EXHIBIT 10.13
EXECUTION COPY
CREDIT AGREEMENT
Dated as of April 4, 2003
among
PLAINS EXPLORATION & PRODUCTION COMPANY,
as Borrower,
JPMORGAN CHASE BANK,
as Administrative Agent,
BANK ONE, NA (MAIN OFFICE CHICAGO)
and
BANK OF MONTREAL,
as Syndication Agents,
BNP PARIBAS
and
THE BANK OF NOVA SCOTIA,
as Documentation Agents,
and
The Lenders party hereto
--------------------------------------------------------------------------------
Sole Bookrunner
X.X. XXXXXX SECURITIES INC.
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS......................................................................1
Section 1.01 Terms Defined Above..........................................................................1
Section 1.02 Certain Defined Terms........................................................................1
Section 1.03 Types of Loans and Borrowings...............................................................23
Section 1.04 Terms Generally; Rules of Construction......................................................23
Section 1.05 Accounting Terms and Determinations; GAAP...................................................23
ARTICLE II THE CREDITS...........................................................................................24
Section 2.01 Commitments.................................................................................24
Section 2.02 Loans and Borrowings........................................................................24
Section 2.03 Requests for Borrowings.....................................................................25
Section 2.04 Interest Elections..........................................................................26
Section 2.05 Funding of Borrowings.......................................................................27
Section 2.06 Termination and Reduction of Aggregate Maximum Credit Amounts...............................28
Section 2.07 Borrowing Base..............................................................................28
Section 2.08 Letters of Credit...........................................................................31
ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES................................................36
Section 3.01 Repayment of Loans..........................................................................36
Section 3.02 Interest....................................................................................36
Section 3.03 Alternate Rate of Interest..................................................................37
Section 3.04 Prepayments.................................................................................37
Section 3.05 Fees........................................................................................39
ARTICLE IV PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS.....................................................40
Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.................................40
Section 4.02 Presumption of Payment by the Borrower......................................................41
Section 4.03 Certain Deductions by the Administrative Agent..............................................41
Section 4.04 Disposition of Proceeds.....................................................................41
ARTICLE V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY.............................................42
Section 5.01 Increased Costs.............................................................................42
Section 5.02 Break Funding Payments......................................................................43
Section 5.03 Taxes. .....................................................................................43
Section 5.04 Mitigation Obligations; Replacement of Lenders..............................................45
Section 5.05 Illegality..................................................................................45
ARTICLE VI CONDITIONS PRECEDENT..................................................................................46
Section 6.01 Effective Date..............................................................................46
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Section 6.02 Each Credit Event...........................................................................48
ARTICLE VII REPRESENTATIONS AND WARRANTIES.......................................................................49
Section 7.01 Organization; Powers........................................................................49
Section 7.02 Authority; Enforceability...................................................................49
Section 7.03 Approvals; No Conflicts.....................................................................50
Section 7.04 Financial Condition; No Material Adverse Change.............................................50
Section 7.05 Litigation..................................................................................51
Section 7.06 Environmental Matters.......................................................................51
Section 7.07 Compliance with the Laws and Agreements; No Defaults........................................52
Section 7.08 Investment Company Act......................................................................53
Section 7.09 Public Utility Holding Company Act..........................................................53
Section 7.10 Taxes.......................................................................................53
Section 7.11 ERISA.......................................................................................53
Section 7.12 Disclosure; No Material Misstatements.......................................................53
Section 7.13 Insurance...................................................................................54
Section 7.14 Restriction on Liens........................................................................54
Section 7.15 Subsidiaries................................................................................54
Section 7.16 Location of Business and Offices............................................................54
Section 7.17 Properties; Titles, Etc.....................................................................55
Section 7.18 Maintenance of Properties...................................................................56
Section 7.19 Gas Imbalances, Prepayments.................................................................56
Section 7.20 Marketing of Production.....................................................................56
Section 7.21 Swap Agreements.............................................................................57
Section 7.22 Use of Loans and Letters of Credit..........................................................57
Section 7.23 Solvency....................................................................................57
Section 7.24 Designated Senior Indebtedness..............................................................57
Section 7.25 Acquisition.................................................................................57
ARTICLE VIII AFFIRMATIVE COVENANTS...............................................................................58
Section 8.01 Financial Statements; Ratings Change; Other Information.....................................58
Section 8.02 Notices of Material Events..................................................................60
Section 8.03 Existence; Conduct of Business..............................................................61
Section 8.04 Payment of Obligations......................................................................61
Section 8.05 Performance of Obligations under Loan Documents.............................................61
Section 8.06 Operation and Maintenance of Properties.....................................................61
Section 8.07 Insurance...................................................................................62
Section 8.08 Books and Records; Inspection Rights........................................................62
Section 8.09 Compliance with Laws........................................................................63
Section 8.10 Environmental Matters.......................................................................63
Section 8.11 Further Assurances..........................................................................64
Section 8.12 Reserve Reports.............................................................................64
Section 8.13 Title Information...........................................................................65
Section 8.14 Additional Collateral; Additional Guarantors................................................66
Section 8.15 ERISA Compliance............................................................................67
Section 8.16 Unrestricted Subsidiaries...................................................................68
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ARTICLE IX NEGATIVE COVENANTS....................................................................................68
Section 9.01 Financial Covenants.........................................................................68
Section 9.02 Debt........................................................................................69
Section 9.03 Liens.......................................................................................70
Section 9.04 Dividends, Distributions and Redemptions; Repayment of 2002 Senior
Subordinated Notes .........................................................................70
Section 9.05 Investments, Loans and Advances.............................................................71
Section 9.06 Designation and Conversion of Restricted and Unrestricted Subsidiaries;
Debt of Unrestricted Subsidiaries...........................................................73
Section 9.07 Nature of Business..........................................................................74
Section 9.08 Limitation on Leases........................................................................74
Section 9.09 Proceeds of Notes...........................................................................74
Section 9.10 ERISA Compliance............................................................................74
Section 9.11 Sale or Discount of Receivables.............................................................75
Section 9.12 Mergers, Etc................................................................................75
Section 9.13 Sale of Properties..........................................................................76
Section 9.14 Environmental Matters.......................................................................77
Section 9.15 Transactions with Affiliates................................................................77
Section 9.16 Subsidiaries................................................................................77
Section 9.17 Negative Pledge Agreements; Dividend Restrictions...........................................77
Section 9.18 Gas Imbalances, Take-or-Pay or Other Prepayments............................................78
Section 9.19 Swap Agreements.............................................................................78
Section 9.20 Acquisition Documents.......................................................................78
ARTICLE X EVENTS OF DEFAULT; REMEDIES............................................................................78
Section 10.01 Events of Default...........................................................................78
Section 10.02 Remedies....................................................................................80
ARTICLE XI THE AGENTS............................................................................................81
Section 11.01 Appointment; Powers.........................................................................81
Section 11.02 Duties and Obligations of Administrative Agent..............................................81
Section 11.03 Action by Administrative Agent..............................................................82
Section 11.04 Reliance by Administrative Agent............................................................83
Section 11.05 Subagents...................................................................................83
Section 11.06 Resignation or Removal of Agents............................................................83
Section 11.07 Agents as Lenders..........................................................................84
Section 11.08 No Reliance.................................................................................84
Section 11.09 Authority of Administrative Agent to Release Collateral and Liens...........................84
Section 11.10 The Syndication Agents, Documentation Agents and Arrangers..................................84
ARTICLE XII MISCELLANEOUS........................................................................................85
Section 12.01 Notices.....................................................................................85
Section 12.02 Waivers; Amendments.........................................................................85
Section 12.03 Expenses, Indemnity; Damage Waiver..........................................................86
Section 12.04 Successors and Assigns......................................................................89
Section 12.05 Survival; Revival; Reinstatement............................................................92
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Section 12.06 Counterparts; Integration; Effectiveness....................................................92
Section 12.07 Severability................................................................................93
Section 12.08 Right of Setoff.............................................................................93
Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS..................................93
Section 12.10 Headings....................................................................................95
Section 12.11 Confidentiality.............................................................................95
Section 12.12 Interest Rate Limitation....................................................................96
Section 12.13 EXCULPATION PROVISIONS......................................................................96
Section 12.14 Specified Senior Indebtedness...............................................................97
Section 12.15 Collateral Matters; Swap Agreements.........................................................97
Section 12.16 No Third Party Beneficiaries................................................................97
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Annex I List of Maximum Credit Amounts
Exhibit A Form of Note
Exhibit B Form of Compliance Certificate
Exhibit C-1 Security Instruments
Exhibit C-2 Form of Guaranty and Collateral Agreement
Exhibit D Form of Assignment and Assumption
Schedule 7.03 Approvals
Schedule 7.05 Litigation
Schedule 7.06 Environmental Matters
Schedule 7.14 Restriction on Liens
Schedule 7.15 Subsidiaries and Partnerships; Unrestricted Subsidiaries
Schedule 7.17 Properties; Titles, Etc.
Schedule 7.19 Gas Imbalances
Schedule 7.20 Marketing Contracts
Schedule 7.21 Swap Agreements
Schedule 9.03 Liens
Schedule 9.05 Investments
Schedule 9.07 Nature of Business
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THIS CREDIT AGREEMENT dated as of April 4, 2003, is among: PLAINS
EXPLORATION & PRODUCTION COMPANY, a corporation duly formed and existing under
the laws of the State of Delaware (the "Borrower"); each of the Lenders from
time to time party hereto; JPMORGAN CHASE BANK (in its individual capacity,
"JPMorgan"), as administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the "Administrative Agent"); BANK ONE, NA
(MAIN OFFICE CHICAGO) and BANK OF MONTREAL, as syndication agents for the
Lenders (each, in such capacity, together with its successors in such capacity,
a "Syndication Agent"); and BNP PARIBAS and THE BANK OF NOVA SCOTIA, as
documentation agents for the Lenders (each, in such capacity, together with its
successors in such capacity, a "Documentation Agent").
R E C I T A L S
A. The Borrower has requested that the Lenders provide certain
loans to and extensions of credit on behalf of the Borrower.
B. The Lenders have agreed to make such loans and extensions of
credit subject to the terms and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. As used in this Agreement, 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.
"Acquisition" means the acquisition of all of the issued and outstanding
Equity Interests of the Target by the Borrower or a Restricted Subsidiary and
the subsequent merger of the Target with and into the Borrower or such
Restricted Subsidiary pursuant to the terms and conditions of the Acquisition
Documents.
"Acquisition Documents" means (a) the Agreement and Plan of Merger among
Target, PXP Gulf Coast Inc. and the Borrower dated as of February 2, 2003 and
(b) all other material agreements, instruments and documents executed and
delivered in connection therewith, each as amended.
"Acquisition Properties" means the Oil and Gas Properties and other
Properties of the Target.
"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 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affected Loans" has the meaning assigned such term in Section 5.05.
"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.
"Affiliate Agreements" means (i) that certain Crude Oil Marketing
Agreement dated as of the November 17, 0000 xxxxx XXX, Xxxxxx Xxxxxxxx Inc., the
Borrower (f/k/a Xxxxxxx Resources, L.P.), Calumet Florida, Inc. and Plains
Marketing LP (as such may be amended in accordance with the express terms of the
Transition Agreements), (ii) that certain Omnibus Agreement dated as of the
November 17, 1998 among PLX, Plains All American Pipeline, L.P., Plains
Marketing LP, All American Pipeline LP and Plains Holdings Inc. (f/k/a Plains
All American Inc.) (as such may be amended in accordance with the express terms
of the Transition Agreements), (iii) that certain Contribution, Conveyance and
Assumption Agreement dated as of the November 23, 1998 among Plains All American
Pipeline, L.P., PLX and certain other parties, (iv) that certain Letter
Agreement dated October 23, 2001 between Plains Marketing, L.P. and the Borrower
regarding the Crude Oil Sales Agreement dated April 1, 2001 between Tosco
Refining Co. and Plains Marketing, L.P., and (v) that certain Agreement for the
Allocation of the Consolidated Federal Income Tax Liability and State and Local
Taxes Among the Members of PLX Affiliate Group, dated June 30, 1998, between PLX
and the members of PLX's consolidated group identified therein.
"Agents" means, collectively, the Administrative Agent, the Syndication
Agents and the Documentation Agents; and "Agent" shall mean either the
Administrative Agent, any Syndication Agent or any Documentation Agent, as the
context requires.
"Aggregate Maximum Credit Amounts" at any time shall equal the sum of
the Maximum Credit Amounts, as the same may be reduced or terminated pursuant to
Section 2.06.
"Agreement" means this Credit Agreement, 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
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
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"Applicable Margin" means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the Commitment Fee Rate, as the case may be,
the rate per annum set forth in the Borrowing Base Utilization Grid below based
upon the Borrowing Base Utilization Percentage then in effect:
Borrowing Base Utilization Grid
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Borrowing Base *25% ****25%, but *50% ****50%, but *75% ****75%, but *90% ****90%
Utilization
Percentage
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ABR Loans 0.125% 0.250% 0.375% 0.500% 0.750%
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Eurodollar Loans 1.375% 1.500% 1.625% 1.750% 2.000%
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Commitment Fee Rate 0.375% 0.375% 0.500% 0.500% 0.500%
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* LESS THAN
**** GREATER THAN EQUAL TO
provided, that at any time when the Borrower's Index Debt is rated BB+ or higher
from S&P or Ba1 or higher from Xxxxx'x, then the Applicable Margin for
Eurodollar Loans set forth in each portion of the grid shall be reduced by an
amount equal to 0.125%.
Each change in the Applicable Margin resulting from either a change in
the Borrowing Base Utilization Percentage or in the Index Debt shall apply
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change,
provided, however, that if at any time the Borrower fails to deliver a Reserve
Report pursuant to Section 8.12(a), then the "Applicable Margin" means the rate
per annum set forth on the grid when the Borrowing Base Utilization Percentage
is at its highest level.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the Aggregate Maximum Credit Amounts represented by such Lender's
Maximum Credit Amount as such percentage is set forth on Annex I.
"Approved Counterparty" means (a) any Lender or any Affiliate of a
Lender and (b) any other Person whose long term senior unsecured debt rating at
the time of entering into the Swap Agreement is BBB+/Baa3 by S&P or Xxxxx'x (or
their equivalent) or higher.
"Approved Fund" means (a) a CLO and (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Approved Petroleum Engineers" means (a) Netherland, Xxxxxx &
Associates, Inc., (b) Xxxxx Xxxxx Company Petroleum Consultants, L.P. and (c)
any other independent petroleum engineers reasonably acceptable to the
Administrative Agent.
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"Arrangers" means, collectively, X.X. Xxxxxx Securities Inc., Banc One
Capital Markets, Inc. and BMO Xxxxxxx Xxxxx Financing, Inc., each in its
capacity as a co-arranger.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"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 D or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the Effective
Date to but excluding the Termination Date.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America or any successor Governmental Authority.
"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 Base" means at any time an amount equal to the amount
determined in accordance with Section 2.07, as the same may be adjusted from
time to time pursuant to Section 2.07(e), Section 8.13(c) or Section 9.13(e).
"Borrowing Base Utilization Percentage" means, as of any day, the
fraction expressed as a percentage, the numerator of which is the sum of the
Revolving Credit Exposures of the Lenders on such day, and the denominator of
which is the Borrowing Base in effect on such day.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"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.
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"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.
"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 the Borrower or any of its Restricted
Subsidiaries having a fair market value in excess of $5,000,000.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof) other than any Permitted Holders
(except that such person or group shall be deemed to have "beneficial ownership"
of all shares that any person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), of Equity
Interests representing more than 40% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Borrower (or
its successor by merger, consolidation or purchase of all or substantially all
of its assets); (b) the first day on which a majority of the members of the
Board of Directors of the Borrower are not Continuing Directors; (c) 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 Section 13(d) and
14(d) of the Securities and Exchange Act of 1934); or (d) a "Change of Control"
under the 2002 Senior Subordinated Indenture.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the Effective Date, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the Effective Date or (c) compliance by any Lender or any Issuing Bank (or, for
purposes of Section 5.01(b)), by any lending office of such Lender or by such
Lender's or such Issuing Bank'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 Effective Date.
"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a)
modified from time to time pursuant to Section 2.06 and (b) modified from time
to time pursuant to assignments by or to such Lender pursuant to Section
12.04(b). The amount representing each Lender's Commitment shall at any time be
the
5
lesser of such Lender's Maximum Credit Amount and such Lender's Applicable
Percentage of the then effective Borrowing Base.
"Commitment Fee Rate" has the meaning set forth in the definition of
"Applicable Margin".
"Consolidated Net Income" means with respect to the Borrower and the
Consolidated Restricted Subsidiaries, for any period, the aggregate of the net
income (or loss) of the Borrower and the Consolidated 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 the Borrower or any Consolidated Restricted Subsidiary has
an interest (which interest does not cause the net income of such other Person
to be consolidated with the net income of the Borrower and the Consolidated
Restricted Subsidiaries 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 the Borrower or to a Consolidated Restricted Subsidiary, as
the case may be; (b) the net income (but not loss) during such period of any
Consolidated Restricted Subsidiary to the extent that the declaration or payment
of dividends or similar distributions or transfers or loans by that Consolidated
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 Consolidated Restricted Subsidiary or is otherwise restricted or
prohibited, in each case determined in accordance with GAAP; (c) the net income
(or loss) of any Person acquired in a pooling-of-interests transaction for any
period prior to the date of such transaction; (d) any extraordinary gains or
losses during such period; (e) non-cash gains, losses or adjustments under FASB
Statement No. 133 as a result of changes in the fair market value of
derivatives; and (f) any gains or losses attributable to writeups or writedowns
of assets, including ceiling test writedowns and writedowns under FASB
Statements Nos. 19 and 121.
"Consolidated Restricted Subsidiaries" means any Restricted Subsidiaries
that are Consolidated Subsidiaries.
"Consolidated Subsidiaries" means each Subsidiary of the Borrower
(whether now existing or hereafter created or acquired) the financial statements
of which are or shall be (or should have been) consolidated with the financial
statements of the Borrower in accordance with GAAP.
"Consolidated Unrestricted Subsidiaries" means any Unrestricted
Subsidiaries that are Consolidated Subsidiaries.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Borrower who: (a) was a member of such
Board of Directors on the date hereof; or (b) 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 such Board at the time of such
nomination or election.
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"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.
"Debt" means, for any Person, the sum of the following (without
duplication): (a) all obligations of such Person for borrowed money or evidenced
by bonds, bankers' acceptances, debentures, notes or other similar instruments;
(b) all obligations of such Person (whether contingent or otherwise) in respect
of letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable, accrued expenses, liabilities or other obligations of such
Person to pay the deferred purchase price of Property or services not excluded
pursuant to the final sentence of this definition; (d) all obligations under
Capital Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as
defined in the other clauses of this definition) of others secured by a Lien on
any Property of such Person, whether or not such Debt is assumed by such Person;
(g) all Debt (as defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the Debt (howsoever such assurance shall be made) to the extent
of the lesser of the amount of such Debt and the maximum stated amount of such
guarantee or assurance against loss; (h) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or covenants
of others or to purchase the Debt or Property of others; (i) obligations to
deliver commodities, goods or services, including, without limitation,
Hydrocarbons, in consideration of one or more advance payments, other than gas
balancing arrangements in the ordinary course of business; (j) obligations to
pay for goods or services whether or not such goods or services are actually
received or utilized by such Person; (k) any Debt of a partnership for which
such Person is liable either by agreement, by operation of law or by a
Governmental Requirement but only to the extent of such liability; (l)
Disqualified Capital Stock; and (m) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly
or indirectly received payment. The Debt of any Person shall include all
obligations of such Person of the character described above to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is not included as a liability of such Person under GAAP. The Debt of
any Person shall not include any accounts payable, accrued expenses or other
liabilities of such Person to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities) which are not greater than 120 days past the invoice or billing
date or, if greater than 120 days past the invoice or billing date, are being
contested in good faith by appropriate proceedings if reserves adequate under
GAAP shall have been established therefor; provided that in the event that the
foregoing conditions are not met, such accounts payable, accrued expenses or
other liabilities shall constitute Debt.
"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 Capital Stock" means 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, matures or is
mandatorily redeemable for any consideration other than other Equity Interests
(which would not constitute Disqualified Capital Stock), pursuant to a sinking
fund obligation or otherwise, or is convertible or exchangeable for Debt or
redeemable
7
for any consideration other than other Equity Interests (which would not
constitute Disqualified Capital Stock) at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the earlier of
(a) the Maturity Date and (b) the date on which there are no Loans, LC Exposure
or other obligations hereunder outstanding and all of the Commitments are
terminated.
"dollars" or "$" refers to lawful money of the United States of America.
"Domestic Subsidiary" means any Restricted Subsidiary 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).
"Engineering Reports" has the meaning assigned such term in Section
2.07(c)(i).
"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
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, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.
8
"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 a Subsidiary would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" means (a) a "Reportable Event" described in section 4043
of ERISA and the regulations issued thereunder, (b) the withdrawal of the
Borrower, a Subsidiary or any ERISA Affiliate from a Plan during a plan year in
which it was a "substantial employer" as defined in section 4001(a)(2) of ERISA,
(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 or (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.
"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.
"Excepted Liens" means: (a) Liens for Taxes, assessments or other
governmental charges or levies which are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (b) Liens incurred or deposits
made in connection with workers' compensation, unemployment insurance or other
social security, old age pension or public liability obligations which are not
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP; (c)
statutory landlord's Liens, operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', suppliers', workers', materialmen's and construction
Liens, Liens on pipelines and pipeline facilities that arise by operation of law
or other like Liens arising by operation of law in the ordinary course of
business or incident to the exploration, development, operation and maintenance
of Oil and Gas Properties each of which is in respect of obligations that are
not delinquent or which are being contested in good faith by appropriate action
and for which adequate reserves have been maintained in accordance with GAAP;
(d) contractual Liens under lease agreements or which arise in the ordinary
course of business under operating agreements, joint venture agreements, oil and
gas partnership agreements, oil and gas leases, farm-out and farm-in agreements,
division orders, contracts for the sale, transportation or exchange of oil and
natural gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the oil and gas business and are for claims which are not
delinquent or which are being
9
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP, provided that any such Lien
referred to in this clause does not materially impair the use of the Property
covered by such Lien for the purposes for which such Property is held by the
Borrower or any Restricted Subsidiary or materially impair the value of such
Property subject thereto; (e) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or similar
rights and remedies and burdening only deposit accounts or other funds
maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account or is subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the Board and no such deposit account is intended by Borrower or
any of its Restricted Subsidiaries to provide collateral to the depository
institution; (f) easements, restrictions, zoning restrictions servitudes,
permits, conditions, covenants, exceptions or reservations in any Property of
the Borrower or any Restricted Subsidiary for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines for the removal of
gas, oil, coal or other minerals or timber, and other like purposes, or for the
joint or common use of real estate, rights of way, facilities and equipment,
which in the aggregate do not materially impair the use of such Property for the
purposes of which such Property is held by the Borrower or any Restricted
Subsidiary or materially impair the value of such Property subject thereto; (g)
Liens on cash or securities pledged to secure 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 a like nature incurred in the ordinary course of business, (h)
judgment and attachment Liens not giving rise to an Event of Default, provided
that any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the period
within which such proceeding may be initiated shall not have expired and no
action to enforce such Lien has been commenced, and (i) Liens arising from
Uniform Commercial Code financing statement filings regarding operating leases
entered into by the Borrower and the Restricted Subsidiaries in the ordinary
course of business covering only the Property under lease; provided, further
that Liens described in clauses (a) through (e) shall remain "Excepted Liens"
only for so long as no action to enforce such Lien has been commenced and no
intention to subordinate the first priority Lien granted in favor of the
Administrative Agent and the Lenders is to be hereby implied or expressed by the
permitted existence of such Excepted Liens.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower or any Guarantor hereunder or under
any other Loan Document, (a) income or franchise taxes imposed on (or measured
by) its income, receipts, total assets, net worth, and capital by the United
States of America or such other jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower or any Guarantor is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 5.04(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 5.03(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or
10
assignment), to receive additional amounts with respect to such withholding tax
pursuant to Section 5.03(a) or Section 5.03(c).
"Existing Credit Agreement" means the Credit Agreement dated as of July
3, 2002 among the Borrower, as borrower, JPMorgan Chase Bank, as administrative
agent, and the other agents and lenders party thereto, as amended by the First
Amendment to Credit Agreement dated effective as of July 19, 2002.
"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.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financial Statements" means the financial statement or statements of
the Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a).
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Restricted Subsidiary that is not a
Domestic Subsidiary.
"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 the Borrower, any Restricted Subsidiary, any of their
Properties, any Agent, any Issuing Bank 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.
11
"Guarantors" means:
(a) Plains Illinois Inc., a Delaware corporation;
(b) Xxxxxxxx Inc., a Delaware corporation;
(c) Plains E&P Company, a Delaware corporation;
(d) PMCT Inc., a Delaware corporation;
(e) Plains Resources International Inc., a Delaware
corporation;
(f) PXP Gulf Coast Inc., a Delaware corporation;
(g) each Domestic Subsidiary that guarantees the
Indebtedness pursuant to Section 8.14(b); and
(h) any other Person that must guarantee the Indebtedness in
order for the Borrower to comply with Section 9.04(b)(ii)(C).
"Guaranty Agreement" means an agreement executed by the Guarantors in
substantially the form of Exhibit C-2 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.
"Highest Lawful Rate" means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws allow as of the date hereof.
"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.
"Indebtedness" means any and all amounts owing or to be owing by the
Borrower, any of its Restricted Subsidiaries or any Guarantor: (a) to the
Administrative Agent, any Issuing Bank or any Lender under any Loan Document;
(b) to any Lender or any Affiliate of a Lender under any Swap Agreement between
the Borrower or any of its Restricted Subsidiaries and such Lender or Affiliate
of a Lender while such Person (or in the case of its Affiliate, the Person
affiliated therewith) is a Lender hereunder; and (c) all renewals, extensions
and/or rearrangements of any of the foregoing.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
12
"Index Debt" means senior, unsecured, long-term indebtedness for
borrowed money of the Borrower that is not guaranteed by any other Person (other
than a Guarantor) or subject to any other credit enhancement.
"Initial Reserve Report" means, collectively, (i) the report of Xxxxx
Xxxxx Company Petroleum Consultants, L.P. with respect to the value of the Oil
and Gas Properties of Plains Illinois Inc. as of December 31, 2002, (ii) the
report of Xxxxx Xxxxx Company Petroleum Consultants, L.P. with respect to the
value of the Xxxxxx Grande Field Oil and Gas Properties of PLX as of December
31, 2002, (iii) the report of Xxxxx Xxxxx Company Petroleum Consultants, L.P.
with respect to the value of the Mount Poso Field Oil and Gas Properties of PLX
as of December 31, 2002, (iv) the report of Netherland, Xxxxxx & Associates,
Inc. with respect to the value of certain Oil and Gas Properties of the Borrower
located in Los Angeles County California as of January 1, 2003, (v) the report
of Netherland, Xxxxxx & Associates, Inc. with respect to the value of certain
Oil and Gas Properties of PLX located in Louisiana as of December 31, 2002, (vi)
the report of Netherland, Xxxxxx & Associates, Inc. with respect to the value of
the Oil and Gas Properties of Xxxxxxxx Inc. as of January 1, 2003 and (vii) the
report of Xxxxx Xxxxx Company Petroleum Consultants, L.P. with respect to the
Acquisition Properties as of December 31, 2002.
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.04.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (a) 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 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, and (b) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"Interim Redetermination" has the meaning assigned such term in Section
2.07(b).
13
"Interim Redetermination Date" means the date on which a Borrowing Base
that has been redetermined pursuant to an Interim Redetermination becomes
effective as provided in Section 2.07(d).
"Investment" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of Equity Interests of any
other Person or any agreement to make any such acquisition (including, without
limitation, any "short sale" or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another Person subject
to an understanding or agreement, contingent or otherwise, to resell such
Property to such Person, but excluding any such advance, loan or extension of
credit having a term not exceeding ninety (90) days representing the purchase
price of inventory or supplies sold by such Person in the ordinary course of
business) or (c) the entering into of any guarantee of, or other contingent
obligation (including the deposit of any Equity Interests to be sold) with
respect to, Debt or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.
"Issuing Bank" means JPMorgan and each Lender that agrees to act as an
issuer of Letters of Credit hereunder at the request of the Borrower, in each
case, in its capacity as an issuer of Letters of Credit hereunder, and its
successors in such capacity as provided in Section 2.08(i). Any Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of such Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
"LC Commitment" at any time means Fifty Million dollars ($50,000,000).
"LC Disbursement" means a payment made by any Issuing Bank pursuant to a
Letter of Credit issued by such Issuing Bank.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
and unexpired stated amount of all outstanding Letters of Credit at such time
plus (b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.
"Lenders" means the Persons listed on Annex I, 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.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Letter of Credit Agreements" means all letter of credit applications
and other agreements (including any amendments, modifications or supplements
thereto) submitted by the Borrower, or entered into by the Borrower, with any
Issuing Bank relating to any Letter of Credit issued by such Issuing Bank.
14
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"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, all Letter of Credit
Agreements, the Letters of Credit and the Security Instruments.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Majority Lenders" means, at any time while no Loans or LC Exposure is
outstanding, Lenders having at least fifty and one tenth percent (50.1%) of the
Aggregate Maximum Credit Amounts; and at any time while any Loans or LC Exposure
is outstanding, Lenders holding at least fifty and one tenth percent (50.1%) of
the outstanding aggregate principal amount of the Loans or participation
interests in Letters of Credit (without regard to any sale by a Lender of a
participation in any Loan under Section 12.04(c)).
"Master Separation Agreement" means the Master Separation Agreement
dated as of July 3, 2002 between the Borrower and PLX.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, Property or financial condition of the Borrower and the
Restricted Subsidiaries taken as a whole, (b) the validity or enforceability of
any of the Loan Documents taken as a whole or
15
the ability of the Borrower, any Restricted Subsidiary or any Guarantor to
perform any of its obligations under any Loan Document or (c) the rights and
remedies of or benefits available to the Administrative Agent, any Issuing Bank
or any Lender under any Loan Document.
"Material Indebtedness" means Debt (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Restricted Subsidiaries in an aggregate principal
amount exceeding $10,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of the Borrower or any Restricted
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time.
"Maturity Date" means April 4, 2006.
"Maximum Credit Amount" means, as to each Lender, the amount set forth
opposite such Lender's name on Annex I under the caption "Maximum Credit
Amounts", as the same may be (a) reduced or terminated from time to time in
connection with a reduction or termination of the Aggregate Maximum Credit
Amounts pursuant to Section 2.06(b) or (b) modified from time to time pursuant
to any assignment permitted by Section 12.04(b).
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
"Mortgaged Property" means any Property owned by the Borrower or any
Guarantor which is subject to the Liens existing and to exist under the terms of
the Security Instruments.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in section 3(37) or 4001 (a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to the sale of any Equity
Interests of the Borrower, all cash received by the Borrower or any of its
Restricted Subsidiaries from such sale after payment of, or provision for, all
underwriter fees and expenses, SEC and blue sky fees, printing costs, fees and
expenses of accountants, lawyers and other professional advisors, brokerage
commissions and other out-of-pocket fees and expenses actually incurred in
connection with such sale of Equity Interests.
"New Borrowing Base Notice" has the meaning assigned such term in
Section 2.07(d).
"Non-Recourse Debt" means any Debt of any Unrestricted Subsidiary or
other Person in which the Borrower or a Restricted Subsidiary made an Investment
permitted by Section 9.05(j), in each case in respect of which: (a) the holder
or holders thereof (i) shall have recourse only to, and shall have the right to
require the obligations of such Unrestricted Subsidiary or such Person to be
performed, satisfied, and paid only out of, the Property of such Unrestricted
Subsidiary or such Person and/or one or more of its Subsidiaries (but only to
the extent that such Subsidiaries are Unrestricted Subsidiaries or not
Subsidiaries of the Borrower) and/or any other Person (other than Borrower
and/or any Restricted Subsidiary) and (ii) shall have no direct or indirect
recourse (including by way of guaranty, support or indemnity) to the Borrower or
any Restricted Subsidiary or to any of the Property of Borrower or any
Restricted Subsidiary, whether for
16
principal, interest, fees, expenses or otherwise; and (b) the terms and
conditions relating to the non-recourse nature of such Debt are in form and
substance reasonably acceptable to the Administrative Agent.
"Notes" means the promissory notes of the Borrower described in Section
2.02(d) and being substantially in the form of Exhibit A, together with all
amendments, modifications, replacements, extensions and rearrangements thereof.
"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, transportation,
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 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.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or Property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement and any other Loan Document.
"Participant" has the meaning set forth in Section 12.04(c)(i).
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Additional Senior Subordinated Notes" means senior
subordinated notes which may be issued by the Borrower pursuant to the 2002
Senior Subordinated Indenture or otherwise on or prior to May 1, 2004, subject
to and in accordance with the terms hereof, in an aggregate principal amount not
to exceed $200,000,000, having a stated coupon not in excess of
17
8-3/4%, a final maturity no earlier than seven years from the Effective Date and
other terms substantially similar in all material respects to the 2002 Senior
Subordinated Notes and the 2002 Senior Subordinated Indenture or which are
otherwise satisfactory to the Administrative Agent.
"Permitted Additional Senior Subordinated Indenture" means the indenture
among the Borrower, as issuer, any subsidiary guarantors party thereto and a
trustee, pursuant to which Permitted Additional Senior Subordinated Notes are
issued, as amended or supplemented pursuant to Section 9.04(b).
"Permitted Holders" means (i) Xxxxx X. Xxxxxx and his spouse and lineal
descendants, their respective estates or legal representatives, (ii) trusts
created for the benefit of such Persons and (iii) entities of which 80% or more
of the Equity Interest having ordinary voting power is directly or indirectly
owned by an of the preceding Persons.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plains E&P Company" means Plains E&P Company, a Delaware corporation.
"PLX" means Plains Resources Inc., a Delaware corporation.
"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 the Borrower, a Subsidiary 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 the Borrower or a Subsidiary or an ERISA
Affiliate.
"Point Xxxxxxxx Partnerships" means the following partnerships of which
Xxxxxxxx Inc. is a managing general partner: (i) Gaviota Gas Plant Company, (ii)
Point Xxxxxxxx Natural Gas Line Company, (iii) Point Xxxxxxxx Pipeline Company
and (iv) Point Xxxxxxxx Terminal Company.
"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.
"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.
"Proposed Borrowing Base" has the meaning assigned to such term in
Section 2.07(c)(i).
18
"Proposed Borrowing Base Notice" has the meaning assigned to such term
in Section 2.07(c)(ii).
"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.
"Redetermination Date" means, with respect to any Scheduled
Redetermination or any Interim Redetermination, the date that the redetermined
Borrowing Base related thereto becomes effective pursuant to Section 2.07(d).
"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 attorneys, accountants and experts of such Person and such Person's
Affiliates.
"Remedial Work" has the meaning assigned such term in Section 8.10(a).
"Reserve Report" means a report, in form and substance reasonably
satisfactory to the Administrative Agent, setting forth, as of each January 1st
or July 1st (or such other date in the event of an Interim Redetermination) 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 pricing
assumptions consistent with SEC reporting 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 Payment" means (a) any dividend or other distribution
(whether in cash, securities or other Property) with respect to any Equity
Interests in the Borrower, 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 in the Borrower or any option, warrant or other right
to acquire any such Equity Interests in the Borrower or (b) any payment or other
distribution in respect of any indemnity obligation of the Borrower or any of
its Subsidiaries under the Master Separation Agreement, the Tax Allocation
Agreement or any other Spin-off Document.
"Restricted Subsidiary" means any Subsidiary of the Borrower that is not
an Unrestricted Subsidiary.
19
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Loans and its
LC Exposure at such time.
"Scheduled Redetermination" has the meaning assigned such term in
Section 2.07(b).
"Scheduled Redetermination Date" means the date on which a Borrowing
Base that has been redetermined pursuant to a Scheduled Redetermination becomes
effective as provided in Section 2.07(d).
"SEC" means the Securities and Exchange Commission or any successor
Governmental Authority.
"Security Instruments" means the Guaranty Agreement, mortgages, deeds of
trust and other agreements, instruments or certificates described or referred to
in Exhibit C-1, and any and all other agreements, instruments 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, this Agreement, or reimbursement obligations under the
Letters of Credit, as such agreements may be amended, modified, supplemented or
restated from time to time.
"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.
"Spin-off Documents" means the Transition Agreements and all other
agreements, instruments and documents executed in connection therewith.
"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 (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) 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.
"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
20
or controlled by the Borrower or one or more of its Subsidiaries or by the
Borrower and one or more of its Subsidiaries and (b) any partnership of which
the Borrower or any of its Subsidiaries is a general partner other than the
Point Xxxxxxxx Partnerships. Unless otherwise indicated herein, each reference
to the term "Subsidiary" shall mean a Subsidiary of the Borrower.
"Super-majority Lenders" means, at any time while no Loans or LC
Exposure is outstanding, Lenders having at least sixty-six and two thirds
percent (66-2/3%) of the Aggregate Maximum Credit Amounts; and at any time while
any Loans or LC Exposure is outstanding, Lenders holding at least sixty-six and
two thirds percent (66-2/3%) of the outstanding aggregate principal amount of
the Loans or participation interests in such Letters of Credit (without regard
to any sale by a Lender of a participation in any Loan under Section 12.04(c)).
"Swap Agreement" means any agreement with respect to any swap, cap,
collar, 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 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
the Borrower or the Subsidiaries 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.
"Tangible Net Worth" means, at any date, the consolidated net worth of
the Borrower and its Consolidated Restricted Subsidiaries after subtracting
therefrom the aggregate amount of treasury stock, goodwill, deferred development
costs, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks and brand names and all other intangible assets of the Borrower
and its Consolidated Restricted Subsidiaries classified as such under GAAP.
"Target" means 3Tec Energy Corporation, a Delaware corporation.
"Tax Allocation Agreement" means the Tax Allocation Agreement dated as
of July 3, 2002 between the Borrower and PLX.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" means the earlier of the Maturity Date and the date
of termination of the Commitments.
21
"Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transactions" means, with respect to (a) the Borrower, the execution,
delivery and performance by the Borrower of this Agreement, each other Loan
Document, and each Acquisition Document to which it is a party, the Acquisition,
the borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder, and the grant of Liens by the Borrower on Mortgaged
Properties and other Properties pursuant to the Security Instruments and (b)
each Guarantor, the execution, delivery and performance by such Guarantor of
each Loan Document, Acquisition Document to which it is a party, the
Acquisition, the guaranteeing of the Indebtedness and the other obligations
under the Guaranty Agreement by such Guarantor and such Guarantor's grant of the
security interests and provision of collateral thereunder, and the grant of
Liens by such Guarantor on Mortgaged Properties and other Properties pursuant to
the Security Instruments.
"Transition Agreements" means the Master Separation Agreement, the
Employee Matters Agreement, between the Borrower and PLX, dated as of July 3,
2002, the Plains Resources Inc. Transition Services Agreement, between the
Borrower and PLX, dated as of July 3, 2002, the Plains Exploration & Production
Company, L.P. Transition Services Agreement, between the Borrower and PLX, dated
as of July 3, 2002, the Technical Services Agreement, among the Borrower, PLX
and Calumet Florida, L.L.C., dated as of July 3, 2002, the Intellectual Property
Agreement, between the Borrower and PLX, dated as of July 3, 2002, and the Tax
Allocation Agreement, each as amended or supplemented from time to time in
compliance with the terms of the 2002 Senior Subordinated Indenture.
"2002 Senior Subordinated Indenture" means that certain Indenture dated
as of July 3, 2002, among the Borrower and Plains E&P Company, as co-issuers,
the Subsidiary Guarantors party thereto and JPMorgan, as trustee, pursuant to
which the 2002 Senior Subordinated Notes are issued, as hereafter amended or
supplemented pursuant to Section 9.04(b).
"2002 Senior Subordinated Notes" means the $200,000,000 8-3/4% senior
subordinated notes due 2012 issued by the Borrower and Plains E&P Company, as
co-issuers.
"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.
22
"Unrestricted Subsidiary" means any Subsidiary of the Borrower
designated as such on Schedule 7.15 or which the Borrower has designated in
writing to the Administrative Agent to be an Unrestricted Subsidiary pursuant to
Section 9.06.
"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
or one or more of the Wholly-Owned Subsidiaries or by the Borrower and one or
more of the Wholly-Owned Subsidiaries.
Section 1.03 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 herein),
(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 herein), (d) the words "herein", "hereof" and "hereunder", and words
of similar import, shall be construed to refer to this 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 accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Administrative Agent or the
Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis
consistent with the Financial Statements except for changes in which Borrower's
independent certified public accountants concur and which are disclosed to
Administrative Agent on the next date on which financial statements are required
to be delivered to the Lenders pursuant to Section 8.01(a); provided that,
unless the Borrower and the Majority Lenders shall otherwise agree in writing,
no such change shall modify or affect the manner in which compliance with the
covenants contained herein is computed such that all such computations shall be
conducted utilizing financial information presented consistently with prior
periods.
23
ARTICLE II
THE CREDITS
Section 2.01 Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Borrower during the
Availability Period in an aggregate principal amount that will not result in (a)
such Lender's Revolving Credit Exposure exceeding such Lender's Commitment or
(b) the total Revolving Credit Exposures exceeding the total Commitments. Within
the foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, repay and reborrow the Loans.
Section 2.02 Loans and Borrowings.
(a) Borrowings; Several Obligations. Each Loan shall be made
as part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments are several and no Lender
shall be responsible for any other Lender's failure to make Loans as required.
(b) Types of Loans. Subject to Section 3.03, each Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option may 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. No such designation or transfer shall result in any
liability on the part of the Borrower for increased costs or expenses resulting
solely from such designation or transfer (except any such transfer which is made
by a Lender pursuant to Section 5.04 or Section 5.05, or otherwise for the
purpose of complying with any Governmental Requirement). Increased costs for
expenses resulting from a change in law occurring subsequent to any such
designation or transfer shall be deemed not to result solely from such
designation or transfer.
(c) Minimum Amounts; Limitation on Number of Borrowings. At
the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. At the time that each ABR Borrowing is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $1,000,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.08(e).
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of eight (8) Eurodollar
Borrowings outstanding. Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.
(d) Notes. The Loans made by each Lender shall be evidenced
by a single promissory note of the Borrower in substantially the form of Exhibit
A, dated, in the case of (i) any Lender party hereto as of the date of this
Agreement, as of the Effective Date or (ii) any
24
Lender that becomes a party hereto pursuant to an Assignment and Assumption, as
of the effective date of the Assignment and Assumption, payable to the order of
such Lender in a principal amount equal to its Maximum Credit Amount as in
effect on such date, and otherwise duly completed. In the event that any
Lender's Maximum Credit Amount increases or decreases for any reason (whether
pursuant to Section 2.06, Section 12.04(b) or otherwise), the Borrower shall
deliver or cause to be delivered on the effective date of such increase or
decrease, a new Note payable to the order of such Lender in a principal amount
equal to its Maximum Credit Amount after giving effect to such increase or
decrease, and otherwise duly completed. The date, amount, Type, interest rate
and, if applicable, Interest Period of each Loan made by each Lender, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books for its Note, and, prior to any transfer, may be endorsed by
such Lender on a schedule attached to such Note or any continuation thereof or
on any separate record maintained by such Lender. Failure to make any such
notation or to attach a schedule shall not affect any Lender's or the Borrower's
rights or obligations in respect of such Loans or affect the validity of such
transfer by any Lender of its Note.
Section 2.03 Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York City time, on
the date of the proposed Borrowing; provided that no such notice shall be
required for any deemed request of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as provided in Section 2.08(e). Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the
initial Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period";
(v) the amount of the then effective Borrowing Base,
the current total Revolving Credit Exposures (without regard to the requested
Borrowing) and the pro forma total Revolving Credit Exposures (giving effect to
the requested Borrowing); and
(vi) the location and number of the Borrower's
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar
25
Borrowing, then the Borrower shall be deemed to have selected an Interest Period
of one month's duration. Each Borrowing Request shall constitute a
representation that the amount of the requested Borrowing shall not cause the
total Revolving Credit Exposures to exceed the total Commitments (i.e., the
lesser of the Aggregate Maximum Credit Amounts and the then effective Borrowing
Base).
Promptly following receipt of a Borrowing Request in accordance with this
Section 2.03, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
Section 2.04 Interest Elections.
(a) Conversion and Continuance. Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section 2.04. The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.
(b) Interest Election Requests. To make an election pursuant
to this Section 2.04, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
(c) Information in Interest Election Requests. Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election
Request applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
Section 2.04(c)(iii) and (iv) shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant
to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
26
(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Notice to Lenders by the Administrative Agent. Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
(e) Effect of Failure to Deliver Timely Interest Election
Request and Events of Default on Interest Election. If the Borrower fails to
deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing: (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing (and any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
Section 2.05 Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in Houston,
Texas and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.08(e) shall be remitted by the Administrative Agent to
the Issuing Bank that made such LC Disbursement.
(b) Presumption of Funding by the Lenders. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing 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 in
accordance with Section 2.05(a) 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 applicable Borrowing available to the
Administrative Agent, 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
27
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.
Section 2.06 Termination and Reduction of Aggregate Maximum Credit
Amounts.
(a) Scheduled Termination of Commitments. Unless previously
terminated, the Commitments shall terminate on the Maturity Date. If at any time
the Aggregate Maximum Credit Amounts or the Borrowing Base is terminated or
reduced to zero, then the Commitments shall terminate on the effective date of
such termination or reduction.
(b) Optional Termination and Reduction of Aggregate Credit
Amounts.
(i) The Borrower may at any time terminate, or from
time to time reduce, the Aggregate Maximum Credit Amounts; provided that (A)
each reduction of the Aggregate Maximum Credit Amounts shall be in an amount
that is an integral multiple of $1,000,000 and not less than $5,000,000 and (B)
the Borrower shall not terminate or reduce the Aggregate Maximum Credit Amounts
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 3.04(c), the total Revolving Credit Exposures would exceed the
total Commitments.
(ii) The Borrower shall notify the Administrative
Agent of any election to terminate or reduce the Aggregate Maximum Credit
Amounts under Section 2.06(b)(i) at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section 2.06(b)(ii) shall be
irrevocable. Any termination or reduction of the Aggregate Maximum Credit
Amounts shall be permanent and may not be reinstated. Each reduction of the
Aggregate Maximum Credit Amounts shall be made ratably among the Lenders in
accordance with each Lender's Applicable Percentage.
Section 2.07 Borrowing Base.
(a) Initial Borrowing Base. For the period from and
including the Effective Date to but excluding the first Redetermination Date,
the amount of the Borrowing Base shall be $425,000,000; provided that if the
Borrower or any Restricted Subsidiary sells or otherwise disposes of (including
Casualty Events) any Oil and Gas Property or any Restricted Subsidiary owning
Oil and Gas Properties included in the most recently delivered Reserve Report
during the period commencing on the date hereof to but excluding the Effective
Date, and such Property has a fair market value in excess of $15,000,000 (as
reasonably determined by the board of directors of the Borrower and, if
requested by the Administrative Agent, the Borrower shall deliver a certificate
of a Responsible Officer of the Borrower certifying to that effect),
individually or in the aggregate, then the Borrowing Base shall be reduced,
effective immediately upon such sale or disposition, by an amount equal to the
value, if any, assigned such Property in the most recently delivered Reserve
Report. Notwithstanding the foregoing, the Borrowing Base may be subject to
further adjustments from time to time pursuant to Section 2.07(e), Section
8.13(c) or Section 9.13.
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(b) Scheduled and Interim Redeterminations. Subject to
Section 2.07(d), the Borrowing Base shall be redetermined (a "Scheduled
Redetermination") on May 1st and November 1st of each year, commencing November
1, 2003. In addition, the Borrower may, by notifying the Administrative Agent
thereof, and the Administrative Agent may, at the direction of the
Super-majority Lenders, by notifying the Borrower thereof, one time during any
12-month period, each elect to cause the Borrowing Base to be redetermined
between Scheduled Redeterminations (an "Interim Redetermination") in accordance
with this Section 2.07.
(c) Scheduled and Interim Redetermination Procedure.
(i) Each Scheduled Redetermination and each Interim
Redetermination shall be effectuated as follows: Upon receipt by the
Administrative Agent of (A) the Reserve Report and the certificate
required to be delivered by the Borrower to the Administrative Agent, in
the case of a Scheduled Redetermination, pursuant to Section 8.12(a) and
(c), and, in the case of an Interim Redetermination, pursuant to Section
8.12(b) and (c), and (B) such other reports, data and supplemental
information, including, without limitation, the information provided
pursuant to Section 8.12(c), as may, from time to time, be reasonably
requested by the Majority Lenders (the Reserve Report, such certificate
and such other reports, data and supplemental information being the
"Engineering Reports"), the Administrative Agent shall evaluate the
information contained in the Engineering Reports and shall, in good
faith, propose a new Borrowing Base (the "Proposed Borrowing Base")
based upon such information and such other information (including,
without limitation, the status of title information with respect to the
Oil and Gas Properties as described in the Engineering Reports and the
existence of any other Debt) as the Administrative Agent deems
appropriate and consistent with its normal oil and gas lending criteria
as it exists at the particular time.
(ii) The Administrative Agent shall notify the
Borrower and the Lenders of the Proposed Borrowing Base (the "Proposed
Borrowing Base Notice"):
(A) in the case of a Scheduled
Redetermination (1) if the Administrative Agent shall have received the
Engineering Reports required to be delivered by the Borrower pursuant to Section
8.12(a) and (c) in a timely and complete manner, then on or before the April
15th and October 15th of such year following the date of delivery or (2) if the
Administrative Agent shall not have received the Engineering Reports required to
be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and
complete manner, then promptly after the Administrative Agent has received
complete Engineering Reports from the Borrower and has had a reasonable
opportunity to determine the Proposed Borrowing Base in accordance with Section
2.07(c)(i); and
(B) in the case of an Interim
Redetermination, promptly, and in any event, within fifteen (15) days after the
Administrative Agent has received the required Engineering Reports.
(iii) Any Proposed Borrowing Base that would increase
the Borrowing Base then in effect must be approved or deemed to have
been approved by all of the Lenders as provided in this Section
2.07(c)(iii); and any Proposed Borrowing Base that
29
would decrease or maintain the Borrowing Base then in effect must be
approved or be deemed to have been approved by the Super-majority
Lenders as provided in this Section 2.07(c)(iii). Upon receipt of the
Proposed Borrowing Base Notice, each Lender shall have fifteen (15) days
to agree with the Proposed Borrowing Base or disagree with the Proposed
Borrowing Base by proposing an alternate Borrowing Base. If at the end
of such fifteen (15) days, any Lender has not communicated its approval
or disapproval in writing to the Administrative Agent, such silence
shall be deemed to be an approval of the Proposed Borrowing Base. If, at
the end of such 15-day period, all of the Lenders, in the case of a
Proposed Borrowing Base that would increase the Borrowing Base then in
effect, or the Super-majority Lenders, in the case of a Proposed
Borrowing Base that would decrease or maintain the Borrowing Base then
in effect, have approved or deemed to have approved, as aforesaid, then
the Proposed Borrowing Base shall become the new Borrowing Base,
effective on the date specified in Section 2.07(d). If, however, at the
end of such 15-day period, all of the Lenders or the Super-majority
Lenders, as applicable, have not approved or deemed to have approved, as
aforesaid, then the Administrative Agent shall poll the Lenders to
ascertain the highest Borrowing Base then acceptable to a number of
Lenders sufficient to constitute all of the Lenders or the
Super-majority Lenders, as applicable, and such amount shall become the
new Borrowing Base, effective on the date specified in Section 2.07(d).
(d) Effectiveness of a Redetermined Borrowing Base. After a
redetermined Borrowing Base is approved or is deemed to have been approved by
all of the Lenders or the Super-majority Lenders, as applicable, pursuant to
Section 2.07(c)(iii), the Administrative Agent shall notify the Borrower and the
Lenders of the amount of the redetermined Borrowing Base (the "New Borrowing
Base Notice"), and such amount shall become the new Borrowing Base, effective
and applicable to the Borrower, the Agents, each Issuing Bank and the Lenders:
(i) in the case of a Scheduled Redetermination, (A)
if the Administrative Agent shall have received the Engineering Reports required
to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely
and complete manner, then on the May 1st or November 1st, as applicable
following such notice, or (B) if the Administrative Agent shall not have
received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on the
Business Day next succeeding delivery of such notice; and
(ii) in the case of an Interim Redetermination, on
the Business Day next succeeding delivery of such notice.
Such amount shall then become the Borrowing Base until the next Scheduled
Redetermination Date, the next Interim Redetermination Date or the next
adjustment to the Borrowing Base under Section 2.07(a), Section 2.07(e), Section
8.13(c) or Section 9.13, whichever occurs first. Notwithstanding the foregoing,
no Scheduled Redetermination or Interim Redetermination shall become effective
until the New Borrowing Base Notice related thereto is received by the Borrower.
(e) Reduction of Borrowing Base Upon Issuance of Permitted
Additional Senior Subordinated Notes. Notwithstanding anything to the contrary
contained herein, upon the
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issuance of any Permitted Additional Senior Subordinated Notes, which must be
issued, if at all, on or prior to May 1, 2004, the Borrowing Base then in effect
shall be reduced by an amount equal to the product of 0.30 multiplied by the
stated principal amount of such Permitted Additional Senior Subordinated Notes,
and the Borrowing Base as so reduced shall become the new Borrowing Base
immediately upon the date of such issuance, effective and applicable to the
Borrower, the Agents, each Issuing Bank and the Lenders on such date until the
next redetermination or modification thereof hereunder.
Section 2.08 Letters of Credit.
(a) General. Subject to the terms and conditions set forth
herein, the Borrower may request any Issuing Bank to issue dollar denominated
Letters of Credit for its own account or for the account of any of its
Restricted Subsidiaries, in a form reasonably acceptable to the Administrative
Agent and such Issuing Bank, at any time and from time to time during the
Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to any Issuing Bank and the Administrative Agent (not less than three (3)
Business Days in advance of the requested date of issuance, amendment, renewal
or extension) a notice:
(i) requesting the issuance of a Letter of Credit or
identifying the Letter of Credit issued by such Issuing Bank to be amended,
renewed or extended;
(ii) specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day);
(iii) specifying the date on which such Letter of
Credit is to expire (which shall comply with Section 2.08(c));
(iv) specifying the amount of such Letter of Credit;
(v) specifying the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit; and
(vi) specifying the amount of the then effective
Borrowing Base, the current total Revolving Credit Exposures (without regard to
the requested Letter of Credit or the requested amendment, renewal or extension
of an outstanding Letter of Credit) and the pro forma total Revolving Credit
Exposures (giving effect to the requested Letter of Credit or the requested
amendment, renewal or extension of an outstanding Letter of Credit).
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Each notice shall constitute a representation that, after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, (i) the LC
Exposure shall not exceed the LC Commitment and (ii) the total Revolving Credit
Exposures shall not exceed the total Commitments (i.e. the lesser of the
Aggregate Maximum Credit Amounts and the then effective Borrowing Base).
If requested by any Issuing Bank, the Borrower also shall submit a
letter of credit application on such Issuing Bank's standard form in connection
with any request for a Letter of Credit.
(c) Expiration Date. Each Letter of Credit shall expire at
or prior to the close of business on the earlier of (i) the date one year after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and (ii)
the date that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank that issues such
Letter of Credit or the Lenders, each Issuing Bank that issues a Letter of
Credit hereunder hereby grants to each Lender, and each Lender hereby acquires
from such Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of any Issuing Bank that issues a
Letter of Credit hereunder, such Lender's Applicable Percentage of each LC
Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the
date due as provided in Section 2.08(e), or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
Section 2.08(d) in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit issued by such Issuing Bank, the
Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent an amount equal to such LC Disbursement not later than 12:00 noon, New
York City time, on the date that such LC Disbursement is made, if the Borrower
shall have received notice of such LC Disbursement prior to 10:00 a.m., New York
City time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 12:00 noon, New
York City time, on (i) the Business Day that the Borrower receives such notice,
if such notice is received prior to 10:00 a.m., New York City time, on the day
of receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; provided that if such LC Disbursement is equal to or
greater than $1,000,000, the Borrower shall, subject to the conditions to
Borrowing set forth herein, be deemed to have requested, and the Borrower does
hereby request under such circumstances, that such LC Disbursement be financed
with an ABR Borrowing in an equivalent amount and, to the extent so
32
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Borrowing. For purposes of the first sentence of
Section 2.01, the amount of the ABR Borrowing shall be considered, but the
amount of the LC Disbursement to be concurrently reimbursed shall not be
considered. If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section
2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank that issued such
Letter of Credit the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this Section 2.08(e), the Administrative Agent shall distribute such
payment to the Issuing Bank that issued such Letter of Credit or, to the extent
that Lenders have made payments pursuant to this Section 2.08(e) to reimburse
such Issuing Bank, then to such Lenders and such Issuing Bank as their interests
may appear. Any payment made by a Lender pursuant to this Section 2.08(e) to
reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR
Loans as contemplated above) shall not constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in Section 2.08(e) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, any Letter of Credit Agreement or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
any Issuing Bank under a Letter of Credit issued by such Issuing Bank against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit or any Letter of Credit Agreement, or (iv) any other event
or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.08(f), constitute a legal or
equitable discharge of, or provide a right of setoff against, the Borrower's
obligations hereunder. Neither the Administrative Agent, the Lenders nor any
Issuing Bank, nor any of their Related Parties shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of any Issuing Bank; provided that the foregoing shall
not be construed to excuse any Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or
33
willful misconduct on the part of any Issuing Bank (as finally determined by a
court of competent jurisdiction), such Issuing Bank shall be deemed to have
exercised all requisite care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
that issued such Letter of Credit may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. Each Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit issued by such Issuing
Bank. Such Issuing Bank shall promptly notify the Administrative Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for payment and
whether such Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse such Issuing Bank and the
Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If any Issuing Bank shall make any LC
Disbursement, then, until the Borrower shall have reimbursed such Issuing Bank
for such LC Disbursement (either with its own funds or a Borrowing under Section
2.08(e)), the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Loans. Interest accrued pursuant to this Section 2.08(h) shall
be for the account of such Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to Section 2.08(e) to reimburse
such Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of an Issuing Bank. Any Issuing Bank may be
replaced or resign at any time by written agreement among the Borrower, the
Administrative Agent, such retiring or replaced Issuing Bank and, in the case of
a replacement, the successor Issuing Bank. The Administrative Agent shall notify
the Lenders of any such resignation or replacement of an Issuing Bank. At the
time any such resignation or replacement shall become effective, the Borrower
shall pay all unpaid fees accrued for the account of the retiring or replaced
Issuing Bank pursuant to Section 3.05(b). In the case of the replacement of an
Issuing Bank, from and after the effective date of such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the replaced
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to "Issuing Bank" shall be deemed to refer
to such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the resignation or
replacement of an Issuing Bank hereunder, the retiring or replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such resignation or replacement, but shall not be
required to issue additional Letters of Credit.
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(j) Cash Collateralization. If (i) any Event of Default
shall occur and be continuing and the Borrower receives notice from the
Administrative Agent or the Majority Lenders demanding the deposit of cash
collateral pursuant to this Section 2.08(j), or (ii) the Borrower is required to
pay to the Administrative Agent the excess attributable to an LC Exposure in
connection with any prepayment pursuant to Section 3.04(c), then the Borrower
shall deposit, in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to, in the case of an Event of Default, the LC Exposure, and in the case of a
payment required by Section 3.04(c), the amount of such excess as provided in
Section 3.04(c), as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower or any Restricted Subsidiary
described in Section 10.01(h) or Section 10.01(i). The Borrower hereby grants to
the Administrative Agent, for the benefit of each Issuing Bank and the Lenders,
an exclusive first priority and continuing perfected security interest in and
Lien on such account and all cash, checks, drafts, certificates and instruments,
if any, from time to time deposited or held in such account, all deposits or
wire transfers made thereto, any and all investments purchased with funds
deposited in such account, all interest, dividends, cash, instruments, financial
assets and other Property from time to time received, receivable or otherwise
payable in respect of, or in exchange for, any or all of the foregoing, and all
proceeds, products, accessions, rents, profits, income and benefits therefrom,
and any substitutions and replacements therefor. The Borrower's obligation to
deposit amounts pursuant to this Section 2.08(j) shall be absolute and
unconditional, without regard to whether any beneficiary of any such Letter of
Credit has attempted to draw down all or a portion of such amount under the
terms of a Letter of Credit, and, to the fullest extent permitted by applicable
law, shall not be subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower or any of its Subsidiaries may now
or hereafter have against any such beneficiary, any Issuing Bank, the
Administrative Agent, the Lenders or any other Person for any reason whatsoever.
Such deposit shall be held as collateral securing the payment and performance of
the Borrower's and the Guarantor's obligations under this Agreement and the
other Loan Documents. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse, on a pro rata basis, each Issuing Bank for LC Disbursements for which
it has not been reimbursed or, if the maturity of the Loans has been
accelerated, be applied to satisfy other obligations of the Borrower and the
Guarantors under this Agreement or the other Loan Documents. In the event of any
such payment by the Borrower of amounts contingently owing under outstanding
Letters of Credit and in the event that thereafter drafts or other demands for
payment complying with the terms of such Letters of Credit are not made on or
prior to the respective expiration dates thereof, the Administrative Agent
agrees, if no Event of Default is then continuing or if no other amounts are
then outstanding under this Agreement, the Notes or the Loan Documents, to remit
to the Borrower amounts for which the contingent obligations evidenced by the
Letters of Credit have ceased. If the Borrower is required to provide an amount
of cash collateral hereunder as a result of the
35
occurrence of an Event of Default, and the Borrower is not otherwise required to
pay to the Administrative Agent the excess attributable to an LC Exposure in
connection with any prepayment pursuant to Section 3.04(c), then such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
Section 3.01 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 on the Termination Date.
Section 3.02 Interest.
(a) ABR Loans. The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate plus the Applicable Margin, but in no
event to exceed the Highest Lawful Rate.
(b) Eurodollar Loans. The Loans comprising each Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Margin, but in no event to
exceed the Highest Lawful Rate.
(c) Post-Default Rate. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower or any Guarantor hereunder or under any other Loan Document is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to two percent (2%) plus the rate applicable to ABR Loans as
provided in Section 3.02(a), but in no event to exceed the Highest Lawful Rate.
(d) Interest Payment Dates. Accrued interest on each Loan
shall be payable in arrears on each Interest Payment Date for such Loan and on
the Termination Date; provided that (i) interest accrued pursuant to Section
3.02(c) shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than an optional prepayment of an ABR Loan prior
to the Termination Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment, and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion (but only to the extent so converted).
(e) Interest Rate Computations. All interest hereunder shall
be computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), except that interest
computed by reference to the Alternate Base Rate at times when the Alternate
Base Rate is based on the Prime Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate,
36
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error, and be binding
upon the parties hereto.
Section 3.03 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Majority
Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
of making or maintaining their Loans included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
Section 3.04 Prepayments.
(a) Optional Prepayments. The Borrower shall have the right
at any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with Section 3.04(b).
(b) Notice and Terms of Optional Prepayment. The Borrower
shall notify the Administrative Agent by telephone (confirmed by telecopy) of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three Business Days
before the date of prepayment, or (ii) in the case of prepayment of an ABR
Borrowing, not later than 12:00 noon, New York City time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 3.02.
(c) Mandatory Prepayments.
(i) If, after giving effect to any termination or
reduction of the Aggregate Maximum Credit Amounts pursuant to Section 2.06(b),
the total Revolving Credit Exposures exceeds the total Commitments, then the
Borrower shall (A) prepay the Borrowings
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on the date of such termination or reduction in an aggregate principal amount
equal to such excess, and (B) if any excess remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(j).
(ii) Upon any redetermination of or adjustment to the
amount of the Borrowing Base in accordance with Section 2.07 or Section 8.13(c),
if the total Revolving Credit Exposures exceeds the redetermined or adjusted
Borrowing Base, then the Borrower shall (A) prepay the Borrowings in an
aggregate principal amount equal to such excess, and (B) if any excess remains
after prepaying all of the Borrowings as a result of an LC Exposure, pay to the
Administrative Agent on behalf of the Lenders an amount equal to such excess to
be held as cash collateral as provided in Section 2.08(j). The Borrower shall be
obligated to make such prepayment and/or deposit of cash collateral (X) in the
case of any reduction of the Borrowing Base as a result of the issuance of
Permitted Additional Senior Subordinated Notes pursuant to Section 2.07(e), on
the date of issuance of such Permitted Additional Senior Subordinated Notes, and
(Y) in the case of any redetermination of or adjustment to the amount of the
Borrowing Base in accordance with Section 2.07 or Section 8.13(c) other than as
described in clause (X) of this Section 3.04(c)(ii), within sixty (60) days
following its receipt of the New Borrowing Base Notice in accordance with
Section 2.07(d) or the date the adjustment occurs; provided that all payments
required to be made pursuant to this Section 3.04(c)(ii) must be made on or
prior to the Termination Date.
(iii) Upon any adjustments to the Borrowing Base
pursuant to Section 9.13, if the total Revolving Credit Exposures exceeds the
Borrowing Base as adjusted, then the Borrower shall (A) prepay the Borrowings in
an aggregate principal amount equal to such excess, and (B) if any excess
remains after prepaying all of the Borrowings as a result of an LC Exposure, pay
to the Administrative Agent on behalf of the Lenders an amount equal to such
excess to be held as cash collateral as provided in Section 2.08(j). The
Borrower shall be obligated to make such prepayment and/or deposit of cash
collateral on the date it or any Subsidiary receives proceeds as a result of
such disposition; provided that all payments required to be made pursuant to
this Section 3.04(c)(iii) must be made on or prior to the Termination Date.
(iv) Each prepayment of Borrowings pursuant to this
Section 3.04(c) shall be applied, first, ratably to any ABR Borrowings then
outstanding, and, second, to any Eurodollar Borrowings then outstanding, and if
more than one Eurodollar Borrowing is then outstanding, to each such Eurodollar
Borrowing in order of priority beginning with the Eurodollar Borrowing with the
least number of days remaining in the Interest Period applicable thereto and
ending with the Eurodollar Borrowing with the most number of days remaining in
the Interest Period applicable thereto.
(v) Each prepayment of Borrowings pursuant to this
Section 3.04(c) shall be applied ratably to the Loans included in the prepaid
Borrowings. Prepayments pursuant to this Section 3.04(c) shall be accompanied by
accrued interest to the extent required by Section 3.02.
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(d) No Premium or Penalty. Prepayments permitted or required
under this Section 3.04 shall be without premium or penalty, except as required
under Section 5.02.
Section 3.05 Fees.
(a) Commitment Fees. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the applicable Commitment Fee Rate on the daily average amount
of the daily unused amount of the Commitment of such Lender during the period
from and including the Effective Date to but excluding the Termination Date.
Accrued commitment fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the Termination Date,
commencing on the first such date to occur after the date hereof. All commitment
fees shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(b) Letter of Credit Fees. The Borrower agrees to pay (i) to
the Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Lender's Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, (ii) to each Issuing Bank a
fronting fee, which shall accrue at the rate of 0.125% per annum on the average
daily amount of that portion of the LC Exposure attributable to such Issuing
Bank (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure attributable to such Issuing Bank,
provided that in no event shall such fee be less than $125 during any quarter,
and (iii) to each Issuing Bank, for its own account, its standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year, shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the Termination Date and any
such fees accruing after the Termination Date shall be payable on demand. Any
other fees payable to an Issuing Bank pursuant to this Section 3.05(b) shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(c) Administrative Agent Fees. The Borrower agrees to pay to
the Administrative Agent, for its own account, fees payable in the amounts and
at the times separately agreed upon between the Borrower and the Administrative
Agent.
(d) Ticking Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a ticking fee, which shall
accrue at a rate equal to 0.1875% on the daily average amount of the Borrowing
Base then in effect during the period from and including
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the date of this Agreement to but excluding the earlier of July 31, 2003 and the
Effective Date. Accrued ticking fees shall be payable in arrears on the earlier
of July 31, 2003 and the Effective Date. All ticking fees shall be computed on
the basis of a year of 365 days (or 366 days in a leap year), and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
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,
fees or reimbursement of LC Disbursements, or of amounts payable under Section
5.01, Section 5.02, Section 5.03 or otherwise) prior to 12:00 noon, New York
City time, on the date when due (for purposes of computing interest and fees,
each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day), in immediately available funds,
without defense, deduction, recoupment, set-off or counterclaim. Fees, once
paid, 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 payments
to be made directly to an Issuing Bank as expressly provided herein and 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) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.
(c) 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 or participations in
LC Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in LC
Disbursements 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 and participations in LC
Disbursements of other Lenders to the extent
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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 and participations in LC
Disbursements; 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(c) 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 or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this Section 4.01(c) 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 or any Issuing Bank 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 or such Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or such Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or such Issuing Bank 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 2.05(b), Section 2.08(d), Section 2.08(e) or 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 Sections until all such unsatisfied obligations are fully paid.
Section 4.04 Disposition of Proceeds. The Security Instruments
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 Mortgaged Property. 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 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
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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 Restricted Subsidiaries.
ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
Section 5.01 Increased Costs.
(a) Eurodollar Changes in Law. If any Change in Law shall:
(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, but not
including Excluded Taxes), 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 or any Issuing Bank
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 or such Issuing
Bank's capital or on the capital of such Lender's or such Issuing Bank's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such Issuing Bank, to a level below that which such Lender or
such Issuing Bank or such Lender's or such Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or such Issuing Bank's policies and the policies of such Lender's or
such Issuing Bank's holding company with respect to capital adequacy), then from
time to time the Borrower will pay to such Lender or such Issuing Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
such Issuing Bank or such Lender's or such Issuing Bank's holding company for
any such reduction suffered.
(c) Certificates. A certificate of a Lender or any Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
such Issuing Bank 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 or such
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
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(d) Effect of Failure or Delay in Requesting Compensation.
Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this Section 5.01 shall not constitute a waiver of such
Lender's or such Issuing Bank's right to demand such compensation; provided that
the Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section 5.01 for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or such Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or such Issuing Bank'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 180-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, (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified in
any notice delivered pursuant hereto or (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 5.04(b), then, in any
such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event (exclusive of any lost profits or opportunity
costs). 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 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) Payments Free of Taxes. Any and all payments by or on
account of any obligation of the Borrower or any Guarantor under any Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 5.03(a)), the Administrative Agent, Lender or Issuing Bank
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the
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Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes by the Borrower. The Borrower
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
(c) Indemnification by the Borrower. The Borrower shall
indemnify the Administrative Agent, each Lender and each Issuing Bank, within 10
days after written demand therefor, for the full amount of any Indemnified Taxes
or Other Taxes paid by the Administrative Agent, such Lender or such Issuing
Bank, as the case may be, on or with respect to any payment by or on account of
any obligation of the Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section 5.03) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority; provided that the Borrower shall not be required to
indemnify the Administrative Agent, any Lender or any Issuing Bank for any
amounts under this Section 5.03(c) to the extent that such Person fails to
notify the Borrower of its intent to make a claim for indemnification under this
Section 5.03(c) within 180 days after a claim is asserted against such Person by
the relevant Governmental Authority. A certificate of the Administrative Agent,
a Lender or an Issuing Bank as to the amount of such payment or liability under
this Section 5.03 shall be delivered to the Borrower and shall be conclusive
absent manifest error.
(d) Evidence of Payments. As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental
Authority, the Borrower shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to
an exemption from or reduction of 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
other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
(f) Refunds. Should any Lender or the Administrative Agent
receive any refund, credit or deduction from any taxing authority to which such
Lender or the Administrative Agent would not be entitled but for the
indemnification or payment of additional amounts pursuant to this Section 5.03
(it being understood that the decision as to whether or not to claim, and if
claimed, as to the amount of any such refund, deduction or credit shall be made
by such Lender or the Administrative Agent, as the case may be, in its sole
discretion), such Lender or the Administrative Agent, as the case may be,
thereupon shall repay to the Borrower an amount with respect to such refund,
credit or deduction equal to any net reduction in taxes actually obtained by
such Lender or the Administrative Agent as is attributable to such refund,
credit or deduction.
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Section 5.04 Mitigation Obligations; Replacement of Lenders.
(a) 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
solely as a result of such designation or assignment.
(b) Replacement of Lenders. 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, or if any Lender defaults in its obligation
to fund Loans hereunder or if any Lender has asserted that any adoption or
change of the type described in Section 5.05 has occurred, 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) if
such assignee is not a Lender, 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 and participations in LC
Disbursements, 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.
Section 5.05 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its obligation to make or maintain Eurodollar
Loans either generally or having a particular Interest Period hereunder, then
(a) such Lender shall promptly notify the Borrower and the Administrative Agent
thereof and such Lender's obligation to make such Eurodollar Loans shall be
suspended (the "Affected Loans") until such time as such Lender may again make
and maintain such Eurodollar Loans and (b) all Affected Loans which would
otherwise be made by such Lender shall be made instead as ABR Loans (and, if
such Lender so requests by notice to the Borrower and the Administrative Agent,
all Affected Loans of such Lender then outstanding shall be automatically
converted into ABR Loans on the date specified by such Lender in such notice)
and, to the extent that Affected Loans are so made as (or converted into) ABR
Loans, all
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payments of principal which would otherwise be applied to such Lender's Affected
Loans shall be applied instead to its ABR Loans.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Effective Date. The obligations of the Lenders to make
Loans and of any Issuing Bank to issue Letters of Credit 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 for which invoices have been presented 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 of
each Guarantor dated as of the Effective Date setting forth (i) resolutions of
its board of directors with respect to the authorization of the Borrower or such
Guarantor to execute and deliver the Loan Documents to which the Borrower or
such Guarantor 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 bylaws 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.
(d) The Administrative Agent shall have received a
compliance certificate which shall be substantially in the form of Exhibit B,
duly and properly executed by a Responsible Officer and dated as of the date of
Effective Date.
(e) 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.
(f) The Administrative Agent shall have received duly
executed Notes payable to the order of each Lender in a principal amount equal
to its Maximum Credit Amount dated as of the Effective Date.
(g) On or before the Effective Date, the Administrative
Agent shall have received from each party thereto duly executed counterparts (in
such number as may be
46
requested by the Administrative Agent) of the Security Instruments, including
the Guaranty Agreement and the other Security Instruments described on Exhibit
C-1. In connection with the execution and delivery of the Security Instruments,
the Administrative Agent shall:
(i) be reasonably satisfied that the Security
Instruments create first priority, perfected Liens (subject only to Excepted
Liens identified in clauses (a) to (d) and (f) of the definition thereof, but
subject to the provisos at the end of such definition and the Liens described on
Schedule 9.03) on at least 80% of the total value of the Oil and Gas Properties
evaluated in the Initial Reserve Report; and
(ii) have received certificates, together with
undated, blank stock powers for each such certificate, representing all of the
issued and outstanding Equity Interests of each of the Guarantors.
(h) The Administrative Agent shall have received an opinion
dated as of the Effective Date of (i) Xxxxxxxxx & Xxxxxxxxx, L.L.P., special
counsel to the Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, and local counsel in each of the following states:
Illinois, California, Texas, Louisiana and any other jurisdictions requested by
the Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent.
(i) 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 7.13.
(j) The Administrative Agent shall have received a
certificate of a Responsible Officer of the Borrower dated as of the Effective
Date certifying that the Borrower has received all consents and approvals
required by Section 7.03.
(k) The Administrative Agent shall have received the
financial statements referred to in Section 7.04(a) and the Initial Reserve
Report accompanied by a certificate covering the matters described in Section
8.12(c).
(l) The Administrative Agent shall have received appropriate
UCC search certificates reflecting no prior Liens encumbering the Properties of
the Borrower and the Restricted Subsidiaries for each of the following
jurisdictions: Delaware, Texas, California, Illinois, Indiana, Louisiana, New
Mexico, Oklahoma and any other jurisdiction requested by the Administrative
Agent; other than those being assigned or released on or prior to the Effective
Date or Liens permitted by Section 9.03.
(m) The Administrative Agent shall have received a copy,
certified by a Responsible Officer as true and complete, of the Affiliate
Agreements, the Transition Agreements (together with all amendments, if any) and
the 2002 Senior Subordinated Indenture.
(n) The Administrative Agent shall have received evidence
satisfactory to it that the Borrower is repaying in full and terminating the
Existing Credit Agreement, and all credit facilities and funded Debt of the
Target are being repaid and terminated, contemporaneously with the initial Loans
under this Agreement, and the Administrative Agent
47
shall have received a certificate dated as of the Effective Date, signed by a
Responsible Officer, to that effect. The Administrative Agent shall have
received evidence satisfactory to it that all Liens associated with the Existing
Credit Agreement and all credit facilities and funded Debt of the Target have
been released or terminated contemporaneously with the making of such payments
and that arrangements satisfactory to the Administrative Agent has been made for
recording and filing of such releases.
(o) The Administrative Agent shall have received from the
Borrower schedules to this Agreement, in form and substance satisfactory to the
Administrative Agent.
(p) The Administrative Agent shall be satisfied that all
consents and approvals required for the consummation of the Acquisition,
including shareholders' consents and approvals, have been obtained and are in
full force and effect and that the Acquisition is being consummated
contemporaneously with the initial funding hereunder and all other conditions to
the Acquisition shall have been satisfied or waived in accordance with the terms
and conditions of the Acquisition Documents, and the Administrative Agent shall
have received a certificate dated as of the Effective Date of a Responsible
Officer of the Borrower certifying that (i) all such consents and approvals have
been obtained and are in full force and effect and (ii) attached thereto are
true and complete copies of the Acquisition Documents, the certificate of merger
related to the Acquisition certified by the Secretary of State of Delaware, and
all material SEC filings theretofore made by the Borrower in respect of the
Acquisition.
(q) The Administrative Agent shall have received a letter
from CT Corporation evidencing the appointment of CT Corporation as authorized
agent for service of process on each of the Borrower and each Obligor (as
defined in the Guaranty Agreement) under each Loan Document to which it is a
party.
(r) The Administrative Agent shall have received such other
documents as the Administrative Agent or special counsel to the Administrative
Agent may reasonably request.
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 and
of any Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 12.02) at or prior to 3:00 p.m., New York City time on July
31, 2003 (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 occasion of any Borrowing (including the initial funding)
(excluding any Loan made pursuant to Section 2.08(e)), and of any Issuing Bank
to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
48
(b) At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Material Adverse Effect shall have occurred.
(c) 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 in all material respects on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except to the extent any such representations
and warranties are expressly limited to an earlier date, in which case, on and
as of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, such representations and
warranties shall continue to be true and correct in all material respects as of
such specified earlier date.
(d) The making of such Loan or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, would not conflict
with, or cause any Lender or any Issuing Bank to violate or exceed, any
applicable Governmental Requirement, and no Change in Law shall have occurred,
and no litigation shall be pending or threatened, which does or, with respect to
any threatened litigation, seeks to, enjoin, prohibit or restrain, the making or
repayment of any Loan, the issuance, amendment, renewal, extension or repayment
of any Letter of Credit or any participations therein or the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
(e) The receipt by the Administrative Agent of a Borrowing
Request in accordance with Section 2.03 or a request for a Letter of Credit in
accordance with Section 2.08(b), as applicable.
Each Borrowing (excluding any Borrowing made pursuant to Section
2.08(e)) and each issuance, amendment, renewal or extension of any Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in Section 6.02(a)
through (e).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
On and after the Effective Date, the Borrower represents and warrants to
the Lenders that:
Section 7.01 Organization; Powers. Each of the Borrower and the
Restricted Subsidiaries 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
the Borrower's and each Guarantor's corporate powers and have been duly
authorized by all necessary corporate
49
and, if required, stockholder action. Each Loan Document and Acquisition
Document to which the Borrower and each Guarantor is a party has been duly
executed and delivered by the Borrower and such Guarantor and constitutes a
legal, valid and binding obligation of the Borrower and such Guarantor, as
applicable, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent transfer or conveyance,
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 and an implied covenant of good faith and fair dealing.
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 (i) the recording and filing of the
Security Instruments as required by this Agreement, (ii) filings, consents or
approvals required for the exercise by the Administrative Agent of its rights
under the Security Instruments, (iii) filings under the Securities and Exchange
Act of 1934, as amended, and filings of releases with respect to the collateral
securing the Existing Credit Agreement, (iv) routine filings to be made after
the date hereof to maintain "good standing" in such jurisdictions and to
maintain licenses and permits, (v) those filings, approvals and consents
disclosed in Schedule 7.03, and (vi) those third party approvals or consents
which, if not made or obtained, would not cause a Default hereunder, could not
reasonably be expected to have a Material Adverse Effect or do not have an
adverse effect on the enforceability of the Loan Documents, (b) will not violate
any applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any Restricted Subsidiary or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument, including the 2002 Senior Subordinated
Indenture and, if applicable, the Permitted Additional Senior Subordinated
Indenture, binding upon the Borrower or any Restricted Subsidiary or its
Properties, or give rise to a right thereunder to require any payment to be made
by the Borrower or such Restricted Subsidiary except as disclosed in Schedule
7.03 and (d) will not result in the creation or imposition of any Lien on any
Property of the Borrower or any Restricted Subsidiary (other than the Liens
created by the Loan Documents).
Section 7.04 Financial Condition; No Material Adverse Change.
(a) The Borrower has furnished to the Lenders on or before
the date of this Agreement (i) its combined balance sheet and statements of
income, shareholders' equity and cash flows as of and for the fiscal year ended
December 31, 2002, reported on by PricewaterhouseCoopers LLP, independent public
accountants, (ii) the Target's balance sheet and statements of income,
shareholders' equity and cash flows as of and for the fiscal year ended December
31, 2002, reported on by KPMG LLP, independent public accountants and (iii) the
summary unaudited combined pro forma financial data set forth in the joint proxy
statement/prospectus included in the Registration Statement on Form S-4 filed
with the SEC in connection with the Acquisition. Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of (A) the Borrower and its Consolidated Subsidiaries
and the Target and its Consolidated Subsidiaries and (B) the pro forma
consolidated financial condition of the Borrower, as of such dates and for such
periods in
50
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the unaudited quarterly financial statements.
(b) Since December 31, 2002, (i) there has been no material
adverse change in the business, operations, Property or financial condition, of
the Borrower and its Restricted Subsidiaries or the Target and its Subsidiaries,
if any, taken as a whole and (ii) the business of the Borrower and its
Restricted Subsidiaries and the Target and its Subsidiaries, if any, has been
conducted only in the ordinary course consistent with past business practices.
(c) Neither the Borrower nor any Restricted Subsidiary has
any material Debt (including Disqualified Capital Stock) other than, if and when
issued, Permitted Additional Senior Subordinated Notes, 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, as of the Effective Date, in the Financial Statements, and after
the Effective Date, in the financial statements furnished pursuant to Section
8.01.
(d) On the Effective Date, neither the Borrower nor any
Restricted Subsidiary is a party to any material agreement with PLX or any
Affiliate of PLX except for the Affiliate Agreements and the Transition
Agreements.
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 or any Restricted Subsidiary 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, (ii)
that involve any Loan Document, any Spin-off Document, any Acquisition Document
or the Transactions or (iii) that could impair the consummation of the
Acquisition on the time and in the manner contemplated by the Acquisition
Documents.
(b) Since the Effective Date, 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 disclosed on Schedule
7.06 and 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):
(a) neither any Property of the Borrower or any Restricted
Subsidiary 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 or any Restricted Subsidiary
nor the operations currently conducted thereon or, to the knowledge of the
Borrower, by any prior owner
51
or operator of such Property or operation, are in violation of or subject to any
existing, pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or to any remedial
obligations under Environmental Laws.
(c) all notices, permits, licenses, 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 each
Restricted Subsidiary, 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 each Restricted Subsidiary are in compliance with the terms and
conditions of all such notices, permits, licenses and similar authorizations.
(d) all hazardous substances, solid waste and oil and gas
waste, if any, generated at any and all Property of the Borrower or any
Restricted Subsidiary have in the past been transported, treated and disposed of
in accordance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the environment, and, to
the knowledge of the Borrower, all such transport carriers and treatment and
disposal facilities have been and are operating in compliance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment, and are not the subject of any existing,
pending or threatened action, investigation or inquiry by any Governmental
Authority in connection with any Environmental Laws.
(e) the Borrower has taken all steps reasonably necessary to
determine and has determined that no 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 or any Restricted Subsidiary
except in compliance with Environmental Laws and so as not to pose an imminent
and substantial endangerment to public health or welfare or the environment.
(f) to the extent applicable, all Property of the Borrower
and each Restricted Subsidiary 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) Each of the Borrower and each Restricted Subsidiary is
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 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.
52
(b) Neither the Borrower nor any Restricted Subsidiary is in
default nor has any event or circumstance occurred which, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default or would require the Borrower or a Restricted Subsidiary to
Redeem or make any offer to Redeem under any indenture, note, credit agreement
or instrument pursuant to which any Material Indebtedness is outstanding or by
which the Borrower or any Restricted Subsidiary or any of their Properties is
bound, except as described on Schedule 7.03.
(c) No Default has occurred and is continuing.
Section 7.08 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of, or subject to regulation under, the
Investment Company Act of 1940, as amended.
Section 7.09 Public Utility Holding Company Act. Neither the Borrower
nor any Subsidiary is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," or a "public utility" within the meaning of, or
subject to regulation under, the Public Utility Holding Company Act of 1935, as
amended.
Section 7.10 Taxes. Each of the Borrower and 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 or such Subsidiary, 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 and its Subsidiaries 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 7.11 ERISA. The Borrower and the ERISA Affiliates have
fulfilled their respective obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or any Plan or
Multiemployer Plan (other than to make contributions in the ordinary course of
business).
Section 7.12 Disclosure; No Material Misstatements. None of the
reports, financial statements, certificates or other written information
furnished by or on behalf of the Borrower or any Restricted Subsidiary 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 (other than
omissions that pertain to matters of a general economic nature or matters of
public knowledge that generally affect any of the industry segments of the
Borrower or its Subsidiaries); provided that, with respect to projected
financial
53
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time. There
is no fact peculiar to the Borrower or any Restricted Subsidiary 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 written statements furnished to the Administrative Agent or the
Lenders by or on behalf of the Borrower or any Restricted Subsidiary 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 the
Borrower and the Restricted Subsidiaries do not warrant that such opinions,
estimates and projections will ultimately prove to have been accurate.
Section 7.13 Insurance. The Borrower has, and has caused all 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. The Agents and the Lenders have been named as
additional insureds in respect of such liability insurance policies and the
Administrative Agent has been named as loss payee with respect to Property loss
insurance.
Section 7.14 Restriction on Liens. Except as disclosed on Schedule
7.14 and as permitted by Section 9.17, neither the Borrower nor any of the
Restricted Subsidiaries is a party to any material agreement or arrangement, 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 7.15 Subsidiaries. Except as set forth on Schedule 7.15 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 7.15, the Borrower
has no Subsidiaries. Schedule 7.15 identifies each Subsidiary as either
Restricted or Unrestricted, and each Restricted Subsidiary on such schedule is a
Wholly-Owned Subsidiary. The Borrower has no Foreign Subsidiaries.
Section 7.16 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 Plains Exploration &
Production Company; and the organizational identification number of the Borrower
in its jurisdiction of organization is 3569131 (or as set forth in a notice
delivered pursuant to Section 8.01(o) or Section 12.01(c)). 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(o) in accordance with Section 12.01(c)). Each
Restricted Subsidiary's jurisdiction of organization, name as listed in the
public records of its jurisdiction of organization, organizational
identification number in its
54
jurisdiction of organization, and the location of its principal place of
business and chief executive office is stated on Schedule 7.15 (or as set forth
in a notice delivered pursuant to Section 8.01(o)).
Section 7.17 Properties; Titles, Etc.
(a) Except as disclosed in Schedule 7.17, each of the
Borrower and the Restricted Subsidiaries 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 and Liens securing the Existing
Credit Agreement that are being contemporaneously extinguished on the date
hereof. After giving full effect to the Excepted 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.
(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 would
affect in any material respect the conduct of the business of the Borrower and
the Restricted Subsidiaries, taken as a whole.
(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
55
production of Hydrocarbons, with such exceptions as could not reasonably be
expected to have a Material Adverse Effect.
Section 7.18 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 Government
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
Government 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 its Restricted Subsidiaries, as applicable. 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 7.07 could not
reasonably be expect to have a Material Adverse Effect).
Section 7.19 Gas Imbalances, Prepayments. As of the Effective Date,
except as set forth on Schedule 7.19 or on the most recent certificate delivered
pursuant to Section 8.12(c), 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 one-half bcf of gas (on an mcf equivalent basis) in the
aggregate.
Section 7.20 Marketing of Production. Except for contracts listed and
in effect on the date hereof on Schedule 7.20, 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 90 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
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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 7.21 Swap Agreements. Schedule 7.21, as of the Effective
Date, and after the Effective Date, each report required to be delivered by the
Borrower pursuant to Section 8.01(f), sets forth, a true and complete list of
all Swap Agreements of the Borrower and each Restricted Subsidiary, 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 7.22 Use of Loans and Letters of Credit. The proceeds of the
Loans and the Letters of Credit shall be used to provide working capital for
exploration and production operations, to provide funds to refinance Debt under
the Existing Credit Agreement and Debt of the Target, to provide funding in
connection with the Acquisition and for general corporate purposes. The Borrower
and its Subsidiaries are not 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 or Letter of Credit will be used for any purpose which
violates the provisions of Regulations T, U or X of the Board.
Section 7.23 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 Borrower and the
Guarantors, taken as a whole, will exceed the aggregate Debt of the Borrower and
the Guarantors on a consolidated basis, as the Debt becomes absolute and
matures, (b) each of the Borrower and the Guarantors will not have incurred or
intended to incur, and does not believe that it will have incurred, Debt beyond
its ability to pay such Debt (after taking into account the timing and amounts
of cash to be received by each of the Borrower and the Guarantors 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 of the Borrower and the Guarantors will not have (and will have no
reason to believe that it will have thereafter) unreasonably small capital for
the conduct of its business.
Section 7.24 Designated Senior Indebtedness. The Indebtedness of the
Borrower constitutes "Senior Indebtedness" and "Designated Senior Indebtedness,"
and the Indebtedness of each Guarantor under the Loan Documents to which it is a
party constitutes "Guarantor Senior Indebtedness", in each case, under and as
defined in the 2002 Senior Subordinated Indenture and, if applicable, under the
Permitted Additional Senior Subordinated Indenture (using such similar terms as
therein defined).
Section 7.25 Acquisition. The copies of the Acquisition Documents
previously delivered by the Borrower to the Administrative Agent are complete
and accurate and have not been amended or modified in any manner, other than
pursuant to amendments or modifications previously delivered to the
Administrative Agent. None of the Borrower, PXP Gulf Coast Inc. or
57
the Target is in default in respect of any material term or obligation under any
Acquisition Document.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and 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 and all
Letters of Credit shall have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that on and after the Effective Date (other than the covenants and agreements
contained in Section 8.01 (other than Section 8.01(d)), Section 8.02, Section
8.12 and Section 8.15, with respect to which the Borrower covenants and agrees
with the Lenders on and after the date hereof):
Section 8.01 Financial Statements; Ratings Change; Other Information.
The Borrower will furnish to the Administrative Agent and each Lender:
(a) Annual Financial Statements. Within 120 days after the
end of each fiscal year of the Borrower, its audited consolidated balance sheet
and related statements of operations, stockholders' equity 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 PricewaterhouseCoopers
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. Within 60 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,
stockholders' equity 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), a certificate of a Financial Officer in substantially the form
of Exhibit B hereto (i) 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, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 9.01 and (iii)
stating whether any change in GAAP or in the application thereof has occurred
since the date of the audited financial
58
statements referred to in Section 7.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate.
(d) Certificate of Accounting Firm -- Defaults. Concurrently
with any delivery of financial statements under Section 8.01(a), a certificate
of the accounting firm that reported on such financial statements stating
whether they obtained knowledge during the course of their examination of such
financial statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines).
(e) Certificate of Financial Officer -- Consolidating
Information. If, at any time, all of the Consolidated Subsidiaries of the
Borrower are not Consolidated Restricted Subsidiaries, then 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 Consolidated Unrestricted Subsidiaries and the eliminating entries, in
such form as would be presentable to the auditors of the Borrower.
(f) Certificate of Financial Officer - Swap Agreements.
Concurrently with any delivery of financial statements under Section 8.01(a) and
Section 8.01(b), 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 the Borrower and each Restricted Subsidiary, 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 7.21, any margin
required or supplied under any credit support document, and the counterparty to
each such agreement.
(g) Certificate of Insurer -- Insurance Coverage.
Concurrently with any delivery of financial statements under Section 8.01(a), a
certificate of insurance coverage from each insurer 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.
(h) Other Accounting Reports. Promptly upon receipt thereof,
a copy of each other report or letter submitted to the Borrower or any of its
Subsidiaries by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Borrower or any such
Subsidiary, and a copy of any response by the Borrower or any such Subsidiary,
or the Board of Directors of the Borrower or any such Subsidiary, to such letter
or report.
(i) 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 or any
Subsidiary with the SEC or with any national securities exchange, or distributed
by the Borrower to its shareholders generally, as the case may be.
(j) 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 or indenture, loan or credit or other similar
59
agreement in respect of Material Indebtedness, other than this Agreement and not
otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 8.01.
(k) 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.
(l) 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
Subsidiary in accordance with Section 9.13, prior written notice of such
disposition, the price thereof and the anticipated date of closing.
(m) 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 action or proceeding that could reasonably be expected
to result in a Casualty Event.
(n) Issuance of Permitted Additional Senior Subordinated
Notes. In the event the Borrower intends to issue Permitted Additional Senior
Subordinated Notes, prior written notice of such intended offering therefor, the
amount thereof and the anticipated date of closing and will furnish a copy of
the preliminary offering memorandum (if any) and the final offering memorandum
(if any).
(o) Information Regarding Borrower and Guarantors. Prompt
written notice (and in any event within ten (10) days prior thereto) of any
change (i) in the Borrower or any Guarantor's corporate name or in the trade
name used to identify such Person in the conduct of its business or the
ownership of its Properties, (ii) in the location of the Borrower or any
Guarantor's 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.
(p) Ratings Change. Promptly after Xxxxx'x or S&P shall have
announced a change in the rating established or deemed to have been established
for the Index Debt or any other Material Indebtedness, written notice of such
rating change.
(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;
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(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that, if adversely determined,
could reasonably be expected to result in liability in excess of $2,500,000 per
claim 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 and its Subsidiaries in an
aggregate amount exceeding $2,500,000; and
(d) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
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 9.12.
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 its 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 or result in the seizure or levy of any Property of the Borrower
or any Subsidiary.
Section 8.05 Performance of Obligations under Loan Documents. The
Borrower will pay the Notes 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 practices
of the industry and in compliance with all applicable contracts and agreements
and in compliance with all Governmental Requirements, including,
61
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 all Property material to the conduct
of its business in good working order and condition, ordinary wear and tear
excepted preserve, maintain and keep in good repair, working order and
efficiency (ordinary wear and tear excepted) all of its material Oil and Gas
Properties and other material Properties, including, without limitation, all
equipment, machinery and facilities.
(c) promptly pay and discharge, or make reasonable and
customary 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 and will do all
other things necessary to keep unimpaired their rights with respect thereto and
prevent any forfeiture thereof or default thereunder.
(d) promptly perform or make reasonable and customary
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) operate its Oil and Gas Properties and other material
Properties or cause or make reasonable and customary efforts to cause such Oil
and Gas Properties and other material Properties to be operated in accordance
with the practices of the industry and in material compliance with all
applicable contracts and agreements and in compliance in all material respects
with all Governmental Requirements.
(f) to the extent the Borrower is not the operator of any
Property, the Borrower shall use 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 of the collateral
for the Loans shall be endorsed in favor of and made payable to the
Administrative Agent as its interests may appear and such 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
62
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 Subsidiary and each
Subsidiary's Properties and operations to comply, with all applicable
Environmental Laws, the breach of which could be reasonably expected to have a
Material Adverse Effect; (ii) not dispose of or otherwise release, and shall
cause each 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 Subsidiaries' Properties or any other Property to the
extent caused by the Borrower's or any of its 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 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 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 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 gas waste,
hazardous substance or solid waste on, under, about or from any of the
Borrower's or its 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
Subsidiary to establish and implement, such procedures as may be necessary to
continuously determine and assure that the Borrower's and its 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 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
63
such action will result in liability (whether individually or in the aggregate)
in excess of $10,000,000 per claim, not fully covered by insurance, subject to
normal deductibles.
(c) The Borrower will and will cause each Subsidiary to
provide environmental audits and tests in accordance with American Society of
Testing Materials standards upon request by the Administrative Agent and the
Lenders and no more than once per year in the absence of any Event of Default
(or as otherwise required to be obtained by the Administrative Agent or the
Lenders by any Governmental Authority), in connection with any future
acquisitions of Oil and Gas Properties or other Properties.
Section 8.11 Further Assurances.
(a) The Borrower at its 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 the Borrower or any Restricted
Subsidiary, as the case may be, in the Loan Documents, including the Notes, or
to further evidence and more fully describe the 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.
(a) On or before April 1st and October 1st of each year,
commencing October 1, 2003, the Borrower shall furnish to the Administrative
Agent and the Lenders a Reserve Report. The January 1 Reserve Report of each
year shall be prepared by or under the supervision of the chief engineer of the
Borrower who shall certify such Reserve Report to be true and accurate, and
shall be audited by one or more Approved Petroleum Engineers, and the July 1
Reserve Report of each year shall be prepared by or under the supervision of the
chief engineer of the Borrower who shall certify such Reserve Report to be true
and accurate and to have been prepared in accordance with the procedures used in
the immediately preceding January 1 Reserve Report.
(b) In the event of an Interim Redetermination, the Borrower
shall furnish to the Administrative Agent and the Lenders a Reserve Report
prepared by or under the supervision of the chief engineer of the Borrower who
shall certify such Reserve Report to be true and
64
accurate and to have been prepared in accordance with the procedures used in the
immediately preceding January 1 Reserve Report. For any Interim Redetermination
requested by the Administrative Agent or the Borrower pursuant to Section
2.07(b), the Borrower shall provide such Reserve Report with an "as of" date as
required by the Administrative Agent as soon as possible, but in any event no
later than thirty (30) days following the receipt of such request.
(c) With the delivery of each Reserve Report, the Borrower
shall provide to the Administrative Agent and the Lenders a certificate from a
Responsible Officer certifying that in all material respects: (i) to the best of
his knowledge the information contained in the Reserve Report and any other
information delivered in connection therewith is true and correct, except that
with respect to the projections in the Reserve Report, the Borrower only
represents that such projections were prepared in good faith based upon
assumptions believed to be reasonable at this time (ii) except as set forth in
Schedule 7.17, the Borrower or its Restricted Subsidiaries owns good and
defensible title to the Oil and Gas Properties evaluated in such Reserve Report
and such Properties are free of all Liens except for Liens permitted by Section
9.03, (iii) except as set forth on an exhibit to the certificate, on a net basis
there are no gas imbalances, take or pay or other prepayments in excess of the
volume specified in Section 7.19 with respect to its Oil and Gas Properties
evaluated in such Reserve Report which would require the Borrower or any
Restricted Subsidiary to deliver Hydrocarbons either generally or produced from
such Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor, (iv) none of their Oil and Gas Properties have
been sold since the date of the last Borrowing Base determination except as set
forth on an exhibit to the certificate, which certificate shall list all of its
Oil and Gas Properties sold and in such detail as reasonably required by the
Administrative Agent, (v) attached to the certificate is a list of all marketing
agreements entered into subsequent to the later of the date hereof or the most
recently delivered Reserve Report which the Borrower could reasonably be
expected to have been obligated to list on Schedule 7.20 had such agreement been
in effect on the date hereof and (vi) attached thereto is a schedule of the Oil
and Gas Properties evaluated by such Reserve Report that are Mortgaged
Properties and demonstrating the percentage of the Borrowing Base that the value
of such Mortgaged Properties represent in compliance with Section 8.14(a).
Section 8.13 Title Information.
(a) On or before the delivery to the Administrative Agent
and the Lenders of each Reserve Report required by Section 8.12(a), the Borrower
will deliver title information in form and substance acceptable to the
Administrative Agent covering enough of the Oil and Gas Properties evaluated by
such Reserve Report that were not included in the immediately preceding Reserve
Report, so that the Administrative Agent shall have received together with title
information previously delivered to the Administrative Agent, satisfactory title
information on at least 80% of the total value of the Oil and Gas Properties
evaluated by such Reserve Report.
(b) If the Borrower has provided title information for
additional Properties under Section 8.13(a), the Borrower shall, within 60 days
of notice from the Administrative Agent that title defects or exceptions exist
with respect to such additional Properties, either (i) cure any such title
defects or exceptions (including defects or exceptions as to priority) which are
not permitted by Section 9.03 raised by such information, (ii) substitute
acceptable Mortgaged
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Properties with no title defects or exceptions except for Excepted Liens (other
than Excepted Liens described in clauses (e), (g) and (h) of such definition)
having an equivalent value or (iii) deliver title information in form and
substance acceptable to the Administrative Agent so that the Administrative
Agent shall have received, together with title information previously delivered
to the Administrative Agent, satisfactory title information on at least 80% of
the value of the Oil and Gas Properties evaluated by such Reserve Report.
(c) If the Borrower is unable to cure any title defect
requested by the Administrative Agent or the Lenders to be cured within the
60-day period or the Borrower does not comply with the requirements to provide
acceptable title information covering 80% of the value of the Oil and Gas
Properties evaluated in the most recent Reserve Report, such default shall not
be a Default, but instead the Administrative Agent and/or the Majority Lenders
shall have the right to exercise the following remedy in their sole discretion
from time to time, and any failure to so exercise this remedy at any time shall
not be a waiver as to future exercise of the remedy by the Administrative Agent
or the Lenders. To the extent that the Administrative Agent or the Majority
Lenders are not satisfied with title to any Mortgaged Property after the 60-day
period has elapsed, such unacceptable Mortgaged Property, shall not count
towards the 80% requirement, and the Administrative Agent may send a notice to
the Borrower and the Lenders that the then outstanding Borrowing Base shall be
reduced by an amount as determined by the Majority Lenders to cause the Borrower
to be in compliance with the requirement to provide acceptable title information
on 80% of the value of the Oil and Gas Properties. This new Borrowing Base shall
become effective immediately after receipt of such notice.
Section 8.14 Additional Collateral; Additional Guarantors.
(a) In connection with each redetermination of the Borrowing
Base, the Borrower shall review the Reserve Report and the list of current
Mortgaged Properties (as described in Section 8.12(c)(vi)) to ascertain whether
the Mortgaged Properties represent at least 80% of the total value of the Oil
and Gas Properties evaluated in the most recently completed Reserve Report after
giving effect to exploration and production activities, acquisitions,
dispositions and production. In the event that the Mortgaged Properties do not
represent at least 80% of such total value, then the Borrower shall, and shall
cause its Restricted Subsidiaries to, grant, within thirty (30) days of delivery
of the certificate required under Section 8.12(c), to the Administrative Agent
as security for the Indebtedness a first-priority Lien interest (subject only to
Excepted Liens of the type described in clauses (a) to (d) and (f) of the
definition thereof, but subject to the provisos at the end of such definition)
on additional Oil and Gas Properties not already subject to a Lien of the
Security Instruments such that after giving effect thereto, the Mortgaged
Properties will represent at least 80% of such total value. All such Liens will
be created and perfected by and in accordance with the provisions of deeds of
trust, security agreements and financing statements or other Security
Instruments, all in form and substance reasonably satisfactory to the
Administrative Agent and in sufficient executed (and acknowledged where
necessary or appropriate) counterparts for recording purposes. In order to
comply with the foregoing, if any Restricted Subsidiary other than a Foreign
Subsidiary places a Lien on its Oil and Gas Properties and such Restricted
Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with
Section 8.14(b).
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(b) The Borrower shall cause each Domestic 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, promptly, but in any event no later than 30 days after the
formation or acquisition (or other similar event) of such Domestic Subsidiary,
(i) execute and deliver a supplement to the Guaranty Agreement executed by such
Domestic Subsidiary, (ii) pledge all of the Equity Interests of such Domestic
Subsidiary (including, without limitation, delivery of original stock
certificates evidencing the Equity Interests of such Domestic Subsidiary,
together with an appropriate undated stock powers for each certificate duly
executed in blank by the registered owner thereof) and (iii) execute and deliver
such other additional closing documents, certificates and legal opinions as
shall reasonably be requested by the Administrative Agent.
(c) In the event that the Borrower or any Domestic
Subsidiary becomes the owner of a Foreign Subsidiary, then the Borrower shall,
or shall cause such Domestic Subsidiary to, promptly, but in any event no later
than 30 days after the date of becoming an owner thereof, (i) pledge 65% of all
the Equity Interests of such Foreign Subsidiary (including, without limitation,
delivery of original stock certificates evidencing such Equity Interests of such
Foreign Subsidiary, together with appropriate stock powers for each certificate
duly executed in blank by the registered owner thereof) and (ii) execute and
deliver such other additional closing documents, certificates and legal opinions
as shall reasonably be requested by the Administrative Agent.
(d) Any Person that must guarantee the Indebtedness in order
for the Borrower to be in compliance with Section 9.04(b)(ii)(C) shall guarantee
the Indebtedness pursuant to the Guaranty Agreement. In connection with any such
guaranty, the Borrower shall, or shall cause such Person to, promptly, but in
any event no later than 30 days after the date required thereby, (A) execute and
deliver a supplement to the Guaranty Agreement executed by such Person, and (B)
execute and deliver such other additional closing documents, certificates and
legal opinions as shall reasonably be requested by the Administrative Agent. If
at any time such Person is not otherwise required to guarantee the Indebtedness
hereunder (whether pursuant to the other provisions of this Section 8.14 or
otherwise) or under any other Loan Document, then upon receipt by the
Administrative Agent of evidence satisfactory to it that such Person has been
fully and finally released from its guarantee obligations in respect of the 2002
Senior Subordinated Notes or the Permitted Additional Senior Subordinated Notes,
as the case may be, such Person shall be released from its guarantee obligations
with respect to the Indebtedness and the Administrative Agent shall, at the sole
cost and expense of the Borrower, execute such further documents and do all such
further acts so as to reasonably evidence such release.
Section 8.15 ERISA Compliance. The Borrower will promptly furnish
and will cause the Subsidiaries and any ERISA Affiliate to promptly furnish to
the Administrative Agent (i) promptly after the filing thereof with the United
States Secretary of Labor, the Internal Revenue Service or the PBGC, copies of
each annual and other report with respect to each Plan or any trust created
thereunder, (ii) immediately upon becoming aware of the occurrence of any ERISA
Event or of any "prohibited transaction," as described in section 406 of ERISA
or in section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by the President or the principal Financial
Officer, the Subsidiary or the ERISA Affiliate, as the case may be, specifying
the nature thereof, what action the Borrower, the Subsidiary or the
67
ERISA Affiliate is taking or proposes to take with respect thereto, and, when
known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, and (iii) 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 its Restricted Subsidiaries to be conducted in such a manner
(including, without limitation, by keeping separate books of account, furnishing
separate financial statements of Unrestricted Subsidiaries to creditors and
potential creditors thereof and by not permitting Properties of the Borrower and
its respective Restricted Subsidiaries 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) 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.
(c) will not permit any Unrestricted Subsidiary to hold any
Equity Interest in, or any Debt of, the Borrower or any Restricted Subsidiary.
ARTICLE IX
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and 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 and all Letters of
Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lenders that on and after
the Effective Date:
Section 9.01 Financial Covenants.
(a) Minimum Tangible Net Worth. The Borrower will not permit
its Tangible Net Worth at any time to be less than the sum of (i) 80% of its
Tangible Net Worth as of the Effective Date plus (ii) 50% of the Borrower's
Consolidated Net Income (but not loss) for each fiscal quarter occurring after
the Effective Date taken as a single accounting period plus (iii) 100% of the
Net Cash Proceeds from the sale of any Equity Interests of the Borrower after
the Effective Date.
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(b) Current Ratio. The Borrower will not permit, as of the
last day of any fiscal quarter, beginning with the first fiscal quarter ending
after the Effective Date, its ratio of (i) consolidated current assets
(including the unused amount of the total Commitments but excluding all non-cash
assets under FAS 133) of the Borrower and its Restricted Subsidiaries to (ii)
consolidated current liabilities (excluding non-cash obligations under FAS 133)
of the Borrower and its Restricted Subsidiaries to be less than 1.0 to 1.0.
Section 9.02 Debt. Neither the Borrower nor any Restricted
Subsidiary will incur, create, assume or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness arising under the Loan
Documents or any guaranty of or suretyship arrangement for the Notes or other
Indebtedness arising under the Loan Documents. (b) Debt of the Borrower and its
Restricted Subsidiaries existing on the date hereof that is reflected in the
Financial Statements.
(c) purchase money Debt and Debt under Capital Leases not to
exceed $15,000,000 in the aggregate.
(d) Debt associated with workers' compensation claims,
performance, bid, surety or similar bonds or surety obligations required by
Governmental Requirements or third parties in connection with the operation of
the Oil and Gas Properties.
(e) intercompany Debt between the Borrower and any
Restricted Subsidiary or between Restricted Subsidiaries to the extent permitted
by Section 9.05(g); provided that such Debt is not held, assigned, transferred,
negotiated or pledged to any Person other than the Borrower or one of its
Wholly-Owned Subsidiaries, and, provided further, that any such Debt owed by
either the Borrower or a Guarantor shall be subordinated to the Indebtedness on
terms set forth in the Guaranty Agreement.
(f) Debt secured by Liens permitted by Section 9.03(d) and
Section 9.03(e), the principal amount of which does not exceed $5,000,000 in the
aggregate at any one time.
(g) endorsements of negotiable instruments for collection in
the ordinary course of business.
(h) Debt under the 2002 Senior Subordinated Notes and any
guarantees thereof by the Guarantors, the principal amount of which does not
exceed $200,000,000 in the aggregate.
(i) Debt under the Permitted Additional Senior Subordinated
Notes issued on or prior to May 1, 2004 and any guarantees thereof by the
Guarantors, the principal amount of which does not exceed $200,000,000 in the
aggregate.
(j) other Debt not to exceed $20,000,000 in the aggregate at
any one time outstanding.
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Section 9.03 Liens. Neither the Borrower nor any Restricted
Subsidiary will create, incur, assume or permit to exist any Lien on any of its
Properties (now owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness.
(b) Excepted Liens.
(c) Liens securing purchase money Debt and Debt under
Capital Leases to the extent permitted by Section 9.02(c) or Section 9.02(j) but
only on the Property and improvements and accessions thereof and proceeds
thereof acquired or under lease; provided that such Liens are created within 180
days of construction, acquisition or lease of such Property.
(d) Liens (other than Liens under ERISA or Environmental
Laws) on Property of any Person that becomes a Restricted Subsidiary of the
Borrower after the Effective Date; provided that (i) such Liens are in existence
at the time such Person becomes a Restricted Subsidiary of the Borrower and were
not created in anticipation thereof and (ii) no such Liens shall extend to or
cover any Property of such Person other than such Property.
(e) Liens (other than Liens under ERISA or Environmental
Laws) upon real and/or tangible personal Property acquired after the Effective
Date (by purchase, construction or otherwise) by the Borrower or its Restricted
Subsidiaries, each of which Liens either (i) existed on such Property before the
time of its acquisition and was not created in anticipation thereof or (ii) was
created solely for the purpose of securing Debt representing, or incurred to
finance, refinance or refund, the cost (including the cost of construction) of
such Property; provided that no such Lien shall extend to or cover any Property
of the Borrower or such Restricted Subsidiary other than the Property so
acquired and improvements thereon and accessions and proceeds thereof.
(f) Liens on Letters of Credit issued hereunder pledged to
secure obligations under any Swap Agreement permitted by Section 9.19 in an
aggregate amount at any time not to exceed $30,000,000 (other than as permitted
by clause (ii) of this Section 9.03(f)), and Liens on cash, letters of credit
and other financial assets pledged to secure obligations under any Swap
Agreement permitted by Section 9.19 in an aggregate amount at any time not to
exceed $10,000,000 (other than as permitted by clause (i) of this Section
9.03(f)).
(g) Liens on Property not constituting collateral for the
Indebtedness and not otherwise permitted by the foregoing clauses of this
Section 9.03; provided that the aggregate principal or face amount of all Debt
secured under this Section 9.03(g) shall not exceed $2,500,000 at any time.
(h) Liens disclosed on Schedule 9.03.
Section 9.04 Dividends, Distributions and Redemptions; Repayment of
2002 Senior Subordinated Notes.
(a) Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted
70
Payment, return any capital to its stockholders or make any distribution of its
Property to its Equity Interest holders, except (i) the Borrower may declare and
pay dividends with respect to its Equity Interests payable solely in additional
shares of its Equity Interests (other than Disqualified Capital Stock), (ii)
Subsidiaries may declare and pay dividends ratably with respect to their Equity
Interests, (iii) the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of the Borrower and its Subsidiaries, (iv) the Borrower may declare
and pay cash dividends to PLX in any fiscal year to pay the Borrower's allocated
share of Taxes (as defined in the Tax Allocation Agreement as it exists on the
date hereof) due in the fiscal year such dividend is declared under the Tax
Allocation Agreement as it exists on the date hereof, (v) payments contemplated
by the Transition Agreements as in effect on the date hereof and the
transactions contemplated thereby; provided that payments made pursuant to the
Transition Agreements (other than the Tax Allocation Agreement and payments
permitted by clause (iv) and clause (vi)) shall be limited in an aggregate
amount not to exceed $30,000,000, and (vi) to the extent not permitted by
clauses (i) to (v) above, the Borrower may make Restricted Payments in respect
of Equity Interests of the Borrower in an amount not to exceed $2,500,000 in the
aggregate minus the aggregate principal amount of 2002 Senior Subordinated Notes
and Permitted Additional Senior Subordinated Notes Redeemed under Section
9.04(b)(i).
(b) Repayment of 2002 Senior Subordinated Notes and
Permitted Additional Senior Subordinated Notes; Amendment of 2002 Senior
Subordinated Indenture and Permitted Additional Senior Subordinated Indenture.
The Borrower will not, and will not permit any Restricted Subsidiary to, prior
to the Termination Date: (i) call, make or offer to make any optional or
voluntary Redemption (whether in whole or in part) of the 2002 Senior
Subordinated Notes or the Permitted Additional Senior Subordinated Notes,
provided that the Borrower may Redeem 2002 Senior Subordinated Notes or
Permitted Additional Senior Subordinated Notes to the extent that it could make
a Restricted Payment under Section 9.04(a)(vi), (ii) amend, modify, waive or
otherwise change, consent or agree to any amendment, modification, waiver or
other change to, any of the terms of the 2002 Senior Subordinated Notes, the
Permitted Additional Senior Subordinated Notes, the 2002 Senior Subordinated
Indenture or the Permitted Additional Senior Subordinated Indenture if (A) the
effect thereof would be to shorten its maturity or average life or increase the
amount of any payment of principal thereof or increase the rate or shorten any
period for payment of interest thereon, (B) such action requires the payment of
a consent fee or the effect thereof would be to add any guarantor or surety,
unless such guarantor or surety also guarantees the Indebtedness pursuant to the
Guaranty Agreement and each of the Borrower and such guarantor or surety
otherwise complies with Section 8.14(d), or (iii) designate any Debt (other than
obligations of the Borrower and the Restricted Subsidiaries pursuant to the Loan
Documents) as "Designated Senior Indebtedness" or "Designated Guarantor Senior
Indebtedness" or give any such other Debt any other similar designation for the
purposes of the 2002 Senior Subordinated Indenture or the Permitted Additional
Senior Subordinated Indenture.
Section 9.05 Investments, Loans and Advances. Neither the Borrower
nor any Restricted Subsidiary will make or permit to remain outstanding any
Investments in or to any Person, except that the foregoing restriction shall not
apply to:
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(a) Investments reflected in the Financial Statements or
which are disclosed to the Lenders in Schedule 9.05.
(b) accounts receivable arising in the ordinary course of
business.
(c) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency thereof,
in each case maturing within one year from the date of creation thereof.
(d) commercial paper maturing within one year from the date
of creation thereof rated in the highest grade by S&P or Xxxxx'x.
(e) deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by, any Lender
or any office located in the United States of any other bank or trust company
which is organized under the laws of the United States or any state thereof, has
capital, surplus and undivided profits aggregating at least $100,000,000 (as of
the date of such bank or trust company's most recent financial reports) and has
a short term deposit rating of no lower than A2 or P2, as such rating is set
forth from time to time, by S&P or Xxxxx'x, respectively.
(f) deposits in money market funds investing exclusively in
Investments described in Section 9.05(c), Section 9.05(d) or Section 9.05(e).
(g) Investments (i) made by the Borrower in or to the
Guarantors, (ii) made by any Restricted Subsidiary in or to the Borrower or any
Guarantor and (iii) made by the Borrower or any Restricted Subsidiary in or to
all other Restricted Subsidiaries which are not Guarantors in an aggregate
amount at any one time outstanding not to exceed $5,000,000.
(h) Investments (including, without limitation, capital
contributions) in general or limited partnerships or other types of entities
(each a "venture") entered into by the Borrower or a Restricted Subsidiary with
others in the ordinary course of business; provided that (i) any such venture is
engaged exclusively in oil and gas exploration, development, production,
processing and related activities, including transportation, (ii) the interest
in such venture is acquired in the ordinary course of business and on fair and
reasonable terms and (iii) such venture interests acquired and capital
contributions made (valued as of the date such interest was acquired or the
contribution made) do not exceed, in the aggregate at any time outstanding an
amount equal to $2,000,000.
(i) Investments received in settlement of amounts owing to
the Borrower or any Restricted Subsidiary as a result of a bankruptcy or other
insolvency proceeding of the obligor in respect of such amounts or upon the
enforcement of any Lien in favor of the Borrower or any of its Restricted
Subsidiaries; provided that the Borrower shall give the Administrative Agent
prompt written notice in the event that the aggregate amount of all Investments
held at any one time under this Section 9.05(i) exceeds $2,000,000.
(j) entry into operating agreements, working interests,
royalty interests, mineral leases, processing agreements, farm-out agreements,
contracts for the sale, transportation or exchange of oil and natural gas,
unitization agreements, pooling arrangements, area of mutual
72
interest agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests or arrangements, and Investments
and expenditures in connection therewith or pursuant thereto, in each case made
or entered into in the ordinary course of the oil and gas business, excluding,
however, Investments in other Persons other than joint ventures; provided,
however, that none of the foregoing shall involve the incurrence of any Debt not
permitted by Section 9.02, and provided further that this Section 9.05(j) shall
not be construed to permit Investments by the Borrower or any Restricted
Subsidiary in any Person which maintains or incurs in the future any Debt other
than Non-Recourse Debt;
(k) loans and advances to directors, officers and employees
not to exceed $1,000,000 in the aggregate at any time.
(l) Investments in Unrestricted Subsidiaries, provided that
(i) the aggregate amount of all such Investments at any one time shall not
exceed $5,000,000 (or its equivalent in other currencies as of the date of
Investment) and (ii) the Borrowing Base Utilization Percentage is less than 80%
immediately before and immediately after giving effect to such Investment.
(m) Guarantees by the Borrower and the Restricted
Subsidiaries of Debt permitted by Section 9.02(a), Section 9.02(c), Section
9.02(h), Section 9.02(i) and Section 9.02(j).
(n) other Investments not to exceed $1,000,000 in the
aggregate at any time.
Section 9.06 Designation and Conversion of Restricted and
Unrestricted Subsidiaries; Debt of Unrestricted Subsidiaries.
(a) Unless designated as an Unrestricted Subsidiary on
Schedule 7.15 as of the Effective Date or thereafter, assuming compliance with
Section 9.06(b), any Person that becomes a Subsidiary of the Borrower or any of
its Restricted Subsidiaries shall be classified as a Restricted Subsidiary.
(b) The Borrower may designate by written notification
thereof to the Administrative Agent, any Restricted Subsidiary, including a
newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary if (i)
prior, and after giving effect, to such designation, neither a Default nor a
Borrowing Base deficiency would exist and (ii) such designation is deemed to be
an Investment in an Unrestricted Subsidiary in an amount equal to the fair
market value as of the date of such designation of the Borrower's direct and
indirect ownership interest in such Subsidiary and such Investment would be
permitted to be made at the time of such designation under Section 9.05(l).
Except as provided in this Section 9.06(b), no Restricted Subsidiary may be
redesignated as an Unrestricted Subsidiary.
(c) The Borrower may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary if after giving effect to such designation, (i)
the representations and warranties of the Borrower and its Restricted
Subsidiaries contained in each of the Loan Documents are true and correct on and
as of such date as if made on and as of the date of such redesignation (or, if
stated to have been made expressly as of an earlier date, were true and correct
as of such date), (ii) no Default would exist and (iii) the Borrower complies
with the requirements of Section 8.14, Section 8.16 and Section 9.16. Any such
designation shall be
73
treated as a cash dividend in an amount equal to the lesser of the fair market
value of the Borrower's direct and indirect ownership interest in such
Subsidiary or the amount of the Borrower's cash investment previously made for
purposes of the limitation on Investments under Section 9.05(l).
(d) The Borrower shall not permit the aggregate principal
amount of all Non-Recourse Debt outstanding at any one time to exceed
$25,000,000.
Section 9.07 Nature of Business. Neither the Borrower nor any
Restricted Subsidiary will allow any material change to be made in the character
of its business as an independent oil and gas exploration and production
company. Notwithstanding the foregoing, this Section 9.07 shall not prohibit the
Borrower and its Restricted Subsidiaries from holding and developing the
Properties described on Schedule 9.07.
Section 9.08 Limitation on Leases. Neither the Borrower nor any
Restricted Subsidiary will create, incur, assume or suffer to exist any
obligation for the payment of rent or hire of Property of any kind whatsoever
(real or personal but excluding Capital Leases and leases of Hydrocarbon
Interests), under leases or lease agreements which would cause the aggregate
amount of all payments made by the Borrower and the Restricted Subsidiaries
pursuant to all such leases or lease agreements, including, without limitation,
any residual payments at the end of any lease, to exceed $1,500,000 in any
period of twelve consecutive calendar months during the life of such leases.
Section 9.09 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 7.22. Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate 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 9.10 ERISA Compliance. The Borrower and the Subsidiaries will
not at any time:
(a) engage in, or permit any ERISA Affiliate to engage in,
any transaction in connection with which the Borrower, a 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, if either of which would have a Material Adverse
Effect.
(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, a Subsidiary or any ERISA
Affiliate to the PBGC which could reasonably be expected to have a Material
Adverse Effect.
74
(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, the Borrower, a Subsidiary
or any ERISA Affiliate is required to pay as contributions thereto if such
failure could reasonably be expected to have a Material Adverse Effect.
(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, whether or not waived, with respect to any
Plan which exceeds $5,000,000.
(e) except as permitted in Section 9.10(f), permit, or allow
any ERISA Affiliate to permit, the actuarial present value of the benefit
liabilities under any Plan maintained by the Borrower, a Subsidiary or any ERISA
Affiliate which is regulated under Title IV of ERISA to exceed the current value
of the assets (computed on a plan termination basis in accordance with Title IV
of ERISA) of such Plan allocable to such benefit liabilities by more than
$5,000,000. The term "actuarial present value of the benefit liabilities" shall
have the meaning specified in section 4041 of ERISA.
(f) 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 the Borrower or a Subsidiary or with respect to any ERISA Affiliate
of the Borrower or a Subsidiary 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, (i) any Multiemployer Plan, or
(ii) 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 by an
amount in excess of $5,000,000.
(g) 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.
(h) amend, or permit any ERISA Affiliate to amend, a Plan
resulting in an increase in current liability such that the Borrower, a
Subsidiary or any ERISA Affiliate is required to provide security to such Plan
under section 401(a)(29) of the Code.
Section 9.11 Sale or Discount of Receivables. Except for
receivables obtained by the Borrower or any Restricted Subsidiary out of the
ordinary course of business or the settlement of joint interest billing accounts
in the ordinary course of business or discounts granted to settle collection of
accounts receivable or the sale of defaulted accounts arising in the ordinary
course of business in connection with the compromise or collection thereof and
not in connection with any financing transaction, neither the Borrower nor any
Restricted Subsidiary will discount or sell (with or without recourse) any of
its notes receivable or accounts receivable.
Section 9.12 Mergers, Etc. Neither the Borrower nor any Restricted
Subsidiary will 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 Property to any other Person
(any such transaction, a "consolidation"); provided that (a) any Restricted
Subsidiary may participate in a consolidation with the Borrower (provided that
the Borrower
75
shall be the continuing or surviving corporation) or any other Restricted
Subsidiary (provided that if a Guarantor is a party to such transaction, the
survivor is such Guarantor or becomes a party to the Guaranty Agreement) or
transfer all or substantially all of its assets to a Guarantor or a Person that
becomes a party to the Guaranty Agreement and (b) the Borrower or any Restricted
Subsidiary may participate in a consolidation (other than as described in clause
(a) above) if (i) at the time thereof and immediately after giving effect
thereto, no Default shall occur and be continuing and no Borrowing Base
deficiency would result therefrom and (ii) the Borrower or such Restricted
Subsidiary, as the case may be, is the surviving entity or the recipient of any
such sale, lease or other disposition of Property, provided that no such
consolidation shall have the effect of releasing the Borrower or any Restricted
Subsidiary from any of its obligations under this Agreement or any other Loan
Document.
Section 9.13 Sale of Properties. The Borrower will not, and will not
permit any Restricted Subsidiary to, sell, assign, farm-out, convey or otherwise
transfer any Property except for (a) the sale of Hydrocarbons in the ordinary
course of business; (b) farmouts of undeveloped acreage and assignments in
connection with such farmouts or the abandonment, farm-out, exchange, lease or
sublease of Oil and Gas Properties not containing proved reserves capable of
being produced in economic quantities and which are not included in the most
recently delivered Reserve Report in the ordinary course of business; (c) the
sale or transfer of equipment that is no longer necessary for the business of
the Borrower or such Restricted Subsidiary or is replaced by equipment of at
least comparable value and use; (d) the sale, transfer or other disposition of
Equity Interests in Unrestricted Subsidiaries; (e) the sale or other disposition
(including Casualty Events) of any Oil and Gas Property or any interest therein
or any Restricted Subsidiary owning Oil and Gas Properties; provided that (i)
the consideration received in respect of such sale or other disposition shall be
equal to or greater than the fair market value of the Oil and Gas Property,
interest therein or Restricted Subsidiary subject of such sale or other
disposition (as reasonably determined by the board of directors of the Borrower
and, if requested by the Administrative Agent, the Borrower shall deliver a
certificate of a Responsible Officer of the Borrower certifying to that effect),
(ii) if such sale or other disposition of Oil and Gas Property or Restricted
Subsidiary owning Oil and Gas Properties included in the most recently delivered
Reserve Report during any period between two successive Scheduled
Redetermination Dates has a fair market value in excess of $15,000,000 (as
reasonably determined by the board of directors of the Borrower and, if
requested by the Administrative Agent, the Borrower shall deliver a certificate
of a Responsible Officer of the Borrower certifying to that effect),
individually or in the aggregate, the Borrowing Base shall be reduced, effective
immediately upon such sale or disposition, by an amount equal to the value, if
any, assigned such Property in the most recently delivered Reserve Report and
(iii) if any such sale or other disposition is of a Restricted Subsidiary owning
Oil and Gas Properties, such sale or other disposition shall include all the
Equity Interests of such Restricted Subsidiary; (f) the sale of Oil and Gas
Properties in connection with tax credit transactions complying with Section 29
of the Code or any other analogous provision whether now existing or hereafter
enacted, which sale does not result in a reduction in the Borrower's or its
Restricted Subsidiaries', as the case may be, right to receive the cash flow
from such Oil and Gas Properties and which sale is on terms reasonably
acceptable to the Administrative Agent; (g) dispositions of Investments
(including cash and cash equivalents) the proceeds of which are used in
accordance with Section 9.03 or as otherwise permitted hereunder; (h) sales and
other dispositions of Properties not regulated by Section 9.13(a) to (j) having
a fair market value not to exceed $5,000,000 during any 6-month period; (i)
transfers and other
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dispositions among the Borrower and the Restricted Subsidiaries subject to the
limitations set forth in Section 9.05(g)(iii); and (j) transfers permitted by
Section 9.11 and Section 9.12.
Section 9.14 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 could reasonably be expected to have a
Material Adverse Effect.
Section 9.15 Transactions with Affiliates. Except for transactions
contemplated by the Transition Agreements and the Affiliate Agreements, the
Borrower will not, and will not permit any Restricted Subsidiary to, enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate (other
than the Guarantors and Wholly-Owned Subsidiaries of the Borrower) unless such
transactions are otherwise permitted under this Agreement and are upon fair and
reasonable terms no less favorable to it than it would obtain in a comparable
arm's length transaction with a Person not an Affiliate.
Section 9.16 Subsidiaries. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, create or acquire any additional Restricted
Subsidiary or redesignate an Unrestricted Subsidiary as a Restricted Subsidiary
unless the Borrower gives written notice to the Administrative Agent of such
creation or acquisition and complies with Section 8.14(b). The Borrower shall
not, and shall not permit any Restricted Subsidiary to, sell, assign or
otherwise dispose of any Equity Interests in any Restricted Subsidiary except in
compliance with Section 9.13(e). Plains E&P Company will not hold any material
assets, become liable for any material obligations, other than its guaranty of
the Indebtedness, the 2002 Senior Subordinated Notes or the Permitted Additional
Senior Subordinate Notes, or engage in any significant business activities;
provided that Plains E&P Company may be a co-obligor with respect to Debt if the
Borrower is the primary obligor of such Debt and the net proceeds of such Debt
are received by the Borrower or one or more Restricted Subsidiary other than
Plains E&P Company.
Section 9.17 Negative Pledge Agreements; Dividend Restrictions. The
Borrower will not, and will not permit any Restricted Subsidiary to, create,
incur, assume or suffer to exist any contract, agreement or understanding which
in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property in favor of the Administrative
Agent and the Lenders or restricts any Restricted Subsidiary from paying
dividends or making distributions to the Borrower or any Guarantor, or which
requires the consent of or notice to other Persons in connection therewith;
provided, however, that the preceding restrictions will not apply to
encumbrances or restrictions arising under or by reason of (i) this Agreement or
the Security Instruments, (ii) Debt securing Liens permitted by Section 9.03(c)
or Section 9.03(g) or any contract, agreement or understanding creating Liens
permitted by Section 9.03(d) and Section 9.03(e) or Section 9.03(g) (but only to
the extent related to the Property on which such Liens were created), (iii) any
leases or licenses or similar contracts as they affect any Property or Lien
subject to a lease or license, (iv) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the direct or
indirect
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sale or disposition of all or substantially all the equity or Property of such
Restricted Subsidiary (or the Property that is subject to such restriction)
pending the closing of such sale or disposition, or (v) customary provisions
with respect to the distribution of Property in joint venture agreements.
Section 9.18 Gas Imbalances, Take-or-Pay or Other Prepayments. The
Borrower will not allow gas imbalances, take-or-pay or other prepayments with
respect to the Oil and Gas Properties of the Borrower or any Restricted
Subsidiary that would require the Borrower or such Restricted Subsidiary to
deliver Hydrocarbons at some future time without then or thereafter receiving
full payment therefor to exceed one-half bcf of gas (on an mcf equivalent basis)
in the aggregate.
Section 9.19 Swap Agreements. The Borrower will not, and will not
permit any Restricted Subsidiary to, enter into any Swap Agreements with any
Person other than (a) Swap Agreements in respect of commodities (i) with an
Approved Counterparty and (ii) the notional volumes for which (when aggregated
with other commodity Swap Agreements then in effect other than basis
differential swaps on volumes already hedged pursuant to other Swap Agreements)
do not exceed, as of the date such Swap Agreement is executed, 85% of the
reasonably anticipated projected production from proved, developed, producing
Oil and Gas Properties for each month during the period during which such Swap
Agreement is in effect for each of crude oil and natural gas, calculated
separately, and (b) Swap Agreements in respect of interest rates with an
Approved Counterparty, as follows: (i) Swap Agreements effectively converting
interest rates from fixed to floating, the notional amounts of which (when
aggregated with all other Swap Agreements of the Borrower and its Restricted
Subsidiaries then in effect effectively converting interest rates from fixed to
floating) do not exceed 50% of the then outstanding principal amount of the
Borrower's Debt for borrowed money which bears interest at a fixed rate and (ii)
Swap Agreements effectively converting interest rates from floating to fixed,
the notional amounts of which (when aggregated with all other Swap Agreements of
the Borrower and its Restricted Subsidiaries then in effect effectively
converting interest rates from floating to fixed) do not exceed 75% of the then
outstanding principal amount of the Borrower's Debt for borrowed money which
bears interest at a floating rate. In no event shall any Swap Agreement contain
any requirement, agreement or covenant for the Borrower or any Restricted
Subsidiary to post collateral or margin to secure their obligations under such
Swap Agreement or to cover market exposures except to the extent permitted by
Section 9.03(a) and Section 9.03(f).
Section 9.20 Acquisition Documents. The Borrower will not, and will
not permit any of its Subsidiaries to, amend, modify or supplement any
Acquisition Document if the effect thereof could reasonably be expected to have
a Material Adverse Effect (and provided that the Borrower promptly furnishes to
the Administrative Agent a copy of such amendment, modification or supplement).
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following events
shall constitute an "Event of Default":
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(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof 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
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 the provisions hereof or 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(o), Section 8.01(p), Section 8.02, Section 8.14, Section
8.15 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 (A) notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender) or (B) a Responsible Officer of the Borrower
or such Restricted Subsidiary otherwise becoming aware of such default.
(f) the Borrower or any Restricted Subsidiary 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.
(g) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) 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.
(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 or any Restricted Subsidiary or its
debts, or of a substantial part of its 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 or any Restricted Subsidiary or
for a substantial part of its assets, and, in any
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such case, such proceeding or petition shall continue undismissed for 30 days or
an order or decree approving or ordering any of the foregoing shall be entered.
(i) the Borrower or any Restricted Subsidiary 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 or any Restricted Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it 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.
(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) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 (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) shall be rendered
against the Borrower, any Restricted Subsidiary 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 the Borrower
or any Restricted Subsidiary 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 generally 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 of the 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 $10,000,000.
(n) a Change in Control shall occur.
Section 10.02 Remedies.
(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 Administrative
Agent may, and at the request of the Majority Lenders, shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate
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immediately, and (ii) declare the Notes and 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 Borrower
and the Guarantors accrued hereunder and under the Notes and the other Loan
Documents (including, without limitation, the payment of cash collateral to
secure the LC Exposure as provided in Section 2.08(j)), 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 the Borrower and each Guarantor; and in case of an Event of
Default described in Section 10.01(h), Section 10.01(i) or Section 10.01(j), the
Commitments shall automatically terminate and 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 (including, without limitation, the
payment of cash collateral to secure the LC Exposure as provided in Section
2.08(j)), shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower and each Guarantor.
(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 collateral or otherwise received after maturity of the Notes,
whether by acceleration or otherwise, shall be applied: first, to reimbursement
of expenses and indemnities owing by the Borrower, any Guarantor or any
Subsidiary provided for in this Agreement and the Security Instruments; second,
to accrued interest on the Notes; third, to fees; fourth, pro rata to principal
outstanding on the Notes and Indebtedness referred to in clause (b) of the
definition of "Indebtedness" owing to a Lender or an Affiliate of a Lender;
fifth, to any other Indebtedness; sixth, to serve as cash collateral to be held
by the Administrative Agent to secure the LC Exposure; and any excess shall be
paid to the Borrower or as otherwise required by any Governmental Requirement.
ARTICLE XI
THE AGENTS
Section 11.01 Appointment; Powers. Each of the Lenders and each
Issuing Bank 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, (b) the Administrative Agent shall not have any 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
81
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries 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, (vi) the existence, value, perfection
or priority of any collateral security or the financial or other condition of
the Borrower and its Subsidiaries 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.
Section 11.03 Action by Administrative Agent. The Administrative Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby 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
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, neither the Syndication Agents nor the
Documentation Agents shall have any obligation to perform any act in respect
thereof. No Agent shall 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
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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, the Lenders and each Issuing Bank 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 Agents 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 or Removal of Agents. 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, each Issuing
Bank and the Borrower, and any Agent may be removed at any time with or without
cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right, 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 or removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders and each Issuing
Bank, appoint a successor Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. 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 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.
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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 Subsidiary 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 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 the Borrower or its Subsidiaries. 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 Arranger 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
of its Affiliates) which may come into the possession of such Agent or any of
its Affiliates. In this regard, each Lender acknowledges that Xxxxxx & Xxxxxx
L.L.P. is acting in this transaction as special counsel to the Administrative
Agent only, except to the extent otherwise expressly stated in any legal opinion
or any Loan Document. Each 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 Authority of Administrative Agent to Release Collateral
and Liens. Each Lender and each Issuing Bank 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 and each
Issuing Bank 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 9.13 or is otherwise authorized by the terms of the Loan Documents.
Section 11.10 The Syndication Agents, Documentation Agents and
Arrangers. The Syndication Agents, the Documentation Agents and the Arrangers
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.
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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 000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000, Attention of Xxxxxxx X. Xxxxxxxxxx
(Telecopy No. (000) 000-0000);
(ii) if to the Administrative Agent, to it at One
Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Loan
and Agency Services, Xxxxxxx Xxxxxxx (Telecopy No. (000) 000-0000), with a copy
to 000 Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention of June Brand
(Telecopy No. (000) 000-0000, and for all other correspondence other than
borrowings, continuation, conversion and Letter of Credit requests 000 Xxxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention of Xxxxxx X. Xxxxxxxxxxx (Telecopy
No. (000) 000-0000); and
(iii) if to any other Lender, in its capacity as such,
or any other Lender in its capacity as an Issuing Bank, 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 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, any
Issuing Bank 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, each Issuing Bank and the
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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 the Borrower 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 or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or any
Issuing Bank 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) increase the Commitment or the Maximum Credit Amount of any Lender
without the written consent of such Lender, (ii) increase the Borrowing Base
without the written consent of all of the Lenders, decrease or maintain the
Borrowing Base without the consent of Super-majority Lenders or modify Section
2.07 without the written consent of all of the Lenders, (iii) reduce the
principal amount of any Loan or LC Disbursement 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, (iv) postpone the scheduled date of payment or
prepayment of the principal amount of any Loan or LC Disbursement, 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 Termination Date without the
written consent of each Lender affected thereby, (v) change Section 4.01(b) or
Section 4.01(c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (vi) waive or
amend Section 3.04(c), Section 6.01, Section 8.14, Section 10.02(c) or Section
12.15 or change the definition of the terms "Domestic Subsidiary", "Foreign
Subsidiary", "Material Domestic Subsidiary" or "Subsidiary", without the written
consent of each Lender, (vii) release any Guarantor (except as set forth in the
Guaranty Agreement) or release all or substantially all of the collateral (other
than as provided in Section 11.09), without the written consent of each Lender,
or (viii) change any of the provisions of this Section 12.02(b) or the
definitions of "Super-majority Lenders" or "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 further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent or any Issuing Bank hereunder or under any other Loan
Document without the prior written consent of the Administrative Agent or such
Issuing Bank, as the case may be. Notwithstanding the foregoing, any supplement
to Schedule 7.15 (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.
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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 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 reasonable out-of-pocket expenses incurred by each Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit issued by such Issuing Bank or any demand for payment
thereunder, (iv) all out-of-pocket expenses incurred by any Agent, any Issuing
Bank or any Lender, including the fees, charges and disbursements of any counsel
for any Agent, any Issuing Bank 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 or Letters of Credit issued hereunder, including,
without limitation, all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) THE BORROWER SHALL INDEMNIFY EACH AGENT, EACH ISSUING
BANK 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, 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, (ii) THE FAILURE OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY TO
COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH
ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY
BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN
ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS
DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE
OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY ANY
ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER
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OF CREDIT ISSUED BY SUCH ISSUING BANK IF THE DOCUMENTS PRESENTED IN CONNECTION
WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT,
OR (B) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE
NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS
PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS,
(vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES BY THE
BORROWER AND ITS SUBSIDIARIES, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT
ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS,
(viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY 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, (ix) THE BREACH OR NON-COMPLIANCE BY THE
BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER
OR ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF
ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH,
THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (xi) 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 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 SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH
OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL
OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING 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
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HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILFUL 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 any Issuing Bank under Section
12.03(a) or (b), each Lender severally agrees to pay to such Agent or such
Issuing Bank, as the case may be, such Lender's Applicable 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 such Issuing Bank in
its capacity as such.
(d) To the extent permitted by applicable law, the Borrower
shall not 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 Letter
of Credit 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.
(f) Notwithstanding any other provisions of this Section
12.03, 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 12.04 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 (including any Affiliate of any Issuing Bank that
issues any Letter of Credit), 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 (including any
Affiliate of any Issuing Bank that issues any Letter of Credit), 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,
each Issuing Bank 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 all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:
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(A) the Borrower, provided that no consent of the
Borrower shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default has occurred and is
continuing, any other assignee; and
(B) the Administrative Agent, provided that no
consent of the Administrative Agent shall be required for an assignment to an
assignee that is a Lender immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following
additional conditions:
(A) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment, the amount of the Commitment 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 no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;
(B) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement;
(C) 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;
(D) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire; and
(E) in the case of an assignment to a CLO, the
assigning Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement, provided that the
Assignment and Assumption between such Lender and such CLO may provide that such
Lender will not, without the consent of such CLO, agree to any amendment,
modification or waiver described in the first proviso to Section 12.02 that
affects such CLO.
(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).
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(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 Maximum Credit Amount of, and
principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
each Issuing Bank 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, any Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice. In connection with any changes to the Register, if necessary, the
Administrative Agent will reflect the revisions on Annex I and forward a copy of
such revised Annex I to the Borrower, each Issuing Bank and each Lender.
(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 (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) (i) Any Lender may, without the consent of the
Borrower, the Administrative Agent or any Issuing Bank, 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 its Commitment and 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 and (C) the Borrower, the Administrative Agent,
each Issuing Bank 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. 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(c) as though it were a Lender.
(ii) 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
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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 would be a
Foreign Lender if it were a 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(e) 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 any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 12.04 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.
Section 12.05 Survival; Revival; Reinstatement.
(a) All covenants, agreements, representations and
warranties made by the Borrower 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 and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, any Issuing Bank 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 on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. 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, the expiration or termination of the Letters
of Credit and the Commitments 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 take such action as may be
reasonably requested by the Administrative Agent and the Lenders to effect such
reinstatement.
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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 (other than the Letters of
Credit and the Letter of Credit Agreements) 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 Restricted Subsidiary against any of and
all the obligations of the Borrower or any Restricted Subsidiary 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.
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(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) THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS AND HEREBY CONFERS AN IRREVOCABLE SPECIAL POWER, AMPLE AND SUFFICIENT,
TO CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 000 XXXXXX XXXXXX,
XXXXXXXXXX XXXXX, XXX XXXX, XXX XXXX, 00000 AS ITS DESIGNEE, APPOINTEE AND AGENT
WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING IN NEW YORK TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH PROCEEDING AND AGREES THAT THE FAILURE OF SUCH AGENT TO GIVE ANY ADVICE
OF ANY SUCH SERVICE OF PROCESS TO THE BORROWER SHALL NOT IMPAIR OR AFFECT THE
VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED THEREON. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE
BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK
CITY REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT ON THE TERMS AND FOR
THE PURPOSES OF THIS PROVISION. 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
94
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, 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, each
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement or any other
Loan Document, (e) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section 12.11, to (i) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement (provided that such Person agrees in writing to
be bound by the provisions of this Section 12.11) or (ii) any actual or
prospective counterparty (or its advisors) to any Swap Agreement relating to the
Borrower and its obligations (provided that such Person agrees in writing to be
bound by the provisions of this Section 12.11), (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 12.11 or (ii) becomes
available to the Administrative Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section 12.11, "Information" means all information received from the
Borrower or any Restricted Subsidiary relating to the Borrower or any Restricted
Subsidiary and their businesses, other than any such information that is
available to the Administrative Agent, any Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrower or a Restricted
Subsidiary; provided that, in the case of information received from the Borrower
or any Restricted Subsidiary after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section 12.11
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
95
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. Accordingly, if the transactions contemplated hereby would be usurious as
to any Lender under laws applicable to it (including the laws of the United
States of America and the State of New York or any other jurisdiction whose laws
may be mandatorily applicable to such Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in any of the Loan Documents or any agreement entered into in
connection with or as security for the Notes, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to any Lender that is contracted for, taken, reserved, charged or received by
such Lender under any of the Loan Documents or agreements or otherwise in
connection with the Notes shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be canceled automatically
and if theretofore paid shall be credited by such Lender on the principal amount
of the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower); and (ii) in the event that the maturity of the Notes is
accelerated by reason of an election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of
the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower). All sums paid or agreed to be paid to any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Lender, be amortized, prorated, allocated
and spread throughout the actual full term of the Loans evidenced by the Notes
until payment in full so that the rate or amount of interest on account of any
Loans hereunder does not exceed the maximum amount allowed by such applicable
law. If at any time and from time to time (i) the amount of interest payable to
any Lender on any date shall be computed at the Highest Lawful Rate applicable
to such Lender pursuant to this Section 12.12 and (ii) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to such Lender would be less than the amount of interest payable to such Lender
computed at the Highest Lawful Rate applicable to such Lender, then the amount
of interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.12.
Section 12.13 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT
96
THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT "CONSPICUOUS."
Section 12.14 Specified Senior Indebtedness. The Parties acknowledge
and agree that the Indebtedness hereunder is specifically designated "Designated
Senior Indebtedness" as required by the 2002 Senior Subordinated Indenture
pursuant to which the 2002 Senior Subordinated Notes have been issued.
Section 12.15 Collateral Matters; Swap Agreements. The benefit of the
Security Instruments and of the provisions of this Agreement relating to any
collateral securing the Indebtedness shall also extend to and be available to
those Lenders or their Affiliates which are counterparties to any Swap Agreement
with the Borrower or any of its Subsidiaries on a pro rata basis in respect of
any obligations of the Borrower or any of its Subsidiaries which arise under any
such Swap Agreement that is in effect while such Person or its Affiliate is a
Lender, but only while such Person or its Affiliate is a Lender, including any
Swap Agreements between such Persons in existence prior to the Effective Date.
No Lender or any Affiliate of a Lender shall have any voting rights under any
Loan Document as a result of the existence of obligations owed to it under any
such Swap Agreements.
Section 12.16 No Third Party Beneficiaries. This Agreement, the other
Loan Documents, and the agreement of the Lenders to make Loans and the Issuing
Bank to issue, amend, renew or extend Letters of Credit hereunder are solely for
the benefit of the Borrower, and no other Person (including, without limitation,
any 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, the Issuing Bank or any Lender for any reason whatsoever. There are no
third party beneficiaries.
[SIGNATURES BEGIN NEXT PAGE]
97
The parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
BORROWER: PLAINS EXPLORATION & PRODUCTION
COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxxx
Executive Vice President and
Chief Financial Officer
[Signature Page- Credit Agreement]
ADMINISTRATIVE AGENT: JPMORGAN CHASE BANK, as a Lender and as
Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxxxx
Managing Director
[Signature Page- Credit Agreement]
BANK ONE, NA (MAIN OFFICE CHICAGO)
as a Lender and as a Co-Syndication Agent
By: /s/ Xxxxxxx Xxxxxxxxx-Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxxx-Xxxxx
Title: Director
[Signature Page- Credit Agreement]
BMO XXXXXXX XXXXX FINANCING, INC.,
as a Lender and as a Co-Syndication Agent
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
[Signature Page- Credit Agreement]
BNP PARIBAS, as a Lender and as a
Co-Documentation Agent
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
[Signature Page- Credit Agreement]
THE BANK OF NOVA SCOTIA, as a Lender and
as a Co-Documentation Agent
By: /s/ X. Xxxx
----------------------------------
Name: X. Xxxx
Title: Senior Manager
[Signature Page- Credit Agreement]
BANK OF SCOTLAND, as a Lender and as a
Managing Agent
By: /s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx
Senior Vice President
[Signature Page- Credit Agreement]
FLEET NATIONAL BANK, as a Lender and as a
Managing Agent
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Director
[Signature Page- Credit Agreement]
FORTIS CAPITAL CORP., as a Lender and as a
Managing Agent
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
[Signature Page- Credit Agreement]
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender and as a Managing
Agent
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
[Signature Page- Credit Agreement]
XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, as a Lender and as a Managing
Agent
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
[Signature Page- Credit Agreement]
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
[Signature Page- Credit Agreement]
COMERICA BANK - TEXAS, as a Lender
By: /s/ X.X. Xxxxxxx
----------------------------------
Name: X.X. Xxxxxxx
Title: Vice President
[Signature Page- Credit Agreement]
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
By:
----------------------------------
Name:
Title:
[Signature Page- Credit Agreement]
TORONTO DOMINION (TEXAS), INC.,
as a Lender
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
[Signature Page- Credit Agreement]
ANNEX I
LIST OF MAXIMUM CREDIT AMOUNTS
NAME OF LENDER APPLICABLE PERCENTAGE MAXIMUM CREDIT AMOUNT
-----------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
Bank One, NA (Main Office Chicago) 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
BMO Xxxxxxx Xxxxx Financing, Inc. 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
BNP Paribas 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
The Bank of Nova Scotia 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
Bank of Scotland 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
Fleet National Bank 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
Fortis Capital Corp. 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
Wachovia Bank, National Association 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
Xxxxx Fargo Bank Texas, National Association 8.00% $ 40,000,000.00
-----------------------------------------------------------------------------------------------------------
Comerica Bank - Texas 5.00% $ 25,000,000.00
-----------------------------------------------------------------------------------------------------------
Credit Lyonnais New York Branch 5.00% $ 25,000,000.00
-----------------------------------------------------------------------------------------------------------
Deutsche Bank Trust Company Americas 5.00% $ 25,000,000.00
-----------------------------------------------------------------------------------------------------------
Toronto Dominion (Texas), Inc. 5.00% $ 25,000,000.00
-----------------------------------------------------------------------------------------------------------
TOTAL 100.00% $ 500,000,000.00
-----------------------------------------------------------------------------------------------------------
Annex I - 1
EXHIBIT A
FORM OF NOTE
$[ ] [ ], 200[ ]
FOR VALUE RECEIVED, PLAINS EXPLORATION & PRODUCTION COMPANY, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of [ ]
(the "Lender"), at the principal office of JPMORGAN CHASE BANK, as
administrative agent (the "Administrative Agent"), at [ ], the principal
sum of [ ] Dollars ($[ ]) (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Loans made by the Lender to the
Borrower under the Credit Agreement, as hereinafter defined), in lawful money of
the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of such Loan until
such Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date, amount, Type, interest rate, Interest Period and maturity of
each Loan made by the Lender to the Borrower, and each payment made on account
of the principal thereof, shall be recorded by the Lender on its books and,
prior to any transfer of this Note, may be endorsed by the Lender on the
schedules attached hereto or any continuation thereof or on any separate record
maintained by the Lender. Failure to make any such notation or to attach a
schedule shall not affect any Lender's or the Borrower's rights or obligations
in respect of such Loans or affect the validity of such transfer by any Lender
of this Note.
This Note is one of the Notes referred to in the Credit Agreement dated
as of April 4, 2003 among the Borrower, the Administrative Agent, and the other
agents and lenders signatory thereto (including the Lender), and evidences Loans
made by the Lender thereunder (such Credit Agreement as the same may be amended,
supplemented or restated from time to time, the "Credit Agreement"). Capitalized
terms used in this Note have the respective meanings assigned to them in the
Credit Agreement.
This Note is issued pursuant to the Credit Agreement and is entitled to
the benefits provided for in the Credit Agreement and the other Loan Documents.
The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events, for prepayments of Loans upon the terms
and conditions specified therein and other provisions relevant to this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
PLAINS EXPLORATION & PRODUCTION
COMPANY
By:
-----------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Exhibit A - 1
EXHIBIT B
FORM OF
COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he/she is the [ ] of PLAINS
EXPLORATION & PRODUCTION COMPANY, a Delaware corporation (the "Borrower"), and
that as such he/she is authorized to execute this certificate on behalf of the
Borrower. With reference to the Credit Agreement dated as of April 4, 2003
(together with all amendments, restatements, supplements or other modifications
thereto being the "Agreement") among the Borrower, JPMORGAN CHASE BANK, as
Administrative Agent, and the other agents and lenders (the "Lenders") which are
or become a party thereto, and such Lenders, the undersigned represents and
warrants as follows (each capitalized term used herein having the same meaning
given to it in the Agreement unless otherwise specified):
(a) The representations and warranties of the Borrower contained in
Article VII of the Agreement and in the Loan Documents and otherwise made in
writing by or on behalf of the Borrower pursuant to the Agreement and the Loan
Documents were true and correct when made, and are repeated at and as of the
time of delivery hereof and are true and correct in all material respects at and
as of the time of delivery hereof, except to the extent such representations and
warranties are expressly limited to an earlier date or the Majority Lenders have
expressly consented in writing to the contrary.
(b) The Borrower has performed and complied with all agreements and
conditions contained in the Agreement and in the Loan Documents required to be
performed or complied with by it prior to or at the time of delivery hereof [or
specify default and describe].
(c) Since December 31, 2002, no change has occurred, either in any
case or in the aggregate, in the condition, financial or otherwise, of the
Borrower or any Restricted Subsidiary which could reasonably be expected to have
a Material Adverse Effect [or specify event].
(d) There exists no Default or Event of Default [or specify Default
and describe].
(e) Attached hereto are the detailed computations necessary to
determine whether the Borrower is in compliance with Section 9.01 as of the end
of the [fiscal quarter][fiscal year] ending ______.
EXECUTED AND DELIVERED this [ ] day of [ ].
PLAINS EXPLORATION & PRODUCTION
COMPANY
By:
-----------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Exhibit B - 1
EXHIBIT C-1
SECURITY INSTRUMENTS
1) Guaranty and Collateral Agreement dated on or prior to the
Effective Date by the Borrower and Plains Illinois Inc., Xxxxxxxx Inc., Plains
E&P Company, PMCT Inc., Plains Resources International Inc. and PXP Gulf Coast
Inc., as the Guarantors, in favor of the Administrative Agent and the Lenders.
2) Financing Statements in respect of item 1 by the Borrower.
3) Stock Powers delivered in respect of item 1 by the Borrower.
a) Plains Illinois Inc., a Delaware corporation
b) Xxxxxxxx Inc., a Delaware corporation
c) Plains E&P Company, a Delaware corporation
d) PMCT Inc., a Delaware corporation
e) Plains Resources International Inc., a Delaware
corporation
f) PXP Gulf Coast Inc.
4) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral,
Security Agreement and Financing Statement dated on or prior to the
Effective Date by the Borrower, as Trustor, in favor of Xxxxxx X.
Xxxxxxxxxxx, as Trustee, for the benefit the Administrative Agent, the
Lenders and others.
5) Financing Statement in respect of item 4.
6) Mortgage, Assignment of As-Extracted Collateral, Security Agreement and
Financing Statement dated on or prior to the Effective Date by Plains
Illinois Inc., as mortgagor, in favor of JPMorgan Chase Bank, as
Administrative Agent, as Mortgagee, for the benefit of itself, the
Lenders and others. (to be filed in Illinois)
7) Financing Statement in respect of item 6.
8) Mortgage, Assignment of As-Extracted Collateral, Security Agreement and
Financing Statement dated on or prior to the Effective Date by Plains
Illinois Inc., as mortgagor, in favor of JPMorgan Chase Bank, as
Administrative Agent, as Mortgagee, for the benefit of itself, the
Lenders and others. (to be filed in Indiana)
9) Financing Statement in respect of item 8.
10) Deed of Trust, Fixture Filing, Assignment of As-Extracted Collateral,
Security Agreement and Financing Statement dated on or prior to the
Effective Date by Xxxxxxxx Inc., as Trustor, in favor of Xxxxxx X.
Xxxxxxxxxxx, as Trustee for the benefit of the Administrative Agreement,
the Lenders and others.
Exhibit X-0 - 0
00) Xxxxxxxxx Xxxxxxxxx in respect of item 10.
12) Deed of Trust, Mortgage, Fixture Filing, Assignment of As-Extracted
Collateral, Security Agreement and Financing Statement dated on or prior
to the Effective Date by PXP Gulf Coast Inc., as Trustor, in favor of
Xxxxxx X. Xxxxxxxxxxx, as Trustee for the benefit of the Administrative
Agreement, the Lenders and others. (to be filed in Texas, Louisiana, New
Mexico and Oklahoma)
13) Financing Statement in respect of item 12.
Exhibit C-1 - 2
EXHIBIT C-2
FORM OF GUARANTY AND COLLATERAL AGREEMENT
Exhibit C-2 - 1
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
Reference is made to the Credit Agreement dated as of April 4, 2003 (as
amended and in effect on the date hereof, the "Credit Agreement"), among PLAINS
EXPLORATION & PRODUCTION COMPANY, a Delaware corporation, the Lenders named
therein and JPMorgan Chase Bank, as Administrative Agent for the Lenders. Terms
defined in the Credit Agreement are used herein with the same meanings.
The Assignor named herein hereby sells and assigns, without recourse, to
the Assignee named herein, and the Assignee hereby purchases and assumes,
without recourse, from the Assignor, effective as of the Assignment Date set
forth herein, the interests set forth on the grid below (the "Assigned
Interest") in the Assignor's rights and obligations under the Credit Agreement,
including, without limitation, the interests set forth on the grid below in the
Maximum Credit Amount of the Assignor on the Assignment Date and Loans owing to
the Assignor which are outstanding on the Assignment Date, together with the
participations in Letters of Credit and LC Disbursements held by the Assignor on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date. The Assignee hereby acknowledges receipt of a copy of the
Credit Agreement and the other Loan Documents. From and after the Assignment
Date (i) the Assignee shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the Assigned Interest, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent of the Assigned Interest, relinquish its rights and be released from its
obligations under the Credit Agreement.
As consideration for the sale and assignment contemplated hereby, the
Assignee shall, on the Assignment Date, pay to the Assignor an amount equal to
the principal amount of Loans assigned by the Assignor to the Assignee as set
forth in the grid below. Except as otherwise provided in this Agreement, all
payments hereunder shall be made in Dollars and in immediately available funds,
without setoff, deduction or counterclaim.
The Assignor and the Assignee agree that (i) the Assignor shall be
entitled to any payments of principal with respect to the Assigned Interest made
prior to the Assignment Date, together with any interest and fees with respect
to the Assigned Interest accrued prior to the Assignment Date, (ii) the Assignee
shall be entitled to any payments of principal with respect to the Assigned
Interest made from and after the Assignment Date, together with any and all
interest and fees with respect to the Assigned Interest accruing from and after
the Assignment Date, and (iii) the Administrative Agent is authorized and
instructed to allocate payments received by it for account of the Assignor and
the Assignee as provided in the foregoing clauses. Each party hereto agrees that
it will hold any interest, fees or other amounts that it may receive to which
the other party hereto shall be entitled pursuant to the preceding sentence for
account of such other party and pay, in like money and funds, any such amounts
that it may receive to such other party promptly upon receipt.
The Assignor does not make any representation or warranty, nor shall it
have any responsibility to the Assignee, with respect to the accuracy of any
recitals, statements, representations or warranties contained in the Loan
Documents, or for the value, validity,
Exhibit D- 1
effectiveness, genuineness, execution, effectiveness, legality, enforceability
or sufficiency of the Loan Documents or any other document referred to or
provided for therein or for any failure by the Borrower or any other Person to
perform any of its obligations thereunder or for the existence, value,
perfection or priority of any collateral security or the financial or other
condition of the Borrower or any of its Subsidiaries or any other obligor or
guarantor, or any other matter relating to the Loan Documents or any extension
of credit thereunder.
Promptly following the receipt by the Assignor of the consideration
required to be paid to it by the Assignee hereunder, the Assignor shall, in the
manner contemplated by Section 2.02(d) of the Credit Agreement: (i) deliver to
the Administrative Agent the Note held by the Assignor, and (ii) notify the
Administrative Agent to request that the Borrower execute and deliver a new Note
to (A) the Assignee, dated as of the Assignment Date, in the principal amount
equal to the Maximum Credit Amount of the Assignee after giving effect to the
sale and assignment contemplated hereby and (B) the Assignor, if the Assignor
has assigned less than the full amount of its Maximum Credit Amount to the
Assignee, dated as of the Assignment Date, in the principal amount equal to the
Maximum Credit Amount of the Assignor after giving effect to the sale and
assignment contemplated hereby.
This Assignment and Assumption is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 5.03(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The [Assignee/Assignor] shall pay the fee payable to the
Administrative Agent pursuant to Section 12.04(b) of the Credit Agreement.
This Assignment and Assumption shall be governed by and construed in
accordance with the laws of the State of New York.
Legal Name of the Assignor: [ ]
Legal Name of Assignee: [ ]
Assignee's Address for Notices: [ ]
[ ]
Effective Date of Assignment ("Assignment Date"): [ ], 200[ ]
Exhibit D- 2
APPLICABLE
PERCENTAGE ASSIGNED
PARTICIPATIONS (SET FORTH AS A
MAXIMUM PRINCIPAL IN LETTERS PERCENTAGE OF THE
CREDIT AMOUNT OF CREDIT AGGREGATE
AMOUNT OF LOANS AND LC MAXIMUM CREDIT
ASSIGNORS ASSIGNED ASSIGNED DISBURSEMENTS AMOUNTS)
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[ ] $ [ ] $ [ ] $ [ ] [ ]%
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[ ] $ [ ] $ [ ] $ [ ] [ ]%
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[ ] $ [ ] $ [ ] $ [ ] [ ]%
----------------------------------------------------------------------------------------------------------------------
[ ] $ [ ] $ [ ] $ [ ] [ ]%
----------------------------------------------------------------------------------------------------------------------
[ ] $ [ ] $ [ ] $ [ ] [ ]%
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Totals $ [ ] $ [ ] $ [ ] [ ]%
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Exhibit D- 3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed by their respective officers thereunto duly
authorized, as of the Assignment Date.
ASSIGNORS: [ ], as Assignor
By:
---------------------------
Name:
Title:
Exhibit D- 4
[ ],
as Assignor
By:
---------------------------
Name:
Title:
Exhibit D- 5
[ ],
as Assignor
By:
---------------------------
Name:
Title:
Exhibit D- 6
[ ],
as Assignor
By:
---------------------------
Name:
Title:
Exhibit D- 7
[ ],
as Assignor
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
Exhibit D- 8
ASSIGNEE: [ ], as Assignee
By:
---------------------------
Name:
Title:
Exhibit D- 9
The undersigned hereby consent to the within assignments:/1/
PLAINS EXPLORATION & JPMORGAN CHASE BANK,
PRODUCTION COMPANY as Administrative Agent,
By: By:
--------------------------------- -----------------------------
[Name] [Name]
[Title [Title]
----------
/1/ Consents to be included to the extent required by Section 12.04(b) of the
Credit Agreement.
Exhibit D- 10