,
if
any, required to be obtained or filed in connection with the operation or use
of
any and all Property of the Borrower and its Restricted Subsidiaries, including,
without limitation, past or present treatment, storage, disposal or release
of a
hazardous substance, oil and gas waste or solid waste into the environment,
have
been duly obtained or filed, and the Borrower and its Restricted Subsidiaries
are in compliance with the terms and conditions of all such notices, permits,
licenses and similar authorizations.
(d) all
hazardous substances, solid waste and oil and gas waste, if any, generated
at
any and all Property of the Borrower and its Restricted Subsidiaries have in
the
past been transported, treated and disposed of in accordance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to public
health or the environment, and, to the actual knowledge of the Borrower, all
such transport carriers and treatment and disposal facilities have been and
are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or the environment,
and
are not the subject of any existing, pending or threatened action, investigation
or inquiry by any Governmental Authority in connection with any Environmental
Laws.
(e) the
Borrower has taken all steps reasonably necessary to determine and has
determined that no oil, hazardous substances, solid waste or oil and gas waste,
have been disposed of or otherwise released and there has been no threatened
release of any oil, hazardous substances, solid waste or oil and gas waste
on or
to any Property of the Borrower and its Restricted Subsidiaries except in
compliance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the
environment.
(f) to
the
extent applicable, all Property of the Borrower and its Restricted Subsidiaries
currently satisfies all design, operation, and equipment requirements imposed
by
the OPA, and the Borrower does not have any reason to believe that such
Property, to the extent subject to the OPA, will not be able to maintain
compliance with the OPA requirements during the term of this
Agreement.
(g) neither
the Borrower nor any Restricted Subsidiary has any known contingent liability
or
Remedial Work in connection with any release or threatened release of any oil,
hazardous substance, solid waste or oil and gas waste into the
environment.
Section
7.07 Compliance
with the Laws and Agreements; No Defaults.
(a) The
Borrower and its Restricted Subsidiaries are in compliance with all Governmental
Requirements applicable to it or its Property and all agreements and other
instruments binding upon it or its Property, and possesses all licenses,
permits, franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its Property and the conduct of its
47
business,
except where the failure to do so, individually or in the aggregate, could
not
reasonably be expected to result in a Material Adverse Effect.
(b) Neither
the Borrower nor any of its Restricted Subsidiaries are in default nor has
any
event or circumstance occurred which, but for the expiration of any applicable
grace period or the giving of notice, or both, would constitute a default or
would require the Borrower or any Restricted Subsidiary to Redeem or make any
offer to Redeem all or any portion of any Debt outstanding under any indenture,
note, credit agreement or instrument pursuant to which any Material Indebtedness
is outstanding or by which the Borrower or any of its Restricted Subsidiaries
or
any of their Properties is bound.
(c) No
Default has occurred and is continuing.
Section
7.08 Investment
Company Act. No
Loan Party is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of, or subject to regulation under, the
Investment Company Act of 1940, as amended.
Section
7.09 Taxes. The
Borrower and each of its Subsidiaries has timely filed or caused to be filed
all
tax returns and reports required to have been filed and has paid or caused
to be
paid all taxes required to have been paid by it, except (a) taxes that are
being
contested in good faith by appropriate proceedings and for which the Borrower,
as applicable, has set aside on its books adequate reserves in accordance with
GAAP or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect. The charges,
accruals and reserves on the books of the Borrower in respect of taxes and
other
governmental charges are, in the reasonable opinion of the Borrower,
adequate. No tax Lien has been filed and, to the knowledge of the
Borrower, no claim is being asserted with respect to any such tax or other
such
governmental charge.
Section
7.10 ERISA.
(a) The
Borrower and each ERISA Affiliate have complied in all material respects with
ERISA and, where applicable, the Code regarding each Plan.
(b) Each
Plan
is, and has been, maintained in substantial compliance with ERISA and,
where applicable, the Code.
(c) No
act,
omission or transaction has occurred which could result in imposition on any
the
Borrower or any of its Subsidiaries or any ERISA Affiliate (whether directly
or
indirectly) of (i) either a civil penalty assessed pursuant to subsections
(c),
(i) or (l) of section 502 of ERISA or a tax imposed pursuant to Chapter 43
of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages
under section 409 of ERISA.
(d) Except
as
provided in Schedule 7.10(d), no Plan (other than a defined contribution
plan) or any trust created under any such Plan has been terminated since
September 2, 1974. No liability to the PBGC (other than for the
payment of current premiums which are not past due) by the Borrower or any
of
its Subsidiaries or any ERISA Affiliate has been or is expected by any Loan
Party or any ERISA Affiliate to be incurred with respect to any
Plan. No ERISA Event with respect to any Plan has
occurred.
(e) Full
payment when due has been made of all amounts which Borrower or any of its
Subsidiaries or any ERISA Affiliate is required under the terms of each Plan
or
applicable law to have paid as contributions to such Plan as of the date
hereof, no accumulated funding deficiency (as
48
defined
in section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan and, on and after the effectiveness of the
Pension Act, and no Plan has failed to satisfy the minimum funding standards
(within the meaning of Section 412 of the Code or Section 302 of ERISA)
applicable to such Plan.
(f) Except
as
provided in Schedule 7.10(f), the actuarial present value of the benefit
liabilities under each Plan which is subject to Title IV of ERISA does not,
as of the end of the Borrower’s most recently ended fiscal year, exceed the
current value of the assets (computed on a plan termination basis in accordance
with Title IV of ERISA) of such Plan allocable to such benefit liabilities
by an amount in excess of $500,000. The term “actuarial present value
of the benefit liabilities” shall have the meaning specified in section 4041 of
ERISA.
(g) Neither
the Borrower and any of its Subsidiaries nor any ERISA Affiliate sponsors,
maintains, or contributes to an employee welfare benefit plan, as defined in
section 3(1) of ERISA, including, without limitation, any such plan maintained
to provide benefits to former employees of such entities, that may not be
terminated by the Borrower or any ERISA Affiliate in its sole discretion at
any
time without any material liability.
(h) Neither
the Borrower and any of its Subsidiaries nor any ERISA Affiliate sponsors,
maintains or contributes to, or has at any time in the six-year period preceding
the date hereof sponsored, maintained or contributed to, any Multiemployer
Plan.
(i) Neither
the Borrower and any of its Subsidiaries nor any ERISA Affiliate is required
to
provide security under section 401(a)(29) of the Code due to a Plan amendment
that results in an increase in current liability for the Plan.
Section
7.11 Disclosure;
No Material Misstatements. The
Borrower has disclosed to the Administrative Agent and the Lenders all material
agreements, instruments and corporate or other restrictions to which it or
any
of its Restricted Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by or on behalf of
the
Borrower and its Restricted Subsidiaries to the Administrative Agent or any
Lender or any of their Affiliates in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or under any other
Loan Document (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time; and further provided that the representations regarding
information and projections with respect to the Acquisition Properties shall
be
limited to the best knowledge of the Borrower. There is no fact
peculiar to the Borrower and its Restricted Subsidiaries which could reasonably
be expected to have a Material Adverse Effect or in the future is reasonably
likely to have a Material Adverse Effect and which has not been set forth in
this Agreement or the Loan Documents or the other documents, certificates and
statements furnished to the Administrative Agent or the Lenders by or on behalf
of the Borrower and its Restricted Subsidiaries prior to, or on, the date hereof
in connection with the transactions contemplated hereby. There are no
statements or conclusions in any Reserve Report which are based upon or include
misleading information or fail to take into account material information
regarding the matters reported therein, it being understood that projections
concerning volumes attributable to the Oil and Gas Properties and production
and
cost estimates contained in each Reserve Report are necessarily based upon
professional opinions, estimates and projections and that neither the Borrower,
Restricted the Subsidiaries
49
nor
such
Responsible Officer warrants that such opinions, estimates and projections
will
ultimately prove to have been accurate.
Section
7.12 Insurance. The
Borrower has, and has caused all of its Restricted Subsidiaries to have, (a)
all
insurance policies sufficient for the compliance by each of them with all
material Governmental Requirements and all material agreements and (b) insurance
coverage in at least amounts and against such risk (including, without
limitation, public liability) that are usually insured against by companies
similarly situated and engaged in the same or a similar business for the assets
and operations of the Borrower and its Restricted
Subsidiaries. Schedule 7.12, as of the date hereof, sets forth a list
of all insurance maintained by the Borrower and all its Restricted
Subsidiaries. The Administrative Agent and the Lenders have been
named as additional insureds in respect of such liability insurance
policies.
Section
7.13 Restriction
on Liens. Neither
the Borrower nor any of its Restricted Subsidiaries is a party to any material
agreement or arrangement (other than the Senior Credit Agreement, this Agreement
and Capital Leases creating Liens permitted by clause (x) and clause (xxiii)
of
the definition of Permitted Liens), but then only on the Property subject of
such Capital Lease), or subject to any order, judgment, writ or decree, which
either restricts or purports to restrict its ability to grant Liens to the
Administrative Agent and the Lenders on or in respect of their Properties to
secure the Indebtedness and the Loan Documents.
Section
7.14 Subsidiaries. Except
as set forth on Schedule 7.14 or as disclosed in writing to the Administrative
Agent (which shall promptly furnish a copy to the Lenders), which shall be
a
supplement to Schedule 7.14, the Borrower has no
Subsidiaries. Schedule 7.14 sets forth each Subsidiary’s status as a
Restricted Subsidiary or an Unrestricted Subsidiary.
Section
7.15 Location
of Business and Offices. The
Borrower’s jurisdiction of organization is Delaware; the name of the Borrower as
listed in the public records of its jurisdiction of organization is McMoRan
Exploration Co.; and the organizational identification number of the Borrower
in
its jurisdiction of organization is 2927190 (or, in each case, as set forth
in a
notice delivered to the Administrative Agent pursuant to Section 8.01(m) in accordance with Section 12.01). The Borrower’s principal place of
business and chief executive offices are located at the address specified in
Section 12.01 (or as set forth in a notice delivered
pursuant to Section 8.01(m) and Section 12.01(c)). Each Subsidiary’s
jurisdiction of organization, name as listed in the public records of its
jurisdiction of organization, organizational identification number in its
jurisdiction of organization, and the location of its principal place of
business and chief executive office is stated on Schedule 7.14 (or as set forth
in a notice delivered pursuant to Section
8.01(m)).
Section
7.16 Properties;
Titles, Etc.
(a) Except
as
set forth in Schedule 7.16, each of the Borrower and the Restricted Subsidiaries
(as applicable) has good and defensible title to the Oil and Gas Properties
evaluated in the most recently delivered Reserve Report and good title to all
its personal Properties, in each case, free and clear of all Liens except Liens
permitted by Section 9.03. After giving
full effect to the Permitted Liens, the Borrower or the Restricted Subsidiary
specified as the owner owns the net interests in production attributable to
the
Hydrocarbon Interests as reflected in the most recently delivered Reserve
Report, and the ownership of such Properties shall not in any material respect
obligate the Borrower or such Restricted Subsidiary to bear the costs and
expenses relating to the maintenance, development and operations of each such
Property in an amount in excess of the working interest of each Property set
forth in the most recently delivered Reserve Report that is not offset by a
corresponding proportionate increase in the Borrower’s or such Restricted
Subsidiary’s net revenue interest in such Property. The Borrower owns
no direct interests in any Oil and Gas Properties.
50
(b) All
material leases and agreements necessary for the conduct of the business of
the
Borrower and the Restricted Subsidiaries are valid and subsisting, in full
force
and effect, and there exists no default or event or circumstance which with
the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which could reasonably be expected to have
a
Material Adverse Effect.
(c) The
rights and Properties presently owned, leased or licensed by the Borrower and
the Restricted Subsidiaries including, without limitation, all easements and
rights of way, include all rights and Properties necessary to permit the
Borrower and the Restricted Subsidiaries to conduct their business in all
material respects in the same manner as its business has been conducted prior
to
the date hereof.
(d) All
of
the Properties of the Borrower and the Restricted Subsidiaries which are
reasonably necessary for the operation of their businesses are in good working
condition and are maintained in accordance with prudent business
standards.
(e) The
Borrower and each Restricted Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual Property
material to its business, and the use thereof by the Borrower and such
Restricted Subsidiary does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse
Effect. The Borrower and its Restricted Subsidiaries either own or
have valid licenses or other rights to use all databases, geological data,
geophysical data, engineering data, seismic data, maps, interpretations and
other technical information used in their businesses as presently conducted,
subject to the limitations contained in the agreements governing the use of
the
same, which limitations are customary for companies engaged in the business
of
the exploration and production of Hydrocarbons, with such exceptions as could
not reasonably be expected to have a Material Adverse Effect.
Section
7.17 Maintenance
of Properties. Except
for such acts or failures to act as could not be reasonably expected to have
a
Material Adverse Effect, the Oil and Gas Properties (and Properties unitized
therewith) of the Borrower and its Restricted Subsidiaries have been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all Governmental Requirements and in conformity with the provisions of all
leases, subleases or other contracts comprising a part of the Hydrocarbon
Interests and other contracts and agreements forming a part of the Oil and
Gas
Properties of the Borrower and its Restricted
Subsidiaries. Specifically in connection with the foregoing, except
for those as could not be reasonably expected to have a Material Adverse Effect,
(i) no Oil and Gas Property of the Borrower or its Restricted Subsidiaries
is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (ii)
none of the xxxxx comprising a part of the Oil and Gas Properties (or Properties
unitized therewith) of the Borrower or its Restricted Subsidiaries is deviated
from the vertical more than the maximum permitted by Governmental Requirements,
and such xxxxx are, in fact, bottomed under and are producing from, and the
well
bores are wholly within, the Oil and Gas Properties (or in the case of xxxxx
located on Properties unitized therewith, such unitized Properties) of the
Borrower or such Restricted Subsidiary. All pipelines, xxxxx, gas
processing plants, platforms and other material improvements, fixtures and
equipment owned in whole or in part by the Borrower or any of its Restricted
Subsidiaries that are necessary to conduct normal operations are being
maintained in a state adequate to conduct normal operations, and with respect
to
such of the foregoing which are operated by the Borrower or any of its
Restricted Subsidiaries, in a manner consistent with the Borrower’s or its
Restricted Subsidiaries’ past practices (other than those the failure of which
to maintain in accordance with this Section 7.17 could not reasonably be
expected to have a Material Adverse Effect).
51
Section
7.18 Gas
Imbalances, Prepayments. Except
as set forth on Schedule 7.18, on a net basis there are no gas imbalances,
take
or pay or other prepayments which would require the Borrower or any of its
Restricted Subsidiaries to deliver Hydrocarbons produced from the Oil and Gas
Properties at some future time without then or thereafter receiving full payment
therefor exceeding two and one-half percent (2.5%) of the aggregate volumes
of
Hydrocarbons (on an Mcf equivalent basis) listed in the most recent Reserve
Report.
Section
7.19 Marketing
of Production. Except
for contracts listed and in effect on the date hereof on Schedule 7.19, and
thereafter either disclosed in writing to the Administrative Agent or included
in the most recently delivered Reserve Report (with respect to all of which
contracts the Borrower represents that it or its Restricted Subsidiaries are
receiving a price for all production sold thereunder which is computed
substantially in accordance with the terms of the relevant contract and are
not
having deliveries curtailed substantially below the subject Property’s delivery
capacity), no material agreements exist which are not cancelable on 60 days
notice or less without penalty or detriment for the sale of production from
the
Borrower’s or its Restricted Subsidiaries’ Hydrocarbons (including, without
limitation, calls on or other rights to purchase, production, whether or not
the
same are currently being exercised) that (a) pertain to the sale of production
at a fixed price and (b) have a maturity or expiry date of longer than six
(6)
months from the date hereof.
Section
7.20 Swap
Agreements. Schedule
7.20, as of the date hereof, and after the date hereof, each report required
to
be delivered by the Borrower pursuant to Section
8.01(d), sets forth, a true and complete list of all Swap Agreements of the
Parent and its Restricted Subsidiaries, the material terms thereof (including
the type, term, effective date, termination date and notional amounts or
volumes), the net xxxx to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied) and the
counterparty to each such agreement.
Section
7.21 Use
of
Loans. The
proceeds of the Loans shall be used to refinance the Second Lien Notes, to
provide funding in connection with the Acquisition, to provide for bonding
requirement with the MMS (defined herein), to provide working capital for
exploration and production operations and to provide funding for general
corporate purposes of the Borrower and its Restricted
Subsidiaries. Neither the Borrower nor any Restricted Subsidiary is
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental
or
ultimate, of buying or carrying margin stock (within the meaning of Regulation
T, U or X of the Board). No part of the proceeds of any Loan will be
used for any purpose which violates the provisions of Regulations T, U or X
of
the Board.
Section
7.22 Solvency. After
giving effect to the transactions contemplated hereby, (a) the aggregate assets
(after giving effect to amounts that could reasonably be received by reason
of
indemnity, offset, insurance or any similar arrangement), at a fair valuation,
of the Loan Parties, taken as a whole, will exceed the aggregate Debt of the
Loan Parties on a consolidated basis, as the Debt becomes absolute and matures,
(b) each Loan Party will not have incurred or intended to incur, and will not
believe that it will incur, Debt beyond its ability to pay such Debt (after
taking into account the timing and amounts of cash to be received by it and
the
amounts to be payable on or in respect of its liabilities, and giving effect
to
amounts that could reasonably be received by reason of indemnity, offset,
insurance or any similar arrangement) as such Debt becomes absolute and matures
and (c) each Loan Party will not have (and will have no reason to believe that
it will have thereafter) unreasonably small capital for the conduct of its
business.
52
ARTICLE
VIII
Affirmative
Covenants
Except
as
modified on the Initial Maturity Date as set forth in Section 12.02, until
the
principal of and interest on each Loan and all fees payable hereunder and all
other amounts payable under the Loan Documents shall have been paid in full,
the
Borrower covenants and agrees with the Lenders that:
Section
8.01 Financial
Statements; Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) Annual
Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 90 days after the end
of
each fiscal year of the Borrower, its audited consolidated balance sheets and
related statements of operations, stockholders’ equity, as applicable, and cash
flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on
by
Ernst & Young LLP or other independent public accountants of recognized
national standing (without a “going concern” or like qualification or exception
and without any qualification or exception as to the scope of such audit) to
the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied.
(b) Quarterly
Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 45 days after the end
of
each of the first three fiscal quarters of each fiscal year of the Borrower,
its
consolidated balance sheet and related statements of operations and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of
the
fiscal year, setting forth in each case in comparative form the figures for
the
corresponding period or periods of (or, in the case of the balance sheet, as
of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries
on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes.
(c) Certificate
of Financial Officer -- Compliance. Concurrently with any
delivery of financial statements under Section
8.01(a) or Section 8.01(b), commencing with the
delivery of financial statements for the fiscal quarter ending September 30,
2007,a certificate of a Financial Officer of the Borrower in substantially
the
form of Exhibit D hereto certifying as to whether a Default has occurred and,
if
a Default has occurred, specifying the details thereof and any action taken
or
proposed to be taken with respect thereto.
(d) Certificate
of Financial Officer – Swap Agreements. Concurrently with any
delivery of financial statements under Section
8.01(a) and Section 8.01(b), commencing with the
delivery of financial statements for the fiscal quarter ending September 30,
2007, a certificate of a Financial Officer, in form and substance satisfactory
to the Administrative Agent, setting forth as of the last Business Day of such
fiscal quarter or fiscal year, a true and complete list of all Swap Agreements
of each Loan Party, the material terms thereof (including the type, term,
effective date, termination date and notional amounts or volumes), the net
xxxx-to-market value therefor, any new credit support agreements relating
thereto not listed on Schedule 7.20, any margin required or supplied under
any
credit support document, and the counterparty to each such
agreement.
(e) Certificate
of Financial Officer -- Consolidating Information. If, at any
time, all of the consolidated Subsidiaries of the Borrower are not Consolidated
Subsidiaries, then
53
concurrently
with any delivery of financial statements under Section 8.01(a) or Section
8.01(b), a certificate of a Financial Officer setting forth consolidating
spreadsheets that show all Unrestricted Subsidiaries and the eliminating
entries, in such form as would be presentable to the auditors of the
Borrower.
(f) Certificate
of Insurer -- Insurance Coverage. Concurrently with any delivery
of financial statements under Section 8.01(a), a
certificate of insurance coverage with respect to the insurance required by
Section 8.07, in form and substance satisfactory to the
Administrative Agent, and, if requested by the Administrative Agent or any
Lender, all copies of the applicable policies.
(g) Other
Accounting Reports. Promptly upon receipt thereof, a copy of each
other report or letter submitted to any Loan Party by independent accountants
in
connection with any annual, interim or special audit made by them of the books
of any such Person, and a copy of any response by such Person, or the board
of
directors or other appropriate governing body of such Person, to such letter
or
report.
(h) SEC
and Other Filings; Reports to Shareholders. Promptly after the
same become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Borrower with the SEC,
or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be. Documents
required to be delivered pursuant to Section 8.01 may be delivered
electronically and if so delivered, shall be deemed to have been delivered
on
the date on which the Borrower posts such documents to XXXXX (or such other
free, publicly-accessible internet database that may be established and
maintained by the SEC as a substitute for or successor to XXXXX).
(i) Notices
Under Material Instruments. Promptly after the furnishing
thereof, copies of any financial statement, report or notice furnished to or
by
any Person pursuant to the terms of any preferred stock designation, indenture,
loan or credit or other similar agreement, other than this Agreement and not
otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 8.01.
(j) Lists
of Purchasers. Concurrently with the delivery of any Reserve
Report to the Administrative Agent pursuant to Section
8.12, a list of all Persons purchasing Hydrocarbons from the Borrower or any
Restricted Subsidiary.
(k) Notice
of Sales of Oil and Gas Properties. In the event the Borrower or
any Restricted Subsidiary intends to sell, transfer, assign or otherwise dispose
of any Oil or Gas Properties or any Equity Interests in any Restricted
Subsidiary with a fair market value in excess of $5,000,000 in accordance with
Section 9.11, prior written notice of such disposition, the price thereof and
the anticipated date of closing and any other details thereof reasonably
requested by the Administrative Agent or any Lender.
(l) Notice
of Casualty Events. Prompt written notice, and in any event
within three Business Days, of the occurrence of any Casualty Event or the
commencement of any legal action or proceeding that could reasonably be expected
to result in a Casualty Event, in each case, of any Property of any Loan Party
having a fair market value in excess of $10,000,000.
(m) Information
Regarding Borrower and Guarantors. Prompt written notice of (and
in any event at least ten (10) Business Days following) any change (i) in
the Borrower or any Guarantor’s corporate name or in any trade name used to
identify such Person in the conduct of its business or in the ownership of
its
Properties, (ii) in the location of the Borrower or any Guarantor’s
54
chief
executive office or principal place of business, (iii) in the Borrower or
any Guarantor’s identity or corporate structure or in the jurisdiction in which
such Person is incorporated or formed, (iv) in the Borrower or any Guarantor’s
jurisdiction of organization or such Person’s organizational identification
number in such jurisdiction of organization, and (v) in the Borrower or any
Guarantor’s federal taxpayer identification number.
(n) Production
Report and Lease Operating Statements. In connection with each
Reserve Report delivered pursuant to Section 8.12(a), a report setting forth,
for each month during the then current fiscal year to date, the volume of
production and sales attributable to production (and the prices at which such
sales were made and the revenues derived from such sales) for each such calendar
month during such period from the Oil and Gas Properties, and setting forth
the
related ad valorem, severance and production taxes and lease operating expenses
attributable thereto and incurred for each such calendar month.
(o) Notices
Relating to Acquisition. In the event that after the Effective
Date: (i) the Borrower is required to purchase any Preferential
Purchase Right Property, (ii) the Borrower and the Seller calculate and agree
upon the “final settlement statement” as contemplated by the Acquisition
Documents, or (iii) the Borrower furnishes the Seller with any notices or
reports under the P&A Escrow Agreement then, in each such case, the Borrower
shall promptly give the Administrative Agent notice in reasonable detail of
such
circumstances.
(p) Patriot
Act. Promptly upon request, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the USA
Patriot Act.
(q) Other
Requested Information. Promptly following any request therefor,
such other information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary (including, without limitation,
any
Plan or Multiemployer Plan and any reports or other information required to
be
filed under ERISA), or compliance with the terms of this Agreement or any other
Loan Document, as the Administrative Agent or any Lender may reasonably
request.
Section
8.02 Notices
of Material Events. The
Borrower will furnish to the Administrative Agent and each Lender prompt written
notice of the following:
(a) the
occurrence of any Default;
(b) the
filing or commencement of, or the threat in writing of, any action, suit,
proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against or affecting the Borrower or any Restricted
Subsidiary thereof not previously disclosed in writing to the Lenders or any
material adverse development in any action, suit, proceeding, investigation
or
arbitration (whether or not previously disclosed to the Lenders) that, in either
case could reasonably be expected to result in liability in excess of
$10,000,000, not fully covered by insurance, subject to normal
deductibles;
(c) the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower or any Restricted Subsidiary in an aggregate amount exceeding
$5,000,000; and
(d) any
other
development that results in, or could reasonably be expected to result in,
a
Material Adverse Effect.
55
Each
notice delivered under this Section 8.02 shall be
accompanied by a statement of a Responsible Officer setting forth the details
of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto.
Section
8.03 Existence;
Conduct of Business. The
Borrower will, and will cause each Restricted Subsidiary to, do or cause to
be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business and maintain, if necessary, its
qualification to do business in each other jurisdiction in which its Oil and
Gas
Properties is located or the ownership of its Properties requires such
qualification, except where the failure to so qualify could not reasonably
be
expected to have a Material Adverse Effect; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 9.10.
Section
8.04 Payment
of Obligations. The
Borrower will, and will cause each Restricted Subsidiary to, pay its
obligations, including tax liabilities of the Borrower and all of its Restricted
Subsidiaries before the same shall become delinquent or in default, except
where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Restricted Subsidiary has
set
aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
Section
8.05 Performance
of Obligations under Loan Documents. The
Borrower will pay the Loans according to the reading, tenor and effect thereof,
and the Borrower will, and will cause each Restricted Subsidiary to, do and
perform every act and discharge all of the obligations to be performed and
discharged by them under the Loan Documents, including, without limitation,
this
Agreement, at the time or times and in the manner specified.
Section
8.06 Operation
and Maintenance of Properties. The
Borrower, at its own expense, will, and will cause each Restricted Subsidiary
to:
(a) operate
its Oil and Gas Properties and other material Properties or cause such Oil
and
Gas Properties and other material Properties to be operated in a careful and
efficient manner in accordance with the customary practices of the industry
and
in compliance with all applicable contracts and agreements and in compliance
with all Governmental Requirements, including, without limitation, applicable
pro ration requirements and Environmental Laws, and all applicable laws, rules
and regulations of every other Governmental Authority from time to time
constituted to regulate the development and operation of its Oil and Gas
Properties and the production and sale of Hydrocarbons and other minerals
therefrom, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.
(b) keep
and
maintain in good repair, working order and condition (ordinary wear and tear
excepted) all of its material Oil and Gas Properties and other Properties
material to the conduct of its business, including, without limitation, all
equipment, machinery and facilities, except to the extent any such Property
is
no longer capable of producing Hydrocarbons in economically reasonable
amounts.
(c) promptly
pay and discharge, or make commercially reasonable efforts to cause to be paid
and discharged, all delay rentals, royalties, expenses and indebtedness accruing
under the leases or other agreements affecting or pertaining to its Oil and
Gas
Properties.
56
(d) promptly
perform or make commercially reasonable efforts to cause to be performed, in
accordance with industry standards, the obligations required by each and all
of
the assignments, deeds, leases, sub-leases, contracts and agreements affecting
its interests in its Oil and Gas Properties and other material
Properties.
(e) to
the
extent the Borrower is not the operator of any Property, the Borrower shall
use
commercially reasonable efforts to cause the operator to comply with this Section 8.06.
Section
8.07 Insurance. The
Borrower will, and will cause each Restricted Subsidiary to, maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in
the
same or similar businesses operating in the same or similar
locations. The loss payable clauses or provisions in said insurance
policy or policies insuring any collateral for the Loans shall be endorsed
in
favor of and made payable to the Administrative Agent as its interests may
appear and such liability policies shall name the Administrative Agent and
the
Lenders as “additional insureds” and provide that the insurer will endeavor to
give at least 30 days prior notice of any cancellation to the Administrative
Agent.
Section
8.08 Books
and Records; Inspection Rights. The
Borrower will, and will cause each Restricted Subsidiary to, keep proper books
of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each Restricted
Subsidiary to, permit any representatives designated by the Administrative
Agent
or any Lender, upon reasonable prior notice, to visit and inspect its
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably
requested.
Section
8.09 Compliance
with Laws. The
Borrower will, and will cause each Restricted Subsidiary to, comply with all
laws, rules, regulations and orders of any Governmental Authority applicable
to
it or its Property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section
8.10 Environmental
Matters.
(a) The
Borrower shall at its sole expense: (i) comply, and shall cause its Properties
and operations and each Restricted Subsidiary and each Restricted Subsidiary’s
Properties and operations to comply, with all applicable Environmental Laws,
the
breach of which Environmental Laws could be reasonably expected to have a
Material Adverse Effect; (ii) not dispose of or otherwise release, and shall
cause each Restricted Subsidiary not to dispose of or otherwise release, any
oil, oil and gas waste, hazardous substance, or solid waste on, under, about
or
from any of the Borrower’s or its Restricted Subsidiaries’ Properties or any
other Property to the extent caused by the Borrower’s or any of its Restricted
Subsidiaries’ operations except in compliance with applicable Environmental
Laws, the disposal or release of which could reasonably be expected to have
a
Material Adverse Effect; (iii) timely obtain or file, and shall cause each
Restricted Subsidiary to timely obtain or file, all notices, permits, licenses,
exemptions, approvals, registrations or other authorizations, if any, required
under applicable Environmental Laws to be obtained or filed in connection with
the operation or use of the Borrower’s or its Restricted Subsidiaries’
Properties, which failure to obtain or file could reasonably be expected to
have
a Material Adverse Effect; (iv) promptly commence and diligently prosecute
to
completion, and shall cause each Restricted Subsidiary to promptly commence
and
diligently prosecute to completion, any assessment, evaluation, investigation,
monitoring, containment, cleanup, removal, repair, restoration, remediation
or
other remedial obligations (collectively, the “Remedial Work”) in the
event any Remedial Work is required or reasonably necessary under applicable
Environmental Laws because of or in connection with the actual or suspected
past, present or future disposal or other release of any oil, oil and
57
gas
waste, hazardous substance or solid waste on, under, about or from any of the
Borrower’s or its Restricted Subsidiaries’ Properties, which failure to commence
and diligently prosecute to completion could reasonably be expected to have
a
Material Adverse Effect; and (v) establish and implement, and shall cause
each Restricted Subsidiary to establish and implement, such policies of
environmental audit and compliance as may be necessary to continuously determine
and assure that the Borrower’s and its Restricted Subsidiaries’ obligations
under this Section 8.10(a)
are timely and fully satisfied, which failure to establish and implement could
reasonably be expected to have a Material Adverse Effect.
(b) The
Borrower will promptly, but in no event later than five days of the occurrence
of a triggering event, notify the Administrative Agent and the Lenders in
writing of any threatened action, investigation or inquiry by any Governmental
Authority or any threatened demand or lawsuit by any landowner or other third
party against the Borrower or its Restricted Subsidiaries or their Properties
of
which the Borrower has knowledge in connection with any Environmental Laws
(excluding routine testing and corrective action) if the Borrower reasonably
anticipates that such action will result in liability (whether individually
or
in the aggregate) in excess of $10,000,000, not fully covered by insurance,
subject to normal deductibles.
Section
8.11 Further
Assurances.
(a) The
Borrower at its sole expense will, and will cause each Restricted Subsidiary
to,
promptly execute and deliver to the Administrative Agent all such other
documents, agreements and instruments reasonably requested by the Administrative
Agent to comply with, cure any defects or accomplish the conditions precedent,
covenants and agreements of any Loan Party, as the case may be, in the Loan
Documents or to further evidence and more fully describe any collateral intended
as security for the Indebtedness, or to correct any omissions in this Agreement
or the Security Instruments, or to state more fully the obligations secured
therein, or to perfect, protect or preserve any Liens created pursuant to this
Agreement or any of the Security Instruments or the priority thereof, or to
make
any recordings, file any notices or obtain any consents, all as may be
reasonably necessary or appropriate, in the sole discretion of the
Administrative Agent, in connection therewith.
(b) The
Borrower hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all
or
any part of the Mortgaged Property without the signature of the Borrower or
any
other Guarantor where permitted by law. A carbon, photographic or
other reproduction of the Security Instruments or any financing statement
covering the Mortgaged Property or any part thereof shall be sufficient as
a
financing statement where permitted by law.
Section
8.12 Reserve
Reports. The
Borrower shall furnish to the Administrative Agent and the Lenders any Reserve
Reports and any officer’s certificate relating thereto promptly after furnishing
the same to the administrative agent and lenders under the Senior Credit
Agreement.
Section
8.13 [Intentionally
Omitted].
Section
8.14 Additional
Guarantors. The
Borrower shall promptly cause each newly created or acquired Domestic Subsidiary
that is a Wholly-Owned Subsidiary to guarantee the Indebtedness pursuant to
the
Guaranty Agreement. In connection with any such guaranty, the
Borrower shall, or shall cause such Domestic Subsidiary to: (i) execute and
deliver a supplement to the Guaranty Agreement executed by such Subsidiary,
and
(ii) execute and deliver such other additional closing documents, certificates
and legal opinions as shall reasonably be requested by the Administrative
Agent.
58
Section
8.15 ERISA
Compliance. The
Borrower will promptly furnish and will cause each Subsidiary and any ERISA
Affiliate to promptly furnish to the Administrative Agent (i) immediately upon
becoming aware of the occurrence of any ERISA Event or of any “prohibited
transaction,” as described in section 406 of ERISA or in section 4975 of the
Code, in connection with any Plan or any trust created thereunder, a written
notice of the Borrower or such other Loan Party or ERISA Affiliate, as the
case
may be, specifying the nature thereof, what action such Person is taking or
proposes to take with respect thereto, and, when known, any action taken or
proposed by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto, and (ii) immediately upon receipt thereof, copies of
any
notice of the PBGC’s intention to terminate or to have a trustee appointed to
administer any Plan. With respect to each Plan (other than a
Multiemployer Plan), the Borrower will, and will cause each Subsidiary and
ERISA
Affiliate to, (i) satisfy in full and in a timely manner, without incurring
any
late payment or underpayment charge or penalty and without giving rise to any
lien, all of the contribution and funding requirements of section 412 of the
Code (determined without regard to subsections (d), (e), (f) and (k) thereof)
and of section 302 of ERISA (determined without regard to sections 303, 304
and
306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely
manner, without incurring any late payment or underpayment charge or penalty,
all premiums required pursuant to sections 4006 and 4007 of ERISA.
Section
8.16 Unrestricted
Subsidiaries. The
Borrower:
(a) will
cause the management, business and affairs of each of the Borrower and each
Restricted Subsidiary to be conducted in such a manner (including, without
limitation, by keeping separate books of account, furnishing separate financial
statements of the Unrestricted Subsidiaries to creditors and potential creditors
thereof and by not permitting Properties of the Borrower and each Restricted
Subsidiary to be commingled) so that each Unrestricted Subsidiary that is a
corporation will be treated as a corporate entity separate and distinct from
Borrower and the Restricted Subsidiaries.
(b) unless
and until the Covenant Effectiveness Date shall occur, will not, and will not
permit any of the Restricted Subsidiaries to, incur, assume, guarantee or be
or
become liable for any Debt of any of the Unrestricted Subsidiaries except that
the Borrower may guarantee or otherwise give credit support for Debt (other
than
Debt in respect of borrowed money) of the Unrestricted Subsidiaries to the
extent it could make an Investment in such Unrestricted Subsidiary.
(c) will
not
permit any Unrestricted Subsidiary to hold any Equity Interest in, or any Debt
of, the Borrower or any Restricted Subsidiary.
Section
8.17 Marketing
Activities. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
engage in marketing activities for any Hydrocarbons or enter into any contracts
related thereto other than (i) contracts for the sale of Hydrocarbons scheduled
or reasonably estimated to be produced from their proved Oil and Gas Properties
during the period of such contract, (ii) contracts for the sale of Hydrocarbons
scheduled or reasonably estimated to be produced from proved Oil and Gas
Properties of third parties during the period of such contract associated with
the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries
that
the Borrower or one of its Restricted Subsidiaries has the right to market
pursuant to joint operating agreements, unitization agreements or other similar
contracts that are usual and customary in the oil and gas business and (iii)
other contracts for the purchase and/or sale of Hydrocarbons of third parties
(A) which have generally offsetting provisions (i.e. corresponding pricing
mechanics, delivery dates and points and volumes) such that no “position” is
taken and (B) for which appropriate credit support has been taken to alleviate
the material credit risks of the counterparty thereto.
59
Section
8.18 Swap
Agreements. The
Borrower shall maintain the hedge position established by the Swap Agreements
required under Section 6.01(j) during the period specified therein and shall
neither assign, terminate or unwind any such Swap Agreements nor sell any Swap
Agreements if the effect of such action (when taken together with any other
Swap
Agreements executed contemporaneously with the taking of such action) would
have
the effect of canceling its positions under such Swap Agreements required
hereby.
Section
8.19 Second
Lien. If,
on the 120th
day after the Effective Date, all Loans shall not have been repaid in full,
the
Borrower will, and will cause each Guarantor to, within 30 days, (i) grant
to
the Administrative Agent, for the ratable benefit of the Lenders, a security
interest in the Collateral as collateral security for the prompt and complete
payment and performance when due of the Indebtedness pursuant to documentation
substantially in the form of the Senior Loan Security Instruments, such security
interest being prior and superior in right to any other Lien on the Collateral
(other than the Lien securing the obligations under the Senior Credit Agreement
and the related Hedging Obligations and non-consensual Permitted Liens preferred
by operation of law) subject to the Intercreditor Agreement and (ii) execute
and
deliver the Intercreditor Agreement. The Lenders hereby authorize the
Administrative Agent to execute and deliver the appropriate documentation and
the Intercreditor Agreement contemplated in this Section 8.19. Upon
reasonable request of the Administrative Agent, the Borrower will, and will
cause each Guarantor to, execute and deliver such further instruments, documents
and opinions and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Section 8.19.
Section
8.20 Exchange
Notes. (a) The
Borrower shall, as promptly as practicable after the nine month anniversary
of
the Effective Date and in any event prior to the Initial Maturity Date, (i)
enter into the Exchange Notes Indenture with a bank or trust company acting
as
indenture trustee thereunder (the “Trustee”), which shall be a
corporation organized and doing business under the laws of the United States
of
America or any state thereof, in good standing, which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by Federal or state authority and which has a combined capital
and
surplus of not less than $50,000,000, (ii) enter into the Exchange and
Registration Rights Agreement, and (iii) cause counsel to the Borrower to
deliver to the Administrative Agent an executed legal opinion in form and
substance customary for a transaction of that type to be mutually agreed upon
by
the Borrower and the Administrative Agent (including, without limitation, with
respect to due authorization, execution and delivery; validity; and
enforceability of the Exchange Documents and the Exchange and Registration
Rights Agreement).
(b) The
Borrower will, on or prior to the third Business Day following the written
request (the “Exchange Request”) of any Lender execute, and cause the
Trustee to authenticate, and deliver to such Lender in accordance with the
Exchange Notes Indenture an Exchange Note bearing interest as set forth therein
in exchange for such Lender’s Loan dated the date of the issuance of such
Exchange Note, registered in the name specified by such Lender, in the principal
amount equal to 100% of the aggregate principal amount (including any accrued
and unpaid interest not required to be paid in cash) of the Loans for which
they
are exchanged. Each Exchange Request shall specify the principal
amount of the Loans to be exchanged pursuant to this Section 8.20, which shall
be at least $1,000,000 and in integral multiples of $100,000 in excess thereof
and, if such Lender holds Loan Notes, be accompanied by the Loan Notes to be
exchanged for Exchange Notes. No Exchange Request shall be made more
than thirty (30) days prior to, and no Exchange Note will be issued prior to,
the Initial Maturity Date. Any Loan Notes delivered to the Borrower
under this Section 8.20 in exchange for Exchange Notes shall be canceled by
the
Borrower and the corresponding amount of the Lender’s Loan deemed repaid and the
Exchange Notes shall be governed by and construed in accordance with the terms
of the Exchange Notes Indenture.
60
(c) If
Exchange Notes are issued pursuant to the terms hereof, the holders of such
Exchange Notes shall have the registration rights set forth in Exhibit
K.
(d) It
is understood and agreed that the Term Loans exchanged for Exchange Notes
constitute the same indebtedness as such Exchange Notes and that no novation
shall be effected by any such exchange.
Section
8.21 Use
of
Proceeds of the Take-Out Securities. The
Borrower shall use the net proceeds received by it from the sale of the Take-Out
Securities to repay the Loans and the Exchange Notes pursuant to Section
3.05(d).
ARTICLE
IX
Negative
Covenants
Except
as
modified on the Initial Maturity Date as set forth in Section 12.02, until
the
principal of and interest on each Loan and all fees payable hereunder and all
other amounts payable under the Loan Documents have been paid in full, the
Borrower covenants and agrees with the Lenders that:
Section
9.01 [Intentionally
Omitted].
Section
9.02 Debt.
(a) The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
Incur any Debt (including Acquired Debt); provided,
however, that the Borrower and the Guarantors may Incur Debt
if
on the date thereof (A) the Consolidated Coverage Ratio for the Borrower and
its
Restricted Subsidiaries is at least 2.50 to 1.00; and (B) no Default or Event
of
Default shall have occurred and be continuing or would occur as a consequence
of
Incurring the Debt or transactions relating to such Incurrence.
(b) Notwithstanding
Section 9.02(a), the Borrower and its Restricted Subsidiaries may Incur the
following Debt:
(i) Debt
of
the Borrower or a Guarantor Incurred pursuant to (x) the Senior Credit Agreement
in an aggregate principal amount at any time outstanding not to exceed the
greater of (A) $700,000,000, which amount shall be reduced by $300,000,000
in
five consecutive and equal quarterly installments of $60,000,000, the initial
reduction of which shall occur on December 31, 2007 and the last reduction
shall
occur on December 31, 2008 and (B) 30% of Adjusted Consolidated Net Tangible
Assets, and Guarantees of the Borrower or any Restricted Subsidiaries in respect
of the Debt Incurred pursuant to the Senior Credit Agreement, (y) this
Agreement, and (z) any Exchange Notes;
(ii) Debt
represented by the Guaranty Agreement and other Guarantees by the Guarantors
of
Debt Incurred in accordance with the provisions of this Agreement;
provided that in the event such Debt that is being Guaranteed is a
Subordinated Obligation or a Guarantor Subordinated Obligation, then the related
Guarantee shall be subordinated in right of payment to the Guaranty Agreement,
as the case may be;
(iii) Debt
of
the Borrower owing to and held by any Restricted Subsidiary or Debt of a
Restricted Subsidiary owing to and held by the Borrower or any Restricted
Subsidiary; provided, however, (A) if the Borrower is the obligor
on such Debt, such Debt is expressly subordinated to the prior payment in full
in cash of all obligations with respect to the Loans; (B)
61
if
a
Guarantor is the obligor on such Debt and the Borrower or a Guarantor is not
the
obligee, such Debt is subordinated in right of payment to the Guaranty Agreement
of such Guarantor; and (C) (1) any subsequent issuance or transfer of Equity
Interest or any other event which results in any such Debt being beneficially
held by a Person other than the Borrower or a Restricted Subsidiary of the
Borrower and (2) any sale or other transfer of any such Debt to a Person other
than the Borrower or a Restricted Subsidiary of the Borrower shall be deemed,
in
each case, to constitute an Incurrence of such Debt by the Borrower or such
Subsidiary, as the case may be;
(iv) Debt
represented by (x) the Senior Notes, (y) any Debt (other than Debt described
in
clauses (i), (ii), (iii), (vi), (viii), (ix) and (x) of this Section 9.02(b))
outstanding on the Effective Date, including without limitation the Existing
Convertible Notes, and (z) any Refinancing Debt Incurred in respect of any
Debt
described in this clause (iv), clause (v), clause (vii) or clause (xvi) of
this
paragraph or Incurred pursuant to Section 9.02(a);
(v) Debt
of a
Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by, or merged into, the Borrower or any
Restricted Subsidiary (other than Debt Incurred (a) to provide all or any
portion of the funds utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was otherwise acquired by the Borrower or (b) otherwise in
connection with, or in contemplation of, such acquisition); provided,
however, that at the time such Restricted Subsidiary is
acquired, the Borrower would have been able to Incur $1.00 of additional Debt
pursuant to Section 9.02(a) after giving effect to the Incurrence of such Debt
pursuant to this clause (v);
(vi) Debt
under Hedging Obligations that are Incurred in the ordinary course of business
or as otherwise required to be incurred under the Senior Credit Agreement (and
not for speculative purposes) (x) for the purpose of fixing or hedging interest
rate risk with respect to any Debt Incurred without violation of this Agreement;
(y) for the purpose of fixing or hedging currency exchange rate risk with
respect to any currency exchanges; or (z) for the purpose of fixing or hedging
commodity price risk with respect to any commodities;
(vii) Debt
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations or other Debt, in each case Incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvements of property used in the business of the Borrower or such Guarantor,
and Attributable Debt, in an aggregate principal amount not to exceed at any
time outstanding the greater of $25,000,000 and 1.5% of Adjusted Consolidated
Net Tangible Assets;
(viii) Debt
Incurred in respect of workers' compensation claims, self-insurance obligations,
performance, surety and similar bonds and completion guarantees issued for
the
account of or provided by the Borrower or a Restricted Subsidiary in the
ordinary course of business, including guarantees and obligations of the
Borrower or any Restricted Subsidiary with respect to letters of credit
supporting such obligations (in each case other than an obligation for borrowed
money);
(ix) Debt
arising from agreements of the Borrower or a Restricted Subsidiary providing
for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred or assumed in connection with the disposition of any business
or
assets of the Borrower or any business, assets or Equity Interest of a
Restricted Subsidiary, provided that the maximum aggregate liability in
respect of all such Debt shall at no time exceed the gross proceeds actually
received by the Borrower and its Restricted Subsidiaries in connection with
such
disposition;
62
(x) Debt
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business; provided,
however, that such Debt is extinguished within five business days
of
Incurrence;
(xi) Indebtedness
Incurred in respect of obligations relating to net gas balancing positions
arising in the ordinary course of business;
(xii) endorsements
of negotiable instruments for collection in the ordinary course of
business;
(xiii) Debt
(other than for borrowed money) incurred in the ordinary course of business
in
connection with Hydrocarbon transportation, Hydrocarbon purchasing or other
similar arrangements, provided that such arrangements are disclosed to the
Administrative Agent;
(xiv) Debt
incurred in connection with vendor financing provided by Midland Pipe
Corporation and its affiliates not to exceed $15,000,000 in the aggregate at
any
one time outstanding;
(xv) Debt
incurred to finance insurance premiums;
(xvi) Debt
in
connection with trade payables owed to FM Services, Inc. arising in the ordinary
course of business; and
(xvii) in
addition to the items referred to in clauses (i) through (xvi) above, Debt
of
the Borrower and the Guarantors in an aggregate outstanding principal amount
which, when taken together with the principal amount of all other Debt Incurred
pursuant to this clause (xvii) (including any Refinancing Debt incurred under
clause (iv) above with respect to such Debt) and then outstanding, will not
exceed the greater of $30,000,000 and 2% of Adjusted Consolidated Net Tangible
Assets.
(c) Notwithstanding
the foregoing, the Borrower will not Incur any Debt under Section 9.02(b) if
the
proceeds thereof are used, directly or indirectly, to refinance any Subordinated
Obligations of the Borrower unless such Debt will be subordinated to the Loans
to at least the same extent as such Subordinated Obligations. No
Guarantor will Incur any Debt under Section 9.02(b) if the proceeds thereof
are
used, directly or indirectly, to refinance any Guarantor Subordinated
Obligations of such Guarantor unless such Debt will be subordinated to the
obligations of such Guarantor under the Guaranty Agreement to at least the
same
extent as such Guarantor Subordinated Obligations. No Restricted
Subsidiary (other than a Guarantor) may Incur any Debt if the proceeds are
used
to refinance Debt of the Borrower.
(d) For
purposes of determining compliance with, and the outstanding principal amount
of
any particular Debt Incurred pursuant to and in compliance with, this
covenant:
(i) in
the
event that Debt meets the criteria of more than one of the types of Debt
described in Section 9.02(a) or 9.02(b), the Borrower, in its sole discretion,
will classify such item of Debt on the date of Incurrence and, subject to clause
(ii) below, may later classify such item of Debt in any manner that complies
with this covenant and only be required to include the amount and type of such
Debt in one of such clauses; provided that all Debt outstanding on the
Effective Date under the Senior Credit Agreement shall be deemed initially
Incurred on the Effective Date under Section 9.02(b)(i) and not Section 9.02(a)
or 9.02(b)(iv) and may not later be reclassified;
63
(ii) Guarantees
of, or obligations in respect of letters of credit relating to, Debt which
is
otherwise included in the determination of a particular amount of Debt shall
not
be included;
(iii) if
obligations in respect of letters of credit are Incurred pursuant to the Senior
Credit Agreement and are being treated as Incurred pursuant to Section
9.02(b)(i) and the letters of credit relate to other Debt, then such other
Debt
shall not be included;
(iv) the
principal amount of any Disqualified Stock of the Borrower or a Restricted
Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a
Guarantor, will be equal to the greater of the maximum mandatory redemption
or
repurchase price (not including, in either case, any redemption or repurchase
premium) or the liquidation preference thereof;
(v) Debt
permitted by this covenant need not be permitted solely by reference to one
provision permitting such Debt but may be permitted in part by one such
provision and in part by one or more other provisions of this covenant
permitting such Debt; and
(vi) the
amount of Debt issued at a price that is less than the principal amount thereof
will be equal to the amount of the liability in respect thereof determined
in
accordance with GAAP.
Accrual
of interest, accrual of dividends, the accretion of accreted value, the payment
of interest in the form of additional Debt and the payment of dividends in
the
form of additional shares of Preferred Stock or Disqualified Stock will not
be
deemed to be an Incurrence of Debt for purposes of this covenant.
(e) If
at any
time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Debt of
such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as
of
such date (and, if such Debt is not permitted to be Incurred as of such date
under this Section 9.02, the Borrower shall be in Default of this
covenant).
(f) For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the Incurrence of Debt, the U.S. dollar-equivalent principal amount of Debt
denominated in a foreign currency shall be calculated based on the relevant
currency exchange rate in effect on the date such Debt was Incurred, in the
case
of term Debt, or first committed, in the case of revolving credit Debt;
provided that if such Debt is Incurred to refinance other Debt
denominated in a foreign currency, and such refinancing would cause the
applicable U.S. dollar-dominated restriction to be exceeded if calculated at
the
relevant currency exchange rate in effect on the date of such refinancing,
such
U.S. dollar-dominated restriction shall be deemed not to have been exceeded
so
long as the principal amount of such refinancing Debt does not exceed the
principal amount of such Debt being refinanced. Notwithstanding any
other provision of this covenant, the maximum amount of Debt that the Borrower
may Incur pursuant to this covenant shall not be deemed to be exceeded solely
as
a result of fluctuations in the exchange rate of currencies. The
principal amount of any Debt Incurred to refinance other Debt, if Incurred
in a
different currency from the Debt being refinanced, shall be
calculated based on the currency exchange rate applicable to the
currencies in which such Refinancing Debt is denominated that is in effect
on
the date of such refinancing.
(g) Unless
and until the Covenant Effectiveness Date shall occur, the Borrower,
notwithstanding any other provision of this Section 9.02 to the contrary, will
not, and will not permit any of its Restricted Subsidiaries to, Incur any Debt
except Debt permitted to be Incurred pursuant to Section 9.02 of the Senior
Secured Credit Agreement as in effect on the date hereof the terms of which
are
hereby incorporated by reference whether or not the Senior Secured Credit
Agreement shall then be in effect.
64
Section
9.03 Liens. (a)
The Borrower will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, Incur or suffer to exist any Lien (other
than Permitted Liens) upon any of its property or assets (including Equity
Interest of Restricted Subsidiaries), whether owned on the Effective Date or
acquired after that date, which Lien is securing any Debt, unless
contemporaneously with the Incurrence of such Liens effective provision is
made
to secure the Loans or, in respect of Liens on any Restricted Subsidiary’s
property or assets, the Guaranty Agreement, equally and ratably with (or senior
in priority to in the case of Liens with respect to Subordinated Obligations
or
Guarantor Subordinated Obligations, as the case may be) the Debt secured by
such
Lien for so long as such Debt is so secured.
(b) Unless
and until the Covenant Effectiveness Date shall occur, the Borrower,
notwithstanding any other provision of this Section 9.03 to the contrary, will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, Incur or suffer to exist any Lien on any of its Property
except Liens permitted under Section 9.03 of the Senior Secured Credit Agreement
as in effect on the date hereof the terms of which are hereby incorporated
by
reference whether or not the Senior Secured Credit Agreement shall then be
in
effect.
Section
9.04 Restricted
Payments.
(a) The
Borrower shall not, and shall not permit any Restricted Subsidiary, directly
or
indirectly, to (i) declare or pay any dividend or make any distribution (whether
made in cash, securities or other property) on or in respect of its Equity
Interests (including any payment in connection with any merger or consolidation
involving the Borrower or any of its Restricted Subsidiaries) except dividends
or distributions payable solely in Equity Interests of the Borrower (other
than
Disqualified Stock) or in options, warrants or rights to purchase such Equity
Interest and except dividends or distributions payable to the Borrower or any
Restricted Subsidiary (and if such Restricted Subsidiary is not a Wholly-Owned
Subsidiary, its other holders of Equity Interests on a pro rata
basis), (ii) purchase, redeem, retire or otherwise acquire for value
any Equity Interest of the Borrower or any direct or indirect parent of the
Borrower held by Persons other than the Borrower or a Restricted Subsidiary
of
the Borrower (other in exchange for its Equity Interest (other than Disqualified
Stock)), (iii) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment any Subordinated Obligations or Guarantor Subordinated
Obligations (other than (x) Debt of the Borrower owing to and held by any
Restricted Subsidiary or Debt of a Restricted Subsidiary owing to and held
by
the Borrower or any other Restricted Subsidiary permitted under Section
9.02(b)(iii) or (y) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Subordinated Obligations or Guarantor Subordinated
Obligations purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of
the
date of purchase, repurchase, redemption, defeasance or other acquisition or
retirement) or (iv) make any Restricted Investment in any Person (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Restricted Investment referred to in clauses (i)
through (iv) being herein referred to as a “Restricted Payment”) if at
the time the Borrower or such Restricted Subsidiary makes such Restricted
Payment: (1) a Default shall have occurred and be continuing (or would result
therefrom); or (2) the Borrower is not able to Incur an additional $1.00 of
Debt
pursuant to Section 9.02(a) after giving effect, on a pro forma basis, to such
Restricted Payment; or (3) the aggregate amount of such Restricted Payment
and
all other Restricted Payments declared or made subsequent to the Effective
Date
would exceed the sum of: (A) 50% of Consolidated Net Income for the period
(treated as one accounting period) from the beginning of the fiscal
quarter in which the Effective Date occurs to the end of the most recent fiscal
quarter ending prior to the date of such Restricted Payment for which financial
statements are in existence (or, in case such Consolidated Net Income is a
deficit, minus 100% of such deficit); (B) 100% of the aggregate Net Cash
Proceeds received by the Borrower from the issue or sale of its Equity Interest
(other than Disqualified
65
Stock)
or
other capital contributions subsequent to the Effective Date (other than Net
Cash Proceeds received from an issuance or sale of such Equity Interest to
a
Subsidiary of the Borrower or an employee stock ownership plan, option plan
or
similar trust to the extent such sale to an employee stock ownership plan or
similar trust is financed by loans from or Guaranteed by the Borrower or any
Restricted Subsidiary unless such loans have been repaid with cash on or prior
to the date of determination) or the merger or consolidation of an Unrestricted
Subsidiary with and into the Borrower or any of its Restricted Subsidiaries;
(C)
the amount by which Debt of the Borrower or its Restricted Subsidiaries is
reduced on the Borrower's balance sheet upon the conversion or exchange (other
than by a Subsidiary of the Borrower) subsequent to the Effective Date of any
Debt of the Borrower or its Restricted Subsidiaries convertible or exchangeable
for Equity Interest (other than Disqualified Stock) of the Borrower (less the
amount of any cash, or the fair market value of any other property, distributed
by the Borrower upon such conversion or exchange); and (D) the amount equal
to
the net reduction in Restricted Investments made by the Borrower or any of
its
Restricted Subsidiaries in any Person resulting from: (x) repurchases or
redemptions of such Restricted Investments by such Person, proceeds realized
upon the sale of such Restricted Investment to an unaffiliated purchaser,
repayments of loans or advances or other transfers of assets (including by
way
of dividend or distribution) by such Person to the Borrower or any Restricted
Subsidiary (other than for reimbursement of tax payments); or (y) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries or the
merger or consolidation of an Unrestricted Subsidiary with and into the Borrower
or any of its Restricted Subsidiaries (valued in each case as provided in the
definition of “Investment”) not to exceed the amount of Investments previously
made by the Borrower or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount in each case under this clause (D) was included in
the
calculation of the amount of Restricted Payments; provided,
however, that no amount will be included under this clause (D)
to the extent it is already included in Consolidated Net Income.
(b) The
provisions of Section 9.04(a) will not prohibit:
(i) any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Equity Interest, Disqualified Stock or Subordinated Obligations of the
Borrower or Guarantor Subordinated Obligations of any Guarantor made by exchange
for, or out of the proceeds of the substantially concurrent sale of, Equity
Interest of the Borrower (other than Disqualified Stock and other than Equity
Interest issued or sold to a Subsidiary or an employee stock ownership plan
or
similar trust to the extent such sale to an employee stock ownership plan or
similar trust is financed by loans from or Guaranteed by the Borrower or any
Restricted Subsidiary unless such loans have been repaid with cash on or prior
to the date of determination); provided, however, that (a) such
purchase, repurchase, redemption, defeasance, acquisition or retirement will
be
excluded from subsequent calculations of the amount of Restricted Payments
and
(b) the Net Cash Proceeds from such sale of Equity Interest will be excluded
from clause Section 9.04(a)(3)(B);
(ii) any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Subordinated Obligations of the Borrower or Guarantor Subordinated
Obligations of any Guarantor made by exchange for, or out of the proceeds of
the
substantially concurrent sale of, Subordinated Obligations of the Borrower
or
any purchase, repurchase, redemption, defeasance or other acquisition or
retirement of Guarantor Subordinated Obligations made by exchange for or out
of
the proceeds of the substantially concurrent sale of Guarantor Subordinated
Obligations that, in each case, is permitted to be Incurred pursuant to Section
9.02 and that in each case constitutes Refinancing Debt; provided,
however, that such purchase, repurchase, redemption, defeasance,
acquisition or retirement will be excluded from subsequent calculations of
the
amount of Restricted Payments;
66
(iii) any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Disqualified Stock of the Borrower or a Restricted Subsidiary made by
exchange for or out of the proceeds of the substantially concurrent sale of
Disqualified Stock of the Borrower or such Restricted Subsidiary, as the case
may be, that, in each case, is permitted to be Incurred pursuant to Section
9.02
and that in each case constitutes Refinancing Debt; provided,
however, that such purchase, repurchase, redemption, defeasance,
acquisition or retirement will be excluded from subsequent calculations of
the
amount of Restricted Payments;
(iv) so
long
as no Default or Event of Default has occurred and is continuing, any purchase
or redemption of Subordinated Obligations or Guarantor Subordinated
Obligations of a Guarantor from Net Available Cash to the extent permitted
under
Section 9.11; provided, however, that such purchase or redemption
will be excluded from subsequent calculations of the amount of Restricted
Payments;
(v) dividends
paid within 60 days after the date of declaration or the consummation of any
irrevocable redemption within 60 days after the date of giving the redemption
price if at such date of declaration or notice of redemption such dividend
or
redemption payment would have complied with this provision; provided,
however, that such dividends or redemption payments will be included
in
subsequent calculations of the amount of Restricted Payments;
(vi) so
long
as no Default or Event of Default has occurred and is continuing, (A) the
purchase, redemption or other acquisition, cancellation or retirement for value
of Equity Interest, or options, warrants, equity appreciation rights or other
rights to purchase or acquire Equity Interest of the Borrower or any parent
of
the Borrower held by any existing or former employees or directors of the
Borrower or any Subsidiary of the Borrower or their assigns, estates or heirs,
in each case in connection with the repurchase provisions under employee stock
option or stock purchase agreements or other agreements to compensate employees
or directors; provided that such purchase, redemption,
acquisition, cancellation or retirement pursuant to this clause will not exceed
$5,000,000 in the aggregate during any calendar year; provided,
however, that the amount of any such purchase, redemption, acquisition,
cancellation or retirement will be excluded from subsequent calculations of
the
amount of Restricted Payments; and (B) loans or advances to employees or
directors of the Borrower or any Subsidiary of the Borrower the proceeds of
which are used to purchase Equity Interest of the Borrower, in an aggregate
amount not in excess of $5,000,000 at any one time outstanding; provided,
however, that the Borrower and its Subsidiaries shall comply in all
material respects with all applicable provisions of the Xxxxxxxx-Xxxxx Act
of
2002 and the rules and regulations promulgated in connection therewith in
connection with such loans or advances as if the Borrower had filed a
registration statement with the SEC; provided,
further, that the amount of such loans and advances will be
included in subsequent calculations of the amount of Restricted
Payments;
(vii) so
long
as no Default or Event of Default has occurred and is continuing, the
declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Borrower, or Preferred Stock of a Restricted
Subsidiary that is not a Guarantor, issued in accordance with the terms of
this
Agreement to the extent such dividends are included in the definition of
“Consolidated Interest Expense”; provided that the payment of
such dividends will be excluded from subsequent calculations of the amount
of
Restricted Payments;
(viii) repurchases
of Equity Interest deemed to occur upon the exercise of stock options, warrants
or other convertible securities if such Equity Interest represents a portion
of
the exercise price thereof; provided, however, that such
repurchases will be excluded from subsequent calculations of the amount of
Restricted Payments;
67
(ix) the
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of any Subordinated Obligation (A) at a purchase price not greater
than 101% of the principal amount of such Subordinated Obligation in the event
of a Change of Control in accordance with provisions similar to Section 9.20
or
(B) at a purchase price not greater than 100% of the principal amount thereof
in
accordance with provisions similar to Section 9.11;
provided that, prior to or simultaneously with such
purchase, repurchase, redemption, defeasance or other acquisition or retirement,
the Borrower has made the Change of Control Offer or Asset Disposition Offer,
as
applicable, as provided in such covenant with respect to the Loans and Notes
and
has completed the repurchase or redemption of all Loans and Notes validly
tendered for payment in connection with such Change of Control Offer or Asset
Disposition Offer; provided, further, that any such
purchase, repurchase, redemption, defeasance or other acquisition will be
excluded from subsequent calculations of the amount of Restricted
Payments;
(x) MOXY
may
make Restricted Payments to the Borrower and each other Restricted Subsidiary
may make Restricted Payments to the Borrower, MOXY or any other Restricted
Subsidiary (which, in the case of Restricted Subsidiaries that are not
Wholly-Owned Subsidiaries, shall be made to the Borrower, to MOXY or to any
Restricted Subsidiary that is the direct or indirect parent of such Restricted
Subsidiary and to each other owner of Equity Interests of such Restricted
Subsidiary ratably, based on the relative ownership interests in such Restricted
Subsidiary);
(xi) so
long
as no Default or Event of Default has occurred and is continuing, the
declaration and payment of dividends to holders of any class or series of
Preferred Stock of the Borrower, provided, however, to the extent
the cash proceeds of such equity issuance were used to make an Investment under
clause (xii)(B) below, such dividends may be paid only to the extent of cash
actually received by the Borrower as dividends, interest or a return of capital
in respect of such Investment;
(xii) Restricted
Payments to Unrestricted Subsidiaries, provided that the aggregate amount of
all
such Restricted Payments shall not exceed (A) $20,000,000 in any fiscal year
plus (B) an amount equal to the net cash proceeds of any Equity Issuance (other
than Disqualified Stock) in excess of $300,000,000 after the Effective Date;
and
(xiii) Restricted
Payments in an amount not to exceed $25,000,000; provided that the amount
of such Restricted Payments will be included in subsequent calculations of
the
amount of Restricted Payments.
The
amount of all Restricted Payments (other than cash) shall be the fair market
value on the date of such Restricted Payment of the asset(s) or securities
proposed to be paid, transferred or issued by the Borrower or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any cash Restricted Payment shall be its face amount
and any non-cash Restricted Payment shall be determined conclusively by the
Board of Directors of the Borrower acting in good faith whose resolution with
respect thereto shall be delivered to the Administrative Agent, such
determination to be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of recognized standing (as determined
in
good faith by the Board of Directors of the Borrower) if such fair market value
is estimated in good faith by the Board of Directors of the Borrower to exceed
$25,000,000. Not later than the date of making any Restricted Payment, the
Borrower shall deliver to the Administrative Agent an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this covenant were computed, together
with a copy of any fairness opinion or appraisal required hereby.
68
(c) Unless
and until the Covenant Effectiveness Date shall occur, the Borrower,
notwithstanding any other provision of this Section 9.04 to the contrary, shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly,
to
declare or make, or agree to pay or make, any Restricted Payment, return any
capital or make any distribution of Property to its Equity Interest holders
except Restricted Payments (as defined in the Senior Secured Credit Agreement
as
in effect on the date hereof, the terms of which are hereby incorporated by
reference whether or not the Senior Secured Credit Agreement shall then be
in
effect), return of capital or distributions permitted pursuant to Section 9.04
of such Senior Secured Credit Agreement and, to the extent included therein
and
notwithstanding the restrictions set forth in this Section 9.04, any Investment
(as defined in such Senior Secured Credit Agreement) permitted pursuant to
Section 9.05 of such Senior Secured Credit Agreement.
Section
9.05 [Intentionally
Omitted].
Section
9.06 Nature
of Business; International Operations. The
Borrower will not, and will not permit any Restricted Subsidiary to, engage
in
any business other than the Oil and Gas Business. Except in an amount
not to exceed an amount of $5,000,000 per year, the Borrower and its Restricted
Subsidiaries will not acquire or make any other expenditures (whether such
expenditure is capital, operating or otherwise) in or related to, any Oil and
Gas Properties not located within the geographical boundaries of the United
States or Canada.
Section
9.07 Proceeds
of Notes. The
Borrower will not permit the proceeds of the Notes to be used for any purpose
other than those permitted by Section
7.21. No Loan Party nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulations T, U or X or any other regulation of the Board
or to violate Section 7 of the Securities Exchange Act of 1934 or any rule
or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect. If requested by the Administrative Agent,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR
Form
U-1 or such other form referred to in Regulation U, Regulation T or Regulation
X
of the Board, as the case may be.
Section
9.08 ERISA
Compliance. The
Borrower will not, and will not permit any Subsidiary to, at any
time:
(a) engage
in, or permit any ERISA Affiliate to engage in, any transaction in connection
with which any Subsidiary or any ERISA Affiliate could be subjected to either
a
civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502
of
ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code.
(b) terminate,
or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any
other action with respect to any Plan, which could result in any liability
of
the Borrower or any Subsidiary or any ERISA Affiliate to the PBGC.
(c) fail
to
make, or permit any ERISA Affiliate to fail to make, full payment when due
of
all amounts which, under the provisions of any Plan, agreement relating thereto
or applicable law, any Subsidiary or any ERISA Affiliate is required to pay
as
contributions thereto.
(d) permit
to
exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding
deficiency within the meaning of section 302 of ERISA or section 412 of the
Code, or, on and after the effectiveness of the Pension Act, fail to satisfy
the
minimum funding standards (within the meaning of Section 412 of the Code or
Section 302 of ERISA), in any case whether or not waived, with respect to any
Plan.
69
(e) except
as
provided in Schedule 7.10(f), permit, or allow any ERISA Affiliate to permit,
the actuarial present value of the benefit liabilities under any Plan maintained
by any Loan Party or any ERISA Affiliate which is regulated under Title IV
of ERISA to exceed the current value of the assets (computed on a plan
termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities. The term “actuarial present
value of the benefit liabilities” shall have the meaning specified in section
4041 of ERISA.
(f) contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate
to
contribute to or assume an obligation to contribute to, any Multiemployer
Plan.
(g) acquire,
or permit any ERISA Affiliate to acquire, an interest in any Person that causes
such Person to become an ERISA Affiliate with respect to any Subsidiary or
with
respect to any ERISA Affiliate if such Person sponsors, maintains or contributes
to, or at any time in the six-year period preceding such acquisition has
sponsored, maintained, or contributed to, (1) any Multiemployer Plan, or (2)
any
other Plan that is subject to Title IV of ERISA under which the actuarial
present value of the benefit liabilities under such Plan exceeds the current
value of the assets (computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit
liabilities.
(h) incur,
or
permit any ERISA Affiliate to incur, a liability to or on account of a Plan
under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA.
(i) contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate
to
contribute to or assume an obligation to contribute to, any employee welfare
benefit plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former employees
of
such entities, that may not be terminated by such entities in their sole
discretion at any time without any material liability.
(j) amend,
or
permit any ERISA Affiliate to amend, a Plan resulting in an increase in current
liability such that any Subsidiary or ERISA Affiliate is required to provide
security to such Plan under section 401(a)(29) of the Code.
Section
9.09 [Intentionally
Omitted].
Section
9.10 Mergers,
Etc. (a) The
Borrower will not consolidate with or merge with or into, or convey, transfer
or
lease all or substantially all its assets to, any Person, unless:
(i) the
resulting, surviving or transferee Person (the “Successor Company”) will
be a corporation organized and existing under the laws of the United States
of
America, any State of the United States or the District of Columbia and the
Successor Company (if not the Borrower) will expressly assume, by an assumption
agreement supplemental hereto, executed by the Successor Company and delivered
to the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, all the obligations of the Borrower under the Notes,
the
Loans and this Agreement;
(ii) immediately
after giving effect to such transaction (and treating any Debt that becomes
an
obligation of the Successor Company or any Subsidiary of the Successor Company
as a result of such transaction as having been Incurred by the Successor Company
or such Subsidiary at the time of such transaction), no Default or Event of
Default shall have occurred and be continuing;
70
(iii) immediately
after giving effect to such transaction, the Successor Company would be able
to
Incur at least an additional $1.00 of Debt pursuant to Section
9.02(a);
(iv) each
Guarantor (unless it is the other party to the transactions above, in which
case
clause (i) shall apply) shall have confirmed that the Guaranty Agreement shall
apply to such Person’s obligations in respect of the Notes and the Loans shall
continue to be in effect; and
(v) the
Borrower shall have delivered to the Administrative Agent an Officers’
Certificate and an Opinion of Counsel to the Borrower, each stating that such
consolidation, merger or transfer and such assumption agreement (if any) comply
with this Agreement.
(b) For
purposes of this Section 9.10, the sale, lease, conveyance, assignment,
transfer, or other disposition of all or substantially all of the properties
and
assets of one or more Subsidiaries of the Borrower, which properties and assets,
if held by the Borrower instead of such Subsidiaries, would constitute all
or
substantially all of the properties and assets of the Borrower on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Borrower.
(c) The
predecessor Borrower will be released from its obligations under this Agreement
and the Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Borrower under this Agreement, but,
in
the case of a lease of all or substantially all its assets, the predecessor
Borrower will not be released from the obligation to pay the principal of and
interest on the Notes and the Loans.
(d) Notwithstanding
Section 9.10(a)(ii), (1) any Restricted Subsidiary may consolidate or merge
with, merge into or transfer all or part of its properties and assets to the
Borrower and (2) the Borrower may merge with an Affiliate incorporated solely
for the purpose of reincorporating the Borrower in another jurisdiction to
realize tax benefits; provided that, in the case of a Restricted
Subsidiary that merges into the Borrower, the Borrower will not be required
to
comply with Section 9.10(a)(v).
(e) The
Borrower will not permit any Guarantor to consolidate with or merge with or
into
any person (other than another Guarantor) and will not permit the conveyance,
transfer or lease of substantially all of the assets of any Guarantor unless
(i)
(A) the resulting, surviving or transferee Person will be a corporation,
partnership, trust or limited liability company organized and existing under
the
laws of the United States of America, any State of the United States or the
District of Columbia and such Person (if not such Guarantor) will expressly
assume, by an assumption agreement supplemental to the Guaranty Agreement,
executed and delivered to the Administrative Agent, all the obligations of
such
Guarantor under the Guaranty Agreement; (B) immediately after giving
effect to such transaction (and treating any Debt that becomes an obligation
of
the resulting, surviving or transferee Person or any Restricted Subsidiary
as a
result of such transaction as having been Incurred by such Person or such
Restricted Subsidiary at the time of such transaction), no Default of Event
of
Default shall have occurred and be continuing; and (C) the Borrower will have
delivered to the Administrative an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
assumption agreement (if any) comply with this Agreement; and (ii) the
transaction is made in compliance with Section 9.11 and this Section
9.10.
(f) Unless
and until the Covenant Effectiveness Date shall occur, the Borrower,
notwithstanding any other provision of this Section 9.10 to the contrary, will
not, and will not permit any Restricted Subsidiary, to merge into or with or
consolidate with any other Person, or sell, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its
71
Property
to any other Person, except as permitted pursuant to Section 9.10 of the Senior
Secured Credit Agreement as in effect on the date hereof the terms of which
are
hereby incorporated by reference whether or not the Senior Secured Credit
Agreement shall then be in effect.
Section
9.11 Sale
of Properties and Subsidiary Stock.
(a) The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
make any Asset Disposition unless: (i) the Borrower or such Restricted
Subsidiary, as the case may be, receives consideration at least equal to the
fair market value (such fair market value to be determined on the date of
contractually agreeing to such Asset Disposition), as determined in good faith
(A) if the consideration is less than or equal to $10,000,000, by a Responsible
Officer of the Borrower or (B) if the consideration is greater than such amount,
by the Board of Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset Disposition;
and
(ii) unless and until the Covenant Effectiveness Date shall occur, 100%, and
thereafter, at least 75% of the consideration from such Asset Disposition
received by the Borrower or such Restricted Subsidiary, as the case may be,
is
in the form of cash or Cash Equivalents; of which the Borrower shall apply
the
Net Available Cash from such Asset Disposition to reduce the Debt outstanding
under the Senior Secured Credit Agreement as in effect on the date hereof (and
to the extent applicable, the commitments of the lenders thereunder) to an
amount not greater than the principal amount of Debt permitted to be outstanding
thereunder after giving effect to the Borrower’s obligations under this Section
9.11(a).
(b) Any
Net
Available Cash from Asset Dispositions that are not applied as provided in
clause (a) above will be deemed to constitute “Excess Proceeds.” Not
later than the 10th day after
the
later of the date of an Asset Disposition or the receipt of such Net Available
Cash, the Borrower will be required to make an offer (“Asset Disposition
Offer”) to all Holders and to the extent required by the terms of other Pari
Passu Debt, to all holders of other Pari Passu Debt outstanding with similar
provisions requiring the Borrower to make an offer to purchase such Pari Passu
Debt with the proceeds from any Asset Disposition, to purchase the maximum
principal amount of Loans and any such Pari Passu Debt to which the Asset
Disposition Offer applies that may be purchased out of the Excess Proceeds,
at
an offer price in cash in an amount equal to 100% of the principal amount of
the
Loans and Pari Passu Debt plus accrued and unpaid interest to the date of
purchase (subject to the right of holders of record on the relevant record
date
to receive interest due on the relevant interest payment date), in accordance
with the procedures set forth in this Agreement or the agreements governing
the
Pari Passu Debt, as applicable, in each case in denominations of $2,000 and
larger integral multiples of $1,000. To the extent that the aggregate amount
of
Loans and Pari Passu Debt so validly tendered and not properly withdrawn
pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the
Borrower may use any remaining Excess Proceeds for general corporate purposes,
subject to other covenants contained in this Agreement. If the
aggregate principal amount of Loans and other Pari Passu Debt surrendered by
holders or lenders, collectively, exceeds the amount of Excess Proceeds, the
Administrative Agent, in consultation with the trustee(s) with respect to such
other Pari Passu Debt shall select the Loans and Pari Passu Debt to be purchased
on a prorata basis on the basis of the aggregate principal amount
of tendered Loans and Pari Passu Debt. Upon completion of such Asset
Disposition Offer, the amount of Excess Proceeds shall be reset at
zero. The Asset Disposition Offer will remain open for a period of 20
Business Days following its commencement, except to the extent that a longer
period is required by applicable law (the “Asset Disposition Offer
Period”). No later than five Business Days after the termination of the
Asset Disposition Offer Period (the “Asset Disposition Purchase Date”),
the Borrower will purchase the principal amount of Loans and Pari Passu Debt
required to be purchased pursuant to this covenant (the “Asset Disposition
Offer Amount”) or, if less than the Asset Disposition Offer Amount has been
so validly tendered, all Loans and Pari Passu Debt validly tendered in response
to the Asset Disposition Offer. If the Asset Disposition Purchase
Date is
72
on
or
after an interest record date and on or before the related interest payment
date, any accrued and unpaid interest will be paid to the Person in whose name
a
Loan or Note is registered at the close of business on such record date, and
no
additional interest will be payable to holders who tender Loans or Notes
pursuant to the Asset Disposition Offer. On or before the Asset
Disposition Purchase Date, the Borrower will, to the extent lawful, accept
for
payment, on a pro rata basis to the extent necessary, the Asset Disposition
Offer Amount of Loans and Pari Passu Debt or portions of Loans and Pari Passu
Debt so validly tendered and not properly withdrawn pursuant to the Asset
Disposition Offer, or if less than the Asset Disposition Offer Amount has been
validly tendered and not properly withdrawn, all Loans and Pari Passu Debt
so
validly tendered and not properly withdrawn, in each case in denominations
of
$2,000 and larger integral multiples of $1,000. The Borrower will
deliver to the Administrative Agent an Officers’ Certificate stating that such
Loans or portions thereof were accepted for payment by the Borrower in
accordance with the terms of this covenant and, in addition, the Borrower will
deliver all certificates and notes required, if any, by the agreements governing
the Pari Passu Debt. The Borrower or the paying agent, as the case
may be, will promptly (but in any case not later than five Business Days after
termination of the Asset Disposition Offer Period) mail or deliver to each
tendering holder of Loans or holder or lender of Pari Passu Debt, as the case
may be, an amount equal to the purchase price of the Loans or Pari Passu Debt
so
validly tendered and not properly withdrawn by such holder or lender, as the
case may be, and accepted by the Borrower for purchase, and the Borrower will
promptly issue a new Note (if required), and with respect to any Exchange Notes,
the Trustee, upon delivery of an Officers’ Certificate from the Borrower, will
authenticate and mail or deliver such new Note to such holder, in a principal
amount equal to any unpurchased portion of the Note surrendered; provided
that each such new Note will be in a principal amount of $2,000 or larger
integral multiples of $1,000. In addition, the Borrower will take any
and all other actions required by the agreements governing the Pari Passu
Debt. Any Note not so accepted will be promptly mailed or delivered
by the Borrower to the holder thereof. The Borrower will publicly
announce the results of the Asset Disposition Offer on the Asset Disposition
Purchase Date.
(c) For
the
purposes of this covenant, the following will be deemed to be cash: (x) the
assumption by the transferee of Debt or other liabilities (other than
Subordinated Obligations or Disqualified Stock) of the Borrower or Debt of
a
Restricted Subsidiary (other than Guarantor Subordinated Obligations or
Disqualified Stock of any Wholly-Owned Subsidiary that is a Guarantor) and
the
release of the Borrower or such Restricted Subsidiary from all liability on
such
Debt in connection with such Asset Disposition (in which case the Borrower
will,
without further action, be deemed to have applied such deemed cash to Debt
in
accordance with clause (a)(iii)(A) above); and (y) securities, notes or other
obligations received by the Borrower or any Restricted Subsidiary from the
transferee that are promptly converted by the Borrower or such Restricted
Subsidiary into cash.
(d) The
Borrower will not, and will not permit any Restricted Subsidiary to, engage
in
any Asset Swaps, unless: (i) at the time of entering into such Asset Swap and
immediately after giving effect to such Asset Swap, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof; (ii) in the event such Asset Swap involves the transfer by the Borrower
or any Restricted Subsidiary of assets having an aggregate fair market value,
as
determined by the Board of Directors of the Borrower in good faith, in excess
of
$10,000,000, the terms of such Asset Swap have been approved by a majority
of
the members of the Board of Directors of the Borrower; and (iii) in the event
such Asset Swap involves the transfer by the Borrower or any Restricted
Subsidiary of assets having an aggregate fair market value, as determined by
the
Board of Directors of the Borrower in good faith, in excess of $25,000,000,
the
Borrower has received a written opinion from an independent investment banking
firm of recognized standing (as determined in good faith by the Board of
Directors of the Borrower) that such Asset Swap is fair to the Borrower or
such
Restricted Subsidiary, as the case may be, from a financial point of
view.
73
(e) The
Borrower will comply, to the extent applicable, with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Exchange Notes pursuant to the Exchange Notes
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Borrower will comply
with the applicable securities laws and regulations and will not be deemed
to
have breached its obligations under the Exchange Notes Indenture by virtue
of
any conflict.
(f) The
Borrower will not, and will not permit any Restricted Subsidiary to, transfer,
convey, sell, lease or otherwise dispose of any Voting Stock of any Restricted
Subsidiary or to issue any of the Voting Stock of a Restricted Subsidiary (other
than, if necessary, shares of its Voting Stock constituting directors’
qualifying shares) to any Person except (i) to the Borrower or a Wholly-Owned
Subsidiary or (ii) in compliance with the other provisions of this Section
9.11
and immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would continue to be a Restricted
Subsidiary. Notwithstanding the preceding sentence, the Borrower or
any Restricted Subsidiary may sell all the Voting Stock of a Restricted
Subsidiary as long as the Borrower complies with the terms of the other
provisions of this Section 9.11.
Section
9.12 Environmental
Matters. The
Borrower will not, and will not permit any Restricted Subsidiary to, cause
or
permit any of its Property to be in violation of, or do anything or permit
anything to be done which will subject any such Property to any Remedial Work
under any Environmental Laws, assuming disclosure to the applicable Governmental
Authority of all relevant facts, conditions and circumstances, if any,
pertaining to such Property where such violations or remedial obligations in
connection with any such Remedial Work could reasonably be expected to have
a
Material Adverse Effect.
Section
9.13 Transactions
with Affiliates.
(a) The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or conduct any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Borrower (an “Affiliate Transaction”)
unless: (i) the terms of such Affiliate Transaction are no less favorable to
the
Borrower or such Restricted Subsidiary, as the case may be, than those that
could be obtained in a comparable transaction at the time of such transaction
in
arm's-length dealings with a Person who is not such an Affiliate; (ii) in the
event such Affiliate Transaction involves an aggregate consideration in excess
of $5,000,000 prior to the Initial Maturity Date and $10,000,000 thereafter,
the
terms of such transaction have been approved by a majority of the members of
the
Board of Directors of the Borrower and by a majority of the members of such
Board having no personal stake in such transaction, if any (and such majority
or
majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in clause (i) above); and (iii) in the event such
Affiliate Transaction involves an aggregate consideration in excess of
$10,000,000 prior to the Initial Maturity Date and $20,000,000 thereafter,
the
Borrower has received a written opinion from an independent investment banking,
accounting or appraisal firm of recognized standing (as determined in good
faith
by the Board of Directors of the Borrower) that such Affiliate Transaction
is
not materially less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm’s-length basis from
a Person that is not an Affiliate.
(b) The
foregoing provisions of Section 9.13(a) will not apply to (i) any Restricted
Payment permitted to be made pursuant to Section 9.04; (ii) any issuance of
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment agreements and other compensation
arrangements, options to purchase Equity Interest of the Borrower, restricted
stock plans, long-term incentive plans, stock appreciation rights
plans, participation plans or
74
similar
employee benefits plans and/or indemnity provided on behalf of officers and
employees approved by the Board of Directors of the Borrower; (iii) loans or
advances to employees, officers or directors in the ordinary course of business
of the Borrower or any of its Restricted Subsidiaries but in any event not
to
exceed $5,000,000 in the aggregate outstanding at any one time with respect
to
all loans or advances made since the Issue Date; provided,
however, that the Borrower and its Subsidiaries will comply in all
material respects with all applicable provisions of the Xxxxxxxx-Xxxxx Act
of
2002 and the rules and regulations promulgated in connection therewith that
would be applicable to an issuer with debt securities registered under the
Securities Act relating to such loans and advances; (iv) any transaction between
the Borrower and a Restricted Subsidiary or between Restricted Subsidiaries
and
Guarantees issued by the Borrower or a Restricted Subsidiary for the benefit
of
the Borrower or a Restricted Subsidiary, as the case may be, in accordance
with
Section 9.02; (v) the payment of reasonable and customary fees paid to, and
indemnity provided on behalf of, directors of the Borrower or any Restricted
Subsidiary; (vi) the existence of, and the performance of obligations of the
Borrower or any of its Restricted Subsidiaries under the terms of any agreement
to which the Borrower or any of its Restricted Subsidiaries is a party as of
or
on the Effective Date and identified on Schedule 9.13, as these agreements
may
be amended, modified, supplemented, extended or renewed from time to time;
provided, however, that any future amendment,
modification, supplement, extension or renewal entered into after the Effective
Date will be permitted to the extent that its terms are not more disadvantageous
to the Lenders than the terms of the agreements in effect on the Effective
Date;
(vii) transactions in the ordinary course of the business of the Borrower and
its Restricted Subsidiaries; provided that such transactions are on terms
that are no less favorable to the Borrower or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Borrower or such Restricted Subsidiary with an unrelated Person; and
(viii) any issuance or sale of Equity Interest (other than Disqualified Stock)
for fair consideration, in the reasonable judgment of the Board of Directors
of
the Borrower, to Affiliates of the Borrower and the granting of registration
and
other customary rights in connection therewith.
Section
9.14 Subsidiaries. The
Borrower will not, and will not permit any Restricted Subsidiary to, create
or
acquire any additional Subsidiaries unless the Borrower gives written notice
to
the Administrative Agent of such creation or acquisition and complies with
Section 8.14.
Section
9.15 Dividend
Restrictions. The
Borrower will not, and will not permit any Restricted Subsidiary to, create
or
otherwise cause or permit to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Equity
Interest or pay any Debt or other obligations owed to the Borrower or any
Restricted Subsidiary (it being understood that the priority of any Preferred
Stock in receiving dividends or liquidating distributions prior to dividends
or
liquidating distributions being paid on Common Stock shall not be deemed a
restriction on the ability to make distributions on Equity Interest); (ii)
make
any loans or advances to the Borrower or any Restricted Subsidiary (it being
understood that the subordination of loans or advances made to the Borrower
or
any Restricted Subsidiary to other Debt Incurred by the Borrower or any
Restricted Subsidiary shall not be deemed a restriction on the ability to make
loans or advances); or (iii) transfer any of its property or assets to the
Borrower or any Restricted Subsidiary; except:
(1) any
encumbrance or restriction pursuant to an agreement in effect at or entered
into
on the Effective Date, including this Agreement and the Senior Secured Credit
Agreement, or pursuant to the Exchange Notes Indenture;
(2) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to
an agreement relating to any Equity Interest or Debt Incurred by a Restricted
Subsidiary on or before the date on which such Restricted Subsidiary was
acquired by the Borrower or a Restricted
75
Subsidiary
(other than Equity Interest or Debt Incurred as consideration in, or to provide
all or any portion of the funds utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Borrower or in
contemplation of the transaction) and outstanding on such date provided,
that any such encumbrance or restriction shall not extend to any assets or
property of the Borrower or any other Restricted Subsidiary other than the
assets and property so acquired;
(3) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to
an agreement effecting a refunding, replacement or refinancing of Debt Incurred
pursuant to an agreement referred to in clause (1) or (2) or this clause (3)
or
contained in any amendment, restatement, modification, renewal, supplement,
refunding, replacement or refinancing of an agreement referred to in clause
(1)
or (2) or this clause (3); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such agreement are no less favorable in any material respect,
taken as a whole, to the Lenders, in the reasonable judgment of the Borrower’s
Board of Directors or senior management, than the encumbrances and restrictions
contained in such agreements referred to in clauses (1) or (2) on the Effective
Date or the date such Restricted Subsidiary became a Restricted Subsidiary
or
was merged into a Restricted Subsidiary, whichever is applicable;
(4) in
the
case of clause (iii) above, any encumbrance or restriction: (A) that restricts
in a customary manner the subletting, assignment or transfer of any property
or
asset that is subject to a lease, license or similar contract, or the assignment
or transfer of any such lease, license or other contract; (B) contained in
mortgages, pledges or other security agreements permitted under this Agreement
securing Debt of the Borrower or a Restricted Subsidiary to the extent such
encumbrances or restrictions restrict the transfer of the property subject
to
such mortgages, pledges or other security agreements; or (C) pursuant to
customary provisions restricting dispositions of real property interests set
forth in any reciprocal easement agreements of the Borrower or any Restricted
Subsidiary;
(5) (A)
purchase money obligations for property acquired in the ordinary course of
business and (B) Capitalized Lease Obligations permitted under this Agreement,
in each case, that impose encumbrances or restrictions of the nature described
in clause (iii) above on the property so acquired;
(6) any
restriction with respect to a Restricted Subsidiary (or any of its property
or
assets) imposed pursuant to an agreement entered into for the direct or indirect
sale or disposition of all or substantially all the Equity Interest or assets
of
such Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition;
(7) customary
encumbrances or restrictions imposed pursuant to any agreement referred to
in
the definition of ‘‘Permitted Business Investment’’;
(8) net
worth
provisions in leases and other agreements entered into by the Borrower or any
Restricted Subsidiary in the ordinary course of business;
(9) encumbrances
or restrictions arising or existing by reason of applicable law or any
applicable rule, regulation or order; and
(10) encumbrances
or restrictions contained in indentures or debt instruments or other debt
arrangements Incurred by Guarantors in accordance with Section 9.02 that are
not
more
76
restrictive,
taken as a whole, than those applicable to the Borrower in either this Agreement
or the Senior Secured Credit Agreement on the Effective Date (which results
in
encumbrances or restrictions comparable to those applicable to the Borrower
at a
Restricted Subsidiary level).
Section
9.16 [Intentionally
Omitted].
Section
9.17 [Intentionally
Omitted].
Section
9.18 [Intentionally
Omitted].
Section
9.19 Unrestricted
Subsidiaries. Unless
and until the Covenant Effectiveness Date shall occur, the Borrower will not
permit its Unrestricted Subsidiaries to incur or suffer to exist any Debt for
borrowed money except Non-Recourse Debt. No Unrestricted Subsidiary
will be redesignated as a Restricted Subsidiary and no Restricted Subsidiary
will be redesignated as an Unrestricted Subsidiary.
Section
9.20 Change
of Control. (a) Upon
a Change of Control, each Holder shall have the right to require that the
Borrower repurchase all or any part of such Holder’s Loans and Exchange Notes
(if any) at a purchase price in cash equal to 100% of the principal amount
thereof (and in the case of any Exchange Notes that are classified as “Fixed
Rate Notes” in the Exchange Notes Indenture, 101% of the principal amount
thereof) plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date), such repurchase to
be
made in accordance with Section 9.20(b).
(b) Within
thirty (30) days following any such Change of Control, the Borrower shall mail
a
notice to each Holder (the “Change of Control Offer”) with a copy to the
Administrative Agent stating:
(i) that
a
Change of Control has occurred and that such Holder has the right to require
the
Borrower to purchase such Holder’s Loans and Exchange Notes (if
any) at a purchase price in cash equal to 100% of the principal
amount thereof (and in the case of any Exchange Notes that are classified as
“Fixed Rate Notes” in the Exchange Notes Indenture, 101% of the principal amount
thereof) plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on a record date to receive interest
on the relevant interest payment date);
(ii) the
repurchase date (which shall be no earlier than thirty (30) days nor later
than
sixty (60) days from the date such notice is mailed); and
(iii) the
procedures determined by the Borrower, consistent with this Section, that a
Holder must follow in order to have its Loans and Exchange Notes (if any)
purchased.
(c) Holders
electing to have a Loan or Exchange Note purchased will be required to give
notice in writing to the Borrower at the address specified in Section 12.01
at
least three (3) Business Days prior to the purchase date. Each Holder
will be entitled to withdraw its election if the Borrower receives, not later
than one Business Day prior to the purchase date, a facsimile transmission
or
letter from such Holder setting forth the name of such Holder, the principal
amount of the Loan or Exchange Note which was to be purchased and a statement
that such Holder is withdrawing its election to have such Loan or Exchange
Note
purchased.
77
(d) On
the purchase date, the Borrower shall pay the purchase price for the Loans
and
Exchange Notes to be purchased, to the Holders entitled thereto upon surrender
of the corresponding Notes.
(e) The
Borrower shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of Loans and Exchange Notes pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Borrower shall comply
with the applicable securities laws and regulations and shall not be deemed
to
have breached its obligations under this Section by virtue thereof.
Section
9.21 Payments
for Consent. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for
the
benefit of any Lender for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Agreement or the Loans
unless such consideration is offered to be paid and is paid to all Lenders
that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
ARTICLE
X
Events
of Default; Remedies
Section
10.01 Events
of Default. Except
as modified on the Initial Maturity Date as set forth in Section 12.02, one
or
more of the following events shall constitute an “Event of
Default”:
(a) the
Borrower shall fail to pay any principal of any Loan when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed
for
prepayment thereof, by acceleration or otherwise.
(b) the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in Section
10.01(a)) payable under any Loan Document, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period of
three (3) Business Days.
(c) any
representation or warranty made or deemed made by or on behalf of the Borrower
or any Restricted Subsidiary in or in connection with any Loan Document or
any
amendment or modification of any Loan Document or waiver under such Loan
Document, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, shall prove to have been incorrect
when made or deemed made.
(d) the
Borrower or any Restricted Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in Section 8.01(j), Section 8.01(m), Section
8.02, Section 8.03, Section 8.14 or in ARTICLE IX.
(e) the
Borrower or any Restricted Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in Section 10.01(a), Section 10.01(b) or Section
10.01(d)) or any other Loan Document, and such failure shall continue
unremedied for a period of 30 days after the earlier to occur of (i) notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender) or (ii) a Responsible Officer of the
Borrower or such Restricted Subsidiary otherwise becoming aware of such
default.
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(f) (i)
the
Borrower or any Guarantor shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable or (ii) so long as any
Existing Convertible Notes remain outstanding, (A) any Significant Subsidiary
fails to make any payment by the end of the applicable grace period, if any,
after the final scheduled payment date for such payment with respect to any
indebtedness for borrowed money in an aggregate amount in excess of $10,000,000
or (B) indebtedness for borrowed money of any Significant Subsidiary in an
aggregate amount in excess of $10,000,000 shall have been accelerated or
otherwise declared due and payable, or required to be prepaid or repurchased
(other than by regularly scheduled required prepayment) prior to the scheduled
maturity thereof as a result of a default with respect to such indebtedness,
in
either case without such indebtedness referred to in subclause (A) or (B) above
having been discharged, cured, waived, rescinded or annulled, for a period
of 30
days after receipt by the Borrower of a notice of default.
(g) any
event
or condition occurs (i) that results in any Material Indebtedness becoming
due
prior to its scheduled maturity or (ii) that enables or permits (following
any
applicable grace period and notice) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the Redemption thereof or
any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require the Borrower or any Restricted Subsidiary to make an offer in respect
thereof; provided, however, that an event referred to in clause (ii) arising
under the Senior Secured Credit Agreement shall not become an Event of Default
unless such event or condition is continuing after the expiration of a
standstill period ending 45 days after the occurrence of such event or
condition.
(h) an
involuntary proceeding shall be commenced or an involuntary petition shall
be
filed seeking (i) liquidation, reorganization or other relief in respect of
the
Borrower, any Restricted Subsidiary or, so long as any Existing Convertible
Notes remain outstanding, any Significant Subsidiary or any Aggregated
Subsidiaries, or its or their debts, or of a substantial part of its or their
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower, any Restricted Subsidiary or, so long as any Existing
Convertible Notes remain outstanding, any Significant Subsidiary or any
Aggregated Subsidiaries or for a substantial part of its or their assets, and,
in any such case, such proceeding or petition shall continue undismissed for
thirty (30) days or an order or decree approving or ordering any of the
foregoing shall be entered.
(i) the
Borrower, any Restricted Subsidiary or, so long as any Existing Convertible
Notes remain outstanding, any Significant Subsidiary or any Aggregated
Subsidiaries, shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal, state
or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in
effect, (ii) consent to the institution of, or fail to contest in a timely
and
appropriate manner, any proceeding or petition described in Section 10.01(h),
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower, any Restricted
Subsidiary or, so long as any Existing Convertible Notes remain outstanding,
any
Significant Subsidiary or any Aggregated Subsidiaries, or for a substantial
part
of its or their assets, (iv) file an answer admitting the material allegations
of a petition filed against it or them in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for
the
purpose of effecting any of the foregoing; or any stockholder of the Borrower
shall make any request or take any action for the purpose of calling a meeting
of the stockholders of the Borrower to consider a resolution to dissolve and
wind up the Borrower’s affairs.
79
(j) the
Borrower or any Restricted Subsidiary shall become unable, admit in writing
its
inability or fail generally to pay its debts as they become due.
(k) (i)
one
or more judgments for the payment of money in an aggregate amount in excess
of
$25,000,000 (to the extent not covered by independent third party insurance
provided by insurers of the highest claims paying rating or financial strength
as to which the insurer does not dispute coverage and is not subject to an
insolvency proceeding) or (ii) any one or more non-monetary judgments that
have,
or could reasonably be expected to have, individually or in the aggregate,
a
Material Adverse Effect, shall be rendered against any Loan Party or any
combination thereof and the same shall remain undischarged for a period of
30
consecutive days during which execution shall not be effectively stayed, or
any
action shall be legally taken by a judgment creditor to attach or levy upon
any
assets of any Loan Party to enforce any such judgment.
(l) the
Loan
Documents after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable in accordance with their terms against the Borrower
or a
Guarantor party thereto or shall be repudiated by any of them, or cease to
create a valid and perfected Lien of the priority required thereby on any
collateral purported to be covered thereby, except to the extent permitted
by
the terms of this Agreement, or the Borrower or any Restricted Subsidiary or
any
of their Affiliates shall so state in writing.
(m) an
ERISA
Event shall have occurred that, in the opinion of the Majority Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in liability of the Borrower and its Subsidiaries in
an
aggregate amount exceeding $25,000,000 in any year.
Section
10.02 Remedies. Except
as modified on the Initial Maturity Date as set forth in Section
12.02:
(a) In
the
case of an Event of Default other than one described in Section 10.01(h),
Section 10.01(i) or Section 10.01(j), at any time
thereafter during the continuance of such Event of Default, the Majority Lenders
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared
to be
due and payable), and thereupon the principal of the Loans so declared to be
due
and payable, together with accrued interest thereon and all fees and other
obligations of the Loan Parties accrued hereunder and under the Loans and the
other Loan Documents shall become due and payable immediately, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby waived by
each
Loan Party; and in case of an Event of Default described in Section 10.01(h),
Section 10.01(i) or Section 10.01(j), the Notes and
the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and the other obligations of the Borrower and the
Guarantors accrued hereunder and under the Notes and the other Loan Documents
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by each Loan
Party.
(b) In
the
case of the occurrence of an Event of Default, the Administrative Agent and
the
Lenders will have all other rights and remedies available at law and
equity.
(c) All
proceeds realized from the liquidation or other disposition of any collateral
or
otherwise received after maturity of the Notes, whether by acceleration or
otherwise, shall be applied in accordance with Section 4.01(c).
80
ARTICLE
XI
The
Administrative Agent
Section
11.01 Appointment;
Powers. Each
of the Lenders hereby irrevocably appoints the Administrative Agent as its
agent
and authorizes the Administrative Agent to take such actions on its behalf
and
to exercise such powers as are delegated to the Administrative Agent by the
terms hereof and the other Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
Section
11.02 Duties
and Obligations of Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing (the use of the term “agent” herein and in the other
Loan Documents with reference to the Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law; rather, such term is used merely as
a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties), (b) the
Administrative Agent shall have no duty to take any discretionary action or
exercise any discretionary powers, except as provided in Section 11.03, and (c) except as expressly set forth
herein, the Administrative Agent shall not have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or any Loan Party that is communicated to or obtained by the bank
serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to
the
Administrative Agent by the Borrower or a Lender, and shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty
or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument
or
document, (v) the satisfaction of any condition set forth in ARTICLE VI or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent
or as to those conditions precedent expressly required to be to the
Administrative Agent’s satisfaction, (vi) the existence, value, perfection or
priority of any collateral security or the financial or other condition of
the
Borrower and the Loan Parties or any other obligor or guarantor, or (vii) any
failure by the Borrower or any other Person (other than itself) to perform
any
of its obligations hereunder or under any other Loan Document or the performance
or observance of any covenants, agreements or other terms or conditions set
forth herein or therein. For purposes of determining compliance with
the conditions specified in ARTICLE VI, each Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to
or
approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received written notice from such Lender prior to the proposed
closing date specifying its objection thereto.
Section
11.03 Action
by Administrative Agent. The
Administrative Agent shall have no duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise in writing as directed by the
Majority Lenders (or such other number or percentage of the Lenders as shall
be
necessary under the circumstances as provided in Section
12.02) and in all cases the Administrative Agent shall be fully justified in
failing or refusing to act hereunder or under any other Loan Documents unless
it
shall (a) receive written instructions from the Majority Lenders or the Lenders,
as applicable, (or such other number or percentage of the Lenders as shall
be
necessary under the circumstances as provided in Section
12.02) specifying the action to be taken and (b) be indemnified to its
81
satisfaction
by the Lenders against any and all liability and expenses which may be incurred
by it by reason of taking or continuing to take any such action. The
instructions as aforesaid and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the
Lenders. If a Default has occurred and is continuing, then the
Administrative Agent shall take such action with respect to such Default as
shall be directed by the requisite Lenders in the written instructions (with
indemnities) described in this Section 11.03,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the
Lenders. In no event, however, shall the Administrative Agent be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement, the Loan Documents or
applicable law. If a Default has occurred and is continuing, the
Syndication Agent shall have no obligation to perform any act in respect
thereof. No Agent shall not be liable for any action taken or not
taken by it with the consent or at the request of the Majority Lenders or the
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section
12.02), and otherwise no Agent shall be liable for any action taken or not
taken by it hereunder or under any other Loan Document or under any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except
for its own gross negligence or willful misconduct.
Section
11.04 Reliance
by Administrative Agent. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or
by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon and each of the Borrower and the Lenders
hereby waives the right to dispute the Administrative Agent’s record of such
statement, except in the case of gross negligence or willful misconduct by
the
Administrative Agent. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and
other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants
or
experts. The Administrative Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof permitted hereunder shall have
been
filed with the Administrative Agent.
Section
11.05 Subagents. The
Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the
preceding Sections of this ARTICLE XI shall apply to
any such sub-agent and to the Related Parties of the Administrative Agent and
any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.
Section
11.06 Resignation
of Administrative Agent. Subject
to the appointment and acceptance of a successor Agent as provided in this
Section 11.06, any Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Majority
Lenders shall have the right, in consultation with the Borrower, to appoint
a
successor. If no successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations
hereunder. The
82
fees
payable by the Borrower to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Agent’s resignation hereunder, the provisions of
this ARTICLE XI and Section
12.03 shall continue in effect for the benefit of such retiring Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Agent.
Section
11.07 Agents
as Lenders. Each
bank serving as an Agent hereunder shall have the same rights and powers in
its
capacity as a Lender as any other Lender and may exercise the same as though
it
were not an Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Borrower
or
any Loan Party or other Affiliate thereof as if it were not an Agent
hereunder.
Section
11.08 No
Reliance. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent, any other Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and each other Loan Document
to which it is a party. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions
in
taking or not taking action under or based upon this Agreement, any other Loan
Document, any related agreement or any document furnished hereunder or
thereunder. The Agents shall not be required to keep themselves
informed as to the performance or observance by the Borrower or any of its
Restricted Subsidiaries of this Agreement, the Loan Documents or any other
document referred to or provided for herein or to inspect the Properties or
books of any such Person. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders
by
the Administrative Agent hereunder, no Agent or the Arrangers shall have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any Loan Party (or any of their Affiliates) which may come into
the
possession of such Agent or any of its Affiliates. Each other party
hereto will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein.
Section
11.09 Administrative
Agent May File Proofs of Claim. In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any of its Restricted Subsidiaries,
the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise
and
irrespective of whether the Administrative Agent shall have made any demand
on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to
file
and prove a claim for the whole amount of the principal and interest owing
and
unpaid in respect of the Loans and all other Indebtedness that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under
Section 12.03) allowed in such judicial proceeding;
and
(b) to
collect and receive any monies or other property payable or deliverable on
any
such claims and to distribute the same;
83
and
any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event
that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due
the
Administrative Agent under Section
12.03.
Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan
of
reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such
proceeding.
Section
11.10 Authority
of Administrative Agent to Release Collateral and Liens. Each
Lender hereby authorizes the Administrative Agent to release any collateral
that
is permitted to be sold or released pursuant to the terms of the Loan
Documents. Each Lender hereby authorizes the Administrative Agent to
execute and deliver to the Borrower, at the Borrower’s sole cost and expense,
any and all releases of Liens, termination statements, assignments or other
documents reasonably requested by the Borrower in connection with any sale
or
other disposition of Property to the extent such sale or other disposition
is
permitted by the terms of Section 9.11 or is otherwise authorized by the terms
of the Loan Documents.
Section
11.11 The
Arrangers and the Agents. The
Arrangers and the Syndication Agent shall have no duties, responsibilities
or
liabilities under this Agreement and the other Loan Documents other than their
duties, responsibilities and liabilities in their capacity as Lenders
hereunder.
ARTICLE
XII
Miscellaneous
Section
12.01 Notices.
(a) Except
in
the case of notices and other communications expressly permitted to be given
by
telephone (and subject to Section 12.01(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified
or
registered mail or sent by telecopy, as follows:
(i) if
to the Borrower, to it at 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxx 00000, Attention of Xxxxxxxx Xxxxx (Telecopy No. (000)
000-0000);
(ii) if
to the
Administrative Agent, to it at: 1 Chase Tower, 10 South Dearborn,
IL1-0010, Xxxxxxx, Xxxxxxxx 00000 Attention: Mi Y Xxx, Phone No.
000.000.0000, Fax No. 000.000.0000, and for all other correspondence other
than
borrowings, continuation and conversion requests 000 Xxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxx 00000, Attention of Xxxxxx Xxxxxxx (Telecopy No. (000)
000-0000);
(iii) if
to any
other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.
(b) Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to ARTICLE II, ARTICLE III, ARTICLE
IV and
ARTICLE V unless otherwise agreed by the
Administrative Agent
84
and
the
applicable Lender. The Administrative Agent or the Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it; provided
that approval of such procedures may be limited to particular notices or
communications.
(c) Any
party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the
date
of receipt.
Section
12.02 Waivers;
Amendments.
(a) No
failure on the part of the Administrative Agent or any Lender to exercise and
no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege, or any abandonment or discontinuance of steps to enforce such
right, power or privilege, under any of the Loan Documents shall operate as
a
waiver thereof, nor shall any single or partial exercise of any right, power
or
privilege under any of the Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
rights and remedies of the Administrative Agent and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by any Loan Party therefrom shall in any event be effective unless
the
same shall be permitted by Section 12.02(b), and
then such waiver or consent shall be effective only in the specific instance
and
for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender may have
had
notice or knowledge of such Default at the time.
(b) Neither
this Agreement nor any provision hereof nor any Security Instrument nor any
provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Majority
Lenders or by the Borrower and the Administrative Agent with the consent of
the
Majority Lenders; provided that no such agreement shall (i) reduce the principal
amount of any Loan or reduce the rate of interest thereon, or reduce any fees
payable hereunder, or reduce any other Indebtedness hereunder or under any
other
Loan Document, without the written consent of each Lender affected thereby,
(ii)
postpone the scheduled date of payment or prepayment of the principal amount
of
any Loan, or any interest thereon, or any fees payable hereunder, or any other
Indebtedness hereunder or under any other Loan Document, or reduce the amount
of, waive or excuse any such payment, or postpone or extend the Initial Maturity
Date or the Final Maturity Date without the written consent of each Lender
affected thereby, (iii) change Section 4.01(b),
Section 4.01(c) or Section 4.01(d) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (iv) waive or amend Section 10.02(c) without the written consent of each
Lender, (v) release any Guarantor (except as set forth in the Guaranty
Agreement), release any collateral (other than as provided in Section 11.10) without the written consent of each
Lender, (vi) restrict the right of each Lender to exchange Term Loans or Initial
Loans on the Initial Maturity Date, for Exchange Notes or amend the rate of
such
exchange without the written consent of each Lender directly affected thereby,
(vii) amend, modify or waive any provision in the Exchange Notes that require
(or would, if any Exchange Notes were outstanding, require) the approval of
all
holders of Exchange Notes without the consent of all the Lenders, or (viii)
change any of the provisions of this Section
12.02(b) or the definitions of “Majority Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or make any
determination or grant any consent hereunder or any other Loan Documents,
without the written consent of each Lender; provided
85
further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent or any other Agent hereunder or under any
other Loan Document without the prior written consent of the Administrative
Agent or such other Agent, as the case may be. Notwithstanding the
foregoing, any supplement to Schedule 7.14 (Subsidiaries) shall be effective
simply by delivering to the Administrative Agent a supplemental schedule clearly
marked as such and, upon receipt, the Administrative Agent will promptly deliver
a copy thereof to the Lenders.
(c) Notwithstanding
anything in clause (a) above or in this Agreement and the other Loan Documents
to the contrary, without notice to or the consent of any Lender, the
Administrative Agent or the Borrower, immediately following the Initial Maturity
Date:
(i)
the
affirmative covenants set forth in Article VIII (other than (A) Section 8.20
(Exchange Notes) and (B) for so long as any Loans are outstanding, Section
8.01
(Financial Statements; Other Information), Section 8.14 (Additional Guarantors)
and Section 8.19 (Second Lien)) shall be deemed deleted;
(ii)
for
so long as any Loans are outstanding, Sections 9.07, 9.08, 9.12, 9.14 and 9.19
shall be deleted and the other negative covenants set forth in Article IX (other
than Section 9.20 (Change of Control)) shall be deemed to have been
automatically replaced by the corresponding covenants set forth in Exhibit
H
hereto, and
(iii)
the
Events of Default and remedies set forth in Article X shall be deemed to have
been automatically replaced by the defaults and remedies described in Exhibit
H
hereto under the heading “Events of default,”
each
as
applicable, which replacement provisions, along with the relevant defined terms
used therein for the purposes thereof, will thereupon be deemed incorporated
by
reference herein, with references therein to the “Issuer” and the “Trustee”
being deemed to be references to the “Borrower” and the “Administrative Agent,”
respectively, and with such other modifications to this Agreement necessary
to
give effect to the foregoing; in furtherance of the foregoing, the
Administrative Agent will, at the request of the Borrower, enter into such
technical amendments to the Loan Documents reasonably necessary to effect the
foregoing; provided that following the Initial Maturity Date, the
proceeds of any mandatory prepayment event set forth in Section 3.05(b) shall
continue to be applied in accordance with Section 3.05(b) and 3.05(d), as
applicable.
Section
12.03 Expenses,
Indemnity; Damage Waiver.
(a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental audits and surveys and appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after
the
execution hereof and including advice of counsel to the Administrative Agent
as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all costs, expenses, taxes, assessments
and
other charges incurred by the any Agent or any Lender in connection with any
filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all out-of-pocket expenses incurred by any Agent
or
any
86
Lender,
including the fees, charges and disbursements of any counsel for any Agent
or
any Lender, in connection with the enforcement or protection of its rights
in
connection with this Agreement or any other Loan Document, including its rights
under this Section 12.03, or in connection with the
Loans made hereunder, including, without limitation, all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans.
(b) THE
BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER AND EACH LENDER, AND EACH
RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED
AN
“INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND
ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE
FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED
BY
OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS
A
RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, (ii)
THE
PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT
OF
THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF
THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (iii) THE
FAILURE OF THE BORROWER OR ANY LOAN PARTY TO COMPLY WITH THE TERMS OF ANY LOAN
DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iv)
ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT
OF THE BORROWER OR ANY LOAN PARTY SET FORTH IN ANY OF THE LOAN DOCUMENTS OR
ANY
INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH,
(v)
ANY LOAN OR THE USE OF THE PROCEEDS THEREFROM, (vi) ANY OTHER ASPECT OF THE
LOAN
DOCUMENTS, (vii) THE OPERATIONS OF THE BUSINESS OF THE BORROWER OR ANY LOAN
PARTY BY SUCH PERSONS, (viii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED
TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (ix)
ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR
ANY
OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION,
STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT
OF
DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS
SUBSTANCES ON ANY OF THEIR PROPERTIES, (x) THE BREACH OR NON-COMPLIANCE BY
THE
BORROWER OR ANY RESTRICTED SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE
TO
THE BORROWER OR ANY RESTRICTED SUBSIDIARY, (xi) THE PAST OWNERSHIP BY THE
BORROWER OR ANY RESTRICTED SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST
ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE
AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xii) THE PRESENCE, USE,
RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE,
TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL
AND
GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES
OWNED OR OPERATED BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR ANY ACTUAL
OR
ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY
OWNED
OR OPERATED BY THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES, (xiii) ANY
ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS
RESTRICTED SUBSIDIARIES, (xiv) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xv) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING
87
RELATING
TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY
AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS
OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE
GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.
(c) To
the
extent that the Borrower fails to pay any amount required to be paid by it
to
any Agent or the Arrangers under Section 12.03(a) or
(b), each Lender severally
agrees to pay to such
Agent or the Arrangers, as the case may be, such Lender’s Commitment Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent or the Arrangers in
their
capacity as such.
(d) To
the
extent permitted by applicable law, no Loan Party shall assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct
or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the Transactions, any Loan or the use of the proceeds
thereof.
(e) All
amounts due under this Section 12.03 shall be payable
not later than 10 days after written demand therefor.
Section
12.04 Successors
and Assigns.
(a) The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns permitted hereby,
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer
its
rights or obligations hereunder except in accordance with this Section 12.04. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants (to the extent provided in Section
12.04(c)) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.
(b) (i)
Subject to the conditions set forth in Section
12.04(b)(ii), any Lender may assign to one or more assignees (each an
“Assignee”) all or a portion of its rights and obligations under this
Agreement (including all or a portion of the Loans at the time owing to it)
with
the prior written consent of:
88
(A) the
Borrower solely if such assignment is made prior to the Initial Maturity Date
and after giving effect to such assignment, the Initial Lenders will hold less
than 50% of the outstanding aggregate principal of the Loans, provided that
no
consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund (as defined below), or, if an Event
of
Default under Section 10.01(a), (h), (i) or (j) has occurred and is continuing;
and
(B) the
Administrative Agent (such consent not to be unreasonably
withheld).
(ii) Assignments
shall be subject to the following additional conditions:
(A) except
in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund or an assignment of the entire remaining amount of the assigning Lender’s
Loans, the amount of the Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, provided that (1) no such consent of the Borrower shall
be
required if an Event of Default has occurred and is continuing and (2) such
amounts shall be aggregated in respect of each Lender and its Affiliates or
Approved Funds;
(B) the
parties to each assignment shall execute and deliver to the Administrative
Agent
an Assignment and Assumption, together with a processing and recordation fee
of
$3,500; and
(C) the
Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent
an Administrative Questionnaire.
For
the
purposes of this Section 12.04, “Approved Fund” means any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) Person or an Affiliate of a Person that administers
or manages a Lender.
(iii) Subject
to Section 12.04(b)(iv) and the acceptance and
recording thereof, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Section 5.01, Section 5.02,
Section
5.03 and Section
12.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 12.04 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section
12.04(c).
(iv) The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of
the Lenders, and the principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the
89
“Register”). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for
all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(v) Upon
its
receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the Assignee’s completed Administrative Questionnaire
and, if required hereunder, applicable tax forms (unless the Assignee shall
already be a Lender hereunder), the processing and recordation fee referred
to
in Section 12.04(b) and any written consent to such
assignment required by Section 12.04(b), the
Administrative Agent shall accept such Assignment and Assumption and record
the
information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section
12.04(b).
(c) (A) Any
Lender may, without the consent of the Borrower but subject to the prior
approval of the Administrative Agent (such approval not to be unreasonably
withheld), sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of the Loans owing
to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (C) the
Borrower, the Administrative Agent and the other Lenders shall continue to
deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and (D) such Lender shall continue to give
prompt attention to and process (including, if required, through discussions
with Participants) requests for waivers or amendments hereunder. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the proviso to Section 12.02 that affects such
Participant. In addition such agreement must provide that the
Participant be bound by the provisions of Section
12.03. Subject to Section
12.04(c)(ii), the Borrower agrees that each Participant shall be entitled to
the benefits of Section 5.01, Section 5.02 and Section
5.03
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section
12.04(b). To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 12.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 4.01(d) as though it were a Lender.
(i) A
Participant shall not be entitled to receive any greater payment under Section 5.01 or Section 5.03
than the applicable Lender would have been entitled to receive with respect
to
the participation sold to such Participant, unless the sale of the participation
to such Participant is made with the Borrower’s prior written
consent. A Participant that is a Non-U.S. Lender shall not be
entitled to the benefits of Section 5.03 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.03(d) as though it were a Lender.
(d) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including, without limitation, any pledge or assignment to secure obligations
to
a Federal Reserve Bank, and this Section 12.04(d)
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee
or
Assignee for such Lender as a party hereto.
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(e) (B) To
the extent requested by any Lender, the Borrower shall execute and deliver
to
such Lender an Initial Note dated the Effective Date substantially in the form
of Exhibit A-1 hereto to evidence the portion of the Initial Loan made by
such Lender and with appropriate insertions (“Initial
Notes”).
(i) Unless
converted to an Exchange Note and, to the extent requested by any Lender, the
Borrower shall execute and deliver to such Lender a Term Note dated the Initial
Maturity Date substantially in the form of Exhibit A-2 hereto to evidence
the Term Loan made on such date, in the principal amount of the Initial Notes
held by such Lender on such date and with other appropriate insertions
(collectively, the “Term Notes”).
(ii) On
or
prior to the effective date of any Assignment and Assumption, the assigning
Lender shall surrender any outstanding Loan Notes held by it all or a portion
of
which are being assigned, and the Borrower, at its own expense, shall, upon
a
request to the Administrative Agent by the assigning Lender or the Assignee,
as
applicable, execute and deliver to the Administrative Agent (in exchange for
outstanding Loan Notes of the assigning Lender, if any) a new Loan Note to
the
order of such Assignee in an amount equal to the amount of such Assignee’s Loans
after giving effect to such Assignment and Assumption and, if the assigning
Lender has retained a Loan hereunder, a new Loan Note, to the order of the
assigning Lender in an amount equal to the amount of such Lender’s Loans after
giving effect to such Assignment and Assumption. Any such new Loan
Notes shall be dated the Effective Date and shall otherwise be in the form
of
the Loan Note replaced thereby. Any Loan Notes surrendered by the
assigning Lender shall be returned by the Administrative Agent to the Borrower
marked “cancelled.”
(f) Notwithstanding
the foregoing, any Conduit Lender may assign any or all of the Loans it may
have
funded hereunder to its designating Lender without the consent of the Borrower
or the Administrative Agent and without regard to the limitations set forth
in
Section 12.04(b). Each of the Borrower, each Lender and the
Administrative Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one
day
after the payment in full of the latest maturing commercial paper note issued
by
such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.
(g) Notwithstanding
any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would require the Borrower and the Guarantors to file a registration
statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any
state.
Section
12.05 Survival;
Revival; Reinstatement.
(a) All
covenants, agreements, representations and warranties made by the Loan Parties
herein and in the certificates or other instruments delivered in connection
with
or pursuant to this Agreement or any other Loan Document shall be considered
to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans, regardless
of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, any other Agent or any Lender
may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest
91
on
any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid. The provisions of Section
5.01, Section 5.02, Section 5.03 and Section
12.03 and ARTICLE XI shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans or the termination of this
Agreement, any other Loan Document or any provision hereof or
thereof.
(b) To
the
extent that any payments on the Indebtedness or proceeds of any collateral
are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Indebtedness so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s and the
Lenders’ Liens, security interests, rights, powers and remedies under this
Agreement and each Loan Document shall continue in full force and
effect. In such event, each Loan Document shall be automatically
reinstated and the Borrower shall, and shall cause each other Loan Party to,
take such action as may be reasonably requested by the Administrative Agent
and
the Lenders to effect such reinstatement.
Section
12.06 Counterparts;
Integration; Effectiveness.
(a) This
Agreement may be executed in counterparts (and by different parties hereto
on
different counterparts), each of which shall constitute an original, but all
of
which when taken together shall constitute a single contract.
(b) This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof
and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof. This Agreement and
the other Loan Documents represent the final agreement among the parties hereto
and thereto 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.
(c) Except
as
provided in Section 6.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and
when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
Section
12.07 Severability. Any
provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision
in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section
12.08 Right
of Setoff. If
an Event of Default shall have occurred and be continuing, each Lender and
each
of its Affiliates is hereby authorized at any time and from time to time, to
the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and
other obligations (of whatsoever kind, including, without limitations
obligations under Swap Agreements) at any time owing by such Lender or Affiliate
to or for the credit or the account of the Borrower or any Loan Party against
any of and all the obligations of the
92
Borrower
or any other Loan Party owed to such Lender now or hereafter existing under
this
Agreement or any other Loan Document, irrespective of whether or not such Lender
shall have made any demand under this Agreement or any other Loan Document
and
although such obligations may be unmatured. The rights of each Lender
under this Section 12.08 are in addition to other
rights and remedies (including other rights of setoff) which such Lender or
its
Affiliates may have.
Section
12.09 GOVERNING
LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT UNITED STATES
FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR
TAKE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
LOCATED.
(b) ANY
LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN
THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE
AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND
DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN
ANY
COURT OTHERWISE HAVING JURISDICTION.
(c) EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.
(d) EACH
PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN;
(ii)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE
OR
AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS,
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AND
(iv)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
12.09.
Section
12.10 Headings. Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.
Section
12.11 Confidentiality. Each
of the Administrative Agent and each Lender agrees to keep confidential all
non-public information provided to it by the Borrower or any of their
Subsidiaries, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider thereof as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate thereof, (b) subject
to
an agreement to comply with the provisions of this Section, to any actual or
prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates, (d) upon the request or demand
of
any Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Governmental Requirement, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) that has been publicly disclosed,
(h) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access
to
information about a Lender’s investment portfolio in connection with ratings
issued with respect to such Lender, or (i) in connection with the exercise
of
any remedy hereunder or under any other Loan Document.
Each
Lender acknowledges that information furnished to it pursuant to this Agreement
or the other Loan Documents may include material non-public information
concerning the Borrower and its Affiliates and their related parties or their
respective securities, and confirms that it has developed compliance procedures
regarding the use of material non-public information and that it will handle
such material non-public information in accordance with those procedures and
applicable law, including Federal and state securities laws.
All
information, including requests for waivers and amendments, furnished by the
Borrower or the Administrative Agent pursuant to, or in the course of
administering, this Agreement or the other Loan Documents will be
syndicate-level information, which may contain material non-public information
about the Borrower and its Affiliates and their related parties or their
respective securities. Accordingly, each Lender represents to the
Borrower and the Administrative Agent that it has identified in its
Administrative Questionnaire a credit contact who may receive information that
may contain material non-public information in accordance with its compliance
procedures and applicable law, including Federal and state securities
laws.
Section
12.12 Interest
Rate Limitation. It
is the intention of the parties hereto that each Lender shall conform strictly
to usury laws applicable to it. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of
such
Loan, together with all Charges payable in respect thereof, shall be limited
to
the Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan but were not payable as a result
of
the operation of this Section shall be cumulated
94
and
the
interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such
Lender.
Section
12.13 Intercreditor
Agreement. This
Agreement and each Security Instrument shall be subject to the terms of the
Intercreditor Agreement upon execution thereof.
Section
12.14 No
Third Party Beneficiaries. This
Agreement, the other Loan Documents, and the agreement of the Lenders to make
Loans hereunder are solely for the benefit of the Borrower, and no other Person
(including, without limitation, any Restricted Subsidiary of the Borrower,
any
obligor, contractor, subcontractor, supplier or materialsman) shall have any
rights, claims, remedies or privileges hereunder or under any other Loan
Document against the Administrative Agent, any other Agent or any Lender for
any
reason whatsoever. There are no third party
beneficiaries.
Section
12.15 Acknowledgements. The
Borrower hereby acknowledges that:
(a) it
has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;
(b) neither
the Administrative Agent nor any Lender has any fiduciary relationship with
or
duty to the Borrower arising out of or in connection with this Agreement or
any
of the other Loan Documents, and the relationship between Administrative Agent
and Lenders, on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
no
joint
venture is created hereby or by the other Loan Documents or otherwise exists
by
virtue of the transactions contemplated hereby among the Lenders or among the
Borrower and the Lenders.
Section
12.16 USA
Patriot Act Notice. Each
Lender hereby notifies the Borrower that pursuant to the requirements of the
USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of
the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act.
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The
parties hereto have caused this Agreement to be duly executed as of the day
and
year first above written.
BORROWER: MCMORAN
EXPLORATION CO.
By: ___________________________
Name:
Title:
ADMINISTRATIVE
AGENT: JPMORGAN
CHASE BANK, N.A.,
as
Administrative Agent and as a Lender
By: ___________________________
Name:
Title:
SYNDICATION
AGENT:
|
XXXXXXX
LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED,
as Syndication Agent
|
By:_________________________________
Name:
Title:
|
XXXXXXX
XXXXX CAPITAL CORPORATION, as a
Lender
|
By: ________________________________
Name:
Title: