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EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF JUNE 29, 2001
AMONG
XXXXXX PETROLEUM COMPANY,
AS BORROWER,
DUKE CAPITAL PARTNERS, LLC,
AS ADMINISTRATIVE AGENT,
AND
THE LENDERS SIGNATORY HERETO
$95,000,000.00 Multiple Advance Term Loan
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above....................................................................1
Section 1.02 Certain Defined Terms..................................................................1
Section 1.03 Accounting Terms and Determinations...................................................29
ARTICLE II
COMMITMENTS
Section 2.01 Loans.................................................................................29
Section 2.02 Borrowings............................................................................29
Section 2.03 Ratio Test............................................................................30
Section 2.04 Fees..................................................................................30
Section 2.05 Several Obligations...................................................................30
Section 2.06 Notes.................................................................................30
Section 2.07 Prepayments...........................................................................31
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans....................................................................32
Section 3.02 Interest..............................................................................32
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments..............................................................................32
Section 4.02 Pro Rata Treatment....................................................................33
Section 4.03 Computations..........................................................................33
Section 4.04 Non-receipt of Funds by the Administrative Agent......................................33
Section 4.05 Set-off, Sharing of Payments, Etc.....................................................33
Section 4.06 Taxes.................................................................................34
ARTICLE V
CAPITAL ADEQUACY
Section 5.01 Capital Adequacy......................................................................37
Section 5.02 Replacement Lenders...................................................................37
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding.......................................................................38
Section 6.02 Initial and Subsequent Loans..........................................................40
Section 6.03 Conditions Precedent for the Benefit of Lenders.......................................40
Section 6.04 No Waiver.............................................................................40
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 Corporate Existence; Capitalization...................................................41
Section 7.02 Financial Condition...................................................................41
Section 7.03 Litigation............................................................................42
Section 7.04 No Breach.............................................................................42
Section 7.05 Authority.............................................................................42
Section 7.06 Approvals.............................................................................42
Section 7.07 Use of Loans..........................................................................43
Section 7.08 ERISA.................................................................................43
Section 7.09 Taxes.................................................................................44
Section 7.10 Titles, Property, etc.................................................................44
Section 7.11 No Material Misstatements.............................................................45
Section 7.12 Investment Company Act................................................................45
Section 7.13 Public Utility Holding Company Act....................................................45
Section 7.14 Subsidiaries..........................................................................46
Section 7.15 Location of Business and Offices......................................................46
Section 7.16 Defaults..............................................................................47
Section 7.17 Environmental Matters.................................................................47
Section 7.18 Compliance with the Law...............................................................48
Section 7.19 Insurance.............................................................................48
Section 7.20 Hedging Agreements....................................................................48
Section 7.21 Material Agreements...................................................................49
Section 7.22 Gas Imbalances........................................................................49
Section 7.23 Labor Relations.......................................................................49
Section 7.24 Intellectual Property.................................................................49
ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01 Reporting Requirements................................................................50
Section 8.02 Litigation............................................................................52
Section 8.03 Maintenance, Etc......................................................................52
Section 8.04 Environmental Matters.................................................................53
Section 8.05 Further Assurances....................................................................53
Section 8.06 Performance of Obligations............................................................53
Section 8.07 Reserve and Engineering Reports.......................................................54
Section 8.08 ERISA Information and Compliance......................................................54
Section 8.09 Restricted Subsidiaries...............................................................54
ARTICLE IX
NEGATIVE COVENANTS
Section 9.01 Debt..................................................................................55
Section 9.02 Liens.................................................................................55
Section 9.03 [Intentionally Left Blank]............................................................56
Section 9.04 Restricted Investments; Restrictive Agreements........................................56
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Section 9.05 Sales and Leasebacks..................................................................61
Section 9.06 Nature of Business....................................................................61
Section 9.07 Limitation on Leases..................................................................61
Section 9.08 Consolidation and Merger..............................................................61
Section 9.09 Proceeds of Notes and Loans...........................................................62
Section 9.10 ERISA Compliance......................................................................62
Section 9.11 Sale or Discount of Receivables.......................................................63
Section 9.12 Sale of Property......................................................................63
Section 9.13 Environmental Matters.................................................................65
Section 9.14 Transactions with Affiliates..........................................................65
Section 9.15 [Intentionally Left Blank]............................................................66
Section 9.16 [Intentionally Left Blank]............................................................66
Section 9.17 Subordinated Debt.....................................................................66
Section 9.18 Issuance and Sale of Capital Stock....................................................66
Section 9.19 Modification of Agreements............................................................66
Section 9.20 Guarantees............................................................................66
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default.....................................................................67
Section 10.02 Remedies..............................................................................68
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities....................................................69
Section 11.02 Reliance by Administrative Agent......................................................70
Section 11.03 Defaults..............................................................................70
Section 11.04 Rights as a Lender....................................................................70
SECTION 11.05 INDEMNIFICATION.......................................................................70
Section 11.06 Non-Reliance on Administrative Agent and other Lenders................................71
Section 11.07 Action by Administrative Agent........................................................71
Section 11.08 Resignation or Removal of Administrative Agent........................................71
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver................................................................................72
Section 12.02 Notices...............................................................................72
Section 12.03 Payment of Expenses, Indemnities, etc.................................................73
Section 12.04 Amendments, Etc.......................................................................75
Section 12.05 Successors and Assigns................................................................75
Section 12.06 Assignments and Participations........................................................75
Section 12.07 Invalidity............................................................................77
Section 12.08 Counterparts..........................................................................77
Section 12.09 References............................................................................77
Section 12.10 Survival..............................................................................77
Section 12.11 Captions..............................................................................77
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SECTION 12.12 NO ORAL AGREEMENTS....................................................................77
SECTION 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.............................................78
Section 12.14 Interest..............................................................................79
Section 12.15 Confidentiality.......................................................................80
Section 12.16 Effectiveness.........................................................................80
SECTION 12.17 EXCULPATION PROVISIONS................................................................80
ANNEXES, EXHIBITS AND SCHEDULES
Annex I - List of Commitments
Exhibit A - Form of Note
Exhibit B - Form of Borrowing Notice
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Assignment Agreement
Schedule 1.1 - Deepwater Oil and Gas Properties
Schedule 7.01(b) - Capitalization
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.17 - Environmental Matters
Schedule 7.19 - Insurance
Schedule 7.20 - Hedging Agreements
Schedule 7.21 - Material Agreements
Schedule 7.22 - Gas Imbalances
Schedule 9.01 - Debt
Schedule 9.02 - Liens
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THIS
CREDIT AGREEMENT, dated as of June 29, 2001, is among
XXXXXX PETROLEUM COMPANY, a corporation formed under the laws of the State of
Delaware (the "Borrower"); each of the lenders that is a signatory hereto or
which becomes a signatory hereto as provided in Section 12.06 (individually,
together with its successors and assigns, a "Lender" and, collectively, the
"Lenders"); and DUKE CAPITAL PARTNERS, LLC, a Delaware limited liability company
(in its individual capacity, "DCP"), as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"Administrative Agent").
RECITALS
A. Borrower has requested that the Lenders provide certain
loans to Borrower; and
B. The Lenders have agreed to make such loans subject to the
terms and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements
herein contained and of the loans and commitments hereinafter referred to, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. As used in this Agreement,
the terms "Administrative Agent," "Borrower," "DCP," "Lender" and "Lenders"
shall have the meanings indicated above.
Section 1.02 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms defined in this
Article I or in other provisions of this Agreement in the singular to have
equivalent meanings when used in the plural and vice versa):
"Adjusted Consolidated Net Tangible Assets" shall mean
(without duplication), as of the date of determination, the remainder of:
(a) the sum of:
(i) discounted future net revenue from proved oil and
gas reserves of Borrower and its Restricted Subsidiaries calculated in
accordance with SEC guidelines but (x) using average prices received by
Borrower during the preceding year and (y) before any state, federal or
foreign income taxes, as estimated by Borrower in a reserve report
prepared as of the end of Borrower's most recently completed fiscal
year for which audited financial statements are available, and any
other Oil and Gas Property in which Borrower maintains an interest in
oil and gas reserves, as increased by, as of the date of determination,
the estimated discounted future net revenues from:
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(A) estimated proved oil and gas reserves of
Borrower, its Restricted Subsidiaries and Borrower's and its
Restricted Subsidiaries' share of Oil and Gas Properties
acquired since such year end, which reserves were not
reflected in such year end reserve report, and
(B) estimated oil and gas reserves of
Borrower, its Restricted Subsidiaries and Borrower's and its
Restricted Subsidiaries' share of Oil and Gas Properties
attributable to extensions, discoveries and other additions
and upward revisions of estimates of proved oil and gas
reserves since such year end due to exploration, development,
exploitation or production activities, in each case calculated
in accordance with SEC guidelines (utilizing the prices
utilized in such year end reserve report),
and decreased by, as of the date of determination, the estimated
discounted future net revenues from:
(C) estimated proved oil and gas reserves of
Borrower, its Restricted Subsidiaries and Borrower's and its
Restricted Subsidiaries' share of Oil and Gas Properties
produced or disposed of since such year end, and
(D) estimated oil and gas reserves of
Borrower, its Restricted Subsidiaries and Borrower's and its
Restricted Subsidiaries' share of Oil and Gas Properties
attributable to downward revisions of estimates of proved oil
and gas reserves since such year end due to changes in
geological conditions or other factors which would, in
accordance with standard industry practice, cause such
revisions, in each case calculated on a pre-tax basis and
substantially in accordance with SEC guidelines (utilizing the
prices utilized in such year end reserve report), in each case
as estimated by Borrower's petroleum engineers or any
independent petroleum engineers engaged by Borrower for that
purpose;
(ii) the capitalized costs that are attributable to
Oil and Gas Properties of Borrower, its Restricted Subsidiaries and
Borrower's and its Restricted Subsidiaries' share of Oil and Gas
Properties to which no proved oil and gas reserves are attributable,
based on Borrower's books and records as of a date no earlier than the
date of Borrower's latest available annual or quarterly financial
statements;
(iii) the consolidated net working capital of
Borrower and its Restricted Subsidiaries on a date no earlier than the
date of Borrower's latest annual or quarterly financial statements;
and
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(iv) the greater of:
(A) the net book value of other tangible
assets of Borrower and its Restricted Subsidiaries, as of a
date no earlier than the date of Borrower's latest annual or
quarterly financial statements, and
(B) the appraised value, as estimated by
independent appraisers (reasonably acceptable to the
Administrative Agent), of other tangible assets of Borrower
and its Restricted Subsidiaries, as of a date no earlier than
the date of Borrower's latest audited financial statements;
minus
(b) the sum of:
(i) minority interests;
(ii) to the extent included in (a)(i) above, any net
gas balancing liabilities of Borrower and its Restricted Subsidiaries
reflected in Borrower's latest audited financial statements;
(iii) to the extent included in (a)(i) above, the
discounted future net revenues, calculated in accordance with SEC
guidelines (utilizing the prices utilized in Borrower's most recent
year end reserve report), attributable to reserves which are required
to be delivered to third parties to fully satisfy the obligations of
Borrower and its Restricted Subsidiaries with respect to Volumetric
Production Payments (determined, if applicable, using the schedules
specified with respect thereto); and
(iv) the discounted future net revenues, calculated
in accordance with SEC guidelines, attributable to reserves subject to
Dollar-Denominated Production Payments which, based on the estimates
of production and price assumptions included in determining the
discounted future net revenues specified in (a)(i) above, would be
necessary to fully satisfy the payment obligations of Borrower and its
Subsidiaries with respect to Dollar-Denominated Production Payments
(determined, if applicable, using the schedules specified with respect
thereto).
"Affiliate" of any Person shall mean (i) any Person directly
or indirectly controlled by, controlling or under common control with such first
Person, (ii) any director or officer of such first Person or of any Person
referred to in clause (i) above and (iii) if any Person in clause (i) above 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. For purposes of this definition, any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 10% 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
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"control" (including, with its correlative meanings, "controlled by" and "under
common control with") such corporation or other Person.
"Agreement" shall mean this
Credit Agreement, as the same may
from time to time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the sum of the
Commitments of the Lenders.
"Asset Disposition" shall mean any direct or indirect sale,
lease (other than an operating lease entered into in the ordinary course of
business), transfer, issuance or other disposition, or a series of related
sales, leases, transfers, issuances or dispositions that are part of a common
plan, of shares of capital stock of a Subsidiary (other than directors'
qualifying shares) or other Property (each referred to for the purposes of this
definition as a "disposition") by Borrower or any of its Restricted
Subsidiaries, including any disposition by means of a merger, consolidation or
similar transaction.
Notwithstanding the preceding, the following items shall not
be deemed to be Asset Dispositions:
(1) a disposition by a Restricted Subsidiary to
Borrower or by Borrower or a Restricted Subsidiary to a Wholly-Owned
Subsidiary;
(2) the sale of Cash Equivalents in the ordinary
course of business;
(3) a disposition of Hydrocarbons in the ordinary
course of business;
(4) a disposition or abandonment of obsolete or worn
out equipment or equipment that is no longer useful in the conduct of
the business of Borrower and its Restricted Subsidiaries and that is
disposed of in each case in the ordinary course of business;
(5) transactions permitted under Section 9.08;
(6) an issuance of capital stock by a Restricted
Subsidiary of Borrower to Borrower or to a Wholly-Owned Subsidiary;
(7) for purposes of this definition only, the making
of a Permitted Investment or a disposition subject to Section 9.04;
(8) dispositions of assets selected by the board of
directors of Borrower as not constituting an Asset Disposition with an
aggregate fair market value since the Closing Date of less than
$2,500,000.00;
(9) dispositions in connection with Liens permitted
under Section 9.02;
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(10) the licensing or sublicensing of intellectual
property or other general intangibles and licenses, leases or subleases
of other property in the ordinary course of business which do not
materially interfere with the business of Borrower and its Restricted
Subsidiaries;
(11) foreclosure on assets;
(12) sale, transfer or abandonment (whether or not in
the ordinary course of business) of Oil and Gas Properties or direct or
indirect interests in Property; provided that at the time of such sale
or transfer such Properties do not have associated with them any
material proved reserves;
(13) the abandonment, farm-out, lease or sublease of
developed or undeveloped Oil and Gas Properties in the ordinary course
of business;
(14) the trade or exchange by Borrower or any
Restricted Subsidiary of any Oil and Gas Properties owned or held by
Borrower or such Restricted Subsidiary for Oil and Gas Properties owned
or held by another Person, including any cash or Cash Equivalents
necessary in order to achieve an exchange of equivalent value; provided
that any such cash or Cash Equivalents received by Borrower or such
Restricted Subsidiary will be subject to the provisions described in
Section 9.12, which the board of directors of Borrower determines in
good faith by resolution to be of approximately equivalent value.
"Asset Disposition Offer" shall have the meaning assigned such
term in Section 9.12(b).
"Asset Disposition Offer Amount" shall have the meaning
assigned such term in Section 9.12(b).
"Asset Disposition Offer Period" shall have the meaning
assigned such term in Section 9.12(b).
"Asset Disposition Purchase Date" shall have the meaning
assigned such term in Section 9.12(b).
"Assignment" shall have the meaning assigned such term in
Section 12.06(b).
"Borrower Intellectual Property" shall have the meaning
assigned such term in Section 7.24.
"Business Day" shall mean any day other than a day on which
commercial banks are authorized or required to close in
New York.
"Cash Equivalents" shall mean:
(1) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality of the United States of America (provided that the full
faith and credit of the United States of America is
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pledged in support thereof), having maturities of not more than one
year from the date of acquisition;
(2) marketable general obligations issued by any
state of the United States of America or any political subdivision of
any such state or any public instrumentality thereof maturing within
one year from the date of acquisition and, at the time of acquisition
of the United States of America (provided that the full faith and
credit of the United States of America is pledged in support thereof),
having a credit rating of "A" or better from either Standard & Poor's
Ratings Services or Xxxxx'x Investors Service, Inc.;
(3) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers'
acceptances having maturities of not more than one year from the date
of acquisition thereof issued by any commercial bank the long-term debt
of which is rated at the time of acquisition thereof at least "A" or
the equivalent thereof by Standard & Poor's Ratings Services, or "A" or
the equivalent thereof by Xxxxx'x Investors Service, Inc., and having
combined capital and surplus in excess of $500,000,000.00;
(4) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in
clauses (1), (2) and (3) above entered into with any bank meeting the
qualifications specified in clause (3) above;
(5) commercial paper rated at the time of acquisition
thereof at least "A-2" or the equivalent thereof by Standard & Poor's
Ratings Services or "P-2" or the equivalent thereof by Xxxxx'x
Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of investments, and in any case
maturing within one year after the date of acquisition thereof; and
(6) interests in any investment company or money
market fund which invests solely in instruments of the type specified
in clauses (1) through (5) above.
"Change in Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
SEC thereunder as in effect on the date hereof) of shares representing more than
35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Borrower; or (b) occupation of a majority of the
seats on the board of directors of Borrower by Persons who were neither (i)
nominated by the board of directors of Borrower nor (ii) appointed by directors
so nominated.
"Closing Date" shall mean June 29, 2001.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and any successor statute.
"Commitment" shall mean, for any Lender, its obligation to
make Loans up to the amount set forth opposite such Lender's name on Annex I.
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"Commitment Letter" shall mean that certain letter agreement
from DCP to Borrower, dated June 21, 2001, Re: Commitment and Engagement Letter
Senior Unsecured Credit Facility for Xxxxxx Petroleum Borrower, including the
Summary of Terms and Conditions attached thereto on Exhibit A.
"Consolidated Net Income" shall mean with respect to Borrower
and its Restricted Subsidiaries, for any period, the aggregate of the net income
(or loss) of Borrower and its Restricted Subsidiaries after allowances for taxes
for such period, determined on a restricted basis in accordance with GAAP;
provided that there shall be excluded from such net income (to the extent
otherwise included therein) the following: (i) the net income of any Person in
which Borrower or any Restricted Subsidiary has an interest (which interest does
not cause the net income of such other Person to be consolidated with the net
income of Borrower and its Restricted Subsidiaries in accordance with GAAP),
except to the extent of the amount of dividends or distributions actually paid
in such period by such other Person to Borrower or to a Restricted Subsidiary,
as the case may be; (ii) the net income (but not loss) of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions or transfers or loans by that Restricted Subsidiary is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument or Governmental Requirement applicable to such Restricted Subsidiary,
or is otherwise restricted or prohibited in each case determined in accordance
with GAAP; (iii) the net income (or loss) of any Person acquired in a
pooling-of-interests transaction for any period prior to the date of such
transaction; (iv) any extraordinary gains or losses, including gains or losses
attributable to Property sales not in the ordinary course of business; (v) the
cumulative effect of a change in accounting principles; and (viii) any gains or
losses attributable to writeups or write downs of assets.
"Consolidated Subsidiaries" shall mean each Subsidiary of
Borrower (whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated with the
financial statements of Borrower in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Debt" shall mean, for any Person the sum of the following
(without duplication): (i) all obligations of such Person for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments (including
principal, interest, fees and charges); (ii) all obligations of such Person
(whether contingent or otherwise) in respect of bankers' acceptances, letters of
credit, surety or other bonds and similar instruments; (iii) all obligations of
such Person to pay the deferred purchase price of Property (except trade
payables), which payment is due more than six months after the date of placing
such Property in service; (iv) all obligations under leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
in respect of which such Person is liable (whether contingent or otherwise); (v)
all obligations under operating leases which require such Person to make
payments over the term of such lease based on the purchase price or appraised
value of the Property subject to such lease plus a marginal interest rate, and
used primarily as a financing vehicle for, or to monetize, such
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Property; (vi) all Debt (as described in the other clauses of this definition)
and other obligations of others secured by a Lien on any Property of such
Person, whether or not such Debt is assumed by such Person; (vii) all Debt (as
described in the other clauses of this definition) and other obligations of
others guaranteed by such Person or in which such Person otherwise assures a
creditor against loss of the debtor or obligations of others; (viii) all
obligations or undertakings of such Person to maintain or cause to be maintained
the financial position or covenants of others or to purchase the Debt or
Property of others; (ix) obligations to deliver goods or services including
Hydrocarbons in consideration of advance payments; (x) obligations to pay for
goods or services whether or not such goods or services are actually received or
utilized by such Person; (xi) any capital stock of such Person in which such
Person has a mandatory obligation to redeem such stock prior to the maturity of
the Indebtedness; (xii) any Debt of a Special Entity for which such Person is
liable either by agreement or because of a Governmental Requirement; (xiii) the
undischarged balance of any production payment created by such Person or for the
creation of which such Person directly or indirectly received payment; and (xiv)
all obligations of such Person under Hedging Agreements.
"Deepwater Oil and Gas Properties" shall mean the Oil and Gas
properties described on Schedule 1.1.
"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.
"Deferred Compensation Plan" shall mean the Borrower Deferred
Compensation Plan dated as of December 1, 1996 and the letter to employees dated
December 13, 1996 relating thereto.
"Disqualified Stock" shall mean, with respect to any Person,
any capital stock of such Person which by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
(1) matures or is mandatorily redeemable pursuant to
a sinking fund obligation or otherwise;
(2) is convertible or exchangeable for Debt or
Disqualified Stock (excluding capital stock which is convertible or
exchangeable solely at the option of Borrower or a Restricted
Subsidiary); or
(3) is redeemable at the option of the holder
thereof, in whole or in part,
in each case on or prior to the date that is 91 days after the date (a) on which
the Notes mature or (b) on which there are no Notes and no Indebtedness
outstanding; provided that only the portion of capital stock which so matures or
is mandatorily redeemable, is so convertible or exchangeable or is so redeemable
at the option of the holder thereof prior to such date will be deemed to be
Disqualified Stock; provided, further, that any capital stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require Borrower to repurchase such capital stock upon the occurrence of a
change of control or asset disposition (each defined in a substantially
identical manner to the corresponding definitions herein) shall
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not constitute Disqualified Stock if the terms of such capital stock (and all
such securities into which it is convertible or for which it is ratable or
exchangeable) provide that Borrower may not repurchase or redeem any such
capital stock (and all such securities into which it is convertible or for which
it is ratable or exchangeable) pursuant to such provision prior to compliance by
Borrower with the provisions hereof described under Sections 2.07(b), 9.04 and
9.12.
"Dollar-Denominated Production Payments" shall mean production
payment obligations recorded as liabilities in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"EBITDA" shall mean, for the period of the most recent four
consecutive calendar quarters ending prior to the date of determination for
which financial statements are available, the sum of Consolidated Net Income for
such period plus the following expenses or charges to the extent deducted from
Consolidated Net Income in such period: Interest Expense, taxes, depreciation,
depletion and amortization; provided, with respect to Consolidated Net Income
flowing from each Deepwater Oil and Gas Property that Borrower has on production
for one month or more (but less than the full pro forma period), EBITDA shall
include the results of operations of such Deepwater Oil and Gas Property as
follows:
(a) If producing longer than one month but less than
three months, EBITDA shall be calculated as if such well were producing
for three months during such period;
(b) If producing longer than three months but less
than six months, EBITDA shall be calculated as if such well were
producing for six months during such period; and
(c) If producing longer than six months, EBITDA shall
be calculated as if such well were producing for the entire pro forma
period.
EBITDA for such Deepwater Oil and Gas Properties shall be
calculated using the average EBITDA per day that the Deepwater Oil and Gas
Property was on production.
For the purposes of this definition (when used in the
calculation of the Interest Coverage Ratio) EBITDA, if any and to the extent
lowered, relating to any production payment, project financing and other
non-recourse debt and in which an imputed interest rate has been calculated and
used in the definition of Interest Expense, will be grossed up by a
corresponding amount.
"Environmental Laws" shall mean any and all Governmental
Requirements pertaining to health or the environment in effect in any and all
jurisdictions in which Borrower or any Subsidiary is conducting or at any time
has conducted business, or where any Property of Borrower or any Subsidiary is
located, including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the
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Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, and other environmental
conservation or protection laws. The term "oil" shall have the meaning specified
in OPA, the terms "hazardous substance" and "release" (or "threatened release")
have the meanings specified in CERCLA, and the terms "solid waste" and
"disposal" (or "disposed") have the meanings specified in RCRA; provided,
however, that (i) in the event either OPA, CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (ii) to the extent
the laws of the state in which any Property of Borrower or any Subsidiary is
located establish a meaning for "oil," "hazardous substance," "release," "solid
waste" or "disposal" which is broader than that specified in either OPA, CERCLA
or RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which together with Borrower or any Subsidiary would be
deemed to be a "single employer" within the meaning of section 4001(b)(1) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder, (ii) the withdrawal
of Borrower, any Subsidiary or any ERISA Affiliate from a Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, (iv)
the institution of proceedings to terminate a Plan by the PBGC or (v) any other
event or condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"Event of Default" shall have the meaning assigned such term
in Section 10.01.
"Excess Proceeds" shall have the meaning assigned such term in
Section 9.12(b).
"Exchanged Properties" shall mean Properties used or useful in
the oil and gas business and received by Borrower or a Consolidated Subsidiary
in exchange for other Properties owned by it, whether directly or indirectly
through the acquisition of the capital stock of a Person holding such Properties
so that such Person becomes a Wholly-Owned and Consolidated Subsidiary of
Borrower, in trade or as a portion of the total consideration for such other
Properties.
"Existing Subordinated Debt" shall mean the 2002 Subordinated
Notes, the 2004 Subordinated Notes and the 2005 Subordinated Notes.
"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 a
member of the Federal Reserve System arranged by
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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 (i) if the
date 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
immediately preceding Business Day as so published on the next succeeding
Business Day, and (ii) if such rate is not so published for any day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" shall mean that certain letter agreement from DCP
to Borrower dated June 21, 2001, concerning certain fees in connection with this
Agreement and any agreements or instruments executed in connection therewith, as
the same may be amended, restated, modified or replaced from time to time.
"Final Maturity Date" shall mean the earlier to occur of (i)
March 31, 2005; provided, however, if the 2004 Subordinated Notes are not
redeemed prior to August 1, 2004, maturity will be September 1, 2004; and (ii)
the date that the Notes are prepaid in full pursuant to Section 2.07.
"Financial Statements" shall have the meaning assigned such
term in Section 7.02.
"Form 1001 Certification" shall have the meaning assigned such
term in Section 4.06(d)(i).
"Form 4224 Certification" shall have the meaning assigned such
term in Section 4.06(d)(i).
"GAAP" shall mean generally accepted accounting principles in
the United States of America (i) as in effect on the date hereof with regard to
Sections 2.03, 9.01 and 9.04 and (ii) otherwise as in effect from time to time.
"Governmental Authority" shall include the country, the state,
county, city and political subdivisions in which any Person or such Person's
Property is located or which exercises valid jurisdiction over any such Person
or such Person's Property, and any court, agency, department, commission, board,
bureau or instrumentality of any of them including monetary authorities which
exercises valid jurisdiction over any such Person or such Person's Property.
Unless otherwise specified, all references to Governmental Authority herein
shall mean a Governmental Authority having jurisdiction over, where applicable,
Borrower, its Subsidiaries or any of their Property or the Administrative Agent
or any Lender.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or
requirement (whether or not having the force of law), including, without
limitation, Environmental Laws, energy regulations and occupational, safety and
health standards or controls, of any Governmental Authority.
"Guarantor" shall mean any Subsidiary or other Person that
executes a Guaranty Agreement, which as of the Closing Date are all of the
Restricted Subsidiaries of Borrower.
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"Guarantor Subordinated Obligation" means, with respect to a
Guarantor, any Debt of such Guarantor (whether outstanding on the Closing Date
or thereafter incurred) which is expressly subordinate in right of payment to
the obligations of such Guarantor under its Guaranty Agreement pursuant to a
written agreement.
"Guaranty Agreement" shall mean an agreement executed by a
Guarantor in form and substance satisfactory to the Administrative Agent
guarantying, unconditionally, payment of the Indebtedness, as the same may be
amended, modified or supplemented from time to time.
"Hedging Agreements" shall mean any commodity, interest rate
or currency swap, cap, floor, collar, forward agreement or other exchange or
protection agreements or any option with respect to any such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes or
on other Indebtedness under laws applicable to such Lender which are currently
in effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles,
interests and estates now or hereafter acquired in and to oil and gas leases,
oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases,
mineral fee interests, overriding royalty and royalty interests, net profit
interests and production payment interests, including any reserved or residual
interests of whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined or separated therefrom.
"Indebtedness" shall mean any and all amounts owing or to be
owing by Borrower to the Administrative Agent and/or the Lenders in connection
with the Loan Documents and any Hedging Agreements now or hereafter arising
between Borrower and any Lender or any Affiliate of any Lender and permitted by
the terms of this Agreement and all renewals, extensions and/or rearrangements
of any of the foregoing.
"Indemnified Parties" shall have the meaning assigned such
term in Section 12.03(a)(ii).
"Indemnity Matters" shall mean any and all actions, suits,
proceedings (including any investigations, litigation or inquiries), claims,
demands and causes of action made or threatened against a Person and, in
connection therewith, all losses, liabilities, damages (including, without
limitation, consequential damages) or reasonable costs and expenses of any kind
or nature whatsoever incurred by such Person whether caused by the sole or
concurrent negligence of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Loans
upon satisfaction of the conditions set forth in Section 6.01.
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"Interest Coverage Ratio" means as of any date of
determination, with respect to Borrower and its Restricted Subsidiaries, the
ratio of (x) the aggregate amount of EBITDA to (y) Interest Expense for such
four calendar quarters; provided, however, that:
(1) if Borrower or any Restricted Subsidiary:
(a) has incurred any Debt since the
beginning of such period that remains outstanding on such date
of determination or if the transaction giving rise to the need
to calculate the Interest Coverage Ratio is an incurrence of
Debt, EBITDA and Interest Expense for such period will be
calculated after giving effect on a pro forma basis to such
Debt as if such Debt has been incurred on the first day of
such period (except that in making such computation, the
amount of Debt under any revolving credit facility existing on
the date of such calculation will be computed based on the
average daily balance of such Debt during such period;
provided that, for purposes of Section 2.03, the average daily
balance deemed outstanding during such period under a
revolving credit facility being repaid in whole or in part
with the proceeds of such Debt shall be the lesser of (i) the
actual average daily balance of such revolving indebtedness
outstanding during such period and (ii) the amount of such
revolving indebtedness outstanding immediately before the
application of the proceeds of such Debt to repay such
revolving indebtedness) and the discharge of any other Debt
repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Debt as if such discharge had occurred on
the first day of such period; or
(b) has repaid, repurchased, defeased or
otherwise discharged any Debt since the beginning of the
period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to
calculate the Interest Coverage Ratio involves a discharge of
Debt (in each case other than Debt incurred under any
revolving credit facility unless such Debt has been
permanently repaid and the related commitment terminated;
provided, that for purposes of Section 2.03, this
parenthetical clause shall not apply), EBITDA and Interest
Expense for such period will be calculated after giving effect
on a pro forma basis to such discharge of such Debt, including
with the proceeds of such new Debt, as if such discharge had
occurred on the first day of such period;
(2) if since the beginning of such period Borrower or
any Restricted Subsidiary will have sold or otherwise disposed of any
material Property or other asset or if the transaction giving rise to
the need to calculate the Interest Coverage Ratio is such a sale or
disposition:
(a) the EBITDA for such period will be
reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of
such sale or disposition for such period or increased by an
amount equal to the EBITDA (if negative) directly attributable
thereto for such period; and
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(b) Interest Expense for such period will be
reduced by an amount equal to the Interest Expense directly
attributable to any Debt of Borrower or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to Borrower and its continuing
Restricted Subsidiaries in connection with such sale or
disposition for such period (or, if the capital stock of any
Restricted Subsidiary is sold, the Interest Expense for such
period directly attributable to the Debt of such Restricted
Subsidiary to the extent Borrower and its continuing
Restricted Subsidiaries are no longer liable for such Debt
after such sale);
(3) if since the beginning of such period Borrower or
any Restricted Subsidiary (by merger or otherwise) will have made an
investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary or is merged with or into Borrower) or an
acquisition of material Properties or other assets, including any
acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, EBITDA and Interest Expense
for such period will be calculated after giving pro forma effect
thereto (including the incurrence of any Debt) as if such investment or
acquisition occurred on the first day of such period; and
(4) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or
into Borrower or any Restricted Subsidiary since the beginning of such
period) will have sold or otherwise disposed of any material property
or other asset or any investment or acquisition of assets that would
have required an adjustment pursuant to clause (2) or (3) above if made
by Borrower or a Restricted Subsidiary during such period, EBITDA and
Interest Expense for such period will be calculated after giving pro
forma effect thereto as if such asset disposition or investment or
acquisition of assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations will
be determined in good faith by a responsible financial or accounting officer of
Borrower (including pro forma expense and cost reductions calculated in good
faith by Borrower). If any Debt bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Debt will be calculated as
if the rate in effect on the date of determination has been the applicable rate
for the entire period (taking into account any interest rate agreement
applicable to such Debt if such interest rate agreement has a remaining term in
excess of 12 months).
For the purposes of this definition an imputed interest rate for any
outstanding or proposed production payment, project financing and other
non-recourse debt will be included in the calculation of Interest Expense and
the corresponding EBITDA, if any and to the extent lowered, will be grossed up,
in a corresponding manner.
"Interest Expense" means, for the period of the most recent
four consecutive calendar quarters ending prior to the date of determination for
which financial statements are available, the total cash interest expense of
Borrower and its Restricted Subsidiaries determined in accordance with GAAP,
plus, to the extent not included in such interest expense (without duplication):
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(1) interest expense attributable to capitalized
lease obligations and the interest portion of rent expense associated
with Debt in respect of the relevant lease giving rise thereto,
determined as if such lease were a capitalized lease in accordance with
GAAP and the interest component of any deferred payment obligations to
the extent not accrued in a prior period;
(2) imputed interest expense attributable to any
production payment, project financing by vendors and other non-recourse
debt;
(3) interest actually paid by Borrower or any
Restricted Subsidiary under any guarantee of Debt or other obligation
of any other person;
(4) net costs associated with Hedging Agreements for
the purpose of ameliorating interest rate fluctuation risk or any kind
of interest rate agreement (excluding amortization of fees);
(5) the consolidated cash interest expense of
Borrower and its Restricted Subsidiaries that was capitalized during
such period; and
(6) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are
used by such plan or trust to pay interest or fees to any Person (other
than Borrower or its Restricted Subsidiaries) in connection with Debt
incurred by such plan or trust; provided, however, that there will be
excluded therefrom any such interest expense of any Unrestricted
Subsidiary to the extent the related Debt is not guaranteed or paid by
Borrower or any Restricted Subsidiary.
For purposes of the foregoing, total Interest Expense will be
determined after giving effect to any net payments made or received by Borrower
and its Restricted Subsidiaries with respect to interest rate agreements;
provided, however, that Interest Expense shall not include (a) to the extent
included in total Interest Expense, amortization or write-off of deferred
financial costs or discount accretion of such Person or (b) accretion of
interest charges on future plugging and abandonment obligations, future
retirement benefits and other obligations that do not constitute Debt
"Investment" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the form
of any direct or indirect advance, loan (other than advances to customers in the
ordinary course of business) or other extension of credit (including by way of
guarantee or similar arrangement, but excluding any Debt or extension of credit
represented by a bank deposit other than a time deposit) or capital contribution
to (by means of any transfer of cash or other Property to others or any payment
for Property or services for the account or use of others), or any purchase or
acquisition of capital stock, Debt or other similar instruments issued by, such
Person and all other items that are or would be classified as investments on a
balance sheet prepared in accordance with GAAP; provided that none of the
following will be deemed to be an Investment:
(1) Hedging Agreements entered into in the ordinary
course of business and in compliance herewith;
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(2) endorsements of negotiable instruments and
documents in the ordinary course of business; and
(3) an acquisition of assets, capital stock or other
securities by Borrower or a Subsidiary for consideration to the extent
such consideration consists exclusively of common equity securities of
Borrower.
For purposes of this definition:
(1) "Investment" will include the portion
(proportionate to Borrower's equity interest in a Restricted Subsidiary
to be designated as an Unrestricted Subsidiary) of the fair market
value of the net assets of such Restricted Subsidiary of Borrower at
the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, Borrower will be deemed to
continue to have a permanent "Investment" in an Unrestricted Subsidiary
in an amount (if positive) equal to (a) Borrower's "Investment" in such
Subsidiary at the time of such redesignation less (b) the portion
(proportionate to Borrower's equity interest in such Subsidiary) of the
fair market value of the net assets (as conclusively determined by the
Board of Directors of Borrower in good faith) of such Subsidiary at the
time that such Subsidiary is so redesignated a Restricted Subsidiary;
and
(2) any Property transferred to or from an
Unrestricted Subsidiary will be valued at its fair market value at the
time of such transfer, in each case as determined in good faith by the
board of directors of Borrower.
"Lender Termination Date" shall have the meaning assigned such
term in Section 5.02(c).
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract,
and whether such obligation or claim is fixed or contingent, and including but
not limited to (i) the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes or (ii) production payments
and the like payable out of Oil and Gas Properties. The term "Lien" shall also
mean reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this Agreement, Borrower or
any Subsidiary shall be deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person in a transaction intended to
create a financing.
"Loan Documents" shall mean the Fee Letter, the Commitment
Letter, this Agreement, the Notes, the Guaranty Agreements, any Assignment and
any other agreements or documents executed in connection herewith.
"Loans" shall mean the loans as provided for by Sections 2.01
and 2.02.
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"Majority Lenders" shall mean, at any time while no Loans are
outstanding, Lenders having at least 50% of the Aggregate Commitments and, at
any time while Loans are outstanding, Lenders holding at least 50% of the
outstanding aggregate principal amount of the Loans (without regard to any sale
by a Lender of a participation in any Loan under Section 12.06(c)).
"Material Adverse Effect" shall mean any material and adverse
effect on (i) the assets, liabilities, financial condition, business, operations
or affairs of Borrower and its Subsidiaries taken as a whole, or (ii) the
ability of Borrower and its Subsidiaries taken as a whole to carry out their
business or meet their obligations under the Loan Documents on a timely basis.
"Material Agreement" shall have the meaning assigned such term
in Section 7.21.
"Multiemployer Plan" shall mean a Plan defined as such in
Section 3(37) or 4001(a)(3) of ERISA.
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring person of Debt or other obligations
relating to the Properties that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of:
(1) all legal, accounting, investment banking, title
and recording tax expenses, commissions and other fees and expenses
incurred, and all federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP (after taking
into account any available tax credits or deductions and any tax
sharing agreements), as a consequence of such Asset Disposition;
(2) all payments made on any Debt which is secured by
any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon such assets, or which must by its terms, or in
order to obtain a necessary consent to such Asset Disposition, or by
applicable law be repaid out of the proceeds from such Asset
Disposition;
(3) all distributions and other payments required to
be made to minority interest holders in Subsidiaries or joint ventures
as a result of such Asset Disposition; and
(4) the deduction of appropriate amounts to be
provided by the seller as a reserve, in accordance with GAAP, against
any liabilities associated with the assets disposed of in such Asset
Disposition and retained by Borrower or any Consolidated Subsidiary
after such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of
capital stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
listing fees, discounts or commissions and brokerage, consultant and other fees
and charges actually incurred in connection with such issuance or sale and net
of taxes
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paid or payable as a result of such issuance or sale (after taking into account
any available tax credit or deductions and any tax sharing arrangements).
"Notes" shall mean the Notes described in and provided for by
Section 2.06, together with any and all renewals, extensions for any period,
increases, rearrangements, substitutions or modifications thereof.
"Notice of Termination" shall have the meaning assigned such
term in Section 5.02(a).
"Oil and Gas Assets" means:
(1) any property or assets (other than Debt and
capital stock) used or to be used by Borrower or a Restricted
Subsidiary in a Related Business;
(2) the capital stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such capital
stock by Borrower or a Restricted Subsidiary of Borrower; or
(3) capital stock constituting a minority interest in
any Person that at such time is a Restricted Subsidiary of Borrower;
provided, however, that, in the case of clauses (2) and (3), such Restricted
Subsidiary is primarily engaged in a Related Business.
"Oil and Gas Properties" shall mean Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all
presently existing or future unitization, pooling agreements and declarations of
pooled units and the units created thereby (including without limitation all
units created under orders, regulations and rules of any Governmental Authority)
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 or processing
of Hydrocarbons from or attributable to such Hydrocarbon Interests; all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby
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 any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests; and all Properties, rights, titles,
interests and estates described or referred to above, including any and all
Property, real or personal, now owned or hereinafter acquired and situated upon,
used, held for use or useful in connection with the operating, working or
development of any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil xxxxx, gas xxxxx, injection xxxxx or other xxxxx,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions,
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replacements, accessions and attachments to any and all of the foregoing. Unless
otherwise indicated, Oil and Gas Properties shall mean such Property of Borrower
and its Restricted Subsidiaries.
"Other Taxes" shall have the meaning assigned such term in
Section 4.06(b).
"Override" shall mean that certain Conveyance of Overriding
Royalty Interest between Borrower and DCP dated as of the date hereof.
"Pari Passu Notes" shall have the meaning assigned such term
in Section 9.12(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any Person succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Aggregate
Commitments to be provided by a Lender under this Agreement as indicated on
Annex I hereto, as modified from time to time to reflect any assignments
permitted by Section 12.06(b).
"Permitted Business Investment" shall mean any Investment made
in the ordinary course of, and of a nature that is or shall have become
customary in, the Related Business including investments or expenditures for
exploiting, exploring for, acquiring, developing, producing, processing,
gathering, marketing or transporting oil and gas through agreements,
transactions, interests or arrangements which permit one to share risks or
costs, comply with regulatory requirements regarding local ownership or satisfy
other objectives customarily achieved through the conduct of the Related
Business jointly with third parties, including (i) ownership interests in oil
and gas properties, processing facilities, gathering systems, pipelines or
ancillary real property interests and (ii) Investments in the form of or
pursuant to operating agreements, processing agreements, farm-in agreements,
farm-out agreements, development agreements, area of mutual interest agreements,
unitization agreements, pooling agreements, joint bidding agreements, service
contracts, joint venture agreements, partnership agreements (whether general or
limited), subscription agreements, stock purchase agreements and other similar
agreements (including for limited liability companies) with third parties,
excluding, however, Investments in corporations other than Restricted
Subsidiaries.
"Permitted Consideration" shall have the meaning assigned such
term in Section 9.12.
"Permitted Indebtedness" shall mean:
(a) the Notes or other Indebtedness or any guaranty
of or suretyship arrangement for the Notes or other Indebtedness;
(b) Debt (other than that associated with the Senior
Secured Credit Facility) of Borrower existing on the Closing Date which
is reflected in the Financial Statements or is disclosed in Schedule
9.01, and any renewals or extensions (but not increases) thereof;
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(c) accounts payable (for the deferred purchase price
of Property or services) from time to time incurred in the ordinary
course of business which, if greater than 90 days past the invoice or
billing date, are being contested in good faith by appropriate
proceedings if reserves adequate under GAAP shall have been established
therefor;
(d) Debt under capital leases (as required to be
reported on the financial statements of Borrower pursuant to GAAP) in
addition to any obligations that are Debt as permitted under Section
9.07;
(e) Debt associated with bonds or surety obligations
required by Governmental Requirements in connection with the operation
of the Oil and Gas Properties;
(f) Hedging Agreements covering (A) oil and gas
production of proved developed producing Oil and Gas Properties of
Borrower or any Guarantor; provided, however, that such Hedging
Agreements related to oil or gas production shall not, either
individually or in the aggregate, cover more than 80% of estimated
production on the date such xxxxxx are entered into of oil or gas of
Borrower and the Guarantors for each individual period covered by the
Hedging Agreements and (B) fluctuations in interest rates for notional
principal amounts not to exceed at any time outstanding 80% of the Debt
for borrowed money of Borrower and its Consolidated Subsidiaries (C)
foreign exchange risk;
(g) Debt arising out of the Deferred Compensation
Plan to the extent such Debt can be satisfied out of the investments
held by such plan and the proceeds thereof;
(h) Debt arising under the Senior Secured Credit
Facility in a total amount outstanding not greater than $75,000,000.00;
and
(i) any Debt that is unsecured and subordinate in
right of payment to the Indebtedness;
(j) Debt of a Restricted Subsidiary incurred and
outstanding on the date on which such Restricted Subsidiary is acquired
by Borrower (other than Debt incurred (a) to provide all or any portion
of the funds utilized to consummate the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was otherwise acquired by Borrower or
(b) otherwise in connection with, or in contemplation of, such
acquisition); provided, however, that at the time such Restricted
Subsidiary is acquired by Borrower, Borrower would have been able to
incur $1.00 of additional Debt pursuant to Section 9.01 after giving
effect to the incurrence of such Debt pursuant to this clause (j);
(k) Debt incurred in respect of workers' compensation
claims, self-insurance obligations, performance, bid, surety and
similar bonds, letters of credit and guarantees supporting such
performance, bid, surety and similar bonds and completion
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guarantees provided by Borrower or a Restricted Subsidiary in the
ordinary course of business;
(l) Debt arising from agreements of Borrower or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or
capital stock of a Restricted Subsidiary, provided that the maximum
aggregate liability in respect of all such Debt other than Debt related
to environmental liabilities to governmental agencies shall at no time
exceed the gross proceeds actually received by Borrower and its
Restricted Subsidiaries in connection with such disposition;
(m) Debt arising from the honoring by a bank or other
financial institution of a check, draft of similar instrument (except
in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, however, that such Debt is
extinguished within five business days of incurrence;
(n) obligations relating to net gas balancing
positions arising in the ordinary course of business and consistent
with past practice;
(o) non-recourse debt not to exceed $10,000,000.00 in
the aggregate at any one time outstanding; and
(p) in addition to the items referred to in clauses
(a) through (o) above, Debt of Borrower and its Restricted Subsidiaries
in an aggregate outstanding principal amount which, when taken together
with the principal amount of all other indebtedness incurred pursuant
to this clause (p) and then outstanding, will not exceed
$10,000,000.00.
"Permitted Investment" means an Investment by Borrower or any
Restricted Subsidiary in:
(1) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted
Subsidiary is a Related Business;
(2) another Person if as a result of such Investment
such other Person is merged or consolidated with or into, or transfers
or conveys all or substantially all its assets to, Borrower or a
Restricted Subsidiary; provided, however, that such Person's primary
business is a Related Business;
(3) cash and Cash Equivalents;
(4) receivables owing to Borrower or any Restricted
Subsidiary created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as Borrower or any such Restricted Subsidiary deems
reasonable under the circumstances;
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(5) payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(6) loans or advances to employees made in the
ordinary course of business consistent with past practices of Borrower
or such Restricted Subsidiary;
(7) stock, obligations or securities received in
settlement of Debts created in the ordinary course of business and
owing to Borrower or any Restricted Subsidiary or in satisfaction of
judgments or pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of a debtor;
(8) Investments made as a result of the receipt of
non-cash consideration from an Asset Disposition that was made pursuant
to and in compliance with Section 9.12;
(9) Investments in existence on the date hereof;
(10) Hedging Agreements which transactions or
obligations are incurred in compliance with Section 9.01;
(11) Investments by Borrower or any of its Restricted
Subsidiaries, together with all other Investments pursuant to this
clause (11), in an aggregate amount at the time of such Investment not
to exceed $10,000,000.00 outstanding at any one time;
(12) guarantees issued in accordance with Section
9.01;
(13) Investments representing deferred compensation
of employees and earnings thereon under Borrower's KEYSOP plan; and
(14) Permitted Business Investments.
"Permitted Lien" shall mean with respect to any Person:
(1) Liens securing Indebtedness hereunder and the
Debt and other obligations of Borrower under the Senior Secured Credit
Facility and related Hedging Agreements and liens on assets of
Restricted Subsidiaries securing Guarantees of Indebtedness hereunder
and the Debt and other obligations of Borrower under the Senior Secured
Credit Facility;
(2) pledges or deposits by such Person under
workmen's compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States
government bonds to secure surety or appeal bonds to which such Person
is a party, or deposits as security for contested taxes or import or
customs duties or for the payment of rent, in each case incurred in the
ordinary course of business;
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(3) Liens imposed by law, including carriers',
warehousemen's, mechanics', materialmen's and operator's Liens,
(including Liens arising pursuant to Article 9.319 of the Texas Uniform
Commercial Code or other similar statutory provisions of other states
with respect to production purchased from others) in each case for sums
not yet due or being contested in good faith by appropriate proceedings
if a reserve or other appropriate provisions, if any, as shall be
required by GAAP shall have been made in respect thereof;
(4) Liens for taxes, assessments or other
governmental charges not yet subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings
provided appropriate reserves required pursuant to GAAP have been made
in respect thereof;
(5) Liens in favor of issuers of surety or
performance bonds or letters of credit or bankers' acceptances issued
pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that such letters
of credit do not constitute Debt;
(6) encumbrances, easements or reservations of, or
rights of others for, licenses, rights of way, sewers, electric lines,
telegraph and telephone lines, pipelines and other similar purposes, or
zoning or other restrictions as to the use of real properties or liens
incidental to the conduct of the business of such Person or to the
ownership of its properties which do not in the aggregate materially
adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;
(7) Liens securing Hedging Agreements so long as the
related Debt is, and is permitted to be under this Agreement, secured
by a Lien on the same property securing such Hedging Agreement;
(8) leases and subleases of real property which do
not materially interfere with the ordinary conduct of the business of
Borrower or any of its Restricted Subsidiaries;
(9) judgment Liens not giving rise to an Event of
Default so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of
such judgment have not been finally terminated or the period within
which such proceedings may be initiated has not expired;
(10) Liens for the purpose of securing the payment of
all or a part of the purchase price of, or capitalized lease
obligations with respect to, assets or property acquired or constructed
in the ordinary course of business, provided that:
(a) the aggregate principal amount of Debt
secured by such Liens is otherwise permitted to be incurred
hereunder and does not exceed the cost of the assets or
property so acquired or constructed; and
(b) such Liens are created within 180 days
of construction or acquisition of such Property and do not
encumber any other Property of Borrower
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or any Restricted Subsidiary other than such Property affixed
or appurtenant thereto;
(11) Liens arising solely by virtue of any statutory
or common law provisions relating to banker's Liens, rights of set-off
or similar rights and remedies as to deposit accounts or other funds
maintained with a depositary institution; provided that:
(a) such deposit account is not a dedicated
cash collateral account and is not subject to restrictions
against access by Borrower in excess of those set forth by
regulations promulgated by the Federal Reserve Board; and
(b) such deposit account is not intended by
Borrower or any Restricted Subsidiary to provide collateral to
the depository institution;
(12) Liens arising from Uniform Commercial Code
financing statement filings regarding operating leases entered into by
Borrower and its Restricted Subsidiaries in the ordinary course of
business;
(13) Liens existing on the Closing Date;
(14) Liens on property or shares of stock of a Person
at the time such Person becomes a Restricted Subsidiary; provided,
however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such other Person becoming a
Restricted Subsidiary; provided further, however, that any such Lien
may not extend to any other property owned by Borrower or any
Restricted Subsidiary;
(15) Liens on property at the time Borrower or a
Restricted Subsidiary acquired the property, including any acquisition
by means of a merger or consolidation with or into Borrower or any
Restricted Subsidiary; provided, however, that such Liens are not
created, incurred or assumed in connection with, or in contemplation
of, such acquisition; provided further, however, that such Liens may
not extend to any other property owned by Borrower or any Restricted
Subsidiary;
(16) Liens securing Debt or other obligations of a
Restricted Subsidiary owing to Borrower or a Wholly Owned Subsidiary;
(17) Liens securing the Notes and Guaranty Agreement;
(18) Liens securing refinancing indebtedness incurred
to refinance Debt that was previously so secured, provided that any
such Lien is limited to all or part of the same Property (plus
improvements, future interests and additional acquired interests in the
same Property apportionment thereto, accessions, proceeds or dividends
or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure)
the Debt being refinanced or is in respect of Property that is the
security for a Permitted Lien hereunder;
(19) Liens upon specific Properties of Borrower or
any of its Subsidiaries securing Debt incurred in the ordinary course
of business to provide all or
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part of the funds for the exploration, drilling, production or
development of those Properties;
(20) Liens in respect of production payments and
reserve sales; and
(21) Farm-out, farm-in, seismic, carried working
interests, areas of mutual interests, joint operating, joint
exploration, unitization, gas balancing, royalty, overriding royalty,
bonus, rental, sales and similar agreements relating to the exploration
or development of, or production from, oil and gas properties and
related facilities (production and transportation) entered into in the
ordinary course of business.
"Person" shall mean any individual, corporation, company,
association, partnership, joint venture, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
"Plan" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA, which (i) is currently or hereafter sponsored,
maintained or contributed to by Borrower, any Subsidiary or an ERISA Affiliate
or (ii) was at any time during the preceding six calendar years sponsored,
maintained or contributed to, by Borrower, any Subsidiary or an ERISA Affiliate.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or any other amount payable by Borrower under this Agreement or any
other Loan Document , a rate per annum during the period commencing on the date
of occurrence of an Event of Default until such amount is paid in full or all
Events of Default then existing are cured or waived equal to 14% per annum, but
in no event to exceed the Highest Lawful Rate.
"Preferred Stock," as applied to the capital stock of any
corporation, means capital stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of capital stock of any other class of such
corporation.
"Principal Office" shall mean the principal office of the
Administrative Agent, currently located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxx, XX 00000.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June,
September, and December, in each year, the first of which shall be September 30,
2001; provided, however, that if any such day is not a Business Day, such
Quarterly Date shall be the next succeeding Business Day.
"Related Business" means any business which is the same as or
related, ancillary or complementary to any of the businesses of Borrower and its
Restricted Subsidiaries on the date hereof.
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"Replacement Lenders" shall have the meaning assigned such
term in Section 5.02.
"Required Payment" shall have the meaning assigned such term
in Section 4.04.
"Reserve Report" shall mean a report, in form and substance
satisfactory to the Administrative Agent, setting forth, as of each January 1 or
July 1, as the case may be (or such other date in the event of an unscheduled
redetermination): (i) the oil and gas reserves attributable to Borrower's Oil
and Gas Properties together with a projection of the rate of production and
future net income, taxes, operating expenses and capital expenditures with
respect thereto as of such date, based upon the pricing assumptions consistent
with SEC reporting requirements at the time and (ii) such other information as
the Administrative Agent may reasonably request. The term "Reserve Report" shall
also include the information to be provided by Borrower each year pursuant to
Section 8.07.
"Responsible Officer" shall mean, as to any Person, the Chief
Executive Officer, the President or any Vice President of such Person and, with
respect to financial matters, the term "Responsible Officer" shall include the
Chief Financial Officer of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible Officer of
Borrower.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Payment" shall have the meaning assigned such term
in Section 9.04(a).
"Restricted Subsidiary" shall mean any Subsidiary identified
as a Restricted Subsidiary on Schedule 7.14 and any Subsidiary created after the
date hereof that Borrower does not designate as an Unrestricted Subsidiary.
"Risk Adjusted PV-10" shall mean as of any date, the most
recently calculated pre-tax present value, discounted at 10%, of future net cash
flows, of Borrower's consolidated estimated net proved reserves including
Volumetric Production Payments owed to other Persons, using NYMEX strip prices
(adjusted for quality and basis differential) as of the date of calculation for
three years and held constant at the average third year price thereafter and
costs held constant. The following risk adjustments shall be applied to the
discounted present value of each category of reserves:
(a) Proved developed producing 100%
(b) Proved developed non-producing 80%
(c) Proved undeveloped 50%
Risk Adjusted PV-10 shall be calculated each March 31 and September 30, using
reserve reports as of the preceding January 1 and July 1. Reserve quantities as
of January 1 of each year shall be estimated by Borrower's independent reserve
engineers, who shall be Xxxxxxxxxx & Co., Inc. or another firm acceptable to the
Administrative Agent, acting reasonably, using definitions approved by the
Society of Petroleum Engineers. Reserve quantities as of July 1 of each year
shall be rolled forwards of January 1 reserve reports prepared internally by
Borrower's
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engineers. The Administrative Agent shall have the right to request a documented
redetermination of rolled forward reserve reports prepared by Borrower's
independent engineers; the redetermination shall be prepared by Borrower's
independent reserve engineers, as designated above, for which the reserve
reports are used in the calculation of the Risk Adjusted PV-10 in accordance
with a debt incurrence test under Section 9.01(b). Borrower shall have the right
to prepare one additional Risk Adjusted PV-10 calculation at any time between
January 1, 2002 and June 30, 2002. Risk Adjusted PV-10 shall be appropriately
adjusted for material purchases, sales and discoveries of oil and gas reserves
which have occurred since the date of the applicable reserve report.
"Risk Adjusted PV-10 Ratio" shall mean the ratio of Risk
Adjusted PV-10 to total Senior Indebtedness including the maximum amount of any
proposed Senior Indebtedness.
"Scheduled Redetermination Date" shall mean, so long as any of
the Commitments are in effect and until payment in full of all Indebtedness
hereunder, the first Business Day of each April and October, commencing October
2001.
"SEC" shall mean the Securities and Exchange Commission or any
successor Governmental Authority.
"Senior Indebtedness" means, whether outstanding on the date
hereof or thereafter issued, created, incurred or assumed, the Senior Secured
Credit Facility Debt and all other Debt of Borrower, including accrued and
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to Borrower at the rate
specified in the documentation with respect thereto whether or not a claim for
post filing interest is allowed in such proceeding) and fees relating thereto;
provided, however, that Senior Indebtedness will not include:
(1) any Debt which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that the obligations in respect of such Debt are not superior
in right of, or are subordinate to, payment of the Notes and the
Guaranty Agreement(s);
(2) any obligation of Borrower to any Subsidiary;
(3) any liability for federal, state, foreign, local
or other taxes owed or owing by Borrower;
(4) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities);
(5) any Debt, guarantee or obligation of Borrower
that is expressly subordinate or junior in right of payment to any
other Debt, guarantee or obligation of Borrower, including, without
limitation, any Subordinated Debt; or
(6) any capital stock.
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For purposes of calculating the Risk Adjusted PV-10 Ratio, Senior Indebtedness
shall include production payments, project financing by vendors and other
non-recourse debt.
"Senior Secured Credit Facility" means, with respect to
Borrower, its primary senior revolving credit facility or facilities as
constituted, amended, modified or restated from time to time which allow
Borrower to borrow and reborrow amounts up to a borrowing base determined by the
lenders thereunder, which is currently the $75,000,000.00 Senior Secured Credit
Facility among Borrower, First Union National Bank, as Administrative Agent and
the other lenders thereto.
"Special Entity" shall mean, with regard to a Person, any
joint venture, limited liability company or partnership, general or limited
partnership or any other type of partnership or company other than a corporation
in which such first Person or one or more of its other Subsidiaries is a member,
owner, partner or joint venturer and owns, directly or indirectly, at least a
majority of the equity of such entity or controls such entity, but excluding any
tax partnerships that are not classified as partnerships under state law.
"Subordinated Debt" shall mean any Debt of Borrower expressly
subordinated to the Indebtedness, on terms including, without limitation, that
payments on such Debt shall be prohibited if a Default exists or would result
from such payment, and other terms and conditions substantially similar to those
found in the Existing Subordinated Debt.
"Subordinated Obligation" means any Debt of Borrower (whether
outstanding on the date hereof or thereafter incurred) which is subordinate or
junior in right of payment to the Notes pursuant to a written agreement.
"Subsidiary" shall mean, with regard to a Person, (i) any
corporation of which at least a majority of the outstanding shares of stock
having by the terms thereof ordinary voting power to elect a majority of the
board of directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation 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 of its
Subsidiaries and (ii) any Special Entity of which at least a majority of the
equity interests are owned directly or indirectly or Controlled by such Person.
Unless otherwise indicated herein, each reference to the term "Subsidiary" shall
mean a Subsidiary of Borrower.
"Subsidiary Securities" shall have the meaning assigned such
term in Section 7.14.
"Taxes" shall have the meaning assigned such term in Section
4.06(a).
"Terminated Lender" shall have the meaning assigned such term
in Section 5.02(a).
"Unrestricted Subsidiary" shall mean any Subsidiary of
Borrower that is not a Restricted Subsidiary.
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"Volumetric Production Payments" means production payment
obligations recorded as defined revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"Wholly-Owned Subsidiary" shall mean a Restricted Subsidiary
of Borrower, all of the capital stock of which (other than director's qualifying
shares) is owned by Borrower or one or more other Wholly-Owned Subsidiaries.
"2002 Subordinated Notes" shall mean the 10.125% Senior
Subordinated Notes due September 15, 2002, issued by Borrower pursuant to that
certain Indenture dated July 31, 1997 between Xxxxxx Petroleum Company and
American Stock Transfer & Trust Company.
"2004 Subordinated Notes" shall mean the 10.25% Senior
Subordinated Notes due September 15, 2004, issued by Borrower pursuant to that
certain Indenture dated July 20, 1999, between Borrower and American Stock
Transfer & Trust Company.
"2005 Subordinated Notes" shall mean the 11% Senior
Subordinated Notes due 2005 issued by Borrower pursuant to that certain
Supplemental Indenture, dated as of October 26, 2000, to the Indenture dated
October 26, 2000 between Borrower and American Stock Transfer and Trust Company.
Section 1.03 Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Administrative Agent or the
Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis
consistent with the audited financial statements of Borrower referred to in
Section 7.02 (except for changes concurred with by Borrower's independent public
accountants).
ARTICLE II
COMMITMENTS
Section 2.01 Loans. Each Lender severally agrees, subject to
the terms and conditions of this Agreement, to make Loans to Borrower during the
period from and including (i) the Closing Date or (ii) such later date that such
Lender becomes a party to this Agreement as provided in Section 12.06(b), to and
up to, but excluding, June 30, 2002, not to exceed such Lender's Commitment.
Borrower may borrow hereunder on multiple occasions as provided in Section 2.02.
Section 2.02 Borrowings.
(a) Borrowings. Up to June 30, 2002, Borrower shall give the
Lenders advance written notice as hereinafter provided of each borrowing
hereunder, which shall specify the aggregate amount of such borrowing and the
date (which shall be a Business Day) of the Loans to be borrowed. The initial
borrowing hereunder shall be in the aggregate principal
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amount of $45,000,000.00 and, subject to the terms and conditions of this
Agreement, will be made to Borrower on the Closing Date and, from time to time
thereafter, but prior to June 30, 2002, Borrower will draw additional Loans up
to the unused amount of the Aggregate Commitments in increments of
$10,000,000.00 until all of the Commitments have been borrowed upon in full.
(b) Notices. All borrowings shall require advance written
notice to the Administrative Agent (which shall promptly notify the Lenders) in
the form of Exhibit B (or telephonic notice promptly confirmed by such a written
notice), which in each case shall be irrevocable, from Borrower to be received
by the Administrative Agent not later than 11:00 a.m.
New York,
New York time at
least one Business Day prior to the Closing Date, with respect to the initial
borrowing, and 45 days prior to the date of each subsequent borrowing. Without
in any way limiting Borrower's obligation to confirm in writing any telephonic
notice, the Administrative Agent may act without liability upon the basis of
telephonic notice believed by the Administrative Agent in good faith to be from
Borrower prior to receipt of written confirmation. In each such case, Borrower
hereby waives the right to dispute the Administrative Agent's record of the
terms of such telephonic notice except in the case of gross negligence or
willful misconduct by the Administrative Agent.
(c) Advances. Not later than 11:00 a.m.
New York,
New York
time on the date specified for each borrowing hereunder, each Lender shall make
available the amount of the Loan to be made by it on such date to the
Administrative Agent, to an account which the Administrative Agent shall
specify, in immediately available funds, for the account of Borrower. The
amounts so received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, be made available to Borrower by depositing the
same, in immediately available funds, in an account of Borrower, designated by
Borrower and maintained at the Principal Office.
Section 2.03 Ratio Test. Borrower shall not be permitted to
borrow on the Commitments hereunder unless on the date of each borrowing (i) the
Interest Coverage Ratio is at least 2.0 to 1.0 and (ii) the Risk Adjusted PV-10
Ratio is 1.25 to 1.0 or more.
Section 2.04 Fees. Borrower shall pay, assign or issue to the
Administrative Agent for its account such fees as are set forth in the Fee
Letter on the dates specified therein to the extent not paid prior to the
Closing Date.
Section 2.05 Several Obligations. The failure of any Lender to
make any Loan to be made by it on the date specified therefor shall not relieve
any other Lender of its obligation to make its Loan on such date, but no Lender
shall be responsible for the failure of any other Lender to make a Loan to be
made by such other Lender.
Section 2.06 Notes. The Loans made by each Lender shall be
evidenced by a single promissory note (a "Note") of Borrower in substantially
the form of Exhibit A, dated the date of the first still outstanding Loan,
payable to the order of such Lender for the principal amount of all Loans
outstanding and due such Lender, and otherwise duly completed. The date and
amount of each Loan made by each Lender, and all payments made on account of the
principal thereof, shall be recorded by such Lender on its books for its Note,
and, prior to any
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transfer may be endorsed by such Lender on the schedule attached to such Note or
any continuation thereof or on any separate record maintained by such Lender.
Failure to make any such notation or to attach a schedule shall not affect any
Lender's or Borrower's rights or obligations in respect of such Loans or affect
the validity of such transfer by any Lender of its Note.
Section 2.07 Prepayments.
(a) Voluntary Prepayments. (i) Subject to the prepayment
premiums provided for in clause (ii) of this Section 2.07(a), at any time after
July 1, 2002, Borrower may prepay the Loans upon not less than one Business
Day's prior notice to the Administrative Agent (which shall promptly notify the
Lenders), which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which shall be at least
$1,000,000.00 or the remaining aggregate principal balance outstanding on the
Notes) and shall be irrevocable and effective only upon receipt by the
Administrative Agent, provided that interest on the principal prepaid, accrued
to the prepayment date, shall be paid on the prepayment date.
(ii) Voluntary prepayments made by Borrower pursuant
to Section 2.07(a)(i) shall be subject to the following prepayment premiums:
(x) For any voluntary prepayment made after July 1,
2002, but before July 1, 2003, Borrower shall pay a prepayment premium
equal to 2% of the amount prepaid;
(y) For any voluntary prepayment made after July 1,
2003, but before July 1, 2004, Borrower shall pay a prepayment premium
equal to 1% of the amount prepaid; and
(z) Any prepayment made after July 1, 2004 shall be
without premium or penalty.
(b) Mandatory Prepayments. Upon the occurrence of a Change in
Control, the Majority Lenders shall have the right to require Borrower to prepay
the aggregate principal amount of Loans outstanding on the date such prepayment
is made, together with accrued and unpaid interest, if any, thereon to the date
of such prepayment, plus a prepayment premium of 1% of the principal amount
prepaid. If the Majority Lenders elect to require such prepayment, the Majority
Lenders shall instruct the Administrative Agent to deliver written notice
thereof to Borrower, such prepayment to be made on or before the date (which
must be a Business Day at least two days following receipt of such notice)
specified in such written notice.
(c) Generally. Any prepayment made pursuant to this Section
2.07 may not be reborrowed and shall be applied to the aggregate outstanding
principal amount of the Loans.
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ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans. On the Final Maturity Date,
Borrower shall repay the outstanding aggregate principal and accrued and unpaid
interest under the Notes and any other amounts due under the Loan Documents.
Such payment shall be made to the Administrative Agent, for the account of each
Lender.
Section 3.02 Interest.
(a) Interest Rate. Borrower will pay to the Administrative
Agent, for the account of each Lender, interest on the unpaid principal amount
of each Loan made by such Lender for the period commencing on the date such Loan
is made to, but excluding, the date such Loan shall be paid in full, at the
simple rate per annum equal to 12%, but in no event to exceed the Highest Lawful
Rate.
(b) Post-Default Rate. Notwithstanding the foregoing, Borrower
will pay to the Administrative Agent, for the account of each Lender, interest
at the applicable Post-Default Rate on any principal of any Loan made by such
Lender to the extent such principal is past due and owing, and (to the fullest
extent permitted by law) on any other amount payable by Borrower hereunder or
under any Note held by such Lender to or for account of such Lender, for the
period commencing on the date of notice to Borrower of an Event of Default until
the same is paid in full or all Events of Default are cured or waived.
(c) Due Dates. Accrued and unpaid interest on the Loans shall
be payable on each Quarterly Date commencing on September 30, 2001, and on the
Final Maturity Date.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by
Borrower under this Agreement and the Notes shall be made in Dollars, in
immediately available funds, to the Administrative Agent at such account as the
Administrative Agent shall specify by notice to Borrower at least three Business
Days prior to the date such payment is due from time to time, not later than
11:00 a.m.
New York,
New York time on the date on which such payments 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). Such payments shall be
made without (to the fullest extent permitted by applicable law) defense,
set-off or counterclaim. Each payment received by the Administrative Agent under
this Agreement or any Note for account of a Lender shall be paid promptly to
such Lender in immediately available funds. If the due date of any payment under
this Agreement or any Note 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.
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Section 4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein each Lender agrees that: (i) each borrowing from the
Lenders hereunder shall be made from the Lenders pro rata in accordance with
their Percentage Share; (ii) each payment of principal of Loans by Borrower
shall be made for account of the Lenders pro rata in accordance with the
respective unpaid principal amount of the Loans held by the Lenders; and (iii)
each payment of interest on Loans by Borrower shall be made for account of the
Lenders pro rata in accordance with the amounts of interest due and payable to
the respective Lenders.
Section 4.03 Computations. Interest shall be computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 4.04 Non-receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Lender or Borrower
prior to the date on which such notifying party is scheduled to make payment to
the Administrative Agent (in the case of a Lender) of the proceeds of a Loan to
be made by it hereunder or (in the case of Borrower) a payment to the
Administrative Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that it does not intend to make the Required Payment to
the Administrative Agent, the Administrative Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient(s)
on such date and, if such Lender or Borrower (as the case may be) has not in
fact made the Required Payment to the Administrative Agent, the recipient(s) of
such payment shall, on demand, repay to the Administrative Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrative Agent until, but excluding, the date the Administrative Agent
recovers such amount at a rate per annum which, for any Lender as recipient,
will be equal to the Federal Funds Rate, and for Borrower as recipient, will be
equal to 12% per annum.
Section 4.05 Set-off, Sharing of Payments, Etc.
(a) Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a Lender may
otherwise have, each Lender shall have the right and be entitled (after
consultation with the Administrative Agent), at its option, to offset balances
held by it or by any of its Affiliates for account of Borrower or any Subsidiary
at any of its offices, in Dollars or in any other currency, against any
principal of or interest on any of such Lender's Loans, or any other amount
payable to such Lender hereunder, which is not paid when due (regardless of
whether such balances are then due to Borrower), in which case it shall promptly
notify Borrower and the Administrative Agent thereof, provided that such
Lender's failure to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or
interest on any Loan made by it to Borrower under this Agreement through the
exercise of any right of set-off, banker's lien or counterclaim or similar right
or otherwise, and, as a result of such payment, such Lender shall have received
a greater percentage of the principal or interest then due hereunder by Borrower
to such Lender than the percentage received by any other Lenders, it shall
promptly (i)
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notify the Administrative Agent and each other Lender thereof and (ii) purchase
from such other Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Loans made by such other Lenders (or in
interest due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal and/or interest on the
Loans held by each of the Lenders. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.
Borrower agrees that any Lender so purchasing a participation (or direct
interest) in the Loans made by other Lenders (or in interest due thereon, as the
case may be) may exercise all rights of set-off, banker's lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Loans in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of Borrower. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a set-off to which this
Section 4.05 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section 4.05 to share the benefits of any
recovery on such secured claim.
Section 4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by Borrower
hereunder shall be made, in accordance with Section 4.01, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, taxes
imposed on its income, and franchise or similar taxes imposed on it, by (i) any
jurisdiction (or political subdivision thereof) of which the Administrative
Agent or such Lender, as the case may be, is a citizen or resident or in which
such Lender has an office, (ii) the jurisdiction (or any political subdivision
thereof) in which the Administrative Agent or such Lender is organized, or (iii)
any jurisdiction (or political subdivision thereof) in which such Lender or the
Administrative Agent is presently doing business which taxes are imposed solely
as a result of doing business in such jurisdiction (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to the Lenders
or the Administrative Agent (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.06) such Lender or
the Administrative Agent (as the case may be) shall receive an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions and (iii) Borrower shall pay the full amount deducted
to the relevant taxing authority or other Governmental Authority in accordance
with applicable law.
(b) Other Taxes. In addition, to the fullest extent permitted
by applicable law, Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the
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execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER WILL INDEMNIFY EACH LENDER AND THE ADMINISTRATIVE AGENT
FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, BUT NOT LIMITED TO, ANY
TAXES OR OTHER TAXES IMPOSED BY ANY GOVERNMENTAL AUTHORITY ON AMOUNTS PAYABLE
UNDER THIS SECTION 4.06) PAID BY SUCH LENDER OR THE ADMINISTRATIVE AGENT (ON
THEIR BEHALF OR ON BEHALF OF ANY LENDER), AS THE CASE MAY BE, AND ANY LIABILITY
(INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY
ASSERTED UNLESS SUCH LENDER'S PAYMENT OF SUCH TAXES OR OTHER TAXES WAS THE
RESULT OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. ANY PAYMENT PURSUANT TO
SUCH INDEMNIFICATION SHALL BE MADE WITHIN 30 DAYS AFTER THE DATE ANY LENDER OR
THE ADMINISTRATIVE AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND THEREFOR. IF
ANY LENDER OR THE ADMINISTRATIVE AGENT RECEIVES A REFUND OR CREDIT IN RESPECT OF
ANY TAXES OR OTHER TAXES FOR WHICH SUCH LENDER OR THE ADMINISTRATIVE AGENT HAS
RECEIVED PAYMENT FROM BORROWER IT SHALL PROMPTLY NOTIFY BORROWER OF SUCH REFUND
OR CREDIT AND SHALL, IF NO DEFAULT HAS OCCURRED AND IS CONTINUING, WITHIN 30
DAYS AFTER RECEIPT OF A REQUEST BY BORROWER (OR PROMPTLY UPON RECEIPT, IF
BORROWER HAS REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT HERETO),
PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO BORROWER WITHOUT INTEREST (BUT
WITH ANY INTEREST SO REFUNDED OR CREDITED), PROVIDED THAT BORROWER, UPON THE
REQUEST OF SUCH LENDER OR THE ADMINISTRATIVE AGENT, AGREES TO RETURN SUCH REFUND
OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER OR THE
ADMINISTRATIVE AGENT IN THE EVENT SUCH LENDER OR THE ADMINISTRATIVE AGENT IS
REQUIRED TO REPAY SUCH REFUND OR CREDIT.
(d) Lender Representations and Actions.
(i) Each Lender represents that it is either (1) a
banking association or corporation organized under the laws of the United States
of America or any state thereof or (2) it is entitled to complete exemption from
United States withholding tax imposed on or with respect to any payments,
including fees, to be made to it pursuant to this Agreement (A) under an
applicable provision of a tax convention to which the United States of America
is a party or (B) because it is acting through a branch, agency or office in the
United States of America and any payment to be received by it hereunder is
effectively connected with a trade or business in the United States of America.
Each Lender that is not a banking association or corporation organized under the
laws of the United States of America or any state thereof agrees to provide to
Borrower and the Administrative Agent on the Closing Date, or on the date of its
delivery of the Assignment pursuant to which it becomes a Lender, and at such
other times as required by United States law or as Borrower or the
Administrative Agent shall reasonably request, two accurate and complete
original signed copies of either (A) Internal Revenue Service Form 4224 (or
successor form) certifying that all payments to be made to it hereunder will be
effectively connected to a United States trade or business (the "Form 4224
Certification") or (B) Internal Revenue Service Form 1001 (or successor form)
certifying that it is entitled to the benefit of a
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provision of a tax convention to which the United States of America is a party
which completely exempts from United States withholding tax all payments to be
made to it hereunder (the "Form 1001 Certification"). In addition, each Lender
agrees that if it previously filed a Form 4224 Certification, it will deliver to
Borrower and the Administrative Agent a new Form 4224 Certification prior to the
first payment date occurring in each of its subsequent taxable years; and if it
previously filed a Form 1001 Certification, it will deliver to Borrower and the
Administrative Agent a new certification prior to the first payment date falling
in the third year following the previous filing of such certification. Each
Lender also agrees to deliver to Borrower and the Administrative Agent such
other or supplemental forms as may at any time be required as a result of
changes in applicable law or regulation in order to confirm or maintain in
effect its entitlement to exemption from United States withholding tax on any
payments hereunder, provided that the circumstances of such Lender at the
relevant time and applicable laws permit it to do so. If a Lender determines, as
a result of any change in either (i) a Governmental Requirement or (ii) its
circumstances, that it is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section 4.06, or that it is required to
withdraw or cancel any such form or certificate previously submitted, it shall
promptly notify Borrower and the Administrative Agent of such fact. If a Lender
is organized under the laws of a jurisdiction outside the United States of
America, unless Borrower and the Administrative Agent have received a Form 1001
Certification or Form 4224 Certification satisfactory to them indicating that
all payments to be made to such Lender hereunder are not subject to United
States withholding tax, Borrower shall withhold taxes from such payments at the
applicable statutory rate. Each Lender agrees to indemnify and hold harmless
Borrower or Administrative Agent, as applicable, from any United States taxes,
penalties, interest and other expenses, costs and losses incurred or payable by
(i) the Administrative Agent as a result of such Lender's failure to submit any
form or certificate that it is required to provide pursuant to this Section 4.06
or (ii) Borrower or the Administrative Agent as a result of their reliance on
any such form or certificate which such Lender has provided to them pursuant to
this Section 4.06.
(ii) For any period with respect to which a Lender
has failed to provide Borrower with the form required pursuant to this Section
4.06, if any, (other than if such failure is due to a change in a Governmental
Requirement occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 4.06 with respect to taxes imposed by the United States which
taxes would not have been imposed but for such failure to provide such forms;
provided, however, that if a Lender, which is otherwise exempt from or subject
to a reduced rate of withholding tax, becomes subject to taxes because of its
failure to deliver a form required hereunder, Borrower shall take such steps as
such Lender shall reasonably request to assist such Lender to recover such
taxes.
(iii) Any Lender claiming any additional amounts
payable pursuant to this Section 4.06 shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file any certificate or document
requested by Borrower or the Administrative Agent or to change the jurisdiction
of its applicable lending office or to contest any tax imposed if the making of
such a filing or change or contesting such tax would avoid the need for or
reduce the amount of any such additional amounts that may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender. The Administrative Agent, at the written request
of Borrower, shall use its commercially reasonable best efforts to replace any
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Lender claiming such additional amounts. No Lender may claim reimbursement for
incurred costs more than 90 days from the date of written request to Borrower.
ARTICLE V
CAPITAL ADEQUACY
Section 5.01 Capital Adequacy.
(a) Borrower shall pay directly to each Lender that is any
regulated banking institution from time to time on request such amounts as such
Lender may determine to be necessary to compensate such Lender or its parent or
holding company for any costs which it determines are attributable to the
maintenance by such Lender or its parent or holding company, pursuant to any
Governmental Requirement, of capital in respect of its Commitment or making,
funding or maintaining any Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or
equity of such Lender or its parent or holding company to a level below that
which such Lender or its parent or holding company could have achieved but for
such Governmental Requirement). Each such Lender will notify Borrower that it is
entitled to compensation pursuant to this Section 5.01(a) as promptly as
practicable after it determines to request such compensation.
(b) Determinations and allocations by any Lender for purposes
of this Article V shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
(c) Any Lender notifying Borrower of the incurrence of
additional costs under this Section 5.01 shall in such notice to Borrower and
the Administrative Agent set forth in reasonable detail the basis and amount of
its request for compensation. Determinations and allocations by each Lender for
purposes of this Section 5.01 of the effect of any regulatory change pursuant to
5.01(a), or of the effect of capital required to be maintained 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, and of the amounts required to
compensate such Lender under this Section 5.01, shall be conclusive and binding
for all purposes, provided that such determinations and allocations are made on
a reasonable basis. Any request for additional compensation under this Section
5.01 shall be paid by Borrower within 30 days of the receipt by Borrower of the
notice described in this Section 5.01(c).
Section 5.02 Replacement Lenders.
(a) If any Lender has notified Borrower and the Administrative
Agent of its incurring additional costs under Section 5.01 or has required
Borrower to make payments for Taxes under Section 4.06, then Borrower may,
unless such Lender has notified Borrower and the Administrative Agent that the
circumstances giving rise to such notice no longer apply, terminate, in whole
but not in part, the Commitment of such Lender (other than the Administrative
Agent) (the "Terminated Lender") at any time upon five Business Days' prior
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written notice to the Terminated Lender and the Administrative Agent (such
notice referred to herein as a "Notice of Termination").
(b) In order to effect the termination of the Commitment of
the Terminated Lender, Borrower shall: (i) obtain an agreement with one or more
Lenders to increase their Commitment or Commitments and/or (ii) request any one
or more other Persons to become parties to this Agreement in place and instead
of such Terminated Lender and agree to accept a Commitment or Commitments;
provided, however, that such one or more other Persons are reasonably acceptable
to the Administrative Agent and become parties by executing an Assignment (the
Lenders or other banking institutions that agree to accept in whole or in part
the Commitment of the Terminated Lender being referred to herein as the
"Replacement Lenders"), such that the aggregate increased and/or accepted
Commitments of the Replacement Lenders under clauses (i) and (ii) above equal
the Commitment of the Terminated Lender.
(c) The Notice of Termination shall include the name of the
Terminated Lender, the date the termination will occur (the "Lender Termination
Date"), and the Replacement Lender or Replacement Lenders to which the
Terminated Lender will assign its Commitment and, if there will be more than one
Replacement Lender, the portion of the Terminated Lender's Commitment to be
assigned to each Replacement Lender.
(d) On the Lender Termination Date, (i) the Terminated Lender
shall by execution and delivery of an Assignment assign its Commitment to the
Replacement Lender or Replacement Lenders (pro rata, if there is more than one
Replacement Lender, in proportion to the portion of the Terminated Lender's
Commitment to be assigned to each Replacement Lender) indicated in the Notice of
Termination and shall assign to the Replacement Lender or Replacement Lenders
each of its Loans (if any) then outstanding pro rata as aforesaid), (ii) the
Terminated Lender shall endorse its Note, payable without recourse,
representation or warranty to the order of the Replacement Lender or Replacement
Lenders (pro rata as aforesaid), (iii) the Replacement Lender or Replacement
Lenders shall purchase the Note held by the Terminated Lender (pro rata as
aforesaid) at a price equal to the unpaid principal amount thereof plus interest
and facility and other fees accrued and unpaid to the Lender Termination Date,
and (iv) the Replacement Lender or Replacement Lenders will thereupon (pro rata
as aforesaid) succeed to and be substituted in all respects for the Terminated
Lender with like effect as if becoming a Lender pursuant to the terms of Section
12.06(b), and the Terminated Lender will have the rights and benefits of an
assignor under Section 12.06(b). To the extent not in conflict, the terms of
Section 12.06(b) shall supplement the provisions of this Section 5.02(d). For
each assignment made under this Section 5.02, the Replacement Lender shall pay
to the Administrative Agent the processing fee provided for in Section 12.06(b).
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding. The obligation of the Lenders to
make the Initial Funding is subject to the receipt by the Administrative Agent
and the Lenders of all fees payable pursuant to Section 2.04 on or before the
Closing Date and the receipt by the
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Administrative Agent of the following documents and satisfaction of the other
conditions provided for in this Section 6.01, each of which shall be
satisfactory to the Administrative Agent in form and substance:
(a) A certificate of the Secretary or an Assistant Secretary
of Borrower setting forth (i) resolutions of its board of directors with respect
to the authorization of Borrower to execute and deliver the Loan Documents to
which it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers of Borrower (y) who are authorized to sign the Loan
Documents to which Borrower is a party and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized officers, and
(iv) the articles or certificate of incorporation and bylaws of Borrower,
certified as being true and complete. The Administrative Agent and the Lenders
may conclusively rely on such certificate until the Administrative Agent
receives notice in writing from Borrower to the contrary.
(b) A certificate of the Secretary or an Assistant Secretary
of the Guarantors setting forth (i) resolutions of its board of directors with
respect to the authorization of the Guarantor to execute and deliver the Loan
Documents to which it is a party and to enter into the transactions contemplated
in those documents, (ii) the officers of the Guarantor (y) who are authorized to
sign the Loan Documents to which Guarantor is a party and (z) who will, until
replaced by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized officers, and
(iv) the articles or certificate of incorporation and bylaws of the Guarantor,
certified as being true and complete. The Administrative Agent and the Lenders
may conclusively rely on such certificate until they receive notice in writing
from the Guarantor to the contrary.
(c) Certificates of the appropriate state agencies with
respect to the existence, qualification and good standing of Borrower and each
Guarantor.
(d) A compliance certificate which shall be substantially in
the form of Exhibit C, duly and properly executed by a Responsible Officer and
dated as of the date of the Closing Date.
(e) The Notes, duly completed and executed.
(f) The Guaranty Agreement(s) duly completed and executed by
the Guarantors.
(g) An opinion of Xxxxxx and Xxxxx, LLP, counsel to Borrower
and the Guarantors and an opinion of Xxxxx Xxxxxxxx, Esq., special Mississippi
counsel to Borrower, both in form and substance satisfactory to the
Administrative Agent and both, as to such matters incident to the transactions
herein contemplated, as the Administrative Agent may reasonably request.
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(h) A certificate of insurance coverage of Borrower evidencing
that Borrower is carrying insurance in accordance with Section 7.19.
(i) Title information for the Oil and Gas Properties referred
to as Boomslang, Entrada, Habanero and Medusa shall have been furnished to the
Administrative Agent and either all leases, assignments of record title and any
other documents in the chain of title shall have been properly filed and
recorded in the appropriate Texas county and/or Louisiana parish offices or
original copies of all leases, assignments of record title and any other
documents in the chain of title shall have been delivered to the Administrative
Agent for filing and recording in the appropriate Texas county and/or Louisiana
parish offices.
(j) Full releases of Liens from First Union National Bank, as
Administrative Agent, releasing all Liens in favor of First Union National Bank,
as Administrative Agent, on Borrower's Oil and Gas Properties conveyed to DCP
pursuant to the Override.
(k) Second Amendment to Senior Secured Credit Facility by
First Union National Bank, as Administrative Agent, consenting to the
transactions contemplated by this Agreement.
(l) Such other documents as the Administrative Agent or any
Lender or special counsel to the Administrative Agent may reasonably request.
Section 6.02 Initial and Subsequent Loans. The obligation of
the Lenders to make Loans to Borrower upon the occasion of each borrowing
hereunder (including the Initial Funding) is subject to the further conditions
precedent that, as of the date of such Loans and after giving effect thereto:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by Borrower in
Sections 7.01(a), 7.05, 7.06, 7.07, 7.11, 7.12 and 7.13 shall be true on and as
of the date of the making of such Loans with the same force and effect as if
made on and as of such date and following such new borrowing, except to the
extent such representations and warranties are expressly limited to an earlier
date or the Majority Lenders may expressly consent in writing to the contrary.
Each request for a borrowing by Borrower hereunder shall
constitute a certification by Borrower to the effect set forth in Sections 2.03
and 6.02(b) both as of the date of such notice and, unless Borrower otherwise
notifies the Administrative Agent, prior to the date of and immediately
following such borrowing.
Section 6.03 Conditions Precedent for the Benefit of Lenders.
All conditions precedent to the obligations of the Lenders to make any Loan are
imposed hereby solely for the benefit of the Lenders, and no other Person may
require satisfaction of any such condition precedent or be entitled to assume
that the Lenders will refuse to make any Loan in the absence of strict
compliance with such conditions precedent.
Section 6.04 No Waiver. No waiver of any condition precedent
shall preclude the Administrative Agent or the Lenders from requiring such
condition to be met prior
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to making any subsequent Loan or preclude the Lenders from thereafter declaring
that the failure of Borrower to satisfy such condition precedent constitutes a
Default.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Administrative Agent
and the Lenders that (each representation and warranty herein is given as of the
Closing Date and shall be deemed repeated and reaffirmed on the dates of each
borrowing as provided in Section 6.02):
Section 7.01 Corporate Existence; Capitalization.
(a) Each of Borrower and each Subsidiary: (i) is a corporation
duly organized, legally existing and in good standing under the laws of the
jurisdiction of its incorporation or legal existence; (ii) has all requisite
corporate power, and has all material governmental permits, licenses,
authorizations, consents and approvals necessary to own its Property and carry
on its business as now being or as proposed to be conducted; and (iii) 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.
(b) As of the Closing Date, the authorized capital stock of
Borrower consists solely of 20,000,000 shares of common stock, par value $0.01
per share (the "Common Stock"), of which 13,260,473 shares are issued and
outstanding and 99,078 shares of which are held in treasury, and 2,500,000
shares of preferred stock, par value $0.01 per share of which 600,861 shares of
$2.125 Convertible Exchangeable Preferred Stock, Series A, are issued and
outstanding. Other than as set forth on Schedule 7.01(b) or the certificate of
designation for Borrower's $2.125 Convertible Exchangeable Preferred Stock as of
the Closing Date, no subscription, warrant, option, convertible security, stock
appreciation or other rights (contingent or other) to purchase or acquire any
shares of any class of capital stock or, or any other equity interest in,
Borrower is authorized or outstanding, and there is not outstanding any
commitment of Borrower or any of its Subsidiaries to issue any shares, warrants,
options or other such rights or to distribute to holders of any class of its
capital stock any evidences of indebtedness or assets. Except as set forth on
Schedule 7.01(b) or the certificate of designation for Borrower's $2.125
Convertible Exchangeable Preferred Stock as of the Closing Date, Borrower does
not have any contingent or other obligation to purchase, redeem or otherwise
acquire any shares of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof, and neither Borrower
nor any of its Subsidiaries is a party to any voting agreement, voting trust or
similar agreement or arrangement relating to its capital stock or any agreement
or arrangement relating to or providing for registration rights with respect to
its capital stock.
Section 7.02 Financial Condition. The audited consolidated
balance sheet of Borrower and its Consolidated Subsidiaries as at December 31,
2000 and the related consolidated statement of income, stockholders' equity and
cash flow of Borrower and its Consolidated Subsidiaries for the fiscal year
ended on said date, with the opinion thereon of Xxxxxx Xxxxxxxx
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LLP heretofore furnished to each of the Lenders and the unaudited consolidated
balance sheet of Borrower and its Consolidated Subsidiaries as at March 31, 2001
and their related consolidated statements of income, stockholders' equity and
cash flow of Borrower and its Consolidated Subsidiaries for the three month
period ended on such date heretofore furnished to the Administrative Agent
(collectively, the "Financial Statements"), are complete and correct and fairly
present the consolidated financial condition of Borrower and its Consolidated
Subsidiaries as at said dates and the results of its operations for the fiscal
year and the three month period on said dates, all in accordance with GAAP, as
applied on a consistent basis (subject, in the case of the interim financial
statements, to normal year-end adjustments). Neither Borrower nor any Subsidiary
has on the Closing Date any material Debt, contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, except as referred to or reflected or
provided for in the Financial Statements or in Schedule 7.02. Since December 31,
2000, there has been no change or event having a Material Adverse Effect. Since
the date of the Financial Statements, neither the business nor the Properties of
Borrower or any Subsidiary have been materially and adversely affected as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by any Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy.
Section 7.03 Litigation. Except as disclosed to the Lenders in
Schedule 7.03 hereto, at the Closing Date there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of Borrower threatened against or affecting
Borrower or any Subsidiary which involves the possibility of any judgment or
liability against Borrower or any Subsidiary not fully covered by insurance
(except for normal deductibles), and which would be reasonably likely to have a
Material Adverse Effect.
Section 7.04 No Breach. Neither the execution and delivery of
the Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent which has not
been obtained as of the Closing Date under, the respective charter or by-laws of
Borrower or any Subsidiary, or any Governmental Requirement or any agreement or
instrument to which Borrower or any Subsidiary is a party or by which it is
bound or to which it or its Properties are subject, or constitute a default
under any such agreement or instrument, or result in the creation or imposition
of any Lien upon any of the revenues or assets of Borrower or any Subsidiary
pursuant to the terms of any such agreement or instrument other than the Liens
created by the Loan Documents.
Section 7.05 Authority. Borrower and each Subsidiary have all
necessary corporate power and authority to execute, deliver and perform its
obligations under the Loan Documents to which it is a party; and the execution,
delivery and performance by Borrower and each Subsidiary of the Loan Documents
to which it is a party, have been duly authorized by all necessary corporate
action on its part; and the Loan Documents constitute the legal, valid and
binding obligations of Borrower and each Subsidiary, enforceable in accordance
with their terms.
Section 7.06 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any Governmental Authority
are necessary for the execution,
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delivery or performance by Borrower or any Subsidiary of the Loan Documents or
for the validity or enforceability thereof.
Section 7.07 Use of Loans. The proceeds of the Loans shall be
used (a) to fund capital expenditures (including expenditures to develop
deepwater Oil and Gas Properties), and (b) for general corporate purposes.
Furthermore, proceeds of the Loan may be used to repay Debt of Borrower under
the Senior Secured Credit Facility. Borrower is not 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 (within the meaning of Regulation T, U or X of the Board of Governors of
the Federal Reserve System) and no part of the proceeds of any Loan hereunder
will be used to buy or carry any margin stock.
Section 7.08 ERISA.
(a) Borrower, each Subsidiary and each ERISA Affiliate have
complied in all material respects with ERISA and, where applicable, the Code
regarding each Plan.
(b) Each Plan is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which could
result in imposition on Borrower, any Subsidiary or any ERISA Affiliate (whether
directly or indirectly) of (i) either a civil penalty assessed pursuant to
section 502(c), (i) or (l) of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under
section 409 of ERISA.
(d) No Plan (other than a defined contribution plan) or any
trust created under any such Plan has been terminated since September 2, 1974.
No liability to the PBGC (other than for the payment of current premiums which
are not past due) by Borrower, any Subsidiary or any ERISA Affiliate has been or
is expected by Borrower, any Subsidiary or any ERISA Affiliate to be incurred
with respect to any Plan. No ERISA Event with respect to any Plan has occurred.
(e) Full payment when due has been made of all amounts which
Borrower, any Subsidiary or any ERISA Affiliate is required under the terms of
each Plan or applicable law to have paid as contributions to such Plan, and no
accumulated funding deficiency (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived, exists with respect to any Plan.
(f) The actuarial present value of the benefit liabilities
under each Plan which is subject to Title IV of ERISA does not, as of the end of
Borrower's most recently ended fiscal year, exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities. The term "actuarial
present value of the benefit liabilities" shall have the meaning specified in
section 4041 of ERISA.
(g) None of Borrower, any Subsidiary or any ERISA Affiliate
sponsors, maintains, or contributes to an employee welfare benefit plan, as
defined in section 3(1) of
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ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by
Borrower, a Subsidiary or any ERISA Affiliate in its sole discretion at any time
without any material liability.
(h) None of Borrower, any Subsidiary or any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time in the preceding six
calendar years, sponsored, maintained or contributed to, any Multiemployer Plan.
(i) None of Borrower, any Subsidiary or any ERISA Affiliate is
required to provide security under section 401(a)(29) of the Code due to a Plan
amendment that results in an increase in current liability for the Plan.
Section 7.09 Taxes. Except as set out in Schedule 7.09, each
of Borrower and its Subsidiaries has filed all United States Federal income tax
returns and all other 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 Borrower or any Subsidiary. The charges, accruals and reserves on
the books of Borrower and its Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of Borrower, adequate. No tax lien has
been filed and, to the knowledge of Borrower, no claim is being asserted with
respect to any such tax, fee or other charge. There is no ongoing audit or
examination or, to the knowledge of Borrower, other investigation by any
Governmental Authority of the tax liability of Borrower or any of its
Subsidiaries, and there is no unresolved claim by any Governmental Authority
concerning the tax liability of Borrower or any Subsidiary for any period for
which tax returns have been or were required to have been filed, other than
unsecured claims for which adequate reserves have been established in accordance
with GAAP.
Section 7.10 Titles, Property, etc.
(a) Except as set out in Schedule 7.10, each of Borrower and
its Subsidiaries has good and defensible title to its material (individually or
in the aggregate) Properties, free and clear of all Liens, except Liens
permitted by Section 9.02. Except as set forth in Schedule 7.10, after giving
full effect to the Permitted Liens, Borrower owns the net interests in
production attributable to the Hydrocarbon Interests reflected in the most
recently delivered Reserve Report, and the ownership of such Properties shall
not in any material respect obligate Borrower to bear the costs and expenses
relating to the maintenance, development and operations of each such Property in
an amount in excess of the working interest of each Property set forth in the
most recently delivered Reserve Report.
(b) All leases and agreements necessary for the conduct of the
business of Borrower and its Subsidiaries are valid and existing, in full force
and effect and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of Borrower and its Subsidiaries.
(c) The rights, Properties and other assets presently owned,
leased or licensed by Borrower and its Subsidiaries including, without
limitation, all easements and rights of way, include all rights, Properties and
other assets necessary to permit Borrower and its Subsidiaries
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to conduct their business in all material respects in the same manner as its
business has been conducted prior to the Closing Date.
(d) All of the assets and Properties of Borrower and its
Subsidiaries which are necessary for the operation of its business are in good
working condition, normal wear and tear excepted, and are maintained in
accordance with prudent business standards.
(e) Borrowers' and its Subsidiaries' Oil and Gas Properties
(and properties unitized therewith) have been maintained, operated and developed
in a good and workmanlike manner and in conformity with all applicable laws and
all rules, regulations and orders of all duly constituted authorities having
jurisdiction and in conformity with the provisions of all leases, subleases or
other contracts comprising a part of the Hydrocarbon Interests and other
contracts and agreements forming a part of the Oil and Gas Properties;
specifically in this connection, (i) after the Closing Date, no Oil and Gas
Property is subject to having allowable production reduced below the full and
regular allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) prior to
the Closing Date and (ii) none of the xxxxx comprising a part of the Oil and Gas
Properties (or properties unitized therewith) are deviated from the vertical
more than the maximum permitted by applicable laws, regulations, rules and
orders, and such xxxxx are, in fact, bottomed under and are producing from, and
the well bores are wholly within, the Oil and Gas Properties (or in the case of
xxxxx located on properties unitized therewith, such unitized properties).
Section 7.11 No Material Misstatements. No written
information, statement, exhibit, certificate, document or report furnished to
the Administrative Agent and the Lenders (or any of them) by Borrower or any
Subsidiary in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statement contained therein not materially misleading in
the light of the circumstances in which made and with respect to Borrower and
its Subsidiaries taken as a whole. There is no fact peculiar to Borrower or any
Subsidiary which has a Material Adverse Effect or in the future is reasonably
likely to have (so far as Borrower can now foresee) a Material Adverse Effect.
Section 7.12 Investment Company Act. Neither Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 7.13 Public Utility Holding Company Act. Neither
Borrower nor any Subsidiary is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
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Section 7.14 Subsidiaries.
(a) Except as set forth on Schedule 7.14, Borrower has no
Subsidiaries or Unrestricted Subsidiaries.
(b) With respect to each Subsidiary of Borrower, Schedule 7.14
sets forth the following information:
(i) the jurisdiction of formation and headquarters of
such Subsidiary;
(ii) the identity of each other jurisdiction wherein
such Subsidiary is qualified to do business;
(iii) the identity of each class of authorized
capital stock of such Subsidiary;
(iv) the amount and ownership of the capital stock of
such Subsidiary that is issued and outstanding (collectively, the
"Subsidiary Securities"); and
(v) the identity of each Person or joint venture
entity in which such Subsidiary has an equity or similar interest.
All of the Subsidiary Securities have been duly authorized and validly issued
and are fully paid and nonassessable, to the extent such term is applicable
under local law. None of the Subsidiary Securities have been issued in violation
of any shareholder's preemptive rights.
(c) There are no contracts obligating Borrower or any of its
Affiliates to issue, sell, pledge, dispose of or encumber, nor any options,
warrants or rights of any kind to acquire, nor any securities that are
convertible into or exercisable or exchangeable for, any shares of any class of
capital stock of any Subsidiary. There are no contracts obligating Borrower or
any of its Affiliates to redeem, purchase or acquire or offer to acquire any
shares of any class of capital stock of any Subsidiary. There are no contracts
obligating any Subsidiary to make any dividend or distribution of any kind.
(d) There are no shareholder agreements, voting agreements,
management agreements, proxies or other similar agreements or understandings
with respect to Borrower or any Subsidiary to which Borrower or any of its
Affiliates is a party. Except as described in the Material Agreements listed on
Schedule 7.21, there are no outstanding or authorized stock appreciation,
phantom stock, profit participation or similar rights affecting the capital
stock of Borrower or any Subsidiary with respect to which Borrower or any of its
Affiliates is a party or issuer.
Section 7.15 Location of Business and Offices. Borrower's
principal place of business and chief executive offices are located at the
address stated on the signature page of this Agreement. The principal place of
business and chief executive office of each Subsidiary are located at the
addresses stated on Schedule 7.14.
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Section 7.16 Defaults. Neither Borrower nor any Subsidiary is
in default nor has any event or circumstance occurred which, but for the
expiration of any applicable grace period or the giving of notice, or both,
would constitute a default under any material agreement or instrument to which
Borrower or any Subsidiary is a party or by which Borrower or any Subsidiary is
bound which default would be reasonably likely to have a Material Adverse
Effect. No Default hereunder has occurred and is continuing.
Section 7.17 Environmental Matters. Except (i) as provided in
Schedule 7.17 or (ii) as would not be reasonably likely to have a Material
Adverse Effect (or with respect to (c), (d) and (e) below, where the failure to
take such actions would not be reasonably likely to have a Material Adverse
Effect):
(a) Neither any Property now or previously owned or leased or
in the possession of or operated by or under the direction of Borrower or any
Subsidiary nor the operations now or previously conducted thereon violate any
order or requirement of any court or Governmental Authority or any Environmental
Laws;
(b) Without limitation of clause (a) above, no Property now or
previously owned or leased or in the possession of or operated by or under the
direction of Borrower or any Subsidiary nor the operations currently conducted
thereon or previously conducted thereon while in the ownership of or under the
operation, possession or direction of Borrower or any Subsidiary, or, to the
best knowledge of Borrower, by any prior owner or operator of such Property or
operation, are in violation of or subject to any existing, pending or threatened
action, suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under Environmental Laws;
(c) All notices, permits, licenses or similar authorizations,
if any, required to be obtained or filed in connection with the operation or use
of any and all Property now or previously owned or leased or in the possession
of or operated by or under the direction of Borrower and each Subsidiary,
including without limitation all permits for the treatment, storage, disposal or
release of a hazardous substance or solid waste, have been duly obtained or
filed, and Borrower and each Subsidiary are in compliance with the terms and
conditions of all such notices, permits, licenses and similar authorizations;
(d) All hazardous substances, solid waste, and oil and gas
exploration and production wastes, if any, generated at any and all Property now
or previously owned or leased or in the possession of or operated by or under
the direction of Borrower or any Subsidiary have in the past been transported,
treated or disposed of in accordance with Environmental Laws, and, to the
knowledge of Borrower, all such transport carriers and treatment and disposal
facilities are in compliance with Environmental Laws, and are not the subject of
any existing, pending or threatened action, investigation or inquiry by any
Governmental Authority in connection with any Environmental Laws;
(e) Borrower has taken steps reasonably necessary to determine
and has determined that no hazardous substances, solid waste, or oil and gas
exploration and production wastes, have been disposed of or otherwise released
and there has been no threatened release of any hazardous substances on or to
any Property now or previously owned or leased or in the
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possession of or operated by or under the direction of Borrower or any
Subsidiary except in compliance with Environmental Laws;
(f) To the extent applicable, all Property owned, leased, in
the possession of or operated by or under the direction of Borrower and each
Subsidiary currently satisfies all design, operation, and equipment requirements
currently imposed by the OPA (as defined in the definition of "Environmental
Laws" herein), and Borrower does not have any reason to believe that such
Property, to the extent subject to OPA, will not be able to maintain compliance
with the OPA requirements during the term of this Agreement; and
(g) To Borrower's knowledge, neither Borrower nor any
Subsidiary has any known contingent liability in connection with any release or
threatened release of any oil, hazardous substance or solid waste into the
environment.
Section 7.18 Compliance with the Law. Neither Borrower nor any
Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business as it is
currently being conducted or proposed to be conducted in the future. All such
licenses, permits, franchises or other governmental authorizations are currently
in full force and effect.
Section 7.19 Insurance. Schedule 7.19 attached hereto contains
an accurate and complete description of all material policies of fire,
liability, workmen's compensation and other forms of insurance owned or held by
Borrower and each Subsidiary. All such policies are in full force and effect,
all premiums with respect thereto covering all periods up to and including the
Closing Date have been paid, and no notice of cancellation or termination has
been received with respect to any such policy. Such policies are sufficient for
compliance with all requirements of law and of all agreements to which Borrower
or any Subsidiary is a party; are valid, outstanding and enforceable policies;
provide adequate insurance coverage in at least such amounts and against at
least such risks (but including in any event public liability) as are usually
insured against in the same general area by companies engaged in the same or a
similar business for the assets and operations of Borrower and each Subsidiary;
will remain in full force and effect through the respective dates set forth in
Schedule 7.19 without the payment of additional premiums; and will not in any
way be affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement. Neither Borrower nor any Subsidiary has been
refused any insurance with respect to its assets or operations, nor has its
coverage been limited below usual and customary policy limits, by an insurance
carrier to which it has applied for any such insurance or with which it has
carried insurance during the last three years.
Section 7.20 Hedging Agreements. Schedule 7.20 sets forth, as
of the Closing Date, a true and complete list of all Hedging Agreements
(including commodity price swap agreements, insurance swap or option agreements,
forward agreements for terms in excess of 30 days or contracts of sale which
provide for prepayment for deferred shipment or delivery of oil, gas or other
commodities) of Borrower and each Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net xxxx to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied), and the counter
party to each such agreement.
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Section 7.21 Material Agreements. Set forth on Schedule 7.21
hereto is a complete and correct list of all material agreements, contracts,
leases, indentures, purchase agreements, obligations in respect of letters of
credit, guarantees, joint venture agreements, and other instruments in effect or
to be in effect as of the Closing Date (other than Hedging Agreements and
agreements relating to Debt of the type described in clause (iii) in the
definition of Debt or clause (vii) in the definition of Debt to the extent
relating to primary obligations of the type described in clause (iii) in the
definition of Debt) providing for, evidencing, securing or otherwise relating to
any Debt of Borrower or any of its Subsidiaries to the extent such instrument
evidences Debt in excess of $5,000,000.00, and all obligations of Borrower or
any of its Subsidiaries to issuers of surety or appeal bonds issued for account
of Borrower or any such Subsidiary in excess of $5,000,000.00 (collectively, the
"Material Agreements"), and such list correctly sets forth the names of the
debtor or lessee and creditor or lessor with respect to the Debt or lease
obligations outstanding or to be outstanding and the Property subject to any
Lien securing such Debt or lease obligation. Borrower has heretofore delivered
to the Administrative Agent a complete and correct copy of all such material
credit agreements, indentures, purchase agreements, contracts, letters of
credit, guarantees, joint venture agreements, or other instruments, including
any modifications or supplements thereto, as in effect on the Closing Date,
which the Administrative Agent has requested. Each Material Agreement is in full
force and effect and is enforceable by Borrower in accordance with its terms,
and none of Borrower nor, to the knowledge of Borrower, any other party thereto
is in breach of or default under any Material Agreement that would reasonably be
likely to have a Material Adverse Effect or has given notice of termination or
cancellation of any Material Agreement.
Section 7.22 Gas Imbalances. As of the Closing Date, except
for the Override and as set forth on Schedule 7.22, on a net basis, there are no
gas imbalances, take or pay or other prepayments with respect to Borrower's Oil
and Gas Properties which would require Borrower to deliver, in the aggregate,
five percent or more of the quarterly production from Hydrocarbons produced from
Borrower's Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor.
Section 7.23 Labor Relations. None of Borrower or any
Subsidiary is engaged in any unfair labor practice within the meaning of the
National Labor Relations Act of 1947, as amended. There is (i) no unfair labor
practice complaint before the National Labor Relations Board, or grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement, pending or, to the knowledge of Borrower, threatened, against
Borrower or any Subsidiary, (ii) no strike, lock-out, slowdown, stoppage,
walkout or other labor dispute pending or, to the knowledge of Borrower,
threatened, against Borrower or any Subsidiary, nor has any such action occurred
within the last five years, and (iii) to the knowledge of Borrower, no petition
for certification or union election or union organizing activities taking place
with respect to Borrower.
Section 7.24 Intellectual Property. Each of Borrower and its
Subsidiaries owns, or has the legal right to use, all intellectual property
necessary for each of them to conduct its business as currently conducted
("Borrower Intellectual Property"). Borrower has not received notice of any
claim challenging or questioning the use of any Borrower Intellectual Property
or the validity or effectiveness of any Borrower Intellectual Property, and to
the knowledge of Borrower, the use of such Borrower Intellectual Property by
Borrower or any
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Subsidiary does not infringe on the rights of any Person, except for such claims
and infringements that in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the
Commitments are in effect and until payment in full of all Loans hereunder, all
interest thereon and all other amounts payable by Borrower hereunder and under
the other Loan Documents:
Section 8.01 Reporting Requirements. Borrower shall deliver,
or shall cause to be delivered, to the Administrative Agent with sufficient
copies of each for the Lenders:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year of Borrower, the
audited consolidated (and if Borrower ever has any Unrestricted Subsidiaries,
the unaudited consolidating) statements of income, stockholders' equity, changes
in financial position and cash flow of Borrower and its Consolidated
Subsidiaries for such fiscal year, and the related consolidated (and if Borrower
ever has any Unrestricted Subsidiaries, the consolidating) balance sheets of
Borrower and its Consolidated Subsidiaries as at the end of such fiscal year,
and setting forth in each case in comparative form the corresponding figures for
the preceding fiscal year, and accompanied by the related opinion of independent
public accountants of recognized national standing acceptable to the
Administrative Agent which opinion shall state that said financial statements
fairly present the consolidated financial condition and results of operations of
Borrower and its Consolidated Subsidiaries as at the end of, and for, such
fiscal year and that such financial statements have been prepared in accordance
with GAAP, except for such changes in such principles with which the independent
public accountants shall have concurred and such opinion shall not contain a
"going concern" or like qualification or exception, 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.
(b) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the end of each of the first three fiscal
quarterly periods of each fiscal year of Borrower, consolidated (and if Borrower
ever has any Unrestricted Subsidiaries, the consolidating) statements of income,
stockholders' equity, changes in financial position and cash flow of Borrower
and its Consolidated Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related consolidated (and if Borrower ever has any Unrestricted Subsidiaries,
the consolidating) balance sheets as at the end of such period, and setting
forth in each case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, accompanied by the
certificate of a Responsible Officer, which certificate shall state that said
financial statements fairly present the consolidated financial condition and
results of operations of Borrower and its Consolidated Subsidiaries in
accordance with GAAP, as at the end of, and for, such period (subject to normal
year-end audit adjustments).
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(c) Notice of Default, Etc. Promptly after Borrower knows that
any Default or any Material Adverse Effect has occurred, a notice of such
Default or Material Adverse Effect, describing the same in reasonable detail and
the action Borrower proposes to take with respect thereto.
(d) Other Accounting Reports. Promptly upon receipt thereof, a
copy of each other material report or letter submitted to Borrower or any
Subsidiary by independent accountants in connection with any annual, interim or
special audit made by them of the books of Borrower and its Subsidiaries, and a
copy of any response by Borrower or any Subsidiary of Borrower, or the Board of
Directors of Borrower or any Subsidiary of Borrower, to such letter or report.
(e) SEC Filings, Etc. Promptly upon its becoming available,
each financial statement, report, notice or proxy statement sent by Borrower to
stockholders generally and each regular or periodic report and any registration
statement, prospectus or written communication (other than transmittal letters)
in respect thereof filed by Borrower with or received by Borrower in connection
therewith from any securities exchange or the SEC or any successor agency.
(f) Notices Under Other Loan Agreements. Promptly after the
furnishing thereof, copies of any statement, report or notice furnished to any
Person pursuant to the terms of any indenture, loan or credit or other similar
agreement, other than this Agreement and not otherwise required to be furnished
to the Lenders pursuant to any other provision of this Section 8.01.
(g) Other Matters. From time to time such other information
regarding the business, affairs or financial condition of Borrower or any
Subsidiary (including, without limitation, any Plan or Multiemployer Plan and
any reports or other information required to be filed under ERISA) as any Lender
or the Administrative Agent may reasonably request.
(h) Hedging Agreements. As soon as available and in any event
within 45 days after the last day of each calendar quarter, a report, in form
and substance reasonably satisfactory to the Administrative Agent, setting forth
as of the last Business Day of such calendar quarter a true and complete list of
all Hedging Agreements (including commodity price swap agreements, insurance
swap or option agreements, forward agreements with terms in excess of 30 days or
contracts of sale which provide for prepayment for deferred shipment or delivery
of oil, gas or other commodities) of Borrower and each Subsidiary, the material
terms thereof (including the type, term, effective date, termination date and
notional amounts or volumes), the net xxxx to market value therefor, any new
credit support agreements relating thereto not listed on Schedule 7.20, any
margin required or supplied under any credit support document, and the counter
party to each such agreement.
(i) Responsible Officer's Certificate. Borrower will furnish
to the Administrative Agent, at the time it furnishes each set of financial
statements pursuant to paragraph (a) or (b) above, a certificate substantially
in the form of Exhibit C executed by a Responsible Officer (i) certifying as to
the matters set forth therein and stating that no Default has occurred and is
continuing (or, if any Default has occurred and is continuing, describing the
same in reasonable detail), and (ii) setting forth in reasonable detail the
computations necessary
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to determine whether Borrower is in compliance with Section 9.01 as of the end
of the respective calendar quarter or fiscal year.
Section 8.02 Litigation. Borrower shall promptly give to the
Administrative Agent notice of: (i) all legal or arbitral proceedings, and of
all proceedings before any Governmental Authority against or adversely affecting
Borrower or any Subsidiary, except proceedings which, if adversely determined,
could not reasonably be expected to have a Material Adverse Effect, and (ii) of
any litigation or proceeding against or adversely affecting in any material
respect Borrower or any Subsidiary in which the amount involved is not covered
in full by insurance (subject to normal and customary deductibles and for which
the insurer has not assumed the defense), or in which injunctive or similar
relief is sought. Borrower will, and will cause each of its Subsidiaries to,
promptly notify the Administrative Agent and each of the Lenders of any claim,
judgment, Lien (other than those permitted under Section 9.02) or other
encumbrance affecting any Property of Borrower or any Subsidiary if the value of
the claim, judgment, Lien, or other encumbrance affecting such Property shall
exceed $500,000.00.
Section 8.03 Maintenance, Etc.
(a) Generally. Borrower shall and shall cause each Subsidiary
to: preserve and maintain its corporate existence and all of its material
rights, privileges and franchises; keep books of record and account in which
full, true and correct entries will be made of all dealings or transactions in
relation to its business and activities; comply with all Governmental
Requirements if failure to comply with such requirements would be reasonably
likely to have a Material Adverse Effect; 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, 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; upon reasonable notice, permit
representatives of the Administrative Agent or any Lender, during normal
business hours, to examine, copy and make extracts from its books and records,
to inspect its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender or the
Administrative Agent (as the case may be); and keep, or cause to be kept,
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, environmental risk
insurance to the extent reasonably available. Subject to Section 9.17, Borrower
will, and will cause each Subsidiary, to pay, discharge or otherwise satisfy at
or before maturity all liabilities and obligations as and when due (subject to
any applicable subordination provisions), and any additional costs that are
imposed as a result of any failure to so pay, discharge or otherwise satisfy
such obligations, except to the extent failure to do so would not, individually
or in the aggregate be reasonably likely to have a Material Adverse Effect.
(b) Proof of Insurance. Contemporaneously with the delivery of
the financial statements required by Section 8.01(a) to be delivered for each
year, Borrower will furnish or cause to be furnished to the Administrative Agent
and the Lenders a certificate of insurance coverage from the insurer in form and
substance satisfactory to the Administrative Agent and, if
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requested, will furnish the Administrative Agent and the Lenders copies of the
applicable policies.
(c) Oil and Gas Properties. Borrower will and will cause each
Subsidiary to maintain all of its Oil and Gas Properties as a reasonably prudent
operator. Borrower will and will cause each Subsidiary to keep unimpaired,
except for Liens described in Section 9.02, its rights with respect to its Oil
and Gas Properties and other material Properties and prevent any forfeiture
thereof or a default thereunder. Borrower will cause and cause each Subsidiary
to perform or make reasonable and customary efforts to cause to be performed, in
accordance with industry standards, the obligations required by each and all of
the assignments, deeds, leases, sub-leases, contracts and agreements affecting
its interests in its Oil and Gas Properties and other material Properties.
Section 8.04 Environmental Matters.
(a) Compliance with Environmental Laws. Borrower will and will
cause each Subsidiary to maintain and operate all Property of Borrower and its
Subsidiaries in compliance with applicable Environmental laws in all material
respects.
(b) Notice of Action. Borrower will promptly notify the
Administrative Agent and the Lenders in writing of any threatened action,
investigation or inquiry by any Governmental Authority of which Borrower has
knowledge in connection with any Environmental Laws, excluding routine testing
and corrective action, which if adversely determined could have a Material
Adverse Effect.
(c) Future Acquisitions. Borrower will and will cause each
Subsidiary to provide environmental audits and tests in accordance with industry
standards as reasonably requested by the Administrative Agent and the Lenders
(or as otherwise required to be obtained by the Administrative Agent or the
Lenders by any Governmental Authority) in connection with any future
acquisitions of Oil and Gas Properties.
Section 8.05 Further Assurances. Borrower will and will cause
each Guarantor to cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of the Guaranty Agreements and this
Agreement. Borrower at its expense will and will cause each Guarantor to
promptly execute and deliver to the Administrative Agent upon request all such
other documents, agreements and instruments to comply with or accomplish the
covenants and agreements of Borrower or any Guarantor, as the case may be, in
the Guaranty Agreements and this Agreement, or to correct any omissions in the
Guaranty Agreements, or to state more fully the obligations set out herein or in
any of the Guaranty Agreements or to make any recordings, to file any notices or
obtain any consents, all as may be necessary or appropriate in connection
therewith.
Section 8.06 Performance of Obligations. Borrower will pay the
Notes according to the reading, tenor and effect thereof and all other
Indebtedness; and Borrower will and will cause each Guarantor to do and perform
every act and discharge all of the obligations to be performed and discharged by
them under the Guaranty Agreements and this Agreement, at the time or times and
in the manner specified.
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Section 8.07 Reserve and Engineering Reports.
(a) Not less than 30 days prior to each Scheduled
Redetermination Date, Borrower shall furnish to the Administrative Agent and the
Lenders a Reserve Report. The January 1 Reserve Report of each year shall be
prepared by certified independent petroleum engineers or other independent
petroleum consultant(s) acceptable to the Administrative Agent and the July 1
Reserve Report of each year shall be prepared by or under the supervision of the
chief engineer of Borrower who shall certify such Reserve Report to have been
prepared in all material respects in accordance with industry standards and the
procedures (other than forecasted product prices) used in the immediately
proceeding January 1 Reserve Report.
(b) In the event of an unscheduled redetermination, Borrower
shall furnish to the Administrative Agent and the Lenders a Reserve Report
prepared by or under the supervision of the chief engineer of Borrower who shall
certify such Reserve Report to have been prepared in all material respects in
accordance with industry standards and the procedures (other than forecasted
product prices) used in the immediately preceding Reserve Report. For any
unscheduled redetermination requested by Borrower pursuant to this Agreement,
Borrower shall provide such Reserve Report with an "as of" date as required by
the Majority Lenders as soon as possible, but in any event no later than 30 days
following the receipt of the request by the Administrative Agent.
Section 8.08 ERISA Information and Compliance. Borrower will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Administrative Agent with sufficient copies to the
Lenders (i) promptly after the filing thereof with the United States Secretary
of Labor, the Internal Revenue Service or the PBGC, copies of each annual and
other report with respect to each Plan or any trust created thereunder, (ii)
immediately upon becoming aware of the occurrence of any ERISA Event or of any
"prohibited transaction," as described in section 406 of ERISA or in section
4975 of the Code, in connection with any Plan or any trust created thereunder, a
written notice signed by a Responsible Officer specifying the nature thereof,
what action Borrower, the Subsidiary or the ERISA Affiliate is taking or
proposes to take with respect thereto, and, when known, any action taken or
proposed by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto, and (iii) immediately upon receipt thereof, copies of any
notice of the PBGC's intention to terminate or to have a trustee appointed to
administer any Plan. With respect to each Plan (other than a Multiemployer
Plan), Borrower will, and will cause each Subsidiary and ERISA Affiliate to, (i)
satisfy in full and in a timely manner, without incurring any late payment or
underpayment charge or penalty and without giving rise to any lien, all of the
contribution and funding requirements of section 412 of the Code (determined
without regard to subsections (d), (e), (f) and (k) thereof) and of section 302
of ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and
(ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring
any late payment or underpayment charge or penalty, all premiums required
pursuant to sections 4006 and 4007 of ERISA.
Section 8.09 Restricted Subsidiaries. Borrower shall ensure
that each Restricted Subsidiary is at all times (i) a Guarantor of Indebtedness
hereunder and (ii) a Consolidated Subsidiary.
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ARTICLE IX
NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the
Commitments are in effect and until payment in full of all Loans hereunder, all
interest thereon and all other amounts payable by Borrower hereunder and under
the other Loan Documents, without the prior written consent of the Majority
Lenders:
Section 9.01 Debt.
(a) Borrower will not, and will not permit any Restricted
Subsidiary to, incur, create or assume any Debt, other than Permitted
Indebtedness, if the Interest Coverage Ratio after giving effect to the
incurrence, creation or assumption of such Debt is less than 2.0 to 1.0.
(b) Borrower will not, and will not permit any Restricted
Subsidiary to, incur, create or assume any Senior Indebtedness, other than
Permitted Indebtedness, if the most recent Risk Adjusted PV-10 Ratio, after
giving effect to such incurrence, creation or assumption and any related
acquisition of reserves, is less than 1.50 to 1.0.
Section 9.02 Liens. Unless the Indebtedness is secured equally
and ratably, Borrower will not, and will not permit any Restricted Subsidiary
to, create, incur or assume any Lien securing pari passu or subordinated debt on
any of its Properties (now owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness;
(b) Permitted Liens;
(c) Liens securing leases allowed under clause (d) in the
definition of Permitted Indebtedness, but only on the Property under lease;
(d) Liens disclosed on Schedule 9.02;
(e) Liens on cash or securities of Borrower securing Debt
described in clause (e) of the definition of Permitted Indebtedness; and
(f) any Lien on any Property acquired after the date hereof
existing prior to the acquisition thereof by Borrower or any Restricted
Subsidiary or existing on any Property of any Person that becomes a Restricted
Subsidiary after the date hereof prior to the time such Person becomes a
Restricted Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Restricted Subsidiary, as the case may be, (ii) such Lien shall not apply to
any other Property of Borrower or any Restricted Subsidiary and (iii) such Lien
shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Restricted Subsidiary, as the case
may be and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof.
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Section 9.03 [Intentionally Left Blank]
Section 9.04 Restricted Investments; Restrictive Agreements.
(a) Borrower will not, and will not permit any of its
Restricted Subsidiaries, directly or indirectly, to:
(1) declare or pay any dividend or make any
distribution on or in respect of its capital stock (including any
payment in connection with any merger or consolidation involving
Borrower or any of its Restricted Subsidiaries) except:
(a) dividends or distributions payable in
capital stock of Borrower (other than Disqualified Stock) or
in options, warrants or other rights to purchase such capital
stock;
(b) dividends or distributions payable to
Borrower or a Restricted Subsidiary of Borrower (and if such
Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its
other holders of common capital stock on a pro rata basis);
and
(c) dividends on Borrower's $2.125
Convertible Exchangeable Preferred Stock, Series A currently
outstanding;
(2) purchase, redeem, retire or otherwise acquire for
value any capital stock of Borrower or any direct or indirect parent of
Borrower held by Persons other than Borrower or a Restricted Subsidiary
of Borrower (other than in exchange for capital stock of Borrower
(other than Disqualified Stock));
(3) purchase, repurchase, redeem, defease or
otherwise acquire or retire for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment, any Subordinated
Debt or Guarantor Subordinated Obligations (other than the purchase,
repurchase or other acquisition of Subordinated Debt or Guarantor
Subordinated Obligations purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of purchase, repurchase or
acquisition);
(4) make any Restricted Investment in any Person; or
(5) purchase, repurchase, redeem, defease, pre-pay or
otherwise acquire for value the 2005 Subordinated Notes;
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Restricted Investment referred to in clauses
(1) through (4) only shall be referred to herein as a "Restricted Payment"), if
at the time Borrower or such Restricted Subsidiary makes such Restricted
Payment:
(a) a Default shall have occurred and be
continuing (or would result therefrom); or
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(b) Borrower is not able to incur an
additional $1.00 of Debt pursuant to Section 9.01 after giving
effect, on a pro forma basis, to such Restricted Payment; or
(c) the aggregate amount of such Restricted
Payment and all other Restricted Payments declared or made
subsequent to the date hereof would exceed the sum of:
(i) 50% of Consolidated Net Income
for the period (treated as one accounting period)
from the beginning of the first calendar quarter
commencing after the date of this Agreement to the
end of the most recent calendar quarter ending prior
to the date of such Restricted Payment for which
financial statements are in existence (or, in case
such Consolidated Net Income is a deficit, minus 100%
of such deficit); provided, however, that writedowns
of oil and gas properties due to the application of
the full-cost method of accounting will not be
deducted in calculating Consolidated Net Income for
purposes of this paragraph;
(ii) the aggregate Net Cash
Proceeds received by Borrower from the issue or sale
of its capital stock (other than Disqualified Stock)
or other capital contributions subsequent to the date
hereof (other than Net Cash Proceeds received from an
issuance or sale of such capital stock to a
Subsidiary of Borrower or an employee stock ownership
plan, option plan or similar trust to the extent such
sale to an employee stock ownership plan, option plan
or similar trust is financed by loans from or
guaranteed by Borrower or any Restricted Subsidiary
unless such loans have been repaid with cash on or
prior to the date of determination);
(iii) the amount by which Debt of
Borrower is reduced on Borrower's balance sheet upon
the conversion or exchange (other than by a
Subsidiary of Borrower) subsequent to the date hereof
of any Debt of Borrower convertible or exchangeable
for capital stock (other than Disqualified Stock) of
Borrower (less the amount of any cash, or other
property, distributed by Borrower upon such
conversion or exchange); and
(iv) the amount equal to the net
reduction in Restricted Investments made by Borrower
or any of its Restricted Subsidiaries in any Person
resulting from:
(a) repurchases or
redemptions of such Restricted Investments
by such Person, proceeds realized upon the
sale of such Restricted Investment to an
unaffiliated purchaser, repayments of loans
or advances or other transfers of assets
(including by way of dividend or
distribution) by such Person to Borrower or
any Restricted Subsidiary of Borrower; or
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(b) the redesignation of
Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as
provided in the definition of "Investment")
not to exceed, in the case of any
Unrestricted Subsidiary, the amount of
Investments previously made by Borrower or
any Restricted Subsidiary in such
Unrestricted Subsidiary,
which amount in each case under this clause (iv) was
included in the calculation of the amount of
Restricted Payments; provided, however, that no
amount will be included under this clause (iv) to the
extent it is already included in Consolidated Net
Income.
The provisions of the preceding paragraph will not prohibit:
(1) any purchase or redemption of capital stock or
Subordinated Debt (except the 2005 Subordinated Notes) of Borrower made
by exchange for, or out of the proceeds of the substantially concurrent
sale of, capital stock of Borrower or Subordinated Debt with a maturity
after March 31, 2005; provided, however, that (a) such purchase or
redemption will be excluded in subsequent calculations of the amount of
Restricted Payments and (b) the Net Cash Proceeds from such sale will
be excluded from clause (c)(ii) of the preceding paragraph;
(2) any purchase or redemption of Subordinated
Obligations of Borrower made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Subordinated Debt of Borrower
that is refinanced in compliance with this Agreement; provided,
however, that such purchase or redemption will be excluded in
subsequent calculations of the amount of Restricted Payments;
(3) so long as no Default or Event of Default has
occurred and is continuing, any purchase or redemption of Subordinated
Debt from Net Available Cash to the extent permitted under Section 9.12
below; provided, however, that such purchase or redemption will be
excluded in subsequent calculations of the amount of Restricted
Payments;
(4) dividends paid within 60 days after the date of
declaration if at such date of declaration such dividend would have
complied with this provision; provided, however, that such dividends
will be included in subsequent calculations of the amount of Restricted
Payments;
(5) so long as no Default or Event of Default has
occurred and is continuing,
(a) the purchase, redemption or
other acquisition, cancellation or retirement for
value of capital stock, or options, warrants, equity
appreciation rights or other rights to purchase or
acquire capital stock of Borrower or any Restricted
Subsidiary of Borrower or any parent of Borrower held
by any existing or former directors, employees or
management of Borrower or any Subsidiary of Borrower
or their assigns,
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estates or heirs, in each case in connection with the
repurchase provisions under employee or director
stock option or stock purchase agreements or other
agreements to compensate management employees or
directors; provided that such redemptions or
repurchases pursuant to this clause will not exceed
$2,000,000.00 in the aggregate during any calendar
year and $10,000,000.00 in the aggregate for all such
redemptions and repurchases; provided, however, that
the amount of any such repurchase or redemption will
be included in subsequent calculations of the amount
of Restricted Payments; and
(b) loans or advances to employees
or directors of Borrower or any Subsidiary of
Borrower the proceeds of which are used to purchase
capital stock of Borrower, in an aggregate amount not
in excess of $2,000,000.00 at any one time
outstanding; provided, however, that the amount of
such loans and advances will be included in
subsequent calculations of the amount of Restricted
Payments;
(6) repurchases of capital stock deemed to occur upon
the exercise of stock options if such capital stock represents a
portion of the exercise price thereof; provided, however, that such
repurchases will be excluded from subsequent calculations of the amount
of Restricted Payments;
(7) repurchase or redemption of the 2002 Subordinated
Notes and 2004 Subordinated Notes with the proceeds of a concurrent
issuance of capital stock, a sale of subordinated notes with a maturity
after March 31, 2005, or, in the case of the 2002 Subordinated Notes
only, a sale of Property; provided, however, that Borrower will in no
event whatsoever prepay or redeem the 2005 Subordinated Notes;
provided, further, that such repurchase or redemption will be excluded
in subsequent calculations of the amount of Restricted Payments; and
(8) Restricted Payments in an amount not to exceed
$15,000,000.00; provided that the amount of such Restricted Payments
(except for those in paragraph 7) will be included in the calculation
of the amount of Restricted Payments pursuant to Section 9.04(a)(5)(c).
The amount of all Restricted Payments (other than cash) shall be the fair market
value on the date of such Restricted Payment of the Property or securities
proposed to be paid, transferred or issued by Borrower or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair
market value of any cash Restricted Payment shall be its face amount and any
non-cash Restricted Payment shall be determined conclusively by the board of
directors of Borrower acting in good faith.
(b) Borrower will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to:
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(1) pay dividends or make any other distributions on
its capital stock or pay any Debt or other obligations owed to Borrower
or any Restricted Subsidiary;
(2) make any loans or advances to Borrower or any
Restricted Subsidiary; or
(3) transfer any of its Property to Borrower or any
Restricted Subsidiary.
The preceding provisions will not prohibit:
(i) any encumbrance or restriction pursuant
to this Agreement, the Senior Secured Credit Facility or an
agreement in effect at the date hereof;
(ii) any encumbrance or restriction with
respect to a Restricted Subsidiary pursuant to an agreement
relating to any Debt incurred by a Restricted Subsidiary on or
before the date on which such Restricted Subsidiary was
acquired by Borrower (other than Debt incurred as
consideration in, or to provide all or any portion of the
funds utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by
Borrower or in contemplation of the transaction) and
outstanding on such date;
(iii) any encumbrance or restriction with
respect to a Restricted Subsidiary pursuant to an agreement
effecting a refunding, replacement or refinancing of Debt
incurred pursuant to an agreement referred to in clause (i) or
(ii) of this paragraph or this clause (iii) or contained in
any amendment to an agreement referred to in clause (i) or
(ii) of this paragraph or this clause (iii); provided,
however, that the encumbrances and restrictions with respect
to such Restricted Subsidiary contained in any such agreement
are no less favorable in any material respect to the holders
of the Notes than the encumbrances and restrictions contained
in such agreements referred to in clauses (i) or (ii) of this
paragraph on the date hereof or the date such Restricted
Subsidiary became a Restricted Subsidiary, whichever is
applicable;
(iv) in the case of clause (3) of this
covenant, any encumbrance or restriction:
(a) that restricts in a customary
manner the subletting, assignment or transfer of any
Property that is subject to a lease, license or
similar contract, or the assignment or transfer of
any such lease, license or other contract;
(b) contained in mortgages, pledges
or other security agreements permitted under this
Agreement securing Debt of Borrower or a Restricted
Subsidiary to the extent such encumbrances or
restrictions restrict the transfer of the Property
subject to such mortgages, pledges or other security
agreements; or
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(c) pursuant to customary provisions
regarding preferential rights or rights of first
refusal or restricting dispositions of real property
interests set forth in any reciprocal easement
agreements of Borrower or any Restricted Subsidiary;
(v) purchase money obligations for Property
acquired in the ordinary course of business that impose
encumbrances or restrictions of the nature described in clause
(3) of this covenant on the Property so acquired;
(vi) any restriction with respect to a
Restricted Subsidiary (or any of its Property) imposed
pursuant to an agreement entered into for the direct or
indirect sale or disposition of all or substantially all the
capital stock or Property of such Restricted Subsidiary (or
the Property that is subject to such restriction) pending the
closing of such sale or disposition;
(vii) encumbrances or restrictions arising
or existing by reason of applicable law or any applicable
rule, regulation or order;
(viii) any encumbrance or restriction
arising out of any Permitted Lien; and
(ix) customary provisions with respect to
the distribution of assets or property in joint venture
agreements.
Section 9.05 Sales and Leasebacks. Neither Borrower nor any
Restricted Subsidiary will enter into any arrangement, directly or indirectly,
with any Person whereby Borrower or any Restricted Subsidiary shall sell or
transfer any of its Property, whether now owned or hereafter acquired, and
whereby Borrower or any Restricted Subsidiary shall then or thereafter rent or
lease as lessee such Property or any part thereof or other Property which
Borrower or any Restricted Subsidiary intends to use for substantially the same
purpose or purposes as the Property sold or transferred.
Section 9.06 Nature of Business. Neither Borrower nor any
Restricted Subsidiary will allow any material change to be made in the character
of its business.
Section 9.07 Limitation on Leases. Neither Borrower nor any
Restricted Subsidiary will create, incur, assume or permit to exist any
obligation for the payment of rent or hire of Property of any kind whatsoever
(real or personal including capital leases, but excluding leases of Hydrocarbon
Interests), under leases or lease agreements for terms in excess of, or are
non-cancelable by Borrower or such Subsidiary within, twelve months which would
cause the aggregate amount of all payments made by Borrower and its Restricted
Subsidiaries pursuant to all such leases or lease agreements to exceed
$1,000,000.00 in any period of twelve consecutive calendar months during the
life of such leases.
Section 9.08 Consolidation and Merger. Borrower shall not
merge into or consolidate with or sell all or substantially all of its Property
to any Person or group of affiliated Persons unless (a) either (i) Borrower
survives, or (ii) survivor is an entity organized under United States law or any
state thereof or the District of Columbia and assumes, in writing, the
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Indebtedness; (b) no Default or Event of Default shall have occurred and be
continuing; (c) except in the case of the consolidation or merger of any
Restricted Subsidiary with or into Borrower, the consolidated net worth of
Borrower (or the surviving entity) does not decrease; (d) Borrower could incur
$1.00 of additional Debt (excluding Permitted Indebtedness) under Section 9.01;
and (e) if any of Borrower's assets become subject to any Lien, the imposition
of such Lien shall have been in compliance with Section 9.02. Notwithstanding
the preceding clause (d), (i) any Restricted Subsidiary of Borrower may
consolidate with, merge into or transfer all or part of its properties and
assets to Borrower, (ii) Borrower may merge with an Affiliate incorporated
solely for the purpose of reincorporating Borrower in another jurisdiction to
realize tax or other benefits and (iii) any Wholly-Owned Subsidiary can
consolidate with or merge into any other Wholly-Owned Subsidiary, except
Restricted Subsidiaries cannot merge with Unrestricted Subsidiaries.
Section 9.09 Proceeds of Notes and Loans. Borrower will not
permit the proceeds of the Notes and Loans to be used for any purpose other than
those permitted by Section 7.07. Neither Borrower nor any Person acting on
behalf of Borrower has taken or will take any action which might cause any of
the Loan Documents to violate Regulation T, U or X or any other regulation of
the Board of Governors of the Federal Reserve System or to violate Section 7 of
the Securities Exchange Act of 1934 or any rule or regulation thereunder, in
each case as now in effect or as the same may hereinafter be in effect.
Section 9.10 ERISA Compliance. Borrower will not at any time:
(a) engage in, or permit any Subsidiary or ERISA Affiliate to
engage in, any transaction in connection with which Borrower, any Subsidiary or
any ERISA Affiliate could be subjected to either a civil penalty assessed
pursuant to section 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43
of Subtitle D of the Code;
(b) terminate, or permit any Subsidiary or ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with respect to any
Plan, which could result in any liability to Borrower, any Subsidiary or any
ERISA Affiliate to the PBGC;
(c) fail to make, or permit any Subsidiary or ERISA Affiliate
to fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law, Borrower,
a Subsidiary or any ERISA Affiliate is required to pay as contributions thereto;
(d) permit to exist, or allow any Subsidiary or ERISA
Affiliate to permit to exist, any accumulated funding deficiency within the
meaning of Section 302 of ERISA or section 412 of the Code, whether or not
waived, with respect to any Plan;
(e) permit, or allow any Subsidiary or ERISA Affiliate to
permit, the actuarial present value of the benefit liabilities under any Plan
maintained by Borrower, any Subsidiary or any ERISA Affiliate which is regulated
under Title IV of ERISA to exceed the current value of the assets (computed on a
plan termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities. The term "actuarial present value of the
benefit liabilities" shall have the meaning specified in section 4041 of ERISA;
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(f) contribute to or assume an obligation to contribute to, or
permit any Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any Multiemployer Plan;
(g) acquire, or permit any Subsidiary or ERISA Affiliate to
acquire, an interest in any Person that causes such Person to become an ERISA
Affiliate with respect to Borrower, any Subsidiary or any ERISA Affiliate if
such Person sponsors, maintains or contributes to, or at any time in the
six-year period preceding such acquisition has sponsored, maintained, or
contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is
subject to Title IV of ERISA under which the actuarial present value of the
benefit liabilities under such Plan exceeds the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities;
(h) incur, or permit any Subsidiary or ERISA Affiliate to
incur, a liability to or on account of a Plan under sections 515, 4062, 4063,
4064, 4201 or 4204 of ERISA;
(i) contribute to or assume an obligation to contribute to, or
permit any Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any employee welfare benefit plan, as defined in
section 3(1) of ERISA, including, without limitation, any such plan maintained
to provide benefits to former employees of such entities, that may not be
terminated by such entities in their sole discretion at any time without any
material liability; or
(j) amend or permit any Subsidiary or ERISA Affiliate to
amend, a Plan resulting in an increase in current liability such that Borrower,
any Subsidiary or any ERISA Affiliate is required to provide security to such
Plan under section 401(a)(29) of the Code.
Section 9.11 Sale or Discount of Receivables. Neither Borrower
nor any Subsidiary will discount or sell (with or without recourse) any of its
notes receivable or accounts receivable other than settlement of any past due
accounts in the ordinary course of business and in accordance with prudent
commercial practices.
Section 9.12 Sale of Property.
(a) Borrower shall not, and shall not permit any Restricted
Subsidiary to, sell, assign, convey or otherwise transfer any Property unless
(i) consideration equal to the fair market value of the Property sold is
received, (ii) the sale is an arm's length transaction; (iii) all of the
consideration received consists of cash, Cash Equivalents, liquid securities or
Exchanged Properties ("Permitted Consideration"); provided, however, that
Borrower and its Restricted Subsidiaries shall be permitted to receive any
Property other than Permitted Consideration, so long as the aggregate fair
market value of such Property at any one time shall not exceed 10.0% of Adjusted
Consolidated Net Tangible Assets.
(b) Within 365 days following the receipt of Net Available
Cash, an amount equal to 100% of the Net Available Cash from such Asset
Disposition shall be applied by Borrower or such Restricted Subsidiary, as the
case may be:
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(i) to apply all or any of the Net Available Cash
therefrom to (A) repay indebtedness under the Senior Secured Credit
Facility or (B) repay or purchase the 2002 Subordinated Notes, or (ii)
invest all or any part of the Net Available Cash in Property that will
be used in the oil and gas business of Borrower or its Restricted
Subsidiaries.
Any Net Available Cash from Asset Dispositions that are not
applied or invested as provided in the preceding paragraph will be deemed to
constitute "Excess Proceeds." On the 366th day after an Asset Disposition, if
the aggregate amount of Excess Proceeds exceeds $5,000,000.00, Borrower will be
required to make an offer ("Asset Disposition Offer") to all holders of Notes
and to the extent required by the terms of other Senior Indebtedness, to all
holders of other Senior Indebtedness outstanding with similar provisions
requiring Borrower to make an offer to purchase such Senior Indebtedness with
the proceeds from any Asset Disposition ("Pari Passu Notes"), to purchase the
maximum principal amount of Notes and any such Pari Passu Notes to which the
Asset Disposition Offer applies that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount of the Notes and Pari Passu Notes plus accrued and unpaid interest to the
date of purchase, in accordance with the procedures set forth herein or in the
agreements governing the Pari Passu Notes, as applicable, and subject to the
prepayment provisions of Section 2.07 (the term "voluntary" therein being
deleted). To the extent that the aggregate amount of Notes and Pari Passu Notes
so validly tendered and not properly withdrawn pursuant to an Asset Disposition
Offer is less than the Excess Proceeds, Borrower may use any remaining Excess
Proceeds for general corporate purposes, subject to the other covenants
contained herein. If the aggregate principal amount of Notes surrendered by
holders thereof and other Pari Passu Notes surrendered by holders or lenders,
collectively, exceeds the amount of Excess Proceeds, Borrower shall select the
Notes and Pari Passu Notes to be purchased on a pro rata basis on the basis of
the aggregate principal amount of tendered Notes and Pari Passu Notes. Upon
completion of such Asset Disposition Offer, the amount of Excess Proceeds shall
be reset at zero.
The Asset Disposition Offer will remain open for a period of
20 Business Days following its commencement, except to the extent that a longer
period is required by applicable law (the "Asset Disposition Offer Period"). No
later than five Business Days after the termination of the Asset Disposition
Offer Period (the "Asset Disposition Purchase Date"), Borrower will purchase the
principal amount of Notes and Pari Passu Notes required to be purchased pursuant
to this covenant (the "Asset Disposition Offer Amount") or, if less than the
Asset Disposition Offer Amount has been so validly tendered, all Notes and Pari
Passu Notes validly tendered in response to the Asset Disposition Offer.
Any accrued and unpaid interest will be paid to the Person in
whose name a Note is registered at the close of business on such date, and no
additional interest will be payable to holders of the Notes who tender Notes
pursuant to the Asset Disposition Offer.
On or before the Asset Disposition Purchase Date, Borrower
will, to the extent lawful, accept for payment, on a pro rata basis to the
extent necessary, the Asset Disposition Offer Amount of Notes and Pari Passu
Notes or portions of Notes and Pari Passu Notes so validly tendered and not
properly withdrawn pursuant to the Asset Disposition Offer, or if less than the
Asset Disposition Offer Amount has been validly tendered and not properly
withdrawn,
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all Notes and Pari Passu Notes so validly tendered and not properly withdrawn.
Borrower will deliver all certificates and notes required, if any, by this
Agreement or the agreements governing the Pari Passu Notes. Borrower will
promptly (but in any case not later than five Business Days after termination of
the Asset Disposition Offer Period) mail or deliver to each tendering holder of
Notes or holder or lender of Pari Passu Notes, as the case may be, an amount
equal to the purchase price of the Notes or Pari Passu Notes so validly tendered
and not properly withdrawn by such holder or lender, as the case may be, and
accepted by Borrower for purchase, and Borrower will promptly issue a new Note
and will deliver such new Note to such holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. In addition, Borrower will take
any and all other actions required by the agreements governing the Pari Passu
Notes. Any Note not so accepted will be promptly mailed or delivered by Borrower
to the holder thereof. Borrower will publicly announce the results of the Asset
Disposition Offer on the Asset Disposition Purchase Date.
For the purposes of this covenant, the following will be
deemed to be cash:
(1) the assumption by the transferee of Debt (other
than Subordinated Obligations or Disqualified Stock) of Borrower or
Debt (other than Guarantor Subordinated Obligations or Preferred Stock)
of any Restricted Subsidiary of Borrower and the release of Borrower or
such Restricted Subsidiary from all liability on such Debt in
connection with such Asset Disposition (in which case Borrower will,
without further action, be deemed to have applied such deemed cash to
Debt in accordance with Section 9.12(b) above); and
(2) securities, notes or other obligations received
by Borrower or any Restricted Subsidiary of Borrower from the
transferee that are promptly converted by Borrower or such Restricted
Subsidiary into cash or Cash Equivalents.
Borrower will comply, to the extent applicable, with the
requirements of securities laws or regulations in connection with the repurchase
of Notes pursuant to this Agreement. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this covenant,
Borrower will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Agreement by
virtue of complying with such securities laws and regulations.
Section 9.13 Environmental Matters. Neither Borrower nor any
Restricted Subsidiary will cause or, to the extent within its control, permit
any of its Property to be in violation of, or do anything or, to the extent
within its control, permit anything to be done which will subject any such
Property to any remedial obligations under any Environmental Laws, assuming
disclosure to the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to such Property where such
violations or remedial obligations would have a Material Adverse Effect.
Section 9.14 Transactions with Affiliates. Neither Borrower
nor any Restricted Subsidiary will enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of Property or the
rendering of any service, with any Affiliate unless such transactions are
otherwise permitted under this Agreement, are in the ordinary course of its
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business and are upon fair and reasonable terms no less favorable to it than it
would obtain in a comparable arm's length transaction with a Person not an
Affiliate.
Section 9.15 [Intentionally Left Blank]
Section 9.16 [Intentionally Left Blank]
Section 9.17 Subordinated Debt. If a Default exists or would
result therefrom, neither Borrower nor any Guarantor shall make any payment in
respect of any Subordinated Debt or the Existing Subordinated Debt. Borrower
will not amend, supplement or otherwise modify any instruments evidencing, or
agreements relating to or executed in connection with, any Existing Subordinated
Debt, in any manner which would have the effect of (i) accelerating the timing
or amount of any scheduled payments of principal or interest thereon, (ii)
increasing the rate of interest payable thereon or (iii) resulting in a Material
Adverse Effect.
Section 9.18 Issuance and Sale of Capital Stock. Borrower (a)
shall not permit any Restricted Subsidiary to issue any capital stock (other
than to Borrower or a Wholly-Owned Subsidiary of Borrower) and (b) shall not
permit any Person (other than Borrower or a wholly-owned Restricted Subsidiary
of Borrower) to own any capital stock of any Restricted Subsidiary, except, in
each case, for (i) directors' qualifying shares, (ii) capital stock of a
Restricted Subsidiary organized in a foreign jurisdiction required to be issued
to, or owned by, the government of such foreign jurisdiction or individual or
corporate citizens of such foreign jurisdiction in order for such Restricted
Subsidiary to transact business in such foreign jurisdiction, (iii) a sale of
all or substantially all the capital stock of a Restricted Subsidiary effected
in connection with a Property sale in accordance with Section 9.12, and (iv) the
capital stock of a Restricted Subsidiary owned by a Person at the time such
Restricted Subsidiary became a Restricted Subsidiary or acquired by such Person
in connection with the formation of the Restricted Subsidiary; provided,
however, that any capital stock retained by Borrower or a Restricted Subsidiary
shall be treated as an Investment for purposes of Section 9.04, if the amount of
such capital stock represents less than a majority of the voting stock of such
Restricted Subsidiary.
Section 9.19 Modification of Agreements. Borrower shall not,
and shall not permit any Subsidiary to, amend, modify or change any provision of
its articles, certificate of incorporation, bylaws, partnership agreement,
certificate of formation or operating agreement, as applicable, or the terms of
any class or series of its capital stock, other than in a manner that would not
be reasonably likely to have a Material Adverse Effect or to adversely affect
the right or ability of Borrower to receive dividend payments or other
distributions from its Subsidiaries, or amend, modify, cancel or terminate or
fail to renew or extend or permit the amendment, modification, cancellation or
termination of any Material Agreement, except to the extent that such
amendments, modifications, cancellations or terminations would not be reasonably
likely to have a Material Adverse Effect.
Section 9.20 Guarantees. Borrower shall not, and shall not
permit any Restricted Subsidiary to, guarantee, directly or indirectly, any Debt
of any Unrestricted Subsidiary.
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ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following
events shall constitute an "Event of Default":
(a) Borrower shall default in the payment or prepayment when
due of any principal of or interest on any Loan or any fees or other
Indebtedness payable by it hereunder or under any Loan Document and such
default, other than a default of a payment or prepayment of principal (which
shall have no cure period), shall continue unremedied for a period of 30 days;
or
(b) Borrower or any Restricted Subsidiary shall default in the
payment when due of any principal of or interest on any of its other Debt (other
than Debt owed to Borrower or any Restricted Subsidiary) aggregating
$10,000,000.00 or more ($15,000,000.00 in the case of non-recourse Debt), or any
event specified in any note, agreement, indenture or other document evidencing
or relating to any such Debt 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 Debt (or a trustee or administrative agent on
behalf of such holder or holders) to cause, such Debt to become due prior to its
stated maturity; or
(c) any representation, warranty or certification made or
deemed made herein, in any Loan Document or in any Guaranty Agreement by
Borrower or any Guarantor, or any certificate furnished to any Lender or the
Administrative Agent pursuant to the provisions hereof, any Loan Document or any
Guaranty Agreement, shall prove to have been false or misleading as of the time
made or furnished in any material respect; or
(d) (i) Borrower shall default in the performance of any of
its obligations under Section 9.08 of this Agreement; (ii) Borrower shall
default in the performance of any of its obligations under Section 2.07(b),
Article VIII or Article IX (other than the payment of amounts due which shall be
governed by Section 10.01(a) or Section 9.08 which shall be governed by Section
10.01(d)(i)) and such default shall continue unremedied for a period of 30 days
after the earlier to occur of (A) notice thereof to Borrower by the
Administrative Agent or any Lender (through the Administrative Agent), or (B)
Borrower otherwise becoming aware of such default; or (iii) Borrower shall
default in the performance of any of its other obligations under this Agreement
and such default shall continue unremedied for a period of 60 days after the
earlier to occur of (A) notice thereof to Borrower by the Administrative Agent
or any Lender (through the Administrative Agent), or (B) Borrower otherwise
becoming aware of such default; or
(e) Borrower or any Restricted Subsidiary shall admit in
writing its inability to, or be generally unable to, pay its debts as such debts
become due; or
(f) Borrower or any Restricted 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 Federal Bankruptcy Code (as now or
hereafter in effect), (iv) file a petition seeking to take advantage of any
other law relating to
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bankruptcy, insolvency, reorganization, winding-up, liquidation 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 Federal 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 Borrower or any Restricted 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 such
Person of all or any substantial part of its assets, or (iii) similar relief in
respect of such Person 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 days; or (iv) an order for relief
against such Person shall be entered in an involuntary case under the Federal
Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in excess
of $10,000,000.00 in the aggregate (net of any amounts that a reputable and
creditworthy insurance company has acknowledged liability for in writing) shall
be rendered by a court against Borrower or any Restricted Subsidiary 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 60 days
from the date of entry thereof and Borrower or such Subsidiary shall not, within
said period of 60 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) any Guaranty Agreement after delivery thereof shall for
any reason, except to the extent permitted by the terms thereof, cease to be in
full force and effect and valid, binding and enforceable in accordance with
their terms, or if any Guarantor shall so state in writing; or
(j) any Subsidiary takes, suffers or permits to exist any of
the events or conditions referred to in paragraphs (e), (f), (g) or (h).
Section 10.02 Remedies.
(a) In the case of an Event of Default other than one referred
to in clauses (e), (f) or (g) of Section 10.01, or in clause (j) to the extent
it relates to clauses (e), (f) or (g), the Administrative Agent, upon request of
the Majority Lenders, shall, by notice to Borrower, cancel the Commitments
and/or declare the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by Borrower hereunder and
under the other Loan Documents and the Notes 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 Borrower.
(b) In the case of the occurrence of an Event of Default
referred to in clauses (e), (f) or (g) of Section 10.01, or in clause (j) to the
extent it relates to clauses (e), (f) or (g), the
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Commitments shall be automatically canceled and the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by Borrower hereunder and under the other Loan Documents and the Notes
shall become automatically 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 Borrower.
(c) All proceeds received after maturity of the Notes,
whether by acceleration or otherwise shall be applied first to reimbursement of
expenses and indemnities provided for in this Agreement and the other Loan
Documents; second to accrued interest on the Notes; third to fees; fourth pro
rata to principal outstanding on the Notes and other Indebtedness; and any
excess shall be paid to Borrower or as otherwise required by any Governmental
Requirement.
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Administrative Agent to act as
its Administrative Agent hereunder with such powers as are specifically
delegated to the Administrative Agent by the terms of this Agreement, together
with such other powers as are reasonably incidental thereto. The Administrative
Agent (which term as used in this sentence and in Section 11.05 and the first
sentence of Section 11.06 shall include reference to its Affiliates and its and
its Affiliates' officers, directors, employees, attorneys, accountants, experts
and administrative agents): (i) shall have no duties or responsibilities except
those expressly set forth in the Loan Documents, and shall not by reason of the
Loan Documents be a trustee or fiduciary for any Lender; (ii) makes no
representation or warranty to any Lender and shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in
the Loan Documents, this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness, execution,
effectiveness, legality, enforceability or sufficiency of this Agreement, the
Loan Documents, any Note or any other document referred to or provided for
herein or for any failure by Borrower or any other Person (other than the
Administrative Agent) to perform any of its obligations hereunder or thereunder
or for the existence, value, perfection or priority of any collateral security
or the financial or other condition of Borrower, its Subsidiaries or any other
obligor or guarantor; (iii) except pursuant to Section 11.07 shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder; and (iv) shall not be responsible for any action taken or omitted to
be taken by it hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith including its own ordinary
negligence, except for its own gross negligence or willful misconduct. The
Administrative Agent may employ administrative agents, accountants, attorneys
and experts and shall not be responsible for the negligence or misconduct of any
such administrative agents, accountants, attorneys or experts selected by it in
good faith or any action taken or omitted to be taken in good faith by it in
accordance with the advice of such administrative agents, accountants, attorneys
or experts. The Administrative Agent may deem and treat the payee of any Note as
the holder thereof for all purposes hereof unless and until a written notice of
the
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assignment or transfer thereof permitted hereunder shall have been filed with
the Administrative Agent. The Administrative Agent is authorized to release any
collateral that is permitted to be sold or released pursuant to the terms of the
Loan Documents.
Section 11.02 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telex, telecopier,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent.
Section 11.03 Defaults. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans or of fees) unless the
Administrative Agent has received notice from a Lender or Borrower specifying
such Default and stating that such notice is a "Notice of Default." In the event
that the Administrative Agent receives such a notice of the occurrence of a
Default, the Administrative Agent shall give prompt notice thereof to the
Lenders. In the event of a payment Default, the Administrative Agent shall give
each Lender prompt notice of each such payment Default.
Section 11.04 Rights as a Lender. With respect to its
Commitments and the Loans made by DCP (and any successor acting as
Administrative Agent) in its capacity as a Lender hereunder, DCP shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Administrative Agent, and the term "Lender"
or "Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. DCP (and any successor acting
as Administrative Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with Borrower (and any of its
Affiliates) as if it were not acting as the Administrative Agent, and DCP and
its Affiliates may accept fees and other consideration from Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
SECTION 11.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY
AND HOLD HARMLESS THE ADMINISTRATIVE AGENT AND ITS AFFILIATES AND EACH OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, PRINCIPALS, MEMBERS, MANAGERS, SHAREHOLDERS,
EMPLOYEES, FAMILY MEMBERS AND AGENTS RATABLY IN ACCORDANCE WITH EACH LENDER'S
PERCENTAGE SHARES FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 12.03 TO THE
EXTENT NOT INDEMNIFIED OR REIMBURSED BY BORROWER UNDER SECTION 12.03, BUT
WITHOUT LIMITING THE OBLIGATIONS OF BORROWER UNDER SAID SECTION 12.03 AND FOR
ANY AND ALL OTHER INDEMNITY MATTERS WHICH MAY BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ANY WAY RELATING TO OR ARISING OUT
OF: (i) THIS AGREEMENT, THE GUARANTY AGREEMENTS, THE LOAN DOCUMENTS OR ANY OTHER
DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED
HEREBY, BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL
ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY
DUTIES HEREUNDER OR (ii) THE ENFORCEMENT OF ANY OF THE
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TERMS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS; WHETHER OR NOT ANY OF THE
FOREGOING SPECIFIED IN THIS SECTION 11.05 ARISES FROM THE SOLE OR CONCURRENT
NEGLIGENCE OF THE ADMINISTRATIVE AGENT, PROVIDED THAT NO LENDER SHALL BE LIABLE
FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE ADMINISTRATIVE AGENT.
Section 11.06 Non-Reliance on Administrative Agent and other
Lenders. Each Lender acknowledges and agrees that it has, independently and
without reliance on the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of Borrower and its decision to enter into this Agreement, and that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Administrative Agent shall
not be required to keep itself informed as to the performance or observance by
Borrower of this Agreement, the Notes or any Loan Document or other document
referred to or provided for herein or to inspect the properties or books of
Borrower. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of Borrower (or any of its Affiliates) which may
come into the possession of the Administrative Agent or any of its Affiliates.
In this regard, each Lender acknowledges that Xxxxxx & Xxxxxx L.L.P. is acting
in this transaction as special counsel to the Administrative Agent only. Each
Lender will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein.
Section 11.07 Action by Administrative Agent. Except for
action or other matters expressly required of the Administrative Agent
hereunder, the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall (i) receive written
instructions from the Majority Lenders (or all of the Lenders as expressly
required by Section 12.04) specifying the action to be taken, and (ii) be
indemnified to its satisfaction by the Lenders against any and all liability and
expenses which may be incurred by it by reason of taking or continuing to take
any such action. The instructions of the Majority Lenders (or all of the Lenders
as expressly required by Section 12.04) and any action taken or failure to act
pursuant thereto by the Administrative Agent shall be binding on all of the
Lenders. If a Default has occurred and is continuing, the Administrative Agent
shall take such action with respect to such Default as shall be directed by the
Majority Lenders (or all of the Lenders as required by Section 12.04) in the
written instructions (with indemnities) described in this Section 11.07,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the Lenders. In no
event, however, shall the Administrative Agent be required to take any action
which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement or applicable law.
Section 11.08 Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as
provided below, the
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Administrative Agent may resign at any time by giving at least 30 days' written
notice thereof to the Lenders and Borrower, and the Administrative Agent may be
removed at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent with consent of Borrower (such consent not to be
unreasonably withheld), except no such consent shall be necessary if an Event of
Default has occurred and is continuing. If no successor Administrative Agent
shall have been so appointed by the Majority Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent's giving
of notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent with consent of Borrower
(such consent not to be unreasonably withheld), except no such consent shall be
necessary if an Event of Default has occurred and is continuing. Upon the
acceptance of such appointment hereunder by a successor Administrative Agent,
such successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Article XI and Section 12.03 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Administrative Agent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power or privilege under any of
the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under any of the Loan
Documents preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
Section 12.02 Notices. All notices and other communications
provided for herein and in the other Loan Documents (including, without
limitation, any modifications of, or waivers or consents under, this Agreement
or the other Loan Documents) shall be given or made by telex, telecopy, courier
(including overnight delivery service with delivery confirmation) or U.S. Mail
or in writing and telexed, telecopied, mailed or delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof or, as to any party, at such other address as shall be designated
by such party in a notice to each other party pursuant to the terms hereof.
Except as otherwise provided in this Agreement or in the other Loan Documents,
all such communications shall be deemed to have been duly given when
transmitted, if transmitted before 1:00 p.m. local time on a Business Day
(otherwise on the next succeeding Business Day) by telex or telecopier and
evidence or confirmation of receipt is obtained, or personally delivered
(including overnight delivery service with delivery confirmation) or, in the
case of a mailed notice, three Business Days after the date deposited in the
mails, postage prepaid, in each case given or addressed as aforesaid.
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Section 12.03 Payment of Expenses, Indemnities, etc.
(a) Borrower agrees:
(i) whether or not the transactions hereby
contemplated are consummated, to pay one-half of the reasonable fees
and disbursements of counsel in connection with this Agreement and
related matters, (with Borrower's share not to exceed $75,000.00)
together with all of the Administrative Agents' reasonable legal fees
and expenses in connection with any amendment, waiver or consent
relating to this Agreement and related matters, and, in the case of
enforcement pursuant to or in connection with this Agreement, the
reasonable fees and disbursements of counsel for the Administrative
Agent and any of the Lenders; and promptly reimburse the Administrative
Agent for all amounts expended, advanced or incurred by the
Administrative Agent or the Lenders to satisfy any obligation of
Borrower under this Agreement or any other Loan Document, including
without limitation, all costs and expenses of foreclosure;
(ii) TO INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH
LENDER AND EACH OF THEIR AFFILIATES AND EACH OF THEIR RESPECTIVE
OFFICERS, MEMBERS, MANAGERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES,
AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS ("INDEMNIFIED PARTIES")
FROM, HOLD EACH OF THEM HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY
OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE
INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT
ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT
OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY BORROWER
OF THE PROCEEDS OF ANY OF THE LOANS, (II) THE EXECUTION, DELIVERY AND
PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE OPERATIONS OF THE BUSINESS
OF BORROWER AND ITS SUBSIDIARIES, (IV) THE FAILURE OF BORROWER OR ANY
SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY GUARANTY AGREEMENT OR THIS
AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF
ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF BORROWER OR ANY
GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS, (VI) ANY ASSERTION
THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED
PURSUANT TO THE GUARANTY AGREEMENTS OR (VII) ANY OTHER ASPECT OF THE
LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION
WITH INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION,
SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR
INQUIRIES) OR CLAIM AND INCLUDING ALL INDEMNITY MATTERS ARISING BY
REASON OF THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY, BUT
EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS
BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE AGENT OR A
LENDER'S SHAREHOLDERS OR OWNERS AGAINST THE ADMINISTRATIVE AGENT OR
LENDER OR BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON
THE PART OF THE INDEMNIFIED PARTY; AND
(iii) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO
TIME THE INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES,
CLAIMS, COST
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RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND
LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER ANY
ENVIRONMENTAL LAW APPLICABLE TO BORROWER OR ANY SUBSIDIARY OR ANY OF
THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (II) AS A
RESULT OF THE BREACH OR NON-COMPLIANCE BY BORROWER OR ANY SUBSIDIARY
WITH ANY ENVIRONMENTAL LAW APPLICABLE TO BORROWER OR ANY SUBSIDIARY,
(III) DUE TO PAST OWNERSHIP BY BORROWER OR ANY SUBSIDIARY OF ANY OF
THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH,
THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN
PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT
OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES
OWNED OR OPERATED BY BORROWER OR ANY SUBSIDIARY, OR (V) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN
DOCUMENTS; PROVIDED, HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER THIS
SECTION 12.03(a)(iii) IN RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE
ARISING FROM THE ACTS OR OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY
LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR
ASSIGNS SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION
OR OTHERWISE).
(b) No Indemnified Party may settle any claim to be
indemnified without the consent of the indemnitor, such consent not to be
unreasonably withheld; provided, that the indemnitor may not reasonably withhold
consent to any settlement that an Indemnified Party proposes, if the indemnitor
does not have the financial ability to pay all its obligations outstanding and
asserted against the indemnitor at that time, including the maximum potential
claims against the Indemnified Party to be indemnified pursuant to this Section
12.03. No indemnitor shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement (1)
includes an unconditional release of such Indemnified Party in form and
substance satisfactory to such Indemnified Party from all liability on claims
that are the subject matter of such proceeding and (2) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any Indemnified Party.
(c) In the case of any indemnification hereunder, the
Administrative Agent or Lender, as appropriate shall give notice to Borrower of
any such claim or demand being made against the Indemnified Party and Borrower
shall have the non-exclusive right to join in the defense against any such claim
or demand provided that if Borrower provides a defense (such defense counsel to
be reasonably acceptable to the Administrative Agent and the Indemnified Party),
the Indemnified Party shall bear its own cost of defense unless there is a
conflict between Borrower and such Indemnified Party.
(d) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE
INDEMNIFIED PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY
KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE
ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
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IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON
ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED
PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT
SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY
REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PARTY.
(e) Borrower's obligations under this Section 12.03 shall
survive any termination of this Agreement and the Loan Documents and the payment
of the Notes and shall continue for a period of three years and one day
thereafter in full force and effect.
(f) Borrower shall pay any amounts due under this Section
12.03 within 30 days of the receipt by Borrower of notice of the amount due.
Section 12.04 Amendments, Etc. Any provision of this Agreement
or any Loan Document may be amended, modified or waived with Borrower's and the
Majority Lenders' prior written consent; provided that (i) no amendment,
modification or waiver which extends the final maturity of the Loans, increases
the Aggregate Commitments, forgives the principal amount of any Indebtedness
outstanding under this Agreement, releases any guarantor of the Indebtedness or
reduces the interest rate applicable to the Loans or the fees payable to the
Lenders generally, affects this Section 12.04 or Section 12.06(a) or modifies
the definition of "Majority Lenders" shall be effective without the consent of
all Lenders; (ii) no amendment, modification or waiver which increases the
Commitment of any Lender shall be effective without the consent of such Lender;
and (iii) no amendment, modification or waiver which modifies the rights, duties
or obligations of the Administrative Agent shall be effective without the
consent of the Administrative Agent.
Section 12.05 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.
Section 12.06 Assignments and Participations.
(a) Borrower may not assign its rights or obligations
hereunder or under the Notes without the prior written consent of all of the
Lenders and the Administrative Agent.
(b) Any Lender may, upon the written consent of the
Administrative Agent and, if no Event of Default has occurred and is continuing,
Borrower (which consent will not be unreasonably withheld), assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement pursuant to an Assignment Agreement substantially in the form of
Exhibit D (an "Assignment"); provided, however, that any such assignment shall
be in the amount of at least $5,000,000.00 or such lesser amount to which
Borrower has consented. Any such assignment will become effective upon the
execution and delivery to the Administrative Agent of the Assignment and the
consent of the Administrative Agent. Promptly after receipt of an executed
Assignment, the Administrative Agent shall send to Borrower a copy of such
executed Assignment. Upon receipt of such executed Assignment, Borrower, will,
at its own
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expense, execute and deliver new Notes to the assignor and/or assignee, as
appropriate, in accordance with their respective interests as they appear. Upon
the effectiveness of any assignment pursuant to this Section 12.06(b), the
assignee will become a "Lender," if not already a "Lender," for all purposes of
this Agreement. The assignor shall be relieved of its obligations hereunder to
the extent of such assignment (and if the assigning Lender no longer holds any
rights or obligations under this Agreement, such assigning Lender shall cease to
be a "Lender" hereunder except that its rights under Sections 4.06, 5.01 and
12.03 shall not be affected). The Administrative Agent will prepare on the last
Business Day of each month during which an assignment has become effective
pursuant to this Section 12.06(b), a new Annex I giving effect to all such
assignments effected during such month, and will promptly provide the same to
Borrower and each of the Lenders.
(c) Each Lender may transfer, grant or assign participations
in all or any part of such Lender's interests hereunder pursuant to this Section
12.06(c) to any Person, provided that: (i) such Lender shall remain a "Lender"
for all purposes of this Agreement and the transferee of such participation
shall not constitute a "Lender" hereunder; and (ii) no participant under any
such participation shall have rights to approve any amendment to or waiver of
any of the Loan Documents except to the extent such amendment or waiver would
(x) forgive any principal owing on any Indebtedness or extend the final maturity
of the Loans, (y) reduce the interest rate (other than as a result of waiving
the applicability of any post-default increases in interest rates) or fees
applicable to any of the Commitments or Loans in which such participant is
participating, or postpone the payment of any thereof, or (z) release any
guarantor of the Indebtedness or release all or substantially all of the
collateral (except as provided in the Loan Documents) supporting any of the
Commitments or Loans in which such participant is participating. In the case of
any such participation, the participant shall not have any rights under this
Agreement or any of the other Loan Documents (the participant's rights against
the granting Lender in respect of such participation to be those set forth in
the agreement with such Lender creating such participation), and all amounts
payable by Borrower hereunder shall be determined as if such Lender had not sold
such participation, provided that such participant shall be entitled to receive
additional amounts under Article V on the same basis as if it were a Lender and
be indemnified under Section 12.03 as if it were a Lender. In addition, each
agreement creating any participation must include an agreement by the
participant to be bound by the provisions of Section 12.15.
(d) The Lenders may furnish any information concerning
Borrower in the possession of the Lenders from time to time to assignees and
participants (including prospective assignees and participants); provided that,
such Persons agree to be bound by the provisions of Section 12.15.
(e) Notwithstanding anything in this Section 12.06 to the
contrary, any Lender may assign and pledge 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
System and/or such Federal Reserve Bank. No such assignment and/or pledge shall
release the assigning and/or pledging Lender from its obligations hereunder.
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(f) Notwithstanding any other provisions of this Section
12.06, no transfer or assignment of the interests or obligations of any Lender
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require Borrower to file a registration statement with
the SEC or to qualify the Loans under the "Blue Sky" laws of any state.
Section 12.07 Invalidity. In the event that any one or more of
the provisions contained in any of the Loan Documents shall, for any reason, be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of the
Notes, this Agreement or any other Loan Document.
Section 12.08 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.
Section 12.09 References. The words "herein," "hereof,"
"hereunder" and other words of similar import when used in this Agreement refer
to this Agreement as a whole, and not to any particular article, section or
subsection. Any reference herein to a Section shall be deemed to refer to the
applicable Section of this Agreement unless otherwise stated herein. Any
reference herein to an annex, exhibit or schedule shall be deemed to refer to
the applicable annex, exhibit or schedule attached hereto unless otherwise
stated herein.
Section 12.10 Survival. The obligations of the parties under
Section 4.06, Article V, and Sections 11.05 and 12.03 shall survive the
repayment of the Indebtedness and the termination of the Commitments. To the
extent that any payments on the Indebtedness or proceeds of any collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Indebtedness so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent's and the
Lenders' Liens, security interests, rights, powers and remedies under this
Agreement and each Loan Document shall continue in full force and effect. In
such event, each Loan Document shall be automatically reinstated and Borrower
shall take such action as may be reasonably requested by the Administrative
Agent and the Lenders to effect such reinstatement.
Section 12.11 Captions. 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.
SECTION 12.12 NO ORAL AGREEMENTS. THE LOAN DOCUMENTS EMBODY
THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL
OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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SECTION 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE NOTES
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND
THEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF
NEW YORK INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS OF THE
STATE OF
NEW YORK, BUT OTHERWISE WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN
DOCUMENTS SHALL BE BROUGHT IN ANY FEDERAL OR STATE COURT OF COMPETENT
JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, AND ANY
APPELLATE COURT AUTHORIZED TO HEAR APPEALS THEREFROM, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS. EACH OF BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO
JURISDICTION IS EXCLUSIVE AND IS INTENDED TO AND DOES PRECLUDE THE PARTIES FROM
OBTAINING JURISDICTION OVER OTHER PARTIES IN ANY OTHER COURT.
(c) BORROWER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
LOCATED AT 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, AS THE DESIGNEE, APPOINTEE
AND AGENT OF BORROWER TO RECEIVE, FOR AND ON BEHALF OF BORROWER, SERVICE OF
PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THE LOAN DOCUMENTS. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS
SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY OVERNIGHT COURIER TO BORROWER
AT ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW, BUT THE FAILURE OF BORROWER
TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS.
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
(e) BORROWER AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
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IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR ADMINISTRATIVE AGENT OF COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 12.13.
Section 12.14 Interest. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of New York or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to
Borrower); and (ii) in the event that the maturity of the Notes is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Lender may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Agreement or otherwise shall be canceled automatically by such Lender as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by such Lender to Borrower). All sums paid or
agreed to be paid to any Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Lender,
be amortized, prorated, allocated and spread throughout the full term of the
Loans evidenced by the Notes until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum amount
allowed by such applicable law. If at any time and from time to time (i) the
amount of interest payable to any Lender on any date shall be computed at the
Highest Lawful Rate applicable to such Lender pursuant to this Section 12.14 and
(ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Lender would be less than the amount of
interest payable to such Lender computed at the Highest Lawful Rate applicable
to such Lender, then the amount of interest payable to such Lender in respect of
such subsequent interest computation period shall continue to be computed at the
Highest Lawful Rate applicable to such Lender until the total amount of interest
payable to such Lender shall equal the total amount of interest which would have
been payable to such Lender if the total amount of interest had been computed
without giving effect to
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this Section 12.14. To the extent that Chapter 303 of the Texas Finance Code is
relevant for the purpose of determining the Highest Lawful Rate, such Lender may
elect to determine the applicable rate ceiling under such Chapter by the
indicated weekly rate ceiling from time to time in effect.
Section 12.15 Confidentiality. In the event that Borrower
provides to the Administrative Agent or the Lenders written confidential
information belonging to Borrower, the Administrative Agent and the Lenders
shall thereafter maintain such information in confidence in accordance with the
standards of care and diligence that each utilizes in maintaining its own
confidential information. This obligation of confidence shall not apply to such
portions of the information which (i) are in the public domain, (ii) hereafter
become part of the public domain without the Administrative Agent or the Lenders
breaching their obligation of confidence to Borrower, (iii) are previously known
by the Administrative Agent or the Lenders from some source other than Borrower,
(iv) are hereafter developed by the Administrative Agent or the Lenders without
using Borrower's information, (v) are hereafter obtained by or available to the
Administrative Agent or the Lenders from a third party who owes no obligation of
confidence to Borrower with respect to such information or through any other
means other than through disclosure by Borrower, (vi) are disclosed with
Borrower's consent, (vii) must be disclosed either pursuant to any Governmental
Requirement or to Persons regulating the activities of the Administrative Agent
or the Lenders, or (viii) as may be required by law or regulation or order of
any Governmental Authority in any judicial, arbitration or governmental
proceeding. Further, the Administrative Agent or a Lender may disclose any such
information to any other Lender, any independent petroleum engineers or
consultants, any independent certified public accountants, any legal counsel
employed by such Person in connection with this Agreement or any Loan Document,
including without limitation, the enforcement or exercise of all rights and
remedies thereunder, or any assignee or participant (including prospective
assignees and participants) in the Loans; provided, however, that the
Administrative Agent or the Lenders shall ensure that the Person to whom such
information is disclosed shall have the same obligation to maintain the
confidentiality of such information as is imposed upon the Administrative Agent
or the Lenders hereunder. Notwithstanding anything to the contrary provided
herein, this obligation of confidence shall cease three years from the date all
Indebtedness is paid in full, unless Borrower requests in writing at least 30
days prior to the expiration of such three year period, to maintain the
confidentiality of such information for an additional three year period.
Borrower waives any and all other rights it may have to confidentiality as
against the Administrative Agent and the Lenders arising by contract, agreement,
statute or law except as expressly stated in this Section 12.15 and in the
Commitment Letter.
Section 12.16 Effectiveness. This Agreement shall be effective
on the Closing Date.
SECTION 12.17 EXCULPATION PROVISIONS. EACH OF THE PARTIES
HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND EACH
LOAN DOCUMENT AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE
TERMS OF THIS AGREEMENT AND EACH LOAN DOCUMENT; THAT IT HAS IN FACT READ THIS
AGREEMENT AND EACH LOAN DOCUMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT AND EACH LOAN
DOCUMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS
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CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND
EACH LOAN DOCUMENT; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO
THIS AGREEMENT AND EACH LOAN DOCUMENT; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND EACH LOAN DOCUMENT RESULT IN ONE PARTY ASSUMING
THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE
OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES
AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS AGREEMENT AND EACH LOAN DOCUMENT ON THE BASIS THAT
THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS
NOT "CONSPICUOUS."
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The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BORROWER: XXXXXX PETROLEUM COMPANY
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
Address for Notices:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx
- SIGNATURE PAGE -
CREDIT AGREEMENT, DATED AS OF JUNE 29, 2001, AMONG
XXXXXX PETROLEUM COMPANY, AS BORROWER,
DUKE CAPITAL PARTNERS, LLC, AS ADMINISTRATIVE AGENT,
AND THE LENDERS SIGNATORY HERETO
88
LENDER AND
ADMINISTRATIVE AGENT: DUKE CAPITAL PARTNERS, LLC, individually
and as Administrative Agent
By: /s/ F. T. Xxxxxxx
---------------------------------------
F.T. Xxxxxxx
Executive Vice President
Address for Notices:
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
With copy to:
Through July 12, 2001:
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
After July 12, 2001:
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: F.T. Xxxxxxx and Xxxx Xxxxxxxxxx
- SIGNATURE PAGE -
CREDIT AGREEMENT, DATED AS OF JUNE 29, 2001, AMONG
XXXXXX PETROLEUM COMPANY, AS BORROWER,
DUKE CAPITAL PARTNERS, LLC, AS ADMINISTRATIVE AGENT,
AND THE LENDERS SIGNATORY HERETO
89
LENDERS:
----------------------------------------------
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------------------
--------------------------------
--------------------------------
Telecopier No.:
-----------------
Telephone No.:
-----------------
Attention:
----------------------
[With copy to:]
- SIGNATURE PAGE -
CREDIT AGREEMENT, DATED AS OF JUNE 29, 2001, AMONG
XXXXXX PETROLEUM COMPANY, AS BORROWER,
DUKE CAPITAL PARTNERS, LLC, AS ADMINISTRATIVE AGENT,
AND THE LENDERS SIGNATORY HERETO
90
ANNEX I
LIST OF COMMITMENTS
LENDER COMMITMENTS
------ -----------
Duke Capital Partners, LLC............................................................. U.S.$95,000,000.00
Annex I
91
EXHIBIT A
FORM OF
NOTE
$45,000,000.00 June 29, 2001
XXXXXX PETROLEUM COMPANY, a Delaware corporation (the "Borrower"), for
value received, promises and agrees to pay to ______________________________
(the "Lender"), or order, at the account of DUKE CAPITAL PARTNERS, LLC, as
Administrative Agent, maintained at The Chase Manhattan Bank, One Chase
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, XXX, Account No. 323198570, ABA No.
000000000, or such other account as the Administrative Agent may from time to
time specify by written notice to Borrower, the principal sum of FORTY-FIVE
MILLION AND NO/100 DOLLARS ($45,000,000.00), or such lesser amount as shall
equal the aggregate unpaid principal amount of the Loans owed to the Lender
under the
Credit Agreement, as hereafter defined, in lawful money of the United
States of America and in immediately available funds, on the dates and in the
principal amounts provided for in the
Credit Agreement, and to pay interest on
the unpaid principal amount as provided for in the
Credit Agreement, at such
account, in like money and funds, for the period commencing on the date of each
such Loan until such Loan shall be paid in full, at the rate per annum equal to
12% or as otherwise specified in the Credit Agreement, but in no event to exceed
the Highest Lawful Rate, and on the dates provided in the Credit Agreement.
This note evidences the Loans owed to the Lender under that certain
Credit Agreement dated as of June 29, 2001, by and among Borrower, Duke Capital
Partners, LLC, individually and as Administrative Agent, and the other lenders
signatory thereto (including the Lender) (such Credit Agreement, together with
all modifications, amendments, supplements or successors thereto, being the
"Credit Agreement"), and shall be governed by the Credit Agreement. Capitalized
terms used in this note and not defined in this note, but which are defined in
the Credit Agreement, have the respective meanings herein as are assigned to
them in the Credit Agreement.
Each payment made on account of the principal and interest hereof shall
be recorded by the Lender on its books, provided that any failure by the Lender
to make any such record shall not affect the obligations of Borrower under the
Credit Agreement or under this note in respect of such Loans.
Except only for any notices which are specifically required by the
Credit Agreement or the other Loan Documents, Borrower and any and all
co-makers, endorsers, guarantors and sureties severally waive notice (including
but not limited to notice of intent to accelerate and notice of acceleration,
notice of protest and notice of dishonor), demand, presentment for payment,
protest, diligence in collecting and the filing of suit for the purpose of
fixing liability, and consent that the time of payment hereof may be extended
and re-extended from time to time without notice to any of them. Each such
person agrees that his, her or its liability on or with respect to this note
shall not be affected by any release of or change in any guaranty or security at
any time existing or by any failure to perfect or maintain perfection of any
lien against or security interest in any such security or the partial or
complete unenforceability of any guaranty
A-1
92
or other surety obligation, in each case in whole or in part, with or without
notice and before or after maturity.
The Credit Agreement provides for the acceleration of the maturity of
this note upon the occurrence of certain events and for prepayment of Loans upon
the terms and conditions specified therein. Reference is made to the Credit
Agreement for all other pertinent purposes. This note may not be assigned,
transferred, sold or indorsed except in accordance with the Credit Agreement.
This note is issued pursuant to and is entitled to the benefits of the
Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS
OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
XXXXXX PETROLEUM COMPANY
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
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93
EXHIBIT B
FORM OF
BORROWING NOTICE
[DATE]
Duke Capital Partners, LLC,
as Administrative Agent
----------------------------
----------------------------
----------------------------
Ladies and Gentlemen:
This borrowing notice is delivered to you by Xxxxxx Petroleum Company
(the "Borrower"), a Delaware corporation, under Section 2.02 of the Credit
Agreement dated as of June 29, 2001 (as restated, amended, modified,
supplemented and in effect, the "Credit Agreement"), by and among Borrower, the
Lenders party thereto, and Duke Capital Partners, LLC, as Administrative Agent.
1. Borrower hereby requests that the Lenders make a Loan or Loans
in the aggregate principal amount of $______________ (the
"Loan" or the "Loans).
2. Borrower hereby requests that the Loan or Loans be made on the
following Business Day: ____________________.
3. Borrower hereby requests that the funds from the Loan or Loans
be disbursed to the following bank account:___________________
4. After giving effect to the requested Loan, the sum of all
outstanding Loans does not exceed the maximum amount permitted
to be outstanding pursuant to the terms of the Credit
Agreement.
5. All of the conditions precedent applicable to the Loans
requested herein as set forth in Article VI of the Credit
Agreement have been satisfied as of the date hereof and will
remain satisfied to the date of such Loans.
6. Borrower hereby certifies that, for the four full calendar
quarters preceding the date hereof for which financial
statements are available, its Interest Coverage Ratio is at
least 2.0 to 1.0, and its Risk Adjusted PV-10 Ratio is 1.25 to
1.0 or more.
7. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
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94
IN WITNESS WHEREOF, the undersigned have executed this borrowing
request this _____ day of _______________, ______.
XXXXXX PETROLEUM COMPANY
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
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95
EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the _______________________
of XXXXXX PETROLEUM COMPANY, a Delaware corporation (the "Borrower"), and that
as such he is authorized to execute and deliver this certificate on behalf of
Borrower. This certificate is being delivered pursuant to that certain Credit
Agreement dated as of June 29, 2001 (as restated, amended, modified,
supplemented and in effect from time to time, the "Agreement"), among Borrower,
the Lenders signatory thereto, and Duke Capital Partners, LLC, as Administrative
Agent for the Lenders.
The undersigned represents and warrants as follows (each capitalized
term used herein having the same meaning given to it in the Agreement unless
otherwise specified);
(a) [There currently does not exist any Default under the Agreement.]
[Attached hereto is a schedule specifying the reasonable details of [a] certain
Default[s] which exist under the Agreement and the action taken or proposed to
be taken with respect thereto.]
(b) Attached hereto are the reasonably detailed computations necessary
to determine whether Borrower is in compliance with Section 2.03 of the
Agreement as of the end of the [calendar quarter][fiscal year] ending _________.
(c) [The following shall be provided with respect to the Initial
Funding only: All of the representations and warranties of Borrower set forth in
the Agreement are true and correct as of the date hereof, unless such
representations and warranties speak as to a certain date.]
EXECUTED AND DELIVERED this ____ day of _________________, 20__.
XXXXXX PETROLEUM COMPANY
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
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96
EXHIBIT D
FORM OF
ASSIGNMENT AGREEMENT
This Assignment Agreement ("Assignment") between Assignor and Assignee
is executed and delivered pursuant to that certain Credit Agreement dated as of
June 29, 2001 (as amended, modified, supplemented and in effect on the date
hereof, the "Credit Agreement"), among Xxxxxx Petroleum Company, a Delaware
corporation, the Lenders signatory thereto and Duke Capital Partners, LLC, as
Administrative Agent for the Lenders. Capitalized terms used but not defined
herein are as defined in the Credit Agreement.
The Assignor named herein hereby sells and assigns, without recourse,
to the Assignee named herein, and the Assignee hereby purchases and assumes,
without recourse, from the Assignor, effective as of the Assignment Date the
interests set forth herein (the "Assigned Interest") in the Assignor's rights
and obligations under the Credit Agreement, including, without limitation, the
Commitment of the Assignor on the Assignment Date and Loans and all Indebtedness
owing to the Assignor which are outstanding on the Assignment Date, but
excluding accrued interest and fees to and excluding the Assignment Date. The
Assignee hereby acknowledges receipt of a copy of the Credit Agreement. From and
after the Assignment Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the Assigned
Interest, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the Assigned Interest, relinquish its rights
and be released from its obligations under the Credit Agreement.
This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a foreign lender, any documentation
required to be delivered by the Assignee pursuant to Section 4.06(d) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, any other
documentation required by the Credit Agreement or any Loan Document, duly
completed by the Assignee, to Borrower, the Administrative Agent and each
Lender, as applicable. The Assignee shall pay the fee payable to the
Administrative Agent pursuant to Section 12.06(b) of the Credit Agreement.
This Assignment shall be governed by and construed in accordance with
the laws of the State of New York including section 5-1401 of the General
Obligations Law of the State of New York, but otherwise without giving effect to
principles of conflicts of laws.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment ("Assignment Date"):
2
97
Percentage Assigned of
Facility/Commitment (set forth, to
at least 8 decimals, as a percentage
of the Facility and the aggregate
Commitments of all Lenders
Facility Principal Amount Assigned thereunder)
---------------------------------------- -------------------------------------- --------------------------------------
Commitment Assigned: $ %
---------------------------------------- -------------------------------------- --------------------------------------
Loans and other Indebtedness:
---------------------------------------- -------------------------------------- --------------------------------------
The terms set forth above are hereby agreed to:
[Name of Assignor] , as Assignor
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
[Name of Assignee] , as Assignee
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
The undersigned hereby consent to this Assignment:
Xxxxxx Petroleum Company
By:
--------------------------------------------
Name:
------------------------------------------------
Title:
--------------------------------------------
Duke Capital Partners, LLC, as Administrative Agent
By:
--------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
3
