1
Exhibit 10.3
CREDIT AGREEMENT
dated as of
MARCH 31, 2000
among
COHO ENERGY, INC.,
as Borrower
THE CHASE MANHATTAN BANK,
as Administrative Agent
THE CHASE MANHATTAN BANK,
as Issuing Bank
MEESPIERSON CAPITAL CORP.,
as Documentation Agent
FLEET NATIONAL BANK,
as Syndication Agent
and
THE LENDERS PARTY HERETO
---------------------------
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................................2
SECTION 1.1 Defined Terms......................................................................2
SECTION 1.2 Classification of Loans and Borrowings............................................26
SECTION 1.3 Terms Generally...................................................................26
SECTION 1.4 Accounting Terms; GAAP............................................................26
ARTICLE II THE CREDITS.......................................................................27
SECTION 2.1 Commitments.......................................................................27
SECTION 2.2 Loans and Borrowings..............................................................27
SECTION 2.3 Requests for Borrowings...........................................................28
SECTION 2.4 Funding of Borrowings.............................................................29
SECTION 2.5 Interest Elections................................................................29
SECTION 2.6 Termination and Reduction of Commitments..........................................31
SECTION 2.7 Repayment of Loans; Evidence of Debt..............................................31
SECTION 2.8 Borrowing Base....................................................................32
SECTION 2.9 Prepayment of Loans...............................................................35
SECTION 2.10 Fees..............................................................................37
SECTION 2.11 Interest..........................................................................38
SECTION 2.12 Alternate Rate of Interest........................................................39
SECTION 2.13 Illegality........................................................................39
SECTION 2.14 Increased Costs...................................................................40
SECTION 2.15 Break Funding Payments............................................................41
SECTION 2.16 Taxes.............................................................................42
SECTION 2.17 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.......................43
SECTION 2.18 Mitigation Obligations............................................................45
SECTION 2.19 Letters of Credit.................................................................45
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................................49
SECTION 3.1 Organization; Powers..............................................................49
SECTION 3.2 Authorization; Enforceability.....................................................50
SECTION 3.3 Approvals; No Conflicts...........................................................50
SECTION 3.4 Financial Condition; No Material Adverse Change...................................50
SECTION 3.5 Properties........................................................................51
SECTION 3.6 Litigation Matters................................................................52
SECTION 3.7 Compliance with Laws and Agreements...............................................52
SECTION 3.8 Investment and Holding Company Status.............................................52
SECTION 3.9 Taxes.............................................................................52
SECTION 3.10 ERISA Matters.....................................................................52
SECTION 3.11 Disclosure........................................................................53
SECTION 3.12 Subsidiaries......................................................................53
SECTION 3.13 Insurance.........................................................................53
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SECTION 3.14 Labor Matters.....................................................................53
SECTION 3.15 Priority; Security Interest.......................................................53
SECTION 3.16 Environmental Matters.............................................................54
SECTION 3.17 Solvency..........................................................................55
SECTION 3.18 Year 2000.........................................................................55
SECTION 3.19 Claims and Liabilities............................................................55
SECTION 3.20 Delivery of Alternative Financing Documentation...................................55
SECTION 3.21 Plan of Reorganization............................................................56
ARTICLE IV CONDITIONS........................................................................56
SECTION 4.1 Effective Date....................................................................56
SECTION 4.2 Each Credit Event.................................................................63
ARTICLE V AFFIRMATIVE COVENANTS.............................................................64
SECTION 5.1 Financial Statements and Other Information........................................64
SECTION 5.2 Notices of Material Events........................................................65
SECTION 5.3 Information Regarding Collateral..................................................67
SECTION 5.4 Existence; Conduct of Business....................................................67
SECTION 5.5 Payment of Obligations............................................................67
SECTION 5.6 Maintenance of Properties.........................................................68
SECTION 5.7 Insurance.........................................................................69
SECTION 5.8 Casualty and Condemnation.........................................................69
SECTION 5.9 Books and Records; Inspection and Audit Rights....................................69
SECTION 5.10 Compliance with Laws..............................................................70
SECTION 5.11 Use of Proceeds and Letters of Credit.............................................70
SECTION 5.12 Additional Subsidiaries...........................................................70
SECTION 5.13 Further Assurances................................................................71
SECTION 5.14 Commodity Hedging.................................................................72
SECTION 5.15 Environmental Covenant............................................................72
SECTION 5.16 Title Matters.....................................................................73
SECTION 5.17 Settlement........................................................................73
ARTICLE VI NEGATIVE COVENANTS................................................................74
SECTION 6.1 Indebtedness; Certain Equity Securities...........................................74
SECTION 6.2 Liens.............................................................................75
SECTION 6.3 Fundamental Changes...............................................................76
SECTION 6.4 Investments, Loans, Advances, Guaranties and Acquisitions.........................76
SECTION 6.5 Asset Sales.......................................................................77
SECTION 6.6 Sale and Leaseback Transactions...................................................78
SECTION 6.7 Hedging Agreements................................................................78
SECTION 6.8 Restricted Payments; Certain Payments of Indebtedness.............................78
SECTION 6.9 Transactions with Affiliates......................................................79
SECTION 6.10 Restrictive Agreements............................................................79
SECTION 6.11 Amendment of Material Documents...................................................79
SECTION 6.12 Minimum EBITDA to Total Interest Expense Ratio....................................79
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SECTION 6.13 Maximum Leverage Ratio............................................................80
SECTION 6.14 Minimum Current Ratio.............................................................80
SECTION 6.15 Subsidiaries......................................................................80
SECTION 6.16. Take or Pay Contracts.............................................................80
ARTICLE VII EVENTS OF DEFAULT.................................................................80
ARTICLE VIII THE AGENTS........................................................................83
ARTICLE IX MISCELLANEOUS.....................................................................85
SECTION 9.1 Notices...........................................................................85
SECTION 9.2 Waivers; Amendments...............................................................87
SECTION 9.3 Expenses; Indemnity; Damage Waiver................................................89
SECTION 9.4 Successors and Assigns............................................................90
SECTION 9.5 Survival..........................................................................93
SECTION 9.6 Counterparts; Integration; Effectiveness..........................................93
SECTION 9.7 Severability......................................................................93
SECTION 9.8 Right of Setoff...................................................................94
SECTION 9.9 GOVERNING LAW.....................................................................94
SECTION 9.10 JURISDICTION......................................................................94
SECTION 9.11 CONSENT TO SERVICE OF PROCESS.....................................................95
SECTION 9.12 WAIVER OF JURY TRIAL..............................................................95
SECTION 9.13 Headings..........................................................................95
SECTION 9.14 Confidentiality...................................................................95
SECTION 9.15 Chapter 15 Not Applicable.........................................................96
SECTION 9.16 Limitation of Interest............................................................96
SECTION 9.17 Collateral Matters; Hedging Agreements............................................97
SECTION 9.18 Arranger; Documentation Agent; Syndication Agent..................................97
SECTION 9.19 Entire Agreement..................................................................98
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SCHEDULES AND EXHIBITS
Schedules
Schedule 2.1 -- Commitments
Schedule 3.3 -- Approvals
Schedule 3.4 -- Material Adverse Change
Schedule 3.5 -- Real Property
Schedule 3.6 -- Disclosed Matters
Schedule 3.9 -- Taxes
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Required Insurance
Schedule 3.16 -- Environmental Matters
Schedule 3.19 -- Claims and Liabilities
Schedule 4.1(g) -- UCC Jurisdictions
Schedule 4.1(s) -- Preferred Stock and Other Indebtedness
Schedule 6.1 -- Existing Indebtedness
Schedule 6.2 -- Existing Liens
Schedule 6.4 -- Existing Investments
Schedule 6.10 -- Existing Restrictions
Exhibits
Exhibit A -- Form of Assignment and Acceptance Agreement
Exhibit B-1 -- Form of Borrowing Request
Exhibit B-2 -- Form of Interest Rate Election
Exhibit C-1 -- Form of Opinion of Borrower's Counsel
Exhibit C-2 -- Form of Opinion of Borrower's Local Counsel
Exhibit D -- Form of Guaranty
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Form of Security Agreement
Exhibit G -- Form of Mortgage
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This CREDIT AGREEMENT, dated as of March 31, 2000, among COHO ENERGY,
INC., a Texas corporation (the "Borrower"), the financial institutions as are or
may become parties hereto (collectively, the "Lenders"), THE CHASE MANHATTAN
BANK ("Chase"), as administrative agent for the Lenders (in such capacity
together with its successors and permitted assigns in such capacity, the
"Administrative Agent"), THE CHASE MANHATTAN BANK, as letter of credit issuing
bank (in such capacity together with its successors and permitted assigns in
such capacity, the "Issuing Bank"), MEESPIERSON CAPITAL CORP., as documentation
agent for the Lenders (in such capacity together with its successors and
permitted assigns in such capacity, the "Documentation Agent"), and FLEET
NATIONAL BANK, as syndication agent for the Lenders (in such capacity together
with its successors and permitted assigns in such capacity, the "Syndication
Agent").
W I T N E S S E T H:
WHEREAS, the Borrower is an independent energy company engaged,
directly and indirectly through its Subsidiaries, in the development and
production of, and the exploration for, crude oil and natural gas; and
WHEREAS, on August 23, 1999, the Borrower and certain of its
Subsidiaries, Coho Resources, Inc., a Nevada corporation ("CRI"); Coho Louisiana
Production Company, a Delaware corporation ("CLP"); Coho Exploration, Inc., a
Delaware corporation ("CEX"); Coho Oil & Gas, Inc., a Delaware corporation
("COG"); Interstate Natural Gas Company, a Delaware corporation ("INGC")
(collectively, the "Coho Bankruptcy Entities"); each commenced a case under
Chapter 11 of the U.S. Bankruptcy Code (as consolidated for administrative
purposes pursuant to order of the "Bankruptcy Court" as hereinafter defined, the
"Bankruptcy Case"); and
WHEREAS, the United States Bankruptcy Court for the Northern District
Court of Texas (the "Bankruptcy Court") issued on March 20, 2000 that certain
"Finding of Fact, Conclusions of Law and Order Confirming the Debtors' First
Amended and Restated Chapter 11 Plan of Reorganization" (the "Confirmation
Order") confirming that certain Debtors' First Amended and Restated Chapter 11
Plan of Reorganization, dated February 15, 2000, as amended by (i) that certain
First Modification and Clarification to Debtors' First Amended and Restated
Chapter 11 Plan of Reorganization, dated March 15, 2000, and (ii) that certain
"Second Modification" (as defined in the Confirmation Order) (the "Plan of
Reorganization"); and
WHEREAS, the Coho Bankruptcy Entities were, as of the date of the
commencement of the Bankruptcy Case, parties to that certain Fourth Amended and
Restated Credit Agreement dated December 18, 1997 (the "Existing Loan
Agreement"); and
WHEREAS, pursuant to the terms of the Plan of Reorganization, the
allowed amount of the claims of the bank parties to the Existing Loan Agreement
are to be paid in cash in full on the effective date of the Plan of
Reorganization (the "Allowed Bank Group Claim"); and
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WHEREAS, the Coho entities have requested that the Lenders make loans
to the Borrower upon the Effective Date hereunder in an aggregate amount up to
$250,000,000 to refinance the indebtedness owing under the Existing Loan
Agreement to provide working capital and for general corporate purposes; and
WHEREAS, the Lenders have agreed to make such loans to the Borrower on
the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" has the meaning assigned to such term in the
Preamble.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent to the Lenders.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agent" means, individually, any of the Administrative Agent, the
Documentation Agent or the Syndication Agent; and "Agents" means, collectively,
all of them.
"Allowed Bank Group Claim" has the meaning assigned to such term in the
Fifth Recital.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the
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Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively. If for any reason Administrative Agent shall have determined
(which determination shall be conclusive and binding, absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including, without limitation, the inability or failure of Administrative Agent
to obtain sufficient bids or publications in accordance with the terms hereof,
the Alternate Base Rate shall be the Prime Rate until the circumstances giving
rise to such inability no longer exist.
"Amoco Properties" means the Hydrocarbon Interests and other real and
personal property purchased by Coho Acquisitions Company from Amoco Production
Company pursuant to that certain Purchase and Sale Agreement between Amoco
Production Company and Coho Acquisitions Company, dated November 26, 1997.
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, such office of such Lender (or of an affiliate of such Lender) as
such Lender may from time to time specify to Administrative Agent and the
Borrower as the office by which its Loans of such Type are to be made and/or
issued and maintained.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day with respect to any ABR Loan or
Eurodollar Loan, as the case may be, the applicable rate per annum set forth
below under the caption "ABR Spread" or "Eurodollar Spread", as the case may be,
based upon the Borrowing Base Usage as of the date of determination:
========================================================================================
ABR Eurodollar
Borrowing Base Usage Spread Spread
----------------------------------------------------------------------------------------
Category 1: 200.0 bps 300.0 bps
>75%
----------------------------------------------------------------------------------------
Category 2: 175.0 bps 275.0 bps
>50% but
<=75%
----------------------------------------------------------------------------------------
Category 3: 150.0 bps 250.0 bps
>25% but
<=50%
----------------------------------------------------------------------------------------
Category 4: 125.0 bps 225.0 bps
<=25%
========================================================================================
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;provided, however, during any time when (A) the sum of principal amount of all
outstanding Loans plus the current LC Exposure exceeds (B) the Borrowing Base as
then in effect at such time, then the "ABR Spread" and the "Eurodollar Spread"
set forth above shall be increased by 100 bps.
"Approved Engineer" means Xxxxx Xxxxx Company Petroleum Consultants,
Xxxxxxx & Associates or any other independent engineer reasonably satisfactory
to the Administrative Agent.
"Assignment and Acceptance Agreement" means an assignment and
acceptance entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 9.4), and accepted by the
Administrative Agent, substantially in the form of Exhibit A, or any other form
approved by the Administrative Agent.
"Authorized Officer" means: (a) with respect to any Person that is a
corporation or a limited liability company, the Chairman, the President, Vice
President, Treasurer, Assistant Treasurer, Attorney-In-Fact, Secretary or
Assistant Secretary of such Person or, in the case of a limited liability
company, the managing member thereof and (b) with respect to any person that is
a partnership, the Chairman, the President, Vice President, Treasurer, Assistant
Treasurer, Attorney-In-Fact, Secretary or Assistant Secretary of the general
partner of such Person.
"Availability Period" means the period from and including the Effective
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Bankruptcy Case" has the meaning assigned to such term in the Second
Recital.
"Bankruptcy Court" has the meaning assigned to such term in the Third
Recital.
"Bankruptcy Disclosure Statement" means that certain First Amended and
Restated Disclosure Statement with Respect to the Plan of Reorganization under
Chapter 11 of the United States Bankruptcy Code, with respect to the Coho
Bankruptcy Entities, filed with the Bankruptcy Court on February 14, 2000.
"Benefit Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV or ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" has the meaning assigned to such term in the Preamble and
shall include its successors.
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"Borrowing" means Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Base" means the "Borrowing Base" as determined from time to
time pursuant to Section 2.8.
"Borrowing Base Deficiency" means the amount by which (a) the aggregate
outstanding principal amount of all Loans exceeds (b) the then current Borrowing
Base.
"Borrowing Base Deficiency Notification Date" means the date on which
any notice of a Borrowing Base Deficiency is received by the Borrower.
"Borrowing Base Excess" means the amount by which (a) the amount of the
then current Borrowing Base exceeds (b) the amount of the aggregate Exposures of
the Lenders.
"Borrowing Base Properties" means those Mortgaged Properties and those
other Oil and Gas Properties owned by the Borrower or its Subsidiaries, if any,
that are given value by the Lenders in their determination of the then current
Borrowing Base.
"Borrowing Base Required Lenders" means, at any time, the
Administrative Agent and the Lenders having Exposures and unused Commitments
representing more than 75% of the sum of the total Exposures and unused
Commitments at such time.
"Borrowing Base Usage" means, at the time of determination, the
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate principal amount of all outstanding Loans plus the current LC Exposure
at such time and the denominator of which is the Borrowing Base as then in
effect at such time.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.3.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Houston, Texas or New York City, New York are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar 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 market.
"Capital Expenditures" means, for any period, (a) the additions to
Property, plant and equipment and other capital expenditures of the Borrower and
its consolidated Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations incurred by the Borrower and its
consolidated Subsidiaries during such period.
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"Capital Lease Obligations" of any Person means the 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 are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601, et. seq., as amended from
time to time.
"Change in Control" means a change resulting when any Unrelated Person
or any Unrelated Persons acting together which would constitute a Group together
with any Affiliates or Related Persons thereof (in each case also constituting
Unrelated Persons) shall at any time either (i) Beneficially Own more than
49.99% of the aggregate voting power of all classes of Voting Stock of the
Borrower or (ii) during any period of two consecutive years ending on or after
the Effective Date, as determined as of the last day of each calendar quarter
after the Effective Date, the individuals and their successors nominated by any
of the Standby Lenders (the "Incumbent Directors") who at the beginning of such
period constituted the Board of Directors of the Borrower (other than additions
thereto or removals therefrom from time to time thereafter approved by a vote of
the Board of Directors in accordance with the Borrower's by-laws) shall cease
for any reason to constitute 50% or more of the Board of Directors of the
Borrower. As used herein (a) "Beneficially Own" means "beneficially own" as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, or any
successor provision thereto; provided, however, that, for purposes of this
definition, a Person shall not be deemed to Beneficially Own securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates until such tendered securities are accepted for
purchase or exchange; (b) "Group" means a "group" for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended; (c) "Unrelated Person" means
at any time any Person other than the Borrower or any Subsidiary or the holders
of the Voting Stock of the Borrower as of the Effective Date, including, without
limitation, PPM America Special Investments Fund, L.P., PPM America Special
Investments CBO II, L.P., Appaloosa Management, L.P., Pacholder Associates Inc.,
and Oaktree Capital Management, L.L.C., and other than any trust for any
employee benefit plan of the Borrower or any Subsidiary of the Borrower; (d)
"Related Person" of any Person shall mean any other Person owning (1) 5% or more
of the outstanding common stock of such Person or (2) 5% or more of the Voting
Stock of such Person; and (e) "Voting Stock" of any Person shall mean capital
stock of such Person which ordinarily has voting power for the election of
directors (or persons performing similar functions) of such Person, whether at
all times or only so long as no senior class of securities has such voting power
by reason of any contingency.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender's
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holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.
"Chapter 1D" shall mean Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended).
"Chase" has the meaning assigned to such term in the Preamble.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Coho Bankruptcy Entities" has the meaning assigned to such term in the
Second Recital.
"Collateral" means any and all "Mortgaged Property" and "Collateral",
as defined in all Security Documents.
"Commitment" means, with respect to each Lender, the obligation, if
any, of such Lender to make Loans, and to acquire participations in Letters of
Credit, hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender's Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.6 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.4. The initial amount of each Lender's Commitment shall be set forth
on Schedule 2.1, or in the Assignment and Acceptance Agreement pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $250,000,000.
"Confirmation Order" means the order pursuant to Section 1129 of the
Bankruptcy Code confirming Borrower's Plan of Reorganization.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Current Ratio" means, as of any date a determination thereof is to be
made, the ratio of
(a) the sum of (i) the amount of the consolidated current assets of the
Borrower and its Subsidiaries plus (ii) the amount of the Borrowing Base Excess
to
(b) the amount of the consolidated current liabilities of the Borrower
and its Subsidiaries.
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"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and
environmental matters disclosed in Schedule 3.6.
"Documentation Agent" has the meaning assigned to such term in the
Preamble.
"dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" means, for any period, the consolidated net income of Borrower
and its Subsidiaries for such period (excluding material gains and losses on
sales and retirement of assets, non-cash write downs, charges resulting from
accounting convention changes and deductions for exploration expenses) before
deduction for federal and state taxes, interest expense (including capitalized
interest), depreciation, depletion and amortization expense, costs associated
directly with the reorganization of the Coho Bankruptcy Entities in accordance
with the Plan of Reorganization, and any severance payments or other
bankruptcy-related costs relating to the reorganization of the Coho Bankruptcy
Entities incurred by Borrower and its Subsidiaries during the period from the
Effective Date until the date 90 days following such Effective Date.
"EBITDA to Total Interest Expense Ratio" means, on any date, the ratio
of EBITDA (calculated for the last four consecutive fiscal quarter period then
most recently ended) to Total Interest Expense (calculated for the last four
consecutive fiscal quarter period then most recently ended).
"Effective Date" means the date on which the conditions specified in
Section 4.1 are satisfied (or waived in accordance with Section 9.2).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Financing" means the Rights Offering and/or the Private
Placement.
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"Equity Financing Documents" means the agreements and documents
executed and delivered in connection with the Equity Financing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations and interpretations by the
Internal Revenue Service or the Department of Labor thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Benefit
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Benefit Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Benefit Plan; (d) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Benefit Plan; (e) the receipt by the Borrower
or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Benefit Plan or Benefit Plans or to
appoint a trustee to administer any Benefit Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Benefit Plan or Multiemployer Plan; or
(g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
other Agent, the Issuing Bank, any Lender or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder, (a)
income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
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recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.18(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or is attributable
to such Foreign Lender's failure to comply with Section 2.16(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.16(a).
"Existing Loan Agreement" has the meaning assigned to such term in the
Fourth Recital.
"Exposure" means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender's Loans and its LC Exposure at
such time.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" means that certain Fee Letter dated as of December 9,
1999, by and among the Borrower, the Administrative Agent and Chase Securities
Inc., as such letter may be amended, supplemented, restated or otherwise
modified from time to time in accordance with the Loan Documents.
"Final Order" means an order that is no longer subject to appeal,
certiorari proceeding or other proceeding for review or rehearing, and as to
which no appeal, certiorari proceeding, or other proceeding for review or
rehearing shall then be pending.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer, assistant treasurer or comptroller of the
Borrower.
"Financing Transactions" means (a) the execution, delivery and
performance by each Subsidiary of the Loan Documents to which it is to be a
party, the borrowing of Loans and the use of the proceeds thereof, and (b) (i)
the execution, delivery and performance by each Subsidiary of the Standby Debt
Documents to which it is to be a party, the issuance of the Standby Debt and the
use of the proceeds thereof and/or (ii) the Equity Financing.
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"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"G&A Expenses" means the general and administrative expenses of the
Borrower and its Subsidiaries not attributable to any particular Oil and Gas
Property or Properties, including without limitation, salaries, office rent and
operating expenses, overhead and outside contractors.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Approval" means (a) any authorization, consent, approval,
license, ruling, permit, tariff, rate, certification, waiver, exemption, filing,
variance, claim, order, judgment or decree of, or with, (b) any required notice
to, (c) any declaration of or with, or (d) any registration by or with, any
Governmental Authority.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Governmental Rule" means any statute, law, regulation, ordinance,
rule, judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive, requirement of, or other governmental restriction or any
similar binding form of decision of or determination by, or any binding
interpretation or administration of any of the foregoing by, any Governmental
Authority, whether now or hereafter in effect.
"guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease Property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term "guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
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"Guaranty" means a Guaranty, dated as of the Effective Date, between
the Administrative Agent and a Subsidiary (other than a Foreign Subsidiary) of
the Borrower, substantially in the form of Exhibit D, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms of
this Agreement and the other Loan Documents. The term "Guaranties" shall include
each and every Guaranty executed and delivered by a Subsidiary (other than a
Foreign Subsidiary) hereunder.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including asbestos or asbestos containing materials, polychlorinated biphenyls,
radon gas, infectious or medical wastes and all other substances or wastes of
any nature regulated pursuant to any Environmental Law and any petroleum,
petroleum products or petroleum distillates and associated oil or natural gas
exploration, production and development wastes that are not exempted or excluded
from being defined as "hazardous substances", "hazardous materials", "hazardous
wastes" and "toxic substances" under such Environmental Laws.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement
between Borrower or its Subsidiaries and any Lender or an Affiliate of a Lender.
"Hedging Obligations" means, with respect to any Person, all
liabilities (including but not limited to obligations and liabilities arising in
connection with or as a result of early or premature termination of a Hedging
Agreement, whether or not occurring as a result of a default thereunder) of such
Person under a Hedging Agreement.
"Xxxxx Muse Lawsuit" means that certain lawsuit styled Coho Energy,
Inc. x. Xxxxx, Muse, et al., which was filed in the District Court of Dallas
County, Texas, 68th Judicial District, as removed to the United States
Bankruptcy Court for the Northern District of Texas, Dallas Division, and any
subsequent case related thereto, arising in connection therewith or which is a
continuation thereof.
"Highest Lawful Rate" shall mean, on any day, the maximum nonusurious
rate of interest permitted for that day by whichever of applicable federal or
Texas law permits the higher interest rate, stated as a rate per annum. On each
day, if any, that Chapter 1D establishes the Highest Lawful Rate, the Highest
Lawful Rate shall be the "applicable interest rate ceiling" (as defined in
Chapter 1D) for that day.
"Hydrocarbon Interests" means all rights, titles and interests in and
to oil and gas leases, oil, gas and mineral leases, other Hydrocarbon leases,
mineral interests; mineral servitudes, overriding royalty interests, royalty
interests, net profits interests, production payment interests, and other
similar interests.
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"Hydrocarbons" means, collectively, oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate and all other liquid or
gaseous hydrocarbons and related minerals and all products therefrom, in each
case whether in a natural or a processed state.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of Property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
Property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances, (k)
all obligations of such Person with respect to any arrangement, directly or
indirectly, whereby such Person or its Subsidiaries shall sell or transfer any
material asset, and whereby such Person or any of its Subsidiaries shall then or
immediately thereafter rent or lease as lessee such asset or any part thereof,
(l) all recourse and support obligations of such Person or any of its
Subsidiaries with respect to the sale or discount of any of its accounts
receivable, (m) all obligations of such Person or any of its Subsidiaries with
respect to any arrangement for the purchase of materials, supplies, other
Property or services if such arrangement by its express terms requires that
payment be made by Borrower or such Subsidiary regardless of whether such
materials, supplies, other Property or services are delivered or furnished to
it, (n) all obligations of such Person with respect to Production Payments, (o)
net liabilities of such Person under all Hedging Obligations, (p) all
obligations of such Person under any prepayment for oil and gas production or
other similar agreement, and (q) all obligations of such Person under operating
leases which require such Person or any of its Affiliates to make payments over
the term of such lease based on the purchase price or appraised value of the
Property subject to such lease plus a marginal interest rate, and used primarily
as a financing vehicle for, or to monetize, such Property. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes and Other
Taxes.
"Initial Reserve Report" means the report delivered to the
Administrative Agent dated as of January 1, 2000, with respect to the Borrower's
Oil and Gas Properties, a true and correct copy of which has been delivered to
the Administrative Agent and the Lenders.
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"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of March 31, 2000, by and between the Administrative Agent, as
Administrative Agent for the Lenders, and the Standby Lenders, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the Loan Documents.
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.5.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine or twelve months) thereafter, as the
Borrower may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (ii) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing, (iii) Interest Periods
commencing on the same dates for Loans comprising part of the same Borrowing
shall be of the same duration, and (iv) no Interest Period may end later than
the last day of the Availability Period.
"Issuing Bank" shall have the meaning set forth in the Preamble;
provided, that the Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term "Issuing Bank" shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that
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have not yet been reimbursed by or on behalf of the Borrower at such time. The
LC Exposure of any Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.
"Legal Requirement" shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, now or hereafter in effect.
"Lenders" has the meaning assigned to such term in the Preamble, and
shall include the Persons listed on Schedule 2.1 and any other Person that shall
have become a party hereto pursuant to an Assignment and Acceptance Agreement,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance Agreement.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Leverage Ratio" means, on any date, the ratio of Total Senior Debt
outstanding on such date to EBITDA (calculated for the last four consecutive
fiscal quarter period then most recently ended) as of the end of the most recent
fiscal quarter; provided, however, that for purposes of calculating the Leverage
Ratio (except for calculating the Leverage Ratio used in (i) the definition of
"Prepayment Event" and (ii) in the first proviso of Section 6.13) for any period
ending on or before December 31, 2000, the appropriate EBITDA to be used in such
calculation of the Leverage Ratio shall not be calculated based on the last four
consecutive fiscal quarter period then most recently ended but instead shall be
calculated by (a) for period of calculation ending on or before June 30, 2000,
multiplying the EBITDA for the fiscal quarter ending June 30, 2000 by 4, (b) for
period of calculation commencing July 1, 2000 and ending on or before September
30, 2000, multiplying the EBITDA for the last two consecutive fiscal quarter
period then most recently ended, by 2, and (c) for period of calculation
commencing October 1, 2000 and ending on or before December 31, 2000,
multiplying the EBITDA for the last three consecutive fiscal quarter period then
most recently ended, by 4/3.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate (rounded upwards, if necessary, to the next 1/16 of
1%) appearing on Page 3750 of the Telerate Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m., New
York City time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate (rounded upwards, if necessary, to the
next 1/16 of 1%) at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at
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approximately 11:00 a.m., New York City time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge, collateral assignment
or security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) 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.
"Loan Documents" means (i) this Agreement, the Security Documents, the
Fee Letter, the Intercreditor Agreement and the Hedging Agreements, and (ii) all
instruments, certificates and agreements now or hereafter executed or delivered
to Administrative Agent or any Lender pursuant to any of the foregoing, and all
amendments, modifications, renewals, extensions, increases and rearrangements
of, and substitutions for, any of the foregoing.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition (financial or otherwise) of the
Borrower, or of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower or any other Subsidiary to perform any of its respective
obligations under any Loan Document to which it is a party or (c) the rights of
or benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), including, without limitation, obligations in respect of one
or more Hedging Agreements, or obligations in respect of the Standby Debt, of
any one or more of the Borrower and its Subsidiaries in an aggregate principal
amount exceeding $2,500,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"Maturity Date" means March 31, 2003.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a Mortgage, Deed of Trust, Assignment, Security
Agreement, Financing Statement and Fixture Filing, dated as of the Effective
Date or otherwise delivered pursuant to the Loan Documents, in substantially the
form of Exhibit G, executed and delivered by the Borrower or any of its
Subsidiaries (other than Foreign Subsidiaries), as the case may be, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents. The term
"Mortgage" shall include each Mortgage
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Supplement after execution and delivery of such Mortgage Supplement. The term
"Mortgages" shall include each and every Mortgage executed and delivered by each
of the Borrower and its Subsidiaries hereunder.
"Mortgage Supplement" means a supplement to any Mortgage, in form and
substance reasonably satisfactory to the Administrative Agent, pursuant to which
the Borrower or any of its Subsidiaries (other than Foreign Subsidiaries) will
xxxxx x xxxx on additional Property subject to the terms of such Mortgage, as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms of this Agreement and the other Loan Documents.
"Mortgaged Property" means, initially, each Oil and Gas Property or
parcel of real Property and the improvements thereto owned by any Subsidiary and
identified on Schedule 3.5, and includes each other Oil and Gas Property or
parcel of real Property and improvements thereto with respect to which a
Mortgage is granted pursuant to Sections 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) by the Borrower and the
Subsidiaries, and the amount of any reserves established by the Borrower and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by the chief financial officer of the Borrower).
"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement and each other Loan Document.
"Obligor" means the Borrower or any other Person (other than the
Administrative Agent or any Lender) obligated under any Loan Document.
"Oil and Gas Properties" means the Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all
presently existing or future unitization, pooling agreements and declarations of
pooled units and the units created thereby (including without
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limitation all units created under orders, regulations and rules of any
Governmental Authority having jurisdiction) which may affect all or any portion
of the Hydrocarbon Interests; all operating agreements, joint venture
agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or processing
of Hydrocarbons from or attributable to such Hydrocarbon Interests; all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, the lands covered thereby and all oil in tanks and
all rents, issues, profits, proceeds, products, revenues and other incomes from
or attributable to the Hydrocarbon Interests; all tenements, profits a prendre,
hereditaments, appurtenances and Properties in anywise appertaining, belonging,
affixed or incidental to the Hydrocarbon Interests, Properties, rights, titles,
interests and estates described or referred to above, including any and all
Property, real or personal, now owned or hereinafter acquired and situated upon,
used, held for use or useful in connection with the operating, working or
development of any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal Property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil xxxxx, gas xxxxx, water xxxxx, injection xxxxx or
other xxxxx, buildings, structures, fuel separators, liquid extraction plants,
plant compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.
"Organic Documents" means, relative to any Person, its articles of
organization, formation or incorporation (or comparable document), its by-laws
or operating agreement and all shareholder agreements, partnership agreements,
limited liability company or operating agreements, voting trusts and similar
arrangements applicable to ownership.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or Property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.5;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.5;
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(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII; and
(f) easements, zoning and deed restrictions, rights-of-way and similar
encumbrances on real Property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected Property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
(g) with respect to any Property (other than Borrowing Base Properties)
from which Hydrocarbons may be severed or extracted in commercial quantities,
Liens for farmout, farmin, joint operating, and area of mutual interest
agreements and/or similar arrangements that the Borrower or any Subsidiary
determines in good faith to be necessary for the economic development of such
Property (other than Borrowing Base Properties) and are customary and usual for
the area in which such Property (other than Borrowing Base Properties) is
located;
(h) with respect to any Borrowing Base Property from which Hydrocarbons
may be severed or extracted in commercial quantities, Liens for farmout, farmin,
joint operating, and area of mutual interest agreements and/or similar
arrangements that the Borrower or any Subsidiary determines in good faith to be
necessary for the economic development of such Borrowing Base Property and are
customary and usual for the area in which such Borrowing Base Property is
located; provided, however, that with respect to any such Liens created after
the Effective Date on Property which constitutes Collateral, such Liens shall be
expressly made subordinate to the Liens created by the Security Documents on
terms and conditions reasonably satisfactory to the Administrative Agent and the
Required Lenders;
(i) production payments, advance payment obligations and other similar
burdens now existing or hereafter created on oil, gas or mineral leases or
interests now owned or hereafter acquired by the Borrower or any of its
Subsidiaries; provided, however, that with respect to any such production
payments, advance payment obligations and other similar burdens owned or
acquired after the Effective Date on Property which constitutes Collateral, such
production payments, advance payment obligations and similar burdens shall be
expressly made subordinate to the Liens created by the Security Documents on
terms and conditions reasonably satisfactory to the Administrative Agent and the
Required Lenders;
(j) royalties, overriding royalties, revenue interests, net revenue
interest and other similar burdens now existing or hereafter acquired on oil,
gas or mineral leases or interests now owned or
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hereafter acquired by the Borrower or any of its Subsidiaries and, with respect
to any Borrowing Base Property, are reflected in the most recent Reserve Report;
(k) rights reserved to or vested in any Governmental Authority by the
terms of any right, power, franchise, grant, license or permit, or by any
provision of law, to terminate such right, power, franchise, grant, license or
permit or to purchase, condemn, expropriate or recapture, or to designate a
purchaser of, any of the Property of Borrower or any of its Subsidiaries;
(l) rights reserved to or vested in any Governmental Authority to
control or regulate any Property of the Borrower or of any of its Subsidiaries,
or to use such Property in a manner which does not materially impair the use of
such Property for the purposes for which it is held by the Borrower or any such
Subsidiary;
(m) any obligations or duties affecting the Property of the Borrower or
of any of its Subsidiaries to any municipality or other Governmental Authority
with respect to any franchise, grant, license or permit; and
(n) rights of a common owner of any interest in real estate, right of
way or easement held by the Borrower or any of its Subsidiaries and such common
owner as tenants in common or through other common ownership.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Xxxxx'x;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market or other deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State thereof
which has a combined capital and surplus and undivided profits of not less than
$500,000,000; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above.
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"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any Benefit Plan or Multiemployer Plan.
"Plan of Reorganization" has the meaning assigned to such term in the
third Recital paragraph hereof.
"Pledge Agreement" means a Pledge Agreement dated as of the Effective
Date or otherwise delivered pursuant to the Loan Documents, substantially in the
form of Exhibit E, as amended, supplemented, restated or otherwise modified from
time to time in accordance with the Loan Documents. The term "Pledge Agreements"
shall include each and every Pledge Agreement executed and delivered pursuant to
the Loan Documents.
"Prepayment Event" means:
(a) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any Property or
asset of the Borrower or any Subsidiary, but only to the extent that the Net
Proceeds therefrom have not been applied to repair, restore or replace such
Property or asset within 30 days after such event; or
(b) unless and until the Leverage Ratio of the Borrower and its
Subsidiaries on a pro forma basis after giving effect to the proposed issuance
or receipt (and after giving effect to any prepayments of Loans to be made in
connection with or immediately following such issuance or receipt) is less than
3.50 to 1.00 following the relevant issuance or receipt, (i) the issuance by the
Borrower or any of its Subsidiaries of any Equity Interests, (ii) the receipt by
the Borrower or any Subsidiary of any capital contribution (other than any such
issuance of Equity Interests to, or receipt of any such capital contribution
from, the Borrower or a Subsidiary) or (iii) the receipt by the Borrower or any
of its Subsidiaries of any proceeds or other amounts relating to the Xxxxx Muse
Lawsuit.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City. Without notice to the Borrower or any other
Person, the Prime Rate shall change automatically from time to time as and in
the amount by which said prime rate shall fluctuate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Administrative Agent may make commercial loans
or other loans at rates of interest at, above or below the Prime Rate. For
purposes of this Agreement any change in the Alternate Base Rate due to a change
in the Prime Rate shall be effective on the date such change in the Prime Rate
is announced.
"Private Placement" shall have the meaning ascribed to such term in the
Plan of Reorganization.
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"Production Payments" means a production payment (whether volumetric or
dollar denominated) or similar royalty, overriding royalty, net profits interest
or other similar interest in Oil and Gas Properties, or the right to receive all
or a portion of the production or the proceeds from the sale of production
attributable to such Oil and Gas Properties where the holder of such interest
has recourse solely to such interest and the grantor or transferor thereof has
an express contractual obligation to produce and sell Hydrocarbons from such Oil
and Gas Properties, or to cause such Oil and Gas Properties to be so operated
and maintained, in each case in a reasonably prudent manner.
"Property" means any interest in any kind of Property or asset, whether
real, personal or mixed, or tangible or intangible.
"Proven Reserves" means collectively, "proved oil and gas reserves,"
"proved developed producing oil and gas reserves," "proved developed
non-producing oil and gas reserves" (consisting of proved developed shut-in oil
and gas reserves and proved developed behind pipe oil and gas reserves), and
"proved undeveloped oil and gas reserves," as such terms are defined by the U.S.
Securities and Exchange Commission in its standards and guidelines.
"Register" has the meaning set forth in Section 9.4(c).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means a "release," as such term is defined in CERCLA.
"Remedial Action" means any action under Environmental Laws required to
(a) clean up, remove, treat, dispose of, xxxxx, or in any other way address
pollutants (including Hazardous Materials) in the environment, (b) prevent the
Release or threat of a Release or minimize the further Release of pollutants, or
(c) investigate and determine if a remedial response is needed and to design
such a response and any post-remedial investigation, monitoring, operation, and
maintenance and care.
"Required Lenders" means, at any time, the Administrative Agent and the
Lenders having Exposures and unused Commitments representing more than 66-2/3%
of the sum of the total Exposures and unused Commitments at such time.
"Reserve Report" means the Initial Reserve Report and any other report
delivered pursuant to Section 2.8, in form and substance reasonably satisfactory
to the Administrative Agent, prepared at the sole cost and expense of the
Borrower by an Approved Engineer, which shall evaluate the Proven Reserves and
probable reserves attributable to the Hydrocarbon Interests owned directly by
the Borrower and/or its Subsidiaries and constituting part of the Borrowing Base
Properties, as of the immediately preceding January 1 or July 1. Each Reserve
Report shall set forth volumes, projections of the future rate of production,
Hydrocarbons prices, escalation rates, discount rate
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assumptions, and net proceeds of production, present value of the net proceeds
of production, estimated costs of Remedial Action, operating expenses and
capital expenditures, in each case based upon updated economic assumptions
reasonably acceptable to the Administrative Agent.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other Property, real, personal or mixed) with respect to
any Equity Interests in the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other Property, real, personal or mixed), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Equity Interests in
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such Equity Interests in the Borrower or any Subsidiary on or account of the
complete or partial liquidation or otherwise of the Borrower or any Subsidiary.
"Rights Offering" shall have the meaning ascribed to such term in the
Plan of Reorganization.
"S&P" means Standard & Poor's Ratings Service, a division of
XxXxxx-Xxxx Companies, Inc., and any successor thereto that is a nationally
recognized statistical rating organization.
"Security Agreement" means a Security Agreement, dated as of the
Effective Date or otherwise delivered pursuant to the Loan Documents, between
the Administrative Agent and the Borrower or a Subsidiary (other than a Foreign
Subsidiary) of the Borrower, substantially in the form of Exhibit F, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents. The term
"Security Agreements" shall include each and every Security Agreement executed
and delivered by the Borrower or a Subsidiary.
"Security Documents" means each of the Security Agreements, each of the
Guaranties, each of the Mortgages, each of the Pledge Agreements and each other
security agreement or other instrument or document executed and delivered
pursuant to Section 5.12 or 5.13 hereof or pursuant to the Loan Documents to
secure any of the Obligations.
"Solvent" means, with respect to any Person at any time, a condition
under which (a) the fair saleable value of such Person's assets is, on the date
of determination, greater than the total amount of such Person's liabilities
(including contingent and unliquidated liabilities) at such time; and (b) such
Person is able to pay all of its liabilities as such liabilities mature. For
purposes of this definition (i) the amount of a Person's contingent or
unliquidated liabilities at any time shall be that amount which, in light of all
the facts and circumstances then existing, represents the amount which can
reasonably be expected to become an actual or matured liability, (ii) the "fair
saleable value" of an asset shall be the amount which may be realized within a
reasonable time either through collection or sale of such asset at its regular
market value, and (iii) the "regular market value" of an asset shall be the
amount which a capable and diligent business person could obtain for such asset
from an interested buyer who is willing to purchase such asset under ordinary
selling conditions.
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"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Standby Debt" means the promissory notes, including, without
limitation, the "Notes"(as defined in Standby Debt Documents) and the "PIK
Notes" (as defined in Standby Debt Documents), which may be issued collectively
by the Borrower, Coho Resources, Inc., Coho Louisiana Production Company, Coho
Exploration, Inc., Coho Oil & Gas, Inc., and Interstate Natural Gas Company in
the aggregate principal amount of approximately $72,000,000 and the Indebtedness
represented thereby, which notes and Indebtedness shall be subordinated to the
Obligations on terms and conditions, and to purchasers, acceptable to the
Administrative Agent in accordance with the Intercreditor Agreement.
"Standby Debt Documents" means the Standby Note Agreement, the Standby
Securities Purchase Agreement, the Standby Registration Rights Agreement, the
Intercreditor Agreement and any other indenture(s) or loan agreement(s) under
which the Standby Debt is issued and all other instruments, agreements and other
documents evidencing or governing the Standby Debt or providing for any
guarantee or other right in respect thereof.
"Standby Lender" shall have the meaning ascribed to the term
"Subordinated Lender" in the Intercreditor Agreement.
"Standby Note Agreement" means that certain Standby Note Agreement of
even date herewith between Borrower, Coho Resources, Inc., a Nevada corporation,
Coho Louisiana Production Company, a Delaware corporation, Coho Exploration,
Inc., a Delaware corporation, Coho Oil & Gas, Inc., a Delaware corporation, and
Interstate Natural Gas Company, a Delaware corporation, and the Standby Lenders.
"Standby Registration Rights Agreement" means that certain Standby
Registration Rights Agreement of even date herewith between Borrower and the
Standby Lenders.
"Standby Securities Purchase Agreement" means that certain Standby
Securities Purchase Agreement of even date herewith between Borrower, Coho
Resources, Inc., a Nevada corporation, Coho Louisiana Production Company, a
Delaware corporation, Coho Exploration, Inc., a Delaware
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corporation, Coho Oil & Gas, Inc., a Delaware corporation, and Interstate
Natural Gas Company, a Delaware corporation, and the Standby Lenders.
"Subordinated Debt" means the Standby Debt and any unsecured
Indebtedness of the Borrower which is subordinated, upon terms and conditions
satisfactory to the Administrative Agent and the Required Lenders, in right of
payment to the payment in full in cash of all Obligations.
"Subordinated Debt Documents" means the Standby Debt Documents and any
indenture(s) or loan agreement(s) under which any Subordinated Debt is issued
and all other instruments, agreements and other documents evidencing or
governing any Subordinated Debt or providing for any guarantee or other right in
respect thereof.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Syndication Agent" has the meaning assigned to such term in the
Preamble.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Debt" means all Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis.
"Total Interest Expense" means, with respect to any period for which a
determination thereof is to be made, the sum, without duplication, of (a) the
aggregate amount of all cash interest accrued (whether or not paid) on all
Indebtedness of the Borrower and its Subsidiaries on a consolidated basis plus
(b) the portion of any Capitalized Lease Obligations allocable to cash interest
expense in accordance with GAAP.
"Total Senior Debt" means Total Debt less Subordinated Debt.
"Tunisia Assets" means all rights and interests of Coho Anaguid, Inc.,
a Delaware corporation, in that certain "Permis Anaguid - Convention Cahier Des
Charges et Annexes Entre
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L'etat Tunisien et L'Entreprise Tunisienne D'Activites Petrolieres et Coho
International Limited", as such agreement may be amended, supplemented, restated
or otherwise modified from time to time.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UCC Searches" shall mean central and local current financing statement
searches from each state in which any Collateral or a Borrowing Base Property is
located, and such other jurisdictions as Administrative Agent may request,
covering the Borrower and each Subsidiary, together with copies of all financing
statements listed in such searches.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
SECTION 1.3 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, provided such successors and assigns are permitted by the Loan
Documents, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "Property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.4 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change
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occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.1 Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (a) such Lender's Exposure exceeding such Lender's Commitment or (b)
the sum of the Exposures exceeding the lesser of (i) the Borrowing Base then in
effect and (ii) the aggregate amount of all the Lenders' Commitments. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Loans; provided, however, that,
notwithstanding the foregoing, without the Borrower first terminating all of the
Lenders' Commitments, the Borrower may never prepay any Loans in such an amount
as to reduce the aggregate principal amount of the Borrower's Exposure to less
than one dollar ($1).
SECTION 2.2 Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans
of the same Type made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Sections 2.12 and 2.13, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith; provided that all Borrowings made on the Effective Date
must be made as ABR Borrowings. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $1,000,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total
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Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.19(c). Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of six (6) Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.3 Requests for Borrowings. To request a Borrowing the
Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or
(b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.19(e) may be given not later
than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request substantially in the form of Exhibit B-1 or otherwise in a
form approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.2:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.5.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section 2.3,
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the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.4 Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
2.4 and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.5 Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section 2.5. The
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section 2.5, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.3 if the Borrower
were requesting a Borrowing of the Type resulting from
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such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request substantially in the form of Exhibit B-2 or otherwise
in a form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.2:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
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SECTION 2.6 Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall terminate on
the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.9, the sum of the Exposures would exceed the total
Commitments.
(c) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section 2.6
at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section 2.6 shall be irrevocable; provided that a notice of termination
of the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
SECTION 2.7 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan of such Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section 2.7 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such
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accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.4) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.8 Borrowing Base.
(a) Determination of the Borrowing Base. During the period from the
date hereof to the date of the first determination of the Borrowing Base
pursuant to the further provisions of this Section 2.8, the initial amount of
the Borrowing Base has been set by the Administrative Agent and acknowledged by
the Borrower and agreed to by the Lenders to be $205,000,000.
(b) Annual Scheduled Determinations of the Borrowing Base. Promptly
after January 1 of each calendar year (commencing January 1, 2001), and in any
event prior to March 1 of each calendar year, the Borrower shall furnish to the
Administrative Agent and the Lenders a report in form and substance reasonably
satisfactory to the Administrative Agent, prepared by an Approved Engineer,
which report shall be dated as of January 1 of such calendar year and shall set
forth the proven and producing oil and gas reserves attributable to the
Mortgaged Properties which the Borrower wishes to include in the Borrowing Base
and a projection of the rate of production and net operating income with respect
thereto, as of such date, together with additional data concerning pricing,
hedging, operating costs, quantities and purchasers of production, and other
information and engineering and geological data as the Administrative Agent or
any Lender may reasonably request. Within thirty (30) days after receipt of such
report and information, the Administrative Agent shall make an initial
determination of the amount of credit to be made available to the Borrower
hereunder, and upon such initial determination shall promptly notify the Lenders
in writing of its initial determination of the Borrowing Base. Such initial
determination of the Borrowing Base made by the Administrative Agent shall be so
made by the Administrative Agent in the exercise of its sole discretion in
accordance with the Administrative Agent's customary practices and standards for
oil and gas loans. The Borrowing Base Required Lenders shall approve or reject
the Administrative Agent's initial determination of the Borrowing Base by
written notice to the Administrative Agent; provided, however that failure by
any Lender to confirm in writing, the Administrative Agent's determination of
the Borrowing Base shall be and shall be deemed, a rejection of such
determination. If the Borrowing Base Required Lenders fail to approve any such
determination of the Borrowing Base made by the Administrative Agent hereunder
then, the Borrowing Base shall be determined as soon as practicable by the
Borrowing Base Required Lenders in their sole discretion in accordance with
their respective customary practices and standards for oil and gas loans. Upon
agreement by
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the Administrative Agent and the Borrowing Base Required Lenders of the amount
of credit to be made available to the Borrower hereunder, the Administrative
Agent shall, by written notice to the Borrower and the Lenders, designate the
new Borrowing Base available to the Borrower. Anything herein contained to the
contrary notwithstanding, any determination or redetermination of the Borrowing
Base resulting in any increase of the Borrowing Base in effect immediately prior
to such determination or redetermination shall be approved by all of the Lenders
in their sole and absolute discretion.
(c) Semi-Annual Scheduled Determination of the Borrowing Base. In
addition, promptly after July 1 of each calendar year (commencing July 1, 2000),
and in any event prior to September 1st of each calendar year, the Borrower will
make available for review by the Administrative Agent a report in form and
substance reasonably satisfactory to the Administrative Agent, prepared by the
Borrower' petroleum engineers, which report shall be dated as of July 1 of such
calendar year and shall set forth the proven and producing oil and gas reserves
attributable to the Mortgaged Properties which the Borrower wishes to include in
the Borrowing Base and a projection of the rate of production and net operating
income with respect thereto, as of such date, together with additional data
concerning pricing, hedging, operating costs, quantities and purchasers of
production, and other information and engineering and geological data as the
Administrative Agent or any Lender may reasonably request. Within thirty (30)
days after receipt of such report and information, the Administrative Agent
shall make an initial determination of the new Borrowing Base as of the
preceding July 1. Such initial determination shall be made in the same manner
and be subject to the same approvals as prescribed above with respect to the
annual review, and likewise the Administrative Agent shall communicate the
results of such initial determination to the Lenders. The Borrowing Base
Required Lenders shall approve such determination by written notice to the
Administrative Agent; provided, however that failure by any Lender to confirm in
writing the Administrative Agent's determination of the Borrowing Base shall be,
and shall be deemed, a rejection of such determination. If the Borrowing Base
Required Lenders fail to approve such initial determination of the Borrowing
Base made by the Administrative Agent pursuant to this Section 2.8(c), then the
Borrowing Base Required Lenders shall as soon as practicable make a
determination of the Borrowing Base based on their sole discretion in accordance
with their respective customary practices and standards for oil and gas loans.
Upon agreement by the Administrative Agent and the Borrowing Base Required
Lenders of the amount of credit to be made available to the Borrower hereunder,
the Administrative Agent shall, by written notice to the Borrower and the
Lenders, designate the new Borrowing Base available to the Borrower. Anything
herein contained to the contrary notwithstanding, any determination or
redetermination of the Borrowing Base resulting in any increase of the Borrowing
Base in effect immediately prior to such determination or redetermination shall
be approved by all of the Lenders in their sole and absolute discretion.
(d) Discretionary Determination of the Borrowing Base.
(i) If the Borrower or any of its Subsidiaries either (A)
issues any Equity Interests, (B) receives any capital contribution (other than
any such issuance of Equity Interests to, or receipt of any such capital
contribution from, the Borrower or a Subsidiary) or (C) receives any
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proceeds or other amounts relating to the Xxxxx Muse Lawsuit, the Borrowing Base
shall be immediately redetermined by the Administrative Agent and the Borrowing
Base Required Lenders, in their reasonable discretion. If such redetermination
shall result in a Borrowing Base Deficiency, then in lieu of any other provision
of this Section, the Borrower shall immediately make a payment with respect to
the Obligations in an amount equal to such Borrowing Base Deficiency.
(ii) In addition to the foregoing determinations or
redeterminations of the Borrowing Base, the Borrowing Base Required Lenders
shall have the right to redetermine the Borrowing Base at their sole discretion
at any time and from time to time but not more often than one (1) time during
any calendar year. If the Borrowing Base Required Lenders shall elect to make a
discretionary redetermination of the Borrowing Base pursuant to the provisions
of this Section 2.8(d), the Borrower shall within thirty (30) days of receipt of
a request therefor from the Administrative Agent, deliver to the Administrative
Agent such updated engineering, production, operating and other data as the
Administrative Agent or any Lender may reasonably request. The Administrative
Agent and the Borrowing Base Required Lenders shall approve and designate the
new Borrowing Base in accordance with the procedures and standards described in
Section 2.8(b).
(e) Discretionary Determination of the Borrowing Base by the Borrower.
In addition to the foregoing determinations of the Borrowing Base, the Borrower
may request a redetermination of the Borrowing Base at any time and from time to
time, but not more often than one (1) time during any calendar year, by
delivering a written request to the Administrative Agent, together with such
updated engineering, production, operating and other data as the Administrative
Agent or any Lender may reasonably request. Each such discretionary
redetermination of the Borrowing Base shall be made in the same manner and in
accordance with the procedures and standards set forth above by adjusting the
Borrowing Base then in effect. The Administrative Agent shall have thirty (30)
days following receipt of such requested information to make an initial
redetermination of the Borrowing Base, and the Administrative Agent and the
Borrowing Base Required Lenders shall approve and designate the new Borrowing
Base in accordance with the procedures and standards described in Section
2.8(b).
(f) General Provisions With Respect to the Borrowing Base. For the
purposes of this Agreement, the Borrowing Base to be certified by the
Administrative Agent and the Lenders from time to time shall be the lesser of
(i) the aggregate principal amount of the Loans that the Administrative Agent
and the Lenders (or the Borrowing Base Required Lenders, as applicable) are
willing to have outstanding to the Borrower, and (ii) the amount requested by
the Borrower. The determination of the Borrowing Base shall be made by the
Administrative Agent and the Lenders (or the Borrowing Base Required Lenders, if
applicable), taking into consideration the estimated value of the Hydrocarbon
Interests owned by the Borrower and its Subsidiaries as reflected in the most
recent Reserve Report delivered hereunder and any other relevant information
obtained by or delivered to the Administrative Agent or any other Lender Party
(as defined in the Security Agreement), all in accordance with the other
provisions of this Section 2.8 in the exercise of their sole and absolute
discretion in accordance with their customary practices for oil and gas loans as
in effect from time to time.
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SECTION 2.9 Prepayment of Loans.
(a) The Borrower shall have the right at any time and from time to time
to prepay any Borrowing in whole or in part, subject to the requirements of this
Section.
(b) In the event and on such occasion that the sum of the aggregate
Exposures exceeds the total Commitments, the Borrower shall forthwith prepay
Borrowings (or, if no such Borrowings are outstanding, deposit cash collateral
in an account with the Administrative Agent pursuant to Section 2.19(j) in an
aggregate amount equal to such excess.
(c) Upon the occurrence of a Borrowing Base Deficiency, the
Administrative Agent may notify the Borrower of such Borrowing Base Deficiency.
Within ten (10) days from and after the Borrowing Base Deficiency Notification
Date, the Borrower shall notify the Administrative Agent that it shall take one
of the following actions:
(i) execute and deliver to the Administrative Agent within
ninety (90) days (or 120 days with respect to any determination of the
existence of a Borrowing Base Deficiency resulting from the semi-annual
determination of the Borrowing Base scheduled for July 1, 2000) from
and after the Borrowing Base Deficiency Notification Date, supplemental
or additional Security Documents, in form and substance reasonably
satisfactory to the Administrative Agent and its counsel, securing
payment of the Obligations and covering other Properties of the
Borrower or its Subsidiaries, including additional Oil and Gas
Properties directly owned by the Borrower or one or more of the
Borrower's Subsidiaries which are not then covered by any Loan Document
and which are of a type and nature satisfactory to the Administrative
Agent and the Borrowing Base Required Lenders, and having a value (as
determined by the Administrative Agent and the Borrowing Base Required
Lenders in their sole discretion), in addition to other Oil and Gas
Properties already subject to a Mortgage, sufficient to eliminate the
Borrowing Base Deficiency, all as more particularly described in
Section 5.13(d) and (e); or
(ii) make a payment with respect to the Obligations, in an
aggregate principal amount sufficient to eliminate such Borrowing Base
Deficiency within ninety (90) days (or 120 days with respect to any
determination of the existence of a Borrowing Base Deficiency resulting
from the semi-annual determination of the Borrowing Base scheduled for
July 1, 2000) after the Borrowing Base Deficiency Notification Date
(and the Borrower shall make such payment within such 90-day (or if
applicable, 120-day) period).
If the Borrower shall elect to execute and deliver (or cause one or more of the
Borrower's Subsidiaries to execute and deliver) supplemental or additional
Security Documents to the Administrative Agent pursuant to clause (i), it shall
provide the Administrative Agent with descriptions of the additional assets to
be collaterally assigned (together with current valuations, engineering reports,
Security Documents described in clause (i) and title evidence applicable thereto
and other documents including opinions of counsel, each of which shall be in
form and substance
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reasonably satisfactory to the Administrative Agent) within ninety (90) days (or
120 days with respect to any determination of the existence of a Borrowing Base
Deficiency resulting from the semi-annual determination of the Borrowing Base
scheduled for July 1, 2000) after the Borrowing Base Deficiency Notification
Date. Such supplemental or additional Security Documents shall be subject to the
terms of Section 5.13. If the Borrower fails to give the required notice that it
shall take any of the actions described in clause (c) within such ten (10) day
period or take the applicable action in subclauses (i) or (ii) above within such
ninety (90) day (or as applicable, 120-day) period, in each case from and after
the Borrowing Base Deficiency Notification Date, then without any necessity for
notice to the Borrower or any other person, the Borrower shall become obligated
immediately to pay Obligations in an aggregate principal amount equal to the
applicable Borrowing Base Deficiency.
(d) If the Borrower or any Subsidiary sells, transfers or otherwise
disposes of Borrowing Base Properties that have been given a value in the most
recent determination of the Borrowing Base in the aggregate for the Borrower and
such Subsidiaries in excess of $5,000,000 during the period from the effective
date of the most recent determination of the Borrowing Base pursuant to Section
2.8 until the effective date of the next determination of the Borrowing Base,
the Borrowing Base shall be immediately reduced, until the effective date of the
next determination of the Borrowing Base, by an amount reflecting the Borrowing
Base valuation of the Oil and Gas Properties so sold, transferred or disposed
of, as reasonably determined by the Administrative Agent. If such reduction
shall result in a Borrowing Base Deficiency, then in lieu of the provisions of
Section 2.9(c), the Borrower shall immediately make a payment with respect to
the Obligations in an amount equal to such Borrowing Base Deficiency. In
addition to and cumulative of the foregoing, if a Borrowing Base Deficiency
exists prior to such sale, transfer or other disposition of assets, then in lieu
of the provisions of Section 2.9(c), the Borrower shall, with the written
consent of the Lenders, immediately make a payment with respect to the
Obligations in an aggregate principal amount equal to the lesser of (i) the
amount of the Borrowing Base Deficiency (after giving effect to the applicable
sale, transfer or other disposition) or (ii) 100% of the Net Proceeds realized
from the applicable sale, transfer or other disposition. Notwithstanding the
foregoing, nothing contained in this Section 2.9(d) shall be construed to permit
any sale or disposition which is otherwise prohibited under Section 6.5 of this
Agreement or any other term or provision of this Agreement or any other Loan
Document.
(e) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, immediately after such Net Proceeds are
received, prepay Borrowings in an aggregate amount equal to such Net Proceeds.
(f) Notwithstanding anything to the contrary in this Agreement, if the
Borrower or any of its Subsidiaries raises capital through the issuance of
Equity Interests or the issuance of any Subordinated Debt, the Net Proceeds of
such issuance will first be applied to cure any existing or resulting Borrowing
Base Deficiency.
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(g) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (h) of this Section.
(h) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
provided that, if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.6, then such notice of prepayment may be revoked if such notice of termination
is revoked in accordance with Section 2.6. Promptly following receipt of any
such notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.2, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.
SECTION 2.10 Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at the rate of 50
basis points per annum on the average daily unused amount of such Lender's pro
rata portion of the Borrowing Base during the period from and including the date
hereof to but excluding the date on which such Lender's Commitment hereunder
terminates. Accrued commitment fees shall be payable in arrears on the last day
of March, June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate then in effect
and applicable to interest on Eurodollar Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period
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from and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Commitments terminate and any such
fees accruing after the date on which the Commitments terminate shall be payable
on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within ten (10) days after demand. All fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution in accordance with the
Fee Letter and the Loan Documents and, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.
SECTION 2.11 Interest.
(a) Subject to Section 9.16, the Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) Subject to Section 9.16, the Loans comprising each Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, but subject to Section 9.16, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section 2.11 or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section 2.11.
(d) Subject to Section 9.16, accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section 2.11 shall be payable on demand of the
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Administrative Agent or the Required Lenders (through the Administrative Agent),
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Loan prior to the end of the Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(e) Subject to Section 9.16, all interest hereunder shall be computed
on the basis of a year of 360 days, except that interest computed by reference
to the Alternate Base Rate at times when the Alternate Base Rate is based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.12 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period; or
(c) the Administrative Agent determines in good faith (which
determination shall be conclusive) that by reason of circumstances affecting the
interbank dollar market generally, deposits in United States dollars in the
relevant interbank dollar market are not being offered for the applicable
Interest Period and in an amount equal to the amount of the Eurodollar Loan
requested by the Borrower,
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
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SECTION 2.13 Illegality.
(a) Notwithstanding any other provision of this Agreement to the
contrary, if (i) by reason of the adoption of any applicable Legal Requirement
or any change in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by any Lender
with any request or directive (whether or not having the force of law) of any
central Lender or other Governmental Authority or (ii) circumstances affecting
the relevant interbank dollar market or the position of a Lender therein shall
at any time make it unlawful or impracticable in the sole discretion of a Lender
exercised in good faith for such Lender or its Applicable Lending Office to (A)
honor its obligation to make Eurodollar Loans hereunder, or (B) maintain
Eurodollar Loans hereunder, then such Lender shall promptly notify the Borrower
thereof through Administrative Agent and such Lender's obligation to make or
maintain Eurodollar Loans hereunder shall be suspended until such time as such
Lender may again make and maintain Eurodollar Loans (in which case the
provisions of Section 2.13(b) hereof shall be applicable). Before giving such
notice pursuant to this Section 2.13, such Lender will designate a different
available Applicable Lending Office for the Eurodollar Loans of such Lender or
take such other action as the Borrower may request if such designation or action
will avoid the need to suspend such Lender's obligation to make Eurodollar Loans
hereunder and will not, in the sole opinion of such Lender exercised in good
faith, be disadvantageous to such Lender (provided, that such Lender shall have
no obligation so to designate an Applicable Lending Office for Eurodollar Loans
located in the United States of America).
(b) If the obligation of any Lender to make or maintain Eurodollar
Loans shall be suspended pursuant to Section 2.13(a) hereof, all Loans which
would otherwise be made by such Lender as Eurodollar Loans shall be made instead
as ABR Loans (and, if such Lender so requests by notice to the Borrower with a
copy to Administrative Agent, each Eurodollar Loan of such Lender then
outstanding shall be automatically converted into an ABR Loan on the date
specified by such Lender in such notice) and, to the extent that Eurodollar
Loans are so made as (or converted into) ABR Loans, all payments of principal
which would otherwise be applied to such Eurodollar Loans shall be applied
instead to such ABR Loans.
SECTION 2.14 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
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and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank such additional amount or
amounts as will compensate such Lender or the Issuing Bank for such additional
costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's capital or on the capital of such Lender's or Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made by, or participations in Letters of Credit held by, such Lender, or the
Letters of Credit issued by the Issuing Bank, to a level below that which such
Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's or the Issuing Bank's policies and the policies of
such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth in
reasonable detail the basis for the amount or amounts necessary to compensate
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section 2.14 shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within thirty (30)
days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section 2.14 shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section 2.14 for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.15 Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay
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any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.9(f) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.18, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section 2.15 shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.16 Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder or under any other Loan Document shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; provided that
if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.16) the Administrative Agent and
Lender or Issuing Bank (as the case may be) and each Lender receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent or such Lender or the Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 2.16) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental
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Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or by the Administrative Agent on its own behalf or
on behalf of a Lender shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Each Lender that is not organized under the laws of the United
States of America or a state thereof agrees that it will deliver to the Borrower
and the Administrative Agent two (2) duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 certifying in either case that such
Lender is entitled to receive payments from the Borrower under the Loan
Documents without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to the Borrower and the Administrative Agent two (2) additional copies
of such form (or a successor form) on or before such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the
Administrative Agent, in each case certifying that such Lender is entitled to
receive payments from the Borrower under the Loan Documents without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) 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 the Borrower and the Administrative Agent that it is not
capable of receiving such payments without any deduction or withholding of
United States federal income tax.
SECTION 2.17 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest or
fees, or of amounts payable under Sections 2.14, 2.15 or 2.16, or otherwise)
prior to the time expressly required hereunder or under such other Loan Document
for such payment (or, if no such time is expressly required, prior to 12:00
noon, New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except payments to be made
directly to the Issuing Bank as expressly provided herein and except that
payments pursuant to Sections 2.14, 2.15, 2.16 and 9.3 shall be made directly to
the Persons entitled thereto and payments pursuant to other Loan Documents shall
be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the
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appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the
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Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Sections 2.4(b), 2.17(d), 2.19(d) or (e) or 9.3(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.18 Mitigation Obligations. If any Lender requests
compensation under Section 2.14, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.16, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Sections 2.14 or 2.16, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
SECTION 2.19 Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit for its own account, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Availability Period. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to
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prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $10,000,000 and (ii) the total Exposures shall not exceed the lesser of
the total Commitments and the Borrowing Base then in effect.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.3 that such payment be financed with an ABR
Borrowing in an equivalent amount and, to the extent so financed, the Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting
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ABR Borrowing. If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section
2.4 with respect to Loans made by such Lender (and Section 2.4 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of ABR Loans as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Agents, the Lenders nor the Issuing Bank, nor any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with
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respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.11(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.10(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 66-2/3%
of the total LC Exposure) demanding the deposit of cash collateral
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pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of Article VII. The Borrower also shall
deposit cash collateral pursuant to this paragraph as and to the extent required
by Section 2.9(b). Each such deposit shall be held by the Administrative Agent
as collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than 66-2/3%
of the total LC Exposure), be applied to satisfy other obligations of the
Borrower under this Agreement. If the Borrower is required to provide an amount
of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of Default have been
cured or waived. If the Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 2.9(b), such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower as and to the extent
that, after giving effect to such return, the Borrower would remain in
compliance with Section 2.9(b) and no Event of Default shall have occurred and
be continuing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Administrative Agent to enter
into this Agreement and to make Loans hereunder, the Borrower represents and
warrants to the Lenders and the Administrative Agent as set forth in this
Article III.
SECTION 3.1 Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
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SECTION 3.2 Authorization; Enforceability. The execution, delivery and
performance by the Borrower of this Agreement and each other Loan Document
executed or to be executed by it, and the execution, delivery and performance by
each other Obligor of each Loan Document executed or to be executed by it, are
within the Borrower's and each such Obligor's corporate, limited liability
company and/or partnership powers, and have been duly authorized by all
necessary corporate, limited liability company and/or partnership action, and if
required, stockholder, member and/or partner action. This Agreement has been
duly executed and delivered by the Borrower and constitutes, and each other Loan
Document executed or to be executed by any Obligor, when executed and delivered
by such Obligor, will constitute, a legal, valid and binding obligation of the
Borrower or such Obligor (as the case may be), enforceable in accordance with
their respective terms.
SECTION 3.3 Approvals; No Conflicts. Except as set forth in Schedule
3.3 hereto, the execution, delivery and performance by the Borrower of this
Agreement and each other Loan Document executed or to be executed by it, and the
execution, delivery and performance by each other Obligor of each Loan Document
executed or to be executed by it, (a) do not require any Governmental Approval
or third party approvals, except such as have been obtained or made and are in
full force and effect and except filings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any applicable Governmental Rule
or the Organic Documents of the Borrower or any such Obligor or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any such
Obligor or its assets, or give rise to a right thereunder to require any payment
to be made by the Borrower or any such Obligor and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any such
Obligor except Liens created under the Loan Documents.
SECTION 3.4 Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders and the
Administrative Agent copies of its consolidated balance sheet and statements of
income, stockholders equity and cash flows as of and for the fiscal year ended
December 31, 1999, audited by Xxxxxx Xxxxxxxx LLP, independent public
accountants. Such financial statements have been prepared in accordance with
GAAP consistently applied, and present fairly, in all material respects, the
financial position and results of operations and cash flows of the Borrower and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments in the case of the
statements referred to in clause (i) above.
(b) The Borrower has heretofore furnished to the Lenders and the
Administrative Agent copies of its pro forma consolidated balance sheet as of
March 31, 2000, prepared giving effect to the Financing Transactions as if the
Financing Transactions had occurred on such date. Such pro forma consolidated
balance sheet (i) has been prepared in good faith based on the same assumptions
used to prepare the pro forma financial statements included in the consolidated
balance sheets and statements of income, stockholders equity and cash flows as
of and for the fiscal year ended December 31, 1999 described in paragraph (a)
above (which assumptions are believed by the
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Borrower to be reasonable), and (ii) is based on the best information available
to the Borrower after due inquiry.
(c) Except as set forth in Schedule 3.4 or reflected in the financial
statements and information referred to in Section 3.4(a), neither the Borrower
nor any of its Subsidiaries has any contingent liabilities, unusual long-term
commitments or unrealized losses.
(d) Since December 31, 1999, there has been no material adverse change
in the business, affairs, assets, operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.5 Properties.
(a) Each of the Borrower and its Subsidiaries has good and defensible
title to, or valid leasehold interests in, or has the right to use pursuant to
valid licenses all its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including its Mortgaged Properties,
trademarks, tradenames, copyrights, patents and other intellectual Property, in
each case free and clear of all Liens, charges, encumbrances and claims
(including infringement claims with respect to patents, trademarks, copyrights
and the like), subject, in each case, only to Liens permitted by Section 6.2.
Schedule 3.5 sets forth the address of each real Property (other than Oil and
Gas Properties) that is owned or leased by the Borrower or any of its
Subsidiaries.
(b) Except as set forth in Schedule 3.5, as of the Effective Date,
neither the Borrower nor any of its Subsidiaries has received notice of, or has
knowledge of, any pending or contemplated condemnation proceeding affecting any
Mortgaged Property or any sale or disposition thereof in lieu of condemnation.
Except as set forth in Schedule 3.5, neither any Mortgaged Property nor any
interest therein is subject to any right of first refusal, option or other
contractual right to purchase such Mortgaged Property or interest therein.
After giving full effect to all Liens permitted under Section 6.2, the
Borrower and its Subsidiaries own the net interests in Hydrocarbons produced
from the Oil and Gas Properties as reflected in the most recent Reserve Report,
and neither the Borrower nor any of its Subsidiaries is obligated to bear costs
or expenses in respect of the Oil and Gas Properties in excess of its working
interest percentage as reflected in the most recent Engineering Report.
SECTION 3.6 Litigation Matters.
(a) Except for such actions, suits or proceedings set forth in Schedule
3.6 hereto and any other actions, suits or proceedings from time to time
disclosed in writing by the Borrower or its Subsidiaries to the Administrative
Agent after the Effective Date (collectively, the "Disclosed Matters"), there
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries or any of their
respective properties, businesses, assets or
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revenues, (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or (ii)
that involve any of the Loan Documents or the transactions contemplated hereby
and thereby.
(b) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in a Material Adverse Effect.
SECTION 3.7 Compliance with Laws and Agreements. Each of the Borrower
and its Subsidiaries is in compliance with all Governmental Rules applicable to
it or its Property and all indentures, agreements and other instruments binding
upon it or its Property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.8 Investment and Holding Company Status. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, or
(b) a "holding company", or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.
SECTION 3.9 Taxes. Except as set forth in Schedule 3.9, each of the
Borrower and its Subsidiaries has timely filed or caused to be filed all Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10 ERISA Matters. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $500,000 the fair market value of the assets of such Plan,
and the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $500,000 the
fair market value of the assets of all such underfunded Plans.
SECTION 3.11 Disclosure. The Borrower has disclosed to the Lenders and
the Administrative Agent all agreements, court orders, judgments, instruments
and corporate or other restrictions to which the Borrower or any of its
Subsidiaries is subject, and all other matters known
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to any of them relating to any of the foregoing, which agreements, court orders,
judgments, instruments, restrictions and other matters individually or in
aggregate could reasonably be expected to result in a Material Adverse Effect.
None of the documents, reports, financial statements, certificates or other
information furnished by or on behalf of any Subsidiary to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or any
other Loan Document or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12 Subsidiaries. Schedule 3.12 sets forth the name of, and
the ownership interest of the Borrower and each Subsidiary in, each Subsidiary
of the Borrower and any Subsidiary of each Subsidiary, respectively, as of the
Effective Date. As of the Effective Date, the Borrower does not have any
subsidiaries other than the Subsidiaries identified in Schedule 3.12.
SECTION 3.13 Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Borrower and its Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid.
SECTION 3.14 Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been in
material violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. All payments due
from the Borrower or any Subsidiary, or for which any claim may be made against
the Borrower or any Subsidiary, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on the books of the Borrower or such Subsidiary.
SECTION 3.15 Priority; Security Interest. The Obligations are and shall
be at all times secured by a first priority Lien in all Collateral, except as a
result of a Permitted Encumbrance or a Lien permitted by Section 6.2(c). The
Borrower has good, sufficient and legal title to, or leasehold interest in, or
right to use (pursuant to a valid license), all Collateral and the Borrowing
Base Properties free and clear of all Liens, except Liens permitted by Section
6.2. As of the Effective Date, all filings, notices, recordings and other action
necessary to perfect the Liens in the Collateral created pursuant to the Loan
Documents have been made, given or accomplished or arrangements for the
completion thereof satisfactory to the Administrative Agent and its counsel have
been made.
SECTION 3.16 Environmental Matters. Except as set forth in Schedule
3.16 or, after the Effective Date, otherwise disclosed in writing by the
Borrower to the Administrative Agent:
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(a) All facilities and Property (including to the Borrower's knowledge
underlying groundwater) owned or leased by the Borrower or any of its
Subsidiaries have been, and continue to be, owned or leased by the Borrower or
any of its Subsidiaries in material compliance with all Environmental Laws;
(b) There are no pending or threatened (i) claims, complaints, notices
or requests for information received by the Borrower or any of its Subsidiaries
with respect to any alleged violation of any Environmental Law, or (ii)
complaints or notices to the Borrower or any of its Subsidiaries regarding
instances which have a reasonable likelihood of having potential liability under
any Environmental Law;
(c) There have been no Releases of Hazardous Materials at, on or under
any Property now or previously owned or leased by the Borrower or any of its
Subsidiaries;
(d) The Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations required by Environmental Laws;
(e) No Property now or previously owned or leased by the Borrower or
any of its Subsidiaries is listed or proposed for listing (with respect to owned
Property only) on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any analogous state list of sites requiring investigation or
clean-up;
(f) There are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any Property now or previously
owned or leased by the Borrower or any of its Subsidiaries;
(g) Neither Borrower nor any Subsidiary of the Borrower has directly
transported or directly arranged for the transportation of any Hazardous
Material to any site which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any analogous state
list or which is the subject of federal, state or local enforcement actions or
other investigations which may lead to material claims relating to potential
liability under any Environmental Law (including CERCLA) against the Debtor, or
any such Debtor or Subsidiary for any remedial work, damage to natural resources
or personal injury, including claims under CERCLA; and
(h) There are no polychlorinated biphenyls or friable asbestos present
at any Property now or previously owned or leased by the Borrower or any of its
Subsidiaries.
SECTION 3.17 Solvency. Immediately after the consummation of the
Financing Transactions to occur on the Effective Date and immediately following
the making of each Loan made on the Effective Date and after giving effect to
the application of the proceeds of such Loans, (a) the fair value of the assets
of each Obligor, at a fair valuation, will exceed its debts and liabilities,
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subordinated, contingent or otherwise; (b) the present fair saleable value of
the Property of each Obligor will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Obligor will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; (d) each Obligor will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date, and (e) the Borrower and the Borrower and its
Subsidiaries, on a consolidated basis, are Solvent.
SECTION 3.18 Year 2000. The Year 2000 date change has not resulted in
disruption of the Borrower's and its Subsidiaries' computer hardware, software,
databases, systems and other equipment containing embedded microchips (including
systems and equipment supplied by others or with which the Borrower's or its
Subsidiaries' systems interface), or to the Borrower's or its Subsidiaries'
operations or business systems, or to the best of the Borrower's and its
Subsidiaries' knowledge, to the operations or business systems of the Borrower's
major vendors, customers, suppliers and counterparties. Borrower has no reason
to believe that liabilities and expenditures related to the Year 2000
date-change (including, without limitation, costs caused by reprogramming
errors, the failure of others' systems or equipment, and the potential
liability, if any, of the Borrower or its Subsidiaries for Year 2000 related
costs incurred or disruption experienced by others) will result in a Default or
a Material Adverse Effect.
SECTION 3.19 Claims and Liabilities. Except as disclosed to the
Administrative Agent in Schedule 3.19, neither the Borrower nor any of its
Subsidiaries has accrued any liabilities under gas purchase contracts for gas
not taken, but for which it is liable to pay if not made up and which, if not
paid, would have a Material Adverse Effect. Except as disclosed to the
Administrative Agent in Schedule 3.19, no claims exist against the Borrower or
any of its Subsidiaries for gas imbalances which claims if adversely determined
would have a Material Adverse Effect. No purchaser of product supplied by the
Borrower or any of its Subsidiaries has any claim against the Borrower or any of
its Subsidiaries for product paid for, but for which delivery was not taken as
and when paid for, which claim if adversely determined would have a Material
Adverse Effect.
SECTION 3.20 Delivery of Alternative Financing Documentation. The
Administrative Agent has received complete copies of the Equity Financing
Documents and the Standby Debt Documents (including all exhibits, schedules and
disclosure letters referred to therein or delivered pursuant thereto, if any)
and all amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof. None of such documents and agreements
has been amended or supplemented, nor have any of the provisions thereof been
waived, except pursuant to a written agreement or instrument which has
heretofore been delivered to Agent.
SECTION 3.21 Plan of Reorganization. The Administrative Agent has
received the Confirmation Order and the Confirmation Order has become a Final
Order, unless the condition precedent set forth in Section 4.1(p) has been
waived with the consent of all Lenders. All other
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conditions precedent to the confirmation and effectiveness of the Plan of
Reorganization have been satisfied or waived.
ARTICLE IV
CONDITIONS
SECTION 4.1 Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall become
effective on the date on which each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.2):
(a) Certain Loan Documents. The Administrative Agent (or its counsel)
shall have received from each party thereto either a counterpart of each of the
following documents duly executed on behalf of such party or written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of such document) that each such party
has duly executed for delivery to the Administrative Agent a counterpart of each
of the following documents and any and all schedules, exhibits or other
attachments to any such document must be acceptable to the Administrative Agent
in its sole and absolute discretion: this Agreement; the Fee Letter; a Guaranty
from each Subsidiary of the Borrower (other than a Foreign Subsidiary); and to
the extent to which the Borrower or any of its Subsidiaries is a party, each
other Loan Document referred to in clause (i) of the definition of such term
and, to the extent requested prior to the Effective Date, each other Loan
Document referred to in clause (ii) in the definition of such term.
(b) Opinions of Counsels. The Administrative Agent shall have received
a favorable written opinion (addressed to the Administrative Agent and the
Lenders and dated the Effective Date), in form and substance satisfactory to the
Administrative Agent, of each of (i) Fulbright & Xxxxxxxx, L.L.P., counsel for
the Borrower, and (ii) local counsel in each jurisdiction where a Mortgaged
Property is located, and, in the case of each such opinion required by this
paragraph, covering such matters relating to the Obligors, the Loan Documents as
the Required Lenders shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinions.
(c) Organizational Documents. The Administrative Agent shall have
received a certificate of the Secretary, Assistant Secretary or Vice President
or other Authorized Officer of each Obligor and, in the case of clauses (i) and
(iii) below, each Subsidiary which is not an Obligor, dated as of the Effective
Date, certifying:
(i) that attached to such certificate is a true and complete
copy of the by-laws or other Organic Documents, as the case may be, of
such Subsidiary as in effect on the date of such certificate and, (A)
in the case of CRI, that attached to such certificate is a true and
complete copy of a certificate from the appropriate Governmental
Authority of the State of Mississippi and the State of Texas certifying
that CRI is duly qualified and in good standing to transact business in
the State of Mississippi or the State of Oklahoma, as the case may be,
as a foreign corporation, (B) in the case of COG, that attached to such
certificate is a true and
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complete copy of a certificate from the appropriate Governmental
Authority of the State of Oklahoma certifying that COG is duly
qualified and in good standing to transact business in the State of
Oklahoma as a foreign corporation, (C) in the case of CEX, that
attached to such certificate is a true and complete copy of a
certificate from the appropriate Governmental Authority of the State of
Mississippi certifying that CEX is duly qualified and in good standing
to transact business in the State of Mississippi as a foreign
corporation, and (D) in the case of the Borrower or any Subsidiary,
that attached to such certificate is a true and complete copy of a
certificate from the appropriate Governmental Authority of each state
(without duplication) certifying that the Borrower or such Subsidiary
is duly qualified and in good standing to transact business in such
state as a foreign corporation, if the failure to be so qualified or in
good standing could reasonably be expected to have a Material Adverse
Effect;
(ii) that attached to such certificate is a true and complete
copy of resolutions duly adopted by the board of directors or
management committee of such Obligor, as applicable, authorizing the
execution, delivery and performance of such of the Loan Documents to
which such Obligor is or is intended to be a party;
(iii) that attached thereto is a copy of the certificate of
incorporation or formation, as the case may be, of the Borrower or such
Subsidiary, in each case certified as of a recent date by the Secretary
of State (or equivalent Governmental Authority, in the case of Foreign
Subsidiaries) of its jurisdiction of incorporation or formation, and a
certificate as to the good standing of and payment of franchise taxes
by the Borrower or each such Subsidiary, if applicable, dated as of a
recent date; and that such certificate of incorporation or certificate
of formation, as the case may be, has not been amended since the date
of such certified copy;
(iv) as to the incumbency and specimen signature of each
officer of such Obligor executing such of the Loan Documents to which
such Obligor is or is intended to be a party;
(d) Officer's Certificates. The Administrative Agent shall have
received the following:
(i) A certificate of an Authorized Officer of the Borrower,
dated as of the Effective Date, certifying that: (A) the
representations and warranties of the Borrower contained in each of the
Loan Documents to which it is a party are true and correct on and as of
such date after giving effect to such funding and to the intended use
thereof) in all material respects as if made on and as of such date
(or, if stated to have been made expressly as of an earlier date, were
true and correct in all material respects as of such date); (B) no
Default or Event of Default has occurred and is continuing on such
date; (C) no act, event or circumstance affecting the Borrower or any
Subsidiary has arisen since the date of the financial statements of the
Borrower described in Section 3.4 that would reasonably be expected to
result in a Material Adverse Effect; (D) except as disclosed in
Schedule 3.6, there
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is no action, suit or proceeding at law or in equity or by or before
any Governmental Authority or arbitral tribunal now pending or, to the
best knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or with respect to any Loan Document, which would reasonably
be expected to result in a Material Adverse Effect; (E) the conditions
precedent to be performed by the Borrower and its Subsidiaries
described in Sections 4.1(j), (l), (m), (n), (o), (p), (r), (t), (u),
(v), (x) and (y) have been satisfied in accordance with this Agreement
(provided that, for purposes of the certification as to the conditions
precedent set forth in Sections 4.1(j), (m), (p), (t), (u), (x) or (v),
the Borrower shall not be required to certify as to the Administrative
Agent's or its counsel's satisfaction or acceptance of such conditions
precedent); and (F) the Liens granted by the Security Documents are
effective to grant a valid first priority Lien on the Collateral
described therein, except as a result of a Permitted Encumbrance or a
Lien permitted by Section 6.2(c).
(ii) A certificate of an Authorized Officer of each of the
Obligors (other than the Borrower), dated as of the Effective Date,
certifying that the representations and warranties of such Obligor,
contained in each of the Loan Documents to which such Obligor is a
party are true and correct on and as of such date after giving effect
to funding and to the intended use thereof) in all material respects as
if made on and as of such date (or, if stated to have been made solely
as of an earlier date, were true and correct in all material respects
as of such date).
(e) Fees and Expenses. The Administrative Agent and the Lenders shall
have received all fees and other amounts due and payable pursuant to the Fee
Letter, this Agreement or any other Loan Document on or prior to the Effective
Date, including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including reasonable fees, charges and disbursements of
counsel) required to be reimbursed or paid by any Obligor hereunder or under any
other Loan Document.
(f) Pledge Agreements. The Administrative Agent shall have received
counterparts of each Pledge Agreement, dated as of the Effective Date, duly
executed and delivered by the Borrower and all other relevant Subsidiaries,
together with the following:
(i) stock certificates representing all the outstanding shares
of capital stock of each Subsidiary owned by or on behalf of any
Subsidiary as of the Effective Date after giving effect to the
Financing Transactions (except that stock certificates representing
shares of common stock of a Foreign Subsidiary may be limited to 65% of
the outstanding shares of common stock of such Foreign Subsidiary),
promissory notes evidencing all intercompany Indebtedness owed to any
Subsidiary by any other Subsidiary as of the Effective Date after
giving effect to the Financing Transactions (if any), and stock powers
and instruments of transfer, endorsed in blank, with respect to such
stock certificates, or, if any securities pledged pursuant to the
Pledge Agreements are uncertificated securities, confirmation and
evidence satisfactory to the Administrative Agent that the security
interest in such uncertificated securities has been transferred to and
perfected by the Administrative Agent
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in accordance with Section 8-313 and Section 8-321 of the Uniform
Commercial Code, as in effect in the State of New York, and, as
applicable, with the evidence of completion (or satisfactory
arrangement for the completion) of all filings and recordings of the
Pledge Agreements as may be necessary, or in the reasonable opinion of
the Administrative Agent, desirable, effectively to create a valid,
perfected first priority lien against and security interest in the
collateral covered thereby;
(ii) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded to create or perfect the Liens intended to be created under
each Pledge Agreement.
(g) Security Agreements. The Administrative Agent shall have received
counterparts of each Security Agreement, dated as of the Effective Date, duly
executed and delivered by the Borrower and each of its Subsidiaries (other than
Foreign Subsidiaries), together with the following:
(i) executed Uniform Commercial Code Financing Statements
(Form UCC-1), dated as of the Effective Date, and such evidence of
filing or arrangements for filing as may be acceptable to the
Administrative Agent, naming such Subsidiary as the debtor and the
Administrative Agent as the secured party, or other similar instruments
or documents, filed or to be under the Uniform Commercial Code of all
jurisdictions listed on Schedule 4.1(g) or as may be necessary or, in
the opinion of the Administrative Agent, desirable to perfect the
security interest of the Administrative Agent pursuant to such Security
Agreement;
(ii) executed copies of proper Uniform Commercial Code Form
UCC-3 termination statements, if any, necessary to release all Liens
and other rights of any Person in any collateral or assigned Property
described in the Security Agreement previously granted by any Person,
and together with such other Uniform Commercial Code Form UCC-3
termination statements as the Administrative Agent may reasonably
request; and
(iii) evidence that all filing fees and all other expenses
related to such filings have been or will be paid in full by or on
behalf of each Subsidiary.
(h) Mortgages. The Administrative Agent shall have received (i)
counterparts of a duly executed Mortgage encumbering Oil and Gas Properties of
the Borrower and its Subsidiaries constituting at least 85% of value of the
Proven Reserves to which value is given in the determination of the Initial
Reserve Report duly executed on behalf of each record owner of such Mortgaged
Property and evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of such Mortgage as may be necessary
or, in the reasonable opinion of the Administrative Agent, desirable effectively
to create a valid, perfected first priority Lien against the Properties
purported to be covered thereby, except as a result of a Permitted Encumbrance
or a Lien permitted by Section 6.2(c); (ii) favorable mortgagee's title opinions
in favor
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of the Administrative Agent (in form and substance satisfactory and issued by
title counsel satisfactory to the Administrative Agent, with respect to the
Property purporting to be covered by the Mortgage setting forth the working
interest and net revenue interest of the Borrower and/or its Subsidiaries in
such Properties and opining that the Borrower's and/or its Subsidiaries' title
to such Property is good and defensible and valid and that the interests created
by the Mortgage constitute valid first Liens thereon free and clear of all
defects and encumbrances other than as approved by the Administrative Agent; and
(iii) such surveys, abstracts and appraisals as may be required pursuant to such
Mortgages or as the Administrative Agent or the Required Lenders may reasonably
request.
(i) UCC Searches. The Administrative Agent shall have received (i) the
UCC Searches, all dated within thirty (30) days of the Effective Date and in
form and substance satisfactory to the Administrative Agent, and (ii) evidence
reasonably satisfactory to the Administrative Agent that the Liens indicated by
the financing statements (or similar documents) in such UCC Searches are
permitted by Section 6.2 or have been released.
(j) Priority; Security Interest. The Collateral and Borrowing Base
Properties shall be free and clear of all Liens, except Liens permitted by
Section 6.2. All filings, notices, recordings and other action necessary to
perfect the Liens in the Collateral shall have been made, given or accomplished
or arrangements for the completion thereof satisfactory to the Administrative
Agent and its counsel shall have been made.
(k) Approvals and Consents. The Administrative Agent shall have
received copies of all Governmental Approvals and third party consents and
approvals necessary or, in the sole discretion of the Administrative Agent,
advisable in connection with the operations of the Borrower and its
Subsidiaries. All such Governmental Approvals and third party consents and
approvals shall be in full force and effect.
(l) Insurance. The Administrative Agent and the Lenders shall have
received certificates, dated the Effective Date, from the Borrower's insurers
certifying (i) compliance with all of the insurance required by Section 5.7
hereof and by the Security Documents and (ii) that such insurance is in full
force and effect.
(m) Environmental Report. The Lenders and the Administrative Agent
shall have received, and shall be satisfied with the contents, results and scope
of, an environmental report prepared by an independent environmental audit firm
acceptable to the Administrative Agent covering all environmental issues related
to all Property owned, leased or operated by any Subsidiary with respect to any
Environmental Liabilities that may be attributable to such properties or
operations as have been specified by the Administrative Agent for review.
(n) Pro Forma Balance Sheet. The Lenders shall have received the pro
forma consolidated balance sheet of the Borrower and its Subsidiaries described
in Section 3.4(b), and such
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pro forma consolidated balance sheet shall be consistent in all material
respects with the forecasts and other information previously provided to the
Lenders.
(o) Financial Reports; Filings. The Administrative Agent shall have
received copies of all financial statements, reports, notices and proxy
statements sent by the Borrower to its stockholders during the period after
December 31, 1998.
(p) Plan of Reorganization; Confirmation. All conditions precedent to
the effectiveness of the Plan of Reorganization shall have been satisfied and
the terms and conditions of the Plan of Reorganization shall not have been
amended or modified without the approval of the Administrative Agent and the
Lenders. The Bankruptcy Court shall have entered the Confirmation Order in form
and substance satisfactory to the Administrative Agent and the Lenders, and such
Confirmation Order (i) shall confirm the Plan of Reorganization, and (ii) shall
have become a Final Order. The Administrative Agent shall have received
satisfactory evidence on the Effective Date that the Confirmation Order has
become a Final Order.
(q) Structure of Borrower. The capital structure, organization
structure, management team and Organic Documents of the Borrower and its
Subsidiaries shall be, as of the Effective Date, acceptable to the
Administrative Agent
(r) Implementation of the Plan of Reorganization. In accordance with
the terms of the Plan of Reorganization and simultaneously with the
effectiveness of this Agreement and the funding of the initial Loan hereunder,
(i) the Borrower shall have issued Equity Interests to all holders of "Allowed
Claims" and "Equity Interests" (as defined in the Plan of Reorganization)
entitled to receive same and (ii) the Borrower shall have distributed cash to
all holders of Allowed Claims entitled to receive same to the extent that
payment is due and owing on such Allowed Claims.
(s) No Preferred Stock or Other Indebtedness. Except as disclosed in
Schedule 4.1(s), neither the Borrower nor any of its Subsidiaries shall have
outstanding (i) any shares of preferred stock other than as otherwise provided
in the Plan of Reorganization or (ii) any Indebtedness other than Indebtedness
incurred under the Loan Documents or permitted under Section 6.1.
(t) Initial Reserve Report. The Administrative Agent and the Lenders
shall have received and shall be satisfied with the contents, results and scope
of the Initial Reserve Report.
(u) Borrowing Base Review. The Administrative Agent shall have
completed and be satisfied with the results of a review of the Borrowing Base
Properties and the status of the environmental condition of the Borrowing Base
Properties.
(v) Alternative Financing. The Borrower shall have received gross
proceeds of not less than $72,000,000 from the Equity Financing and/or the
Standby Debt, provided that such Equity Financing and/or Standby Debt shall be
on terms and conditions satisfactory to the Administrative Agent and the
Required Lenders, and provided that all conditions to effectiveness under the
various
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Equity Financing Documents and/or Standby Debt Documents, as the case may be,
have been satisfied or waived by the relevant parties thereto. The
Administrative Agent shall have received executed copies of the Equity Financing
Documents, the Standby Debt Documents (if executed) and all related agreements
and documents, each certified as of the date hereof by the Secretary or
Assistant Secretary of the Borrower (i) to be a true, correct and complete copy
of such document and (ii) not to have been amended or rescinded from the form so
certified and to be in full force and effect.
(w) Intercreditor Agreement. The Administrative Agent shall have
received the counterparts of the Intercreditor Agreement, duly executed by the
parties thereto.
(x) Hedging Agreements. The Borrower shall have delivered to the
Administrative Agent copies of any Hedging Agreements currently in existence.
(y) Confirmation Order. The Administrative Agent shall have received a
certificate of the Secretary or Assistant Secretary of the Borrower, dated as of
the Closing Date, certifying (i) that attached thereto is a true, correct and
complete copy of the Confirmation Order (including the Plan of Reorganization
attached to such Confirmation Order) and (ii) that no pending appeal or motion
for rehearing has been filed or granted in connection with such Confirmation
Order.
(z) Initial Cash Availability. The Administrative Agent shall have
received satisfactory evidence on the Effective Date that after taking into
account (A) any payments of any amounts required to be paid under the Plan of
Reorganization either on the Effective Date or on or prior to December 31, 2000,
(B) the amount of any claims which are not yet due and payable under the Plan of
Reorganization but which are required under the Plan of Reorganization to be
paid on or prior to December 31, 2000, and (c) any amounts payable pursuant to
this Agreement or the Fee Letter, the amount of (i) cash on hand of the Borrower
and its Subsidiaries plus (ii) the then current Borrowing Base Excess, shall be
equal to or greater than $15,000,000.
(aa) Environmental Settlement Agreements. The Administrative Agent
shall have received copies of (i) that certain Compromise and Settlement
Agreement, dated as of March 1, 2000, between the Borrower, Coho Resources,
Inc., Coho Oil & Gas, Inc., Coho Exploration, Inc., Coho Louisiana Production
Company and Interstate Natural Gas Company and Chevron Corp. and Chevron U.S.A.
Inc., and (ii) that certain settlement agreement between the Borrower, Coho
Resources, Inc., Coho Oil & Gas, Inc., Coho Exploration, Inc., Coho Louisiana
Production Company and Interstate Natural Gas Company and the "Plaintiffs" (as
defined in the "Disclosure Schedule" (as defined in the Plan of
Reorganization)), each certified as of the date hereof by the Secretary or
Assistant Secretary of the Borrower (i) to be a true, correct and complete copy
of such document and (ii) not to have been amended or rescinded from the form so
certified and to be in full force and effect.
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(bb) Other Documents. The Administrative Agent shall have received such
other documents consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as the Administrative Agent may reasonably
request.
SECTION 4.2 Each Credit Event. The obligation of each Lender to make a
Loan (including the initial Loan) on the occasion of any Borrowing, and of the
Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject
to receipt of the request therefor in accordance herewith and to the
satisfaction of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Borrower and each Obligor set forth in the Loan Documents (other than
those representations and warranties limited by their terms to a specific date)
shall be true and correct on and as of the date of such Borrowing.
(b) Default. At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, no Default shall have occurred and be continuing.
(c) No Material Adverse Effect. At the time of and immediately after
giving effect to such Borrowing or the issuance, amendment, renewal or extension
of such Letter of Credit,
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries which could reasonably be expected to result in a
Material Adverse Effect; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental investigation or
proceeding which could reasonably be expected to result in a Material
Adverse Effect; and
(iii) neither the Borrower nor any of its Subsidiaries are in
violation of any Governmental Rule except for any such violation which
would not reasonably be expected to result in a Material Adverse
Effect.
(d) Borrowing Request. The Administrative Agent shall have received a
Borrowing Request for such Borrowing. Each of the delivery of a Borrowing
Request and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing (both immediately before and after giving effect to such
Borrowing and the application of the proceeds thereof) the statements and
matters made in Sections 4.2(a), (b) and (c) are true and correct.
(e) Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by and on behalf of the Borrower or any other Subsidiary shall
be in form and substance reasonably
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satisfactory to the Administrative Agent and its counsel. The Administrative
Agent and its counsel shall have received all information, approvals, documents
or instruments as the Administrative Agent or its counsel may reasonably
request.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower agrees with the Administrative Agent and each Lender that,
until the Commitments have expired or been terminated and Obligations shall have
been paid and performed in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
will perform the obligations set forth in this Article V.
SECTION 5.1 Financial Statements and Other Information. The Borrower
will furnish, or will cause to be furnished, to the Administrative Agent and
each Lender copies of the following financial statements, reports, notices and
information:
(a) Annual Financials. Within 90 days after the end of each fiscal year
of the Borrower, its audited consolidated and consolidating balance sheet and
related statements of operations, stockholders' equity and cash flows as of the
end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by an independent public
accountants of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, together with a certificate
of the accounting firm that reported on such financial statements stating
whether they obtained knowledge during the course of their examination of such
financial statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(b) Quarterly Financials. Within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, its
consolidated and consolidating balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) Financial Officer's Certificate. Concurrently with any delivery of
financial statements under clause (a) or (b) above, a certificate of a Financial
Officer of the Borrower (i) certifying as to
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whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.12, 6.13 and 6.14 and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date of the
Borrower's audited financial statements referred to in Section 3.4 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) Certificate as to Defaults. Concurrently with any delivery of
financial statements under clause (a) above, a certificate of the accounting
firm that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements of
any Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(e) Budgets. At least thirty (30) days prior to the commencement of
each fiscal year of the Borrower, a detailed consolidated budget for such fiscal
year (including a projected consolidated balance sheet and related statements of
projected operations and cash flow as of the end of and for such fiscal year and
setting forth the assumptions used for purposes of preparing such budget) and,
promptly when available, any significant revisions of such budget;
(f) Reserve Reports. By March 1st of each year, a Reserve Report
prepared by the Borrower and audited by an Approved Engineer; and by September
1st of each year, a Reserve Report prepared by the Borrower in form acceptable
to the Administrative Agent.
(g) SEC Disclosure. Promptly after the same become publicly available,
all periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and
(h) Other Information. Promptly following any request therefor, such
other information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.2 Notices of Material Events. Promptly, and in any event
within three (3) (or ten (10), in the case of (d) or (e) below) Business Days
upon the Borrower or any of its Subsidiaries becoming aware of the following
events, the Borrower will furnish to the Administrative Agent and each Lender
written notice of the following:
(a) the occurrence of any Default;
(b) (i) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof or
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(ii) the occurrence of any adverse development with respect to any action, suit
or proceeding previously disclosed to the Administrative Agent or the Lenders
pursuant to this Agreement, in each case if such action, suit or proceeding
could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$500,000; and
(d) (i) any claim by any Person against the Borrower or any of its
Subsidiaries of nonpayment of, or (ii) any attempt by any Person to collect upon
or enforce, any accounts payable (that are more than sixty (60) days past due)
of the Borrower or any of its Subsidiaries, in the case of any single account
payable in excess of $500,000, or in the case of all accounts payable in the
aggregate in excess of $500,000;
(e) (i) any and all enforcement, cleanup, removal or other governmental
or regulatory actions instituted, completed or threatened or other environmental
claims against the Borrower or any Subsidiary or any of its Properties pursuant
to any applicable Environmental Laws which could have a Material Adverse Effect,
and (ii) any environmental or similar condition on any real Property adjoining
or in the vicinity of the Property of the Borrower or any Subsidiary that could
reasonably be anticipated to cause such Property or any part thereof to be
subject to any material restrictions on the ownership, occupancy,
transferability or use of such Property under any Environmental Laws; and
(f) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 5.2 shall be accompanied by a statement
of a Financial Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
SECTION 5.3 Information Regarding Collateral.
(a) Promptly, and in any event within five (5) Business Days upon
becoming aware of the following changes, the Borrower will furnish to the
Administrative Agent written notice of any change (i) in any Subsidiary's
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of any
Subsidiary's chief executive office, its principal place of business, any office
in which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Subsidiary's
identity or corporate structure or (iv) in any Subsidiary's Federal Taxpayer
Identification Number. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order
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for the Administrative Agent to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral. The
Borrower also agrees promptly to notify the Administrative Agent if any material
portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section 5.1,
the Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer and the chief legal officer of the Borrower confirming that
there has been no change in the information previously furnished and described
in Section 5.3(a) and Section 4.1(d)(i)(F).
(c) On or before the forty-fifth day after the end of each fiscal
quarter, the Borrower shall provide to the Administrative Agent and the Lenders
a report containing operational and accounting information with respect to the
Mortgaged Properties and Borrowing Base Properties for the immediately preceding
quarter, including estimated production volumes, revenues, operating costs,
drilling costs, completion costs, geological and geophysical costs, G&A
Expenses, position under Hedging Agreements, summary drilling and completion
reports and well test data, and such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as the Administrative Agent or any Lender may from time to time
reasonably request.
SECTION 5.4 Existence; Conduct of Business. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect (i) its legal existence and
(ii) the rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business, except where
the failure to so preserve, renew or keep in full force and effect such rights,
licenses, permits, privileges, franchises, patents, copyrights, trademarks or
trade names could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.5 Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.6 Maintenance of Properties.
(a) The Borrower will, and will cause each of its Subsidiaries to,
keep, preserve, protect and maintain all Property material to the conduct of its
business in good repair, working order and condition, and make necessary and
proper repairs, renewals and replacements so that its business, and the
respective businesses of its Subsidiaries, carried on in connection therewith
may be properly
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conducted at all times in accordance with standard industry practices unless the
(i) Borrower or the respective Subsidiary determines in good faith that the
continued maintenance of any of its properties is no longer economically
desirable or (ii) the failure to so keep, preserve, protect and maintain such
Property or the failure to make such repairs, renewals or replacements could not
reasonably be expected to result in a Material Adverse Effect. In particular,
the Borrower will, and will cause each of its Subsidiaries to, operate or cause
to be operated its Oil and Gas Properties as a reasonable and prudent operator.
(b) The Borrower shall use reasonable efforts to develop and bring into
production in a prudent and businesslike manner the proved developed
non-producing reserves and projects that the Lenders have considered in their
determination of the Borrowing Base.
(c) The Borrower shall ensure that at all times it has available to it,
either through its employees or through independent contractors, petroleum
engineers with appropriate experience and expertise in the proper operation and
development of properties similar to the Mortgaged Properties and the Borrowing
Base Properties.
(d) Promptly after the drilling and completion of each well drilled on
the Oil and Gas Properties that have been considered by the Lenders in the
determination or redetermination of the Borrowing Base, the Borrower shall
promptly request assignments of any interests earned by virtue of such drilling
and, within fifteen (15) days after the earlier to occur of the receipt of such
assignments or sixty (60) days after first production from such well, shall
deliver to the Administrative Agent:
(i) true and correct copies of any such assignments of record
title of the applicable Oil & Gas Properties into the Borrower or its
Subsidiary, as applicable,
(ii) true and correct copies of all required consents and
Governmental Approvals applicable to such assignments,
(iii) original, executed and acknowledged counterparts of a
supplemental Mortgage and related amendments to financing statements
covering any such interest so earned, and
(iv) a favorable mortgagee's title opinion showing that the
Borrower or its Subsidiary, as applicable, is vested with good and
defensible title to the interests so earned consistent with the working
interests and net revenue interest for such Property shown in the most
recent Reserve Report and showing that the interests created by such
supplemental Mortgage constitute valid first Liens thereon, free and
clear of all defects and encumbrances, except as a result of a
Permitted Encumbrance or a Lien permitted by Section 6.2(c),
in each case in form and substance reasonably satisfactory to the
Administrative Agent.
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SECTION 5.7 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts (with no greater risk retention) and
against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations and (b) all insurance required to be maintained pursuant to
the Security Documents. The Administrative Agent, on behalf of the Lenders, will
be named as loss payees and additional insureds, as appropriate. The Borrower
will furnish to the Lenders, upon request of the Administrative Agent,
information in reasonable detail as to the insurance so maintained.
SECTION 5.8 Casualty and Condemnation. The Borrower (a) will furnish to
the Administrative Agent and the Lenders prompt written notice of any casualty
or other insured damage to any material portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or any
part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions of the Security Documents.
SECTION 5.9 Books and Records; Inspection and Audit Rights.
(a) The Borrower will, and will cause each of its Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested. The Borrower shall
pay any reasonable fees of such independent public accountant incurred in
connection with the Administrative Agent or such Lender's exercise of its rights
pursuant to this Section. Furthermore, the Borrower will permit the
Administrative Agent or any Lender, or its agents, at the cost and expense of
the Borrower, to enter upon the Oil and Gas Properties and all parts thereof,
for the purpose of investigating and inspecting the condition and operation
thereof, and shall permit reasonable access to the field offices and other
offices, including the principal place of business, of the Borrower to inspect
and examine the Oil and Gas Properties.
(b) Without limiting the generality of Section 5.9(a), the Borrower
will, and will cause each of its Subsidiaries to, permit any representatives
designated by the Administrative Agent (including any consultants, accountants,
lawyers and appraisers retained by the Administrative Agent) to conduct
evaluations and inspections of the Oil and Gas Properties and the assets
included in the Borrowing Base or of the Borrower's or any Approved Engineer's
assessment of the condition or value thereof, all at such reasonable times and
as often as reasonably requested. The Borrower shall pay the reasonable fees and
expenses of any representatives retained by the Administrative Agent to conduct
any such evaluation or inspection.
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SECTION 5.10 Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries to, comply with all Governmental Rule applicable to it,
any Subsidiary, or their respective Property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.11 Use of Proceeds and Letters of Credit. The proceeds of the
Loans, together with the proceeds of the Standby Debt, will be used only for the
payment of (a) amounts payable under the Existing Loan Agreement in accordance
with the Plan of Reorganization and (b) capital expenditures, working capital
and other general corporate purposes of Borrower and its Subsidiaries. No part
of the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the regulations of the Board,
including Regulations G, U and X. Letters of Credit will be issued only to
support normal and customary oil and gas operations undertaken by the Borrower
and its Subsidiaries in the ordinary course of business.
SECTION 5.12 Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Effective Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and (a) the Borrower will cause
such Subsidiary (unless such Subsidiary is a Foreign Subsidiary) to execute a
Security Agreement, a Mortgage (to the extent it owns Oil and Gas Properties)
and a Guaranty within ten (10) Business Days after such Subsidiary is formed or
acquired and promptly take such actions to create and perfect Liens on such
Subsidiary's assets to secure the Obligations as the Administrative Agent or the
Required Lenders shall reasonably request and (b) if any Equity Interest in or
Indebtedness of such Subsidiary are owned by or on behalf of any Subsidiary, the
Borrower will cause such Equity Interests and promissory notes evidencing such
Indebtedness to be pledged pursuant to its Pledge Agreement within ten (10)
Business Days after such Subsidiary is formed or acquired (except that, if such
Subsidiary is a Foreign Subsidiary, shares of common stock of such Subsidiary to
be pledged pursuant to such Pledge Agreement may be limited to 65% of the
outstanding shares of common stock of such Subsidiary).
SECTION 5.13 Further Assurances.
(a) The Borrower will, and will cause each Subsidiary to, execute any
and all further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Administrative
Agent or the Required Lenders may reasonably request, to effectuate the
transactions contemplated by the Loan Documents or to grant, preserve, protect
or perfect the Liens created or intended to be created by the Security Documents
or the validity or priority of any such Lien, all at the expense of the
Obligors. The Borrower also agrees to provide to the Administrative Agent, from
time to time upon reasonable request of the Administrative Agent, information
which is in the possession of the Borrower or its Subsidiaries or otherwise
reasonably obtainable by any of them, reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
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(b) If any material assets (including any real Property or improvements
thereto or any interest therein) are acquired by the Borrower or any Subsidiary
after the Effective Date (other than assets constituting Collateral under the
Security Documents that become subject to the Lien of any of the Security
Documents upon acquisition thereof), the Borrower will notify the Administrative
Agent and the Lenders thereof, and, if requested by the Administrative Agent or
the Required Lenders, the Borrower will cause such assets to be subjected to a
Lien securing the Obligations and will take, and cause the Subsidiary to take,
such actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions described in paragraph
(a) of this Section 5.13, all at the expense of the Obligors.
(c) The Borrower hereby authorizes the Administrative Agent and the
Lenders to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
the Borrower or any relevant Subsidiary where permitted by law. A carbon,
photographic or other reproduction of the Security Documents or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. The Administrative Agent will
promptly send the Borrower any financing or continuation statements it files
without the signature of the Borrower or any other relevant Subsidiary and the
Administrative Agent will promptly send the Borrower the filing or recordation
information with respect thereto.
(d) Without limiting any other provision of this Section 5.13, the
Borrower shall, and shall cause each of its Subsidiaries to take such actions
and execute and deliver such documents and instruments as the Administrative
Agent shall reasonably require to ensure that the Administrative Agent shall, at
all times, have received currently effective, duly executed Loan Documents
encumbering Oil and Gas Properties of the Borrower and its Subsidiaries
constituting 85% of value of the Proven Reserves to which value is given in the
determination of the then current Borrowing Base (with accompanying letters in
lieu of transfer orders) and satisfactory title evidence in form and substance
reasonably acceptable to the Administrative Agent in its reasonable business
judgment as to ownership of such Oil and Gas Properties.
(e) If the Administrative Agent shall determine that, as of the date of
any Borrowing Base redetermination, the Borrower or any of its Subsidiaries
shall have failed to comply with the preceding Section 5.13(d), the
Administrative Agent may notify the Borrower in writing of such failure and,
within thirty (30) days from and after receipt of such written notice by the
Borrower, the Borrower or its Subsidiaries (as applicable) shall execute and
deliver to the Administrative Agent supplemental or additional Loan Documents,
in form and substance reasonably satisfactory to the Administrative Agent and
its counsel, securing payment of the Obligations and covering additional assets
not then encumbered by any Loan Documents (together with current valuations,
engineering reports, and title evidence applicable to the additional assets
collaterally assigned and such other documents as the Administrative Agent may
reasonably require, including opinions of counsel, each of which shall be in
form and substance reasonably satisfactory to the Administrative Agent) such
that the Administrative Agent shall have received currently effective duly
executed Loan Documents encumbering Oil and Gas Properties constituting at least
85% of the value of the Proven Reserves
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of the Borrower and its Subsidiaries to which value is given in the
determination of the then current Borrowing Base (with accompanying letters in
lieu of transfer orders) and satisfactory title evidence in form and substance
acceptable to the Administrative Agent in its reasonable business judgment as to
ownership of such Oil and Gas Properties.
SECTION 5.14 Commodity Hedging. As promptly as practicable, and in any
event within ten (10) days after the Effective Date, the Borrower will, or will
cause its Subsidiaries to, enter into, and thereafter until the Obligations have
been indefeasibly paid in full and all Commitments have terminated and all
Letters of Credit have terminated or expired, crude oil Hedging Agreements on
such terms and with such parties as shall be reasonably satisfactory to the
Administrative Agent, with respect to 75% of crude oil production as of the
Effective Date (for the period commencing as of the Effective Date and ending
not earlier than the date which is two years after the Effective Date) from the
"proved developed producing oil and gas reserves" (as defined in the standards
and guidelines of the U.S. Securities and Exchange Commission) which are
attributable to the Hydrocarbon Interests of the Borrower and its Subsidiaries
as set forth in the Borrowing Base Report delivered as of the Effective Date;
provided that at no time, until the Obligations have been indefeasibly paid in
full and all Commitments have terminated and all Letters of Credit have
terminated or expired, shall Borrower and its Subsidiaries have crude oil
Hedging Agreements in place with respect to more than 85% of crude oil
production from the "proved developed producing oil and gas reserves" (as
defined in the standards and guidelines of the U.S. Securities and Exchange
Commission) which are attributable to the Hydrocarbon Interests of the Borrower
and its Subsidiaries as set forth in the most recently delivered Reserve Report.
SECTION 5.15 Environmental Covenant. The Borrower will, and will cause
each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits, approvals,
certificates, licenses and other authorizations required by Environmental Laws
in effect and remain in material compliance therewith, and handle all Hazardous
Materials in material compliance with all applicable Environmental Laws;
(b) provide to the Administrative Agent promptly following receipt,
copies of any notice, pleading, citation, indictment, complaint, order, decree
or other documentation from any source asserting or alleging a material
violation of any Environmental Law or a circumstance or condition which requires
or may require a material financial contribution by the Borrower or any of its
Subsidiaries for a Remedial Action under any Environmental Law, or which seeks a
material amount of damages or civil, criminal or punitive penalties from the
Borrower or any of its Subsidiaries for an alleged or actual violation of any
Environmental Law, or which names or lists the Borrower or any of its
Subsidiaries as a potentially responsible party under Environmental Law;
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(c) shall use its best efforts to promptly cure and have dismissed with
prejudice to the satisfaction of the Administrative Agent any actions and
proceedings relating to compliance with Environmental Laws; and
(d) provide such pertinent information and certifications which the
Administrative Agent may reasonably request from time to time to evidence
compliance with this Section 5.15.
SECTION 5.16 Title Matters. Within one hundred eighty (180) days after
the Effective Date, favorable title opinions and/or title reports addressed to
the Administrative Agent and the Lenders and issued by counsel to the Borrower,
satisfactory to the Administrative Agent in its reasonable discretion, as to the
status of title to and Liens affecting the Amoco Properties containing at least
seventy-five percent (75%) of the Proven Reserves as of the Effective Date
attributable to the Amoco Properties. Such opinions and/or title reports may
contain (i) in the case of any Amoco Properties comprised of oil and gas leases
or interests therein, or participating mineral interests substantially all of
which were acquired by Amoco Production Company or any of its Affiliates or
Mobil Oil Corporation, Mobil Rocky Mountain, Inc. or any of their Affiliates or
any corporate predecessors of any of them and held by such entities for more
than twenty-five (25) years prior to the acquisition thereof by Coho
Acquisitions Company, assumptions regarding the status of title to the lands
covered by such oil and gas leases or interests therein at the time of such
lease or mineral acquisition by such predecessors in title, and (ii) subject to
the consent of the Administrative Agent, such other reasonable assumptions,
exceptions and qualifications as are customary for opinions or reports of that
type.
SECTION 5.17 Settlement. Within 60 days of the Effective Date or such
other period of time consented to by the Required Lenders, the Borrower (i)
will, and will cause Coho Resources, Inc., Coho Oil & Gas, Inc., Coho
Exploration, Inc., Coho Louisiana Production Company and Interstate Natural Gas
Company to, enter into an agreement or other settlement with Florabama
Associates, Ltd., in form and substance acceptable to the Administrative Agent
and the Required Lenders, fully resolving the claims of Florabama Associates,
Ltd. in connection with the Bankruptcy Case, and (ii) will deliver to the
Administrative Agent a copy of such agreement certified as of the date hereof by
the Secretary or Assistant Secretary of the Borrower (A) to be a true, correct
and complete copy of such document and (B) not to have been amended or rescinded
from the form so certified and to be in full force and effect.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that:
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SECTION 6.1 Indebtedness; Certain Equity Securities.
(a) The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) the Standby Debt;
(iii) Indebtedness existing on the Effective Date and set
forth in Schedule 6.1, but not any extensions, renewals or replacements
of any such Indebtedness;
(iv) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary; provided that
Indebtedness of any Subsidiary that is not a Obligor to the Borrower or
any other Obligor shall be subject to Section 6.4;
(v) guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any
other Subsidiary; provided that guarantees by the Borrower or any other
Obligor of Indebtedness of any Subsidiary that is not a Obligor shall
be subject to Section 6.4;
(vi) Indebtedness of any Person that becomes a Subsidiary
after the Effective Date; provided that (A) such Indebtedness exists at
the time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a
Subsidiary and (B) the aggregate principal amount of Indebtedness
permitted by this clause (vi) and clause (viii) shall not exceed
$5,000,000 at any time outstanding;
(vii) Hedging Obligations incurred pursuant to the Hedging
Agreements required or permitted pursuant to Sections 5.14 or 6.7; and
(viii) other unsecured Indebtedness in an aggregate principal
amount not exceeding $5,000,000 at any time outstanding; provided that
the aggregate principal amount of Indebtedness of the Borrower and its
Subsidiaries permitted by clause (vi) and this clause (viii) shall not
exceed $5,000,000 at any time outstanding.
(b) The Borrower will not, and will not permit any Subsidiary to, issue
any preferred stock or other preferred Equity Interests other than as in
existence as of the Effective Date and disclosed pursuant to Schedule 4.1(q).
SECTION 6.2 Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any Property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
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(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any Property or asset of the Borrower or any Subsidiary
existing on the Effective Date and set forth in Schedule 6.2; provided that (i)
such Lien shall not apply to any other Property or asset of the Borrower or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the Effective Date;
(d) any Lien existing on any Property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any Property or asset
of any Person that becomes a Subsidiary after the Effective Date prior to the
time such Person becomes a Subsidiary; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary , as the case may be, (ii) such Lien shall not
apply to any other Property or assets of the Borrower or any Subsidiary and
(iii) such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as the case
may be; and
(e) Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any Subsidiary which do not constitute Mortgaged Property;
provided that (i) such security interests secure Indebtedness permitted by
clause (vi) or (viii) of Section 6.1(a), (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 75% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security
interests shall not apply to any other Property or assets of the Borrower or any
Subsidiary.
SECTION 6.3 Fundamental Changes.
(a) The Borrower will not, and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary in a transaction in which the surviving
entity is a Subsidiary and (if any party to such merger is an Obligor) is an
Obligor and (iii) any Subsidiary (other than an Obligor) may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders; provided that any such merger involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger shall not
be permitted unless also permitted by Section 6.4.
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(b) The Borrower will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than businesses of the
type conducted by the Borrower and its Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.
(c) The Borrower will not engage in any business or activity other than
the ownership of all the outstanding shares of capital stock of its Subsidiaries
and activities incidental thereto. The Borrower will not own or acquire any
assets (other than shares of capital stock of its Subsidiaries, cash and
Permitted Investments).
SECTION 6.4 Investments, Loans, Advances, Guaranties and Acquisitions.
The Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any Equity Interests in or
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments existing on the Effective Date and set forth on
Schedule 6.4;
(c) investments by the Borrower and its Subsidiaries in Equity
Interests in their respective Subsidiaries; provided that (i) any such Equity
Interests held by a Subsidiary shall be pledged pursuant to a Pledge Agreement
(subject to the limitations applicable to common stock of a Foreign Subsidiary
referred to in Section 5.12) and (ii) the aggregate amount of investments by
Subsidiaries in, and loans and advances by Subsidiaries to, and guarantees by
Subsidiaries of Indebtedness of, Foreign Subsidiaries (including all such
investments, loans, advances and guarantees existing on the Effective Date)
shall not exceed $5,000,000 at any time outstanding;
(d) loans or advances made by the Borrower to any Subsidiary and made
by any Subsidiary to the Borrower or any other Subsidiary; provided that (i) any
such loans and advances made by any Subsidiary shall be evidenced by a
promissory note and, with respect to a Subsidiary which is not a Foreign
Subsidiary, such note shall pledged pursuant to a Pledge Agreement and (ii) the
amount of such loans and advances made by Subsidiaries to Foreign Subsidiaries
shall be subject to the limitation set forth in clause (c) above;
(e) guarantees constituting Indebtedness permitted by Section 6.1;
provided that (i) a Subsidiary shall not guarantee the Subordinated Debt unless
(A) such Subsidiary also has guaranteed the Obligations pursuant to a Guaranty,
(B) such guarantee of the Subordinated Debt is subordinated to such guarantee of
the Obligations on terms no less favorable to the Lenders than the subordination
provisions of the Subordinated Debt and (C) such guarantee of the Subordinated
Debt provides for the release and termination thereof, without action by any
party, upon any release and termination
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of such guarantee of the Obligations, and (ii) the aggregate principal amount of
Indebtedness of Foreign Subsidiaries that is guaranteed by any Subsidiary shall
be subject to the limitation set forth in clause (c) above; and
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business.
SECTION 6.5 Asset Sales. The Borrower will not, and will not permit any
of its Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Borrower permit any of
it Subsidiaries to issue any additional Equity Interest in such Subsidiary,
except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business and assignments of interests in
oil and gas leases in connection with customary farmout arrangements entered
into in the ordinary course of business;
(b) sales, transfers and dispositions to the Borrower or a Subsidiary;
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not an Obligor shall be made in compliance with Section 6.9;
(c) sales, transfers and other dispositions by the Borrower or its
Subsidiaries of the Tunisia Assets;
(d) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by any other clause of
this Section 6.5; provided that the aggregate fair market value of all assets
sold, transferred or otherwise disposed of in reliance upon this clause (d)
shall not exceed $5,000,000 during the last four consecutive fiscal quarter
period then most recently ended;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value solely for cash consideration.
SECTION 6.6 Sale and Leaseback Transactions. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby it shall sell or transfer any Property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such Property or other Property that it intends to use
for substantially the same purpose or purposes as the Property sold or
transferred.
SECTION 6.7 Hedging Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
(a) Hedging Agreements required or permitted by Section 5.14 and (b) subject to
the limitations set forth in Section 5.14, Hedging Agreements entered into in
the ordinary course of business to hedge or mitigate risks to which the
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Borrower or any Subsidiary is exposed in the conduct of its business or the
management of its liabilities.
SECTION 6.8 Restricted Payments; Certain Payments of Indebtedness.
(a) The Borrower will not, and will not permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except that
(i) any Subsidiary may pay dividends to the Borrower or any other Subsidiary
(other than a Foreign Subsidiary) at such times and in such amounts during any
fiscal year, as shall be necessary to permit the Borrower or any other
Subsidiary (other than a Foreign Subsidiary) to discharge its permitted
liabilities, (ii) any Subsidiary may pay dividends to a Foreign Subsidiary at
such times and in such amounts so that the aggregate amount of the dividends
paid to all Foreign Subsidiaries does not exceed $250,000 during any fiscal
year, (iii) the Borrower may make Restricted Payments in the form of dividends
to the extent payable in, or exchanges or conversions for or into, shares of
common stock of the Borrower or options or warrants to purchase common stock of
the Borrower, and (iv) the Borrower may make Restricted Payments required by the
Confirmation Order to the shareholders of the "Existing Common Stock" (as
defined in the Plan of Reorganization) with respect to (A) 20% of any proceeds
or other amounts relating to the Xxxxx Muse Lawsuit to which the Borrower or any
of its Subsidiaries are entitled, and (B) 40% of any Net Proceeds received by
the Borrower or any of its Subsidiaries with respect any sale, transfer or other
disposition of the Tunisia Assets.
(b) The Borrower will not, and will not permit any Subsidiary to, make
or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other Property) of or in respect of
principal of or interest on any Indebtedness not permitted under Section 6.1, or
any payment or other distribution (whether in cash, securities or other
Property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Indebtedness not permitted under Section 6.1, except payment of regularly
scheduled interest and principal payments as and when due in respect of the
Standby Debt and prepayments in respect of the Standby Debt, provided that such
payments and prepayments are made in accordance with the terms and conditions of
the Intercreditor Agreement and are not otherwise prohibited by the
subordination provisions of such Standby Debt.
SECTION 6.9 Transactions with Affiliates. The Borrower will not and
will not permit any Subsidiary to, sell, lease or otherwise transfer any
Property or assets to, or purchase, lease or otherwise acquire any Property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business and that
are at prices and on terms and conditions not less favorable to the Borrower or
such Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties, (b) transactions between or among the Borrower and the
Subsidiaries not involving any other Affiliate and (c) any Restricted Payment
permitted by Section 6.8.
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SECTION 6.10 Restrictive Agreements. The Borrower will not and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its Property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document or Standby
Debt Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the Effective Date identified on Schedule 6.10 (but shall apply to
any extension or renewal of, or any amendment or modification expanding the
scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the Property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.
SECTION 6.11 Amendment of Material Documents. The Borrower will not and
will not permit any Subsidiary to, amend, modify or waive any of its rights
under (a) any Subordinated Debt Document or (b) any of its Organic Documents.
SECTION 6.12 Minimum EBITDA to Total Interest Expense Ratio. The
Borrower will not permit its EBITDA to Total Interest Expense Ratio for the last
four consecutive fiscal quarter period then most recently ended to be less than:
2.00 to 1.00 as of the end of any fiscal quarter ending on or before December
31, 2000; (b) 2.25 to 1.00 as of the end of any fiscal quarter ending between
January 1, 2001 and June 30, 2001; (c) 2.50 to 1.00 as of the end of any fiscal
quarter ending between July 1, 2001 and October 31, 2001; (d) 2.75 to 1.00 as of
the end of any fiscal quarter ending between November 1, 2001 and December 31,
2001, and (e) 3.00 to 1.00 as of the end of any fiscal quarter ending after
January 1, 2002; provided, however, that for periods of calculation ending on or
before December 31, 2000, each reference to "last four consecutive fiscal
quarter period then most recently ended" shall be deemed to be a reference to
the period from April 1, 2000 through the date of such calculation.
SECTION 6.13 Maximum Leverage Ratio. The Borrower will not permit its
Leverage Ratio to exceed: (a) 5.00 to 1.00 as of the end of any fiscal quarter
ending on or before December 31, 2000; (b) 4.50 to 1.00 as of the end of any
fiscal quarter ending between January 1, 2001 and June 30, 2001; (c) 4.25 to
1.00 as of the end of any fiscal quarter ending between July 1, 2001 and October
31, 2001; (d) 3.75 to 1.00 as of the end of any fiscal quarter ending between
November 1, 2001 and December 31, 2001, and (e) 3.50 to 1.00 as of the end of
any fiscal quarter ending after January 1, 2002; provided, however, that,
notwithstanding the foregoing, upon the occurrence of any prepayment of the
principal outstanding under the Standby Debt or any other Subordinated Debt, the
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Borrower from the time of such prepayment will not permit its Leverage Ratio to
exceed 3.50 to 1.00 as of the end of any fiscal quarter ending after the date of
such prepayment.
SECTION 6.14 Minimum Current Ratio. The Borrower will not permit its
Current Ratio to be less than 1.00 to 1.00 as of the end of any fiscal quarter.
SECTION 6.15 Subsidiaries. The Borrower will not at any time create or
acquire any Subsidiary unless the Borrower has caused such Subsidiary to comply
with the requirements of Section 5.12.
SECTION 6.16. Take or Pay Contracts. Except as disclosed pursuant to
Schedule 6.16, and except for reservation charges payable for reservations of
capacity in gathering systems and pipelines incurred in the ordinary course of
business on an arm's length basis for volumes reasonably expected to be produced
from the Borrower's or its Subsidiaries' Properties to be transported through
such systems and pipelines, the Borrower will not, and will not permit any of
its Subsidiaries to, enter into or be a party to any arrangement for the
purchase of materials, supplies, other Property (including without limitation
Hydrocarbons), or services if such arrangement requires that payment be made by
the Borrower or such Subsidiary regardless of whether such materials, supplies,
other Property, or services are delivered or furnished to it.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article VII) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been incorrect when made or deemed
made;
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(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Sections 5.2, 5.4 (with respect to the
existence of the Borrower) or 5.11 or in Article VI of this Agreement or any
term or provision of the Intercreditor Agreement;
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article VIII), and such
failure shall continue unremedied for a period of thirty (30) days after notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender);
(f) [Intentionally omitted];
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the Property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article VII, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Subsidiary or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
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(k) one or more judgments for the payment of money in an aggregate
amount in excess of either (i) $2,500,000 or (ii) an amount which would have a
Material Adverse Effect on the Borrower shall be rendered against the Borrower,
any Subsidiary or any combination thereof and the same shall remain undischarged
for a period of ten 10 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Borrower or any Subsidiary to enforce
any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
(m) any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Subsidiary not to be, a valid and
perfected Lien on any Collateral, with the priority required by the applicable
Security Document, except (i) as a result of the sale or other disposition of
the applicable Collateral in a transaction permitted under the Loan Documents or
(ii) as a result of the Administrative Agent's failure to maintain possession of
any stock certificates, promissory notes or other instruments delivered to it
under the Collateral Agreement; or
(n) a Change in Control shall occur;
(o) any cessation of business by the Borrower shall occur;
(p) any of the Loan Documents is determined to be invalid or
unenforceable in any material respect; or
(q) The Plan of Reorganization or the Confirmation Order shall for any
reason be vacated or materially modified;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article VII), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower and (iii) exercise any
and all other remedies available under the Loan Documents and applicable law;
and in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article VII, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without
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presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
THE AGENTS
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
each Agent to act as its agent hereunder and under the Letters of Credit and the
other Loan Documents and authorizes such Agent to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
hereof and thereof, together with such actions and powers as are reasonably
incidental thereto.
Any financial institution serving as an Agent hereunder and which is
also a Lender shall have the same rights and powers in its capacity as a Lender
as any other Lender and may exercise the same as though it were not an Agent,
and such financial institution and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.
No Agent shall have any duties or obligations except those expressly
set forth in the Loan Documents. Without limiting the generality of the
foregoing, (a) no Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) no
Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that such Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 9.2
or elsewhere in the Loan Documents), and (c) except as expressly set forth in
the Loan Documents, no Agent shall have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the financial
institution serving as an Agent or any of its Affiliates in any capacity. No
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
9.2 or elsewhere in the Loan Documents) or in the absence of its own gross
negligence or wilful misconduct; PROVIDED, HOWEVER, THAT IT IS THE INTENTION OF
THE PARTIES HERETO THAT EACH OF THE AGENTS BE INDEMNIFIED IN THE CASE OF ITS OWN
NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE
IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. No
Agent shall be deemed to have knowledge of any Default unless and until written
notice thereof is given to such Agent by the Borrower or a Lender, and no Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered
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thereunder or in connection therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth in any
Loan Document, (iv) the validity, enforceability, effectiveness or genuineness
of any Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.
Each of the Agents shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each of the Agents also
may rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper Person, and shall not incur any liability for relying
thereon. Each of the Agents may consult with legal counsel (who may be counsel
for the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
Each of the Agents may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by such
Agent. Such Agent and any such sub- agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such sub-
agent and to the Related Parties of each Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as an Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article VIII and Section 9.3 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
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Each Lender acknowledges that it has, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent to act as its agent under the Intercreditor Agreement
and authorizes the Administrative Agent to execute the Intercreditor Agent on
its behalf and to take such actions on its behalf and to exercise such powers as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such actions and powers as are reasonably incidental thereto.
The Lenders identified as either the Syndication Agent or the
Documentation Agent under this Agreement shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. 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 Agreement or in taking or not taking action hereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower:
Coho Energy, Inc.
c/o Coho Resources, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to the Administrative Agent:
The Chase Manhattan Bank
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Loan and Agency Services
Xxx Xxxxx Xxxxxxxxx Xxxxx, 0xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
The Chase Manhattan Bank
Global Oil & Gas Group
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: June Brand
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) if to the Issuing Bank:
The Chase Manhattan Bank
Loan and Agency Services
One Chase Xxxxxxxxx Xxxxx, 0xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
The Chase Manhattan Bank
Global Oil & Gas Group
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: June Brand
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(d) if to the Documentation Agent:
MeesPierson Capital Corp.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
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Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(e) if to the Syndication Agent:
Fleet National Bank
100 Federal Street, MADE 10008D
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Fleet National Bank
100 Federal Street, MADE 10008D
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(f) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.2 Waivers; Amendments.
(a) No failure or delay by the Administrative Agent, the Issuing Bank
or any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Obligor therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) of this Section
9.2, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
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Administrative Agent or any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Obligor or Obligors that are parties
thereto, in each case with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Sections 2.17(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
9.2 or the definition of "Required Lenders" or any other provision of any Loan
Document specifying the number or percentage of Lenders required to determine or
redetermine the Borrowing Base, or to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, (vi) release any Subsidiary from its
Guaranty, or limit its liability in respect of such guarantee, without the
written consent of each Lender, (vii) except as otherwise expressly provided
herein, release any Collateral from the Liens of the Security Documents, without
the written consent of each Lender; provided further that (A) no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, Documentation Agent, Syndication Agent or Issuing Bank
without the prior written consent of the Administrative Agent, Documentation
Agent, Syndication Agent or Issuing Bank, respectively, and (B) any waiver,
amendment or modification of this Agreement that by its terms affects the rights
or duties under this Agreement of the Lenders may be effected by an agreement or
agreements in writing entered into by the Borrower and requisite percentage in
interest of the affected Lenders.
SECTION 9.3 Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable legal, printing,
recording, syndication, travel, advertising and other out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, the Documentation Agent, the Syndication Agent and the Issuing Bank in
connection with the syndication of the credit facilities provided for herein,
the registration, preparation, execution, delivery and administration of this
Agreement and the other Loan Documents or any document or instrument relevant to
this Agreement or any other Loan Document or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) the filing,
recording, refiling
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or rerecording of the Mortgages, the Security Agreements, the Pledge Agreements
and the other Security Documents and/or any Uniform Commercial Code financing
statements relating thereto and all amendments, supplements and modifications
to, and all releases and terminations of, any thereof and any and all other
documents or instruments of further assurance required to be filed or recorded
or refiled or rerecorded by the terms hereof or of the Mortgages, the Security
Agreements, the Pledge Agreements and the other Security Documents, (iii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iv) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Documentation Agent, the Syndication
Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section 9.3, or in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) In consideration of the execution and delivery of this Agreement by
the Administrative Agent, the Issuing Bank and each Lender and the extension of
the Commitments, the Borrower shall indemnify the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Financing Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any Mortgaged Property or any other Property currently or formerly
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee; PROVIDED, HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO
THAT THE INDEMNITEES BE INDEMNIFIED IN THE CASE OF THEIR OWN NEGLIGENCE (OTHER
THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR
CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower
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hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the foregoing which is permissible under applicable law.
(c) To the extent that the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent or the Issuing Bank under paragraph
(a) or (b) of this Section 9.3, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender's pro
rata share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Issuing Bank in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon its share of
the sum of the total Exposures and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower shall
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Financing Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section 9.3 shall be payable promptly
and in any event not later than 10 (ten) days after written demand therefor.
SECTION 9.4 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Borrower (except during the occurrence and continuance of an Event of
Default) and the Administrative Agent (and, in the case of an assignment of all
or a portion any Lender's obligations in respect of its LC Exposure, the Issuing
Bank) must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld), (ii) except in the
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case of an assignment to a Lender or an Affiliate of a Lender or an assignment
of the entire remaining amount of the assigning Lender's Commitment or Loans,
the amount of the Commitment or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance
Agreement with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent or such amount is equal to all of such
Lender's Commitment under this Agreement, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement, (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance Agreement, together with a processing and recordation fee of $3,500,
and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (h) or (i) of Article VII has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section 9.4, from and after the effective date
specified in each Assignment and Acceptance Agreement the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance Agreement, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance Agreement, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance Agreement covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.16 and 9.3). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section 9.4.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance Agreement delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
Agreement executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section 9.4 and any written consent to such assignment required by
paragraph (b) of this Section 9.4, the Administrative Agent shall accept such
Assignment and Acceptance Agreement and record the information contained therein
in the Register.
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No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, the Issuing Bank, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such Lender's rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.2(b) that affects such Participant. Subject to
paragraph (f) of this Section 9.4, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 9.4. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.8 as though
it were a Lender, provided such Participant agrees to be subject to Section
2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Sections 2.14 or 2.16 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section 9.4 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
(h) Any Lender that becomes a Lender as a result of an assignment
pursuant to Section 9.4 shall be bound by the terms of the last paragraph of
Article VIII as if it were an original Lender hereto.
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SECTION 9.5 Survival. All covenants, agreements, representations and
warranties made by the Obligors in the Loan Documents and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement or
any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans, and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.3 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.6 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.1, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.7 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.8 Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Borrower
against any of and all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this
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Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section 9.8 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.9 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF TEXAS WITHOUT
GIVING EFFECT TO CHOICE OF LAW PRINCIPLES.
SECTION 9.10 JURISDICTION.
(a) THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF TEXAS AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY 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 OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO 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. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
(b) THE 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 AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION. EACH OF THE PARTIES HERETO
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 9.11 CONSENT TO SERVICE OF PROCESS. EACH PARTY TO THIS
AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
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MANNER PROVIDED FOR NOTICES IN SECTION 9.1. NOTHING IN THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 9.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.13 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.14 Confidentiality. Each of the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Issuing Bank and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section
9.14, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 9.14 or
(ii) becomes available to the Administrative Agent, the Issuing Bank, the
Documentation Agent, the Syndication Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section 9.14, "Information" means all information received from the
Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank, the
Documentation Agent, the Syndication Agent, the Issuing Bank or any Lender on a
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nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from the Borrower after the Effective Date, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section 9.14 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.
SECTION 9.15 Chapter 15 Not Applicable. Chapter 15, Subtitle 3, Title
79, Revised Civil Statutes of Texas, 1925, as amended, shall not apply to this
Agreement or to any Loan or Letter of Credit, nor shall this Agreement or any
Loan or Letter of Credit be governed by or be subject to the provisions of such
Chapter 15 in any manner whatsoever.
SECTION 9.16 Limitation of Interest. The Borrower, the Administrative
Agent and the Lenders intend to strictly comply with all applicable laws,
including applicable usury laws. Accordingly, the provisions of this Section
9.16 shall govern and control over every other provision of this Agreement or
any other Loan Document which conflicts or is inconsistent with this Section
9.16, even if such provision declares that it controls. As used in this Section
9.16, the term "interest" includes the aggregate of all charges, fees, benefits
or other compensation which constitute interest under applicable law, provided
that, to the maximum extent permitted by applicable law, (a) any non-principal
payment shall be characterized as an expense or as compensation for something
other than the use, forbearance or detention of money and not as interest, and
(b) all interest at any time contracted for, reserved, charged or received shall
be amortized, prorated, allocated and spread, in equal parts during the full
term of the Obligations. In no event shall the Borrower or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the laws of the State of Texas or the applicable laws
(if any) of the United States or of any other applicable state, or (b) total
interest in excess of the amount which such Lender could lawfully have
contracted for, reserved, received, retained or charged had the interest been
calculated for the full term of the Obligations at the Highest Lawful Rate. On
each day, if any, that the interest rate (the "Stated Rate") called for under
this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the
rate at which interest shall accrue shall automatically be fixed by operation of
this sentence at the Highest Lawful Rate for that day, and shall remain fixed at
the Highest Lawful Rate for each day thereafter until the total amount of
interest accrued equals the total amount of interest which would have accrued if
there were no such ceiling rate as is imposed by this sentence. Thereafter,
interest shall accrue at the Stated Rate unless and until the Stated Rate again
exceeds the Highest Lawful Rate when the provisions of the immediately preceding
sentence shall again automatically operate to limit the interest accrual rate.
The daily interest rates to be used in calculating interest at the Highest
Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate
per annum by the number of days in the calendar year for which such calculation
is being made. None of the terms and provisions contained in this Agreement or
in any other Loan Document which directly or indirectly relate to interest shall
ever be construed without reference to this Section 9.16, or be construed to
create a contract to pay for the use, forbearance or detention of money at an
interest rate in excess of the Highest Lawful Rate. If the term of any
Obligation is shortened by reason of
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acceleration of maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Highest Lawful Rate, then and in any such event all
of any such excess interest shall be canceled automatically as of the date of
such acceleration, prepayment or other event which produces the excess, and, if
such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of the Borrower's
obligations to such Lender, effective as of the date or dates when the event
occurs which causes it to be excess interest, until such excess is exhausted or
all of such principal has been fully paid and satisfied, whichever occurs first,
and any remaining balance of such excess shall be promptly refunded to its
payor. Chapter 346 of the Texas Finance Code (which regulates certain revolving
credit accounts (formerly Tex. Rev. Civ. Stat. Xxx. Art. 0000, Xx. 15)) shall
not apply to this Agreement.
SECTION 9.17 Collateral Matters; Hedging Agreements. The benefit of the
Security Documents and of the provisions of this Agreement relating to the
Collateral shall also extend to and be available to those Lenders or their
Affiliates which are counterparties to the Hedging Agreements on a pro rata
basis in respect of any obligations of the Borrower which arise under any
Hedging Agreement.
SECTION 9.18 Arranger; Documentation Agent; Syndication Agent. None of
the Persons identified on the facing page or the signature pages of this
Agreement as the "Arranger" or "Documentation Agent" or the "Syndication Agent"
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement or any other Loan Document other than (a) except in the case of
the Arranger, those applicable to all Lenders as such or (b) as expressly
provided for herein or therein. Without limiting the foregoing, none of the
"Arranger", the Documentation Agent or the Syndication Agent 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 either the
"Arranger", the Documentation Agent or Syndication Agent in deciding to enter
into this Agreement or in taking or not taking any action hereunder or under the
Loan Documents.
SECTION 9.19 Entire Agreement. THIS WRITTEN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
COHO ENERGY, INC.
By:
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
individually as a Lender and as
Administrative Agent
By:
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Issuing Bank
By:
-------------------------------
Name:
Title:
MEESPIERSON CAPITAL CORP.,
individually as a Lender and as
Documentation Agent
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
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FLEET NATIONAL BANK, individually as
a Lender and as Syndication Agent
By:
-------------------------------
Name:
Title:
CREDIT LYONNAIS, NEW YORK
BRANCH, individually as Lender
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
ABN AMRO BANK N.V., individually as
Lender
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, individually as Lender
By:
-------------------------------
Name:
Title:
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CIBC INC., individually as Lender
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
CREDIT AGRICOLE INDOSUEZ,
individually as Lender
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
NATEXIS BANQUE BFCE, individually as
Lender
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
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