EXECUTION COPY
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
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PLAINS RESOURCES INC.
and
ING (U.S.) CAPITAL CORPORATION,
as Agent
and
CERTAIN INSTITUTIONS
as Lenders
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$225,000,000
May 22, 1998
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TABLE OF CONTENTS
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
Page
Section 1. Definitions and Accounting Matters...................... 1
1.01 Certain Defined Terms................................... 1
1.02 Oil and Gas Terms....................................... 15
1.03 Accounting Terms and Determinations..................... 16
1.04 Types of Loans.......................................... 16
Section 2. The Commitment.......................................... 16
2.01 Loans................................................... 16
2.02 Borrowings.............................................. 17
2.03 Changes of Commitment................................... 17
2.04 Commitment and Agency Fees.............................. 18
2.05 Lending Offices......................................... 18
2.06 Notes................................................... 18
2.07 Prepayments and Conversions or Continuations of Loans... 19
2.08 Borrowing Base.......................................... 19
2.09 Letters of Credit....................................... 21
2.10 Requesting Letters of Credit............................ 22
2.11 Reimbursement and Participations........................ 22
2.12 Letter of Credit Fees................................... 24
2.13 No Duty to Inquire...................................... 24
2.14 LC Collateral........................................... 25
Section 3. Payments of Principal and Interest...................... 26
3.01 Repayment of Term Loans................................. 26
3.02 Interest................................................ 26
Section 4. Payments; Computations; Etc............................. 27
4.01 Payments................................................ 27
4.02 Computations............................................ 28
4.03 Minimum Amounts......................................... 28
4.04 Certain Notices......................................... 29
4.05 Set-off................................................. 29
Section 5. Yield Protection, Etc................................... 30
5.01 Additional Costs........................................ 30
5.02 Limitation on Types of Loans............................ 32
5.03 Illegality.............................................. 32
5.04 Treatment of Affected Loans............................. 32
5.05 Compensation............................................ 33
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Section 6. Conditions Precedent.................................... 34
6.01 Initial Loan............................................ 34
6.02 Initial and Subsequent Loans............................ 35
Section 7. Representations and Warranties.......................... 36
7.01 Corporate Existence..................................... 36
7.02 Financial Condition..................................... 36
7.03 Litigation.............................................. 37
7.04 No Breach............................................... 37
7.05 Due Execution........................................... 37
7.06 Approvals............................................... 37
7.07 Use of Loans............................................ 37
7.08 ERISA................................................... 37
7.09 Taxes................................................... 38
7.10 Investment Company Act.................................. 38
7.11 Public Utility Holding Company Act...................... 38
7.12 Titles to Oil and Gas Properties........................ 38
7.13 Foreign Assets Control Regulations, Etc................. 39
7.14 Gas Imbalances.......................................... 39
7.15 Rate Filings............................................ 39
7.16 Qualification to Hold Federal Oil and Gas Leases........ 40
7.17 Drilling and Operations................................. 40
7.18 Payments by Purchasers of Production.................... 40
7.19 Credit Agreements....................................... 40
7.20 Hazardous Materials..................................... 41
7.21 Subsidiaries and Partnerships........................... 43
7.22 True and Complete Disclosure............................ 43
7.23 No Election to be Treated as a Utility.................. 44
Section 8. Covenants of the Company................................ 44
8.01 Financial Statements.................................... 44
8.02 Litigation.............................................. 47
8.03 Corporate Existence, Etc................................ 47
8.04 Engineering Reports..................................... 47
8.05 Acquisition of Oil and Gas Properties................... 48
8.06 Insurance............................................... 50
8.07 Prohibition of Fundamental Changes...................... 51
8.08 Limitation on Liens..................................... 52
8.09 Indebtedness............................................ 53
8.10 Investments............................................. 54
8.11 Dividend Payments....................................... 55
8.12 Tangible Net Worth...................................... 56
8.13 Current Ratio........................................... 56
8.14 Subordinated Indebtedness............................... 56
8.15 Lines of Business....................................... 57
8.16 Transactions with Affiliates............................ 57
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8.17 Use of Proceeds......................................... 57
8.18 Certain Obligations Respecting Subsidiaries............. 57
8.19 Additional Subsidiary Guarantors........................ 58
8.20 Environmental Matters; Environmental Reviews............ 58
8.21 Environmental Indemnification........................... 59
8.22 Environmental Certification............................. 59
8.23 Modifications of Certain Documents...................... 59
8.24 Gas Imbalances.......................................... 59
8.25 Sale of Oil and Gas Properties.......................... 60
8.26 Partnership Units; New Partnerships..................... 60
8.27 Amendments of Partnership Agreements.................... 60
8.28 Notice to Purchasers of Production...................... 61
8.29 Restrictions on PMTI.................................... 61
8.30 Lien Releases........................................... 61
8.31 Additional Security..................................... 61
8.32 Post Closing Curative................................... 62
8.33 Hedging Contracts....................................... 62
8.34 Transactions with PMCT.................................. 63
8.35 Unrestricted Subsidiaries............................... 63
Section 9. Events of Default....................................... 64
Section 10. Agent................................................... 67
10.01 Appointment and Authority............................... 67
10.02 Exculpation, Agent's Reliance, Etc...................... 67
10.03 Bank Parties' Credit Decisions.......................... 68
10.04 Indemnification......................................... 68
10.05 Rights as Lender........................................ 68
10.06 Sharing of Set-Offs and Other Payments.................. 69
10.07 Investments............................................. 69
10.08 Benefit of Section 10................................... 69
10.09 Resignation............................................. 69
Section 11. Miscellaneous........................................... 70
11.01 Waiver.................................................. 70
11.02 Notices................................................. 70
11.03 Expenses, Etc........................................... 70
11.04 Amendments, Etc......................................... 72
11.05 Successors and Assigns.................................. 72
11.06 Assignments and Participation........................... 73
11.07 Survival................................................ 74
11.08 Captions................................................ 74
11.09 Counterparts............................................ 74
11.10 Governing Law; Submission to Jurisdiction............... 75
11.11 Waiver of Jury Trial, Punitive Damages, Etc............. 75
11.12 Rate of Interest........................................ 76
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11.13 Release of Liens........................................ 77
11.14 Confidentiality......................................... 77
SCHEDULES AND EXHIBITS
Schedule 6.01(g) - Security Documents
Schedule 7.01 - Licenses, Franchises, Etc.
Schedule 7.02 - Contingent Liabilities
Schedule 7.03 - Litigation
Schedule 7.12 - Unmortgaged Oil and Gas Properties
Schedule 7.19 - Credit Agreements
Schedule 7.21 - Subsidiaries, Partnerships and Investments
Schedule 8.01(c) - Immaterial Partnerships
Schedule 8.08 - Existing Liens
Schedule 8.09 - Indebtedness
Exhibit A - Promissory Note
Exhibit B-1 - Amended and Restated Guaranty of Subsidiary Guarantors
other than Xxxxxxx Resources, L.P., Calumet Florida,
Inc. and Plains Illinois Inc.
Exhibit B-2 - Amended and Restated Guaranty of Xxxxxxx Resources,
L.P., Calumet Florida, Inc. and Plains Illinois Inc.
Exhibit C - Opinion of Xxxxxxx X. Xxxxxxxxx, Esq., General Counsel
to Obligors
Exhibit D - Opinion of Fulbright & Xxxxxxxx L.L.P., special Texas
and New York counsel to Obligors
Exhibit E - Environmental Compliance Certificate
Exhibit F - Agreement to Be Bound and Assignment and Acceptance
Exhibit G - Standby Letter of Credit Application and Agreement
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated
as of May 22, 1998, by and among PLAINS RESOURCES INC., a corporation duly
organized and validly existing under the laws of the state of Delaware (the
"Company"), ING (U.S.) CAPITAL CORPORATION, a Delaware corporation, as agent for
the Lenders ("Agent"), and the Lenders named herein, amending and restating the
Original Agreement referred to herein.
W I T N E S S E T H
WHEREAS, the Company, Agent and certain of the Lenders entered into that
certain Third Amended and Restated Credit Agreement dated as of April 11, 1996,
as amended (the "Original Agreement"), providing for extensions of credit by
such certain Lenders to the Company up to the amount of $165,000,000; and
WHEREAS, the Company has requested that Agent and Lenders amend and restate
the Original Agreement to (i) renew and extend the aggregate unpaid principal
balance of the loans under the Original Agreement, as evidenced by the Notes
(herein defined), and (ii) provide for the extension of additional credit to the
Company, such balance and such additional credit to be in an aggregate principal
amount of up to but not exceeding $225,000,000, and Agent and Lenders are
prepared to amend and restate the Original Agreement and renew, extend and
increase such credit upon the terms and conditions hereof; and
WHEREAS, to induce Lenders to renew and extend such credit, certain
subsidiaries of the Company will execute and deliver guaranties guaranteeing the
Obligations (herein defined) of the Company to Lenders, and the Company and
certain of its subsidiaries will execute mortgages and security agreements
granting, confirming, amending and/or ratifying security interests and liens on
substantially all of their respective properties as collateral security for the
obligations of the Obligors (as defined herein) to Bank Parties (or in favor of
Agent for the benefit of Bank Parties) hereunder, each of the Obligors expecting
to derive benefit, direct or indirect, from the credit so extended to the
Company, both in its separate capacity and as a member of the integrated group.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"Affiliate" shall mean any Person which directly or indirectly controls, or
is under common control with, or is controlled by, the Company and, if such
Person is an individual, any member of the immediate family (including parents,
spouse and children) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition,
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"control" (including, with its correlative meanings, "controlled by" and "under
common control with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise), provided that, in any event, any Person which owns directly or
indirectly 5% or more of the securities having ordinary voting power for the
election of directors or other governing body of a corporation or 5% or more of
the partnership or other ownership interests of any other Person (other than as
a limited partner of such other Person) will be deemed to control such
corporation or other Person.
"Agent" shall have the meaning assigned to such term in the first paragraph
of this Agreement as agent hereunder, and its successors in such capacity.
"Applicable Lending Office" shall mean the Principal Office or, with
respect to any Type of Loan, such other office of each Lender (or of an
affiliate of such Lender) as such Lender may from time to time specify to the
Company as the office by which the Loans of such Type are to be made and
maintained, and with respect to LC Issuer, the office, branch, or agency through
which it issues Letters of Credit.
"Applicable Margin" shall mean (i) with respect to Base Rate Loans zero
percent (0%) per annum and (ii) with respect to Eurodollar Loans, one and three-
eighths percent (1.375%) per annum.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code, as amended from
time to time.
"Bank Parties" means Agent, LC Issuer, and all Lenders.
"Base Rate" shall mean, for any day, the higher of (a) the Federal Funds
Rate for such day plus one-half percent (0.5%) per annum and (b) the Prime Rate
for such day. Each change in any interest rate provided for herein based upon
the Base Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans which bear interest at rates based upon
the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement, the Notes, the
Letters of Credit, the LC Applications, the Security Documents and each Hedging
Agreement.
"Borrowing Base" shall mean, at any time, an amount equal to the amount
determined in accordance with Section 2.08 hereof.
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in New York City or Houston, Texas and, if such
day relates to a borrowing of, a payment or prepayment of principal of or
interest on, or a Conversion of or into, or an Interest Period for, Eurodollar
Loan or a notice by the Company with respect to any such borrowing,
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payment, prepayment, Conversion or Interest Period, which is also a day on which
dealings in Dollar deposits are carried out in the London interbank market.
"CERCLA" has the meaning given it in Section 7.20(d).
"CERCLIS" has the meaning given it in Section 7.20(d).
"Chief Financial Officer" shall mean the senior executive officer of the
Company who is primarily responsible for the financial affairs of the Company.
"Closing Date" shall mean the date upon which the conditions precedent to
the initial Loan hereunder set forth in Section 6 hereof have been satisfied and
the initial extension of credit hereunder made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" shall mean the obligation of Lenders to make Loans in an
aggregate amount at any one time outstanding up to but not exceeding
$225,000,000, as the same may be reduced at any time or from time to time
pursuant to Sections 2.03(a), (b) or (c).
"Company" shall have the meaning assigned to such term in the first
paragraph of this Agreement.
"Company Reserve Reports" shall have the meaning assigned to such term in
Section 8.04(b) hereof.
"Consolidated Subsidiary" shall mean, for any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated with
the financial statements of such Person in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the continuation
pursuant to Section 2.07(a) hereof of a Eurodollar Loan from one Interest Period
to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.07(a) hereof of Base Rate Loans into Eurodollar Loans or
of Eurodollar Loans into Base Rate Loans, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one Applicable
Lending Office to another.
"Default" shall mean an Event of Default or an event which with notice or
lapse of time or both would become an Event of Default.
"Dividend Payment" shall mean dividends (in cash, Property or obligations)
on, or other payments or distributions on account of, or the setting apart of
money for a sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock of the
Company, but excluding (i) dividends payable solely in shares of common
3
or preferred stock of the Company, and (ii) dividends from a Subsidiary of the
Company to the Company.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Engineering Report" shall mean any Independent Reserve Report or Company
Reserve Report.
"Environmental Affiliate" shall mean, as to any Person (the "successor"),
any other Person whose liability (contingent or otherwise) for an Environmental
Claim the successor may have retained, assumed or otherwise become or remained
liable for suits or other procedures (contingently or otherwise), whether by
contract, operation of law or otherwise; provided that each Subsidiary of the
successor, and each former Subsidiary or division of the successor transferred
to another Person, shall in any event be an "Environmental Affiliate" of the
successor; provided, further, that whenever reference is made to liabilities or
properties of an Environmental Affiliate, such reference shall exclude the
liabilities of the Environmental Affiliate which the successor did not retain,
assume or otherwise become or remain liable for and the properties of the
Environmental Affiliate which were not acquired in any manner by the successor
for and with respect to which the successor did not retain or assume or
otherwise become liable for any liability on any Environmental Claims.
"Environmental Claim" shall mean, with respect to any Person, any notice,
claim, demand, order, citation, complaint, penalty assessment or other
communication (whether written or oral) by any other Person alleging or
asserting such Person's liability for investigatory costs, cleanup costs,
governmental response costs, damages to natural resources or other Property,
personal injuries, fines or penalties arising out of, based on or resulting from
(a) the presence, or Release into the environment, of any Hazardous Material at
any location, whether or not owned by such Person, or (b) circumstances forming
the basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" shall mean any and all applicable Federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as
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the Company or is under common control (within the meaning of Section 414(c) of
the Code) with the Company.
"Eurodollar Loans" shall mean Loans the interest rates on which are
determined on the basis of rates based upon the Eurodollar Rate.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any Interest
Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) reported, on the date two Business Days prior to the first day of
such Interest Period, on Telerate Access Service Page 3750 (British Bankers
Association Settlement Rate) as the London Interbank Offered Rate for dollar
deposits having a term comparable to such Interest Period and in an amount of
$1,000,000 or more (or, if such Page shall cease to be publicly available or if
the information contained on such Page, in Agent's sole judgment, shall cease to
accurately reflect such London Interbank Offered Rate, such rate as reported by
any publicly available source of similar market data selected by Agent that, in
Agent's sole judgment, accurately reflects such London Interbank Offered Rate).
"Events of Default" shall have the meaning assigned to such term in Section
10 hereof.
"Facility Usage" means, at the time in question, the aggregate amount of
outstanding Loans and existing LC Obligations at such time.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be such rate as reported by any
publicly available source of similar market data selected by Agent that, in
Agent's sole judgment, accurately reflects such rate on overnight Federal funds
transactions.
"Financial Statements" shall have the meaning assigned to such term in
Section 7.02 hereof.
"GAAP" shall mean generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.03(a) hereof,
are to be used in making the calculations for purposes of determining compliance
with the terms of this Agreement.
"Guaranty" shall mean a guaranty, an endorsement, a contingent agreement to
purchase or to furnish funds for the payment or maintenance of, or otherwise to
be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guaranty of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or
5
lessor) Property, products, materials, supplies or services primarily for the
purpose of enabling a debtor to make payment of his or its obligations or an
agreement to assure a creditor against loss, including, without limitation,
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
terms "Guaranty" and "Guaranteed" used as a verb shall have a correlative
meaning.
"Hazardous Materials" shall have the meaning assigned to such term in
Section 7.20(b) hereof.
"Hedging Agreement" shall mean (i) any currency rate swap, rate cap, rate
floor, rate collar, exchange transaction, forward rate agreement, or other
exchange or rate protection agreements or any option with respect to any such
transaction now existing or hereafter entered into between any Obligor and
Agent, any Lender or an Affiliate thereof, or (ii) any swap agreement, cap,
floor, collar, exchange transaction, forward agreement, or other exchange or
protection agreements relating to crude oil, natural gas or other hydrocarbons,
or any option with respect to any such transaction now existing or hereafter
entered into between any Obligor and Agent, any Lender or an Affiliate thereof.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates in and to oil and gas leases, oil, gas and mineral leases, or other
liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty
and royalty interests, net profits interests and production payment interests,
including any remainder or reversionary interest of whatever nature, and the
lands covered or affected thereby.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all constituents, elements or compounds thereof and products refined therefrom.
"Indebtedness" shall mean, for any Person (without duplication): (a)
indebtedness created, issued or incurred by such Person for borrowed money
(whether by loan or the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable or accrued expenses are payable within 120
days of the date the respective goods are delivered or the respective services
are rendered; (c) indebtedness of others secured by a Lien on the Property of
such Person, whether or not the respective indebtedness so secured has been
assumed by such Person; (d) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) indebtedness of others Guaranteed
by such Person; (f) past due obligations of such Person (including, without
limitation, any joint interest xxxxxxxx) that are more than 60 days past due in
respect of leases, operating agreements, gas balancing agreements, farm-out
agreements, capital lease obligations, purchase and sale agreements and other
agreements and instruments pertaining to the Properties mortgaged to Bank
Parties (or Agent for the benefit of Bank Parties) pursuant to the Security
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Documents; (g) production payments in connection with Oil and Gas Properties of
such Person; (h) uncovered or unhedged obligations of such Person arising under
futures contracts, forward contracts, or other commodity agreements; (i)
obligations of such Person in respect of an interest rate swap, cap or collar
agreement or similar arrangement providing for the transfer or mitigation of
interest risks generally or under specific contingencies; (j) indebtedness of
such Person arising under leases serving as a source of financing or otherwise
capitalized in accordance with GAAP (but excluding customary oil, gas and
mineral leases); and (k) obligations of such Person arising under conditional
sales or other title retention agreements.
"Independent Reserve Reports" shall have the meaning assigned to such term
in Section 8.04(a) hereof.
"ING Capital" means ING (U.S.) Capital Corporation, a Delaware corporation,
and its successors and assigns.
"Initial Reserve Reports" shall mean the Independent Reserve Reports dated
(i) February 23, 1998 by Xxxxx Xxxxx Company, (ii) February 25, 1998 by X.X.
Xxxx and Associates, Inc., and (iii) February 25, 1998 by Netherland, Xxxxxx &
Associates, Inc., each as of December 31, 1997, and the Independent Reserve
Report dated February 12, 1998 by System Technology Associates, Inc., as of
January 1, 1998.
"Interest Period" shall mean, with respect to any Eurodollar Loan, each
period commencing on the date such Eurodollar Loan is made or Converted from a
Base Rate Loan or the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in the third calendar month
thereafter, as the Company may select as provided in Section 4.04 hereof, except
that each Interest Period which commences on the last Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (i) no
Interest Period may commence before and end after any Quarterly Date unless,
after giving effect thereto, the aggregate principal amount of the Loans having
Interest Periods which end after such Quarterly Date shall be equal to or less
than the aggregate principal amount of the Loans scheduled to be outstanding
after giving effect to the payments of principal required to be made on such
Quarterly Date; (ii) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day (or,
if such next succeeding Business Day falls in the next succeeding calendar
month, on the next preceding Business Day); and (iii) notwithstanding clause (i)
above, no Interest Period shall have a duration of less than one month and, if
the Interest Period for any Eurodollar Loan would otherwise be a shorter period,
such Loan shall not be available hereunder.
"Investment" shall mean, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such short sale);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including, without limitation, the purchase of
Property from another person subject to an understanding or
7
agreement, contingent or otherwise, to resell such property to such Person, but
excluding any such advance, loan or extension of credit having a term not
exceeding 90 days representing the purchase price of inventory or supplies sold
in the ordinary course of business); or (c) the entering into of any Guaranty
of, or other contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any amount committed to
be advanced, lent or extended to such Person.
"LC Application" means any application for a Letter of Credit hereunder
made by the Company to LC Issuer.
"LC Collateral" has the meaning given it in Section 2.14(a).
"LC Issuer" means ING Capital in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity. Agent may, with the
consent of the Company and the Lender in question, appoint any Lender hereunder
as the LC Issuer in place of or in addition to ING Capital.
"LC Obligations" means, at the time in question, the sum of all Matured LC
Obligations plus the Maximum Drawing Amount.
"Lenders" means each signatory hereto (other than the Company), including
ING (U.S.) Capital Corporation in its capacity as a Lender hereunder rather than
as Agent or LC Issuer, and the successors of each as holder of a Note.
"Letter of Credit" means any letter of credit issued by LC Issuer hereunder
at the application of the Company.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge (including, without limitation, production payments and the like
burdening such Properties), security interest, preferential right to purchase,
right of first refusal, call on production or other burden or encumbrance of any
kind in respect of such Property. For purposes of this Agreement, the Company
or any of its Subsidiaries or any Partnership shall be deemed to own subject to
a Lien any Property which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such Property.
"Loans" shall mean the loans provided for by Section 2.01 hereof and shall
include Revolving Credit Loans and Term Loans.
"Majority Lenders" shall mean Lenders having Percentage Shares equal to or
greater than fifty-one percent (51%).
"Margin Stock" shall mean margin stock within the meaning of Regulations U
and X.
"Material Adverse Effect" shall mean a material adverse effect on any of
the following, either individually or in the aggregate with all other events and
circumstances then existing which
8
would be a Default if such events or circumstances were to have a Material
Adverse Effect: (a) the consolidated financial condition, business, operations
or prospects taken as a whole of the Company and its Consolidated Subsidiaries,
(b) the ability of the Company to perform its obligations under any of the Basic
Documents or (c) the aggregate value of the security provided to Bank Parties
(or Agent for the benefit of Bank Parties) under the Security Documents.
"Material Subsidiary" shall mean, at any time, a Subsidiary of the Company
which as of such time meets the definition of a "significant subsidiary"
contained as of the date hereof in Regulation S-X of the Securities and Exchange
Commission.
"Matured LC Obligations" means all amounts paid by LC Issuer on drafts or
demands for payment drawn or made under or purported to be under any Letter of
Credit and all other amounts due and owing to LC Issuer under any LC Application
for any Letter of Credit, to the extent the same have not been repaid to LC
Issuer (with the proceeds of Revolving Credit Loans or otherwise).
"Maximum Drawing Amount" means at the time in question the sum of the
maximum amounts which LC Issuer might be called upon to advance under all
Letters of Credit then outstanding.
"Maximum Rate" shall mean, with respect to each Bank Party, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Obligations under laws from time to time applicable to such Bank Party.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Notes" shall mean the notes provided for by Section 2.06 hereof. "Note"
shall mean any of the Notes.
"Obligations" shall mean, as at any date of determination thereof, all
obligations of the Obligors, now existing or hereafter arising, owing to any
Bank Party under this Agreement, the Notes or any other Basic Document, whether
for principal, interest, fees, expenses or otherwise, including all LC
Obligations.
"Obligors" shall mean the Company and each of the Subsidiary Guarantors.
"Oil and Gas Properties" shall mean the Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all
presently existing or future unitization agreements, pooling agreements and
declarations of pooled units and the units created thereby (including, without
limitation, all units created under orders, regulations and rules of any
governmental body or agency having jurisdiction) which may affect all or any
portion of the Hydrocarbon Interests; all operating agreements, contracts and
other agreements which relate to any of the Hydrocarbon Interests or the
production, sale, purchase, exchange, transporting,
9
treating or processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests; all Hydrocarbons in and under and which may be produced from 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,
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 primarily located or used
elsewhere but which may be on such premises for the purpose of drilling a well
or for other similar temporary uses) and including any and all oil xxxxx, gas
xxxxx, injection xxxxx or other xxxxx, buildings, structures, improvements, 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.
"Original Agreement" shall have the meaning assigned to such term in the
second paragraph of this Agreement.
"PAAI" shall mean Plains All American Inc., a Delaware corporation and a
Wholly-Owned Subsidiary of the Company.
"Partnerships" shall mean the partnerships in which the Company or any of
its Subsidiaries owns a general partnership interest (including, without
limitation, those listed in Schedule 7.21 hereof) other than (i) any partnership
regarded as such solely for Federal income tax purposes if such partnership has
made or is deemed to have made an election to be excluded from Subchapter K,
Chapter 1, Subtitle A of the Code as permitted by Section 761 of the Code and
the regulations thereunder and (ii) any partnership of which all of the
partnership interests are owned, directly or indirectly, by the Company and/or
any of its Subsidiaries.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage Share" shall mean, with respect to any Lender (a) when used in
Section 2.01 or when no Loans are outstanding hereunder, the percentage set
forth opposite such Lender's name on the Lender Schedule attached to this
Agreement, as from time to time amended or supplemented, or with respect to a
Person who shall become a Lender after the date of this Agreement, the
percentage of the Commitment and Loans assigned to and assumed by such Lender,
as set forth in the assignment made pursuant to Section 11.06(b), and (b) when
used otherwise, the percentage equal to (i) the sum of (A) the unpaid principal
balance of such Lender's Loans at the time in question, plus (B) Matured LC
Obligations which such Lender has funded pursuant to Section 2.11(c), plus (C)
the portion of the Maximum Drawing Amount which such Lender might be obligated
to fund under Section 2.11(c), divided by (ii) the sum of (I) the
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aggregate unpaid principal balance of all Loans at such time plus (II) the
aggregate amount of LC Obligations outstanding at such time.
"Permitted Investments" shall mean, for any Person: (a) direct obligations
of the United States of America, or of any agency thereof, or obligations
guaranteed as to principal and interest by the United States of America, or of
any agency thereof, in either case maturing not more than 90 days from the date
of acquisition thereof by such Person; (b) certificates of deposit issued by any
bank or trust company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided profits of at
least $500,000,000, maturing not more than 90 days from the date of acquisition
thereof by such Person; and (c) commercial paper rated A-1 or better or P-1 by
Standard & Poor's Corporation or Xxxxx'x Investors Services, Inc., respectively,
maturing not more than 90 days from the date of acquisition thereof by such
Person.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and which is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"PMCT" shall mean PMCT Inc., a Delaware corporation, a Wholly-Owned
Subsidiary of the Company.
"PMTI" shall mean Plains Marketing & Transportation, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of the Company.
"PMTI Credit Facility" shall mean: (i) initially, the uncommitted secured
demand transactional line of credit facility, in an amount not to exceed
$90,000,000, dated August 23, 1995, as heretofore amended, among BankBoston,
N.A. (f/k/a The First National Bank of Boston), individually and as agent, ING
Capital, the other lenders named therein and PMTI, and (ii) any secured credit
facility refinancing the facility described in clause (i) above, in an amount
not to exceed $175,000,000, among PMTI, BankBoston, N.A., as agent, and the co-
agents and lenders named therein, constituting "Permitted Marketing
Obligations", "Permitted Operating Obligations", or "Permitted Contango Market
Transaction Obligations", as such terms are defined in the Senior Subordinated
Indenture, in each case together with the security documents and other documents
and agreements executed in connection with such facilities.
"Post-Default Rate" shall mean, in respect of any principal of any Loan or
any other amount under this Agreement, the Notes or any other Basic Document
that is not paid when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise), a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid in
full equal to 3% above the Base Rate as in effect from time to time plus the
Applicable Margin (provided that, if the amount so in default is principal of a
Eurodollar Loan and the due date thereof is a day other than the last day of an
Interest Period therefor, the "Post-Default Rate" for such principal shall be,
for the period from and including such due date to but
11
excluding the last day of such Interest Period, 3% above the interest rate for
such Loan as provided in Section 3.02(b) hereof and, thereafter, the rate
provided for above in this definition). In no event shall the Post-Default Rate
exceed the Maximum Rate.
"Prime Rate" shall mean the arithmetic average of the rates of interest
publicly announced by The Chase Manhattan Bank (National Association), Citibank,
N.A. and Xxxxxx Guaranty Trust Company of New York (or their respective
successors) as their respective prime commercial lending rates (or, as to any
such bank that does not announce such a rate, such bank's "base" or other rate
determined by Agent to be the equivalent rate announced by such bank), except
that, if any such bank shall, for any period, cease to announce publicly its
prime commercial lending (or equivalent) rate, Agent shall, during such period,
determine the "Prime Rate" based upon the arithmetic average of the prime
commercial lending (or equivalent) rates announced publicly by the other such
banks.
"Principal Office" shall mean the principal office of each Lender, as set
forth on the signature pages hereto.
"Property" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Quarterly Dates" shall mean the first Business Day of July, October,
January and April in each year, the first of which shall be July 1, 1998.
"Regulations D, U and X" shall mean, respectively, Regulations D, U and X
of the Board of Governors of the Federal Reserve System (or any successor), as
the same may be amended or supplemented from time to time.
"Regulatory Change" shall mean any change after the date of this Agreement
in United States Federal, state or foreign law or regulations (including,
without limitation, Regulation D) or the adoption or making after such date of
any interpretation, directive or request applying to a class of banks (including
any Bank Party who is such a bank) of or under any United States Federal, state
or foreign law or regulations (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Release" shall have the meaning assigned to such term in Section 7.20(b)
hereof.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to
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be determined or (ii) any category of extensions of credit or other assets which
includes Eurodollar Loans.
"Revolving Credit Loan" shall have the meaning assigned to such term in
Section 2.01(a) hereof.
"Revolving Credit Termination Date" shall mean the earlier of (a) July 1,
2000 and (b) the date on which the Commitment is reduced to zero or terminated
pursuant to Section 2.03 hereof.
"Security Documents" shall mean, collectively, each Security Document
listed on Schedule 6.01(g) attached hereto and all Uniform Commercial Code
financing statements required by this Agreement or any Security Document to be
filed with respect to the security interests in personal Property and fixtures
created pursuant to any Security Document and all other security agreements,
deeds of trust, mortgages, chattel mortgages, pledges, guaranties, financing
statements, continuation statements, extension agreements and other agreements
or instruments now, heretofore, or hereafter delivered by the Company and any of
its Subsidiaries to, any Bank Party in connection with this Agreement or any
transaction contemplated hereby to secure or guarantee the payment of any part
of the Obligations or the performance of any other duties and obligations under
the Basic Documents.
"Senior Subordinated Indenture" shall mean (i) that certain Indenture dated
as of March 15, 1996 among the Company, Subsidiary Guarantors and Chase Bank of
Texas, National Association (f/k/a Texas Commerce Bank National Association), as
Trustee, and (ii) that certain Indenture dated as of July 21, 1997 among the
Company, Subsidiary Guarantors and Chase Bank of Texas, National Association
(f/k/a Texas Commerce Bank National Association), as Trustee, in each case as
amended or modified from time to time in compliance with Section 8.23.
"Senior Subordinated Notes" shall mean (i) the 10 1/4% senior subordinated
notes due 2006 in the aggregate principal amount of $150,000,000 issued by the
Company pursuant to the Senior Subordinated Indenture dated as of March 15, 1996
and (ii) the 10 1/4% senior subordinated notes due 2006 in the aggregate
principal amount of $50,000,000 issued by the Company pursuant to the Senior
Subordinated Indenture dated as of July 21, 1997.
"Society of Petroleum Engineers" shall mean the Society of Petroleum
Engineers of the American Institute of Petroleum or any successor organization
or, if there is no successor organization, a similar organization designated by
Agent.
"Subordinated Indebtedness" shall mean, collectively, (i) Indebtedness of
the Company and its Subsidiaries listed in Schedule 8.09 hereto which is
identified as subordinated indebtedness on such Schedule 8.09, (ii) Indebtedness
of the Company evidenced by the Senior Subordinated Notes and the Indebtedness
of its Subsidiaries from time to time evidenced by the guaranties of such Senior
Subordinated Notes, and (iii) other Indebtedness for which the Company is
directly and primarily liable, in respect of which none of its Subsidiaries is
contingently or otherwise obligated and which is subordinated to the obligations
of the Company to pay principal of and interest on the Loans and the Notes
hereunder on terms satisfactory to
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Majority Lenders, which contain other terms (including interest rate,
amortization and financial covenants) satisfactory to Majority Lenders and where
the aggregate Indebtedness of the Company and the Company's ability to pay its
Indebtedness when due, after giving effect to such Subordinated Indebtedness, is
satisfactory to Majority Lenders.
"Subsidiary" shall mean, for any Person, any corporation or other entity of
which at least a majority of the securities or other ownership interests having
by the terms thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such corporation or
other entity (irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such corporation or other
entity shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person; provided that the term "Subsidiary" shall not
include any of the Partnerships other than any Partnership of which all of the
partnership interests are owned, directly or indirectly, by the Company and/or
any of its Subsidiaries. "Wholly-Owned Subsidiary" shall mean any such
corporation or other entity of which all of such securities or other ownership
interests (other than, in the case of a corporation, directors' qualifying
shares) are so owned or controlled. Notwithstanding the foregoing, pursuant to
Section 8.35 no Unrestricted Subsidiary shall be deemed a "Subsidiary" of the
Company for purposes of this Agreement and each other Basic Document.
"Subsidiary Guaranty" shall mean a Guaranty guaranteeing some or all of the
Obligations executed by one or more Subsidiary Guarantors or any Subsidiary of
the Company which now or hereafter executes and delivers a Guaranty in favor of
Bank Parties (or Agent for the benefit of Bank Parties), as the same shall be
amended, modified and supplemented and in effect from time to time. "Subsidiary
Guaranties" shall mean, collectively, all Subsidiary Guaranties.
"Subsidiary Guarantor" shall mean each of the following Subsidiaries of the
Company: Xxxxxxx Resources, L.P., Calumet Florida, Inc., Plains Illinois Inc.,
PMTI, Plains Resources International Inc., Plains Terminal & Transfer
Corporation, PLX Crude Lines Inc., Xxxxxxx Resources, Inc. and PLX Ingleside
Inc.
"Supermajority Lenders" shall mean Lenders having Percentage Shares equal
to or greater than sixty-six and two-thirds percent (66 2/3%).
"Tangible Net Worth" shall mean, as at any date, the sum for the Company
and its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) the amount of capital stock, plus
(b) the amount of surplus and retained earnings (or in the case of a
surplus or retained earnings deficit, minus the amount of such deficit),
minus
(c) the sum of the following: cost of treasury shares and the book
value of all assets which should be classified as intangibles (without
duplication of deductions in respect of items already deducted in arriving
at surplus and retained earnings) but in any
14
event including goodwill, research and development costs, trademarks, trade
names, copyrights, patents and franchises, unamortized debt discount and
expense, all reserves and any write-up in the book value of assets
resulting from a revaluation thereof subsequent to December 31, 1997.
"Term Loan" shall have the meaning assigned to such term in Section 2.01(b)
hereof.
"Type" shall have the meaning assigned that term in Section 1.04 hereof.
"Unrestricted Subsidiary" shall mean PAAI and each of its Subsidiaries,
whether now existing or hereafter formed or acquired.
1.02 Oil and Gas Terms. As used herein, the terms "reserves," "proved
reserves," "proved developed reserves," "proved developed producing reserves,"
"proved developed nonproducing reserves" and "proved undeveloped reserves" shall
have the meanings given such terms from time to time by the Society of Petroleum
Engineers.
1.03 Accounting Terms and Determinations. (a) Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, all determinations and calculations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be delivered to Bank Parties
hereunder shall be prepared, in accordance with generally accepted accounting
principles as in effect from time to time applied on a basis consistent with
that used in the preparation of the latest financial statements furnished to
Bank Parties hereunder (which, prior to the first financial statements delivered
under Sections 8.01(a), (b) and (c) hereof, shall mean the financial statements
referred to in Section 7.02 hereof).
(b) To enable the ready and consistent determination of compliance with the
covenants set forth in Sections 8.12 and 8.13 hereof, the Company will not
change the last day of its fiscal year from December 31, or the last days of the
first three fiscal quarters in each of its fiscal years from March 31, June 30
and September 30, respectively.
1.04 Types of Loans. Loans hereunder are distinguished by "Type". The
"Type" of a Loan refers to whether such Loan is a Base Rate Loan or a Eurodollar
Loan, each of which constitutes a Type.
Section 2. The Commitment.
2.01 Loans. (a) Each Lender agrees, on the terms of this Agreement, to
make revolving credit loans to the Company in Dollars during the period from and
including the Closing Date to but excluding the Revolving Credit Termination
Date (each, such Lender's "Revolving Credit Loans") in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount of such
Lender's Percentage Share of the Commitment as in effect from time to time,
provided that at no time shall the Facility Usage be in excess of the Borrowing
Base as then in effect. Subject to the terms of this Agreement, during such
period the Company may borrow, repay and reborrow by means of Base Rate Loans
and Eurodollar Loans and may Convert
15
Revolving Credit Loans of one Type into Revolving Credit Loans of another Type
(as provided in Section 2.07(a) hereof) or Continue Revolving Credit Loans of
one Type as Revolving Credit Loans of the same Type; provided that no more than
six separate Interest Periods in respect of Eurodollar Loans may be outstanding
at any one time.
(b) Each Lender agrees, on the terms of this Agreement, to make a term loan
to the Company by converting the Revolving Credit Loans pursuant to Section
3.01(a) hereof, in Dollars on the Revolving Credit Termination Date (such
Lender's "Term Loan") in an amount up to but not exceeding the aggregate unpaid
principal amount of such Lender's Revolving Credit Loans outstanding at the
opening of business on the Revolving Credit Termination Date, provided that the
Facility Usage shall not exceed the Borrowing Base as then in effect.
Thereafter, the Company may Convert Term Loans of one Type into Term Loans of
another Type (as provided in Section 2.07(a) hereof) or Continue Term Loans of
one Type as Term Loans of the same Type; provided that no more than six separate
Interest periods in respect of Eurodollar Loans may be outstanding at any one
time.
2.02 Borrowings. The Company shall give Agent notice of each borrowing
hereunder as provided in Section 4.04 hereof, after which Agent shall give each
Lender prompt written notice thereof. On the date specified for each borrowing
hereunder, each Lender shall, subject to the terms and conditions of this
Agreement, promptly remit to Agent at Agent's Principal Office the amount of
such Lender's Percentage Share of such borrowing in immediately available funds,
and upon receipt of such funds, subject to the terms and conditions of this
Agreement, Agent shall promptly make available the amount of such borrowing to
the Company by depositing the same, in immediately available funds, in an
account of the Company designated by the Company. Unless Agent shall have
received prompt notice from a Lender that such Lender will not make available to
Agent such Lender's Percentage Share of a requested borrowing, Agent may in its
discretion assume that such Lender has made its Percentage Share of such
requested borrowing available to Agent in accordance with this section and Agent
may if it chooses, in reliance upon such assumption, make such borrowing
available to the Company and shall use its best efforts to notify the Company of
such action, provided, however, that any failure by Agent to notify the Company
of such action shall not in any way or manner diminish, nullify or reduce the
Company's and such Lender's obligations in the following sentence. If and to
the extent such Lender shall not so make its Percentage Share of such requested
borrowing available to Agent, such Lender and the Company severally agree to pay
or repay to Agent within three days after demand the amount of such Lender's
Percentage Share of such requested borrowing together with interest thereon, for
each day from the date such amount is made available to the Company until the
date such amount is paid or repaid to Agent, such interest to be paid (i) by
such Lender at the Federal Funds Rate plus $200 per day, and (ii) by the Company
at the interest rate applicable at the time to the remainder of the requested
borrowing made on such date. The failure of any Lender to make its Percentage
Share of any requested borrowing available to Agent hereunder shall not relieve
any other Lender of its obligation hereunder, if any, to make its Percentage
Share of such requested borrowing available to Agent, but no Lender shall be
responsible for any other Lender's failure to make its Percentage Share of any
requested borrowing available to Agent.
2.03 Changes of Commitment. (a) The Company shall make any mandatory
prepayments required by Section 2.07(b) hereof resulting from such Commitment
reduction on the date of such
16
Commitment reduction. The reduction in the Commitment under this Section 2.03(a)
shall be in addition to any reduction in the Commitment pursuant to Section
2.03(b) below.
(b) The Company shall have the right at any time or from time to time (i)
so long as no Loans are outstanding, to terminate the Commitment and (ii) to
reduce the unused amount of the Commitment; provided that (x) the Company shall
give notice of each such termination or reduction as provided in Section 4.04
hereof, and (y) each partial reduction shall be in an amount at least equal to
$500,000 and in multiples of $100,000 in excess thereof.
(c) The Commitment shall be automatically reduced to zero at the close of
business on the Revolving Credit Termination Date.
(d) The Commitment once terminated or reduced may not be reinstated.
2.04 Commitment and Agency Fees. (a) The Company shall pay to Agent for
the account of each Lender a commitment fee on the lesser of the daily average
unused amount of such Lender's Percentage Share of the Commitment and the daily
average unused amount of the Borrowing Base, for the period from and including
the date hereof to but not including the earlier of the date the Commitment is
terminated and the Revolving Credit Termination Date, at a rate per annum equal
to three-eighths of one percent (0.375%). Accrued commitment fees (including
commitment fees accruing under the Original Agreement during the period from
April 1, 1998 through and including the date hereof) shall be payable on each
Quarterly Date and on the earlier of the date the Commitment is terminated or
the Revolving Credit Termination Date.
(b) The Company shall pay to Agent for its own account an agency fee
pursuant to a letter agreement of even date herewith between Agent and the
Company.
2.05 Lending Offices. The Loans of each Type shall be made and maintained
at each Lender's Applicable Lending Office for Loans of such Type.
2.06 Notes. (a) Each Lender's Loans shall be evidenced by a single
promissory note (such Lender's "Note" and collectively, the "Notes") of the
Company substantially in the form of Exhibit "A" hereto, dated the Closing Date,
payable to such Lender at the Principal Office of Agent, in a principal amount
equal to the amount of such Lender's Percentage Share of the Commitment as
originally in effect and otherwise duly completed, such Notes to be given in
renewal, extension and increase of, but not in extinguishment or novation of,
those certain Promissory Notes dated March 7, 1997 in the original aggregate
principal amount of $165,000,000 issued by the Company under the Original
Agreement.
(b) The date, amount, Type, interest rate, and duration of Interest Period
(if applicable) of each Loan made by each Lender to the Company, and each
payment made on account of the principal thereof, shall be recorded by Agent on
its books and by such Lender on its books and, prior to any transfer of such
Lender's Note, endorsed by such Lender on the schedule attached to such Lender's
Note or any Continuation thereof; provided that the failure of such Lender to
make any such recordation or endorsement shall not affect the obligations of the
Company to make a payment when due of any amount owing under such Lender's Note.
17
(c) No Lender shall be entitled to have its Note subdivided, by exchange
for promissory notes of lesser denominations or otherwise, except in connection
with a permitted assignment of all or any portion of its Percentage Share of the
Commitment, its Loans and its Note pursuant to Section 11.06(b) hereof.
2.07 Prepayments and Conversions or Continuations of Loans. (a)
Optional. Subject to Section 4.03 hereof, the Company shall have the right to
prepay Loans, or to Convert Loans of one Type into Loans of another Type or
Continue Loans of one Type as Loans of the same Type, at any time or from time
to time; provided that: (i) the Company shall give Agent and each Lender notice
of each such prepayment, Conversion or Continuation as provided in Section 4.04
hereof and (ii) a Eurodollar Loan may be prepaid or converted only on the last
day of an Interest Period for such Loan. Notwithstanding the foregoing, and
without limiting the rights and remedies of Bank Parties under Section 10
hereof, in the event that any Event of Default shall have occurred and be
continuing, Majority Lenders may suspend the right of the Company to Convert any
Loan into a Eurodollar Loan, or to Continue any Loan as a Eurodollar Loan, in
which event all Loans shall be Converted (on the last day(s) of the respective
Interest Periods therefor) or Continued, as the case may be, as Base Rate Loans.
(b) Mandatory. The Company shall from time to time prepay the Loans in
such amounts as shall be necessary so that at all times (i) the Facility Usage
shall be less than or equal to the Borrowing Base then in effect (unless the
Company shall have provided additional collateral acceptable to Majority Lenders
in their sole discretion) (or, if the Revolving Credit Loans have been paid in
full, deliver LC Collateral to LC Issuer as required under Section 2.14(a)). and
(ii) the Facility Usage shall be less than or equal to the Commitment then in
effect.
(c) Inverse Order. After the Revolving Credit Termination Date, all
optional and mandatory prepayments made on the Term Loans pursuant to Sections
2.07(a) and (b) above shall be applied to the scheduled installments of the Term
Loans in inverse order of their maturity.
2.08 Borrowing Base. (a) During the period commencing on the Closing
Date and ending on the date the first redetermination of the Borrowing Base
becomes effective, the Borrowing Base shall be $225,000,000.
(b) Supermajority Lenders shall endeavor on each May 1 and October 1,
commencing on October 1, 1998, and may at any time upon the occurrence of any
event or change which in the reasonable judgment of such Supermajority Lenders
would have a Material Adverse Effect or a material adverse change in the value
or nature of the Oil and Gas Properties included in the Borrowing Base from the
most recent redetermination pursuant to this Section 2.08 or upon the incurrence
of additional Subordinated Indebtedness, of not less than $10,000,000,
redetermine the amount of the Borrowing Base in accordance with this Section
2.08. The Company may from time to time request in writing a redetermination of
the Borrowing Base (a "Special Redetermination") on a date other than May 1 or
October 1, by delivering to each Lender additional Company Reserve Reports and
other relevant information (including, without limitation, as to any additional
Indebtedness of the Obligors) that any Lender may request and as otherwise
provided in Section 8.04 hereof.
18
(c) Upon receipt of each Engineering Report required by Section 8.04 hereof
or as furnished pursuant to Section 2.08(b) hereof and such other financial
statements, reports, data and supplemental information as may from time to time
be reasonably requested by any Lender, together with a certificate from a senior
officer of the Company that (i) to the best of his knowledge, the information
upon which such Engineering Report is based is true and complete in all material
respects, (ii) identifies the properties covered by such Engineering Report that
have not been previously included in any prior Engineering Reports, (iii) no
Properties mortgaged to Bank Parties (or Agent for the benefit of Bank Parties)
pursuant to the Security Documents have been sold since the date of the last
Borrowing Base determination except as set forth on an exhibit to the
certificate, listing all Properties mortgaged to Lenders (or Agent for the
benefit of Bank Parties) pursuant to the Security Documents sold in such detail
as reasonably required by Agent, (iv) except as set forth on an exhibit to the
certificate, the Company owns good and defensible title to the Oil and Gas
Properties included in such Engineering Report free of all Liens except as
permitted by Section 8.08 hereof, (v) Bank Parties (or Agent for the benefit of
Bank Parties) have valid first and prior liens pursuant to the Security
Documents on not less than 80% of the value of all Oil and Gas Properties
included in such Engineering Report, and (vi) except as set forth on an exhibit
to the certificate, on a net basis there are no gas imbalances, take-or-pay or
other prepayments with respect to such Oil and Gas Properties which would
require the Company to deliver Hydrocarbons produced from such Oil and Gas
Properties at some future time, without then or thereafter receiving full
payment therefor, which would (1) exceed $100,000 for any individual well, (2)
exceed $250,000 in the aggregate or (3) with respect to any individual material
well, exceed the proved developed producing reserves attributable to such well.
Based upon such information and such other information as any Lender, in its
sole reasonable discretion, deems appropriate, Supermajority Lenders shall
endeavor to determine a new Borrowing Base in accordance with the principles
described below.
(d) Determination of the Borrowing Base shall be made by Supermajority
Lenders, in good faith, in the exercise of their respective sole discretion, and
in accordance with their respective customary practices and standards in effect
from time to time for oil and gas loans to borrowers similar to the Company. In
determining the Borrowing Base, Supermajority Lenders shall adjust the reserve
volumes and economics as required by such respective practices and standards of
such Lenders. Supermajority Lenders shall evaluate the proved developed
producing reserves and proved developed nonproducing reserves; provided that
Supermajority Lenders may, in their respective sole discretion, take into
account in determining the Borrowing Base proved undeveloped reserves.
Notwithstanding anything to the contrary contained herein, Supermajority Lenders
may, in their respective sole discretion, exclude from the Borrowing Base any
Oil and Gas Properties as to which Lenders (i) have not received (x) title
opinions that are reasonably acceptable to Agent issued by attorneys competent
in the examination of land titles in the states in which such Oil and Gas
Properties are located or (y) other verification of title acceptable to Agent in
its sole discretion and (ii) do not (or Agent for the benefit of Bank Parties
does not) have a valid first priority perfected Lien pursuant to the Security
Documents. Prices used may be the prices actually being received by the Company
or the prices set by Supermajority Lenders from time to time and utilized
generally in evaluating their respective other oil and gas loans. The pricing,
escalation rate and discount factor may be changed from time to time by
Supermajority Lenders in accordance with their respective current oil and gas
lending criteria. Supermajority Lenders' evaluation may consider, but shall not
be limited to the following: (i) the Properties
19
included in the Engineering Reports which are Properties mortgaged to Bank
Parties (or Agent for the benefit of Bank Parties) pursuant to the Security
Documents, (ii) the degree of title assurance and Lien priority concerning the
Properties mortgaged to Bank Parties (or Agent for the benefit of Bank Parties)
pursuant to the Security Documents, (iii) the production history of the reserves
of the Company, its Subsidiaries and the Partnerships, (iv) take-or-pay, gas
balancing, operating and other agreements affecting the reserves of the Company,
its Subsidiaries and the Partnerships, (v) nature of ownership of the reserves,
(vi) the existence of other collateral, (vii) the financial condition of the
Company, its Subsidiaries and the Partnerships, (viii) the existence of all
Liens affecting the Properties of the Company, its Subsidiaries and the
Partnerships, and (ix) the total Indebtedness of the Company, its Subsidiaries
and the Partnerships and the debt service thereon.
(e) Each redetermination of the Borrowing Base shall be effective and
applicable for all purposes of this Agreement until the effective date of the
next redetermination. Agent shall promptly notify the Company in writing of
each redetermination of the Borrowing Base made by Supermajority Lenders. Until
such notification, the Borrowing Base established for the immediately preceding
period shall remain in effect, and thereafter the new Borrowing Base as set
forth in such notification shall be in effect.
2.09 Letters of Credit. Subject to the terms and conditions hereof, the
Company may during the Revolving Credit Commitment Period request LC Issuer to
issue one or more Letters of Credit, provided that, after taking such Letter of
Credit into account:
(a) the Facility Usage does not exceed the Borrowing Base at such
time; and
(b) the aggregate amount of LC Obligations at such time does not
exceed fifteen percent (15%) of the Borrowing Base at such time; and
(c) the expiration date of such Letter of Credit is prior to the end
of the Revolving Credit Commitment Period; and
(d) such Letter of Credit is to be used for general business purposes
of the Company or its Subsidiaries;
(e) such Letter of Credit is not directly or indirectly used to assure
payment of or otherwise support any Indebtedness of any Person other than
Indebtedness of any Obligor;
(f) the issuance of such Letter of Credit will be in compliance with
all applicable governmental restrictions, policies, and guidelines and will
not subject LC Issuer to any cost which is not reimbursable hereunder;
(g) the form and terms of such Letter of Credit are acceptable to LC
Issuer in its sole and reasonable discretion; and
(h) all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.
20
LC Issuer will honor any such request if the foregoing conditions (a) through
(h) (in the following Section 2.10 called the "LC Conditions") have been met as
of the date of issuance of such Letter of Credit. The Company and Bank Parties
hereby acknowledge and agree that (i) any letters of credit issued under the
Original Agreement and outstanding as of the Closing Date, including without
limitation that certain Letter of Credit Xx. 000000 dated August 23, 1995,
issued by LC Issuer for the benefit of BankBoston, N.A. (f/k/a The First
National Bank of Boston), as agent, for the account of the Company, in the face
amount of $1,000,000, shall be deemed to have been issued hereunder and,
together with any related applications and agreements executed in connection
therewith, are Basic Documents, and (ii) the reimbursement obligations of the
Company relating thereto constitute LC Obligations hereunder, secured by the
Security Documents, including without limitation the Subsidiary Guaranties.
2.10 Requesting Letters of Credit. The Company must make written
application for any Letter of Credit at least three Business Days before the
date on which the Company desires for LC Issuer to issue such Letter of Credit.
By making any such written application the Company shall be deemed to have
represented and warranted that the LC Conditions described in Section 2.09 will
be met as of the date of issuance of such Letter of Credit. Each such written
application for a Letter of Credit must be made in writing in the form and
substance of Exhibit G, the terms and provisions of which are hereby
incorporated herein by reference (or in such other form as may mutually be
agreed upon by LC Issuer and the Company). Two Business Days after the LC
Conditions for a Letter of Credit have been met as described in Section 2.09 (or
if LC Issuer otherwise desires to issue such Letter of Credit), LC Issuer will
issue such Letter of Credit at LC Issuer's office in New York, New York. If any
provisions of any LC Application conflict with any provisions of this Agreement,
the provisions of this Agreement shall govern and control.
2.11 Reimbursement and Participations.
(a) Reimbursement by the Company. Each Matured LC Obligation shall
constitute a loan by LC Issuer to the Company. The Company promises to pay to
LC Issuer, or to LC Issuer's order, on demand, the full amount of each Matured
LC Obligation, unless funded under Section 2.11(b) hereof, together with
interest thereon at the Post-Default Rate.
(b) Revolving Credit Loans Upon Letter of Credit Drawings. If the
beneficiary of any Letter of Credit makes a draft or other demand for payment
thereunder, then the Company shall be deemed to have requested Lenders to make
Revolving Credit Loans to the Company on the date such draft or demand is to be
paid in the amount of such draft or demand. If all conditions precedent to such
Revolving Credit Loans shall be satisfied as of the date on which such Revolving
Credit Loans are to be made, Lenders shall make such Revolving Credit Loans
pursuant to Section 2.01(a) concurrently with LC Issuer's payment of such draft
or demand, and such Revolving Credit Loans shall be immediately used by LC
Issuer to repay the amount of the resulting Matured LC Obligation. For the
purposes of the first sentence of Section 2.01(a) the amount of such Revolving
Credit Loans shall be considered but the amount of the Matured LC Obligation to
be concurrently paid by such Revolving Credit Loans shall not be considered.
(c) Participation by Lenders. LC Issuer irrevocably agrees to grant and
hereby grants to each Lender, and -- to induce LC Issuer to issue Letters of
Credit hereunder -- each Lender
21
irrevocably agrees to accept and purchase and hereby accepts and purchases from
LC Issuer, on the terms and conditions hereinafter stated and for such Lender's
own account and risk an undivided interest equal to such Lender's Percentage
Share of LC Issuer's obligations and rights under each Letter of Credit issued
hereunder and the amount of each Matured LC Obligation paid by LC Issuer
thereunder. Each Lender unconditionally and irrevocably agrees with LC Issuer
that, if a Matured LC Obligation is paid under any Letter of Credit for which LC
Issuer is not reimbursed in full by the Company in accordance with the terms of
this Agreement and the related LC Application (including any reimbursement by
means of concurrent Revolving Credit Loans or by the application of LC
Collateral), such Lender shall (in all circumstances and without set-off or
counterclaim) pay to LC Issuer on demand, in immediately available funds at LC
Issuer's address for notices hereunder, such Lender's Percentage Share of such
Matured LC Obligation (or any portion thereof which has not been reimbursed by
the Company). Each Lender's obligation to pay LC Issuer pursuant to the terms of
this subsection is irrevocable and unconditional. If any amount required to be
paid by any Lender to LC Issuer pursuant to this subsection is paid by such
Lender to LC Issuer within three Business Days after the date such payment is
due, LC Issuer shall in addition to such amount be entitled to recover from such
Lender, on demand, interest thereon calculated from such due date at the Federal
Funds Rate. If any amount required to be paid by any Lender to LC Issuer
pursuant to this subsection is not paid by such Lender to LC Issuer within three
Business Days after the date such payment is due, LC Issuer shall in addition to
such amount be entitled to recover from such Lender, on demand, interest thereon
calculated from such due date at the Post-Default Rate.
(d) Distributions to Participants. Whenever LC Issuer has in accordance
with this section received from any Lender payment of such Lender's Percentage
Share of any Matured LC Obligation, if LC Issuer thereafter receives any payment
of such Matured LC Obligation or any payment of interest thereon (whether
directly from the Company or by application of LC Collateral or otherwise, and
excluding only interest for any period prior to LC Issuer's demand that such
Lender make such payment of its Percentage Share), LC Issuer will distribute to
such Lender its Percentage Share of the amounts so received by LC Issuer;
provided, however, that if any such payment received by LC Issuer must
thereafter be returned by LC Issuer, such Lender shall return to LC Issuer the
portion thereof which LC Issuer has previously distributed to it.
(e) Calculations. A written advice setting forth in reasonable detail the
amounts owing under this section, submitted by LC Issuer to the Company or any
Lender from time to time, shall be conclusive, absent demonstrable error, as to
the amounts thereof.
2.12 Letter of Credit Fees. In consideration of LC Issuer's issuance of
any Letter of Credit, the Company agrees to pay to Agent, for the account of all
Lenders in accordance with their respective Percentage Shares, a letter of
credit issuance fee at a rate equal to one and one-quarter percent (1.25%) per
annum, and to Agent, for its own account, a letter of credit fronting fee at a
rate equal to one-eighth percent (0.125%) per annum; provided that the aggregate
amount of such fees shall not be less than $500 as to any Letter of Credit.
Each such fee will be calculated based on the term and face amount of such
Letter of Credit and the above applicable rate and will be payable on each
Quarterly Date in arrears. In addition, The Company will pay to LC Issuer a
minimum administrative issuance fee of $100 for each Letter of Credit and an
administrative drawing fee of $300 upon any drawing under a Letter of Credit.
22
2.13 No Duty to Inquire.
(a) Drafts and Demands. LC Issuer is authorized and instructed to accept
and pay drafts and demands for payment under any Letter of Credit without
requiring, and without responsibility for, any determination as to the existence
of any event giving rise to said draft, either at the time of acceptance of
payment or thereafter. LC Issuer is under no duty to determine the proper
identity of anyone presenting such a draft or making such a demand (whether by
tested telex or otherwise) as the officer, representative or agent of any
beneficiary under any Letter of Credit, and payment by LC Issuer to any such
beneficiary when requested by any such purported officer, representative or
agent is hereby authorized and approved. The Company agrees to hold LC Issuer
and each other Bank Party harmless and indemnified against any liability or
claim in connection with or arising out of the subject matter of this section,
WHICH INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY
WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY KIND BY ANY BANK PARTY, provided only that no Bank Party shall
be entitled to indemnification for that portion, if any, of any liability or
claim which is proximately caused by its own individual gross negligence or
willful misconduct.
(b) Extension of Maturity. If the maturity of any Letter of Credit is
extended by its terms or by any law or regulation or any interpretation,
directive or request (whether or not having the force of law) of any court or
governmental or monetary authority or other governmental action having
jurisdiction over LC Issuer, if any extension of the maturity or time for
presentation of drafts or any other modification of the terms of any Letter of
Credit is made at the request of the Company or any Subsidiary, or if the amount
of any Letter of Credit is increased at the request of the Company or any
Subsidiary, this Agreement shall be binding upon Obligors with respect to such
Letter of Credit as so extended, increased or otherwise modified, with respect
to drafts and property covered thereby, and with respect to any action taken by
LC Issuer, LC Issuer's correspondents, or any Bank Party in accordance with such
extension, increase or other modification.
(c) Transferees of Letters of Credit. If any Letter of Credit provides
that it is transferable, LC Issuer shall have no duty to determine the proper
identity of anyone appearing as transferee of such Letter of Credit, nor shall
LC Issuer be charged with responsibility of any nature or character for the
validity or correctness of any transfer or successive transfers, and
payment by LC Issuer to any purported transferee or transferees as determined by
LC Issuer is hereby authorized and approved, and the Company further agrees to
hold LC Issuer and each other Bank Party harmless and indemnified against any
liability or claim in connection with or arising out of the foregoing, WHICH
INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY
OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION
OF ANY KIND BY ANY BANK PARTY, provided only that no Bank Party shall be
entitled to indemnification for that portion, if any, of any liability or claim
which is proximately caused by its own individual gross negligence or willful
misconduct.
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2.14 LC Collateral.
(a) LC Obligations in Excess of Borrowing Base. If, after the making of
all mandatory prepayments required under Section 2.07(b), the outstanding LC
Obligations will exceed the Borrowing Base, then in addition to prepayment of
the entire principal balance of the Revolving Credit Loans, the Company will
immediately pay to LC Issuer an amount equal to such excess. LC Issuer will
hold such amount as security for the remaining LC Obligations (all such amounts
held as security for LC Obligations being herein collectively called "LC
Collateral") until such LC Obligations become Matured LC Obligations, at which
time such LC Collateral may be applied to such Matured LC Obligations. So long
as no Default has occurred and is continuing, if such LC Obligations shall
expire or otherwise terminate without a drawing or other demand for payment, or
if the Borrowing Base shall increase such that the Borrowing Base exceeds the
Facility Usage, LC Collateral in an amount equal to such expired or terminated
and undrawn LC Obligation shall be returned to the Company. Neither this
subsection nor the following subsection shall, however, limit or impair any
rights which LC Issuer may have under any other document or agreement relating
to any Letter of Credit or LC Obligation, including any LC Application, or any
rights which any Bank Party may have to otherwise apply any payments by the
Company and any LC Collateral under Section 4.01.
(b) Acceleration of LC Obligations. If the Obligations or any part
thereof become immediately due and payable pursuant to Section 9, then all LC
Obligations shall become immediately due and payable without regard to whether
or not actual drawings or payments on the Letters of Credit have occurred, and
the Company shall be obligated to pay to LC Issuer immediately an amount equal
to the aggregate LC Obligations which are then outstanding. All amounts so paid
shall first be applied to Matured LC Obligations and then held by LC Issuer as
LC Collateral until such LC Obligations become Matured LC Obligations, at which
time such LC Collateral shall be applied to such Matured LC Obligations.
(c) Investment of LC Collateral. Pending application thereof, all LC
Collateral shall be invested by LC Issuer in such investments as LC Issuer may
choose in its sole discretion. All interest on such investments shall be
reinvested or applied to Matured LC Obligations. When all Obligations have been
satisfied in full, including all LC Obligations, all Letters of Credit have
expired or been terminated, and all of the Company's reimbursement obligations
in connection therewith have been satisfied in full, LC Issuer shall release any
remaining LC Collateral. The Company hereby assigns and grants to LC Issuer a
continuing security interest in all LC Collateral paid by it to LC Issuer, all
investments purchased with such LC Collateral, and all proceeds thereof to
secure its Matured LC Obligations and its Obligations under this Agreement, the
Notes, and the other Basic Documents, and the Company agrees that such LC
Collateral and investments shall be subject to all of the terms and conditions
of the Security Documents. The Company further agrees that LC Issuer shall have
all of the rights and remedies of a secured party under the Uniform Commercial
Code as adopted in the State of New York with respect to such security interest
and that an Event of Default under this Agreement shall constitute a default for
purposes of such security interest.
(d) Payment of LC Collateral. When the Company is required to provide LC
Collateral for any reason and fails to do so on the day when required, LC Issuer
may without notice to the
24
Company or any other Obligor provide such LC Collateral (whether by application
of proceeds of other Collateral, by transfers from other accounts maintained
with LC Issuer, or otherwise) using any available funds of the Company or any
other Person also liable to make such payments. Any such amounts which are
required to be provided as LC Collateral and which are not provided on the date
required shall, for purposes of each Security Document, be considered past due
Obligations owing hereunder, and LC Issuer is hereby authorized to exercise its
respective rights under each Security Document to obtain such amounts.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Term Loans. (a) Subject to the terms of this
Agreement, the aggregate outstanding principal of the Revolving Credit Loans
shall convert to Term Loans on the Revolving Credit Termination Date.
(b) The Company will repay the principal of the Term Loans in twenty
installments payable on each Quarterly Date beginning October 1, 2000, with the
final installment being due and payable on or before July 1, 2005. Each such
installment shall be equal to one-twentieth of the original principal amount of
the Term Loans as of the Revolving Credit Termination Date. In any event all
unpaid principal and interest shall be due and payable in full on the final
maturity of July 1, 2005. As set forth in Section 2.07(c), all optional and
mandatory prepayments made on the Term Loans shall be applied to the scheduled
installments in inverse order of their maturity.
3.02 Interest. The Company hereby promises to pay to Agent for the
account of each Lender interest on the unpaid principal amount of each Lender's
Loans for the period from and including the date of such Lender's Loans to but
excluding the date such Lender's Loans shall be paid in full, at the following
rates per annum:
(a) during such periods as such Lender's Loan is a Base Rate Loan, the Base
Rate (as in effect from time to time) plus the Applicable Margin; and
(b) during such periods as such Lender's Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such Loan for
such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to each Bank
Party (without duplication) interest at the applicable Post-Default Rate on any
principal of any Loan and on any other amount payable by the Company hereunder
or under any Note which shall not be paid in full when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise), for the period
from and including the due date thereof to but excluding the date the same is
paid in full. Accrued interest on each Loan shall be payable (i) in the case of
a Base Rate Loan, quarterly on the Quarterly Dates, (ii) in the case of a
Eurodollar Loan, on the last day of each Interest Period therefor (and if such
Interest Period is longer than three months, at three month intervals following
the first day of such Interest Period) and (iii) in the case of any Eurodollar
Loan, upon the payment or prepayment thereof or the Conversion of such Loan to a
Loan of another Type (but only on the principal amount so paid, prepaid or
Converted), except that interest payable at the Post-Default Rate shall be
payable from time to time on demand. Promptly
25
after the determination of any interest rate provided for herein or any change
therein, Agent shall give notice thereof to the Company. Notwithstanding
anything to the contrary herein, in no event shall the interest on any principal
of any Loan or on any other amount payable by the Company hereunder or under the
Notes exceed the Maximum Rate.
Section 4. Payments; Computations; Etc.
4.01 Payments. (a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Company
under this Agreement and the Notes, and, except to the extent otherwise provided
therein, all payments to be made by the Company under any other Basic Document,
shall be made in Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to Agent, for the account of the Bank Party to whom
such payment is owed, as set forth on the signature pages hereto (or such other
account as directed by Agent through notice pursuant to Section 11.02 hereof),
not later than 1:00 p.m. New York time on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).
(b) Any Bank Party may (but shall not be obligated to) debit the amount of
any such payment which is not made by such time to any ordinary deposit account
of the Company with such Bank Party (with notice to Agent and the Company).
(c) The Company shall, at the time of making each payment under this
Agreement or the Notes, specify to Agent the Loans or other amounts payable by
the Company hereunder to which such payment is to be applied. When Agent
collects or receives money on account of the Obligations, Agent shall distribute
all money so collected or received, and Bank Parties shall apply all such money
they receive from Agent, as follows:
(i) first, for the payment of all Obligations which are then due
(and if such money is insufficient to pay all such Obligations, first to
any reimbursements due Agent under Sections 8.06(d) or 11.03 and then to
the partial payment of all other Obligations then due in proportion to the
amounts thereof, or as Bank Parties shall otherwise agree);
(ii) then for the prepayment of amounts owing under the Basic
Documents (other than principal on the Notes) if so specified by the
Company;
(iii) then for the prepayment of principal on the Notes, together
with accrued and unpaid interest on the principal so prepaid; and
(iv) last, for the payment or prepayment of any other Obligations.
All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
2.07(c) and 3.01 hereof. All distributions of amounts described in any of
clauses (ii), (iii) or (iv) above shall be made by Agent pro rata to each Bank
Party that is owed Obligations under such clause, in proportion to all amounts
owed to Agent and
26
all Bank Parties that are owed Obligations under such clause; provided that if
any Lender then owes payments to LC Issuer for the purchase of a participation
under Section 2.11(c) hereof, any amounts otherwise distributable under this
section to such Lender shall be deemed to belong to LC Issuer, to the extent of
such unpaid payments, and Agent shall apply such amounts to make such unpaid
payments rather than distribute such amounts to such Lender.
(d) If the due date of any payment under this Agreement or the Notes would
otherwise fall on a day which is not a Business Day such date shall be extended
to the next succeeding Business Day and interest shall be payable for any
principal so extended for the period of such extension.
4.02 Computations. Interest on Base Rate Loans and Eurodollar Loans and
all fees shall be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable.
4.03 Minimum Amounts. Each borrowing, Conversion and prepayment of
principal of Loans shall be in an amount at least equal to $100,000 and in
multiples of $100,000 in excess thereof (borrowings, Conversions or prepayments
of or into Loans of different Types or, in the case of Eurodollar Loans, having
different Interest Periods at the same time hereunder to be deemed separate
borrowings, Conversions and prepayments for purposes of the foregoing, one for
each Type or Interest Period). Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of Eurodollar Loans having the
same Interest Period shall be in an amount at least equal to $100,000 and in
multiples of $100,000 in excess thereof and, if any Eurodollar Loans would
otherwise be in a lesser principal amount for any period, such Loans shall be
Base Rate Loans during such period.
4.04 Certain Notices. Notices by the Company to Bank Parties of
terminations or reductions of the Commitment, of borrowings, Conversions,
Continuations and optional prepayments of Loans, and of Types of Loans and of
the duration of Interest Periods shall be irrevocable and shall be effective
only if received by each Bank Party not later than 11:00 a.m. New York time on
at least the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or prepayment or the
first day of such Interest Period specified below:
Number of Business
Notice Days Prior
------ ------------------
Termination or reduction of the Commitment 2
Borrowing or prepayment of, or Conversions into,
Base Rate Loans 1
Borrowing or prepayment of, Conversions into, Continuations
as, or duration of Interest Period for, Eurodollar Loans 3
27
Each such notice of termination or reduction shall specify the amount of the
Commitment to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or optional prepayment shall specify the Loans to be
borrowed, Converted, Continued or prepaid and the amount (subject to Section
4.03 hereof) and Type of each Loan to be borrowed, Converted, Continued or
prepaid and the date of borrowing, Conversion, Continuation or optional
prepayment (which shall be a Business Day). Each such notice of the duration of
an Interest Period shall specify the Loans to which such Interest Period is to
relate. In the event that the Company fails to select the Type of Loan, or the
duration of any Interest Period, for any Eurodollar Loan within the time period
and otherwise as provided in this Section 4.04, such Loan (if outstanding as a
Eurodollar Loan) will be automatically Converted into a Base Rate Loan on the
last day of the then current Interest Period for such Loan or (if outstanding as
a Base Rate Loan) will remain as, or (if not then outstanding) will be made as,
a Base Rate Loan.
4.05 Set-off. The Company agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim any Bank
Party may otherwise have, any Bank Party shall be entitled, at its option, to
offset balances held by it for account of the Company at any of its offices, in
Dollars or in any other currency, against any principal of or interest on any of
the Loans or any other amount payable to such Bank Party hereunder, that is not
paid when due (regardless of whether such balances are then due to the Company),
in which case it shall promptly notify Agent and the Company thereof, provided
that such Bank Party's failure to give such notice shall not affect the validity
thereof.
Section 5. Yield Protection, Etc.
5.01 Additional Costs. (a) The Company shall pay to each Bank Party from
time to time such amounts as such Bank Party may determine to be necessary to
compensate it for any costs of such Bank Party which such Bank Party determines
are attributable to its making or maintaining of any Eurodollar Loans or its
obligation to make any Eurodollar Loans hereunder, or any reduction in any
amount receivable by such Bank Party hereunder in respect of any of such Loans
or such obligation, or the issuance of or participation in Letters of Credit
(such increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such
Bank Party under this agreement or its Note in respect of any of such Loans
or Letters of Credit (other than taxes imposed on or measured by the
overall net income of such Bank Party or of its Applicable Lending Office
for any of such loans by the jurisdiction in which such Applicable Lending
Office or the Principal Office is located); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Bank Party (including any of such Loans or any
deposits referred to in the definition of "Eurodollar Rate" in Section 1.01
hereof), or the issuance of or participation in Letters of Credit, or any
commitment of such Bank Party (including the Commitment of such Bank Party
hereunder); or
28
(iii) imposes any other condition affecting this Agreement or the
Notes (or any of such extensions of credit or liabilities), or the issuance
of or participation in Letters of Credit, or the Commitment.
If any Bank Party requests compensation from the Company under this Section
5.01(a) with respect to Eurodollar Loans, the Company may, by notice to such
Bank Party, suspend the obligation of such Bank Party to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the
Regulatory Change giving rise to such request ceases to be in effect.
(b) Without limiting the effect of the provisions of Section 5.01(a) above,
in the event that, by reason of any Regulatory Change, any Bank Party either (i)
incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of such Bank
Party which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank Party which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Bank Party so
elects by notice to the Company, the obligation of such Bank Party to make or
Continue, or to Convert Base Rate Loans into, Eurodollar Loans hereunder shall
be suspended until such Regulatory Change ceases to be in effect.
(c) Without limiting the effect of the foregoing provisions of this Section
5.01 (but without duplication), the Company shall pay to any Bank Party from
time to time on request such amounts as such Bank Party may determine to be
necessary to compensate such Bank Party (or, without duplication, the bank
holding company of which such Bank Party is a subsidiary) for any costs of such
Bank Party which it determines are attributable to the maintenance by such Bank
Party (or any Applicable Lending Office or such bank holding company), pursuant
to any law or regulation or any interpretation, directive or request (whether or
not having the force of law) of any court or governmental or monetary authority
(i) following any Regulatory Change or (ii) implementing, after the Closing
Date, any risk-based capital guideline or requirement (whether or not having the
force of law and whether or not the failure to comply therewith would be
unlawful) heretofore or hereafter issued by any government or governmental or
supervisory authority implementing at the national level the Basle Accord
(including, without limitation, the Final Risk-Based Capital Guidelines of the
Board of Governors of the Federal Reserve System
(12 CFR Part 208, Appendix A; 00 XXX Xxxx 000, Xxxxxxxx X) and the Final Risk-
Based Capital Guidelines of the Office of the Comptroller of the Currency (12
CFR Part 3, Appendix A)), of capital in respect of the Commitment, Loans, or
issuance of or participations in Letters of Credit and commitments and loans and
letters of credit of similar type (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or
equity of such Bank Party (or any Applicable Lending Office or such bank holding
company) to a level below that which such Bank Party (or any Applicable Lending
Office or such bank holding company) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes of this Section
5.01(c), "Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Lending Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.
29
(d) A Bank Party shall notify the Company of any event occurring after the
date of this Agreement that will entitle such Bank Party to compensation under
Sections 5.01(a) or (c) above as promptly as practicable, but in any event
within 90 days, after such Bank Party obtains actual knowledge thereof;
provided, that (i) if such Bank Party fails to give such notice within 90 days
after it obtains actual knowledge of such an event, such Bank Party shall, with
respect to compensation payable pursuant to this Section 5.01 in respect of any
costs resulting from such event, only be entitled to payment under this Section
5.01 for costs incurred from and after the date 90 days prior to the date that
such Bank Party does give such notice and (ii) such Bank Party will designate a
different Applicable Lending Office for the Loans affected by such event if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Bank Party, be disadvantageous to such
Bank Party, except that such Bank Party shall have no obligation to designate an
Applicable Lending Office located in the United States of America. Each Bank
Party will furnish to the Company a certificate setting forth the basis and
amount of each request by such Bank Party for compensation under Sections
5.01(a) or (c) above. Determinations and allocations by a Bank Party for
purposes of this Section 5.01 of the effect of any Regulatory Change pursuant to
Sections 5.01(a) or (b) above, or of the effect of capital maintained pursuant
to Section 5.01(c) above, on its costs or rate of return of maintaining Loans or
its obligation to make Loans, or on amounts receivable by it in respect of
Loans, or issue Letters of Credit or its obligation to participate in Letters of
Credit, and of the amounts required to compensate such Bank Party under this
Section 5.01, shall, absent manifest error, be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar Rate for
any Interest Period, any Bank Party determines (which determination shall,
absent manifest error, be conclusive) that:
(a) quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein; or
(b) the relevant rates of interest referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof upon the basis of which the rate of
interest for Eurodollar Loans for such Interest Period is to be determined are
not likely adequately to cover the cost to such Bank Party of making or
maintaining Eurodollar Loans for such Interest Period;
then such Bank Party shall give the Company prompt notice thereof, and so long
as such condition remains in effect, such Bank Party shall be under no
obligation to make additional Eurodollar Loans, to Continue Eurodollar Loans or
to Convert Base Rate Loans into Eurodollar Loans and the Company shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Loans or Convert such Loans into Base Rate
Loans in accordance with Section 2.07 hereof.
5.03 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Bank Party or its Applicable
Lending Office to honor its obligation to
30
make or maintain Eurodollar Loans hereunder, or to issue or participate in
Letters of Credit, then such Bank Party shall promptly notify the Company
thereof and such Bank Party's obligation to make or Continue, or to Convert
Loans of any other Type into, Eurodollar Loans, or its obligation to issue or
participate in Letters of Credit, shall be suspended until such time as such
Bank Party may again make and maintain Eurodollar Loans, or issue or participate
in Letters of Credit, and the Company shall, upon the request of such Bank
Party, prepay any of such Loans then outstanding hereunder together with accrued
interest thereon, or purchase such Bank Party's participation in any of such
outstanding Letters of Credit.
5.04 Treatment of Affected Loans. If the obligation of any Bank Party to
make Eurodollar Loans or participate in Letters of Credit shall be suspended
pursuant to Section 5.01 or 5.03 hereof (Loans of such type being herein called
"Affected Loans" and such type being herein called the "Affected Type"), all
Loans which would otherwise be made by such Bank Party as Loans of the Affected
Type shall be made instead as Base Rate Loans, and all participations in Letters
of Credit that would otherwise be purchased by such Bank Party shall be instead
purchased by the Company, and, if an event referred to in Sections 5.01(b) or
5.03 hereof has occurred and such Bank Party so requests by notice to the
Company, all Affected Loans of such Bank Party then outstanding shall be
automatically converted into Base Rate Loans on the date specified by such Bank
Party in such notice, and all such Bank Party's participations in any
outstanding Letters of Credit shall be purchased by the Company (which date for
Affected Loans, subject to the event referred to in Section 5.01(b) hereof,
shall be the last day of the then current Interest Period for outstanding
Eurodollar Loans or, if such Bank Party waives any requirements for the payment
of Additional Costs in respect of an earlier date, such earlier date as is
specified in such notice) and, to the extent that Affected Loans are so made (or
converted), all payments of principal which would otherwise be applied to such
Bank Party's Affected Loans shall be applied instead to such Loans.
5.05 Compensation. The Company shall pay to any Bank Party, upon the
request of such Bank Party, such amount or amounts as shall be sufficient (in
the reasonable opinion of such Bank Party) to compensate it for any loss, cost
or expense of such Bank Party which such Bank Party determines is attributable
to:
(a) any payment, prepayment or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 10 hereof) on a date other than the last day of the Interest Period for
such Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in Section
7 hereof to be satisfied) to borrow a Eurodollar Loan on the date for such
borrowing specified in the relevant notice of borrowing given pursuant to
Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid prepaid or
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such
31
Loan (or, in the case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date specified for such borrowing) at the
applicable rate of interest for such Loan provided for herein over (ii) the
amount of interest which otherwise would have accrued on such principal amount
at a rate per annum equal to the interest component of the amount such Bank
Party would have bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such Bank Party).
Section 6. Conditions Precedent.
6.01 Initial Loan. The obligation of each Lender to make the initial Loan
hereunder, and of LC Issuer to issued its first Letter of Credit hereunder, is
subject to the receipt by each Lender of the following documents, each of which
shall be satisfactory to each Lender in form and substance:
(a) Corporate Documents. The following documents, each certified as
indicated below:
(i) a copy of the charter, as amended, of the Company certified by
the Secretary of State of Delaware, a copy of the charter, as amended, of
each Subsidiary Guarantor of the Company certified by the Chief Financial
Officer or the Secretary of the Company, a certificate dated as of a recent
date as to the good standing of and charter documents filed by such Obligor
from the Secretary of State of its jurisdiction of incorporation, and
certificates dated as of a recent date issued by appropriate officials in
each state in which such Obligor owns property subject to any Security
Document as to such Obligor's good standing and due qualification to do
business;
(ii) a certificate of the Secretary or an Assistant Secretary of each
Obligor, dated the Closing Date and certifying (A) that attached thereto is
a true and complete copy of the by-laws of such Person as in effect on the
date of such certificate, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the board of directors of such Person
authorizing the execution, delivery and performance of such of the Basic
Documents to which such Person is or is intended to be a party and the
extensions of credit hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that
the charter of such Person has not been amended since the date of the
certification thereto furnished pursuant to Section 6.01(a)(i) above, and
(D) as to the incumbency and specimen signature of each officer of such
Person executing such of the Basic Documents to which such Person is
intended to be a party and each other document to be delivered by such
Person from time to time in connection therewith (and Bank Parties may
conclusively rely on such certificate until it receives notice in writing
from such Person);
(iii) a certificate of another officer of each Obligor as to the
incumbency and specimen signature of the Secretary or Assistant Secretary,
as the case may be, of such Obligor, and a corresponding certificate of
another officer of such Obligor as to its signing officers.
32
(b) Officer's Certificate. A certificate of the President or Chief
Financial Officer to the effect set forth in the first sentence of Section 6.02
hereof.
(c) Opinion of General Counsel to the Obligors. An opinion of Xxxxxxx X.
Xxxxxxxxx, general counsel to the Obligors, substantially in the form of Exhibit
"C" hereto.
(d) Opinions of Special Counsel to the Obligors. An opinion of Fulbright &
Xxxxxxxx L.L.P., special Texas and New York counsel to the Obligors,
substantially in the form of Exhibit "D" hereto.
(e) Opinions of Special Counsel to Agent. An opinion of Xxxxxxxx & Knight,
special Texas counsel to Agent, in form and substance satisfactory to Agent.
(f) Notes. Each Lender's Note, duly completed and executed.
(g) Security Documents. Each Security Document listed on Schedule 6.01(g)
attached hereto, duly executed and delivered by each party thereto.
(h) Insurance. Certificates of insurance evidencing the existence of all
insurance required to be maintained by the Company pursuant to Section 8.06
hereof, such certificates to be in such form and contain such information as is
specified in said Section 8.06. In addition, the Company shall have delivered a
certificate of a senior officer of the Company setting forth the insurance
obtained by it in accordance with the requirements of said Section 8.06 and
stating that such insurance is in full force and effect and that all premiums
then due and payable thereon have been paid.
(i) Environmental Compliance Certificate. A certificate of the President
or Chief Financial Officer of the Company substantially in the form attached
hereto as Exhibit "E".
(j) Subsidiary Guaranty. A Subsidiary Guaranty by each of the Subsidiaries
other than PMCT, substantially in the form attached hereto as Exhibit B-1 (as to
each Subsidiary Guarantor other than Xxxxxxx Resources, L.P., Calumet Florida,
Inc. and Plains Illinois Inc.) and Exhibit B-2 (as to Xxxxxxx Resources, L.P.,
Calumet Florida, Inc. and Plains Illinois Inc.).
(k) Other Documents. Such other documents as Agent may reasonably request.
6.02 Initial and Subsequent Loans. The obligation of each Lender to make
any Loan to the Company upon the occasion of each borrowing hereunder (including
the initial borrowing), and the obligation of LC Issuer to issue any Letter of
Credit hereunder (including its first Letter of Credit), is subject to the
further conditions precedent that, both immediately prior to the making of such
Loan and also after giving effect thereto: (i) no Default shall have occurred
and be continuing; (ii) the representations and warranties made by the Company
in Section 8 hereof, and by each Obligor in each of the other Basic Documents to
which such Obligor is a party, shall be true and complete on and as of the date
of the making of such Loan, or the date of issuance of such Letter of Credit,
with the same force and effect as if made on and as of such date except to the
extent that such representation or warranty was made as of a specific date or
updated,
33
modified or supplemented as of a subsequent date with the consent of Majority
Lenders; (iii) the Facility Usage shall not exceed the Borrowing Base or the
Commitment; and (iv) no Material Adverse Effect shall have occurred and be
continuing since the date of the immediately preceding Loan made, or the date of
issuance of the immediately preceding Letter of Credit issued, hereunder (and in
the case of the initial Loan or the first Letter of Credit, since the date of
the Financial Statements delivered to Bank Parties as described in Section 7.02
hereof). Each notice of borrowing or LC Application by the Company hereunder
shall constitute a certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice and, unless the Company
otherwise notifies Bank Parties prior to the date of such borrowing or the date
of issuance of such Letter of Credit, as of the date of such borrowing or the
date of issuance of such Letter of Credit).
Section 7. Representations and Warranties. The Company represents and
warrants to each Bank Party that:
7.01 Corporate Existence. Each of the Company, its Subsidiaries and each
of the Partnerships: (a) is a corporation, partnership or other entity duly
organized and validly existing under the laws of the jurisdiction of its
organization; (b) has all requisite corporate or other power, and has all
material governmental licenses, franchises, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted, except as disclosed in Schedule 7.01 hereto; and
(c) is qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify would have a Material Adverse Effect.
7.02 Financial Condition. The Company has delivered to Each Bank Party
copies of the consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of December 31, 1997, and the related consolidated statements of
operations, shareholders' equity and cash flows of the Company and its
Consolidated Subsidiaries for the fiscal year ended on said date, with reports
thereon by Price Waterhouse, independent public accountants, and the
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
of March 31, 1998, and the related consolidated statements of operations,
shareholders' equity and cash flows of the Company and its Consolidated
Subsidiaries for the fiscal quarter ended on such date. Such financial
statements are called the "Financial Statements". The Financial Statements
(including in each case, without limitation, the related schedules and notes)
are complete and correct and fairly present the consolidated position of the
Company and its Consolidated Subsidiaries as of the respective dates of said
balance sheets and the consolidated results of their operations for the
respective periods covered by said statements of operations, shareholders'
equity and cash flows, and have been prepared in accordance with GAAP
consistently applied by the Company and its Consolidated Subsidiaries throughout
the periods involved. Except as set forth in Schedule 7.02
34
hereto, neither the Company nor any of its Subsidiaries had on December 31, 1997
any material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments not referred to or reflected or provided for in said balance sheet
as at said date. Since December 31, 1997, there has been no material adverse
change in the consolidated financial condition, operations, business or
prospects taken as a whole of the Company and its Consolidated Subsidiaries.
Except as set forth in Schedule 7.02 hereto, the Partnerships do not have any
material assets except as reflected in the Initial Reserve Reports heretofore
delivered to each Bank Party, or liabilities.
7.03 Litigation. Except as set forth in Schedule 7.03 hereto, there are
no legal or arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the best
knowledge of the Company) threatened against the Company, any of its
Subsidiaries or any of the Partnerships which, if adversely determined, could
have a Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of this Agreement, the
Notes and the other Basic Documents, the consummation of the transactions herein
and therein contemplated and compliance with the terms and provisions hereof and
thereof will conflict with or result in a breach of, or require any consent
under, the charter or by-laws of any Obligor, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any material agreement or instrument to
which the Company, any of its Subsidiaries or any of the Partnerships is a party
or by which any of them is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or (except for the
Liens created pursuant to the Security Documents) result in the creation or
imposition of any Lien upon any Property of the Company or any of its
Subsidiaries or any of the Partnerships pursuant to the terms of any such
agreement or instrument.
7.05 Due Execution. Each Obligor has all necessary corporate power and
authority to execute, deliver and perform its obligations under each of the
Basic Documents to which it is or is intended to be a party; the execution,
delivery and performance by each Obligor of each of the Basic Documents to which
it is or is intended to be a party have been duly authorized by all necessary
corporate action on its part; and this Agreement has been duly and validly
executed and delivered by each Obligor and constitutes, and each of the other
Basic Documents to which such Obligor is or is intended to be a party when
executed and delivered by such Obligor (in the case of any Note, for value) will
constitute, its legal, valid and binding obligation, enforceable against it in
accordance with its terms except as such enforceability may be limited by
bankruptcy or other similar laws of general applicability affecting the
enforcement of creditor's rights and general principals of equity.
7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency are necessary for the execution, delivery or performance by any Obligor
of the Basic Documents to which such Obligor is a party or for the validity or
enforceability thereof, except for filings and recordings in respect of the
Liens created pursuant to the Security Documents.
7.07 Use of Loans. Neither the Company nor any of its Subsidiaries or any
of the Partnerships is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock and no
part of the proceeds of any extension of credit hereunder will be used to buy or
carry any Margin Stock.
35
7.08 ERISA. The Company and the ERISA Affiliates have fulfilled their
respective obligations under the minimum funding standards of ERISA and the Code
with respect to each Plan and are in compliance in all material respects with
the presently applicable provisions of ERISA and the Code, and have not incurred
any liability to the PBGC or any Plan or Multiemployer Plan (other than to make
contributions in the ordinary course of business).
7.09 Taxes. Except as disclosed to Bank Parties as set forth in Schedule
7.09, the United States Federal income tax returns of the Company, its
subsidiaries and the Partnerships have never been examined. The Company, its
subsidiaries and the partnerships have filed all United States Federal income
tax returns and all other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company, any of its Subsidiaries and any of the
Partnerships. The charges, accruals and reserves on the books of the Company,
its Subsidiaries and the Partnerships in respect of taxes and other governmental
charges are, in the opinion of the Company, adequate. If the Company is a
member of an affiliated group of corporations filing consolidated returns for
United States Federal Income tax purposes, it is the "common parent" of such
group. There are no applicable taxes, fees or other governmental charges
payable in connection with the execution and delivery of this Agreement, the
Notes or any of the other Basic Documents, except for fees and taxes payable in
connection with the filing or recording of the Security Documents.
7.10 Investment Company Act. Neither the Company nor any of its
Subsidiaries or any of the Partnerships is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
7.11 Public Utility Holding Company Act. Neither the Company nor any of
its Subsidiaries or any of the Partnerships is a "holding company", or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
7.12 Titles to Oil and Gas Properties. The Oil and Gas Properties listed
in the Initial Reserve Reports are true, complete and correct lists of all Oil
and Gas Properties owned, as of the date hereof, by the Company, its
Subsidiaries and the Partnerships, other than (i) such Oil and Gas Properties
that individually have a value (determined in accordance with the guidelines
established by the Securities and Exchange Commission) of less than $25,000 and,
in the aggregate, have a value (so determined) of less than $2,000,000 and (ii)
Oil and Gas Properties without any proven reserves. The Properties mortgaged to
Bank Parties (or Agent for the benefit of Bank Parties) by the Company and its
Subsidiaries pursuant to the Security Documents consist, in part, of all Oil and
Gas Properties of the Company and its Subsidiaries, other than the Oil and Gas
Properties referred to in clauses (i) and (ii) above of this Section 7.12 and as
otherwise set forth on Schedule 7.12 hereto. Each of the Company, its
Subsidiaries and the Partnerships has, as of the Closing Date, good and
defensible title to the Oil and Gas Properties listed in the Initial Reserve
Reports and to all of its other properties, free and clear of all Liens except
Liens permitted by Section 8.08 hereof and except as disclosed in title opinions
and other title verification materials delivered in connection with the Original
Agreement. The Company, its Subsidiaries and the Partnerships own the working
interest and the net revenue interests in production attributable to the xxxxx
and units reflected in the Initial Reserve Reports and the ownership of such
Properties does not
36
obligate the Company, any of its Subsidiaries or any Partnership to bear the
costs and expenses relating to the maintenance, development and operations of
any such Property in an amount in excess of the working interest of such
Property set forth in the Initial Reserve Reports (except in connection with the
assumption of a joint interest owner's share of costs under the nonconsent
provisions of standard operating agreements). Further, upon delivery of each
Engineering Report pursuant to Section 8.04 hereof, the statements made in the
preceding sentence shall be true with respect to such Engineering Report. All
information contained in the Initial Reserve Reports is true and correct in all
material respects as of the date thereof and as of the Closing Date. The Company
has delivered to each Bank Party all available copies of the most recent title
opinions that the Company has commissioned with respect to the Properties
mortgaged to Bank Parties (or Agent for the benefit of Bank Parties) pursuant to
the Security Documents.
7.13 Foreign Assets Control Regulations, Etc. Neither the Company nor any
of its Subsidiaries or any of the Partnerships is a "national" of any foreign
country designated in the Foreign Assets Control Regulations, the Company
hereunder nor its use of the proceeds thereof will violate the Foreign Assets
Control Regulations, the Cuban Assets Control Regulations, the Iranian Assets
Control Regulations, the Nicaraguan Trade Control Regulations, the South African
Transactions Regulations, the Libyan Sanctions Regulations, the Iranian
Transactions Regulations or the Panamanian Transaction Regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or the
Comprehensive Anti-Apartheid Act of 1986 (P.L. 99-440) or Executive Orders 12722
and 12724 (55 Fed. Reg. 31803 and 55 Fed. Reg 33089) Blocking Iraqi Government
Property and Prohibiting Transactions with Iraq and Executive Orders 12723 and
12725 (55 Fed. Reg. 31805 and 55 Fed. Reg. 33091) Blocking Kuwaiti Government
Property and Prohibiting Transactions with Kuwait. None of the proceeds of the
Loans or Letters of Credit under this Agreement will be used, directly or
indirectly, for the purpose of engaging in any transaction which violates any of
said Regulations or which violates the Regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended), or any regulation or
ruling issued thereunder.
7.14 Gas Imbalances. As of and after the date hereof, except as disclosed
in the certificate delivered by the Company pursuant to Section 2.08(c) hereof,
there are no net gas imbalances, take-or-pay or other prepayment credit
obligations with respect to any Obligor's Oil and Gas Properties which would
require such Obligor to deliver Hydrocarbons produced from such Oil and Gas
Properties at some future time, without then or thereafter receiving full
payment therefor, in amounts (i) exceeding $500,000 for any individual well,
(ii) exceeding $2,000,000 in the aggregate for all Obligors or (iii) with
respect to any individual material well, exceeding the proved developed
producing reserves attributable to such well.
7.15 Rate Filings. Neither the Company nor any of its Subsidiaries or any
Partnership has violated any provisions of the Natural Gas Act or the Natural
Gas Policy Act of 1978 or any other Federal or state law or any of the
regulations thereunder (including those of the respective conservation
commissions and land offices of the various jurisdictions having authority over
the Property mortgaged to Bank Parties (or Agent for the benefit of Bank
Parties) pursuant to the Security Documents) with respect to the Property
mortgaged to Bank Parties (or Agent for the benefit of Bank Parties) pursuant to
the Security Documents which would have a Material Adverse Effect. The Company,
each of its Subsidiaries and each Partnership has made all
37
necessary material rate filings, certificate applications, well category
filings, interim collection filings and notices, and any other filings or
certifications, and has received all necessary material regulatory
authorizations (including, without limitation, necessary authorizations, if any,
with respect to any processing arrangements conducted by it or others respecting
the Properties mortgaged to Bank Parties (or Agent for the benefit of Bank
Parties) pursuant to the Security Documents or production therefrom) required
under the laws and regulations with respect to all of the Properties mortgaged
to Bank Parties (or Agent for the benefit of Bank Parties) pursuant to the
Security Documents or production therefrom. No material rate filing, certificate
application, well category filing, interim collection filing or notice, or other
filing and certification contains any untrue statement of any material fact or
omits any statement of material fact necessary for said filing.
7.16 Qualification to Hold Federal Oil and Gas Leases. Each of the
Company, its Subsidiaries and the Partnerships that own onshore oil and gas
leases is duly qualified to own and hold United States on shore oil and gas
leases and has obtained approval by the United States Bureau of Land Management
of its ownership thereof, and, to the extent it is the operator of such leases,
of its role as operator thereof. The Company does not own any United States
offshore oil and gas leases.
7.17 Drilling and Operations. Since owned by the Company and to the best
of its knowledge prior thereto, the oil and gas xxxxx comprising the producing
Properties mortgaged to Bank Parties (or Agent for the benefit of Bank Parties)
pursuant to the Security Documents have been drilled and operated in all
material respects in accordance with the material terms of relevant leases and
agreements and applicable Federal, state, and local laws and regulations and are
bottomed on and producing from the drilling and spacing units or blocks therefor
and no failure to comply therewith could have a Material Adverse Effect.
7.18 Payments by Purchasers of Production. All material amounts of
proceeds from the sale by the Company or any of its Subsidiaries of any interest
in oil and gas production from the Properties mortgaged to Bank Parties (or
Agent for the benefit of Bank Parties) pursuant to the Security Documents are
currently being paid in full to the Company or such Subsidiary or have been paid
to the Company or such Subsidiary or its respective predecessors in interest by
the purchaser thereof on a timely basis and at prices and terms comparable to
market prices and terms generally available at the time such prices and terms
were negotiated for oil and gas production from producing areas situated near
the Properties mortgaged to Bank Parties (or Agent for the benefit of Bank
Parties) pursuant to the Security Documents and none of such proceeds are
currently being held in suspense by such purchaser or any other party except for
routine delays in the ordinary course of business.
7.19 Credit Agreements. Schedule 7.19 hereto is a complete and correct
list, as of the date of this Agreement, of each credit agreement, loan
agreement, indenture, purchase agreement, guaranty or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guaranty by, the
Company or any of its Subsidiaries or any Partnership the aggregate principal or
face amount of which equals or exceeds (or may equal or exceed) $1,000,000 and
the aggregate principal or face
38
amount outstanding or which may become outstanding under each such arrangement
is correctly described in said Schedule 7.19 .
7.20 Hazardous Materials. (a) The Company, each of its Subsidiaries and
each Partnership have obtained all permits, licenses and other authorizations
which are required under all applicable Environmental Laws, except to the extent
failure to have any such permit, license or authorization would not have a
Material Adverse Effect. The Company, each of its Subsidiaries and each
Partnership are in compliance with the terms and conditions of all such permits,
licenses and authorizations, and are also in compliance with all applicable
Environmental Laws, except to the extent failure to comply would not have a
Material Adverse Effect. No action to revoke any permit, license or other
authorization is pending or, to the best knowledge of the Company, threatened.
(b) No notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or, to the best
knowledge of the Company, threatened by any governmental or other entity with
respect to any alleged failure by the Company, its Subsidiaries, any Partnership
or any Environmental Affiliate to have any permit, license or authorization
required in connection with the conduct of the business of the Company, its
Subsidiaries, any Partnership or any Environmental Affiliate or with respect to
any generation, treatment, storage, recycling, transportation, release or
disposal, or any release as defined in 42 U.S.C. (S) 9601(22) ("Release"), of
any substance regulated under Environmental Laws ("Hazardous Materials")
generated by the Company, its Subsidiaries, any Partnership or any Environmental
Affiliate.
(c) Neither the Company, its Subsidiaries, any Partnership or any
Environmental Affiliate has handled any Hazardous Materials, other than as a
generator, on any properties now or previously owned or leased by the Company,
its Subsidiaries, any Partnership or Environmental Affiliate to an extent that
it has, or may reasonably be expected to have, a Material Adverse Effect; and
(i) no PCB contamination is present at any Properties now (or, to
the best of the Company's knowledge, previously) owned or leased by the
Company, its Subsidiaries, any Partnership or any Environmental Affiliate;
(ii) no asbestos is present at any Properties now (or, to the best of
the Company's knowledge, previously) owned or leased by the Company, its
Subsidiaries, any Partnership or any Environmental Affiliate;
(iii) there are no underground storage tanks for Hazardous Materials,
active or abandoned, at any Properties now (or, to the best of the
Company's knowledge, previously) owned or leased by the Company, its
Subsidiaries, any Partnership or any Environmental Affiliate; and
(iv) no Hazardous Materials have been Released at, on or under any
Properties now (or, to the best of the Company's knowledge, previously)
owned or leased by the
39
Company, its Subsidiaries, any Partnership or any Environmental Affiliate
to an extent that it has, or may reasonably be expected to have, a Material
Adverse Effect.
(d) Neither (i) to the knowledge of the Company nor (ii) to an extent that
has or may be reasonably be expected to have a Material Adverse Effect, whether
or not known by the Company, has the Company, its Subsidiaries, any Partnership
or any Environmental Affiliate transported or arranged for the transportation
of, any Hazardous Material to any location which is listed on the National
Priorities List under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), listed for possible inclusion on
the National Priorities List by the Environmental Protection Agency in the
Comprehensive Environmental Response, Compensation and Liability Information
System List ("CERCLIS") or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations which may
lead to claims against the Company, its Subsidiaries, any Partnership or any
Environmental Affiliate for clean-up costs, remedial work, damages to natural
resources or for personal injury claims, including, but not limited to, claims
under CERCLA.
(e) No Hazardous Material generated by the Company, its Subsidiaries, any
Partnership or any Environmental Affiliate has been recycled, treated, stored,
disposed of or released by the Company, its Subsidiaries, any Partnership or any
Environmental Affiliate at any location, to the extent that it has or may
reasonably be expected to have, a Material Adverse Effect.
(f) No written notification of a Release, to the extent that it has or may
reasonably be expected to have, a Material Adverse Effect, of a Hazardous
Material has been filed by or on behalf of the Company, its Subsidiaries, any
Partnership or any Environmental Affiliate and no Properties now or previously
owned or leased by the Company, its Subsidiaries, any Partnership or any
Environmental Affiliate is listed or listed for possible inclusion on the
National Priority list promulgated pursuant to CERCLA, on CERCLIS or on any
similar state list of sites requiring investigation or clean-up.
(g) No Liens have arisen under or pursuant to any Environmental Laws on any
of the real Properties or Properties owned or leased by the Company, its
Subsidiaries, any Partnership or any Environmental Affiliate, and no government
actions have been taken or are in process which could subject any of such
Properties to such Liens, and neither the Company, its Subsidiaries, any
Partnership or any Environmental Affiliate would be required to place any
notice or restriction relating to the presence of Hazardous Materials at any
Properties owned by it in any deed to such properties.
(h) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or which are in the possession of
the Company, its Subsidiaries, any Partnership or any Environmental Affiliate in
relation to any Properties or facility now or previously owned or leased by the
Company, its Subsidiaries, any Partnership or any Environmental Affiliate which
have not been made available to each Bank Party or their agents, employees or
contractors. The Company has not received notice of any Environmental Claim
that has not been provided to each Bank Party.
40
(i) Each of the representations and warranties made in Sections 7.20(a),
(b), (c), (d), (e), (f), (g) and (h) herein are made subject to those matters
disclosed in a letter from the Company to Bank Parties delivered on the date
hereof and signed by the Company and Agent for identification with this
Agreement.
7.21 Subsidiaries and Partnerships. Set forth in Schedule 7.21 hereto is
a complete and correct list, as of the date of this Agreement, of all
Subsidiaries of the Company and all partnerships (other than any partnership
regarded as such solely for Federal income tax purposes if such partnership has
made or is deemed to have made an election to be excluded from Subchapter K,
Chapter 1, Subtitle A of the Code as permitted by Section 761 of the Code and
the regulations thereunder) of which the Company or any of its Subsidiaries is a
general or limited partner (and the jurisdiction of incorporation or
organization of each such Subsidiary or partnership) and of all Investments held
by the Company or any of its Subsidiaries in any joint venture or other Person.
Except as disclosed in Schedule 7.21 hereto the Company owns, free and clear of
Liens, all outstanding shares of such Subsidiaries and interests in such
partnerships (and each such Subsidiary owns, free and clear of Liens, all
outstanding shares of its Subsidiaries) and all such shares are validly issued,
fully paid and nonassessable and the Company (or the respective Subsidiary) also
owns, free and clear of Liens, all such Investments.
7.22 True and Complete Disclosure. No information, report, financial
statement, exhibit, schedule or disclosure letter furnished to Agent or any Bank
Party in writing by or on behalf of the Company, any of its Subsidiaries or any
Partnership in connection with the negotiation, preparation or delivery of this
Agreement, the Notes, and the other Basic Documents or included therein or
delivered pursuant thereto contains any untrue statement of material fact or
omits or omitted to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by or on
behalf of the Company, its Subsidiaries and any Partnership to Agent or any Bank
Party in connection with this Agreement and the other Basic Documents and the
transactions contemplated hereby and thereby will be true, complete and accurate
in every material respect or based on reasonable estimates on the date as of
which such information is stated or certified. There is no fact known to the
Company, any of its Subsidiaries or any Partnership that could have a Material
Adverse Effect that has not been disclosed herein, in the other Basic Documents
or in a report, financial statement, exhibit, schedule, disclosure letter or
other writing furnished to each Bank Party for use in connection with the
transactions contemplated hereby.
7.23 No Election to be Treated as a Utility. No Obligor has made an
election to be treated as a utility (as defined in Section 35.01(a)(2) of the
Texas Business and Commerce Code).
Section 8. Covenants of the Company. The Company covenants and agrees
with each Bank Party that, so long as the Commitment or any Loan is outstanding
and until payment in full of all amounts payable by the Company hereunder:
8.01 Financial Statements. The Company will deliver to each Bank Party.
41
(a) as soon as available and in any event within 45 days after the end of
each of the first three quarterly fiscal periods of each fiscal year of the
Company, (i) consolidated statements of income, retained earnings and cash flow
of the Company and its Consolidated Subsidiaries for the period from the
beginning of the respective fiscal year to the end of such period, and the
related consolidated balance sheets as at the end of such period, setting forth
in each case in comparative form the corresponding consolidated figures for the
corresponding period in the preceding fiscal year that is presently required to
be disclosed, and in the form presently required, in Form 10-Q promulgated by
the Securities and Exchange Commission, all in reasonable detail, accompanied by
a certificate of the Chief Financial Officer, which certificate shall state that
said financial statements fairly present the consolidated financial condition
and results of operations of the Company and its Consolidated Subsidiaries, in
accordance with GAAP, consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments) and (ii) supporting
consolidating statements of income, retained earnings and cash flow of the
Company and its Consolidated Subsidiaries for the period from the beginning of
the respective fiscal year to the end of such period and the related
consolidating balance sheets as at the end of such period for each unaudited
financial report described in clause (i) above of this Section 8.01(a), and
accompanied by a certificate of the Chief Financial Officer, which certificate
shall state that said consolidating financial statements are true and complete
and have been prepared in accordance with prudent accounting practice;
(b) as soon as available and in any event within 90 days after the end of
each fiscal year of the Company, (i) consolidated statements of income, retained
earnings and cash flow of the Company and its Consolidated Subsidiaries for such
year and the related consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form the corresponding consolidated
figures for the preceding fiscal year, and accompanied, by an opinion thereon of
Price Waterhouse or other independent public accountants of recognized national
standing acceptable to Majority Lenders, which opinion shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the Company and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year in accordance with
GAAP, and a certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no knowledge, except as
specifically stated, of any Default, or if such Default then exists, specifying
the nature and period of existence thereof and (ii) supporting consolidating
statements of income, retained earnings and cash flow of the Company and its
Consolidated Subsidiaries for such year and the related consolidating balance
sheets as at the end of such year for each annual audit report described in
clause (i) above of this Section 8.01(b), and accompanied by a certificate of
the Chief Financial Officer, which certificate shall state that said
consolidating financial statements are true and complete and have been prepared
in accordance with prudent accounting practice;
(c) as soon as available and in any event within 90 days after the end of a
fiscal year of each Partnership other than those Partnerships identified on
Schedule 8.01(c) hereto, the respective statements of operations, partners'
equity and cash flows of each such Partnership for such year and the related
balance sheets as at the end of such year, setting forth in each case in
comparative form the corresponding figures for the preceding fiscal year, and
accompanied by an opinion of independent public accountants of recognized
national standing, which opinion shall state that said financial statements
fairly present the financial condition and results of operations
42
of such Partnership as at the end of, and for, such fiscal year in accordance
with GAAP, and a certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no knowledge, except as
specifically stated, of any Default, or if such Default then exists, specifying
the nature and period of existence thereof;
(d) promptly upon their becoming available, copies of all registration
statements and regular periodic reports (including, without limitation, reports
filed on Form 8-K pursuant to the Securities Exchange Act of 1934), if any,
which any Obligor shall have filed with the Securities and Exchange Commission
(or any governmental agency substituted therefor) or any national securities
exchange;
(e) promptly upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements so
mailed;
(f) upon the release thereof, copies of any press releases or ether public
announcements of any Obligor;
(g) as soon as is available, and in any event within 90 days after the end
of each fiscal year of the Company (commencing with current fiscal year), a five
year financial plan for the Company (in form reasonably satisfactory to Agent),
prepared by a senior financial officer thereof (the "Five Year Plan"), setting
forth for the first year thereof, month by month financial projections for the
Company, and thereafter setting forth yearly financial projections for the
Company;
(h) as soon as possible, and in any event within ten days after the Company
knows or has reason to believe that any of the events or conditions specified
below with respect to any Plan or Multiemployer Plan have occurred or exist, a
statement signed by the Chief Financial Officer setting forth details respecting
such event or condition and the action, if any, which the Company or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by the Company or an ERISA
Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA and
the regulations issued thereunder, with respect to a Plan, as to which PBGC
has not by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of Section
412 of the Code or Section 302 of ERISA shall be a reportable event
regardless of the issuance of any waivers in accordance with Section 412(d)
of the Code);
(ii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by
43
the Company or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal by the Company or any ERISA
Affiliate under Section 4201 or 4204 of ERISA from a Multiemployer Plan, or
the receipt by the Company or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA; and
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
(i) promptly after the Company knows or has reason to believe that any
Default has occurred, a notice of such Default describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that the Company has taken and proposes to take with
respect thereto; and
(j) from time to time such other information regarding the financial
condition, operations, business or prospects of the Company or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer Plan and
any reports or other information required to be filed under ERISA) as Agent may
reasonably request.
The Company will furnish to each Bank Party, at the time it furnishes each set
of financial statements pursuant to Sections 8.01(a), (b) or (c) above, a
certificate of the Chief Financial Officer (i) to the effect that (to the best
of his knowledge after due inquiry) no Default has occurred and is continuing
(or, if any Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that the Company has taken and
proposes to take with respect thereto) and (ii) setting forth in reasonable
detail the computations necessary to determine whether the Company is in
compliance with Sections 8.12 and 8.13 hereof as of the end of the respective
quarterly fiscal period or fiscal year.
8.02 Litigation. The Company will promptly give to each Bank Party notice
of all legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, and any material development in
respect of such legal or other proceedings, affecting the Company, any of its
Subsidiaries or any Partnership, except proceedings which, if adversely
determined, could not have a Material Adverse Effect.
8.03 Corporate Existence, Etc. The Company will, and will cause each of
its Subsidiaries and each Partnership to: (a) preserve and maintain its legal
existence and all of its material rights, privileges and franchises (provided
that nothing in this Section 8.03 shall prohibit any transaction expressly
permitted under Section 8.07 hereof); (b) comply with the requirements of all
applicable laws, rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements could have a Material
Adverse Effect; (c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax,
44
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained; (d) maintain all of its material Properties used or useful in its
business in good working order and condition, ordinary wear and tear excepted,
or as permitted by Section 8.07(b)(iv) hereof; and (e) permit representatives of
Agent, during normal business hours, to examine, copy and make extracts from the
books and records of the Company, its Subsidiaries and each Partnership, to
inspect their Properties, and to discuss their business and affairs with their
officers, all to the extent reasonably requested by Agent.
8.04 Engineering Reports. (a) As soon as available and in any event on
or before March 15 of each year, the Company will furnish to each Bank Party
reports (the "Independent Reserve Reports") in form and substance reasonably
satisfactory to Agent in its sole discretion, prepared by independent petroleum
consultants acceptable to Agent, which independent Reserve Reports shall
evaluate as of January 1 of such year the Oil and Gas Properties of the Company,
its Subsidiaries and the Partnerships and shall, together with any other
information reasonably requested by Agent, set forth for each property the
separate categories of proved developed producing reserves, proved developed
nonproducing reserves and proved undeveloped reserves attributable to such
Property together with a projection of the rate of production and future net
income with respect thereto as of such date, based upon (i) the pricing
assumptions consistent with Securities and Exchange Commission reporting
requirements at the time and (ii) the pricing assumptions acceptable to Agent
(together with any volume adjustments necessary as a result of such pricing
assumptions).
(b) As soon as available and in any event on or before September 1 of each
year, the Company will furnish to each Bank Party reports (the "Company Reserve
Reports"), in form and substance reasonably satisfactory to Agent, which may be
prepared by or under the supervision of a petroleum engineer who is an employee
of the Company and certified by a senior officer of the Company as to its truth
and completeness, which shall evaluate the Oil and Gas Properties of the
Company, its Subsidiaries and the Partnerships and which shall, together with
any other information reasonably requested by Agent, set forth for each such
Property the separate categories of proved developed producing reserves, proved
developed nonproducing reserves and proved undeveloped reserves attributable to
such Property as of the immediately preceding July 1, together with a projection
of the rate of production and net future income with respect thereto as of such
date, based upon the pricing assumptions reasonably acceptable to Agent
(together with any volume adjustments necessary as a result of such pricing
assumptions).
(c) With the delivery of each report required in Sections 8.04(a) or (b)
above, the Company shall provide to each Bank Party a statement reflecting any
material changes in the net revenue interest of each well or lease as reflected
in the Security Documents after giving effect to all encumbrances listed therein
from the net revenue interests as reflected in such report, and, if requested by
Agent, the nature of such changes.
(d) Concurrently with the delivery of each report required in Sections
8.04(a) or (b) above, the Company shall provide to each Bank Party a report in
form reasonably satisfactory to Agent in its sole discretion prepared and
certified by the Chief Financial Officer, which report shall, together with any
other information requested by Agent, set forth in reasonable detail the
45
volume, estimated amount and nature of any and all gas imbalances with respect
to the Oil and Gas properties of the Company, its Subsidiaries and any
Partnership as of the date of each Engineering Report delivered hereunder.
8.05 Acquisition of Oil and Gas Properties. (a) If, subsequent to the
date hereof, the Company or any of its Subsidiaries develops, acquires or
receives any interest or interests in Oil and Gas Properties with proved
reserves having a net present value of $1,000,000 or more (determined in
accordance with the guidelines established by the Securities and Exchange
Commission), and which interest is not already subject to the Lien of the
Security Documents and therefore not part of the Property mortgaged to Bank
Parties (or Agent for the benefit of Bank Parties) pursuant to the Security
Documents, then not later than the earlier of (i) the first July 1 or January 1
to occur after such development, acquisition or receipt or (ii) 90 days after
such development, acquisition or receipt, the Company or such Subsidiary will
grant to Bank Parties (or Agent for the benefit of Bank Parties) as security for
the Obligations a first priority Lien (subject only to Liens permitted by
Section 8.08 hereof) on such Oil and Gas Properties, which Lien will be created
and perfected by and in accordance with the provisions of the Security
Documents, all in form and substance reasonably satisfactory to Agent in its
sole discretion and in sufficient executed (and acknowledged where necessary or
appropriate) counterparts for recording purposes.
(b) Concurrently with the granting of the Lien or other action referred to
in Section 8.05(a) hereof, and concurrently with the development, acquisition
subsequent to the date hereof or receipt by the Company, its Subsidiaries or
Partnerships of any interest or interests in Oil and Gas Properties with proved
reserves having a net present value of $5,000,000 in the aggregate (or, if less,
upon the request of Agent) or more (determined in accordance with the guidelines
established by the Securities and Exchange Commission), the Company will provide
to each Bank Party title information (which may include current title opinions)
in form and substance satisfactory to Agent in its sole reasonable discretion
with respect to such Oil and Gas Properties. The title information or opinions
will state or reflect to the satisfaction of Agent, at a minimum (i) that the
applicable Security Documents have been filed in all records with respect to
such Oil and Gas Properties which are Properties mortgaged to Bank Parties (or
Agent for the benefit of Bank Parties) pursuant to the Security Documents and
that all releases, waivers and consents have been obtained which are necessary
for Bank Parties (or Agent for the benefit of Bank Parties) to perfect a first
priority Lien (subject only to Liens permitted by Section 8.08 hereof) on the
subject Oil and Gas Properties which are Properties mortgaged to Bank Parties
(or Agent for the benefit of Bank Parties) pursuant to the Security Documents,
(ii) that the Company, its Subsidiary or the Partnership, as the case may be,
owns good and defensible record title to such Oil and Gas Properties free and
clear of all Liens except for those permitted under Section 8.08 hereof, (iii)
the Company's, the Subsidiary's or the Partnership's, as the case may be, record
interest in such Oil and Gas Properties, after giving effect to such permitted
Liens, and (iv) that the descriptions set forth in the Security Documents of
such Oil and Gas Properties are complete, accurate and legally sufficient
descriptions for purposes of creating the Liens purported to be created by such
Security Documents.
(c) The Company shall give written notice to each Bank Party at least 20
days prior to (i) the acquisition, subsequent to the date hereof, by the
Company, any of its Subsidiaries or any
46
partnership of any interest or interests in Oil and Gas properties with proved
reserves having a net present value of $1,000,000 or more (determined in
accordance with the guidelines established by the Securities and Exchange
Commission) and (ii) the commencement, subsequent to the date hereof, of initial
drilling operations with respect to any Oil and Gas Property now owned or
hereafter acquired by the Company, any of its Subsidiaries or any Partnership.
Such notice shall set forth a description, in reasonable detail, of such Oil and
Gas Property, the proposed activities in respect thereof and any known
environmental conditions or risks, or potential sources of future liabilities,
relating to such Oil and Gas Property. In addition, the Company shall, at or
prior to giving each Bank Party such notice, deliver to each Bank Party copies
of any and all environmental surveys or assessments available to the Company
which relate to such Oil and Gas Property. Upon the request of Agent at any
time, the Company shall cause to be conducted a Phase I Environmental Review (as
defined below) in respect of such Oil and Gas Property as soon as practicable
after such request. The Company shall cause such Phase I Environmental Review to
be completed, and the results thereof delivered to each Bank Party, prior to the
time the Company is required to subject such Oil and Gas Property to the Lien of
the Security Documents pursuant to Section 8.05(a) hereof. As used herein, the
term "Phase I Environmental Review" shall mean, with respect to any such Oil and
Gas Property, an environmental survey and assessment prepared by an independent
environmental consultant of recognized national standing (the "Environmental
Consultant") selected by the Company, expert in the identification and analysis
of environmental risks, such survey and assessment to (i) estimate current
liabilities and assess potential sources of future liabilities relating to the
Property under any Environmental Law and (ii) be based upon (w) a physical on-
site inspection by the Environmental Consultant of such Property, (x) interviews
by the Environmental Consultant of individuals who have direct managerial
responsibility for operations in respect of such Property, (y) a review by the
Environmental Consultant of records relating to current and historical
operations conducted in respect of such Property and (z) as deemed appropriate
by the Environmental Consultant, interviews by the Environmental Consultant of
Federal, state and local governmental authorities, or other individuals familiar
with such Property who may have knowledge of current and historical operations
conducted in respect of such Property. The Company will promptly furnish to each
Bank Party all Phase I Environmental Reviews of Oil and Gas Properties prepared
pursuant to this Section 8.05(c).
(d) Promptly after the filing of any Security Document in any state, upon
the reasonable request of Agent, the Company will provide to Bank Parties an
opinion addressed to Bank Parties in form and substance reasonably satisfactory
to Agent in its sole discretion from counsel acceptable to Agent, stating that
such Security Document is valid, binding and enforceable against the Company or
its Subsidiary, as the case may be, in accordance with its terms and addressing
such priority questions as Agent may request.
(e) Upon the development or acquisition of Oil and Gas properties as
contemplated by, and the compliance with the provisions of, this Section 8.05,
Lenders shall include such Oil and Gas Properties in the next redetermination of
the Borrowing Base in accordance with and subject to the terms and conditions of
Section 2.08 hereof.
8.06 Insurance.
47
(a) The Company will, and will cause each of its Subsidiaries and each
Partnership to, keep insured by financially sound and reputable insurers all
Property of a character usually insured by Persons engaged in the same or
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such Persons and carry such other
insurance as is usually carried by such Persons including, without limitation,
well control, redrill and pollution insurance. The Company and each Subsidiary
Guarantor will maintain the additional insurance coverage as described in the
respective Security Documents.
(b) The Company, each Subsidiary and each Partnership shall at all times
maintain insurance against its liability for injury to persons or property of
the kinds and in the amounts usually carried by Persons engaged in the same or
similar business similarly situated, which insurance shall be by financially
sound and reputable insurers.
(c) From time to time at Agent's request, the Company will furnish each
Bank Party with certificates of all such policies of insurance setting forth the
coverage, the limits of liability, the names of the carriers, the policy
numbers, and the expiration dates. All such policies shall contain a provision
that such policies will not be canceled or materially amended, which term shall
include any reduction in the scope of limits of coverage, without at least 30
days prior written notice to Agent.
(d) In the event the Company fails to provide, maintain, keep in force or
deliver and furnish to each Bank Party the certificates of insurance required by
this Section 8.06, Agent may procure such insurance or single interest insurance
for risks covering Bank Parties' interest, and the Company will pay, or if paid
by Agent, will reimburse to Agent all premiums thereon promptly upon demand by
Agent, together with interest on the amount reimbursed to Agent at Post-Default
Rate. Agent shall have the right to retain from time to time, at the expense of
the Company, an insurance consultant to review the adequacy of the insurance
coverage maintained by the Company, its Subsidiaries and each Partnership and to
confirm compliance with this Section 8.06.
8.07 Prohibition of Fundamental Changes. (a) The Company will not, and
will not permit any of its Subsidiaries or any Partnership to, (i) enter into
any transaction of merger or consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution), (ii) acquire
any business or Property from, or capital stock of, or be a party to any
acquisition of, any Person except for purchases of inventory and other Property
to be sold or used in the ordinary course of business and Investments permitted
under Section 8.10 hereof or (iii) sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, any part of its business or
Property, whether now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests), having an aggregate fair
market value in excess of $5,000,000.
(b) Notwithstanding the provisions of Section 8.07(a) hereof:
(i) any Subsidiary of the Company may be merged or consolidated with
or into: (x) the Company if the Company shall be the continuing or
surviving corporation or (y) any other such Subsidiary; provided that if
any such transaction shall be between a Subsidiary and a Wholly-Owned
Subsidiary, the Wholly-Owned Subsidiary shall be the continuing or
48
surviving corporation and provided, further, that if any such transaction
shall be between a Subsidiary Guarantor and a Subsidiary not a Subsidiary
Guarantor, and such Subsidiary Guarantor is not the continuing or surviving
corporation, then the continuing or surviving corporation shall have
assumed all of the obligations of such Subsidiary Guarantor hereunder;
(ii) any such Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its Property (upon voluntary liquidation or
otherwise) to the Company or a Wholly-Owned Subsidiary of the Company
provided that if any such sale is by a Subsidiary Guarantor to a Subsidiary
of the Company not a Subsidiary Guarantor, then such Subsidiary shall have
assumed all of the obligations of such Subsidiary Guarantor under its
Subsidiary Guaranty;
(iii) the Company or any Subsidiary of the Company may merge or
consolidate with any other Person if (x) in the case of a merger or
consolidation of the Company, the Company is the surviving corporation and,
in any other case, the surviving corporation is a Wholly-Owned Subsidiary
of the Company and (y) after giving effect thereto no Default would exist
hereunder; and
(iv) the Company or any such Subsidiary may sell (x) obsolete or
wornout Property, tools or equipment no longer used or useful in its
business so long as the amount thereof sold in any single fiscal year by
the Company and its Subsidiaries shall not have a fair market value in
excess of $5,000,000 and (y) any inventory or, subject to Section 8.25
hereof, other Property in the ordinary course of business and on ordinary
business terms.
8.08 Limitation on Liens. The Company will not, and will not permit any
of its Subsidiaries or any Partnership to, create, incur, assume or suffer to
exist any Lien upon any of its properties, whether now owned or hereafter
acquired, except:
(a) Liens created pursuant to the Security Documents and Liens existing on
the date hereof and listed in Schedule 8.08 hereto:
(b) Liens imposed by any governmental authority for taxes, assessments or
charges not yet due or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of the Company, any of its Subsidiaries or any Partnership, as the
case may be, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's, or other like Liens arising in the ordinary course of business for
amounts which are not overdue for a period of more than 60 days or which are
being contested in good faith and by appropriate proceedings and for which
adequate accruals and reserves are maintained on the books of the Company or
such Subsidiary or partnership;
(d) pledges or deposits under worker's compensation, unemployment insurance
and other social security legislation;
49
(e) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business and encumbrances consisting of
zoning restrictions, easements, licenses, restrictions on the use of real
Property or minor imperfections in title thereto which, in the aggregate, are
not material in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere with the ordinary conduct of
the business of the Company, or any of its Subsidiaries or any Partnership;
(g) Liens (other than Liens under ERISA or Environmental Laws) on Property
of any corporation that becomes a Subsidiary of the Company after the date of
this Agreement, provided that such Liens are in existence at the time such
corporation becomes a Subsidiary of the Company and were not created in
anticipation thereof;
(h) Liens (other than Liens under ERISA or Environmental Laws) upon real
and/or tangible personal Property acquired after the date hereof (by purchase,
construction or otherwise) by the Company, its Subsidiaries or any Partnership,
each of which Liens either (i) existed on such Property before the time of its
acquisition and was not created in anticipation thereof, or (ii) was created
solely for the purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, the cost (including the cost of construction) of
such Property; provided that no such Lien shall extend to or cover any Property
of the Company or such Subsidiary or Partnership other than the Property so
acquired and improvements thereon; and provided, further, that the principal
amount of Indebtedness secured by any such Lien shall at no time exceed 100% of
the fair market value of such Property at the time it was acquired (by purchase,
construction or otherwise);
(i) with respect to any Property from which Hydrocarbons may be severed or
extracted in commercially feasible quantities, Liens with respect to obligations
that are not yet due and payable under or for farm-out, farm-in, joint
operating, area of mutual interest agreements and/or similar arrangements which
Liens the Company determines in good faith to be necessary for the economic
development of such Property and are customary and usual for the area in which
such Property is located;
(j) Liens by PMTI and the other obligors under the PMTI Facility in favor
of the agent or lenders under the PMTI Facility upon any of their Properties,
securing the PMTI Facility;
(k) Liens by the Company in favor of the agent or lenders under the PMTI
Facility upon all securities or other property belonging to the Company now or
hereafter held by such agent or lenders and in all deposits (general or special,
time or demand, provisional or final) and other sums credited by or due from
such agent or lenders to the Company or subject to withdrawal by the Company,
securing the guaranty by the Company of the Indebtedness under the PMTI
Facility; provided, any such Liens shall be subordinated to any Liens by the
Company in favor of Bank Parties (or Agent for the benefit of Bank Parties) in
such securities or other
50
property belonging to the Company securing the Obligations, on terms and
conditions satisfactory to Agent; and
(l) any extension, renewal or replacement of the foregoing, provided,
however, that the Liens permitted hereunder shall not be spread to cover any
additional Indebtedness or Property (other than a substitution of like
Property).
8.09 Indebtedness. The Company will not, and will not permit any of its
Subsidiaries or any Partnership to, create, incur or suffer to exist any
Indebtedness except:
(a) the Obligations;
(b) Indebtedness outstanding on the date hereof and listed in Schedule 8.09
hereto (excluding, however, following the making of the initial Loan hereunder,
the Indebtedness to be repaid with the proceeds of such Loan, as indicated on
said Schedule 8.09);
(c) Subordinated Indebtedness;
(d) Indebtedness of Subsidiaries of the Company or Partnerships to the
Company or to Wholly-Owned Subsidiaries of the Company or Partnerships in which
the Company owns all the limited partnership interests;
(e) (i) Indebtedness of PMTI and the other obligors under the PMTI
Facility, and the guaranty by the Company of such Indebtedness (together with
reimbursement obligations of the Company in connection with any Letter of Credit
issued in connection therewith), (ii) other Indebtedness of PMTI and its Wholly-
Owned Subsidiaries arising in the ordinary course of their businesses under
crude oil purchase or sale agreements, crude oil future, forward or similar
contracts, or letters of credit supporting such obligations, and (iii) the
unsecured guaranty by the Company of indebtedness of PMTI and its Wholly-Owned
Subsidiaries arising in the ordinary course of their businesses under crude oil
purchase or sale agreements, crude oil future, forward or similar contracts, or
letters of credit supporting such obligations; provided, the aggregate
outstanding amount of such Indebtedness shall not at any time exceed (A)
$250,000,000 minus (B) the outstanding Indebtedness under the PMTI Facility.
(f) obligations constituting Indebtedness by reason of clauses (e) and (f)
of the definition of Indebtedness contained in this Agreement (i) not exceeding
an aggregate principal amount of $3,000,000 at any one time or (ii) permitted
pursuant to Section 8.09(e); and
(g) other Indebtedness of the Company and its Subsidiaries (including
without limitation Indebtedness secured by Liens permitted by Section 8.08(h)
hereof) not exceeding an aggregate principal amount of $5,000,000 at any one
time outstanding.
8.10 Investments. The Company will not, and will not permit any of its
Subsidiaries or any Partnership to, make or permit to remain outstanding any
Investments except:
(a) operating deposit accounts with banks;
51
(b) Permitted Investments;
(c) loans, advances and other extensions of credit made after the date
hereof by the Company and its Subsidiaries to Subsidiaries of the Company in the
ordinary course of business, provided that (i) the aggregate amount of such
loans, advances and other extensions of credit by the Company to any one of its
Subsidiaries shall not exceed $5,000,000 at any one time outstanding and (ii)
the aggregate amount of such loans, advances and other extensions of credit by
the Company to its Subsidiaries taken as a whole shall not exceed $5,000,000 at
any one time outstanding; in addition to the foregoing (1) the Company may make
loans, advances or other extensions of credit or capital contributions of up to
$5,000,000 in the aggregate to PMTI and/or its Subsidiaries in connection with
acquisitions and other capital investments, (2) the Company may make additional
loans, advances or other extensions of credit of up to $15,000,000 in the
aggregate to PMTI and/or its Subsidiaries, the proceeds of which are used to
finance purchases and physical storage of crude oil that is fully hedged on the
NYMEX and located in the Cushing, Oklahoma storage facility or which is in
transit in specified pipelines approved by Majority Lenders and listed on
Schedule 8.10(c) hereto, and (3) so long as no Default shall have occurred and
be continuing or would exist after giving effect thereto, the Company may make
Investments without limitation in Xxxxxxx Resources, Inc., Xxxxxxx Resources,
L.P., Calumet Florida Inc. and Plains Illinois Inc.
(d) Investments outstanding (or, as to Investments to PMTI and/or its
Subsidiaries in connection with the cost of the construction of the Xxxxxxx,
Oklahoma storage facility, contemplated) on the date hereof and identified in
Schedule 7.21 hereto;
(e) capital contributions to Unrestricted Subsidiaries from time to time in
an aggregate amount not to exceed $55,000,000;
(f) in addition to any capital contributions permitted in subsection (e)
above, the following Investments in Unrestricted Subsidiaries: (i) capital
contributions of up to $85,000,000 of the proceeds of any preferred or common
stock of the Company issued after January 1, 1998; and (ii) any Investment
represented by, or required to comply with the obligations undertaken under, the
Stock Purchase Agreement described in Section 8.35(c);
(g) additional Investments not otherwise permitted by this Section 8.10 up
to but not exceeding $1,000,000 in the aggregate; and
(h) advances in the ordinary course of business of operating funds on
behalf of co-owners of Oil and Gas Properties of the Company, its Subsidiaries
or the Partnerships pursuant to joint operating agreements.
8.11 Dividend Payments. The Company will not, and will not permit any of
its Subsidiaries to, declare or make any Dividend Payment at any time; provided,
however, the Company may make:
(a) regularly scheduled Dividend Payments in cash in respect of the
Company's Series D Cumulative Convertible Preferred Stock, par value $500 per
share (i) the aggregate amount of
52
all such Dividend Payments not to exceed (A) 6% ($30 per share) in any one
fiscal year, or (B) in the event the purchaser thereof shall desire to sell such
stock in a secondary offering, and the investment bankers representing such
purchaser shall issue a written opinion to the Company that the gross proceeds
of such secondary offering shall not exceed $23,300,000, such percentage as is
necessary to enable such Purchaser to receive $23,300,000 of gross proceeds from
such secondary offering, but in no event exceeding 7.5% ($37.50 per share)) in
any one fiscal year, and (ii) the aggregate stated value of such outstanding
Convertible Preferred Stock at issuance not to exceed $23,300,000; and
(b) regularly scheduled Dividend Payments in cash in respect of the
Company's proposed issuance of Series E Cumulative Convertible Preferred Stock,
stated value $500 per share, the aggregate amount of all such Dividend Payments
not to exceed $8,075,000 during the term of this Agreement.
8.12 Tangible Net Worth. The Company will not permit Tangible Net Worth
at any time to be less than the sum of (a) $85,000,000 plus (b) fifty percent
(50%) of the net proceeds received by the Company from any capital stock issued
by the Company on or after December 31, 1997 other than capital stock issued by
the Company (y) as a dividend on any of its capital stock or (z) in exchange or
conversion of any of its preferred stock to other capital stock plus (c) fifty
percent (50%) of the Company's cumulative Consolidated net income (if positive)
for each fiscal quarter from and after December 31, 1997 to and including the
date of determination thereof, computed on a cumulative basis for such period.
For purposes of this Section 8.12, Tangible Net Worth will not be reduced by the
amount of any accrued dividends on preferred stock that (i) are not yet due,
(ii) are payable in additional shares of preferred stock, and (iii) will in fact
be paid by the Company in additional shares of preferred stock.
8.13 Current Ratio. The Company will not at any time permit current
assets of the Company and its Consolidated Subsidiaries to be less than 50% of
current liabilities. For purposes hereof, the terms "current assets" and
"current liabilities" shall have the respective meanings assigned to them by
GAAP, and, in addition, all LC Obligations shall be included as current
liabilities, regardless of whether or not contingent (but without duplication).
8.14 Subordinated Indebtedness. (a) Except as provided in this Section
8.14, neither the Company, nor any of its Subsidiaries nor any Partnership shall
purchase, redeem, retire or otherwise acquire for value, or set apart any money
for a sinking, defeasance or other analogous fund for, the purchase, redemption,
retirement or other acquisition of, or make any voluntary payment or prepayment
of the principal of or interest on, or any other amount owing in respect of, any
Subordinated Indebtedness, except for regularly scheduled payments of principal
and interest in respect thereof required pursuant to the instruments evidencing
such Subordinated Indebtedness.
(b) The Company may offer to purchase and redeem Senior Subordinated Notes
in the amount and under the circumstances described in Section 4.12(iii)(c) of
the Senior Subordinated Indenture dated as of March 15, 1996 and Section
4.12(iv) of the Senior Subordinated Indenture dated as of July 21, 1997,
provided that: (i) the Company shall have given each Bank Party written notice
of its intent to so purchase and redeem (collectively "redeem") the Senior
53
Subordinated Notes at least 25 days prior to the date (the "Net Proceeds Payment
Date") that it will become obligated to so redeem such Senior Subordinated Notes
pursuant to such Section 4.12(iii)(c) or Section 4.12(iv), as appropriate, such
notice to specify the Net Proceeds Payment Date and, based upon the proceeds
available for such redemption, the maximum amount of Senior Subordinated Notes
that may be so redeemed, (ii) the Company shall have provided to each Bank Party
such information as Agent shall have reasonably requested with regard to such
redemption, (iii) no Default or Event of Default shall have occurred and be
continuing at the time of any such redemption, and (iv) if elected by Majority
Lenders, by written notice to the Company during the 25 day period after such
notice is given, a new Borrowing Base shall have been determined by
Supermajority Lenders in the manner specified by Section 2.08 hereof and the
Facility Usage shall not exceed the Borrowing Base as so redetermined.
(c) The Company may offer to purchase and redeem Senior Subordinated Notes
in an amount of up to $60,000,000 under the circumstances described in Paragraph
5 thereof, provided that: (i) the Company shall have given each Bank Party
written notice of its intent to so purchase or redeem (collectively "redeem")
such Senior Subordinated Notes at least 25 days prior to the date (the "Net
Proceeds of a Public Offering Redemption Date") that it will become obligated
to so redeem such Senior Subordinated Notes pursuant to Paragraph 5 thereof,
such notice to specify the Net Proceeds of a Public Offering Redemption Date
and, based upon the proceeds available for such redemption, the maximum amount
of Senior Subordinated Notes that may be so redeemed, (ii) the Company shall
have provided to each Bank Party such information as Agent shall have reasonably
requested with regard to such redemption, (iii) no Default or Event of Default
shall have occurred and be continuing at the time of any such redemption, and
(iv) if elected by Majority Lenders, by written notice to the Company during the
25 day period after such notice is given, a new Borrowing Base shall have been
determined by Supermajority Lenders in the manner specified by Section 2.08
hereof and the Facility Usage shall not exceed the Borrowing Base as so
redetermined.
8.15 Lines of Business. Neither the Company nor any of its Subsidiaries
nor any Partnership shall engage to any substantial extent in any line or lines
of business activity other than the lines of business conducted by the Company,
its Subsidiaries and each Partnership on the date of this Agreement.
8.16 Transactions with Affiliates. The Company will not, and will not
permit any of its Subsidiaries to, enter into any material transaction with any
Affiliate or any director, officer, employee or shareholder of the Company,
except upon fair and reasonable terms.
8.17 Use of Proceeds. The Company will use the proceeds of the Loans
hereunder solely (i) to refinance, extend, renew and/or rearrange the
outstanding principal balance under the Original Agreement, (ii) to refinance
Matured LC Obligations, (iii) to acquire additional Oil and Gas Properties and
(iv) to finance the ongoing working capital requirements and other general
corporate purposes of the Company and its Subsidiaries, and will use all Letters
of Credit for its general business purposes (all in compliance with all
applicable legal and regulatory requirements including, without limitation,
Regulations U and X of the Board of Governors of the Federal Reserve System and
the Securities Act of 1933 and the Securities Exchange Act of 1934, and the
rules and regulations thereunder); provided that no Lender shall have any
responsibility as to the
54
use of any of such proceeds or Letters of Credit. In addition, the Company may
use up to $55,000,000 of the proceeds of the Loans hereunder to make or
refinance capital contributions to Unrestricted Subsidiaries as permitted in
Section 8.10(e).
8.18 Certain Obligations Respecting Subsidiaries. The Company will, and
will cause each of its Subsidiaries to, take such action from time to time as
shall be necessary to ensure that the Company and each of its Subsidiaries at
all times owns (subject only to the Lien of the Security Documents) at least the
same percentage of the issued and outstanding shares of each class of stock of
each of its Subsidiaries as is owned on the date of this Agreement. Without
limiting the generality of the foregoing, none of the Company nor any of its
Subsidiaries shall sell, transfer or otherwise dispose of any shares of stock in
any Subsidiary owned by them, nor permit any Subsidiary to issue any shares of
stock of any class whatsoever to any Person (other than to the Company or
another of its Subsidiaries). In the event that any such additional shares of
stock shall be issued by any Subsidiary, the Company agrees forthwith that it
shall cause such Obligor to deliver to Agent pursuant to any Security Document
the certificates evidencing such shares of stock, accompanied by undated stock
powers executed in blank and shall take such other action as Agent shall request
to perfect the security interest created therein pursuant to any Security
Document.
8.19 Additional Subsidiary Guarantors. The Company will take such action,
as shall be necessary to ensure that all Subsidiaries of the Company (other than
PMCT) are Subsidiary Guarantors and, thereby, Obligors hereunder; provided,
however, that Majority Lenders may, in their sole discretion, consent to the
release of PMTI and/or any of its Wholly-owned Subsidiaries as a Subsidiary
Guarantor if such Person is not obligated on a Guaranty of the Indebtedness of
the Company or any Subsidiary or Partnership (other than PMTI or its Wholly-
owned Subsidiaries). Without limiting the generality of the foregoing and
subject to the limitations on Investments in Section 8.10 hereof, in the event
that the Company or any of its Subsidiaries shall form any new Subsidiary after
the date hereof, the Company or the respective Subsidiary will cause such new
Subsidiary to become a "Subsidiary Guarantor" (and, thereby, an Obligor)
hereunder pursuant to a written instrument in form and substance satisfactory to
Agent, and to deliver such proof of corporate action, incumbency of officers,
opinions of counsel and other documents as is consistent with those delivered by
each Obligor pursuant to Section 6.01 hereof on the Closing Date or as Agent
shall have requested.
8.20 Environmental Matters; Environmental Reviews. (a) The Company will
comply, and will cause each of its Subsidiaries and the Partnerships to comply
in all material respects with all Environmental Laws now or hereafter applicable
to the Company, each of its Subsidiaries, or the Partnerships and shall obtain,
at or prior to the time required by applicable Environmental Laws, all
environmental, health and safety permits, licenses and other authorizations
necessary for its operations and maintain such authorizations in full force and
effect.
(b) The Company will promptly furnish to each Bank Party all written
notices of any Environmental Claim received by the Company, any of
55
its Subsidiaries, Environmental Affiliates, or any Partnership, or of which it
has notice, pending or threatened against the Company, any of its Subsidiaries,
any Environmental Affiliates, or any Partnership which could result in fines or
liabilities in excess of $1,000,000.
(c) The Company will promptly furnish to each Bank Party all requests for
information, notices of claim, demand letters, and other notifications, received
by the Company, any of its Subsidiaries, Environmental Affiliates, or any
Partnership, that in connection with its ownership or use of the Properties or
the conduct of its business, it may be potentially responsible with respect to
any investigation or clean-up of Hazardous Material at any location which could
result in fines or liabilities in excess of $1,000,000.
(d) The Company shall carry out with reasonable diligence the remediation
of the Hazardous Materials on the Properties of the Company and its Subsidiaries
as disclosed in the Environmental Compliance Certificate described in Section
6.01(i) hereof.
8.21 Environmental Indemnification. The Company will defend, indemnify
and hold harmless each Bank Party, its employees, agents, officers and
directors, from and against all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, known or
unknown, contingent or otherwise, including, without limitation, reasonable
attorney and consultant fees, investigation and laboratory fees, court costs and
litigation expenses incurred by any of them arising out of, or in any way
relating to (a) any violation or noncompliance with any Environmental Laws by
the Company or any of its Subsidiaries, or the Partnerships or (b) any Release
of a Hazardous Material into the environment, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor.
8.22 Environmental Certification. As soon as available, and in any event
within thirty (30) days after the end of each fiscal year, the Company shall
deliver to each Bank Party a certificate signed by the president or chief
executive officer of the Company in the form attached hereto as Exhibit "E",
setting forth certain matters regarding the environmental practices and policies
of the Company, its Subsidiaries and the Partnerships. Further, upon request by
Agent, and no more often than one time during each fiscal year, the Company and
its Subsidiaries shall permit and cooperate with an environmental and safety
review made in connection with the operations of the Company's and Subsidiaries'
Oil and Gas Properties by consultants selected by Agent which review shall, if
requested by Agent, be arranged and supervised by environmental legal counsel
for Agent, all at the Company's cost and expense; provided such costs and
expense shall be reasonable in relation to the services rendered; provided,
further, that the Company shall be responsible, for any fiscal year, for only
50% of such costs and expenses of such consultant and legal counsel that exceed
in the aggregate $25,000 for such fiscal year. The consultant shall render a
verbal or written report, as specified by Agent, based upon such review at the
Company's cost and expense, as so limited.
8.23 Modifications of Certain Documents. The Company will not, and will
not permit any of its Subsidiaries to, (i) consent to any termination,
modification, supplement or waiver of any of the provisions of its charter or
by-laws (or equivalent document) in any manner which could have a Material
Adverse Effect and (ii) amend or modify any indenture or other agreement
providing for or otherwise relating to any Subordinated Indebtedness if such
amendment or
56
modification will affect or impair the subordination provisions of such
indenture or agreement or modify the Persons obligated thereon or the interest
rate, amortization, repurchase or redemption provisions or financial covenants
of such indenture or agreement.
8.24 Gas Imbalances. The Company will not, and will not permit any of its
Subsidiaries or any Partnership to, have any gas imbalances, take-or-pay or
other prepayments with respect to any Obligor's Oil and Gas Properties which
would require any Obligor to deliver Hydrocarbons produced from any Oil and Gas
Property at some future time without then or thereafter receiving full payment
therefor, which would (i) exceed $1,000,000 for any individual well, (ii) exceed
$2,000,000 in the aggregate for all Obligors or (iii) with respect to any
individual material well, exceed the proved developed producing reserves
attributable to such well.
8.25 Sale of Oil and Gas Properties. The Company will not, and will not
permit any of its Subsidiaries or any Partnership to, sell, assign, transfer or
convey any interest in any of the Oil and Gas Properties except for (unless
otherwise prohibited in the Security Documents):
(a) Hydrocarbons sold in the ordinary course of business as and when
produced;
(b) routine farm-outs of non-proven acreage;
(c) sales of Oil and Gas Properties provided that the aggregate value
(determined in accordance with the guidelines of the Securities and Exchange
Commission) of the sales of all such Oil and Gas Properties permitted under this
Section 8.25(c) since the date of the last redetermination of the Borrowing Base
shall not exceed $2,000,000; or
(d) in addition to sales permitted by Section 8.25(c) above, sales of Oil
and Gas Properties included in the Borrowing Base, provided simultaneously with
each such sale the Borrowing Base is reduced by amounts agreed to at the time by
Majority Lenders and the Facility Usage shall not exceed the Borrowing Base as
so reduced after giving effect to the net proceeds received in respect of such
sale that are applied to prepay the Obligations.
In connection with any sale permitted by this Section 8.25, Bank Parties shall
grant appropriate releases from the Security Documents subject to retention of
the Lien on any retained, reversionary or back-in interest.
8.26 Partnership Units; New Partnerships. The Company will not, and will
not permit any of its Subsidiaries or any Partnership to, (i) sell, assign or
transfer any units or other interests in any Partnership, other than to the
Company, any Wholly-Owned Subsidiary or any Partnership in which the Company
owns all the partnership interests subject in all respects to the Lien of the
applicable Security Documents and upon prior notice to each Bank Party, (ii)
make distributions of assets or Properties of any Partnership to any Person
other than to the Company or its Subsidiaries and the other partners of such
Partnership as a portion of pro rata distributions to the partners of such
Partnership generally, (iii) create any new general or limited partnership in
which the Company or any of its Subsidiaries or any Partnership shall have a
general partnership interest other than in the ordinary course of business and
upon prior notice to each Bank Party, or (iv) consent to or permit any
additional units, interests or rights to distributions in any Partnership to
57
be created, issued or sold by any Partnership, other than such additional units,
interests or rights to distributions which are issued to and held by the
Company.
8.27 Amendments of Partnership Agreements. The Company will not amend,
modify or terminate (or consent to amend, modify or terminate), or permit any of
its Subsidiaries to amend, modify, or terminate (or consent to amend, modify or
terminate), any partnership agreement in any manner which could have a Material
Adverse Effect.
8.28 Notice to Purchasers of Production. The Company will, and shall
cause each other Obligor to, upon the occurrence and during the continuance of
an Event of Default and upon request of Agent, join with Agent in notifying the
purchaser or purchasers of oil and gas production of the existence of the
Security Documents, such notification to be in writing and accompanied (if
necessary) by certified copies of the Security Documents.
8.29 Restrictions on PMTI. Neither PMTI nor any Subsidiary thereof will
(a) own any Oil and Gas Properties or (b) engage in any business other than (i)
the marketing and transportation of Hydrocarbons, (ii) the ownership and
operation of Hydrocarbon storage facilities, and (iii) the ownership and
operation of Hydrocarbon processing facilities which are utilized at least in
part in connection with the processing of Hydrocarbons owned by the Company, any
Subsidiary or Partnership.
8.30 Lien Releases. Within 30 days after the Closing Date, the Company
shall obtain, or cause to be obtained, written releases in form and substance
satisfactory to Agent of all Liens shown in Schedule 8.08 hereto which secure
obligations that the Company has indicated on said Schedule 8.08 have been paid
or satisfied in full as of the Closing Date. In addition, the Company shall
obtain, or cause to be obtained, written releases in form and substance
satisfactory to Agent of all other Liens shown on Schedule 8.08 hereto within 30
days after the obligations secured by such Liens have been paid or satisfied in
full.
8.31 Additional Security. Notwithstanding anything in this Agreement or
any other Basic Document to the contrary, and subject to the provisions of
8.05(e) hereof, at Agent's request from time to time, and at the Company's sole
cost and expense, the Company shall execute and deliver, or cause to be executed
and delivered, to each Bank Party such mortgages, security interests, UCC
financing statements and such other instruments and documents and do, or cause
to be done, all such other acts that Agent deems reasonably necessary for Bank
Parties (or Agent for the benefit of Bank Parties) to obtain and perfect a Lien
under the Security Documents in any Oil and Gas Properties of the Company or any
of its Subsidiaries not constituting Properties mortgaged to Bank Parties (or
Agent for the benefit of Bank Parties) pursuant to the Security Documents at the
time of such request which the Company or such Subsidiary may mortgage to Bank
Parties (or Agent for the benefit of Bank Parties) without breaching any
existing covenant in favor of, or agreement with, any third party. Further, the
Company will from time to time deliver to each Bank Party any financing
statements, continuation statements, modification agreements, extension
agreements and other documents, properly completed and executed (and
acknowledged when required by Agent) by the Obligors in form and substance
reasonably satisfactory to Agent, which Agent requests for the purpose of
continuing or extending the perfection and priority, or for confirming and
protecting, the Liens and other rights securing the Obligations. Each Bank
58
Party hereby acknowledges and agrees that at the request of the Company the
Security Documents limit the indebtedness secured by properties located in the
State of Florida to the amount of $125,000,000.
8.32 Post Closing Curative. If any title opinion furnished to Bank
Parties as contemplated herein or other title information received by Bank
Parties discloses a title defect requiring or recommending curative action which
Agent deems material in its sole but reasonable discretion, the Company shall,
upon Agent's written request, use its reasonable best efforts to cure such
defect, satisfy such requirement or take such recommended action within a
reasonable time but in any event within sixty days following the date of such
request by Agent.
8.33 Hedging Contracts. Neither the Company nor any
Subsidiary or Partnership will be a party to or in any manner be liable on any
forward, future, swap or hedging contract, except:
(a) (i) contracts by PMTI (1) for which neither the Company nor any
subsidiary other than PMTI is liable or (2) that are guaranteed by the Company
as permitted under Section 8.09(e);
(b) contracts entered into with the purpose and effect of fixing prices on
oil or gas expected to be produced by the Company, any Subsidiary or
Partnership, provided that at all times: (i) no such contract (other than a
physical delivery contract) fixes a price for a term of more than three (3)
years; (ii) the aggregate monthly production covered by all such contracts
(determined, in the case of contracts that are not settled on a monthly basis,
by a monthly proration acceptable to Agent) for any single month does not in the
aggregate exceed eighty-five percent (85%) of the aggregate Projected Oil and
Gas Production of the Company, its Subsidiaries and Partnerships anticipated to
be sold in the ordinary course of their businesses for such month, (iii) no such
contract (unless the counterparty is a Bank Party or an Affiliate thereof)
requires the Company, any Subsidiary or Partnership to put up money, assets,
letters of credit or other security against the event of its nonperformance
prior to actual default by such Person in performing its obligations thereunder,
and (iv) each such contract is with a counterparty or has a guarantor of the
obligation of the counterparty who (unless such counterparty is a Bank Party or
Affiliate thereof) at the time the contract is made has long-term obligations
rated BBB- or Baa3 or better, respectively, by Standard & Poor's Corporation or
Xxxxx'x Investors Services, Inc. (or a successor credit rating agency). As used
in this subsection, the term "Projected Oil and Gas Production" means the
projected production of oil or gas (measured by volume unit or BTU equivalent,
not sales price) for the term of the contracts or a particular month, as
applicable, from properties and interests owned by the Company, its Subsidiaries
and Partnerships which are located in or offshore of the United States and which
have attributable to them proved oil or gas reserves, as such production is
projected in the most recent reports delivered pursuant to Section 8.04, after
deducting projected production from any properties or interests sold or under
contract for sale that had been included in such reports and after adding
projected production from any properties or interests that had not been
reflected in such reports but that are reflected in a separate or supplemental
reports meeting the requirements of such Section 8.04 hereof and otherwise are
satisfactory to Agent; or
59
(c) contracts entered into by the Company with the purpose and effect of
fixing interest rates on a principal amount of indebtedness of the Company that
is accruing interest at a variable rate, provided that (i) the aggregate
notional amount of such contracts never exceeds seventy-five percent (75%) of
the anticipated outstanding principal balance of the indebtedness to be hedged
by such contracts or an average of such principal balances calculated using a
generally accepted method of matching interest swap contracts to declining
principal balances, (ii) the floating rate index of each such contract generally
matches the index used to determine the floating rates of interest on the
corresponding indebtedness to be hedged by such contract, and (iii) each such
contract is with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a Bank Party or Affiliate thereof)
at the time the contract is made has long-term obligations rated BBB- or Baa3 or
better, respectively, by Standard & Poor's Corporation or Xxxxx'x Investors
Services, Inc. (or a successor credit rating agency).
8.34 Transactions with PMCT. The Company shall not, and shall not permit
any Subsidiary to (i) Guarantee any Indebtedness or other obligation of PMCT or
any Subsidiary of PMCT, (ii) grant or permit any Lien on any Property of the
Company or any Subsidiary of the Company to secure any Indebtedness or other
obligation of PMCT or any Subsidiary of PMCT, (iii) make any Investment in or
transfer any Property to PMCT or any Subsidiary of PMCT, (iv) assume or grant an
indemnity with respect to PMCT or any Subsidiary of PMCT, (v) provide any other
form of credit support to PMCT or any Subsidiary of PMCT, or (vi) enter into any
transaction with PMCT or any Subsidiary of PMCT.
8.35 Unrestricted Subsidiaries. Each Unrestricted Subsidiary shall be
subject to the following:
(a) Subject to subsection (d) below, no Unrestricted Subsidiary shall be
deemed to be a "Subsidiary" of the Company for purposes of this Agreement or any
other Basic Document, and no Unrestricted Subsidiary shall be subject to or
included within the scope of any provision herein or in any other Basic
Document, including without limitation any representation, warranty,
covenant or Event of Default herein or in any other Basic Document, except as
set forth in this Section 8.35.
(b) Except as permitted under Section 8.10(e) and (f) or Section 8.35 (c),
neither the Company nor any of its Subsidiaries shall Guarantee any Indebtedness
or other obligation of, grant any Lien on any of its Property to secure any
Indebtedness or other obligation of, make any Investment in, assume or grant an
indemnity with respect to, or provide any other form of credit support to, any
Unrestricted Subsidiary, and neither the Company nor any of its Subsidiaries
shall enter into (i) any management contract or agreement with any Unrestricted
Subsidiary, except upon the prior written consent of Majority Lenders, not to be
unreasonably withheld, or (ii) any other contract or agreement with any
Unrestricted Subsidiary, except in the course of ordinary business on terms no
less favorable to the Company or such Subsidiary, as applicable, than could be
obtained in a comparable arm's length transaction from an unaffiliated party.
(c) Notwithstanding anything to the contrary contained in this Agreement,
the Company and PAAI may observe and perform their respective obligations under,
and
60
consummate the stock purchases set forth in that certain Stock Purchase
Agreement dated as of March 15, 1998 among the Company, PAAI and Wingfoot
Ventures Seven Inc., as may be amended or modified as may be agreed to by the
Company and PAAI, provided that (i) such observance or performance does not
constitute or result in a default or violation of any Indenture or other
agreement governing Indebtedness of the Company or its Subsidiaries, and (ii)
such additions or modifications shall not modify or increase any direct or
indirect liability of the Company or any of its Subsidiaries which arises or may
arise thereunder, unless such additions or modifications have been consented to
by Majority Lenders.
(d) In the event Unrestricted Subsidiaries shall fail to consummate the
transactions contemplated by such Stock Purchase Agreement prior to September
30, 1998, then on and after October 1, 1998 each Unrestricted Subsidiary shall
be deemed to be a "Subsidiary" of the Company for purposes of this Agreement and
shall be subject to the terms and conditions hereof.
Section 9. Events of Default. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) the Company or any Subsidiary Guarantor shall default in the payment
when due of (i) any principal of any Loan or (ii) any interest on any Loan and
(iii) any fee or any other amount payable by it hereunder, under any Note or
under any other Basic Document (other than principal or interest) and such
default with respect to a payment of interest shall continue unremedied for one
day or with respect to any fee or other amount (other than principal or
interest) shall continue unremedied for five days; or
(b) the Company or any Subsidiary Guarantor or any Partnership shall
default in the payment when due of any principal of or interest on any of its
other Indebtedness in excess of $2,500,000 in the aggregate, or any event
specified in any note, agreement, indenture or other document evidencing or
relating to any such Indebtedness shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or both) to permit
the holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, such Indebtedness to become due, or to be
prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity; or
(c) any representation, warranty or certification made or deemed made in
any Basic Document (or in any modification or supplement thereto) by any
Obligor, or any certificate furnished to any Bank Party pursuant to the
provisions thereof, shall have been false or misleading in any material respect
as of the time made or furnished; or
(d) the Company shall default in the performance of any of its obligations
under Sections 8.05, 8.07, 8.08, 8.09, 8.10, 8.11, 8.12, 8.13, 8.14, 8.17, 8.20,
8.21, 8.22 or 8.30 hereof or any Obligor shall default in the performance of any
of its obligations under any material provision of any Security Document; or any
Obligor shall default in the performance of any of its other obligations in this
Agreement or any other Basic Document and such default shall continue unremedied
for a period of ten days after the occurrence thereof; or
61
(e) the Company or any Subsidiary Guarantor shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become due;
or
(f) the Company or any Material Subsidiary shall (i) apply for or consent
to the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its Property,
(ii) make a general assignment for the benefit of its creditors, (iii) commence
a voluntary case under the Bankruptcy Code (as now or hereafter in effect), (iv)
file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any Petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate action
for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application or
consent of the Company or any Material Subsidiary, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Company or such Subsidiary or of all or any substantial part of its assets, or
(iii) similar relief in respect of the Company or such Subsidiary under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 60 or more days;
or an order for relief against the Company or such Subsidiary shall be entered
in an involuntary case under the Bankruptcy Code; or
(h) a final judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such judgment)
or in excess of $1,000,000 in the aggregate (regardless of insurance coverage)
shall be rendered by one or more courts, administrative tribunals or other
bodies having jurisdiction against the Company and/or any Subsidiary Guarantor
or any Partnership and the same shall not be discharged (or provision shall not
be made for such discharge), or a stay of execution thereof shall not be
procured, within 30 days from the date of entry thereof and the Company or the
relevant Subsidiary or Partnership shall not, within said period of 30 days, or
such longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(i) an event or condition specified in Section 8.01(h) hereof shall occur
or exist with respect to any Plan or Multiemployer Plan and, as a result of such
event or condition, together with all other such events or conditions, the
Company or any ERISA Affiliate shall incur or in the opinion of Agent shall be
reasonably likely to incur a liability to a Plan, a Multiemployer Plan or PBGC
(or any combination of the foregoing) which would constitute, in the
determination of Agent, a Material Adverse Effect; or
(j) either (i) an event or series of events by which any Person or other
entity or group of Persons or other entities acting in concert as a partnership
or other group (a "Group of Persons") shall, as a result of a tender or exchange
offer, open market purchases, privately
62
negotiated purchases, merger, consolidation or otherwise, have become the
beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as amended) of 40% or more of the combined voting power of the then
outstanding voting stock of the Company, (ii) during any period of two
consecutive years (A) the members of the board of directors of the Company (the
"Board") as of January 1, 1998, (B) any director elected thereafter in any
annual meeting of the stockholders of the Company upon the recommendation of the
Board, and (C) any other member of the Board who will be recommended or elected
to succeed those Persons described in subclauses (A) and (B) of this clause (ii)
by a majority of such Persons who are then members of the Board, cease for any
reason to constitute collectively a majority of the Board then in office, or
(iii) the direct or indirect sale, lease, exchange or other transfer of all or
substantially all of the assets of the Company to any Person or Group of
Persons; or
(k) except for expiration in accordance with its terms, any of the Security
Documents shall be terminated or shall cease to be in full force and effect, for
whatever reason except for releases granted pursuant to the terms of this
Agreement.
THEREUPON: (1) in the case of an Event of Default other than one referred to in
Sections 9(f) or (g) above with respect to any Obligor, Agent may (and upon
written notification from Majority Lenders, Agent shall), by notice to the
Company, terminate the Commitment and/or declare the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Obligors hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 hereof) to be forthwith due
and payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby expressly
waived by the Company and each other Obligor; and (2) in the case of the
occurrence of an Event of Default referred to in Sections 9(f) or (g) above with
respect to any Obligor, the Commitment shall automatically be terminated and the
principal amount then outstanding of, and the accrued interest on, the Loans and
all other amounts payable by the Obligors hereunder and under the Notes
(including, without limitation, any amounts payable under Section 5.05 hereof)
shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor. If any Event of Default shall occur and be continuing, each Lender may
protect and enforce its rights under the Basic Documents by any appropriate
proceedings, including proceedings for specific performance of any covenant or
agreement contained in any Basic Document, and each Bank Party may enforce the
payment of any Obligations due it or enforce any other legal or equitable right
which it may have. All rights, remedies and powers conferred upon Bank Parties
under the Basic Documents shall be deemed cumulative and not exclusive of any
other rights, remedies or powers available under the Basic Documents or at law
or in equity.
Section 10. Agent.
10.01 Appointment and Authority. Each Bank Party hereby irrevocably
authorizes Agent, and Agent hereby undertakes, to receive payments of principal,
interest and other amounts due hereunder as specified herein and to take all
other actions and to exercise such powers under the Basic Documents as are
specifically delegated to Agent by the terms hereof or thereof,
63
together with all other powers reasonably incidental thereto. The relationship
of Agent to Bank Parties is only that of one company acting as administrative
agent for others, and nothing in the Basic Documents shall be construed to
constitute Agent a trustee or other fiduciary for any holder of any of the Notes
or of any participation therein nor to impose on Agent duties and obligations
other than those expressly provided for in the Basic Documents. With respect to
any matters not expressly provided for in the Basic Documents and any matters
which the Basic Documents place within the discretion of Agent, Agent shall not
be required to exercise any discretion or take any action, and it may request
instructions from Bank Parties with respect to any such matter, in which case it
shall be required to act or to refrain from acting (and shall be fully protected
and free from liability to all Bank Parties in so acting or refraining from
acting) upon the instructions of Majority Lenders (including itself), provided,
however, that Agent shall not be required to take any action which exposes it to
a risk of personal liability that it considers unreasonable or which is contrary
to the Basic Documents or to applicable law. Upon receipt by Agent from the
Company of any communication calling for action on the part of Bank Parties or
upon notice from any Bank Party to Agent of any Default or Event of Default,
Agent shall promptly notify each bank Party thereof.
10.02 Exculpation, Agent's Reliance, Etc. NEITHER AGENT NOR ANY OF ITS
DIRECTORS, OFFICERS, AGENTS, ATTORNEYS, OR EMPLOYEES SHALL BE LIABLE FOR ANY
ACTION TAKEN OR OMITTED TO BE TAKEN BY ANY OF THEM UNDER OR IN CONNECTION WITH
THE BASIC DOCUMENTS, INCLUDING THEIR NEGLIGENCE OF ANY KIND, EXCEPT THAT EACH
SHALL BE LIABLE FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Without
limiting the generality of the foregoing, Agent (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed by such payee and
in form satisfactory to Agent; (b) may consult with legal counsel (including
counsel for the Company), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Bank
Party and shall not be responsible to any Bank Party for any statements,
warranties or representations made in or in connection with the Basic Documents;
(d) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of the Basic Documents
on the part of any Obligor or to inspect the property (including the books and
records) of any Obligor; (e) shall not be responsible to any Bank Party for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Basic Document or any instrument or document furnished in
connection therewith; (f) may rely upon the representations and warranties of
the Obligors and Bank Parties in exercising its powers hereunder; and (g) shall
incur no liability under or in respect of the Basic Documents by acting upon any
notice, consent, certificate or other instrument or writing (including any
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.
10.03 Bank Parties' Credit Decisions. Each Bank Party acknowledges that
it has, independently and without reliance upon Agent or any other Bank Party,
made its own analysis of the Company and the transactions contemplated hereby
and its own independent decision to enter into this Agreement and the other
Basic Documents. Each Bank Party also acknowledges that it will, independently
and without reliance upon Agent or any other Bank Party and based on such
64
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Basic
Documents.
10.04 Indemnification. Each Bank Party agrees to indemnify Agent (to the
extent not reimbursed by the Company within ten (10) days after demand) from and
against such Lender's Percentage Share of any and all liabilities, obligations,
claims, losses, damages, penalties, fines, actions, judgments, suits,
settlements, costs, expenses or disbursements (including reasonable fees of
attorneys, accountants, experts, and advisors) of any kind or nature whatsoever
(in this section collectively called "liabilities and costs") which to any
extent (in whole or in part) may be imposed on, incurred by, or asserted against
Agent growing out of, resulting from or in any other way associated with any of
the Basic Documents and the transactions and events (including the enforcement
thereof) at any time associated therewith or contemplated therein (including any
violation or noncompliance with any Environmental Laws by any Person or any
liabilities or duties of any Person with respect to Hazardous Materials found in
or released into the environment). The foregoing indemnification shall apply
whether or not such liabilities and costs are in any way or to any extent
caused, in whole or in part, by any negligent act or omission of any kind by
Agent, provided only that no Bank Party shall be obligated under this section to
indemnify Agent for that portion, if any, of any liabilities and costs which is
proximately caused by Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing,
each Bank Party agrees to reimburse Agent promptly upon demand for such Lender's
Percentage Share of any costs and expenses to be paid to Agent by the Company
under Section 11.03 to the extent that Agent is not timely reimbursed for such
expenses by the Company as provided in such section. As used in this Section
10.04, the term "Agent" shall refer not only to the Person designated as such in
Section 1.01 but also to each director, officer, agent attorney, employee,
representative and Affiliate of such Person.
10.05 Rights as Lender. In its capacity as a Lender, Agent shall have the
same rights and obligations as any Lender and may exercise such rights as though
it were not Agent. Agent may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with
any of the Obligors or their Affiliates, all as if it were not Agent hereunder
and without any duty to account therefor to any other Lender.
10.06 Sharing of Set-Offs and Other Payments. Each Bank Party agrees that
if it shall, whether through the exercise of rights under Security Documents or
rights of banker's lien, set off, or counterclaim against the Company or
otherwise, obtain payment of a portion of the aggregate Obligations owed to it
which, taking into account all distributions made by Agent under Section 4.01,
causes such Bank Party to have received more than it would have received had
such payment been received by Agent and distributed pursuant to Section 4.01,
then (a) it shall be deemed to have simultaneously purchased and shall be
obligated to purchase interests in the Obligations as necessary to cause all
Bank Parties to share all payments as provided for in Section 4.01, and (b) such
other adjustments shall be made from time to time as shall be equitable to
ensure that Bank Parties share all payments of Obligations as provided in
Section 4.01; provided, however, that nothing herein contained shall in any way
affect the right of any Bank Party to obtain payment (whether by exercise of
rights of banker's lien, set-off or counterclaim or otherwise) of indebtedness
other than the Obligations. The Company expressly consents to the foregoing
arrangements and agrees that any holder of any such interest or other
participation in
65
the Obligations, whether or not acquired pursuant to the foregoing arrangements,
may to the fullest extent permitted by law exercise any and all rights of
banker's lien, set-off, or counterclaim as fully as if such holder were a holder
of the Obligations in the amount of such interest or other participation. If all
or any part of any funds transferred pursuant to this section is thereafter
recovered from the seller under this section which received the same, the
purchase provided for in this section shall be deemed to have been rescinded to
the extent of such recovery, together with interest, if any, if interest is
required pursuant to court order to be paid on account of the possession of such
funds prior to such recovery.
10.07 Investments. Whenever Agent in good faith determines that it is
uncertain about how to distribute to Bank Parties any funds which it has
received, or whenever Agent in good faith determines that there is any dispute
among Bank Parties about how such funds should be distributed, Agent may choose
to defer distribution of the funds which are the subject of such uncertainty or
dispute. If Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if Agent is otherwise required to invest funds
pending distribution to Bank Parties, Agent shall invest such funds pending
distribution; all interest on any such investment shall be distributed upon the
distribution of such investment and in the same proportion and to the same
Persons as such investment. All moneys received by Agent for distribution to
Bank Parties (other than to the Person who is Agent in its separate capacity as
a Lender) shall be held by Agent pending such distribution solely as Agent for
such Bank Parties, and Agent shall have no equitable title to any portion
thereof.
10.08 Benefit of Section 10. The provisions of this Section 10 (other
than the following Section 10.09) are intended solely for the benefit of Bank
Parties, and no Obligor shall be entitled to rely on any such provision or
assert any such provision in a claim or defense against any Bank Party. Bank
Parties may waive or amend such provisions as they desire without any notice to
or consent of the Company.
10.09 Resignation. Agent may resign at any time by giving written notice
thereof to Bank Parties and the Company. Each such notice shall set forth the
date of such resignation. Upon any such resignation Majority Lenders shall have
the right to appoint a successor Agent. A successor must be appointed for any
retiring Agent, and such Agent's resignation shall become effective when such
successor accepts such appointment. If, within thirty days after the date of the
retiring Agent's resignation, no successor Agent has been appointed and has
accepted such appointment, then the retiring Agent may appoint a successor
Agent, which shall be a commercial bank organized or licensed to conduct a
banking or trust business under the laws of the United States of America or of
any state thereof. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, the retiring Agent shall be discharged from its duties and
obligations under this Agreement and the other Basic Documents. After any
retiring Agent's resignation hereunder the provisions of this Section 10 shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under the Basic Documents.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of any Bank Party to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under this
66
Agreement or the Notes shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege under this Agreement or the
Notes preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
11.02 Notices. All notices and other communications provided for herein
and under the Security Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telex or telecopy)
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof (below the name of the Company, in the
case of any Subsidiary Guarantor); or, as to any party, at such other address as
shall be designated by such party in a notice to each other party. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telex or telecopier and confirmed by
telephone call or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid. All notices and
communications provided for under any Basic Document which is required to be
delivered to Agent or LC Issuer shall be deemed given to Agent or LC Issuer if
it is delivered to a Bank Party who is then also Agent or LC Issuer, and vice
versa.
11.03 Expenses, Etc. Whether or not the transactions contemplated by this
Agreement are consummated, the Company will promptly (and in any event, within
30 days after any invoice or other statement or notice) pay (a) all reasonable
costs and expenses incurred by or on behalf of Agent (including attorneys' fees,
consultants fees and engineering fees) in connection with (i) the negotiation,
preparation, execution and delivery of the Basic Documents and any other
documents requested by the Company or required to preclude the Company from
being in Default, any and all consents, waivers or other documents or
instruments relating thereto, (ii) the filing, recording, refiling and re-
recording of any Basic Documents and any other documents or instruments or
further assurances required to be filed or recorded or refiled or re-recorded by
the terms of any Basic Document, (iii) any amendment, modification or waiver of
any of the terms of this Agreement or any of the other Basic Documents requested
by the Company or required to preclude the Company from being in default, (iv)
the borrowings hereunder and other action reasonably required in the course of
administration hereof, (v) monitoring or confirming (or preparation or
negotiation of any document related to) the Company's compliance with any
covenants or conditions contained in this Agreement or in any Basic Document,
and (vi) the enforcement of this Section 11.03; and (b) all transfer, stamp,
mortgage, documentary or other similar taxes, assessments or charges levied by
any governmental or revenue authority in respect of this Agreement or any of the
other Basic Documents or any other document referred to herein or therein. In
addition to the foregoing, without duplication, until all Obligations to Bank
Parties have been paid in full, the Company will also pay or reimburse Agent for
all reasonable out-of-pocket costs and expenses of Agent or its agents or
employees in connection with the continuing administration of the Loans and
Letters of Credit and the related due diligence of Agent, including, without
limitation, travel and miscellaneous expenses and fees and expenses of Agent's
outside counsel, reserve engineers and consultants engaged in connection with
the Basic Documents.
67
The Company hereby agrees to indemnify and hold harmless each Bank Party
and its directors, officers, employees and agents for, and hold each of them
harmless against, any and all losses, liabilities, claims, damages or expenses
incurred by any of them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to the extensions of credit hereunder
or any actual or proposed use by the Company or any of its Subsidiaries of the
proceeds of any of the extensions of credit hereunder, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).
In addition, the Company hereby agrees to indemnify and hold harmless each
Bank Party and any trustee under any Security Document for and against, and the
Company shall promptly (and in any event, within thirty days after any invoice
or other statement or notice) pay, all expenditures, including reasonable
attorneys' fees and expenses, incurred or expended in connection with (i) the
breach by any Obligor of any covenant, agreement or condition contained herein
or in any Security Document, (ii) the exercise by any Bank Party or any trustee
under any Security Document of any of their rights and remedies under the Basic
Documents, and (iii) the protection of the Collateral and/or the liens and
security interests of any Bank Party or any trustee therein. Each Bank Party
and any trustee under any Security Document shall have the right to compromise
and adjust any such claims, actions and judgments, and in addition to the rights
to be indemnified as herein provided, all amounts paid by such Bank Party or
such trustee in compromise, satisfaction or discharge of any such claim, action
or judgment, and all court costs, attorneys' fees and other expenses of every
character expended by such Bank Party or such trustee pursuant to the provisions
hereof shall be a demand obligation (which obligation the Company hereby
expressly promises to pay) owing by the Company to such Person. The "Release
Date" as used in this Section shall mean the earlier of the following two dates:
(i) the date on which the Obligations have been paid and performed in full and
each Security Document has been released of record, or (ii) the date on which
the liens of all Security Documents are foreclosed or a deed in lieu of such
foreclosure is fully effective and recorded. WITHOUT LIMITATION, IT IS THE
INTENTION OF THE COMPANY AND EACH BANK PARTY THAT THE FOREGOING INDEMNITIES
SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO CLAIMS, DEMANDS,
LIABILITIES, LOSSES, DAMAGES, CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS AND
EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES) WHICH IN
WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR
ANY OTHER) INDEMNIFIED PARTY. However, such indemnities shall not apply to any
particular indemnified party (but shall apply to the other indemnified parties)
to the extent the subject of the indemnification is caused by or arises out of
the gross negligence or willful misconduct of such particular indemnified party.
The foregoing indemnities shall not terminate upon the Release Date or upon the
release, foreclosure or other termination of the Security Documents but will
survive the Release Date, foreclosure of the Collateral or conveyance in lieu of
foreclosure, and the repayment of the Obligations and the discharge and release
of the Security Documents and the other documents evidencing and/or securing the
Obligations. Any amount to be paid hereunder by the Company to any Bank Party or
any trustee
68
under any Security Document shall be a demand obligation owing by
the Company to such Person.
11.04 Amendments, Etc. No provision of this Agreement may be amended or
modified or waived except by an instrument in writing signed by (a) if such
party is the Company, by the Company, (b) if such party is Agent or LC Issuer,
by such party, and (c) if such party is a Lender, by Majority Lenders, except as
to determinations of a new Borrowing Base, as set forth in Section 2.08, and
increases in the aggregate Commitment of all Lenders, which shall require
Supermajority Lenders; provided, notwithstanding the foregoing or anything to
the contrary herein, no such amendment, modification or waiver shall be valid or
effective against any Lender (unless signed by such Lender) which would: (i)
increase the Commitment of such Lender or subject such Lender to any additional
obligations, (ii) reduce any fees hereunder, or the principal of, or interest
on, such Lender's Note, (iii) postpone any date fixed for any payment of any
such fees, principal or interest, (iv) amend the definition herein of "Majority
Lenders" or "Supermajority Lenders" or otherwise change the aggregate amount of
Percentage Shares which is required for Agent, Lenders or any of them to take
any particular action under the Loan Documents, or (v) release the Company from
its obligation to pay such Lender's Note or any Guarantor from its guaranty of
such payment; provided, further, in clarification of the foregoing,
Supermajority Lenders may increase the aggregate Commitment of all Lenders
(pursuant to an increase in such Supermajority Lenders' individual Commitments),
provided that no individual Lender's Commitment may be increased in connection
with any such increase in the aggregate Commitment of all Lenders without such
individual Lender's consent as set forth in clause (i) above.
11.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
11.06 Assignments and Participation. (a) The Company may not assign its
rights or obligations hereunder or under any Note without the prior consent of
each Bank Party. The Company shall not directly or indirectly purchase or
otherwise retire any Obligations owed to any Bank Party nor will any Bank Party
accept any offer to do so, unless each Lender shall have received substantially
the same offer with respect to the same Percentage Share of the Obligations owed
to it. If the Company at any time purchases or otherwise retires some but less
than all of the Obligations owed to Bank Parties, such purchaser shall not be
entitled to any rights of any Bank Party under the Basic Documents unless and
until the Company has purchased all of the Obligations.
(b) Any Lender may assign any of its Loans, its Note, and its Percentage
Share of the Commitment; provided that, (i) such Lender gives written notice of
such assignment to the Company; (ii) any such partial assignment shall be in an
amount at least equal to $5,000,000; (iii) the assignee shall be a bank or other
financial institution having a combined capital and surplus greater than
$100,000,000; and (iv) each such assignment by any Lender of its Loans, its
Note, or its Percentage Share of the Commitment shall be made in such manner so
that the same portion of its Loans, its Note, and its Percentage Share of the
Commitment is assigned to the respective assignee. Upon execution and delivery
by the assignee to the Company of an Agreement to Be Bound, substantially in the
form of Exhibit F attached hereto, pursuant to which such assignee
69
agrees to become a "Lender" hereunder having the Percentage Share of the
Commitment and Loans specified in such instrument, the assignee shall have, to
the extent of such assignment (unless otherwise provided in such assignment),
the obligations, rights and benefits of a Lender hereunder holding the
Percentage Share of the Commitment and Loans (or portions thereof) assigned to
it (in addition to the Percentage Share of the Commitment and Loans, if any,
theretofore held by such assignee) and such Lender shall, to the extent of such
assignment, be released from its Percentage Share of the Commitment (or portion
thereof) so assigned. Within five (5) Business Days after its receipt of notice
that the Agent has received copies of any assignment and the other documents
relating thereto, the Company shall execute and deliver to Agent (for delivery
to the relevant assignee) a new Note, evidencing such assignee's assigned Loans
and, if the assignor Lender has retained a portion of its Loans, a replacement
Note in the principal amount of the Loans retained by the assignor Lender (such
Notes to be in exchange for, but not in payment of, the Note held by such
Lender).
(c) Any Lender may sell or agree to sell to one or more other Persons a
participation in all or any part of any Loans, or in the Commitment, in which
event each purchaser of a participation (a "Participant") shall be entitled to
the rights and benefits of the provisions of Section 8.01(j) hereof with respect
to its participation in such Loans and Commitment as if (and the Company shall
be directly obligated to such Participant under such provisions as if) such
Participant were a "Lender" for purposes of said Section, but shall not have any
other rights or benefits under this Agreement, the Notes or any other Basic
Document (the Participant's rights against such Lender in respect of such
participation to be those set forth in the agreements executed by such Lender in
favor of the Participant). All amounts payable by the Company to such Lender
under Section 5 hereof in respect of Loans, and the Commitment, shall be
determined as if such Lender had not sold or agreed to sell any participation in
such Loans and Commitment, and as if such Lender were funding each of such Loan
and Commitment in the same way that it is funding the portion of such Loan and
Commitment in which no participations have been sold. In no event shall any
Lender agree with the Participant to take or refrain from taking any action
hereunder or under any other Basic Document except that any Lender may agree
with the Participant that it will not, without the consent of the Participant,
agree to (i) increase or extend the term, or extend the time or waive any
requirement for the reduction or termination, of the Commitment, (ii) extend the
date fixed for the payment of principal of or interest on the related Loan or
Loans or any portion of any fee hereunder payable to the Participant, (iii)
reduce the amount of any such payment of principal, (iv) reduce the rate at
which interest is payable thereon, or any fee hereunder payable to the
Participant, to a level below the rate at which the Participant is entitled to
receive such interest or fee, or (v) alter the rights or obligations of the
Company to prepay the related Loans.
(d) Anything in this Section 11.06 to the contrary notwithstanding, any
Lender may assign and pledge all or any portion of its Loans and its Note to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank, and such Loans and Note shall be fully
transferrable as provided therein. No such assignment shall release any Lender
from its obligations hereunder.
70
(e) Any Bank Party may furnish any information concerning the Company or
any of its Subsidiaries in the possession of such Bank Party from time to time
to assignees and participants (including prospective assignees and
participants).
11.07 Survival. The obligations of the Company under Sections 5.01, 5.05,
8.21 and 11.03 hereof shall survive the repayment of the Loans and the
termination of the Commitment. In addition, each representation and warranty
made, or deemed to made by a notice of any extension of credit, herein or
pursuant hereto shall survive the making of such representation and warranty,
and no Bank Party shall be deemed to have waived, by reason of making any
extension of credit hereunder, any Default which may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that such Bank Party may have had notice or knowledge or reason
to believe that such representation or warranty was false or misleading at the
time such extension of credit was made.
11.08 Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) THE COMPANY HEREBY SUBMITS, AND SHALL CAUSE EACH SUBSIDIARY
GUARANTOR TO SUBMIT, TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY WAIVES, AND SHALL
CAUSE EACH SUBSIDIARY GUARANTOR TO IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) The Company hereby irrevocably designates, and shall cause each
Subsidiary Guarantor to irrevocably designate, Xxxxxxxx-Xxxx Corporation
System, Inc., located at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
(000) 000-0000, as its
71
designee, appointee and agent to receive, for and on its behalf, service of
process in such respective jurisdictions in any legal action or proceeding
with respect to this Agreement, the Notes or the other Security Documents.
It is understood that a copy of such process served on such agent will be
promptly forwarded by overnight courier to the Company or the Subsidiary
Guarantor at its address for notices pursuant to Section 11.02, but the
failure of the Company or the Subsidiary Guarantor to receive such copy
shall not affect in any way the service of such process. The Company
further irrevocably consents, and shall cause each Subsidiary Guarantor to
irrevocably consent, to the service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at its said address,
such service to become effective 30 days after such mailing.
(d) Nothing herein shall affect the right of the Company, any Bank
Party or any holder of a Note to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed
against the Company or any Bank Party in any other jurisdiction.
11.11 Waiver of Jury Trial, Punitive Damages, Etc. THE COMPANY AND EACH
BANK PARTY HEREBY IRREVOCABLY WAIVES, AND THE COMPANY SHALL CAUSE EACH
SUBSIDIARY GUARANTOR TO IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
BANK PARTY AND THE COMPANY HEREBY FURTHER (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (II) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (III)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
BASIC DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION,
AND THE COMPANY SHALL CAUSE EACH SUBSIDIARY GUARANTOR TO MAKE SUCH WAIVER,
CERTIFICATION, AND ACKNOWLEDGMENT.
11.12 Rate of Interest. It is the intention of the parties hereto that
each Bank Party shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Bank Party under laws applicable to it (including the laws of the United States
of America and the State of New York or any other jurisdiction whose laws may be
mandatorily applicable to such Bank Party notwithstanding the other provisions
of this Agreement), then, in that event, notwithstanding anything to the
contrary in any Note, this Agreement or in any other Security Document or
agreement entered into in connection with or as
72
security for any Note, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to such Bank Party
that is contracted for, taken, reserved, charged or received by such Bank Party
under any Note, this Agreement or under any of the other aforesaid Security
Documents or agreements or otherwise in connection with any Note shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Bank Party on the principal amount of the Obligations (or, to the extent
that the principal amount of the Obligations shall have been or would thereby be
paid in full, refunded by such Bank Party to the Company); and (ii) in the event
that the maturity of any Note is accelerated by reason of an election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to such Bank Party
may never include more than the maximum amount allowed by such applicable law,
and excess interest, if any, provided for in this Agreement or otherwise shall
be canceled automatically by such Bank Party as of the date of such acceleration
or prepayment and, if theretofore paid, shall be credited by such Bank Party on
the principal amount of the Obligations (or, to the extent that the principal
amount of the Obligations shall have been or would thereby be paid in full,
refunded by such Bank Party to the Company). All sums paid or agreed to be paid
to such Bank Party for the use, forbearance or detention of sums due hereunder
shall, to the extent permitted by law applicable to such Bank Party, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Loans evidenced by the Notes until payment in full so that the rate
or amount of interest on account of any Loans hereunder does not exceed the
maximum amount allowed by such applicable law. If at any time and from time to
time (i) the amount of interest payable to any Bank Party on any date shall be
computed at the Maximum Rate applicable to such Bank Party pursuant to this
Section 11.12 and (ii) in respect of any subsequent interest computation period
the amount of interest otherwise payable to such Bank Party would be less than
the amount of interest payable to such Bank Party computed at the Maximum Rate
applicable to such Bank Party, then the amount of interest payable to such Bank
Party in respect of such subsequent interest computation period shall continue
to be computed at the Maximum Rate applicable to such Bank Party until the total
amount of interest payable to such Bank Party shall equal the total amount of
interest which would have been payable to such Bank Party if the total amount of
interest had been computed without giving effect to this Section.
Without limiting the intent of the parties expressed under Sections 11.11
and 11.12 hereof, to the extent, if any, that Chapter 303 of the Texas Finance
Code is relevant to any Bank Party for the purpose of determining the Maximum
Rate, such Bank Party hereby elects to determine the applicable rate ceiling
under such Article by the indicated weekly rate ceiling from time to time in
effect and, in no event, shall Tex. Rev. Civ. Stat. Xxx. Art. 5069, ch. 15
(which regulates certain revolving credit loan accounts and revolving tri-party
accounts) apply to this Agreement or any Note.
11.13 Release of Liens. Notwithstanding anything to the contrary
contained herein no Bank Party shall be required to release any Lien under the
Security Documents in connection with any sale of Property by any of the
Obligors if, at the time of such sale, a Default shall have occurred and be
continuing or would result therefrom.
73
11.14 Confidentiality. Each Bank Party agrees (on behalf of itself and
each of its affiliates, directors, officers, employees and representatives) to
use reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Company pursuant to this Agreement which is identified by
the Company as being confidential at the time the same is delivered to such Bank
Party, provided that nothing herein shall limit the disclosure of any such
information (i) to the extent required by statute, rule, regulation or judicial
process, (ii) to counsel for any Bank Party, (iii) to bank examiners, auditors
or accountants, (iv) in connection with any litigation to which any Bank Party
is a party or (v) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) first enters into a confidentiality agreement with such Bank Party;
and provided, further, that in no event shall any Bank Party be required to
return any materials furnished by the Company.
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PLAINS RESOURCES INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and Chief Financial Officer
Address for Notices:
-------------------
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
75
ING (U.S.) CAPITAL CORPORATION,
as Agent, a Lender and as LC Issuer
By: /s/ Xxxxxxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxxxxxx X. Xxxxxx, Vice President
Principal Office for all Loans:
------------------------------
ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Address for Notices:
-------------------
ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telex No.: TRT 177792
RCA Intl 238686
ITT Intl 428379
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx, Vice President
PAYMENT INFORMATION:
Xxxxxx Guaranty Trust Company of New York
for the account of ING (U.S.) Capital Corporation
Account No. 0000000, ABA No. 000000000
Reference: ING (U.S.) Capital Corporation for
Natural Resources Department/Plains
76
BANKBOSTON, N.A., Lender
By: /s/ Xxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
Principal Office for all Loans:
------------------------------
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Address for Notices:
-------------------
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx Xxxxx
PAYMENT INFORMATION:
BankBoston, N.A.
ABA #000000000
Attn: Commercial Loan Services -
Xxxxx Xxxxxxxx
Ref: Plains Resources
77
DEN NORSKE BANK ASA, Lender
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: First Vice President
Principal Office for all Loans:
------------------------------
Den norske Bank ASA
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Address for Notices:
-------------------
Den norske Bank ASA
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, First Vice President
PAYMENT INFORMATION:
Unibank New York
ABA #000000000
ACC# 27260999
Ref: Plains Resources
78
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, Lender
By: /s/ Xxx Xxxxxx
---------------------------------------
Name: Xxx Xxxxxx
Title: Vice President
Principal Office for all Loans:
------------------------------
Xxxxx Fargo Bank (Texas), National Association
0000 Xxxxxxxxx, Xxxx Xxxxxxx 000
Xxxxxxx, Xxxxx 00000
Address for Notices:
-------------------
Xxxxx Fargo Bank (Texas), National Association
0000 Xxxxxxxxx, Xxxx Xxxxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxxx, Vice President
PAYMENT INFORMATION:
Xxxxx Fargo Bank (Texas), National Association
ABA #1130-01064
Ref: Plains Resources
79
CHASE BANK OF TEXAS, N.A, Lender
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Principal Office for all Loans:
------------------------------
Chase Bank of Texas, N.A.
600 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Address for Notices:
-------------------
Chase Bank of Texas, N.A.
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
PAYMENT INFORMATION:
ABA #000-000-000
ACC# GL #13681-7800
Commercial Loan Clearing Account
Ref: Plains Resources
80
COMERICA BANK-TEXAS, Lender
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
Principal Office for all Loans:
------------------------------
Comerica Bank-Texas
000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Address for Notices:
-------------------
Comerica Bank-Texas
000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
PAYMENT INFORMATION:
ABA #000-000-000
Account No. __________
Reference: Plains Resources Inc.
00
XXXXXXXXXXX XXXXXXX XXXX., Xxxxxx
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxx Xxxxx Xxxxxx
Title: Senior Vice President Managing Director
Principal Office for all Loans:
------------------------------
MeesPierson Capital Corp.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Address for Notices:
-------------------
MeesPierson Capital Corp.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President
PAYMENT INFORMATION:
Chase Manhattan Bank
ABA No. 021 000 021
Account name: MeesPierson New York Agency
Account No. 000-0-000000
Ref: Plains Resources - Account #___________
82
BANK OF SCOTLAND, Lender
By: /s/ Xxxxx Xxx Tat
---------------------------------------
Name: Xxxxx Xxxx Tat
Title: Vice President
Principal Office for all Loans:
------------------------------
Bank of Scotland
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
-------------------
Bank of Scotland
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
PAYMENT INFORMATION:
Citibank N.A., New York
ABA No. 021 000 089
Account Name: Bank of Scotland, NY
Account No. 00000000
Ref: Plains Resources
Attention: Loan Admin.
83
U.S. BANK NATIONAL ASSOCIATION, Lender
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Principal Office for all Loans:
------------------------------
U.S. Bank
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Address for Notices:
-------------------
U.S. Bank
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx
PAYMENT INFORMATION:
ABA #000000000
Account No. 28888532160600
Ref: Plains Resources
84
HIBERNIA NATIONAL BANK, Lender
By: /s/ S. Xxxx Xxxxxxxxxx
---------------------------------------
Name: S. Xxxx Xxxxxxxxxx
Title: Vice President
Principal Office for all Loans:
------------------------------
Hibernia National Bank
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Address for Notices:
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Hibernia National Bank
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
PAYMENT INFORMATION:
ABA #___________
Account No. ___________
Ref: Plains Resources
85
LENDER SCHEDULE
Lender Commitment Percentage Share
------ ---------- ----------------
ING (U.S.) Capital Corporation $28,000,000 12.444444%
BankBoston, N.A. $25,000,000 11.111111%
Den Norske Bank ASA $25,000,000 11.111111%
Xxxxx Fargo Bank (Texas), $25,000,000 11.111111%
National Association
Chase Bank of Texas, N.A. $25,000,000 11.111111%
Comerica Bank-Texas $20,000,000 8.888889%
MeesPierson Capital Corp. $20,000,000 8.888889%
Bank of Scotland $20,000,000 8.888889%
U.S. Bank National Association $20,000,000 8.888889%
Hibernia National Bank $17,000,000 7.555556%
============ ==========
TOTAL $225,000,000 100.000000%
