Up to $450,000,000
REVOLVING CREDIT AGREEMENT
AMONG
XXXXXXX RESOURCES CORPORATION,
as Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent and Issuing Lender,
AND
THE LENDERS PARTY HERETO
BANC OF AMERICA SECURITIES L.L.C.,
as Sole Lead Arranger and Book Manager
BANK ONE, NA,
as Syndication Agent
FLEET NATIONAL BANK,
as Documentation Agent
December 15, 2000
TABLE OF CONTENTS
-----------------
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS......................................................................1
--------------------------------
SECTION 1.01 Certain Defined Terms............................................................................1
SECTION 1.02 Accounting Terms................................................................................25
SECTION 1.03 Interpretation..................................................................................25
ARTICLE II COMMITMENTS; BORROWING BASE DETERMINATIONS...........................................................26
------------------------------------------
SECTION 2.01 Commitments.....................................................................................26
SECTION 2.02 Borrowing Base..................................................................................27
SECTION 2.03 Borrowing Procedure for Loans...................................................................29
SECTION 2.04 Minimum Amount and Maximum Number of Eurodollar Rate Borrowings.................................30
SECTION 2.05 Issuing the Letters of Credit...................................................................30
SECTION 2.06 Conversions or Continuation of Borrowings.......................................................33
SECTION 2.07 Fees............................................................................................34
SECTION 2.08 Evidence of Debt................................................................................34
SECTION 2.09 Interest on Loans and Payment Dates.............................................................35
SECTION 2.10 Default Rate....................................................................................35
SECTION 2.11 Voluntary Termination and Reduction of the Total Commitment; Increase
of the Total Commitment.........................................................................36
SECTION 2.12 Voluntary Prepayment of Loans...................................................................38
SECTION 2.13 Mandatory Prepayments; Borrowing Base Deficiency................................................38
SECTION 2.14 Alternate Rate of Interest......................................................................39
SECTION 2.15 Change in Circumstances.........................................................................40
SECTION 2.16 Change in Legality..............................................................................42
SECTION 2.17 Funding Losses..................................................................................42
SECTION 2.18 Method of Payments; Pro Rata Treatment..........................................................43
SECTION 2.19 Taxes...........................................................................................45
SECTION 2.20 Sharing of Payments and Setoffs.................................................................46
SECTION 2.21 Limitation on Reimbursement; Mitigation.........................................................47
SECTION 2.22 Replacement of Lenders..........................................................................47
SECTION 2.23 Use of Proceeds.................................................................................48
SECTION 2.24 Maturity Date...................................................................................48
SECTION 2.25 Affiliates; Lending Offices.....................................................................48
ARTICLE III CONDITIONS PRECEDENT................................................................................49
--------------------
SECTION 3.01 Conditions Precedent to the Loans...............................................................49
SECTION 3.02 Additional Conditions Precedent.................................................................51
SECTION 3.03 General.........................................................................................51
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................................................51
------------------------------
SECTION 4.01 Organization; Corporate Powers..................................................................52
SECTION 4.02 Authority.......................................................................................52
SECTION 4.03 Use of Proceeds.................................................................................52
SECTION 4.04 No Conflict.....................................................................................52
SECTION 4.05 Gas Balancing Agreements and Advance Payment Contracts..........................................52
SECTION 4.06 Oil and Gas Interests...........................................................................53
SECTION 4.07 Ownership of Properties Generally...............................................................53
SECTION 4.08 No Defaults.....................................................................................53
SECTION 4.09 Financial Position: No Material Adverse Change..................................................54
SECTION 4.10 Litigation; Adverse Effects.....................................................................54
i
SECTION 4.11 ERISA...........................................................................................54
SECTION 4.12 Payment of Taxes................................................................................54
SECTION 4.13 Environmental Matters...........................................................................55
SECTION 4.14 Governmental Regulation.........................................................................56
SECTION 4.15 Disclosure......................................................................................56
SECTION 4.16 Subsidiaries....................................................................................57
SECTION 4.17 Solvency........................................................................................57
SECTION 4.18 Business........................................................................................57
SECTION 4.19 Material Contracts..............................................................................57
SECTION 4.20 Licenses, Permits, Etc..........................................................................57
SECTION 4.21 Fiscal Year.....................................................................................57
ARTICLE V AFFIRMATIVE COVENANTS.................................................................................58
---------------------
SECTION 5.01 Information.....................................................................................58
SECTION 5.02 Business of Borrower............................................................................61
SECTION 5.03 Corporate Existence.............................................................................61
SECTION 5.04 Right of Inspection.............................................................................61
SECTION 5.05 Maintenance of Insurance........................................................................61
SECTION 5.06 Payment of Taxes and Claims.....................................................................61
SECTION 5.07 Compliance with Laws and Documents..............................................................62
SECTION 5.08 Operation of Properties and Equipment...........................................................62
SECTION 5.09 Environmental Matters and Indemnity.............................................................62
SECTION 5.10 ERISA Reporting Requirements....................................................................63
SECTION 5.11 Additional Documents............................................................................64
SECTION 5.12 Equal Security for Loans and Notes..............................................................64
ARTICLE VI NEGATIVE COVENANTS....................................................................................64
------------------
SECTION 6.01 Indebtedness and Accommodation Obligations......................................................65
SECTION 6.02 Restrictions on Distributions...................................................................66
SECTION 6.03 Negative Pledge.................................................................................66
SECTION 6.04 Consolidation, Mergers and Acquisitions; Fundamental Changes....................................67
SECTION 6.05 Investments.....................................................................................67
SECTION 6.06 Transactions with Affiliates....................................................................67
SECTION 6.07 Agreements......................................................................................68
SECTION 6.08 Sales of Assets.................................................................................68
SECTION 6.09 ERISA Compliance................................................................................68
SECTION 6.10 Sales and Leasebacks............................................................................69
SECTION 6.11 Margin Regulation...............................................................................69
SECTION 6.12 Amendment to Organizational Documents...........................................................69
SECTION 6.13 Fiscal Year; Fiscal Quarter.....................................................................69
SECTION 6.14 Hedge Transactions..............................................................................69
SECTION 6.15 Financial Covenants.............................................................................69
SECTION 6.16 Subsidiaries....................................................................................70
ARTICLE VII EVENTS OF DEFAULT....................................................................................70
-----------------
SECTION 7.01 Events of Default...............................................................................70
SECTION 7.02 Remedies........................................................................................73
SECTION 7.03 Indemnity.......................................................................................73
ARTICLE VIII ADMINISTRATIVE AGENT................................................................................74
--------------------
SECTION 8.01 Appointment and Authorization of Administrative Agent...........................................74
ii
SECTION 8.02 Delegation of Duties............................................................................74
SECTION 8.03 Liability of Administrative Agent...............................................................74
SECTION 8.04 Reliance by Administrative Agent................................................................75
SECTION 8.05 Notice of Default...............................................................................75
SECTION 8.06 Credit Decision; Disclosure of Information by Administrative Agent..............................76
SECTION 8.07 Indemnification of Administrative Agent.........................................................76
SECTION 8.08 Administrative Agent in its Individual Capacity.................................................77
SECTION 8.09 Successor Administrative Agent..................................................................77
SECTION 8.10 Other Agents....................................................................................77
ARTICLE XI MISCELLANEOUS........................................................................................78
-------------
SECTION 9.01 Amendments and Waivers..........................................................................78
SECTION 9.02 Notices, Etc....................................................................................79
SECTION 9.03 No Waiver; Remedies Cumulative..................................................................80
SECTION 9.04 Costs, Expenses and Taxes.......................................................................80
SECTION 9.05 Right of Setoff.................................................................................81
SECTION 9.06 Governing Law...................................................................................81
SECTION 9.07 Interest........................................................................................81
SECTION 9.08 Survival of Representations and Warranties......................................................82
SECTION 9.09 Binding Effect..................................................................................82
SECTION 9.10 Successors and Assigns; Participations..........................................................83
SECTION 9.11 Separability....................................................................................86
SECTION 9.12 Confidentiality.................................................................................86
SECTION 9.13 Marshaling; Recapture...........................................................................87
SECTION 9.14 Representation by the Lenders...................................................................87
SECTION 9.15 No Third Party Beneficiaries....................................................................87
SECTION 9.16 Execution in Counterparts.......................................................................87
SECTION 9.17 Jurisdiction; Consent to Service of Process.....................................................88
SECTION 9.18 Waiver of Rights to Trial by Jury...............................................................88
SECTION 9.19 Credit Agreement Governs Conflicts..............................................................88
SECTION 9.20 FINAL AGREEMENT OF THE PARTIES..................................................................89
iii
REVOLVING CREDIT AGREEMENT
--------------------------
THIS REVOLVING CREDIT AGREEMENT dated as of December 15, 2000, is
entered into among XXXXXXX RESOURCES CORPORATION, a Delaware corporation
("Borrower"), the LENDERS (as hereinafter defined), the ISSUING LENDER (as
hereinafter defined), and BANK OF AMERICA, N.A., a national banking association,
acting in its capacity as administrative agent for the Lenders (in such
capacity, the "Administrative Agent").
PRELIMINARY STATEMENTS
WHEREAS, Borrower has requested that the Lenders and the Issuing
Lender extend credit to Borrower, as more particularly set forth herein; and
WHEREAS, the Lenders and the Issuing Lender have agreed to extend such
credit to Borrower upon the terms and subject to the conditions set forth
herein;
NOW THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
SECTION 1.01. Certain Defined Terms. As used in this Credit
Agreement, the following terms shall have the following meanings:
"Accommodation Obligation," as applied to Borrower or any of its
Subsidiaries, means any Contractual Obligation, contingent or otherwise, of
Borrower or such Subsidiary of Borrower with respect to any Indebtedness or
other obligation or liability of another Person, including, without limitation,
any such Indebtedness, obligation or liability directly or indirectly
guarantied, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by Borrower or
such Subsidiary of Borrower, or in respect of which Borrower or such Subsidiary
of Borrower is otherwise directly or indirectly liable, including Contractual
Obligations (contingent or otherwise) arising through any agreement to purchase,
repurchase, or otherwise acquire such Indebtedness, obligation or liability or
any security therefor, or to provide funds for the payment or discharge thereof
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain solvency, assets, level of income, or other
financial condition, or any "keep well," "take-or-pay," "throughput" or other
similar arrangement or to make payment other than for value received; provided
that Accommodation Obligations shall not include bonds in favor of the United
States or any state securing obligations to plug abandoned xxxxx and to clean up
and restore the land on which such xxxxx are located.
1
"Administrative Agent" has the meaning specified in the introduction
to this Credit Agreement and shall include any successor administrative agent
appointed in accordance with Section 8.09 of this Credit Agreement.
"Advance Payment Contract" means any transaction or contract
(including any volumetric or dollar denominated production payment but excluding
any Hedge Transaction) whereby Borrower or any of its Subsidiaries either (a)
receives or becomes entitled to receive (either directly or indirectly) any
payment (an "Advance Payment") to be applied toward payment of the purchase
price of Hydrocarbons produced or to be produced from Oil and Gas Interests
owned by Borrower or any of its Subsidiaries and which Advance Payment is paid
or to be paid in advance of actual delivery of such production to or for the
account of the purchaser, or (b) grants an option or right of refusal to the
purchaser to take delivery of such production in lieu of payment, and, in either
of the foregoing instances, the Advance Payment is, or is to be, applied as
payment in full for such production when sold and delivered or is, or is to be,
applied as payment for a portion only of the purchase price thereof or of a
percentage or share of such production; provided that inclusion of the standard
provisions in any oil or gas sale or purchase contract or any similar contract
shall not, in and of itself, constitute such contract as an Advance Payment
Contract for the purposes hereof.
"Affected Lender" has the meaning specified in Section 2.22.
"Affiliate" means, when used with respect to any Person, each other
Person that directly or indirectly controls or is controlled by or is under
common control with such Person. As used in this definition, "control" means the
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise) and shall include,
without limitation, any Person who beneficially owns more than 50% of the equity
of the other Person and, as to any general or limited partnership, any general
partner thereof.
"Agent-Related Persons" means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as Administrative Agent, the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Applicable Rate" means, (a) on any day prior to the Borrowing Base
Commencement Date, the applicable percentage (expressed in basis points) set
forth in the first grid below, based on the Debt Ratings in effect on such day,
and (b) on any day from and after the Borrowing Base Commencement Date, the
applicable percentage (expressed in basis points) set forth in the second grid
below, based on the ratio of Consolidated Funded Debt to Consolidated EBITDA on
such day and the Debt Ratings in effect on such day:
2
Prior to Borrowing Base Commencement Date
-----------------------------------------
=======================================================================================
Pricing Debt Rating Commitment Eurodollar Rate+ Base
Level (S&P / Moody's) Fee Rate+
Letters of Credit
=======================================================================================
1 BBB/Baa2 or higher 17.5 75.0 0
---------------------------------------------------------------------------------------
2 BBB-/Baa3 25.0 100.0 0
---------------------------------------------------------------------------------------
3 BB+/Bal 37.5 125.0 0
=======================================================================================
From and After Borrowing Base Commencement Date
-----------------------------------------------
=====================================================================================================
Pricing Applicable Applicable Commitment L/C Fee
Level Margin for LIBOR Margin for Fee
Loans Base Rate
Loans
=====================================================================================================
Funded Debt to
EBITDA Ratio <2x >2x <2x >2x <2x >2x <2x >2x
- --- - --- - --- - ---
(Horizontal) /
Debt Rating (S&P
/ Moody's)
(Vertical)
=====================================================================================================
BBB-/Baa3 or 100.0 112.5 0 0 17.5 22.5 100.0 112.5
1 higher
-----------------------------------------------------------------------------------------------------
BB+/Ba1 125.0 137.5 0 12.5 25.0 30.0 125.0 137.5
2
-----------------------------------------------------------------------------------------------------
BB/Ba2 137.5 150.0 12.5 25.0 37.5 42.5 137.5 150.0
3
-----------------------------------------------------------------------------------------------------
BB-/Ba3 or 162.5 175.0 37.5 50.0 45.0 50.0 162.5 175.0
4 lower
=====================================================================================================
"Debt Ratings" means, as of any date of determination, the ratings
assigned by S&P and Moody's to Borrower's non-credit-enhanced, senior, unsecured
long-term debt; provided that if the Debt Ratings assigned by S&P and Moody's
are at different Pricing Levels, then the higher of such Debt Ratings shall
apply (with Pricing Level 1 being the highest and Pricing Level 4 being the
lowest), unless there is a split in Debt Ratings of more than one Pricing Level,
in which case the Pricing Level that is one Pricing Level higher than the lower
Debt Rating shall apply. If either S&P or Moody's ceases to assign a Debt
Rating, its Debt Rating shall be deemed to be at the lowest Pricing Level. On
the Effective Date, Pricing Level 3 in the first grid above shall determine the
Applicable Rate. Thereafter, each change in the Applicable Rate resulting from a
publicly announced change in either Debt Rating shall be effective as of the
date of the public announcement by S&P or Moody's of such change, and each
change in the Applicable Rate resulting from a change in the ratio of
Consolidated Funded Debt to Consolidated EBITDA shall be effective as of the
date Borrower delivers a Compliance Certificate showing such change pursuant to
Section 5.01(c).
3
"Approved Fund" has the meaning specified in Section 9.10(d).
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and book manager.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, substantially in the form of Exhibit A.
"Available Commitment" means, at any time, (a) the Total Commitment at
such time or (b) if the Borrowing Base Commencement Date has occurred, the
lesser of (i) the Total Commitment and (ii) the Borrowing Base at such time.
"Bank of America" means Bank of America, N.A.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978 as codified
under 11 U.S.C. Section 101, et seq.
"Base Rate" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." Such rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Benefit Plan" means any employee benefit plan subject to Title IV of
ERISA maintained by Borrower or any ERISA Affiliate with respect to which
Borrower or such ERISA Affiliate has a fixed or contingent liability.
"Board" means the Board of Governors of the Federal Reserve System of
the United States.
"Borrower" shall have the meaning specified in the introduction to
this Credit Agreement.
"Borrowing" means a borrowing comprised of a group of Loans of the
same Type made to Borrower on the same date by the Lenders (or resulting from
conversions or continuations on a given date pursuant to Section 2.06), having,
in the case of Eurodollar Rate Loans, the same Interest Period. A Borrowing may
be a Eurodollar Rate Borrowing or a Base Rate Borrowing.
"Borrowing Base" means, at the particular time in question, the amount
determined by the Administrative Agent and the Lenders, the Majority Lenders or
the Super Majority Lenders, as the case may be, in accordance with the
provisions of Section 2.02.
4
"Borrowing Base Commencement Date" means (a) the date on which the
Debt Rating by S&P is BB or lower or the Debt Rating by Xxxxx'x is Ba2 or lower
or either S&P or Moody's no longer assigns a Debt Rating or (b) the 30th day
after Borrower notifies the Administrative Agent and the Lenders in writing that
it requests that the Borrowing Base Commencement Date occur.
"Borrowing Base Notice" means a written notice sent to Borrower by the
Administrative Agent notifying Borrower of the Borrowing Base determined by the
Lenders, the Majority Lenders or the Super Majority Lenders, as the case may be,
for the upcoming Borrowing Base Period.
"Borrowing Base Period" means (a) initially, the period from the first
day of the month in which the Borrowing Base Commencement Date occurs to, but
excluding, the next following May 1 or, if the next following May 1 is more than
nine months or less than three months after the month in which the Borrowing
Base Commencement Date occurs, the next following November 1, and (b)
thereafter, each six month period beginning on the next following November 1 or
May 1 of each year; provided that the Borrowing Base Period for which a
Borrowing Base is applicable following an Unscheduled Determination Notice shall
be the period from the date such Borrowing Base becomes effective in accordance
with Section 2.02(b) until the next following November 1 or May 1, as the case
may be.
"Borrowing Date" means, with respect to each Borrowing, the Business
Day upon which the proceeds of such Borrowing are made available to Borrower by
the Lenders.
"Borrowing Request" means, with respect to a Borrowing or an issuance
of a Letter of Credit, a request made pursuant to Section 2.03 or Section 2.05,
which request shall be in the form of Exhibit B.
"Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of Texas) on which banks are open for
business in Dallas, Texas; provided that, when used in connection with a
Eurodollar Rate Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London interbank
eurodollar market.
"Capital Lease" means, when used with respect to any Person, any lease
in respect of which the obligations of such Person constitute Capitalized Lease
Obligations.
"Capitalized Lease Obligations" means, when used with respect to any
Person, without duplication, all obligations of such Person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations shall
have been or should be, in accordance with GAAP, capitalized on the books of
such Person.
"Cash Equivalents" means, when used in connection with Borrower or any
Subsidiary of Borrower, such Borrower's or such Subsidiary's Investments in:
(a) Government Securities due within one year from the date of
acquisition thereof;
(b) Readily marketable direct obligations of any State of the
United States or any political subdivision of any such State given on
the date of such investment a credit rating of at
5
least A2 by Moody's or A by S&P, in each case due within one year from the
date of acquisition thereof;
(c) Certificates of deposit issued by, money market deposit accounts
with, eurodollar deposits through, bankers' acceptances of, and repurchase
and reverse repurchase agreements covering Government Securities executed
by, a Lender or any other bank doing business in and incorporated under the
laws of the United States or any state thereof whose deposits are insured
through the FDIC and having (either itself or its holding company) on the
date of such Investment combined capital, surplus and undivided profits of
at least $250,000,000, or any offshore branch of such Lender or bank, in
each case maturing within one year from the date of acquisition thereof;
(d) Readily marketable commercial paper of a Lender or such Lender's
holding company or of any other bank or bank holding company given on the
date of such investment a credit rating of at least P-1 by Xxxxx'x or A-1
by S&P, or of corporations doing business in and incorporated under the
laws of the United States or any state thereof given on the date of such
Investment a credit rating of at least P-1 by Xxxxx'x or A-1 by S&P, in
each case, maturing within one year from the date of acquisition thereof;
and
(e) "Money-market mutual funds" investing solely in instruments of
the types described in clauses (a) through (d) above.
"Change of Control" means, with respect to Borrower, an event or series of
events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of Borrower or its subsidiaries, or any Person acting
in its capacity as trustee, agent or other fiduciary or administrator of
any such plan), becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
25% or more of the equity interests of Borrower; or
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of
Borrower cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
6
"Commitment" means, as to any Lender, the obligation of such Lender to
Loans and participate in Letter of Credit Liabilities in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set forth
opposite such Lender's name on the signature pages hereof under the caption
"Commitment" or contained in an Assignment and Assumption, as the same may be
increased or decreased from time to time pursuant to this Credit Agreement.
"Commitment Percentage" means, as to any Lender, a fraction (expressed as a
percentage), the numerator of which shall be the amount of such Lender's
Commitment and the denominator of which shall be the Total Commitment.
"Communications" has the meaning specified in Section 9.02.
"Compliance Certificate" means a compliance certificate delivered by
Borrower to the Lenders pursuant to Section 5.01(c).
"Consolidated" refers to the consolidation of any Person, in accordance
with GAAP, with its properly Consolidated Affiliates. Reference to a Person's
Consolidated financial statements, financial position, financial condition,
liabilities, etc. refer to the Consolidated financial statements, financial
position, financial condition, liabilities, etc. of such Person and its properly
Consolidated Affiliates.
"Consolidated Assets" means, with respect to Borrower and its Subsidiaries
on a Consolidated basis, all items which should be classified as assets on the
Consolidated financial statements of Borrower delivered to the Lenders pursuant
to Section 5.01, all as determined in conformity with GAAP.
"Consolidated EBITDA" means, with respect to Borrower and its Subsidiaries
on a Consolidated basis, net income (or loss), plus, without duplication and to
the extent included in determining net income (or loss), the sum of (a) total
income tax expense, (b) Consolidated Interest Expense, (c) depreciation,
depletion and amortization expense, (d) amortization of intangibles (including,
but not limited to, goodwill) and organization costs, (e) any extraordinary
losses on sales of assets outside of the ordinary course of business and (f) any
other non-cash charges, minus, without duplication and to the extent included in
determining net income (or loss), the sum of (i) any extraordinary gains on
sales of assets outside of the ordinary course of business, and (ii) any other
non-cash credits, all as determined in accordance with GAAP.
"Consolidated Equity" means, with respect to Borrower and its Subsidiaries
on a Consolidated basis, the Consolidated Assets of Borrower less the
Consolidated Liabilities of Borrower, adjusted to exclude non-cash items,
including unrealized gains and losses, related to EITF 98-10 until Financial
Accounting Standard 133 becomes effective on January 1, 2001, and to Financial
Accounting Standard 133 after it becomes effective on January 1, 2001.
"Consolidated Funded Debt" means, with respect to Borrower and its
Subsidiaries on a Consolidated basis, without duplication, Indebtedness in any
of the following categories:
(a) Indebtedness for borrowed money, including the Obligations;
(b) Indebtedness constituting an obligation to pay the deferred
purchase price of property;
7
(c) Indebtedness evidenced by a bond, debenture, note or similar
instrument;
(d) Indebtedness constituting Capitalized Lease Obligations;
(e) Indebtedness constituting the portion of any Advance Payment that
has not been satisfied by the delivery of production from Oil and Gas
Interests;
(f) Indebtedness constituting a non-contingent obligation to
reimburse the issuer of any letter of credit or any guarantor or surety for
payments made by such issuer, guarantor or surety; and
(g) Accommodation Obligations with respect to Indebtedness of any
other Person of the types described in clauses (a) through (c) above.
"Consolidated Interest Expense" means, for any period, with respect to
Borrower and its Subsidiaries on a Consolidated basis, the sum of (a) all
interest, premium payments, fees, charges and related expenses in connection
with borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, and (b) the portion of rent expense with
respect to such period under Capital Leases that is treated as interest in
accordance with GAAP, minus interest income.
"Consolidated Liabilities" means, with respect to Borrower and its
Subsidiaries on a Consolidated basis, all items which should be classified as
liabilities on the Consolidated financial statements of Borrower delivered to
the Lenders pursuant to Section 5.01, all as determined in conformity with GAAP.
"Consolidated Net Income" means, for any period, with respect to Borrower
and its Subsidiaries on a Consolidated basis, net income (or loss) for such
period determined in conformity with GAAP, but adjusted to exclude non-cash
items, including unrealized gains and losses, related to EITF 98-10 until
Financial Accounting Standard 133 becomes effective on January 1, 2001, and to
Financial Accounting Standard 133 after it becomes effective on January 1, 2001.
"Consolidated Tangible Net Worth" means, with respect to Borrower and its
Subsidiaries on a Consolidated basis, at any time, the Consolidated Equity of
Borrower at such time, less the Consolidated Intangible Assets of Borrower at
such time. For purposes of this definition, "Intangible Assets" means the amount
(to the extent reflected in determining Consolidated Equity) of all unamortized
debt discount and expense (to the extent, if any, recorded as an unamortized
deferred charge), unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights and organization expenses.
"Contractual Obligation" as applied to any Person, means any provision of
any stock or other securities issued by that Person or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement or
instrument to which that Person is a party or by which it or any of its
properties is bound, or to which it or any of its properties is subject
(including, without limitation, any restrictive covenant affecting such Person
or any of its properties).
8
"Credit Agreement" means this Revolving Credit Agreement dated as of
December 15, 2000, among Borrower, the Administrative Agent, the Issuing Lender
and the Lenders, as this Revolving Credit Agreement may be amended, modified,
supplemented and/or extended from time to time.
"Debtor Relief Laws" means the Bankruptcy Code and all other applicable
dissolution, liquidation, conservatorship, bankruptcy, moratorium, readjustment
of debt, compromise, rearrangement, receivership, insolvency, reorganization, or
similar debtor relief laws from time to time in effect affecting the rights of
creditors generally.
"Default" means any Event of Default or the occurrence of any event or
condition which would, with the giving of any requisite notice and/or the
passage of time or both, constitute an Event of Default.
"Default Rate" has the meaning specified in Section 2.10.
"Designated Hedge Transactions" means the Hedge Transactions described on
Schedule 5.12.
"Determination Date" has the meaning specified in Section 2.02(b).
"Distribution" means any dividend payable in cash or property with respect
to any shares of capital stock of Borrower or any Subsidiary of Borrower (other
than dividends payable in shares of the same class of common, preferred or other
capital stock as the shares upon which the dividend is being paid), any other
distribution made with respect to any shares of capital stock of Borrower or any
Subsidiary of Borrower, or any purchase, redemption or retirement of, or other
payment with respect to, any shares of capital stock of Borrower or any
Subsidiary of Borrower; provided that the following shall not be considered
"Distributions" for purposes of this Credit Agreement: (a) purchases and sales
of Borrower's securities pursuant to Borrower's 401(k) Plan and (b) the issuance
by Borrower of securities or rights pursuant to the Rights Agreement and the
conversion of those securities or the exercise of those rights.
"Dollars" and the symbol "$" means the lawful currency of the United
States.
"Effective Date" means the date on which all of the conditions precedent to
the making of the Loans and the issuance of the Letters of Credit set forth in
Section 3.01 are first satisfied or waived by the Lenders and the initial Loans
are made or the initial Letter of Credit is issued.
"Eligible Assignee" has the meaning specified in Section 9.10(d).
"Environmental Laws" means any federal, state or local statute, code,
ordinance, rule, regulation, permit, consent, approval, license, judgment,
order, writ, judicial decision, decree, injunction or other authorization or
requirement whenever promulgated, issued or modified, including the requirement
to register underground storage tanks, well plugging and abandonment
requirements, and oil and gas waste disposal requirements relating to:
(a) emissions, discharges, spills, migration, movement, releases or
threatened releases of pollutants, contaminants, Hazardous
Substances, or hazardous or
9
toxic materials or wastes into or onto soil, land, ambient air,
surface water, ground water, watercourses, publicly owned
treatment works, drains, sewer systems, wetlands or septic
systems;
(b) the use, treatment, storage, disposal, handling, manufacturing,
transportation, or shipment of Hazardous Substances or hazardous
and/or toxic wastes, material, products or by-products containing
Hazardous Substances (or of equipment or apparatus containing
Hazardous Substances); or
(c) otherwise relating to pollution or the protection of human health
or the environment.
"Environmental Liabilities" means, with respect to any Person, any and all
liabilities, responsibilities, losses, sums paid in settlement of claims,
obligations, charges, actions (formal or informal), claims (including, without
limitation, claims for personal injury or for real or personal property damage),
liens, administrative proceedings, damages (including, without limitation, loss
or damage resulting from the occurrence of an Event of Default), punitive
damages, consequential damages, treble damages, penalties, fines, monetary
sanctions, interest, court costs, response and remediation costs, stabilization
costs, encapsulation costs, treatment, storage, or disposal costs, groundwater
monitoring or environmental sampling costs, other causes of action and any other
costs and expenses (including, without limitation, reasonable attorneys',
experts' and consultants' fees, costs of investigation and feasibility studies
and disbursements in connection with any investigative, administrative or
judicial proceeding) , whether direct or indirect, known or unknown, absolute or
contingent, past, present or future arising under, pursuant to or in connection
with any Environmental Law, or any other binding obligation of such Person
requiring abatement of pollution or protection of human health and the
environment.
"Environmental Lien" means a Lien in favor of any Governmental Authority
for (a) any liability under Environmental Laws or (b) damages arising from, or
costs incurred by such Governmental Authority in response to, a Release or
threatened Release of a Hazardous Substance into the environment.
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA Affiliate" means any (a) corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as Borrower, (b) partnership or other trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with Borrower, (c) member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as Borrower or (d) other Person required
to be aggregated with Borrower or an ERISA Affiliate thereof, as defined above,
pursuant to Section 414(o) of the Code.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
10
Eurodollar Rate = Eurodollar Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" means, for such Interest Period:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first
day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or
(b) in the event the rate referenced in the preceding clause (a) does
not appear on such page or service or such page or service shall cease to
be available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(c) in the event the rates referenced in the preceding clauses (a)
and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest (rounded upward to the next
1/100th of 1%) at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America
and with a term equivalent to such Interest Period would be offered by Bank
of America's London Branch to major banks in the offshore Dollar market at
their request at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage, if any (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the
Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate
Loan shall be adjusted automatically as of the effective date of any change
in the Eurodollar Reserve Percentage. "Eurodollar Rate Loan" means a Loan
that bears interest at a rate based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 7.01.
"Existing Credit Agreement" means that certain Amended and Restated Credit
Agreement dated as of November 12, 1997, among Borrower, certain agents and
certain lenders, as amended, modified, supplemented and/or restated prior to the
Effective Date.
11
"Facility Usage" means, on any day, the sum of (a) the outstanding
principal balance of the Loans after giving effect to any Borrowing, prepayment
and repayment of the Loans on such day, plus (b) the outstanding Letter of
Credit Liabilities after giving effect to any issuance, cancellation or
expiration of Letters of Credit and any repayment of Letter of Credit
Liabilities on such day.
"FC Energy" means FC Energy Finance I, Inc., a wholly-owned Subsidiary of
Bank One, NA (f/k/a The First National Bank of Chicago).
"FDIC" means the Federal Deposit Insurance Corporation or any successor.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.
"Fiscal Quarter" means a three-month period ending on the last day of
December, March, June or September of any year.
"Fee Letter" means that certain letter agreement dated as of August 30,
2000, among Borrower, Arranger and Bank of America.
"Fiscal Year" means a twelve-month period ending on December 31 of any
year.
"Fund" has the meaning specified in Section 9.10(d).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession.
"Gas Balancing Agreement" means any agreement or arrangement whereby
Borrower or any of its Subsidiaries or any other party having an interest in any
Hydrocarbons to be produced from Oil and Gas Interests in which Borrower or any
of its Subsidiaries has a right to take more than its proportionate share of
production therefrom.
"Government Securities" means readily marketable direct full faith and
credit obligations of the United States or obligations unconditionally
guaranteed by the full faith and credit of the United States (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States).
12
"Governmental Approval" means any authorization, consent, approval,
license, lease, ruling, permit, certification, exemption, filing for or
registration by or with any Governmental Authority required of or by Borrower or
any Subsidiary of Borrower in connection with (a) the execution, delivery and
performance of the Loan Documents by Borrower and the incurrence of any
Obligations under this Credit Agreement, (b) the validity or enforceability of
the Loan Documents and the exercise by the Administrative Agent, the Issuing
Lender or any Lender of its rights and remedies thereunder, and (c) the
acquisition, maintenance, ownership and operation of the Oil and Gas Interests.
"Governmental Authority" means any nation or government, any federal,
state, province, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Hazardous Substances" means (a) hazardous materials, hazardous wastes, and
hazardous substances including, but not limited to, those substances, materials
and wastes listed in the United States Department of Transportation Hazardous
Materials Table, 49 C.F.R. Section 172.101, as amended, or listed by the federal
Environmental Protection Agency as hazardous substances under or pursuant to 40
C.F.R. Part 302, as amended, or substances, materials, contaminants or wastes
which are or become regulated under any Environmental Law, including without
limitation, those substances, materials, contaminants or wastes as defined in
the following statutes and their implementing regulations: the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq., as amended, the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as
amended, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq., as amended; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., as amended; the Clean Air Act, 42 U.S.C.
Section 7401 et seq., as amended, the federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq., as amended, the Occupational Safety and Health Act,
2 U.S.C. Section 651 et seq., as amended, the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq., as amended and the Natural Gas Pipeline Safety Act of
1968, 49 U.S.C. Section 1671 et seq., as amended; (b) all substances, materials,
contaminants or wastes listed in all comparable statutes of the States of Texas,
Colorado, Kansas, Wyoming, New Mexico, Oklahoma or Louisiana or other states in
which any Oil and Gas Interests owned by Borrower or any of its Subsidiaries are
located and in comparable local governmental regulations in such states; (c)
acid gas, sour water streams or sour water vapor streams containing hydrogen
sulfide or other forms of sulphur, sodium hydrosulfide and ammonia; (d)
Hydrocarbons; (e) natural gas, synthetic gas, and any mixtures thereof; (f)
asbestos and/or any material which contains 1% or more, by weight, of any
hydrated mineral silicate, including but not limited to chrysotile, amosite,
crocidolite, tremolite, anthophylite and/or actinolite, whether friable or non-
friable; (g) PCB's, or PCB containing materials or fluids; (h) radon; (i)
naturally occurring radioactive material, radioactive substances or waste; (j)
salt water and other oil and gas wastes and (k) any other hazardous or noxious
substance, material, pollutant, emission, or solid, liquid or gaseous waste.
"Hedge Transaction" means a transaction, including the Designated Hedge
Transactions, pursuant to which Borrower or any of its Subsidiaries xxxxxx the
price to be received by it for future production of Hydrocarbons, including
price swap agreements under which Borrower or any of its Subsidiaries agrees to
pay a price for a specified amount of Hydrocarbons determined by reference to a
recognized market on a specified future date and the contracting counterparty
agrees to pay Borrower or
13
any of its Subsidiaries a fixed price for the same or similar amount of
Hydrocarbons; provided that "Hedge Transaction" shall not include the purchase
by Borrower or any of its Subsidiaries of any "floor" or similar transaction by
means of which Borrower or such Subsidiary protects itself from declining prices
for its production without fixing any ceiling price for such production.
"Highest Lawful Rate" means, as of a particular date and as to any Lender,
the maximum nonusurious interest rate that may under applicable law then be
contracted for, charged or received by such Lender in connection with its Loans
and other extensions of credit hereunder.
"Hostile Acquisition" means any transaction in which Borrower or any of its
Subsidiaries, directly or indirectly, purchases or offers to purchase or
acquire, in any transaction or series of transactions, an aggregate of 5% or
more of the equity securities or controlling interest of any Person, for any
type of consideration, without the prior written consent of such Person's
management and Board of Directors or controlling body.
"Hydrocarbons" means oil, gas, casinghead gas, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons and all products separated, settled
and dehydrated therefrom and all products refined therefrom, including, without
limitation, kerosene, liquified petroleum gas, refined lubricating oils, diesel
fuel, drip gasoline, natural gasoline, helium, sulphur and all other minerals.
"Immaterial Mineral Interests" has the meaning specified in Section 4.06.
"Increase Effective Date" has the meaning specified in Section 2.11(b).
"Increasing Lender" has the meaning specified in Section 2.11(b).
"Indebtedness" means, with respect to Borrower or any Subsidiary of
Borrower, (a) indebtedness for borrowed money (including without duplication
obligations, contingent or otherwise, to reimburse the issuer of any letter of
credit or any guarantor or surety), (b) indebtedness for the deferred purchase
price of property or services (excluding accounts payable incurred in the
ordinary course of business, subject to the last sentence of this definition),
(c) indebtedness evidenced by bonds, debentures, notes or other similar
instruments (but shall not include any Indebtedness guaranteed, or bonds posted
to state and/or federal agencies incurred in the ordinary course of business in
conjunction with Borrower's and its Subsidiaries' oil and gas operations but
shall include Environmental Liabilities or liabilities to the PBGC), (d)
obligations and liabilities secured by a Lien upon property owned by Borrower or
a Subsidiary of Borrower, whether or not Borrower or such Subsidiary of Borrower
has assumed such obligations and liabilities and the amount of which
Indebtedness shall not exceed the fair market value of the property subject to
such Lien if Borrower or such Subsidiary of Borrower has not assumed such
obligations and liabilities, (e) Capitalized Lease Obligations, (f) all net
payments or amounts owing by Borrower or any Subsidiary of Borrower in respect
of interest rate protection agreements, foreign currency exchange agreements,
commodity swap agreements or other interest, exchange rate or commodity hedging
arrangements, and (g) the portion of any Advance Payment that has not been
satisfied by the delivery of production from Oil and Gas Interests. The
Indebtedness of Borrower or any Subsidiary of Borrower shall include the
Indebtedness of any partnership or joint venture in which Borrower or any
Subsidiary of Borrower is a general or venture partner. The Indebtedness of
Borrower or any Subsidiary of Borrower shall not include trade payables and
---
expense
14
accruals incurred or assumed in the ordinary course of Borrower's or such
Subsidiary's business (including trade payables and expense accruals of any
partnership or joint venture in which Borrower or any Subsidiary of Borrower is
a general or venture partner), provided such payables have not remained unpaid
for a period of 90 days after the same became due unless Borrower or such
Subsidiary is diligently contesting same in good faith.
"Indemnified Liabilities" has the meaning specified in Section 7.03.
"Indemnitee" has the meaning specified in Section 7.03.
"Initial Financial Statements" means, collectively, the audited annual
Consolidated financial statements of Borrower dated as of December 31, 1999, and
the quarterly Consolidated financial statements of Borrower dated as of
September 30, 2000.
"Initial Reserve Report" means the first Reserve Report delivered to the
Administrative Agent and the Lenders after the occurrence of the Borrowing Base
Commencement Date.
"Interest Coverage Ratio" means, as of any date of determination, the ratio
of (a) Consolidated EBITDA for the period of the four Fiscal Quarters ending on
such date to (b) Consolidated Interest Expense for such period.
"Interest Payment Date" means any date interest is due pursuant to the
provisions of Section 2.09(b).
"Interest Period" means, with respect to any Eurodollar Rate Loan, the
period commencing on (a) the date such Loan is made or converted into or
continued as a Eurodollar Rate Loan or (b) in the case of a roll-over to a
successive Interest Period, the last day of the immediately preceding Interest
Period and ending on the numerically corresponding day in the first, second,
third, sixth, or, subject to availability to each Lender, ninth calendar month
thereafter, as Borrower may select as provided in Section 2.03 or 2.06.
Notwithstanding the foregoing, (i) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day), (ii) no Interest
Period shall extend beyond the Maturity Date, and (iii) no Interest Period shall
have a duration of less than one month and, if the Interest Period for any
Eurodollar Rate Loan would otherwise be a shorter period, such Eurodollar Rate
Loan shall not be available hereunder.
"Investment" means, with respect to Borrower or any Subsidiary of Borrower,
any direct or indirect purchase or other acquisition by Borrower or such
Subsidiary of any stock, partnership interest or other equity interest, or of a
beneficial interest therein, of any other Person, and any direct or indirect
loan, advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, advances to employees and similar items
made or incurred in the ordinary course of business), or capital contribution by
Borrower or such Subsidiary to any other Person, including all Indebtedness and
accounts owed by such other Person which are not current assets or did not arise
from sales of goods or services to Borrower or such Subsidiary in the ordinary
course of business. The amount of any Investment shall be determined in
conformity with GAAP.
15
"IRS" means the Internal Revenue Service or any successor agency.
"Issuing Lender" means Bank of America.
"Lender" means each of the financial institutions whose name appears on the
signature pages to this Credit Agreement and each Person that from time to time
becomes a party hereto in accordance with Section 2.11(b), Section 2.22 or
Section 9.10, and includes the Issuing Lender, as the context may require.
"Lending Office" means, with respect to each Lender, the branch or branches
(or Affiliate or Affiliates) from which such Lender's Eurodollar Rate Loans or
Base Rate Loans, as the case may be, are made or maintained and for the account
of which payments of principal of, and interest on, such Lender's Eurodollar
Rate Loans or Base Rate Loans are made.
"Letter of Credit Application" means an application to the Issuing Bank by
Borrower for the issuance of a Letter of Credit.
"Letter of Credit" means each Standby Letter of Credit requested to be
issued pursuant to Section 2.01(b) and Section 2.05.
"Letter of Credit Commitment" means, at any time, the lesser of (a)
$50,000,000 and (b) the Total Commitment at such time, or if the Borrowing Base
Commencement Date has occurred, the lesser of (c) 15% of the Borrowing Base and
(d) the Total Commitment at such time.
"Letter of Credit Liabilities" means, at any time in respect of the Letters
of Credit, the sum of (a) the amount available for drawings under the Letters of
Credit and (b) the aggregate unpaid amount of all Reimbursement Obligations at
the time due and payable in respect of previous drawings made under the Letters
of Credit.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
production payment, deposit, lien, charge, pledge, security interest, claim or
encumbrance of any kind (whether voluntary or involuntary, affirmative or
negative, and whether imposed or created by operation of law or otherwise) upon
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities but excluding any right
of offset which arises without agreement in the ordinary course of business.
"Loan Documents" means this Credit Agreement, each of the Notes, the Letter
of Credit Applications and reimbursement agreements executed in connection
therewith, each Compliance Certificate, each Notice of Conversion or
Continuation, each Borrowing Request, all Reserve Reports, all legal opinions
and when executed and delivered by the parties thereto, all other agreements,
certificates, instruments and documents executed in connection with this Credit
Agreement or any of the other foregoing documents, as the same may be amended,
modified, supplemented or extended from time to time.
"Loan(s)" means the loan(s) provided for in Section 2.01.
16
"Majority Lenders" means the Lenders holding more than 66-2/3% of the
aggregate principal amount of the Loans and Letter of Credit Liabilities, or, if
no Loans or Letters of Credit Liabilities are outstanding, the Lenders holding
more than 66-2/3% of the Total Commitment.
"Market Exposure" means, with respect to Borrower, on any Business Day, the
aggregate amount of Dollars, if any, that would be payable by Borrower to the
counterparties to the Designated Hedge Transactions, if all Designated Hedge
Transactions were being terminated as of the close of business in New York, New
York on such Business Day.
"Market Quotation" means, with respect to a Designated Hedge Transaction,
an amount determined on the basis of a quotation from a Reference Market Maker.
Such quotation will be for an amount, if any, that would be paid to Borrower
(expressed as a negative number), or by Borrower (expressed as a positive
number) in consideration of an agreement between Borrower (taking into account
any existing credit support document with respect to the obligations of
Borrower) and the quoting Reference Market Maker, with the relevant Business Day
as the date of commencement of such agreement, to enter into a transaction that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties in respect of such Designated Hedge Transaction that would, but
for the occurrence of the designation of an "Early Termination Date" as of the
relevant Business Day, have been required after that date. Borrower will request
each Reference Market Maker to provide its quotation as of the relevant Business
Day.
"Margin Stock" shall have the meaning given to such term under Regulation
U.
"Material Adverse Effect" means (a) a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of Borrower
and its Subsidiaries taken as a whole, (b) material impairment of the ability of
Borrower to perform timely any of its Obligations under any Loan Document to
which it is or will be a party, or (c) a material impairment of the rights of or
benefits available to the Lenders under any Loan Document.
"Material Contract" means any contract, agreement or instrument to which
Borrower or any of its Subsidiaries is a party (a) which calls for payments to
or from Borrower or any Subsidiary of Borrower of an amount in excess of
$30,000,000 during any twelve month period or (b) pursuant to which Borrower or
any Subsidiary of Borrower acquires any right to an interest in real or personal
property or a right to obtain services if Borrower or such Subsidiary's
inability to obtain any such right could reasonably be expected to result in a
Material Adverse Effect.
"Material Subsidiary" means any Subsidiary of Borrower other than a
Subsidiary which alone or together with its Subsidiaries did not have more than
$1,000,000 in assets or $500,000 of annual revenue as of the end of and for the
most recently ended Fiscal Year. As of the date of this Credit Agreement, each
Subsidiary of Borrower is a Material Subsidiary other than Plains Petroleum
Gathering Company and Xxxxxxx Fuels Corporation.
"Maturity Date" means December 15, 2005, or the earlier date of termination
in whole of the Total Commitment.
17
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five (5) plan years made or accrued an obligation to make contributions.
"New Funds Amount" means the amount by which a New Lender's or an
Increasing Lender's outstanding Loans increase as of a Commitment Increase
Effective Date (without regard to any such increase as a result of Borrowings
made on such Commitment Increase Effective Date).
"New Lender" has the meaning specified in Section 2.11(b).
"Notes" means the promissory notes of Borrower evidencing the Loans, in the
form of Exhibit C, together with all renewals, extensions, modifications and
replacements thereof and substitutions therefor.
"Notice of Commitment Increase" has the meaning specified in Section
2.11(b).
"Notice of Conversion or Continuation" means a Notice of Conversion or
Continuation in the form of Exhibit D signed by a Responsible Officer of
Borrower.
"Obligations" means all obligations, liabilities and indebtedness of every
nature of Borrower from time to time owing to the Issuing Lender or any Lender
under any Loan Document, including, without limitation, (a) the due and punctual
payment of (i) the principal of and interest on the Loans and the Letter of
Credit Liabilities, when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, including, to the extent
permitted by applicable law, interest that accrues after the commencement of any
proceeding by or against Borrower under the Bankruptcy Code and all other
applicable Debtor Relief Laws and (ii) all other monetary obligations of
Borrower to the Issuing Lender or any Lender under this Credit Agreement and
each of the other Loan Documents, including any and all fees, costs, expenses
and indemnities and (b) the due and punctual performance of all other
obligations of Borrower under this Credit Agreement and each other Loan
Document. "Obligation" means any part of the Obligations.
"Oil and Gas Interests" means any and all rights, estates, titles and
interests in any oil and gas xxxxx, oil, gas, sulphur and other mineral
leaseholds and fee interests, all overriding royalty interests, mineral
interests, royalty interests, net profits interests, oil payments, production
payments, carried interests and any and all other interests in Hydrocarbons,
whether any of the same be real or personal, now owned or hereafter acquired by
Borrower or any of its Subsidiaries, directly or indirectly, together with
rights, titles and interests created by or arising under the terms of any
unitization, communitization, and pooling agreements or arrangements, and all
properties, rights and interests covered thereby, whether arising by contract,
by order or by operation of law, which now or hereafter include all or any part
of the foregoing.
18
"Opinion of Borrower's Counsel" means the written legal opinions of Xxxxxx
X. Xxxx, Xx., General Counsel to Borrower and its Subsidiaries, and Xxxxxx &
Xxxxxx L.L.P., counsel to Borrower and its Subsidiaries, substantially in the
form of Exhibit E, to be delivered pursuant to Section 3.01(a)(iv).
"Partially Increasing Lender" has the meaning specified in Section 2.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permitted Additional Senior Notes" means unsecured notes issued by
Borrower (and not guaranteed by any of Borrower's Subsidiaries) prior to the
Borrowing Base Commencement Date, in a principal amount not to exceed
$150,000,000 (provided that such limitation on the principal amount shall not
apply in the event the Debt Ratings are BBB- or higher by S&P and Baa3 or higher
by Moody's), maturing not earlier than 120 days after the Maturity Date, and
having terms and conditions not more onerous to Borrower and its Subsidiaries
than the terms and conditions of this Credit Agreement and otherwise reasonably
satisfactory (including with respect to the use of the proceeds thereof) to the
Majority Lenders.
"Permitted Liens" means, with respect to Borrower or any Subsidiary of
Borrower:
(a) Liens (if any) securing the Obligations in favor of the Issuing
Lender and the Lenders;
(b) Inchoate Liens securing obligations for labor, services,
materials and supplies with respect to the Oil and Gas Interests in the
ordinary course of business which are not delinquent or for which adequate
reserves with respect thereto are maintained on its books in accordance
with GAAP and which are being diligently contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided that,
by reason of nonpayment of the obligations secured by such Liens, no such
property is subject to a risk of loss or forfeiture prior to judgment which
could reasonably be expected to result in a Material Adverse Effect;
(c) Liens for taxes and assessments on real property which are not
yet past due, or Liens for taxes and assessments on real property for which
adequate reserves with respect thereto are maintained on its books in
accordance with GAAP and which taxes and assessments are being diligently
contested in good faith by appropriate proceedings and have not proceeded
to judgment, provided that, by reason of nonpayment of the obligations
secured by such Liens, no such property is subject to a risk of loss or
forfeiture prior to judgment which could reasonably be expected to result
in a Material Adverse Effect;
(d) Imperfections and irregularities in title to any property which
in the aggregate do not materially impair the marketability or use of such
property for the purposes for which it is or may reasonably be expected to
be held;
(e) Easements, exceptions, reservations, or other agreements for the
purpose of pipelines, conduits, cables, wire communication lines, power
lines and substations, streets, trails, walkways, drainage, irrigation,
water, and sewerage purposes, dikes, canals, ditches, the removal
19
of oil, gas, coal, or other minerals, and other like purposes affecting
real property which in the aggregate do not materially burden or impair the
marketability or use of such real property for the purposes for which it is
or may reasonably be expected to be held;
(f) Non-consensual Liens imposed by Law, including carrier's,
mechanic's, landlord's, warehousemen's or other similar Liens, other than
those described in clauses (b) or (c) above, arising in the ordinary course
of business with respect to obligations which are not delinquent or are
being diligently contested in good faith by appropriate proceedings,
provided that, if delinquent, adequate reserves with respect thereto are
maintained on its books in accordance with GAAP and, by reason of
nonpayment, no property is subject to a material risk of loss or forfeiture
prior to judgment;
(g) Liens consisting of pledges or deposits made in the ordinary
course of business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(h) Liens consisting of deposits of property to secure the
performance of bids, trade contracts (other than for Indebtedness or Hedge
Transactions), leases (other than Capitalized Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(i) Lease burdens payable to third parties which, if the Borrowing
Base Commencement Date has occurred, are either (i) deducted in the
calculation of discounted present value in the Reserve Reports including,
without limitation, any royalty, overriding royalty, net profit interests,
payment pursuant to the Hugoton Gas Trust, production payment, carried
interest or reversionary working interest which has been disclosed to the
Administrative Agent in writing, or (ii) affecting properties which are not
included in the Reserve Reports;
(j) Dedication of net acreage to satisfy third party contractual
obligations of Borrower or any Subsidiary of Borrower with respect to the
purchase and sale or gathering or transportation of Hydrocarbons of a scope
and nature customary in the oil and gas industry (excluding production
payments unless permitted pursuant to Section 6.01 and Section 6.08 and
Hedge Transactions);
(k) Liens arising under operating, pooling or unitization agreements
of a scope and nature customary in the oil and gas industry;
(l) Purchase money Liens upon or in any property acquired by Borrower
or any of its Subsidiaries in the ordinary course of business to secure the
deferred portion of the purchase price of such property or any indebtedness
incurred to finance the acquisition of such property provided that (i) no
such Lien shall be extended to cover property other than the property being
acquired, and (ii) the Indebtedness secured thereby is permitted pursuant
to Section 6.01(f);
(m) Liens arising under, in connection with or related to farm-out,
farm-in, joint operating or area of mutual interest agreements or other
similar or customary arrangements, agreements or interests, incurred in the
ordinary course of business and to the extent such Liens
20
are limited in recourse to (i) the properties subject to such interests or
agreements, (ii) the Hydrocarbons produced from such properties and (iii)
the proceeds of such Hydrocarbons;
(n) Liens on cash to secure margin obligations of Borrower under
Hedge Transactions (excluding the Designated Hedge Transactions); provided
that the aggregate amount of cash posted as margin together with any
letters of credit issued for the benefit of any counterparty to secure such
margin obligations shall not for any period of five consecutive Business
Days exceed (i) $65,000,000 from the date hereof through December 31, 2001,
(ii) $45,000,000 from January 1, 2002 through December 31, 2002, or (iii)
$25,000,000 from and after January 1, 2003; and provided, further, that the
aggregate amount of cash posted as margin shall not for any period of five
consecutive Business Days exceed $25,000,000.
(o) Liens securing the Designated Hedge Transactions covering
collateral that also secures the Obligations on a pari passu basis; and
(p) All other non-consensual Liens arising in the ordinary course of
Borrower's or such Subsidiaries' business or incidental to the ownership of
their properties;
provided that no Permitted Lien referred to above shall (i) secure Indebtedness
for borrowed money or for the deferred purchase price of property or services
except for such Indebtedness permitted under Section 6.01(a) or Section 6.01(f),
(ii) secure Hedge Transactions (regardless of whether such Hedge Transactions
constitute Indebtedness) except to the extent permitted by clauses (n) and (o)
of this definition, or (iii) in the aggregate materially detract from the
marketability of the material Oil and Gas Interests owned by Borrower and any of
its Subsidiaries or materially impair the use thereof in the operation of the
business of Borrower or any such Subsidiary.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a foreign state or political subdivision thereof or
any agency of such state or subdivision.
"Proved Developed Behind Pipe Hydrocarbon Reserves" means Proved
Hydrocarbon Reserves which are recoverable from zones behind casing in existing
xxxxx and which will require additional completion work or a future recompletion
prior to the start of production.
"Proved Developed Non-Producing Hydrocarbon Reserves" means Proved
Developed Behind Pipe Hydrocarbon Reserves and Proved Developed Shut-in
Hydrocarbon Reserves.
"Proved Developed Producing Hydrocarbon Reserves" means those Proved
Hydrocarbon Reserves which are recoverable from completion intervals currently
open and producing to market. Improved recovery reserves are considered to be
producing only after an improved recovery project has been installed and is in
operation.
"Proved Developed Shut-in Hydrocarbon Reserves" means Proved Hydrocarbon
Reserves that are recoverable from completion intervals open as of the date of
determination, but which are not producing as of such date.
21
"Proved Hydrocarbon Reserves" means those recoverable Hydrocarbons which
have been proved to a high degree of certainty by reason of existing production,
adequate testing, or in certain cases by adequate core data and other
engineering and geologic information on zones which are present in existing
xxxxx or in known reservoirs. Reserves that can be produced economically through
the application of established improved recovery techniques are included in the
proved classification when (a) successful testing by a pilot project or the
operation of any installed program in that reservoir or one in the immediate
area with similar rock and fluid properties provides support for the engineering
analysis on which the project or program was based and (b) it is reasonably
certain the project will proceed. Reserves to be recovered by improved recovery
techniques that have yet to be established through repeated economically
successful applications are included in the proved category only after
successful testing by a pilot project or after the operation of an installed
program in the reservoir provides support for the engineering analysis on which
the project or program was based. Improved recovery includes all methods for
supplement natural reservoir including (i) pressure maintenance, (ii) cycling
and (iii) secondary recovery in its original sense. Improved recovery also
includes the enhanced recovery methods of thermal, chemical flooding and the use
of miscible and immiscible displacement fluids.
"Proved Reserves" means Proved Hydrocarbon Reserves that are Proved
Developed Producing Hydrocarbon Reserves, Proved Developed Behind Pipe
Hydrocarbon Reserves, Proved Developed Shut-In Hydrocarbon Reserves, or Proved
Undeveloped Hydrocarbon Reserves.
"Proved Undeveloped Hydrocarbon Reserves" means Proved Hydrocarbon Reserves
that are recoverable (a) by new xxxxx on undrilled acreage, (b) by replacement
xxxxx on previously drilled and producing acreage or (c) from existing xxxxx
where a relatively large expenditure is required for recompletion and from
acreage where the application of an improved recovery technique is planned and
the costs required to place the project in operation are relatively large.
Proved Undeveloped Hydrocarbon Reserves on undrilled acreage shall be limited to
those drilling units offsetting productive units that are reasonably certain of
production when drilled. Proved Hydrocarbon Reserves for other undrilled units
are Proved Undeveloped Hydrocarbon Reserves only where it can be demonstrated
with certainty that there is continuity of production from the existing
productive formation.
"Public Indenture" means the Indenture, dated as of February 1, 1997,
entered into between Borrower and Bankers Trust Company, as Trustee, and any
indenture pursuant to which the Permitted Additional Senior Notes are issued.
"Reducing Lender" has the meaning specified in Section 2.11(b).
"Reduction Amount" means the amount by which a Reducing Lender's or a
Partially Increasing Lender's outstanding Loans decrease as of an Increase
Effective Date (without regard to any such increase as a result of Borrowings
made on such Increase Effective Date).
"Reference Market Maker" shall mean a leading dealer in the relevant market
selected by Borrower in good faith (a) from among dealers of the highest credit
standing reasonably satisfactory to the Administrative Agent and (b) to the
extent practicable, from among such dealers having an office in the same city.
"Register" shall have the meaning specified in Section 9.10(f).
22
"Regulation U" means Regulation U of the Board (respecting margin credit
extended by banks), as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board (respecting borrowers who
obtain margin credit), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"Reimbursement Obligations" shall mean, as at any date, the obligations of
Borrower then outstanding in respect of Letters of Credit to reimburse the
Administrative Agent for the account of the Issuing Lender for the amount paid
by the Issuing Lender in respect of any drawing under such Letters of Credit.
"Release" means any release, spill, emission, leak, injection, deposit,
disposal, discharge, dispersal, leaching or migration of any Hazardous Substance
into the environment or into or out of any real property of Borrower or any
Subsidiary of Borrower, including the movement of Hazardous Substances through
or in the air, soil, surface water, groundwater and/or land which could
reasonably be expected to form the basis of an Environmental Liability against
Borrower or any Subsidiary of Borrower.
"Remedial Action" means actions to (a) clean up, remove, treat or in any
other way address Hazardous Substances in the environment, (b) prevent the
Release or threat of Release or minimize the further Release of Hazardous
Substances so they do not migrate or endanger or threaten to endanger public
health or welfare or the environment or (c) perform pre-remedial studies and
investigations and post- remedial monitoring and care.
"Replacement Lender" has the meaning specified in Section 2.22.
"Reportable Event" means any of the events described in Section 4043 or
Section 4068(f) of ERISA for which the 30 day notice requirement of 29 C.F.R.
Section 2615.3 has not been waived.
"Requirements of Law" means any federal, state or local law, rule or
regulation, permit or other binding determination of any Governmental Authority
applicable to Borrower or any of its Subsidiaries or any of their respective
properties or assets.
"Reserve Report" has the meaning specified in Section 2.02(a).
"Responsible Officer" means, as to any Person, the President, any Executive
Vice President, any Senior Vice President or the Secretary of such Person.
"Rights Agreement" means the Rights Agreement dated August 5, 1997 between
Borrower and BankBoston, N. A. concerning Borrower's rights plan, as amended
from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of The XxXxxx-
Xxxx Companies, Inc.
23
"Sharing Percentage" means, as to any Lender on any day, a fraction
(expressed as a percentage), the numerator of which shall be the sum of such
Lender's (a) aggregate outstanding principal balance of all Loans to Borrower
held by such Lender at such time plus (b) aggregate participation in the Letter
of Credit Liabilities and the denominator of which shall be the Facility Usage.
"Standby Letter of Credit" means a Letter of Credit which represents an
obligation to the beneficiary on the part of the Issuing Lender (a) to repay
money borrowed by or advanced to or for the account of Borrower or any of its
Subsidiaries, (b) to make payment on account of any indebtedness undertaken by
Borrower or any of its Subsidiaries or (c) to make payment on account of any
default by Borrower or any of its Subsidiaries in the performance of an
obligation.
"Subsidiary" means as of any date of determination and with respect to any
Person, any corporation, partnership, joint venture or other entity whether now
existing or hereafter organized or acquired of which the securities, partnership
units or other ownership interests having ordinary voting power, in the absence
of contingencies, to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person and/or one or more Subsidiaries of such Person.
"Super Majority Lenders" means the Lenders holding 75% or more of the
aggregate principal amount of the Loans and the Letter of Credit Liabilities, or
if no Loans or Letter of Credit Liabilities are outstanding, the Lenders holding
75% or more of the Total Commitment.
"Termination Event" means (a) a Reportable Event with respect to any
Benefit Plan (other than a "reportable event" that is not subject to the
provision for 30 days notice to the PBGC; (b) the withdrawal of Borrower from a
Benefit Plan during a plan year in which Borrower was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA; (c) the imposition of an obligation
on Borrower under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress termination described
in Section 4041(c) of ERISA; (d) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (e) any other event or condition which would
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan; or (f) the occurrence
of an event described in Section 4068(f) of ERISA with respect to a Benefit
Plan.
"Total Commitment" means the aggregate of the Commitments, being in the
amount of $350,000,000 on the Effective Date, as the same may be increased or
reduced from time to time pursuant to this Credit Agreement.
"Total Exposure Amount" means, at any time, the sum of the Obligations and
the Market Exposure.
"Trust" means the Xxxxxxx 1997 Trust created pursuant to the Trust
Agreement.
"Trust Agreement" means the Trust Agreement For The Xxxxxxx 1997 Trust
dated as of November 1, 1997, entered into between and among FC Energy, Borrower
and certain of Borrower's Subsidiaries, as amended by the Amendment No. 1 to
Trust Agreement for The Xxxxxxx 1997 Trust dated as of May 1, 2000.
24
"Type" of a Loan refers to the determination whether such Loan is a
Eurodollar Rate Loan or a Base Rate Loan.
"Unscheduled Determination Notice" means a written notice given by Borrower
to the Administrative Agent or by the Administrative Agent (at the request of
the Majority Lenders) to Borrower, in either case not more often than once
during any calendar year, that an unscheduled redetermination of the Borrowing
Base is requested.
"United States" and "U.S." each means the United States of America.
"Withholding Taxes" has the meaning specified in Section 2.19(a).
SECTION 102. Accounting Terms. All terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, for purposes of determining compliance with any covenant
set forth in Article VI, such terms shall be construed in accordance with GAAP
as in effect on the date of this Credit Agreement, applied on a basis consistent
with the application used in the audited Initial Financial Statements.
SECTION 103. Interpretation.
(a) In this Credit Agreement, unless a clear contrary intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Credit Agreement as a whole and not
to any particular Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns
are permitted by this Credit Agreement, and reference to a Person
in a particular capacity excludes such Person in any other
capacity or individually, provided that nothing in this clause
(iv) is intended to authorize any assignment not otherwise
permitted by this Credit Agreement;
(v) reference to any agreement, document or instrument means such
agreement, document or instrument as amended, supplemented or
modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof, and reference
to any Note includes any Note issued pursuant hereto in extension
or renewal thereof and in substitution or replacement therefor;
25
(vi) unless the context indicates otherwise, reference to any
Article, Section, Schedule or Exhibit means such Article or
Section hereof or such Schedule or Exhibit hereto;
(vii) the words "including" (and with correlative meaning "include")
means including, without limiting the generality of any
description preceding such term;
(viii) with respect to the determination of any period of time, the
word "from" means "from and including" and the word "to" means
"to but excluding;" and
(ix) reference to any law means such as amended, modified, codified
or reenacted, in whole or in part, and in effect from time to
time.
(b) The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction of this Credit
Agreement.
(c) No provision of this Credit Agreement shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
ARTICLE II
COMMITMENTS; BORROWING BASE DETERMINATIONS
------------------------------------------
SECTION 2.01 Commitments.
(a) Loans. From time to time from the Effective Date to the Maturity
Date, each Lender severally agrees to make Loans under this Section 2.0l(a)
to Borrower in an aggregate principal amount at any one time outstanding up
to but not exceeding such Lender's Commitment Percentage of the amount by
which the Available Commitment exceeds the aggregate unpaid principal
balance of all Loans and Letter of Credit Liabilities from time to time
outstanding; provided that the unpaid principal balance of all Loans owed
to such Lender plus its participation interest in the principal amount of
all outstanding Letter of Credit Liabilities shall not exceed such Lender's
Commitment. Subject to the conditions herein, the amount of any Loan repaid
prior to the Maturity Date may be reborrowed pursuant to the terms of this
Credit Agreement; provided that any and all Loans shall be due and payable
in full on the Maturity Date.
(b) Letters of Credit. Subject to the terms and conditions hereof,
and on the condition that the principal amount of the Letter of Credit
Liabilities shall never exceed the lesser of the Letter of Credit
Commitment and the Available Commitment less the aggregate unpaid principal
balance of all Loans, Borrower shall have the right, in addition to Loans
provided for in Section 2.01(a), to utilize a portion of the Available
Commitment from time to time from the Effective Date to the Maturity Date
by obtaining the issuance of Letters of Credit for the account of Borrower
and on behalf of Borrower by the Issuing Lender. Upon the issuance of a
Letter of Credit, the Issuing Lender shall be deemed, without further
action by any party hereto, to have sold to each Lender, and each Lender
shall be deemed, without further
26
action by any party hereto, to have purchased from the Issuing Lender, a
participation, to the extent of such Lender's Commitment Percentage, in
such Letter of Credit and the related Letter of Credit Liabilities. No
Letter of Credit may be issued if after giving effect thereto the Facility
Usage would exceed the Available Commitment. On each day during the period
commencing with the issuance of any Letter of Credit and until such Letter
of Credit shall have expired or been terminated, the Commitment of each
Lender shall be deemed to be utilized for all purposes hereof in an amount
equal to such Lender's Commitment Percentage of the Letter of Credit
Liabilities in respect of such Letter of Credit.
SECTION 2.02 Borrowing Base.
(a) (i) On or before the 30th day after the occurrence of the
Borrowing Base Commencement Date, (ii) on or before each March 1 and
September 1 prior to the commencement of each Borrowing Base Period
thereafter, and (iii) on or before the 30th day after Borrower or the
Administrative Agent gives an Unscheduled Determination Notice, Borrower
shall furnish to the Administrative Agent and each Lender a report (herein
called a "Reserve Report") in form and substance satisfactory to
Administrative Agent which Reserve Report shall be dated as of the first
day of the month in which the Borrowing Base Commencement Date occurred, as
of the next preceding December 31 or June 30, or as of the date of the
Unscheduled Determination Notice, as the case may be, and shall review at
least eighty percent (80%) of the Proved Reserves attributable to the Oil
and Gas Interests of Borrower and its Subsidiaries, and set forth the
Proved Reserves attributable to such Oil and Gas Interests and a projection
of the rate of production and net income with respect to the Proved
Reserves as of the date of such Reserve Report, all in accordance with the
guidelines published by the Securities and Exchange Commission, and shall
set forth such other information and data with respect to such Oil and Gas
Interests as the Administrative Agent may reasonably request. The Initial
Reserve Report and any subsequent Reserve Report to be submitted on or
before any March 1 shall be prepared by Borrower and reviewed by Xxxxx
Xxxxx, Netherland, Xxxxxx & Associates, Inc., or such other independent
petroleum engineer acceptable to the Administrative Agent. Each Reserve
Report to be submitted on or before any September 1 and each Reserve Report
to be submitted following an Unscheduled Determination Notice shall be
prepared by Borrower and shall provide the current status of the
information set forth in the immediately preceding Reserve Report.
(b) The "Borrowing Base" from time to time in effect hereunder shall
be the maximum aggregate amount of credit which the Lenders have determined
to be available pursuant to the Total Commitment. The determination of such
maximum aggregate amount of credit shall be made by the Lenders, in the
exercise of their sole discretion and in accordance with their respective
customary practices and standards for oil and gas loans, which may include
varying (from Lender to Lender) (i) assumptions regarding appropriate
existing and projected pricing, (ii) assumptions modifying projected rates
of future production and/or quantities of future production, (iii)
considerations related to the projected cash requirements of Borrower and
its Subsidiaries assumed to be provided from production of the Oil and Gas
Interests including present and future debt service of Borrower and its
Subsidiaries, general and administrative expenses and distributions in
respect of equity and (iv) such other considerations as each Lender deems
appropriate. In connection with the initial determination of the Borrowing
Base following
27
the Borrowing Base Commencement Date or any redetermination of the
Borrowing Base, the Administrative Agent shall submit to the Lenders in
writing, on or before the 35th day after the receipt by the Administrative
Agent of each Reserve Report, the Administrative Agent's recommendation as
to the Borrowing Base as of the Borrowing Base Commencement Date or the
first day of the next succeeding Borrowing Base Period, as the case may be
(each such date being a "Determination Date"). Each Lender shall submit to
the Administrative Agent, in writing on or before the 10th day after
receipt of the Administrative Agent's recommended Borrowing Base, such
Lender's approval or disapproval of the Administrative Agent's recommended
Borrowing Base and any such disapproval shall state the maximum Borrowing
Base acceptable to such Lender for the applicable Borrowing Base Period. If
the Administrative Agent has not received such notice from a Lender on or
before the close of business on such 10th day, such Lender shall be deemed
to have approved the Administrative Agent's recommended Borrowing Base. If
by any Determination Date the Administrative Agent has not received the
approval (actual or deemed) of all Lenders (in the case of the initial
determination of the Borrowing Base), the Majority Lenders (if the
Administrative Agent has recommended a decrease in the amount of the then
existing Borrowing Base or that the then existing Borrowing Base remain
unchanged) or the Super Majority Lenders (if the Administrative Agent has
recommended an increase in the amount of then existing Borrowing Base) of
the Borrowing Base recommended by the Administrative Agent, then for the
applicable Borrowing Base Period the Borrowing Base shall be the lowest
determination agreed to by all the Lenders, the Majority Lenders or the
Super Majority Lenders, as the case may be. The Administrative Agent shall
advise Borrower of the determination of each Borrowing Base by the Lenders
by providing Borrower a Borrowing Base Notice within ten days after it is
determined; provided that if, due to any failure by Borrower to submit in a
timely manner any Reserve Report or other information required to be
submitted by Borrower hereunder or, if requested in writing by the
Administrative Agent, any additional information or data needed in
connection with the determination or re-determination of the Borrowing Base
or due to any other reason beyond the control of the Administrative Agent,
the Administrative Agent does not provide a Borrowing Base Notice by the
time described above, then, unless the Administrative Agent gives notice to
Borrower of a new Borrowing Base, the Borrowing Base from the previous
Borrowing Base Period shall be carried over into the new Borrowing Base
Period until a Borrowing Base Notice is sent to Borrower by the
Administrative Agent; which Borrowing Base Notice shall be sent to Borrower
by the Administrative Agent within 30 days after the cessation or cure of
the circumstances causing the Borrowing Base Notice to not be previously
delivered in a timely manner, and the remainder of the procedures described
in this Section 2.02 have been completed. Until the initial determination
of the Borrowing Base after the Borrowing Base Commencement Date, the
Borrowing Base shall be deemed to be equal to the Total Commitment then in
effect. Notwithstanding the foregoing, if Borrower does not furnish a
Reserve Report and such other information and data as the Administrative
Agent may request, as required by this Section 2.02, the Administrative
Agent and the Lenders may nonetheless determine or re-determine the
Borrowing Base.
28
SECTION 2.03 Borrowing Procedure for Loans.
(a) In order to effect a Borrowing, Borrower shall submit a Borrowing
Request in writing or by telecopy (or telephone notice promptly confirmed
in writing or by telecopy) to the Administrative Agent, (i) in the case of
a Eurodollar Rate Borrowing, not later than 11:00 a.m., Dallas, Texas time,
three Business Days before the Borrowing Date specified in the Borrowing
Request for such proposed Eurodollar Rate Borrowing and (ii) in the case of
Base Rate Borrowing, not later than 11:00 a.m., Dallas, Texas time, on the
Borrowing Date specified in the Borrowing Request for such proposed Base
Rate Borrowing. Such Borrowing Request shall be irrevocable and shall in
each case refer to this Credit Agreement and specify (w) whether the
Borrowing then being requested is to be a Eurodollar Rate Borrowing, or a
Base Rate Borrowing, or a combination thereof, (x) the Borrowing Date of
such Borrowing (which shall be a Business Day), (y) the aggregate principal
amount of such Borrowing and (z) in the case of a Eurodollar Rate
Borrowing, the Interest Period with respect thereto. If no Interest Period
with respect to any Eurodollar Rate Borrowing is specified in any such
Borrowing Request, then Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative Agent shall
promptly advise the Lenders of any Borrowing Request given pursuant to this
Section 2.03 and of each Lender's Commitment Percentage of the requested
Borrowing by telecopy (or telephone notice promptly confirmed in writing or
by telecopy).
(b) No later than 2:00 p.m., Dallas, Texas time, on the Borrowing
Date specified in each Borrowing Request, each Lender will make available
to the Administrative Agent its Commitment Percentage of the Loans
comprising the Borrowing requested to be made on such date, in Dollars and
immediately available funds. Upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make the proceeds
of each Borrowing so requested available to Borrower by crediting the
amounts so received to a general deposit account maintained by Borrower
with Bank of America, on the Borrowing Date or, if a Borrowing shall not
occur on such Borrowing Date because any condition precedent specified in
Article III shall not have been met, the Administrative Agent will return
the amounts so received to the respective Lenders as soon as practicable.
Each Borrowing shall be made by the Lenders pro rata in accordance with
such Lender's Commitment Percentage of the Loans comprising such Borrowing.
Unless the Administrative Agent shall have received notice from a Lender
prior to any proposed Borrowing Date that such Lender will not make
available to the Administrative Agent such Lender's Commitment Percentage
of such Borrowing, the Administrative Agent may assume that such Lender has
made its Commitment Percentage available to the Administrative Agent on
such Borrowing Date in accordance with this Section 2.03(b) and the
Administrative Agent, in reliance upon such assumption, may, but under no
circumstances shall the Administrative Agent be obligated to, make
available to Borrower on such Borrowing Date a corresponding amount. If and
to the extent that such Lender shall not have made its Commitment
Percentage of such Borrowing available to the Administrative Agent, (i)
such Lender agrees to repay to the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from
the date such amount is made available to Borrower until the date such
amount is repaid to the Administrative Agent at the Federal Funds Rate, and
(ii) Borrower agrees to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereof, for each
day from the date
29
such amount is made available to Borrower until the date such amount is
repaid to the Administrative Agent at the rate applicable to the Borrowing
of which such corresponding amount was a part. Upon such Lender's repayment
to the Administrative Agent of such corresponding amount, such amount shall
constitute such Lender's Commitment Percentage of such Borrowing for
purposes of this Credit Agreement.
SECTION 2.04 Minimum Amount and Maximum Number of Eurodollar Rate
Borrowings.
All Borrowings, conversions, continuations, payments, prepayments and
selections of Interest Periods under this Credit Agreement shall be made or
selected so that, immediately after giving effect thereto, (a) the aggregate
principal amount of all Loans comprising a single Eurodollar Rate Borrowing
shall not be less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and (b) there shall be no more than eight Interest Periods in
effect with respect to Eurodollar Rate Loans.
SECTION 2.05 Issuing the Letters of Credit.
(a) In order to effect the issuance of a Letter of Credit, Borrower
shall submit a Borrowing Request and a Letter of Credit Application in
writing by telecopy to the Administrative Agent (who shall promptly notify
the Issuing Lender) not later than 12:00 noon, Dallas, Texas time, two
Business Days before the date of issuance of such Letter of Credit. Each
such Borrowing Request and Letter of Credit Application shall (i) be signed
by Borrower, (ii) specify the Business Day on which such Letter of Credit
is to be issued, and (iii) specify the availability for Letters of Credit
under the Letter of Credit Commitment and the Available Commitment as of
the date of issuance of such Letter of Credit and the expiration date of
such Letter of Credit which shall not be later than the earlier of (A) 12
months from the date of issuance of such Letter of Credit and (B) the
Maturity Date; provided that Borrower may request evergreen Letters of
Credit that automatically renew for additional one year periods so long as
the final expiration date thereof is on or before the Maturity Date.
(b) Upon satisfaction of the applicable terms and conditions set
forth in Article III, the Issuing Lender shall issue such Letter of Credit
to the specified beneficiary not later than the close of business, Dallas,
Texas time, on the date so specified. The Administrative Agent shall
provide Borrower with a copy of each Letter of Credit so issued. Each such
Letter of Credit shall (i) provide for the payment of drafts, presented for
honor thereunder by the beneficiary in accordance with the terms thereof,
at sight when accompanied by the documents described therein and (ii)
unless otherwise agreed by the Issuing Lender and Borrower when such Letter
of Credit is issued, be subject to the rules of the "International Standby
Practices 1998" published by the Institute of International Banking Law &
Practice (or such later version as may be in effect at the time of
issuance).
(c) Upon the issuance of each Letter of Credit, the Issuing Lender
shall be deemed, without further action by any party hereto, to have sold
to each other Lender, and each other Lender shall be deemed, without
further action by any party hereto, to have purchased from the Issuing
Lender, a participation, to the extent of such Lender's Commitment
Percentage, in such Letter of Credit and the Letter of Credit Liabilities
thereunder. If requested by the Issuing
30
Lender, the other Lenders will execute any other documents reasonably
requested by the Issuing Lender to evidence the purchase of such
participation.
(d) Upon the presentment of any draft for honor under any Letter of
Credit by the beneficiary thereof which the Issuing Lender determines is in
compliance with the conditions for payment thereunder, the Issuing Lender
shall promptly notify Borrower and the Administrative Agent of the intended
date of honor of such draft and Borrower hereby promises and agrees, at
Borrower's option, to either (i) pay to the Administrative Agent for the
account of the Issuing Lender, by 1:00 p.m., Dallas, Texas time, on the
date payment is due as specified in such notice, the full amount of such
draft in immediately available funds or (ii) request a Loan pursuant to the
provisions of Section 2.01(a) and Section 2.03 in the full amount of such
draft, which request shall specify that the Borrowing Date is to be the
date payment is due under the Letter of Credit as specified in the Issuing
Lender's notice. If Borrower fails timely to make such payment because a
Loan cannot be made pursuant to Section 2.01(a) and Section 3.02, each
Lender shall, notwithstanding any other provision of this Credit Agreement
(including the occurrence and continuance of a Default or an Event of
Default), make available to the Administrative Agent for the benefit of the
Issuing Lender an amount equal to its Commitment Percentage of the
presented draft on the day the Issuing Lender honors such draft. If such
amount is not in fact made available to the Administrative Agent by such
Lender on such date, such Lender shall pay to the Administrative Agent for
the account of the Issuing Lender, on demand made by the Issuing Lender, in
addition to such amount, interest on such amount at the Federal Funds Rate
for each day that such amount is not so made available to the
Administrative Agent by such Lender. In the event that a Loan cannot be
made pursuant to the provisions of Section 2.01(a) and Section 3.02, and
Borrower fails to pay directly the amount of the draft, then upon receipt
by the Administrative Agent from the Lenders of the full amount of such
draft, notwithstanding any other provision of this Credit Agreement
(including the occurrence and continuance of a Default or an Event of
Default) the full amount of such draft shall, automatically and without any
action by Borrower, be deemed to have been a Base Rate Borrowing as of the
date of payment of such draft. Nothing in this Section 2.05(d) or elsewhere
in this Credit Agreement shall diminish Borrower's obligation under this
Credit Agreement to provide the funds for the payment of any draft
presented to, and duly honored by, the Issuing Lender under any Letter of
Credit by either obtaining a Loan pursuant to the provisions of Section
2.01(a) and Section 3.02 or paying directly to the Administrative Agent for
the benefit of the Issuing Lender and the other Lenders the amount of the
draft, and the automatic funding of a Loan as provided in the immediately
preceding sentence shall not constitute a cure or waiver of the Event of
Default for failure to timely provide such funds.
(e) In order to induce the issuance of Letters of Credit by the
Issuing Lender and the purchase of participations therein by the other
Lenders, Borrower agrees with the Administrative Agent, the Issuing Lender
and the other Lenders that neither the Administrative Agent nor any Lender
(including the Issuing Lender) shall be responsible or liable (except as
provided in the following sentence) for, and Borrower's unconditional
obligation to reimburse the Issuing Lender through the Administrative Agent
for amounts paid by such Issuing Lender, as provided in Section 2.05(d), on
account of drafts honored under Letters of Credit shall not be affected by,
any circumstance, act or omission whatsoever (whether or not known to the
Administrative Agent or any Lender (including the Issuing Lender)), other
than a circumstance, act or omission
31
resulting from the gross negligence or willful misconduct of the Issuing
Lender in determining whether any draw under any Letter of Credit is in
compliance with the conditions for the payment thereof. Borrower agrees
that any action taken or omitted to be taken by the Administrative Agent or
any Lender (including the Issuing Lender) under or in connection with any
Letter of Credit or any related draft, document or property shall be
binding on Borrower and shall not put the Administrative Agent or any
Lender (including the Issuing Lender) under any resulting liability to
Borrower, unless such action or omission is the result of the gross
negligence or willful misconduct of the Administrative Agent or such Lender
(including the Issuing Lender). Borrower hereby waives presentment for
payment (except the presentment required by the terms of any Letter of
Credit) and notice of dishonor, protest and notice of protest with respect
to drafts honored under the Letters of Credit. The Issuing Lender agrees
promptly to notify Borrower whenever a draft is presented under any Letter
of Credit, but failure to so notify Borrower shall not in any way affect
Borrower's obligations hereunder. Subject to Section 2.21, if while any
Letter of Credit is outstanding, any law, executive order or regulation is
enforced, adopted or interpreted by any public body, governmental agency or
court of competent jurisdiction so as to affect any of Borrower's
obligations or the compensation to the Issuing Lender or any Lender in
respect of the Letters of Credit or the cost to the Issuing Lender or any
Lender of establishing and/or maintaining the Letters of Credit (or any
participation therein), the Issuing Lender or such Lender shall promptly
notify Borrower thereof in writing in accordance with Section 2.15(c) or
Section 2.19, and within ten Business Days after receipt by Borrower of the
Issuing Lender's or such Lender's request (through the Administrative
Agent) for reimbursement or indemnification or within 30 days after receipt
of a notice in respect of Withholding Taxes under Section 2.19, accompanied
by a certificate from the Issuing Lender or such Lender setting forth in
reasonable detail the basis for such reimbursement or indemnification and
the calculation thereof in accordance with Section 2.15(c) or Section 2.19,
Borrower shall reimburse or indemnify the Issuing Lender or such Lender, as
the case may be, with respect thereto so that the Issuing Lender or such
Lender shall be in the same position as if there had been no such
enforcement, adoption or interpretation. The foregoing agreement of
Borrower to reimburse or indemnify the Issuing Lender and each Lender shall
apply in (but shall not be limited to) the following situations: an
imposition of or change in reserve, capital maintenance or other similar
requirements or in excise or similar taxes or monetary restraints, except a
change in franchise taxes imposed on the Issuing Lender or such Lender or
in tax on the net income of the Issuing Lender or such Lender; provided
that Borrower shall not be required to compensate a Lender or the Issuing
Lender pursuant to this Section 2.05(e) for any of the foregoing items
incurred more than 180 days (plus any period of retroactivity in the
application of such items that is greater than 180 days) prior to the date
that such Lender or the Issuing Lender, as the case may be, notifies
Borrower of the imposition or change giving rise thereto and of such
Lender's or the Issuing Lender's intention to claim compensation therefor.
(f) In the event that any provision of a Letter of Credit Application
is inconsistent with, or in conflict of, any provision of this Credit
Agreement, including provisions for the rate of interest applicable to
drawings thereunder or rights of setoff or any representations, warranties,
covenants or any events of default set forth therein, the provisions of
this Credit Agreement shall govern.
32
SECTION 2.06 Conversions or Continuation of Borrowings .
(a) Subject to the other provisions of this Credit Agreement,
Borrower may elect from time to time to convert (i) all or any part of
Eurodollar Rate Loans which comprise part of the same Eurodollar Rate
Borrowing to a Borrowing comprised of Base Rate Loans, and (ii) all or any
part of Base Rate Loans which comprise part of the same Borrowing to a
Borrowing comprised of Eurodollar Rate Loans, provided that any such
conversion of Loans comprising a Eurodollar Rate Borrowing shall only be
made on the last day of an Interest Period with respect thereto. All or any
part of a Borrowing may be converted as provided herein, provided that no
Borrowing may be converted into a Eurodollar Rate Borrowing when any
Default or Event of Default has occurred and is continuing.
(b) Any Eurodollar Rate Borrowing may be continued as such effective
upon the expiration of the Interest Period with respect thereto; provided
that no Eurodollar Rate Borrowing may be continued as such when any Default
or Event of Default has occurred and is continuing, but in such event shall
be automatically converted to an Base Rate Borrowing on the last day of the
then current Interest Period with respect thereto.
(c) In order to elect to convert or continue a Borrowing, or any
portion thereof, under this Section 2.06, Borrower shall deliver an
irrevocable Notice of Conversion or Continuation to the Administrative
Agent not later than 11:00 a.m., Dallas, Texas time, (i) three Business
Days in advance of the proposed conversion or continuation date in the case
of a conversion to, or continuation of, a Eurodollar Rate Borrowing and
(ii) on the proposed conversion date in the case of a conversion to a Base
Rate Borrowing. Each such Notice of Conversion or Continuation shall be by
telecopy (confirmed thereafter by a delivery of the original of such Notice
of Conversion or Continuation by United States mail or a reputable courier)
and shall specify (v) the date of the requested conversion or continuation
(which shall be a Business Day), (w) the amount of the Borrowing to be
converted or continued, (y) whether a conversion or continuation is
requested, and, if a conversion, into what Type of Borrowing and (z) in the
case of a conversion to, or a continuation of, a Eurodollar Rate Borrowing,
the requested Interest Period. Promptly after receipt of a Notice of
Conversion or Continuation under this Section 2.06, the Administrative
Agent shall notify each Lender thereof.
(d) No Borrowing, or any portion thereof, may be converted into a
Eurodollar Rate Borrowing if, after giving effect to such conversion, there
would be more than eight Interest Periods outstanding at such time.
(e) If Borrower shall fail to deliver a timely Notice of Conversion
or Continuation with respect to any Eurodollar Rate Borrowing, Borrower
shall be deemed to have elected to convert such Eurodollar Rate Borrowing
to a Base Rate Borrowing on the last day of the Interest Period with
respect to such Eurodollar Rate Borrowing.
(f) For purposes of this Section 2.06, Borrowings having different
Interest Periods, regardless of whether they commence on the same date or
are of the same Type shall be considered different Borrowings.
33
SECTION 207 Fees.
(a) Borrower shall pay to the Administrative Agent for the account of
each Lender a commitment fee accruing from the Effective Date to the
Maturity Date, computed for each day at a rate per annum equal to the
Applicable Rate (for the "Commitment Fee") times such Lender's Commitment
Percentage of (i) the Available Commitment minus (ii) the Facility Usage on
such day. Such commitment fees shall be payable on the last Business Day of
each calendar quarter and on the earlier of the date the Total Commitment
is terminated in its entirety or the Maturity Date.
(b) Borrower agrees to pay (i) to the Administrative Agent for
account of each Lender a Letter of Credit fee for its participation in each
Letter of Credit, from the date of issuance thereof to the date on which
such Letter of Credit expires or is terminated, computed for each day at a
rate per annum equal to the Applicable Rate times such Lender's Commitment
Percentage of the amount available to be drawn under such Letter of Credit,
and (ii) to the Issuing Lender as a fronting fee for the issuance of each
Letter of Credit issued by it, in an amount equal to one-eighth of one
percent (.125%) per annum of the face amount of each Letter of Credit from
the date of issuance thereof to the date on which such Letter of Credit
expires or is terminated. All such Letter of Credit fees shall be payable
quarterly in arrears on the last Business Day of each calendar quarter.
(c) Borrower shall pay when due to the Administrative Agent and the
Arranger such other fees as shall have been separately agreed by the
Administrative Agent, the Arranger and Borrower in writing, including
pursuant to the Fee Letter.
(d) Subject to Section 9.07, all computations of fees hereunder shall
be calculated on the basis of a year of 360 days and the actual number of
days elapsed.
SECTION 2.08 Evidence of Debt . The Loans and other credit extensions made
hereunder by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and by the Administrative Agent in the ordinary course
of business. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of Loans and
other credit extensions made by the Lenders to Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligations of Borrower hereunder to pay
any amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts and
records of such Lender shall control. Upon the request of any Lender made
through the Administrative Agent, such Lender's Loans may be evidenced by a Note
in addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity of
the applicable Loans and payments with respect thereto.
34
SECTION 2.09 Interest on Loans and Payment Dates.
(a) Subject to the provisions of Section 2.10 and Section 9.07, the
Loans shall bear interest as follows:
(i) The Loans comprising each Eurodollar Rate Borrowing shall
bear interest (computed on the basis of the actual number of
days elapsed over a year of 360 days) at a rate per annum
equal to the lesser of (i) the Highest Lawful Rate and (ii)
the Eurodollar Rate for the Interest Period in effect for
such Borrowing plus the Applicable Rate with respect to such
Eurodollar Rate Loans.
(ii) The Loans comprising each Base Rate Borrowing shall bear
interest at a rate per annum equal to the lesser of (i) the
Highest Lawful Rate and (ii) the Base Rate plus the
Applicable Rate with respect to such Base Rate Loans (if the
Base Rate is based on the "prime rate" of Bank of America,
computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be; if the
Base Rate is based on the Federal Funds Rate, computed on
the basis of the actual number of days elapsed over a year
of 360 days).
(b) Interest on each Loan or other amount owing hereunder shall be
payable by Borrower (i) in respect of each Loan comprising part of a Base
Rate Borrowing, quarterly in arrears on the last Business Day of each
calendar quarter, (ii) in respect of each Loan comprising part of a
Eurodollar Rate Borrowing, on the last day of the Interest Period
applicable to such Eurodollar Rate Borrowing, and, in the case of an
Interest Period for Eurodollar Rate Borrowings of six months, on the date
occurring three months from the first day of such Interest Period, (iii) in
respect of each Loan or other amount owing hereunder accruing interest at
the Default Rate, on demand and (iv) in respect of all Loans, on the date
of any prepayment or conversion (on the amount prepaid or converted), at
maturity (whether by acceleration or otherwise) and, after maturity, on
demand.
(c) Interest in respect of the unpaid principal amount of each Loan
shall accrue from (and including) the date of the making of such Loan to
(but not including) the date on which such Loan shall be paid in full.
(d) The Administrative Agent shall, upon determining a Eurodollar
Rate for any Interest Period, promptly notify Borrower and the Lenders
thereof.
SECTION 2.10 Default Rate . If Borrower shall fail to pay any principal of,
or interest on, any Loan, any Letter of Credit Liabilities or any other amount
payable by Borrower when due hereunder, Borrower shall on demand from time to
time pay interest, to the extent permitted by law, on such defaulted amount from
the date due up to (but not including) the date of actual payment (after as well
as before judgment) at a rate per annum (the "Default Rate") equal to the lesser
of (a) the sum of (i) with respect to Eurodollar Rate Loans, 2% per annum plus
the applicable Eurodollar Rate then in effect plus
35
the Applicable Rate until the expiration of the applicable Interest Period and
(ii) with respect to Base Rate Loans and with respect to Eurodollar Rate Loans
after the expiration of the applicable Interest Period (and also with respect to
amounts owing other than Loans), 2% plus the Base Rate as in effect from time to
time plus the Applicable Rate, in each case calculated as provided in Section
2.09(a), or (b) the Highest Lawful Rate.
SECTION 2.11 Voluntary Termination and Reduction of the Total Commitment;
Increase of the Total Commitment.
(a) Subject to Section 2.13, Borrower may permanently terminate, or
from time to time in part permanently reduce, the Total Commitment upon at
least five Business Days' prior irrevocable written or telecopy notice (or
telephone notice promptly confirmed in writing) to the Administrative Agent
(which notice the Administrative Agent shall promptly transmit to each of
the Lenders). Such notice shall specify the date and the amount of the
termination or reduction of the Total Commitment. Each partial reduction of
the Total Commitment shall be in a minimum aggregate principal amount of
$5,000,000 and in integral multiples of $1,000,000.
(b) So long as no Default has occurred and is continuing, Borrower
may request from time to time, subject to the terms and conditions
hereinafter set forth, that the Total Commitment be increased. Any such
request shall be made by written notice to the Administrative Agent;
provided that any such notice must be given no later than 30 days prior to
the Maturity Date. Each such notice (a "Notice of Commitment Increase")
shall be in the form of Exhibit F and specify therein:
(i) the proposed effective date of such increase, which date (the
requested "Increase Effective Date") shall be no earlier than
five Business Days after receipt by the Administrative Agent
of such notice;
(ii) the amount of the requested increase; provided that (A) such
increase must be at least $25,000,000, and (B) after giving
effect to such requested increase, the Total Commitment shall
not exceed $450,000,000;
(iii) the identity of each of the then Lenders, if any, which has
agreed with Borrower to increase its Commitment in an amount
such that its Commitment Percentage after giving effect to
such requested increase will be the same or greater than its
Commitment Percentage prior to giving effect to such
requested increase (each such Lender being an "Increasing
Lender"), each of the other then Lenders, if any, which has
agreed to increase its Commitment in an amount such that its
Commitment Percentage after giving effect to such a requested
increase will be less than its Commitment Percentage prior to
giving effect to such requested increase (each such Lender
being a "Partially Increasing Lender") and the identity of
each financial institution not already a Lender, if any,
which has agreed with Borrower to become a Lender to effect
such requested increase in the Total Commitment (each such
36
financial institution shall be an Eligible Assignee and each
such financial institution being a "New Lender" and each of
the other then Lenders, if any, which has not agreed to
increase its Commitment being a "Reducing Lender"); and
(iv) the amount of the respective Commitments of the then existing
Lenders and such New Lenders from and after the effective
date of such increase.
(c) On or before each Increase Effective Date:
(i) Borrower, each Increasing Lender, each Partially Increasing
Lender and each New Lender shall execute and deliver to the
Administrative Agent for its acceptance, as to form,
documentation embodying the provisions of the Notice of
Commitment Increase relating to the increase in the Total
Commitment to be effected on such Increase Effective Date;
and
(ii) upon acceptance of such documentation by the Administrative
Agent, which acceptance shall not be unreasonably withheld,
and so long as no Default has occurred and is continuing, (A)
the Administrative Agent shall give prompt notice of such
acceptance to each Lender (including each New Lender), (B) it
shall become effective, and each Increasing Lender's,
Partially Increasing Lender's and New Lender's Commitment
shall be increased to or established at the amount specified
therein, on such Increase Effective Date and (C) the
Administrative Agent shall record each New Lender's
information in the Register.
(d) On each Increase Effective Date:
(i) each New Lender and each Increasing Lender shall, by wire
transfer of immediately available funds, deliver to the
Administrative Agent such Lenders' New Funds Amount for such
Increase Effective Date, which amount, for each such Lender,
shall constitute Loans made by such Lender to Borrower
pursuant to Section 2.01 on such Increase Effective Date; and
(ii) the Administrative Agent shall, by wire transfer of
immediately available funds, pay to each Reducing Lender and
to each Partially Increasing Lender its Reduction Amount for
such Increase Effective Date, which amount, for each such
Lender, shall constitute a prepayment by Borrower pursuant to
Section 2.12, ratably in accordance with the respective
principal amounts thereof, of the principal amounts of all
then outstanding Loans of such Lender.
The Administrative Agent shall record each New Lender's, each Increasing
Lender's and each Partially Increasing Lender's information in the
Register. Also effective as of each Increase Effective Date, each New
Lender and each Increasing Lender shall be deemed to have purchased
37
and had transferred to it, and each Reducing Lender and each Partially
Increasing Lender shall be deemed to have sold and transferred as provided
in Section 2.05(c) to such New Lenders and Increasing Lenders, such
undivided interest and participation in such Reducing Lender's and such
Partially Increasing Lender's interest and participation in all then
outstanding Letters of Credit, to the extent necessary so that such
undivided interests and participations of all Lenders (including each new
Lender) shall accord with their respective Commitment Percentages after
giving effect to the increase in the Total Commitment on such Increase
Effective Date.
SECTION 2.12 Voluntary Prepayment of Loans.
(a) Borrower shall have the right at any time and from time to time
to prepay the Loans, in whole or in part, (i) in the case of Eurodollar
Rate Loans upon at least three Business Days' prior written or telecopy
notice (or telephone notice promptly confirmed in writing) to the
Administrative Agent; provided that in the event Borrower prepays
Eurodollar Rate Loans in whole or in part on a day which is not the last
day of the Interest Period applicable thereto, the provisions of Section
2.17 shall apply, or (ii) in the case of a Base Rate Loan, upon at least
one Business Day's prior written or telecopy notice (or telephone notice
promptly confirmed in writing) to the Administrative Agent; provided that
each such partial prepayment shall be in a minimum principal amount of
$1,000,000 and in integral multiples of $1,000,000 (or a lesser amount
equal to the sum of the aggregate principal amount of all Loans
outstanding).
(b) Each notice of prepayment under Section 2.12(a) above shall (i)
specify the prepayment date, the principal amount of such prepayment, which
Loans are to be prepaid, and in the case of Loans comprising Eurodollar
Rate Borrowings, the specific Borrowing(s) pursuant to which such Loans
were made and the Interest Period applicable thereto, (ii) be irrevocable
and (iii) commit Borrower to prepay such Loans by the amount stated therein
on the date stated therein. All prepayments under this Section 2.12 shall
be subject to Section 2.17 (as to prepayments of Eurodollar Rate Loans),
but otherwise without premium or penalty. All prepayments of Eurodollar
Rate Loans under this Section 2.12 shall be accompanied by accrued interest
on the principal amount being prepaid to the date of payment.
SECTION 2.13 Mandatory Prepayments; Borrowing Base Deficiency.
(a) Borrower shall from time to time prepay the Loans and/or cause
Letters of Credit to be canceled, terminated or otherwise supported to the
satisfaction of the Administrative Agent in such amounts as shall be
necessary so that at all times the Facility Usage shall not be in excess of
the Total Commitment, as reduced from time to time pursuant hereto.
(b) In the event that, after the Borrowing Base Commencement Date has
occurred, the Facility Usage ever exceeds the Borrowing Base as then in
effect, Borrower shall, at its election, either (i) make mandatory
prepayments on Loans (together with accrued interest on the principal
amount of the Loans so prepaid to the date of prepayment), cause Letters of
Credit to be canceled, terminated or otherwise supported to the
satisfaction of the Administrative Agent in equal monthly installments so
that such excess is eliminated in not more than six months (commencing no
later than 30 days after the date such excess occurs), or (ii) prepay (no
later than 30 days after the date such excess occurs) the principal of the
Loans (together with accrued
38
interest on the principal amount of the Loans so prepaid to the date of
prepayment), cause Letters of Credit to be canceled, terminated or
otherwise supported to the satisfaction of the Administrative Agent in an
aggregate amount equal to such excess, or (iii) add (no later than 60 days
after the date such excess occurs) to the Oil and Gas Interests covered by
the Reserve Reports, additional Oil and Gas Interests of a value, as
determined by the Administrative Agent and approved by the Majority
Lenders, equal to or exceeding such excess. Borrower shall give prompt
written notice to the Administrative Agent of each election made by it
pursuant to this Section 2.13(b). If Borrower shall fail to give notice to
the Administrative Agent as aforesaid, Borrower shall be deemed to have
elected to prepay the Loans, cause Letters of Credit to be canceled,
terminated or otherwise supported to the satisfaction of the Administrative
Agent in accordance with clause (ii) of the first sentence of this Section
2.13(b).
(c) With respect to each payment of principal required to be made
pursuant to this Section 2.13, Borrower may designate, by written notice to
the Administrative Agent on or before the date of such payment, the Types
of Loans which are to be paid and, in the case of Eurodollar Rate Loans,
the specific Eurodollar Rate Borrowing(s) pursuant to which made and the
Interest Periods applicable thereto, provided that (i) payments of
Eurodollar Rate Loans may only be made on the last day of an Interest
Period applicable thereto unless all Base Rate Loans have been paid in
full; and (ii) if any payment of Eurodollar Rate Loans made pursuant to a
single Eurodollar Rate Borrowing shall reduce the outstanding Loans made
pursuant to such Eurodollar Rate Borrowing to an amount less than
$5,000,000, such Eurodollar Rate Borrowing shall immediately be converted
into Base Rate Loans. In the absence of a designation by Borrower as
described in the preceding sentence, the Administrative Agent shall apply
the amount of such payment first to the payment of the outstanding Base
Rate Loans and second to the payment of the outstanding Eurodollar Rate
Loans.
SECTION 2.14 Alternate Rate of Interest. In the event, and on each
occasion, that on the day three Business Days prior to the commencement of any
Interest Period for a Eurodollar Rate Borrowing, the Administrative Agent shall
have reasonably determined (which determination shall be final and binding upon
Borrower) that (a) Dollar deposits in the principal amounts of the relevant
Eurodollar Rate Loans comprising such Eurodollar Rate Borrowing are not
generally available in the London interbank eurodollar market, (b) by reason of
any changes arising after the date of this Credit Agreement affecting the London
interbank eurodollar market, adequate and fair means do not exist for
ascertaining the Eurodollar Rate on the basis provided for in the definition of
the Eurodollar Rate, or (c) by reason of any other circumstance affecting a
Lender or the London interbank eurodollar market or the position of a Lender in
such market, the Eurodollar Rate will not adequately and fairly reflect the cost
to any Lender of making or maintaining its Eurodollar Rate Loan during such
Interest Period and such unreflected cost is not paid by Borrower pursuant to
Section 2.15(a), the Administrative Agent shall, as soon as practicable
thereafter, give written notice of such determination to Borrower and the
Lenders. In the event of any such determination, any request by Borrower for a
Eurodollar Rate Borrowing pursuant to Section 2.03 or Section 2.06 shall, until
the circumstances giving rise to such notice no longer exist, be deemed to be a
request for a Borrowing comprised of Base Rate Loans.
39
SECTION 2.15 Change in Circumstances.
(a) Notwithstanding any other provision herein but subject to Section
2.21, if after the Effective Date the introduction of any applicable law or
regulation or any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by
any Lender with any applicable guideline or request from any central bank
or Governmental Authority (whether or not having the force of law) (i)
shall change the basis of taxation of payments to any Lender, of the
principal of or interest on any Loan made by such Lender or shall change
the basis of taxation of any other fees or amounts payable hereunder (other
than changes in the rate of tax imposed on the overall net income of,
including penalties and interest in respect thereof, or franchise taxes
based on the net income of, such Lender or its Lending Office), (ii) shall
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 or (iii) shall impose on any Lender or the
London interbank eurodollar market any other condition affecting this
Credit Agreement or any Eurodollar Rate Loan made by such Lender, and the
result of any of the foregoing shall be to increase the cost to such Lender
of making, continuing, converting, or maintaining any Eurodollar Rate Loan
or to reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise) in respect thereof
by an amount deemed in good faith by such Lender to be material (provided
that the foregoing shall not apply to increases resulting from general
increases in interest rates or general increases in such Lender's
administrative expenses or overhead), then Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reductions suffered in accordance with
Section 2.15(c). Notwithstanding the foregoing, in no event shall any
Lender be permitted to receive any compensation hereunder constituting
interest in excess of the Highest Lawful Rate.
(b) If any Lender shall have determined that the applicability of any
law, rule, regulation or guideline adopted pursuant to or arising out of
the July 1988 report of the Basle Committee on Banking Regulations and
Supervisory Practices entitled "International Convergence of Capital
Measurement and Capital Standards" or the adoption or effectiveness after
the Effective Date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing, or any
change in the interpretation or administration in any of the foregoing by
any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by such Lender
(or its Lending Office) or such Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any such Governmental Authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, as a
consequence of its obligations under this Credit Agreement to a level below
that which such Lender or such Lender's holding company could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed in good faith by such
Lender to be material, then such Lender shall promptly notify Borrower in
writing of the occurrence of any such event, such notice to state in
reasonable detail
40
the reasons therefor and the additional amount required to compensate such
Lender for the reduction in its rate of return and Borrower and such Lender
or (as the case may be) the Administrative Agent shall thereafter attempt
to negotiate in good faith, within 30 days of the day on which Borrower
receives such notice, an adjustment payable hereunder that will adequately
compensate such Lender or the Administrative Agent in light of these
circumstances. If Borrower and such Lender or the Administrative Agent are
unable to agree to such adjustment within 30 days of the date on which
Borrower receives such notice, then Borrower shall pay, subject to Section
2.21, to such Lender or the Administrative Agent, as the case may be, an
amount that will, in such Lender's or the Administrative Agent's reasonable
determination, provided adequate compensation to such Lender or such
Lender's holding company (or the Administrative Agent or the Administrative
Agent's holding company, as the case may be) for any such reduction in
accordance with Section 2.15(c). Notwithstanding the foregoing, in no event
shall any Lender be permitted to receive any compensation hereunder
constituting interest in excess of the Highest Lawful Rate.
(c) Any Lender requesting compensation pursuant to Section 2.15(a) or
Section 2.15(b) shall deliver to Borrower a certificate of such Lender
setting forth in reasonable detail such amount or amounts as shall be
necessary to compensate such Lender or its holding company as specified in
Sections 2.15(a) or Section 2.15(b), as the case may be, such certificate
to state, in reasonable detail, the reasons therefor, and such certificate
shall, in the absence of manifest error, be conclusive and binding on
Borrower. In preparing such certificate, such Lender may employ such
assumptions and allocations of costs and expenses as it shall in good xxxxx
xxxx reasonable and may be determined by any reasonable averaging and
attribution method; provided that Borrower shall not be required to
compensate a Lender pursuant to this Section 2.15 for any of the foregoing
items incurred more than 180 days (plus any period of retroactivity in the
application of such items that is greater than 180 days) prior to the date
that such Lender notifies Borrower of the imposition or change giving rise
thereto and of such Lender's intention to claim compensation therefor.
Borrower shall pay to such Lender the amount shown as due on any such
certificate within 30 Business Days after Borrower's receipt of the same.
Any decision by a Lender not to require payment of any interest, cost or
other amount payable under this Section 2.15 or to calculate any amount
payable by a particular method, on one occasion, shall in no way limit or
be deemed a waiver of such Lender's right to require full payment of any
interest, cost or other amount payable hereunder, or to calculate any
amount payable by another method, on any other or subsequent occasion.
41
SECTION 2.16 Change in Legality.
(a) Notwithstanding any other provision herein contained to the
contrary, if (x) any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any
Lender or its Lending Office to make or maintain its Commitment Percentage
of any Eurodollar Rate Borrowing or to give effect to its obligations as
contemplated hereby with respect to its Commitment Percentage of any
Eurodollar Rate Borrowing, or (y) at any time the Majority Lenders
reasonably determine the making or continuance of any Lender's Eurodollar
Rate Loans comprising a portion of any Eurodollar Rate Borrowing has become
impracticable as a result of a contingency occurring after the date hereof
which adversely affects the London interbank eurodollar market, then, and
in any such event, such Lender shall, promptly after making such
determination, give written or telecopy notice (or by telephone promptly
confirmed in writing) to Borrower and the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly
transmit to each of the other Lenders); provided that before giving any
such notice, such Lender shall use reasonable good faith efforts to
designate a different Lending Office to make or maintain its Eurodollar
Rate Loans if such designation will avoid the need to suspend such Lender's
obligations to make or maintain Eurodollar Rate Loans and will not be
otherwise disadvantageous to such Lender. Thereafter each such affected
Lender may (i) declare that such affected Lender will no longer make
Eurodollar Rate Loans (subject to Section 2.16(b)) whereupon any request by
Borrower for a Eurodollar Rate Borrowing shall, as to such Lender only, be
deemed a request for a Base Rate Loan; and (ii) require that all
outstanding Eurodollar Rate Loans made by such affected Lender(s) be
converted into Base Rate Loans at the end of the applicable Interest Period
or such earlier time as may be required by applicable Requirements of Law,
in each case by giving the Administrative Agent written or telecopy notice
(or by telephone promptly confirmed in writing) thereof (which notice, in
the case of subclause (ii) above shall specify which affected Eurodollar
Rate Loans are to be converted); provided that all Lenders whose Eurodollar
Rate Loans are affected by the circumstances described above shall be
treated in the same manner.
(b) In the event any Lender shall exercise its rights under (a)
above, all payments of principal which would otherwise have been applied to
repay the Eurodollar Rate Loans that would have been made, converted or
continued by such Lender or the converted Eurodollar Rate Loans of such
Lender shall instead be applied to repay the Base Rate Loans made by the
Lender in lieu of, or resulting from the conversion of, such affected
Eurodollar Rate Loans.
SECTION 2.17 Funding Losses. Without duplication of other provisions
contained herein, Borrower shall indemnify each Lender against any loss
(excluding loss of anticipated profits) or reasonable expense which such
Lender may sustain or incur as a consequence of (a) any failure by Borrower
to fulfill on the Borrowing Date for any Borrowing hereunder the applicable
conditions set forth in Article III, (b) any failure by Borrower to borrow
hereunder after a Borrowing Request pursuant to this Article II has been
given, (c) any failure by Borrower to convert or continue a Borrowing
hereunder after a Notice of Conversion or Continuation pursuant to this
Article II has been given, (d) any payment, prepayment, continuance, or
conversion of a Eurodollar Rate Borrowing required or permitted by any
other provision of this
42
Credit Agreement including, without limitation, payments made due to the
acceleration of the maturity of the Obligations pursuant to Section 7.01,
or otherwise made on a date other than the last day of the applicable
Interest Period, or (e) any default in the payment or prepayment of the
principal amount of any Eurodollar Rate Borrowing or any part thereof or
interest accrued thereon, as and when due and payable (at the due date
thereof, by notice of prepayment or otherwise) including, but not limited
to, any loss or reasonable expense sustained or incurred or to be sustained
or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Lender's Commitment Percentage of any
Eurodollar Rate Borrowing or any part thereof as a Eurodollar Rate
Borrowing. Such loss or reasonable expense shall include, without
limitation, an amount equal to the excess, if any, as reasonably determined
by such Lender of (i) its cost of obtaining the funds for its Commitment
Percentage of the Eurodollar Rate Borrowing being paid, prepaid or
converted or not borrowed (based on the Eurodollar Rate applicable thereto)
for the period from the date of such payment, prepayment, continuance or
conversion or failure to borrow to the last day of the Interest Period for
such Eurodollar Rate Loan (or, in the case of a failure to borrow, the
Interest Period for the Eurodollar Rate Loan, as the case may be, which
would have commenced on the date of such failure to borrow) over (ii) the
amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in reemploying the funds so paid, prepaid,
continued or converted or not borrowed for such period or Interest Period,
as the case may be, provided that such Lender will use its best efforts to
reemploy funds in investments of similar quality. A certificate of such
Lender signed by an officer setting forth in reasonable detail any amount
or amounts which such Lender is entitled to receive pursuant to this
Section 2.17 shall be delivered to Borrower, and Borrower shall pay to such
Lender the amount shown as due on any certificate within 30 Business Days
after its receipt of the same. Notwithstanding the foregoing, in no event
shall any Lender be permitted to receive any compensation hereunder
constituting interest in excess of the Highest Lawful Rate. Without
prejudice to the survival of any other obligations of Borrower hereunder,
the obligations of Borrower under this Section 2.17 shall survive the date
of termination of this Credit Agreement and the payment in full of the
Obligations for a period of 60 days.
SECTION 2.18 Method of Payments; Pro Rata Treatment.
(a) Borrower shall make each payment of principal, interest, Letter
of Credit Liabilities and other amounts to be made by Borrower hereunder
and under any Notes delivered hereunder not later than 1:00 p.m., Dallas,
Texas time, on the day when due in lawful money of the United States (in
freely transferable Dollars) to the Administrative Agent for the account of
the Lenders entitled thereto at the Administrative Agent's address referred
to in Section 9.02 in immediately available funds and without setoff,
deduction or counterclaim, and any funds received by the Administrative
Agent after such time shall, for all purposes hereof (including the
following sentence), be deemed to have been paid on the next succeeding
Business Day. Except as otherwise specifically provided herein, the
Administrative Agent shall thereafter cause to be distributed on the date
of receipt thereof to each Lender in like funds its Sharing Percentage (or,
if the Loan of such Lender with respect to which such payment is being made
is not of the same Type as the Loans of the other Lenders with respect to
which such payment is being made, such Lender's appropriate share) of the
payments so received for the account of such Lender's Lending Office for
the Loan or other Obligation in respect of which such payment is made.
43
(b) Except as otherwise provided herein, (i) each Borrowing
hereunder shall be obtained from the Lenders, each payment of fees shall be
paid for the account of the Lenders and each partial reduction of the Total
Commitment under Section 2.11 shall be applied to the Commitments of the
Lenders, in each case simultaneously and pro rata in accordance with each
Lender's Commitment Percentage, (ii) each conversion of a Borrowing
comprised of Loans of a particular Type shall be made pro rata among the
Lenders according to their respective Commitment Percentage of such
Borrowing and (iii) each payment and prepayment of principal of or interest
on any Loans or Letter of Credit Liabilities will be made to the
Administrative Agent for the account of each of the Lenders simultaneously
and pro rata in accordance with their respective Sharing Percentage of
unpaid principal amounts of such Loans or Letter of Credit Liabilities.
(c) Whenever any payment hereunder or under any Notes (including
principal of or interest on any Loan or Letter of Credit Liability or any
fees or other amounts), shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest, fee or other amount, as the case may
be; provided that, if such extension would cause payment of interest on or
principal of a Eurodollar Rate Loan to be made in the next following
calendar month, such payment shall be made on the next preceding Business
Day.
44
SECTION 2.19 Taxes.
(a) All payments of principal, interest, expenses,
reimbursements, compensation, commitment, arrangement or
administration fees and any other amount from time to time due
hereunder, under any Notes or any other Loan Document made by Borrower
shall be made free and clear of and without deduction for any present
or future tax, levy, impost or any other charge, if any, of any nature
whatsoever now or hereafter imposed by any Governmental Authority,
excluding, however, in the case of the Administrative Agent and each
Lender, any such taxes, levies, costs or charges imposed on or
measured by the gross receipts, capital or overall net income of the
Administrative Agent or such Lender or such Lender's Lending Office by
any jurisdiction in which the Administrative Agent or such Lender or
such Lender's Lending Office is located (all such non- excluded taxes,
levies, costs, imposts, deductions, charges or withholdings being
herein called "Withholding Taxes"). If any Withholding Taxes are
required to be withheld from any amounts payable to the Administrative
Agent or any Lender hereunder or under any Notes, and if such
withholding does not result from the breach by such Lender of its
agreement set forth in Section 2.19(b) or would not be required if
such Lender's representation and warranty set forth in Section 2.19(c)
were true, then to the extent that any such Withholding Taxes are a
liability of, or credited to, the account of Borrower, Borrower shall
pay to the Administrative Agent or such Lender, on the date of each
such payment, such additional amounts as may be necessary in order
that the net amounts received by the Administrative Lender or such
Lender after such deduction or withholding shall equal the amounts
which would have been received if such deduction or withholding were
not required; provided that all amounts payable under this Section
2.19 which constitute interest under applicable law shall not exceed
an amount which would result in the payment of interest at a rate in
excess of the Highest Lawful Rate. Whenever any Withholding Taxes are
withheld by Borrower as aforesaid, as promptly as possible thereafter,
Borrower shall send to the Administrative Agent for its own account or
for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by Borrower showing payment
thereof. If Borrower fails to pay any Withholding Taxes so withheld by
it when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required
documentary evidence, Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties
that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this Section 2.19 shall
survive the termination of this Credit Agreement and the payment of
any Notes and all other Obligations for a period of 60 days.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (including each Eligible
Assignee that becomes a party to this Credit Agreement pursuant to
Section 2.11 or Section 9.10) that is entitled to receive payments
under this Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes agrees that,
prior to the first date on which any payment is due to it hereunder,
it will deliver to Borrower and the Administrative Agent, as the case
may be, two duly completed copies of IRS Form W-
45
8BEN or W8ECI, or successor applicable form, as the case may be,
certifying in each case that such Lender is entitled to receive
payments under this Credit Agreement and any Notes payable to it,
without deduction or withholding of any United States federal income
taxes. Each Lender which delivers to Borrower and the Administrative
Agent a Form W-8BEN or W8ECI, or successor applicable form, pursuant
to the preceding sentence further undertakes to deliver to Borrower
and the Administrative Agent two further copies of Form W-8BEN or
W8ECI, or successor applicable form, or other manner of certification,
as the case may be, on or before the date that any such form expires
or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to Borrower,
and such extensions or renewals thereof as may reasonably be requested
by Borrower, certifying that such Lender is entitled to receive
payments under this Credit Agreement without deduction or withholding
of any United States federal income taxes, unless in any such case an
event (including, without limitation, any change in any Requirement of
Law) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or
which would prevent such Lender from duly completing and delivering
any such form with respect to it and such Lender advises Borrower that
it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(c) Each Lender (including each Eligible Assignee that becomes a
party to this Credit Agreement pursuant to Section 2.11 or Section
9.10) represents and warrants to Borrower that each Lending Office of
such Lender hereunder will be entitled to receive payments of
principal of, and interest on, the Loans made by such Lender from such
Lending Office without withholding or deduction for or on account of
any United States federal income taxes.
SECTION 2.20 Sharing of Payments and Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff to the extent
not prohibited under Section 9.05, or counterclaim against Borrower, including,
but not limited to, a secured claim under Section 506 of Title 11 of the United
States Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by similar means, obtain
payment (voluntary or involuntary) in respect of any Loan or any Letter of
Credit Liability (other than pursuant to Section 2.15, Section 2.17 or Section
2.19) as a result of which the unpaid principal portion of its Loans and Letter
of Credit Liabilities shall be proportionately less than the unpaid principal
portion of the Loans and Letter of Credit Liabilities of any other Lender, it
shall simultaneously purchase from such other Lenders at face value a
participation in the Loans and Letter of Credit Liabilities of such other
Lenders, so that the aggregate unpaid principal amount of Loans and Letter of
Credit Liabilities and participations in Loans and Letter of Credit Liabilities
held by each Lender shall be in the same proportion to the aggregate unpaid
principal amount of all Loans and Letter of Credit Liabilities then outstanding
as the principal amount of its Loans and Letter of Credit Liabilities prior to
such exercise of banker's lien, setoff, counterclaim or other event was to the
principal amount of all Loans and Letter of Credit Liabilities outstanding prior
to such exercise of banker's lien, setoff pursuant to Section 9.05, counterclaim
or other event, provided that if any such purchase or purchases or adjustments
shall be made pursuant to this Section 2.20 and the payment giving rise thereto
shall thereafter be recovered, such purchase or purchases or adjustments shall
be rescinded to the extent of
46
such recovery and the purchase price or prices or adjustment restored without
interest. Borrower expressly consents to the foregoing arrangements and agrees
that any Lender holding a participation in any Loans or Letter of Credit
Liabilities deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by Borrower to such Lender as fully as if such Lender had made a Loan directly
to such Borrower in the amount of such participation.
SECTION 2.21 Limitation on Reimbursement; Mitigation.
(a) Notwithstanding the provisions of Section 2.15, if any Lender
fails to give notice to Borrower of any event that would obligate Borrower
to pay any amount owing pursuant to Section 2.15 within 30 days after such
Lender obtains knowledge of such event, and subsequently gives notice to
Borrower of such event, Borrower shall pay only such amounts for costs
incurred for the 90 day immediately prior to such notice.
(b) Any Lender claiming any additional amounts payable pursuant to
Section 2.15 or Section 2.19 or any Lender subject to Section 2.14 or
Section 2.16 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of
its Lending Office for the Loans, if the making of such a change would
avoid the need for, or reduce the amount of, any such additional amounts
which may thereafter accrue under Section 2.15 or Section 2.19 or would
avoid the unavailability of Eurodollar Rate Loans under Section 2.14 or
Section 2.16 and would not, in any such case, in the judgment of such
Lender, be otherwise disadvantageous.
SECTION 2.22 Replacement of Lenders. If any Lender (an "Affected Lender")
shall have (a) failed to fund any Loan that such Lender is obligated to fund
hereunder and such failure has not been cured, (b) requested compensation from
Borrower under Section 2.15 or Section 2.19 to recover costs or taxes incurred
by such Lender which are not being incurred generally by the other Lenders, or
(c) given notice pursuant to Section 2.14 or Section 2.16 that such Lender has
suspended Borrower's right to elect Eurodollar Rate Loans from such Lender for
reasons not generally applicable to the other Lenders then, in any such case and
in addition to any other rights or remedies available to Borrower, Borrower may
give written notice to such Affected Lender of the occurrence of an event set
forth in clauses (a), (b), or (c) of this Section 2.22, and during the 60 day
period following such notice, Borrower may make written demand on such Affected
Lender (with a copy to the Administrative Agent and each other Lender), for such
Affected Lender to assign to one or more Eligible Assignees (a "Replacement
Lender"), all of such Affected Lender's rights and obligations under this Credit
Agreement and the other Loan Documents (including such Affected Lender's
Commitment and all Loans and Letter of Credit Liabilities owing to such Affected
Lender), provided that such assignment shall be consummated in accordance with
and shall be subject to the terms of Section 2.17 and Section 9.10. Pursuant to
Section 9.10, upon any such assignment, such Affected Lender shall cease to be a
party hereto, provided that such Affected Lender shall continue to be entitled
to the benefits of Section 2.15, Section 2.17, Section 2.19 and Section 7.03
accruing with respect to such Affected Lender prior to such assignment, as well
as any fees accrued for its account and not yet paid and breakage costs incurred
by such Affected Lender in connection with any such assignment. If an Eligible
Assignee cannot be obtained within the 60 day period following said notice to
the Affected Lender, to assume the Commitment of such Affected Lender, and
provided that no Default or Event of Default shall have occurred and be
continuing, then Borrower may prepay
47
immediately (subject to the provisions of Section 2.17) all Loans of such
Affected Lender, provide cash collateral for the participation interest of such
Affected Lender in all Letter of Credit Liabilities, and terminate such Affected
Lender's entire Commitment hereunder; provided that in the event Borrower makes
any prepayment pursuant to this sentence, then on the date of such prepayment,
the Total Commitment shall be permanently reduced by the amount of such Affected
Lender's Commitments and the Commitment Percentage of each other Lender shall be
redetermined based upon the amount each such other Lender's Commitment is of the
Total Commitment as so reduced.
SECTION 2.23 Use of Proceeds.
(a) The proceeds of all Loans and Letters of Credit shall be used for
general business and corporate requirements of Borrower and its
Subsidiaries.
(b) No portion of the proceeds of any Loan under this Credit
Agreement shall be used by Borrower in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation U or
Regulation X or any other regulation of the Board or to violate the
Securities Exchange Act of 1934, in each case as in effect on the date or
dates of such borrowing and such use of proceeds.
(c) No portion of the proceeds of any Loan under this Credit
Agreement shall be used by Borrower, directly or indirectly, for a Hostile
Acquisition.
SECTION 2.24 Maturity Date. The Total Commitment shall terminate, and any
Loans and Letter of Credit Liabilities then outstanding (together with accrued
and unpaid interest thereon) and all other Obligations shall be due and payable
in full, on the Maturity Date, and Borrower promises to pay such amounts on the
Maturity Date.
SECTION 2.25 Affiliates; Lending Offices.
(a) Any Lender may, if it so elects, fulfill any obligation to make a
Eurodollar Rate Loan by causing a branch, foreign or otherwise, or
Affiliate of such Lender to make such Loan and may transfer and carry such
Loan at, to or for the account of any branch office or Affiliate of such
Lender; provided that, in such event for the purposes of this Credit
Agreement such Loan shall be deemed to have been made by such Lender and
the obligation of Borrower to repay such Loan shall nevertheless be to such
Lender and shall be deemed to be held by such Lender and, to the extent of
such Loan, to have been made for the account of such branch or Affiliate.
(b) Notwithstanding any provision of this Credit Agreement to the
contrary, each Lender shall be entitled to fund and maintain its funding of
all or any part of its Loans hereunder in any manner it sees fit, it being
understood, however, that for the purposes of this Credit Agreement all
determinations hereunder shall be made as if such Lender had actually
funded and maintained each Eurodollar Rate Loan during each Interest Period
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate
for such Interest Period.
48
ARTICLE III
CONDITIONS PRECEDENT
--------------------
SECTION 3.01 Conditions Precedent to the Loans. The obligation of each
Lender to make its initial Loan or for the Issuing Lender to issue its initial
Letter of Credit hereunder is subject to the satisfaction of the following
conditions precedent:
(a) The Administrative Agent shall have received, duly authorized,
executed and delivered by each Person that is a party thereto, in form and
substance reasonably satisfactory to the Lenders, each of the following:
(i) Each of the following Loan Documents (together with all
exhibits thereto) dated on or as of the Effective Date:
(A) this Credit Agreement; and
(B) each of the Notes requested by any Lender;
(ii) A certificate of the Secretary or Assistant Secretary of
Borrower, dated the Effective Date, certifying as to (A) the
adoption and continuing effect of resolutions of the board
of directors of Borrower authorizing the transactions
contemplated hereby and by the other Loan Documents; (B) the
Certificate of Incorporation of Borrower and all amendments
thereto, (C) the Bylaws of Borrower and all amendments
thereto, and (D) the incumbency of all officers of Borrower
who will execute or have executed any document or instrument
required to be delivered hereunder, containing the signature
of same;
(iii) (A) With respect to Borrower, a certificate of existence and
good standing from the Secretary of State of the State of
Delaware and certificates of authorization to do business
and good standing in the States of Colorado, Oklahoma, North
Dakota, Wyoming, and Utah, each dated no more than 30 days
prior to the Effective Date; (B) with respect to Plains
Petroleum Operating Company, a certificate of existence and
good standing from the Secretary of State of Delaware and
certificates of authorization to do business and good
standing in the States of Colorado, Kansas and Wyoming, each
dated no more than 30 days prior to the Effective Date; (C)
with respect to Plains Petroleum Company, a certificate of
existence and good standing from the Secretary of State of
Delaware and a certificate of authorization to do business
and good standing in the State of Colorado, each dated no
more than 30 days prior to the Effective Date; (D) with
respect to Xxxxxxx Fuels Corporation, a certificate of
existence and good standing from the Secretary of State of
Delaware and a certificate of authorization to do business
and good standing in the State of Colorado, each dated no
more than 30 days prior to the Effective Date; (E) with
respect to Plains Petroleum Gathering
49
Company, a certificate of existence and good standing from
the Secretary of State of Delaware and certificates of
authorization to do business and good standing in the States
of Colorado and Kansas, each dated no more than 30 days
prior to the Effective Date; (F) with respect to Fort Union
Gas Gathering, L.L.C., a certificate of existence and good
standing from the Secretary of State of Delaware and a
certificate of authorization to do business and good
standing in the State of Colorado, each dated no more than
30 days prior to the Effective Date; (G) with respect to
Bargath, Inc., a certificate of existence and good standing
from the Secretary of State of Colorado and a certificate of
authorization to do business and good standing in the State
of Wyoming, each dated no more than 30 days prior to the
Effective Date; and (H) with respect to each of Xxxxxxx
Resources International Corporation and Xxxxxxx Resources
(Peru) Corporation, a certificate of existence and good
standing from the Secretary of State of Delaware and a
certificate of authorization to do business and good
standing in the State of Colorado, each dated no more than
30 days prior to the Effective Date.
(iv) The Opinion of Borrower's Counsel;
(v) A certificate of insurance coverage evidencing that all
insurance required to be obtained and maintained by Borrower
and its Subsidiaries as of the Effective Date pursuant to
any of the Loan Documents is in full force and effect;
(vi) The Initial Financial Statements and such other financial
information, regarding Borrower or its Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
All of such financial statements and financial information
shall be satisfactory to the Lenders;
(vii) For its account and for the account of each Lender, as
applicable, all fees and expenses due and payable hereunder
on or before the Effective Date and invoiced to Borrower in
writing prior to the Effective Date; including pursuant to
the Fee Letter;
(viii) Evidence satisfactory to the Administrative Agent that,
concurrently with the initial Loans, the Existing Credit
Agreement will be terminated and all amounts owing
thereunder will be paid in full;
(ix) Borrower's Marketing Business Plan and Risk Management
Policy adopted by the Board of Directors of Borrower on
November 16, 2000; and
(x) Such other certificates, opinions, documents and instruments
relating to the transactions contemplated hereby as may have
been reasonably requested by the Administrative Agent or any
Lender.
50
(b) (i) The representation and warranties of Borrower contained in
Article IV and, in all material respects, in each of the other Loan
Documents to which Borrower is a party shall be true and correct on the
Effective Date both before and after giving effect to the making of the
initial Loans or the issuance of the initial Letter of Credit; (ii) no
Default or Event of Default shall have occurred and be continuing on the
Effective Date either before or after giving effect to the making of the
initial Loans or the issuance of the initial Letter of Credit; and (iii)
except as disclosed in Borrower's 10-Q for the Fiscal Quarter ended June
30, 2000, no Material Adverse Effect shall have occurred since December 31,
1999; and
(c) Such other conditions precedent which the Administrative Agent
may reasonably have requested or required.
SECTION 3.02 Additional Conditions Precedent. No Lender has any
obligation to make any Loan (including its initial Loan) and the Issuing Lender
has no obligation to issue any Letter of Credit (including the initial Letter of
Credit) unless (i) the Administrative Agent shall have received a Borrowing
Request, and the certifications made by Borrower in such Borrowing Request shall
be true and correct, and (ii) the following conditions precedent have been
satisfied:
(a) Borrower shall have complied with the provisions of Section 2.03
or Section 2.05, as applicable;
(b) The Maturity Date shall not have occurred;
(c) After giving effect to the requested Borrowing or the face amount
of the requested Letter of Credit, the Facility Usage will not exceed the
Available Commitment; and
(d) The making of such Loans or the issuance of such Letter of Credit
shall be permitted by Requirements of Law.
SECTION 3.03 General. All of the agreements, instruments, reports,
opinions and other documents and papers referred to in this Article III (except
for the Notes), unless otherwise expressly specified, shall be delivered to the
Administrative Agent in sufficient counterparts for each of the Lenders. As soon
as practicable after receipt of such documents the Administrative Agent shall
deliver such documents to each of the Lenders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Administrative Agent, the Issuing Lender and each
Lender to enter into this Credit Agreement and to make the Loans and issue or
participate in the Letters of Credit, Borrower represents and warrants, as to
itself and each of its Subsidiaries, to the Administrative Agent, the Issuing
Lender and each Lender that the following statements are true, correct and
complete:
51
SECTION 4.01 Organization; Corporate Powers . Each of Borrower and each
of its Material Subsidiaries (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (b) is duly qualified to do business as a foreign corporation and
is in good standing in each other jurisdiction in which such qualification and
good standing are necessary in order for it to conduct its business and own its
properties as conducted and owned (except only for jurisdictions in which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, result in a Material Adverse Effect) and (c) has all requisite power
and authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted.
SECTION 4.02 Authority. Borrower has the corporate power and authority
and legal right to execute, deliver and perform each of the Loan Documents
executed by, or to be executed by, Borrower and each other agreement or
instrument contemplated thereby to which it is or will be a party and to borrow
hereunder. The execution, delivery and performance of each of the Loan Documents
to which Borrower is or will be a party and the consummation of the transactions
contemplated thereby, and the borrowing of funds and incurrence of Letter of
Credit Liabilities under this Credit Agreement, have been duly approved by the
board of directors of Borrower and no other corporate proceedings on the part of
Borrower are necessary to consummate such transactions. This Credit Agreement
constitutes, and each of the other Loan Documents to which Borrower is a party,
when executed and delivered by Borrower, will constitute the legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws relating to creditors' rights generally and by general principles of equity
which may limit the right to obtain equitable remedies (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
SECTION 4.03 Use of Proceeds. Borrower's uses of the proceeds of the
Loans and the Letters of Credit shall be as set forth in Section 2.23.
SECTION 4.04 No Conflict . The execution, delivery and performance by
Borrower of the Loan Documents to which Borrower is a party, the compliance by
Borrower with the terms and provisions thereof and the consummation of each of
the transactions contemplated thereby, do not and will not (a) require any
consent or approval of the stockholders of Borrower or any authorization,
consent or approval by any Governmental Authority or (b) by the lapse of time,
the giving of notice or otherwise, (i) constitute a violation of any Requirement
of Law binding on Borrower or any Subsidiary of Borrower or a breach of any
provision contained in the articles or certificate of incorporation or bylaws of
Borrower or any Material Subsidiary of Borrower, (ii) constitute a breach of any
material provision contained in any Material Contract to which Borrower or any
Subsidiary of Borrower is a party or by which Borrower or any Subsidiary of
Borrower is bound, or (iii) result in or require the creation or imposition of
any Lien whatsoever upon any of the properties or assets of Borrower or any
Material Subsidiary of Borrower (other than Permitted Liens).
SECTION 4.05 Gas Balancing Agreements and Advance Payment Contracts . On
the date of this Credit Agreement (a) the net gas imbalance to Borrower and its
Subsidiaries (considered in the aggregate) under all Gas Balancing Agreements to
which Borrower or any of its Subsidiaries is a party or by which any Oil and Gas
Interests owned by Borrower or any of its Subsidiaries is bound, is not in
excess of $5,000,000, and (b) the aggregate amount of all Advance Payments
received by Borrower or
52
any of its Subsidiaries under Advance Payment Contracts which have not been
satisfied by delivery of production does not exceed $17,000,000.
SECTION 4.06 Oil and Gas Interests. If the Borrowing Base Commencement
Date has occurred, Borrower and its Subsidiaries have good and defensible title
to all Oil and Gas Interests described in each Reserve Report other than
Immaterial Mineral Interests, free and clear of all Liens except Permitted
Liens. With the exception of Immaterial Mineral Interests, all such Oil and Gas
Interests are valid, subsisting, and in full force and effect, and all rentals,
royalties, and other amounts due and payable in respect thereof have been duly
paid. Except with respect to Immaterial Mineral Interests, but without regard to
any consent or non-consent provisions of any joint operating agreement covering
any of the Proved Reserves of Borrower and its Subsidiaries, Borrower's and each
of its Subsidiaries' share of (a) the cost for each such Proved Reserves
described in each Reserve Report is not greater than the decimal fraction set
forth in each Reserve Report, before and after payout, as the case may be, and
described therein by the designation "working interest," "WI," "gross working
interest," "GWI" or similar terms, and (b) the production from, allocated to or
attributed to each such Proved Reserves is not less than the decimal fraction
set forth in each Reserve Report, before and after payout, as the case may be,
and described therein by the designation "net revenue interest," "NRI," or
similar terms. Except with respect to Immaterial Mineral Interests, each well
drilled in respect of each Proved Developed Producing Hydrocarbon Reserves
described in each Reserve Report, (y) is capable of, and is presently, producing
Hydrocarbons in commercial quantities, and Borrower or its Subsidiary is
currently receiving payments for its share of production, with no funds in
respect of any thereof being presently held in suspense, other than any such
funds being held in suspense pending delivery of appropriate division orders,
and (z) has been drilled, bottomed, completed, and operated in compliance with
all applicable Requirements of Law and no such well which is currently producing
Hydrocarbons is subject to any penalty in production by reason of such well
having produced in excess of its allowable production. For purposes of this
Section 4.06, "Immaterial Mineral Interests" means Oil and Gas Interests which,
in the aggregate, do not represent more than 5% of the discounted present value
of all Oil and Gas Interests as set forth in any Reserve Report.
SECTION 4.07 Ownership of Properties Generally. With respect to all
properties and assets of Borrower and its Material Subsidiaries other than Oil
and Gas Interests, Borrower and each of its Material Subsidiaries have good and
valid fee simple or leasehold title to all material properties and assets
purported to be owned by them, including, without limitation, all assets
reflected in the balance sheets referred to in Section 4.09(a) and all assets
which are used by Borrower and its Material Subsidiaries in the operation of
their respective businesses, and none of such properties or assets is subject to
any Lien other than Permitted Liens.
SECTION 4.08 No Defaults .
(a) Neither Borrower nor any Subsidiary of Borrower is a party to any
Contractual Obligation that has resulted or is likely to result in a
Material Adverse Effect.
(b) (i) No Default or Event of Default exists and (ii) neither
Borrower nor any Subsidiary of Borrower is in default with respect to any
Material Contract.
53
SECTION 4.09 Financial Position: No Material Adverse Change.
(a) (i) Borrower has heretofore furnished to the Administrative
Agent and the Lenders the Initial Financial Statements. Such financial
statements present fairly the financial condition and results of operations
of Borrower and its Subsidiaries as of the dates thereof and for the
periods covered thereby. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.
(ii) Neither Borrower nor any Subsidiary of Borrower has any
material contingent liabilities, material liabilities for taxes, unusual
and material forward or long-term commitments or material unrealized or
anticipated losses from any unfavorable commitments, except as referred to
or reflected or provided for in the Initial Financial Statements or as
otherwise disclosed to the Lenders in writing prior to the Effective Date.
(b) Since the date of the Initial Financial Statements, no event or
condition has occurred that could reasonably be expected to have a Material
Adverse Effect, except as disclosed in writing to the Lenders prior to the
date of this Credit Agreement.
SECTION 4.10 Litigation; Adverse Effects.
(a) There are no actions, suits, proceedings, governmental
investigations or arbitrations, at law or in equity, before or by any
Governmental Authority, pending or, to the best knowledge of Borrower,
probable of assertion against Borrower or any Subsidiary of Borrower or any
property of Borrower or any Subsidiary of Borrower which could reasonably
be expected to result in a Material Adverse Effect.
(b) None of the business, properties, or operations of Borrower or
any Subsidiary of Borrower are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God, or of the public enemy or other casualty (whether or
not covered by insurance) which could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.11 ERISA. All currently existing Benefit Plans are listed on
Schedule 4.11. Borrower and each of its Subsidiaries is in compliance in all
material respects with the applicable provisions of ERISA and the regulations
and published interpretations thereunder with respect to each such Benefit Plan.
No Reportable Event has occurred as to which Borrower or any Subsidiary of
Borrower was required to file a report with the PBGC, and the present value of
all benefit liabilities under each Benefit Plan (based on those assumptions used
to fund such Benefit Plan) did not, as of the last annual valuation date
applicable thereto, exceed the value of the assets of such Benefit Plan. Neither
Borrower nor any Subsidiary of Borrower has any ERISA Affiliates (other than
Borrower and its Subsidiaries) or Multiemployer Plans.
SECTION 4.12 Payment of Taxes . Borrower has filed, and has caused each
of its Subsidiaries to file, all federal, state and local tax returns and other
reports required by Requirements of Law to have been filed by Borrower or such
Subsidiary of Borrower and has paid (prior to delinquency)
54
all taxes and other similar charges and assessments that are due and payable,
including extensions, except taxes, charges and assessments which are being
diligently contested in good faith by appropriate proceedings, and any Lien
arising thereunder constitutes a Permitted Lien. No Responsible Officer of
Borrower or any Subsidiary of Borrower has knowledge of any proposed tax
assessment against Borrower or any Subsidiary of Borrower that is likely to
result in a Material Adverse Effect.
SECTION 4.13 Environmental Matters. Except as could not reasonably be
expected to result in a Material Adverse Effect:
(a) Borrower and each of its Subsidiaries is in compliance with all
applicable Environmental Laws;
(b) Borrower and each of its Subsidiaries has obtained all consents
and permits required under all applicable Environmental Laws to operate its
business as presently conducted or as proposed to be conducted and all such
consents and permits are in full force and effect and Borrower and its
Subsidiaries are in compliance with all terms and conditions of such
approvals;
(c) Neither Borrower nor any Subsidiary of Borrower nor any of the
present property or operations or the past property or operations of
Borrower or any Subsidiary of Borrower is subject to any order from or
agreement with any Governmental Authority or private party respecting (i)
failure to comply with any Environmental Law or any Remedial Action or (ii)
any Environmental Liabilities arising from the Release or threatened
Release except those orders and agreements with which Borrower or such
Subsidiary of Borrower has complied;
(d) None of the operations of Borrower or any Subsidiary of Borrower
is subject to any judicial or administrative proceeding alleging a
violation of, or liability under, any Environmental Law;
(e) To the best knowledge and belief of Borrower after due inquiry
with respect thereto, none of the operations of Borrower or any Subsidiary
of Borrower is the subject of any investigation by any Governmental
Authority evaluating whether any Remedial Action is needed to respond to a
Release or threatened Release;
(f) Neither Borrower nor any Subsidiary of Borrower has been required
to file any notice under any Environmental Law indicating past or present
treatment, storage or disposal of a hazardous waste as defined by 40 CFR
Part 261 or any state or local equivalent;
(g) Neither Borrower nor any Subsidiary of Borrower has been required
to file any notice under any applicable Environmental Law reporting a
Release (other than minor or de minimis Releases);
(h) There is not now, nor, to the best knowledge and belief of
Borrower, has there ever been, on or in any property of Borrower or of any
Subsidiary of Borrower:
55
(i) any unauthorized generation, treatment, recycling, storage
or disposal of any hazardous waste as defined by 40 CFR Part
261 or any state or local equivalent,
(ii) any underground storage tanks or surface impoundments
without proper permits,
(iii) any asbestos-containing material, or
(iv) any polychlorinated biphenyls (PCBs) used in hydraulic oils,
electrical transformers or other equipment;
(i) There have been no written commitments or agreements involving
Borrower or any Subsidiary of Borrower from or with any Governmental
Authority or any private entity (including, without limitation, the owner
of the property or any portion thereof) relating to the generation,
storage, treatment, presence, Release or threatened Release on or into any
of the properties of Borrower or any Subsidiary of Borrower or the
environment (including off-site disposal of Hazardous Substances) or any
Remedial Action with respect thereto;
(j) Neither Borrower nor any Subsidiary of Borrower has received
any written notice or claim to the effect that it is or may be liable to
any Person as a result of a Release or threatened Release;
(k) Neither Borrower nor any Subsidiary of Borrower has any known
liability in connection with any material Release or material threatened
Release; and
(l) After due inquiry, no Environmental Lien has attached to any
properties of Borrower or any Subsidiary of Borrower.
SECTION 4.14 Governmental Regulation. Borrower is not subject to
regulation under the Interstate Commerce Act, the Investment Company Act of
1940, the Public Utility Holding Company Act of 1935, the Federal Power Act or
any other Requirements of Law such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by this
Credit Agreement and the other Loan Documents or any document executed in
connection therewith is impaired.
SECTION 4.15 Disclosure. All information contained in any financial
statements, certificates, exhibits, schedules, operating statements and any
other written statements and written information (excluding estimates and
forecasts) furnished by or on behalf of Borrower or any Subsidiary of Borrower
to the Lenders and the Administrative Agent, in connection with any transaction
contemplated hereby or by any other Loan Document on or prior to the date this
representation is made or deemed made, were, and will be, taken as a whole, true
and correct in all material respects and do not, and will not, taken as a whole,
contain any material misstatement of fact or omit to state a material fact
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
56
SECTION 4.16 Subsidiaries. As of the Effective Date, Schedule 4.16
contains a complete and accurate (a) list of all Subsidiaries of Borrower, (b)
description of the issued and outstanding capital stock of each Subsidiary of
Borrower and (c) the record owners of such capital stock.
SECTION 4.17 Solvency. Neither Borrower nor any Material Subsidiary of
Borrower (a) is "insolvent" (within the meaning of Section 101(32) of the
Bankruptcy Code, Section 2 of the Uniform Fraudulent Conveyance Act or Section 2
of the Uniform Fraudulent Transfer Act) or will become insolvent as a result of
the incurrence of any obligation under any Loan Document to which it is a party;
(b) has unreasonably small capital (after giving effect to the transactions
contemplated in any Loan Document to which it is a party) for the conduct of its
existing and contemplated business; or (c) is unable to perform its contingent
obligations and other commitments as they mature in the normal course of
business.
SECTION 4.18 Business. Neither Borrower nor any Material Subsidiary has
conducted or is conducting any business other than business relating to the
exploration, development, financing, acquisition, ownership, operation,
maintenance, storage, trading, transporting and marketing of the Oil and Gas
Interests as currently conducted.
SECTION 4.19 Material Contracts. Neither Borrower nor any of its
Subsidiaries is a party to or bound by any Material Contract other than (a) the
Loan Documents, (b) agreements, documents and instruments giving rise to Oil and
Gas Interests owned by Borrower and its Subsidiaries, (c) farmout agreements and
agreements for the sale, purchase, processing, transportation or marketing of
oil, gas or other minerals entered into in the ordinary course of business, (d)
operating and joint operating agreements related to such Oil and Gas Interests,
(e) agreements and plans relating to employee benefits, and (f) the Public
Indenture and the senior notes issued thereunder, (g) the Rights Agreement, (h)
the Trust Agreement and (i) agreements governing Hedge Transactions permitted
hereunder. Borrower and each of its Subsidiaries have complied in all material
respects with all obligations required to be performed by them under all
Material Contracts, except to the extent a failure to comply could not result in
a Material Adverse Effect. Borrower is not aware of any default by any other
party to any Material Contract.
SECTION 4.20 Licenses, Permits, Etc. Borrower and each of its Subsidiaries
possess all valid franchises, certificates of convenience and necessity,
operating rights, licenses, permits, consents, authorizations, exemptions and
orders of Governmental Authorities, as are necessary to carry on their
respective businesses as now conducted and as proposed to be conducted, except
to the extent a failure to obtain any such item would not result in a Material
Adverse Effect.
SECTION 4.21 Fiscal Year. Borrower's Fiscal Year is January 1 through
December 31.
57
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
So long as this Credit Agreement shall remain in effect, the principal of
or interest on any Loan, any Letter of Credit Liability or any commitment or
other fee, expense, compensation or any other amount payable under any Loan
Document shall remain unpaid or outstanding or any Lender shall have any
Commitment hereunder, unless the Majority Lenders shall otherwise consent in
writing, Borrower covenants and agrees that:
SECTION 5.01 Information. Borrower shall deliver, or cause to be
delivered, to the Lenders at Borrower's sole expense:
(a) As soon as practicable, and in any event within 45 days after the
end of each Fiscal Quarter (or 50 days after the end of each Fiscal Quarter
upon Borrower's timely filing with the Securities and Exchange Commission
of a Notification of Late Filing on Form 12b-25 with respect to Borrower's
Form 10-Q for that Fiscal Quarter), but within 90 days after the end of the
last Fiscal Quarter (or 105 days after the end of the last Fiscal Quarter
upon Borrower's timely filing of a Form 12b-25 with respect to Borrower's
Form 10-K for that Fiscal Year) in each Fiscal Year of Borrower, the
unaudited Consolidated balance sheet of Borrower and its Subsidiaries as at
the end of such Fiscal Quarter and the related unaudited Consolidated
statements of income and cash flows for such quarterly Fiscal Quarter and
for the portion of the Fiscal Year ended with the last day of such Fiscal
Quarter, and shareholders' equity for the Fiscal Year, in each case setting
forth comparative figures for the related periods in the prior Fiscal Year,
all in reasonable detail prepared in a manner satisfactory to the
Administrative Agent and the Majority Lenders, and certified by a
Responsible Officer of Borrower responsible for the administration of the
finances and accounting practices of Borrower that such financial
statements fairly present the Consolidated financial condition and results
of operations of, respectively, Borrower and its Subsidiaries in accordance
with GAAP for the Fiscal Quarter and year to date period then ended,
subject to changes resulting from normal year-end audit adjustments;
(b) Within 90 days after the close of each Fiscal Year of Borrower,
the audited Consolidated balance sheet of Borrower as of the end of such
Fiscal Year and the related audited Consolidated statements of income, cash
flows and shareholders' equity of Borrower for such Fiscal Year, setting
forth the comparative figures for the preceding Fiscal Year and accompanied
by the unqualified audit opinion thereon of Xxxxxx Xxxxxxxx or other
independent certified public accountants of recognized national standing
satisfactory to the Majority Lenders and any management letter prepared by
such accountants;
(c) Together with the delivery of statements referred to in Section
5.01(a) and Section 5.01(b), a Compliance Certificate, in form and
substance satisfactory to the Administrative Agent, signed by a Responsible
Officer of Borrower responsible for the administration of the finances and
accounting practices of Borrower, stating that the signer has reviewed the
terms of this Credit Agreement and the other Loan Documents and that in the
course of the performance of his duties, he would normally have knowledge
of any condition or
58
event which would constitute a Default or an Event of Default and stating
whether or not he has knowledge of any such condition or event and, if so,
specifying each such condition or event of which he has knowledge and the
nature thereof and any corrective action taken or proposed to be taken with
respect thereto. Such Compliance Certificate shall set forth the
calculations required to establish compliance or non-compliance by Borrower
with the covenants set forth in Section 6.15 as of the end of and for the
fiscal period covered by such financial statements;
(d) Promptly and in any event within three Business Days after any
Responsible Officer of Borrower obtains knowledge thereof, notice of (i)
the institution of, or threat in writing of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting Borrower or
any Subsidiary of Borrower not previously disclosed in writing to the
Lenders or any material adverse development in any action, suit,
proceeding, governmental investigation or arbitration already disclosed to
the Lenders which could reasonably be expected to result in a Material
Adverse Effect, and (ii) the occurrence of any event which constitutes a
Default or Event of Default, such notice to specify the nature and period
of existence of such Default or Event of Default, and what action Borrower
has taken, are taking or propose to take with respect thereto;
(e) Promptly upon the mailing thereof to the stockholders of Borrower
generally, copies of all financial statements, reports and proxy statements
so mailed;
(f) Promptly upon the filing thereof, copies of all final
registration statements, post effective amendments thereto and annual,
quarterly or special reports which Borrower shall have filed with the
Securities and Exchange Commission; provided that Borrower must deliver, or
cause to be delivered, any annual reports which Borrower shall have filed
with the Securities and Exchange Commission, within 105 days after the end
of each Fiscal Year of Borrower, and any quarterly reports which Borrower
shall have filed with the Securities and Exchange Commission, within 50
days after the end of each of the first three Fiscal Quarters of each
Fiscal Year of Borrower;
(g) If the Borrowing Base Commencement Date has occurred, promptly
upon request therefor by the Administrative Agent, such title opinions and
other information in either Borrower's possession or control regarding
title to the Oil and Gas Interests owned by Borrower or any of its
Subsidiaries as are appropriate to determine the status thereof;
(h) Promptly upon receipt of same, any notice or other information
received by Borrower or any Subsidiary of Borrower indicating any
potential, actual or alleged (i) non-compliance with or violation of the
requirements of any Environmental Law which could result in liability to
Borrower or any Subsidiary for fines, clean up or any other remediation
obligations or any other liability in excess of $5,000,000 in the
aggregate; (ii) Release or threatened Release which Release would impose on
Borrower or any Subsidiary of Borrower a duty to report to a Governmental
Authority or to pay cleanup costs or to take Remedial Action which could
result in liability to Borrower or any Subsidiary of Borrower for fines,
clean up and other remediation obligations or any other liability in excess
of $5,000,000 in the aggregate; or (iii) the existence of any Lien arising
under any Environmental Law securing any obligation to pay fines, clean up
or other remediation costs or any other liability in excess of $5,000,000
in the aggregate. Without
59
limiting the foregoing, Borrower shall provide to the Administrative Agent,
promptly upon request, copies of all environmental consultants', employees'
or engineers' reports received by Borrower or any Subsidiary of Borrower
which reflect the existence of any circumstance or condition which would
require delivery of a notice or other information to the Lenders, pursuant
to this Section 5.01(h);
(i) In the event any notification is provided by Borrower to the
Lenders pursuant to Section 5.01(h) or the Administrative Agent or any
Lender otherwise learns of any event or condition under which any such
notice would be required, then, upon request of Majority Lenders, Borrower
shall, within 90 days of such request, cause to be furnished to each Lender
a report by an environmental consulting firm or employee of Borrower in
charge of compliance with Environmental Laws reasonably acceptable to the
Administrative Agent and Majority Lenders, stating that a review of such
event, condition or circumstance has been undertaken (the scope of which
shall be acceptable to the Administrative Agent and Majority Lenders) and
detailing the findings, conclusions, and recommendations of such consultant
or employee of Borrower in charge of compliance with Environmental Laws.
Borrower shall bear all expenses and costs associated with such review and
updates thereof, as well as, upon the reasonable request of the Majority
Lenders all remediation or curative action recommended by any such
environmental consultant or employee;
(j) Promptly upon becoming aware thereof, notice of any material
adverse change in the business, financial condition, operations or
prospects of Borrower and its Subsidiaries taken as a whole;
(k) From time to time such additional information regarding the
financial position or business of Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Lender, may reasonably request;
(l) Together with the delivery of statements referred to in Section
5.01(a), a report, in form and substance satisfactory to the Administrative
Agent, setting forth as of the last day of such Fiscal Quarter, a true and
complete list of all Hedge Transactions to which Borrower or any of its
Subsidiaries is a party (with the Designated Hedge Transactions listed
separately from the other Hedge Transactions), 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 margin
required or supplied under any credit support document, and the
counterparty to each such Hedge Transaction. In addition, Borrower shall
specify (i) the aggregate amount of margin (whether in cash or in letters
of credit) posted to support its margin obligations in respect of all Hedge
Transactions, (ii) the Market Exposure for each Business Day in such Fiscal
Quarter, and (iii) the Total Exposure Amount for each Business Day in such
Fiscal Quarter. In calculating the Market Exposure, Borrower may utilize,
and shall apply on a consistent basis, any methodology which is (A) based
on the use of Market Quotations, (B) generally recognized as a valid
methodology for calculating termination payments in respect of swap
transactions in the derivatives market and (C) agreed to by the
Administrative Agent. If the Administrative Agent disputes Borrower's
calculation of Market Exposure, then the Administrative Agent will notify
Borrower and Borrower will promptly recalculate the Market Exposure as of
the relevant Business Day by calculating that part of the Market Exposure
attributable to each Designated
60
Hedge Transaction in dispute by seeking four actual quotations at mid-
market from four Reference Market Makers for purposes of calculating Market
Quotation, and taking the arithmetic average of those obtained; provided
that if fewer than four quotations are available for a particular
Designated Hedge Transaction, then fewer than four quotations may be used
for that Designated Hedge Transaction, and if no quotations are available
for a particular Designated Hedge Transaction, then the Administrative
Agent shall determine the replacement value of such Designated Hedge
Transaction. For purposes of calculating the replacement value of a
disputed Designated Hedge Transaction, the Administrative Agent may in its
sole discretion utilize any methodology generally recognized as a valid
methodology for calculating termination payments in respect of swap
transactions in the derivatives market, including, without limitation, the
use of the loss method of calculation. Any calculations made by the
Administrative Agent pursuant to the immediately preceding sentence shall
be conclusive and binding on Borrower for all purposes; and
(m) Promptly upon the adoption thereof, copies of any changes in
Borrower's Risk Management Policy from that adopted by the Board of
Directors of Borrower on November 16, 2000.
SECTION 5.02 Business of Borrower. Borrower will cause the primary
business of Borrower and its Material Subsidiaries to be the acquisition,
exploration for, development, production, transportation, processing, trading,
and marketing of Hydrocarbons and accompanying elements.
SECTION 5.03 Corporate Existence. Borrower shall, and shall cause each of
its Material Subsidiaries to, maintain its (a) existence and good standing in
the jurisdiction of its incorporation and (b) qualification and good standing in
all jurisdictions in which such qualification and good standing are necessary in
order for Borrower or such Material Subsidiary to conduct its business and own
its property as conducted and owned in such jurisdiction except where the
failure to be so qualified or in good standing would not, individually or in the
aggregate, result in a Material Adverse Effect.
SECTION 5.04 Right of Inspection. Borrower will permit, and will cause
each Subsidiary of Borrower to permit, any officer, employee or agent of the
Administrative Agent or any of the Lenders to visit and inspect any of the
assets of Borrower and its Subsidiaries, examine Borrower's and its
Subsidiaries' books of record and accounts, take copies and extracts therefrom,
and discuss the affairs, finances and accounts of Borrower and its Subsidiaries
with Borrower's and its Subsidiaries' officers, accountants and auditors, all at
such reasonable times and as often as the Administrative Agent or any of the
Lenders reasonably may desire.
SECTION 5.05 Maintenance of Insurance. Borrower will maintain or cause to
be maintained, and will cause each Material Subsidiary of Borrower to maintain
or cause to be maintained (and will use its reasonable best efforts to cause all
operators of Oil and Gas Interests owned by Borrower and any of its Material
Subsidiaries to maintain or cause to be maintained) at all times, insurance
covering such risks as are customarily carried by businesses similarly situated.
SECTION 5.06 Payment of Taxes and Claims. Borrower will pay, and will
cause each of its Subsidiaries to pay, (a) all taxes imposed upon it or any of
its assets or with respect to any of its franchises, business, income or profits
before any material penalty or interest accrues thereon and (b) all
61
material claims (including, without limitation, claims for labor, services,
materials and supplies) for sums which have become due and payable and which by
law have or might become a Lien (other than a Permitted Lien) on any of its
assets; provided that no payment of taxes or claims shall be required if (i) the
amount, applicability or validity thereof is currently being contested in good
faith by appropriate action promptly initiated and diligently conducted in
accordance with good business practices and any Lien arising thereunder
constitutes a Permitted Lien, (ii) as and to the extent required in accordance
with GAAP, Borrower or the applicable Subsidiary shall have set aside on its
books reserves (segregated to the extent required by GAAP) deemed by it to be
adequate with respect thereto, and (iii) to the extent the amount of the
contested taxes or claims are in excess of $5,000,000 (in the aggregate),
Borrower has notified the Administrative Agent of such circumstances, in detail
satisfactory to the Administrative Agent.
SECTION 5.07 Compliance with Laws and Documents. Borrower will comply,
and will cause each of its Subsidiaries to comply, with all Requirements of Law,
their respective certificates (or articles) of incorporation, bylaws and similar
charter documents and all Material Contracts to which Borrower or any of its
Subsidiaries is a party, if a violation, alone or when combined with all other
such violations, could result in a Material Adverse Effect.
SECTION 5.08 Operation of Properties and Equipment.
(a) Borrower will maintain and operate, and will cause each of its
Material Subsidiaries to maintain and operate, their respective Oil and Gas
Interests in a good and workmanlike manner, and observe and comply with all
of the terms and provisions, express or implied, of all oil and gas leases
relating to such Oil and Gas Interests so long as such Oil and Gas
Interests are capable of producing Hydrocarbons and accompanying elements
in paying quantities;
(b) Borrower will comply, and will cause each of its Subsidiaries to
comply, in all respects with all contracts and agreements applicable to or
relating to their respective Oil and Gas Interests or the production and
sale of Hydrocarbons and accompanying elements therefrom, except to the
extent a failure to so comply could not reasonably be expected to result in
a Material Adverse Effect; and
(c) Borrower will maintain, preserve and keep, and will cause each
of its Subsidiaries to maintain, preserve and keep, at all times, all
operating equipment used with respect to their respective Oil and Gas
Interests in proper repair, working order and condition, and make all
necessary or appropriate repairs, renewals, replacements, additions and
improvements thereto so that the efficiency of such operating equipment
shall at all times be properly preserved and maintained; provided that no
item of operating equipment need be so repaired, renewed, replaced, added
to or improved, if Borrower shall in good faith determine that such action
is not necessary or desirable for the continued efficient and profitable
operation of the business of Borrower and its Subsidiaries.
SECTION 5.09 Environmental Matters and Indemnity. Except to the extent a
failure to comply would not result in a Material Adverse Effect, Borrower will
comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws, including, without limitation (a) all licensing,
62
permitting, notification and similar requirements of Environmental Laws, and (b)
all provisions of all Environmental Laws regarding generation, storage,
discharge, release, transportation, treatment and disposal of Hazardous
Substances. Borrower will promptly pay and discharge when due, and will cause
each of its Subsidiaries to promptly pay and discharge when due, all debts,
claims, liabilities and obligations with respect to any clean-up or remediation
measures necessary to comply with Environmental Laws. Borrower hereby agrees to
indemnify, defend and hold harmless the Lenders, the Administrative Agent, the
Issuing Lender and their respective agents, affiliates, officers, directors, and
employees from and against any and all claims, losses, demands, actions, causes
of action, and liabilities whatsoever (including without limitation reasonable
attorney's fees and expenses, and costs and expenses reasonably incurred in
investigating, preparing or defending against any litigation or claim, action,
suit, proceeding or demand of any kind or character) arising out of or resulting
from noncompliance with Environmental Laws or a Release or threatened Release.
SECTION 5.10 ERISA Reporting Requirements. Borrower shall furnish or cause
to be furnished to the Administrative Agent:
(a) Promptly and in any event (i) within 15 days after Borrower or
any ERISA Affiliate knows or has reason to know that any ERISA Event
described in clause (a) of the definition of ERISA Event or any event
described in Section 4063(a) of ERISA with respect to any Benefit Plan of
Borrower or any ERISA Affiliate has occurred, and (ii) within ten days
after Borrower or any ERISA Affiliate knows or has reason to know that any
other ERISA Event with respect to any Benefit Plan of Borrower or any ERISA
Affiliate has occurred or a request for minimum funding waiver under
Section 412 of the Code with respect to any Benefit Plan of Borrower or any
ERISA Affiliate has been made, a written notice describing such event and
describing what action is being taken or is proposed to be taken with
respect thereto, together with a copy of any notice of event that is given
to the PBGC;
(b) Promptly and in any event within two Business Days after receipt
thereof by Borrower or any ERISA Affiliate from the PBGC, copies of each
notice received by Borrower or any ERISA Affiliate of the PBGC's intention
to terminate any Plan or to have a trustee appointed to administer any
Benefit Plan;
(c) Promptly and in any event within 15 days after the receipt by
Borrower of a request therefor by any Lender, copies of any annual and
other report (including Schedule B thereto) with respect to a Benefit Plan
filed by Borrower or any ERISA Affiliate with the United States Department
of Labor, the IRS or the PBGC;
(d) Promptly, and in any event within ten Business Days after receipt
thereof, a copy of any correspondence Borrower or any ERISA Affiliate
receives from the Plan Sponsor (as defined by Section 4001(a)(10) of ERISA)
of any Benefit Plan asserting withdrawal liability pursuant to Section 4219
or 4202 of ERISA upon Borrower or any ERISA Affiliate, and a statement from
a Responsible Officer of Borrower or such ERISA Affiliate setting forth
details as to the events giving rise to such withdrawal liability and the
action which Borrower or such ERISA Affiliate is taking or proposes to take
with respect thereto;
63
(e) Promptly, and in any event within three Business Days after
Borrower or any ERISA Affiliate knows or has reason to know that Borrower
or any such ERISA Affiliate has or intends to file a notice of intent to
terminate any Benefit Plan under a distress termination within the meaning
of Section 4041(c) of ERISA notification thereof and a copy of such notice;
and
(f) Promptly after receipt of written notice of commencement thereof,
notice of all (i) claims made by participants or beneficiaries with respect
to any Benefit Plan and (ii) actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting Borrower or any ERISA
Affiliate with respect to any Benefit Plan, except those which, in the
aggregate, if adversely determined could not result in a Material Adverse
Effect.
SECTION 5.11 Additional Documents. Borrower will cure promptly any defects
in the execution and delivery of this Credit Agreement and the other Loan
Documents and, at Borrower's expense, Borrower shall promptly and duly execute
and deliver, and cause each Subsidiary of Borrower to promptly execute and
deliver, to each Lender, upon reasonable request, all such other and further
documents, agreements and instruments in compliance with or accomplishment of
the covenants and agreements of Borrower in this Credit Agreement and the other
Loan Documents as may be reasonably necessary or appropriate in connection
therewith.
SECTION 5.12 Equal Security for Loans and Notes. If Borrower or any of its
Subsidiaries shall create, incur, assume, or suffer to exist any Lien (other
than Permitted Liens) upon any of its assets or property, whether now owned or
hereafter acquired (unless prior written consent to the creation or assumption
thereof shall have been obtained from the Majority Lenders), including, without
limitation, as security for the Indebtedness arising under the Public Indenture,
Borrower or such Subsidiary, as the case may be, shall make or cause to be made
an effective provision whereby the Loans and other Obligations under this Credit
Agreement and, at the request of the applicable Lender (or its Affiliate) that
is a party thereto, the Hedge Transactions with such Lender (or its Affiliate)
will be secured by such Lien equally and ratably with any and all other
Indebtedness thereby secured as long as any such other Indebtedness shall be so
secured; provided that this covenant shall not be construed as consent by the
Lenders to any violation by Borrower or its Subsidiaries of Section 6.03 and,
provided, further, that Borrower and its Subsidiaries shall not agree with any
other holder of its Indebtedness (except as provided in the Public Indenture)
that it shall provide equal security for such Indebtedness.
ARTICLE VI
NEGATIVE COVENANTS
------------------
So long as this Credit Agreement shall remain in effect, the principal of
or interest on any Loan, any Letter of Credit Liability or any commitment or
other fee, expense, compensation or any other amount payable under any Loan
Document shall remain unpaid or outstanding or any Lender shall have any
Commitment hereunder, unless the Majority Lenders shall otherwise consent in
writing, Borrower covenants and agrees that:
64
SECTION 6.01 Indebtedness and Accommodation Obligations. Borrower shall
not, and shall not permit any of its Subsidiaries to, create, incur, assume or
otherwise become or remain liable with respect to, any Indebtedness or
Accommodation Obligation, except for:
(a) Indebtedness and Accommodation Obligations arising hereunder and
under the other Loan Documents;
(b) Unsecured Indebtedness and Accommodation Obligations outstanding
on the Effective Date and described in Schedule 6.01, in each case in a
principal amount at any one time outstanding not to exceed the amount set
forth on Schedule 6.01;
(c) Endorsements of negotiable instruments for collection in the
ordinary course of business;
(d) Liabilities for taxes, assessments, governmental charges or
levies to the extent such liabilities are permitted pursuant to Section
5.06;
(e) Liabilities of Borrower incurred under Hedge Transactions
permitted pursuant to Section 6.14;
(f) Capitalized Lease Obligations and purchase money Indebtedness in
respect of property acquired by Borrower and its Subsidiaries in the
ordinary course of business; provided that the aggregate amount of all
outstanding Indebtedness incurred by Borrower and its Subsidiaries pursuant
to this Section 6.01(f) and Section 6.01(g) shall not exceed $30,000,000 at
any time other than a time that the Debt Ratings are BBB- or higher by S&P
and Baa3 or higher by Xxxxx'x; provided, further, that the aggregate amount
of all outstanding Indebtedness incurred by Borrower pursuant to this
Section 6.01(f) at any time that the Debt Ratings are BBB- or higher by S&P
and Baa3 or higher by Xxxxx'x shall not be limited so long as no Default or
Event of Default exists at the time of, or after giving effect to, such
incurrence; and provided, further, that the aggregate amount of all
outstanding Indebtedness incurred by Borrower's Subsidiaries pursuant to
this Section 6.01(f) and Section 6.01(g) shall not exceed $30,000,000 at
any time that the Debt Ratings are BBB- or higher by S&P and Baa3 or higher
by Xxxxx'x;
(g) Additional unsecured Indebtedness (which shall not include
obligations under Advance Payment Contracts) not permitted by Sections
6.01(a) through 6.01(e) and Section 6.01(h) and Section 6.01(i); provided
that the aggregate amount of all outstanding Indebtedness incurred by
Borrower and its Subsidiaries pursuant to this Section 6.01(g) and Section
6.01(f) shall not exceed $30,000,000 (which shall include Indebtedness in
respect of letters of credit, other than Letters of Credit, in an aggregate
amount not to exceed $5,000,000) at any time other than a time that the
Debt Ratings are BBB-or higher by S&P and Baa3 or higher by Xxxxx'x;
provided, further, that the aggregate amount of all outstanding
Indebtedness incurred by Borrower pursuant to this Section 6.01(g) at any
time that the Debt Ratings are BBB- or higher by S&P and Baa3 or higher by
Xxxxx'x shall not be limited so long as no Default or Event of Default
exists at the time of, or after giving effect to, such incurrence; and
provided, further, that the aggregate amount of all outstanding
Indebtedness incurred by Borrower's Subsidiaries pursuant to this Section
6.01(g) and Section 6.01(f) shall not exceed
65
$30,000,000 at any time that the Debt Ratings are BBB- or higher by S&P and
Baa3 or higher by Xxxxx'x;
(h) Indebtedness and Accommodation Obligations arising under the
Trust Agreement concerning (1) Borrower's obligation to advance to the
Trust amounts for capital expenditures and other expenses related to the
Oil and Gas Interests held by the Trust to the extent that those expenses
would be within the exceptions set forth in Section 6.01(d) or Section
6.01(g) above if incurred directly by Borrower, and (2) the payment of the
purchase price to Borrower and certain of Borrower's Subsidiaries for the
Oil and Gas Interests transferred to the Trust, the reflection of the
purchase price on Borrower's financial statements as Indebtedness, and the
payments by the Trust to Borrower and FC Energy in accordance with the
Trust Agreement, with the payments to FC Energy to be reflected on
Borrower's financial statements as reductions in the Indebtedness recorded
by Borrower upon the receipt of the purchase price and the recognition by
Borrower of interest expense, provided that the purchase price payable by
the Trust to Borrower upon which these amounts are based shall not exceed
$20,000,000; and
(i) Indebtedness incurred pursuant to the Public Indenture.
SECTION 6.02 Restrictions on Distributions. Borrower will not directly or
indirectly declare or make, or incur any liability to make, and Borrower will
not permit any of its Subsidiaries to directly or indirectly declare or make, or
incur any liability to make, Distributions in any Fiscal Quarter in excess of an
amount equal to 50% of an amount equal to (a) the sum of the Consolidated Net
Income for each of the four immediately preceding Fiscal Quarters divided by (b)
four, determined as of the last day of the immediately preceding Fiscal Quarter.
Notwithstanding the foregoing, (i) any Subsidiary of Borrower may make
Distributions to Borrower, (ii) Borrower may make odd-lot repurchases of its
capital stock, (iii) Borrower may purchase its capital stock for contribution to
its Benefit Plans, and (iv) Borrower may accept its capital stock in payment for
the exercise price of stock options issued by Borrower. Borrower will not enter
into or become subject to, and Borrower will not permit any of its Subsidiaries
to enter into, or become subject to, any agreement or order of any Governmental
Authority which prohibits or restricts in any way the right of any of Borrower's
Subsidiaries to make Distributions to Borrower.
SECTION 6.03 Negative Pledge. Borrower will not create, incur, assume or
suffer to exist, and Borrower will not permit any Subsidiary of Borrower to
create, incur, assume or suffer to exist, any Lien on any asset (other than
Margin Stock to the extent, but only to the extent that such Margin Stock
exceeds 25% of the value of the Consolidated Assets of Borrower and its
Subsidiaries) of Borrower or any of its Subsidiaries other than Permitted Liens;
provided that Borrower may create and suffer to exist Liens to secure its
obligations under the Public Indenture if Borrower complies with Section 5.12
concurrently with the creation of such Liens. Borrower will not enter into or
become subject to, and Borrower will not permit any Subsidiary of Borrower to
enter into or become subject to, any agreement (other than this Credit
Agreement, the Public Indenture, the Trust Agreement and instruments creating
Permitted Liens, but only as the asset subject to such Permitted Lien) that
prohibits or otherwise restricts the right of Borrower or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien in favor of
the Administrative Agent for the benefit of the Lenders and the Issuing Lender
on any of Borrower's or any of its Subsidiaries' assets.
66
SECTION 6.04 Consolidation, Mergers and Acquisitions; Fundamental
Changes. Borrower shall not, and shall not permit any of its Material
Subsidiaries to, merge or consolidate with or acquire substantially all of the
outstanding capital stock or assets of any other Person or liquidate, wind up or
dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or any substantial part of its business, property or assets, whether now or
hereafter acquired except for transactions in the nature of a consolidation
and/or merger in which Borrower (if Borrower is a party thereto) or a wholly
owned Subsidiary is the surviving entity, subject in each case to the condition
that immediately after such merger or consolidation and after giving effect and
pro forma effect thereto for the immediately preceding twelve-month period, no
Event of Default or Default shall have occurred, exist or be continuing.
SECTION 6.05 Investments. Borrower shall not, and shall not permit any of
its Subsidiaries to, make, directly or indirectly, any Investments, except:
(a) Investments existing on the date hereof and disclosed on Schedule
6.05;
(b) Investments consisting of Cash Equivalents;
(c) Accounts receivable from customers in the ordinary course of
business;
(d) Investments by Borrower in wholly owned Subsidiaries;
(e) Investments in capital stock issued by a United States
corporation, provided that any such Investment is not a Hostile Acquisition
and subject in each case to the condition that immediately after such
Investment and after giving effect and pro forma effect thereto for the
next succeeding twelve-month period, no Event of Default or Default shall
have occurred, exist or be continuing;
(f) Acquisitions permitted under Section 6.04;
(g) Investments in connection with or related to farm-out, farm-in,
joint operating, joint venture or area of mutual interest agreements,
gathering systems, pipelines or other similar or customary arrangements
entered into in the ordinary course of business; and
(h) Investments not otherwise permitted hereunder in an aggregate
principal amount not to exceed $10,000,000.
SECTION 6.06 Transactions with Affiliates. Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into, or be a party to any
transaction with any of such Person's Affiliates, officers, directors, partners,
employees or stockholders who have filed a Form 13-D with the Securities and
Exchange Commission, except for (a) the transactions provided for in the Loan
Documents or (b) transactions entered into in the ordinary course of business
and pursuant to the reasonable requirements of such Person's business and upon
such fair and reasonable terms as could reasonably be obtained in an arm's
length transaction with an unaffiliated Person in accordance with prevailing
industry customs and practices.
67
SECTION 6.07 Agreements. Borrower shall not, and shall not permit any of
its Subsidiaries to, amend or modify any of the Material Contracts or enter into
any contract, agreement or transaction which at the time such amendment,
modification, contract, agreement or transaction is entered into materially and
adversely affects (a) the business, property, assets, operations, condition
(financial or otherwise) of Borrower or any Subsidiary of Borrower, or (b)
ability of Borrower or any Subsidiary of Borrower to perform timely its
obligations under this Credit Agreement and the other Loan Documents to which it
is a party.
SECTION 6.08 Sales of Assets. Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, assign, transfer, lease, convey or otherwise
dispose of , whether in one transaction or in a series of transactions, any of
its assets or properties, whether now owned or hereafter acquired, or any income
or profits therefrom, or enter into any agreement to do so, except for (a) sales
of inventory in the ordinary course of its business, (b) sales or dispositions
of worn out or obsolete tools or equipment no longer used or useful in the
business of Borrower or such Subsidiary of Borrower, (c) if the Borrowing Base
Commencement Date has not occurred, sales of assets for fair market value on an
arm's length basis in an aggregate amount for Borrower and its Subsidiaries not
to exceed, (A) during any Fiscal Year, 5% of Consolidated Assets as of the end
of the most recently ended Fiscal Quarter prior to any such sale, or (B)
$100,000,000 for all such sales, (d) if the Borrowing Base Commencement Date has
occurred, sales of assets for fair market value on an arm's length basis in an
aggregate amount for Borrower and its Subsidiaries not to exceed during any six
month period between Determination Dates, the greater of (i) $5,000,000 and (ii)
an amount equal to 5% of the Borrowing Base, and (e) transfers and conveyances
of assets permitted under Section 6.04. Any permitted sale, assignment,
transfer, lease, conveyance or other disposition that is made pursuant to clause
(c) of the immediately preceding sentence shall not cease to be permitted
because of the occurrence of the Borrowing Base Commencement Date thereafter.
SECTION 6.09 ERISA Compliance. Borrower shall not, and shall not permit
any of its Subsidiaries to, engage in a "prohibited transaction", as defined in
Section 406 of ERISA or Section 4975 of the Code, with respect to any Benefit
Plan or knowingly consent to any other "interested party" or any "disqualified
person", as such terms are defined in Section 3(14) of ERISA and Section
4975(e)(2) of the Code, respectively, engaging in any "prohibited transaction",
with respect to any Benefit Plan maintained by Borrower or such Subsidiary of
Borrower, or permit any Benefit Plan maintained by Borrower or such Subsidiary
of Borrower to incur any "accumulated funding deficiency", as defined in Section
302 of ERISA or Section 412 of the Code, unless such incurrence shall have been
waived in advance by the IRS; or terminate any Benefit Plan in a manner which
could result in the imposition of a Lien on any property of Borrower or such
Subsidiary of Borrower pursuant to Section 4068 of ERISA; or breach any
fiduciary responsibility imposed under Title I of ERISA with respect to any
Benefit Plan; or engage in any transaction which would result in the incurrence
of a liability under Section 4069 of ERISA; or fail to make contributions to a
Benefit Plan which results in the imposition of a Lien on any property of
Borrower or such Subsidiary of Borrower pursuant to Section 302(f) of ERISA or
Section 412(n) of the Code, if the occurrence of any of the foregoing events
would constitute a Material Adverse Effect. Borrower shall not, and shall not
permit any of its Subsidiaries to (nor will any trade or business, whether or
not incorporated, that is a member of a group of which Borrower or such
Subsidiary of Borrower is a member and which is treated as a single employer
under Section 414 of the Code) sponsor, maintain or contribute to any
Multiemployer Plan(s). Borrower shall not, and shall not permit any of its
Subsidiaries to, become a member of any other group which is treated as a single
employer under Section 414 of the Code.
68
SECTION 6.10 Sales and Leasebacks. Borrower shall not, and shall not
permit any of its Subsidiaries to, become liable, directly or by way of
Accommodation Obligation, with respect to any lease of any property (whether
real or personal or mixed) whether now owned or hereafter acquired, (a) which
Borrower or such Subsidiary of Borrower has sold or transferred or is to sell or
transfer to any other Person or (b) which Borrower or such Subsidiary of
Borrower intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by Borrower or such
Subsidiary of Borrower to any other Person in connection with such lease.
SECTION 6.11 Margin Regulation. Borrower shall not use or permit any
other Person to use any portion of the proceeds of any credit extended under
this Credit Agreement in any manner which might cause the extension of credit or
the application of such proceeds to violate the Securities Act of 1933 or
Securities Exchange Act of 1934 (each as amended to the date hereof and from
time to time hereafter, and any successor statute) or to violate Regulation G,
Regulation U or Regulation X, or any other regulation of the Board, in each case
as in effect on the date or dates of such extension of credit and such use of
proceeds.
SECTION 6.12 Amendment to Organizational Documents. Borrower will not
enter into or permit, and Borrower will not permit any of its Subsidiaries to
enter into or permit, any modification or amendment of, or waive any material
right or obligation under, its certificate or articles of incorporation, bylaws
or other charter documents other than such modifications, amendments or waivers
which would not, singly or in the aggregate, result in a Material Adverse
Effect.
SECTION 6.13 Fiscal Year; Fiscal Quarter. Borrower shall not, and shall
not permit any of its Subsidiaries to, change its Fiscal Year or any of its
Fiscal Quarters.
SECTION 6.14 Hedge Transactions. Borrower will not enter into, and
Borrower will not permit any of its Subsidiaries to enter into, any Hedge
Transactions which would cause the amount of Hydrocarbons which are the subject
of Hedge Transactions in existence at any time to exceed (a) in the case of
production from Oil and Gas Interests owned by Borrower or any of its
Subsidiaries (i) 95% of Borrower's and its Subsidiaries anticipated production
from Proved Developed Producing Hydrocarbon Reserves during any calendar month,
or (ii) 80% of Borrower's and its Subsidiaries anticipated production from
Proved Developed Producing Hydrocarbon Reserves during any Fiscal Year, and (b)
in the case of trading activities of production from Oil and Gas Properties not
owned by Borrower or any of its Subsidiaries, 100% of the Hydrocarbons purchased
or sold pursuant to third party contracts concerning the purchase and sale of
Hydrocarbons by Borrower and its Subsidiaries.
SECTION 6.15 Financial Covenants. From and after the Effective Date,
Borrower on a Consolidated basis shall not:
(a) Permit its Consolidated Tangible Net Worth at any time to be less
than the sum of (i) $355,000,000 plus, if positive (i) 50% of Consolidated
Net Income for each Fiscal Quarter ending after September 30, 2000, plus
(ii) 50% of the net proceeds from the sale of any equity securities of
Borrower and its Subsidiaries after September 30, 2000, on a Consolidated
basis;
69
(b) Until the Borrowing Base Commencement Date occurs, permit the
ratio of its Consolidated Funded Debt to its Consolidated EBITDA for the
four Fiscal Quarter period then most recently ended to exceed 3.50 to 1.0
at any time; or
(c) From and after the occurrence of the Borrowing Base Commencement
Date, permit the ratio of its Consolidated EBITDA to its Consolidated
Interest Expense, in each case for the four Fiscal Quarter period then most
recently ended, to be less than 3.0 to 1.0.
SECTION 6.16 Subsidiaries. Borrower shall not acquire, create or
otherwise allow or permit any corporation, partnership or other Person to become
a Subsidiary (other than those Subsidiaries set forth on Schedule 4.16) without,
in each instance, the prior written consent of Majority Lenders.
ARTICLE VI
EVENTS OF DEFAULT
-----------------
SECTION 7.01 Events of Default. Each of the following events, acts,
occurrences or conditions constitutes an "Event of Default" under this Credit
Agreement:
(a) Borrower shall fail to pay when due any payment of any principal
of any Loan or any Letter of Credit Liabilities; or
(b) (i) Borrower shall fail to pay when due any payment of any
accrued interest with respect to the Loans or Letter of Credit Liabilities
and such failure shall continue for five (5) Business Days; or (ii)
Borrower shall fail to pay when due any payment of any fee, expense,
compensation, reimbursement or other amount when due under this Credit
Agreement, the Notes or any other Loan Document or other agreement or
document contemplated by or delivered pursuant to or in connection with
this Credit Agreement or such Loan Document or any material document
executed in connection therewith and, in any event, such failure shall
continue for five Business Days after the earlier of (x) notice thereof
from the Administrative Agent or any Lender to Borrower and (y) discovery
thereof by Borrower; or
(c) Borrower or any Subsidiary of Borrower shall fail to perform or
observe any term, covenant or agreement contained in Sections 5.01(d)(ii),
5.04, 5.12, 6.01(a) through (d), 6.02, 6.03, 6.04, 6.06, 6.08, 6.09, 6.10,
6.11, 6.12, and 6.15 of this Credit Agreement; or
(d) Borrower or any Subsidiary of Borrower shall fail to perform or
observe any term, covenant or agreement contained in Sections 5.01(c),
5.01(l), 6.01(e), (f), (g), or (i), 6.05, 6.07, 6.13, and 6.14 of this
Credit Agreement and such failure shall not have been remedied within five
calendar days after the earlier of (i) notice thereof from the
Administrative Agent to Borrower and (ii) discovery thereof by a
Responsible Officer of Borrower or such Subsidiary of Borrower; or
(e) Borrower or any Subsidiary of Borrower shall fail to perform any
term, covenant or agreement contained in this Credit Agreement (other than
those referenced in Sections 7.01(a), (b), (c) or (d)) or in any other Loan
Document to which it is a party and, in the
70
case of any such failure that is capable of being remedied, such failure
shall not have been remedied within 30 days after the earlier of (i) notice
thereof from the Administrative Agent to Borrower and (ii) discovery
thereof by a Responsible Officer of Borrower or such Subsidiary of
Borrower; or
(f) A Change of Control occurs; or
(g) Any Termination Event occurs which would subject Borrower or any
Subsidiary of Borrower to a liability in excess of $5,000,000, or the plan
administrator of any Benefit Plan applies under Section 412(d) of the Code
for a waiver of the minimum funding standards of Section 412(a) of the Code
which would subject Borrower or any Subsidiary of Borrower to a liability
in excess of $5,000,000; or
(h) Any representation or warranty made or incorporated by Borrower
or any Subsidiary of Borrower in any Loan Document to which such Person is
a party or in any certificate, agreement or instrument delivered in
connection with, any Loan Document shall prove to have been incorrect or
misleading in any material respect when made or deemed made; or
(i) Borrower or any Subsidiary of Borrower, shall (i) fail to pay any
Indebtedness or Accommodation Obligation having a principal amount in
excess of $20,000,000 (other than the amounts referred to in Section
7.01(a) and Section 7.01(b)) owing by such Person, or any interest or
premium thereon, when due (or, if permitted by the terms of the relevant
document, within any applicable grace period), whether such Indebtedness or
Accommodation Obligation shall become due by scheduled maturity, by
required prepayment, by acceleration, by demand or otherwise unless
effectively waived or consented to in accordance with the documents
evidencing such Indebtedness or Accommodation Obligation or (ii) fail to
observe or perform any material term, covenant or condition on its
respective part to be performed under any agreement or instrument
evidencing, securing or relating to any such Indebtedness or Accommodation
Obligation, when required to be performed, and such failure shall continue
after the applicable grace period, if any, specified in such agreement or
instrument if the effect of any failure is to cause, or to permit the
holder or holders of such Indebtedness or Accommodation Obligation or a
trustee on its or their behalf (with or without the giving of notice, the
lapse of time, or both) to cause such Indebtedness or Accommodation
Obligation to become due prior to its stated maturity; or
(j) Any Loan Document shall, at any time after its execution and
delivery and for any reason, cease to be in full force and effect or shall
be declared to be null and void, or the validity or enforceability thereof
shall be contested by any Person party thereto (other than the
Administrative Agent or any Lender) or any such Person party thereto (other
than the Administrative Agent or any Lender) shall deny that it has any or
further liability or obligation thereunder, or the Obligations shall be
subordinated for any reason; or
(k) Borrower or any Material Subsidiary of Borrower shall be
adjudicated insolvent, or shall generally not pay, or admit in writing its
inability to pay, its debts as they mature, or shall make a general
assignment for the benefit of creditors, or any proceeding shall be
instituted
71
by any such Person seeking liquidation, reorganization, or other relief of
its debts under any Debtor Relief Law, or seeking or consenting to the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property,
or any such Person shall take any corporate action to authorize any of the
actions set forth above in this Section 7.01(k); or
(l) Any proceeding of the type referred to in Section 7.01(k) is
filed, or any such proceeding is commenced against Borrower or any Material
Subsidiary of Borrower and such proceeding remains in effect for 60 days,
or an order for relief is entered in an involuntary case under the
bankruptcy law of the United States, or an order, judgment or decree is
entered appointing a trustee, receiver, custodian, liquidator or similar
official or adjudicating any such Person insolvent, or approving the
petition in any such proceedings, and such order, judgment or decree
remains in effect for 60 days; or
(m) A final judgment or order for the payment of money in an amount
more than $20,000,000 in excess of insurance in respect thereof shall be
rendered against Borrower or any Subsidiary of Borrower and the same shall
not be discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 45 days from the
date of entry thereof, or Borrower or any Subsidiary of Borrower shall not,
within said period of 45 days or such longer period during which execution
of the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal; or
(n) Any Environmental Liability shall have been asserted against
Borrower or any Subsidiary of Borrower which could reasonably be expected
to have a Material Adverse Effect or any Release shall have occurred, and
such event could form the basis of an Environmental Liability against
Borrower or any Subsidiary of Borrower which could reasonably be expected
to result in a Material Adverse Effect; or
(o) The Total Exposure Amount shall exceed $100,000,000 more than the
lesser of (i) the Total Commitment or (ii) the Borrowing Base for any
period of 30 consecutive days or for a total of 61 days in any 365-day
period.
THEREUPON: (x) upon the occurrence of any Event of Default described in Section
7.01(k) or Section 7.01(l) with respect to Borrower or any Material Subsidiary
of Borrower, (i) all of the Commitments shall automatically terminate, and (ii)
the entire unpaid amount of all Obligations (including the Letter of Credit
Liabilities whether or not then otherwise due and payable) shall automatically
become immediately due and payable, without presentment for payment, demand,
protest, notice of intent to accelerate, notice of acceleration or further
notice of any kind, all of which are hereby expressly waived by Borrower, and
(y) upon the occurrence of any other Event of Default, the Administrative Agent
shall at the request, or may with the consent, of the Majority Lenders, (i) by
written notice to Borrower declare all of the Commitments to be terminated, and
(ii) by written notice to Borrower declare the entire unpaid amount of all
Obligations to be forthwith due and payable, whereupon all Obligations
(including the Letter of Credit Liabilities whether or not then otherwise due
and payable) shall become and be forthwith due and payable, without presentment
for payment, demand, protest, notice of intent to accelerate, notice of
acceleration or further notice of any kind, all of which are hereby expressly
waived by Borrower.
72
SECTION 7.02 Remedies. If any Event of Default shall occur, the
Administrative Agent for the ratable benefit of the Lenders, may (and upon the
request of the Majority Lenders shall) protect and enforce the Lenders' rights
and remedies under the Loan Documents by any appropriate proceedings, including
proceedings for specific performance of any covenant or agreement contained in
any Loan Document, and the Lenders may enforce the payment of any Obligations
due or enforce any other legal or equitable right. All rights and remedies and
powers conferred upon the Administrative Agent and/or the Lenders under the Loan
Documents shall be deemed cumulative and not exclusive of any other rights,
remedies or powers available under the Loan Documents or at law or in equity.
SECTION 7.03 Indemnity. Borrower shall indemnify the Administrative
Agent, the Issuing Lender, each Lender, each Affiliate thereof and their
respective directors, officers, employees, shareholders and agents (each an
"Indemnitee") from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, expenses, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature whatsoever (collectively, the
"Indemnified Liabilities") that are asserted against an Indemnitee (including on
account of the negligence of an Indemnitee) by any Person if such Indemnified
Liabilities arise out of or result from (i) any use by Borrower of the proceeds
of any extension of credit by the Lenders hereunder or (ii) any investigation,
litigation or other proceeding (including any threatened investigation or
proceeding) relating to the foregoing or arising out of or based upon any Loan
Document or any of the transactions contemplated by any Loan Document, and
Borrower shall reimburse such Indemnitee, within ten Business Days after receipt
of a composite statement of account for any reasonable expenses (including
reasonable legal fees) incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages,
expenses, penalties, actions, judgments, suits, costs or disbursements which are
proximately caused by the gross negligence or willful misconduct of such
Indemnitee. Without prejudice to the survival of any other Obligations of
Borrower hereunder and the other Loan Documents, the Obligations of Borrower
under this Section 7.03 shall survive the termination of this Credit Agreement,
the payment in full of the Obligations and/or assignment of the Obligations.
73
ARTICLE VIII
ADMINISTRATIVE AGENT
--------------------
SECTION 8.01 Appointment and Authorization of Administrative Agent .
(a) Each Lender hereby irrevocably (subject to Section 8.09)
appoints, designates and authorizes the Administrative Agent to take such
action on its behalf under the provisions of this Credit Agreement and each
other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Credit Agreement or any
other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere
herein or in any other Loan Document, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Credit Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein
and in the other Loan Documents with reference to the Administrative Agent
is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead,
such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Lender shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith until such time (and except for so long) as the Administrative
Agent may agree at the request of the Majority Lenders and with the consent
of the Issuing Lender to act for the Issuing Lender with respect thereto;
provided that the Issuing Lender shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article VIII
with respect to any acts taken or omissions suffered by the Issuing Lender
in connection with Letters of Credit issued by it or proposed to be issued
by it and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term "Administrative Agent" as
used in this Article VIII included the Issuing Lender with respect to such
acts or omissions, and (ii) as additionally provided herein with respect to
the Issuing Lender.
SECTION 8.02 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Credit Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
SECTION 8.03 Liability of Administrative Agent. No Agent-Related Person
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Credit Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein), or
(b) be
74
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by Borrower or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Credit Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Credit Agreement or any other Loan Document, or for any
failure of Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Credit Agreement or any other Loan Document, or to inspect the
properties, books or records of Borrower or any Affiliate thereof.
SECTION 8.04 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel to Borrower),
independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or
refusing to take any action under any Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders, the Super
Majority Lenders or all the Lenders, as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Credit Agreement or any other Loan Document in
accordance with a request or consent of the Majority Lenders, the Super
Majority Lenders or all the Lenders, as may be required hereunder, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and participants. Where this Credit Agreement
expressly permits or prohibits an action unless the Majority Lenders, the
Super Majority Lenders or all the Lenders otherwise determine, the
Administrative Agent shall, and in all other instances, the Administrative
Agent may, but shall not be required to, initiate any solicitation for the
consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 3.01, each Lender that has signed this Credit
Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter either sent by the
Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender.
SECTION 8.05 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice from
a Lender or Borrower referring to this Credit Agreement, describing such Default
or Event of Default and stating
75
that such notice is a "notice of default." The Administrative Agent will notify
the Lenders of its receipt of any such notice. The Administrative Agent shall
take such action with respect to such Default or Event of Default as may be
directed by the Majority Lenders in accordance with Article VII; provided that
unless and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.
SECTION 8.06 Credit Decision; Disclosure of Information by Administrative
Agent. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of Borrower or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower and its Subsidiaries, and all applicable bank or
other regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Credit Agreement and to extend credit to
Borrower hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
herein, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of Borrower or any of its Affiliates which may come into the
possession of any Agent-Related Person.
SECTION 8.07 Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of Borrower and without limiting the obligation of Borrower to do so),
pro rata, and hold harmless each Agent-Related Person from and against any and
all Indemnified Liabilities (including those arising due to the negligence of
any Agent-Related Person) incurred by it; provided that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting from such Person's gross negligence or willful
misconduct; provided that no action taken in accordance with the directions of
the Majority Lenders, the Super Majority Lenders, or all the Lender, as may be
required, shall be deemed to constitute gross negligence or willful misconduct
for purposes of this Section. Without limitation of the foregoing, each Lender
shall reimburse the Administrative Agent upon demand for its ratable share of
any costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Credit Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses
76
by or on behalf of Borrower. The undertaking in this Section shall survive
termination of the Commitments, the payment of all Obligations hereunder and the
resignation or replacement of the Administrative Agent.
SECTION 8.08 Administrative Agent in its Individual Capacity. Bank of
America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with Borrower and its Affiliates as though Bank of America were not the
Administrative Agent or the Letter of Credit Issuer hereunder and without notice
to or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of Borrower or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Credit Agreement as any other
Lender and may exercise such rights and powers as though it were not the
Administrative Agent or the Letter of Credit Issuer, and the terms "Lender" and
"Lenders" include Bank of America in its individual capacity.
SECTION 8.09 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Credit Agreement, the Majority Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders which successor administrative agent shall be consented to by Borrower
at all times other than during the existence of an Event of Default (which
consent of Borrower shall not be unreasonably withheld or delayed). If no
successor administrative agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Lenders and Borrower, a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term "Administrative Agent" shall mean such successor
administrative agent and the retiring Administrative Agent's appointment, powers
and duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Credit Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Credit Agreement. If no successor administrative agent has accepted appointment
as Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Majority Lenders appoint a successor agent as
provided for above.
SECTION 8.10 Other Agents. None of the Lenders identified on the facing
page or signature pages of this Credit Agreement as a "syndication agent" or
"documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than those applicable
to all Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Credit Agreement
or in taking or not taking action hereunder.
77
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 9.01 Amendments and Waivers. Neither this Credit Agreement nor
any other Loan Document to which Borrower is a party nor any terms hereof or
thereof may be amended, supplemented, waived or otherwise modified except in
accordance with the provisions of this section. Any provision of this Credit
Agreement or any other Loan Document may be amended, supplemented, waived, or
otherwise modified if and only if such amendment, supplement, waiver or other
modification (x) is in writing, (y) is signed by each other party thereto except
that in the case of a waiver, the party whose performance is being waived need
not be a signatory, and (z) with respect to the Lenders, is signed by the
Majority Lenders or by the Administrative Agent with the consent of the Majority
Lenders; provided that no such amendment, supplement, waiver or other
modification shall do any of the following unless signed by each Lender affected
thereby or by the Administrative Agent with the consent of each Lender affected
thereby:
(a) extend the Maturity Date, the date of payment of any principal,
interest or fees, the date of payment of any Letter of Credit Liabilities,
or the date of payment of any required principal prepayment;
(b) reduce the amount of any principal, interest, Letter of Credit
Liabilities, or fees, the rate of interest paid with respect to any unpaid
principal, interest, Letter of Credit Liabilities or fees, or the amount of
any fee payable to the Lenders hereunder;
(c) change the amount of the Commitment of any Lender;
(d) amend, modify, or waive any of the conditions set forth in
Article III (other than any condition which refers therein to the Majority
Lenders);
(e) amend, modify or waive any provision which calls for the consent
of, the approval of, or direction from all of the Lenders;
(f) amend, modify or waive any provision of Section 2.02, Section
7.03, Section 9.04, Section 9.10 or this Section 9.01 or amend the
definition of Majority Lenders, Super Majority Lenders or Borrowing Base
Commencement Date; or
(g) consent to or permit the assignment or transfer by Borrower of
any of its rights and obligations under this Credit Agreement or any other
Loan Document;
and provided, further, that, without the prior written consent of the
Administrative Agent, no such amendment, supplement, waiver or modification
shall amend, supplement, waive or otherwise modify any provision of Article VIII
or any other provision of any Loan Document if the effect thereof is to affect
the rights or duties of the Administrative Agent; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the Issuing
Lender in addition to the Lenders required above to take such action, affect the
rights and duties of the Issuing Lender with respect to the Letters of
78
Credit and the Letter of Credit Applications, if any, outstanding under this
Credit Agreement; and provided, further, that, without the prior written consent
of the Super Majority Lenders, no such amendment, supplement, waiver or
modification shall amend, modify or waive any provision that calls for the
consent of, the approval of, or direction from the Super Majority Lenders. Any
such amendment, supplement, modification or waiver shall apply to each of the
Lenders equally and shall be binding upon the Lenders, the Administrative Agent,
all future holders of the Notes and Obligations, and all parties to the Loan
Document so amended, supplemented, waived or otherwise modified.
SECTION 9.02 Notices, Etc. Notices, consents, requests, approvals,
demands and other communications (collectively, "Communications") provided for
herein shall be in writing (including telecopy communications) and mailed,
telecopied, or otherwise delivered:
If to Borrower or any of its Subsidiaries, to it at:
Xxxxxxx Resources Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx 0, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
If to the Administrative Agent, to it at:
Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone Number: (000) 000-0000
Telecopy Number (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxxx
With a copy to:
Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone Number (000) 000-0000
Telecopy Number (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxxxx
If to any Lender, as specified on the administrative questionnaire
completed and delivered by such Lender to the Administrative Agent in
connection herewith.
All Communications, except as otherwise expressly provided in the Loan
Documents, must be in writing and must be mailed, telecopied or delivered, to
the appropriate party at the address set forth herein or other applicable Loan
Document or, as to any party to any Loan Document, at any other address as may
be designated by it in a written notice sent to all other parties to such Loan
Document in accordance with this Section 9.02 and (b) any notice, request,
demand, direction, or other communication given by telecopier must be confirmed
within 48 hours by a writing mailed or delivered to the appropriate parry at
79
its respective address. Except as otherwise expressly provided in any Loan
Document, any notice, request, demand, direction, or other communication
required or permitted by any Loan Document given in compliance with this Section
9.02 shall be effective when received or delivered.
SECTION 9.03 No Waiver; Remedies Cumulative. No failure on the part of
the Administrative Agent or any Lender or any holder of a Note to exercise, and
no delay in exercising, any right, power or privilege hereunder or under any
other Loan Document and no course of dealing between Borrower, its Subsidiaries,
or any of them and the Administrative Agent or any Lender or any holder of any
Note shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power or privilege, or any abandonment or discontinuance of
any steps to enforce such right, power or privilege, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
No notice to or demand on Borrower in any case shall entitle Borrower to any
other or further notice or demand in similar or other circumstances. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.04 Costs, Expenses and Taxes.
(a) Borrower agrees to pay within ten Business Days after
presentation of a composite statement of account: all reasonable out-of-
pocket costs and expenses of the Administrative Agent in connection with
(i) the negotiation, preparation, distribution, execution and delivery of
this Credit Agreement, the Notes and the other Loan Documents and the
documents and instruments referred to therein, (ii) the syndication,
management and agenting of the Loans and Letter of Credit Liabilities,
(iii) the Administrative Agent's review and due diligence (including,
without limitation, the review of the material Oil and Gas Interests) and
(iv) the negotiation, preparation, distribution, execution and delivery of
any amendment, supplement, modification, waiver or consent relating to any
of the Loan Documents to which Borrower is a party (including, without
limitation, as to each of the foregoing, the reasonable fees and
disbursements of legal counsel).
(b) Borrower shall pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent, the Issuing Lender and each Lender in
connection with (i) the preservation of their rights under, and enforcement
of, the Loan Documents to which Borrower is a party and the documents and
instruments referred to therein (including, without limitation, the
reasonable fees and disbursements of legal counsel), and (ii) any workout,
restructuring or rescheduling of the Obligations or any proceeding under
any Debtor Relief Law with respect to Borrower (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent, the Issuing Lender and each Lender and allocated
costs of internal counsel).
(c) Borrower shall pay, and hold the Administrative Agent and each of
the Lenders harmless from and against, any and all present and future
stamp, excise, and other similar taxes and fees with respect to the
foregoing matters and hold the Administrative Agent and each Lender
harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable
to the Administrative Agent or such Lender) to pay such taxes.
80
(d) Without prejudice to the survival of any other obligations of
Borrower hereunder, under the other Loan Documents, the obligations of
Borrower under this Section 9.04 shall survive the termination of this
Credit Agreement and the payment in full of the Obligations for a period of
six months.
SECTION 9.05 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default, each Lender is hereby authorized at any time or from time to time, to
the fullest extent permitted by law and without presentment, demand, protest or
other notice of any kind to Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held, and
other Indebtedness at any time owing, by such Lender (including, without
limitation, by Affiliates, branches or agencies of such Lender wherever located)
to or for the credit or the account of Borrower against any of and all the
Obligations, including, without limitation, all interests in Obligations
purchased by such Lender pursuant to Section 2.22, and all other claims of any
nature or description arising out of or in connection with this Credit Agreement
or any other Loan Document, irrespective of whether or not such Lender shall
have made any demand under this Credit Agreement or the Notes or other Loan
Documents and although such Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured. Such Lender agrees promptly to notify Borrower
after any such setoff and application made by such Lender, but the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of the Lenders under this Section 9.05 are in addition to other
rights and remedies (including, without limitation, other rights of setoff)
which the Lenders may have. Notwithstanding any other provisions of this Credit
Agreement, the provisions of this Section 9.05 (except for the provisions of
this sentence) will not apply to any amounts held by Borrower or any Subsidiary
of Borrower for the benefit of working interest owners and/or royalty owners for
the purpose of paying ad valorem taxes, development costs and/or operating costs
or for the purpose of making distributions to the revenue interest owners of
revenues from various Oil and Gas Interests.
SECTION 9.06 Governing Law. This Credit Agreement, the Notes and, unless
otherwise specified therein, all other Loan Documents and all other documents
executed in connection herewith or therewith, shall be deemed to be contracts
and agreements executed by Borrower, the Administrative Agent, the Issuing
Lender and the Lenders under the laws of the State of Texas and of the United
States and for all purposes shall be construed in accordance with, and governed
by, the laws of said State and of the United States. Without limitation of the
foregoing, nothing in this Credit Agreement, the Notes or any other Loan
Document shall be deemed to constitute a waiver of any rights which any Lender
may have under applicable federal legislation relating to the amount of interest
which such Lender may contract for, take, receive or charge in respect of any
Loans, including any right to take, receive, reserve and charge interest at the
rate allowed by the law of the state where such Lender is located. The
provisions of Chapter 346 of the Texas Finance Code do not apply to this Credit
Agreement or any Notes issued hereunder.
SECTION 9.07 Interest. Each provision in this Credit Agreement and each
other Loan Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, to the Administrative Agent or
any Lender for the use, forbearance or detention of the money to be loaned under
this Credit Agreement or any Loan Document or otherwise (including any sums paid
as required by any covenant or obligation contained herein or in any other Loan
Document which is for
81
the use, forbearance or detention of such money), exceed that amount of money
which would cause the effective rate of interest to exceed the Highest Lawful
Rate, and all amounts owed under this Credit Agreement and each other Loan
Document shall be held to be subject to reduction to the effect that such
amounts so paid or agreed to be paid which are for the use, forbearance or
detention of money under this Credit Agreement or such Loan Document shall in no
event exceed that amount of money which would cause the effective rate of
interest to exceed the Highest Lawful Rate. Anything in this Credit Agreement,
any Note or any other Loan Document to the contrary notwithstanding, with
respect to Borrower shall never be required to pay unearned interest on the
Obligations or ever be required to pay interest on the Obligations at a rate in
excess of the Highest Lawful Rate, and if the effective rate of interest which
would otherwise be payable with respect to the Obligations would exceed the
Highest Lawful Rate, or if the holder of the Obligations shall receive any
unearned interest or shall receive monies that are deemed to constitute interest
which would increase the effective rate of interest payable by Borrower with
respect to the Obligations to a rate in excess of the Highest Lawful Rate, then
(a) the amount of interest which would otherwise be payable by Borrower with
respect to the Obligations shall be reduced to the amount allowed under
applicable law and (b) any unearned interest paid by Borrower or any interest
paid by Borrower in excess of the Highest Lawful Rate shall be in the first
instance credited on the principal of the Obligations with the excess thereof,
if any, refunded to Borrower. It is further agreed that, without limitation of
the foregoing, all calculations of the rate of interest contracted for, charged
or received by any Lender under any Note held by it, or under this Credit
Agreement or the other Loan Documents, are made for the purpose of determining
whether such rate exceeds the Highest Lawful Rate applicable to such Lender
shall be made, to the extent permitted by usury laws applicable to such Lender
(now or hereafter enacted), by (i) characterizing any non-principal payment as
an expense, fee or premium rather than as interest and (ii) amortizing,
prorating and spreading in equal or unequal parts during the period of the full
stated term of the Loans evidenced by this Credit Agreement or any Note all
interest at any time contracted for, charged or received by such Lender in
connection therewith.
SECTION 9.08 Survival of Representations and Warranties. All
representations, warranties and covenants contained or incorporated herein or
made in writing by Borrower in connection herewith shall survive the execution
and delivery of this Credit Agreement, the Notes and the other Loan Documents.
SECTION 9.09 Binding Effect. This Credit Agreement shall become effective
when it shall have been executed by Borrower, the Administrative Agent, the
Issuing Lender and each of the Lenders and shall be binding upon and inure to
the benefit of Borrower, the Administrative Agent, the Issuing Lender and the
Lenders and their respective successors and assigns, whether so expressed or
not, provided that the undertaking of the Lenders to make Loans or other
extensions of credit to Borrower shall not inure to the benefit of any successor
or assign of Borrower.
82
SECTION 9.10 Successors and Assigns; Participations.
(a) Whenever in this Credit Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party; and all covenants, promises and agreements
by or on behalf of Borrower, the Administrative Agent, the Issuing Lender
or the Lenders that are contained in this Credit Agreement shall bind and
inure to the benefit of their respective successors and permitted assigns.
Borrower may not assign or transfer any of its rights or obligations
hereunder without the written consent of all of the Lenders.
(b) Each of the Lenders may, without the consent of Borrower or the
Administrative Agent, sell participation to one or more banks or other
financial institutions in all or a portion of its rights and obligations
under this Credit Agreement and the other Loan Documents, including,
without limitation, all or a portion of its Commitment, the Loans owing to
it, any Note held by it and the Letter of Credit Liabilities owing to it;
provided that (i) such Lender's obligations under this Credit Agreement and
the other Loan Documents shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) Borrower, the Administrative Agent, the Issuing
Lender 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 Credit Agreement and the other Loan Documents; provided that
such Lender shall retain the sole right and responsibility to enforce the
obligations of Borrower relating to the Loans including, without
limitation, the right to approve any amendment, modification or waiver of
any provision of this Credit Agreement or any other Loan Document; and
provided, further, that such Lender may grant its participant rights, as
between such Lender and its participant, with respect to amendments,
modifications or waivers with respect to any fees payable hereunder
(including, without limitation, the amount and the dates fixed for the
payment of any such fees) or the amount of principal, or the rate of
interest payable on, or the dates fixed for any payment of principal of or
interest on the Loans and the Letter of Credit Liabilities, and (iv) such
Lender shall disclose in writing to the Administrative Agent the number of
participating banks or other entities and the dollar amount of each such
participation. Each Lender also agrees that it shall retain the right (but
shall have no obligation) to buy back any participating interest sold by it
from the holder thereof if such holder refuses to consent to any proposed
amendment, modification, supplement or waiver of this Credit Agreement or
any other Loan Document.
(c) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Commitment, its Loans and its
participations in Letter of Credit Liabilities); provided that (i) except
in the case of an assignment of the entire remaining amount of the
assigning Lender's Commitment, Loans and participations in Letter of Credit
Liabilities or in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund with respect to a Lender, the aggregate amount
of the Commitment (which for this purpose includes Loans and participations
in Letter of Credit Liabilities outstanding thereunder) subject to each
such assignment, determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent,
shall not be less than $5,000,000, unless each of the Administrative Agent
and, so long as
83
no Event of Default has occurred and is continuing, Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed),
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Credit Agreement with respect to the Commitment, Loans and
participations in Letter of Credit Liabilities assigned, and (iii) the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and
recordation fee of $3,500. Subject to acceptance and recording thereof by
the Administrative Agent pursuant to Section 9.10(g), from and after the
effective date specified in each Assignment and Acceptance, the Eligible
Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Credit Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Credit Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Credit
Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 2.15, Section 2.17, Section 2.19
and Section 7.03 accruing with respect to such Lender prior to such
assignment). Any assignment or transfer by a Lender of rights or
obligations under this Credit Agreement that does not comply with this
section shall be treated for purposes of this Credit Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with Section 9.10(b).
(d) As used herein, the following terms have the following meanings:
(e) "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) an Approved Fund; and (iv) any other Person (other than a
natural Person) approved by the Administrative Agent and the Issuing
Lender, and unless (x) such Person is taking delivery of an assignment in
connection with physical settlement of a credit derivatives transaction or
(y) an Event of Default has occurred and is continuing, Borrower (each such
approval not to be unreasonably withheld or delayed).
(f) "Fund" means any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
(g) "Approved Fund" means any Fund that is administered or managed by
(i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
(h) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Eligible Assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto
as follows: (i) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and
clear of any adverse claim known to such assigning Lender, such assigning
Lender makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Credit Agreement and the other Loan Documents of the
execution, legality, validity, enforceability, genuineness, sufficiency or
84
value of this Credit Agreement or any other instrument or document
furnished pursuant hereto or thereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of Borrower or any Subsidiary of Borrower, the
performance or observance of their respective obligations under this Credit
Agreement, any Loan Document, any other instrument or document furnished
pursuant hereto or thereto; (iii) such Eligible Assignee confirms that it
has received a copy of this Credit Agreement together with copies of the
most recent financial statements delivered pursuant to Section 4.09 or
Section 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such Eligible Assignee will, independently
and without reliance upon the Administrative Agent, such assigning Lender
or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement and the other Loan
Documents; (v) such Eligible Assignee appoints and authorizes the
Administrative Agent to take such action on behalf of such Eligible
Assignee and to exercise such powers under this Credit Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental
thereto; (vi) such Eligible Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
this Credit Agreement and the other Loan Documents are required to be
performed by it as a Lender; and (vii) such Eligible Assignee confirms that
it is an Eligible Assignee as defined herein.
(i) The Administrative Agent shall maintain at its office a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the Commitments
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, in the absence of manifest error, and
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(j) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee together with any Note subject to
such Assignment and Acceptance, the Administrative Agent shall (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders
and Borrower. If requested by the assigning Lender or the Eligible
Assignee, as the case may be, within five Business Days after receipt of
such notice, Borrower, the Assigning Lender and the Administrative Agent
shall make the appropriate arrangements for the execution and delivery by
Borrower to the Administrative Agent in exchange for the surrendered Note,
a replacement Note payable to the order of such Eligible Assignee in an
aggregate amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained any of
its Commitment hereunder, a replacement Note payable to the order of the
assigning Lender in an aggregate amount equal to the Commitment retained by
it. Such replacement Note shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note and shall be
dated the date of the surrendered Note which they replace and shall
otherwise be in substantially the form of Exhibit C and shall
85
contain specific language stating that such replacement Note is given in
exchange for and substitution of the surrendered Note and that the
Indebtedness evidenced by the surrendered Note constitutes the same
indebtedness evidenced by the replacement Note. Canceled Notes shall be
returned as soon as practical to Borrower marked "Replaced."
(k) Notwithstanding any other language in this Credit Agreement, any
Lender may at any time assign all or any portion of its rights under this
Credit Agreement and any Notes to a Federal Reserve Bank as collateral in
accordance with Regulation A of the Board and the applicable operating
circular of such Federal Reserve Bank.
SECTION 9.11 Separability. Should any clause, sentence, paragraph or
section of this Credit Agreement or any other Loan Document be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Credit Agreement or such
other Loan Document, as the case may be, and the parties hereto agree that the
part or parts of this Credit Agreement or such Loan Document so held to be
invalid, unenforceable or void will be deemed to have been stricken herefrom or
therefrom and the remainder will have the same force and effectiveness as if
such part or parts had never been included herein or therein.
SECTION 9.12 Confidentiality. Each of the Administrative Agent 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 Credit Agreement; (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Credit Agreement or
the enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section 9.12, to (i) any
Eligible Assignee of or participant in, or any prospective Eligible Assignee of
or participant in, any of its rights or obligations under this Credit Agreement
or (ii) any direct or indirect contractual counterparty or prospective
counterparty (or such contractual counterparty's or prospective counterparty's
professional advisor) to any credit derivative transaction relating to
obligations of Borrower; (g) with the consent of Borrower; (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Administrative Agent or
any Lender on a nonconfidential basis from a source other than Borrower; or (i)
to the National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's or its Affiliates' investment portfolio in
connection with ratings issued with respect to such Lender or its Affiliates.
For the purposes of this Section, "Information" means all information received
from Borrower relating to Borrower or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by Borrower; provided that, in the
case of information received from Borrower after the date hereof, such
information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 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.
86
SECTION 9.13 Marshaling; Recapture. Neither the Administrative Agent nor
any Lender shall be under any obligation to marshal any assets in favor of
Borrower or any other Person or against or in payment of any or all of the
Obligations. To the extent the Issuing Lender or any Lender receives any payment
by or on behalf of Borrower, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to Borrower or its estate, trustee, receiver, custodian or any other
party under any Debtor Relief Law, state or federal law, common law or equitable
cause, then to the extent of such payment or repayment, the obligation or part
thereof which has been paid, reduced or satisfied by the amount so repaid shall
be reinstated by the amount so repaid and shall be included within the
liabilities of Borrower to such Lender as of the date such initial payment,
reduction or satisfaction occurred.
SECTION 9.14 Representation by the Lenders. Each of the Lenders
represents that it is the present intention of such Lender to acquire its Note,
if any, for its own account or for the account of its Affiliates and not with a
view to the distribution or sale thereof, subject, nevertheless to the necessity
that such Lender remain in control at all times of the disposition of property
held by it for its own account; it being understood that the foregoing
representations shall not affect the characterization of the Loans as commercial
lending transactions.
SECTION 9.15 No Third Party Beneficiaries. The agreement of each Lender
to make its Loans and other extensions of credit on the terms and conditions set
forth in this Credit Agreement is solely for the benefit of Borrower, and no
other Person (including any obligor, contractor, subcontractor, supplier or
materialman furnishing supplies, goods or services to or for the benefit of
Borrower) shall have any rights hereunder, as against the Administrative Agent
or any Lender, under any other Loan Document, or with respect to the Loans or
Letters of Credit or the proceeds thereof.
SECTION 9.16 Execution in Counterparts. This Credit Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. 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.
87
SECTION 9.17 Jurisdiction; Consent to Service of Process.
(a) Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any Texas
State court or Federal court of the United States of America sitting in
Xxxxxx or Dallas County, Texas, in any action or proceeding arising out of
or relating to this Credit Agreement or the Loan Documents, or for
recognition or enforcement of any order or judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and
determined in such Texas State court, or to the extent permitted by law, in
such Federal court in Xxxxxx or Dallas County, Texas. Each party to this
Credit Agreement irrevocably consents to the service of process out of any
Texas State court or Federal court of the United States of America sitting
in Xxxxxx or Dallas County, Texas in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to such party at its address referred to in Section 9.02. Borrower agrees
that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law subject to applicable appeal rights.
Nothing in this Credit Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action
or proceeding relating to this Credit Agreement or the Loan Documents
against Borrower or any Subsidiary of Borrower or its respective properties
in the courts of any other jurisdiction.
(b) Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Credit Agreement or the Loan
Documents in any Texas State or Federal court sitting in Xxxxxx or Dallas
County, Texas. Borrower hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 9.18 Waiver of Rights to Trial by Jury. EACH PARTY TO THIS CREDIT
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS CREDIT AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
SECTION 9.19 Credit Agreement Governs Conflicts. To the fullest extent
possible, the terms and provisions of the Loan Documents shall be read together
with the terms and provisions of this Credit Agreement so that the terms and
provisions thereof do not conflict with the terms and provisions
88
of this Credit Agreement; provided that notwithstanding the foregoing, in the
event that any of the terms of provisions of the Loan Documents conflict with
any terms or provisions of this Credit Agreement, the terms or provisions of
this Credit Agreement shall govern and control for all purposes, provided that
the inclusion of additional terms and provisions, supplemental rights or
remedies in favor of the Administrative Agent in any Loan Document shall not be
deemed to be a conflict with this Credit Agreement.
SECTION 9.20 Final Agreement Of The Parties. THIS CREDIT AGREEMENT
(INCLUDING THE EXHIBITS HERETO), ANY NOTES AND THE OTHER LOAN DOCUMENTS TO WHICH
BORROWER OR ANY OF ITS SUBSIDIARIES IS A PARTY CONSTITUTE A "LOAN AGREEMENT" AS
DEFINED IN SECTION 26.02(A) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
89
IN WITNESS WHEREOF, the parties hereto have caused this Revolving Credit
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
XXXXXXX RESOURCES CORPORATION, BANK OF AMERICA, N.A., as the
as Borrower Administrative Agent for the Lenders
By /s/ J. Xxxxx Xxxxxx By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ---------------------------------
J. Xxxxx Xxxxxx, Executive Vice Xxxxxx X. Xxxxxxx, Principal
President and Chief Executive Officer
90
COMMITMENT LENDER:
$55,000,000.00 BANK OF AMERICA, N.A., as a Lender and as the
Issuing Lender
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxx X. Xxxxxxx, Principal
COMMITMENT LENDER:
$55,000,000.00 FLEET NATIONAL BANK, as a Lender and as
Documentation Agent
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
COMMITMENT LENDER:
$55,000,000.00 BANK ONE, NA (main office Chicago), as a
Lender and as Syndication Agent
By /s/ Xxxx X. Xxxxx
-------------------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Title: First Vice President
-----------------------------------
COMMITMENT LENDER:
$45,000,000.00 U.S. BANK NATIONAL ASSOCIATION, as a Lender
By /s/ Xxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxxxx
------------------------------------
Title: Vice President
------------------------------------
COMMITMENT LENDER:
$40,000,000.00 CITIBANK, N.A., as a Lender
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
Global Engineering & Mining
------------------------------------
399 Park/4th Fl./Zn. 4/559-1536
------------------------------------
COMMITMENT LENDER:
$35,000,000.00 THE FUJI BANK, LIMITED, as a Lender
By /s/ Xxxxxxx Xxxxxxx
-------------------------------------------
Name: Jacques Azabury
------------------------------------
Title: Senior Vice President & Manager
------------------------------------
COMMITMENT LENDER:
$25,000,000.00 COMERICA BANK-TEXAS, as a Lender
By /s/ Xxxxx Xxxxxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxxxxx
------------------------------------
Title: Vice President
------------------------------------
COMMITMENT LENDER:
$25,000,000.00 XXXXX FARGO BANK TEXAS, N.A., as a Lender
By /s/ Xxx XxXxxxxx
-------------------------------------------
Name: Xxx XxXxxxxx
------------------------------------
Title: Vice President
------------------------------------
COMMITMENT LENDER:
$15,000,000.00 HIBERNIA NATIONAL BANK, as a Lender
By /s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
