EXHIBIT 10.3
EXECUTION COPY
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$900,000,000
CREDIT AGREEMENT
AMONG
THE XXXXXXXX COMPANIES, INC.
XXXXXXXX PRODUCTION HOLDINGS LLC
XXXXXXXX PRODUCTION RMT COMPANY,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
XXXXXX BROTHERS INC.,
AS LEAD ARRANGER AND BOOK MANAGER
XXXXXX COMMERCIAL PAPER INC.,
AS SYNDICATION AGENT
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF JULY 31, 2002
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TABLE OF CONTENTS
Page
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SECTION 1 - DEFINITIONS..................................................................1
1.1 Defined Terms................................................................1
1.2 Other Definitional Provisions...............................................18
SECTION 2 - AMOUNT AND TERMS OF COMMITMENTS.............................................19
2.1 Commitments.................................................................19
2.2 Procedure for Term Loan Borrowing...........................................19
2.3 Repayment of Term Loans.....................................................19
2.4 [Intentionally Omitted].....................................................19
2.5 [Intentionally Omitted].....................................................19
2.6 [Intentionally Omitted].....................................................19
2.7 [Intentionally Omitted].....................................................19
2.8 Repayment of Term Loans; Evidence of Indebtedness...........................19
2.9 Fees, Etc...................................................................20
2.10 [Intentionally Omitted].....................................................21
2.11 Optional Prepayments........................................................21
2.12 Mandatory Prepayments.......................................................21
2.13 [Intentionally Omitted].....................................................22
2.14 [Intentionally Omitted].....................................................22
2.15 Interest Rates and Payment Dates............................................22
2.16 Computation of Interest and Fees............................................23
2.17 Inability to Determine Interest Rate........................................24
2.18 Pro Rata Treatment and Payments.............................................24
2.19 Requirements of Law.........................................................25
2.20 Taxes.......................................................................26
2.21 Indemnity...................................................................28
2.22 Illegality..................................................................28
2.23 Change of Lending Office....................................................29
SECTION 3 - [INTENTIONALLY OMITTED].....................................................29
SECTION 4 - REPRESENTATIONS AND WARRANTIES..............................................29
4.1 Financial Condition.........................................................29
4.2 No Change...................................................................30
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4.3 Existence; Compliance with Law..............................................30
4.4 Power; Authorization; Enforceable Obligations...............................30
4.5 No Legal Bar................................................................31
4.6 No Material Litigation......................................................31
4.7 No Default..................................................................31
4.8 Ownership of Property; Liens................................................31
4.9 Intellectual Property.......................................................31
4.10 Taxes.......................................................................31
4.11 Federal Regulations.........................................................32
4.12 Labor Matters...............................................................32
4.13 ERISA.......................................................................32
4.14 Investment Company Act; Other Regulations...................................33
4.15 Subsidiaries................................................................33
4.16 Use of Proceeds.............................................................33
4.17 Environmental Matters.......................................................33
4.18 Accuracy of Information, Etc................................................34
4.19 Security Documents..........................................................34
4.20 Solvency....................................................................35
4.21 Net Indebtedness............................................................35
4.22 Insurance...................................................................35
4.23 [Intentionally Omitted].....................................................35
4.24 Hydrocarbon Interests.......................................................35
4.25 Permits.....................................................................36
4.26 Lease Payments..............................................................36
SECTION 5 - CONDITIONS PRECEDENT........................................................36
5.1 Conditions to Initial Extension of Credit...................................36
SECTION 6 - AFFIRMATIVE COVENANTS.......................................................40
6.1 Financial Statements........................................................40
6.2 Certificates; Other Information.............................................41
6.3 Payment of Obligations......................................................44
6.4 Conduct of Business and Maintenance of Existence, Etc.......................44
6.5 Maintenance of Property; Leases; Insurance..................................44
6.6 Inspection of Property; Books and Records; Discussions......................46
6.7 Notices.....................................................................46
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6.8 Environmental Laws..........................................................47
6.9 Parent Liquidity Event......................................................47
6.10 Additional Collateral, Guarantors, Etc......................................47
6.11 [Intentionally Omitted].....................................................48
6.12 Use of Proceeds.............................................................48
6.13 [Intentionally Omitted].....................................................48
6.14 Further Assurances..........................................................48
6.15 Other Provisions Relating to Holdings and the Borrower......................48
6.16 Capital Expenditures........................................................49
SECTION 7 - NEGATIVE COVENANTS..........................................................49
7.1 Financial Condition Covenants...............................................49
7.2 Limitation on Indebtedness..................................................49
7.3 Limitation on Liens.........................................................49
7.4 Limitation on Fundamental Changes...........................................51
7.5 Limitation on Disposition of Property.......................................51
7.6 Limitation on Restricted Payments...........................................52
7.7 Limitation on Capital Expenditures..........................................52
7.8 Limitation on Investments...................................................53
7.9 Limitation on Optional Payments and Modifications of Indebtedness...........53
7.10 Limitation on Transactions with Affiliates..................................53
7.11 Limitation on Sales and Leasebacks..........................................54
7.12 Limitation on Changes in Fiscal Periods.....................................54
7.13 Limitation on Negative Pledge Clauses.......................................54
7.14 Limitation on Restrictions on Subsidiary Distributions, Etc.................54
7.15 Business Activities.........................................................54
7.16 Intercompany Indebtedness...................................................55
7.17 Subsidiaries................................................................55
7.18 Limitation on Hedge Agreements and Firm Transportation Contracts............55
7.19 Partnerships and Joint Ventures.............................................55
7.20 Negative Pledge; Limitation on Assets.......................................55
SECTION 8 - EVENTS OF DEFAULT...........................................................56
SECTION 9 - THE AGENTS; THE ARRANGER....................................................59
9.1 Appointment.................................................................59
9.2 Delegation of Duties........................................................59
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9.3 Exculpatory Provisions......................................................59
9.4 Reliance by Agents..........................................................60
9.5 Notice of Default...........................................................60
9.6 Non-Reliance on Agents and Other Lenders....................................60
9.7 Indemnification.............................................................61
9.8 Arranger and Agents in Their Individual Capacities..........................61
9.9 Successor Agents............................................................62
9.10 Authorization to Release Liens..............................................62
9.11 The Arranger................................................................62
SECTION 10 - MISCELLANEOUS.................................................................63
10.1 Amendments and Waivers......................................................63
10.2 Notices.....................................................................64
10.3 No Waiver; Cumulative Remedies..............................................66
10.4 Survival of Representations and Warranties..................................66
10.5 Payment of Expenses.........................................................66
10.6 Successors and Assigns; Participations and Assignments......................67
10.7 Adjustments; Set-off........................................................70
10.8 Counterparts................................................................70
10.9 Severability................................................................70
10.10 Integration.................................................................70
10.11 GOVERNING LAW...............................................................71
10.12 Submission To Jurisdiction; Waivers.........................................71
10.13 Suretyship Waivers..........................................................71
10.14 Acknowledgments.............................................................71
10.15 Confidentiality.............................................................72
10.16 Release of Collateral and Guarantee Obligations.............................72
10.17 Accounting Changes..........................................................73
10.18 Delivery of Lender Addenda..................................................73
10.19 Construction................................................................73
10.20 WAIVERS OF JURY TRIAL.......................................................73
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SCHEDULES:
1.1(a) Gas Gathering Systems
1.1(b) Mortgaged Property
2.9(b) Net Indebtedness
4.1(a) Contingent Liabilities, Etc.
4.1(b) Dispositions
4.4 Consents, Authorizations, Filings and Notices
4.6 Material Litigation
4.13 ERISA
4.15 Subsidiaries
4.19(a)-1 UCC Filing Jurisdictions -- Collateral
4.19(a)-2 UCC Financing Statements to Remain on File
4.19(b) Mortgage Filings Jurisdictions
4.19(c) UCC Filing Jurisdictions -- Intellectual Property Collateral
4.24 Hydrocarbon Interests
4.25(b) Consents
6.15(a) Hedging Arrangements
7.2(d) Existing Indebtedness
7.3(j) Existing Liens
8(g)(i) Required Payments to Employee Welfare Benefit Plans
8(g)(ii) Required Payments to Multiemployer Plans
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP
F-2 Form of Legal Opinion of General Counsel
F-3 Form of Opinion of Xxxxx, Xxxxxx & Xxxxxx LLP
G Form of Term Note
H Form of Exemption Certificate
I Form of Lender Addendum
J Form of Solvency Certificate
K Form of Notice of Borrowing
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CREDIT AGREEMENT, dated as of July 31, 2002, among The Xxxxxxxx
Companies, Inc., a Delaware corporation ("Parent"), Xxxxxxxx Production Holdings
LLC, a Delaware limited liability company ("Holdings"), Xxxxxxxx Production RMT
Company, a Delaware corporation (the "Borrower"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
as lenders (the "Lenders"), XXXXXX BROTHERS INC., as advisor, lead arranger and
book manager (in such capacity, the "Arranger"), XXXXXX COMMERCIAL PAPER INC.,
as syndication agent (in such capacity, the "Syndication Agent"), and XXXXXX
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower intends to provide Holdings with the net proceeds
of the Term Loans (as defined below) in the form of a loan to Holdings and
Holdings will provide Parent with an amount equal to such loan from the Borrower
in the form of a loan to Parent;
WHEREAS, the Lenders are willing to make such Terms Loans available upon
and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1 - DEFINITIONS
1.1 Defined Terms.
As used in this Agreement, the terms listed in this Section 1.1 shall
have the respective meanings set forth in this Section 1.1.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Affiliated Fund": means, with respect to any Lender that is a fund that
invests (in whole or in part) in commercial loans, any other fund that invests
(in whole or in part) in commercial loans and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"Agents": the collective reference to the Syndication Agent and the
Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an amount
equal to (a) until the Closing Date, the aggregate amount of such Lender's
Commitments at such time and (b) thereafter, the aggregate then unpaid principal
amount of such Lender's Term Loans.
"Agreement": this Credit Agreement, as amended, supplemented, replaced
or otherwise modified from time to time in accordance with this Agreement.
"Approved Engineer": any independent engineer recognized in the U.S. oil
and gas loan syndication market and reasonably satisfactory to the
Administrative Agent.
"Arranger": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clauses
(a), (b), (c) or (d) of Section 7.5) by Holdings, the Borrower or any of the
Borrower's Subsidiaries other than a Company Sale.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%.
"Base Rate Loans": Term Loans for which the applicable rate of interest
is based upon the Base Rate.
"Benefited Lender": as defined in Section 10.7(a).
"Bison Entities": means, collectively, Bison Royalty LLC, Piceance
Production Holdings LLC and Xxxxxxx Production Company LLC.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrower Liquidity Reserve": the sum of (a) cash and Cash Equivalents
owned by the Borrower (excluding (a) Net Cash Proceeds from any Asset Sales,
free of Liens, which shall be applied as a mandatory prepayment of the Term
Loans pursuant to Section 2.12 and (b) any cash or Cash Equivalents posted as
cash collateral for, or the amount of any letter of credit issued in support of,
Hedge Agreements) in an amount equal to $65,000,000 in the possession of the
Borrower and (b) an irrevocable standby letter of credit naming the
Administrative Agent as beneficiary, issued by a financial institution
reasonably acceptable to the Administrative Agent, equal to the difference, if
any, between (x) $65,000,000 and (y) the aggregate cash and Cash Equivalents
referred to in the foregoing clause (a).
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"Business Day": (a) for all purposes other than as covered by clause (b)
below, a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and (b) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (a) and which is also a day for trading by and between banks
in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1
by Xxxxx'x Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of
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clause (b) of this definition; or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"Closing Date": the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied, which date shall be not later than July
31, 2002.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Commitment": as to any Lender, the obligation of such Lender, to make a
Term Loan to the Borrower hereunder in a principal amount not to exceed the
amount set forth under the heading "Commitment" opposite such Lender's name on
Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case may
be, in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the terms
hereof; provided that the original aggregate amount of the Commitments is
$900,000,000.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Company Sale": the Disposition to a third party (other than to Holdings
or to an Affiliate thereof) of at least a majority of the fair market value of
the Property of the Borrower and its Subsidiaries, whether by asset sale, by
sale of at least a majority of the Capital Stock of the Borrower, directly or
indirectly, by merger, consolidation, amalgamation or otherwise.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Consolidated EBITDA": of any Person for any period, Consolidated Net
Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
Consolidated Interest Expense of such Person and its Subsidiaries, amortization
or write-off of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness (including, in the case
of the Borrower, the Term Loans), (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring expenses or
losses (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business), (f) any non-cash losses in
connection with commodity hedge agreements entered into by Parent or one of its
Affiliates other than Holdings or any of its Subsidiaries for the benefit of the
Borrower or any of its Subsidiaries not otherwise excluded from Consolidated Net
Income and (g) any other non-cash charges, and minus, to the extent included in
the statement of such Consolidated Net Income for such period, the sum of (w)
interest income (except to the extent deducted in determining Consolidated
Interest
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Expense), (x) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business), (y) any non-cash gains in
connection with commodity hedge agreements entered into by Parent or one of its
Affiliates other than Holdings or any of its Subsidiaries for the benefit of the
Borrower or any of its Subsidiaries and (z) any other non-cash income, all as
determined on a consolidated basis.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio of
(a) the difference of (i) the sum of (A) Consolidated EBITDA of the Borrower and
its Subsidiaries for such period, plus (B) equity capital contributed to the
Borrower or any of its Subsidiaries by any Person except in the case of the
Borrower's Subsidiaries, the Borrower, minus (ii) the aggregate amount actually
paid by the Borrower and its Subsidiaries in cash during such period on account
of Capital Expenditures to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and its
Subsidiaries for such period and (b) provision for cash income taxes made by the
Borrower or any of its Subsidiaries on a consolidated basis in respect of such
period.
"Consolidated Interest Coverage Ratio": for any period, the ratio of (a)
Consolidated EBITDA of the Borrower and its Subsidiaries for such period to (b)
Consolidated Interest Expense of the Borrower and its Subsidiaries for such
period.
"Consolidated Interest Expense": of any Person for any period, total
cash interest expense (including that attributable to Capital Lease Obligations)
of such Person and its Subsidiaries for such period with respect to all
outstanding Indebtedness of such Person and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed by such
Person with respect to letters of credit and bankers' acceptance financing and
net costs of such Person under Hedge Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP).
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any Period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar distributions
and (c) the undistributed earnings of any Subsidiary of the Borrower (other than
any of the Bison Entities) to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Continuing Directors": as to any Person, the directors of such Person
on the Closing Date, after giving effect to the transactions contemplated
hereby, and each other director, if, in
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each case, such other director's nomination for election to the board of
directors of such Person is recommended by at least 66-2/3% of the then
Continuing Directors or such other director receives the vote of each of the
shareholders of such Person on the Closing Date in his or her election by the
shareholders of such Person.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Derivatives Counterparty": as defined in Section 7.6.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Disqualified Stock": any Capital Stock or other ownership or profit
interest of any Loan Party that any Loan Party is or, upon the passage of time
or the occurrence of any event, may become obligated to redeem, purchase,
retire, defease or otherwise make any payment in respect of in consideration
other than Capital Stock (other than Disqualified Stock).
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, local, municipal
or other Governmental Authority, regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment or of human
health, or employee health and safety, as has been, is now, or may at any time
hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization required
under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System. Eurodollar Loans shall be
6
deemed to constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under Regulation D.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the British Bankers Association Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In the
event that such rate does not appear on Page 3750 of the British Bankers
Association Telerate screen (or otherwise on such screen), the "Eurodollar Base
Rate" for purposes of this definition shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent.
"Eurodollar Loans": Term Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/16th of
1%):
Eurodollar Base Rate
--------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 8; provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Facility": the Commitments and the Term Loans made thereunder.
"Federal Funds Effective Rate": for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.
"Fee Letter": as defined in Section 2.9(a).
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United States of
America as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
financial statements delivered pursuant to Section 4.1(b).
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"Gas Gathering Systems": the gas plant and those certain gas gathering
systems consisting of all equipment, assets, rights-of-way, surface leases,
contracts and related assets more particularly described on Schedule 1.1(a)
attached hereto.
"Governing Documents": collectively, as to any Person, the articles or
certificate of incorporation and bylaws, any shareholders agreement, certificate
of formation, limited liability company agreement, partnership agreement or
other formation or constituent documents of such Person.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by Parent, Holdings, the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as the same
may be amended, supplemented, replaced or otherwise modified from time to time
in accordance with this Agreement.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantors": the collective reference to Parent, Holdings and the
Subsidiary Guarantors.
8
"Hedge Agreements": (a) all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Borrower or any of its
Subsidiaries providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies and (b) all hedging agreements entered
into by the Borrower or any of its Subsidiaries in connection with the hedging
of commodity prices, including basis (transportation) xxxxxx.
"Holdings": as defined in the preamble hereto.
"Hydrocarbons": oil, gas, casing head gas, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons, all products refined, separated,
settled and dehydrated therefrom and all products refined therefrom, including,
without limitation, kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other
minerals.
"Hydrocarbon Interests": all rights, titles, interests and estates now
owned or hereafter acquired by the Borrower or any of its Subsidiaries in any
and all oil, gas and other liquid or gaseous hydrocarbon properties and
interests, including without limitation, mineral fee or lease interests,
production sharing agreements, concession agreements, license agreements,
service agreements, risk service agreements or similar Hydrocarbon interests
granted by an appropriate Governmental Authority, farmout, overriding royalty
and royalty interests, net profit interests, oil payments, production payment
interests and similar interests in Hydrocarbons, including any reserved or
residual interests of whatever nature.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations or Synthetic Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation, and
(j) for the purposes of Section 8(e) only, all obligations of such Person in
respect of Hedge Agreements.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
9
"Initial Title Opinions": as defined in Section 6.2(m).
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, state, multinational or foreign laws or otherwise,
including, without limitation, copyrights, patents, trademarks, service-marks,
technology, know-how and processes, recipes, formulas, trade secrets, or
licenses (under which the applicable Person is licensor or licensee) relating to
any of the foregoing and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Term Loan is
outstanding, (b) as to any Eurodollar Loan, the last day of the relevant
Interest Period and (c) as to any Term Loan, the date of any repayment under
Section 2.11 or 2.12 or upon the Maturity Date.
"Interest Period": as to any Eurodollar Loan, (a) the three-month period
commencing on the Closing Date; and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending three months thereafter; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business
Day;
(ii) any Interest Period that would otherwise extend beyond the
date final payment is due on the Term Loans shall end on the date final
payment is due; and
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Investments": as defined in Section 7.8.
"Xxxxxx Entity": any of Xxxxxx Commercial Paper Inc. or any of its
Affiliates (including, without limitation, Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit I, to be executed and delivered
by such Lender on the Closing Date as provided in Section 10.18.
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"Lenders": as defined in the preamble hereto.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan Documents": this Agreement, the Security Documents, the Fee Letter
and the Term Notes (if any).
"Loan Parties": Holdings, the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document (including pursuant to Section
6.10).
"Make-Whole Amount": in the event that the Term Loans are repaid in
whole or in part prior to the Maturity Date, an amount in cash equal to the
amount of interest that would have been paid, accrued or capitalized on such
Term Loans through and including the Maturity Date at the rate specified in this
Agreement, which amount shall be discounted at a rate per annum equal to (x) the
yield on one-year U.S. Treasury notes having a remaining maturity as close as is
practical to the remaining term of the Terms Loans (but for the optional
prepayment, mandatory prepayment, Parent Liquidity Event or acceleration, as the
case may be), as determined by the Administrative Agent plus (y) 0.50%; provided
that the portion of interest payable based on the Eurodollar Rate plus 4.0% per
annum shall be based on a fixed interest rate equal to the Eurodollar Rate as of
the repayment date plus 4.0% per annum.
"Material Adverse Effect": a material adverse effect on or affecting (a)
the business, assets, liabilities, property, condition (financial or otherwise),
results of operations, prospects, value or management of Parent or the Loan
Parties taken as a whole, (b) the validity or enforceability of this Agreement
or any of the other Loan Documents, (c) the validity, enforceability or priority
of the Liens purported to be created by the Security Documents or (d) the rights
or remedies of any Secured Party hereunder or under any of the other Loan
Documents; provided that any event that otherwise be a Material Adverse Effect
shall not be deemed to be a Material Adverse Effect if disclosed by Parent or
any Loan Party in filings with the Securities and Exchange Commission prior to
the Closing Date.
"Material Environmental Amount": an amount or amounts payable by the
Borrower and/or any of its Subsidiaries, in the aggregate in excess of
$1,000,000, for: (a) costs to comply with any Environmental Law; (b) costs of
any investigation, and any remediation, of any Materials of Environmental
Concern; and (c) compensatory damages (including, without limitation damages to
natural resources), punitive damages, fines, and penalties pursuant to any
Environmental Law.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any
11
Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Maturity Date": the date that is 360 days after the Closing Date.
"Maximum Lawful Rate": as defined in Section 2.15(f).
"Mortgaged Properties": the real properties and leasehold estates listed
on Schedule 1.1(b), as to which the Administrative Agent for the benefit of the
Secured Parties shall be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages, deeds of trust and deeds to secure
debt made by any Loan Party in favor of, or for the benefit of, the
Administrative Agent for the benefit of the Secured Parties, substantially in
the form of Exhibit D (with such changes thereto as shall be advisable under the
law of the jurisdiction in which such mortgage or deed of trust is to be
recorded), as the same may be amended, supplemented, replaced or otherwise
modified from time to time in accordance with this Agreement.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 3(37) or 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale permitted by
Section 7.5(e), the proceeds thereof in the form of cash or Cash Equivalents of
such Asset Sale, net of reasonable and customary attorneys' fees, accountants'
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness secured by a Lien expressly permitted hereunder on any asset
which is the subject of such Asset Sale (other than any Lien pursuant to a
Security Document) and other reasonable and customary fees and expenses, in each
case, to the extent actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of reasonable and
customary attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other reasonable and customary fees
and expenses, in each case, to the extent actually incurred in connection
therewith.
"Non-Excluded Taxes": as defined in Section 2.20(a).
"Non-U.S. Lender": as defined in Section 2.20(f).
"Notice of Borrowing": a certificate duly executed by a Responsible
Officer of the Borrower substantially in the form of Exhibit K.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Term Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Parent (with respect to its Obligations under the Guarantee and Collateral
Agreement and the transactions contemplated thereby only) or any Loan Party,
12
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Term Loans and all other obligations and liabilities of the
Loan Parties to the Arranger, to any Agent or to any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees (including any deferred set-up fees),
Make-Whole Amounts, indemnities, costs, expenses (including, without limitation,
all fees, charges and disbursements of counsel to the Arranger, to any Agent or
to any Lender that are required to be paid by any Loan Party pursuant hereto or
to any other Loan Document) or otherwise.
"Oil and Gas Business" (a) the acquisition, exploration, exploitation,
development, operation, management and disposition of interests in Hydrocarbon
Interests and Hydrocarbons; (b) gathering, marketing, treating, processing,
storage, selling and transporting of any production from such interests or
Hydrocarbon Interests, including, without limitation, the marketing of
Hydrocarbons obtained from unrelated Persons; (c) any business relating to or
arising from exploration for or development, production, treatment, processing,
storage, transportation or marketing of oil, gas and other minerals and products
produced in association therewith; and (d) any activity that is ancillary or
necessary or desirable to facilitate the activities described in clauses (a)
through (c) of this definition.
"Oil and Gas Properties" (a) Hydrocarbon Interests; (b) the Property now
or hereafter pooled or unitized with Hydrocarbon Interests; (a) all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including, without limitation, all units
created under orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of the Hydrocarbon Interests; (d) all operating
agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or processing
of Hydrocarbons from or attributable to such Hydrocarbon Interest; (e) all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, the lands covered thereby and all oil in tanks and
all rents, issues, profits, proceeds, products, revenues and other income from
or attributable to the Hydrocarbon Interests; and (f) all tenements,
hereditaments, appurtenances and Property in any manner appertaining, belonging,
affixed or incidental to the Hydrocarbon Interests, Property, Gas Gathering
System, rights, titles, interests and estates described or referred to above,
including, without limitation, any and all Property, now owned or hereinafter
acquired and situated upon, used, held for use or useful in connection with the
operating, working or development of any of such Hydrocarbon Interests or
Property (excluding drilling rigs, automotive equipment or other personal
property which may be on such premises for the purpose of drilling a well or for
other similar temporary uses) and including any and all oil xxxxx, gas xxxxx,
injection xxxxx or other xxxxx, buildings, structures, fuel separators, liquid
extraction plants, plant compressors, pumps, pumping units, field gathering
systems, tanks and tank batteries, fixtures, valves, fittings, machinery and
parts, engines, boilers, meters, apparatus, equipment, appliances, tools,
implements, cables, wires, towers, casing, tubing and rods, surface leases,
rights-of-way, easements and servitudes together with all additions,
substitutions, replacements, accessions and attachments to any and all of the
foregoing.
"Original Lenders": Xxxxxx Commercial Paper Inc. and National Indemnity
Company.
13
"Other Taxes": any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.
"Parent": as defined in the preamble hereto.
"Parent Liquidity Amount": (a) at any time from the Closing Date through
the 180th day thereafter, $600,000,000; (b) at any time thereafter through and
including the Maturity Date, $750,000,000; and (c) at any time after the
Maturity Date, $200,000,000.
"Parent Liquidity Event": any time (a) when the sum of (i) Parent's
actual cash and Cash Equivalents on hand and (ii) the unused borrowing capacity
of Parent available to it under its credit facilities is less than the Parent
Liquidity Amount in the aggregate, (b) Parent's projected forward liquidity
determined as of the Closing Date (determined as described in the succeeding
sentence) at any time prior to the Maturity Date is less than the Parent
Liquidity Amount, (c) Parent's projected liquidity at the Maturity Date after
giving effect to the prepayment or repayment of the Term Loans in accordance
with this Agreement is less than the Parent Liquidity Amount, (d) there shall
occur and be continuing a payment default (beyond any grace period) by Parent or
any of its Subsidiaries (other than Holdings or any of its Subsidiaries) with
respect to one or more Indebtedness having a principal amount outstanding in
excess of $20,000,000 in the aggregate or (e) there shall have occurred and be
continuing any event of default under one or more Indebtedness of Parent or any
of its Subsidiaries (other than Holdings or any of its Subsidiaries) that, with
notice or the passage of time or both, would permit the holders thereof to
accelerate such Indebtedness and any other Indebtedness of Parent or any of its
Subsidiaries (other than Holdings or any of its Subsidiaries) that may be so
accelerated and has an aggregate principal amount outstanding in excess of
$20,000,000 in the aggregate. In determining Parent's forward liquidity, Parent
may take into account asset sales or other liquidity events projected as of the
Closing Date, if, but only if, (i) Parent shall have initiated a Disposition
process related to such liquidity event at least six months prior to such
Disposition, (ii) such process shall be evidenced by a contract for Disposition
from no later than 60 days prior to its scheduled Disposition date through such
scheduled Disposition date, and (iii) shall be satisfactory to the Original
Lenders and determined by them to be reasonably likely to result in the
consummation of such proposed Disposition or liquidity event (at the net
proceeds reflected in the projection) prior to such time as the Parent Liquidity
Event (at such price) shall occur.
"Participant": as defined in Section 10.6(b).
"Payment Office": the office of the Administrative Agent specified in
Section 10.2 or as otherwise specified from time to time by the Administrative
Agent as its payment office by notice to the Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
"Permits": the collective reference to (i) Environmental Permits, and
(ii) any and all other franchises, licenses, leases, permits, approvals,
notifications, certifications, registrations,
14
authorizations, exemptions, qualifications, easements, rights of way, Liens and
other rights, privileges and approvals required under any Requirement of Law.
"Permitted Liens": the collective reference to (i) in the case of
Collateral other than Pledged Stock, Liens permitted by Section 7.3 and (ii) in
the case of Collateral consisting of Pledged Stock, non-consensual Liens
permitted by Section 7.3 to the extent arising by operation of law.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is covered
by ERISA and which the Borrower or any Commonly Controlled Entity maintains,
administers, contributes to or is required to contribute to or under which the
Borrower or any Commonly Controlled Entity could incur any liability.
"Pledged Stock": as defined in the Guarantee and Collateral Agreement.
"Prime Rate" shall mean the prime lending rate as set forth on the
British Banking Association Telerate Page 5 (or such other comparable page as
may, in the opinion of the Administrative Agent, replace such page for purpose
of displaying such rate), as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually available. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(d).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock and Hydrocarbon Interests.
"Proved Producing Reserves": Proved Reserves that are recoverable from
existing xxxxx with current operating methods and expenses and are producing.
"Proved Reserves" those recoverable Hydrocarbons which have been
estimated with reasonable certainty, as demonstrated by geological and
engineering data, to be economically recoverable from the Oil and Gas Properties
by existing producing methods under existing economic conditions.
"Real Estate": All real property held or used by the Borrower or its
Subsidiaries, which the Borrower or the relevant Subsidiary owns in fee or in
which it holds a leasehold interest as a tenant.
"Register": as defined in Section 10.6(d).
15
"Regulation D": Regulation D of the Board as in effect from time to time
(and any successor to all or a portion thereof).
"Regulation H": Regulation H of the Board as in effect from time to time
(and any successor to all or a portion thereof).
"Regulation T": Regulation T of the Board as in effect from time to time
(and any successor to all or a portion thereof).
"Regulation U": Regulation U of the Board as in effect from time to time
(and any successor to all or a portion thereof).
"Regulation X": Regulation X of the Board as in effect from time to time
(and any successor to all or a portion thereof).
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Required Lenders": at any time, the holders of more than a majority of
(a) until the Closing Date, the Commitments and (b) thereafter, the aggregate
unpaid principal amount of the Term Loans then outstanding.
"Requirement of Law": as to any Person, the Governing Documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Reserve Report": means a report setting forth the Proved Reserves by
reserve category attributable to the Hydrocarbon Interests constituting Proved
Reserves owned directly by the Borrower or any Subsidiary thereof, a projection
of the rate of production and net operating income with respect thereto, as of a
specified date, and such other information as is customarily obtained from and
provided in such reports, satisfactory in form and substance to the
Administrative Agent. All Reserve Reports prepared after the Closing Date and
required by this Agreement or any of the other Loan documents shall be prepared
or audited by an Approved Engineer.
"Responsible Officer": as to any Person, the chief executive officer,
president or chief financial officer of such Person, but in any event, with
respect to financial matters, the chief financial officer of such Person. Unless
otherwise qualified, all references to a "Responsible Officer" shall refer to a
Responsible Officer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Second Tranche Title Opinions": as defined in Section 6.2(m).
16
"Secured Parties": collectively, the Arranger, the Agents and the
Lenders.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other pledge and security documents
hereafter delivered to the Administrative Agent granting a Lien on any Property
of any Person to secure the obligations and liabilities of Parent or any Loan
Party under any Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvency Certificate": the Solvency Certificate to be executed and
delivered by the chief financial officer of each Loan Party, substantially in
the form of Exhibit J, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with this Agreement.
"Solvent": when used with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, (d) such Person will be able to pay its debts as they mature, and (e)
such Person is not insolvent within the meaning of any applicable Requirements
of Law. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower (other than the
Bison Entities).
"Syndication Agent": as defined in the preamble hereto.
"Syndication Date": the date on which the Syndication Agent completes
the syndication of the Facility and the Persons selected in such syndication
process become parties to this Agreement.
17
"Synthetic Lease Obligations": all monetary obligations of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations
which do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment).
"Taking": a taking or voluntary conveyance during the term of this
Agreement of all or part of any Mortgaged Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority affecting a Mortgaged Property or any portion thereof, whether or not
the same shall have actually been commenced.
"Term Loan Percentage": as to any Lender (a) at any time prior to the
Closing Date, the percentage which such Lender's Commitment then constitutes of
the aggregate Commitments or (b) at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's Term Loans then
outstanding constitutes of the aggregate principal amount of the Term Loans then
outstanding.
"Term Loan": as defined in Section 2.1.
"Term Notes": as defined in Section 2.8(e).
"Transferee": as defined in Section 10.15.
"Type": as to any Term Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"UCC": the Uniform Commercial Code, as in effect from time to time in
any jurisdiction.
"Wholly Owned Subsidiary": as to any Person, any other Person all of the
Capital Stock of which (other than directors' qualifying shares required by law)
is owned by such Person directly and/or through other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the other Loan Documents
or any certificate or other document made or delivered pursuant hereto or
thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
18
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) The expressions "payment in full," "paid in full" and any other
similar terms or phrases when used herein with respect to the Obligations shall
mean the payment in full, in immediately available funds, of all of the
Obligations.
(f) The words "including" and "includes" and words of similar import
when used in this Agreement shall not be limiting and shall mean "including
without limitation" or "includes without limitation", as the case may be.
SECTION 2 - AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. Subject to the terms and conditions hereof, each Lender
severally agrees to make a term loan (a "Term Loan") to the Borrower on the
Closing Date in an amount not to exceed the amount of the Term Loan Commitment
of such Lender. The Term Loans shall be Eurodollar Loans or, if Eurodollar Loans
are not available, shall be Base Rate Loans.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Lenders make the Term
Loans on the Closing Date and specifying the amount to be borrowed. Upon receipt
of such notice the Administrative Agent shall promptly notify each Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date each
Lender shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the Term Loan to be made by such
Lender. The Administrative Agent shall make available to the Borrower the
aggregate of the amounts made available to the Administrative Agent by the
Lenders in like funds.
2.3 Repayment of Term Loans. The Term Loan of each Lender shall mature
on the Maturity Date.
2.4 [Intentionally Omitted].
2.5 [Intentionally Omitted].
2.6 [Intentionally Omitted].
2.7 [Intentionally Omitted].
2.8 Repayment of Term Loans; Evidence of Indebtedness. (a) The Borrower
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Lender the principal amount of each Term Loan on the Maturity
Date (or on such earlier date on
19
which the Term Loans become due and payable pursuant to Section 2.12 or 8). The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Term Loans from time to time outstanding from the date hereof until payment
in full thereof at the rates per annum, and on the dates, and in the form set
forth in Section 2.15.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Term Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a sub-account therein for
each Lender, in which shall be recorded (i) the amount of each Term Loan made
hereunder and any Term Note evidencing such Term Loan, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Term Loans
made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Term Loan of such Lender,
substantially in the form of Exhibit G, with appropriate insertions as to date
and principal amount (such notes, "Term Notes").
2.9 Fees, Etc. (a) The Borrower agrees to pay to the Arranger, the
Agents and the Lenders the fees in the amounts and on the dates agreed to by the
Borrower and the Original Lenders pursuant to the letter agreement, dated as of
July 31, 2002 (the "Fee Letter"), among the Original Lenders and the Borrower.
(b) (i) If a Company Sale has occurred on or prior to the Maturity
Date (whether or not the Obligations have been repaid in full prior to such
Company Sale), the Borrower shall pay to the Lenders, in immediately available
funds, a deferred set-up fee (to be shared among them on a pro rata basis based
on their respective outstanding balance of the Term Loans immediately prior to
the consummation of the Company Sale) in an amount in cash initially equal to
the greater of (x) 15% of the principal amount of the Term Loans funded on the
Closing Date and (y) 15% (which percentage for the purposes of this clause (y)
shall increase by 1% at the beginning of the 60-day period following the Closing
Date and by an additional 1% at the beginning of each subsequent 60-day period)
of the difference between (A) the aggregate purchase price paid to Parent,
Holdings or the Borrower (including, without limitation, the amount of any
liabilities assumed by the purchaser in the transaction) in connection with such
20
Company Sale (such amount for the purposes of this calculation not to exceed
$2,500,000,000) and (B) the sum of (1) the principal amount of the
then-outstanding Term Loans, plus (2) the aggregate principal amount of any
other net Indebtedness of the Borrower and its Subsidiaries then outstanding
(which amount as of the Closing Date is set forth on Schedule 2.9(b)) plus (3)
accrued and unpaid interest on the Terms Loans to the date of repayment; or (ii)
if a Company Sale has not occurred on or prior to the Maturity Date, the
Borrower shall pay to the Lenders on the Maturity Date, in immediately available
funds, a deferred set-up fee (to be shared among them on a pro rata basis based
on their respective Term Loans outstanding immediately prior to the Maturity
Date) in an amount in cash equal to 15% of the Term Loans funded on the Closing
Date; provided, however, that if a Company Sale occurs within three months
following the Maturity Date, then upon such Company Sale the Borrower shall pay
to the Lenders (to be shared among them on a pro rata basis based on their
respective Term Loans outstanding immediately prior to the Maturity Date) an
additional amount in cash equal to the positive difference, if any, between the
fee that would have been paid pursuant to clause (i) above had such Company Sale
occurred prior to the Maturity Date and the fee paid pursuant to clause (ii)
above. This covenant shall survive the termination of this Agreement and the
payment in full of the Obligations in cash. Notwithstanding anything to the
contrary in this Section 2.9(b), the fees described in this Section shall be
earned on the Closing Date and shall be payable to the Lenders regardless of
whether the Term Loans are repaid or not.
2.10 [Intentionally Omitted].
2.11 Optional Prepayments.
(a) The principal of the Term Loans may be prepaid in whole or in
part at any time, plus the sum of (x) accrued and unpaid interest to the
repayment date, plus (y) the Make-Whole Amount, plus (z) a pro rata portion
(based on the amount of the Term Loans prepaid) of the applicable deferred
set-up fee referred to in Section 2.9(b)(ii), all of which shall be paid by the
Borrower immediately upon any such prepayment of Term Loans.
(b) Amounts to be applied in connection with a partial prepayment
made pursuant to this Section 2.11 shall be applied, first, to accrued and
unpaid interest on the Term Loans, second, to the deferred set-up fee referred
to in Section 2.9(b)(ii), third, to outstanding principal of the Terms Loans
(including, without limitation, any capitalized interest that has been added to
the principal of the Term Loans) and, fourth, to any remaining Obligations
outstanding. The application of any repayment pursuant to this Section 2.11
shall be made, first, to Base Rate Loans, if any, and, second, to Eurodollar
Loans.
2.12 Mandatory Prepayments.
(a) If on any date Holdings, the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Disposition
permitted by Section 7.5(e), such Net Cash Proceeds promptly (but in any event
no later than 2 Business Days after such receipt) shall be paid by the Borrower
to the Administrative Agent, for the ratable benefit of the Lenders, to prepay
the Obligations in cash at 100% of the principal amount of the Term Loans so
prepaid, plus the sum of (x) accrued and unpaid interest to the repayment date,
plus (y) the Make-Whole
21
Amount, plus (z) a pro rata portion (based on the amount of the Term Loans
prepaid) of the deferred set-up fee referred to in Section 2.9(b)(ii).
(b) On any date Parent, Holdings or the Borrower receives proceeds
from a Company Sale, (i) all such proceeds (whether or not sufficient to make
the following payments in full) shall be immediately applied to repay the
Obligations in full in cash and to pay to the Administrative Agent, for the pro
rata benefit of the Lenders, the sum of 100% of the principal amount of the Term
Loans, plus (x) accrued and unpaid interest to the repayment date, plus (y) the
Make-Whole Amount, plus (z) the deferred set-up fee referred to in Section
2.9(b)(i); provided that at the time of any such Company Sale, all of the
foregoing Obligations shall be paid in full regardless of the amount of proceeds
actually received by Parent, holdings or the Borrower.
(c) Unless the Borrower shall otherwise have repaid in full all
Obligations under this Agreement, upon (i) 75 days following a Parent Liquidity
Event or (ii) an acceleration of the Obligations pursuant to Section 8, the
Borrower shall repay the Obligations in full in cash, plus and pay to the
Administrative Agent, for the pro rata benefit of the Lenders, including 100% of
the principal amount of the outstanding Term Loans, plus the sum of (x) accrued
and unpaid interest to the repayment date, plus (y) the Make-Whole Amount, plus
(z) the deferred set-up fee referred to in Section 2.9(b)(ii).
(d) Subject to Section 2.18, amounts to be applied in connection
with a repayment made pursuant to this Section 2.12, if the Obligations are not
paid in full in cash, shall be applied, first, to accrued and unpaid interests
on the Term Loans, second, to the deferred set-up fee referred to in Section
2.9(b), third, to outstanding principal of the Terms Loans (including, without
limitation, any capitalized interest that has been added to the principal of the
Term Loans) and, fourth, to any remaining Obligations outstanding. The
application of any repayment pursuant to this Section 2.12 shall be made, first,
to Base Rate Loans, if any, and, second, to Eurodollar Loan.
2.13 [Intentionally Omitted].
2.14 [Intentionally Omitted].
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest during each Interest Period with respect thereto at a rate per
annum equal to the sum of (i) the Eurodollar Rate determined for such day plus
(ii) 4.00% per annum.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the sum of (i) the Base Rate plus (ii) 3.00% per annum.
(c) Each Term Loan also shall accrue additional interest at a rate
of 14% per annum.
(d) (i) If all or a portion of the principal amount of any Term
Loan shall not be paid when due (whether at the stated maturity, by acceleration
or otherwise), all outstanding Term Loans (whether or not overdue) shall bear
interest at a rate per annum that is equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this
22
Section plus 2.0%, and (ii) if all or a portion of any interest payable on any
Term Loan or other amount payable hereunder shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum equal to the rate then applicable to Base Rate
Loans plus 2.0%, in each case, with respect to clauses (i) and (ii) above, from
the date of such non-payment until such amount is paid in full (after as well as
before judgment).
(e) (i) Interest accruing pursuant to paragraphs (a) and (b) above
shall be payable by the Borrower in cash in arrears on each Interest Payment
Date; (ii) interest accruing pursuant to paragraph (c) above shall be calculated
on the outstanding principal amount of the Term Loans on a weighted average
daily basis and shall be payable by the Borrower in arrears on each Interest
Payment Date by increasing the outstanding principal amount of the Term Loans by
the amount of such interest due on a pro rata basis based on the Lenders'
outstanding Term Loans immediately prior to such interest payment and (iii)
interest accruing pursuant to paragraph (d) above shall be payable in cash from
time to time on demand.
(f) Notwithstanding anything to the contrary set forth in this
Section 2.15, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by the Lenders is
equal to the total interest which would have been received had the interest rate
payable hereunder been (but for the operation of this paragraph) the interest
rate payable since the Closing Date as otherwise provided in this Agreement.
Thereafter, interest hereunder shall be paid at the rate(s) of interest and in
the manner provided in Sections 2.15(a) through (e) above, unless and until the
rate of interest again exceeds the Maximum Lawful Rate, and at that time this
paragraph shall again apply. In no event shall the total interest received by
the Lenders pursuant to the terms hereof exceed the amount which the Lenders
could lawfully have received had the interest due hereunder been calculated for
the full term hereof at the Maximum Lawful Rate. If the Maximum Lawful Rate is
calculated pursuant to this paragraph, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in the
year in which such calculation is made. If, notwithstanding the provisions of
this Section 2.15(f), a court of competent jurisdiction shall finally determine
that the Lenders have received interest hereunder in excess of the Maximum
Lawful Rate, the Lenders shall refund any excess to Borrower or as a court of
competent jurisdiction may otherwise order.
2.16 Computation of Interest and Fees. (a) Interest, fees and
commissions payable on a per annum basis pursuant hereto shall be calculated on
the basis of a 360-day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on a
Term Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the
23
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.15(a).
2.17 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Term Loans during such Interest Period, the Administrative Agent
shall give telecopy or telephonic notice thereof to the Borrower and the
relevant Lenders as soon as practicable thereafter. If such notice is given (x)
any Eurodollar Loans requested to be made on the first day of such Interest
Period shall be made as Base Rate Loans and (y) any outstanding Eurodollar Loans
shall be converted, on the last day of the then current Interest Period with
respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be continued as such.
2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder shall be made pro rata according to the respective
Term Loan Percentages of the Lenders. Each payment (other than prepayments) in
respect of principal or interest in respect of the Term Loans, and each payment
in respect of fees or expenses payable hereunder shall be applied to the amounts
of such Obligations owing to the Lenders pro rata according to the respective
amounts then due and owing to the Lenders.
(b) Each payment (including each prepayment) of the Term Loans
outstanding under the Facility shall be allocated among the Lenders holding such
Term Loans pro rata based on the principal amount of such Term Loans held by
such Lenders. Amounts prepaid on account of the Term Loans may not be
reborrowed.
(c) [Intentionally Omitted].
(d) [Intentionally Omitted].
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Payment Office,
24
in Dollars and in immediately available funds. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to the Closing Date that such Lender will not make
the amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Closing Date, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this paragraph shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of the
Closing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate Loans
on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.19 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, or any Eurodollar Loan made by it, or
change the basis of
25
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes in the rate of
tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender that is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making or maintaining
Eurodollar Loans, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon such Lender's demand, any additional amounts necessary to compensate such
Lender on an after-tax basis for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any Person
controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender on an after-tax basis for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Obligations in full.
2.20 Taxes. (a) All payments made by the Borrower under this Agreement
or any other Loan Document shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Arranger, any Agent or any
Lender as a
26
result of a present or former connection between the Arranger, such Agent or
such Lender and the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Arranger's, such Agent's or such
Lender's having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Arranger, any Agent or any Lender hereunder, the amounts so
payable to the Arranger, such Agent or such Lender shall be increased to the
extent necessary to yield to the Arranger, such Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts that would
have been received hereunder had such withholding not been required; provided,
however, that the Borrower or a Guarantor shall not be required to increase any
such amounts payable to the Arranger, any Agent or any Lender with respect to
any Non-Excluded Taxes that are attributable to the Arranger's, such Agent's or
such Lender's failure to comply with the requirements of paragraph (f) of this
Section. The Borrower or the applicable Guarantor shall make any required
withholding and pay the full amount withheld to the relevant tax authority or
other Governmental Authority in accordance with applicable Requirements of Law.
(b) The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable Requirements of Law.
(c) The Borrower shall indemnify the Arranger, each Agent and any
Lender for the full amount of Non-Excluded Taxes or Other Taxes arising in
connection with payments made under this Agreement (including, without
limitation, any Non-Excluded Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.20) paid by the Arranger, such Agent or
Lender or any of their respective Affiliates and any liability (including
penalties, additions to tax interest and expenses) arising therefrom or with
respect thereto. Payment under this indemnification shall be made within ten
days from the date the Arranger, any Agent or any Lender or any of their
respective Affiliates makes written demand therefor.
(d) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the Arranger or the relevant Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof.
(e) The agreements in this Section 2.20 shall survive the
termination of this Agreement and the payment of the Term Loans and all other
amounts payable hereunder.
(f) Each Lender (or Transferee) that is not a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the laws of the United States of America (or
any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (and, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI or other appropriate form, establishing a complete exemption from
withholding of U.S. taxes under Section 871(h) or 881(c) of the Code and a Form
W-8BEN, or any subsequent versions thereof or successors
27
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(g) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payment under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, 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, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
2.21 Indemnity. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of
Eurodollar Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by the Borrower in
making a mandatory repayment under Section 2.12 in accordance with the
provisions of this Agreement or an optional prepayment after the Borrower has
given notice thereof or (c) the making of a repayment of Eurodollar Loans on a
day that is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (x) the
amount of interest that would have accrued on the amount so repaid, or not so
borrowed for the period from the date of such prepayment or of such failure to
borrow to the last day of such Interest Period (or, in the case of a failure to
borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Term Loans provided for herein over (y) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Obligations in
full.
2.22 Illegality. Notwithstanding any other provision in this Agreement,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this
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Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans
shall forthwith be canceled and (b) such Lender's Term Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Term Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 2.21.
2.23 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.19, 2.20(a) or
2.22 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Term Loans affected by such event with
the object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided further that nothing in this Section shall affect or
postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.19, 2.20(a) or 2.22.
SECTION 3 - [INTENTIONALLY OMITTED]
SECTION 4 - REPRESENTATIONS AND WARRANTIES
To induce the Arranger, the Agents and the Lenders to enter into this
Agreement and to make the Term Loans, each of Parent, Holdings and the Borrower
hereby represent and warrant to the Arranger, each Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at June 30,
2002 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies of
which have heretofore been furnished to each Original Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the Term
Loans to be made on the Closing Date and the use of proceeds thereof and (ii)
the payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to the
Borrower as of the date of delivery thereof, and presents fairly on a pro forma
basis the estimated financial position of Borrower and its consolidated
Subsidiaries as at June 30, 2002, assuming that the events specified in the
preceding sentence had actually occurred at such date.
(b) The consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2001, and the related consolidated statements of
income and of cash flows for the fiscal year ended on such date present fairly
the consolidated financial condition of the Borrower and its Subsidiaries as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the fiscal year then ended. The unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at June 30, 2002, and the related
unaudited consolidated statements of income and cash flows for the six-month
period ended on such date, present fairly the consolidated financial condition
of the Borrower and its Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the six-month
period then ended (subject to normal year-end audit adjustments). All such
financial statements,
29
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved.
Except as set forth in Schedule 4.1(a), the Borrower and its Subsidiaries do not
have any material Guarantee Obligations, contingent liabilities and liabilities
for taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
Except as set forth on Schedule 4.1(b), during the period from June 30, 2002 to
and including the date hereof there has been no Disposition by the Borrower or
any of its Subsidiaries of any material part of its business or Property.
4.2 No Change. Since June 30, 2002, there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect (except as to Parent and as disclosed in Parent's filings with the
Securities and Exchange Commission pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended).
4.3 Existence; Compliance with Law. Each of Parent, Holdings, the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the power and authority, and the legal right, to own and operate its Property,
to lease the Property it operates as lessee and to conduct the business in which
it is currently engaged, including the Oil and Gas Business, (c) is duly
qualified as a foreign entity and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Power; Authorization; Enforceable Obligations. Parent and each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder. Parent and each Loan Party has taken all
necessary corporate, partnership, limited liability company or other action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party and, in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except (a)
consents, authorizations, filings and notices described in Schedule 4.4, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect and (b) the filings referred to in Section 4.19. Each
Loan Document has been duly executed and delivered on behalf of Parent and each
Loan Party to the extent it is a party thereto. This Agreement constitutes, and
each other Loan Document upon execution will constitute, a legal, valid and
binding obligation of Parent and each Loan Party to the extent it is a party
thereto, enforceable against Parent and each such Loan Party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
30
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement, the other Loan Documents, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of Parent (or a Subsidiary thereof, other than Holdings, the Borrower
or any of the Borrower's Subsidiaries), Holdings, the Borrower or any of the
Borrower's Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to Parent, Holdings, the Borrower or any of
its Subsidiaries could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. Except as set forth in Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Parent, Holdings or
the Borrower, threatened by or against Parent, Holdings, the Borrower or any of
the Borrower's Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby or (b) that could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. None of Parent, Holdings, the Borrower or any of the
Borrower's Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be expected to have
a Material Adverse Effect. and no Default or Event of Default has occurred and
is continuing.
4.8 Ownership of Property; Liens. Each of Holdings, the Borrower and the
Borrower's Subsidiaries is the sole owner of, legally and beneficially, and has
good and defensible title in fee simple to, or a valid leasehold interest in,
all its real property , including, those subject to the Mortgages, free and
clear of Liens other than Permitted Liens.
4.9 Intellectual Property. Holdings, the Borrower and each of the
Borrower's Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No material
claim has been asserted or is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does Parent, Holdings or the Borrower know of any
valid basis for any such claim. The use of Intellectual Property by Holdings,
the Borrower and the Borrower's Subsidiaries does not infringe on the rights of
any Person in any material respect.
4.10 Taxes. Each of Parent, Holdings, the Borrower and each of their
respective Subsidiaries has filed or caused to be filed all federal, state and
other material tax returns that are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any material assessments made
against it or any of its Property and all other material taxes, fees or other
charges imposed on it or any of its Property by any Governmental Authority
(other than any taxes, the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Parent,
Holdings, the Borrower or any of their respective Subsidiaries, as the case may
be); the contents of all such material tax returns are correct and complete in
all
31
material respects, no tax Lien has been filed, and, to the knowledge of Parent,
Holdings and the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of the Term Loans will
be used for purchasing or carrying any "margin stock" (within the meaning of
Regulation U) or for the purpose of purchasing, carrying or trading in any
securities under such circumstances as to involve the Borrower in a violation of
Regulation X or to involve any broker or dealer in a violation of Regulation T.
No indebtedness being reduced or retired out of the proceeds of the Term Loans
was or will be incurred for the purpose of purchasing or carrying any "margin
stock" (within the meaning of Regulation U). Following application of the
proceeds of the Term Loans, "margin stock" (within the meaning of Regulation U)
does not constitute more than 25% of the value of the assets of Parent,
Holdings, the Borrower and the Borrower's Subsidiaries. None of the transactions
contemplated by this Agreement (including, without limitation, the direct and
indirect use of proceeds of the Term Loans) will violate or result in a
violation of Regulation T, Regulation U or Regulation X. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
Regulation U.
4.12 Labor Matters. There are no strikes, stoppages, slowdowns or other
labor disputes against Holdings, the Borrower or any of the Borrower's
Subsidiaries pending or, to the knowledge of Parent, Holdings or the Borrower,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payment made to employees
of Holdings, the Borrower and the Borrower's Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
Holdings, the Borrower or any of the Borrower's Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid have
been paid or accrued as a liability on the books of Holdings, the Borrower or
the relevant Subsidiary.
4.13 ERISA. Except as set forth on Schedule 4.13, neither a Reportable
Event nor an "accumulated funding deficiency" (within the meaning of Section 412
of the Code or Section 302 of ERISA) has occurred during the five-year period
prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material respects with
all applicable provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. Except as set forth in Schedule 4.13, the
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to
32
withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.
No such Multiemployer Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. Neither Parent nor any
Loan Party is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. Neither Parent nor any Loan Party is subject to regulation under any
Requirement of Law (other than Regulation X) which limits or conditions its
ability to incur Indebtedness.
4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of Holdings as of the Closing Date. Schedule
4.15 sets forth as of the Closing Date, the name and jurisdiction of
incorporation of each Subsidiary of Holdings and, as to each such Subsidiary,
the percentage and number of each class of Capital Stock owned by Holdings, the
Borrower and the Borrower's Subsidiaries.
(b) There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors' qualifying shares) of any
nature relating to any Capital Stock of the Borrower or any Subsidiary, except
as disclosed on Schedule 4.15. None of Holdings, the Borrower or any of the
Borrower's Subsidiaries has issued, or authorized the issuance of, any
Disqualified Stock. Parent owns, beneficially or of record, 100% of the Capital
Stock of Holdings, and Holdings owns, beneficially or of record, 100% of the
Capital Stock of the Borrower.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be used
solely to make a loan to Holdings pursuant to an intercompany note, and shall be
used by Holdings to make a Loan to Parent pursuant to an intercompany note, and
to pay related fees and expenses.
4.17 Environmental Matters. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to result in the payment of a Material Environmental Amount:
(a) Holdings, the Borrower and the Borrower's Subsidiaries: (i) are,
and within the period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; and (ii) reasonably believe
that compliance with all applicable Environmental Law that is or is expected to
become applicable to any of them will be timely attained and maintained, without
material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or operated
by Holdings, the Borrower or any of the Borrower's Subsidiaries, or at any other
location which could reasonably be expected to (i) give rise to material
liability of Holdings, the Borrower or any of the Borrower's Subsidiaries under
any applicable Environmental Law or otherwise result in costs to Holdings, the
Borrower or any of the Borrower's Subsidiaries, or (ii) materially interfere
with Holdings', the Borrower's or any of the Borrower's Subsidiaries' continued
operations, or (iii) materially impair the fair saleable value of any Real
Estate owned or leased by Holdings, the Borrower or any of the Borrower's
Subsidiaries.
33
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which Holdings, the Borrower or any of the Borrower's
Subsidiaries is, or to the knowledge of Parent, Holdings or the Borrower will
be, named as a party that is pending or, to the knowledge of Parent, Holdings or
the Borrower, threatened.
(d) None of Holdings, the Borrower or any of the Borrower's
Subsidiaries has received any written request for information, or been notified
that it is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act or any
similar Environmental Law, or with respect to any Materials of Environmental
Concern.
(e) None of Holdings, the Borrower or any of the Borrower's
Subsidiaries has entered into or agreed to any consent decree, order, or
settlement or other agreement, or is subject to any judgment, decree, or order
or other agreement, in any judicial, administrative, arbitral, or other forum
for dispute resolution, relating to compliance with or liability under any
Environmental Law.
(f) Except as disclosed in filings made with the Securities and
Exchange Commission for Parent, Holdings or the Borrower, none of Holdings, the
Borrower or any of the Borrower's Subsidiaries has assumed or retained, by
contract or operation of law, any material liabilities of any kind, fixed or
contingent, known or unknown, under any Environmental Law or with respect to any
Material of Environmental Concern.
4.18 Accuracy of Information, Etc. No statement or information contained
in this Agreement, any other Loan Document, or any other document, certificate
or statement furnished to the Arranger, the Administrative Agent, the
Syndication Agent or the Lenders or any of them, by or on behalf of Parent,
Holdings, the Borrower or any of the Borrower's Subsidiaries for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading. The projections and pro forma
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of Parent, Holdings
and the Borrower to be reasonable at the time made, it being recognized by the
Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results during the period or periods covered
by such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to Parent, Holdings, the
Borrower or any of the Borrower's Subsidiaries that could reasonably be expected
to have a Material Adverse Effect that has not been expressly disclosed herein,
in the other Loan Documents or in any other documents, certificates and written
statements furnished to the Arranger, the Agents and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
4.19 Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a legal, valid, binding and enforceable security interest in
the Collateral described therein and proceeds and
34
products thereof. In the case of the Pledged Stock, when any stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.19(a)-1 (which financing statements may be filed
by the Administrative Agent at any time) and such other filings as are specified
on Schedule 3 to the Guarantee and Collateral Agreement are made (all of which
filings may be filed by the Administrative Agent at any time), the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds and products thereof, as security for the
Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person (except Permitted Liens).
Schedule 4.19(a)-2 lists each UCC Financing Statement that (i) names any Loan
Party as debtor and (ii) will remain on file after the Closing Date.
(b) Upon the due execution thereof, each of the Mortgages will be
effective to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a legal, valid, binding and enforceable Lien on, and security
interest in, the Mortgaged Properties described, and as defined, therein and
proceeds and products thereof, and when the Mortgages are filed in the offices
specified on Schedule 4.19(b), each such Mortgage shall constitute a fully
perfected first-priority Lien on, and security interest in, all of the Mortgaged
Properties and the proceeds and products thereof, as security for the
Obligations, in each case prior and superior in right to any Liens of any other
Person other than Permitted Liens.
4.20 Solvency. Each Loan Party is and, after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection with
the Loan Documents will be, and will continue to be, Solvent.
4.21 Net Indebtedness. On the Closing Date, the net Indebtedness of the
Borrower and its Subsidiaries in the aggregate (other than the Term Loans) shall
be approximately as set forth in Schedule 2.9(b).
4.22 Insurance. Each of Holdings, the Borrower and the Borrower's
Subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which it is engaged; and none of Holdings, the Borrower or
any of the Borrower's Subsidiaries (a) has received notice from any insurer or
agent of such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or (b) has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers at a cost that could not reasonably be expected to have a
Material Adverse Effect.
4.23 [Intentionally Omitted].
4.24 Hydrocarbon Interests. As of the Closing Date, Schedule 4.24 sets
forth a list of all of the Hydrocarbon Interests consisting of oil and gas
leaseholds, mineral interests, royalty and overriding royalty interests in which
the Borrower or any of its Subsidiaries has an interest.
35
4.25 Permits. (a) Other than exceptions to any of the following that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (or, in the case of Environmental Permits, result in the
payment of a Material Environmental Amount): (i) each of Holdings, the Borrower
and the Borrower's Subsidiaries has obtained and holds all Permits required in
respect of all Real Estate and for any other property otherwise operated by or
on behalf of, or for the benefit of, such Person and for the operation of each
of its businesses as presently conducted and as proposed to be conducted, (ii)
all such Permits are in full force and effect, and each of Holdings, the
Borrower and the Borrower's Subsidiaries has performed and observed all
requirements of such Permits, (iii) no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in,
revocation or termination by the issuer thereof or in any other impairment of
the rights of the holder of any such Permit, (iv) no such Permits contain any
restrictions, either individually or in the aggregate, that are materially
burdensome to Holdings, the Borrower or any of the Borrower's Subsidiaries, or
to the operation of any of its businesses or any property owned, leased or
otherwise operated by such Person, (v) each of Holdings, the Borrower and the
Borrower's Subsidiaries reasonably believes that each of its Permits will be
timely renewed and complied with, without material expense, and that any
additional Permits that may be required of such Person will be timely obtained
and complied with, without material expense and (vi) none of Parent, Holdings or
the Borrower has any knowledge or reason to believe that any Governmental
Authority is considering limiting, suspending, revoking or renewing on
materially burdensome terms any such Permit.
(b) Except as set forth on Schedule 4.25(b), no consent or
authorization of, filing with, Permit from, or other act by or in respect of,
any Governmental Authority is required in connection with the execution,
delivery, performance, validity or enforceability of, or enforcement of remedies
(including, without limitation, foreclosure on the Collateral) pursuant to, this
Agreement and the other Loan Documents.
4.26 Lease Payments. Each of Holdings, the Borrower and the Borrower's
Subsidiaries has paid all royalties and payments required to be made by it under
leases of Oil and Gas Properties (except for properties abandoned in the
ordinary course of business or with respect to which the failure to pay such
royalties and other payments could not be reasonably expect to have a Material
Adverse Effect) where any of the Collateral is or may be located from time to
time (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Holdings,
the Borrower or such Subsidiary, as the case may be); no landlord Lien has been
filed, and, to the knowledge of Parent, Holdings and the Borrower, no claim is
being asserted, with respect to any such payments.
SECTION 5 - CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the extension of credit requested to be made by it is subject to
the satisfaction, prior to or concurrently with the making of such extension of
credit on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of Parent,
Holdings and the
36
Borrower, (ii) the Guarantee and Collateral Agreement, executed and delivered by
a duly authorized officer of Parent, Holdings, the Borrower and each Subsidiary
Guarantor and (iii) if requested by any Lender, for the account of such Lender,
Term Notes conforming to the requirements hereof and executed and delivered by a
duly authorized officer of the Borrower.
(b) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) satisfactory internally
prepared operating reports of the Borrower and its Subsidiaries as of and for
the period from August 1, 2001, the date of consummation of the merger of
Xxxxxxx Resource Corporation with and into the Borrower, through December 31,
2001 and (iii) satisfactory internally prepared operating reports of the
Borrower and its Subsidiaries for the six-month period ended June 30, 2002.
(c) Approvals. All governmental and third party approvals (including
landlords' and other consents) necessary or, in the discretion of the Original
Lenders, advisable in connection with, the continuing operations of Parent,
Holdings, the Borrower and the Borrower's Subsidiaries and the transactions
contemplated hereby shall have been obtained and be in full force and effect,
and all applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the financing contemplated hereby.
(d) Fees. The Original Lenders, the Arranger, the Syndication Agent
and the Administrative Agent shall have received all fees required to be paid,
and all expenses for which invoices have been presented (including, without
limitation, the reasonable fees, disbursements and other charges of counsel to
the Agents and the Lenders), on or before the Closing Date. All such amounts
will be paid with proceeds of Term Loans made on the Closing Date and will be
reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.
(e) Solvency. The Lenders shall have received a Solvency Certificate
executed by the chief financial officer of Holdings, the Borrower and each other
Loan Party and a solvency analysis of the chief financial officer of such Loan
Parties in form and substance satisfactory to the Agents, in each case, which
shall document the solvency of Holdings, the Borrower and each other Loan Party
before and after giving effect to the transactions contemplated hereby.
(f) Lien Searches. The Administrative Agent shall be satisfied with
the results of a recent lien, tax lien, judgment and litigation search in each
of the jurisdictions or offices (including, without limitation, in the United
States Patent and Trademark Office and the United States Copyright Office)
specified by the Administrative Agent in which UCC financing statements or other
filings or recordations should be made to evidence or perfect (with the priority
required under the Loan Documents) security interests in all Property of the
Loan Parties, and such search shall reveal no Liens on any of the assets of
Holdings, the Borrower or the Borrower's Subsidiaries except for Permitted
Liens.
(g) Closing Certificate. The Administrative Agent shall have
received a certificate of Parent and each Loan Party, dated as of the Closing
Date, substantially in the form of Exhibit C, with appropriate insertions and
attachments.
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(h) Other Certifications. The Administrative Agent shall have
received the following:
(i) a copy of the charter of Parent, Holdings, the Borrower and
each of the Borrower's Subsidiaries and each amendment thereto,
certified (as of a date reasonably near the date of the initial
extension of credit) as being a true and correct copy thereof by the
Secretary of State or other applicable Governmental Authority of the
jurisdiction in which Parent and each such Loan Party is organized;
(ii) a copy of a certificate of the Secretary of State or other
applicable Governmental Authority of the jurisdiction in which each such
Loan Party is organized, dated reasonably near the date of the initial
extension of credit, listing the charter of such Loan Party and each
amendment thereto on file in such office and certifying that (A) such
amendments are the only amendments to such Person's charter on file in
such office, (B) such Person has paid all franchise taxes to the date of
such certificate and (C) such Person is duly organized and in good
standing under the laws of such jurisdiction;
(iii) a telephonic confirmation from the Secretary of State or
other applicable Governmental Authority of each jurisdiction in which
each such Person is organized certifying that Parent, Holdings, the
Borrower and each of the Borrower's Subsidiaries is duly organized and
in good standing under the laws of such jurisdiction on the date of the
initial extension of credit, together with a written confirmatory report
in respect thereof prepared by, or on behalf of, a filing service
acceptable to the Administrative Agent; and
(iv) a copy of a certificate of the Secretary of State or other
applicable Governmental Authority of each jurisdiction in which Parent,
Holdings, the Borrower and each of the Borrower's Subsidiaries is
required to be qualified as a foreign corporation or entity.
(i) Legal Opinions. The Administrative Agent shall have received
the following executed legal opinions:
(i) the legal opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel to Parent, Holdings, the Borrower and the Borrower's
Subsidiaries, substantially in the form of Exhibit F-1;
(ii) the legal opinion of the general counsel of the Parent,
Holdings, the Borrower and the Borrower's subsidiaries, substantially in
the form of Exhibit F-2
(iii) the legal opinion of Xxxxx Xxxxxx & Xxxxxx LLP, counsel
to the Borrower, substantially in the form of Exhibit F-3; and
(iv) such other legal opinions of local counsel as are
requested by the Administrative Agent in form and substance satisfactory
to the Administrative Agent.
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Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement and the other Loan Documents as the
Administrative Agent may reasonably require.
(j) Pledged Stock; Stock Power; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in blank
by a duly authorized officer of the pledgor thereof and (ii) each promissory
note pledged to the Administrative Agent pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank satisfactory to the Administrative Agent) by the
pledgor thereof.
(k) Filings, Registrations and Recordings. Each document
(including, without limitation, any UCC financing statement) required by the
Security Documents or under law or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a perfected Lien
on, and security interest in, the Collateral described therein, prior and
superior in right to any other Person (other than Permitted Liens), shall have
been delivered to the Administrative Agent in proper form for filing,
registration or recordation.
(l) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 4.24 and of
Section 5.3 of the Guarantee and Collateral Agreement.
(m) Representations and Warranties. Each of the representations and
warranties made by Parent or any Loan Party in or pursuant to the Loan Documents
shall be true and correct on the Closing Date.
(n) No Default. No Default or Event of Default shall have occurred
and be continuing on the Closing Date or after giving effect to the extensions
of credit requested to be made on the Closing Date, Parent shall have provided
evidence satisfactory to the Administrative Agent of all consents and waivers
necessary under Parent's credit facilities and a borrowing availability
thereunder of at least $400,000,000.
(o) Capital Structure. The capital structure of Holdings, the
Borrower and its Subsidiaries both before and after giving effect to the
borrowing of the Term Loans and the use of the proceeds of the Term Loans as
contemplated in this Agreement shall be satisfactory to the Administrative
Agent.
(p) Satisfactory Documentation. The loan by the Borrower to
Holdings, and by Holdings to Parent, of the net proceeds of the Term Loans shall
have been consummated by documentation satisfactory to the Agents, and no
provision of any such documentation shall have been waived, amended,
supplemented or otherwise amended without the consent of the Agents.
(q) Reserve Reports. The Lenders shall have received Reserve
Reports dated as of December 31, 2001, covering the Hydrocarbon Interests of the
Borrower and its Subsidiaries in form and substance satisfactory to the
Administrative Agent.
39
(r) Funds Received on Closing Date. Parent shall have received
$3,400,000,000 (including, without limitation, evidence of available liquidity
under its credit facilities), including proceeds of the Terms Loans, all of
which shall be funded into escrow and none of which shall be released until all
such funds are released. On the Closing Date, Parent shall have borrowed at
least $5,000,000 under its $700,000,000 revolving credit facility. The
Administrative Agent shall be satisfied with the sufficiency of the amounts
available to the Borrower to meet the Borrower's and its Subsidiaries' ongoing
working capital needs after the borrowing of the Term Loans hereunder. The
Borrower shall have cash on hand on the Closing Date, after giving effect to the
transactions contemplated by the Loan Documents, of not less than $65,000,000,
free of Liens.
(s) Intercompany Indebtedness. The Lenders shall have receive a
schedule in form and substance satisfactory to them setting forth the
Indebtedness between Parent or any of its Affiliates (other than Holdings and
its Subsidiaries), on the one hand, and Holdings, the Borrower or any of the
Borrower's Subsidiaries, on the other hand. Parent, Holdings and the Borrower
shall deliver evidence satisfactory to the Administrative Agent that immediately
prior to the borrowing of the Term Loans, there are no intercompany balances
owed by Holdings, the Borrower or any of the Borrower's Subsidiaries to Parent
or any of its Subsidiaries (other than Holdings and its Subsidiaries).
(t) Oil and Gas Mortgages. The Lenders shall have received evidence
satisfactory to them of the filing of oil and gas mortgages on all of the
Borrower's real property in the Powder River Basin, the Piecance Basin and the
Raton Basin, which mortgages the Borrower has represented to cover at least 85%
of the value of the Borrower's and its Subsidiaries' Hydrocarbon Interests.
(u) Environmental. The Lenders shall be satisfied with the
environmental affairs of the Borrower and its Subsidiaries.
(v) Miscellaneous. The Administrative Agent shall have received
such other documents, agreements, certificates and information as it shall
reasonably request.
SECTION 6 - AFFIRMATIVE COVENANTS
Parent, Holdings and the Borrower hereby jointly and severally agree
that, so long as any Term Loan or other amount is owing to any Lender, the
Arranger or any Agent hereunder, each of Parent, Holdings and the Borrower
shall, and shall cause each of the Borrower's Subsidiaries to:
6.1 Financial Statements. Furnish to each Agent and each Lender:
(a) as soon as available, but in any event within 105 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by a firm of
40
independent certified public accountants of nationally recognized standing
satisfactory to the Administrative Agent;
(b) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, the unaudited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of the Borrower
(other than the third, sixth, ninth and twelfth such month), the unaudited
consolidated balance sheet of the Borrower and the Borrower's Subsidiaries as at
the end of such month and the related unaudited consolidated statements of
income and of cash flows for such month and the portion of the fiscal year
through the end of such month, setting forth in each case in comparative form
the figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Agent and each
Lender, or, in the case of clause (i), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, Parent and each
Loan Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this Agreement and
the other Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate and (ii)
in the case of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by Parent, Holdings, the Borrower and the Borrower's
Subsidiaries with Section 7.1 as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent in writing, a listing of any county,
state, territory, province, region or any other jurisdiction, or any political
subdivision thereof, whether of the United States or otherwise,
41
where any Loan Party keeps inventory or equipment (other than mobile goods) and
of any Intellectual Property acquired by any Loan Party since the date of the
most recent list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) concurrently with any Compliance Certificate delivered pursuant
to paragraph (b) above, (i) a production statement that identifies the most
recent information available relating to the gross volumes of Hydrocarbons
produced in the aggregate from the Hydrocarbon Interests of the Borrower and its
Subsidiaries and (ii) a statement of revenues and expenses attributable to the
Hydrocarbon Interests of the Borrower and its Subsidiaries for such fiscal
quarter ended;
(d) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and the Borrower's Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of projected cash
flow, projected changes in financial position and projected income), and, as
soon as available, significant revisions, if any, of such budget and projections
with respect to such fiscal year (collectively, the "Projections"), which
Projections shall in each case be accompanied by a certificate of a Responsible
Officer stating that such Projections are based on reasonable estimates,
information and assumptions and that such Responsible Officer has no reason to
believe that such Projections are incorrect or misleading in any material
respect;
(e) within 60 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition and
results of operations of the Borrower and the Borrower's Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current fiscal
year to the end of such fiscal quarter, as compared to the portion of the
Projections covering such periods and to the comparable periods of the previous
year;
(f) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect the Governing Documents of
Holdings, the Borrower or any of the Borrower's Subsidiaries;
(g) within five days after the same are sent, copies of all
financial statements and reports that Holdings, the Borrower or any of the
Borrower's Subsidiaries sends to the holders of any class of its debt securities
or public equity securities and, within five days after the same are filed,
copies of all financial statements and reports that Holdings, the Borrower or
any of the Borrower's Subsidiaries may make to, or file with, the SEC;
(h) as soon as possible and in any event within 5 days of obtaining
knowledge thereof: (i) notice of any development, event, or condition that,
individually or in the aggregate with other developments, events or conditions,
could reasonably be expected to result in the payment by Holdings, the Borrower
or any of the Borrower's Subsidiaries, in the aggregate, of a Material
Environmental Amount; and (ii) any notice that any Governmental Authority may
condition approval of, or any application for, an Environmental Permit or any
other material
42
Permit held by Holdings, the Borrower or any of the Borrower's Subsidiaries on
terms and conditions that are materially burdensome to Holdings, the Borrower or
any of the Borrower's Subsidiaries, or to the operation of any of its businesses
or any property owned, leased or otherwise operated by such Person;
(i) to the extent not included in clauses (a) through (h) above, no
later than the date the same are required to be delivered thereunder, copies of
all agreements, documents or other instruments (including, without limitation,
(i) audited and unaudited, pro forma and other financial statements, reports,
forecasts, and projections, together with any required certifications thereon by
independent public auditors or officers of Holdings, the Borrower or any of the
Borrower's Subsidiaries or otherwise), (ii) press releases and (iii) statements
or reports) furnished to any other holder of the securities of Holdings, the
Borrower or any of the Borrower's Subsidiaries;
(j) weekly, on the first Business Day of each week (or on a more
frequent basis if requested by the Administrative Agent), (i) a certificate of
the chief financial officer of Parent certifying that no Parent Liquidity Event
has occurred and (ii) a 12-month liquidity projection as of such date. In
determining Parent's forward liquidity, Parent may take into account asset sales
or other liquidity events if, but only if, at the date of the projection Parent
shall have initiated a Disposition process related to such liquidity event
reasonably satisfactory to the Administrative Agent and determined by the
Administrative Agent to be reasonably likely to result in the consummation of
such proposed Disposition or liquidity event within such 12-month period);
(k) no later than 45 days following the Closing Date, Reserve
Reports with respect to the Hydrocarbon Interests of the Borrower and its
Subsidiaries dated as of July 1, 2002 accompanied by a report thereon by Xxxxx
Xxxxx satisfactory to the Administrative Agent (other than with respect to the
reserves located in the Powder River Basin and the Raton Basin, as to which the
Borrower shall deliver a Reserve Report dated as of July 1, 2002 accompanied by
a report thereon by Netherland Sewel satisfactory to the Administrative Agent),
each of which shall be in form and substance satisfactory to the Administrative
Agent. Such Reserve Reports shall not contain information materially worse,
taken as a whole, than the information contained in the Reserve Reports with
three price cases as of July 1, 2001 previously delivered pursuant to Section
5.1 (except with respect to commodity prices), as determined by the
Administrative Agent in their reasonable discretion;
(l) no later than 75 days after the Closing Date, (i) audited
consolidated financial statements for the Borrower and its Subsidiaries as of
and for the year ended December 31, 2001, accompanied by the unqualified opinion
of an independent auditing firm satisfactory to the Administrative Agent and
(ii) unaudited interim consolidated financial statements as of and for the six
months ended June 30, 2002, accompanied by the interim review report pursuant to
SAS 71 of such independent auditors. None of the foregoing financial statements
shall be different in any materially adverse respect from the internally
prepared operating reports as of and for the aforementioned dates delivered
pursuant to Section 5.1; and
(m) furnish to the Administrative Agent, within 60 days of
identification thereof by the Administrative Agent, limited mortgage title
opinions in form and content
43
reasonably satisfactory to the Administrative Agent showing the Administrative
Agent as having a valid and perfected first-priority Lien (subject to Permitted
Liens) covering the Borrower's interest in at least 250 producing xxxxx included
in the Oil and Gas Properties, as selected by the Administrative Agent (the
"Initial Title Opinions"). If the Initial Title Opinions show material defects
to title which render the Borrower's title to its interests in xxxxx
representing more than 10% of the aggregate reserve value of the examined xxxxx
less than defensible in accordance with oil and gas industry standards, then the
Administrative Agent may request additional limited mortgage title opinions
covering an additional 50 producing xxxxx included in the Oil and Gas Properties
to be delivered within 45 days from the Administrative Agent's request therefor
(the "Second Tranche Title Opinions"). If the Second Tranche Title Opinions show
material defects to title which render the Borrower's title to its interests in
xxxxx representing more than 10% of the aggregate reserve value of all the
examined xxxxx less than defensible in accordance with oil and gas industry
standards, then the Administrative Agent may request additional limited mortgage
title opinions covering an additional 50 xxxxx included in the Oil and Gas
Properties to be delivered within 45 days from the Administrative Agent's
request therefor; and
(n) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Holdings, the Borrower or the Borrower's Subsidiaries, as the case
may be.
6.4 Conduct of Business and Maintenance of Existence, Etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate, partnership or
limited liability company existence and (ii) take all reasonable action to
maintain all rights, privileges, franchises Permits and licenses necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) to then extent not in conflict with this
Agreement or the other Loan Documents comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
6.5 Maintenance of Property; Leases; Insurance. (a) Keep all Property
and systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) Maintain all rights of way, easements, grants, privileges,
licenses, certificates, and permits necessary or advisable for the use of any
Real Estate and will not, without the prior written consent of the
Administrative Agent, consent to any public or private restriction as to the use
of any Real Estate.
44
(c) Comply with the terms of each lease in respect of Oil and Gas
Properties so as to not permit any material uncured default on its part to exist
in respect of such lease, except such defaults that could not be reasonably
expected to have a Material Adverse Effect.
(d) Maintain with financially sound and reputable insurance
companies insurance on all its Property (including, without limitation, all
inventory, equipment and vehicles) in at least such amounts and against at least
such risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the Administrative
Agent with copies for each Secured Party, upon written request, full information
as to the insurance carried; provided that in any event each of Holdings, the
Borrower and the Borrower's Subsidiaries will maintain, to the extent obtainable
on commercially reasonable terms, (i) property insurance on an all risks basis
(including the perils of flood and quake, loss by fire, explosion and theft and
such other risks and hazards as are covered by an all risk policy), covering the
repair or replacement cost, business interruption and extra expense (which shall
include reconstruction costs and business interruption losses as are otherwise
generally available to similar businesses), and (ii) public liability insurance,
such property insurance shall include to the satisfaction of the Administrative
Agent coverage for the increased cost of construction, debris removal and/or
demolition expenses incurred as a result of the application of any building law
and/or ordinance. All such insurance with respect to each of Holdings, the
Borrower and the Borrower's Subsidiaries shall be provided by insurers or
re-insurers which (x) in the case of United States insurers and re-insurers,
have an A.M. Best rating of not less than A- with respect to primary insurance
and B+ with respect to excess insurance and (y) in the case of non-United States
insurers or re-insurers, the providers of at least 80% of such insurance have
either an ISI policyholders rating of not less than A, an A.M. Best rating of
not less than A- or a surplus of not less than $500,000,000 with respect to
primary insurance, and an ISI policyholders rating of not less than BBB or an
A.M. Best rating of not less than B+ with respect to excess insurance, or such
other insurers as the Administrative Agent may approve in writing. To the extent
obtainable from the Borrower's and its Subsidiaries' insurers, all insurance
shall (i) provide that no cancellation, material reduction in amount or material
change in coverage thereof shall be effective until at least 30 days after
receipt by the Administrative Agent of written notice thereof, (ii) contain a
waiver of subrogation against any Secured Party, (iii) contain a standard
noncontributory mortgagee clause naming the Administrative Agent (and/or such
other party as may be designated by the Administrative Agent) as the party to
which all payments made by such property insurance company shall be paid, (iv)
if requested by the Administrative Agent, provide that none of Holdings, the
Borrower or any of the Borrower's Subsidiaries, any Secured Party or any other
Person shall be a co-insurer under such insurance policies, and (v) be
reasonably satisfactory in all other respects to the Administrative Agent. Each
Secured Party shall be named as an additional insured on all liability insurance
policies of each of Holdings, the Borrower and the Borrower's Subsidiaries and
the Administrative Agent shall be named as loss payee on all property insurance
policies of each such Person.
(e) Deliver to the Administrative Agent on behalf of the Secured
Parties, (i) on the Closing Date, a certificate dated such date showing the
amount and types of insurance coverage as of such date, (ii) upon request of any
Secured Party from time to time, full information as to the insurance carried,
(iii) promptly following receipt of notice from any insurer, a copy of any
notice of cancellation or material change in coverage from that existing on the
Closing Date, (iv) forthwith, notice of any cancellation or non-renewal of
coverage by any of
45
Holdings, the Borrower or any of the Borrower's Subsidiaries and (v) promptly
after such information is available to any of Holdings, the Borrower or any of
the Borrower's Subsidiaries, full information as to any claim for an amount in
excess of $1,000,000 with respect to any property and casualty insurance policy
maintained by any of Holdings, the Borrower or the Borrower's Subsidiaries.
(f) Preserve and protect the Lien status of each respective Mortgage
and, if any Lien (other than unrecorded Liens permitted under Section 7.3 that
arise by operation of law and other Liens permitted under Section 7.3(f)) is
asserted against a Mortgaged Property, promptly and at its expense, give the
Administrative Agent a detailed written notice of such Lien and pay the
underlying claim in full or take such other action so as to cause it to be
released or bonded over in a manner satisfactory to the Administrative Agent.
6.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender to visit and inspect any of its properties and
examine and, at the Borrower's Subsidiaries' expense, make abstracts from any of
its books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of Parent, Holdings, the Borrower and the Borrower's
Subsidiaries with officers and employees of Parent, Holdings, the Borrower and
the Borrower's Subsidiaries and with their respective independent certified
public accountants.
6.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default (or alleged default) under
any Contractual Obligation of Holdings, the Borrower or any of the Borrower's
Subsidiaries or (ii) litigation, investigation or proceeding which may exist at
any time between Holdings, the Borrower or any of the Borrower's Subsidiaries
and any Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings, the Borrower or
any of the Borrower's Subsidiaries in which the amount involved is $1,000,000 or
more and not covered by insurance or in which injunctive or similar relief is
sought;
(d) the following events, as soon as possible and in any event
within 30 days after Holdings, the Borrower or any of the Borrower's
Subsidiaries knows or has reason to know thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan;
46
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect; and
(f) any notice of default given to the Borrower or any of the
Borrower's Subsidiaries from a landlord in connection with any leased property
where inventory of the Borrower or the Borrower's Subsidiaries is located.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and Environmental Permits, and
obtain, maintain and comply in all material respects with and maintain, and
ensure that all tenants and subtenants obtain, maintain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all material investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Parent Liquidity Event. Within two Business Days following the
occurrence of a Parent Liquidity Event or Default (provided that the foregoing
shall not limit the rights of the Administrative Agent or the Lenders set forth
in Section 8), Parent shall retain Xxxxxx Brothers Inc. or an Affiliate thereof
and another independent financial advisor reasonably acceptable to the Original
Lenders to commence a process with respect to the consummation of a Company Sale
for fair value and such Company Sale shall occur within 75 days of such Parent
Liquidity Event or such Default (provided that the foregoing shall not limit the
rights of the Administrative Agent or the Lenders set forth in Section 8).
Parent shall cause Xxxxxx Brothers Inc. or such Affiliate and such other
independent financial advisor to report to the Administrative Agent on the
status of such process on a weekly basis.
6.10 Additional Collateral, Guarantors, Etc.
(a) With respect to any Property acquired after the Closing Date,
the Borrower or any of the Borrower's Subsidiaries (other than any Property
described in paragraphs (b) or (c) of this Section 6.10), promptly (and, in any
event, within 10 days following the date of such acquisition) (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a security interest in such Property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first-priority security interest
(subject to Permitted Liens) in such Property, including, without limitation,
the filing of UCC financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may be requested by
the Administrative Agent.
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(b) In the case of any Wholly-Owned Subsidiary of any Loan Party
that is a Domestic Subsidiary, such Loan Party shall cause such Wholly-Owned
Subsidiary to execute a supplement, amendment or joinder or otherwise become a
party to the guaranty contained in the Guarantee and Collateral Agreement to the
satisfaction of the Administrative Agent.
(c) Notwithstanding anything to the contrary in this Section 6.10,
paragraph shall not apply to any Property or new Subsidiary created or acquired
after the Closing Date, as applicable, as to which the Administrative Agent has
determined in its sole discretion that the collateral value thereof is
insufficient to justify the difficulty, time and/or expense of obtaining a
perfected security interest therein.
6.11 [Intentionally Omitted].
6.12 Use of Proceeds. Use the proceeds of the Term Loans only for the
purposes specified in Section 4.16.
6.13 [Intentionally Omitted].
6.14 Further Assurances. From time to time execute and deliver, or cause
to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request, for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
or products thereof or with respect to any other property or assets hereafter
acquired by the Borrower or any Subsidiary which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by the Administrative
Agent or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority, the
Borrower will execute and deliver, or will cause the execution and delivery of,
all applications, certifications, instruments and other documents and papers
that the Administrative Agent or such Lender may be required to obtain from the
Borrower or any of the Borrower's Subsidiaries for such governmental consent,
approval, recording, qualification or authorization.
6.15 Other Provisions Relating to Holdings and the Borrower.
(a) Parent, Holdings and the Borrower shall hedge the Borrower's
commodity price risk as set forth on Schedule 6.15(a).
(b) Holdings and the Borrower shall (a) do all things necessary to
permit each of the Original Lenders to appoint a representative to act as an
observer at all meetings of the Board of Directors of the Borrower or committees
thereof and (b) shall provide to the Original Lenders (i) all notices of such
meetings when they are sent to the members of the Board of Directors or any such
committee, as the case may be, and (ii) all information distributed to the
members of the Board of Directors or such committee in advance of and in
connection with any such meeting.
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6.16 Capital Expenditures. The Borrower and its Subsidiaries shall make
Capital Expenditures in the ordinary course consistent with past practice.
SECTION 7 - NEGATIVE COVENANTS
Parent, Holdings and the Borrower hereby jointly and severally agree
that, so long as any Obligations are owing to any Lender, the Arranger or any
Agent hereunder, Holdings and the Borrower shall not, and the Borrower shall not
permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Interest Coverage Ratio. On the last day of any
fiscal quarter, permit the Consolidated Interest Coverage Ratio of the Borrower
to be less than 1.50 to 1.00 for any four consecutive fiscal quarter period
beginning two fiscal quarters prior to such date and ending two fiscal quarters
subsequent to such date; provided that the financial information used for the
two fiscal-quarter period shall be the relevant information disclosed in the
most recent Projections delivered to the Administrative Agent.
(b) Consolidated Fixed Charge Coverage Ratio. On the last day of any
fiscal quarter, permit the Consolidated Fixed Charge Coverage Ratio of the
Borrower to be less than 1.15 to 1.00 for any four consecutive fiscal quarter
period beginning two fiscal quarters prior to such date and ending two fiscal
quarters subsequent to such date; provided that the financial information used
for the two fiscal-quarter period shall be the relevant information disclosed in
the most recent Projections delivered to the Administrative Agent.
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness of any Loan Party created under any Loan Document;
(b) Unsecured Indebtedness of the Borrower to any Solvent Subsidiary
and of any Wholly Owned Subsidiary Guarantor to the Borrower or any other
Solvent Subsidiary;
(c) Indebtedness permitted by Section 7.16; and
(d) Indebtedness of the Borrower and the Borrower's Subsidiaries
outstanding on the date hereof and listed on Schedule 7.2(d).
7.3 Limitation on Liens. Other than with respect to the Bison Entities,
create, incur, assume or suffer to exist any Lien upon any of its Property,
whether now owned or hereafter acquired, except for (with respect to the
Borrower and its Subsidiaries only):
(a) Lessors' royalties, overriding royalties, reversionary interests
and similar burdens;
(b) Any required third-party consents to assignment of leases and
contracts and preferential purchase rights;
49
(c) Liens for taxes or assessments not yet due or not yet delinquent
or, if delinquent, that are being contested in good faith in the normal course
of business and for which adequate reserves are maintained in accordance with
GAAP;
(d) all rights to consent by, required notices to, filings with, or
other actions by Governmental Authorities in connection with the sale or
conveyance of the assets if the same is customarily obtained subsequent to such
sale or conveyance;
(e) Rights of reassignment upon the surrender or expiration of any
lease;
(f) easements, rights-of-way, servitudes, permits, surface leases
and other rights with respect to surface operations on, over or in respect of
any of the Oil and Gas Properties or any restriction on access thereto and that
do not materially interfere with the operation of the affected Oil and Gas
Property;
(g) Materialman's, mechanics', repairman's, employees',
contractors', operators or other similar Liens or charges arising in the
ordinary course of business incidental to construction, maintenance or operation
of the assets of Holdings, the Borrower or the Borrower's Subsidiaries, (i) if
they have not been filed pursuant to law and the time for filing has expired,
(ii) if filed, they have not yet become due and payable or payment is being
withheld as provided by law or (iii) if their validity is being contested in
good faith by appropriate action;
(h) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(i) deposits by or on behalf of the Borrower or any of the
Borrower's Subsidiaries to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(j) Liens in existence on the date hereof listed on Schedule 7.3(j),
securing Indebtedness permitted by Section 7.2(d), provided that no such Lien is
spread to cover any additional Property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
(k) any interest or title of a lessor under any lease entered into
by the Borrower or any of the Borrower's Subsidiaries in the ordinary course of
its business and covering only the assets so leased;
(l) Liens arising out of all presently existing and future division
and transfer orders, advance payment agreements, processing contracts, gas
processing plant agreements, operating agreements, gas balancing or deferred
production agreements, pooling, unitization or communitization agreements,
pipeline, gathering or transportation agreements, platform agreements, drilling
contracts, injection or repressuring agreements, cycling agreements,
construction agreements, salt water or other disposal agreements, leases or
rental agreements, farm-out and farm-in agreements, exploration and development
agreements, and any and all other contracts or agreements covering, arising out,
used or useful in connection with or pertaining to the exploration, development,
operation, production, sale, use, purchase, exchange,
50
storage, separation, dehydration, treatment, compression, gathering,
transportation, processing, improvement, marketing, disposal, or handling of any
Hydrocarbon Interest of the Borrower or any Subsidiary thereof; provided that
such agreements are entered into in the ordinary course of business and contain
terms customary for such agreements in the industry; and provided further that
no Liens described in this paragraph (j) shall be granted or created in
connection with the incurrence of Indebtedness;
(m) Rights reserved to or vested in any Governmental Authority to
control or regulate any of the Oil and Gas Properties in any manner and all
Requirements of Law of general applicability in that area;
(n) Liens arising out of operating agreements, unitization and
pooling agreements and production sales contracts securing amounts not yet due
or, if due, being contested in good faith in the ordinary course of business;
(o) Gas imbalances that obligate the Borrower to provide and make up
free of charge, and that other third parties are entitled to take without paying
for, under applicable contracts, as a result of any imbalances in production or
sales from the assets at any xxxxx, in any pipelines, at any gas plant or in
storage;
(p) defects, irregularities and deficiencies in the title to any
rights of way or any Hydrocarbon Interest of the Borrower or any Subsidiary
thereof which in the aggregate do not materially impair the use of such rights
of way or any Hydrocarbon Interest for the purposes for which such rights of way
and any other Hydrocarbon Interest are held by such Person, and defects,
irregularities and deficiencies in title to any Hydrocarbon Interest of the
Borrower or any of its Subsidiaries, which defects, irregularities or
deficiencies have been cured by possession under applicable statutes of
limitations; and
(q) Liens granted pursuant to the Loan Documents.
7.4 Limitation on Fundamental Changes. Other than with respect to the
Bison Entities, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its Property or
business, except that:
(a) any Solvent Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Subsidiary Guarantor
(provided that the Subsidiary Guarantor shall be the continuing or surviving
corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor.
7.5 Limitation on Disposition of Property. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary of
Holdings, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
51
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of Hydrocarbons or other inventory in the ordinary
course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of (i) any Capital Stock of a Subsidiary of
the Borrower (other than Disqualified Stock) to the Borrower or any Subsidiary
Guarantor or (ii) the Borrower's Capital Stock (other than Disqualified Stock)
to Holdings; and
(e) (i) an Asset Sale or (ii) Dispositions the prohibition of which
would conflict with any material Indebtedness or financing agreement of Parent
as in effect on the Closing Date; provided that the proceeds of any such Asset
Sale or Disposition, as the case may be, are solely in the form of cash and the
Loan Parties party to such Asset Sale or Disposition, as the case may be, comply
with the provisions of Section 2.12.
7.6 Limitation on Restricted Payments. Other than with respect to the
Bison Entities, declare or pay any dividend (other than dividends payable solely
in common stock (excluding Disqualified Stock) of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of Holdings, the Borrower
or any of the Borrower's Subsidiaries, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Holdings, the Borrower or any
of the Borrower's Subsidiaries, or enter into any derivatives or other
transaction with any counterparty (a "Derivatives Counterparty") obligating the
Borrower or any of the Borrower's Subsidiaries to make payments to such
Derivatives Counterparty as a result of any change in market value of any such
Capital Stock (collectively, "Restricted Payments"), except that:
(a) a Subsidiary may make Restricted Payments to the Borrower or any
Subsidiary Guarantor; and
(b) the Borrower and Holdings may pay dividends or lend funds to
Holdings and Parent (i) on the Closing Date, in an amount equal to the net
proceeds of the Term Loans; and (ii) thereafter, in cash, to the extent (A) no
Default or Event of Default has occurred and is continuing and (B) pro forma for
making such dividend or lending such funds, the Borrower still maintains 100% of
the Borrower Liquidity Reserve.
7.7 Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditure, except Capital Expenditures of the Borrower and the
Borrower's Subsidiaries in the ordinary course of business not exceeding
$300,000,000 for each fiscal year and (ii) Capital Expenditures made pursuant to
this clause (a) during any fiscal year shall be deemed made, first, in respect
of amounts permitted for such fiscal year as provided above and second, in
respect of amounts carried over from the prior fiscal year pursuant to subclause
(i) above.
52
7.8 Limitation on Investments. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b);
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for Holdings, the Borrower and Subsidiaries of the Borrower not
to exceed $1,000,000 at any one time outstanding; and
(e) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.8(c)) by Holdings, the Borrower or any of
the Borrower's Subsidiaries in the Borrower or any Person that, prior to such
Investment, is a Subsidiary Guarantor.
7.9 Limitation on Optional Payments and Modifications of Indebtedness.
(a) Other than the Bison Entities, make or offer to make any optional or
voluntary payment, prepayment, repurchase or redemption of, or otherwise
voluntarily or optionally defease, any Indebtedness, or segregate funds for any
such payment, prepayment, repurchase, redemption or defeasance, or enter into
any derivative or other transaction with any Derivatives Counterparty obligating
Holdings, the Borrower or any of the Borrower's Subsidiaries to make payments to
such Derivatives Counterparty as a result of any change in market value of such
Indebtedness, other than the prepayment of Indebtedness incurred hereunder, (b)
amend, modify or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms (including, without
limitation, the subordination terms) of any Indebtedness (excluding the
Indebtedness hereunder) (other than any such amendment, modification, waiver or
other change which (i) would extend the maturity or reduce the amount of any
payment of principal thereof, reduce the rate or extend the date for payment of
interest thereon or relax any covenant or other restriction applicable to
Holdings, the Borrower or any of the Borrower's Subsidiaries and (ii) does not
involve the payment of a consent fee), or (c) amend or permit the amendment of
its Governing Documents in any manner determined by the Administrative Agent to
be adverse to the Lenders.
7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Holdings, Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's-length transaction with
a Person that is not an Affiliate; provided that Holdings, the
53
Borrower or any of the Borrower's Subsidiaries may not enter into any
transaction with an Affiliate thereof if the value of such transaction is
greater than $1,000,000 individually and the value of all such transactions by
Holdings, the Borrower and the Borrower's Subsidiaries is greater than
$5,000,000 in the aggregate.
7.11 Limitation on Sales and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by Holdings, the Borrower or any of the
Borrower's Subsidiaries of Property which has been or is to be sold or
transferred by Holdings, the Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such Property or rental obligations of Holdings, the Borrower or
such Subsidiary.
7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of
Holdings, the Borrower or any of the Borrower's Subsidiaries to end on a day
other than December 31 or change Holdings', the Borrower's or any of the
Borrower's Subsidiaries' method of determining fiscal quarters, in each case,
without the prior written consent of the Administrative Agent. The Lenders
hereby authorize the Agents to enter into such amendments to effect such
modifications, if any, in accordance with the provisions of this Section.
7.13 Limitation on Negative Pledge Clauses. Other than with respect to
the Bison Entities, enter into or suffer to exist or become effective any
agreement that prohibits or limits the ability of Holdings, the Borrower or any
of the Borrower's Subsidiaries to create, incur, assume or suffer to exist any
Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, to secure the Obligations or, in the case of any guarantor, its
obligations under the Guarantee and Collateral Agreement, other than (a) this
Agreement and the other Loan Documents, (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby) and (c) any agreements in effect on the date of this
Agreement.
7.14 Limitation on Restrictions on Subsidiary Distributions, Etc. Other
than the Bison Entities, enter into or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of the Borrower or any of
the Borrower's Subsidiaries to (a) make Restricted Payments in respect of any
Capital Stock of such Subsidiary held by, or pay or subordinate any Indebtedness
owed to, Holdings, the Borrower or any other Subsidiary, (b) make Investments in
Holdings, the Borrower or any other Subsidiary or (c) transfer any of its assets
to Holdings, the Borrower or any other Subsidiary, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents and (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary.
7.15 Business Activities. The Borrower shall not, and shall not permit
its Subsidiaries to, engage in any business activity other than the Oil and Gas
Business. In the case of Holdings, notwithstanding anything to the contrary in
this Agreement or any other Loan Document, (a) conduct, transact or otherwise
engage in, or commit to conduct, transact or otherwise engage in, any business
or operations other than those incidental to its ownership of the Capital Stock
of
54
the Borrower, (b) incur, create, assume or suffer to exist any Indebtedness or
other liabilities or financial obligations, except (i) nonconsensual obligations
imposed by operation of law, (ii) pursuant to the Loan Documents to which it is
a party and (iii) obligations with respect to its Capital Stock, or (c) own,
lease, manage or otherwise operate any properties or assets (including cash
(other than cash received in connection with dividends made by the Borrower in
accordance with Section 7.6 pending application in the manner contemplated by
said Section) and Cash Equivalents) other than the ownership of shares of
Capital Stock of the Borrower.
7.16 Intercompany Indebtedness. Other than (a) as otherwise permitted by
Section 7.2, (b) the loan of the net proceeds of the Term Loans (less
$65,000,000) from the Borrower to Holdings on the Closing Date evidenced by that
certain Intercompany Note, dated July 31, 2002, made by Holdings in favor of the
Borrower, (c) the loan of the net proceeds of the Intercompany Note referred to
in the foregoing clause (b) from the Holdings to Parent on the Closing Date
evidenced by that certain Intercompany Note, dated July 31, 2002, made by Parent
in favor of Holdings, (d) the loan of the remaining $65,000,000 of the net
proceeds of the Term Loans from the Borrower to Holdings subsequent to the
Closing Date evidenced by an intercompany note to be made by Holdings in favor
of the Borrower in an aggregate principal amount of $65,000,000 and (e) the loan
of the net proceeds of the Intercompany Note referred to in the foregoing clause
(d) from Holdings to Parent subsequent to the Closing Date evidenced by an
intercompany note to be made by Parent in favor of Holdings in an aggregate
principal amount of $65,000,000; provided that on or before the issuance of the
intercompany notes referred to in the foregoing clauses (d) and (e), Parent
shall have caused an irrevocable standby letter of credit in an amount equal to
$65,000,000 to be issued in favor of the Administrative Agent as specified in
the definition of "Borrower Liquidity Reserve" in this Agreement and (d) with
respect to the Bison Entities, at all times there shall be no net Indebtedness
owed by Holdings, the Borrower and/or any of the Borrower's Subsidiaries to
Parent or any of its Affiliates (other than Holdings, the Borrower or the
Borrower's Subsidiaries), unless (x) no Default or Event of Default has occurred
and is continuing, (y) such Indebtedness is set forth in the forward liquidity
projections delivered by Parent pursuant to Section 6.2(j) and (z) the Borrower
is maintaining 100% of the Borrower Liquidity Reserve at the time of the
incurrence of such Indebtedness.
7.17 Subsidiaries. Form or create any direct or indirect Subsidiary.
7.18 Limitation on Hedge Agreements and Firm Transportation Contracts.
Other than the Borrower, enter into any Hedge Agreement or firm transportation
contracts relating to the production of the Borrower and its Subsidiaries;
provided, however, that the Borrower shall not enter into any such Hedge
Agreement with a price less than $3 per mmbtu without the prior written consent
of the Administrative Agent.
7.19 Partnerships and Joint Ventures. Become a general or limited
partner in a partnership or a joint venturer in any joint venture that
constitutes a separate legal entity, or permit Holdings, the Borrower or any of
the Borrower's Subsidiaries to do so.
7.20 Negative Pledge; Limitation on Assets. Solely with respect to
Holdings, (a) create, incur, assume or suffer to exist any Lien upon any of its
Property or revenues, whether now owned or hereafter acquired, to secure any
Indebtedness of Holdings or (b) hold any
55
Property other than (i) all of the Capital Stock of the Borrower and (ii) that
certain Intercompany Note, dated as of July 31, 2002, made by Parent in favor of
Holdings.
SECTION 8 - EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when
due in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan; or Parent or any Loan Party shall fail to pay any other
amount payable hereunder or under any other Loan Document, within five days
after any such interest or other amount becomes due in accordance with the terms
hereof;
(b) Any representation or warranty made or deemed made by Parent or
any Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made;
(c) (i) Parent or any Loan Party shall default in the observance or
performance of any agreement contained in Section 6.2(k) which default is not
cured within 2 days after the occurrence thereof, clause (i) or (ii) of Section
6.4(a) (with respect to Holdings and the Borrower only), Section 6.7(a), Section
6.9, Section 6.10(a), Section 7 or Section 5 of the Guarantee and Collateral
Agreement, (ii) an "Event of Default" under and as defined in any material
Mortgage shall have occurred and be continuing or (iii) Holdings, Borrower or
any of its Subsidiaries shall transfer or otherwise dispose of any of its
properties or assets to Parent or any of its Subsidiaries (other than the Loan
Parties), except to the extent provided for in Section 7.6;
(d) Parent or any Loan Party shall default in the observance or
performance of any other covenant or agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c) of
this Section), and such default shall continue unremedied for a period of 30
days;
(e) Parent, Holdings, the Borrower or any of the Borrower's
Subsidiaries shall (i) default in making any payment of any principal of any
Indebtedness (including, without limitation, any Guarantee Obligation, but
excluding the Term Loans) on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of
Default
56
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $10,000,000; provided further
that with respect to Parent only, a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to Indebtedness
the outstanding principal amount of which exceeds in the aggregate $60,000,000
(f) (i) Parent, Holdings, the Borrower or any of the Borrower's
Subsidiaries shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or Parent, Holdings, the Borrower or any of the
Borrower's Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Parent, Holdings, the
Borrower or any of the Borrower's Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against Parent, Holdings, the Borrower or any of the
Borrower's Subsidiaries any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) Parent, Holdings,
the Borrower or any of the Borrower's Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Parent,
Holdings, the Borrower or any of the Borrower's Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due;
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan,
(vi) the Borrower, any of the Borrower's Subsidiaries or any Commonly Controlled
Entity shall be required to make during any fiscal year of the Borrower payments
pursuant to any employee welfare benefit plan (as defined in Section
57
3(1) of ERISA) that provides benefits to retired employees (or their dependents)
that, in the aggregate, exceed the amount set forth on Schedule 8(g)(i) with
respect to such fiscal year, (vii) the Borrower, any of the Borrower's
Subsidiaries or any Commonly Controlled Entity shall be required to make during
any fiscal year of the Borrower contributions to any defined benefit pension
plan subject to Title IV of ERISA (including any Multiemployer Plan) that, in
the aggregate, exceed the amount set forth on Schedule 8(g)(ii) with respect to
such fiscal year or (viii) any other similar event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (viii)
above, such event or condition, together with all other such events or
conditions, if any, could, in the sole judgment of the Required Lenders,
reasonably be expected to have a Material Adverse Effect;
(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of the Borrower's Subsidiaries involving for
Holdings, the Borrower and the Borrower's Subsidiaries taken as a whole a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $10,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof;
(i) Any of the Security Documents shall cease, for any reason (other
than pursuant to the terms thereof), to be in full force and effect, or any Loan
Party or any Affiliate of any Loan Party shall so assert, or any Lien created by
any of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby;
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than pursuant to the
terms thereof), to be in full force and effect or Parent any Loan Party or any
Affiliate of Parent or any Loan Party shall so assert;
(k) Parent or any Loan Party or any Affiliate of Parent or any Loan
Party shall assert that any provision of any Loan Document is not in full force
and effect;
(l) (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), shall become, or obtain rights (whether by means or warrants,
options or otherwise) to become, the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more
than 50% of the outstanding common stock of Parent or Holdings; (ii) the board
of directors of Parent or Holdings shall cease to consist of a majority of
Continuing Directors; or (iii) Parent or Holdings shall cease to own and
control, of record and beneficially, directly, 100% of each class of outstanding
Capital Stock of the Borrower (other than the Class B Common Stock of the
Borrower) free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement); or
(m) Parent, Holdings or the Borrower has not consummated the Company
Sale referred to in Section 6.9 within 75 days of the Parent Liquidity Event
giving rise to the obligation to consummate such Company Sale and if the
Obligations have not been repaid in full with the net proceeds of such Company
Sale;
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then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to Parent or any Loan
Party, automatically the Commitments shall immediately terminate and the Term
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents shall immediately become due
and payable, and (B) if such event is any other Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Term Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Loan Documents to
be due and payable forthwith, whereupon the same shall immediately become due
and payable. Upon the occurrence and during the continuation of an Event of
Default, the Administrative Agent and the Lenders shall be entitled to exercise
any and all remedies available under the Security Documents, including, without
limitation, the Guarantee and Collateral Agreement and the Mortgages, or
otherwise available under applicable law or otherwise.
SECTION 9 - THE AGENTS; THE ARRANGER
9.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Agents as the agents of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the other Loan Documents, the Fee Letter and the
syndication and fee sharing letter, dated July 31, 2002, among the Original
Lenders, no Agent shall have any duties or responsibilities, except those
expressly set forth herein or therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. None of the Arranger, any Agent or any of
their respective officers, directors, partners, employees, agents, attorneys and
other advisors, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except to the extent
that any of the foregoing are found by a final and non-appealable decision of a
court of competent jurisdiction to have resulted solely and proximately from its
or such Person's own gross negligence or willful misconduct in breach of a duty
owed to the party asserting liability) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by Parent or any Loan Party or any officer thereof contained in this Agreement
or any other Loan Document or in any certificate, report, statement
59
or other document referred to or provided for in, or received by the Arranger or
the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of Parent or any Loan Party party thereto to perform its obligations hereunder
or thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of Parent or any Loan
Party.
9.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Parent, Holdings or the other Loan Parties), independent
accountants and other experts selected by such Agent. The Agents shall deem and
treat the payee of any Term Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent as recorded in the Register. Each Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders or the requisite Lenders required under
Section 10.1 to authorize or require such action (or, if so specified by this
Agreement, all Lenders) as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action. Each Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders or the requisite Lenders under
Section 10.1 to authorize or require such action (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Term Loans.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender, Holdings or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
requisite Lenders (or, if so specified by this Agreement, all Lenders); provided
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that none of the Arranger, the Agents or any of their respective
officers, directors, employees, agents, attorneys and other advisors, partners,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Arranger or any Agent hereinafter taken, including any
review of the affairs of Parent or a Loan Party or any Affiliate of
60
Parent or a Loan Party, shall be deemed to constitute any representation or
warranty by the Arranger or any Agent to any Lender. Each Lender represents to
the Arranger and the Agents that it has, independently and without reliance upon
the Arranger or any Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition, prospects and creditworthiness of Parent or the Loan Parties and
their Affiliates and made its own decision to make its Term Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Arranger or any Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition,
prospects and creditworthiness of Parent or the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, neither
the Arranger nor any Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
Parent or any Loan Party or any Affiliate of Parent or a Loan Party that may
come into the possession of the Arranger or such Agent or any of its officers,
directors, employees, agents, attorneys and other advisors, partners,
attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify the Arranger and
each Agent in its capacity as such (to the extent not reimbursed by Holdings or
the Borrower and without limiting the obligation of Holdings or the Borrower to
do so), ratably according to their respective Term Loan Percentages in effect on
the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Term Loans shall have been paid in full, ratably in
accordance with such Term Loan Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time
following the payment of the Term Loans) be imposed on, incurred by or asserted
against the Arranger or such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Arranger or
such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and non-appealable decision
of a court of competent jurisdiction to have resulted solely and proximately
from the Arranger's or such Agent's gross negligence or willful misconduct in
breach of a duty owed to such Lender. The agreements in this Section 9.7 shall
survive the payment of the Term Loans and all other amounts payable hereunder.
9.8 Arranger and Agents in Their Individual Capacities. The Arranger and
each Agent and their respective Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with Parent or any Loan Party
as though the Arranger was not the Arranger and such Agent was not an Agent.
With respect to its Term Loans made or renewed by
61
it, the Arranger and each Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Arranger or an Agent, as the case may be, and the
terms "Lender" and "Lenders" shall include the Arranger and each Agent in their
respective individual capacities.
9.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Term Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. The Syndication Agent may, at any time, by notice
to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of the
Syndication Agent hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Arranger,
the Syndication Agent, the Administrative Agent or any Lender. After any
retiring Agent's resignation as Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent is hereby
irrevocably authorized by each of the Lenders to release any Lien covering any
Property of the Borrower or any of the Borrower's Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
9.11 The Arranger. The Arranger, in its capacity as such, shall have no
duties or responsibilities, and shall incur no liability, under this Agreement
and the other Term Loan Documents.
(a) To the extent required by any applicable law, the
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If the forms or other
documentation required by Section 2.20(f) are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from any
interest payment to any Lender not providing such forms or other documentation,
an amount equivalent to the applicable withholding tax.
62
(b) If the Internal Revenue Service or any authority of the United
States or other jurisdiction 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, was not properly executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax 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 or otherwise, including penalties and interest,
together with all expenses incurred, including legal expenses, allocated staff
costs and any out of pocket expenses.
(c) If any Lender sells, assigns, grants a participation in, or
otherwise transfers its rights under this Agreement, the purchaser, assignee,
participant or transferee, as applicable, shall comply and be bound by the terms
of Sections 2.20(f) and 9.12.
SECTION 10 - MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and Parent and/or each Loan Party party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the Agents
and Parent and/or each Loan Party party to the relevant Loan Document may, from
time to time, (a) enter into written amendments, supplements or modifications
hereto and to the other Loan Documents (including amendments and restatements
hereof or thereof) for the purpose of adding any provisions to this Agreement or
the other Loan Documents or changing in any manner the rights of the Lenders or
Parent and the Loan Parties hereunder or thereunder or (b) waive, on such terms
and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive or reduce
the principal amount or extend the final scheduled date of maturity of any Term
Loan, extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof, in each case without the
consent of each Lender directly affected thereby; (ii) amend, modify or waive
any provision of this Section or reduce any percentage specified in the
definition of Required Lenders or Required Lenders, consent to the assignment or
transfer by Parent or any Loan Party of any of its rights and obligations under
this Agreement and the other Loan Documents, release all or substantially all of
the Collateral or release all or substantially all of the Subsidiary Guarantors
from their guarantee obligations under the Guarantee and Collateral Agreement,
in each case without the consent of all Lenders; (iii) reduce the percentage
specified in the definition of Required Lenders with respect to the Facility
without the written consent of all Lenders under such Facility; (iv) amend,
modify or waive any provision of Section 9 without the consent of the Arranger
or any Agent directly affected thereby; or (v) amend, modify or waive any
provision of Section 2.12 or Section 2.18 without the consent of each Lender
directly affected thereby. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon Parent and the Loan Parties, the Lenders, the Agents, the Arranger and all
future holders of the Term Loans. In the case of any waiver, Parent, the Loan
Parties, the Lenders, the Arranger and the Agents shall be restored to
63
their former position and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of Holdings, the Borrower, the Arranger and
the Agents, as follows and (b) in the case of the Lenders, as set forth on
Schedule I to the Lender Addendum to which such Lender is a party or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
Parent: The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
Holdings: Xxxxxxxx Production Holdings LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
The Borrower: Xxxxxxxx Production RMT Company
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
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The Syndication Agent: Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx/Xxxxx
Xxxxxxxx
Telecopy: (000) 000-0000/(000) 000-0000
Telephone: (000) 000-0000/(000) 000-0000
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Arranger: Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
65
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
; provided that any notice, request or demand to or upon any Agent or any Lender
shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Arranger, any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Term Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse
the Arranger, the Agents and the Lenders for all their reasonable out-of-pocket
costs and expenses incurred in connection with the syndication of the Facility
(other than fees payable to syndicate members) and the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements and other charges of counsel and other
consultants to each of the Arranger, the Administrative Agent and the
Syndication Agent and the charges of IntraLinks, (b) to pay or reimburse each
Lender, the Arranger and each Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel (including the
allocated fees and disbursements and other charges of in-house counsel) to each
Lender and of counsel to the Arranger and each Agent and the charges of
IntraLinks, (c) to pay, indemnify, and hold each Lender, the Arranger and the
Agents harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender, the Arranger, each Agent, their
respective Affiliates, and their respective officers, directors, partners,
trustees, employees, affiliates, shareholders, attorneys and other advisors,
agents, attorneys-in-
66
fact and controlling persons (each, an "Indemnitee") harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to or arising out of the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the use of proceeds of the Term Loans, the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of any Loan Party or any of the Properties or the use by
unauthorized persons of information or other materials sent through electronic,
telecommunications or other information transmission systems that are
intercepted by such persons and the fees and disbursements and other charges of
legal counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities"); provided that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
non-appealable decision of a court of competent jurisdiction to have resulted
solely and proximately from the gross negligence or willful misconduct of such
Indemnitee in breach of a duty owed to the Borrower. Without limiting the
foregoing, and to the extent permitted by applicable law, each of Holdings and
the Borrower agrees not to assert, and the Borrower agrees to cause its
Subsidiaries not to assert, and each of Holdings and the Borrower hereby waives,
and the Borrower agrees to cause the its Subsidiaries so to waive, all rights
for contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than five days after written
demand therefor. Statements payable by the Borrower pursuant to this Section
shall be submitted to the Borrower in accordance with Section 10.2, or to such
other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section shall
survive repayment of the Term Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of Parent, Holdings,
the Borrower, the Lenders, the Arranger, the Agents, all future holders of the
Term Loans and their respective successors and assigns, except that none of
Parent, Holdings or the Borrower may assign or transfer any of their respective
rights or obligations under this Agreement without the prior written consent of
the Arranger, the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower or any
other Person, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Term Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Term Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower, the Arranger and the Agents shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan
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Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by Parent or any Loan Party therefrom,
except to the extent that such amendment, waiver or consent would reduce the
principal of, or interest on, the Term Loans or any fees payable hereunder, or
postpone the date of the final maturity of the Term Loans, in each case to the
extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Term Loans are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement; provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.19, 2.20 and 2.21 with respect to its
participation in the Commitments and the Term Loans outstanding from time to
time as if it was a Lender; provided that, in the case of Section 2.20, such
Participant shall have complied with the requirements of said Section and
provided further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
law and upon written notice to the Syndication Agent, at any time and from time
to time assign to any Lender any affiliate thereof or Affiliated Fund of the
assigning Lender or of another Lender or, with the consent of the Borrower and
the Agents (which, in each case, shall not be unreasonably withheld or delayed)
(provided that (x) no such consent need be obtained by a Xxxxxx Entity for a
period of 180 days following the Closing Date and (y) the consent of the
Borrower need not be obtained with respect to any assignment of Term Loans), to
an additional bank, financial institution or other entity (an "Assignee") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit E (an
"Assignment and Acceptance"), executed by such Assignee and such Assignor (and,
where the consent of the Borrower or the Agents is required pursuant to the
foregoing provisions, by the Borrower and such other Persons) and delivered to
the Administrative Agent for its acceptance and recording in the Register;
provided that no such assignment to an Assignee (other than any Lender or any
affiliate thereof or Affiliated Fund) shall be in an aggregate principal amount
of less than $10,000,000, unless otherwise agreed by the Borrower, the
Syndication Agent and the Administrative Agent. Any such assignment need not be
ratable as among the Facility. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with Term Loans as set forth therein, and
(y) the Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto). Notwithstanding any provision of this Section, the consent of the
Borrower shall not be
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required for any assignment that occurs at any time when any Event of Default
shall have occurred and be continuing.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the principal amount
of, and interest accrued on, the Term Loans owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of the
Term Loans and any Term Notes evidencing such Term Loans recorded therein for
all purposes of this Agreement. Any assignment of any Term Loan, whether or not
evidenced by a Term Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Term Note shall expressly
so provide). Any assignment or transfer of all or part of a Term Loan evidenced
by a Term Note shall be registered on the Register only upon surrender for
registration of assignment or transfer of the Term Note evidencing such Term
Loan, accompanied by a duly executed Assignment and Acceptance; thereupon one or
more new Term Notes in the same aggregate principal amount shall be issued to
the designated Assignee, and the old Term Notes shall be returned by the
Administrative Agent to the Borrower marked "canceled". The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender's Term Loans) at any reasonable time and from time
to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 10.6(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,500
(except that no such registration and processing fee shall be payable (y) in
connection with an assignment by or to an Original Lender) or (z) in the case of
an Assignee which is already a Lender or is an affiliate of a Lender or an
Affiliated Fund), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Borrower. On or prior to such
effective date, the Borrower, at its own expense, upon request, shall execute
and deliver to the Administrative Agent (in exchange for the applicable Term
Notes, as the case may be, of the assigning Lender) new applicable Term Notes to
such Assignee or its registered assigns in an amount equal to the applicable
Term Loans, assumed or acquired by it pursuant to such Assignment and Acceptance
and, if the Assignor has retained Term Loans, upon request, new Term Notes, to
the Assignor or its registered assigns in an amount equal to the applicable Term
Loans, as the case may be, retained by it hereunder. Such new Term Note or Term
Notes shall be dated the Closing Date and shall otherwise be in the form of the
Term Note or Term Notes replaced thereby.
(f) For the avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Term
Loans and Term Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests, including,
without limitation, any pledge or assignment by a Lender of any Term Loan or
Term Note to any Federal Reserve Bank in accordance with applicable law.
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10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement
provides for payments to be allocated to a particular Lender or to the Lenders,
if any Lender (a "Benefited Lender") shall at any time receive any payment of
all or part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Obligations, such Benefited
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Obligations, or shall provide such
other Lenders with the benefits of any such collateral, as shall be necessary to
cause such Benefited Lender to share the excess payment or benefits of such
collateral ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to Holdings or
the Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
the Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
to notify promptly the Borrower and the Administrative Agent after any such
setoff and application made by such Lender; provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents represent
the agreement of Parent, Holdings, the Borrower, the Agents, the Arranger and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Arranger, any Agent
or any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
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10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of Parent, Holdings and
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to Parent, Holdings or
the Borrower, as the case may be, at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
10.13 Suretyship Waivers. Each of Holdings and the Borrower hereby
waives any and all defenses applicable or available to guarantors or sureties
whether arising as a result of the joint and several nature of the obligations
of Parent, Holdings and the Borrower hereunder or otherwise. Without limiting
the generality of the foregoing, the waivers of the Guarantors (as defined in
the Guarantee and Collateral Agreement) set forth in Section 2.5 of the
Guarantee and Collateral Agreement are hereby incorporated herein by this
reference mutatis mutandis and such waivers shall be deemed to be made by
Parent, Holdings and the Borrower hereunder as if such waivers had been
expressly set forth herein.
10.14 Acknowledgments. Each of Parent, Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
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(b) neither the Arranger, any Agent nor any Lender has any
fiduciary relationship with or duty to Parent, Holdings or the Borrower arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Arranger, the Agents and Lenders, on one hand,
and Parent, Holdings and the Borrower, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Arranger, the Agents and the Lenders or among Parent, Holdings, the
Borrower and the Lenders.
10.15 Confidentiality. Each of the Arranger, the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by Parent
or any Loan Party pursuant to this Agreement that is designated by Parent or
such Loan Party as confidential; provided that nothing herein shall prevent the
Arranger, any Agent or any Lender from disclosing any such information (a) to
the Arranger, any Agent, any other Lender or any affiliate of any thereof, (b)
to any Participant or Assignee (each, a "Transferee") or prospective Transferee
that agrees to comply with the provisions of this Section, (c) to any of its
employees, directors, agents, attorneys, accountants and other professional
advisors, (d) upon the request or demand of any Governmental Authority having
jurisdiction over it, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed other
than in breach of this Section, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.
10.16 Release of Collateral and Guarantee Obligations. (a)
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, upon request of the Borrower in connection with any Disposition of
Property permitted by the Loan Documents, the Administrative Agent shall take
such actions as shall be required to release its security interest in any
Collateral being Disposed of in such Disposition, and to release any guarantee
obligations of any Person being Disposed of in such Disposition, to the extent
necessary to permit consummation of such Disposition in accordance with the Loan
Documents; provided that the Borrower shall have delivered to the Administrative
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Collateral being Disposed
of in such Disposition and the terms of such Disposition in reasonable detail,
including the date thereof, the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with this Agreement and the other Loan Documents
and that the proceeds of such Disposition will be applied in accordance with
this Agreement and the other Loan Documents.
(b) Notwithstanding anything to the contrary contained herein or
any other Loan Document, when all Obligations have been paid in full, upon
request of the Borrower, the Administrative Agent shall take such actions as
shall be required to release its security interest in all Collateral, and to
release all guarantee obligations provided for in any Loan Document.
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10.17 Accounting Changes. In the event that any "Accounting Change" (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
Parent, Holdings, the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's Subsidiaries' financial condition shall
be the same after such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been executed and
delivered by Parent, Holdings, the Borrower, the Administrative Agent and the
Required Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Changes had
not occurred. "Accounting Changes" refers to changes in accounting principles
required or permitted by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the SEC.
10.18 Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent and the
Syndication Agent a Lender Addendum duly executed by such Lender, Parent,
Holdings, the Borrower and each Agent.
10.19 Construction. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
10.20 WAIVERS OF JURY TRIAL. PARENT, HOLDINGS, THE BORROWER, THE
ARRANGER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
THE XXXXXXXX COMPANIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer and President
XXXXXXXX PRODUCTION HOLDINGS LLC
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
XXXXXXXX PRODUCTION RMT COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
XXXXXX BROTHERS INC.,
as Arranger
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
[SIGNATURE PAGE TO CREDIT AGREEMENT]
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
[SIGNATURE PAGE TO CREDIT AGREEMENT]
