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CREDIT AGREEMENT
DATED AS OF JULY 17, 2000
AMONG
SOUTHWESTERN ENERGY COMPANY,
THE LENDERS,
BANK ONE, NA,
AS ADMINISTRATIVE AGENT,
AND
BANK OF AMERICA, N.A.,
AS SYNDICATION AGENT
BANC ONE CAPITAL MARKETS, INC. AND
BANC OF AMERICA SECURITIES LLC,
AS JOINT LEAD ARRANGERS AND BOOK RUNNERS
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS.................................1
ARTICLE II
THE CREDITS ...............................12
2.1 Commitment ....................................................12
2.2 Required Payments; Maturity ...................................13
2.3 Ratable Loans .................................................13
2.4 Types of Advances .............................................13
2.5 Commitment Fee; Voluntary Reductions in Aggregate Commitment ..13
2.6 Minimum Amount of Each Advance ................................13
2.7 Mandatory Reductions in Aggregate Commitment ..................13
2.8 Prepayments ...................................................14
2.9 Method of Selecting Types and Interest Periods for
New Advances ..................................................14
2.10 Conversion and Continuation of Outstanding Advances ...........15
2.11 Changes in Interest Rate, etc .................................16
2.12 Rates Applicable After Default ................................16
2.13 Method of Payment .............................................16
2.14 Noteless Agreement; Evidence of Indebtedness ..................17
2.15 Telephonic Notices ............................................17
2.16 Interest Payment Dates; Interest and Fee Basis ................18
2.17 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions .........................................18
2.18 Lending Installations .........................................18
2.19 Non-Receipt of Funds by the Administrative Agent ..............18
2.20 Replacement of Lender .........................................19
ARTICLE III
YIELD PROTECTION; TAXES..........................19
3.1 Yield Protection ..............................................19
3.2 Changes in Capital Adequacy Regulations .......................20
3.3 Availability of Types of Advances .............................21
3.4 Funding Indemnification .......................................21
3.5 Taxes .........................................................21
3.6 Lender Statements; Survival of Indemnity ......................23
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ARTICLE IV
CONDITIONS PRECEDENT ...........................24
4.1 Initial Advance ...............................................24
4.2 Each Advance ..................................................25
ARTICLE V
REPRESENTATIONS AND WARRANTIES ......................26
5.1 Organization ..................................................26
5.2 Authorization and Validity ....................................26
5.3 Financial Statements ..........................................26
5.4 Subsidiaries ..................................................26
5.5 ERISA .........................................................26
5.6 Defaults ......................................................27
5.7 Accuracy of Information .......................................27
5.8 Regulation U ..................................................27
5.9 No Adverse Change .............................................27
5.10 Taxes .........................................................27
5.11 Liens .........................................................27
5.12 Compliance with Orders ........................................28
5.13 Litigation ....................................................28
5.14 Burdensome Agreements .........................................28
5.15 No Conflict ...................................................28
5.16 Title to Properties ...........................................28
5.17 Public Utility Holding Company Act ............................28
5.18 Regulatory Approval ...........................................29
5.19 Negative Pledge ...............................................29
5.20 Investment Company Act ........................................29
5.21 Compliance with Laws ..........................................29
ARTICLE VI
COVENANTS.................................29
6.1 Information ...................................................29
6.2 Affirmative Covenants .........................................32
6.2.1. Reports and Inspection .................................32
6.2.2 Conduct of Business .....................................32
6.2.3 Insurance ...............................................33
6.2.4 Taxes ...................................................33
6.2.5 Compliance with Laws ....................................33
6.2.6 Maintenance of Properties ...............................33
6.3 Negative Covenants ............................................33
6.3.1 Restricted Payments .....................................34
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6.3.2 Merger and Sale of Assets ...............................34
6.3.3 Liens ...................................................35
6.4 Financial Covenants ...........................................38
6.4.1 Debt to Capitalization Ratio ............................38
6.4.2 Fixed Charge Coverage Ratio .............................38
6.4.3 Net Worth ...............................................38
6.3.4 Subsidiary Indebtedness .................................38
ARTICLE VII
DEFAULTS..................................38
7.1 Events of Default .............................................38
7.1.1 Representations and Warranties ..........................38
7.1.2 Payment Default .........................................38
7.1.3 Breach of Certain Covenants .............................38
7.1.4 Other Breach of this Agreement ..........................39
7.1.5 ERISA ...................................................39
7.1.6 Cross-Default ...........................................39
7.1.7 Voluntary Bankruptcy, etc ...............................39
7.1.8 Involuntary Bankruptcy, etc .............................39
7.1.9 Judgments ...............................................40
7.1.10 Environmental Matters ..................................40
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES ..............40
8.1 Acceleration ..................................................40
8.2 Amendments ....................................................40
8.3 Preservation of Rights ........................................41
ARTICLE IX
GENERAL PROVISIONS.............................41
9.1 Survival of Representations ...................................41
9.2 Governmental Regulation .......................................41
9.3 Headings ......................................................42
9.4 Entire Agreement ..............................................42
9.5 Several Obligations; Benefits of this Agreement ...............42
9.6 Expenses; Indemnification .....................................42
9.7 Numbers of Documents ..........................................43
9.8 Accounting ....................................................43
9.9 Severability of Provisions ....................................43
9.10 Nonliability of Lenders .......................................43
9.11 Confidentiality ...............................................43
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9.12 Nonreliance ...................................................44
9.13 Disclosure ....................................................44
ARTICLE X
THE AGENTS ................................44
10.1 Appointment; Nature of Relationship ...........................44
10.2 Powers ........................................................44
10.3 General Immunity ..............................................44
10.4 No Responsibility for Loans, Recitals, etc ....................45
10.5 Action on Instructions of Lenders .............................45
10.6 Employment of Agents and Counsel ..............................45
10.7 Reliance on Documents; Counsel ................................45
10.8 Agents' Reimbursement and Indemnification .....................46
10.9 Notice of Default .............................................46
10.10 Rights as a Lender ............................................46
10.11 Lender Credit Decision ........................................47
10.12 Successor Agent ...............................................47
10.13 Delegation to Affiliates ......................................48
ARTICLE XI
SETOFF; RATABLE PAYMENTS .........................48
11.1 Setoff ........................................................48
11.2 Ratable Payments ..............................................48
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS .............48
12.1 Successors and Assigns ........................................48
12.2 Participations ................................................49
12.2.1. Permitted Participants; Effect ........................49
12.2.2. Voting Rights .........................................49
12.3 Assignments ...................................................50
12.3.1. Permitted Assignments .................................50
12.3.2. Effect; Effective Date ................................50
12.4 Dissemination of Information ..................................51
12.5 Tax Treatment .................................................51
ARTICLE XIII
NOTICES ..................................51
13.1 Notices .......................................................51
13.2 Change of Address .............................................51
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ARTICLE XIV
COUNTERPARTS ...............................51
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL; MAXIMUM INTEREST RATE ................52
15.1 CHOICE OF LAW .................................................52
15.2 CONSENT TO JURISDICTION .......................................52
15.3 WAIVER OF JURY TRIAL ..........................................52
15.4 Maximum Interest Rate .........................................53
15.5 Termination of Existing Agreements ............................53
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SCHEDULES
Schedule 1A Commitments
Schedule 1B Existing Indebtedness
Schedule 2.7(a) Excluded Asset Sales
Schedule 2.7(b) Assets to be Swapped
Schedule 5.4 Subsidiaries
Schedule 5.13 Litigation
Schedule 5.19 Liens
Schedule 6.2 Insurance
EXHIBITS
Exhibit A Form of Borrowing Notice
Exhibit B Form of Opinion of Counsel to Borrower
Exhibit C Form of Assignment Agreement
Exhibit D Form of Money Transfer Instructions
Exhibit E Form of Note
Exhibit F Form of Compliance Certificate
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CREDIT AGREEMENT
This Agreement, dated as of July 17, 2000, is among Southwestern Energy
Company, the Lenders, Bank of America N.A., as Syndication Agent, and Bank One,
NA, a national banking association having its principal office in Chicago,
Illinois, as Administrative Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding ownership interests of a partnership or limited
liability company.
"Administrative Agent" means Bank One in its capacity as administrative
agent for the Lenders pursuant to Article X, and not in its individual capacity
as a Lender, and any successor Administrative Agent appointed pursuant to
Article X.
"Advance" means a borrowing hereunder, (i) made by the Lenders on the same
Borrowing Date, or (ii) converted or continued by the Lenders on the same date
of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans and Transaction Rate Loans, for the same Interest Period.
"Affected Lender" is defined in Section 2.20.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means the Administrative Agent and/or the Syndication Agent.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time; provided that if the Borrower
notifies the Administrative Agent that the Borrower does not want to give effect
to any change in generally accepted accounting principles (or if the
Administrative Agent notifies the Borrower that the Required Lenders do not want
to give effect to any such change), then Agreement Accounting Principles shall
mean generally accepted accounting principles as in effect immediately before
the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or this Agreement is amended in
a manner satisfactory to the Borrower and the Required Lenders. "Alternate Base
Rate" means, for any day, a rate of interest per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of the Federal Funds Effective
Rate for such day plus 1/2% per annum.
"Arranger" means each of Banc One Capital Markets, Inc. and Banc of America
Securities LLC.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Sale" means any sale, lease, assignment for value or other
disposition by the Borrower or any Subsidiary, excluding (a) sales and other
dispositions in the ordinary course of business and (b) any sale or other
disposition of any asset listed on Schedule 2.7(a).
"Authorized Officer" means any of the following officers of the Borrower,
acting singly: the Chief Executive Officer, the President, the Chief Financial
Officer, the Treasurer or any Executive Vice President, Senior Vice President or
Vice President.
"Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means Southwestern Energy Company, an Arkansas corporation, and
its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
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"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Dallas and New York for the conduct
of substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago and Dallas for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made on the
Fedwire system.
"Capitalized Lease" of a Person means any lease of Property, except oil and
gas leases, by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement Accounting
Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Case" means the case styled as Xxxxx Xxxxx, Xxxx Xxxxxx Xxxxx, Xxxxxx X.
Xxxxxxx, Xxxxx X. Xxxxxx, and Xxxxxx Family Limited Partnership "A" v. Seeco,
Inc., Arkansas Western Gas Company, and Southwestern Energy Company, Case No.
CIV-96-327 (III), in the Circuit Court of Sebastian County, Arkansas, and the
appeals therefrom.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth on Schedule 1A or as set forth in any
assignment that has become effective pursuant to Section 12.3.2, as such amount
may be modified from time to time pursuant to the terms hereof.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take or pay contract, application for a Letter of Credit or the
obligations of any such Person as general partner of a partnership with respect
to the liabilities of the partnership.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common
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control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Debt to Capitalization Ratio" means the ratio of (a) Total Debt to (b) the
sum of Total Debt plus Stockholders' Equity.
"Default" means an event described in Article VII.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as
of 11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, and having a maturity equal to such Interest Period, provided
that, (i) if Reuters Screen FRBD is not available to the Administrative Agent
for any reason, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any other generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Administrative Agent,
the applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the rate determined by the Administrative Agent to be the rate at
which Bank One or one of its Affiliate banks offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of the relevant Eurodollar Loan and
having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
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"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of the Eurodollar Base Rate applicable to such
Interest Period plus 1.125%.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and each Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or such Agent is incorporated or organized or (ii) the jurisdiction
in which such Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Indebtedness" means any Indebtedness described in Schedule 1B
hereto having those terms existing on the date of this Agreement, but no
extension, renewal or replacement thereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Final Maturity Date" means July 16, 2001 or such earlier date when the
amount of the Aggregate Commitment has been reduced to zero.
"Fixed Charge Coverage Ratio" means, for any period of four fiscal quarters
of the Borrower ending on the last day of a fiscal quarter, the ratio of (a) the
sum of (i) the Borrower's consolidated earnings before interest, taxes,
depreciation and amortization of non-cash charges, all determined on a
consolidated basis and in accordance with Agreement Accounting Principles for
such period, but excluding, to the extent otherwise included therein, any
non-cash gain or loss on any hedging agreement resulting from the requirements
of SFAS 133, plus (ii) to the extent deducted in determining such consolidated
earnings, (x) any charge resulting from the Case and (y) any non-cash charge
after the date hereof resulting from any write-down of the Borrower's oil and
gas properties to the full cost ceiling limitation required by the full cost
method of accounting for such properties, to (b) the sum of (i) the Borrower's
interest expense for such period plus (ii) the current portion of principal
payments of long-term Indebtedness as of the last day of such period (excluding
any portion of the Private Placement Debt which is current due to the
acceleration thereof resulting from a breach of Section 6.A or 6.B of the
Private Placement Agreement, which acceleration would not be permitted by any
other provision of the Private Placement Agreement).
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"Floating Rate" means, for any day, a rate per annum equal to the Alternate
Base Rate for such day, changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the Floating Rate.
"Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of Property or
services, (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from Property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments, (v) obligations of such Person to purchase
accounts, securities or other Property arising out of or in connection with the
sale of the same or substantially similar accounts, securities or Property, (vi)
Capitalized Lease Obligations, (vii) any other obligation for borrowed money or
other financial accommodation which in accordance with Agreement Accounting
Principles would be shown as a liability on the consolidated balance sheet of
such Person, (viii) net liabilities under interest rate swap, exchange or cap
agreements, obligations or other liabilities with respect to accounts or notes,
(ix) Sale and Leaseback Transactions which do not create a liability on the
consolidated balance sheet of such Person, (x) other transactions which are the
functional equivalent, or take the place, of borrowing but which do not
constitute a liability on the consolidated balance sheet of such Person, (xi)
Contingent Obligations and (xii) Mandatorily Redeemable Stock; provided that,
notwithstanding any of the foregoing, accounts payable arising in the ordinary
course of business payable on terms customary in the trade, and Contingent
Obligations in respect thereof, shall not constitute Indebtedness; and provided,
further, that Indebtedness shall not include accounts payable which the Borrower
is required to reflect on its balance sheet in accordance with Agreement
Accounting Principles to the extent that (i) such accounts payable consist
solely of contingent obligations under oil and gas hedge transactions for future
periods and (ii) as of any date of calculation thereof, the volume of oil and
gas subject to such hedge transactions is not greater than 90% of the Borrower's
anticipated production from proved, producing, oil and gas reserves owned by the
Borrower and its Subsidiaries as of such date over the term covered by such
hedge transactions.
"Intercompany Indebtedness" means any Indebtedness of the Borrower owing to
any Subsidiary or of any Subsidiary owing to the Borrower or to any other
Subsidiary; provided that in the case of any Indebtedness owed by the Borrower
or any Subsidiary to a Subsidiary which is not a Wholly-Owned Subsidiary, such
Indebtedness shall constitute Intercompany Indebtedness only to the extent of
the Borrower's ownership percentage (whether direct or indirect) of the
Subsidiary holding such Indebtedness.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this
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Agreement. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, three or six months thereafter, provided that
if there is no such numerically corresponding day in such next, second, third or
sixth succeeding month, such Interest Period shall end on the last Business Day
of such next, second, third or sixth succeeding month. If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificate of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person.
"Knowledge" means, with respect to the Borrower, the actual knowledge of
(i) any Authorized Officer, (ii) any vice president of the Borrower in charge of
a principal business unit, division or function (such as sales, administration
or finance), (iii) any other officer who performs a policy making function or
(iv) any other person who performs similar policy making functions for the
Borrower.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on its administrative questionnaire or on the
signature pages hereof or otherwise selected by such Lender or the
Administrative Agent pursuant to Section 2.18.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or other security
arrangement (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, any loan made by such Lender
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement and any Notes issued pursuant to
Section 2.15.
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"Mandatorily Redeemable Stock" means, with respect to any Person, any share
of such Person's capital stock or other equity interest to the extent that it is
(a) redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into any Indebtedness or other liability of such
Person, (i) at a fixed or determinable date, whether by operation of a sinking
fund or otherwise, (ii) at the option of any Person other than such Person or
(iii) upon the occurrence of a condition not solely within the control of such
Person, such as a redemption required to be made out of future earnings or (b)
convertible into Mandatorily Redeemable Stock.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the
Borrower to perform its obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent or the Lenders thereunder.
"Material Group of Subsidiaries" means two or more Subsidiaries which, if
merged as of any relevant date of determination, would constitute a Significant
Subsidiary.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Cash Proceeds" means, with respect to any Asset Sale, the aggregate
cash proceeds (including cash proceeds received by way of deferred payment of
principal pursuant to a note, installment receivable or otherwise, but only as
and when received) received by the Borrower or any Subsidiary pursuant to such
Asset Sale net of (i) the direct costs relating to such Asset Sale (including
sales commissions and legal, accounting and investment banking fees), (ii) taxes
paid or reasonably estimated by the Borrower to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), (iii) amounts required to be applied to the repayment of
any Indebtedness secured by a Lien on any asset subject to such Asset Sale, (iv)
amounts required to be applied to prepay Private Placement Debt (without giving
effect to any amendment after the date hereof to the Private Placement
Agreement) and (v) the proceeds of any sale of any of the assets listed on
Schedule 2.7(b) to the extent that such proceeds are applied within 150 days to
acquire oil or gas producing properties.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means any promissory note issued at the request of a Lender pursuant
to Section 2.14 in the form of Exhibit E.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lenders or to any
Lender, either Agent or any indemnified party arising under the Loan Documents.
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"Other Taxes" is defined in Section 3.5(ii).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced by Bank One or by its parent, BANK ONE CORPORATION, which is not
necessarily the lowest rate charged to any customer, changing when and as said
prime rate changes.
"Principal Transmission Facility" means any transportation or distribution
facility, including pipelines, of the Borrower or any Subsidiary located in the
United States of America other than (a) any such facility which in the opinion
of the Board of Directors of the Borrower is not of material importance to the
business conducted by the Borrower and its Subsidiaries taken as a whole, or (b)
any such facility in which interests are held by the Borrower or by one or more
Subsidiaries or by the Borrower and one or more Subsidiaries and by others and
the aggregate interest held by the Borrower and all Subsidiaries does not exceed
50%.
"Private Placement Agreement" means the Note Agreement dated as of December
4, 1991 among the Borrower and various investors pursuant to which the Borrower
issued the Private Placement Debt.
"Private Placement Debt" means the 9.36% Senior Notes due 2011, Series C
issued by the Borrower.
"Productive Property" means any property interest owned by the Borrower or
a Subsidiary in land (including submerged land and rights in and to oil, gas and
mineral leases) located in the United States of America and classified by the
Borrower or such Subsidiary, as the case may be, as productive of crude oil,
natural gas or other petroleum hydrocarbons in paying quantities; provided that
such term shall not include any exploration or production facilities on said
land, including any drilling or producing platform.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
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"Purchasers" is defined in Section 12.3.1.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Required Lenders" means Lenders in the aggregate having at least 66-2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66-2/3% of the aggregate unpaid
principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the daily
average during such Interest Period of the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on Eurocurrency liabilities.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"SEC" means the Securities and Exchange Commission.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Significant Subsidiary" means, as of any date of determination, each
Subsidiary of the Borrower that meets any of the following criteria:
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(i) the Borrower's and its other Subsidiaries' Investments in and to
such Subsidiary (and its respective Subsidiaries), as shown in the
consolidated financial statements of the Borrower and its Subsidiaries
prepared as of the end of the fiscal quarter ended most recently prior to
such date of determination, exceed 10% of the total consolidated assets of
the Borrower and its Subsidiaries; or
(ii) the assets of such Subsidiary (and its respective Subsidiaries)
represent more than 10% of the consolidated assets of the Borrower and its
Subsidiaries as would be shown in the consolidated financial statements
referred to in clause (i) above; or
(iii) such Subsidiary (and its respective Subsidiaries) is responsible
for more than 10% of the consolidated net sales or of the consolidated net
income of the Borrower and its Subsidiaries as reflected in the financial
statements referred to in clause (i) above;
provided that each such determination of such sales or assets shall be made
after deducting all intercompany transactions which, in accordance with
Agreement Accounting Principles, would be eliminated in preparing consolidated
financial statements for the Borrower and its Subsidiaries.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Stockholders' Equity" means the Borrower's stockholders' equity,
determined in accordance with Agreement Accounting Principles, but without
giving effect to (1) any non-cash charge after the date hereof resulting from
any write-down of the Borrower's oil and gas properties to the full cost ceiling
limitations required by the full cost method of accounting for such properties
and (ii) any non-cash gain or loss on any hedging agreement resulting from the
requirements of SFAS 133.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Syndication Agent" means Bank of America, N.A. in its capacity as
syndication agent for the Lenders pursuant to Article X, and not in its
individual capacity as Lender.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
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"Total Debt" means all Indebtedness of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with Agreement Accounting
Principles.
"Transaction Rate" means, for any day, a rate per annum equal to the higher
of the rate quoted by the Administrative Agent and the rate quoted by the
Syndication Agent, in each case for a loan to the Borrower, for the relevant
Transaction Rate Interest Period, pursuant to procedures agreed to among the
Borrower and the Agents.
"Transaction Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Transaction Rate.
"Transaction Rate Interest Period" means a period of not less than 1 nor
more than 180 days, commencing on a Business Day, agreed to by the Borrower, the
Administrative Agent and the Syndication Agent at the time of establishing the
Transaction Rate for such period. If any Transaction Rate Interest Period would
end on a day which is not a Business Day, such Transaction Rate Interest Period
shall end on the next succeeding Business Day.
"Transaction Rate Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at a Transaction Rate.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance, a Eurodollar Advance or a Transaction Rate Advance.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would, unless cured or waived, constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and to the
Final Maturity Date, each Lender severally agrees, on the terms and conditions
set forth in this
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Agreement (including Section 4.2(iv) and (v)), to make Loans to the Borrower
from time to time in amounts not to exceed in the aggregate at any one time
outstanding the amount of its Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow at any time prior to the
Final Maturity Date.
2.2 Required Payments; Maturity. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by the Borrower on the Final Maturity
Date or such other date required by Section 2.8 below.
2.3 Ratable Loans. Each Advance hereunder shall consist of Loans made from
the several Lenders ratably in proportion to the ratio that their respective
Commitments bear to the Aggregate Commitment.
2.4 Types of Advances. The Advances may be Floating Rate Advances,
Eurodollar Advances or Transaction Rate Advances, or a combination thereof,
selected by the Borrower in accordance with Sections 2.9 and 2.10; provided that
not more than $20,000,000 of Transaction Rate Advances shall be outstanding at
any time.
2.5 Commitment Fee; Voluntary Reductions in Aggregate Commitment. The
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee at a per annum rate equal to 0.375% on the daily unused
portion of such Lender's Commitment from the date hereof to and including the
Final Maturity Date, payable on each Payment Date hereafter and on the Final
Maturity Date. The Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders, in integral multiples of
$1,000,000, upon at least three Business Days' written notice to the
Administrative Agent, which notice shall specify the amount of any such
reduction, provided that the amount of the Aggregate Commitment may not be
reduced below the aggregate principal amount of the outstanding Advances. All
accrued commitment fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans hereunder.
2.6 Minimum Amount of Each Advance. Each Eurodollar Advance shall be in the
minimum amount of $750,000 (and in multiples of $50,000 if in excess thereof),
and each Floating Rate Advance and Transaction Rate Advance shall be in the
minimum amount of $500,000 (and in multiples of $50,000 if in excess thereof),
provided that any Floating Rate Advance or Transaction Rate Advance may be in
the amount of the unused Aggregate Commitment.
2.7 Mandatory Reductions in Aggregate Commitment. (a) Within five Business
Days after the receipt by the Borrower or any Subsidiary of the Net Cash
Proceeds of any Asset Sale, the Aggregate Commitment shall be reduced by an
amount equal to such Net Cash Proceeds; provided that (x) no such reduction
shall be required unless the aggregate amount of all Net Cash Proceeds
(excluding any Net Cash Proceeds previously applied to reduce the Aggregate
Commitment pursuant to this Section) received since the date of this Agreement
equals or exceeds $1,000,000; and (y) the amount of Net Cash Proceeds to be
applied on any single
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occasion shall be rounded down to an integral multiple of $100,000 (it being
understood that the amount of Net Cash Proceeds in excess of any such integral
multiple shall be applied on the next date on which Net Cash Proceeds are
applied).
(b) In addition to any reduction of the Aggregate Commitment pursuant to
clause (a) above, if the Private Placement has not been repaid on or before
September 12, 2000, the Aggregate Commitment shall be reduced on such date by an
amount equal to the excess, if any, of $25,000,000 over the aggregate amount of
all previous voluntary reductions of the Aggregate Commitment pursuant to
Section 2.5.
(c) In addition to any reduction of the Aggregate Commitment pursuant to
clause (a) or (b) above, the Aggregate Commitment shall be reduced to zero on
the date of the occurrence of a sale by the Borrower of the capital stock of
Arkansas Western Gas Company, or any sale of all or substantially all of the
assets, of Arkansas Western Gas Company.
2.8 Prepayments. (a) The Borrower may from time to time prepay, without
penalty or premium, all outstanding Floating Rate Advances or Transaction Rate
Advances, or, in a minimum aggregate amount of $1,000,000 or any integral
multiple of $500,000 in excess thereof, any portion of the outstanding Floating
Rate Advances or Transaction Rate Advances upon notice to the Administrative
Agent not later than 10:00 a.m. (Chicago time) on the date of prepayment. The
Borrower may from time to time prepay, without penalty or premium, all
outstanding Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000
or any integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Eurodollar Advances upon three Business Days' prior notice to the
Administrative Agent.
(b) On any date on which the Aggregate Commitment is reduced pursuant to
Section 2.7, the Borrower shall make a prepayment of Advances in the amount, if
any, by which the aggregate principal amount of all outstanding Advances exceeds
the Aggregate Commitment. Any partial prepayment pursuant to this clause (b)
shall be applied to such Advances as the Borrower may direct or, in the absence
of such direction, as the Administrative Agent may reasonably determine as so
reduced.
(c) Any prepayment of a Eurodollar Loan or a Transaction Rate Loan on a day
other than the last day of an Interest Period therefor shall be subject to
Section 3.4.
2.9 Method of Selecting Types and Interest Periods for New Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance and Transaction Rate Advance, the Interest Period applicable thereto
from time to time. The Borrower shall give the Administrative Agent irrevocable
notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago time) on the
Borrowing Date of each Floating Rate Advance or Transaction Rate Advance and
three Business Days before the Borrowing Date of each Eurodollar Advance,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
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(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance and Transaction Rate Advance,
the Interest Period applicable thereto.
Each Borrowing Notice for a Floating Rate Advance or a Eurodollar Advance shall
be in writing (or by telephone promptly confirmed in writing) substantially in
the form of Exhibit A.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Administrative Agent at its address specified pursuant to Article XIII. The
Administrative Agent will make the funds so received from the Lenders available
to the Borrower at the Administrative Agent's aforesaid address.
2.10 Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.10 or are repaid in accordance with Section 2.8. Each Eurodollar Advance and
Transaction Rate Advance shall continue as a Eurodollar Advance or Transaction
Rate Advance, as the case may be, until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance or Transaction Rate
Advance shall be automatically converted into a Floating Rate Advance unless (x)
such Advance is or was repaid in accordance with Section 2.8 or (y) the Borrower
shall have given the Administrative Agent a Conversion/Continuation Notice (as
defined below) requesting that, at the end of such Interest Period, such Advance
continue as a Eurodollar Advance or a Transaction Rate Advance, as applicable,
for the same or another Interest Period. Subject to the terms of Section 2.6,
the Borrower may elect from time to time to convert all or any part of any
Advance into an Advance of another Type. The Borrower shall give the
Administrative Agent irrevocable notice (a "Conversion/Continuation Notice") of
each continuation or conversion of an Advance (other than an automatic
continuation or conversion as provided in this Section 2.10) not later than the
time specified in Section 2.9 for the making of the Type of Advance to be
continued or converted into, specifying:
(i) the requested date, which shall be a Business Day, of such conversion
or continuation,
(ii) the aggregate amount and Type of the Advance which is to be converted
or continued,
(iii) in the case of conversion of an Advance, the Type of Advance to be
converted into,
(iv) the amount of such Advance which is to be converted or continued, and
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(v) in the case of conversion into or continuation of a Eurodollar
Advance or a Transaction Rate Advance, the duration of the
Interest Period applicable thereto.
Each Conversion/Continuation Notice given by the Borrower shall constitute a
representation and warranty by the Borrower that no Default or Unmatured Default
exists.
2.11 Changes in Interest Rate, etc. Each Floating Rate Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from another Type of
Advance into a Floating Rate Advance pursuant to Section 2.10, to but excluding
the date it is paid or is converted into another Type of Advance pursuant to
Section 2.10, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance and Transaction Rate Advance shall
bear interest on the outstanding principal amount thereof from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined by the
Administrative Agent as applicable to such Eurodollar Advance and Transaction
Rate Advance based upon the Borrower's selections under Sections 2.9 and 2.10
and otherwise in accordance with the terms hereof. No Interest Period may end
after the Final Maturity Date.
2.12 Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance or a Transaction Rate
Advance. During the continuance of a Default the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance and Transaction Rate Advance shall bear interest for the
remainder of the applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum and (ii) each Floating Rate Advance shall
bear interest at a rate per annum equal to the Floating Rate in effect from time
to time plus 2% per annum, provided that, during the continuance of a Default
under Section 7.1.6 or 7.1.7, the interest rates set forth in clauses (i) and
(ii) above shall be applicable to all Advances without any election or action on
the part of either Agent or any Lender.
2.13 Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by noon (local time) on the date when due and shall be applied ratably
by the Administrative Agent among the Lenders. Each payment delivered to the
Administrative Agent for the account of any Lender shall be delivered promptly
by the Administrative Agent to
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such Lender in the same type of funds that the Administrative Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Administrative Agent from such Lender. The
Administrative Agent is hereby authorized to charge the account of the Borrower
maintained with Bank One for each payment of principal, interest and fees as it
becomes due hereunder.
2.14 Noteless Agreement; Evidence of Indebtedness. (i) Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in which it will
record (a) the amount of each Loan made hereunder, the Type thereof and the
Interest Period with respect thereto, (b) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (c) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided that the failure of the
Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a Note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a Note
payable to the order of such Lender in a form supplied by the Administrative
Agent substantially in the form of Exhibit E. Thereafter, the Loans evidenced by
such Note and interest thereon shall at all times (including after any
assignment pursuant to Section 12.3) be represented by one or more Notes payable
to the order of the payee named therein or any assignee pursuant to Section
12.3, except to the extent that any such Lender or assignee subsequently returns
any such Note for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.15 Telephonic Notices. The Borrower hereby authorizes the Lenders and the
Administrative Agent to extend, convert or continue Advances, effect selections
of Types of Advances and to transfer funds based on telephonic notices made by
any person or persons the Administrative Agent or any Lender in good faith
believes to be acting on behalf of the Borrower, it being understood that the
foregoing authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The Borrower agrees
to deliver promptly to the Administrative Agent a written confirmation, if such
confirmation is requested by the Administrative Agent or any Lender, of each
telephonic notice signed by an Authorized Officer. If the written confirmation
differs in any material respect from the action taken by the Administrative
Agent and the Lenders, the records of the Administrative Agent and the Lenders
shall govern absent manifest error.
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2.16 Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
or is converted into another Type of Advance, and at maturity. Interest accrued
on each Eurodollar Advance and Transaction Rate Advance shall be payable on the
last day of each applicable Interest Period, on any date on which such Advance
is prepaid, whether by acceleration or otherwise, or is converted into another
Type of Advance, and at maturity. Interest accrued on each Eurodollar Advance
and Transaction Rate Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest and commitment fees shall be calculated for actual
days elapsed on the basis of a 360-day year, except that interest accruing at
the Prime Rate shall be calculated for actual days elapsed on the basis of a
365, or when appropriate 366, day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any payment
of principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.17 Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Administrative Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Administrative Agent will notify each Lender of the
interest rate applicable to each Eurodollar Advance and Transaction Rate Advance
promptly upon determination of such interest rate and will give each Lender
prompt notice of each change in the Alternate Base Rate.
2.18 Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans and any Notes issued hereunder shall be deemed held
by each Lender for the benefit of any such Lending Installation. Each Lender
may, by written notice to the Administrative Agent and the Borrower in
accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it and for whose account Loan
payments are to be made.
2.19 Non-Receipt of Funds by the Administrative Agent. Unless the Borrower
or a Lender, as the case may be, notifies the Administrative Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (i)
in the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Administrative Agent,
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the recipient of such payment shall, on demand by the Administrative Agent,
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 the date the
Administrative Agent recovers such amount at a rate per annum equal to (x) in
the case of payment by a Lender, the Federal Funds Effective Rate for such day
for the first three days and, thereafter, the interest rate applicable to the
relevant Loan or (y) in the case of payment by the Borrower, the interest rate
applicable to the relevant Loan.
2.20 Replacement of Lender. If the Borrower is required pursuant to Section
3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender's
obligation to make or continue, or to convert Advances into, Eurodollar Advances
shall be suspended pursuant to Section 3.3 (any Lender so affected an "Affected
Lender"), the Borrower may elect, if such amounts continue to be charged or such
suspension is still effective, to replace such Affected Lender as a Lender party
to this Agreement, provided that no Default or Unmatured Default shall have
occurred and be continuing at the time of such replacement, and provided,
further, that, concurrently with such replacement, (i) another bank or other
entity which is reasonably satisfactory to the Borrower and the Administrative
Agent shall agree, as of such date, to purchase for cash the Advances and other
Obligations due to the Affected Lender pursuant to an assignment substantially
in the form of Exhibit C and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Affected Lender to be terminated
as of such date and to comply with the requirements of Section 12.3 applicable
to assignments, and (ii) the Borrower shall pay to such Affected Lender in same
day funds on the day of such replacement (A) all interest, fees and other
amounts then accrued but unpaid to such Affected Lender by the Borrower
hereunder to and including the date of termination, including without limitation
payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an
amount, if any, equal to the payment which would have been due to such Lender on
the day of such replacement under Section 3.4 had the Loans of such Affected
Lender been prepaid on such date rather than sold to the replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1 Yield Protection. (a) If, on or after the date of this Agreement, (x)
the adoption of or any change in any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or (y) any change in the interpretation or
administration thereof by any governmental or quasi-governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or (z) compliance by any Lender or applicable Lending
Installation with any request or directive (whether or not having the force of
law) issued on or after the date hereof of any such authority, central bank or
comparable agency:
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(i) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than
with respect to Excluded Taxes) to any Lender in respect of its
Eurodollar Loans, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation
(other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances),
or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining its Eurodollar Loans or reduces
any amount receivable by any Lender or any applicable Lending
Installation in connection with its Eurodollar Loans, or requires
any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of Eurodollar Loans
held or interest received by it, by an amount deemed material by
such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received. A Lender shall not be entitled to demand
compensation or be compensated hereunder to the extent that such compensation
relates to any period of time more than 60 days prior to the date upon which
such Lender first notified the Borrower of the occurrence of the event entitling
such Lender to such compensation (unless, and to the extent, that any such
compensation so demanded shall relate to the retroactive application of any
event so notified to the Borrower).
(b) Without limiting clause (a) above, any Lender may require the Borrower
to pay, contemporaneously with each payment of interest on any Eurodollar Loan
of such Lender, additional interest on such Eurodollar Loan at a rate per annum
determined by such Lender up to but not exceeding the excess of (i) (A) the
applicable Eurodollar Base Rate divided by (B) one minus the Reserve Requirement
over (ii) the applicable Eurodollar Base Rate. Any Lender wishing to require
payment of such additional interest (x) shall so notify the Borrower and the
Administrative Agent, in which case such additional interest on the Eurodollar
Loans of such Lender shall be payable to such Lender at the place indicated in
such notice with respect to each Interest Period commencing at least three
Business Days after the giving of such notice and (y) shall notify the Borrower
at least five Business Days prior to each date on which interest is payable on
any Eurodollar Loan of the amount then due it under this Section.
3.2 Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such
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Lender or any corporation controlling such Lender is increased as a result of a
Change, then, within 15 days of demand by such Lender, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans or its Commitment to make Loans
hereunder (after taking into account such Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If any Lender reasonably determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders reasonably determine that
(i) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the Eurodollar Base Rate does not accurately
reflect the cost of obtaining funds to make or maintain Eurodollar Advances,
then the Administrative Agent shall suspend the availability of Eurodollar
Advances and require any affected Eurodollar Advances to be repaid or converted
to Floating Rate Advances (on or before the date required by such law, rule,
regulation or directive), subject to the payment of any funding indemnification
amounts required by Section 3.4.
3.4 Funding Indemnification. If any payment of a Eurodollar Advance or a
Transaction Rate Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance or a Transaction Rate Advance is not made on
the date specified by the Borrower for any reason other than default by the
Lenders, the Borrower will indemnify each Lender for any loss or cost incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance or a Transaction Rate Advance.
3.5 Taxes. (i) All payments by the Borrower to or for the account of any
Lender or the Administrative Agent hereunder or under any Note shall be made
free and clear of and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or either Agent, (a) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.5) such
Lender
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or such Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (b) the Borrower shall make such
deductions, (c) the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall furnish
to the Administrative Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify each Agent and each Lender
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by
such Agent or such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date such Agent or such
Lender makes demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form W-8 BEN or W-8 ECI,
certifying in either case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to each of the Borrower and the Administrative
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Borrower and the Administrative Agent (x) renewals or additional copies of
such form (or any successor form) on or before the date that such form expires
or becomes obsolete, and (y) after the occurrence of any event requiring a
change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Borrower or the
Administrative Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the Borrower and
the Administrative Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide the
Borrower with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any
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governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be
entitled to indemnification under this Section 3.5 with respect to Taxes imposed
by the United States; provided that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under clause (iv),
above, the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Administrative Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because such Lender
failed to notify the Administrative Agent of a change in circumstances which
rendered its exemption from withholding ineffective, or for any other reason),
such Lender shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Administrative Agent under
this subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Administrative Agent, which
attorneys may be employees of the Administrative Agent). The obligations of the
Lenders under this Section 3.5(vii) shall survive the payment of the Obligations
and termination of this Agreement.
3.6 Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the reasonable judgment of such Lender, disadvantageous to such Lender. Each
Lender shall deliver a written statement of such Lender to the Borrower (with a
copy to the Administrative Agent) as to the amount due, if any, under Section
3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be rebuttable presumptive evidence of the amount thereof. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Base Rate applicable to such Loan,
whether in fact that is the case or not. Determination of amounts payable under
Section 3.4 in connection with any Transaction Rate Loan may be made by the
applicable Lender on any reasonable method. Unless otherwise provided herein,
the amount
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specified in the written statement of any Lender shall be payable on demand
after receipt by the Borrower of such written statement. The obligations of the
Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Initial Advance. The Lenders shall not be required to make the initial
Advance hereunder unless (a) concurrently with the making of such Advance, the
Borrower shall have paid in full all principal, interest, fees and other amounts
payable under each of the Credit Agreement dated as of February 28, 1994 between
the Borrower and Bank One (then known as The First National Bank of Chicago),
the Credit Agreement dated as of April 29, 1994 between the Borrower and Bank of
America, N.A. (then known as NationsBank, N.A.) and the Letter of Credit
Agreement dated as of November 16, 1998 among the Borrower, various financial
institutions and Bank One, NA (then known as The First National Bank of Chicago)
and (b) the Borrower shall have furnished to the Administrative Agent with
sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of the
Borrower, together with all amendments, and a certificate of good
standing, each certified by the appropriate governmental officer in
its jurisdiction of incorporation.
(ii) Copies certified by the Secretary or Assistant Secretary of the
Borrower, of its by-laws and of its Board of Directors' resolutions
and of resolutions or actions of any other body authorizing the
execution of the Loan Documents to which the Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and title
and bear the signatures of the officers of the Borrower authorized
to sign the Loan Documents to which the Borrower is a party, upon
which certificate the Agents and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower.
(iv) Evidence, in form and substance satisfactory to the Administrative
Agent, that the Borrower has obtained all governmental approvals
necessary for it to enter into the Loan Documents.
(v) A certificate, signed by an Authorized Officer, stating that on the
initial Borrowing Date (x) no Default or Unmatured Default has
occurred and is continuing and (y) the representatives and
warranties set forth in Article V are true and correct as of such
date.
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(vi) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit B.
(vii) Any Notes requested by a Lender pursuant to Section 2.14 payable to
the order of each such requesting Lender.
(viii) Written money transfer instructions, in substantially the form of
Exhibit D, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably
requested.
(ix) Copies, certified as being correct and complete by an Authorized
Officer, of (x) the Private Placement Agreement and (y) the
Indenture dated as of December 1, 1995, between the Borrower and
Bank One (then known as The First National Bank of Chicago), as
trustee, and all supplements thereto.
(x) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2 Each Advance. The Lenders shall not be required to make any Advance,
the effect of which is to increase the aggregate amount of Loans outstanding
hereunder, unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are true
and correct as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty shall have been
true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of such Advance shall be
reasonably satisfactory to the Lenders and their counsel.
(iv) With respect to any Advance which causes the aggregate amount of
outstanding Loans to exceed $45,000,000, Bank One shall be satisfied
that the letter of credit issued under the Letter of Credit
Agreement referred to in Section 4.1(a) will be (x) cancelled
without any drawing thereunder and (y) returned to Bank One on the
date of the making of such Advance.
(v) With respect to any Advance which causes the aggregate amount of
outstanding Loans to exceed the remainder of $155,000,000 minus all
reductions of the Aggregate Commitment previously made pursuant to
Section 2.7(a), written evidence that the Private Placement Debt has
been (or concurrently with the making of such Advance will be) paid
in full.
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Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 4.2(i) and (ii) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1 Organization. The Borrower and each of its Subsidiaries are
corporations duly incorporated and validly existing and in good standing under
the laws of the states of their incorporation and have all requisite authority
to conduct their respective businesses in each jurisdiction in which the failure
to have such authority, singly or in the aggregate, could reasonably be expected
to have a Material Adverse Effect. The Borrower and each of its Subsidiaries
have full power and authority to carry on their business as now conducted and
the Borrower has full power and authority to execute, deliver and perform its
obligations under this Agreement.
5.2 Authorization and Validity. The execution and delivery by the Borrower
of this Agreement has been duly authorized by proper corporate proceedings. This
Agreement has been duly executed and delivered by the Borrower and constitutes,
and when executed and delivered by the Borrower each Note will constitute, a
legal, valid and binding obligation of the Borrower enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally.
5.3 Financial Statements. The December 31, 1999 and the March 31, 2000
consolidated financial statements of the Borrower and the Subsidiaries
heretofore delivered to the Agents and the Lenders were prepared in accordance
with generally accepted accounting principles in effect on the date such
statements were prepared and fairly present the financial position and results
of operations of the Borrower and its Subsidiaries at such dates and the
consolidated results of their operations for the periods then ended.
5.4 Subsidiaries. Schedule 5.4 hereto contains an accurate list of all of
the presently existing Subsidiaries, setting forth their respective
jurisdictions of incorporation and the percentage of their respective capital
stock owned by the Borrower or other Subsidiaries. All of the issued and
outstanding shares of capital stock of the Subsidiaries have been duly
authorized and issued and are fully paid and nonassessable.
5.5 ERISA. Each Plan is in material compliance with, and has been
administered in material compliance with, all applicable provisions of ERISA,
the Code and any other applicable federal or state law, except where the failure
to so comply would not (individually or in the aggregate) reasonably be expected
to have a Material Adverse Effect, and no event or condition
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has occurred and is continuing as to which the Borrower is under an obligation
to furnish a report to the Administrative Agent and the Lenders under Section
6.1(d) and which would reasonably be expected (individually or in the aggregate)
to have a Material Adverse Effect.
5.6 Defaults. No Default or Unmatured Default has occurred and is
continuing.
5.7 Accuracy of Information. No information, exhibit or report furnished by
the Borrower or any Subsidiary to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement contains any material
misstatement of fact or omitted to state a material fact necessary to make the
statements contained therein not misleading.
5.8 Regulation U. Neither the Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock. Margin Stock
constitutes less than 25% of the consolidated assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale or pledge or any other
restriction hereunder. No part of the proceeds of any Credit will be used to
purchase or carry any Margin Stock in violation of Regulation U.
5.9 No Adverse Change. Except for developments in the Case or as disclosed
in the Quarterly Report on Form 10-Q of the Borrower for the quarterly period
ended March 31, 2000 filed with the Securities and Exchange Commission or the
Forms 8-K of the Borrower filed with the Securities and Exchange Commission on
June 22, 2000 and June 26, 2000, since March 31, 2000 there has been no change
in the business, property, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
5.10 Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which, to the Knowledge of the
Borrower, are required to be filed and have paid all taxes due pursuant to said
returns or material taxes due pursuant to any assessment received by the
Borrower or any Subsidiary, except in both cases such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement Accounting Principles. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate in accordance
with Agreement Accounting Principles.
5.11 Liens. There are no Liens on any of the properties or assets of the
Borrower or any Subsidiary except (i) Liens permitted by Section 6.3.5 and (ii)
with respect to properties and assets other than Productive Properties,
Principal Transmission Facilities and the stock of any Subsidiary, Liens that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. All easements, rights of way, licenses and other real
property rights required for operation of the businesses of the Borrower and its
Subsidiaries (collectively the "Rights of Way") are owned free and clear of any
Lien, other than Liens permitted by this Agreement and Liens already on any
parcel of real property with respect to which the Rights of Way have been
granted, which will not, in the aggregate, at any time materially detract from
the
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value of the Rights of Way or materially impair the use of the Rights of Way in
the operation of the businesses of the Borrower and its Subsidiaries.
5.12 Compliance with Orders. Neither the Borrower nor any Subsidiary is in
default under the terms of any order of any federal or state court or
administrative agency by which it or any of its properties may be bound, except
for any defaults which could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
5.13 Litigation. Except for the Case and as set forth in Schedule 5.13,
there are no actions at law or in equity pending or, to the Knowledge of the
Borrower, threatened involving the likelihood of any judgment or liability
against the Borrower or any Subsidiary which could reasonably be expected to
have a Material Adverse Effect. Except for the investigation arising out of the
1990 rate increase approved by the Arkansas Public Service Commission and
related proceedings, there are no proceedings of any kind or nature pending or,
to the Knowledge of the Borrower, threatened against the Borrower by any federal
or state board or other administrative authority or agency which could
reasonably be expected to have a Material Adverse Effect.
5.14 Burdensome Agreements. The Borrower is not a party to any contract or
agreement which, in the opinion of management of the Borrower, could reasonably
be expected to have a Material Adverse Effect.
5.15 No Conflict. The execution, delivery, and compliance with the terms of
this Agreement will not conflict with or result in the breach of any of the
terms, conditions or provisions of, or constitute a default under, the charter
or bylaws of the Borrower or any Subsidiary, or any indenture, loan agreement or
other agreement or instrument to which the Borrower or any Subsidiary is a party
or by which it may be bound, or result in creation of any Lien on any property
of the Borrower or any Subsidiary, and neither the Borrower nor any Subsidiary
is in default (after the expiration of any applicable grace period) in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect, or (ii) any
agreement or instrument evidencing or governing Indebtedness in a principal
amount exceeding $5,000,000 (excluding in each case any default under Section
6.A or 6.B of the Private Placement Agreement).
5.16 Title to Properties. The Borrower and its Subsidiaries have good and
marketable title to all real properties purported to be owned by them and good
title to all other assets purported to be owned by them, subject to such minor
defects as are common to property of the type owned by the Borrower and its
Subsidiaries and Liens permitted by this Agreement and such defects and Liens in
the aggregate do not materially interfere with or impair the Borrower's or any
Subsidiary's business as presently conducted.
5.17 Public Utility Holding Company Act. The Borrower and the Subsidiaries
are exempt from registration under the provisions of the Public Utility Holding
Company Act of 1935 pursuant to Section 3(a) thereof.
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5.18 Regulatory Approval. No consent or authorization of, filing with, or
any other act by or in respect of any Person is required in connection with the
enforceability, execution, delivery, performance or validity of this Agreement
or the transactions contemplated thereby.
5.19 Negative Pledge. Except as set forth in Schedule 5.19 hereto, neither
the Borrower nor any Subsidiary is subject to any agreement, indenture,
instrument, undertaking or security (other than this Agreement) which prohibit
the creation, incurrence or sufferance to exist of any Lien.
5.20 Investment Company Act. The Borrower is not an "investment company" or
a Borrower "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
5.21 Compliance with Laws. The Borrower and its Subsidiaries have all
franchises, licenses and permits necessary for the conduct of their respective
businesses, and are in compliance with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject,
including, without limitation, (i) all provisions of ERISA, which, if violated,
might result in a Lien or charge upon any property of the Borrower or any
Subsidiary, and (ii) all material provisions of the Occupational Safety and
Health Act of 1970 and the rules and regulations thereunder and applicable
statutes, regulations, orders and restrictions relating to environmental
standards or controls, except to the extent that failure to maintain or comply
with any of the foregoing, singly and in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1 Information. The Borrower will furnish to each Lender:
(a) As soon as reasonably practicable and in any event within 120 days
after the close of each of its fiscal years, financial statements of the
Borrower for such fiscal year on a consolidated and consolidating basis
(consolidating statements need not be certified by such accountants) for
itself and its Subsidiaries, including balance sheets as of the end of such
period, statements of income and statements of retained earnings, and
statements of cash flows, and, as to the consolidated statements, prepared
in accordance with generally accepted accounting principles (except as
expressly set forth therein) and accompanied by an unqualified (as to going
concern or the scope of the audit) opinion of independent certified public
accountants of recognized standing, which opinion shall state that such
audit was conducted in accordance with generally accepted auditing
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standards and said financial statements fairly present the financial
condition and results of operation of the Borrower as at the end of, and
for, such fiscal year and a certificate of said accountants that, in the
course of their examination necessary for their opinion, they have obtained
no knowledge of any Default or Unmatured Default relating to accounting
matters, or if, in the opinion of such accountants, any such Default or
Unmatured Default shall exist, said certificate shall state the nature and
status thereof; provided that delivery pursuant to clause (e) below of
copies of the Annual Report on Form 10-K of the Borrower for such fiscal
year filed with the Securities and Exchange Commission (together with
copies of the financial statements required to be included therein) shall
be deemed to satisfy the requirement of this clause (a) to deliver
consolidated financial statements (but not the requirement to deliver
consolidating statements or the accountants' certificate as to the presence
or absence of any Default or Unmatured Default).
(b) As soon as reasonably practicable and in any event within 60 days
after the close of each of the first three quarterly accounting periods of
each of its fiscal years, for itself and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such period
and consolidated and consolidating statements of income and statements of
retained earnings and statements of cash flows for the period from the
beginning of such fiscal year to the end of such quarter; provided that
delivery pursuant to clause (e) below of copies of the Quarterly Report on
Form 10-Q of the Borrower for such quarterly period filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (b) to deliver consolidated financial
statements (but not the requirement to deliver the certificate of the
Borrower's chief financial officer or chief accounting officer with respect
thereto).
(c) Simultaneously with the delivery of each set of financial
statements referred to in Sections 6.1(a) and 6.1(b), a certificate of the
chief financial officer or the chief accounting officer of the Borrower in
the form of Exhibit F (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in compliance
with the requirements of Section 6.4 on the date of such financial
statements, (ii) stating whether there exists on the date of such
certificate any Default and or Unmatured Default and, if any Default or
Unmatured Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto, and (iii) stating that such financial statements fairly reflect in
all material respects the financial conditions and results of operations of
the Borrower and its Subsidiaries as of the date of the delivery of such
financial statements and for the period covered thereby.
(d) As soon as possible and in any event within 10 Business Days after
the Borrower has Knowledge that any of the events or conditions specified
below has occurred or exists with respect to any Plan or Multiemployer
Plan, a statement, signed by the chief financial officer or chief
accounting officer of the Borrower, describing said event or condition and
the action which the Borrower or applicable member of the
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Controlled Group proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to the PBGC by the
Borrower or applicable member of the Controlled Group with respect to such
event or condition):
(i) the occurrence of any Reportable Event with respect to any
Plan, or any waiver shall be requested under Section 412(d) of the Code
for any Plan,
(ii) the distribution under Section 4041(c) of ERISA of a notice of
intent to terminate any Plan, or any action taken by the Borrower or
any member of the Controlled Group to terminate any Plan under Section
4041(c) of ERISA,
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower or any member of
the Controlled Group of a notice from any Multiemployer Plan that such
action has been taken by PBGC with respect to such Multiemployer Plan,
(iv) the complete or partial withdrawal from a Multiemployer Plan
by the Borrower or any member of the Controlled Group that could
reasonably be expected to result in liability of the Borrower or such
member under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) having
a Material Adverse Effect, or the receipt by the Borrower or any member
of the Controlled Group of notice from a Multiemployer Plan that it is
in reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA or that it intends to terminate or has terminated under Section
4041A of ERISA,
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Borrower or any member of the Controlled
Group to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days, or
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in
the loss of tax-exempt status of the trust of which such Plan is a part
if the Borrower or any member of the Controlled Group fails to timely
provide security to the Plan in accordance with the provisions of said
Sections.
(e) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
the Borrower or any of its Subsidiaries files with the Securities and
Exchange Commission.
(f) Promptly upon the furnishing thereof to all shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so furnished.
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(g) Promptly upon receipt thereof, one copy of each written audit
report submitted to the Borrower or any Subsidiary by independent
accountants resulting from (i) any annual or interim audit submitted after
the occurrence and during the continuance of a Default or Unmatured Default
and (ii) any special audit submitted at any time, in each case, made by
them of the books of the Borrower or any Subsidiary.
(h) As soon as available and in any event not later than April 30 of
each calendar year, an engineering and economic analysis of the producing
properties of the Borrower and its Subsidiaries prepared by an independent
firm of consulting petroleum engineers and in form, substance and detail
consistent with past practice.
(i) Promptly and in any event within five Business Days after an
Authorized Officer obtains knowledge thereof, notice of the occurrence of a
Default or Unmatured Default, together with the details of such event and
the actions, if any, the Borrower has taken or intends to take with respect
thereto.
(j) Such other information (including nonfinancial information) as the
Administrative Agent or any Lender may from time to time reasonably
request.
6.2 Affirmative Covenants. The Borrower will, and will cause each
Subsidiary, to:
6.2.1. Reports and Inspection. Keep proper books and records in good order
in accordance with sound business practice and prepare its financial statements
in accordance with Agreement Accounting Principles and permit the Administrative
Agent or any Lender, at its own expense, by its representatives and agents, to
inspect any of the properties, corporate books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals during regular business hours as the
Administrative Agent or such Lender may designate, provided that such inquiry
shall be limited to the purpose of evaluating the Borrower's financial condition
or compliance with this Agreement.
6.2.2 Conduct of Business. Carry on and conduct its principal business of
exploration for, and production, transportation, distribution, refinement,
processing, storage, marketing and gathering of oil and other hydrocarbons and
petroleum, and natural, synthetic or other gas in substantially the same manner
and in substantially the same fields of enterprise as it is presently conducted;
and do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of incorporation
(unless the corporate existence or ownership by the Borrower of any Subsidiary
shall be discontinued as a result of a merger, consolidation or sale of assets
as permitted by Section 6.3.2) and maintain all requisite authority to conduct
its business in each jurisdiction in which the failure to have such authority
could reasonably be expected to have a Material Adverse Effect.
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6.2.3 Insurance. Maintain insurance with reputable insurance companies or
associations in such forms and amounts and covering such risks as are customary
for companies of established reputation and similar size engaged in similar
businesses and owning and operating similar properties; provided that it is
agreed that, as of the date of this Agreement, the insurance coverage of the
Borrower and its Subsidiaries set forth on Schedule 6.2 hereto satisfies the
requirements of this Section 6.2.3.
6.2.4 Taxes. Promptly pay and discharge all material taxes, assessments and
governmental charges or levies imposed upon the Borrower or any Subsidiary (but
in the case of a Subsidiary, only to the extent that such Subsidiary's assets
shall be sufficient for the purpose), respectively, or upon or in respect of all
or any part of the property and business of the Borrower or any Subsidiary, and
all due and payable claims for work, labor or materials, which if unpaid might
become a Lien upon any property of the Borrower or any Subsidiary (other than
claims against any such Subsidiary in a proceeding under any bankruptcy or
similar law), provided that the Borrower or such Subsidiary shall not be
required to pay any such tax, assessment, charge, levy or claim if the validity
thereof shall concurrently be contested in good faith by appropriate proceedings
and if the Borrower or such Subsidiary shall set aside on its or their books
reserves deemed by it or them to be required with respect thereto in accordance
with generally accepted accounting principles.
6.2.5 Compliance with Laws. Maintain all franchises, licenses and permits
necessary for the conduct of its businesses, and comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, including, without limitation, (i) all provisions of ERISA,
which, if violated, might result in a Lien or charge upon any property of the
Borrower or any Subsidiary, and (ii) all material provisions of the Occupational
Safety and Health Act of 1970 and the rules and regulations thereunder and
applicable statutes, regulations, orders and restrictions relating to
environmental standards or controls, except to the extent that failure to
maintain or comply with any of the foregoing, singly and in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
6.2.6 Maintenance of Properties. Do all things necessary to maintain,
preserve, protect and keep its material properties (whether owned in fee or a
leasehold interest) in good repair, working order and condition, and make all
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times; provided that,
subject to Section 6.3.2 and all other terms of this Agreement, nothing in this
Section shall prevent the Borrower or any of its Subsidiaries from discontinuing
the operation and maintenance of any of its properties (x) if such
discontinuance is, in the judgment of the Borrower or such Subsidiary, desirable
in the conduct of its business or (y) if such discontinuance or disposal could
not reasonably be expected to have a Material Adverse Effect.
6.3 Negative Covenants. The Borrower will not, nor (where applicable) will
it permit any Subsidiary to:
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6.3.1 Restricted Payments. Declare or pay any dividends on its capital
stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding or any warrants, rights or options to purchase or acquire any shares
of its capital stock or permit any Subsidiary to purchase any shares of stock of
the Borrower, except that any Subsidiary may declare and pay dividends to the
Borrower or another Wholly-Owned Subsidiary.
6.3.2 Merger and Sale of Assets. Merge or consolidate with or into any
other Person or lease, sell or otherwise dispose of all, or substantially all,
of its property, assets (other than inventory, physical assets sold in the
ordinary course of business or obsolete, worn out or excess property) or
business to any other Person except that:
(1) the Borrower may merge or consolidate with or sell all of its assets to
any other solvent corporation, provided that (i) the surviving, continuing or
resulting corporation (if not the Borrower) shall (x) expressly assume by a
written instrument reasonably satisfactory to the Administrative Agent and the
Lenders (which shall be provided with an opportunity to review and comment upon
it prior to the consummation of any transaction) the due and punctual payment of
the principal of all Obligations and the due performance and observance of all
covenants, conditions and agreements on the part of the Borrower under this
Agreement, (y) deliver to the Administrative Agent and the Lenders an opinion of
counsel, in form and substance reasonably satisfactory to the Administrative
Agent and the Lenders, to the effect that such written instrument has been duly
authorized, executed and delivered by such surviving, continuing or resulting
corporation and constitutes a legal, valid and binding instrument enforceable
against such surviving, continuing or resulting corporation in accordance with
its terms, and to such further effects as the Administrative Agent and the
Lenders may reasonably request, and (z) have an investment grade rating from
Xxxxx'x Investors Service, Inc. and Standard & Poor's Rating Group, (ii) the
surviving, continuing or resulting corporation shall be a corporation organized
and existing under the laws of the United States of America or any State thereof
or the District of Columbia, and (iii) immediately after such merger,
consolidation or sale, no Default or Unmatured Default would exist;
(2) any Subsidiary may merge into the Borrower or another Subsidiary which
is a Wholly-Owned Subsidiary, and may sell, lease or otherwise dispose of any of
its assets to the Borrower or another Subsidiary which is a Wholly-Owned
Subsidiary;
(3) any Subsidiary may merge or consolidate with any corporation other than
the Borrower or another Subsidiary, provided that (i) the surviving, continuing
or resulting corporation shall be a Subsidiary, and (ii) immediately after such
merger or consolidation, no Default or Unmatured Default would exist; and
(4) the Borrower may sell, lease or otherwise dispose of all or any part of
its assets to any Person, and any Subsidiary may sell, lease or otherwise
dispose of all or any part of its assets to any Person other than the Borrower
or another Subsidiary, in each case, for a consideration which represents the
fair value at the time of such sale or other disposition,
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provided that (x) immediately after such sale, lease or other disposition (and
the application of the proceeds thereof as provided in clause (y)) no Default or
Unmatured Default would exist and (y) to the extent applicable, the Net Cash
Proceeds of such sale, lease or other disposition are applied as required by
Sections 2.7 and 2.8; and provided, further, that no sale, lease or other
disposition shall be permitted (unless the cash proceeds of such sale, lease or
other disposition will be applied to reduce the Aggregate Commitment to zero)
if, after giving effect to such transaction, the aggregate fair market value of
all non-cash proceeds received by the Borrower and its Subsidiaries from all
sales, leases and other dispositions after the date of this Agreement, less all
cash proceeds which have been received from such non-cash proceeds, would exceed
$20,000,000.
6.3.3 Liens. Create, incur, assume or suffer to exist any Lien on (a) any
Productive Property, (b) any Principal Transmission Facility or (c) any shares
of stock of any Subsidiary, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its property if the same shall not at the time be delinquent or
thereafter can be paid without penalty or, provided the Borrower or any
Subsidiary knew or should have known of such Liens, are being actively
contested in good faith and by appropriate proceedings and for which
adequate reserves shall have been set aside on its books in accordance
with Agreement Accounting Principles,
(ii) Liens imposed by law, such as carriers', warehousemen's,
operators', royalty, surface damages and mechanics' liens and other
similar liens arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or which are
being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books in accordance
with Agreement Accounting Principles,
(iii) Liens incurred in the ordinary course of business (a) arising
out of pledges or deposits under workmen's compensation laws,
unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar legislation, (b) to secure the
performance of letters of credit, bids, tenders, sales contracts,
leases (including rent security deposits), statutory obligations,
surety, appeal and performance bonds, joint operating agreements or
other similar agreements and other similar obligations not incurred in
connection with the borrowing of money, the obtaining of advances or
the payment of the deferred purchase price of property or (c)
consisting of deposits which secure public or statutory obligations of
the Borrower or any Subsidiary, or surety, custom or appeal bonds to
which the Borrower or any Subsidiary is a party, or the payment of
contested taxes or import duties of the Borrower or any Subsidiary,
(iv) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect
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to properties of a similar character and which do not in any material
way affect the marketability of the same or interfere with the use
thereof in the business of the Borrower or the Subsidiaries,
(v) Liens on drilling equipment and facilities in order to secure
the financing for the construction of such equipment and facilities not
constructed as of the date hereof, provided that such financing is
permitted pursuant to Section 6.4,
(vi) attachment, judgment and other similar Liens arising in
connection with court proceedings; provided the execution or other
enforcement of such Liens is effectively stayed or the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings; and provided, further, the Borrower or any Subsidiary knew
or should have known of such Liens,
(vii) Liens on property of a Subsidiary, provided such Liens secure
only obligations owing to the Borrower or a Wholly-Owned Subsidiary,
(viii) purchase money mortgages or other mortgages or other Liens
on assets of the Borrower or any Subsidiary securing Indebtedness
hereafter incurred by the Borrower or such Subsidiary for the
acquisition of such assets, provided no such mortgage or other Lien
shall extend to any other property (unless such mortgage or Lien is
permitted under another clause of this Section 6.3.3) and the amount
thereby secured shall not exceed the purchase price of such asset plus
interest, if any, accrued thereon and shall be permitted pursuant to
Section 6.4,
(ix) Liens on property hereafter acquired (including shares of
stock hereafter acquired of any Person (including any Person in which
the Borrower or any Subsidiary already owns an interest)) existing at
the time of acquisition and liens assumed by the Borrower or a
Subsidiary as a result of a merger of another corporation into the
Borrower or a Subsidiary or the acquisition by the Borrower or a
Subsidiary of the assets and liabilities of another corporation,
provided that in each case such Liens shall not have been created in
anticipation of such transaction,
(x) any right which any municipal or governmental body or agency
may have by virtue of any franchise, license, contract or statute to
purchase, or designate a purchaser of or order the sale of, any
property of the Borrower or any Subsidiary upon payment of reasonable
compensation therefor or to terminate any franchise, license or other
rights or to regulate the property and business of the Borrower or any
Subsidiary,
(xi) easements or reservations in respect of any property of the
Borrower or any Subsidiary for the purpose of rights-of-way and similar
purposes,
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reservations, restrictions, covenants, party wall agreements,
conditions of record and other encumbrances (other than to secure the
payment of money) and minor irregularities or deficiencies in the
record and evidence of title, which in the reasonable opinion of the
Borrower (at the time of the acquisition of the property affected or
subsequently) will not interfere in any material way with the proper
operation and development of the property affected thereby,
(xii) Liens existing on the date hereof and set forth on Schedule
5.19 hereto,
(xiii) Liens on property to secure all or any part of the cost of
construction, alteration or repair of any building, equipment or other
improvement on all or any part of such property, including any
pipeline, or to secure any Indebtedness incurred prior to, at the time
of, or within 360 days after, the completion of such construction,
alteration or repair to provide funds for the payment of all or any
part of such cost,
(xiv) rights of lessors under oil, gas or mineral leases arising in
the ordinary course of business,
(xv) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided that the principal
amount of Indebtedness secured thereby shall not exceed the principal
amount of Indebtedness so secured at the time of such extension,
renewal or replacement and such extension, renewal or replacement Lien
shall be limited to all or a part of the property which secured the
Lien so extended, renewed or replaced (plus improvements on such
property),
(xvi) Liens which may hereafter be attached to undeveloped real
estate not containing oil or gas reserves presently owned by the
Borrower in the ordinary course of the Borrower's real estate sales,
development and rental activities,
(xvii) Liens not otherwise permitted by the foregoing clauses of
this Section 6.3.3 securing Indebtedness in an aggregate principal
amount which, at the time of incurrence, does not exceed 5% of
Stockholders' Equity as of the end of the most recently completed
fiscal quarter of the Borrower as shown on the consolidated balance
sheet related thereto, and
(xviii) Liens not otherwise permitted by the foregoing clauses of
this Section 6.3.3 in an aggregate principal amount in excess of 5% of
Stockholders' Equity; provided that at the time such Lien is created,
the Obligations will be secured pari passu with the obligations such
Lien is securing pursuant to documentation in form and substance
satisfactory to the Administrative Agent
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and the Lenders (drafts of which documentation shall be furnished to
the Administrative Agent and the Lenders sufficiently in advance to
provide the Administrative Agent and the Lenders with an opportunity to
review and comment upon it prior to the granting of any such Lien).
6.4 Financial Covenants. The Borrower will not:
6.4.1 Debt to Capitalization Ratio. Permit the Debt to Capitalization Ratio
at any time to exceed 0.8 to 1.
6.4.2 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio
as of the last day of any fiscal quarter of the Borrower to be less than 2.5 to
1.
6.4.3 Net Worth. Permit Stockholder's Equity at any time to be less than
$120,000,000.
6.4.4 Subsidiary Indebtedness. Permit the aggregate outstanding amount of
all Indebtedness of Subsidiaries (excluding (i) Indebtedness outstanding on the
date hereof and renewals, extensions and refinancings thereof so long as the
principal amount thereof is not increased) and (ii) Indebtedness of any
Subsidiary to the Company or a Wholly-Owned Subsidiary) to exceed $20,000,000
unless provision has been made for all Subsidiaries (other than Subsidiaries
which would not constitute a Material Group of Subsidiaries) to guarantee the
Obligations pursuant to documentation (and related certificates and opinions)
reasonably satisfactory to the Administrative Agent and the Syndication Agent.
ARTICLE VII
DEFAULTS
7.1 Events of Default. The occurrence and continuance of any one or more of
the following events shall constitute a Default:
7.1.1 Representations and Warranties. Any representation or warranty made
or deemed made by or on behalf of the Borrower to either Agent or any Lender in
this Agreement or in any certificate or instrument delivered in connection
herewith shall be materially false as of the date on which made.
7.1.2 Payment Default. Nonpayment of any principal, interest, fee or other
obligation hereunder within ten days after the same becomes due.
7.1.3 Breach of Certain Covenants. The breach by the Borrower of (i) any of
the terms or provisions of Section 6.1(i), 6.3.1, 6.3.2 or 6.4 or (ii) any of
the terms or provisions of Section 6.3.3 which is not remedied within ten days
after written notice from the Administrative Agent or the Syndication Agent.
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7.1.4 Other Breach of this Agreement. The breach by the Borrower (other
than a breach which constitutes a Default under Section 7.1.1, 7.1.2 or 7.1.3)
of any term or provision of this Agreement which is not remedied within 30 days
after written notice from the Administrative Agent or the Syndication Agent.
7.1.5 ERISA. An event or condition specified in Section 6.1(d) shall occur
or exist with respect to any Plan or any Multiemployer Plan and, as a result or
such event or condition, together with all other such events or conditions then
outstanding, the Borrower or any member or the Controlled Group shall incur, or
shall be reasonably likely to incur, a liability to any Plan, any Multiemployer
Plan or the PBGC (or any combination of the foregoing) that would have a
Material Adverse Effect.
7.1.6 Cross-Default. Failure of the Borrower or any Significant Subsidiary
to pay any Indebtedness when due (after giving effect to any period of grace set
forth in any agreement under which such Indebtedness was created or is
governed); or the default by the Borrower or any Significant Subsidiary in the
performance of any other term, provision or condition contained in any agreement
under which any of their respective Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any Indebtedness of the Borrower or any Significant Subsidiary
shall become due and payable or be required to be prepaid (other than by a
regularly scheduled payment) prior to the stated maturity thereof; provided
that, in each case, the principal amount of Indebtedness as to which such a
payment default shall occur and be continuing, or such a failure to perform or
other event causing or permitting acceleration shall occur and be continuing,
exceeds $5,000,000; and provided, further, that no payment or other default
under the Private Placement Debt resulting solely from a breach of Section 6.A
or 6.B of the Private Placement Agreement shall constitute a Default or an
Unmatured Default hereunder.
7.1.7 Voluntary Bankruptcy, etc. The Borrower, or any Significant
Subsidiary or a Material Group of Subsidiaries shall (i) not pay, or admit in
writing its inability to pay, its debts generally as they become due, (ii) make
an assignment for the benefit of creditors, (iii) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for the Borrower, such Significant Subsidiary or
such Material Group of Subsidiaries, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or (v) take any corporate action to
authorize or effect any of the foregoing actions set forth in this Section
7.1.7.
7.1.8 Involuntary Bankruptcy, etc. Without the application, approval or
consent of the Borrower, the applicable Significant Subsidiary or the applicable
Material Group of Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower, any Significant Subsidiary
or such Material Group of Subsidiaries, or a proceeding described in
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Section 7.1.7(iv) shall be instituted against the Borrower, any Significant
Subsidiary or such Material Group of Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 consecutive days.
7.1.9 Judgments. The Borrower or any Significant Subsidiary shall fail
within 30 days to pay, bond or otherwise discharge any final judgment or order
for the payment of money in excess of $2,500,000, which is not stayed on appeal
or otherwise being appropriately contested in good faith.
7.1.10 Environmental Matters. The Borrower, any Significant Subsidiary or
any Material Group of Subsidiaries shall suffer any adverse determination
pertaining to the release by the Borrower, any Significant Subsidiary or any
other Person of any toxic or hazardous waste or substance into the environment,
or any violation of any federal, state or local environmental, health or safety
law or regulation, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration. If any Default described in Section 7.1.6 or 7.1.7 occurs
with respect to the Borrower, the obligations of the Lenders to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of either
Agent or any Lender. If any other Default occurs, the Required Lenders (or the
Administrative Agent with the consent of the Required Lenders) may terminate or
suspend the obligations of the Lenders to make Loans hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives.
If, within 30 days after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans hereunder as a
result of any Default (other than any Default as described in Section 7.1.6 or
7.1.7 with respect to the Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Administrative Agent
shall, by notice to the Borrower, rescind and annul such acceleration and/or
termination.
8.2 Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Administrative Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided that no such supplemental agreement
shall, without the consent of all of the Lenders:
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(i) Extend the final maturity of any Loan or forgive all or any portion
of the principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Final Maturity Date, or reduce the amount or extend the
payment date for, the mandatory payments required under Section 2.2,
or increase the amount of the Aggregate Commitment or of the
Commitment of any Lender hereunder, or permit the Borrower to assign
its rights under this Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of such Agent. The
Administrative Agent may waive payment of the fee required under Section 12.3.2
without obtaining the consent of any other party to this Agreement.
8.3 Preservation of Rights. No delay or omission of the Lenders or either
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agents and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Loans
herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
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9.3 Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.
9.4 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agents and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agents and the
Lenders relating to the subject matter thereof.
9.5 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided that the parties
hereto expressly agree that the Arrangers shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6 Expenses; Indemnification. (i) The Borrower shall reimburse the Agents
and the Arrangers for all reasonable costs, internal charges and out-of-pocket
expenses (including, subject to any limit on fees which is separately agreed to,
reasonable attorneys' fees and reasonable time charges of attorneys for either
Agent, which attorneys may be employees of such Agent) paid or incurred by
either Agent or either Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Agents, the Arrangers and the Lenders for all reasonable costs, internal charges
and out-of-pocket expenses (including reasonable attorneys' fees and reasonable
time charges of attorneys for the Agents, the Arrangers and the Lenders, which
attorneys may be employees of an Agent, either Arranger or the Lenders) paid or
incurred by either Agent, either Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agents, the
Arrangers, each Lender, their respective affiliates, and each of their
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and reasonable expenses (including, without
limitation, all reasonable expenses of litigation or preparation therefor
whether or not an Agent, an Arranger, any Lender or any affiliate is a party
thereto) which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated hereby or the
direct or indirect application or proposed application of the proceeds of any
Loan hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
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9.7 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
9.8 Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
9.9 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10 Nonliability of Lenders. The relationship between the Borrower on the
one hand and the Lenders and the Agents on the other hand shall be solely that
of borrower and lender. None of either Agent, either Arranger or any Lender
shall have any fiduciary responsibilities to the Borrower. None of either Agent,
either Arranger or any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower agrees that none of either
Agent, either Arranger or any Lender shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by the
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. None of either
Agent, either Arranger or any Lender shall have any liability with respect to,
and the Borrower hereby waives, releases and agrees not to xxx for, any special,
indirect or consequential damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11 Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to the extent permitted by law or
regulation, to its Affiliates and to other Lenders and their respective
Affiliates, (ii) to legal counsel, accountants, and other professional advisors
to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any
Person as required by law, regulation, or legal process, (v) to any Person in
connection with any legal proceeding to which such Lender is a party to the
extent required by law, regulation or legal process, (vi) permitted by Section
12.4, (vii) to rating agencies if required by such agencies in connection with a
rating relating to the Advances hereunder, and (viii) to the extent required in
connection with the exercise of any remedy or any enforcement of this Agreement
by such Lender or the Administrative Agent.
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9.12 Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
9.13 Disclosure. The Borrower and each Lender hereby (i) acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates, and (ii) waive any liability of Bank One or such Affiliate of Bank
One to the Borrower or any Lender, respectively, arising out of or resulting
from such investments, loans or relationships other than liabilities arising out
of the gross negligence or willful misconduct of Bank One or its Affiliates.
ARTICLE X
THE AGENTS
10.1 Appointment; Nature of Relationship. Bank One and Bank of America,
N.A., are hereby appointed by each of the Lenders as the Administrative Agent
and the Syndication Agent, respectively, hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes each Agent to act as
the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. Each Agent agrees to
act as an Agent upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "Administrative Agent" or
"Syndication Agent," it is expressly understood and agreed that neither Agent
shall have any fiduciary responsibilities to any Lender by reason of this
Agreement or any other Loan Document and that each Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as an Agent (i) neither Agent hereby assumes any fiduciary duties to
any of the Lenders, (ii) is a "representative" of the Lenders within the meaning
of Section 9-105 of the Uniform Commercial Code and (iii) each Agent is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against either Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Lender hereby waives.
10.2 Powers. Each Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to such Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. Neither
Agent shall have any implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by such Agent.
10.3 General Immunity. Neither an Agent nor any of such Agent's respective
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other
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Loan Document or in connection herewith or therewith except to the extent such
action or inaction is determined in a final non-appealable judgment by a court
of competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.
10.4 No Responsibility for Loans, Recitals, etc. Neither an Agent nor any
of such Agent's directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except,
in the case of the Administrative Agent receipt of items required to be
delivered solely to Administrative Agent; (d) the existence or possible
existence of any Default or Unmatured Default; (e) the validity, enforceability,
effectiveness, sufficiency or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; or (f) the financial
condition of the Borrower or of any of the Borrower's Subsidiaries. Neither
Agent shall have any duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to such Agent at such time, but is
voluntarily furnished by the Borrower to such Agent (either in its capacity as
an Agent or in its individual capacity).
10.5 Action on Instructions of Lenders. Each Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or, when expressly required hereunder, all of the Lenders),
and such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders. The Lenders hereby acknowledge that
neither Agent shall be under any duty to take any discretionary action permitted
to be taken by it pursuant to the provisions of this Agreement or any other Loan
Document unless it shall be requested in writing to do so by the Required
Lenders. Each Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action. The Administrative Agent agrees, upon the request of
any Lender at any time an Unmatured Default exists, to give a written notice to
the Borrower of the type described in Section 7.1.3 or 7.1.4.
10.6 Employment of Agents and Counsel. Each Agent may execute any of its
duties as an Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Each Agent shall be entitled to advice of
counsel concerning the contractual arrangement between such Agent and the
Lenders and all matters pertaining to such Agent's duties hereunder and under
any other Loan Document.
10.7 Reliance on Documents; Counsel. Each Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document
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believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and, in respect to legal matters, upon the opinion of
counsel selected by such Agent, which counsel may be employees of such Agent.
10.8 Agents' Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify each Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which either Agent is entitled to reimbursement
by the Borrower under the Loan Documents, (ii) for any other expenses incurred
by either Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by an Agent in
connection with any dispute between either Agent and any Lender or between two
or more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against either Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against an Agent in connection with any dispute
between either Agent and any Lender or between two or more of the Lenders), or
the enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable to any Agent for any of
the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Agent and (ii) any
indemnification required pursuant to Section 3.5(vii) shall, notwithstanding the
provisions of this Section 10.8, be paid by the relevant Lender in accordance
with the provisions thereof. The obligations of the Lenders under this Section
10.8 shall survive payment of the Obligations and termination of this Agreement.
10.9 Notice of Default. Neither Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
such Agent has received written notice from a Lender or the Borrower referring
to this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that either Agent receives
such a notice, such Agent shall give prompt notice thereof to the Lenders.
10.10 Rights as a Lender. In the event an Agent is a Lender, such Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not an Agent, and the term "Lender" or
"Lenders" shall, at any time when an Agent is a Lender, unless the context
otherwise indicates, include such Agent in its individual capacity. Each Agent
and its respective Affiliates may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which
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the Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. Neither Agent, in its individual capacity, is obligated to remain
a Lender.
10.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon either Agent, either Arranger or any
other Lender and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon either Agent, either Arranger or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
10.12 Successor Agent. Each Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, such resignation to be effective
(i) in the case of the Syndication Agent, immediately, and (ii) in the case of
the Administrative Agent, upon the appointment of a successor Agent, or, if no
successor Agent has been appointed, forty-five days after the retiring Agent
gives notice of its intention to resign. Either Agent may be removed at any time
with or without cause by written notice received by such Agent from the Required
Lenders, such removal to be effective on the date specified by the Required
Lenders. Upon any resignation or removal of the Administrative Agent, the
Required Lenders shall have the right (with, so long as no Default or Unmatured
Default exists, the consent of the Borrower, which shall not be unreasonably
withheld) to appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of any
Lender and with the consent of the Borrower, not to be unreasonably withheld or
delayed, appoint any of its Affiliates which is a commercial bank as a successor
Administrative Agent hereunder. If the Administrative Agent has resigned or been
removed and no successor Administrative Agent has been appointed, the Lenders
may perform all the duties of the Administrative Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders. No
successor Administrative Agent shall be deemed to be appointed hereunder until
such Administrative Agent has accepted the appointment. Any such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $100,000,000. Upon the acceptance of any appointment as
Administrative Agent 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 resigning or removed
Administrative Agent. Upon the effectiveness of the resignation or removal of
either Agent, the resigning or removed Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of an Agent, the provisions of this Article X
shall continue in effect for the benefit of such Agent in respect of any actions
taken or omitted to be
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taken by such Agent while such Agent was acting as an Agent hereunder and under
the other Loan Documents. In the event that there is a successor to the
Administrative Agent by merger, or the Administrative Agent assigns its duties
and obligations to an Affiliate pursuant to this Section 10.12, then the term
"Prime Rate" as used in this Agreement shall mean the prime rate, base rate or
other analogous rate of the new Administrative Agent.
10.13 Delegation to Affiliates. The Borrower and the Lenders agree that
each Agent may delegate any of its duties under this Agreement to any of its
respective Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Agents are entitled under Articles
IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the Lenders
and their respective
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successors and assigns, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents and (ii) any
assignment by any Lender must be made in compliance with Section 12.3. The
parties to this Agreement acknowledge that clause (ii) of this Section 12.1
relates only to absolute assignments and does not prohibit assignments creating
security interests, including, without limitation, any pledge or assignment by
any Lender of all or any portion of its rights under this Agreement and any Note
to a Federal Reserve Bank; provided that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the provisions
of Section 12.3. The Administrative Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided that the
Administrative Agent may in its discretion (but shall not be required to) follow
instructions from the Person which made any Loan or which holds any Note to
direct payments relating to such Loan or Note to another Person. Any assignee of
the rights to any Loan or any Note agrees by acceptance of such assignment to be
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Loan.
12.2 Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Note held by such Lender,
any Commitment of such Lender or any other interest of such Lender under
the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement
(including under Article III) shall be determined as if such Lender had not
sold such participating interests, and the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Final Maturity
Date, or postpones any date fixed for any regularly scheduled payment of
principal of, or interest or fees on, any such Loan or Commitment.
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12.3 Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of
its rights and obligations under the Loan Documents. Such assignment shall
be substantially in the form of Exhibit C or in such other form as may be
agreed to by the parties thereto. The consent of the Borrower, the
Administrative Agent and the Syndication Agent (which consent shall not be
unreasonably withheld or delayed by any such party) shall be required prior
to an assignment becoming effective with respect to a Purchaser which is
not a Lender or an Affiliate thereof; provided that if a Default has
occurred and is continuing, the consent of the Borrower shall not be
required; provided, further, that no assignment shall be permitted if, as
of the date thereof, any event or circumstance exists which would result in
the Borrower being obligated to pay any greater amount hereunder to the
Purchaser than the Borrower is obligated to pay to the assigning Lender.
Each such assignment with respect to a Purchaser which is not a Lender or
an Affiliate thereof shall (unless each of the Borrower and the
Administrative Agent otherwise consents) be in an amount not less than the
lesser of (i) $5,000,000 or (ii) the remaining amount of the assigning
Lender's Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).
12.3.2. Effect; Effective Date. Upon (i) delivery to the Administrative
Agent of an assignment, together with any consents required by Section
12.3.1, and (ii) payment of a $4,000 fee to the Administrative Agent for
processing such assignment (unless such fee is waived by the Administrative
Agent), such assignment shall become effective on the effective date
specified in such assignment. The assignment shall contain a representation
by the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Loans under the applicable assignment
agreement constitutes "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party hereto,
and no further consent or action by the Borrower, the Lenders, the
Administrative Agent or the Syndication Agent shall be required to release
the transferor Lender with respect to the percentage of the Aggregate
Commitment and Loans assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Administrative Agent and the Borrower shall, if the
transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case
in principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
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12.4 Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5 Tax Treatment. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv) and the Borrower shall not be required to
indemnify such Transferee pursuant to Section 3.5 hereof for any Taxes withheld
as a result of the failure of the Transferee to so comply.
ARTICLE XIII
NOTICES
13.1 Notices. Except as otherwise permitted by Section 2.15 with respect to
borrowing notices, all notices, requests and other communications to any party
hereunder shall be in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or an Agent, at its address or facsimile number set forth
on the signature pages hereof, (y) in the case of any Lender, at its address or
facsimile number set forth in its administrative questionnaire or (z) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, or (ii) if given by any
other means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section; provided that notices to the
Administrative Agent under Article II shall not be effective until received.
13.2 Change of Address. The Borrower, each Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this
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Agreement by signing any such counterpart. This Agreement shall be effective
when it has been executed by the Borrower, the Agents and the Lenders and each
party has notified the Administrative Agent by facsimile transmission or
telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL; MAXIMUM INTEREST RATE
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF EITHER AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE
BORROWER AGAINST EITHER AGENT OR ANY LENDER OR ANY AFFILIATE OF EITHER AGENT OR
ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
-52-
15.4 Maximum Interest Rate. No provision of the Loan Documents shall
require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law ("Maximum Rate"). If any interest in excess
of the Maximum Rate is provided for or shall be adjudicated to be provided for
in the Notes or otherwise in connection with this Agreement, the provisions of
this Section 15.4 shall govern and prevail and neither the Borrower nor the
sureties, guarantors, successors or assigns of the Borrower shall be obligated
to pay the excess amount of the interest or any other excess sum paid for the
use, forbearance, or detention of sums loaned. In the event either Agent or any
Lender ever receives, collects or applies as interest any amount in excess of
the Maximum Rate, the amount by which such amount exceeds the Maximum Rate shall
be applied as a payment and reduction of the principal of indebtedness evidenced
by the Loans, and, if the principal amount of the Loans has been paid in full,
any remaining excess shall forthwith be paid to the Borrower.
15.5 Termination of Existing Agreements. Each of the parties hereto (to the
extent applicable) agrees that, concurrently with the making of the initial
Advance hereunder, each of the Agreements referred to in clause (a) of the first
paragraph of Section 4.1 shall be terminated (without regard to any requirement
for notice of termination of any commitment thereunder) and each such Agreement
shall be of no further force or effect (except for any provision thereof which
by its terms survives termination thereof).
-53-
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agents have executed
this Agreement as of the date first above written.
SOUTHWESTERN ENERGY COMPANY
By:____________________________________
Executive Vice President and
Chief Financial Officer
0000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Fax: 000-000-0000
X-0
XXXX XXX, XX,
Xxxxxxxxxxxx and as Administrative Agent
By:____________________________________
Title:_______________________________
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxx
Fax: 000-000-0000
S-2
BANK OF AMERICA, N.A.,
Individually and as Syndication Agent
By:____________________________________
J. Xxxxx Xxxxxx
Managing Director
S-3
SCHEDULE 1A
COMMITMENTS
Lender Amount of Commitment
------ --------------------
Bank One, NA $ 90,000,000
Bank of America, N.A. $ 90,000,000
-------------------- ------------
Aggregate Commitment $180,000,000
SCHEDULE 1B
EXISTING INDEBTEDNESS
Outstanding Principal
Designation Obligor Holders as of July 10, 2000 Amount as of July 10, 2000
----------- ------- --------------------------- --------------------------
Private Placement Debt Company Various Investors $22,000,000
Senior Notes Company Bank One, NA (then known as $125,000,000
The First National Bank of
Chicago), as Trustee
Medium Term Notes Company Bank One, NA (then known as $100,000,000
The First National Bank of
Chicago), as Trustee
Guaranty Agreement Re: Company The Bank of New York, as $45,600,000
NOARK Pipeline System Trustee
SCHEDULE 2.7(a)
EXCLUDED ASSET SALES
A.W. Realty Sale
An undivided 2/3 interest in Lot1-B of Vantage Square, a Joint Venture, or a
portion of Lot 1-B yet to be determined. Lot 1-B containing 5.86 acres is
located in the northeast quarter of the northeast quarter of Section 26,
Township 17 north, range 00 xxxx xx Xxxxxxxxxx Xxxxxx, Xxxxxxxx. Anticipated
sales proceeds of approximately $1.2 million.
Oklahoma E&P Properties
Southwestern Energy Production Company's working interest in approximately 135
oil and gas producing properties located primarily in the Anadarko Basin in
western Oklahoma. Properties will be auctioned at the Oil & Gas Asset
Clearinghouse Auction scheduled for the week of July 10, 2000 with proceeds
expected to be between $11 million and $13 million.
SCHEDULE 2.7(b)
ASSETS TO BE SWAPPED
Southwestern Energy Production Company's working interest in approximately 300
oil and gas producing properties in the Anadarko Basin of Oklahoma. Properties
represent the remaining Anadarko properties not sold at auction during the week
of July 10, 2000. Properties would be anticipated to be sold at a price ranging
from $20 million to $30 million.
SCHEDULE 5.4
SUBSIDIARIES
Arkansas Western Gas Company
Southwestern Energy Production Company
Southwestern Energy Pipeline Company
SEECO, Inc.
A.W. Realty Company
Southwestern Energy Services Company
Diamond M Production Company
All of the above are 100% wholly-owned by the Company and are Arkansas
corporations.
Arkansas Gas Gathering Company, an Arkansas corporation, is 100% wholly-owned by
SEECO, Inc.
SCHEDULE 5.13
LITIGATION
Enron v. Southwestern Energy Company, et. al
In its Form 8-K filed July 2, 1996, the Borrower disclosed that this lawsuit
relating to overriding royalty interests in certain Arkansas oil and gas
properties had been filed against it and two of its wholly-owned subsidiaries.
The lawsuit, which was brought by a party who was originally included in (but
opted out of) the Case, involves claims similar to those upon which judgment was
rendered against the Borrower and its Subsidiaries. In September 1998, another
party who opted out of the class threatened the Borrower with similar
litigation. While the amounts of these pending and threatened claims could be
significant, management believes, based on its extensive investigations and
trial preparation, that these claims are without merit, and that the Borrower's
ultimate liability, if any, will not be material to its consolidated financial
position or results of operation. This matter went to a non-jury trial as to
liability on January 10, 2000 and the Borrower is awaiting the Court's ruling.
SCHEDULE 5.19
NEGATIVE PLEDGES
Listed below are all of the documents evidencing Indebtedness of
Southwestern Energy Company and its Subsidiaries which contain limitations on
the creation, incurrence, or assumption of Liens on any of their properties.
9.36% Senior Notes due 2011, Series C issued by the Borrower.
Indenture dated as of December 1, 1995, between the Borrower and Bank One,
NA (then known as The First National Bank of Chicago), as Trustee.
SCHEDULE 6.2
INSURANCE
1. Property "all risk" insurance including earthquake coverage for buildings,
personal property, equipment and inventory. Minimum limit of $15,000,000.
2. Workers' Compensation with Statutory Limits and Employer's Liability with
$1,000,000 per accident or occupational disease covering all employees in
compliance with the laws of the States of Arkansas, Oklahoma, New Mexico
and Texas. Such policy is endorsed to provide United States Longshoremen's
& Harbor Workers' Compensation Act and Maritime Coverages.
3. Comprehensive General Liability Insurance with bodily injury and death
limits of $1,000,000 for injury to or death of one person and $2,000,000
for the death or injury of more than one person in one occurrence and
property damage limits of $1,000,000 for each occurrence.
4. Automobile Public Liability Insurance covering bodily injury or death and
property damage of at least $1,000,000 per occurrence, combined single
limit.
5. Control of Well Coverage with $10,000,000 combined single limit for
operator's extra expense/care, custody and control;
redrilling/recompletion; and seepage, pollution and containment.
6. Umbrella Liability Insurance with minimum limits of at least $30,000,000 to
apply in excess of the primary limits of the above stated policies.
EXHIBIT A
FORM OF BORROWING NOTICE
Reference is made to the Credit Agreement dated as of July 17, 2000 (as from
time to time amended, the "Agreement") among Southwestern Energy Company, an
Arkansas corporation (the "Borrower"), various financial institutions, and Bank
One, NA, as Administrative Agent (the "Administrative Agent"). Capitalized terms
used but not defined herein have the respective meanings given to such terms in
the Agreement.
Pursuant to the Agreement, the Borrower hereby requests that an Advance in the
amount of $_________ to be made on ____________, ____. The Borrower requests
that the Advance to be made hereunder shall be [a Floating Rate Advance] [a
Eurodollar Advance] [a Transaction Rate Advance] [and shall have an Interest
Period/Transaction Rate Interest Period of _______________.]
The Borrower certifies that:
(a) The representations and warranties of the Borrower set forth in
Article V of the Agreement are true and correct on and as of the date hereof,
with the same effect as though such representations and warranties had been made
on and as of the date hereof or, if such representations and warranties are
expressly limited to particular dates, as of such particular dates.
(b) No Default or Unmatured Default exists or will result from the
Borrower's receipt and application of the proceeds of the Advance requested
hereby.
IN WITNESS WHEREOF, this instrument is executed as of _________, ____.
SOUTHWESTERN ENERGY COMPANY
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT B
FORM OF OPINION
___________, 2000
The Administrative Agent and the Lenders who are parties to the Credit Agreement
described below.
Gentlemen/Ladies:
I am counsel for Southwestern Energy Company (the "Borrower"), and have
represented the Borrower in connection with its execution and delivery of a
Credit Agreement dated as of July 17, 2000 (the "Agreement") among the Borrower,
the Lenders named therein, and Bank One, NA, as Administrative Agent, and
providing for Advances in an aggregate principal amount not exceeding
$180,000,000 at any one time outstanding. All capitalized terms used in this
opinion and not otherwise defined herein shall have the meanings attributed to
them in the Agreement.
I have examined the Borrower's **[describe constitutive documents of
Borrower and appropriate evidence of authority to enter into the transaction]**,
the Loan Documents and such other matters of fact and law which we deem
necessary in order to render this opinion. Based upon the foregoing, it is our
opinion that:
l. Each of the Borrower and its Subsidiaries is a corporation, partnership
or limited liability Borrower duly and properly incorporated or organized, as
the case may be, validly existing and (to the extent such concept applies to
such entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
2. The execution and delivery by the Borrower of the Loan Documents and the
performance by the Borrower of its obligations thereunder have been duly
authorized by proper corporate proceedings on the part of the Borrower and will
not:
(a) require any consent of the Borrower's shareholders or members
(other than any such consent as has already been given and remains in full
force and effect);
(b) violate (i) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, bylaws, or operating
or
other management agreement, as the case may be, or (iii) the provisions of
any indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder; or
(c) result in, or require, the creation or imposition of any Lien in,
of or on the Property of the Borrower or a Subsidiary pursuant to the terms
of any indenture, instrument or agreement binding upon the Borrower or any
of its Subsidiaries.
3. The Loan Documents have been duly executed and delivered by the Borrower
and constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
4. Except for the litigation disclosed in Borrower's Form 8-K filed July 2,
1996 and updated in the Borrower's most recent Form 10-Q, there is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the best of our knowledge after due inquiry, threatened against
the Borrower or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
5. No order, consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement, the payment and performance by
the Borrower of the Obligations, or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
This opinion may be relied upon by the Agents, the Lenders and their
participants, assignees and other transferees.
Very truly yours,
EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between ___________
(the "Assignor") and _____________ (the "Assignee") is dated as of ________, ___
20___. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other Loan
Documents relating to the facilities listed in Item 3 of Schedule 1. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Administrative
Agent) after this Assignment Agreement, together with any consents required
under the Credit Agreement, are delivered to the Administrative Agent. In no
event will the Effective Date occur if the payments required to be made by the
Assignee to the Assignor on the Effective Date are not made on the proposed
Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of
Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date, the
amount agreed to by the Assignor and the Assignee. On and after the Effective
Date, the Assignee shall be entitled to receive from the Administrative Agent
all payments of principal, interest and fees with respect to the interest
assigned hereby. The Assignee will promptly remit to the Assignor any interest
on Loans and fees received from the Administrative Agent which relate to the
portion of the Commitment or Loans assigned to the Assignee hereunder for
periods prior to the Effective Date and not previously paid by the Assignee to
the Assignor. In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit it to the other party
hereto.
5. RECORDATION FEE. The Assignor and Assignee each agree to pay one-half of
the recordation fee required to be paid to the Administrative Agent in
connection with this Assignment Agreement unless otherwise specified in Item 6
of Schedule 1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon either Agent, the Assignor or
any other Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Agents to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agents by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) confirms
that the execution and delivery of this Assignment Agreement by the Assignee is
duly authorized, (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Lender, (vi) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vii)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as defined
under ERISA and that its rights, benefits and interests in and under the Loan
Documents will not be "plan assets" under ERISA, (viii) agrees to indemnify and
hold the Assignor harmless against all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
nonperformance of the obligations assumed under this Assignment Agreement, and
2
(ix) if applicable, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any United
States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
9. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may be
executed in counterparts. Transmission by facsimile of an executed counterpart
of this Assignment Agreement shall be deemed to constitute due and sufficient
delivery of such counterpart and such facsimile shall be deemed to be an
original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto have
executed this Assignment Agreement by executing Schedule 1 hereto as of the date
first above written.
3
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
Credit Agreement dated as of July 17, 2000 among Southwestern Energy
Company, the lenders named therein including the Assignor, and Bank One, NA
individually and as Administrative Agent for such lender, as it may be
amended from time to time.
2. Date of Assignment Agreement:_________ , 20__
3. Amounts (As of Date of Item 2 above):
a. Assignee's percentage
of Aggregate Commitment
(Advances) purchased
under the Assignment
Agreement** ____%
b. Amount of
Assignor's Commitment
purchased
under the Assignment
Agreement** $______
4. Assignee's Commitment (or Loans
with respect to terminated
Commitments) purchased
hereunder: $___________________
5. Proposed Effective Date: ___________________
6. Non-standard Recordation Fee
Arrangement
N/A***
[Assignor/Assignee
to pay 100% of fee]
[Fee waived by Administrative Agent]
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:______________________ By:_____________________
Title____________________ Title:___________________
4
ACCEPTED AND CONSENTED TO****
SOUTHWESTERN ENERGY COMPANY
By:_______________________________
Title:____________________________
** Percentage taken to 10 decimal places
*** If fee is split 50-50, pick N/A as option
**** Delete if not required by Credit Agreement
ACCEPTED AND CONSENTED
TO BY BANK ONE, NA,
as Administrative Agent
By:_______________________________
Title:____________________________
ACCEPTED AND CONSENTED
TO BY BANK OF AMERICA, N.A.,
as Syndication Agent
By:_______________________________
Title:____________________________
5
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
Contact:
Name:_____________________________ Telephone No.:__________________________
Fax No.:__________________________ Telex No.:______________________________
Answerback:_____________________________
Payment Information:
Name & ABA # of Destination Bank: ______________________
Account Name & Number for Wire Transfer:_______________________________________
_______________________________________________________________________________
Other Instructions:____________________________________________________________
Address for Notices for Assignor:______________________________________________
ASSIGNEE INFORMATION
Credit Contact:
Name:_____________________________ Telephone No.:__________________________
Fax No.:__________________________ Telex No.:______________________________
Answerback:_____________________________
Key Operations Contacts:
Booking Installation: Booking Installation:
Name: Name:
Telephone No.: Telephone No.:
Fax No.: Fax No.:
Telex No.: Telex No.:
Answerback: Answerback:
6
Payment Information:
Name & ABA # of Destination Bank:
Account Name & Number for Wire Transfer:_______________________________
Other Instructions:
Address for Notices for Assignee:
7
BANK ONE INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
Initial Funding Contact: Subsequent Operations Contact:
Name: Name:
Telephone No.: (312) Telephone No.: (312)
Fax No.: (312) Fax No.: (312)
Bank One Telex No.: 190201 (Answerback: FNBC UT)
Initial Funding Standards:
Libor Fund 2 days after rates are set.
Bank One Wire Instructions: Bank One, NA, ABA # 000000000
LS2 Incoming Account # 481152860000
Ref:________________
Address for Notices for Bank One : 0 Xxxx Xxx Xxxxx, Xxxxxxx, XX 00000
Attn: Agency Compliance Division,
Suite IL1-0353
Fax No. (000) 0000000 or (000) 0000000
8
EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, NA,
as Administrative Agent (the "Administrative Agent") under the Credit
Agreement
Described Below.
Re: Credit Agreement, dated as of July 17, 2000 (as the same may be amended
or modified, the "Credit Agreement"), among Southwestern Energy Company (the
"Borrower"), the Lenders named therein and the Administrative Agent. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided that the Administrative Agent may
otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 13.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.15 of the Credit Agreement.
Facility Identification Number(s)________________________________________
Customer/Account Name: [Borrower]
Transfer Funds To_________________________________________________________
_________________________________________________________
For Account No.___________________________________________________________
Reference/Attention To____________________________________________________
Authorized Officer (Customer Representative) Date________________
____________________________________________ _________________________
(Please Print) Signature
Bank Officer Name Date________________
____________________________________________ _________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
EXHIBIT E
NOTE
[Date]
Southwestern Energy Company, an Arkansas corporation (the "Borrower"),
promises to pay to the order of ____________________________________ (the
"Lender") the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to Article II of the Agreement (as hereinafter
defined), in immediately available funds at the main office of Bank One, NA in
Chicago, Illinois, as Administrative Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Final Maturity Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of July 17, 2000 (which, as it
may be amended or modified and in effect from time to time, is herein called the
"Agreement"), among the Borrower, the lenders party thereto, including the
Lender, and Bank One, NA, as Administrative Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
Notwithstanding anything to the contrary in this Note, no provision of
this Note shall require the payment or permit the collection of interest in
excess of the maximum permitted by applicable law ("Maximum Rate"). If any
interest in excess of the Maximum Rate is provided for or shall be adjudicated
to be so provided, in this Note or otherwise in connection with the loan
transaction, the provisions of this paragraph shall govern and prevail, and
neither the Borrower nor the sureties, guarantors, successors or assigns of the
Borrower shall be obligated to pay the excess of the interest or any other
excess sum paid for the use, forbearance, or detention of sums loaned. If for
any reason interest in excess of the Maximum Rate shall be deemed charged,
required or permitted by any court of competent jurisdiction, the excess shall
be applied as payment and reduction of the principal of indebtedness evidenced
by this Note, and, if the principal amount has been paid in full, any remaining
excess shall forthwith be paid to the Borrower.
This Note shall be construed in accordance with the internal laws (and
not the law of conflicts) of the State of Illinois, but giving effect to Federal
laws applicable to national banks.
SOUTHWESTERN ENERGY COMPANY
By:____________________________________
Print Name:____________________________
Title:_________________________________
2
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE
DATED JULY 17, 2000
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: Date : Amount of Loan : of Interest Period : Amount Paid : Unpaid Balance :
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i
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
The undersigned, the _________________ of Southwestern Energy Company
(the "Borrower") hereby (a) delivers this Certificate pursuant to Section 6.1(c)
of the Credit Agreement dated as of July 17, 2000 (the "Agreement"; capitalized
terms used but not defined herein have the respective meanings given thereto in
the Agreement) among the Borrower, various financial institutions and Bank One,
NA, as Administrative Agent, and (b) certifies to each Lender as follows:
1. Attached as Schedule I are the financial statements of the Borrower as
of and for the Fiscal Year Quarter (check one) ended _____________, ________ .
2. Such financial statements have been prepared in accordance with
Agreement Accounting Principles and fairly present in all material respects the
financial condition of the Borrower as of the date indicated therein and the
results of operations for the respective periods covered thereby.
3. Attached as Schedule II are detailed calculations used by the Borrower
to establish whether the Borrower was in compliance with the requirements of
Section 6.4 of the Agreement on the date of the financial statements attached as
Schedule I.
4. Unless otherwise disclosed on Schedule III, neither a Default nor an
Unmatured Default has occurred which is in existence on the date hereof or, if
any Default or Unmatured Default is disclosed on Schedule III, the Borrower has
taken or proposes to take the action to cure such Default or Unmatured Default
set forth on Schedule III.
5. Except as described on Schedule IV, the representations and warranties
of the Borrower set forth in the Agreement are true and correct on and as of the
date hereof, with the same effect as though such representations and warranties
had been made on and as of the date hereof or, if such representations and
warranties are expressly limited to particular dates, as of such particular
dates.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate as
of __________, ________.
SOUTHWESTERN ENERGY COMPANY
By:____________________________________
Name:__________________________________
Title:_________________________________
Schedule I
Financial Statements
(to be attached)
Schedule II
Compliance Calculations
(to be attached)
Schedule III
Defaults/Remedial Action
(to be attached)
Schedule IV
Qualifications to Representations and Warranties
