Exhibit 10.31
AMENDED AND RESTATED CREDIT AGREEMENT
Among
McMoRan OIL & GAS LLC,
as Borrower,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Agent,
and
THE LENDERS SIGNATORY HERETO
Dated as of June 15, 2000
$75,000,000 Revolving Credit Facility
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Accounting Matters -1-
Section 1.01 Terms Defined Above -1-
Section 1.02 Certain Defined Terms -1-
Section 1.03 Accounting Terms and Determinations -16-
ARTICLE II
Commitments -17-
Section 2.01 Tranche A Loans and Tranche A Letters of Credit -17-
Section 2.02 Borrowings, Continuations and Conversions, Tranche A
Letters of Credit -18-
Section 2.03 Changes of Commitments -20-
Section 2.04 Fees -20-
Section 2.05 Several Obligations -21-
Section 2.06 Tranche A Notes -21-
Section 2.07 Prepayments and Releases -22-
Section 2.08 Borrowing Base -23-
Section 2.09 Assumption of Risks -25-
Section 2.10 Obligation to Reimburse and to Prepay -26-
Section 2.11 Lending Offices -28-
ARTICLE III
Payments of Principal and Interest -28-
Section 3.01 Repayment of Tranche A Loans -28-
Section 3.02 Interest -28-
Section 3.03 Subordination of the Tranche B Indebtedness and
Offer of Assignment -29-
ARTICLE IV
Payments; Pro Rata Treatment; Computations; Etc. -29-
Section 4.01 Payments -29-
Section 4.02 Pro Rata Treatment -30-
Section 4.03 Computations -30-
Section 4.04 Non-receipt of Funds by the Agent -31-
Section 4.05 Set-off, Sharing of Payments, Etc -31-
Section 4.06 Taxes -32-
Section 4.07 Disposition of Proceeds -35-
ARTICLE V
Capital Adequacy -35-
Section 5.01 Additional Costs -35-
Section 5.02 Limitation on Tranche A Eurodollar Loans -37-
Section 5.03 Illegality -38-
Section 5.04 Tranche A Base Rate Loans Pursuant to Sections 5.01, 5.02 and
5.03 -38-
Section 5.05 Compensation -38-
Section 5.06 Replacement Lenders -39-
ARTICLE VI
Conditions Precedent -40-
Section 6.01 Initial Funding -40-
Section 6.02 Initial and Subsequent Tranche A Loans and Tranche A
Letters of Credit -42-
Section 6.03 Conditions Relating to Tranche A Letters of Credit -42-
ARTICLE VII
Representations and Warranties -43-
Section 7.01 Existence -43-
Section 7.02 Financial Condition -43-
Section 7.03 Litigation -44-
Section 7.04 No Breach -44-
Section 7.05 Authority -44-
Section 7.06 Approvals -45-
Section 7.07 Use of Tranche A Loans -45-
Section 7.08 ERISA -45-
Section 7.09 Taxes -46-
Section 7.10 Titles, etc -46-
Section 7.11 No Material Misstatements -47-
Section 7.12 Investment Company Act -47-
Section 7.13 Public Utility Holding Company Act -47-
Section 7.14 Subsidiaries -48-
Section 7.15 Location of Business and Offices -48-
Section 7.16 Defaults -48-
Section 7.17 Environmental Matters -48-
Section 7.18 Compliance with the Law -49-
Section 7.19 Insurance -50-
Section 7.20 Hedging Agreements -50-
Section 7.21 Restriction on Liens -50-
Section 7.22 Material Agreements -50-
Section 7.23 Gas Imbalances -51-
ARTICLE VIII
Affirmative Covenants -51-
Section 8.01 Financial Statements -51-
Section 8.02 Litigation -53-
Section 8.03 Maintenance, Etc. -53-
Section 8.04 Environmental Matters -55-
Section 8.05 Further Assurances -56-
Section 8.06 Performance of Obligations -56-
Section 8.07 Engineering Reports -56-
Section 8.08 Title Information -57-
Section 8.09 Collateral -58-
Section 8.10 ERISA Information and Compliance -59-
Section 8.11 Applicability of Affirmative Covenants -59-
ARTICLE IX
Negative Covenants -59-
Section 9.01 Debt -60-
Section 9.02 Liens -61-
Section 9.03 Investments, Loans and Advances -62-
Section 9.04 Dividends, Distributions and Redemptions -63-
Section 9.05 Sales and Leasebacks -63-
Section 9.06 Nature of Business -63-
Section 9.07 Mergers, Etc. -64-
Section 9.08 Proceeds of Tranche A Notes -64-
Section 9.09 ERISA Compliance -64-
Section 9.10 Sale or Discount of Receivables -66-
Section 9.11 Ratio of Debt to EBITDAX -66-
Section 9.12 Interest Coverage Ratio -66-
Section 9.13 Sale of Oil and Gas Properties -66-
Section 9.14 Environmental Matters -66-
Section 9.15 Transactions with Affiliates -66-
Section 9.16 Subsidiaries -67-
Section 9.17 Negative Pledge Agreements -67-
Section 9.18 Gas Imbalances, Take-or-Pay or Other Prepayments -68-
Section 9.19 Applicability of Negative Covenants -68-
Section 9.20 "Margin Calls" on Hedging Agreements -68-
ARTICLE X
Events of Default; Remedies -68-
Section 10.01 Events of Default -68-
Section 10.02 Remedies -70-
ARTICLE XI
The Agent -71-
Section 11.01 Appointment, Powers and Immunities -71-
Section 11.02 Reliance by Agent -72-
Section 11.03 Defaults -72-
Section 11.04 Rights as a Lender -72-
Section 11.05 INDEMNIFICATION -73-
Section 11.06 Non-Reliance on Agent and other Lenders -73-
Section 11.07 Action by Agent -74-
Section 11.08 Resignation or Removal of Agent -74-
ARTICLE XII
Miscellaneous -75-
Section 12.01 Waiver -75-
Section 12.02 Notices -75-
Section 12.03 Payment of Expenses, Indemnities, etc -75-
Section 12.04 Amendments, Etc -78-
Section 12.05 Successors and Assigns -78-
Section 12.06 Assignments and Participations -78-
Section 12.07 Invalidity -80-
Section 12.08 Counterparts -80-
Section 12.09 References -80-
Section 12.10 Survival -80-
Section 12.11 Captions -81-
Section 12.12 NO ORAL AGREEMENTS -81-
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION -81-
Section 12.14 Interest -82-
Section 12.15 Confidentiality -83-
Section 12.16 Effectiveness -84-
Section 12.17 Assignment of Tranche B Loans -84-
Section 12.18 Tranche A Security Instruments -85-
Section 12.19 EXCULPATION PROVISIONS -85-
Section 12.20 Coordinating Provision -85-
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 15, 2000 is among:
McMoRan OIL & GAS LLC (successor by merger with McMoRan Oil & Gas Co.), a
limited liability company formed under the laws of the State of Delaware
(together with its successors and assigns, the "Borrower"); each of the lenders
that is a signatory hereto or which becomes a signatory hereto as provided in
Section 12.06 (individually, together with its successors and assigns, a
"Lender" and, collectively, the "Lenders"); and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, a national banking association (in its individual capacity,
"Chase"), as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Agent").
R E C I T A L S
A. Pursuant to that certain Amended and Restated Credit Agreement dated
as of January 14, 2000, by and among the Borrower, the Agent and the lenders
party thereto (such Amended and Restated Credit Agreement, as heretofore
amended and supplemented, the "Existing Credit Agreement"), the Borrower
received certain loans and extensions of credit under a revolving credit
facility made available to the Borrower under the Existing Credit Agreement,
evidenced by those certain promissory notes in the aggregate principal
amount of $35,000,000, issued by the Borrower under and pursuant to the
Existing Credit Agreement (the "Prior Notes").
B. The Borrower, the Agent and the Lenders mutually desire to amend and
restate in its entirety the Existing Credit Agreement to, among other
things, provide for an increase in the revolving credit facility available
thereunder. All collateral given as security for the Existing Credit
Agreement, other than Brazos A-19 shall continue to secure this Agreement as
set forth herein.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree that the Existing Credit Agreement is
hereby amended and restated in its entirety to read as follows:
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above. As used in this Amended and Restated
Credit Agreement, the terms "Agent," "Borrower," "Chase," "Existing Credit
Agreement," "Lender," "Lenders" and "Prior Notes" shall have the meanings
indicated above.
Section 1.02 Certain Defined Terms. As used in this Amended and Restated
Credit Agreement, the following terms shall have the following meanings (all
terms defined in this Article I or in other provisions of this Agreement in
the singular to have the same meanings when used in the plural and vice
versa):
"Additional Costs" shall have the meaning assigned such term in Section
5.01(a).
"Affected Tranche A Loans" shall have the meaning assigned such term in
Section 5.04.
"Affiliate" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person,
(ii) any director or officer of such first Person or of any Person referred
to in clause (i) above and (iii) if any Person in clause (i) above is an
individual, any member of the immediate family (including parents, spouse
and children) of such individual and any trust whose principal beneficiary
is such individual or one or more members of such immediate family and any
Person who is controlled by any such member or trust. For purposes of this
definition, any Person which owns directly or indirectly 35% or more of the
securities having ordinary voting power for the election of directors or
other governing body of a corporation or 35% or more of the partnership or
other ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to "control" (including, with
its correlative meanings, "controlled by" and "under common control with")
such corporation or other Person.
"Agreement" shall mean this Amended and Restated Credit Agreement, as the
same may from time to time be amended or supplemented which shall include,
inter alia, Annex I hereto.
"Aggregate Maximum Tranche A Credit Amount" at any time shall equal the sum
of the Maximum Tranche A Credit Amounts of the Lenders ($75,000,000), as the
same may be reduced pursuant to Section 2.03(b), less the Aggregate Tranche
B Commitments.
"Aggregate Maximum Tranche B Credit Amount" shall have the meaning assigned
such term in Annex I.
"Aggregate Tranche A Commitments" at any time shall equal the amount
calculated in accordance with Section 2.03(a) hereof.
"Aggregate Tranche B Commitments" shall have the meaning assigned such term
in Annex I.
"Annex I" shall mean the Terms, Conditions and Provisions Relating to the
Tranche B Credit Facility attached hereto and made a part hereof for all
purposes.
"Applicable Lending Office" shall mean, for each Lender and for each Type of
Tranche A Loan, the lending office of such Lender (or an Affiliate of such
Lender) designated for such Type of Tranche A Loan on the signature pages
hereof or such other offices of such Lender (or of an Affiliate of such
Lender) as such Lender may from time to time specify to the Agent and the
Borrower as the office by which its Tranche A Loans of such Type are to be
made and maintained.
"Applicable Margin" shall mean two percent (2%) per annum with respect to
Tranche A Eurodollar Loans; and one-fourth of one percent (1/4 of 1%) per
annum with respect to Tranche A Base Rate Loans.
"Assignment" shall have the meaning assigned such term in Section 12.06(b).
"Base Rate" shall mean, with respect to any Tranche A Base Rate Loan, for
any day, the higher of (i) the Federal Funds Rate for any such day plus 1/2 of
1% or (ii) the Prime Rate for such day. Each change in any interest rate
provided for herein based upon the Base Rate resulting from a change in the
Base Rate shall take effect at the time of such change in the Base Rate.
"Borrowing Base" shall mean at any time an amount equal to the amount
determined in accordance with Section 2.08(f).
"Borrowing Base Deficiency" shall have the meaning assigned such term in
Section 2.07(c).
"Brazos A-19" shall mean the Hydrocarbon Interests described under the
heading "Brazos A-19" in Subpart A of Schedule 7.22 and all Hydrocarbons and
Oil and Gas Properties relating thereto.
"Business Day" shall mean any day other than a day on which commercial banks
are authorized or required to close in Houston, Texas and, where such term
is used in the definition of "Quarterly Date" or if such day relates to a
borrowing or continuation of, a payment or prepayment of principal of or
interest on, or a conversion of or into, or the Interest Period for, a
Tranche A Eurodollar Loan or a notice by the Borrower with respect to any
such borrowing or continuation, payment, prepayment, conversion or Interest
Period, any day which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Closing Date" shall mean June 15, 2000.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time and any successor statute.
"Consolidated Subsidiaries" shall mean with regard to any entity each
Subsidiary of such entity (whether now existing or hereafter created or
acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of such entity in accordance with
GAAP.
"Debt" of any Person means, without duplication, (a) all obligations of such
Person for borrowed money (including principal, interest, fees and charges), (b)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments (including principal, interest, fees and charges), (c) all
obligations of such Person for the unearned balance of any payment received
under any contract outstanding for 180 days, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to Property
or assets purchased by such Person, (e) all obligations of such Person issued or
assumed as the deferred purchase price of Property or services (excluding trade
accounts payable and accrued obligations incurred in the ordinary course of
business so long as the same are not 180 days overdue or, if overdue, are being
contested in good faith and by appropriate proceedings), (f) all Debt of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on Property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (g) all obligations of such Person, contingent or otherwise,
guaranteeing or having the economic effect of guaranteeing Debt of others, (h)
all obligations of such Person to pay rent or other amounts under a capital
lease, (i) all recourse obligations of such Person with respect to sales of
accounts receivable which would be shown under GAAP on the balance sheet of such
Person as a liability, (j) all obligations of such Person as an account party
(including reimbursement obligations to the issuer of a letter of credit) in
respect of bankers' acceptances and letters of credit guaranteeing Debt, (k) all
noncontingent obligations of such Person as an account party (including
reimbursement obligations to the issuer of a letter of credit) in respect of
letters of credit other than those referred to in clause (j) above, (l) all
obligations under leases which require such Person to make payments over the
term of such lease, including payments at termination, which are substantially
equal to at least eighty percent (80%) of the purchase price of the Property
subject to such lease plus interest at an imputed rate of interest, (m) all
obligations or undertakings of such Person to maintain or cause to be maintained
the financial position or covenants of others or to purchase the Debt or
Property of others, (n) obligations outstanding for 180 days or more to deliver
goods or services including Hydrocarbons in consideration of advance payments,
(o) obligations to pay for goods or services in the event that such goods or
services are not actually received or utilized by such Person, (p) any capital
stock of such Person in which such Person has a mandatory obligation to redeem
such stock within two (2) years after the Termination Date (plus any extension
of such date), (q) any Debt of a Special Entity for which such Person is liable
either by agreement or because of a Governmental Requirement, (r) the
undischarged balance of any production payment created by such Person or for the
creation of which such Person directly received payment; and (s) all obligations
of such Person under Hedging Agreements. The Debt of any person shall exclude
obligations under leases which are characterized as operating leases.
"Default" shall mean an Event of Default or an event which with notice or lapse
of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of America.
"EBITDAX" shall mean, for any period, the sum of consolidated net income for
such period plus the following expenses or charges to the extent deducted from
consolidated net income in such period: interest paid or accrued on the Tranche
A Loans to the Borrower and on other Debt of the Borrower during such period,
taxes, depreciation, depletion, amortization and exploration expenses. As used
herein, "consolidated net income" shall mean, for any period, the amount which,
in conformity with GAAP, would be set forth opposite the caption "net income or
loss" (or any like caption) on a consolidated income statement of the Borrower
and its Consolidated Subsidiaries (before deducting minority interests in net
income of Consolidated Subsidiaries, but disregarding all extraordinary or
unusual noncash items in calculating such consolidated net income). The
calculation of each of the items specified above will exclude items relating to
Unrestricted Subsidiaries.
"Effective Date" shall have the meaning assigned such term in Section 12.16.
"Engineering Reports" shall have the meaning assigned such term in Section
2.08.
"Environmental Laws" shall mean any and all applicable Governmental Requirements
pertaining to health or the environment in effect in jurisdictions in which the
Borrower or any Subsidiary is conducting or at any time has conducted business,
or where any Property of the Borrower or any Subsidiary is located, including
without limitation, the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as
amended, the Comprehensive Environmental, Response, Compensation, and Liability
Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, and other environmental
conservation or protection laws. The term "oil" shall have the meaning
specified in OPA, the terms "hazardous substance" and "release" (or "threatened
release") have the meanings specified in CERCLA, and the terms "solid waste" and
"disposal" (or "disposed") have the meanings specified in RCRA; provided,
however, that (i) in the event either OPA, CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (ii) to the extent
the laws of the state in which any Property of the Borrower or any Subsidiary is
located establish a meaning for "oil," "hazardous substance," "release," "solid
waste" or "disposal" which is broader than that specified in either OPA, CERCLA
or RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Borrower or any Subsidiary would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) with respect to any plan, as to which PBGC has not
by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of Section 412 of the Code or Section 302
of ERISA, including, without limitation, the failure to make on or before its
due date a required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued thereunder, (ii)
the withdrawal of the Borrower, any Subsidiary or any ERISA Affiliate from a
Plan during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (iii) the filing of a notice of intent to terminate
a Plan or the treatment of a Plan amendment as a termination under Section 4041
of ERISA, (iv) the institution of proceedings to terminate a Plan by the PBGC or
(v) any other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Eurodollar Rate" shall mean, with respect to any Tranche A Eurodollar Loan, the
rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) quoted
by the Agent at approximately 11:00 a.m. London time (or as soon thereafter as
practicable) two (2) Business Days prior to the first day of the Interest Period
for such Tranche A Loan for the offering by Chase to leading banks in the London
interbank market of Dollar deposits having a term comparable to such Interest
Period and in an amount comparable to the principal amount of the Tranche A
Eurodollar Loan to be made by the Lenders for such Interest Period.
"Event of Default" shall have the meaning assigned such term in Section 10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been
maintained; (ii) Liens in connection with workmen's compensation, unemployment
insurance or other social security, old age pension or public liability
obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (iii) operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', workmen's, materialmen's, construction or other like
Liens arising by operation of law or lien in favor of operators or co-interest
owners under contract in the ordinary course of business or incident to the
exploration, development, operation and maintenance of Oil and Gas Properties or
statutory landlord's liens, each of which is in respect of obligations that have
not been outstanding more than 90 days or which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP; (iv) any Liens reserved in leases or farmout
agreements for rent or royalties and for compliance with the terms of the
farmout agreements or leases in the case of leasehold estates, to the extent
that any such Lien referred to in this clause does not materially impair the use
of the Property covered by such Lien for the purposes for which such Property is
held by the Borrower or any Subsidiary or materially impair the value of such
Property subject thereto; (v) encumbrances (other than to secure the payment of
borrowed money or the deferred purchase price of Property or services),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any rights of way or other Property of the Borrower or any
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any rights of
way or other Property which in the aggregate do not materially impair the use of
such rights of way or other Property for the purposes of which such rights of
way and other Property are held by the Borrower or any Subsidiary or materially
impair the value of such Property subject thereto; (vi) deposits of cash or
securities to secure the performance of bids, trade contracts, leases, statutory
obligations and other obligations of a like nature incurred in the ordinary
course of business; (vii) Liens permitted by the Tranche A Security Instruments
; (viii) required margin deposits on permitted Hedging Agreements arising in the
ordinary course of business; (ix) Liens on assets or Properties not owned as of
the Closing Date by the Borrower or any Restricted Subsidiary securing only
purchase money Debt of the Borrower or such Restricted Subsidiary permitted by
Section 9.01(f), which Liens are limited to the specific Property the purchase
of which is financed by such Debt; (x) Liens existing at the time of acquisition
by the Borrower or any Restricted Subsidiary of the majority of the capital
stock or other ownership interests or substantially all of the assets of any
other Person or existing at the time of the merger of any such other Person into
the Borrower or any Restricted Subsidiary, on such capital stock or other
ownership interests or assets so acquired or on the assets of the Person so
merged into the Borrower or such Restricted Subsidiary; provided, however, that
such acquisition or merger (and the discharge of such Liens referred to in the
immediately succeeding proviso) shall not otherwise result in an Event of
Default or Default; and provided further that all such Liens shall be discharged
within 180 days after the date of the respective acquisition or merger; (xi)
Liens of lessors of Property (in such capacity) leased by the Borrower or any
Restricted Subsidiary pursuant to an operating lease or permitted capital lease,
which Lien in any such case is limited to the Property leased thereunder; and
(xii) Liens on equity or debt investments in Third Parties owned by the Borrower
or a Restricted Subsidiary (which Lien in any case is limited to such pledged
equity or debt investment) which secure Debt of Third Parties or other Third
Party obligations (or guaranties thereof); provided that such pledged
investments were initially acquired in accordance with Section 9.03.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with a member of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the date for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to Chase on such day on such transactions as determined by Chase.
"Fee Letter" shall mean that certain letter agreement dated June 15, 2000 from
Chase to the Borrower, concerning certain fees in connection with this Agreement
and any agreements or instruments executed in connection therewith, as the same
may be amended, supplemented or replaced from time to time.
"Financial Statements" shall mean the financial statement or statements of the
Borrower and its Consolidated Subsidiaries described or referred to in Section
7.02.
"Form 1001 Certification" shall have the meaning assigned such in Section
4.06(d).
"Form 4224 Certification" shall have the meaning assigned such term in Section
4.06(d).
"GAAP" shall mean generally accepted accounting principles in the United States
of America in effect from time to time.
"Governmental Authority" shall include the country, the state, county, city and
political subdivisions in which any Person or such Person's Property is located
or which exercises valid jurisdiction over any such Person or such Person's
Property, and any court, agency, department, commission, board, bureau or
instrumentality of any of them including monetary authorities which exercises
valid jurisdiction over any such Person or such Person's Property. Unless
otherwise specified, all references to Governmental Authority herein shall mean
a Governmental Authority having jurisdiction over, where applicable, the
Borrower, the Subsidiaries or any of their Property or the Agent, any Lender or
any Applicable Lending Office.
"Governmental Requirement" shall mean any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.
"Halliburton" shall mean Halliburton Company, a Delaware corporation.
"Hedging Agreements" shall mean any commodity, interest rate or currency swap,
cap, floor, collar, forward agreement or other exchange or protection agreements
or any option with respect to any such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Tranche A Notes or
on other Tranche A Indebtedness under laws applicable to such Lender which are
presently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum nonusurious
interest rate than applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles, interests and estates now
or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases,
or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all products refined or separated therefrom.
"Indemnified Parties" shall have the meaning assigned such term in Section
12.03(b).
"Indemnity Matters" shall mean any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent
negligence of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Tranche A Loans or
issuance of the initial Tranche A Letters of Credit, whichever occurs first,
pursuant to Section 6.01 hereof.
"Interest Coverage Ratio" shall have the meaning assigned such term in Section
9.12.
"Interest Period" shall mean, with respect to any Tranche A Eurodollar Loan, the
period commencing on the date such Tranche A Eurodollar Loan is made and ending
on the numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Borrower may select as provided in Section
2.02 (or such longer period as may be requested by the Borrower and agreed to by
the Majority Lenders), except that each Interest Period which commences on the
last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may commence before and
end after the Termination Date; (ii) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); and (iii) no
Interest Period shall have a duration of less than one month and, if the
Interest Period for any Tranche A Eurodollar Loans would otherwise be for a
shorter period, such Tranche A Loans shall not be available hereunder.
"Lender Termination Date" shall have the meaning assigned such term in Section
5.06(c).
"Lien" shall mean any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (i) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (ii) production payments and the like payable out of
Oil and Gas Properties. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.
"Majority Lenders" shall mean, at any time while no Tranche A Loans are
outstanding, Lenders having at least seventy-five percent (75%) of the Aggregate
Tranche A Commitments and, at any time while Tranche A Loans are outstanding,
Lenders holding at least seventy-five percent (75%) of the outstanding aggregate
principal amount of the Tranche A Loans (without regard to any sale by a Lender
of a participation in any Tranche A Loan under Section 12.06(c)).
"Material Adverse Effect" shall mean any material and adverse effect on (i) the
assets, liabilities, financial condition, business, operations or affairs of the
Borrower and the Restricted Subsidiaries taken as a whole or from the facts
represented or warranted in any Tranche A Loan Document, or (ii) the ability of
the Borrower and the Restricted Subsidiaries taken as a whole to carry out their
business as at the Closing Date or as proposed as of the Closing Date to be
conducted or meet their obligations under the Tranche A Loan Documents on a
timely basis.
"Maximum Tranche A Credit Amount" shall mean, as to each Lender and subject to
the limitation set forth in Section 2.03 hereof, the amount set forth opposite
such Lender's name on Schedule I under the caption "Maximum Tranche A Credit
Amounts" (as the same may be reduced pursuant to Section 2.03(b) hereof pro rata
to each Lender based on its Percentage Share), as modified from time to time to
reflect any assignments permitted by Section 12.06(b).
"MMR" shall mean McMoRan Exploration Co., a Delaware corporation and the sole
member of the Borrower.
"Mortgaged Property" shall mean the Property owned by the Borrower or a
Restricted Subsidiary and which is subject to the Liens existing and to exist
under the terms of the Tranche A Security Instruments.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37) or
4001(a)(3) of ERISA.
"net dividends, distributions and redemptions" (as used in Section 9.04 hereof)
shall mean the gross amount of all dividends, distributions and redemptions
under Section 9.04 of the Existing Credit Agreement after March 24, 2000, less
the amount of cash contributed to the capital of the Borrower after March 24,
2000.
"Notice of Termination" shall have the meaning assigned such term in Section
5.06(a).
"Oil and Gas Properties" shall mean Hydrocarbon Interests; the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; all presently existing
or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including without limitation all units created under
orders, regulations and rules of any Governmental Authority) which may affect
all or any portion of the Hydrocarbon Interests; all operating agreements,
contracts and other agreements which relate to any of the Hydrocarbon Interests
or the production, sale, purchase, exchange or processing of Hydrocarbons from
or attributable to such Hydrocarbon Interests; all Hydrocarbons in and under and
which may be produced and saved or attributable to the Hydrocarbon Interests,
including all oil in tanks, the lands covered thereby and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; all tenements, hereditaments, appurtenances and
Properties in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests; and all Properties, rights, titles, interests and estates
described or referred to above, including any and all Property, real or
personal, now owned or hereinafter acquired and situated upon, used, held for
use or useful in connection with the operating, working or development of any of
such Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment or other personal property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil xxxxx, gas xxxxx, injection xxxxx or other xxxxx, buildings,
structures, fuel separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements and servitudes together with
all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing.
"Other Taxes" shall have the meaning assigned such term in Section 4.06(b).
"Participation Agreement" shall mean the Participation Agreement among the
Borrower, Halliburton Energy Services, Inc. and Haliburton dated June 15, 2000.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Aggregate Tranche A
Commitments to be provided by a Lender under this Agreement as indicated on
Schedule I hereto, as modified from time to time to reflect any assignments
permitted by Section 12.06(b).
"Person" shall mean any individual, corporation, company, voluntary association,
partnership, joint venture, trust, unincorporated organization or government or
any agency, instrumentality or political subdivision thereof, or any other form
of entity.
"Plan" shall mean any employee pension benefit plan, as defined in Section 3(2)
of ERISA, which (i) is currently or hereafter sponsored, maintained or
contributed to by the Borrower, any Subsidiary or an ERISA Affiliate or (ii) was
at any time during the preceding six calendar years sponsored, maintained or
contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate.
"Post-Default Rate" shall mean, in respect of any principal of any Tranche A
Loan or any other amount payable by the Borrower under this Agreement or any
Tranche A Note, a rate per annum during the period commencing on the date of an
Event of Default until such amount is paid in full or all Events of Default are
cured or waived equal to 2% per annum above the Base Rate as in effect from time
to time plus the Applicable Margin (if any), but in no event to exceed the
Highest Lawful Rate provided that, for a Tranche A Eurodollar Loan, the "Post-
Default Rate" for such principal shall be, for the period commencing on the date
of the Event of Default and ending on the earlier to occur of the last day of
the Interest Period therefor or the date all Events of Default are cured or
waived, 2% per annum above the interest rate for such Tranche A Loan as provided
in Section 3.02(ii), but in no event to exceed the Highest Lawful Rate.
"Prime Rate" shall mean the rate of interest from time to time announced
publicly by the Agent at the Principal Office as its prime commercial lending
rate. Such rate is set by the Agent as a general reference rate of interest,
taking into account such factors as the Agent may deem appropriate, it being
understood that many of the Agent's commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or best rate
actually charged to any customer and that the Agent may make various commercial
or other loans at rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the Agent, presently
located at 000 Xxxxxx, Xxxxxxx, Xxxxx 00000 or such other location as
designated by the Agent from time to time.
"Property" shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June, September and
December, in each year, the first of which shall be June 30, 2000; provided,
however, that if any such day is not a Business Day, such Quarterly Date shall
be the next succeeding Business Day.
"Redetermination Date" shall have the meaning assigned such term in Section
2.08(a).
"Regulation D" shall mean Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be amended or supplemented
from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change after the
Closing Date in any Governmental Requirement (including Regulation D) or the
adoption or making after such date of any interpretations, directives or
requests applying to a class of lenders (including such Lender or its Applicable
Lending Office) of or under any Governmental Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.
"Replacement Lenders" shall have the meaning assigned such term in Section
5.06(b).
"Required Payment" shall have the meaning assigned such term in Section 4.04.
"Reserve Report" shall mean a report, in form and substance satisfactory to the
Agent, to be delivered prior to March 1 of each year, setting forth as of prior
year-end: (i) the oil and gas reserves attributable to certain of the Borrower's
and/or any Restricted Subsidiary's Oil and Gas Properties together with a
projection of the rate of production and future net income, taxes, operating
expenses and capital expenditures with respect thereto as of such date, based
upon the pricing assumptions consistent with SEC reporting requirements at the
time, and (ii) such other information as the Agent may reasonably request. The
term "Reserve Report" shall also include the information to be provided by the
Borrower pursuant to Section 8.07(a) prior to September 1 of each year, setting
forth, as of July 1 of such year, the information required in clauses (i) and
(ii) of the preceding sentence.
"Responsible Officer" shall mean, as to any Person, the Chief Executive Officer,
the President or any Vice President of such Person and, with respect to
financial matters, the term "Responsible Officer" shall include the Chief
Financial Officer or the Treasurer of such Person. Unless otherwise specified,
all references to a Responsible Officer herein shall mean a Responsible Officer
of the Borrower.
"Restricted Subsidiary" means any direct or indirect Subsidiary of the Borrower
that is not an Unrestricted Subsidiary.
"rolling four quarter basis" shall have the meaning assigned such term in
Section 9.11.
"Scheduled Redetermination Date" shall have the meaning assigned such term in
Section 2.08(d).
"SEC" shall mean the Securities and Exchange Commission or any successor
Governmental Authority.
"Senior Creditors" shall have the meaning assigned such term in Annex I.
"Senior Obligations" shall have the meaning assigned such term in Annex I.
"Special Entity" shall mean any joint venture, limited liability company or
partnership, general or limited partnership or any other type of partnership or
company other than a corporation in which the Borrower or one or more of its
other Subsidiaries is a member, owner, partner or joint venturer and owns,
directly or indirectly, at least a majority of the equity of such entity or
controls such entity, but excluding any tax partnerships that are not classified
as partnerships under state law. For purposes of this definition, any Person
which owns directly or indirectly an equity investment in another Person which
allows the first Person to manage or elect managers who manage the normal
activities of such second Person will be deemed to "control" such second Person
(e.g. a sole general partner controls a limited partnership).
"Subordinated Indebtedness" shall have the meaning assigned such term in Annex
I.
"Subsidiary" shall mean (i) any corporation of which at least a majority of the
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the Borrower or one or more of its Subsidiaries or by the Borrower and one or
more of its Subsidiaries and (ii) any Special Entity. Unless otherwise
indicated herein, each reference to the term "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Taxes" shall have the meaning assigned such term in Section 4.06(a).
"Terminated Lender" shall have the meaning assigned such term in Section
5.06(a).
"Termination Date" shall mean, unless the Tranche A Commitments are sooner
terminated pursuant to Sections 2.03(b) or 10.02 hereof, December 31, 2003.
"Third Party" shall have the meaning assigned such term in Section 9.03.
"Tranche A Base Rate Loans" shall mean Tranche A Loans that bear interest at
rates based upon the Base Rate.
"Tranche A Commitment" shall mean, for any Lender, its obligation to (i) make
Tranche A Loans up to the lesser of such Lender's Maximum Tranche A Credit
Amount or the Lender's Percentage Share of the then effective Borrowing Base and
(ii) participate in the issuance of Tranche A Letters of Credit as provided in
Section 2.01(b).
"Tranche A Credit Facility" shall mean the revolving credit facility provided
for in this Amended and Restated Credit Agreement.
"Tranche A Eurodollar Loans" shall mean Tranche A Loans the interest rates on
which are determined on the basis of rates referred to in the definition of
"Eurodollar Rate".
"Tranche A Indebtedness" shall mean any and all amounts owing or to be owing by
the Borrower or any Restricted Subsidiary to the Agent and/or Lenders in
connection with the Tranche A Loan Documents and the Tranche A Letters of
Credit, and any Hedging Agreements now or hereafter arising between the Borrower
or any Restricted Subsidiary and any Lender or any Affiliate of such Lender
pertaining to the Tranche A Credit Facility and otherwise permitted by the terms
of this Agreement and all renewals, refinancings, extensions and/or
rearrangements of any of the above.
"Tranche A LC Commitment" at any time shall mean $7,000,000.00, minus the
Tranche B LC Exposure.
"Tranche A LC Exposure" at any time shall mean the aggregate face amount of all
undrawn and uncancelled Tranche A Letters of Credit and the aggregate of all
amounts drawn under all Tranche A Letters of Credit and not yet reimbursed.
"Tranche A Letter of Credit Agreements" shall mean the written agreements with
the Agent, as issuing lender for any Tranche A Letter of Credit, executed or
hereafter executed in connection with the issuance by the Agent of the Tranche A
Letters of Credit, such agreements to be on the Agent's customary form for
letters of credit of comparable amount and purpose as from time to time in
effect or as otherwise agreed to by the Borrower and the Agent.
"Tranche A Letters of Credit" shall mean the letters of credit issued pursuant
to Section 2.01(b) and all reimbursement obligations pertaining to any such
letters of credit, and "Tranche A Letter of Credit" shall mean any one of the
Tranche A Letters of Credit and the reimbursement obligations pertaining
thereto.
"Tranche A Loan Documents" shall mean this Agreement, the Tranche A Notes and
the Tranche A Security Instruments.
"Tranche A Loans" shall mean the loans as provided for by Section 2.01(a).
"Tranche A Notes" shall mean the promissory note or notes (whether one or more)
of the Borrower provided for by Section 2.06 and in the form of Exhibit A
hereto, together with any and all renewals, extensions for any period,
increases, rearrangements, substitutions or modifications thereof.
"Tranche A Security Instruments" shall mean the Tranche A Letters of Credit, the
Tranche A Letter of Credit Agreements, the Fee Letter, the agreements or
instruments described or referred to in Exhibit E, and any and all other
agreements or instruments now or hereafter executed and delivered by the
Borrower, any Restricted Subsidiary or any other Person (other than
participation or similar agreements between any Lender and any other lender or
creditor with respect to any Tranche A Indebtedness pursuant to this Agreement)
in connection with, or as security for the payment or performance of the Tranche
A Notes or this Agreement, or reimbursement obligations under the Tranche A
Letters of Credit, as such agreements may be amended, supplemented or restated
from time to time.
"Tranche B Agent" shall have the meaning assigned such term in Section 3.03.
"Tranche B Commitment" shall have the meaning assigned such term in Annex I.
"Tranche B Credit Facility" shall mean the $50,000,000 revolving credit facility
provided for in Annex I.
"Tranche B Indebtedness" shall have the meaning assigned such term in Annex I.
"Tranche B LC Exposure" shall have the meaning assigned such term in Annex I.
"Tranche B Letters of Credit" shall have the meaning assigned such term in Annex
I.
"Tranche B Lenders" shall have the meaning assigned such term in Section 3.03.
"Tranche B Loan Documents" shall have the meaning assigned such term in Annex I.
"Tranche B Loans" shall have the meaning assigned such term in Annex I.
"Tranche B Notes" shall have the meaning assigned such term in Annex I.
"Type" shall mean, with respect to any Tranche A Loan, a Tranche A Base Rate
Loan or a Tranche A Eurodollar Loan.
"Unrestricted Subsidiary" shall mean (i) any of the Subsidiaries listed on
Schedule 7.14 hereto as an Unrestricted Subsidiary, (ii) any Subsidiary of any
Unrestricted Subsidiary, (iii) any surviving Person (other than the Borrower or
a Restricted Subsidiary) into which any of such Persons referred to in clause
(i) or (ii) is merged or consolidated and (iv) any Subsidiary organized after
the date of this Agreement and designated as an Unrestricted Subsidiary by the
Borrower (pursuant to Section 9.16(b) hereof). By written notice to the Agent,
the Borrower may (x) declare any Unrestricted Subsidiary to be a Restricted
Subsidiary and such former Unrestricted Subsidiary shall thereafter be deemed to
be a Restricted Subsidiary for all purposes of this Agreement (subject to the
limitations of this Agreement and pursuant to Section 9.16 hereof) or (y) at any
time other than when a Default or Event of Default has occurred and is
continuing or would exist after giving effect to such declaration, in any fiscal
year, declare one or more Restricted Subsidiaries, to be an Unrestricted
Subsidiary, subject to the limitations contained in Section 9.03 hereof, and any
such former Restricted Subsidiary shall thereafter be deemed to be an
Unrestricted Subsidiary for all purposes of this Agreement.
"Wholly-Owned Subsidiary" shall mean, as to the Borrower, any Subsidiary of
which all of the outstanding shares of stock having by the terms thereof
ordinary voting power to elect the board of directors of such corporation, other
than directors' qualifying shares, are owned or controlled by the Borrower or
one or more of the Wholly-Owned Subsidiaries or by the Borrower and one or more
of the Wholly-Owned Subsidiaries.
Section 1.03 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent with the
audited financial statements of MMR referred to in Section 7.02 (except for
changes concurred with by MMR's independent public accountants).
ARTICLE II
Commitments
Section 2.01 Tranche A Loans and Tranche A Letters of Credit.
(a) Tranche A Loans. Each Lender severally agrees, on the terms of this
Agreement, to make Tranche A Loans to the Borrower during the period from and
including (i) the Closing Date or (ii) such later date that such Lender becomes
a party to this Agreement as provided in Section 12.06(b), to but excluding, the
Termination Date in an aggregate principal amount at any one time outstanding up
to but not exceeding the amount of such Lender's Tranche A Commitment as then in
effect; provided, however, that the aggregate principal amount of all Tranche A
Loans by all Lenders hereunder at any one time outstanding together with the
Tranche A LC Exposure shall not exceed the Aggregate Tranche A Commitments.
Subject to the terms of this Agreement, during the period from the Closing Date
to but excluding the Termination Date, the Borrower may borrow, repay and
reborrow the amount determined pursuant to this Section 2.01(a).
(b) Tranche A Letters of Credit. During the period from and including the
Closing Date to but excluding the Termination Date, the Agent, as issuing bank
for the Lenders, agrees, on the terms of this Agreement, to extend credit for
the account of the Borrower at any time and from time to time by issuing,
renewing, extending or reissuing Tranche A Letters of Credit; provided however,
the Tranche A LC Exposure at any one time outstanding shall not exceed the
lesser of (i) the Tranche A LC Commitment or (ii) the Aggregate Tranche A
Commitments, as then in effect, minus the aggregate principal amount of all
Tranche A Loans then outstanding. The Lenders shall participate in such Tranche
A Letters of Credit according to their respective Percentage Shares.
(c) Limitation on Types of Tranche A Loans. Subject to the other terms and
provisions of this Agreement, at the option of the Borrower, the Tranche A Loans
may be Tranche A Base Rate Loans or Tranche A Eurodollar Loans; provided that,
without the prior written consent of the Majority Lenders, no more than six (6)
Tranche A Eurodollar Loans may be outstanding at any time to any Lender.
(d) Tranche B Loans. Each Lender severally agrees, upon and subject to the
terms and conditions contained in Annex I and prior to any assignment described
in Section 12.17 hereof, to make Tranche B Loans to the Borrower and to
participate in the issuance of Tranche B Letters of Credit.
Section 2.02 Borrowings, Continuations and Conversions, Tranche A Letters of
Credit.
(a) Borrowings. The Borrower shall give the Agent (which shall promptly
notify the Lenders) advance notice as hereinafter provided of each borrowing
hereunder, which shall specify the aggregate amount of such borrowing, the Type
and the date (which shall be a Business Day) of the Tranche A Loans to be
borrowed and (in the case of Tranche A Eurodollar Loans) the duration of the
Interest Period therefor.
(b) Minimum Amounts. All Tranche A Base Rate Loan borrowings shall be in
amounts of at least $1,000,000 or the remaining balance of the Aggregate Tranche
A Commitments, if less, or any whole multiple of $1,000,000 in excess thereof,
and all Tranche A Eurodollar Loans shall be in amounts of at least $1,000,000 or
any whole multiple of $1,000,000 in excess thereof.
(c) Notices. The initial borrowing and all subsequent borrowings,
continuations and conversions shall require advance written notice to the Agent
(which shall promptly notify the Lenders) in the form of Exhibit B hereto (or
telephonic notice promptly confirmed by such a written notice), which in each
case may be revocable or irrevocable, from the Borrower to be received by the
Agent not later than 11:00 a.m. Houston, Texas time on the date of each Tranche
A Base Rate Loan borrowing and three Business Days prior to the date of each
Tranche A Eurodollar Loan borrowing, continuation or conversion. Without in any
way limiting the Borrower's obligation to confirm in writing any telephonic
notice, the Agent may act without liability upon the basis of telephonic notice
believed by the Agent in good faith to be from the Borrower prior to receipt of
written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Agent's record of the terms of such telephonic notice except in
the case of gross negligence or willful misconduct by the Agent.
(d) Continuation Options. Subject to the provisions made in this Section
2.02(d), the Borrower may elect to continue all or any part of any Tranche A
Eurodollar Loan beyond the expiration of the then current Interest Period
relating thereto by giving advance notice as provided in Section 2.02(c) to the
Agent (which shall promptly notify the Lenders) of such election, specifying the
amount of such Tranche A Loan to be continued and the Interest Period therefor.
In the absence of such a timely and proper election, the Borrower shall be
deemed to have elected to convert such Tranche A Eurodollar Loan to a Tranche A
Base Rate Loan pursuant to Section 2.02(e). All or any part of any Tranche A
Eurodollar Loan may be continued as provided herein, provided that (i) any
continuation of any such Tranche A Loan shall be (as to each Tranche A Loan as
continued for an applicable Interest Period) in amounts of at least $1,000,000
or any whole multiple of $1,000,000 in excess thereof and (ii) no Default shall
have occurred and be continuing. If a Default shall have occurred and be
continuing, each Tranche A Eurodollar Loan shall be converted to a Tranche A
Base Rate Loan on the last day of the Interest Period applicable thereto.
(e) Conversion Options. The Borrower may elect to convert all or any part of
any Tranche A Eurodollar Loan on the last day of the then current Interest
Period relating thereto to a Tranche A Base Rate Loan by giving advance notice
to the Agent (which shall promptly notify the Lenders) of such election.
Subject to the provisions made in this Section 2.02(e), the Borrower may elect
to convert all or any part of any Tranche A Base Rate Loan at any time and from
time to time to a Tranche A Eurodollar Loan by giving advance notice as provided
in Section 2.02(c) to the Agent (which shall promptly notify the Lenders) of
such election. All or any part of any outstanding Tranche A Loan may be
converted as provided herein, provided that (i) any conversion of any Tranche A
Base Rate Loan into a Tranche A Eurodollar Loan shall be (as to each such
Tranche A Loan into which there is a conversion for an applicable Interest
Period) in amounts of at least $1,000,000 or any whole multiple of $1,000,000 in
excess thereof and (ii) no Default shall have occurred and be continuing. If a
Default shall have occurred and be continuing, no Tranche A Base Rate Loan may
be converted into a Tranche A Eurodollar Loan.
(f) Advances. Not later than 1:00 p.m. Houston, Texas time on the date
specified for each borrowing hereunder, each Lender shall make available the
amount of the Tranche A Loan to be made by it on such date to the Agent, to an
account which the Agent shall specify, in immediately available funds, for the
account of the Borrower. The amounts so received by the Agent shall, subject to
the terms and conditions of this Agreement, be made available to the Borrower by
depositing the same, in immediately available funds, in an account of the
Borrower, designated by the Borrower and maintained at the Principal Office.
(g) Tranche A Letters of Credit. The Borrower shall give the Agent (which
shall promptly notify the Lenders of such request) advance revocable or
irrevocable notice to be received by the Agent not later than 11:00 a.m.
Houston, Texas time not less than three (3) Business Days prior thereto of each
request for the issuance and at least thirty (30) Business Days prior to the
date of the renewal or extension of a Tranche A Letter of Credit hereunder which
request shall specify the amount of such Tranche A Letter of Credit, the date
(which shall be a Business Day) such Tranche A Letter of Credit is to be issued,
renewed or extended, the duration thereof, the name and address of the
beneficiary thereof, the form of the Tranche A Letter of Credit and such other
information as the Agent may reasonably request all of which shall be reasonably
satisfactory to the Agent. Subject to the terms and conditions of this
Agreement, on the date specified for the issuance, renewal or extension of a
Tranche A Letter of Credit, the Agent shall issue such Tranche A Letter of
Credit to the beneficiary thereof. No Tranche A Letter of Credit shall be
issued, renewed, or extended with an expiration date after December 31, 2003.
In conjunction with the issuance of each Tranche A Letter of Credit, the
Borrower shall execute a Tranche A Letter of Credit Agreement. In the event of
any conflict between any provision of a Tranche A Letter of Credit Agreement and
this Agreement, the Borrower, the Agent and the Lenders hereby agree that the
provisions of this Agreement shall govern.
The Agent will send to the Borrower and each Lender, upon issuance of any
Tranche A Letter of Credit, or an amendment thereto, a true and complete copy of
such Tranche A Letter of Credit, or such amendment thereto.
Section 2.03 Changes of Commitments.
(a) The Aggregate Tranche A Commitments shall at all times be equal to the
lesser of (i) the Aggregate Maximum Tranche A Credit Amount after adjustments
resulting from reductions pursuant to Section 2.03(b) hereof, or (ii) the
Borrowing Base as determined from time to time pursuant to Section 2.08(f)
hereof.
(b) The Borrower shall have the right to terminate or to reduce the amount of
the Aggregate Maximum Tranche A Credit Amounts at any time or from time to time
upon not less than three (3) Business Days' prior notice to the Agent (which
shall promptly notify the Lenders) of each such termination or reduction, which
notice shall specify the effective date thereof and the amount of any such
reduction (which shall not be less than $1,000,000 or any whole multiple of
$1,000,000 in excess thereof) and may be revocable or irrevocable and effective
only upon receipt by the Agent. The Aggregate Maximum Tranche A Credit Amounts
once terminated or reduced pursuant to this Section 2.03(b) may not be
reinstated.
Section 2.04 Fees.
(a) The Borrower agrees to pay to the Agent, for the account of each Lender, a
commitment fee on the daily average of the amount by which the Aggregate Tranche
A Commitments exceed the sum of (A) the Tranche A LC Exposure, plus (B) the
aggregate principal amount of all outstanding Tranche A Loans for the period
from and including the Closing Date up to but excluding the earlier of the date
the Aggregate Tranche A Commitments are terminated or the Termination Date at a
rate per annum equal to one half of one percent (1/2 of 1%).
All such commitment fees shall be calculated on the basis of a year of 365 (or,
in a leap year, 366) days for the actual number of days elapsed. The accrued
commitment fees shall be due and payable quarterly in arrears on each Quarterly
Date and on the earlier of the date the Aggregate Tranche A Commitments are
terminated or the Termination Date.
(b) The Borrower agrees to pay the Agent, for the account of each Lender,
commissions for issuing the Tranche A Letters of Credit on the daily average
outstanding of the maximum liability of the Agent existing from time to time
under such Tranche A Letter of Credit (calculated separately for each Tranche A
Letter of Credit) at the rate of 2% per annum of the daily average outstanding
of the maximum liability of the Agent existing from time to time under each
Tranche A Letter of Credit, provided that each Tranche A Letter of Credit shall
bear a minimum commission of $300.00. Each Tranche A Letter of Credit shall be
deemed to be outstanding up to the full face amount of the Tranche A Letter of
Credit until the Agent has received the canceled Tranche A Letter of Credit or a
written cancellation of the Tranche A Letter of Credit from the beneficiary of
such Tranche A Letter of Credit in form and substance acceptable to the Agent,
or for any reductions in the amount of the Tranche A Letter of Credit (other
than from a drawing), written notification from the beneficiary of such Tranche
A Letter of Credit. Such commissions are payable quarterly in arrears.
(c) The Agent, for its own account, shall retain 0.125% of the Tranche A
Letter of Credit fee (as described in subsection (b) above) as an issuing fee
and shall pay the balance of such Tranche A Letter of Credit fee to the Lenders
pro rata.
(d) The Borrower shall pay to the Agent for its account such other fees as are
set forth in the Fee Letter on the dates specified therein to the extent not
paid prior to the Closing Date.
(e) If the Borrower exercises its option to cause the Lenders to redetermine
the Borrowing Base pursuant to Section 2.08(d), then for each exercise of such
option, the Borrower shall pay a fee to the Agent in the amount of $2,000 to be
shared by the Lenders pro rata in proportion to their Percentage Share. Such
fee shall be due and payable at the time the Borrower gives notice of its
election to exercise such option.
Section 2.05 Several Obligations. The failure of any Lender to make any
Tranche A Loan to be made by it or to provide funds for disbursements or
reimbursements under Tranche A Letters of Credit on the date specified therefor
shall not relieve any other Lender of its obligation to make its Tranche A Loan
or provide funds on such date, but no Lender shall be responsible for the
failure of any other Lender to make a Tranche A Loan to be made by such other
Lender or to provide funds to be provided by such other Lender.
Section 2.06 Tranche A Notes. The Tranche A Loans made by each Lender shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A hereto, dated (i) the Closing Date or (ii) the effective date of an
Assignment pursuant to Section 12.06(b), payable to the order of such Lender in
a principal amount equal to its Maximum Tranche A Credit Amount as in effect and
otherwise duly completed and such substitute Tranche A Notes as required by
Section 12.06(b). The date, amount, Type, interest rate and Interest Period of
each Tranche A Loan made by each Lender, and all payments made on account of the
principal thereof, shall be recorded by such Lender on its books for its Tranche
A Notes, and, prior to any transfer, may be endorsed by such Lender on a
schedule attached to such Tranche A Notes or any continuation thereof or on any
separate record maintained by such Lender. Failure to make any such notation or
to attach a schedule shall not affect any Lender's or the Borrower's rights or
obligations in respect of such Tranche A Loans or affect the validity of such
transfer by any Lender of its Tranche A Notes.
Section 2.07 Prepayments and Releases.
(a) The Borrower may prepay the Tranche A Base Rate Loans upon one (1)
Business Day's prior notice to the Agent (which shall promptly notify the
Lenders), which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which shall be at least
$1,000,000 or the remaining aggregate principal balance outstanding on the
Tranche A Notes) and may be revocable or irrevocable and effective only upon
receipt by the Agent, provided that interest on the principal prepaid, accrued
to the prepayment date, shall be paid on the prepayment date. The Borrower may
prepay all or any portion of Tranche A Eurodollar Loans upon not less than three
(3) Business Day's prior notice to the Agent (which shall promptly notify the
Lenders), which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which shall be at least
$1,000,000 or the remaining aggregate principal balance outstanding on the
Tranche A Notes) and may be revocable or irrevocable and effective only upon
receipt by the Agent, provided that interest on the principal prepaid, accrued
to the prepayment date, shall be paid on the prepayment date. In addition,
prepayments of Tranche A Eurodollar Loans shall be subject to the terms of
Section 5.05.(b) If, after giving effect to any termination or reduction of the
Aggregate Maximum Tranche A Credit Amounts pursuant to Section 2.03(b), the
outstanding aggregate principal amount of the Tranche A Loans plus the Tranche A
LC Exposure exceeds the Aggregate Maximum Tranche A Credit Amounts, the Borrower
shall (i) prepay the Tranche A Loans on the date of such termination or
reduction in an aggregate principal amount equal to the excess, together with
interest on the principal amount paid accrued to the date of such prepayment and
(ii) if any excess remains after prepaying all of the Tranche A Loans, pay to
the Agent on behalf of the Lenders an amount equal to the excess to be held as
cash collateral as provided in Section 2.10(b) hereof.
(c) Upon any adjustment or redetermination of the amount of the Borrowing Base
in accordance with Sections 2.07(e), 2.08, 8.08(c), 9.03(i) or 9.13 or
otherwise, if the adjusted or redetermined Borrowing Base is less than the sum
of the aggregate outstanding principal amount of the Tranche A Loans and the
Tranche A LC Exposure (a "Borrowing Base Deficiency"), then, subject to the
release approval requirements in Section 2.07(e), the Borrower shall cure such
Borrowing Base Deficiency by prepaying the Tranche A Loans or reducing the
Tranche A LC Exposure in an aggregate principal amount equal to such excess,
together with interest on the principal amount paid which has accrued to the
date of such prepayment, within 45 days of receipt of written notice thereof.
If such Borrowing Base Deficiency is not cured by the 45th day after the
Borrower's receipt of notice of such Borrowing Base Deficiency, then such
Borrowing Base Deficiency shall constitute an Event of Default hereunder.
(d) Following a casualty loss to all or any part of the Oil and Gas Properties
constituting the Borrowing Base, all insurance proceeds payable to the Borrower
or a Restricted Subsidiary, as applicable, and not used by the Borrower or such
Restricted Subsidiary to repair or replace such Properties shall be used by the
Borrower or such Restricted Subsidiary to prepay the Tranche A Loans. The
Borrowing Base shall be reduced by an amount reasonably determined at the time
by the Agent to reflect the contribution to the Borrowing Base of such Oil and
Gas Properties not repaired or replaced and such Oil and Gas Properties shall no
longer be included in the Borrowing Base.
(e) Upon the request of the Borrower, the Agent shall release any Oil and Gas
Properties from the Lien of the Security Documents; provided that (i) at the
time of such request, no Event of Default shall have occurred and be continuing
or be occasioned by such action and (ii) with respect to Oil and Gas Properties
included in the Borrowing Base, the Borrowing Base shall be reduced by an amount
reasonably determined at the time by the Agent to reflect the contribution to
the Borrowing Base of such Oil and Gas Properties so released and any such Oil
and Gas Properties so released shall no longer be included in the Borrowing Base
and no Borrowing Base Deficiency shall exist before or be occasioned by the
requested release (unless such Borrowing Base Deficiency is cured
contemporaneously with any such requested release). With respect to any
releases (i) of non-borrowing base Properties, only the Agent's consent shall be
required and same shall not be withheld so long as the other requirements of
Section 2.07(e) are satisfied, (ii) of 10% or less of the Borrowing Base
Properties (based on the present value of the assets to be released as shown on
the most recent Engineering Reports), only the Agent's consent shall be
required, and (iii) of more than 10% of the Borrowing Base Properties (based on
the present value of the assets to be released as shown on the most recent
Engineering Report), the prior written consent of all of the Lenders is
required.
(f) Prepayments permitted or required under this Section 2.07 shall be without
notice, premium or penalty, except as required under Section 5.05 for prepayment
of Tranche A Eurodollar Loans. Any prepayments on the Tranche A Loans may be
reborrowed subject to the then effective Aggregate Tranche A Commitments.
Section 2.08 Borrowing Base.
(a) During the period from and after the Closing Date until the first
scheduled redetermination of the Borrowing Base (scheduled to be October 15,
2000) in accordance with this Section 2.08, the amount of the Borrowing Base
shall be $10,000,000. The Borrowing Base shall be redetermined in accordance
with Sections 2.08(b), 2.08(c) and 2.08(d) by the Agent with the concurrence of
the Majority Lenders. Upon any redetermination of the Borrowing Base, such
redetermination shall remain in effect until the next successive Redetermination
Date. "Redetermination Date" shall mean the date that the redetermined
Borrowing Base becomes effective subject to the notice requirements specified in
Section 2.08(e) both for scheduled redeterminations and unscheduled
redeterminations.
(b) Upon receipt of the reports required by Section 8.07 and such other
reports, data and supplemental information as may from time to time be
reasonably requested by the Agent (the "Engineering Reports"), the Agent will
redetermine the Borrowing Base. Such redetermination will be in accordance with
its normal and customary procedures for evaluating oil and gas reserves and
other related assets as such exist at that particular time. The Agent, in its
sole discretion, may make adjustments to the rates, volumes and prices and other
assumptions set forth therein in accordance with its normal and customary
procedures for evaluating oil and gas reserves and other related assets as such
exist at that particular time. The Agent shall propose to the Lenders a new
Borrowing Base within 30 days following receipt by the Agent and the Lenders of
the applicable Engineering Reports in a timely and complete manner, with respect
to each scheduled redetermination of the Borrowing Base. After having received
notice of such proposal by the Agent, each Lender shall have 14 days to agree or
disagree with such proposal. If at the end of the 14 days, any Lender shall
have not communicated its approval or disapproval, such silence shall be deemed
to be an approval. If within such 14 day period the Majority Lenders have
approved or been deemed to approve the Agent's proposal, then the Agent's
proposal shall be the new Borrowing Base; provided, however, an increase in the
Borrowing Base shall require the approval of 100% of the Lenders before such
increase shall become effective. If however, the Majority Lenders have not
approved or been deemed to approve the Agent's proposal within 14 days, the
Majority Lenders shall, within a reasonable period of time, agree on a new
Borrowing Base. The first scheduled redetermination of the Borrowing Base is to
occur on October 15, 2000.
(c) The Agent may exclude any Oil and Gas Property or portion of production
therefrom or any income from any other Property from the Borrowing Base, at any
time, because title information is not reasonably satisfactory, such Property is
not Mortgaged Property or such Property is not assignable.
(d) (i) So long as any of the Tranche A Commitments are in effect and until
payment in full of all Tranche A Loans hereunder, on or around the fifteenth
(15th) day of each October and April, commencing October 15, 2000 (each being a
"Scheduled Redetermination Date"), the Lenders shall redetermine the amount of
the Borrowing Base in accordance with Section 2.08(b). (ii) In addition to the
scheduled redeterminations pursuant to clause (i) of this Section 2.08(d), the
Majority Lenders or the Borrower may each initiate a redetermination of the
Borrowing Base as they so elect; provided, however, only one such unscheduled
redetermination may be elected between each Scheduled Redetermination Date. If
such redetermination is initiated by the Majority Lenders, the Agent shall
specify in writing to the Borrower the date on which the Borrower is to furnish
a Reserve Report in accordance with Section 8.07(b) and the date on which such
redetermination is to occur. Each such redetermination shall be made in
accordance with Sections 2.08(b) and (c); provided, however, the Agent shall
propose to the Lenders the redetermined Borrowing Base within 14 days following
receipt by the Agent and the Lenders of the Engineering Reports in a timely and
complete manner. After having received notice of such proposal by the Agent,
the Majority Lenders shall have 14 days to agree or disagree with such proposal.
If at the end of the 14 days, the Majority Lenders have not communicated their
approval or disapproval, such silence shall be deemed to be an approval and the
Agent's proposal shall be the new Borrowing Base; provided, however, an increase
in the Borrowing Base shall require the approval of 100% of the Lenders before
such increase shall become effective. If however, the Majority Lenders notify
Agent within 14 days of their disapproval, the Majority Lenders shall, within a
reasonable period of time, agree on a new Borrowing Base.
(e) The Agent shall promptly notify in writing the Borrower and the Lenders of
the new Borrowing Base. Any redetermination of the Borrowing Base shall not be
in effect until written notice is received by the Borrower.
(f) Upon the Borrower's receipt of written notice from the Agent of the amount
of the Borrowing Base then in effect, the Agent and the Borrower shall mutually
agree on the portion of such Borrowing Base to be accepted by the Borrower as
the Borrowing Base. During the period from and after the Closing Date to and
including the effective date of the next designation of the Borrowing Base in
accordance with this Section 2.08(f), the amount of the Borrowing Base shall be
$10,000,000.
(g) In addition to the scheduled and unscheduled redeterminations of the
Borrowing Base pursuant to this Section 2.08, the Borrowing Base in effect from
time to time is subject to reductions and adjustments made in accordance with
Sections 2.07(e), 2.07(f), 8.08(c), 9.03(i) or 9.13.
(h) So long as any of the Tranche A Commitments are in effect or any Tranche A
LC Exposure or Tranche A Loans are outstanding hereunder, the Tranche A Loans
and Tranche A Letters of Credit shall be governed by the then effective
Borrowing Base.
Section 2.09 Assumption of Risks. The Borrower assumes all risks of the acts
or omissions of any beneficiary of any Tranche A Letter of Credit or any
transferee thereof with respect to its use of such Tranche A Letter of Credit.
Neither the Agent (except in the case of willful misconduct or bad faith on the
part of the Agent or any of its employees), its correspondents nor any Lender
shall be responsible for the validity, sufficiency or genuineness of
certificates or other documents or any endorsements thereon, even if such
certificates or other documents should in fact prove to be invalid,
insufficient, fraudulent or forged; for errors, omissions, interruptions or
delays in transmissions or delivery of any messages by mail, telex, or
otherwise, whether or not they be in code; for errors in translation or for
errors in interpretation of technical terms; the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Tranche A Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; the failure of any beneficiary or any transferee of any Tranche A
Letter of Credit to comply fully with conditions required in order to draw upon
any Tranche A Letter of Credit; or for any other consequences arising from
causes beyond the Agent's control or the control of the Agent's correspondents.
In addition, neither the Agent nor any Lender shall be responsible for any
error, neglect, or default of any of the Agent's correspondents; and none of the
above shall affect, impair or prevent the vesting of any of the Agent's or any
Lender's rights or powers hereunder or under the Tranche A Letter of Credit
Agreements, all of which rights shall be cumulative. The Agent and its
correspondents may accept certificates or other documents that appear on their
face to be in order, without responsibility for further investigation of any
matter contained therein regardless of any notice or information to the
contrary. In furtherance and not in limitation of the foregoing provisions, the
Borrower agrees that any action, inaction or omission taken or not taken by the
Agent or by any correspondent for the Agent in good faith in connection with any
Tranche A Letter of Credit, or any related drafts, certificates, documents or
instruments, shall be binding on the Borrower and shall not put the Agent or its
correspondents under any resulting liability to the Borrower.
Section 2.10 Obligation to Reimburse and to Prepay.
(a) If a disbursement by the Agent is made under any Tranche A Letter of
Credit, the Borrower shall pay to the Agent within two (2) Business Days after
notice of any such disbursement is received by the Borrower, the amount of each
such disbursement made by the Agent under the Tranche A Letter of Credit (if
such payment is not sooner effected as may be required under this Section 2.10
or under other provisions of the Tranche A Letter of Credit), together with
interest on the amount disbursed from and including the date of disbursement
until payment in full of such disbursed amount at a varying rate per annum equal
to (i) the then applicable interest rate for Tranche A Base Rate Loans through
the second Business Day after notice of such disbursement is received by the
Borrower and (ii) thereafter, the Post-Default Rate for Tranche A Base Rate
Loans (but in no event to exceed the Highest Lawful Rate) for the period from
and including the third Business Day following the date of notice of such
disbursement to and including the date of repayment in full of such disbursed
amount; provided that the Borrower may repay any such disbursement with a
Tranche A Loan if all of the conditions for the making of such a loan are met
under this Agreement. The obligations of the Borrower under this Agreement with
respect to each Tranche A Letter of Credit shall be absolute, unconditional and
irrevocable and shall be paid or performed strictly in accordance with the terms
of this Agreement under all circumstances whatsoever, including, without
limitation, but only to the fullest extent permitted by applicable law, the
following circumstances: (i) any lack of validity or enforceability of this
Agreement, any Tranche A Letter of Credit or any of the Tranche A Security
Instruments; (ii) any amendment or waiver of (including any default), or any
consent to departure from this Agreement (except to the extent permitted by any
amendment or waiver), any Tranche A Letter of Credit or any of the Tranche A
Security Instruments; (iii) the existence of any claim, set-off, defense or
other rights which the Borrower may have at any time against the beneficiary of
any Tranche A Letter of Credit or any transferee of any Tranche A Letter of
Credit (or any Persons for whom any such beneficiary or any such transferee may
be acting), the Agent, any Lender or any other Person, whether in connection
with this Agreement, any Tranche A Letter of Credit, the Tranche A Security
Instruments, the transactions contemplated hereby or any unrelated transaction;
(iv) any statement, certificate, draft, notice or any other document presented
under any Tranche A Letter of Credit proves to have been forged, fraudulent,
insufficient or invalid in any respect or any statement therein proves to have
been untrue or inaccurate in any respect whatsoever; (v) payment by the Agent
under any Tranche A Letter of Credit against presentation of a draft or
certificate which appears on its face to comply, but does not comply, with the
terms of such Tranche A Letter of Credit; and (vi) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing.
Notwithstanding anything in this Agreement to the contrary, the Borrower will
not be liable for payment or performance that results from the gross negligence
or willful misconduct of the Agent, except (i) where the Borrower or any
Subsidiary actually recovers the proceeds for itself or the Agent of any payment
made by the Agent in connection with such gross negligence or willful misconduct
or (ii) in cases where the Agent makes payment to the named beneficiary of a
Tranche A Letter of Credit.
(b) In the event of the occurrence of any Event of Default, a payment or
prepayment pursuant to Sections 2.07(b), (c) and (d) hereof or the maturity of
the Tranche A Notes, whether by acceleration or otherwise, an amount equal to
the Tranche A LC Exposure (or the excess in the case of Section 2.07(b)) shall
be deemed to be forthwith due and owing by the Borrower to the Agent and the
Lenders as of the date of any such occurrence; and the Borrower's obligation to
pay such amount shall be absolute and unconditional, without regard to whether
any beneficiary of any such Tranche A Letter of Credit has attempted to draw
down all or a portion of such amount under the terms of a Tranche A Letter of
Credit, and, to the fullest extent permitted by applicable law, shall not be
subject to any defense or be affected by a right of set-off, counterclaim or
recoupment which the Borrower may now or hereafter have against any such
beneficiary, the Agent, the Lenders or any other Person for any reason
whatsoever. Such payments shall be held by the Agent on behalf of the Lenders
as cash collateral securing the Tranche A LC Exposure in an interest bearing
account or accounts at the Principal Office; and the Borrower hereby grants to
and by its deposit with the Agent grants to the Agent a security interest in
such cash collateral. In the event of any such payment by the Borrower of
amounts contingently owing under outstanding Tranche A Letters of Credit and in
the event that thereafter drafts or other demands for payment complying with the
terms of such Tranche A Letters of Credit are not made prior to the respective
expiration dates thereof, the Agent agrees, if no Event of Default has occurred
and is continuing or if no other amounts are outstanding under this Agreement,
the Tranche A Notes or the Tranche A Security Instruments, to remit to the
Borrower amounts for which the contingent obligations evidenced by the Tranche A
Letters of Credit have ceased.
(c) Each Lender severally and unconditionally agrees that it shall promptly
reimburse the Agent an amount equal to such Lender's Percentage Share of any
disbursement made by the Agent under any Tranche A Letter of Credit that is not
reimbursed according to this Section 2.10.
Section 2.11 Lending Offices. The Tranche A Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Tranche A Loans of such Type.
ARTICLE III
Payments of Principal and Interest
Section 3.01 Repayment of Tranche A Loans. The Borrower will pay to the Agent,
for the account of each Lender, the principal payments required by this Section
3.01. On the Termination Date the Borrower shall repay the outstanding
aggregate principal and accrued and unpaid interest under the Tranche A Notes.
Section 3.02 Interest. The Borrower will pay to the Agent, for the account of
each Lender, interest on the unpaid principal amount of each Tranche A Loan made
by such Lender for the period commencing on the date such Tranche A Loan is made
to but excluding the date such Tranche A Loan shall be paid in full, at the
following rates per annum:
(i) if such a Tranche A Loan is a Tranche A Base Rate Loan, the Base Rate (as
in effect from time to time) plus the Applicable Margin, but in no event to
exceed the Highest Lawful Rate; and
(ii) if such a Tranche A Loan is a Tranche A Eurodollar Loan, for each Interest
Period relating thereto, the Eurodollar Rate for such Tranche A Loan plus the
Applicable Margin, but in no event to exceed the Highest Lawful Rate.
Notwithstanding the foregoing, the Borrower will pay to the Agent, for the
account of each Lender interest at the applicable Post-Default Rate on any
principal of any Tranche A Loan made by such Lender, and (to the fullest extent
permitted by law) on any other amount payable by the Borrower hereunder, under
any Tranche A Loan Document or under any Tranche A Note held by such Lender to
or for account of such Lender, for the period commencing on the date of an Event
of Default until the same is paid in full or all Events of Default are cured or
waived.
Accrued interest on Tranche A Base Rate Loans shall be payable on each Quarterly
Date commencing on June 30, 2000, and accrued interest on each Tranche A
Eurodollar Loan shall be payable on the last day of the Interest Period therefor
and, if such Interest Period is longer than three months at three-month
intervals following the first day of such Interest Period, except that interest
payable at the Post-Default Rate shall be payable from time to time on demand
and interest on any Tranche A Eurodollar Loan that is converted into a Tranche A
Base Rate Loan (pursuant to Section 5.04) shall be payable on the date of
conversion (but only to the extent so converted).
Promptly after the determination of any interest rate provided for herein or any
change therein, the Agent shall notify the Lenders to which such interest is
payable and the Borrower thereof. Each determination by the Agent of an
interest rate or fee hereunder shall, except in cases of manifest error, be
final, conclusive and binding on the parties.
Section 3.03 Subordination of the Tranche B Indebtedness and Offer of
Assignment. Reference is hereby made to Sections 3.15 and 3.16 of Annex I with
respect to the subordination provisions of Sections 3.03 through 3.18 of Annex
I. Each of the Lenders hereby agrees for the benefit of the holders of the
Tranche B Indebtedness ("Tranche B Lenders") and Chase, in its capacity as
administrative agent for such holders (in such capacity, together with its
successors in such capacity, "Tranche B Agent"), that in consideration for the
subordination provisions contained in Sections 3.03 through 3.18 of Annex I, (a)
the maturity of the Tranche A Credit Facility shall not be extended past
December 31, 2003 without the prior written consent of the Tranche B Lenders and
Halliburton and (b) if Halliburton is called upon to perform under the
Halliburton Guaranty (as defined in Annex I) and Halliburton performs under the
Halliburton Guaranty and pays in full all amounts owing under and in connection
with the Tranche B Credit Facility and if an Event of Default is declared by the
Lenders hereunder, then the Lenders (or an agent operating on their behalf) will
(i) use reasonable efforts to give notice to Halliburton and the Tranche B Agent
of the Event of Default, (ii) offer within ten (10) Business Days to sell the
Tranche A Indebtedness to the Tranche B Lenders at par including all amounts
owing in connection with the Tranche A Loan Documents, and (iii) upon acceptance
by the Tranche B Lenders of the offer described in clause (ii) within said ten
(10) Business Days of such offer, assign to the Tranche B Lenders (utilizing the
Form of Assignment attached as Exhibit I of Annex I) all the Lenders' rights
under the Tranche A Loan Documents and any Liens securing those rights upon
payment in full within said ten-day period of all amounts owing in connection
with the Tranche A Loan Documents. In addition, the Lenders will use reasonable
efforts to give the Tranche B Agent written notice of any foreclosure actions
initiated by the Lenders on any Property upon which the Agent has a Lien either
(x) at the time notice is given to the Borrower, or (y) at the time any
otherwise required statutory notices would be given. Nothing contained in this
Section 3.03 shall in any way prejudice the Lenders' and the Agent's rights to,
or prevent the Lenders or the Agent from, foreclosing on any collateral covered
by the Security Instruments or prejudice any rights of the Tranche B Agent or
the Tranche B Lenders to enforce the Halliburton Guaranty or in any way affect
or impair Halliburton's obligations under the Halliburton Guaranty or prohibit
or restrict the Senior Creditors' rights to sell and assign the Senior
Obligations to others after the ten-day period referenced in this Section 3.03.
ARTICLE IV
Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
under the Tranche A Loan Documents shall be made in Dollars, in immediately
available funds, to the Agent at such account as the Agent shall specify by
notice to the Borrower from time to time, not later than 11:00 a.m. Houston,
Texas time on the date on which such payments shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). Such payments shall be made without (to the
fullest extent permitted by applicable law) defense, set-off or counterclaim.
Each payment received by the Agent under this Agreement or any Tranche A Note
for account of a Lender shall be paid promptly to such Lender in immediately
available funds. Except as provided in clause (iii) of the definition of
"Interest Period", if the due date of any payment under this Agreement or any
Tranche A Note would otherwise fall on a day which is not a Business Day such
date shall be extended to the next succeeding Business Day and interest shall be
payable for any principal so extended for the period of such extension. At the
time of each payment to the Agent of any principal of or interest on any
borrowing, the Borrower shall notify the Agent of the Tranche A Loans to which
such payment shall apply. In the absence of such notice the Agent may specify
the Tranche A Loans to which such payment shall apply, but to the extent
possible such payment or prepayment will be applied first to the Tranche A Loans
comprised of Tranche A Base Rate Loans.
Section 4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein each Lender agrees that: (i) each borrowing from the Lenders under
Section 2.01 and each continuation and conversion under Section 2.02 shall be
made from the Lenders pro rata in accordance with their Percentage Share, each
payment of commitment fee or other fees under Sections 2.04(a), (b) and (c)
shall be made for account of the Lenders pro rata in accordance with their
Percentage Share, and each termination or reduction of the amount of the
Aggregate Maximum Tranche A Credit Amounts or the Aggregate Tranche A
Commitments under Section 2.03(b) shall be applied to the Maximum Tranche A
Credit Amount or the Tranche A Commitment of each Lender, as the case may be,
pro rata according to the amounts of its respective Tranche A Commitment; (ii)
each payment of principal of Tranche A Loans by the Borrower shall be made for
account of the Lenders pro rata in accordance with the respective unpaid
principal amount of the Tranche A Loans held by the Lenders; and (iii) each
payment of interest on Tranche A Loans by the Borrower shall be made for account
of the Lenders pro rata in accordance with the amounts of interest due and
payable to the respective Lenders; and (iv) each reimbursement by the Borrower
of disbursements under Tranche A Letters of Credit shall be made for account of
the Agent or, if funded by the Lenders, pro rata for the account of the Lenders,
in accordance with the amounts of reimbursement obligations due and payable to
each respective Lender.
Section 4.03 Computations. Interest on Tranche A Eurodollar Loans shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last day) occurring in the period for which such
interest is payable, unless such calculation would exceed the Highest Lawful
Rate, in which case interest shall be calculated on the per annum basis of a
year of 365 or 366 days, as the case may be. Interest on Tranche A Base Rate
Loans and fees shall be computed on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which such interest is payable.
Section 4.04 Non-receipt of Funds by the Agent. Unless the Agent shall have
been notified by a Lender or the Borrower prior to the date on which such
notifying party is scheduled to make payment to the Agent (in the case of a
Lender) of the proceeds of a Tranche A Loan or a payment under a Tranche A
Letter of Credit to be made by it hereunder or (in the case of the Borrower) a
payment to the Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that it does not intend to make the Required Payment to
the Agent, the Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient(s) on such date and, if such Lender
or the Borrower (as the case may be) has not in fact made the Required Payment
to the Agent, the recipient(s) of such payment shall, on demand, repay to the
Agent the amount so made available together with interest thereon in respect of
each day during the period commencing on the date such amount was so made
available by the Agent until but excluding the date the Agent recovers such
amount at a rate per annum which, for any Lender as recipient, will be equal to
the Federal Funds Rate, and for the Borrower as recipient, will be equal to the
Base Rate plus the Applicable Margin.
Section 4.05 Set-off, Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without limitation of) any
right of set-off, bankers' lien or counterclaim a Lender may otherwise have,
each Lender shall have the right and be entitled (after consultation with the
Agent), at its option, to offset balances held by it or by any of its Affiliates
for account of the Borrower or any Restricted Subsidiary at any of its offices,
in Dollars or in any other currency, against any principal of or interest on any
of such Lender's Tranche A Loans, or any other amount payable to such Lender
hereunder, which is not paid when due (regardless of whether such balances are
then due to the Borrower), in which case it shall promptly notify the Borrower
and the Agent thereof, provided that such Lender's failure to give such notice
shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or interest on any
Tranche A Loan made by it to the Borrower under this Agreement (or reimbursement
as to any Tranche A Letter of Credit) through the exercise of any right of set-
off, banker's lien or counterclaim or similar right or otherwise, and, as a
result of such payment, such Lender shall have received a greater percentage of
the principal or interest (or reimbursement) then due hereunder by the Borrower
to such Lender than the percentage received by any other Lenders, it shall
promptly (i) notify the Agent and each other Lender thereof and (ii) purchase
from such other Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Tranche A Loans (or participations in
Tranche A Letters of Credit) made by such other Lenders (or in interest due
thereon, as the case may be) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the Lenders shall
share the benefit of such excess payment (net of any expenses which may be
incurred by such Lender in obtaining or preserving such excess payment) pro rata
in accordance with the unpaid principal and/or interest on the Tranche A Loans
held by each of the Lenders (or reimbursements of Tranche A Letters of Credit).
To such end all the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such payment is rescinded
or must otherwise be restored. The Borrower agrees that any Lender so
purchasing a participation (or direct interest) in the Tranche A Loans made by
other Lenders (or in interest due thereon, as the case may be) may exercise all
rights of set-off, banker's lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender were a direct holder of Tranche A
Loans (or Tranche A Letters of Credit) in the amount of such participation.
Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a set-off to which
this Section 4.05 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.05 to share the benefits
of any recovery on such secured claim.
Section 4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower hereunder
shall be made, in accordance with Section 4.01, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Agent, taxes imposed on its income, and
franchise or similar taxes imposed on it, by (i) any jurisdiction (or political
subdivision thereof) of which the Agent or such Lender, as the case may be, is a
citizen or resident or in which such Lender has an Applicable Lending Office,
(ii) the jurisdiction (or any political subdivision thereof) in which the Agent
or such Lender is organized, or (iii) any jurisdiction (or political subdivision
thereof) in which such Lender or the Agent is presently doing business in which
taxes are imposed solely as a result of doing business in such jurisdiction (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders or the Agent (i) the sum payable shall be increased by
the amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 4.06) such
Lender or the Agent (as the case may be) shall receive an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other Governmental Authority in
accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent permitted by applicable
law, the Borrower agrees to pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement, any Assignment or any Tranche A
Security Instrument (hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, BUT SUBJECT TO SECTION 4.06(d)(ii), THE BORROWER WILL INDEMNIFY EACH
LENDER AND THE AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES
(INCLUDING, BUT NOT LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED BY ANY
GOVERNMENTAL AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY
SUCH LENDER OR THE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY LENDER), AS THE
CASE MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES)
ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER
TAXES WERE CORRECTLY OR LEGALLY ASSERTED UNLESS THE PAYMENT OF SUCH TAXES WAS
NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH LENDER'S PAYMENT OF SUCH TAXES OR
OTHER TAXES WAS THE RESULT OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. ANY
PAYMENT PURSUANT TO SUCH INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS
AFTER THE DATE ANY LENDER OR THE AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND
THEREFOR.
IF ANY LENDER OR THE AGENT RECEIVES A REFUND OR CREDIT IN RESPECT OF ANY TAXES
OR OTHER TAXES FOR WHICH SUCH LENDER OR THE AGENT HAS RECEIVED PAYMENT FROM THE
BORROWER IT SHALL PROMPTLY NOTIFY THE BORROWER OF SUCH REFUND OR CREDIT AND
SHALL, IF NO DEFAULT HAS OCCURRED AND IS CONTINUING, WITHIN THIRTY (30) DAYS
AFTER RECEIPT OF A REQUEST BY THE BORROWER (OR PROMPTLY UPON RECEIPT, IF THE
BORROWER HAS REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT HERETO),
PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE BORROWER WITHOUT INTEREST
(BUT WITH ANY INTEREST SO REFUNDED OR CREDITED), PROVIDED THAT THE BORROWER,
UPON THE REQUEST OF SUCH LENDER OR THE AGENT, AGREES TO RETURN SUCH REFUND OR
CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER OR THE
AGENT IN THE EVENT SUCH LENDER OR THE AGENT IS REQUIRED TO REPAY SUCH REFUND
OR CREDIT.
(d) Lender Representations.
(i) Each Lender represents that it is either (1) a corporation or banking
association organized under the laws of the United States of America or any
state thereof or (2) it is entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including fees, to
be made to it pursuant to this Agreement (A) under an applicable provision of a
tax convention to which the United States of America is a party or (B) because
it is acting through a branch, agency or office in the United States of America
and any payment to be received by it hereunder is effectively connected with a
trade or business in the United States of America. Each Lender that is not a
corporation or banking association organized under the laws of the United States
of America or any state thereof agrees to provide to the Borrower and the Agent
on the Closing Date, or on the date of its delivery of the Assignment pursuant
to which it becomes a Lender, and at such other times as required by United
States law or as the Borrower or the Agent shall reasonably request, two
accurate and complete original signed copies of either (A) Internal Revenue
Service Form 4224 (or successor form) certifying that all payments to be made to
it hereunder will be effectively connected to a United States trade or business
(the "Form 4224 Certification") or (B) Internal Revenue Service Form 1001 (or
successor form) certifying that it is entitled to the benefit of a provision of
a tax convention to which the United States of America is a party which
completely exempts from United States withholding tax all payments to be made to
it hereunder (the "Form 1001 Certification"). In addition, each Lender agrees
that if it previously filed a Form 4224 Certification, it will deliver to the
Borrower and the Agent a new Form 4224 Certification prior to the first payment
date occurring in each of its subse-quent taxable years; and if it previously
filed a Form 1001 Certification, it will deliver to the Borrower and the Agent a
new certification prior to the first payment date falling in the third year
following the previous filing of such certification. Each Lender also agrees to
deliver to the Borrower and the Agent such other or supplemental forms as may at
any time be required as a result of changes in applicable law or regulation in
order to confirm or maintain in effect its entitlement to exemption from United
States withholding tax on any payments hereunder, provided that the
circumstances of such Lender at the relevant time and applicable laws permit it
to do so. If a Lender determines, as a result of any change in either (i) a
Governmental Requirement or (ii) its circumstances, that it is unable to submit
any form or certificate that it is obligated to submit pursuant to this Section
4.06, or that it is required to withdraw or cancel any such form or certificate
previously submitted, it shall promptly notify the Borrower and the Agent of
such fact. If a Lender is organized under the laws of a jurisdiction outside
the United States of America, unless the Borrower and the Agent have received a
Form 1001 Certification or Form 4224 Certification satisfactory to them
indicating that all payments to be made to such Lender hereunder are not subject
to United States withholding tax, the Borrower shall withhold taxes from such
payments at the applicable statutory rate. Each Lender agrees to indemnify and
hold harmless the Borrower or Agent, as applicable, from any United States
taxes, penalties, interest and other expenses, costs and losses incurred or
payable by (i) the Agent as a result of such Lender's failure to submit any form
or certificate that it is required to provide pursuant to this Section 4.06 or
(ii) the Borrower or the Agent as a result of their reliance on any such form or
certificate which such Lender has provided to them pursuant to this Section
4.06.
(ii) For any period with respect to which a Lender has failed to provide the
Borrower with the form required pursuant to this Section 4.06, if any, (other
than if such failure is due to a change in a Governmental Requirement occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 4.06 with
respect to taxes imposed by the United States which taxes would not have been
imposed but for such failure to provide such forms; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax becomes subject to taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such taxes.
(iii) Any Lender claiming any additional amounts payable pursuant to this
Section 4.06 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Borrower or
the Agent or to change the jurisdiction of its Applicable Lending Office or to
contest any tax imposed if the making of such a filing or change or contesting
such tax would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole determination of
such Lender, be otherwise disadvantageous to such Lender.
Section 4.07 Disposition of Proceeds. The Tranche A Security Instruments
contain an assignment by the Borrower or a Restricted Subsidiary, as the case
may be, unto and in favor of the Agent for the benefit of the Lenders of all
production and all proceeds attributable thereto which may be produced from or
allocated to the Mortgaged Property, and the Tranche A Security Instruments
further provide in general for the application of such proceeds to the
satisfaction of the Tranche A Indebtedness and other obligations described
therein and secured thereby. Notwithstanding the assignment contained in such
Tranche A Security Instruments, until the occurrence of an Event of Default, the
Lenders agree that they will neither notify the purchaser or purchasers of such
production nor take any other action to cause such proceeds to be remitted to
the Lenders, but the Lenders will instead permit such proceeds to be paid to the
Borrower or such Restricted Subsidiary.
ARTICLE V
Capital Adequacy
Section 5.01 Additional Costs.
(a) Eurodollar Regulations, etc. The Borrower shall pay directly to each
Lender from time to time such amounts as such Lender may determine to be
necessary to compensate such Lender for any costs which it determines are
attributable to its making or maintaining of any Tranche A Eurodollar Loans or
issuing or participating in Tranche A Letters of Credit hereunder or its
obligation to make any Tranche A Eurodollar Loans or issue or participate in any
Tranche A Letters of Credit hereunder, or any reduction in any amount receivable
by such Lender hereunder in respect of any of such Tranche A Eurodollar Loans,
Tranche A Letters of Credit or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Lender under this Agreement or any Tranche A Note in
respect of any of such Tranche A Eurodollar Loans or Tranche A Letters of Credit
(other than taxes imposed on the overall net income of such Lender or of its
Applicable Lending Office for any of such Tranche A Eurodollar Loans by the
jurisdiction in which such Lender has its principal office or Applicable Lending
Office); or (ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of such
Lender, or the Tranche A Commitment or Tranche A Loans of such Lender or the
Eurodollar interbank market; or (iii) imposes any other condition affecting this
Agreement or any Tranche A Note (or any of such extensions of credit or
liabilities) or such Lender's Tranche A Commitment or Tranche A Loans. Each
Lender will notify the Agent and the Borrower of any event occurring after the
Closing Date which will entitle such Lender to compensation pursuant to this
Section 5.01(a) as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation, and will designate a different
Applicable Lending Office for the Tranche A Loans of such Lender affected by
such event if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, provided that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the United
States. If any Lender requests compensation from the Borrower under this
Section 5.01(a), the Borrower may, by notice to such Lender, suspend the
obligation of such Lender to make additional Tranche A Loans of the Type with
respect to which such compensation is requested until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 5.04 shall be applicable).
(b) Regulatory Change. Without limiting the effect of the provisions of
Section 5.01(a), in the event that, by reason of any Regulatory Change or any
other circumstances arising after the Closing Date affecting such Lender, the
Eurodollar interbank market or such Lender's position in such market, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
Tranche A Eurodollar Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of such Lender which includes
Tranche A Eurodollar Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets which it may hold, then, if such
Lender so elects by notice to the Borrower, the obligation of such Lender to
make additional Tranche A Eurodollar Loans shall be suspended until such
Regulatory Change or other circumstances ceases to be in effect (in which case
the provisions of Section 5.04 shall be applicable).
(c) Capital Adequacy. Without limiting the effect of the foregoing provisions
of this Section 5.01 (but without duplication), the Borrower shall pay directly
to any Lender from time to time on request such amounts as such Lender may
reasonably determine to be necessary to compensate such Lender or its parent or
holding company for any costs which it determines are attributable to the
maintenance by such Lender or its parent or holding company (or any Applicable
Lending Office), pursuant to any Governmental Requirement following any
Regulatory Change, of capital in respect of its Tranche A Commitment, its
Tranche A Notes, its Tranche A Loans or any interest held by it in any Tranche A
Letter of Credit, such compensation to include, without limitation, an amount
equal to any reduction of the rate of return on assets or equity of such Lender
or its parent or holding company (or any Applicable Lending Office) to a level
below that which such Lender or its parent or holding company (or any Applicable
Lending Office) could have achieved but for such Governmental Requirement. Such
Lender will notify the Borrower that it is entitled to compensation pursuant to
this Section 5.01(c) as promptly as practicable after it determines to request
such compensation.
(d) Compensation Procedure. Any Lender notifying the Borrower of the
incurrence of additional costs under this Section 5.01 shall deliver such notice
to the Borrower as soon as practicable and in any event within ninety (90) days
after the change or other event giving rise to the incurrence of such additional
costs and shall in such notice to the Borrower and the Agent set forth in
reasonable detail the basis and amount of its request for compensation.
Determinations and allocations by each Lender for purposes of this Section 5.01
of the effect of any Regulatory Change pursuant to Section 5.01(a) or (b), or of
the effect of capital maintained pursuant to Section 5.01(c), on its costs or
rate of return of maintaining Tranche A Loans or its obligation to make Tranche
A Loans or issue Tranche A Letters of Credit, or on amounts receivable by it in
respect of Tranche A Loans or Tranche A Letters of Credit, and of the amounts
required to compensate such Lender under this Section 5.01, shall be conclusive
and binding for all purposes, provided that such determinations and allocations
are made on a reasonable basis. Any request for additional compensation under
this Section 5.01 shall be paid by the Borrower within thirty (30) days of the
receipt by the Borrower of the notice described in this Section 5.01(d).
Section 5.02 Limitation on Tranche A Eurodollar Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Rate for any Interest Period:
(i) the Agent determines (which determination shall be conclusive, absent
manifest error) that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Rate" in Section 1.02 are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Tranche A Eurodollar Loans as provided herein;
or
(ii) the Agent determines (which determination shall be conclusive, absent
manifest error) that the relevant rates of interest referred to in the
definition of "Eurodollar Rate" in Section 1.02 upon the basis of which the rate
of interest for Tranche A Eurodollar Loans for such Interest Period is to be
determined are not sufficient to adequately cover the cost to the Lenders of
making or maintaining Tranche A Eurodollar Loans;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Tranche A Eurodollar Loans.
Section 5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Tranche A
Eurodollar Loans hereunder, then such Lender shall promptly notify the Borrower
thereof and such Lender's obligation to make Tranche A Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain Tranche A
Eurodollar Loans (in which case the provisions of Section 5.04 shall be
applicable).
Section 5.04 Tranche A Base Rate Loans Pursuant to Sections 5.01, 5.02 and
5.03. If the obligation of any Lender to make Tranche A Eurodollar Loans shall
be suspended pursuant to Sections 5.01, 5.02 or 5.03 ("Affected Tranche A
Loans"), all Affected Tranche A Loans which would otherwise be made by such
Lender shall be made instead as Tranche A Base Rate Loans (and, if an event
referred to in Section 5.01(b) or Section 5.03 has occurred and such Lender so
requests by notice to the Borrower, all Affected Tranche A Loans of such Lender
then outstanding shall be automatically converted into Tranche A Base Rate Loans
on the date specified by such Lender in such notice) and, to the extent that
Affected Tranche A Loans are so made as (or converted into) Tranche A Base Rate
Loans, all payments of principal which would otherwise be applied to such
Lender's Affected Tranche A Loans shall be applied instead to its Tranche A Base
Rate Loans.
Section 5.05 Compensation. The Borrower shall pay to each Lender within thirty
(30) days of receipt of written request of such Lender (which request shall set
forth, in reasonable detail, the basis for requesting such amounts and which
shall be conclusive and binding for all purposes provided that such
determinations are made on a reasonable basis), such amount or amounts as shall
compensate it for any loss, cost, expense or liability which such Lender
determines are attributable to:
(i) any payment, prepayment or conversion of a Tranche A Eurodollar Loan
properly made by such Lender or the Borrower for any reason (including, without
limitation, the acceleration of the Tranche A Loans pursuant to Section 10.02)
on a date other than the last day of the Interest Period for such Tranche A
Loan;
(ii) any failure by the Borrower for any reason (including but not limited to,
the failure of any of the conditions precedent specified in Article VI to be
satisfied) to borrow, continue or convert a Tranche A Eurodollar Loan from such
Lender on the date for such borrowing, continuation or conversion specified in
the relevant notice given pursuant to Section 2.02(c); or
(iii) the revocation by the Borrower of (a) a revocable notice of borrowing
delivered pursuant to Section 2.02(c) or (b) a revocable request for the
issuance of a Tranche A Letter of Credit delivered pursuant to Section 2.02(g)
or (c) a revocable notice of reduction or termination delivered pursuant to
Section 2.03(b) or (d) a revocable notice of prepayment delivered pursuant to
Section 2.07(a).
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount so paid, prepaid or converted
or not borrowed for the period from the date of such payment, prepayment or
conversion or failure to borrow to the last day of the Interest Period for such
Tranche A Loan (or, in the case of a failure to borrow, the Interest Period for
such Tranche A Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Tranche A Loan provided
for herein over (ii) the interest component of the amount such Lender would have
bid in the London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities comparable to
such period (as reasonably determined by such Lender).
Section 5.06 Replacement Lenders.
(a) If any Lender has notified the Borrower and the Agent of its incurring
additional costs under Section 5.01 hereof or has required the Borrower to make
payments for Taxes under Section 4.06 hereof, then the Borrower may, unless such
Lender has notified the Borrower and the Agent that the circumstances giving
rise to such notice no longer apply, terminate, in whole but not in part, the
Tranche A Commitment of any Lender (other than the Agent) (the "Terminated
Lender") at any time upon five (5) Business Days' prior written notice to the
Terminated Lender and the Agent (such notice referred to herein as a "Notice of
Termination").
(b) In order to effect the termination of the Tranche A Commitment of the
Terminated Lender, the Borrower shall: (i) obtain an agreement with one or more
Lenders to increase their Tranche A Commitment or Tranche A Commitments and/or
(ii) request any one or more other banking institutions to become parties to
this Agreement in place and instead of such Terminated Lender and agree to
accept a Tranche A Commitment or Tranche A Commitments; provided, however, that
such one or more other banking institutions are reasonably acceptable to the
Agent and become parties by executing an Assignment (the Lenders or other
banking institutions that agree to accept in whole or in part the Tranche A
Commitment of the Terminated Lender being referred to herein as the "Replacement
Lenders"), such that the aggregate increased and/or accepted Tranche A
Commitments of the Replacement Lenders under clauses (i) and (ii) above equal
the Tranche A Commitment of the Terminated Lender.
(c) The Notice of Termination shall include the name of the Terminated Lender,
the date the termination will occur (the "Lender Termination Date"), and the
Replacement Lender or Replacement Lenders to which the Terminated Lender will
assign its Tranche A Commitment and, if there will be more than one Replacement
Lender, the portion of the Terminated Lender's Tranche A Commitment to be
assigned to each Replacement Lender.
(d) On the Lender Termination Date, (i) the Terminated Lender shall by
execution and delivery of an Assignment assign its Tranche A Commitment to the
Replacement Lender or Replacement Lenders (pro rata, if there is more than one
Replacement Lender, in proportion to the portion of the Terminated Lender's
Tranche A Commitment to be assigned to each Replacement Lender) indicated in the
Notice of Termination and shall assign to the Replacement Lender or Replacement
Lenders each of its Tranche A Loans (if any) then outstanding and participation
interests in Tranche A Letters of Credit (if any) then outstanding (pro rata as
aforesaid), (ii) the Terminated Lender shall endorse its Tranche A Notes,
payable without recourse, representation or warranty to the order of the
Replacement Lender or Replacement Lenders (pro rata as aforesaid), (iii) the
Replacement Lender or Replacement Lenders shall purchase the Tranche A Notes
held by the Terminated Lender (pro rata as aforesaid) at a price equal to the
unpaid principal amount thereof plus interest and facility and other fees
accrued and unpaid to the Lender Termination Date, and (iv) the Replacement
Lender or Replacement Lenders will thereupon (pro rata as aforesaid) succeed to
and be substituted in all respects for the Terminated Lender with like effect as
if becoming a Lender pursuant to the terms of Section 12.06(b), and the
Terminated Lender will have the rights and benefits of an assignor under Section
12.06(b). To the extent not in conflict, the terms of Section 12.06(b) shall
supplement the provisions of this Section 5.06(d). For each assignment made
under this Section 5.06, the Replacement Lender shall pay to the Agent the
processing fee provided for in Section 12.06(b). The Borrower will be
responsible for the payment of any breakage costs associated with termination of
the Terminated Lender, as set forth in Section 5.05.
(e) If any Lender is replaced pursuant to this Section 5.06 with respect to
such Lender's Tranche A Commitment, such Lender shall also be terminated and
replaced with regard to its Tranche B Commitment and any Replacement Lenders
shall be joined pro rata in the Tranche A Commitment and the Tranche B
Commitment.
ARTICLE VI
Conditions Precedent
Section 6.01 Initial Funding.
The obligation of the Lenders to make the Initial Funding is subject to the
receipt by the Agent and the Lenders of all fees payable pursuant to Section
2.04 on or before the Closing Date and the receipt by the Agent of the following
documents and satisfaction of the other conditions provided in this Section
6.01, each of which shall be satisfactory to the Agent in form and substance:
(a) A certificate of the Secretary of MMR setting forth (i) resolutions of
the board of directors of MMR, as the sole member of the Borrower, with respect
to the authorization of the Borrower to execute and deliver the Tranche A Loan
Documents to which it is a party and to enter into the transactions contemplated
in those documents, (ii) the officers of MMR and the Borrower (y) who are
authorized to sign the Tranche A Loan Documents to which Borrower is a party and
(z) who will, until replaced by another officer or officers duly authorized for
that purpose, act as its representative for the purposes of signing documents
and giving notices and other communications in connection with this Agreement
and the transactions contemplated hereby, (iii) specimen signatures of the
authorized officers, (iv) the limited liability company agreement of the
Borrower, and (v) the certificate of formation filed with the Delaware Secretary
of State, as amended, all certified as being true and complete. The Agent and
the Lenders may conclusively rely on such certificate until the Agent receives
notice in writing from MMR or the Borrower to the contrary.
(b) Certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of the Borrower.
(c) A compliance certificate which shall be substantially in the form of
Exhibit C, duly and properly executed by a Responsible Officer and dated as of
the Closing Date.
(d) The Tranche A Notes, duly completed and executed.
(e) An opinion of Jones, Walker, Waechter, Poitevent, Carrere & Xxxxxxx,
L.L.P. counsel to the Borrower, substantially in the form of Exhibit D hereto.
(f) A certificate of insurance coverage of the Borrower evidencing that the
Borrower is carrying insurance in accordance with Section 7.19 hereof.
(g) Receipt by the Agent of the fees due and payable after the Closing Date as
provided for in the Fee Letter.
(h) Receipt by the Agent of each of the Tranche A Security Instruments,
including those described on Exhibit E, duly completed and executed in
sufficient number of counterparts for recording, if necessary, and otherwise in
recordable form and substance satisfactory to the Agent.
(i) Receipt by the Agent of such title information as the Agent may require
from attorneys satisfactory to the Agent setting forth the status of title to
100% of the value of the Hydrocarbon Interests included in the Borrowing Base.
(j) The Agent shall have been furnished with appropriate UCC search
certificates reflecting no prior Liens.
(k) Receipt by the Agent of such other documents as the Agent or any Lender or
special counsel to the Agent may reasonably request.
(l) The Borrower shall be in compliance with all covenants and agreements
contained in Article VIII and Article IX (after giving effect to the requested
Tranche A Loan).
(m) The Tranche B Loans shall be fully advanced and there shall be no
availability for Tranche B Loans under the Aggregate Maximum Tranche B Credit
Amounts (as defined in Annex I).
(n) No Default shall have occurred and be continuing under Annex I.
Section 6.02 Initial and Subsequent Tranche A Loans and Tranche A Letters of
Credit. The obligation of the Lenders to make Tranche A Loans to the Borrower
upon the occasion of each borrowing hereunder and to issue, renew, extend or
reissue Tranche A Letters of Credit for the account of the Borrower (including
the Initial Funding) and to increase the Borrowing Base in accordance with
Section 6.02 is subject to the further conditions precedent that, as of the date
of such Tranche A Loans or Tranche A Letters of Credit or increase, as the case
may be, and after giving effect thereto: (i) no Default shall have occurred and
be continuing; (ii) no Material Adverse Effect shall have occurred; (iii) the
representations and warranties made by the Borrower in Article VII and by the
Borrower or any Restricted Subsidiary in the Tranche A Security Instruments
shall be true on and as of the date of the making of such Tranche A Loans or
issuance, renewal, extension or reissuance of a Tranche A Letter of Credit or
increase of the Borrowing Base, as the case may be, with the same force and
effect as if made on and as of such date and following such new borrowing,
issuance or increase, except to the extent such representations and warranties
are expressly limited to an earlier date or the Majority Lenders may expressly
consent in writing to the contrary; and (iv) the aggregate outstanding amount of
investments, loans and advances permitted by Section 9.03(i) and net dividends,
distributions and redemptions permitted by Section 9.04, shall not exceed
$7,000,000. Each request for a borrowing or issuance, renewal, extension or
reissuance of a Tranche A Letter of Credit by the Borrower hereunder shall
constitute a certification by the Borrower to the effect set forth in the
preceding sentence (both as of the date of such notice and, unless the Borrower
otherwise notifies the Agent prior to the date of and immediately following such
borrowing or issuance, renewal, extension or reissuance of a Tranche A Letter of
Credit, as of the date thereof).
Section 6.03 Conditions Relating to Tranche A Letters of Credit. In addition to
the satisfaction of all other conditions precedent set forth in this Article VI,
the issuance, renewal, extension or reissuance of the Tranche A Letters of
Credit referred to in Section 2.01(b) hereof is subject to the following
conditions precedent:
(a) At least three (3) Business Days prior to the date of the issuance and at
least thirty (30) Business Days prior to the date of the renewal, extension or
reissuance of each Tranche A Letter of Credit, the Agent shall have received a
written request for a Tranche A Letter of Credit, in accordance with Section
2.02(g) hereof.
(b) Each of the Tranche A Letters of Credit shall (i) be issued by the Agent,
(ii) contain such terms and provisions as are reasonably required by the Agent,
(iii) be for the account of the Borrower and (iv) expire not later than the
earlier of one (1) year from the date of issuance, renewal, extension or
reissuance or two (2) days before the Termination Date.
(c) The Borrower shall have duly and validly executed and delivered to the
Agent a Tranche A Letter of Credit Agreement pertaining to the Tranche A Letter
of Credit.
ARTICLE VII
Representations and Warranties
The Borrower represents and warrants to the Agent and the Lenders that (each
representation and warranty herein is given as of the Closing Date and shall be
deemed repeated and reaffirmed on the dates of each borrowing and issuance,
renewal, extension or reissuance of a Tranche A Letter of Credit as provided in
Section 6.03):
Section 7.01 Existence. Each of the Borrower and each Restricted Subsidiary:
(i) is a corporation or limited liability company duly organized, legally
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation; (ii) has all requisite power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted; and (iii) is qualified to do business in all jurisdictions in which
the nature of the business conducted by it makes such qualification necessary
and where failure so to qualify would have a Material Adverse Effect.
Section 7.02 Financial Condition. The audited consolidated financial
statements of MMR and its Consolidated Subsidiaries as at December 31, 1999, and
the balance sheet of the Borrower and its Consolidated Subsidiaries as at
December 31, 1999 and the related statement of income, member's capital and cash
flow of the Borrower and its Consolidated Subsidiaries for the fiscal year ended
on said date, in each case as included in the consolidating statements of MMR
and its Consolidated Subsidiaries as of said date with the opinion thereon of
Xxxxxx Xxxxxxxx LLP heretofore furnished to each of the Lenders and the
unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at March 31, 2000 and the related consolidated statements of
income, members capital and cash flow of the Borrower and its Consolidated
Subsidiaries for the three-month period ended on such date heretofore furnished
to the Agent, are complete and correct and fairly present the consolidated
financial condition of the Borrower and its Consolidated Subsidiaries as at said
date and the results of its operations for the fiscal year and the three-month
period ended on said date, all in accordance with GAAP, as applied on a
consistent basis (subject, in the case of the interim financial statements, to
normal year-end adjustments). Neither the Borrower nor any Subsidiary has on
the Closing Date any material Debt, contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, in each case, that would be required to
be reserved for in the Financial Statements in accordance with GAAP, except as
referred to or reflected or provided for in the Financial Statements or in
Schedule 7.02. Except as set forth on Schedule 7.10, since March 31, 2000,
there has been no change or event having a Material Adverse Effect. Except as
set forth on Schedule 7.10, since the date of the Financial Statements, neither
the business nor the Properties of the Borrower or any Subsidiary have been
materially and adversely affected as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any Governmental Authority, riot,
activities of armed forces or acts of God or of any public enemy.
Section 7.03 Litigation. Except as disclosed to the Lenders in Schedule 7.03
hereto, at the Closing Date there is no litigation, legal, administrative or
arbitral proceeding, investigation or other action of any nature pending or, to
the knowledge of the Borrower threatened against or affecting the Borrower or
any Restricted Subsidiary as to which there is a reasonable possibility of an
adverse determination and which, if adversely determined, could, individually or
in the aggregate, materially impair the ability of the Borrower to conduct its
business substantially as now conducted, or materially and adversely affect the
businesses, assets, operations, prospects or condition, financial or otherwise,
of the Borrower, or impair the validity or enforceability of, or the ability of
the Borrower to perform its obligations under, this Agreement or any of the
other Tranche A Loan Documents to which it is a party, in each case, taking into
account any applicable insurance.
Section 7.04 No Breach. Neither the execution and delivery of the Tranche A
Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent which has not
been obtained as of the Closing Date under, the respective charter or by-laws of
the Borrower or any Restricted Subsidiary, or any Governmental Requirement or
any agreement or instrument to which the Borrower or any Restricted Subsidiary
is a party or by which it is bound or to which it or its Properties are subject,
or constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of the
Borrower or any Restricted Subsidiary pursuant to the terms of any such
agreement or instrument other than the Liens created by the Tranche A Loan
Documents and those permitted under Section 9.02.
Section 7.05 Authority. The Borrower and each Restricted Subsidiary have all
necessary power and authority to execute, deliver and perform its obligations
under the Tranche A Loan Documents to which it is a party; and the execution,
delivery and performance by the Borrower and each Restricted Subsidiary of the
Tranche A Loan Documents to which it is a party, have been duly authorized by
all necessary corporate action on its part; and the Tranche A Loan Documents
constitute the legal, valid and binding obligations of the Borrower and each
Restricted Subsidiary, enforceable in accordance with their terms.
Section 7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority are necessary for the
execution, delivery or performance by the Borrower or any Restricted Subsidiary
of the Tranche A Loan Documents or for the validity or enforceability thereof,
except for the recording and filing of the Tranche A Security Instruments as
required by this Agreement.
Section 7.07 Use of Tranche A Loans. The proceeds of the Tranche A Loans shall
be used to (a) renew, extend, modify and rearrange the outstanding principal
balance of the Prior Notes, (b) develop the Borrower's reserves from its Oil and
Gas Properties, (c) provide funding for acquisitions of Oil and Gas Properties
and (d) for general corporate purposes. The Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock (within the meaning of Regulation G, U or X of the Board
of Governors of the Federal Reserve System) and no part of the proceeds of any
Tranche A Loan hereunder will be used to buy or carry any margin stock.
Section 7.08 ERISA.
(a) The Borrower and each Restricted Subsidiary have complied in all material
respects with ERISA and, where applicable, the Code regarding each Plan.
(b) Each Plan of the Borrower and of each Restricted Subsidiary is, and has
been, maintained in substantial compliance with ERISA and, where applicable, the
Code.
(c) To the knowledge of the Borrower, no act, omission or transaction has
occurred which could result in imposition on the Borrower or on any Restricted
Subsidiary (whether directly or indirectly) of (i) either a civil penalty
assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages under section 409 of ERISA.
(d) No Plan (other than a defined contribution plan) or any trust created
under any such Plan has been terminated since September 2, 1974. No liability
to the PBGC (other than for the payment of current premiums which are not past
due) by the Borrower, any Subsidiary or any ERISA Affiliate has been or is
expected by the Borrower, any Subsidiary or any ERISA Affiliate to be incurred
with respect to any Plan. No ERISA Event with respect to any Plan has occurred.
(e) Full payment when due has been made of all amounts which the Borrower, any
Subsidiary or any ERISA Affiliate is required under the terms of each Plan or
applicable law to have paid as contributions to such Plan, and no accumulated
funding deficiency (as defined in section 302 of ERISA and section 412 of the
Code), whether or not waived, exists with respect to any Plan.
(f) The actuarial present value of the benefit liabilities under each Plan
which is subject to Title IV of ERISA does not, as of the end of the Borrower's
most recently ended fiscal year, exceed the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities. The term "actuarial present
value of the benefit liabilities" shall have the meaning specified in section
4041 of ERISA.
(g) Neither the Borrower nor any Restricted Subsidiary sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(1) of
ERISA, includ-ing, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by the
Borrower or a Restricted Subsidiary or any ERISA Affiliate in its sole
discretion at any time without any material liability.
(h) None of the Borrower, any Subsidiary or any ERISA Affiliate sponsors,
maintains or contributes to, or has at any time in the preceding six calendar
years, sponsored, maintained or contributed to, any Multiemployer Plan.
(i) None of the Borrower, any Subsidiary or any ERISA Affiliate is required to
provide security under section 401(a)(29) of the Code due to a Plan amendment
that results in an increase in current liability for the Plan.
Section 7.09 Taxes. Except as set out in Schedule 7.09, each of the Borrower
and the Restricted Subsidiaries has filed all United States Federal income tax
returns and all other tax returns which are required to be filed by them and
have paid all material taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Restricted Subsidiary, other than any
taxes the validity of which the Borrower or the relevant Restricted Subsidiary
is contesting in good faith by appropriate proceedings, and with respect to
which the Borrower or such Restricted Subsidiary shall, to the extent required
by GAAP, have set aside on its books adequate reserves. The charges, accruals
and reserves on the books of the Borrower and the Restricted Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of the
Borrower, adequate. No tax lien has been filed and, to the knowledge of the
Borrower, no claim is being asserted with respect to any such tax, fee or other
charge.
Section 7.10 Titles, etc.
(a) Except as set out in the title reports delivered to the Agent prior to the
Closing Date, each of the Borrower and the Restricted Subsidiaries has good and
defensible title to its material (individually or in the aggregate) Properties,
free and clear of all Liens except Liens permitted by Section 9.02. Except as
set forth in Schedules 7.10 and 7.22, after giving full effect to the Excepted
Liens, the Borrower or each Restricted Subsidiary, as applicable, owns the net
interests in production attributable to the Hydrocarbon Interests reflected in
the most recently delivered Reserve Report and the ownership of such Properties
shall not in any material respect obligate the Borrower or any Restricted
Subsidiary to bear the costs and expenses relating to the maintenance,
development and operations of each such Property in an amount in excess of the
working interest of each Property set forth in the most recently delivered
Reserve Report. All factual information contained in the most recently
delivered Reserve Report is true and correct in all material respects as of the
date thereof.
(b) All leases and agreements necessary for the conduct of the business of the
Borrower and the Restricted Subsidiaries are valid and subsisting, in full force
and effect and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of the Borrower and the Restricted Subsidiaries.
(c) The rights, Properties and other assets presently owned, leased or
licensed by the Borrower and the Restricted Subsidiaries including, without
limitation, all easements and rights of way, include all rights, Properties and
other assets necessary to permit the Borrower and the Restricted Subsidiaries to
conduct their business in all material respects in the same manner as its
business has been conducted prior to the Closing Date.
(d) Except as set forth on Schedule 7.10, all of the assets and Properties of
the Borrower and the Restricted Subsidiaries which are reasonably necessary for
the operation of its business are in good working condition and are maintained
in accordance with prudent business standards.
Section 7.11 No Material Misstatements. No written information, statement,
exhibit, certificate, document or report furnished to the Agent and the Lenders
(or any of them) by the Borrower or any Subsidiary in connection with the
negotiation of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statement
contained therein not materially misleading in the light of the circumstances in
which made and with respect to the Borrower and the Subsidiaries taken as a
whole. There is no fact peculiar to the Borrower or any Subsidiary which has a
Material Adverse Effect or in the future is reasonably likely to have (so far as
the Borrower can now foresee) a Material Adverse Effect and which has not been
set forth in this Agreement or the other documents, certificates and statements
furnished to the Agent by or on behalf of the Borrower or any Subsidiary prior
to, or on, the Closing Date in connection with the transactions contemplated
hereby.
Section 7.12 Investment Company Act. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Section 7.13 Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 7.14 Subsidiaries. Except as set forth on Schedule 7.14 which
indicates all Restricted Subsidiaries and all Unrestricted Subsidiaries, the
Borrower has no Subsidiaries other than those formed pursuant to Section 9.16
prior to the quarterly report required by Section 8.01(i).
Section 7.15 Location of Business and Offices. The Borrower's principal place
of business and chief executive offices are located at the address stated on the
signature page of this Agreement. The principal place of business and chief
executive office of each Subsidiary are located at the addresses stated on
Schedule 7.14.
Section 7.16 Defaults. Neither the Borrower nor any Subsidiary is in default
nor has any event or circumstance occurred which, but for the expiration of any
applicable grace period or the giving of notice, or both, would constitute a
default under any material agreement or instrument to which the Borrower or any
Subsidiary is a party or by which the Borrower or any Subsidiary is bound which
default would have a Material Adverse Effect. No Default hereunder has occurred
and is continuing.
Section 7.17 Environmental Matters. Except (i) as provided in Schedule 7.17 or
(ii) as would not have a Material Adverse Effect (or with respect to (c), (d)
and (e) below, where the failure to take such actions would not have a Material
Adverse Effect):
(a) Neither any Property of the Borrower or any Subsidiary nor the operations
conducted thereon violate any order or requirement of any court or Governmental
Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of the Borrower or any
Subsidiary nor the operations currently conducted thereon or, to the best
knowledge of the Borrower, by any prior owner or operator of such Property or
operation, are in violation of or subject to any existing, pending or threatened
action, suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under Environmental Laws;
(c) All notices, permits, licenses or similar authorizations, if any, required
to be obtained or filed in connection with the operation or use of any and all
Property of the Borrower and each Subsidiary, including without limitation past
or present treatment, storage, disposal or release of a hazardous substance or
solid waste into the environment, have been duly obtained or filed, and the
Borrower and each Subsidiary are in compliance with the terms and conditions of
all such notices, permits, licenses and similar authorizations;
(d) All hazardous substances, solid waste, and oil and gas exploration and
production wastes, if any, generated at any and all Property of the Borrower or
any Subsidiary have in the past been transported, treated and disposed of in
accordance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the environment, and, to
the best knowledge of the Borrower, all such transport carriers and treatment
and disposal facilities have been and are operating in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and are not the
subject of any existing, pending or threatened action, investigation or inquiry
by any Governmental Authority in connection with any Environmental Laws;
(e) The Borrower has taken all steps reasonably necessary to determine and has
determined that no hazardous substances, solid waste, or oil and gas exploration
and production wastes, have been disposed of or otherwise released and there has
been no threatened release of any hazardous substances on or to any Property of
the Borrower or any Subsidiary except in compliance with Environmental Laws and
so as not to pose an imminent and substantial endangerment to public health or
welfare or the environment;
(f) To the extent applicable, all Property of the Borrower and each Subsidiary
currently satisfies all design, operation, and equipment requirements imposed by
the OPA or scheduled as of the Closing Date to be imposed by OPA during the term
of this Agreement, and the Borrower does not have any reason to believe that
such Property, to the extent subject to OPA, will not be able to maintain
compliance with the OPA requirements during the term of this Agreement; and
(g) Neither the Borrower nor any Subsidiary has any known contingent liability
in connection with any release or threatened release of any oil, hazardous
substance or solid waste into the environment.
Section 7.18 Compliance with the Law. Neither the Borrower nor any Subsidiary
has violated any Governmental Requirement or failed to obtain any license,
permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
Except for such acts or failures to act as would not have a Material Adverse
Effect, the Oil and Gas Properties (and properties unitized therewith) have been
maintained, operated and developed in a good and workmanlike manner and in
conformity with all applicable laws and all rules, regulations and orders of all
duly constituted authorities having jurisdiction and in conformity with the
provisions of all leases, subleases or other contracts comprising a part of the
Hydrocarbon Interests and other contracts and agreements forming a part of the
Oil and Gas Properties; specifically in this connection, (i) after the Closing
Date, no Oil and Gas Property is subject to having allowable production reduced
below the full and regular allowable (including the maximum permissible
tolerance) because of any overproduction (whether or not the same was
permissible at the time) prior to the Closing Date and (ii) none of the xxxxx
comprising a part of the Oil and Gas Properties (or properties unitized
therewith) are deviated from the vertical more than the maximum permitted by
applicable laws, regulations, rules and orders, and such xxxxx are, in fact,
bottomed under and are producing from, and the producing intervals are wholly
within the Oil and Gas Properties (or in the case of xxxxx located on properties
unitized therewith, such unitized properties).
Section 7.19 Insurance. Schedule 7.19 attached hereto contains an accurate and
complete description of all material policies of fire, liability, workmen's
compensation and other forms of insurance maintained by or on behalf of the
Borrower and each Restricted Subsidiary. All such policies are in full force
and effect, all premium payments with respect thereto covering all periods up to
and including the date of the closing are current, and no notice of cancellation
or termination has been received with respect to any such policy. Such policies
are sufficient for compliance with all requirements of law and of all agreements
to which the Borrower or any Restricted Subsidiary is a party; are valid,
outstanding and enforceable policies; provide adequate insurance coverage in at
least such amounts and against at least such risks (but including in any event
public liability) as are usually insured against in the same general area by
companies engaged in the same or a similar business for the assets and
operations of the Borrower and each Restricted Subsidiary; will remain in full
force and effect through the respective dates set forth in Schedule 7.19 without
the payment of additional premiums (except for adjustments); and will not in any
way be affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement. Schedule 7.19 identifies all material risks, if
any, which the Borrower and the Restricted Subsidiaries and their respective
board of directors or officers have designated as being self-insured. Neither
the Borrower nor any Restricted Subsidiary has been refused any insurance with
respect to its assets or operations, nor has its coverage been limited below
usual and customary policy limits, by an insurance carrier to which it has
applied for any such insurance or with which it has carried insurance during the
last three years.
Section 7.20 Hedging Agreements. Schedule 7.20 sets forth, as of the Closing
Date, a true and complete list of all Hedging Agreements (including commodity
price swap agreements, forward agreements or contracts of sale which provide for
prepayment for deferred shipment or delivery of oil, gas or other commodities)
of the Borrower and each Restricted Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net xxxx to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied), and the
counterparty to each such agreement.
Section 7.21 Restriction on Liens. Except as set forth on Schedule 7.21,
neither the Borrower nor any of the Restricted Subsidiaries is a party to any
agreement or arrangement (other than this Agreement, the Tranche A Security
Instruments and the Tranche B Security Instruments (as defined in Annex I)) or
subject to any order, judgment, writ or decree, which either restricts or
purports to restrict its ability to grant Liens to other Persons on or in
respect of their respective assets or Properties.
Section 7.22 Material Agreements. Set forth on Schedule 7.22 hereto (as same
may be amended quarterly and delivered together with the reports required in
Sections 8.01(a) and 8.01(b) hereof for leases, agreements, and other documents,
entered into after the Closing Date) is a complete and correct list of all
material agreements, leases, indentures, purchase agreements, obligations in
respect of letters of credit, guarantees, joint venture agreements, and other
instruments in effect or to be in effect as of the Closing Date (other than
Hedging Agreements) providing for, evidencing, securing or otherwise relating to
any Debt of the Borrower or any of the Restricted Subsidiaries, and all
obligations of the Borrower or any of the Restricted Subsidiaries to issuers of
surety or appeal bonds issued for account of the Borrower or any such Restricted
Subsidiary, and such list correctly sets forth the names of the debtor or lessee
and creditor or lessor with respect to the Debt or lease obligations outstanding
or to be outstanding and the property subject to any Lien securing such Debt or
lease obligation. Also set forth on Schedule 7.22 hereto is a complete and
correct list of all material agreements and other instruments of the Borrower
and the Restricted Subsidiaries relating to the purchase, transportation by
pipeline, gas processing, marketing, sale and supply of natural gas and other
Hydrocarbons, but in any event, any such agreement or other instrument that will
account for more than 20% of the sales of the Borrower and the Restricted
Subsidiaries during the Borrower's current fiscal year.
Section 7.23 Gas Imbalances. As of the Closing Date, except as set forth on
Schedule 7.23 or on the most recent certificate delivered pursuant to Section
8.07(c), on a net basis there are no gas imbalances, take or pay or other
prepayments with respect to the Borrower's or any Restricted Subsidiary's Oil
and Gas Properties which would require the Borrower or such Restricted
Subsidiary to deliver Hydrocarbons produced from the Oil and Gas Properties at
some future time without then or thereafter receiving full payment therefor
exceeding one billion cubic feet of gas in the aggregate.
ARTICLE VIII
Affirmative Covenants
The Borrower covenants and agrees that, so long as any of the Tranche A
Commitments are in effect and until payment in full of all Tranche A
Indebtedness hereunder, all interest thereon and all other amounts payable by
the Borrower hereunder, without the prior written consent of the Majority
Lenders:
Section 8.01 Financial Statements. The Borrower shall deliver, or shall cause
to be delivered, to the Agent with sufficient copies for each for the Lenders:
(a) As soon as available and in any event within 90 days after the end of each
fiscal year of the Borrower, the statements of income, member's capital, and
cash flow of the Borrower and its Consolidated Subsidiaries for such fiscal
year, and the related balance sheets of the Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year, as contained in the audited
consolidated financial statements of MMR and the related consolidating financial
statements of its Consolidated Subsidiaries as at the end of such fiscal year,
and setting forth in each case in comparative form the corresponding figures for
the preceding fiscal year, and accompanied by the related opinion of independent
public accountants of recognized national standing acceptable to the Agent which
opinion shall state that said financial statements fairly present the
consolidated financial condition and results of operations of the Borrower and
its Consolidated Subsidiaries as at the end of, and for, such fiscal year and
that such financial statements have been prepared in accordance with GAAP except
for such changes in such principles with which the independent public
accountants shall have concurred and such opinion shall not contain a "going
concern" or like qualification or exception, and a certificate of such
accountants stating that, in making the examination necessary for their opinion,
they obtained no knowledge, except as specifically stated, of any Default.
(b) As soon as available and in any event within 60 days after the end of each
of the first three fiscal quarterly periods of each fiscal year of the Borrower,
consolidated statements of income, member's capital, and cash flow of the
Borrower and its Consolidated Subsidiaries for such period and for the period
from the beginning of the respective fiscal year to the end of such period, and
the related consolidated balance sheets as at the end of such period, and
setting forth in each case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, accompanied by the
certificate of a Responsible Officer, which certificate shall state that said
financial statements fairly present the consolidated financial condition and
results of operations of the Borrower and its Consolidated Subsidiaries in
accordance with GAAP, as at the end of, and for, such period (subject to normal
year-end audit adjustments).
(c) Promptly after the Borrower knows that any Default or any Material Adverse
Effect has occurred, a notice of such Default or Material Adverse Effect,
describing the same in reasonable detail and the action the Borrower proposes to
take with respect thereto.
(d) Promptly upon receipt thereof, a copy of each other report or letter
submitted to MMR, the Borrower or any Restricted Subsidiary by independent
accountants in connection with any annual, interim or special audit made by them
of the books of MMR, the Borrower and the Restricted Subsidiaries, and a copy of
any response by MMR, the Borrower or any Restricted Subsidiary, or the board of
directors of MMR, the Borrower or any Restricted Subsidiary, to such letter or
report.
(e) Promptly upon its becoming available, each financial statement, report,
notice or proxy statement sent by MMR to stockholders generally and each regular
or periodic report and any registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed by MMR
with or received by MMR in connection therewith from any securities exchange or
the SEC or any successor agency.
(f) Promptly after the furnishing thereof, copies of any material statement,
report or notice furnished by the Borrower to any Person pursuant to the terms
of any material (i.e., over $1,500,000, if permitted) indenture, loan or credit
or other similar agreement, other than this Agreement and not otherwise required
to be furnished to the Lenders pursuant to any other provision of this Section
8.01.
(g) From time to time such other information regarding the business, affairs
or financial condition of the Borrower or any Restricted Subsidiary (including,
without limitation, any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA) as any Lender or the Agent may
reasonably request.
(h) Simultaneously with the delivery of the financial statements referred to
in clauses (a) and (b) above, a report, in form and substance satisfactory to
the Agent, setting forth as of the last Business Day of such calendar quarter a
true and complete list of all Hedging Agreements (including commodity price swap
agreements, forward agreements or contracts of sale which provide for prepayment
for deferred shipment or delivery of oil, gas or other commodities) of the
Borrower and each Restricted Subsidiary, the material terms thereof (including
the type, term, effective date, termination date and notional amounts or
volumes), the net xxxx to market value therefor, any new credit support
agreements relating thereto not listed on Schedule 7.20, any margin required or
supplied under any credit support document, and the counterparty to each such
agreement.
(i) Simultaneously with the delivery of the financial statements referred to
in clause (b) above, an update to Schedule 7.14 setting forth all Subsidiaries
of the Borrower as of the last Business Day of such calendar quarter.
The Borrower will furnish to the Agent, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate
substantially in the form of Exhibit C hereto executed by a Responsible Officer
(i) certifying as to the matters set forth therein and stating that no Default
has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail), and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Borrower
is in compliance with Sections 9.11 and 9.12 as of the end of the respective
fiscal quarter or fiscal year.
Section 8.02 Litigation. The Borrower shall promptly give to the Agent notice
of all legal or arbitral proceedings, and of all proceedings before any
Governmental Authority affecting the Borrower or any Restricted Subsidiary,
except proceedings which, if adversely determined, would not have a Material
Adverse Effect. The Borrower will, and will cause each of the Restricted
Subsidiaries to, promptly notify the Agent and each of the Lenders of any claim,
judgment, Lien or other encumbrance affecting any Property of the Borrower or
any Restricted Subsidiary if the value of the claim, judgment, Lien, or other
encumbrance affecting such Property shall exceed $1,000,000.
Section 8.03 Maintenance, Etc.
(a) The Borrower shall and shall cause each Restricted Subsidiary to: preserve
and maintain its existence and all of its material rights, privileges and
franchises; keep books of record and account in which full, true and correct
entries will be made of all dealings or transactions in relation to its business
and activities; comply with all Governmental Requirements if failure to comply
with such requirements will have a Material Adverse Effect; pay and discharge
all taxes, assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper proceedings
and against which adequate reserves are being maintained; upon reasonable
notice, permit representatives of the Agent or any Lender, during normal
business hours, to examine, copy and make extracts from its books and records,
to inspect its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender or the Agent (as
the case may be); and keep, or cause to be kept, insured by financially sound
and reputable insurers all Property of a character usually insured by Persons
engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such
Persons and carry such other insurance as is usually carried by such Persons
including, without limitation, pollution insurance to the extent reasonably
available.
(b) Contemporaneously with the delivery of the financial statements required
by Section 8.01(a) to be delivered for each year, the Borrower will furnish or
cause to be furnished to the Agent and the Lenders a certificate of insurance
coverage from the insurer in form and substance satisfactory to the Agent and,
if requested, will furnish the Agent and the Lenders copies of the applicable
policies.
(c) The Borrower will and will cause each Restricted Subsidiary to operate its
Properties or cause such Properties to be operated in a good and workmanlike
manner in accordance with the standard practices of the industry and in
compliance with all applicable contracts and agreements and in compliance in all
material respects with all Governmental Requirements.
(d) The Borrower will and will cause each Restricted Subsidiary to, at its own
expense, do or cause to be done all things reasonably necessary to preserve and
keep in good repair, working order and efficiency all of its Oil and Gas
Properties subject to a Lien in favor of the Agent securing the Tranche A
Indebtedness and other material Properties includ-ing, without limitation, all
equipment, machinery and facilities, and from time to time will make all the
reasonably necessary repairs, renewals and replacements so that at all times the
state and condition of its Oil and Gas Properties subject to a Lien in favor of
the Agent securing the Tranche A Indebtedness and other material Properties will
be fully preserved and maintained, except (1) for ordinary wear and tear, (2)
for equipment, machinery and facilities no longer used or useful in the
Borrower's or such Restricted Subsidiary's business, (3) for casualty losses
being handled in accordance with Section 2.07(e) and (4) to the extent a portion
of such Properties is no longer capable of producing Hydrocarbons in
economically reasonable amounts. The Borrower will and will cause each
Restricted Subsidiary to promptly: (i) pay and discharge, or make reasonable and
customary efforts to cause to be paid and discharged, all delay rentals,
royalties, expenses and indebtedness accruing under the leases or other
agreements affecting or pertaining to its Oil and Gas Properties subject to a
Lien in favor of the Agent securing the Tranche A Indebtedness, to the extent
that any failure to so pay or discharge would have a Material Adverse Effect,
(ii) perform or make reasonable and customary efforts to cause to be performed,
in accordance with industry standards, the material obligations required by each
and all of the assignments, deeds, leases, subleases, contracts and agreements
affecting its interests in its Oil and Gas Properties subject to a Lien in favor
of the Agent securing the Tranche A Indebtedness and other material Properties,
(iii) do all other things necessary to keep unimpaired, except for Liens
described in Section 9.02, its rights with respect to its Oil and Gas Properties
subject to a Lien in favor of the Agent securing the Tranche A Indebtedness and
other material Properties and prevent any forfeiture thereof or a default
thereunder, except to the extent a portion of such Properties is no longer
capable of producing Hydrocarbons in economically reasonable amounts. The
Borrower will and will cause each Restricted Subsidiary to operate its Oil and
Gas Properties subject to a Lien in favor of the Agent securing the Tranche A
Indebtedness and other material Properties or cause or make reasonable and
customary efforts to cause such Oil and Gas Properties and other material
Properties to be operated in a good and workmanlike manner in accordance with
the standard practices of the industry and in compliance with all applicable
contracts and agreements and in compliance in all material respects with all
Governmental Requirements.
Section 8.04 Environmental Matters.
(a) The Borrower will and will cause each Subsidiary, to the extent not
already in place, to establish and implement such procedures as may be
reasonably necessary to continuously determine and assure that any failure of
the following does not have a Material Adverse Effect: (i) all Property of the
Borrower and the Subsidiaries and the operations conducted thereon and other
activities of the Borrower and the Subsidiaries are in compliance with and do
not violate the requirements of any Environmental Laws, (ii) no oil, hazardous
substances or solid wastes are disposed of or otherwise released on or to any
Property owned by any such party except in compliance with Environmental Laws,
(iii) no hazardous substance will be released on or to any such Property in a
quantity equal to or exceeding that quantity which requires reporting pursuant
to Section 103 of CERCLA, and (iv) no oil, oil and gas exploration and
production wastes or hazardous substance is released on or to any such Property
so as to pose an imminent and substantial endangerment to public health or
welfare or the environment.
(b) The Borrower will promptly notify the Agent and the Lenders in writing of
any material threatened action, investigation or inquiry by any Governmental
Authority of which the Borrower has knowledge in connection with any
Environmental Laws, excluding routine testing and corrective action.
(c) The Borrower will and will cause each Subsidiary to provide environmental
audits and tests in accordance with American Society for Testing and Materials
standards as reasonably requested by the Agent and the Lenders (or as otherwise
required to be obtained by the Agent or the Lenders by any Governmental
Authority) in connection with any future acquisitions of Oil and Gas Properties
or other material Properties.
Section 8.05 Further Assurances. The Borrower will and will cause each
Restricted Subsidiary to cure promptly any defects in the creation and issuance
of the Tranche A Notes and the execution and delivery of the Tranche A Security
Instruments and this Agreement. The Borrower at its expense will and will cause
each Restricted Subsidiary to promptly execute and deliver to the Agent upon
request all such other documents, agreements and instruments to comply with or
accomplish the covenants and agreements of the Borrower or any Restricted
Subsidiary, as the case may be, in the Tranche A Security Instruments and this
Agreement, or to further evidence and more fully describe the collateral
intended as security for the Tranche A Notes, or to correct any omissions in the
Tranche A Security Instruments, or to state more fully the security obligations
set out herein or in any of the Tranche A Security Instruments, or to perfect,
protect or preserve any Liens created pursuant to any of the Tranche A Security
Instruments, or to make any recordings, to file any notices or obtain any
consents, all as may be necessary or appropriate in connection therewith.
Section 8.06 Performance of Obligations. The Borrower will pay the Tranche A
Notes according to the reading, tenor and effect thereof; and the Borrower will
and will cause each Restricted Subsidiary to do and perform every act and
discharge all of the obligations to be performed and discharged by them under
the Tranche A Security Instruments and this Agreement, at the time or times and
in the manner specified.
Section 8.07 Engineering Reports.
(a) Not less than 45 days prior to each Scheduled Redetermination Date, the
Borrower shall furnish to the Agent and the Lenders a Reserve Report. The
Reserve Report to be delivered by March 1 of each year shall be prepared by
certified independent petroleum engineers or other independent petroleum
consultant(s) acceptable to the Agent and the Reserve Report to be delivered by
September 1 of each year shall be prepared by or under the supervision of the
chief engineer of the Borrower who shall certify such Reserve Report to be true
and accurate and to have been prepared in accordance with the procedures used in
the immediately preceding March 1 Reserve Report.
(b) In the event of an unscheduled redetermination, the Borrower shall furnish
to the Agent and the Lenders a Reserve Report prepared by or under the
supervision of the chief engineer of the Borrower who shall certify such Reserve
Report to be true and accurate and to have been prepared in accordance with the
procedures used in the immediately preceding Reserve Report. For any
unscheduled redetermination requested by the Majority Lenders or the Borrower
pursuant to Section 2.08(d), the Borrower shall provide such Reserve Report with
an "as of" date as required by the Majority Lenders as soon as possible, but in
any event no later than 30 days following the receipt of the request by the
Agent on behalf of the Majority Lenders.
(c) With the delivery of each Reserve Report, the Borrower shall provide to
the Agent and the Lenders, a certificate from a Responsible Officer certifying
that, to the best of his knowledge and in all material respects: (i) the
information contained in the Reserve Report and any other information delivered
in connection therewith is true and correct, (ii) the Borrower or each
Restricted Subsidiary, as applicable, owns good and defensible title to the Oil
and Gas Properties evaluated in such Reserve Report and such Properties are free
of all Liens except for Liens permitted by Section 9.02, (iii) except as set
forth on an exhibit to the certificate, on a net basis there are no gas
imbalances, take or pay or other prepayments with respect to the Borrower's or
any Restricted Subsidiary's Oil and Gas Properties evaluated in such Reserve
Report which would require the Borrower or such Restricted Subsidiary to deliver
Hydrocarbons produced from such Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor, (iv) none of the
Borrower's or any Restricted Subsidiary's Oil and Gas Properties have been sold
since the date of the last Borrowing Base determination except as set forth on
an exhibit to the certificate, which certificate shall list all of such Oil and
Gas Properties sold and in such detail as reasonably required by the Agent, (v)
attached to the certificate is a list of the Borrower's or any Restricted
Subsidiary's Oil and Gas Properties added to and deleted from the immediately
prior Reserve Report and a list showing any change in working interest or net
revenue interest in the Borrower's or any Restricted Subsidiary's Oil and Gas
Properties occurring and the reason for such change, (vi) attached to the
certificate is a list of all Persons disbursing proceeds to the Borrower or a
Restricted Subsidiary from its Oil and Gas Properties and (vii) Schedule B
attached to such Reserve Report is a listing of the Oil and Gas Properties to be
considered in the determination of the Borrowing Base.
(d) As soon as available and in any event within 60 days after the end of each
calendar quarter, the Borrower shall provide production reports and lease
operating summaries by lease for the Borrower's and each Restricted Subsidiary's
Oil and Gas Properties subject to a Lien in favor of the Agent securing the
Tranche A Indebtedness, which reports shall include quantities or volume of
production, revenue, realized product prices, operating expenses, taxes, capital
expenditures and lease operating costs which have accrued to the Borrower's or
such Restricted Subsidiary's accounts in such period, and such other information
with respect thereto as the Agent may reasonably require.
Section 8.08 Title Information.
(a) On or before the delivery to the Agent and the Lenders of each Reserve
Report required by Section 8.07(a), the Borrower will deliver, or cause to be
delivered, title information in form and substance acceptable to the Agent
covering enough of the Hydrocarbon Interests included in the Borrowing Base that
were not included in the immediately preceding Reserve Report, so that the Agent
shall have received together with title information previously delivered to the
Agent, satisfactory title information on 100% of the value of the Hydrocarbon
Interests included in the Borrowing Base.
(b) The Borrower shall cure, or cause to be cured, any title defects or
exceptions which are not Excepted Liens raised by such information, or
substitute, or cause to be substituted, acceptable Mortgaged Properties with no
title defects or exceptions except for Excepted Liens or Liens permitted by
Section 9.02 covering Mortgaged Properties of an equivalent value, within 30
days after a request by the Agent or the Lenders to cure such defects or
exceptions.
(c) If the Borrower is unable to cure, or cause to be cured, any title defect
requested by the Agent or the Lenders to be cured within the 30-day period or
the Borrower does not comply with the requirements to provide acceptable title
information covering 100% of the value of the Oil and Gas Properties evaluated
in the most recent Reserve Report, such default shall not be a Default or an
Event of Default, but instead the Agent and the Lenders shall have the right to
exercise the following remedy in their sole discretion from time to time, and
any failure to so exercise this remedy at any time shall not be a waiver as to
future exercise of the remedy by the Agent or the Lenders. To the extent that
the Agent or the Lenders are not satisfied with title to any Mortgaged Property
after the time period in Section 8.08(b) has elapsed, such unacceptable
Mortgaged Property shall not count towards the 100% requirement, and the Agent
may send a notice to the Borrower and the Lenders that the then outstanding
Borrowing Base shall be reduced by an amount as determined by the Majority
Lenders to cause the Borrower to be in compliance with the requirement to
provide, or cause to be provided, acceptable title information on 100% of the
value of the Hydrocarbon Interests included in the Borrowing Base. This new
Borrowing Base shall become effective immediately after receipt of such notice.
Section 8.09 Collateral.
(a) Acquisitions. Should the Borrower or any Restricted Subsidiary acquire
any additional Oil and Gas Properties which will be part of the Oil and Gas
Properties included in the Borrowing Base, the Borrower or such Restricted
Subsidiary will grant to the Agent as security for the Tranche A Indebtedness a
first-priority Lien (subject only to Liens permitted under Section 9.02) on the
Borrower's or such Restricted Subsidiary's interest in any such Oil and Gas
Properties included in the Borrowing Base not already subject to a Lien of the
Tranche A Security Instruments, which Lien will be created and perfected by and
in accordance with the provisions of mortgages, deeds of trust, security
agreements and financing statements, or other Tranche A Security Instruments,
all in form and substance satisfactory to the Agent in its sole discretion and
in sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes.
(b) Concurrently with the granting of the Lien or other action referred to in
Section 8.09(a) above, the Borrower will provide, or cause to be provided, to
the Agent title information in form and substance satisfactory to the Agent in
its reasonable discretion with respect to the Borrower's or such Restricted
Subsidiary's interests in such Oil and Gas Properties.
(c) Also, promptly after the filing in any state of each new Security
Instrument delivered pursuant to Section 8.09(a), upon the reasonable request of
the Agent, the Borrower will provide, or cause to be provided, to the Agent an
opinion addressed to the Agent for the benefit of the Lenders in form and
substance satisfactory to the Agent in its sole discretion from counsel
acceptable to the Agent, stating that such Security Instrument is valid, binding
and enforceable in accordance with its terms and in legally sufficient form for
recordation in such jurisdiction.
Section 8.10 ERISA Information and Compliance. When requested by the Agent,
the Borrower will promptly furnish and will cause the Subsidiaries and any ERISA
Affiliate to promptly furnish to the Agent with sufficient copies to the Lenders
copies of each annual and other report with respect to each Plan or any trust
created thereunder filed with the United States Secretary of Labor, the Internal
Revenue Service or the PBGC. The Borrower will promptly notify the Agent
immediately upon becoming aware of the occurrence of any ERISA Event or, with
respect to any Restricted Subsidiary or Plan thereof, of any "prohibited
transaction," as described in section 406 of ERISA or in section 4975 of the
Code, in connection with any Plan or any trust created thereunder, to the extent
that such ERISA Event or "prohibited transaction" results in a Material Adverse
Effect, in a written notice signed by a Responsible Officer specifying the
nature thereof, what action the Borrower, the Subsidiary or the ERISA Affiliate
is taking or proposes to take with respect thereto, and, when known, any action
taken or proposed by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto. Immediately upon receipt thereof, the Borrower
will promptly send to the Agent, with sufficient copies to the Lenders, copies
of any notice of the PBGC's intention to terminate or to have a trustee
appointed to administer any Plan. With respect to each Plan (other than a
Multiemployer Plan), the Borrower will, and will cause each Subsidiary and ERISA
Affiliate to, (i) satisfy in full, without giving rise to any lien, all of the
contribution and funding requirements of section 412 of the Code (determined
without regard to subsections (d), (e), (f) and (k) thereof) and of section 302
of ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and
(ii) pay, or cause to be paid, to the PBGC all premiums required pursuant to
sections 4006 and 4007 of ERISA.
Section 8.11 Applicability of Affirmative Covenants. Notwithstanding anything
to the contrary contained herein, the covenants contained in this Article VIII
shall apply only after the Initial Funding hereunder and at all times
thereafter; provided, however, Borrower shall comply with Sections 8.01, 8.02,
8.03, 8.04, 8.05, 8.07, 8.08, and 8.09 starting at the date of this Agreement.
ARTICLE IX
Negative Covenants
The Borrower covenants and agrees that, so long as any of the Tranche A
Commitments are in effect and until payment in full of Tranche A Loans
hereunder, all interest thereon and all other amounts payable by the Borrower
hereunder, without the prior written consent of the Majority Lenders:
Section 9.01 Debt. Neither the Borrower nor any Restricted Subsidiary will
incur, create, assume or suffer to exist any Debt, except:
(a) the Tranche A Notes or other Tranche A Indebtedness arising under the
Tranche A Loan Documents or any guaranty of or suretyship arrangement for the
Tranche A Notes or other Tranche A Indebtedness arising under the Tranche A Loan
Documents;
(b) the Tranche B Notes or other Tranche B Indebtedness arising under the
Tranche B Loan Documents or any guaranty of or suretyship arrangement for the
Tranche B Notes or other Tranche B Indebtedness arising under the Tranche B Loan
Documents;
(c) Debt existing on the Closing Date which is reflected in the Financial
Statements or is disclosed in Schedule 9.01, and any renewals, extensions or
refinancings (but not increases) thereof;
(d) Debt (unrelated to Unrestricted Subsidiaries and other than for borrowed
money) incurred in the ordinary course of business in connection with
Hydrocarbon transportation, Hydrocarbon purchasing or other similar
arrangements, provided that such arrangements are disclosed to the Agent and the
costs of the financing related to such arrangements are incorporated into the
Engineering Reports provided to the Agent;
(e) Debt under Hedging Agreements with a Lender or another counterparty rated
BBB+ by Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or better (or the equivalent rating by another nationally
recognized rating service), the notional amounts of which, with respect to
commodity Hedging Agreements, do not exceed 80% of Borrower's anticipated oil
and/or gas production from producing xxxxx to be produced during the term of
such Hedging Agreements, entered into as a part of its normal business
operations as a risk management strategy and/or hedge against changes resulting
from market conditions related to the Borrower's and its Subsidiaries'
operations;
(f) additional Debt (including, without limitation, guarantees of Debt of
Unrestricted Subsidiaries) with an outstanding aggregate principal amount not at
any time in excess of $5,000,000; provided, however, that the Borrowing Base
shall be reduced by the amount of all such Debt outstanding at any time which is
in excess of $1,500,000;
(g) Debt secured by the Liens permitted by clause (x) of the definition of
"Excepted Liens"; provided that such Debt is discharged within 180 days of the
relevant acquisition or merger;
(h) Debt secured by a pledge of investments in Unrestricted Subsidiaries
permitted by clause (xii) of the definition of "Excepted Liens"; provided that
such Debt is recourse solely to the investment so pledged;
(i) loans and advances between the Restricted Subsidiaries, to any Restricted
Subsidiary from the Borrower and to the Borrower from any Restricted Subsidiary;
(j) Debt approved by the Majority Lenders which is subordinated on terms
satisfactory to the Majority Lenders to the payment of the Tranche A
Indebtedness (with the Borrowing Base in effect from time to time being reduced
by an amount equal to any effect upon the Borrowing Base occasioned by such
subordinated Debt in the judgment of the Majority Lenders);
(k) Debt of the Borrower pursuant to Section 3.03(f) of Annex I which is
subordinated to the Senior Obligations in accordance with the terms set forth on
Exhibit J to Annex I or such other terms as are satisfactory to the Agent and
the Lenders for the Senior Obligations; and
(l) Debt consisting of the Borrower's obligation to make payments to
Halliburton pursuant to Section 5.9 of the Participation Agreement in the event
that the Borrower does not convey a working interest to Halliburton or its
designee in the properties contemplated in such Section.
Section 9.02 Liens. Neither the Borrower nor any Restricted Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties
included in the Borrowing Base (now owned or hereafter acquired), except:
(a) Liens securing the payment of any Tranche A Indebtedness;
(b) Liens securing the payment of any Tranche B Indebtedness which are junior
to Liens in Section 9.02(a), except as to Brazos A-19 which Liens on Brazos A-19
may be senior to Liens under Section 9.02(a);
(c) Excepted Liens;
(d) Liens in favor of Halliburton contemplated by the proviso in Section
12.19(d)(i) of Annex I;
(e) Liens disclosed on Schedule 7.22;
(f) Liens on cash or securities of the Borrower securing the Debt described in
Sections 9.01(d) and (e);
(g) encumbrances in favor of Halliburton created by the Participation
Agreement (as such agreement exists on the date hereof); and
(h) Liens permitted under Section 9.20. provided, however, the exceptions
permitted under this Section 9.02 shall not permit any contractual Liens upon
the Oil and Gas Properties which are included in the Borrowing Base superior to
any Liens in favor of the Agent as security for the Tranche A Indebtedness.
Section 9.03 Investments, Loans and Advances. Neither the Borrower nor any
Restricted Subsidiary will make or permit to remain outstanding any loans or
advances to or investments in any Person which is not the Borrower or a
Restricted Subsidiary, but which does include Unrestricted Subsidiaries (each
such Person being a "Third Party") (which shall include any payments on behalf
of any Unrestricted Subsidiary and shall include the Borrower's investments in
and any loans and advances to any Restricted Subsidiaries that become
Unrestricted Subsidiaries in accordance with Section 9.16 and the definition of
"Unrestricted Subsidiary"), except that the foregoing restriction shall not
apply to:
(a) investments, loans or advances reflected in the Financial Statements or
which are disclosed to the Lenders in Schedule 9.03;
(b) investments, loans or advances up to the aggregate amount of $5,000,000 at
any one time outstanding;
(c) accounts receivable arising in the ordinary course of business;
(d) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of creation thereof;
(e) commercial paper maturing within one year from the date of creation
thereof rated in the highest grade by Standard & Poors Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or Xxxxx'x Investors Service, Inc.;
(f) deposits maturing within one year from the date of creation thereof with,
in-cluding certificates of deposit issued by, any Lender or any office located
in the United States of any other bank or trust company which is organized under
the laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000.00 (as of the date of such
Lender's or bank or trust company's most recent financial reports) and has a
short term deposit rating of no lower than A2 or P2, as such rating is set forth
from time to time, by Standard & Poors Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or Xxxxx'x Investors Service, Inc., respectively;
(g) deposits in money market funds investing exclusively in investments
described in Section 9.03(c), 9.03(d) or 9.03(e);
(h) investments in direct ownership interests in additional Oil and Gas
Properties and gas gathering systems related thereto;
(i) investments in Unrestricted Subsidiaries in the form of Oil and Gas
Properties which are included in the Borrowing Base with adjustments to be made
to the Borrowing Base with respect to the elimination of such properties from
the Borrowing Base; provided, however, the approval of the Majority Lenders
shall be required for such removal of a property from the Borrowing Base; and
(j) investments, loans and advances of cash and any other Property not
included in the Borrowing Base in an aggregate outstanding amount not at any
time in excess of (when aggregated with net dividends, distributions and
redemptions permitted under Section 9.04) $7,000,000; provided, however, that
with respect to investments of Property, only the amount of the excess (if any)
of the book value of such Property over the consideration received by the
transferor in connection with the investment of such Property shall count
against such $7,000,000 limit; and provided further, however, that if the
Borrowing Base is more than 50% utilized, or if the making of any such
investment, loan or advance using the proceeds of a Tranche A Loan would result
in the Borrowing Base being more than 50% utilized, then no such investment,
loan or advance otherwise permitted by this Section 9.03 may be made using the
proceeds of a Tranche A Loan hereunder.
Section 9.04 Dividends, Distributions and Redemptions. The Borrower will not
declare or pay any dividend, purchase, redeem or otherwise acquire for value any
of its membership interests now or hereafter outstanding, return any capital to
its members or make any distribution of its assets to its members, except that
the Borrower may make dividends, distributions and redemptions to MMR so long as
the aggregate amount of net dividends, distributions and redemptions, when
aggregated with investments, loans and advances permitted under Section 9.03(j),
do not exceed $7,000,000; provided, however, that such dividends, distributions
and redemptions shall not be permitted hereunder if an Event of Default has
occurred and is continuing or would result therefrom; and provided further,
however, that if the Borrowing Base is more than 50% utilized, or if the making
of any such dividend, distribution or redemption using the proceeds of a Tranche
A Loan would result in the Borrowing Base being more than 50% utilized, then no
such dividend, distribution or redemption otherwise permitted by this Section
9.04 may be made using the proceeds of a Tranche A Loan hereunder.
Section 9.05 Sales and Leasebacks. Neither the Borrower nor any Restricted
Subsidiary will enter into any arrangement, directly or indirectly, with any
Person whereby the Borrower or any Restricted Subsidiary shall sell or transfer
any of its Property included in the Borrowing Base, whether now owned or
hereafter acquired, and whereby the Borrower or any Restricted Subsidiary shall
then or thereafter rent or lease as lessee such Property or any part thereof or
other Property which the Borrower or any Restricted Subsidiary intends to use
for substantially the same purpose or purposes as the Property sold or
transferred.
Section 9.06 Nature of Business. Neither the Borrower nor any Restricted
Subsidiary will allow any material change to be made in the character of its
business as an independent oil and gas exploration and production company.
Section 9.07 Mergers, Etc. Neither the Borrower nor any Restricted Subsidiary
will merge into or with or consolidate with any other Person, or sell, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property or assets to any other Person, except
that:
(a) the Borrower or any Restricted Subsidiary may merge or liquidate any other
Person into itself, so long as the surviving entity will be in compliance with
all of the terms of this Agreement immediately following the merger or
liquidation;
(b) any Restricted Subsidiary may merge or liquidate into the Borrower or
another Restricted Subsidiary; and
(c) any Restricted Subsidiary may be merged into any other Person; provided
that such other Person, immediately following such merger, shall be deemed a
Restricted Subsidiary and shall comply with the provisions of Section 9.16
hereof; provided, however, that in the case of a merger permitted by clauses (a)
and (b) above, immediately thereafter and giving effect thereto, the Borrower
or, as the case may be, a Restricted Subsidiary would be the surviving Person
and, in the case of a merger permitted by clause (a), (b) or (c) above, no
Default or Event of Default would, immediately thereafter and giving effect
thereto, have occurred and be continuing. In all such instances permitted by
this Section 9.07, the surviving entity shall be an entity formed under the laws
of one of the states of the United States of America.
Section 9.08 Proceeds of Tranche A Notes. The Borrower will not permit the
proceeds of the Tranche A Notes to be used for any purpose other than those
permitted by Section 7.07. Neither the Borrower nor any Person acting on
behalf of the Borrower has taken or will take any action which might cause any
of the Tranche A Loan Documents to violate Regulation G, U or X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
Section 7 of the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect.
Section 9.09 ERISA Compliance. The Borrower will not at any time engage in or
permit any of the following if a Material Adverse Effect would result:
(a) Engage in, or permit any Restricted Subsidiary or ERISA Affiliate to
engage in, any transaction in connection with which the Borrower, any Restricted
Subsidiary or any ERISA Affiliate could be subjected to either a civil penalty
assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax imposed by
Chapter 43 of Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA Affiliate to terminate, any
Plan in a manner, or take any other action with respect to any Plan, which could
result in any liability of the Borrower, any Subsidiary or any ERISA Affiliate
to the PBGC;
(c) Fail to make, or permit any Restricted Subsidiary to fail to make, full
payment of all amounts which, under the provisions of any Plan, agreement
relating thereto or applicable law, the Borrower or a Restricted Subsidiary is
required to pay as contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA Affiliate to permit to
exist, any accumulated funding deficiency within the meaning of Section 302 of
ERISA or Section 412 of the Code, whether or not waived, with respect to any
Plan;
(e) Permit, or allow any Subsidiary or ERISA Affiliate to permit, the
actuarial present value of the benefit liabilities under any Plan maintained by
the Borrower, any Subsidiary or any ERISA Affiliate which is regulated under
Title IV of ERISA to exceed the current value of the assets (computed on a plan
termination basis in accordance with Title IV of ERISA) of such Plan allocable
to such benefit liabilities to the extent that such liability can not be paid in
the ordinary course. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in section 4041 of ERISA;
(f) Contribute to or assume an obligation to contribute to, or permit any
Subsidiary or ERISA Affiliate to contribute to or assume an obligation to
contribute to, any Multiemployer Plan;
(g) Acquire, or permit any Subsidiary or ERISA Affiliate to acquire, an
interest in any Person that causes such Person to become an ERISA Affiliate with
respect to the Borrower, any Subsidiary or any ERISA Affiliate if such Person
sponsors, maintains or con-tributes to, or at any time in the six-year period
preceding such acquisition has sponsored, maintained, or contributed to, (1) any
Multiemployer Plan, or (2) any other Plan that is subject to Title IV of ERISA
under which the actuarial present value of the benefit liabilities under such
Plan exceeds the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Plan allocable to such
benefit liabilities;
(h) Incur, or permit any Subsidiary or ERISA Affiliate to incur, a liability
to or on account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of
ERISA;
(i) Contribute to or assume an obligation to contribute to, or permit any
Restricted Subsidiary to contribute to or assume an obligation to contribute
to, any employee welfare benefit plan, as defined in section 3(1) of ERISA,
including, without limitation, any such plan maintained to provide benefits to
former employees of such entities, that may not be terminated by such entities
in their sole discretion at any time without any material liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a Plan
resulting in an increase in current liability such that the Borrower, any
Subsidiary or any ERISA Affiliate is required to provide security to such Plan
under section 401(a)(29) of the Code.
Section 9.10 Sale or Discount of Receivables. Neither the Borrower nor any
Restricted Subsidiary will discount or sell (with or without recourse) any of
its notes receivable or accounts receivable except (i) in the ordinary course of
business, or (ii) in connection with a receivables asset securitization,
otherwise permitted under this Agreement.
Section 9.11 Ratio of Debt to EBITDAX. The Borrower will not permit the ratio
of Debt to EBITDAX as of the end of any fiscal quarter of the Borrower
(calculated on a rolling four quarter basis) to be greater than 3.00 to 1.00 for
any fiscal quarter. As used in this Agreement, "rolling four quarter basis"
shall mean, as to any fiscal quarter, such quarter and the three preceding
fiscal quarters.
Section 9.12 Interest Coverage Ratio. The Borrower will not permit its
Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower
(calculated on a rolling four quarter basis) to be less than 3.00 to 1.00. For
the purposes of this Section 9.12, "Interest Coverage Ratio" shall mean the
ratio of (i) EBITDAX for the four fiscal quarters ending on such date to (ii)
cash interest payments made for such four fiscal quarters of the Borrower and
its Restricted Subsidiaries.
Section 9.13 Sale of Oil and Gas Properties. The Borrower will not, and
will not permit any Restricted Subsidiary to, sell, assign, farm-out, convey or
otherwise transfer any Oil and Gas Property subject to a Lien in favor of the
Agent securing the Tranche A Indebtedness or any interest in any Oil and Gas
Property subject to a Lien in favor of the Agent securing the Tranche A
Indebtedness, unless (i) no Default shall have occurred and be continuing, (ii)
simultaneously with any such disposition of Oil and Gas Properties included in
the Borrowing Base, the Borrowing Base is reduced by an amount reasonably
determined at the time by the Agent to reflect the contribution to the Borrowing
Base of the Oil and Gas Property so disposed of, and (iii) same is in compliance
with Section 2.07(e) hereof.
Section 9.14 Environmental Matters. Neither the Borrower nor any
Subsidiary will cause or permit any of its Property to be in violation of, or do
anything or permit anything to be done which will subject any such Property to
any remedial obligations under any Environmental Laws, assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations would have a Material Adverse Effect.
Section 9.15 Transactions with Affiliates. Neither the Borrower nor any
Restricted Subsidiary will enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property or the rendering
of any service, with any Affiliate unless such transactions are otherwise
permitted under this Agreement, are in the ordinary course of its business and
are upon fair and reasonable terms no less favorable to it than it would obtain
in a comparable arm's length transaction with a Person not an Affiliate.
Section 9.16 Subsidiaries. The Borrower shall not and shall not permit any
Restricted Subsidiary to sell or to issue any stock or ownership interest of a
Restricted Subsidiary except to the Borrower or a Restricted Subsidiary and
except in compliance with Section 9.03. The Borrower shall not create any
additional Subsidiaries or permit any Restricted Subsidiary to do so, except:
(a) the Borrower or any Restricted Subsidiary may create (by formation or by
an acquisition otherwise permitted by this Agreement) a Restricted Subsidiary
provided, that:
(i) each new Restricted Subsidiary shall forthwith execute and deliver to the
Agent for the benefit of the Lenders a written instrument of guaranty,
unconditionally guaranteeing payment of all Tranche A Indebtedness of the
Borrower; and
(ii) simultaneously with the delivery of the aforementioned written instrument
of guaranty, each new Restricted Subsidiary shall deliver to the Agent a
certificate of the Secretary or Assistant Secretary of such Restricted
Subsidiary setting forth (A) resolutions of its board of directors with respect
to the authorization of such Restricted Subsidiary to execute and deliver such
written instrument of guaranty and to enter into the transactions contemplated
thereby, (B) the officers of such Restricted Subsidiary (y) who are authorized
to sign such written instrument of guaranty, and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with such written instrument of guaranty and
the transactions contemplated thereby, (C) specimen signatures for such
officers, and (D) the articles or certificate of incorporation and bylaws of
such Restricted Subsidiary, certified as being true and complete. The Agent and
the Lenders may conclusively rely on such certificate until the Agent receives
notice in writing from the Borrower or such Restricted Subsidiary to the
contrary;
(b) the Borrower or a Restricted Subsidiary may create (by formation or by an
acquisition otherwise permitted by this Agreement) additional Subsidiaries
provided, that, such Subsidiary is designated as an Unrestricted Subsidiary by a
certificate of the Borrower signed by both of the chief financial officer (or
treasurer) and the general counsel of the Borrower, which certificate shall be
delivered to the Agent.
Section 9.17 Negative Pledge Agreements. Neither the Borrower nor any
Restricted Subsidiary will create, incur, assume or suffer to exist any
contract, agreement or understanding (other than this Agreement, the Tranche A
Security Instruments and the Tranche B Security Instruments (as defined in Annex
I) which in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property included in the Borrowing Base or
restricts any Restricted Subsidiary from paying dividends to the Borrower, or
which requires the consent of or notice to other Persons in connection
therewith.
Section 9.18 Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower
will not allow gas imbalances, take-or-pay or other prepayments with respect to
the Oil and Gas Properties of the Borrower or any Restricted Subsidiary which
would require the Borrower or such Restricted Subsidiary to deliver Hydrocarbons
produced on Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor to exceed one billion cubic feet of
gas in the aggregate on a net basis for the Borrower and the Restricted
Subsidiaries.
Section 9.19 Applicability of Negative Covenants. Notwithstanding anything to
the contrary contained herein, the covenants contained in this Article IX shall
apply only after the Initial Funding hereunder and at all times thereafter.
Section 9.20 "Margin Calls" on Hedging Agreements. With respect to Hedging
Agreements, neither the Borrower nor any Subsidiary shall post cash or any other
consideration whatsoever in response to a call on Borrower or any Subsidiary for
credit support or eligible material in an aggregate amount greater than 25% of
the then current Borrowing Base.
ARTICLE X
Events of Default; Remedies
Section 10.01 Events of Default. One or more of the following events shall
constitute an "Event of Default":
(a) the Borrower shall default in the payment or prepayment (i) (including,
without limitation, prepayments resulting from a Borrowing Base Deficiency, but
excluding prepayments to be made pursuant to Section 2.07(b) and revocable
notices delivered pursuant to Section 2.07(a) hereof) when due of any principal
of or interest on any Tranche A Loan, or any reimbursement obligation for a
disbursement made under any Tranche A Letter of Credit, or any fees or other
amount payable by it hereunder or under any Tranche A Security Instrument and
such default, other than a default of a payment or prepayment of principal
(which shall have no cure period) shall continue unremedied for a period of 3
Business Days and/or (ii) when due of any required prepayments pursuant to
Section 2.07 (b) hereof and such default shall continue unremedied for a period
of 30 days; or
(b) the Borrower or any Restricted Subsidiary shall default in the payment
when due of any principal of or interest on any of its other Debt aggregating
$500,000 or more, or any event specified in any note, agreement, indenture or
other document evidencing or relating to any such Debt shall occur if the effect
of such event is to cause, or (with the giving of any notice or the lapse of
time or both) to permit the holder or holders of such Debt (or a trustee or
agent on behalf of such holder or holders) to cause, such Debt to become due
prior to its stated maturity; or
(c) any representation, warranty or certification made or deemed made herein
or in any Tranche A Security Instrument by the Borrower or any Restricted
Subsidiary, or any certificate furnished to any Lender or the Agent pursuant to
the provisions hereof or any Tranche A Security Instrument, shall prove to have
been false or misleading as of the time made or furnished in any material
respect; or
(d) the Borrower shall default in the performance of any of its obligations
under Article IX or any other Article of this Agreement other than under Article
VIII; or the Borrower shall default in the performance of any of its obligations
under Article VIII or the Borrower or any Restricted Subsidiary shall default in
the performance of any of its obligations under any Tranche A Security
Instrument (other than the payment of amounts due which shall be governed by
Section 10.01(a)) and such default shall continue unremedied for a period of
thirty (30) days after the earlier to occur of (i) notice thereof to the
Borrower by the Agent or any Lender (through the Agent), or (ii) the Borrower
otherwise becoming aware of such default; or
(e) the Borrower shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; or
(f) the Borrower shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
Federal Bankruptcy Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, liquidation or composition or readjustment of debts,
(v) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
Federal Bankruptcy Code, or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application or
consent of the Borrower, in any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Borrower of all or any substantial part
of its assets, or (iii) similar relief in respect of the Borrower under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composi-tion
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 60 days; or (iv)
an order for relief against the Borrower shall be entered in an involuntary case
under the Federal Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in excess of $500,000 in
the aggregate shall be rendered by a court against the Borrower or any
Restricted Subsidiary and the same shall not be discharged (or arrangements
satisfactory to the Agent shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within thirty (30) days from the date
of entry thereof and the Borrower or such Restricted Subsidiary shall not,
within said period of 30 days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) the Tranche A Security Instruments after delivery thereof shall for any
reason, except to the extent permitted by the terms thereof, cease to be in full
force and effect and valid, binding and enforceable in accordance with their
terms, or cease to create a valid and perfected Lien of the priority required
thereby on any of the collateral purported to be covered thereby, except to the
extent permitted by the terms of this Agreement, or the Borrower shall so state
in writing; or
(j) any Tranche A Letter of Credit becomes the subject matter of any order,
judgment, injunction or any other such determination, or if the Borrower or any
other Person shall petition or apply for or obtain any order restricting payment
by the Agent under any Tranche A Letter of Credit or extending the Lenders'
liability under any Tranche A Letter of Credit beyond the expiration date stated
therein or otherwise agreed to by the Agent; or
(k) the Borrower discontinues its usual business or suffers to exist any
material change in its ownership, control or management; or
(l) any Restricted Subsidiary takes, suffers or permits to exist any of the
events or conditions referred to in paragraphs (e), (f), (g) or (h) hereof; or
(m) a Borrowing Base Deficiency shall remain after the applicable time period
provided for in Section 2.07(c); or
(n) any "Event of Default," as defined in Annex I shall occur and be
continuing.
Section 10.02 Remedies.
(a) In the case of an Event of Default other than one referred to in clauses
(e), (f) or (g) of Section 10.01 or in clause (l) to the extent it relates to
clauses (e), (f) or (g), the Agent, upon request of the Majority Lenders, shall,
by notice to the Borrower, cancel the Tranche A Commitments and/or declare the
principal amount then outstanding of, and the accrued interest on, the Tranche A
Loans and all other amounts payable by the Borrower hereunder and under the
Tranche A Notes (including without limitation the payment of cash collateral to
secure the Tranche A LC Exposure as provided in Section 2.10(b) hereof) to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
(b) In the case of the occurrence of an Event of Default referred to in
clauses (e), (f) or (g) of Section 10.01 or in clause (l) to the extent it
relates to clauses (e), (f) or (g), the Tranche A Commitments shall be
automatically canceled and the principal amount then outstanding of, and the
accrued interest on, the Tranche A Loans and all other amounts payable by the
Borrower hereunder and under the Tranche A Notes (including without limitation
the payment of cash collateral to secure the Tranche A LC Exposure as provided
in Section 2.10(b) hereof) shall become automatically immediately due and
payable without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
(c) All proceeds received after maturity of the Tranche A Notes, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and the Tranche A Security
Instruments; second to accrued interest on the Tranche A Notes; third to fees;
fourth pro rata to principal outstanding on the Tranche A Notes and other
Tranche A Indebtedness; fifth to serve as cash collateral to be held by the
Agent to secure the Tranche A LC Exposure; and any excess shall be paid to the
Borrower or the Restricted Subsidiaries, as applicable, or as otherwise required
by any Governmental Requirement.
ARTICLE XI
The Agent
Section 11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the Tranche A Security Instruments with such powers as are specifically
delegated to the Agent by the terms of this Agreement and the Tranche A Security
Instruments, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 11.05
and the first sentence of Section 11.06 shall include reference to its
Affiliates and its and its Affiliates' officers, directors, employees,
attorneys, accountants, experts and agents): (i) shall have no duties or
responsibilities except those expressly set forth in the Tranche A Loan
Documents, and shall not by reason of the Tranche A Loan Documents be a trustee
or fiduciary for any Lender; (ii) makes no representation or warranty to any
Lender and shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by any of them
under, this Agreement, or for the value, validity, effectiveness, genuineness,
execution, legality, enforceability or sufficiency of this Agreement, any
Tranche A Note or any other document referred to or provided for herein or for
any failure by the Borrower or any other Person (other than the Agent) to
perform any of its obligations hereunder or thereunder or for the existence,
value, perfection or priority of any collateral security or the financial or
other condition of the Borrower, the Subsidiaries or any other obligor or
guarantor; (iii) except pursuant to Section 11.07 shall not be required to
initiate or conduct any litigation or collection proceedings hereunder; and (iv)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith including its own ordinary negligence, except
for its own gross negligence or willful misconduct. The Agent may employ
agents, accountants, attorneys and experts and shall not be responsible for the
negligence or misconduct of any such agents, accountants, attorneys or experts
selected by it in good faith or any action taken or omitted to be taken in good
faith by it in accordance with the advice of such agents, accountants, attorneys
or experts. The Agent may deem and treat the payee of any Tranche A Note as the
holder thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof permitted hereunder shall have been filed with
the Agent. The Agent is authorized to release any collateral that is permitted
to be sold or released pursuant to the terms of the Tranche A Loan Documents.
Section 11.02 Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telecopier, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent.
Section 11.03 Defaults. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest
on Tranche A Loans or of fees or failure to reimburse for Tranche A Letter of
Credit drawings) unless the Agent has received notice from a Lender or the
Borrower specifying such Default and stating that such notice is a "Notice of
Default." In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Lenders. In the
event of a payment Default, the Agent shall give each Lender prompt notice of
each such payment Default.
Section 11.04 Rights as a Lender. With respect to its Tranche A Commitments
and the Tranche A Loans made by it and its participation in the issuance of
Tranche A Letters of Credit, Chase (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. Chase (and
any successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with the Borrower (and any of
its Affiliates) as if it were not acting as the Agent, and Chase and its
Affiliates may accept fees and other consideration from the Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
Section 11.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE AGENT
RATABLY IN ACCORDANCE WITH THEIR PERCENTAGE SHARES FOR THE INDEMNITY MATTERS AS
DESCRIBED IN SECTION 12.03 TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE
BORROWER UNDER SECTION 12.03, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
BORROWER UNDER SAID SECTION 12.03 AND FOR ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR ARISING
OUT OF: (I) THIS AGREEMENT, THE TRANCHE A SECURITY INSTRUMENTS OR ANY OTHER
DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED
HEREBY, BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL
ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY
DUTIES HEREUNDER OR (II) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT,
ANY TRANCHE A SECURITY INSTRUMENT OR OF ANY SUCH OTHER DOCUMENTS; WHETHER OR NOT
ANY OF THE FOREGOING SPECIFIED IN THIS SECTION 11.05 ARISES FROM THE SOLE OR
CONCURRENT NEGLIGENCE OF THE AGENT, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR
ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE AGENT.
Section 11.06 Non-Reliance on Agent and other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Borrower and its
decision to enter into this Agreement, and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement.
The Agent shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Agreement, the Tranche A Notes, the Tranche A
Security Instruments or any other document referred to or provided for herein or
to inspect the properties or books of the Borrower. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Affiliates) which may come into the possession of the Agent or any of its
Affiliates. In this regard, each Lender acknowledges that Xxxxxx & Xxxxxx
L.L.P. is acting in this transaction as special counsel to the Agent only,
except to the extent otherwise expressly stated in any legal opinion or any
Tranche A Loan Document. Each Lender will consult with its own legal counsel to
the extent that it deems necessary in connection with the Tranche A Loan
Documents and the matters contemplated therein.
Section 11.07 Action by Agent. Except for action or other matters expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall (i) receive written
instructions from the Majority Lenders (or all of the Lenders as expressly
required by Section 12.04) specifying the action to be taken, and (ii) be
indemnified to its satisfaction by the Lenders against any and all liability and
expenses which may be incurred by it by reason of taking or continuing to take
any such action. The instructions of the Majority Lenders (or all of the
Lenders as expressly required by Section 12.04) and any action taken or failure
to act pursuant thereto by the Agent shall be binding on all of the Lenders. If
a Default has occurred and is continuing, the Agent shall take such action with
respect to such Default as shall be directed by the Majority Lenders (or all of
the Lenders as required by Section 12.04) in the written instructions (with
indemnities) described in this Section 11.07, provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interests of the Lenders.
In no event, however, shall the Agent be required to take any action which
exposes the Agent to personal liability or which is contrary to this Agreement
and the Tranche A Security Instruments or applicable law.
Section 11.08 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower, and the Agent may
be removed at any time with or without cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed
by the Majority Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent. Upon the acceptance of such
appointment hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article XI and Section 12.03
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent. Notwithstanding
anything in this Section 11.08 to the contrary, but expressly subject to the
provisions of Section 11.09 of Annex I, the Agent shall not resign or be removed
under this Agreement unless the Agent resigns or is removed as agent under the
Annex I. In each such case, the successor Agent that is appointed under this
Agreement and Annex I shall be the same until such time as the Tranche B Credit
Facility and the Tranche B Loan Documents are assigned pursuant to Section 12.17
hereof.
ARTICLE XII
Miscellaneous
Section 12.01 Waiver. No failure on the part of the Agent or any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under any of the Tranche A Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Tranche A Loan Documents preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
Section 12.02 Notices. All notices and other communications provided for
herein and in the other Tranche A Loan Documents (including, without limitation,
any modifications of, or waivers or consents under, this Agreement or the other
Tranche A Loan Documents) shall be given or made by telecopy, personal
delivery, nationally recognized overnight courier or U.S. Mail in writing and
telecopied, mailed or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof or in the
Tranche A Loan Documents or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement or in the other Tranche A Loan Documents, all such
communications shall be deemed to have been duly given when transmitted, if
transmitted before 1:00 p.m. local time on a Business Day (otherwise on the next
succeeding Business Day) by telecopier to the extent that confirmation of
receipt is obtained, or personally delivered or, in the case of a mailed notice,
three (3) Business Days after the date deposited in the mails, postage prepaid,
or, in the case of a nationally recognized overnight courier, one (1) day after
the date delivered to such courier with guaranteed next day delivery, in each
case given or addressed as aforesaid.
Section 12.03 Payment of Expenses, Indemnities, etc. The Borrower agrees:
(a) whether or not the transactions hereby contemplated are consummated, to
pay all reasonable expenses of the Agent in the administration (both before and
after the execution hereof and including advice of counsel as to the rights and
duties of the Agent and the Lenders with respect thereto) of, and in connection
with the negotiation, syndication, investigation, preparation, execution and
delivery of, recording or filing of, preservation of rights under, enforcement
of, and refinancing, renegotiation or restructuring of, the Tranche A Loan
Documents and any amendment, waiver or consent relating thereto (including,
without limitation, travel, photocopy, mailing, courier, telephone and other
similar expenses of the Agent, the cost of environmental audits, surveys and
appraisals at reasonable intervals, the reasonable fees and disbursements of
counsel and other outside consultants for the Agent and, in the case of
enforcement, the reasonable fees and disbursements of counsel for the Agent and
any of the Lenders); and promptly reimburse the Agent for all amounts expended,
advanced or incurred by the Agent or the Lenders to satisfy any obligation of
the Borrower under this Agreement or any Tranche A Security Instrument,
including without limitation, all costs and expenses of foreclosure;
(b) TO INDEMNIFY THE AGENT AND EACH LENDER AND EACH OF THEIR AFFILIATES AND
EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS,
ATTORNEYS, ACCOUNTANTS AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF
THEM HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM
FOR, THE INDEMNITY MATTERS WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR
INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO)
AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR
PROPOSED USE BY THE BORROWER OF THE PROCEEDS OF ANY OF THE TRANCHE A LOANS OR
TRANCHE A LETTERS OF CREDIT, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF THE
TRANCHE A LOAN DOCUMENTS, (III) THE OPERATIONS OF THE BUSINESS OF THE BORROWER
AND THE SUBSIDIARIES, (IV) THE FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO
COMPLY WITH THE TERMS OF ANY TRANCHE A SECURITY INSTRUMENT OR THIS AGREEMENT, OR
WITH ANY GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY REPRESENTATION OR
ANY BREACH OF ANY WARRANTY OF THE BORROWER SET FORTH IN ANY OF THE TRANCHE A
LOAN DOCUMENTS, (VI) THE ISSUANCE, EXECUTION AND DELIVERY OR TRANSFER OF OR
PAYMENT OR FAILURE TO PAY UNDER ANY TRANCHE A LETTER OF CREDIT, OR (VII) THE
PAYMENT OF A DRAWING UNDER ANY TRANCHE A LETTER OF CREDIT NOTWITHSTANDING THE
NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE MANUALLY
EXECUTED DRAFT(S) AND CERTIFICATION(S), (VIII) ANY ASSERTION THAT THE LENDERS
WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE TRANCHE A
SECURITY INSTRUMENTS OR (IX) ANY OTHER ASPECT OF THE TRANCHE A LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND INCLUDING ALL INDEMNITY
MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY,
BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS BETWEEN
THE LENDERS OR ANY LENDER AND THE AGENT OR A LENDER'S SHAREHOLDERS AGAINST THE
AGENT OR LENDER OR BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON
THE PART OF THE INDEMNIFIED PARTY OR ITS AFFILIATE; AND
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED PARTIES
FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE
BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT
LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR
PROPERTIES, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR
ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY
SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY
OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY,
(IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR
ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN
CONNECTION WITH THE TRANCHE A LOAN DOCUMENTS, PROVIDED, HOWEVER, NO INDEMNITY
SHALL BE AFFORDED UNDER THIS SECTION 12.03(C) IN RESPECT OF ANY PROPERTY FOR ANY
OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF THE AGENT OR ANY LENDER DURING
THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE
OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF
FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be indemnified without the
consent of the indemnitor, such consent not to be unreasonably withheld;
provided, that the indemnitor may not reasonably withhold consent to any
settlement that an Indemnified Party proposes, if the indemnitor does not have
the financial ability to pay all its obligations outstanding and asserted
against the indemnitor at that time, including the maximum potential claims
against the Indemnified Party to be indemnified pursuant to this Section 12.03.
(e) In the case of any indemnification hereunder, the Agent or Lender, as
appropriate shall give notice to the Borrower of any such claim or demand being
made against the Indemnified Party and the Borrower shall have the non-exclusive
right to join in the defense against any such claim or demand provided that if
the Borrower provides a defense, the Indemnified Party shall bear its own cost
of defense unless there is a conflict between the Borrower and such Indemnified
Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER (OTHER THAN GROSS NEGLIGENCE), WHETHER ACTIVE OR PASSIVE, WHETHER AN
AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF
NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE
OF THE INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN
INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL
CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO
HAVE OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE INDEMNIFIED PARTY.
(g) The Borrower's obligations under this Section 12.03 shall survive any
termination of this Agreement and the payment of the Tranche A Notes and shall
continue thereafter in full force and effect.
(h) The Borrower shall pay any amounts due under this Section 12.03 within
thirty (30) days of the receipt by the Borrower of notice of the amount due.
Section 12.04 Amendments, Etc. Any provision of this Agreement or any Tranche
A Security Instrument may be amended, modified or waived with the Borrower's and
the Majority Lenders' prior written consent; provided that (i) no amendment,
modification or waiver which extends the final maturity of the Tranche A Loans,
increases the Aggregate Maximum Tranche A Credit Amounts, forgives the principal
amount of any Tranche A Indebtedness outstanding under this Agreement, releases
any guarantor of the Tranche A Indebtedness or releases any of the collateral,
reduces the interest rate applicable to the Tranche A Loans or the fees payable
to the Lenders generally, affects Sections 2.03(a) or (b), this Section 12.04 or
Section 12.06(a) or modifies the definition of "Majority Lenders" shall be
effective without consent of all Lenders; (ii) no amendment, modification or
waiver which increases the Maximum Tranche A Credit Amount of any Lender shall
be effective without the consent of such Lender; and (iii) no amendment,
modification or waiver which modifies the rights, duties or obligations of the
Agent shall be effective without the consent of the Agent.
Section 12.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section 12.06 Assignments and Participations. Subject expressly to subsection
(g) below:
(a) The Borrower may not assign its rights or obligations hereunder or under
the Tranche A Notes or any Tranche A Letters of Credit without the prior consent
of all of the Lenders and the Agent.
(b) Any Lender may assign to one or more of its Affiliates or, upon the
written consent of the Agent and the Borrower (which consent will not be
unreasonably withheld), assign to one or more assignees who are not Affiliates
of such Lender, all or a portion of its rights and obligations under this
Agreement pursuant to an Assignment Agreement substantially in the form of
Exhibit F (an "Assignment") provided, however, that (i) any such assignment
shall be in the amount of at least $5,000,000 or such lesser amount to which the
Borrower has consented and (ii) the assignee or assignor shall pay to the Agent
a processing and recordation fee of $2,500 for each assignment. Any such
assignment will become effective upon the execution and delivery to the Agent of
the Assignment and the consent of the Agent. Promptly after receipt of an
executed Assignment, the Agent shall send to the Borrower a copy of such
executed Assignment. Upon receipt of such executed Assignment, the Borrower,
will, at its own expense, execute and deliver new Tranche A Notes to the
assignor and/or assignee, as appropriate, in accordance with their respective
interests as they appear. Upon the effectiveness of any assignment pursuant to
this Section 12.06(b), the assignee will become a "Lender," if not already a
"Lender," for all purposes of this Agreement and the Tranche A Security
Instruments. The assignor shall be relieved of its obligations hereunder to the
extent of such assignment (and if the assigning Lender no longer holds any
rights or obligations under this Agreement, such assigning Lender shall cease to
be a "Lender" hereunder except that its rights under Sections 4.06, 5.01, 5.05
and 12.03 shall not be affected). The Agent will prepare on the last Business
Day of each month during which an assignment has become effective pursuant to
this Section 12.06(b), a new Annex I giving effect to all such assignments
effected during such month, and will promptly provide the same to the Borrower
and each of the Lenders.
(c) Each Lender may transfer, grant or assign participations in all or any
part of such Lender's interests hereunder pursuant to this Section 12.06(c) to
any Person, provided that: (i) such Lender shall remain a "Lender" for all
purposes of this Agreement and the transferee of such participation shall not
constitute a "Lender" hereunder; and (ii) no participant under any such
participation shall have rights to approve any amendment to or waiver of any of
the Tranche A Loan Documents except to the extent such amendment or waiver would
(x) forgive any principal owing on any Tranche A Indebtedness or extend the
final maturity of the Tranche A Loans, (y) reduce the interest rate (other than
as a result of waiving the applicability of any post-default increases in
interest rates) or fees applicable to any of the Tranche A Commitments or
Tranche A Loans or Tranche A Letters of Credit in which such participant is
participating, or postpone the payment of any thereof, or (z) release any
guarantor of the Tranche A Indebtedness or release all or substantially all of
the collateral (except as provided in the Tranche A Loan Documents) supporting
any of the Tranche A Commitments or Tranche A Loans or Tranche A Letters of
Credit in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the Tranche A Security Instruments (the participant's rights against the
granting Lender in respect of such participation to be those set forth in the
agreement with such Lender creating such participation), and all amounts payable
by the Borrower hereunder shall be determined as if such Lender had not sold
such participation, provided that such participant shall be entitled to receive
additional amounts under Article V on the same basis as if it were a Lender and
be indemnified under Section 12.03 as if it were a Lender. In addition, each
agreement creating any participation must include an agreement by the
participant to be bound by the provisions of Section 12.15.
(d) The Lenders may furnish any information concerning the Borrower in the
possession of the Lenders from time to time to assignees and participants
(including prospective assignees and participants); provided that, such Persons
agree to be bound by the provisions of Section 12.15 hereof.
(e) Notwithstanding anything in this Section 12.06 to the contrary, any Lender
may assign and pledge all or any of its Tranche A Notes to any Federal Reserve
Bank or the United States Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve System and/or such Federal Reserve Bank.
No such assignment and/or pledge shall release the assigning and/or pledging
Lender from its obligations hereunder.
(f) Notwithstanding any other provisions of this Section 12.06, no transfer or
assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrower to file a registration statement with the SEC or to
qualify the Tranche A Loans under the "Blue Sky" laws of any state.
(g) Notwithstanding any other provisions of this Section 12.06, no transfer or
assignment of the interest or obligations of any Lender or any grant of
participations therein shall be permitted hereunder unless a prorata portion of
such Lender's Tranche B Commitment is contemporaneously transferred, assigned or
conveyed or participated and the transferee agrees to be bound by these transfer
restrictions with respect to any future transfer, assignment, conveyance or
grant of participations with respect to the Tranche A Commitments and Tranche A
Indebtedness until such time as the Tranche B Credit Facility and the Tranche B
Loan Documents are assigned pursuant to Section 12.17 hereof.
Section 12.07 Invalidity. In the event that any one or more of the provisions
contained in any of the Tranche A Loan Documents or the Tranche A Letters of
Credit or the Tranche A Letter of Credit Agreements shall, for any reason, be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of the
Tranche A Notes, this Agreement or any Tranche A Security Instrument.
Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 12.09 References. The words "herein," "hereof," "hereunder" and other
words of similar import when used in this Agreement refer to this Agreement as a
whole (except for Annex I), and not to any particular article, section or
subsection. Any reference herein to a Section shall be deemed to refer to the
applicable Section of this Agreement unless otherwise stated herein. Any
reference herein to an exhibit or schedule shall be deemed to refer to the
applicable exhibit or schedule attached to this Agreement (except for Annex I)
unless otherwise stated herein.
Section 12.10 Survival. The obligations of the parties under Section 4.06,
Article V, and Sections 11.05 and 12.03 shall survive the repayment of the
Tranche A Loans and the termination of the Tranche A Commitments. To the extent
that any payments on the Tranche A Indebtedness or proceeds of any collateral
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, debtor in possession, receiver or
other Person under any bankruptcy law, common law or equitable cause, then to
such extent, the Tranche A Indebtedness so satisfied shall be revived and
continue as if such payment or proceeds had not been received and the Agent's
and the Lenders' Liens, security interests, rights, powers and remedies under
this Agreement and each Tranche A Security Instrument shall continue in full
force and effect. In such event, each Tranche A Security Instrument shall be
automatically reinstated and the Borrower shall take such action as may be
reasonably requested by the Agent and the Lenders to effect such reinstatement.
Section 12.11 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
Section 12.12 NO ORAL AGREEMENTS. THE TRANCHE A LOAN DOCUMENTS EMBODY THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THE TRANCHE A LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE TRANCHE A NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT
UNITED STATES FEDERAL LAW PERMITS ANY LENDER TO CHARGE INTEREST AT THE RATE
ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED. TEX. REV. CIV.
STAT. XXX. ART. 0000, XX. 15 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN
ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR
THE TRANCHE A NOTES.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE TRANCHE A LOAN
DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF AND (TO THE
EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE
AND DOES NOT PRECLUDE THE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER
THE BORROWER IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE BORROWER HEREBY IRREVOCABLY DESIGNATES C.T. CORPORATION LOCATED IN
HOUSTON, TEXAS, AS THE DESIGNEE, APPOINTEE AND AGENT OF THE BORROWER TO RECEIVE,
FOR AND ON BEHALF OF THE BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE TRANCHE A
LOAN DOCUMENTS. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH
AGENT WILL BE PROMPTLY FORWARDED BY OVERNIGHT COURIER TO THE BORROWER AT ITS
ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW, BUT THE FAILURE OF THE BORROWER TO
RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER OR ANY
HOLDER OF A TRANCHE A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN
ANY OTHER JURISDICTION.
(e) EACH OF THE BORROWER AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY TRANCHE A
SECURITY INSTRUMENT AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE TRANCHE A
SECURITY INSTRUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION 12.13.
Section 12.14 Interest. It is the intention of the parties hereto that each
Lender shall conform strictly to usury laws applicable to it. Accordingly, if
the transactions contemplated hereby would be usurious as to any Lender under
laws applicable to it (including the laws of the United States of America and
the State of Texas or any other jurisdiction whose laws may be mandatorily
applicable to such Lender notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in any
of the Tranche A Loan Documents or any agreement entered into in connection with
or as security for the Tranche A Notes, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to any Lender that is contracted for, taken, reserved, charged or received by
such Lender under any of the Tranche A Loan Documents or agreements or otherwise
in connection with the Tranche A Notes shall under no circumstances exceed the
maximum amount allowed by such applicable law, and any excess shall be canceled
automatically and if theretofore paid shall be credited by such Lender on the
principal amount of the Tranche A Indebtedness (or, to the extent that the
principal amount of the Tranche A Indebtedness shall have been or would thereby
be paid in full, refunded by such Lender to the Borrower); and (ii) in the event
that the maturity of the Tranche A Notes is accelerated by reason of an election
of the holder thereof resulting from any Event of Default under this Agreement
or otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Tranche A Indebtedness (or, to the extent that the
principal amount of the Tranche A Indebtedness shall have been or would thereby
be paid in full, refunded by such Lender to the Borrower). All sums paid or
agreed to be paid to any Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Lender,
be amortized, prorated, allocated and spread throughout the full term of the
Tranche A Loans evidenced by the Tranche A Notes until payment in full so that
the rate or amount of interest on account of any Tranche A Loans hereunder does
not exceed the maximum amount allowed by such applicable law. If at any time
and from time to time (i) the amount of interest payable to any Lender on any
date shall be computed at the Highest Lawful Rate applicable to such Lender
pursuant to this Section 12.14 and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Lender would
be less than the amount of interest payable to such Lender computed at the
Highest Lawful Rate applicable to such Lender, then the amount of interest
payable to such Lender in respect of such subsequent interest computation period
shall continue to be computed at the Highest Lawful Rate applicable to such
Lender until the total amount of interest payable to such Lender shall equal the
total amount of interest which would have been payable to such Lender if the
total amount of interest had been computed without giving effect to this Section
12.14. To the extent that Article 5069-1.04 of the Texas Revised Civil Statutes
is relevant for the purpose of determining the Highest Lawful Rate, such Lender
elects to determine the applicable rate ceiling under such Article by the
indicated weekly rate ceiling from time to time in effect.
Section 12.15 Confidentiality. In the event that the Borrower provides to the
Agent or the Lenders written confidential information belonging to the Borrower,
if the Borrower shall denominate such information in writing as "confidential",
the Agent and the Lenders shall thereafter maintain such information in
confidence in accordance with the standards of care and diligence that each
utilizes in maintaining its own confidential information. This obligation of
confidence shall not apply to such portions of the information which (i) are in
the public domain, (ii) hereafter become part of the public domain without the
Agent or the Lenders breaching their obligation of confidence to the Borrower,
(iii) are previously known by the Agent or the Lenders from some source other
than the Borrower, (iv) are hereafter developed by the Agent or the Lenders
without using the Borrower's information, (v) are hereafter obtained by or
available to the Agent or the Lenders from a third party who owes no obligation
of confidence to the Borrower with respect to such information or through any
other means other than through disclosure by the Borrower, (vi) are disclosed
with the Borrower's consent, (vii) must be disclosed either pursuant to any
Governmental Requirement or to Persons regulating the activities of the Agent or
the Lenders, or (viii) as may be required by law or regulation or order of any
Governmental Authority in any judicial, arbitration or governmental proceeding.
Further, the Agent or a Lender may disclose any such information to any other
Lender, any Affiliate of any Lender, any independent petroleum engineers or
consultants, any independent certified public accountants, any legal counsel
employed by such Person in connection with this Agreement or any Tranche A
Security Instrument, including without limitation, the enforcement or exercise
of all rights and remedies thereunder, or any assignee or participant (including
prospective assignees and participants) in the Tranche A Loans; provided,
however, that the Agent or the Lenders shall receive a confidentiality agreement
from the Person to whom such information is disclosed such that said Person
shall have the same obligation to maintain the confidentiality of such
information as is imposed upon the Agent or the Lenders hereunder.
Notwithstanding anything to the contrary provided herein, this obligation of
confidence shall cease three (3) years from the date the information was
furnished, unless the Borrower requests in writing at least thirty (30) days
prior to the expiration of such three year period, to maintain the
confidentiality of such information for an additional three year period. The
Borrower waives any and all other rights it may have to confidentiality as
against the Agent and the Lenders arising by contract, agreement, statute or law
except as expressly stated in this Section 12.15.
Section 12.16 Effectiveness. This Agreement shall be effective on the Closing
Date (the "Effective Date").
Section 12.17 Assignment of Tranche B Loans. In the event Halliburton is
called upon to perform under the Halliburton Guaranty, in exchange for payment
in full of all amounts owing under and in connection with the Tranche B Credit
Facility, the Agent and the Lenders shall assign the Tranche B Notes and all
Liens securing same to Halliburton or its designee under an assignment the form
of which is attached as Exhibit J to Annex I. If the Tranche B Loans are
assigned to Halliburton, then Halliburton shall replace Chase as administrative
agent under the Tranche B Credit Facility and neither Chase nor any Lender shall
have any obligation with respect thereto. Furthermore, following such
assignment, the applicable Tranche A Loan Documents and the applicable Tranche B
Loan Documents shall be amended, supplemented and/or restated to reflect such
fact and to sever the two facilities. So long as the amendments, supplements
and/or restatements of the applicable Tranche A Loan Documents, and Tranche B
Loan Documents contain the same terms as the current Tranche A Loan Documents
and Tranche B Loan Documents and the severing of the two facilities is not
materially adverse to the Borrower, the aforementioned assignment and
amendments, supplements and/or restatements shall not require the prior consent
of the Borrower, and Borrower hereby irrevocably appoints the Agent as the
Borrower's attorney-in-fact, with full authority in the place and stead of the
Borrower and in the name of the Borrower or otherwise, from time to time in the
Agent's discretion, to take any action and to execute any instrument which the
Agent may deem necessary or advisable in connection with such assignment and
amendments, supplements and/or restatements.
Section 12.18 Tranche A Security Instruments. Nothing contained herein or
in any of the Tranche A Security Instruments shall be construed (a) as a
novation of the Tranche A Security Instruments, (b) as a reissuance or repledge
of any collateral covered by the Tranche A Security Instruments, or (c) to
release, cancel, terminate or otherwise impair the status or priority of the
Lien created by any of the Tranche A Security Instruments. All references to
the "Credit Agreement" made in any of the Tranche A Security Instruments which
secure the Existing Credit Agreement shall refer to this Agreement. Any Tranche
A Indebtedness under this Agreement which was not outstanding pursuant to the
Existing Credit Agreement is "other indebtedness" under the Tranche A Security
Instruments. For purposes of preserving the priority of the Liens of the
Tranche A Security Instruments, the parties hereby acknowledge that this
Agreement is an amendment and restatement of the Existing Credit Agreement.
Section 12.19 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE TRANCHE A SECURITY
INSTRUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE TRANCHE A SECURITY INSTRUMENTS; THAT IT HAS IN FACT
READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF
THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN
REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE TRANCHE A
SECURITY INSTRUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING
INTO THIS AGREEMENT AND THE TRANCHE A SECURITY INSTRUMENTS; AND THAT IT
RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE TRANCHE A
SECURITY INSTRUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME
ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY
FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT
CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS
AGREEMENT AND THE TRANCHE A SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY
HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
Section 12.20 Coordinating Provision. The Tranche A Lenders and each of their
successors and permitted assigns hereby acknowledge by the execution of this
Agreement or their acceptance of a transfer, sale, assignment or participation
interest in the Tranche A Indebtedness and Tranche A Loan Documents that it is
the intention of the parties to this Agreement that each Lender under this
Agreement own a "Percentage Share" (as defined in Annex I) in the Tranche B
Indebtedness and the Tranche B Commitments that is equal to the Percentage Share
that such Lender holds in the Tranche A Indebtedness and the Tranche A
Commitments. Notwithstanding this fact, this Agreement and Annex I are
established as two separate facilities to more easily accommodate the potential
assignment to Halliburton in accordance with Section 12.17, but it is the
intention of the parties to this Agreement that this Agreement and Annex I be
read together as one agreement until such time as there is an assignment to
Halliburton pursuant to Section 12.17 hereof. As a result, there are a number
of provisions in this Agreement and Annex I that need to be coordinated to
better account for the fact that the same group of Lenders will be holding both
the Tranche B Indebtedness
and the Tranche A Indebtedness prior to the assignment contemplated pursuant to
Section 12.17 hereof. Without limiting the generality of the foregoing, prior
to the assignment to Halliburton contemplated by Section 12.17 hereof: (a) any
notice that is given to a Lender under this Agreement shall also be deemed to be
notice to such Lender under Annex I; (b) delivery of any item that is required
to be delivered under this Agreement shall also be deemed to constitute delivery
of such item under Annex I; (c) any amounts that the Borrower is required to pay
to any Lender or to the Agent under this Agreement and Annex I for expenses,
indemnities and other similar matters shall be payable to each Lender or the
Agent only once, without duplication; (d) any consent by a Lender to an
amendment, waiver or modification to this Agreement shall also constitute
consent to the amendment, waiver or modification of the similar provisions of
Annex I, unless expressly indicated otherwise in writing; and (e) any notice by
any Lender to the Borrower with respect to any matter that relates equally to
this Agreement and Annex I need only be given by such Lender once, without
duplication.
The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.
BORROWER: McMoRan OIL & GAS LLC
By:_________________________________
Name: _______________________________
Title:
_________________________________
Address for Notices:
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: _________________
with copy to:
Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx, L.L.P.
000 Xx. Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Relationship Partner
LENDER AND AGENT: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, Individually and as Agent
By:____________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Lending Office for Tranche A Base Rate Loans and Tranche A Eurodollar Loans and
Address for Notice:
Chase Bank of Texas, National Association
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. 212/000-0000
Telephone No. 212/000-0000
Attn: Xxxx Anemone
with copies to:
Chase Bank of Texas, National Association
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No. 713/000-0000
Telephone No. 713/000-0000
Attn: Xxxxx Xxxxxxx
Chase Bank of Texas, National Association
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. 212/000-0000
Telephone No. 212/000-0000
Attn: Xxxxxxx Xxxxxxx
BANK OF MONTREAL
By:
___________________________________
Name: Xxxxx Xxxxxxxx
Title: Director
Lending Office for Tranche A Base Rate Loans and Tranche A Eurodollar Loans
and Address for Notice:
Bank of Montreal
000 X. XxXxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: 312/000-0000
Telephone No.: 312/000-0000
Attention: Keiko Kuze
with copies to:
Bank of Montreal
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
HIBERNIA NATIONAL BANK
By:
___________________________________
Name:
_________________________________
Title:
__________________________________
Lending Office for Tranche A Base Rate Loans and Tranche A Eurodollar Loans
and Address for Notice:
Hibernia National Bank
313 Carondelet, Ste. 1300
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Hibernia National Bank
313 Carondelet, Ste. 1300
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
ANNEX I
TERMS, CONDITIONS AND PROVISIONS
RELATING TO THE TRANCHE B CREDIT FACILITY
Among
MCMORAN OIL & GAS LLC,
as Borrower,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Agent,
and
THE LENDERS SIGNATORY THERETO
Dated as of June 15, 2000
$50,000,000 Tranche B Revolving Credit Facility
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Accounting Matters -1-
Section 1.01 Terms Defined Above -1-
Section 1.02 Certain Defined Terms -1-
Section 1.03 Accounting Terms and Determinations -16-
ARTICLE II Commitments -16-
Section 2.01 Tranche B Loans and Tranche B Letters
of Credit -16-
Section 2.02 Borrowings, Continuations and
Conversions, Tranche B Letters of Credit -17-
Section 2.03 Changes of Commitments and Credit Amounts -19-
Section 2.04 Fees -20-
Section 2.05 Several Obligations -20-
Section 2.06 Tranche B Notes -21-
Section 2.07 Prepayments -21-
Section 2.08 [Intentionally Left Blank] -22-
Section 2.09 Assumption of Risks -22-
Section 2.10 Obligation to Reimburse and to Prepay-23-
Section 2.11 Lending Offices -24-
ARTICLE III
Payments of Principal and Interest -24-
Section 3.01 Repayment of Tranche B Loans -24-
Section 3.02 Interest -24-
Section 3.03 Payments -25-
Section 3.04 Payment Over of Proceeds Upon
Dissolution, Etc -26-
Section 3.05 Payments Held in Trust -26-
Section 3.06 No Exercise of Remedies -26-
Section 3.07 Rights of Senior Creditors -27-
Section 3.08 Covenants -27-
Section 3.09 Amendments and Waivers -27-
Section 3.10 Undertaking -28-
Section 3.11 Non-Transferability of Tranche B
Indebtedness -28-
Section 3.12 Amendment, Waiver, Etc. of Covenants -28-
Section 3.13 Waiver of Defaults -28-
Section 3.14 Release of Liens -28-
Section 3.15 Extensions of Maturity -29-
Section 3.16 Offer of Assignment of Senior
Obligations -29-
Section 3.17 Assignment of Tranche B Loans -29-
Section 3.18 Standstill -30-
ARTICLE IV
Payments; Pro Rata Treatment; Computations; Etc. -30-
Section 4.01 Payments -30-
Section 4.02 Pro Rata Treatment -30-
Section 4.03 Computations -31-
Section 4.04 Non-receipt of Funds by the Agent -31-
Section 4.05 Set-off, Sharing of Payments, Etc. -32-
Section 4.06 Taxes -32-
Section 4.07 Disposition of Proceeds -35-
ARTICLE V
Capital Adequacy -36-
Section 5.01 Additional Costs. -36-
Section 5.02 Limitation on Tranche B Eurodollar
Loans -37-
Section 5.03 Illegality -38-
Section 5.04 Tranche B Base Rate Loans Pursuant
to Sections 5.01, 5.02 and 5.03 -38-
Section 5.05 Compensation -38-
Section 5.06 Replacement Lenders. -39-
ARTICLE VI Conditions Precedent -40-
Section 6.01 Initial Funding -40-
Section 6.02 Initial and Subsequent Tranche B
Loans and Tranche B Letters of Credit -42-
Section 6.03 Conditions Relating to Tranche B
Letters of Credit -42-
ARTICLE VII
Representations and Warranties -43-
Section 7.01 Existence -43-
Section 7.02 Financial Condition -43-
Section 7.03 Litigation -44-
Section 7.04 No Breach -44-
Section 7.05 Authority -44-
Section 7.06 Approvals -44-
Section 7.07 Use of Tranche B Loans -44-
Section 7.08 ERISA -45-
Section 7.09 Taxes -46-
Section 7.10 Titles, etc. -46-
Section 7.11 No Material Misstatements -47-
Section 7.12 Investment Company Act -47-
Section 7.13 Public Utility Holding Company Act -47-
Section 7.14 Subsidiaries -47-
Section 7.15 Location of Business and Offices -47-
Section 7.16 Defaults -47-
Section 7.17 Environmental Matters -47-
Section 7.18 Compliance with the Law -49-
Section 7.19 Insurance -49-
Section 7.20 Hedging Agreements -49-
Section 7.21 Restriction on Liens -50-
Section 7.22 Material Agreements -50-
Section 7.23 Gas Imbalances -50-
ARTICLE VIII
Affirmative Covenants -50-
Section 8.01 Financial Statements -51-
Section 8.02 Litigation -53-
Section 8.03 Maintenance, Etc. -53-
Section 8.04 Environmental Matters -54-
Section 8.05 Further Assurances -55-
Section 8.06 Performance of Obligations -55-
Section 8.07 Title Information -55-
Section 8.08 ERISA Information and Compliance -56-
Section 8.09 Engineering Reports -56-
Section 8.10 Liens. -57-
ARTICLE IX
Negative Covenants -57-
Section 9.01 Debt -57-
Section 9.02 Liens -59-
Section 9.03 Investments, Loans and Advances -59-
Section 9.04 Dividends, Distributions and Redemptions -60-
Section 9.05 [Intentionally left blank] -60-
Section 9.06 Nature of Business -60-
Section 9.07 Mergers, Etc. -60-
Section 9.08 Proceeds of Tranche B Notes -61-
Section 9.09 ERISA Compliance -61-
Section 9.10 Sale or Discount of Receivables -62-
Section 9.11 Sale of Oil and Gas Properties -62-
Section 9.12 Environmental Matters -63-
Section 9.13 Transactions with Affiliates -63-
Section 9.14 [Intentionally left blank.] -63-
Section 9.15 Interest Coverage Ratio -63-
Section 9.16 Subsidiaries -63-
Section 9.17 Negative Pledge Agreements -64-
Section 9.18 Gas Imbalances, Take-or-Pay or Other Prepayments -64-
ARTICLE X
Events of Default; Remedies -64-
Section 10.01 Events of Default -64-
Section 10.02 Remedies -66-
ARTICLE XI
The Agent -67-
Section 11.01 Appointment, Powers and Immunities -67-
Section 11.02 Reliance by Agent -68-
Section 11.03 Defaults -68-
Section 11.04 Rights as a Lender -68-
Section 11.05 INDEMNIFICATION -68-
Section 11.06 Non-Reliance on Agent and other Lenders -69-
Section 11.07 Action by Agent -69-
Section 11.08 Resignation or Removal of Agent -70-
ARTICLE XII
Miscellaneous -70-
Section 12.01 Waiver -70-
Section 12.02 Notices -71-
Section 12.03 Payment of Expenses, Indemnities, etc -71-
Section 12.04 Amendments, Etc. -73-
Section 12.05 Successors and Assigns -75-
Section 12.06 Assignments and Participations -75-
Section 12.07 Invalidity -77-
Section 12.08 Counterparts -77-
Section 12.09 References -77-
Section 12.10 Survival -77-
Section 12.11 Captions -77-
Section 12.12 NO ORAL AGREEMENTS -77-
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION -78-
Section 12.14 Interest -79-
Section 12.15 Confidentiality -80-
Section 12.16 Effectiveness -80-
Section 12.17 EXCULPATION PROVISIONS -80-
Section 12.18 Coordinating Provision -81-
Section 12.19 Lien Releases -81-
THIS ANNEX I dated as of June 15, 2000, is among:
McMoRan OIL & GAS LLC (successor by merger with McMoRan Oil & Gas
Co.), formed under the laws of the State of Delaware (together with
its successors and assigns, the "Borrower"); each of the lenders
that is identified as a Lender on the signature pages hereof or
which becomes a signatory hereto as provided in Section 12.06
(individually, together with its successors and assigns, a "Lender"
and, collectively, the "Lenders"); and CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, a national banking association (in its
individual capacity, "Chase"), as agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"Agent").
R E C I T A L S
A. The Borrower has requested that the Lenders provide
certain loans to and extensions of credit on behalf of the
Borrower.
B. The Lenders have agreed to make such loans and extensions
of credit subject to the terms and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements
herein contained and of the loans, extensions of credit and
commitments hereinafter referred to, the parties hereto hereby
agree as follows:
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above. As used in this
Agreement, the terms "Agent," "Borrower," "Chase," "Lender" and
"Lenders" shall have the meanings indicated above.
Section 1.02 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Article I or in other provisions of this Agreement
in the singular to have the same meanings when used in the plural
and vice versa):
"Additional Costs" shall have the meaning assigned such term
in Section 5.01(a).
"Affected Tranche B Loans" shall have the meaning assigned
such term in Section 5.04.
"Affiliate" of any Person shall mean (i) any Person directly
or indirectly controlled by, controlling or under common control
with such first Person, (ii) any director or officer of such first
Person or of any Person referred to in clause (i) above and (iii)
if any Person in clause (i) above is an individual, any member of
the immediate family (including parents, spouse and children) of
such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any
Person who is controlled by any such member or trust. For purposes
of this definition, any Person which owns directly or indirectly
35% or more of the securities having ordinary voting power for the
election of directors or other governing body of a corporation or
35% or more of the partnership or other ownership interests of any
other Person (other than as a limited partner of such other Person)
will be deemed to "control" (including, with its correlative
meanings, "controlled by" and "under common control with") such
corporation or other Person.
"Agreement" shall mean this Annex I, as the same may from time
to time be amended or supplemented.
"Aggregate Investment Proceeds" shall have the meaning set
forth in the Participation Agreement as in effect on the date
hereof.
"Aggregate Maximum Tranche B Credit Amount" at any time shall
equal the sum of the Maximum Tranche B Credit Amounts of the
Lenders (initially $50,000,000), as the same may be reduced and
increased pursuant to Section 2.03(d), but which shall never be
greater than $50,000,000.
"Aggregate Tranche B Commitments" at any time shall equal the
amount calculated in accordance with Section 2.03(a) hereof.
"Applicable Lending Office" shall mean, for each Lender and
for each Type of Tranche B Loan, the lending office of such Lender
(or an Affiliate of such Lender) designated for such Type of
Tranche B Loan on the signature pages hereof or such other offices
of such Lender (or of an Affiliate of such Lender) as such Lender
may from time to time specify to the Agent and the Borrower as the
office by which its Tranche B Loans of such Type are to be made and
maintained.
"Applicable Margin" shall mean one-half of one percent (0.50%)
per annum with respect to Tranche B Eurodollar Loans; and zero
percent (0%) per annum with respect to Tranche B Base Rate Loans.
"Assignment" shall have the meaning assigned such term in
Section 12.06(b).
"Base Rate" shall mean, with respect to any Tranche B Base
Rate Loan, for any day, the higher of (i) the Federal Funds Rate
for any such day plus > of 1% or (ii) the Prime Rate for such day.
Each change in any interest rate provided for herein based upon
the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"Brazos A-19" shall mean the Hydrocarbon Interests described
under the Heading "Brazos A-19" in Subpart A of Schedule 7.22 and
all Hydrocarbons and Oil and Gas Properties relating thereto.
"Business Day" shall mean any day other than a day on which
commercial banks are authorized or required to close in Houston,
Texas and, where such term is used in the definition of "Quarterly
Date" or if such day relates to a borrowing or continuation of, a
payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Tranche B
Eurodollar Loan or a notice by the Borrower with respect to any
such borrowing or continuation, payment, prepayment, conversion or
Interest Period, any day which is also a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Closing Date" shall mean June 15, 2000.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and any successor statute.
"Collateral Account" shall mean a cash collateral account
maintained at the offices of Chase in the name of the Borrower and
any substitute account therefor, which account shall be pledged to
the Agent as collateral for the Tranche B Indebtedness.
"Consolidated Subsidiaries" shall mean with regard to any
entity each Subsidiary of such entity (whether now existing or
hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial
statements of such entity in accordance with GAAP.
"Conventional Senior Debt" shall mean (i) the Senior Debt
evidenced by the Credit Agreement, as the same may be amended,
modified or restated from time to time, provided that the "Agent"
(as defined in the Credit Agreement) remains unchanged (other than
pursuant to 11.08 of the Credit Agreement or as a result of a
merger, acquisition, corporate reorganization or assignment to a
subsidiary or Affiliate) and (ii) any other Senior Debt with a
committed principal amount that is available to be drawn of not
less than $10,000,000, in favor of a Person, group of Persons or
agent acting on behalf of a Person or group of Persons who are
commercial lenders and who are in the business of making loans that
are secured by Hydrocarbon Interests and Hydrocarbons utilizing a
traditional borrowing base analysis with respect to Hydrocarbon
Interests and Hydrocarbons and the Senior Debt is advanced on such
basis.
"Credit Agreement" shall mean that certain Amended and
Restated Credit Agreement dated as of June 15, 2000, among the
Borrower, the Agent and the Lenders, to which this Agreement is
attached as Annex I, but excluding this Annex I.
"Debt" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money (including principal,
interest, fees and charges), (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments
(including principal, interest, fees and charges), (c) all
obligations of such Person for the unearned balance of any payment
received under any contract outstanding for 180 days, (d) all
obligations of such Person under conditional sale or other title
retention agreements relating to Property or assets purchased by
such Person, (e) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services (excluding
trade accounts payable and accrued obligations incurred in the
ordinary course of business so long as the same are not 180 days
overdue or, if overdue, are being contested in good faith and by
appropriate proceedings), (f) all Debt of others secured by (or for
which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on Property owned or acquired
by such Person, whether or not the obligations secured thereby have
been assumed, (g) all obligations of such Person, contingent or
otherwise, guaranteeing or having the economic effect of
guaranteeing Debt of others, (h) all obligations of such Person to
pay rent or other amounts under a capital lease, (i) all recourse
obligations of such Person with respect to sales of accounts
receivable which would be shown under GAAP on the balance sheet of
such Person as a liability, (j) all obligations of such Person as
an account party (including reimbursement obligations to the issuer
of a letter of credit) in respect of bankers' acceptances and
letters of credit guaranteeing Debt, (k) all noncontingent
obligations of such Person as an account party (including
reimbursement obligations to the issuer of a letter of credit) in
respect of letters of credit other than those referred to in clause
(j) above, (l) all obligations under leases which require such
Person to make payments over the term of such lease, including
payments at termination, which are substantially equal to at least
eighty percent (80%) of the purchase price of the Property subject
to such lease plus interest at an imputed rate of interest, (m) all
obligations or undertakings of such Person to maintain or cause to
be maintained the financial position or covenants of others or to
purchase the Debt or Property of others, (n) obligations
outstanding for 180 days or more to deliver goods or services
including Hydrocarbons in consideration of advance payments, (o)
obligations to pay for goods or services in the event that such
goods or services are not actually received or utilized by such
Person, (p) any capital stock of such Person in which such Person
has a mandatory obligation to redeem such stock within two (2)
years after the Termination Date (plus any extension of such date),
(q) any Debt of a Special Entity for which such Person is liable
either by agreement or because of a Governmental Requirement, (r)
the undischarged balance of any production payment created by such
Person or for the creation of which such Person directly received
payment; and (s) all obligations of such Person under Hedging
Agreements. The Debt of any person shall exclude obligations under
leases which are characterized as operating leases.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of
Default.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"EBITDAX" shall mean, for any period, the sum of consolidated
net income for such period plus the following expenses or charges
to the extent deducted from consolidated net income in such period:
interest paid or accrued on the Tranche B Loans to the Borrower
and on other Debt of the Borrower during such period, taxes,
depreciation, depletion, amortization and exploration expenses. As
used herein, "consolidated net income" shall mean, for any period,
the amount which, in conformity with GAAP, would be set forth
opposite the caption "net income or loss" (or any like caption) on
a consolidated income statement of the Borrower and its
Consolidated Subsidiaries (before deducting minority interests in
net income of Consolidated Subsidiaries, but disregarding all
extraordinary or unusual noncash items in calculating such
consolidated net income). The calculation of each of the items
specified above will exclude items relating to Unrestricted
Subsidiaries.
"Effective Date" shall have the meaning assigned such term in
Section 12.16.
"Environmental Laws" shall mean any and all applicable
Governmental Requirements pertaining to health or the environment
in effect in jurisdictions in which the Borrower or any Subsidiary
is conducting or at any time has conducted business, or where any
Property of the Borrower or any Subsidiary is located, including
without limitation, the Oil Pollution Act of 1990 ("OPA"), the
Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 ("CERCLA"), as
amended, the Federal Water Pollution Control Act, as amended, the
Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and other environmental
conservation or protection laws. The term "oil" shall have the
meaning specified in OPA, the terms "hazardous substance" and
"release" (or "threatened release") have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal" (or "disposed")
have the meanings specified in RCRA; provided, however, that (i) in
the event either OPA, CERCLA or RCRA is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (ii)
to the extent the laws of the state in which any Property of the
Borrower or any Subsidiary is located establish a meaning for
"oil," "hazardous substance," "release," "solid waste" or
"disposal" which is broader than that specified in either OPA,
CERCLA or RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which together with the Borrower or any
Subsidiary would be deemed to be a "single employer" within the
meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m)
or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) with respect to any plan, as to
which PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code or Section 302
of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of
the Code or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder, (ii)
the withdrawal of the Borrower, any Subsidiary or any ERISA
Affiliate from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
(iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041
of ERISA, (iv) the institution of proceedings to terminate a Plan
by the PBGC or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan.
"Eurodollar Rate" shall mean, with respect to any Tranche B
Eurodollar Loan, the rate per annum (rounded upwards, if necessary,
to the nearest 1/16 of 1%) quoted by the Agent at approximately
11:00 a.m. London time (or as soon thereafter as practicable) two
(2) Business Days prior to the first day of the Interest Period for
such Tranche B Loan for the offering by Chase to leading banks in
the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to
the principal amount of the Tranche B Eurodollar Loan to be made by
the Lenders for such Interest Period.
"Event of Default" shall have the meaning assigned such term
in Section 10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments
or other governmental charges or levies not yet due or which are
being contested in good faith by appropriate action and for which
adequate reserves have been maintained; (ii) Liens in connection
with workmen's compensation, unemployment insurance or other social
security, old age pension or public liability obligations not yet
due or which are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in
accordance with GAAP; (iii) operators', vendors', carriers',
warehousemen's, repairmen's, mechanics', workmen's, materialmen's,
construction or other like Liens arising by operation of law or
lien in favor of operators or co-interest owners under contract in
the ordinary course of business or incident to the exploration,
development, operation and maintenance of Oil and Gas Properties or
statutory landlord's liens, each of which is in respect of
obligations that have not been outstanding more than 90 days or
which are being contested in good faith by appropriate proceedings
and for which adequate reserves have been maintained in accordance
with GAAP; (iv) any Liens reserved in leases or farmout agreements
for rent or royalties and for compliance with the terms of the
farmout agreements or leases in the case of leasehold estates, to
the extent that any such Lien referred to in this clause does not
materially impair the use of the Property covered by such Lien for
the purposes for which such Property is held by the Borrower or any
Subsidiary or materially impair the value of such Property subject
thereto; (v) encumbrances (other than to secure the payment of
borrowed money or the deferred purchase price of Property or
services), easements, restrictions, servitudes, permits,
conditions, covenants, exceptions or reservations in any rights of
way or other Property of the Borrower or any Subsidiary for the
purpose of roads, pipelines, transmission lines, transportation
lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint
or common use of real estate, rights of way, facilities and
equipment, and defects, irregularities, zoning restrictions and
deficiencies in title of any rights of way or other Property which
in the aggregate do not materially impair the use of such rights of
way or other Property for the purposes of which such rights of way
and other Property are held by the Borrower or any Subsidiary or
materially impair the value of such Property subject thereto; (vi)
deposits of cash or securities to secure the performance of bids,
trade contracts, leases, statutory obligations and other
obligations of a like nature incurred in the ordinary course of
business; (vii) Liens permitted by the Tranche B Security
Instruments; (viii) required margin deposits on permitted Hedging
Agreements arising in the ordinary course of business; (ix) Liens
on assets or Properties not owned as of the Closing Date by the
Borrower or any Restricted Subsidiary securing only purchase money
Debt of the Borrower or such Restricted Subsidiary permitted by
Section 9.01(f), which Liens are limited to the specific Property
the purchase of which is financed by such Debt; (x) Liens existing
at the time of acquisition by the Borrower or any Restricted
Subsidiary of the majority of the capital stock or other ownership
interests or substantially all of the assets of any other Person or
existing at the time of the merger of any such other Person into
the Borrower or any Restricted Subsidiary, on such capital stock or
other ownership interests or assets so acquired or on the assets of
the Person so merged into the Borrower or such Restricted
Subsidiary; provided, however, that such acquisition or merger
shall not otherwise result in an Event of Default or Default; (xi)
Liens of lessors of Property (in such capacity) leased by the
Borrower or any Restricted Subsidiary pursuant to an operating
lease or permitted capital lease, which Lien in any such case is
limited to the Property leased thereunder; and (xii) Liens on
equity or debt investments in Third Parties owned by the Borrower
or a Restricted Subsidiary (which Lien in any case is limited to
such pledged equity or debt investment) which secure Debt of Third
Parties or other Third Party obligations (or guaranties thereof);
provided that such pledged investments were initially acquired in
accordance with Section 9.03.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the weighted average of the rates on overnight federal
funds transactions with a member of the Federal Reserve System
arranged by federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the date for which such
rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day, and (ii) if such rate is not so published for any
day, the Federal Funds Rate for such day shall be the average rate
charged to Chase on such day on such transactions as determined by
Chase.
"Fee Letter" shall mean that certain letter agreement dated
June 15, 2000 from Chase to the Borrower, concerning certain fees
in connection with this Agreement and any agreements or instruments
executed in connection therewith, as the same may be amended,
supplemented or replaced from time to time.
"Financial Statements" shall mean the financial statement or
statements of the Borrower and its Consolidated Subsidiaries
described or referred to in Section 7.02.
"Form 1001 Certification" shall have the meaning assigned such
term in Section 4.06(d).
"Form 4224 Certification" shall have the meaning assigned such
term in Section 4.06(d).
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Governmental Authority" shall include the country, the state,
county, city and political subdivisions in which any Person or such
Person's Property is located or which exercises valid jurisdiction
over any such Person or such Person's Property, and any court,
agency, department, commission, board, bureau or instrumentality of
any of them including monetary authorities which exercises valid
jurisdiction over any such Person or such Person's Property.
Unless otherwise specified, all references to Governmental
Authority herein shall mean a Governmental Authority having
jurisdiction over, where applicable, the Borrower, the Subsidiaries
or any of their Property or the Agent, any Lender or any Applicable
Lending Office.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment,
decree, injunction, franchise, permit, certificate, license,
authorization or other directive or requirement (whether or not
having the force of law), including, without limitation,
Environmental Laws, energy regulations and occupational, safety and
health standards or controls, of any Governmental Authority.
"Halliburton" shall mean Halliburton Company, a Delaware
corporation, and for purposes of Sections 2.07(c) and 12.19 shall
include its Affiliates.
"Halliburton Guaranty" shall mean that certain Guaranty
Agreement, in form and substance satisfactory to the Agent, dated
of even date herewith from Halliburton in favor of the Agent,
pursuant to which Halliburton guarantees the prompt payment of all
amounts owing or to be owing under the Tranche B Credit Facility.
"Hedging Agreements" shall mean any commodity, interest rate
or currency swap, cap, floor, collar, forward agreement or other
exchange or protection agreements or any option with respect to any
such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or
from time to time may be contracted for, taken, reserved, charged
or received on the Tranche B Notes or on other Tranche B
Indebtedness under laws applicable to such Lender which are
presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws now
allow.
"Hydrocarbon Interests" shall mean all rights, titles,
interests and estates now or hereafter acquired in and to oil and
gas leases, oil, gas and mineral leases, or other liquid or gaseous
hydrocarbon leases, mineral fee interests, overriding royalty and
royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons and all products refined or
separated therefrom.
"Indemnified Parties" shall have the meaning assigned such
term in Section 12.03(b).
"Indemnity Matters" shall mean any and all actions, suits,
proceedings (including any investigations, litigation or
inquiries), claims, demands and causes of action made or threatened
against a Person and, in connection therewith, all losses,
liabilities, damages (including, without limitation, consequential
damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or
concurrent negligence of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial
Tranche B Loans or issuance of the initial Tranche B Letters of
Credit, whichever occurs first, pursuant to Section 6.01 hereof.
"Initial Participation Payment" shall have the meaning
assigned such term in the Participation Agreement as in effect on
the date hereof.
"Interest Coverage Ratio" shall have the meaning assigned such
term in Section 9.15.
"Interest Period" shall mean, with respect to any Tranche B
Eurodollar Loan, the period commencing on the date such Tranche B
Eurodollar Loan is made and ending on the numerically corresponding
day in the first, second, third or sixth calendar month thereafter,
as the Borrower may select as provided in Section 2.02 (or such
longer period as may be requested by the Borrower and agreed to by
the Majority Lenders), except that each Interest Period which
commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may
commence before and end after the Termination Date; (ii) each
Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or, if
such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (iii) no
Interest Period shall have a duration of less than one month and,
if the Interest Period for any Tranche B Eurodollar Loans would
otherwise be for a shorter period, such Tranche B Loans shall not
be available hereunder.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of
the Property, whether such interest is based on the common law,
statute or contract, and whether such obligation or claim is fixed
or contingent, and including but not limited to (i) the lien or
security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes or (ii) production
payments and the like payable out of Oil and Gas Properties. The
term "Lien" shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting
Property. For the purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, or
leases under a financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some
other Person in a transaction intended to create a financing.
"Majority Lenders" shall mean, at any time while no Tranche B
Loans are outstanding, Lenders having at least seventy-five percent
(75%) of the Aggregate Tranche B Commitments and, at any time while
Tranche B Loans are outstanding, Lenders holding at least
seventy-five percent (75%) of the outstanding aggregate principal
amount of the Tranche B Loans (without regard to any sale by a
Lender of a participation in any Tranche B Loan under Section
12.06(c)).
"Material Adverse Effect" shall mean any material and adverse
effect on (i) the assets, liabilities, financial condition,
business, operations or affairs of the Borrower and the Restricted
Subsidiaries taken as a whole or from the facts represented or
warranted in any Tranche B Loan Document, or (ii) the ability of
the Borrower and the Restricted Subsidiaries taken as a whole to
carry out their business as at the Closing Date or as proposed as
of the Closing Date to be conducted or meet their obligations under
the Tranche B Loan Documents on a timely basis.
"Maximum Tranche B Credit Amount" shall mean, as to each
Lender, the amount set forth opposite such Lender's name on
Schedule I under the caption "Maximum Tranche B Credit Amounts" (as
the same may be changed, reduced or adjusted pursuant to Section
2.03(d) hereof pro rata to each Lender based on its Percentage
Share), as modified from time to time to reflect any assignments
permitted by Section 12.06(b).
"MMR" shall mean McMoRan Exploration Co., a Delaware
corporation and the sole member of the Borrower.
"MMR Guaranty" shall mean a guaranty agreement from MMR in
favor of the Agent on behalf of the Lenders in the form thereof
attached hereto as Exhibit "D".
"MMR Material Adverse Effect" shall mean any material and
adverse effect on (i) the assets, liabilities, financial condition,
business, operations or affairs of MMR and its Subsidiaries taken
as a whole, (ii) the ability of MMR and its Subsidiaries taken as
a whole to carry on its business as being conducted on March 24,
2000 or (iii) the ability of MMR to execute and deliver the
guaranty of MMR described in Section 12.19.
"Mortgaged Property" shall mean the Property owned by the
Borrower or a Restricted Subsidiary and which is subject to the
Liens existing and to exist under the terms of the Tranche B
Security Instruments.
"Multiemployer Plan" shall mean a Plan defined as such in Sec-
tion 3(37) or 4001(a)(3) of ERISA.
"net dividends, distributions and redemptions" (as used in
Section 9.04 hereof) shall mean the gross amount of all dividends,
distributions and redemptions under Section 9.04 of the Existing
Credit Agreement after March 24, 2000, less the amount of cash
contributed to the capital of the Borrower after March 24, 2000.
"Notice of Termination" shall have the meaning assigned to
such term in Section 5.06(a).
"Oil and Gas Properties" shall mean Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon
Interests; all presently existing or future unitization, pooling
agreements and declarations of pooled units and the units created
thereby (including without limitation all units created under
orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of the Hydrocarbon Interests; all
operating agreements, contracts and other agreements which relate
to any of the Hydrocarbon Interests or the production, sale,
purchase, exchange or processing of Hydrocarbons from or
attributable to such Hydrocarbon Interests; all Hydrocarbons in and
under and which may be produced and saved or attributable to the
Hydrocarbon Interests, including all oil in tanks, the lands
covered thereby and all rents, issues, profits, proceeds, products,
revenues and other incomes from or attributable to the Hydrocarbon
Interests; all tenements, hereditaments, appurtenances and
Properties in any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests; and all Properties,
rights, titles, interests and estates described or referred to
above, including any and all Property, real or personal, now owned
or hereinafter acquired and situated upon, used, held for use or
useful in connection with the operating, working or development of
any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be
on such premises for the purpose of drilling a well or for other
similar temporary uses) and including any and all oil xxxxx, gas
xxxxx, injection xxxxx or other xxxxx, buildings, structures, fuel
separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries,
fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements,
cables, wires, towers, casing, tubing and rods, surface leases,
rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments
to any and all of the foregoing.
"Other Taxes" shall have the meaning assigned such term in
Section 4.06(b).
"Pari Passu Debt" shall mean unsecured Debt of the Borrower or
a Restricted Subsidiary that is not Senior Debt and is not, by its
terms, subordinated to the Tranche B Indebtedness in right of
payment.
"Participation Agreement" shall mean the Participation
Agreement among the Borrower, Halliburton Energy Services, Inc. and
Halliburton dated June 15, 2000.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Aggregate
Tranche B Commitments to be provided by a Lender under this
Agreement as indicated on Schedule I hereto, as modified from time
to time to reflect any assignments permitted by Section 12.06(b).
"Permitted Payments" shall have the meaning assigned such term
in Section 3.04
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust,
unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form
of entity.
"Plan" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA, which (i) is currently or
hereafter sponsored, maintained or contributed to by the Borrower,
any Subsidiary or an ERISA Affiliate or (ii) was at any time during
the preceding six calendar years sponsored, maintained or
contributed to, by the Borrower, any Subsidiary or an ERISA
Affiliate.
"Post-Default Rate" shall mean, in respect of any principal of
any Tranche B Loan or any other amount payable by the Borrower
under this Agreement or any Tranche B Note, a rate per annum during
the period commencing on the date of an Event of Default until such
amount is paid in full or all Events of Default are cured or waived
equal to 2% per annum above the Base Rate as in effect from time to
time plus the Applicable Margin (if any), but in no event to exceed
the Highest Lawful Rate provided that, for a Tranche B Eurodollar
Loan, the "Post-Default Rate" for such principal shall be, for the
period commencing on the date of the Event of Default and ending on
the earlier to occur of the last day of the Interest Period
therefor or the date all Events of Default are cured or waived, 2%
per annum above the interest rate for such Tranche B Loan as
provided in Section 3.02(ii), but in no event to exceed the Highest
Lawful Rate.
"Prime Rate" shall mean the rate of interest from time to time
announced publicly by the Agent (or if the Agent is Halliburton by
Chase) at the Principal Office as its prime commercial lending
rate. Such rate is set by Chase as a general reference rate of
interest, taking into account such factors as Chase may deem
appropriate, it being understood that many of Chase's commercial or
other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any
customer and that Chase may make various commercial or other loans
at rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the
Agent, presently located at 000 Xxxxxx, Xxxxxxx, Xxxxx 00000 or
such other location as designated by the Agent from time to time.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June,
September and December, in each year, the first of which shall be
June 30, 2000; provided, however, that if any such day is not a
Business Day, such Quarterly Date shall be the next succeeding
Business Day.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as the
same may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender,
any change after the Closing Date in any Governmental Requirement
(including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class
of lenders (including such Lender or its Applicable Lending Office)
of or under any Governmental Requirement (whether or not having the
force of law) by any Governmental Authority charged with the
interpretation or administration thereof.
"Replacement Lenders" shall have the meaning assigned such
term in Section 5.06(b).
"Required Payment" shall have the meaning assigned such term
in Section 4.04.
"Reserve Report" shall have the meaning assigned such term in
the Credit Agreement.
"Responsible Officer" shall mean, as to any Person, the Chief
Executive Officer, the President or any Vice President of such
Person and, with respect to financial matters, the term
"Responsible Officer" shall include the Chief Financial Officer or
the Treasurer of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible
Officer of the Borrower.
"Restricted Subsidiary" shall mean any direct or indirect
Subsidiary of the Borrower that is not an Unrestricted Subsidiary.
"SEC" shall mean the Securities and Exchange Commission or any
successor Governmental Authority.
"Security Instruments" shall mean the Tranche A Security
Instruments and the Tranche B Security Instruments.
"Senior Creditors" shall have the meaning assigned such term
in Section 3.04.
"Senior Debt" shall mean any Debt that (a) is secured by a
Lien that is not junior to the Liens securing the Tranche B
Indebtedness or (b) is senior to the Tranche B Indebtedness in
right of payment.
"Senior Obligations" shall mean the principal of, premium, if
any, and unpaid interest (including all interest accruing after the
filing of a petition in bankruptcy or the commencement of any
insolvency or bankruptcy proceedings with respect to the Borrower,
whether or not such interest is allowable as a claim in any such
proceedings) on any Senior Debt, whether outstanding at the date
hereof or hereafter incurred, together with all charges, fees,
costs and expenses required to be paid by the Borrower under the
terms thereof, including any renewals, extensions and refundings
of, and indebtedness and obligations of a successor Person issued
in exchange for or in replacement of, such Senior Debt; provided,
however, that the following shall not constitute Senior
Obligations: (i) any Debt as to which, in the instrument creating
or evidencing the same or pursuant to which the same is
outstanding, it is expressly provided that such Debt is subordinate
in right of payment to all other Debt of the Borrower not expressly
subordinated to such Debt; (ii) any Debt which by its terms refers
explicitly to the Tranche B Indebtedness and states that such Debt
shall not be senior in right of payment thereto; and (iii) the
Tranche B Indebtedness.
"Shortfall" shall mean: (a) on December 31, 2000: the amount,
if any, by which the Aggregate Investment Proceeds raised by MMR
and the Borrower from March 24, 2000 through December 31, 2000 is
less than $75,000,000, (b) between January 1, 2001 and December 31,
2001: the amount, if any, on the last day of the first three
calendar quarters of such period by which the Aggregate Investment
Proceeds raised by MMR and the Borrower from March 24, 2000 through
that date is less than $75,000,000, and (c) on December 31, 2001:
the amount, if any, by which the Aggregate Investment Proceeds
raised by MMR and the Borrower from March 24, 2000 through December
31, 2001 is less than $125,000,000.
"Shortfall Measurement Date" shall mean each of December 31,
2000; March 31, 2001; June 30, 2001; September 30, 2001; and
December 31, 2001.
"Special Entity" shall mean any joint venture, limited
liability company or partnership, general or limited partnership or
any other type of partnership or company other than a corporation
in which the Borrower or one or more of its other Subsidiaries is
a member, owner, partner or joint venturer and owns, directly or
indirectly, at least a majority of the equity of such entity or
controls such entity, but excluding any tax partnerships that are
not classified as partnerships under state law. For purposes of
this definition, any Person which owns directly or indirectly an
equity investment in another Person which allows the first Person
to manage or elect managers who manage the normal activities of
such second Person will be deemed to "control" such second Person
(e.g. a sole general partner controls a limited partnership).
"Subordinated Indebtedness" shall have the meaning assigned to
such term in Section 3.03.
"Subsidiary" shall mean (i) any corporation of which at least
a majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at
the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or
controlled by the Borrower or one or more of its Subsidiaries or by
the Borrower and one or more of its Subsidiaries and (ii) any
Special Entity. Unless otherwise indicated herein, each reference
to the term "Subsidiary" shall mean a Subsidiary of the Borrower.
"Taxes" shall have the meaning assigned such term in
Section 4.06(a).
"Terminated Lender" shall have the meaning assigned such term
in Section 5.06(a).
"Termination Date" shall mean, unless the Tranche B Commit-
ments are sooner terminated pursuant to Section 2.03(b), (c) or (e)
or Section 10.02 hereof, December 31, 2003.
"Third Party" shall have the meaning assigned such term in
Section 9.03.
"Tranche A Credit Facility" shall mean the revolving credit
facility provided for in the Credit Agreement.
"Tranche A LC Exposure" shall have the meaning assigned such
term in the Credit Agreement.
"Tranche A Letters of Credit" shall have the meaning assigned
such term in the Credit Agreement.
"Tranche A Loans" shall have the meaning assigned such term in
the Credit Agreement.
"Tranche A Security Instruments" shall have the meaning
assigned such term in the Credit Agreement.
"Tranche B Base Rate Loans" shall mean Tranche B Loans that
bear interest at rates based upon the Base Rate.
"Tranche B Commitment" shall mean, for any Lender, its
obligation to (i) make Tranche B Loans up to such Lender's Maximum
Tranche B Credit Amount and (ii) participate in the issuance of
Tranche B Letters of Credit as provided in Section 2.01(b).
"Tranche B Credit Facility" shall mean the $50,000,000
revolving credit facility provided for herein.
"Tranche B Eurodollar Loans" shall mean Tranche B Loans the
interest rates on which are determined on the basis of rates
referred to in the definition of "Eurodollar Rate".
"Tranche B Indebtedness" shall mean any and all amounts owing
or to be owing by the Borrower or any Restricted Subsidiary to the
Agent and/or Lenders in connection with the Tranche B Loan
Documents and the Tranche B Letters of Credit, and any Hedging
Agreements now or hereafter arising between the Borrower or any
Restricted Subsidiary and any Lender or any Affiliate of such
Lender pertaining to the Tranche B Credit Facility and otherwise
permitted by the terms of this Agreement and all renewals,
refinancings, extensions and/or rearrangements of any of the above.
"Tranche B LC Commitment" at any time shall mean
$7,000,000.00, minus the Tranche A LC Exposure.
"Tranche B LC Exposure" at any time shall mean the aggregate
face amount of all undrawn and uncancelled Tranche B Letters of
Credit and the aggregate of all amounts drawn under all Tranche B
Letters of Credit and not yet reimbursed.
"Tranche B Letter of Credit Agreements" shall mean the written
agreements with the Agent, as issuing lender for any Tranche B
Letter of Credit, executed or hereafter executed in connection with
the issuance by the Agent of the Tranche B Letters of Credit, such
agreements to be on the Agent's customary form for letters of
credit of comparable amount and purpose as from time to time in
effect or as otherwise agreed to by the Borrower and the Agent.
"Tranche B Letters of Credit" shall mean the letters of credit
issued pursuant to Section 2.01(b) and all reimbursement
obligations pertaining to any such letters of credit, and "Tranche
B Letter of Credit" shall mean any one of the Tranche B Letters of
Credit and the reimbursement obligations pertaining thereto.
"Tranche B Liens" shall have the meaning assigned to such term
in Section 8.10.
"Tranche B Loan Documents" shall mean this Agreement, the
Tranche B Notes and the Tranche B Security Instruments.
"Tranche B Loans" shall mean the loans as provided for by
Section 2.01(a).
"Tranche B Notes" shall mean the promissory note or notes
(whether one or more) of the Borrower provided for by Section 2.06
and in the form of Exhibit A hereto, together with any and all
renewals, extensions for any period, increases, rearrangements,
substitutions or modifications thereof.
"Tranche B Security Instruments" shall mean the Tranche B
Letters of Credit, the Tranche B Letter of Credit Agreements, the
Fee Letter, the agreements or instruments described or referred to
in Exhibit E, and any and all other agreements or instruments now
or hereafter executed and delivered by the Borrower, any Restricted
Subsidiary or any other Person (other than participation or similar
agreements between any Lender and any other lender or creditor with
respect to any Tranche B Indebtedness pursuant to this Agreement)
in connection with, or as security for the payment or performance
of the Tranche B Notes or this Agreement, or reimbursement
obligations under the Tranche B Letters of Credit, as such
agreements may be amended, supplemented or restated from time to
time, including, without limitation, the MMR Guaranty (if and when
same may be executed and delivered).
"Type" shall mean, with respect to any Tranche B Loan, a
Tranche B Base Rate Loan or a Tranche B Eurodollar Loan.
"Unrestricted Subsidiary" shall mean (i) any of the
Subsidiaries listed on Schedule 7.14 hereto as an Unrestricted
Subsidiary, (ii) any Subsidiary of any Unrestricted Subsidiary,
(iii) any surviving Person (other than the Borrower or a Restricted
Subsidiary) into which any of such Persons referred to in clause
(i) or (ii) is merged or consolidated and (iv) any Subsidiary
organized after the date of this Agreement and designated as an
Unrestricted Subsidiary by the Borrower (pursuant to Section
9.16(b) hereof). By written notice to the Agent, the Borrower may
(x) declare any Unrestricted Subsidiary to be a Restricted
Subsidiary and such former Unrestricted Subsidiary shall thereafter
be deemed to be a Restricted Subsidiary for all purposes of this
Agreement (subject to the limitations of this Agreement and
pursuant to Section 9.16 hereof) or (y) at any time other than when
a Default or Event of Default has occurred and is continuing or
would exist after giving effect to such declaration, in any fiscal
year, declare one or more Restricted Subsidiaries, to be an
Unrestricted Subsidiary, subject to the limitations contained in
Section 9.03 hereof, and any such former Restricted Subsidiary
shall thereafter be deemed to be an Unrestricted Subsidiary for all
purposes of this Agreement.
"Wholly-Owned Subsidiary" shall mean, as to the Borrower, any
Subsidiary of which all of the outstanding shares of stock having
by the terms thereof ordinary voting power to elect the board of
directors of such corporation, other than directors' qualifying
shares, are owned or controlled by the Borrower or one or more of
the Wholly-Owned Subsidiaries or by the Borrower and one or more of
the Wholly-Owned Subsidiaries.
Section 1.03 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and
certificates and reports as to financial matters required to be
furnished to the Agent or the Lenders hereunder shall be prepared,
in accordance with GAAP, applied on a basis consistent with the
audited financial statements of MMR referred to in Section 7.02
(except for changes concurred with by MMR's independent public
accountants).
ARTICLE II
Commitments
Section 2.01 Tranche B Loans and Tranche B Letters of
Credit.
(a) Tranche B Loans. Each Lender severally agrees, on
the terms of this Agreement, to make Tranche B Loans to the
Borrower during the period from and including (i) the Closing
Date or (ii) such later date that such Lender becomes a party
to this Agreement as provided in Section 12.06(b), to but
excluding, the Termination Date in an aggregate principal
amount at any one time outstanding up to but not exceeding the
amount of such Lender's Tranche B Commitment as then in
effect; provided, however, that the aggregate principal amount
of all Tranche B Loans by all Lenders hereunder at any one
time outstanding together with the Tranche B LC Exposure shall
not exceed the lesser of the Aggregate Tranche B Commitments
or the Aggregate Maximum Tranche B Credit Amounts. Subject to
the terms of this Agreement, during the period from the
Closing Date to but excluding the Termination Date, the
Borrower may borrow, repay and reborrow the amount determined
pursuant to in this Section 2.01(a).
(b) Tranche B Letters of Credit. During the period from
and including the Closing Date to but excluding the
Termination Date, the Agent, as issuing bank for the Lenders,
agrees, on the terms of this Agreement, to extend credit for
the account of the Borrower at any time and from time to time
by issuing, renewing, extending or reissuing Tranche B
Letters of Credit; provided however, the Tranche B LC Exposure
at any one time outstanding shall not exceed the lesser of (i)
the Tranche B LC Commitment or (ii) the lesser of the
Aggregate Maximum Tranche B Credit Amounts or the Aggregate
Tranche B Commitments, as then in effect, in either case,
minus the aggregate principal amount of all Tranche B Loans
then outstanding. The Lenders shall participate in such
Tranche B Letters of Credit according to their respective
Percentage Shares.
(c) Limitation on Types of Tranche B Loans. Subject to
the other terms and provisions of this Agreement, at the
option of the Borrower, the Tranche B Loans may be Tranche B
Base Rate Loans or Tranche B Eurodollar Loans; provided that,
without the prior written consent of the Majority Lenders, no
more than six (6) Tranche B Eurodollar Loans may be
outstanding at any time to any Lender.
Section 2.02 Borrowings, Continuations and Conversions,
Tranche B Letters of Credit.
(a) Borrowings. The Borrower shall give the Agent
(which shall promptly notify the Lenders) advance notice as
hereinafter provided of each borrowing hereunder, which shall
specify the aggregate amount of such borrowing, the Type and
the date (which shall be a Business Day) of the Tranche B
Loans to be borrowed and (in the case of Tranche B Eurodollar
Loans) the duration of the Interest Period therefor.
(b) Minimum Amounts. All Tranche B Base Rate Loan
borrowings shall be in amounts of at least $1,000,000 or the
lesser of the remaining balance of the Aggregate Tranche B
Commitments or Aggregate Maximum Tranche B Credit Amounts, if
less, or any whole multiple of $1,000,000 in excess thereof,
and all Tranche B Eurodollar Loans shall be in amounts of at
least $1,000,000 or any whole multiple of $1,000,000 in excess
thereof.
(c) Notices. The initial borrowing and all subsequent
borrowings, continuations and conversions shall require
advance written notice to the Agent (which shall promptly
notify the Lenders) in the form of Exhibit B hereto (or
telephonic notice promptly confirmed by such a written
notice), which in each case may be revocable or irrevocable,
from the Borrower to be received by the Agent not later than
11:00 a.m. Houston, Texas time on the date of each Tranche B
Base Rate Loan borrowing and three Business Days prior to the
date of each Tranche B Eurodollar Loan borrowing, continuation
or conversion. Without in any way limiting the Borrower's
obligation to confirm in writing any telephonic notice, the
Agent may act without liability upon the basis of telephonic
notice believed by the Agent in good faith to be from the
Borrower prior to receipt of written confirmation. In each
such case, the Borrower hereby waives the right to dispute the
Agent's record of the terms of such telephonic notice except
in the case of gross negligence or willful misconduct by the
Agent.
(d) Continuation Options. Subject to the provisions
made in this Section 2.02(d), the Borrower may elect to
continue all or any part of any Tranche B Eurodollar Loan
beyond the expiration of the then current Interest Period
relating thereto by giving advance notice as provided in
Section 2.02(c) to the Agent (which shall promptly notify the
Lenders) of such election, specifying the amount of such
Tranche B Loan to be continued and the Interest Period
therefor. In the absence of such a timely and proper election,
the Borrower shall be deemed to have elected to convert such
Tranche B Eurodollar Loan to a Tranche B Base Rate Loan
pursuant to Section 2.02(e). All or any part of any Tranche
B Eurodollar Loan may be continued as provided herein,
provided that (i) any continuation of any such Tranche B Loan
shall be (as to each Tranche B Loan as continued for an
applicable Interest Period) in amounts of at least $1,000,000
or any whole multiple of $1,000,000 in excess thereof and (ii)
no Default shall have occurred and be continuing. If a
Default shall have occurred and be continuing, each Tranche B
Eurodollar Loan shall be converted to a Tranche B Base Rate
Loan on the last day of the Interest Period applicable
thereto.
(e) Conversion Options. The Borrower may elect to
convert all or any part of any Tranche B Eurodollar Loan on
the last day of the then current Interest Period relating
thereto to a Tranche B Base Rate Loan by giving advance notice
to the Agent (which shall promptly notify the Lenders) of such
election. Subject to the provisions made in this Section
2.02(e), the Borrower may elect to convert all or any part of
any Tranche B Base Rate Loan at any time and from time to time
to a Tranche B Eurodollar Loan by giving advance notice as
provided in Section 2.02(c) to the Agent (which shall promptly
notify the Lenders) of such election. All or any part of any
outstanding Tranche B Loan may be converted as provided
herein, provided that (i) any conversion of any Tranche B Base
Rate Loan into a Tranche B Eurodollar Loan shall be (as to
each such Tranche B Loan into which there is a conversion for
an applicable Interest Period) in amounts of at least
$1,000,000 or any whole multiple of $1,000,000 in excess
thereof and (ii) no Default shall have occurred and be
continuing. If a Default shall have occurred and be
continuing, no Tranche B Base Rate Loan may be converted into
a Tranche B Eurodollar Loan.
(f) Advances. Not later than 1:00 p.m. Houston, Texas
time on the date specified for each borrowing hereunder, each
Lender shall make available the amount of the Tranche B Loan
to be made by it on such date to the Agent, to an account
which the Agent shall specify, in immediately available funds,
for the account of the Borrower. The amounts so received by
the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by depositing the
same, in immediately available funds, in an account of the
Borrower, designated by the Borrower and maintained at the
Principal Office.
(g) Tranche B Letters of Credit. The Borrower shall
give the Agent (which shall promptly notify the Lenders of
such request) advance revocable or irrevocable notice to be
received by the Agent not later than 11:00 a.m. Houston, Texas
time not less than three (3) Business Days prior thereto of
each request for the issuance and at least thirty (30)
Business Days prior to the date of the renewal or extension of
a Tranche B Letter of Credit hereunder which request shall
specify the amount of such Tranche B Letter of Credit, the
date (which shall be a Business Day) such Tranche B Letter of
Credit is to be issued, renewed or extended, the duration
thereof, the name and address of the beneficiary thereof, the
form of the Tranche B Letter of Credit and such other
information as the Agent may reasonably request all of which
shall be reasonably satisfactory to the Agent. Subject to the
terms and conditions of this Agreement, on the date specified
for the issuance, renewal or extension of a Tranche B Letter
of Credit, the Agent shall issue such Tranche B Letter of
Credit to the beneficiary thereof. No Tranche A Letter of
Credit shall be issued or renewed or extended with an
expiration date after December 31, 2003.
In conjunction with the issuance of each Tranche B Letter
of Credit, the Borrower shall execute a Tranche B Letter of
Credit Agreement. In the event of any conflict between any
provision of a Tranche B Letter of Credit Agreement and this
Agreement, the Borrower, the Agent and the Lenders hereby
agree that the provisions of this Agreement shall govern.
The Agent will send to the Borrower and each Lender, upon
issuance of any Tranche B Letter of Credit, or an amendment
thereto, a true and complete copy of such Tranche B Letter of
Credit, or such amendment thereto.
Section 2.03 Changes of Commitments and Credit Amounts.
(a) The Aggregate Tranche B Commitments shall at all
times be equal to $50,000,000 less adjustments pursuant to
Section 2.03(b), (c) or (e) hereof.
(b) So long as there are no amounts outstanding under
the Credit Agreement, the Borrower shall have the right to
terminate or to reduce the amount of the Aggregate Tranche B
Commitments at any time or from time to time, in each case
upon not less than three (3) Business Days' prior notice to
the Agent (which shall promptly notify the Lenders) of each
such termination or reduction, which notice shall specify the
effective date thereof and the amount of any such reduction
(which shall not be less than $1,000,000 or any whole multiple
of $1,000,000 in excess thereof) and may be revocable or
irrevocable and effective only upon receipt by the Agent. The
Aggregate Tranche B Commitments once terminated or reduced
pursuant to this Section 2.03(b) may not be reinstated.
(c) The Aggregate Tranche B Commitments shall
automatically be reduced at the time that Halliburton makes an
Initial Participation Payment to the Borrower by an amount
equal to such Initial Participation Payment reduced by the
portion thereof attributable to development costs; provided
that (i) the Initial Participation Payment shall be paid into
the Collateral Account as provided in Section 2.07(c) and (ii)
the Agent shall have received from the Borrower or Halliburton
a certificate identifying the Initial Participation Payment
and the portion thereof attributable to development costs.
The Aggregate Tranche B Commitments once reduced pursuant to
this Section 2.03(c) may not be reinstated.
(d) (i) The Aggregate Maximum Tranche B Credit Amounts
shall be contemporaneously reduced by the amount by which the
Aggregate Tranche B Commitments are reduced pursuant to
Section 2.03(b) and (c) and shall be adjusted within four (4)
Business Days after each Shortfall Measurement Date to an
amount equal to $50,000,000 minus the amount by which the
Aggregate Tranche B Commitments have been reduced pursuant to
Section 2.03(b) and (c) as of such date, minus the Shortfall,
if any, on the date of such calculation.
(ii) The Borrower shall deliver to the Agent a
certificate within three (3) Business Days after each
Shortfall Measurement Date indicating the Aggregate Investment
Proceeds raised by MMR and MOXY as of such date, and, the
amount of the Shortfall as of such date, if any.
(e) On the fourth Business Day following December 31,
2001, the Aggregate Tranche B Commitments shall be permanently
reduced (if applicable) to the Aggregate Maximum Tranche B
Credit Amounts as of such date.
Section 2.04 Fees.
(a) The Borrower agrees to pay to the Agent, for the
account of each Lender, a commitment fee on the daily average
of the amount by which the Aggregate Tranche B Commitments
exceed the sum of (A) the Tranche B LC Exposure, plus (B) the
aggregate principal amount of all outstanding Tranche B Loans
for the period from and including the Closing Date up to but
excluding the earlier of the date the Aggregate Tranche B
Commitments are terminated or the Termination Date at a rate
per annum equal to one tenth of one percent (1/10 of 1%). All
such commitment fees shall be calculated on the basis of a
year of 365 (or, in a leap year, 366) days for the actual
number of days elapsed. The accrued commitment fees shall be
due and payable quarterly in arrears on each Quarterly Date
and on the earlier of the date the Aggregate Tranche B
Commitments are terminated or the Termination Date.
(b) The Borrower agrees to pay the Agent, for the
account of each Lender, commissions for issuing the Tranche B
Letters of Credit on the daily average outstanding of the
maximum liability of the Agent existing from time to time
under such Tranche B Letter of Credit (calculated separately
for each Tranche B Letter of Credit) at the rate of 0.375% per
annum of the daily average outstanding of the maximum
liability of the Agent existing from time to time under each
Tranche B Letter of Credit, provided that each Tranche B
Letter of Credit shall bear a minimum commission of $300.00.
Each Tranche B Letter of Credit shall be deemed to be
outstanding up to the full face amount of the Tranche B Letter
of Credit until the Agent has received the canceled Tranche B
Letter of Credit or a written cancellation of the Tranche B
Letter of Credit from the beneficiary of such Tranche B Letter
of Credit in form and substance acceptable to the Agent, or
for any reductions in the amount of the Tranche B Letter of
Credit (other than from a drawing), written notification from
the beneficiary of such Tranche B Letter of Credit. Such
commissions are payable quarterly in arrears.
(c) The Agent, for its own account, shall retain 0.125%
of the Tranche B Letter of Credit fee (as described in
subsection (b) above) as an issuing fee and shall pay the
balance of such Tranche B Letter of Credit fee to the Lenders
pro rata.
(d) The Borrower shall pay to the Agent for its account
such other fees as are set forth in the Fee Letter on the
dates specified therein to the extent not paid prior to the
Closing Date.
Section 2.05 Several Obligations. The failure of any
Lender to make any Tranche B Loan to be made by it or to provide
funds for disbursements or reimbursements under Tranche B Letters
of Credit on the date specified therefor shall not relieve any
other Lender of its obligation to make its Tranche B Loan or
provide funds on such date, but no Lender shall be responsible for
the failure of any other Lender to make a Tranche B Loan to be made
by such other Lender or to provide funds to be provided by such
other Lender.
Section 2.06 Tranche B Notes. The Tranche B Loans made
by each Lender shall be evidenced by a single promissory note of
the Borrower in substantially the form of Exhibit A hereto, dated
(i) the Closing Date or (ii) the effective date of an Assignment
pursuant to Section 12.06(b), payable to the order of such Lender
in a principal amount equal to its Maximum Tranche B Credit Amount
as in effect and otherwise duly completed and such substitute
Tranche B Notes as required by Section 12.06(b). The date, amount,
Type, interest rate and Interest Period of each Tranche B Loan made
by each Lender, and all payments made on account of the principal
thereof, shall be recorded by such Lender on its books for its
Tranche B Notes, and, prior to any transfer, may be endorsed by
such Lender on a schedule attached to such Tranche B Notes or any
continuation thereof or on any separate record maintained by such
Lender. Failure to make any such notation or to attach a schedule
shall not affect any Lender's or the Borrower's rights or
obligations in respect of such Tranche B Loans or affect the
validity of such transfer by any Lender of its Tranche B Notes.
Section 2.07 Prepayments. Subject to Sections 3.03
through 3.18 hereof:
(a) The Borrower may prepay the Tranche B Base Rate
Loans upon one (1) Business Day's prior notice to the Agent
(which shall promptly notify the Lenders), which notice shall
specify the prepayment date (which shall be a Business Day)
and the amount of the prepayment (which shall be at least
$1,000,000 or the remaining aggregate principal balance
outstanding on the Tranche B Notes) and may be revocable or
irrevocable and effective only upon receipt by the Agent,
provided that interest on the principal prepaid, accrued to
the prepayment date, shall be paid on the prepayment date.
The Borrower may prepay all or any portion of Tranche B
Eurodollar Loans upon not less than three (3) Business Day's
prior notice to the Agent (which shall promptly notify the
Lenders), which notice shall specify the prepayment date
(which shall be a Business Day) and the amount of the
prepayment (which shall be at least $1,000,000 or the
remaining aggregate principal balance outstanding on the
Tranche B Notes) and may be revocable or irrevocable and
effective only upon receipt by the Agent, provided that
interest on the principal prepaid, accrued to the prepayment
date, shall be paid on the prepayment date. In addition,
prepayments of Tranche B Eurodollar Loans shall be subject to
the terms of Section 5.05;
(b) If, at any time, the outstanding aggregate principal
amount of the Tranche B Loans plus the Tranche B LC Exposure
exceeds either the Aggregate Tranche B Commitments or the
Aggregate Maximum Tranche B Credit Amounts, the Borrower shall
(i) prepay the Tranche B Loans on the date of such termination
or reduction in an aggregate principal amount equal to the
excess, together with interest accrued on the principal amount
pre-paid to the date of such prepayment and (ii) if any excess
remains after prepaying all of the Tranche B Loans, pay to the
Agent on behalf of the Lenders an amount equal to the excess
to be held as cash collateral in the Collateral Account as
provided in Section 2.10(b) hereof;
(c) The Borrower shall instruct Halliburton to pay all
Initial Participation Payments to the Collateral Account. The
Agent shall hold each such payment at the direction of the
Borrower, except to the extent that the Aggregate Tranche B
Commitments or the Aggregate Maximum Tranche B Credit Amounts
are or would be less than the outstanding Tranche B
Indebtedness at the time of the receipt by the Agent of an
Initial Participation Payment, in which case the Borrower
hereby authorizes and instructs the Agent to immediately apply
all or a portion of such Initial Participation Payment to the
repayment of Tranche B Indebtedness or to deposit same as cash
collateral in the Collateral Account, as the case may be, as
required by Section 2.07(b) so that the outstanding Tranche B
Indebtedness does not exceed either the Aggregate Tranche B
Commitments or the Aggregate Maximum Tranche B Credit Amounts
at the time of such Initial Participation Payment; and
(d) Prepayments permitted or required under this Section
2.07 shall be without notice, premium or penalty, except as
required under Section 5.05 for prepayment of Tranche B
Eurodollar Loans. Any prepayments on the Tranche B Loans may
be reborrowed subject to the then effective Aggregate Maximum
Tranche B Credit Amounts.
Section 2.08 [Intentionally Left Blank]
Section 2.09 Assumption of Risks. The Borrower assumes
all risks of the acts or omissions of any beneficiary of any
Tranche B Letter of Credit or any transferee thereof with respect
to its use of such Tranche B Letter of Credit. Neither the Agent
(except in the case of willful misconduct or bad faith on the part
of the Agent or any of its employees), its correspondents nor any
Lender shall be responsible for the validity, sufficiency or
genuineness of certificates or other documents or any endorsements
thereon, even if such certificates or other documents should in
fact prove to be invalid, insufficient, fraudulent or forged; for
errors, omissions, interruptions or delays in transmissions or
delivery of any messages by mail, telex, or otherwise, whether or
not they be in code; for errors in translation or for errors in
interpretation of technical terms; the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer
or assign any Tranche B Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; the failure of
any beneficiary or any transferee of any Tranche B Letter of Credit
to comply fully with conditions required in order to draw upon any
Tranche B Letter of Credit; or for any other consequences arising
from causes beyond the Agent's control or the control of the
Agent's correspondents. In addition, neither the Agent nor any
Lender shall be responsible for any error, neglect, or default of
any of the Agent's correspondents; and none of the above shall
affect, impair or prevent the vesting of any of the Agent's or any
Lender's rights or powers hereunder or under the Tranche B Letter
of Credit Agreements, all of which rights shall be cumulative. The
Agent and its correspondents may accept certificates or other
documents that appear on their face to be in order, without
responsibility for further investigation of any matter contained
therein regardless of any notice or information to the contrary.
In furtherance and not in limitation of the foregoing provisions,
the Borrower agrees that any action, inaction or omission taken or
not taken by the Agent or by any correspondent for the Agent in
good faith in connection with any Tranche B Letter of Credit, or
any related drafts, certificates, documents or instruments, shall
be binding on the Borrower and shall not put the Agent or its
correspondents under any resulting liability to the Borrower.
Section 2.10 Obligation to Reimburse and to Prepay.
Subject to the provisions of Sections 3.03 through 3.18 hereof:
(a) If a disbursement by the Agent is made under any
Tranche B Letter of Credit, the Borrower shall pay to the
Agent within two (2) Business Days after notice of any such
disbursement is received by the Borrower, the amount of each
such disbursement made by the Agent under the Tranche B Letter
of Credit (if such payment is not sooner effected as may be
required under this Section 2.10 or under other provisions of
the Tranche B Letter of Credit), together with interest on the
amount disbursed from and including the date of disbursement
until payment in full of such disbursed amount at a varying
rate per annum equal to (i) the then applicable interest rate
for Tranche B Base Rate Loans through the second Business Day
after notice of such disbursement is received by the Borrower
and (ii) thereafter, the Post-Default Rate for Tranche B Base
Rate Loans (but in no event to exceed the Highest Lawful Rate)
for the period from and including the third Business Day
following the date of notice of such disbursement to and
including the date of repayment in full of such disbursed
amount; provided that the Borrower may repay any such
disbursement with a Tranche B Loan if all of the conditions
for the making of such a loan are met under this Agreement.
The obligations of the Borrower under this Agreement with
respect to each Tranche B Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid or performed
strictly in accordance with the terms of this Agreement under
all circumstances whatsoever, including, without limitation,
but only to the fullest extent permitted by applicable law,
the following circumstances: (i) any lack of validity or
enforceability of this Agreement, any Tranche B Letter of
Credit or any of the Tranche B Security Instruments; (ii) any
amendment or waiver of (including any default), or any consent
to departure from this Agreement (except to the extent
permitted by any amendment or waiver), any Tranche B Letter of
Credit or any of the Tranche B Security Instruments; (iii) the
existence of any claim, set-off, defense or other rights which
the Borrower may have at any time against the beneficiary of
any Tranche B Letter of Credit or any transferee of any
Tranche B Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Agent,
any Lender or any other Person, whether in connection with
this Agreement, any Tranche B Letter of Credit, the Tranche B
Security Instruments, the transactions contemplated hereby or
any unrelated transaction; (iv) any statement, certificate,
draft, notice or any other document presented under any
Tranche B Letter of Credit proves to have been forged, fraudu-
lent, insufficient or invalid in any respect or any statement
therein proves to have been untrue or inaccurate in any
respect whatsoever; (v) payment by the Agent under any Tranche
B Letter of Credit against presentation of a draft or
certificate which appears on its face to comply, but does not
comply, with the terms of such Tranche B Letter of Credit; and
(vi) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
Notwithstanding anything in this Agreement to the contrary,
the Borrower will not be liable for payment or performance
that results from the gross negligence or willful misconduct
of the Agent, except (i) where the Borrower or any Subsidiary
actually recovers the proceeds for itself or the Agent of any
payment made by the Agent in connection with such gross
negligence or willful misconduct or (ii) in cases where the
Agent makes payment to the named beneficiary of a Tranche B
Letter of Credit.
(b) In the event of the occurrence of any Event of
Default, a payment or prepayment pursuant to Sections
2.07(b)(ii) hereof or the maturity of the Tranche B Notes,
whether by acceleration or otherwise, an amount equal to the
Tranche B LC Exposure (or the excess in the case of Section
2.07(b)(ii)) shall be deemed to be forthwith due and owing by
the Borrower to the Agent and the Lenders as of the date of
any such occurrence; and the Borrower's obligation to pay such
amount shall be absolute and unconditional, without regard to
whether any beneficiary of any such Tranche B Letter of Credit
has attempted to draw down all or a portion of such amount
under the terms of a Tranche B Letter of Credit, and, to the
fullest extent permitted by applicable law, shall not be
subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower may now or
hereafter have against any such beneficiary, the Agent, the
Lenders or any other Person for any reason whatsoever. Such
payments shall be held by the Agent on behalf of the Lenders
as cash collateral in the Collateral Account securing the
Tranche B LC Exposure in an interest bearing account or
accounts at the Principal Office; and the Borrower hereby
grants to and by its deposit with the Agent grants to the
Agent a security interest in such cash collateral. In the
event of any such payment by the Borrower of amounts
contingently owing under outstanding Tranche B Letters of
Credit and in the event that thereafter drafts or other
demands for payment complying with the terms of such Tranche
B Letters of Credit are not made prior to the respective
expiration dates thereof, the Agent agrees, if no Event of
Default has occurred and is continuing or if no other amounts
are outstanding under this Agreement, the Tranche B Notes or
the Tranche B Security Instruments, to remit to the Borrower
amounts for which the contingent obligations evidenced by the
Tranche B Letters of Credit have ceased.
(c) Each Lender severally and unconditionally agrees
that it shall promptly reimburse the Agent an amount equal to
such Lender's Percentage Share of any disbursement made by the
Agent under any Tranche B Letter of Credit that is not
reimbursed according to this Section 2.10.
Section 2.11 Lending Offices. The Tranche B Loans of
each Type made by each Lender shall be made and maintained at such
Lender's Applicable Lending Office for Tranche B Loans of such
Type.
ARTICLE III
Payments of Principal and Interest; Subordination
Section 3.01 Repayment of Tranche B Loans. Subject to
the provisions of Sections 3.03 through 3.18, the Borrower will pay
to the Agent, for the account of each Lender, the principal
payments required by this Section 3.01. On the Termination Date
the Borrower shall repay the outstanding aggregate principal and
accrued and unpaid interest under the Tranche B Notes.
Section 3.02 Interest. Subject to the provisions of
Sections 3.03 through 3.18, the Borrower will pay to the Agent, for
the account of each Lender, interest on the unpaid principal amount
of each Tranche B Loan made by such Lender for the period
commencing on the date such Tranche B Loan is made to but excluding
the date such Tranche B Loan shall be paid in full, at the
following rates per annum:
(i) if such a Tranche B Loan is a Tranche B Base
Rate Loan, the Base Rate (as in effect from time to time)
plus the Applicable Margin, but in no event to exceed the
Highest Lawful Rate; and
(ii) if such a Tranche B Loan is a Tranche B
Eurodollar Loan, for each Interest Period relating
thereto, the Eurodollar Rate for such Tranche B Loan plus
the Applicable Margin, but in no event to exceed the
Highest Lawful Rate.
Notwithstanding the foregoing, but subject to the provisions of
Sections 3.03 through 3.18, the Borrower will pay to the Agent, for
the account of each Lender interest at the applicable Post-Default
Rate on any principal of any Tranche B Loan made by such Lender,
and (to the fullest extent permitted by law) on any other amount
payable by the Borrower hereunder, under any Tranche B Loan
Document or under any Tranche B Note held by such Lender to or for
account of such Lender, for the period commencing on the date of an
Event of Default until the same is paid in full or all Events of
Default are cured or waived.
Accrued interest on Tranche B Base Rate Loans shall be payable
on each Quarterly Date commencing on June 30, 2000, and accrued
interest on each Tranche B Eurodollar Loan shall be payable on the
last day of the Interest Period therefor and, if such Interest
Period is longer than three months, at three-month intervals
following the first day of such Interest Period, except that
interest payable at the Post-Default Rate shall be payable from
time to time on demand and interest on any Tranche B Eurodollar
Loan that is converted into a Tranche B Base Rate Loan (pursuant to
Section 5.04) shall be payable on the date of conversion (but only
to the extent so converted).
Promptly after the determination of any interest rate provided
for herein or any change therein, the Agent shall notify the
Lenders to which such interest is payable and the Borrower thereof.
Each determination by the Agent of an interest rate or fee
hereunder shall, except in cases of manifest error, be final,
conclusive and binding on the parties.
Section 3.03 Payments. Notwithstanding anything in this
Agreement or any Tranche B Security Instrument to the contrary, no
payment shall be made on the principal of, premium, if any, or
interest on, or charges, fees, costs, expenses or other amounts
whatsoever in connection with the Tranche B Indebtedness, or any
portion thereof (the "Subordinated Indebtedness") (including,
without limitation, any indemnity payment, redemption, retirement,
purchase, defeasance, prepayment, acquisition or satisfaction of
such Subordinated Indebtedness or sinking fund payment in
connection therewith) at any time unless all amounts owing under or
in connection with the Senior Obligations, whether for principal,
accrued interest or other amounts shall be fully and finally paid,
except for (a) accrued interest on the Tranche B Notes if at the
time of such payment, or immediately after giving effect thereto,
no default or event of default (excluding any applicable notice or
grace periods) shall have occurred and be continuing under any
Senior Obligations or the documents and agreements governing the
Senior Obligations, including without limitation, a Default (as
defined in the Credit Agreement) under the Tranche A Credit
Facility; (b) voluntary prepayments of principal on the Tranche B
Notes, if at the time of such payment, or immediately after giving
effect thereto, no amounts are outstanding under the Tranche A
Credit Facility; (c) prepayments associated with reductions to the
Aggregate Tranche B Commitments as contemplated by Section 2.07(c);
(d) payments made to the Agent or the Lenders pursuant to the
Halliburton Guaranty; (e) payments made or received by the Agent or
the Lenders from the foreclosure upon or exercise of other remedies
with respect to Brazos A-19 or the MMR Guaranty, if applicable;
(f) voluntary prepayments of principal on the Tranche B Notes as a
result or in anticipation of a Shortfall, if such prepayments are
made from either (i) equity paid into the Borrower by its parent,
(ii) Debt of the Borrower which is subordinated to the Senior
Obligations in accordance with the terms set forth on Exhibit K or
such other terms as are acceptable to the Agent and the Lenders or
(iii) asset sales of non borrowing base Properties permitted by or
not otherwise prohibited under this Agreement, and (g) voluntary
prepayments of principal on the Tranche B Note with the prior
written consent of the Tranche A Lenders in their sole and absolute
discretion.
Section 3.04 Payment Over of Proceeds Upon Dissolution,
Etc. In the event of any liquidation, dissolution, reorganization
or winding-up of the Borrower, or of any execution, sale,
receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization, or other similar proceeding relative to the
Borrower or a substantial part of its property, all Senior
Obligations shall first be paid in full before any payment is made
upon any Subordinated Indebtedness, other than the payments
permitted by subsections (d), (e) and (f) of Section 3.03 and
prepayments made pursuant to Section 2.07(c) (collectively, the
"Permitted Payments"), and in any event any payment or distribution
of any kind, whether in cash, property or securities (other than in
securities or other evidences of indebtedness, the payment of which
is subordinated to the payment of all Senior Obligations which may
at the time be outstanding), which shall be made upon or in respect
of the Subordinated Indebtedness other than Permitted Payments
shall be paid to the holders of such Senior Obligations, or to any
agents or trustees on their behalf (the "Senior Creditors") for
application in payment thereof in accordance with the priorities
then existing among the Senior Creditors unless and until such
Senior Obligations shall have been paid or satisfied in full.
Section 3.05 Payments Held in Trust; Subrogation. In
the event that, notwithstanding the foregoing, any payment or
distribution of the assets of the Borrower of any kind or
character, whether in cash, property or securities, shall be
received by the Agent or any Lender in respect of any Subordinated
Indebtedness before all of the Senior Obligations have been paid in
full in cash, in contravention of any provision of this Article
III, such payment or distribution shall be held in trust for the
Senior Creditors and shall forthwith be paid over to the Senior
Creditors until all such Senior Obligations shall have been paid in
full in cash, after giving effect to any concurrent payment or
distribution to the Senior Creditors. With respect to all such
amounts paid by the Agent or the Lenders to the Senior Creditors,
after the Senior Obligations have been paid in full, the Agent
and/or the Lenders will be subrogated to the rights of the Senior
Creditors in respect of all amounts paid, including security and
collateral associated therewith.
Section 3.06 No Exercise of Remedies. Notwithstanding
anything in this Agreement or any Tranche B Security Instrument to
the contrary but only prior to the expiration of the standstill
provisions contained in Section 3.18, the Agent shall not, without
the prior written consent of all of the Senior Creditors so long as
any Senior Obligations are outstanding, have any right to in any
circumstance whatsoever, either (a) institute any proceedings or
seek any other remedy allowed at law or in equity to enforce the
Subordinated Indebtedness other than the foreclosure upon or
exercise of other remedies with respect to Brazos A-19 or the MMR
Guaranty if applicable or (b) transfer or assign any of its rights,
title or interest in and to any of the Subordinated Indebtedness,
except in accordance with Sections 3.08(b) and 3.11 hereof.
Section 3.07 Rights of Senior Creditors. Subject to the
provisions and terms contained in Sections 3.01 through 3.18, the
Senior Creditors, or any of them, may, at any time, and from time
to time, without the consent of or notice to the Agent, any Lender
or Halliburton, without incurring responsibility to the Agent, any
Lender or Halliburton and without impairing or releasing any of the
Senior Creditors' rights or remedies or any of the obligations of
the Agent, any Lender or Halliburton under this Article III: (a)
change the amount, manner, place or terms of payment, or change or
extend the time of payment of, or renew or otherwise alter the
Senior Obligations or any instrument or agreement now or hereafter
executed evidencing, in connection with, as security for or
providing for the issuance of any of the Senior Obligations in any
manner, or enter into or amend in any manner any other agreement
relating to the Senior Obligations (other than the terms of this
Agreement which require the express consent of Halliburton); (b)
sell, exchange, release or otherwise deal with all or any part of
any Property by whomsoever at any time pledged or mortgaged to
secure, howsoever securing, the Senior Obligations, but only to the
extent securing the Senior Obligations; (c) release any Person
liable in any manner for payment or collection of the Senior
Obligations; (d) exercise or refrain from exercising any rights in
respect of the Senior Obligations against the Borrower or others,
including the Agent; and (e) apply any sums received by the Senior
Creditors, or any of them, paid by any Person and however realized,
to payment of the Senior Obligations in such a manner as the Senior
Creditors, or any of them, in its sole discretion, may deem
appropriate.
Section 3.08 Covenants. The Agent and the Lenders
covenant that so long as any of the Senior Obligations remain
outstanding, they will: (a) execute any and all other instruments
necessary as reasonably required by the Senior Creditors, or any of
them, to subordinate the Subordinated Indebtedness to the Senior
Obligations as herein provided, (b) not assign or transfer to
others any Subordinated Indebtedness, the Tranche B Notes or any
claim the Agent or the Lenders have or may have against the
Borrower pursuant to this Agreement, unless such assignment or
transfer is expressly made subject to this Article III, and (c)
consent to, as required, or execute, as required, any releases of
Liens upon any Property in which the Agent under the Credit
Agreement holds a first and prior Lien as requested by such Agent
under the Credit Agreement.
Section 3.09 Amendments and Waivers. The acceptance by
any Senior Creditor of partial or delinquent payments or any
forbearance, failure or delay by it in exercising any right, power
or remedy hereunder shall not be deemed a waiver of any obligation
of the Borrower, the Agent or any Lender, or of any right, power or
remedy of the Senior Creditors, or any of them; and no partial
exercise of any right, power or remedy shall preclude any other or
further exercise thereof. No right of any Senior Creditor to
enforce subordination as herein provided shall at any time or in
any way be affected or impaired by any failure to act on the part
of the Borrower or a Senior Creditor, or by any noncompliance by
the Borrower with any of the terms, provisions and covenants of
this Agreement, regardless of any knowledge thereof that any such
Senior Creditor may have or be otherwise charged with. The
subordination provisions contained herein are for the benefit of
all Senior Creditors and their respective successors and assigns.
In addition to any requirements of Section 12.04, Sections 3.03
through 3.18 may be amended, canceled or modified only by an
instrument in writing executed jointly by the Agent and the Senior
Creditor against whom enforcement is being sought, and may be
supplemented only by documents delivered or to be delivered in
accordance with the express terms hereof.
Section 3.10 Undertaking. Each Lender, by accepting the
Subordinated Indebtedness, agrees to and shall be bound by the
provisions contained in this Article III.
Section 3.11 Non-Transferability of Tranche B
Indebtedness. The Tranche B Indebtedness may be transferred by the
Lenders only to one or more transferees who agree in writing to be
bound by all of the provisions of Sections 3.03 through 3.18,
including, without limitation, the transfer restrictions hereunder.
In addition, each such transfer shall be subject to the prior
written consent of the Borrower (which consent shall not be
unreasonably withheld). As provided in Section 3.17, upon payment
to the Lenders in satisfaction of the Halliburton Guaranty, the
Tranche B Loan Documents will be transferred to Halliburton, with
no consent of the Borrower required.
Section 3.12 Amendment, Waiver, Etc. of Covenants.
During the period the covenants set forth in the Conventional
Senior Debt are applicable to the Tranche B Credit Facility as
provided in Articles VIII (with the exception of Section 8.10,
which section will not be amended, modified or waived in any event
without the prior written consent of Halliburton and the Majority
Lenders) and IX hereof, such covenants shall be deemed to be
automatically incorporated in full herein, without the necessity
for any amendment or other modification of this Agreement, and any
amendment, modification or waiver of any of such covenants by the
holders of the Conventional Senior Debt shall be deemed to be an
automatic amendment, modification or waiver of such covenants as
incorporated herein for such period without the need for the
consent or approval of the Agent, any Lender or Halliburton.
Notwithstanding the foregoing, if a Conventional Senior Debt
facility shall no longer exist with respect to the Borrower,
effective as of such date, the provisions of this Agreement that
existed, but for the automatic incorporation by reference of the
Conventional Senior Debt covenants as provided for in this Section
3.12, shall automatically be restored to their condition as of
Effective Date (as amended, modified, renewed, extended or released
with Halliburton's consent and as waived pursuant to Section
12.04(b)(i)), without the necessity for any amendment or other
modification of this Agreement.
Section 3.13 Waiver of Defaults. An Event of Default
under Section 10.01(b) and/or Section 10.01(n) hereof that results
from the occurrence of a default or event of default under the
Conventional Senior Debt (or an event which with the passage of
time or the giving of notice, or both, would become a default or
event of default thereunder) shall automatically cease to be an
Event of Default hereunder upon the cure of such default or the
waiver of such default by the holders of the applicable
Conventional Senior Debt, provided the Halliburton Guaranty has not
been called and paid in full by Halliburton prior to the cure or
waiver.
Section 3.14 Release of Liens. In addition to the
provisions of Section 12.19 of this Annex I, in the event that the
holders of the Conventional Senior Debt release any Lien on any
Property of the Borrower (other than in connection with a total
payoff of the Conventional Senior Debt) securing such Debt, other
than the Lien on Brazos A-19, then the Lenders hereby authorize and
instruct the Agent and the Agent hereby agrees to release the Lien
on such Property securing the Tranche B Indebtedness
contemporaneously with the release of the Lien in favor of the
holders of the Conventional Senior Debt.
Section 3.15 Extensions of Maturity. The maturity of
Senior Obligations shall not be extended past December 31, 2003 or
such date as the holders of the Tranche B Indebtedness and
Halliburton agree to in writing.
Section 3.16 Offer of Assignment of Senior Obligations.
In order for the subordination provisions provided in Section 3.03
through 3.18 to apply for the benefit of the Senior Obligations,
the instrument creating the Senior Obligations must contain a
provision referencing this Section 3.16 and Section 3.15 and
providing that the Senior Creditors agree for the benefit of the
Agent and the Lenders that in consideration for the subordination
provisions provided in Section 3.03 through 3.18 of this Agreement
(a) if the Halliburton Guaranty is called by the Agent under this
Agreement and Halliburton fully performs under the Halliburton
Guaranty and pays in full all amounts owing under and in connection
with the Tranche B Credit Facility, and (b) if an event of default
is declared by the Senior Creditors under the Senior Obligations,
then the Senior Creditors (or an agent operating on their behalf)
will (i) use reasonable efforts to give notice to the Agent of the
default, (ii) offer to sell the Senior Obligations to the Lenders
at par within ten (10) Business Days of such offer, and (iii) upon
acceptance by the Lenders of the offer described in clause (ii)
within said ten-day period, assign to the Lenders (utilizing the
Form of Assignment attached hereto in Exhibit "I") all the Senior
Creditors' rights under the Senior Obligations and any Liens
securing those rights upon payment in full within said ten-day
period of all amounts owing under the Senior Obligations. In
addition, the Senior Creditors will use reasonable efforts to give
the Agent written notice of any foreclosure actions initiated by
the Senior Creditors on any Property for which the Agent has a
Lien, either (a) at the time notice is given to the Borrower, or
(b) at the time any otherwise required statutory notices would be
given. Nothing contained in this Section 3.16 shall in any way
prejudice the Senior Creditors' rights to, or prevent the Senior
Creditors from, foreclosing on any collateral for the Senior
Obligations or prejudice any rights of the Agent or the Lenders to
enforce the Halliburton Guaranty Agreement or in any way affect or
impair Halliburton's obligations under the Halliburton Guaranty
Agreement or prohibit or restrict the Senior Creditors' rights to
sell and assign the Senior Obligations to others after the ten-day
period referenced in this Section 3.16.
Section 3.17 Assignment of Tranche B Loan Documents.
In the event Halliburton is called upon to perform under the
Halliburton Guaranty, in exchange for payment in full of all
amounts owing under and in connection with the Tranche B Credit
Facility, the Agent and the Lenders shall assign the Tranche B Loan
Documents to Halliburton or its designee under an assignment the
form of which is attached hereto as Exhibit J. Upon any such
assignment, Halliburton or its designee shall replace Chase (and
Chase shall resign as Agent pursuant to Section 11.09 hereof) as
Agent under the Tranche B Credit Facility, and neither Chase nor
any Lender shall have any further obligations with respect to the
Tranche B Credit Facility. Furthermore, following such assignment,
the applicable Tranche A Loan Documents and the applicable Tranche
B Loan Documents shall be amended, supplemented and/or restated to
reflect such fact and to sever the two facilities. So long as the
amendments, supplements and/or restatements of the applicable
Tranche A Loan Documents and Tranche B Loan Documents contain the
same terms as the current Tranche A Loan Documents and Tranche B
Loan Documents and the severing of the two facilities is not
materially adverse to the Borrower, the aforementioned assignment
and amendments, supplements and/or restatements shall not require
the prior consent of the Borrower, and the Borrower hereby
irrevocably appoints the Agent as the Borrower's attorney-in-fact,
with full authority in the place and stead of the Borrower and in
the name of the Borrower or otherwise, from time to time in the
Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable in
connection with such assignment and amendments, supplements and/or
restatements. In the event of any such assignment, Section 4.06(d)
shall no longer be applicable.
Section 3.18 Standstill. In the event Halliburton or
its designee becomes the holder of the Tranche B Loan Documents
whether pursuant to an assignment under Section 3.17 or by way of
subrogation, (a) Halliburton agrees that it shall not institute any
proceedings or seek any other remedy allowed at law or in equity to
enforce the Subordinated Indebtedness, except for any of its rights
to foreclose upon or exercise any other remedies with respect to
Brazos A-19 or the MMR Guaranty (if applicable) until the earlier
of (x) the date upon which any such actions are taken with respect
to the Senior Obligations, and (y) the date which is 90 days from
and after the earlier of (i) the date of assignment of the
Subordinated Indebtedness and the Tranche B Loan Documents to
Halliburton or its designee, and (ii) the date of payment in full
of the Tranche B Indebtedness to the Lenders in satisfaction of the
Halliburton Guaranty, and (b) following the expiration of the 90-
day period, Halliburton or its designee shall have the right to
institute proceedings against the Borrower and to enforce its
rights in the Liens securing the Tranche B Indebtedness, subject to
the terms and provisions of Sections 3.03 through 3.05 and 3.07
through 3.16.
ARTICLE IV
Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments. Except to the extent otherwise
provided herein, all payments of principal, interest and other
amounts to be made by the Borrower under the Tranche B Loan
Documents shall be made in Dollars, in immediately available funds,
to the Agent at such account as the Agent shall specify by notice
to the Borrower from time to time, not later than 11:00 a.m.
Houston, Texas time on the date on which such payments shall become
due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).
Such payments shall be made without (to the fullest extent
permitted by applicable law) defense, set-off or counterclaim.
Each payment received by the Agent under this Agreement or any
Tranche B Note for account of a Lender shall be paid promptly to
such Lender in immediately available funds. Except as provided in
clause (iii) of the definition of "Interest Period", if the due
date of any payment under this Agreement or any Tranche B Note
would otherwise fall on a day which is not a Business Day such date
shall be extended to the next succeeding Business Day and interest
shall be payable for any principal so extended for the period of
such extension. At the time of each payment to the Agent of any
principal of or interest on any borrowing, the Borrower shall
notify the Agent of the Tranche B Loans to which such payment shall
apply. In the absence of such notice the Agent may specify the
Tranche B Loans to which such payment shall apply, but to the
extent possible such payment or prepayment will be applied first to
the Tranche B Loans comprised of Tranche B Base Rate Loans.
Section 4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein each Lender agrees that: (i) each
borrowing from the Lenders under Section 2.01 and each continuation
and conversion under Section 2.02 shall be made from the Lenders
pro rata in accordance with their Percentage Share, each payment of
commitment fee or other fees under Sections 2.04(a), (b) and (c)
shall be made for account of the Lenders pro rata in accordance
with their Percentage Share, and each termination or reduction of
the amount of the Aggregate Maximum Tranche B Credit Amounts or the
Aggregate Tranche B Commitments under Section 2.03 shall be applied
to the Maximum Tranche B Credit Amount or the Tranche B Commitment
of each Lender, as the case may be, pro rata according to the
amounts of its respective Tranche B Commitment; (ii) each payment
of principal of Tranche B Loans by the Borrower shall be made for
account of the Lenders pro rata in accordance with the respective
unpaid principal amount of the Tranche B Loans held by the Lenders;
(iii) each payment of interest on Tranche B Loans by the Borrower
shall be made for account of the Lenders pro rata in accordance
with the amounts of interest due and payable to the respective
Lenders; (iv) each reimbursement by the Borrower of disbursements
under Tranche B Letters of Credit shall be made for account of the
Agent or, if funded by the Lenders, pro rata for the account of the
Lenders, in accordance with the amounts of reimbursement
obligations due and payable to each respective Lender; and (v) each
increase in the Aggregate Maximum Tranche B Credit Amount pursuant
to Section 2.03(d) shall result in an increase to the Maximum
Tranche B Credit Amount of each Lender, pro rata according to the
amount of its respective Tranche B Commitment.
Section 4.03 Computations. Interest on Tranche B
Eurodollar Loans shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which such interest is
payable, unless such calculation would exceed the Highest Lawful
Rate, in which case interest shall be calculated on the per annum
basis of a year of 365 or 366 days, as the case may be. Interest
on Tranche B Base Rate Loans and fees shall be computed on the
basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed (including the first day but excluding the last day)
occurring in the period for which such interest is payable.
Section 4.04 Non-receipt of Funds by the Agent. Unless
the Agent shall have been notified by a Lender or the Borrower
prior to the date on which such notifying party is scheduled to
make payment to the Agent (in the case of a Lender) of the proceeds
of a Tranche B Loan or a payment under a Tranche B Letter of Credit
to be made by it hereunder or (in the case of the Borrower) a
payment to the Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that it
does not intend to make the Required Payment to the Agent, the
Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient(s) on
such date and, if such Lender or the Borrower (as the case may be)
has not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent
the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such
amount was so made available by the Agent until but excluding the
date the Agent recovers such amount at a rate per annum which, for
any Lender as recipient, will be equal to the Federal Funds Rate,
and for the Borrower as recipient, will be equal to the Base Rate
plus the Applicable Margin.
Section 4.05 Set-off, Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or
counterclaim a Lender may otherwise have, each Lender shall
have the right and be entitled (after consultation with the
Agent), at its option, to offset balances held by it or by any
of its Affiliates for account of the Borrower or any
Restricted Subsidiary at any of its offices, in Dollars or in
any other currency, against any principal of or interest on
any of such Lender's Tranche B Loans, or any other amount
payable to such Lender hereunder, which is not paid when due
(regardless of whether such balances are then due to the
Borrower), in which case it shall promptly notify the Borrower
and the Agent thereof, provided that such Lender's failure to
give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal
of or interest on any Tranche B Loan made by it to the
Borrower under this Agreement (or reimbursement as to any
Tranche B Letter of Credit) through the exercise of any right
of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Lender shall
have received a greater percentage of the principal or
interest (or reimbursement) then due hereunder by the Borrower
to such Lender than the percentage received by any other
Lenders, it shall promptly (i) notify the Agent and each other
Lender thereof and (ii) purchase from such other Lenders
participations in (or, if and to the extent specified by such
Lender, direct interests in) the Tranche B Loans (or
participations in Tranche B Letters of Credit) made by such
other Lenders (or in interest due thereon, as the case may be)
in such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all the Lenders
shall share the benefit of such excess payment (net of any
expenses which may be incurred by such Lender in obtaining or
preserving such excess payment) pro rata in accordance with
the unpaid principal and/or interest on the Tranche B Loans
held by each of the Lenders (or reimbursements of Tranche B
Letters of Credit). To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded
or must otherwise be restored. The Borrower agrees that any
Lender so purchasing a participation (or direct interest) in
the Tranche B Loans made by other Lenders (or in interest due
thereon, as the case may be) may exercise all rights of set-
off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were
a direct holder of Tranche B Loans (or Tranche B Letters of
Credit) in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such
right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect
to any other indebtedness or obligation of the Borrower. If
under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a set-off
to which this Section 4.05 applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the
Lenders entitled under this Section 4.05 to share the benefits
of any recovery on such secured claim.
Section 4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by
the Borrower hereunder shall be made, in accordance with
Section 4.01, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent,
taxes imposed on its income, and franchise or similar taxes
imposed on it, by (i) any jurisdiction (or political
subdivision thereof) of which the Agent or such Lender, as the
case may be, is a citizen or resident or in which such Lender
has an Applicable Lending Office, (ii) the jurisdiction (or
any political subdivision thereof) in which the Agent or such
Lender is organized, or (iii) any jurisdiction (or political
subdivision thereof) in which such Lender or the Agent is
presently doing business in which taxes are imposed solely as
a result of doing business in such jurisdiction (all such non-
excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder to
the Lenders or the Agent (i) the sum payable shall be
increased by the amount necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 4.06) such Lender
or the Agent (as the case may be) shall receive an amount
equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in
accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent
permitted by applicable law, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise
from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement, any Assignment or any Tranche B Security
Instrument (hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BUT SUBJECT TO SECTION 4.06(d)(ii), THE
BORROWER WILL INDEMNIFY EACH LENDER AND THE AGENT FOR THE FULL
AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, BUT NOT LIMITED
TO, ANY TAXES OR OTHER TAXES IMPOSED BY ANY GOVERNMENTAL
AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY
SUCH LENDER OR THE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY
LENDER), AS THE CASE MAY BE, AND ANY LIABILITY (INCLUDING
PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH
RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE
CORRECTLY OR LEGALLY ASSERTED UNLESS THE PAYMENT OF SUCH TAXES
WAS NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH LENDER'S
PAYMENT OF SUCH TAXES OR OTHER TAXES WAS THE RESULT OF ITS
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. ANY PAYMENT PURSUANT
TO SUCH INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS
AFTER THE DATE ANY LENDER OR THE AGENT, AS THE CASE MAY BE,
MAKES WRITTEN DEMAND THEREFOR. IF ANY LENDER OR THE AGENT
RECEIVES A REFUND OR CREDIT IN RESPECT OF ANY TAXES OR OTHER
TAXES FOR WHICH SUCH LENDER OR THE AGENT HAS RECEIVED PAYMENT
FROM THE BORROWER IT SHALL PROMPTLY NOTIFY THE BORROWER OF
SUCH REFUND OR CREDIT AND SHALL, IF NO DEFAULT HAS OCCURRED
AND IS CONTINUING, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A
REQUEST BY THE BORROWER (OR PROMPTLY UPON RECEIPT, IF THE
BORROWER HAS REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT
PURSUANT HERETO), PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT
TO THE BORROWER WITHOUT INTEREST (BUT WITH ANY INTEREST SO
REFUNDED OR CREDITED), PROVIDED THAT THE BORROWER, UPON THE
REQUEST OF SUCH LENDER OR THE AGENT, AGREES TO RETURN SUCH
REFUND OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES)
TO SUCH LENDER OR THE AGENT IN THE EVENT SUCH LENDER OR THE
AGENT IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.
(d) Lender Representations.
(i) Each Lender represents that it is either (1) a
corporation or banking association organized under the
laws of the United States of America or any state thereof
or (2) it is entitled to complete exemption from United
States withholding tax imposed on or with respect to any
payments, including fees, to be made to it pursuant to
this Agreement (A) under an applicable provision of a tax
convention to which the United States of America is a
party or (B) because it is acting through a branch,
agency or office in the United States of America and any
payment to be received by it hereunder is effectively
connected with a trade or business in the United States
of America. Each Lender that is not a corporation or
banking association organized under the laws of the
United States of America or any state thereof agrees to
provide to the Borrower and the Agent on the Closing
Date, or on the date of its delivery of the Assignment
pursuant to which it becomes a Lender, and at such other
times as required by United States law or as the Borrower
or the Agent shall reasonably request, two accurate and
complete original signed copies of either (A) Internal
Revenue Service Form 4224 (or successor form) certifying
that all payments to be made to it hereunder will be
effectively connected to a United States trade or
business (the "Form 4224 Certification") or (B) Internal
Revenue Service Form 1001 (or successor form) certifying
that it is entitled to the benefit of a provision of a
tax convention to which the United States of America is
a party which completely exempts from United States
withholding tax all payments to be made to it hereunder
(the "Form 1001 Certification"). In addition, each
Lender agrees that if it previously filed a Form 4224
Certification, it will deliver to the Borrower and the
Agent a new Form 4224 Certification prior to the first
payment date occurring in each of its subsequent taxable
years; and if it previously filed a Form 1001
Certification, it will deliver to the Borrower and the
Agent a new certification prior to the first payment date
falling in the third year following the previous filing
of such certification. Each Lender also agrees to
deliver to the Borrower and the Agent such other or
supplemental forms as may at any time be required as a
result of changes in applicable law or regulation in
order to confirm or maintain in effect its entitlement to
exemption from United States withholding tax on any
payments hereunder, provided that the circumstances of
such Lender at the relevant time and applicable laws
permit it to do so. If a Lender determines, as a result
of any change in either (i) a Governmental Requirement or
(ii) its circumstances, that it is unable to submit any
form or certificate that it is obligated to submit
pursuant to this Section 4.06, or that it is required to
withdraw or cancel any such form or certificate
previously submitted, it shall promptly notify the
Borrower and the Agent of such fact. If a Lender is
organized under the laws of a jurisdiction outside the
United States of America, unless the Borrower and the
Agent have received a Form 1001 Certification or
Form 4224 Certification satisfactory to them indicating
that all payments to be made to such Lender hereunder are
not subject to United States withholding tax, the
Borrower shall withhold taxes from such payments at the
applicable statutory rate. Each Lender agrees to
indemnify and hold harmless the Borrower or Agent, as
applicable, from any United States taxes, penalties,
interest and other expenses, costs and losses incurred or
payable by (i) the Agent as a result of such Lender's
failure to submit any form or certificate that it is
required to provide pursuant to this Section 4.06 or
(ii) the Borrower or the Agent as a result of their
reliance on any such form or certificate which such
Lender has provided to them pursuant to this
Section 4.06.
(ii) For any period with respect to which a Lender
has failed to provide the Borrower with the form required
pursuant to this Section 4.06, if any, (other than if
such failure is due to a change in a Governmental
Requirement occurring subsequent to the date on which a
form originally was required to be provided), such Lender
shall not be entitled to indemnification under Section
4.06 with respect to taxes imposed by the United States
which taxes would not have been imposed but for such
failure to provide such forms; provided, however, that
should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax becomes
subject to taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as
such Lender shall reasonably request to assist such
Lender to recover such taxes.
(iii) Any Lender claiming any additional
amounts payable pursuant to this Section 4.06 shall use
reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document
requested by the Borrower or the Agent or to change the
jurisdiction of its Applicable Lending Office or to
contest any tax imposed if the making of such a filing or
change or contesting such tax would avoid the need for or
reduce the amount of any such additional amounts that may
thereafter accrue and would not, in the sole
determination of such Lender, be otherwise
disadvantageous to such Lender.
Section 4.07 Disposition of Proceeds. The Tranche B
Security Instruments contain an assignment by the Borrower or a
Restricted Subsidiary, as the case may be, unto and in favor of the
Agent for the benefit of the Lenders of all production and all
proceeds attributable thereto which may be produced from or
allocated to the Mortgaged Property, and the Tranche B Security
Instruments further provide in general for the application of such
proceeds to the satisfaction of the Tranche B Indebtedness and
other obligations described therein and secured thereby.
Notwithstanding the assignment contained in such Tranche B Security
Instruments, until the occurrence of an Event of Default, the
Lenders agree that they will neither notify the purchaser or
purchasers of such production nor take any other action to cause
such proceeds to be remitted to the Lenders, but the Lenders will
instead permit such proceeds to be paid to the Borrower or such
Restricted Subsidiary.
ARTICLE V
Capital Adequacy
Section 5.01 Additional Costs. Subject to the
provisions of Section 3.03 through 3.18:
(a) Eurodollar Regulations, etc. The Borrower shall pay
directly to each Lender from time to time such amounts as such
Lender may determine to be necessary to compensate such Lender
for any costs which it determines are attributable to its
making or maintaining of any Tranche B Eurodollar Loans or
issuing or participating in Tranche B Letters of Credit
hereunder or its obligation to make any Tranche B Eurodollar
Loans or issue or participate in any Tranche B Letters of
Credit hereunder, or any reduction in any amount receivable by
such Lender hereunder in respect of any of such Tranche B
Eurodollar Loans, Tranche B Letters of Credit or such
obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting
from any Regulatory Change which: (i) changes the basis of
taxation of any amounts payable to such Lender under this
Agreement or any Tranche B Note in respect of any of such
Tranche B Eurodollar Loans or Tranche B Letters of Credit
(other than taxes imposed on the overall net income of such
Lender or of its Applicable Lending Office for any of such
Tranche B Eurodollar Loans by the jurisdiction in which such
Lender has its principal office or Applicable Lending Office);
or (ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio or similar requirements
relating to any extensions of credit or other assets of, or
any deposits with or other liabilities of such Lender, or the
Tranche B Commitment or Tranche B Loans of such Lender or the
Eurodollar interbank market; or (iii) imposes any other
condition affecting this Agreement or any Tranche B Note (or
any of such extensions of credit or liabilities) or such
Lender's Tranche B Commitment or Tranche B Loans. Each Lender
will notify the Agent and the Borrower of any event occurring
after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 5.01(a) as promptly as
practicable after it obtains knowledge thereof and determines
to request such compensation, and will designate a different
Applicable Lending Office for the Tranche B Loans of such
Lender affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation and
will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, provided that such Lender
shall have no obligation to so designate an Applicable Lending
Office located in the United States. If any Lender requests
compensation from the Borrower under this Section 5.01(a), the
Borrower may, by notice to such Lender, suspend the obligation
of such Lender to make additional Tranche B Loans of the Type
with respect to which such compensation is requested until the
Regulatory Change giving rise to such request ceases to be in
effect (in which case the provisions of Section 5.04 shall be
applicable).
(b) Regulatory Change. Without limiting the effect of
the provisions of Section 5.01(a), in the event that, by
reason of any Regulatory Change or any other circumstances
arising after the Closing Date affecting such Lender, the
Eurodollar interbank market or such Lender's position in such
market, any Lender either (i) incurs Additional Costs based on
or measured by the excess above a specified level of the
amount of a category of deposits or other liabilities of such
Lender which includes deposits by reference to which the
interest rate on Tranche B Eurodollar Loans is determined as
provided in this Agreement or a category of extensions of
credit or other assets of such Lender which includes Tranche B
Eurodollar Loans or (ii) becomes subject to restrictions on
the amount of such a category of liabilities or assets which
it may hold, then, if such Lender so elects by notice to the
Borrower, the obligation of such Lender to make additional
Tranche B Eurodollar Loans shall be suspended until such
Regulatory Change or other circumstances ceases to be in
effect (in which case the provisions of Section 5.04 shall be
applicable).
(c) Capital Adequacy. Without limiting the effect of
the foregoing provisions of this Section 5.01 (but without
duplication), the Borrower shall pay directly to any Lender
from time to time on request such amounts as such Lender may
reasonably determine to be necessary to compensate such Lender
or its parent or holding company for any costs which it
determines are attributable to the maintenance by such Lender
or its parent or holding company (or any Applicable Lending
Office), pursuant to any Governmental Requirement following
any Regulatory Change, of capital in respect of its Tranche B
Commitment, its Tranche B Notes, its Tranche B Loans or any
interest held by it in any Tranche B Letter of Credit, such
compensation to include, without limitation, an amount equal
to any reduction of the rate of return on assets or equity of
such Lender or its parent or holding company (or any
Applicable Lending Office) to a level below that which such
Lender or its parent or holding company (or any Applicable
Lending Office) could have achieved but for such Governmental
Requirement. Such Lender will notify the Borrower that it is
entitled to compensation pursuant to this Section 5.01(c) as
promptly as practicable after it determines to request such
compensation.
(d) Compensation Procedure. Any Lender notifying the
Borrower of the incurrence of additional costs under this
Section 5.01 shall deliver such notice to the Borrower as soon
as practicable and in any event within ninety (90) days after
the change or other event giving rise to the incurrence of
such additional costs and shall in such notice to the Borrower
and the Agent set forth in reasonable detail the basis and
amount of its request for compensation. Determinations and
allocations by each Lender for purposes of this Section 5.01
of the effect of any Regulatory Change pursuant to Section
5.01(a) or (b), or of the effect of capital maintained
pursuant to Section 5.01(c), on its costs or rate of return of
maintaining Tranche B Loans or its obligation to make Tranche
B Loans or issue Tranche B Letters of Credit, or on amounts
receivable by it in respect of Tranche B Loans or Tranche B
Letters of Credit, and of the amounts required to compensate
such Lender under this Section 5.01, shall be conclusive and
binding for all purposes, provided that such determinations
and allocations are made on a reasonable basis. Any request
for additional compensation under this Section 5.01 shall be
paid by the Borrower within thirty (30) days of the receipt by
the Borrower of the notice described in this Section 5.01(d).
Section 5.02 Limitation on Tranche B Eurodollar Loans.
Anything herein to the contrary notwithstanding, if, on or prior
to the determination of any Eurodollar Rate for any Interest
Period:
(i) the Agent determines (which determination
shall be conclusive, absent manifest error) that
quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Rate" in
Section 1.02 are not being provided in the relevant
amounts or for the relevant maturities for purposes of
determining rates of interest for Tranche B Eurodollar
Loans as provided herein; or
(ii) the Agent determines (which determination
shall be conclusive, absent manifest error) that the
relevant rates of interest referred to in the definition
of "Eurodollar Rate" in Section 1.02 upon the basis of
which the rate of interest for Tranche B Eurodollar Loans
for such Interest Period is to be determined are not
sufficient to adequately cover the cost to the Lenders of
making or maintaining Tranche B Eurodollar Loans;
then the Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be
under no obligation to make additional Tranche B Eurodollar Loans.
Section 5.03 Illegality. Notwithstanding any other
provision of this Agreement, in the event that it becomes unlawful
for any Lender or its Applicable Lending Office to honor its
obligation to make or maintain Tranche B Eurodollar Loans
hereunder, then such Lender shall promptly notify the Borrower
thereof and such Lender's obligation to make Tranche B Eurodollar
Loans shall be suspended until such time as such Lender may again
make and maintain Tranche B Eurodollar Loans (in which case the
provisions of Section 5.04 shall be applicable).
Section 5.04 Tranche B Base Rate Loans Pursuant to
Sections 5.01, 5.02 and 5.03. If the obligation of any Lender to
make Tranche B Eurodollar Loans shall be suspended pursuant to
Sections 5.01, 5.02 or 5.03 ("Affected Tranche B Loans"), all
Affected Tranche B Loans which would otherwise be made by such
Lender shall be made instead as Tranche B Base Rate Loans (and, if
an event referred to in Section 5.01(b) or Section 5.03 has
occurred and such Lender so requests by notice to the Borrower, all
Affected Tranche B Loans of such Lender then outstanding shall be
automatically converted into Tranche B Base Rate Loans on the date
specified by such Lender in such notice) and, to the extent that
Affected Tranche B Loans are so made as (or converted into) Tranche
B Base Rate Loans, all payments of principal which would otherwise
be applied to such Lender's Affected Tranche B Loans shall be
applied instead to its Tranche B Base Rate Loans.
Section 5.05 Compensation. The Borrower shall pay to
each Lender within thirty (30) days of receipt of written request
of such Lender (which request shall set forth, in reasonable
detail, the basis for requesting such amounts and which shall be
conclusive and binding for all purposes provided that such
determinations are made on a reasonable basis), such amount or
amounts as shall compensate it for any loss, cost, expense or
liability which such Lender determines are attributable to:
(i) any payment, prepayment or conversion of a
Tranche B Eurodollar Loan properly made by such Lender or
the Borrower for any reason (including, without
limitation, the acceleration of the Tranche B Loans
pursuant to Section 10.02) on a date other than the last
day of the Interest Period for such Tranche B Loan;
(ii) any failure by the Borrower for any reason
(including but not limited to, the failure of any of the
conditions precedent specified in Article VI to be
satisfied) to borrow, continue or convert a Tranche B
Eurodollar Loan from such Lender on the date for such
borrowing, continuation or conversion specified in the
relevant notice given pursuant to Section 2.02(c); or
(iii) the revocation by the Borrower of (a) a
revocable notice of borrowing delivered pursuant to
Section 2.02(c) or (b) a revocable request for the
issuance of a Tranche B Letter of Credit delivered
pursuant to Section 2.02(g) or (c) a revocable notice of
reduction or termination delivered pursuant to Section
2.03(b) or (d) a revocable notice of prepayment delivered
pursuant to Section 2.07(a).
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or converted or not borrowed for
the period from the date of such payment, prepayment or conversion
or failure to borrow to the last day of the Interest Period for
such Tranche B Loan (or, in the case of a failure to borrow, the
Interest Period for such Tranche B Loan which would have commenced
on the date specified for such borrowing) at the applicable rate of
interest for such Tranche B Loan provided for herein over (ii) the
interest component of the amount such Lender would have bid in the
London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such
Lender).
Section 5.06 Replacement Lenders.
(a) If any Lender has notified the Borrower and the
Agent of its incurring additional costs under Section 5.01
hereof or has required the Borrower to make payments for Taxes
under Section 4.06 hereof, then the Borrower may, unless such
Lender has notified the Borrower and the Agent that the
circumstances giving rise to such notice no longer apply,
terminate, in whole but not in part, the Tranche B Commitment
of any Lender (other than the Agent) (the "Terminated Lender")
at any time upon five (5) Business Days' prior written notice
to the Terminated Lender and the Agent (such notice referred
to herein as a "Notice of Termination").
(b) In order to effect the termination of the Tranche B
Commitment of the Terminated Lender, the Borrower shall: (i)
obtain an agreement with one or more Lenders to increase their
Tranche B Commitment or Tranche B Commitments and/or (ii)
request any one or more other banking institutions to become
parties to this Agreement in place and instead of such
Terminated Lender and agree to accept a Tranche B Commitment
or Tranche B Commitments; provided, however, that such one or
more other banking institutions are reasonably acceptable to
the Agent and become parties by executing an Assignment (the
Lenders or other banking institutions that agree to accept in
whole or in part the Tranche B Commitment of the Terminated
Lender being referred to herein as the "Replacement Lenders"),
such that the aggregate increased and/or accepted Tranche B
Commitments of the Replacement Lenders under clauses (i) and
(ii) above equal the Tranche B Commitment of the Terminated
Lender.
(c) The Notice of Termination shall include the name of
the Terminated Lender, the date the termination will occur
(the "Lender Termination Date"), and the Replacement Lender or
Replacement Lenders to which the Terminated Lender will assign
its Tranche B Commitment and, if there will be more than one
Replacement Lender, the portion of the Terminated Lender's
Tranche B Commitment to be assigned to each Replacement
Lender.
(d) On the Lender Termination Date, (i) the Terminated
Lender shall by execution and delivery of an Assignment assign
its Tranche B Commitment to the Replacement Lender or
Replacement Lenders (pro rata, if there is more than one
Replacement Lender, in proportion to the portion of the
Terminated Lender's Tranche B Commitment to be assigned to
each Replacement Lender) indicated in the Notice of
Termination and shall assign to the Replacement Lender or
Replacement Lenders each of its Tranche B Loans (if any) then
outstanding and participation interests in Tranche B Letters
of Credit (if any) then outstanding (pro rata as aforesaid),
(ii) the Terminated Lender shall endorse its Tranche B Notes,
payable without recourse, representation or warranty to the
order of the Replacement Lender or Replacement Lenders (pro
rata as aforesaid), (iii) the Replacement Lender or
Replacement Lenders shall purchase the Tranche B Notes held by
the Terminated Lender (pro rata as aforesaid) at a price equal
to the unpaid principal amount thereof plus interest and
facility and other fees accrued and unpaid to the Lender
Termination Date, and (iv) the Replacement Lender or
Replacement Lenders will thereupon (pro rata as aforesaid)
succeed to and be substituted in all respects for the
Terminated Lender with like effect as if becoming a Lender
pursuant to the terms of Section 12.06(b), and the Terminated
Lender will have the rights and benefits of an assignor under
Section 12.06(b). To the extent not in conflict, the terms of
Section 12.06(b) shall supplement the provisions of this
Section 5.06(d). For each assignment made under this Section
5.06, the Replacement Lender shall pay to the Agent the
processing fee provided for in Section 12.06(b). The Borrower
will be responsible for the payment of any breakage costs
associated with termination of the Terminated Lender, as set
forth in Section 5.05.
(e) If any Lender is replaced pursuant to this Section
5.06 with respect to such Lender's Tranche B Commitment, such
Lender shall also be terminated with regard to its Tranche A
Commitment and any Replacement Lenders shall be the same.
ARTICLE VI
Conditions Precedent
Section 6.01 Initial Funding.
In addition to all conditions precedent contained in
Article VI of the Credit Agreement (other than Sections 6.01 (l)
and (m)), the obligation of the Lenders to make the Initial Funding
is subject to the receipt by the Agent and the Lenders of all fees
payable pursuant to Section 2.04 on or before the Closing Date and
the receipt by the Agent of the following documents and
satisfaction of the other conditions provided in this Section 6.01,
each of which shall be satisfactory to the Agent in form and
substance. Notwithstanding the fact that the "Initial Funding"
under the Credit Agreement shall not have occurred prior to the
Initial Funding hereunder, the conditions precedent contained in
Article VI of the Credit Agreement (other than Sections 6.01(l) and
(m)) are hereby deemed to be independent conditions precedent to
the Initial Funding hereunder.
(a) The Tranche B Notes, duly completed and executed.
(b) Receipt by the Agent of the fees due and payable
after the Closing Date as provided for in the Fee Letter.
(c) Receipt by the Agent of each of the Tranche B
Security Instruments, including those described on Exhibit E,
duly completed and executed in sufficient number of
counterparts for recording, if necessary, and otherwise in
recordable form and substance satisfactory to the Agent.
(d) Receipt by the Agent of such title information as
the Agent may require from attorneys satisfactory to the Agent
setting forth the status of title to 100% of the value of the
Hydrocarbon Interests covered by the Tranche B Security
Instruments.
(e) The Borrower shall be in compliance with all
covenants and agreements contained in Article VIII and Article
IX (after giving effect to the requested Tranche B Loan).
(f) Receipt by the Agent of a fully executed copy of the
Participation Agreement in form and substance reasonably
satisfactory to the Agent.
(g) A certificate of the Secretary of Halliburton
setting forth (i) resolutions of the board of directors of
Halliburton with respect to the authorization of Halliburton
to execute and deliver the Halliburton Guaranty and to enter
into the transactions contemplated therein, (ii) the officers
of Halliburton (y) who are authorized to sign the Halliburton
Guaranty and (z) who will, until replaced by another officer
or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and
giving notices and other communications in connection with the
Halliburton Guaranty and the transactions contemplated
thereby, (iii) specimen signatures of the authorized officers,
(iv) the articles or certificate of incorporation of
Halliburton, and (v) the by-laws of Halliburton, as amended,
all certified as being true and complete. The Agent and the
Lenders may conclusively rely on such certificate until the
Agent receives notice in writing from Halliburton to the
contrary.
(h) Certificates of the Secretary of State of Delaware
with respect to the existence, qualification and good standing
of Halliburton.
(i) A compliance certificate which shall be
substantially in the form of Exhibit C, duly and properly
executed by a Responsible Officer and dated as of the date of
the Initial Funding.
(j) An opinion of Xxxxx Xxxxxxxxx, Esq., in-house
counsel of Halliburton substantially in the form of Exhibit G.
(k) An opinion of Xxxxxx & Xxxxxxxx, P.C., counsel to
Halliburton, regarding enforceability of the Halliburton
Guaranty, substantially in the form of Exhibit H.
(l) Receipt of the executed Halliburton Guaranty.
(m) The Agent shall have been furnished with appropriate
UCC search certificates reflecting no prior liens or security
interests.
(n) A certificate of insurance coverage of the Borrower
evidencing that the Borrower is carrying insurance in
accordance with Section 7.19 herein.
(o) Receipt by the Agent of such other documents as the
Agent or any Lender or special counsel to the Agent may
reasonably request.
Section 6.02 Initial and Subsequent Tranche B Loans and
Tranche B Letters of Credit. The obligation of the Lenders to make
Tranche B Loans to the Borrower upon the occasion of each borrowing
hereunder and to issue, renew, extend or reissue Tranche B Letters
of Credit for the account of the Borrower (including the Initial
Funding) is subject to the further conditions precedent that, as of
the date of such Tranche B Loans or Tranche B Letters of Credit or
increase, as the case may be, and after giving effect thereto:
(i) no Default shall have occurred and be continuing; (ii) no
Material Adverse Effect shall have occurred; (iii) the
representations and warranties made by the Borrower in Article VII
and by the Borrower or any Restricted Subsidiary in the Tranche B
Security Instruments shall be true on and as of the date of the
making of such Tranche B Loans or issuance, renewal, extension or
reissuance of a Tranche B Letter of Credit, as the case may be,
with the same force and effect as if made on and as of such date
and following such new borrowing, issuance or increase, except to
the extent such representations and warranties are expressly
limited to an earlier date or the Majority Lenders may expressly
consent in writing to the contrary; and (iv) the aggregate
outstanding amount of investments, loans and advances permitted by
Section 9.03(b) and net dividends, distributions and redemptions
permitted by Section 9.04, shall not exceed $7,000,000.00. Each
request for a borrowing or issuance, renewal, extension or
reissuance of a Tranche B Letter of Credit by the Borrower
hereunder shall constitute a certification by the Borrower to the
effect set forth in the preceding sentence (both as of the date of
such notice and, unless the Borrower otherwise notifies the Agent
prior to the date of and immediately following such borrowing or
issuance, renewal, extension or reissuance of a Tranche B Letter of
Credit, as of the date thereof).
Section 6.03 Conditions Relating to Tranche B Letters of
Credit. In addition to the satisfaction of all other conditions
precedent set forth in this Article VI, the issuance, renewal,
extension or reissuance of the Tranche B Letters of Credit referred
to in Section 2.01(b) hereof is subject to the following conditions
precedent:
(a) At least three (3) Business Days prior to the date
of the issuance and at least thirty (30) Business Days prior
to the date of the renewal, extension or reissuance of each
Tranche B Letter of Credit, the Agent shall have received a
written request for a Tranche B Letter of Credit, in
accordance with Section 2.02(g) hereof.
(b) Each of the Tranche B Letters of Credit shall (i) be
issued by the Agent, (ii) contain such terms and provisions as
are reasonably required by the Agent, (iii) be for the account
of the Borrower and (iv) expire not later than the earlier of
one (1) year from the date of issuance, renewal, extension or
reissuance or two (2) days before the Termination Date.
(c) The Borrower shall have duly and validly executed
and delivered to the Agent a Tranche B Letter of Credit
Agreement pertaining to the Tranche B Letter of Credit.
ARTICLE VII
Representations and Warranties
The Borrower represents and warrants to the Agent and the
Lenders that (each representation and warranty herein is given as
of the Closing Date and shall be deemed repeated and reaffirmed on
the dates of each borrowing and issuance, renewal, extension or
reissuance of a Tranche B Letter of Credit as provided in Section
6.03):
Section 7.01 Existence. Each of the Borrower and each
Restricted Subsidiary: (i) is a corporation or limited liability
company duly organized, legally existing and in good standing under
the laws of the jurisdiction of its incorporation or formation;
(ii) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to
be conducted; and (iii) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure so to qualify
would have a Material Adverse Effect.
Section 7.02 Financial Condition. The audited
consolidated financial statements of MMR and its Consolidated
Subsidiaries as at December 31, 1999, and the balance sheet of the
Borrower and its Consolidated Subsidiaries as at December 31, 1999
and the related statement of income, member's capital and cash flow
of the Borrower and its Consolidated Subsidiaries for the fiscal
year ended on said date, in each case as included in the
consolidating statements of MMR and its Consolidated Subsidiaries
as of said date with the opinion thereon of Xxxxxx Xxxxxxxx LLP
heretofore furnished to each of the Lenders and the unaudited
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at March 31, 2000 and the related consolidated
statements of income, members capital and cash flow of the Borrower
and its Consolidated Subsidiaries for the three-month period ended
on such date heretofore furnished to the Agent, are complete and
correct and fairly present the consolidated financial condition of
the Borrower and its Consolidated Subsidiaries as at said date and
the results of its operations for the fiscal year and the three-
month period ended on said date, all in accordance with GAAP, as
applied on a consistent basis (subject, in the case of the interim
financial statements, to normal year-end adjustments). Neither the
Borrower nor any Subsidiary has on the Closing Date any material
Debt, contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, in each case, that would
be required to be reserved for in the Financial Statements in
accordance with GAAP, except as referred to or reflected or
provided for in the Financial Statements or in Schedule 7.02.
Except as set forth on Schedule 7.10, since March 31, 2000, there
has been no change or event having a Material Adverse Effect.
Except as set forth on Schedule 7.10, since the date of the
Financial Statements, neither the business nor the Properties of
the Borrower or any Subsidiary have been materially and adversely
affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance,
embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any Governmental Authority,
riot, activities of armed forces or acts of God or of any public
enemy.
Section 7.03 Litigation. Except as disclosed to the
Lenders in Schedule 7.03 hereto, at the Closing Date there is no
litigation, legal, administrative or arbitral proceeding,
investigation or other action of any nature pending or, to the
knowledge of the Borrower threatened against or affecting the
Borrower or any Restricted Subsidiary as to which there is a
reasonable possibility of an adverse determination and which, if
adversely determined, could, individually or in the aggregate,
materially impair the ability of the Borrower to conduct its
business substantially as now conducted, or materially and
adversely affect the businesses, assets, operations, prospects or
condition, financial or otherwise, of the Borrower, or impair the
validity or enforceability of, or the ability of the Borrower to
perform its obligations under, this Agreement or any of the other
Tranche B Loan Documents to which it is a party, in each case,
taking into account any applicable insurance.
Section 7.04 No Breach. Neither the execution and
delivery of the Tranche B Loan Documents, nor compliance with the
terms and provisions hereof will conflict with or result in a
breach of, or require any consent which has not been obtained as of
the Closing Date under, the respective charter or by-laws of the
Borrower or any Restricted Subsidiary, or any Governmental
Requirement or any agreement or instrument to which the Borrower or
any Restricted Subsidiary is a party or by which it is bound or to
which it or its Properties are subject, or constitute a default
under any such agreement or instrument, or result in the creation
or imposition of any Lien upon any of the revenues or assets of the
Borrower or any Restricted Subsidiary pursuant to the terms of any
such agreement or instrument other than the Liens created by the
Tranche B Loan Documents and those permitted under Section 9.02.
Section 7.05 Authority. The Borrower and each
Restricted Subsidiary have all necessary power and authority to
execute, deliver and perform its obligations under the Tranche B
Loan Documents to which it is a party; and the execution, delivery
and performance by the Borrower and each Restricted Subsidiary of
the Tranche B Loan Documents to which it is a party, have been duly
authorized by all necessary corporate action on its part; and the
Tranche B Loan Documents constitute the legal, valid and binding
obligations of the Borrower and each Restricted Subsidiary,
enforceable in accordance with their terms.
Section 7.06 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any Governmental
Authority are necessary for the execution, delivery or performance
by the Borrower or any Restricted Subsidiary of the Tranche B Loan
Documents or for the validity or enforceability thereof, except for
the recording and filing of the Tranche B Security Instruments as
required by this Agreement.
Section 7.07 Use of Tranche B Loans. The proceeds of
the Tranche B Loans shall be used to (a) explore for and develop
the Borrower's reserves from its Oil and Gas Properties,
(b) provide funding for acquisitions of Oil and Gas Properties and
(c) for general corporate purposes. The Borrower is not engaged
principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying margin stock (within the meaning
of Regulation G, U or X of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of any Tranche B Loan
hereunder will be used to buy or carry any margin stock.
Section 7.08 ERISA.
(a) The Borrower and each Restricted Subsidiary have
complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan.
(b) Each Plan of the Borrower and of each Restricted
Subsidiary is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
(c) To the knowledge of the Borrower, no act, omission
or transaction has occurred which could result in imposition
on the Borrower or on any Restricted Subsidiary (whether
directly or indirectly) of (i) either a civil penalty assessed
pursuant to section 502(c), (i) or (l) of ERISA or a tax
imposed pursuant to Chapter 43 of Subtitle D of the Code or
(ii) breach of fiduciary duty liability damages under section
409 of ERISA.
(d) No Plan (other than a defined contribution plan) or
any trust created under any such Plan has been terminated
since September 2, 1974. No liability to the PBGC (other than
for the payment of current premiums which are not past due) by
the Borrower, any Subsidiary or any ERISA Affiliate has been
or is expected by the Borrower, any Subsidiary or any ERISA
Affiliate to be incurred with respect to any Plan. No ERISA
Event with respect to any Plan has occurred.
(e) Full payment when due has been made of all amounts
which the Borrower, any Subsidiary or any ERISA Affiliate is
required under the terms of each Plan or applicable law to
have paid as contributions to such Plan, and no accumulated
funding deficiency (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, exists with
respect to any Plan.
(f) The actuarial present value of the benefit
liabilities under each Plan which is subject to Title IV of
ERISA does not, as of the end of the Borrower's most recently
ended fiscal year, exceed the current value of the assets
(computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit
liabilities. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in section 4041
of ERISA.
(g) Neither the Borrower nor any Restricted Subsidiary
sponsors, maintains, or contributes to an employee welfare
benefit plan, as defined in section 3(1) of ERISA, including,
without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be
terminated by the Borrower or a Restricted Subsidiary or any
ERISA Affiliate in its sole discretion at any time without any
material liability.
(h) None of the Borrower, any Subsidiary or any ERISA
Affiliate sponsors, maintains or contributes to, or has at any
time in the preceding six calendar years, sponsored,
maintained or contributed to, any Multiemployer Plan.
(i) None of the Borrower, any Subsidiary or any ERISA
Affiliate is required to provide security under section
401(a)(29) of the Code due to a Plan amendment that results in
an increase in current liability for the Plan.
Section 7.09 Taxes. Except as set out in Schedule 7.09,
each of the Borrower and the Restricted Subsidiaries has filed all
United States Federal income tax returns and all other tax returns
which are required to be filed by them and have paid all material
taxes due pursuant to such returns or pursuant to any assessment
received by the Borrower or any Restricted Subsidiary, other than
any taxes the validity of which the Borrower or the relevant
Restricted Subsidiary is contesting in good faith by appropriate
proceedings, and with respect to which the Borrower or such
Restricted Subsidiary shall, to the extent required by GAAP, have
set aside on its books adequate reserves. The charges, accruals
and reserves on the books of the Borrower and the Restricted
Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of the Borrower, adequate. No tax lien has
been filed and, to the knowledge of the Borrower, no claim is being
asserted with respect to any such tax, fee or other charge.
Section 7.10 Titles, etc.
(a) Except as set out in the title reports delivered to
the Agent prior to the Closing Date, each of the Borrower and
the Restricted Subsidiaries has good and defensible title to
its material (individually or in the aggregate) Properties,
free and clear of all Liens except Liens permitted by Section
9.02. Except as set forth in Schedules 7.10 and 7.22, after
giving full effect to the Excepted Liens, the Borrower or each
Restricted Subsidiary, as applicable, owns the net interests
in production attributable to the Hydrocarbon Interests
reflected in Schedule 7.22 and the ownership of such
Properties shall not in any material respect obligate the
Borrower or any Restricted Subsidiary to bear the costs and
expenses relating to the maintenance, development and opera-
tions of each such Property in an amount in excess of the
working interest of each Property set forth in Schedule 7.22.
(b) All leases and agreements necessary for the conduct
of the business of the Borrower and the Restricted
Subsidiaries are valid and subsisting, in full force and
effect and there exists no default or event or circumstance
which with the giving of notice or the passage of time or both
would give rise to a default under any such lease or leases,
which would affect in any material respect the conduct of the
business of the Borrower and the Restricted Subsidiaries.
(c) The rights, Properties and other assets presently
owned, leased or licensed by the Borrower and the Restricted
Subsidiaries including, without limitation, all easements and
rights of way, include all rights, Properties and other assets
necessary to permit the Borrower and the Restricted
Subsidiaries to conduct their business in all material
respects in the same manner as its business has been conducted
prior to the Closing Date.
(d) Except as set forth on Schedule 7.10, all of the
assets and Properties of the Borrower and the Restricted
Subsidiaries which are reasonably necessary for the operation
of its business are in good working condition and are
maintained in accordance with prudent business standards.
Section 7.11 No Material Misstatements. No written
information, statement, exhibit, certificate, document or report
furnished to the Agent and the Lenders (or any of them) by the
Borrower or any Subsidiary in connection with the negotiation of
this Agreement contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading in the light
of the circumstances in which made and with respect to the Borrower
and the Subsidiaries taken as a whole. There is no fact peculiar
to the Borrower or any Subsidiary which has a Material Adverse
Effect or in the future is reasonably likely to have (so far as the
Borrower can now foresee) a Material Adverse Effect and which has
not been set forth in this Agreement or the other documents,
certificates and statements furnished to the Agent by or on behalf
of the Borrower or any Subsidiary prior to, or on, the Closing Date
in connection with the transactions contemplated hereby.
Section 7.12 Investment Company Act. Neither the
Borrower nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
Section 7.13 Public Utility Holding Company Act.
Neither the Borrower nor any Subsidiary is a "holding company," or
a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 7.14 Subsidiaries. Except as set forth on
Schedule 7.14 which indicates all Restricted Subsidiaries and all
Unrestricted Subsidiaries, the Borrower has no Subsidiaries other
than those formed pursuant to Section 9.16 prior to the quarterly
report required by Section 8.01(i).
Section 7.15 Location of Business and Offices. The
Borrower's principal place of business and chief executive offices
are located at the address stated on the signature page of this
Agreement. The principal place of business and chief executive
office of each Subsidiary are located at the addresses stated on
Schedule 7.14.
Section 7.16 Defaults. Neither the Borrower nor any
Subsidiary is in default nor has any event or circumstance occurred
which, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default under any
material agreement or instrument to which the Borrower or any
Subsidiary is a party or by which the Borrower or any Subsidiary is
bound which default would have a Material Adverse Effect. No
Default hereunder has occurred and is continuing.
Section 7.17 Environmental Matters. Except (i) as
provided in Schedule 7.17 or (ii) as would not have a Material
Adverse Effect (or with respect to (c), (d) and (e) below, where
the failure to take such actions would not have a Material Adverse
Effect):
(a) Neither any Property of the Borrower or any
Subsidiary nor the operations conducted thereon violate any
order or requirement of any court or Governmental Authority or
any Environmental Laws;
(b) Without limitation of clause (a) above, no Property
of the Borrower or any Subsidiary nor the operations currently
conducted thereon or, to the best knowledge of the Borrower,
by any prior owner or operator of such Property or operation,
are in violation of or subject to any existing, pending or
threatened action, suit, investigation, inquiry or proceeding
by or before any court or Governmental Authority or to any
remedial obligations under Environmental Laws;
(c) All notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed in
connection with the operation or use of any and all Property
of the Borrower and each Subsidiary, including without
limitation past or present treatment, storage, disposal or
release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed, and the
Borrower and each Subsidiary are in compliance with the terms
and conditions of all such notices, permits, licenses and
similar authorizations;
(d) All hazardous substances, solid waste, and oil and
gas exploration and production wastes, if any, generated at
any and all Property of the Borrower or any Subsidiary have in
the past been transported, treated and disposed of in
accordance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or
welfare or the environment, and, to the best knowledge of the
Borrower, all such transport carriers and treatment and
disposal facilities have been and are operating in compliance
with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending
or threatened action, investigation or inquiry by any
Governmental Authority in connection with any Environmental
Laws;
(e) The Borrower has taken all steps reasonably
necessary to determine and has determined that no hazardous
substances, solid waste, or oil and gas exploration and
production wastes, have been disposed of or otherwise released
and there has been no threatened release of any hazardous
substances on or to any Property of the Borrower or any
Subsidiary except in compliance with Environmental Laws and so
as not to pose an imminent and substantial endangerment to
public health or welfare or the environment;
(f) To the extent applicable, all Property of the
Borrower and each Subsidiary currently satisfies all design,
operation, and equipment requirements imposed by the OPA or
scheduled as of the Closing Date to be imposed by OPA during
the term of this Agreement, and the Borrower does not have any
reason to believe that such Property, to the extent subject to
OPA, will not be able to maintain compliance with the OPA
requirements during the term of this Agreement; and
(g) Neither the Borrower nor any Subsidiary has any
known contingent liability in connection with any release or
threatened release of any oil, hazardous substance or solid
waste into the environment.
Section 7.18 Compliance with the Law. Neither the
Borrower nor any Subsidiary has violated any Governmental
Requirement or failed to obtain any license, permit, franchise or
other governmental authorization necessary for the ownership of any
of its Properties or the conduct of its business, which violation
or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material
Adverse Effect. Except for such acts or failures to act as would
not have a Material Adverse Effect, the Oil and Gas Properties (and
properties unitized therewith) have been maintained, operated and
developed in a good and workmanlike manner and in conformity with
all applicable laws and all rules, regulations and orders of all
duly constituted authorities having jurisdiction and in conformity
with the provisions of all leases, subleases or other contracts
comprising a part of the Hydrocarbon Interests and other contracts
and agreements forming a part of the Oil and Gas Properties;
specifically in this connection, (i) after the Closing Date, no Oil
and Gas Property is subject to having allowable production reduced
below the full and regular allowable (including the maximum
permissible tolerance) because of any overproduction (whether or
not the same was permissible at the time) prior to the Closing Date
and (ii) none of the xxxxx comprising a part of the Oil and Gas
Properties (or properties unitized therewith) are deviated from the
vertical more than the maximum permitted by applicable laws,
regulations, rules and orders, and such xxxxx are, in fact,
bottomed under and are producing from, and the producing intervals
are wholly within the Oil and Gas Properties (or in the case of
xxxxx located on properties unitized therewith, such unitized
properties).
Section 7.19 Insurance. Schedule 7.19 attached hereto
contains an accurate and complete description of all material
policies of fire, liability, workmen's compensation and other forms
of insurance maintained by or on behalf of the Borrower and each
Restricted Subsidiary. All such policies are in full force and
effect, all premium payments with respect thereto covering all
periods up to and including the date of the closing are current,
and no notice of cancellation or termination has been received with
respect to any such policy. Such policies are sufficient for
compliance with all requirements of law and of all agreements to
which the Borrower or any Restricted Subsidiary is a party; are
valid, outstanding and enforceable policies; provide adequate
insurance coverage in at least such amounts and against at least
such risks (but including in any event public liability) as are
usually insured against in the same general area by companies
engaged in the same or a similar business for the assets and
operations of the Borrower and each Restricted Subsidiary; will
remain in full force and effect through the respective dates set
forth in Schedule 7.19 without the payment of additional premiums
(except for adjustments); and will not in any way be affected by,
or terminate or lapse by reason of, the transactions contemplated
by this Agreement. Schedule 7.19 identifies all material risks, if
any, which the Borrower and the Restricted Subsidiaries and their
respective board of directors or officers have designated as being
self-insured. Neither the Borrower nor any Restricted Subsidiary
has been refused any insurance with respect to its assets or
operations, nor has its coverage been limited below usual and
customary policy limits, by an insurance carrier to which it has
applied for any such insurance or with which it has carried
insurance during the last three years.
Section 7.20 Hedging Agreements. Schedule 7.20 sets
forth, as of the Closing Date, a true and complete list of all
Hedging Agreements (including commodity price swap agreements,
forward agreements or contracts of sale which provide for
prepayment for deferred shipment or delivery of oil, gas or other
commodities) of the Borrower and each Restricted Subsidiary, the
material terms thereof (including the type, term, effective date,
termination date and notional amounts or volumes), the net xxxx to
market value thereof, all credit support agreements relating
thereto (including any margin required or supplied), and the
counterparty to each such agreement.
Section 7.21 Restriction on Liens. Except as set forth
on Schedule 7.21, neither the Borrower nor any of the Restricted
Subsidiaries is a party to any agreement or arrangement (other than
this Agreement, the Credit Agreement and the Security Instruments)
or subject to any order, judgment, writ or decree, which either
restricts or purports to restrict its ability to grant Liens to
other Persons on or in respect of their respective assets or
Properties.
Section 7.22 Material Agreements. Set forth on Schedule
7.22 hereto (as same may be amended quarterly and delivered
together with the reports required in Sections 8.01(a) and 8.01(b)
hereof for leases, agreements, and other documents, entered into
after the Closing Date) is a complete and correct list of all
material agreements, leases, indentures, purchase agreements,
obligations in respect of letters of credit, guarantees, joint
venture agreements, and other instruments in effect or to be in
effect as of the Closing Date (other than Hedging Agreements)
providing for, evidencing, securing or otherwise relating to any
Debt of the Borrower or any of the Restricted Subsidiaries, and all
obligations of the Borrower or any of the Restricted Subsidiaries
to issuers of surety or appeal bonds issued for account of the
Borrower or any such Restricted Subsidiary, and such list correctly
sets forth the names of the debtor or lessee and creditor or lessor
with respect to the Debt or lease obligations outstanding or to be
outstanding and the property subject to any Lien securing such Debt
or lease obligation. Also set forth on Schedule 7.22 hereto is a
complete and correct list of all material agreements and other
instruments of the Borrower and the Restricted Subsidiaries
relating to the purchase, transportation by pipeline, gas
processing, marketing, sale and supply of natural gas and other
Hydrocarbons, but in any event, any such agreement or other
instrument that will account for more than 20% of the sales of the
Borrower and the Restricted Subsidiaries during the Borrower's
current fiscal year.
Section 7.23 Gas Imbalances. As of the Closing Date,
except as set forth on Schedule 7.23 or on the most recent
certificate delivered pursuant to Section 8.07(c) of the Credit
Agreement, on a net basis there are no gas imbalances, take or pay
or other prepayments with respect to the Borrower's or any
Restricted Subsidiary's Oil and Gas Properties which would require
the Borrower or such Restricted Subsidiary to deliver Hydrocarbons
produced from the Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor
exceeding one billion cubic feet of gas in the aggregate.
ARTICLE VIII
Affirmative Covenants
The Borrower covenants and agrees that, so long as (i) (a) any
of the Tranche B Commitments are in effect, (b) no Conventional
Senior Debt covenants are in effect, and (c) any Tranche B
Indebtedness or any interest thereon or any other amounts payable
by the Borrower hereunder remains outstanding, or (ii) an Event of
Default has occurred and is continuing, other than an Event of
Default under Section 10.01(b) caused by the occurrence of an
"Event of Default" under the Credit Agreement or Section 10.01(n)
when, in either case, the "Event of Default" under the Credit
Agreement has been cured or has been waived in accordance with the
terms of the Credit Agreement, the following covenants set forth in
this Article VIII shall apply to the Tranche B Indebtedness. In
all other circumstances, the covenants set forth in the
Conventional Senior Debt (with the exception of Section 8.10
hereof, which section will not be replaced, amended, modified or
waived without the written consent of Halliburton) shall apply to
the Tranche B Indebtedness, subject, however, to Section 3.12
hereof.
Section 8.01 Financial Statements. The Borrower shall
deliver, or shall cause to be delivered, to the Agent with
sufficient copies for each for the Lenders:
(a) As soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, the
statements of income, member's capital, and cash flow of the
Borrower and its Consolidated Subsidiaries for such fiscal
year, and the related balance sheets of the Borrower and its
Consolidated Subsidiaries as at the end of such fiscal year,
as contained in the audited consolidated financial statements
of MMR and the related consolidating financial statements of
its Consolidated Subsidiaries as at the end of such fiscal
year, and setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, and
accompanied by the related opinion of independent public
accountants of recognized national standing acceptable to the
Agent which opinion shall state that said financial statements
fairly present the consolidated financial condition and
results of operations of the Borrower and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year and
that such financial statements have been prepared in
accordance with GAAP except for such changes in such
principles with which the independent public accountants shall
have concurred and such opinion shall not contain a "going
concern" or like qualification or exception, and a certificate
of such accountants stating that, in making the examination
necessary for their opinion, they obtained no knowledge,
except as specifically stated, of any Default.
(b) As soon as available and in any event within 60 days
after the end of each of the first three fiscal quarterly
periods of each fiscal year of the Borrower, consolidated
statements of income, member's capital, and cash flow of the
Borrower and its Consolidated Subsidiaries for such period and
for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated
balance sheets as at the end of such period, and setting forth
in each case in comparative form the corresponding figures for
the corresponding period in the preceding fiscal year,
accompanied by the certificate of a Responsible Officer, which
certificate shall state that said financial statements fairly
present the consolidated financial condition and results of
operations of the Borrower and its Consolidated Subsidiaries
in accordance with GAAP, as at the end of, and for, such
period (subject to normal year-end audit adjustments).
(c) Promptly after the Borrower knows that any Default
or any Material Adverse Effect has occurred, a notice of such
Default or Material Adverse Effect, describing the same in
reasonable detail and the action the Borrower proposes to take
with respect thereto.
(d) Promptly upon receipt thereof, a copy of each other
report or letter submitted to MMR, the Borrower or any
Restricted Subsidiary by independent accountants in connection
with any annual, interim or special audit made by them of the
books of MMR, the Borrower and the Restricted Subsidiaries,
and a copy of any response by MMR, the Borrower or any
Restricted Subsidiary, or the board of directors of MMR, the
Borrower or any Restricted Subsidiary, to such letter or
report.
(e) Promptly upon its becoming available, each financial
statement, report, notice or proxy statement sent by MMR to
stockholders generally and each regular or periodic report and
any registration statement, prospectus or written
communication (other than transmittal letters) in respect
thereof filed by MMR with or received by MMR in connection
therewith from any securities exchange or the SEC or any
successor agency.
(f) Promptly after the furnishing thereof, copies of any
material statement, report or notice furnished by the Borrower
to any Person pursuant to the terms of any material (i.e.,
over $1,500,000, if permitted) indenture, loan or credit or
other similar agreement, other than this Agreement and not
otherwise required to be furnished to the Lenders pursuant to
any other provision of this Section 8.01.
(g) From time to time such other information regarding
the business, affairs or financial condition of the Borrower
or any Restricted Subsidiary (including, without limitation,
any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA) as any Lender or
the Agent may reasonably request.
(h) Simultaneously with the delivery of the financial
statements referred to in clauses (a) and (b) above, a report,
in form and substance satisfactory to the Agent, setting forth
as of the last Business Day of such calendar quarter a true
and complete list of all Hedging Agreements (including
commodity price swap agreements, forward agreements or
contracts of sale which provide for prepayment for deferred
shipment or delivery of oil, gas or other commodities) of the
Borrower and each Restricted Subsidiary, the material terms
thereof (including the type, term, effective date, termination
date and notional amounts or volumes), the net xxxx to market
value therefor, any new credit support agreements relating
thereto not listed on Schedule 7.20, any margin required or
supplied under any credit support document, and the
counterparty to each such agreement.
(i) Simultaneously with the delivery of the financial
statements referred to in clause (b) above, an update to
Schedule 7.14 setting forth all Subsidiaries of the Borrower
as of the last Business Day of such calendar quarter.
The Borrower will furnish to the Agent, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate substantially in the form of Exhibit C hereto
executed by a Responsible Officer (i) certifying as to the matters
set forth therein and stating that no Default has occurred and is
continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail), and (ii) setting forth
in reasonable detail the computations necessary to determine
whether the Borrower is in compliance with Section 9.15 as of the
end of the respective fiscal quarter or fiscal year.
Section 8.02 Litigation. The Borrower shall promptly
give to the Agent notice of all legal or arbitral proceedings, and
of all proceedings before any Governmental Authority affecting the
Borrower or any Restricted Subsidiary, except proceedings which, if
adversely determined, would not have a Material Adverse Effect.
The Borrower will, and will cause each of the Restricted
Subsidiaries to, promptly notify the Agent and each of the Lenders
of any claim, judgment, Lien or other encumbrance affecting any
Property of the Borrower or any Restricted Subsidiary if the value
of the claim, judgment, Lien, or other encumbrance affecting such
Property shall exceed $1,000,000.
Section 8.03 Maintenance, Etc.
(a) The Borrower shall and shall cause each Restricted
Subsidiary to: preserve and maintain its existence and all of
its material rights, privileges and franchises; keep books of
record and account in which full, true and correct entries
will be made of all dealings or transactions in relation to
its business and activities; comply with all Governmental
Requirements if failure to comply with such requirements will
have a Material Adverse Effect; pay and discharge all taxes,
assessments and governmental charges or levies imposed on it
or on its income or profits or on any of its Property prior to
the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained; upon
reasonable notice, permit representatives of the Agent or any
Lender, during normal business hours, to examine, copy and
make extracts from its books and records, to inspect its
Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such
Lender or the Agent (as the case may be); and keep, or cause
to be kept, insured by financially sound and reputable
insurers all Property of a character usually insured by
Persons engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the
amounts customarily insured against by such Persons and carry
such other insurance as is usually carried by such Persons
including, without limitation, pollution insurance to the
extent reasonably available.
(b) Contemporaneously with the delivery of the financial
statements required by Section 8.01(a) to be delivered for
each year, the Borrower will furnish or cause to be furnished
to the Agent and the Lenders a certificate of insurance
coverage from the insurer in form and substance satisfactory
to the Agent and, if requested, will furnish the Agent and the
Lenders copies of the applicable policies.
(c) The Borrower will and will cause each Restricted
Subsidiary to operate its Properties or cause such Properties
to be operated in a good and workmanlike manner in accordance
with the standard practices of the industry and in compliance
with all applicable contracts and agreements and in compliance
in all material respects with all Governmental Requirements.
(d) The Borrower will and will cause each Restricted
Subsidiary to, at its own expense, do or cause to be done all
things reasonably necessary to preserve and keep in good
repair, working order and efficiency all of its Oil and Gas
Properties subject to a Lien in favor of the Agent securing
the Tranche B Indebtedness and other material Properties
including, without limitation, all equipment, machinery and
facilities, and from time to time will make all the reasonably
necessary repairs, renewals and replacements so that at all
times the state and condition of its Oil and Gas Properties
subject to a Lien in favor of the Agent securing the Tranche
B Indebtedness and other material Properties will be fully
preserved and maintained, except (1) for ordinary wear and
tear, (2) for equipment, machinery and facilities no longer
used or useful in the Borrower's or such Restricted
Subsidiary's business, (3) for casualty losses and (4) to the
extent a portion of such Properties is no longer capable of
producing Hydrocarbons in economically reasonable amounts.
The Borrower will and will cause each Restricted Subsidiary to
promptly: (i) pay and discharge, or make reasonable and
customary efforts to cause to be paid and discharged, all
delay rentals, royalties, expenses and indebtedness accruing
under the leases or other agreements affecting or pertaining
to its Oil and Gas Properties subject to a Lien in favor of
the Agent securing the Tranche B Indebtedness, to the extent
that any failure to so pay or discharge would have a Material
Adverse Effect, (ii) perform or make reasonable and customary
efforts to cause to be performed, in accordance with industry
standards, the material obligations required by each and all
of the assignments, deeds, leases, subleases, contracts and
agreements affecting its interests in its Oil and Gas
Properties subject to a Lien in favor of the Agent securing
the Tranche B Indebtedness and other material Properties,
(iii) do all other things necessary to keep unimpaired, except
for Liens described in Section 9.02, its rights with respect
to its Oil and Gas Properties subject to a Lien in favor of
the Agent securing the Tranche B Indebtedness and other
material Properties and prevent any forfeiture thereof or a
default thereunder, except to the extent a portion of such
Properties is no longer capable of producing Hydrocarbons in
economically reasonable amounts. The Borrower will and will
cause each Restricted Subsidiary to operate its Oil and Gas
Properties subject to a Lien in favor of the Agent securing
the Tranche B Indebtedness and other material Properties or
cause or make reasonable and customary efforts to cause such
Oil and Gas Properties and other material Properties to be
operated in a good and workmanlike manner in accordance with
the standard practices of the industry and in compliance with
all applicable contracts and agreements and in compliance in
all material respects with all Governmental Requirements.
Section 8.04 Environmental Matters.
(a) The Borrower will and will cause each Subsidiary, to
the extent not already in place, to establish and implement
such procedures as may be reasonably necessary to continuously
determine and assure that any failure of the following does
not have a Material Adverse Effect: (i) all Property of the
Borrower and the Subsidiaries and the operations conducted
thereon and other activities of the Borrower and the
Subsidiaries are in compliance with and do not violate the
requirements of any Environmental Laws, (ii) no oil, hazardous
substances or solid wastes are disposed of or otherwise
released on or to any Property owned by any such party except
in compliance with Environmental Laws, (iii) no hazardous
substance will be released on or to any such Property in a
quantity equal to or exceeding that quantity which requires
reporting pursuant to Section 103 of CERCLA, and (iv) no oil,
oil and gas exploration and production wastes or hazardous
substance is released on or to any such Property so as to pose
an imminent and substantial endangerment to public health or
welfare or the environment.
(b) The Borrower will promptly notify the Agent and the
Lenders in writing of any material threatened action,
investigation or inquiry by any Governmental Authority of
which the Borrower has knowledge in connection with any
Environmental Laws, excluding routine testing and corrective
action.
(c) The Borrower will and will cause each Subsidiary to
provide environmental audits and tests in accordance with
American Society for Testing and Materials standards as
reasonably requested by the Agent and the Lenders (or as
otherwise required to be obtained by the Agent or the Lenders
by any Governmental Authority) in connection with any future
acquisitions of Oil and Gas Properties or other material
Properties.
Section 8.05 Further Assurances. The Borrower will and
will cause each Restricted Subsidiary to cure promptly any defects
in the creation and issuance of the Tranche B Notes and the
execution and delivery of the Tranche B Security Instruments and
this Agreement. The Borrower at its expense will and will cause
each Restricted Subsidiary to promptly execute and deliver to the
Agent upon request all such other documents, agreements and
instruments to comply with or accomplish the covenants and
agreements of the Borrower or any Restricted Subsidiary, as the
case may be, in the Tranche B Security Instruments and this
Agreement, or to further evidence and more fully describe the
collateral intended as security for the Tranche B Notes, or to
correct any omissions in the Tranche B Security Instruments, or to
state more fully the security obligations set out herein or in any
of the Tranche B Security Instruments, or to perfect, protect or
preserve any Liens created pursuant to any of the Tranche B
Security Instruments, or to make any recordings, to file any
notices or obtain any consents, all as may be necessary or
appropriate in connection therewith.
Section 8.06 Performance of Obligations. The Borrower
will pay the Tranche B Notes according to the reading, tenor and
effect thereof; and the Borrower will and will cause each
Restricted Subsidiary to do and perform every act and discharge all
of the obligations to be performed and discharged by them under the
Tranche B Security Instruments and this Agreement, at the time or
times and in the manner specified.
Section 8.07 Title Information With respect to all
Property of the Borrower which is required to be subjected to a
Lien in favor of the Agent to secure the Tranche B Indebtedness:
(a) The Borrower will deliver, or cause to be delivered,
title information in form and substance acceptable to the
Agent covering the Hydrocarbon Interests subject to a Lien in
favor of the Agent securing the Tranche B Indebtedness
pursuant to the Tranche B Security Instruments, so that the
Agent shall have received together with title information
previously delivered to the Agent, satisfactory title
information on 100% of the value of such Hydrocarbon
Interests.
(b) The Borrower shall cure, or cause to be cured, any
title defects or exceptions which are not Excepted Liens
raised by such information, or substitute, or cause to be
substituted, acceptable Mortgaged Properties with no title
defects or exceptions except for Excepted Liens covering
Mortgaged Properties of an equivalent value, within 30 days
after a request by the Agent or the Lenders to cure such
defects or exceptions.
(c) If the Borrower is unable to cure, or cause to be
cured, any title defect requested by the Agent or the Lenders
to be cured within the 30-day period or the Borrower does not
comply with the requirements to provide acceptable title
information covering 100% of the value of the Mortgaged
Properties, such default shall not be a Default or an Event of
Default, but instead the Agent and the Lenders shall have the
right to require the Borrower to xxxxx x Xxxx in favor of the
Agent securing the Tranche B Indebtedness on such other
Property of the Borrower or any Restricted Subsidiary
reasonably satisfactory to the Lenders and the Agent.
Section 8.08 ERISA Information and Compliance. When
requested by the Agent, the Borrower will promptly furnish and will
cause the Subsidiaries and any ERISA Affiliate to promptly furnish
to the Agent with sufficient copies to the Lenders copies of each
annual and other report with respect to each Plan or any trust
created thereunder filed with the United States Secretary of Labor,
the Internal Revenue Service or the PBGC. The Borrower will
promptly notify the Agent immediately upon becoming aware of the
occurrence of any ERISA Event or, with respect to any Restricted
Subsidiary or Plan thereof, of any "prohibited transaction," as
described in section 406 of ERISA or in section 4975 of the Code,
in connection with any Plan or any trust created thereunder, to the
extent that such ERISA Event or "prohibited transaction" results in
a Material Adverse Effect, in a written notice signed by a
Responsible Officer specifying the nature thereof, what action the
Borrower, the Subsidiary or the ERISA Affiliate is taking or
proposes to take with respect thereto, and, when known, any action
taken or proposed by the Internal Revenue Service, the Department
of Labor or the PBGC with respect thereto. Immediately upon
receipt thereof, the Borrower will promptly send to the Agent, with
sufficient copies to the Lenders, copies of any notice of the
PBGC's intention to terminate or to have a trustee appointed to
administer any Plan. With respect to each Plan (other than a
Multiemployer Plan), the Borrower will, and will cause each
Subsidiary and ERISA Affiliate to, (i) satisfy in full, without
giving rise to any lien, all of the contribution and funding
requirements of section 412 of the Code (determined without regard
to subsections (d), (e), (f) and (k) thereof) and of section 302 of
ERISA (determined without regard to sections 303, 304 and 306 of
ERISA), and (ii) pay, or cause to be paid, to the PBGC all premiums
required pursuant to sections 4006 and 4007 of ERISA.
Section 8.09 Engineering Reports.
(a) Borrower shall deliver to the Lenders any Reserve
Report required to be delivered under the Credit Agreement.
(b) [This section is intentionally left blank.]
(c) With the delivery of each Reserve Report, the
Borrower shall provide to the Agent and the Lenders, any
certificate from a Responsible Officer that is required to be
delivered pursuant to the Credit Agreement.
(d) As soon as available and in any event within 60 days
after the end of each calendar quarter, the Borrower shall
provide production reports and lease operating summaries by
lease for the Borrower's and each Restricted Subsidiary's Oil
and Gas Properties subject to a Lien in favor of the Agent
securing the Tranche B Indebtedness, which reports shall
include quantities or volume of production, revenue, realized
product prices, operating expenses, taxes, capital
expenditures and lease operating costs which have accrued to
the Borrower's or such Restricted Subsidiary's accounts in
such period, and such other information with respect thereto
as the Agent may reasonably require.
Section 8.10 Liens. The Borrower agrees that it will
grant to the Agent, for the benefit of the Lenders under this
Agreement, Liens (the "Tranche B Liens") on all Oil and Gas
Properties that are now owned or hereafter acquired by the Borrower
and that are encumbered by a Lien securing the obligations of the
Borrower under the Credit Agreement (or any Conventional Senior
Debt facility replacing the Credit Agreement). Subject to the
provisions of Section 12.19, all Tranche B Liens will be: (a)
subordinate and junior to the Liens securing the obligations of the
Borrower under the Credit Agreement or the Conventional Senior
Debt, except with respect to Brazos A-19 the Tranche B Lien upon
which will be senior to the Lien on Brazos A-19 securing the
obligations of the Borrower under the Credit Agreement or the
Conventional Senior Debt; (b) created and perfected by the Tranche
B Security Instruments, which Tranche B Security Instruments will
be sufficient to perfect the Tranche B Liens in favor of the Agent;
and (c) released by the Agent on behalf of the Lenders in
accordance with Sections 3.08, 3.14 and 12.19. The Borrower
covenants and agrees to execute such documents and agreements as
are reasonably necessary to effectuate the purposes of this Section
8.10.
ARTICLE IX
Negative Covenants
The Borrower covenants and agrees that, so long (i) (a) as any of
the Tranche B Commitments are in effect, (b) no Conventional Senior
Debt covenants are in effect and (c) any Tranche B Indebtedness or
any interest thereon or any other amounts payable by the Borrower
hereunder remains outstanding, or (ii) an Event of Default has
occurred and is continuing, other than an Event of Default under
Section 10.01(b) caused by the occurrence of an "Event of Default"
under the Credit Agreement or Section 10.01(n) when, in either
case, the "Event of Default" under the Credit Agreement has been
cured or has been waived in accordance with the terms of the Credit
Agreement, without the prior written consent of the Majority
Lenders, the following covenants set forth in this Article IX shall
apply to the Tranche B Indebtedness. In all other circumstances,
the covenants set forth in the Conventional Senior Debt shall apply
to the Tranche B Indebtedness, subject, however, to Section 3.12
hereof.
Section 9.01 Debt. Neither the Borrower nor any
Restricted Subsidiary will incur, create, assume or suffer to exist
any Debt, except:
(a) Senior Debt not in excess of the greater of (i) $100
million dollars minus the Aggregate Tranche B Commitments
minus the amount of Pari Passu Debt outstanding from time to
time that exceeds $10,000,000 in the aggregate, if any or (ii)
the amount of Senior Debt permitted such that the Interest
Coverage Ratio on a commercially reasonable proforma projected
basis for the twelve month period beginning on the date of the
calculation thereof shall be greater than 2.75 to 1.00;
provided that no additional Senior Debt may be incurred
following and during the continuance of a Default;
(b) The Tranche B Indebtedness;
(c) Debt existing on the Closing Date which is reflected
in the Financial Statements or is disclosed in Schedule 9.01,
and any renewals, extensions or refinancings (but not
increases) thereof;
(d) Debt (unrelated to Unrestricted Subsidiaries and
other than for borrowed money) incurred in the ordinary course
of business in connection with Hydrocarbon transportation,
Hydrocarbon purchasing or other similar arrangements, provided
that such arrangements are disclosed to the Agent and the
costs of the financing related to such arrangements are
incorporated into the Reserve Reports provided to the Agent;
(e) Debt under Hedging Agreements with a Lender or
another Person rated BBB+ by Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., or
better (or the equivalent rating by another nationally
recognized rating service), the notional amounts of which,
with respect to commodity Hedging Agreements, do not exceed
80% of Borrower's anticipated oil and/or gas production from
producing xxxxx to be produced during the term of such Hedging
Agreements, entered into as a part of its normal business
operations as a risk management strategy and/or hedge against
changes resulting from market conditions related to the
Borrower's and its Subsidiaries' operations;
(f) Debt secured by the Liens permitted by clause (x) of
the definition of "Excepted Liens";
(g) Debt secured by a pledge of investments in
Unrestricted Subsidiaries permitted by clause (xii) of the
definition of "Excepted Liens"; provided that such Debt is
recourse solely to the investment so pledged;
(h) loans and advances between the Restricted
Subsidiaries, to any Restricted Subsidiary from the Borrower
and to the Borrower from any Restricted Subsidiary;
(i) Debt which is subordinated to the Tranche B
Indebtedness in right of payment;
(j) Pari Passu Debt not in excess of the greater of (i)
$10,000,000 in the aggregate or (ii) $110,000,000 minus the
Aggregate Tranche B Commitments minus the aggregate amount of
Senior Debt outstanding from time to time; and
(k) Debt consisting of the Borrower's obligation to make
payments to Halliburton pursuant to Section 5.9 of the
Participation Agreement in the event that the Borrower does
not convey a working interest to Halliburton or its designee
in the properties contemplated in such Section.
Section 9.02 Liens. Neither the Borrower nor any
Restricted Subsidiary will create, incur, assume or permit to exist
any Lien on any of its Properties (now owned or hereafter ac-
quired), except:
(a) Liens securing the payment of Senior Debt (including
the Tranche A Indebtedness) permitted under Section 9.01(a),
which Liens may be senior to the Liens securing the Tranche B
Indebtedness;
(b) Liens securing the payment of the Tranche B
Indebtedness;
(c) Liens subordinate to the Liens securing the Tranche
B Indebtedness;
(d) Excepted Liens;
(e) Liens disclosed on Schedule 7.22;
(f) Liens on cash or securities of the Borrower securing
the Debt described in Sections 9.01(d) and (e);
(g) Liens in favor of Halliburton contemplated by the
proviso in Section 12.19(d)(i); and
(h) Encumbrances in favor of Halliburton created by the
Participation Agreement (as such agreement exists on the date
hereof).
Section 9.03 Investments, Loans and Advances. Neither
the Borrower nor any Restricted Subsidiary will make or permit to
remain outstanding any loans or advances to or investments in any
Person which is not the Borrower or a Restricted Subsidiary, but
which does include Unrestricted Subsidiaries (each such Person
being a "Third Party") (which shall include any payments on behalf
of any Unrestricted Subsidiary and shall include the Borrower's
investments in and any loans and advances to any Restricted
Subsidiaries that become Unrestricted Subsidiaries in accordance
with Section 9.16 and the definition of "Unrestricted Subsidiary"),
except that the foregoing restriction shall not apply to:
(a) investments, loans or advances reflected in the
Financial Statements or which are disclosed to the Lenders in
Schedule 9.03;
(b) investments, loans or advances of cash or other
Property in an aggregate outstanding amount not at any time in
excess of (when aggregated with net dividends, distributions
and redemptions permitted under Section 9.04) $7,000,000.00;
(c) accounts receivable arising in the ordinary course
of business;
(d) direct obligations of the United States or any
agency thereof, or obligations guaranteed by the United States
or any agency thereof, in each case maturing within one year
from the date of creation thereof;
(e) commercial paper maturing within one year from the
date of creation thereof rated in the highest grade by
Standard & Poors Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or Xxxxx'x Investors Service,
Inc.;
(f) deposits maturing within one year from the date of
creation thereof with, including certificates of deposit
issued by, any Lender or any office located in the United
States of any other bank or trust company which is organized
under the laws of the United States or any state thereof, has
capital, surplus and undivided profits aggregating at least
$100,000,000.00 (as of the date of such Lender's or bank or
trust company's most recent financial reports) and has a short
term deposit rating of no lower than A2 or P2, as such rating
is set forth from time to time, by Standard & Poors Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., or
Xxxxx'x Investors Service, Inc., respectively;
(g) deposits in money market funds investing exclusively
in investments described in Section 9.03(d), 9.03(e) or
9.03(f); and
(h) investments in direct ownership interests in
additional Oil and Gas Properties and gas gathering systems
related thereto.
Section 9.04 Dividends, Distributions and Redemptions.
The Borrower will not declare or pay any dividend, purchase,
redeem or otherwise acquire for value any of its membership
interests now or hereafter outstanding, return any capital to its
members or make any distribution of its assets to its members,
except that the Borrower may make dividends, distributions and
redemptions to MMR so long as the aggregate amount of net
dividends, distributions and redemptions, when aggregated with
investments, loans and advances permitted under Section 9.03(b), do
not exceed $7,000,000.00; provided, however, that such dividends,
distributions and redemptions shall not be permitted hereunder if
an Event of Default has occurred and is continuing or would result
therefrom.
Section 9.05 [Intentionally left blank.]
Section 9.06 Nature of Business. Neither the Borrower
nor any Restricted Subsidiary will allow any material change to be
made in the character of its business as an independent oil and gas
exploration and production company.
Section 9.07 Mergers, Etc. Neither the Borrower nor any
Restricted Subsidiary will merge into or with or consolidate with
any other Person, or sell, lease or otherwise dispose of (whether
in one transaction or in a series of transactions) all or
substantially all of its Property or assets to any other Person,
except that:
(a) the Borrower or any Restricted Subsidiary may merge
or liquidate any other Person into itself, so long as the
surviving entity will be in compliance with all of the terms
of this Agreement immediately following the merger or
liquidation;
(b) any Restricted Subsidiary may merge or liquidate
into the Borrower or another Restricted Subsidiary; and
(c) any Restricted Subsidiary may be merged into any
other Person; provided that such other Person, immediately
following such merger, shall be deemed a Restricted Subsidiary
and shall comply with the provisions of Section 9.16 hereof;
provided, however, that in the case of a merger permitted by
clauses (a) and (b) above, immediately thereafter and giving
effect thereto, the Borrower or, as the case may be, a
Restricted Subsidiary would be the surviving Person and, in
the case of a merger permitted by clause (a), (b), or (c)
above, no Default or Event of Default would, immediately
thereafter and giving effect thereto, have occurred and be
continuing. In all such instances permitted by this Section
9.07, the surviving entity shall be an entity formed under the
laws of one of the States of the United States of America.
Section 9.08 Proceeds of Tranche B Notes. The Borrower
will not permit the proceeds of the Tranche B Notes to be used for
any purpose other than those permitted by Section 7.07. Neither
the Borrower nor any Person acting on behalf of the Borrower has
taken or will take any action which might cause any of the Tranche
B Loan Documents to violate Regulation G, U or X or any other
regulation of the Board of Governors of the Federal Reserve System
or to violate Section 7 of the Securities Exchange Act of 1934 or
any rule or regulation thereunder, in each case as now in effect or
as the same may hereinafter be in effect.
Section 9.09 ERISA Compliance. The Borrower will not at
any time engage in or permit any of the following if a Material
Adverse Effect would result:
(a) Engage in, or permit any Restricted Subsidiary or
ERISA Affiliate to engage in, any transaction in connection
with which the Borrower, any Restricted Subsidiary or any
ERISA Affiliate could be subjected to either a civil penalty
assessed pursuant to section 502(c), (i) or (l) of ERISA or a
tax imposed by Chapter 43 of Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA
Affiliate to terminate, any Plan in a manner, or take any
other action with respect to any Plan, which could result in
any liability of the Borrower, any Subsidiary or any ERISA
Affiliate to the PBGC;
(c) Fail to make, or permit any Restricted Subsidiary to
fail to make, full payment of all amounts which, under the
provisions of any Plan, agreement relating thereto or
applicable law, the Borrower or a Restricted Subsidiary is
required to pay as contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA
Affiliate to permit to exist, any accumulated funding
deficiency within the meaning of Section 302 of ERISA or
Section 412 of the Code, whether or not waived, with respect
to any Plan;
(e) Permit, or allow any Subsidiary or ERISA Affiliate
to permit, the actuarial present value of the benefit liabil-
ities under any Plan maintained by the Borrower, any
Subsidiary or any ERISA Affiliate which is regulated under
Title IV of ERISA to exceed the current value of the assets
(computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit
liabilities to the extent that such liability can not be paid
in the ordinary course. The term "actuarial present value of
the benefit liabilities" shall have the meaning specified in
section 4041 of ERISA;
(f) Contribute to or assume an obligation to contribute
to, or permit any Subsidiary or ERISA Affiliate to contribute
to or assume an obligation to contribute to, any Multiemployer
Plan;
(g) Acquire, or permit any Subsidiary or ERISA Affiliate
to acquire, an interest in any Person that causes such Person
to become an ERISA Affiliate with respect to the Borrower, any
Subsidiary or any ERISA Affiliate if such Person sponsors,
maintains or contributes to, or at any time in the six-year
period preceding such acquisition has sponsored, maintained,
or contributed to, (1) any Multiemployer Plan, or (2) any
other Plan that is subject to Title IV of ERISA under which
the actuarial present value of the benefit liabilities under
such Plan exceeds the current value of the assets (computed on
a plan termination basis in accordance with Title IV of ERISA)
of such Plan allocable to such benefit liabilities;
(h) Incur, or permit any Subsidiary or ERISA Affiliate
to incur, a liability to or on account of a Plan under
sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA;
(i) Contribute to or assume an obligation to contribute
to, or permit any Restricted Subsidiary to contribute to or
assume an obligation to contribute to, any employee welfare
benefit plan, as defined in section 3(1) of ERISA, including,
without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be
terminated by such entities in their sole discretion at any
time without any material liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to
amend, a Plan resulting in an increase in current liability
such that the Borrower, any Subsidiary or any ERISA Affiliate
is required to provide security to such Plan under section
401(a)(29) of the Code.
Section 9.10 Sale or Discount of Receivables. Neither
the Borrower nor any Restricted Subsidiary will discount or sell
(with or without recourse) any of its notes receivable or accounts
receivable except (i) in the ordinary course of business, or (ii)
in connection with a receivables asset securitization, otherwise
permitted under this Agreement.
Section 9.11 Sale of Oil and Gas Properties. The
Borrower will not, and will not permit any Restricted Subsidiary
to, sell, assign, farm-out, convey or otherwise transfer any Oil
and Gas Property subject to a Lien in favor of the Agent securing
the Tranche B Indebtedness or any interest in any Oil and Gas
Property subject to a Lien in favor of the Agent securing the
Tranche B Indebtedness, unless (i) no Default shall have occurred
and be continuing and (ii) the consideration received for any such
Oil and Gas Property is equal to or greater than its fair market
value at the time of its sale.
Section 9.12 Environmental Matters. Neither the
Borrower nor any Subsidiary will cause or permit any of its
Property to be in violation of, or do anything or permit anything
to be done which will subject any such Property to any remedial
obligations under any Environmental Laws, assuming disclosure to
the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to such Property
where such violations or remedial obligations would have a Material
Adverse Effect.
Section 9.13 Transactions with Affiliates. Neither the
Borrower nor any Restricted Subsidiary will enter into any
transaction, including, without limitation, any purchase, sale,
lease or exchange of Property or the rendering of any service, with
any Affiliate unless such transactions are otherwise permitted
under this Agreement, are in the ordinary course of its business
and are upon fair and reasonable terms no less favorable to it than
it would obtain in a comparable arm's length transaction with a
Person not an Affiliate.
Section 9.14 [Intentionally left blank.]
Section 9.15 Interest Coverage Ratio. The Borrower will
not permit its Interest Coverage Ratio as of the end of any fiscal
quarter of the Borrower (calculated on a rolling four quarter
basis) to be less than 2.25 to 1.00. For the purposes of this
Agreement, "Interest Coverage Ratio" shall mean the ratio of (i)
EBITDAX for the four fiscal quarters ending on such date to (ii)
cash interest payments made for such four fiscal quarters of the
Borrower and its Restricted Subsidiaries.
Section 9.16 Subsidiaries. The Borrower shall not and
shall not permit any Restricted Subsidiary to sell or to issue any
stock or ownership interest of a Restricted Subsidiary except to
the Borrower or a Restricted Subsidiary, in compliance with Section
9.03 or for fair market value. The Borrower shall not create any
additional Subsidiaries or permit any Restricted Subsidiary to do
so, except:
(a) the Borrower or any Restricted Subsidiary may create
(by formation or by an acquisition otherwise permitted by this
Agreement) a Restricted Subsidiary provided, that:
(i) each new Restricted Subsidiary shall forthwith
execute and deliver to the Agent for the benefit of the
Lenders a written instrument of guaranty, unconditionally
guaranteeing payment of all Tranche B Indebtedness of the
Borrower; and
(ii) simultaneously with the delivery of the
aforementioned written instrument of guaranty, each new
Restricted Subsidiary shall deliver to the Agent a
certificate of the Secretary or Assistant Secretary of
such Restricted Subsidiary setting forth (A) resolutions
of its board of directors with respect to the
authorization of such Restricted Subsidiary to execute
and deliver such written instrument of guaranty and to
enter into the transactions contemplated thereby, (B) the
officers of such Restricted Subsidiary (y) who are
authorized to sign such written instrument of guaranty,
and (z) who will, until replaced by another officer or
officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and
giving notices and other communications in connection
with such written instrument of guaranty and the
transactions contemplated thereby, (C) specimen
signatures for such officers, and (D) the articles or
certificate of incorporation and bylaws of such
Restricted Subsidiary, certified as being true and
complete. The Agent and the Lenders may conclusively
rely on such certificate until the Agent receives notice
in writing from the Borrower or such Restricted
Subsidiary to the contrary;
(b) the Borrower or a Restricted Subsidiary may create
(by formation or by an acquisition otherwise permitted by this
Agreement) additional Subsidiaries provided, that, such
Subsidiary is designated as an Unrestricted Subsidiary by a
certificate of the Borrower signed by both of the chief
financial officer (or treasurer) and the general counsel of
the Borrower, which certificate shall be delivered to the
Agent.
Section 9.17 Negative Pledge Agreements. Neither the
Borrower nor any Restricted Subsidiary will create, incur, assume
or suffer to exist any contract, agreement or understanding (other
than this Agreement, the Credit Agreement and the Security
Instruments) which in any way prohibits or restricts the granting,
conveying, creation or imposition of any Lien on any of its
Property which is required to be subject to a Lien in favor of the
Agent securing the Tranche B Indebtedness or restricts any
Restricted Subsidiary from paying dividends to the Borrower, or
which requires the consent of or notice to other Persons in
connection therewith.
Section 9.18 Gas Imbalances, Take-or-Pay or Other
Prepayments. The Borrower will not allow gas imbalances, take-or-
pay or other prepayments with respect to the Oil and Gas Properties
of the Borrower or any Restricted Subsidiary which would require
the Borrower or such Restricted Subsidiary to deliver Hydrocarbons
produced on Oil and Gas Properties at some future time without then
or thereafter receiving full payment therefor to exceed one billion
cubic feet of gas in the aggregate on a net basis for the Borrower
and the Restricted Subsidiaries.
ARTICLE X
Events of Default; Remedies
Section 10.01 Events of Default. One or more of the
following events shall constitute an "Event of Default":
(a) the Borrower shall default in the payment or
prepayment (i) (excluding prepayments to be made pursuant to
Section 2.07(b) with respect to a Shortfall and revocable
notices delivered pursuant to Section 2.07(a) hereof) when due
of any principal of or interest on any Tranche B Loan, or any
reimbursement obligation for a disbursement made under any
Tranche B Letter of Credit, or any fees or other amount
payable by it hereunder or under any Tranche B Security
Instrument and such default, other than a default of a payment
or prepayment of principal (which shall have no cure period)
shall continue unremedied for a period of 3 Business Days
and/or (ii) when due of any required prepayments with respect
to a Shortfall pursuant to Section 2.07(b) hereof and such
default shall continue unremedied for a period of 30 days; or
(b) the Borrower or any Restricted Subsidiary shall
default in the payment when due of any principal of or
interest on any of its other Debt aggregating $500,000 or
more, or any event specified in any note, agreement, indenture
or other document evidencing or relating to any such Debt
shall occur if the effect of such event is to cause, or (with
the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Debt (or a trustee or
agent on behalf of such holder or holders) to cause, such Debt
to become due prior to its stated maturity; or
(c) any representation, warranty or certification made
or deemed made herein or in any Tranche B Security Instrument
by the Borrower or any Restricted Subsidiary, or any
certificate furnished to any Lender or the Agent pursuant to
the provisions hereof or any Tranche B Security Instrument,
shall prove to have been false or misleading as of the time
made or furnished in any material respect; or
(d) the Borrower shall default in the performance of any
of its obligations under Article IX or any other Article of
this Agreement other than under Article VIII; or the Borrower
shall default in the performance of any of its obligations
under Article VIII or the Borrower or any Restricted
Subsidiary shall default in the performance of any of its
obligations under any Tranche B Security Instrument (other
than the payment of amounts due which shall be governed by
Section 10.01(a)) and such default shall continue unremedied
for a period of thirty (30) days after the earlier to occur of
(i) notice thereof to the Borrower by the Agent or any Lender
(through the Agent), or (ii) the Borrower otherwise becoming
aware of such default; or
(e) the Borrower shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts
become due; or
(f) the Borrower shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Federal Bankruptcy Code (as now or
hereafter in effect), (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, liquidation or composition or
readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Federal
Bankruptcy Code, or (vi) take any corporate action for the
purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the
application or consent of the Borrower, in any court of
competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of the
Borrower of all or any substantial part of its assets, or
(iii) similar relief in respect of the Borrower under any law
relating to bankruptcy, insolvency, reorganization, winding-
up, or composition or adjustment of debts, and such proceeding
or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of
60 days; or (iv) an order for relief against the Borrower
shall be entered in an involuntary case under the Federal
Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in
excess of $500,000 in the aggregate shall be rendered by a
court against the Borrower or any Restricted Subsidiary and
the same shall not be discharged (or arrangements satisfactory
to the Agent shall not be made for such discharge), or a stay
of execution thereof shall not be procured, within thirty (30)
days from the date of entry thereof and the Borrower or such
Restricted Subsidiary shall not, within said period of 30
days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal; or
(i) the Tranche B Security Instruments after delivery
thereof shall for any reason, except to the extent permitted
by the terms thereof, cease to be in full force and effect and
valid, binding and enforceable in accordance with their terms,
or cease to create a valid and perfected Lien of the priority
required thereby on any of the collateral purported to be
covered thereby, except to the extent permitted by the terms
of this Agreement, or the Borrower shall so state in writing;
or
(j) any Tranche B Letter of Credit becomes the subject
matter of any order, judgment, injunction or any other such
determination, or if the Borrower or any other Person shall
petition or apply for or obtain any order restricting payment
by the Agent under any Tranche B Letter of Credit or extending
the Lenders' liability under any Tranche B Letter of Credit
beyond the expiration date stated therein or otherwise agreed
to by the Agent; or
(k) the Borrower discontinues its usual business or
suffers to exist any material change in its ownership, control
or management; or
(l) any Restricted Subsidiary takes, suffers or permits
to exist any of the events or conditions referred to in
paragraphs (e), (f), (g) or (h) hereof; or
(m) so long as Halliburton is obligated under the
Halliburton Guaranty, Halliburton shall default in the payment
when due of any principal of or interest on any of its Debt
aggregating $50,000,000 or more, or any event specified as a
default or event of default in any note, agreement, indenture
or other document evidencing or relating to any such Debt
shall occur and such default or event of default shall not be
cured within thirty (30) days of Halliburton having been given
notice of such default or event of default; or
(n) any "Event of Default," as defined in the Credit
Agreement, shall occur and be continuing.
Section 10.02 Remedies. Subject to the provisions of
Sections 3.03 through 3.18:
(a) In the case of an Event of Default other than one
referred to in clauses (e), (f) or (g) of Section 10.01 or in
clause (l) to the extent it relates to clauses (e), (f) or
(g), the Agent, upon request of the Majority Lenders, shall,
by notice to the Borrower, cancel the Tranche B Commitments
and/or declare the principal amount then outstanding of, and
the accrued interest on, the Tranche B Loans and all other
amounts payable by the Borrower hereunder and under the
Tranche B Notes (including without limitation the payment of
cash collateral to secure the Tranche B LC Exposure as
provided in Section 2.10(b) hereof) to be forthwith due and
payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent
to accelerate, notice of acceleration or other formalities of
any kind, all of which are hereby expressly waived by the
Borrower.
(b) In the case of the occurrence of an Event of Default
referred to in clauses (e), (f) or (g) of Section 10.01 or in
clause (l) to the extent it relates to clauses (e), (f) or
(g), the Tranche B Commitments shall be automatically canceled
and the principal amount then outstanding of, and the accrued
interest on, the Tranche B Loans and all other amounts payable
by the Borrower hereunder and under the Tranche B Notes
(including without limitation the payment of cash collateral
to secure the Tranche B LC Exposure as provided in Section
2.10(b) hereof) shall become automatically immediately due and
payable without presentment, demand, protest, notice of intent
to accelerate, notice of acceleration or other formalities of
any kind, all of which are hereby expressly waived by the
Borrower.
(c) All proceeds received after maturity of the Tranche
B Notes, whether by acceleration or otherwise shall be applied
first to reimbursement of expenses and indemnities provided
for in this Agreement and the Tranche B Security Instruments;
second to accrued interest on the Tranche B Notes; third to
fees; fourth pro rata to principal outstanding on the
Tranche B Notes and other Tranche B Indebtedness; fifth to
serve as cash collateral to be held by the Agent to secure the
Tranche B LC Exposure; and any excess shall be paid to the
Borrower or the Restricted Subsidiaries, as applicable, or as
otherwise required by any Governmental Requirement.
ARTICLE XI
The Agent
Section 11.01 Appointment, Powers and Immunities. Each
Lender hereby irrevocably appoints and authorizes the Agent to act
as its agent hereunder and under the Tranche B Security
Instruments with such powers as are specifically delegated to the
Agent by the terms of this Agreement and the Tranche B Security
Instruments, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence
and in Section 11.05 and the first sentence of Section 11.06 shall
include reference to its Affiliates and its and its Affiliates'
officers, directors, employees, attorneys, accountants, experts and
agents): (i) shall have no duties or responsibilities except those
expressly set forth in the Tranche B Loan Documents, and shall not
by reason of the Tranche B Loan Documents be a trustee or fiduciary
for any Lender; (ii) makes no representation or warranty to any
Lender and shall not be responsible to the Lenders for any
recitals, statements, representations or warranties contained in
this Agreement, or in any certificate or other document referred to
or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness,
execution, legality, enforceability or sufficiency of this
Agreement, any Tranche B Note or any other document referred to or
provided for herein or for any failure by the Borrower or any other
Person (other than the Agent) to perform any of its obligations
hereunder or thereunder or for the existence, value, perfection or
priority of any collateral security or the financial or other
condition of the Borrower, the Subsidiaries or any other obligor or
guarantor; (iii) except pursuant to Section 11.07 shall not be
required to initiate or conduct any litigation or collection
proceedings hereunder; and (iv) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any
other document or instrument referred to or provided for herein or
in connection herewith including its own ordinary negligence,
except for its own gross negligence or willful misconduct. The
Agent may employ agents, accountants, attorneys and experts and
shall not be responsible for the negligence or misconduct of any
such agents, accountants, attorneys or experts selected by it in
good faith or any action taken or omitted to be taken in good faith
by it in accordance with the advice of such agents, accountants,
attorneys or experts. The Agent may deem and treat the payee of
any Tranche B Note as the holder thereof for all purposes hereof
unless and until a written notice of the assignment or transfer
thereof permitted hereunder shall have been filed with the Agent.
The Agent is authorized to release any collateral that is
permitted to be sold or released pursuant to the terms of the
Tranche B Loan Documents.
Section 11.02 Reliance by Agent. The Agent shall be
entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex,
telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
Agent.
Section 11.03 Defaults. The Agent shall not be deemed
to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Tranche B Loans or of
fees or failure to reimburse for Tranche B Letter of Credit
drawings) unless the Agent has received notice from a Lender or the
Borrower specifying such Default and stating that such notice is a
"Notice of Default." In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt
notice thereof to the Lenders. In the event of a payment Default,
the Agent shall give each Lender prompt notice of each such payment
Default.
Section 11.04 Rights as a Lender. With respect to its
Tranche B Commitments and the Tranche B Loans made by it and its
participation in the issuance of Tranche B Letters of Credit, Chase
(and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting
as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual
capacity. Chase (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with the Borrower (and any
of its Affiliates) as if it were not acting as the Agent, and Chase
and its Affiliates may accept fees and other consideration from the
Borrower for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
Section 11.05 INDEMNIFICATION. THE LENDERS AGREE TO
INDEMNIFY THE AGENT RATABLY IN ACCORDANCE WITH THEIR PERCENTAGE
SHARES FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 12.03 TO
THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE BORROWER UNDER
SECTION 12.03, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER
UNDER SAID SECTION 12.03 AND FOR ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT
IN ANY WAY RELATING TO OR ARISING OUT OF: (I) THIS AGREEMENT, THE
TRANCHE B SECURITY INSTRUMENTS OR ANY OTHER DOCUMENTS CONTEMPLATED
BY OR REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY,
BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS CONTINUING,
NORMAL ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE
PERFORMANCE OF ITS AGENCY DUTIES HEREUNDER OR (II) THE ENFORCEMENT
OF ANY OF THE TERMS OF THIS AGREEMENT, ANY TRANCHE B SECURITY
INSTRUMENT OR OF ANY SUCH OTHER DOCUMENTS; WHETHER OR NOT ANY OF
THE FOREGOING SPECIFIED IN THIS SECTION 11.05 ARISES FROM THE SOLE
OR CONCURRENT NEGLIGENCE OF THE AGENT, PROVIDED THAT NO LENDER
SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT.
Section 11.06 Non-Reliance on Agent and other Lenders.
Each Lender acknowledges and agrees that it has, independently and
without reliance on the Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and its decision to enter
into this Agreement, and that it will, independently and without
reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not
taking action under this Agreement. The Agent shall not be
required to keep itself informed as to the performance or
observance by the Borrower of this Agreement, the Tranche B Notes,
the Tranche B Security Instruments or any other document referred
to or provided for herein or to inspect the properties or books of
the Borrower. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business
of the Borrower (or any of its Affiliates) which may come into the
possession of the Agent or any of its Affiliates. In this regard,
each Lender acknowledges that Xxxxxx & Xxxxxx L.L.P. is acting in
this transaction as special counsel to the Agent only, except to
the extent otherwise expressly stated in any legal opinion or any
Tranche B Loan Document. Each Lender will consult with its own
legal counsel to the extent that it deems necessary in connection
with the Tranche B Loan Documents and the matters contemplated
therein.
Section 11.07 Action by Agent. Except for action or
other matters expressly required of the Agent hereunder, the Agent
shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall (i) receive written instructions from the
Majority Lenders (or all of the Lenders as expressly required by
Section 12.04) specifying the action to be taken, and (ii) be
indemnified to its satisfaction by the Lenders against any and all
liability and expenses which may be incurred by it by reason of
taking or continuing to take any such action. The instructions of
the Majority Lenders (or all of the Lenders as expressly required
by Section 12.04) and any action taken or failure to act pursuant
thereto by the Agent shall be binding on all of the Lenders. If a
Default has occurred and is continuing, the Agent shall take such
action with respect to such Default as shall be directed by the
Majority Lenders (or all of the Lenders as required by Section
12.04) in the written instructions (with indemnities) described in
this Section 11.07, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable in the best
interests of the Lenders. In no event, however, shall the Agent be
required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement and the Tranche B
Security Instruments or applicable law.
Section 11.08 Resignation or Removal of Agent. Subject
to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof to
the Lenders and the Borrower, and the Agent may be removed at any
time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Majority Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation or the Majority Lenders' removal of
the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent. Upon the acceptance of such
appointment hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article XI and Section
12.03 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
the Agent. Notwithstanding anything in this Section 11.08 to the
contrary, but expressly subject to the provisions of Section 11.09,
the Agent shall not resign or be removed under this Agreement
unless the Agent resigns or is removed as agent under the Credit
Agreement. In each such case, the successor Agent that is
appointed under this Agreement and the Credit Agreement shall be
the same until such time as the Tranche B Credit Facility and the
Tranche B Loan Documents are assigned pursuant to Section 3.17
hereof.
Section 11.09 Resignation of Agent on Assignment.
Notwithstanding anything to the contrary contained in this
Agreement, in the event the Tranche B Credit Facility and the
Tranche B Loan Documents are assigned pursuant to Section 3.17
hereof, the Agent under this Agreement shall be entitled to resign
as Agent for the Tranche B Lenders under this Agreement in
connection with any such assignment; provided that any such
resignation shall not adversely affect the Agent's status as
"agent" for the Tranche A Lenders.
ARTICLE XII
Miscellaneous
Section 12.01 Waiver. No failure on the part of the
Agent or any Lender to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege
under any of the Tranche B Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right,
power or privilege under any of the Tranche B Loan Documents
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided herein
are cumulative and not exclusive of any remedies provided by law.
Section 12.02 Notices. All notices and other communica-
tions provided for herein and in the other Tranche B Loan Documents
(including, without limitation, any modifications of, or waivers or
consents under, this Agreement or the other Tranche B Loan
Documents) shall be given or made by telecopy, personal delivery,
nationally recognized overnight courier or U.S. Mail in writing and
telecopied, mailed or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature
pages hereof or in the Tranche B Loan Documents or, as to any
party, at such other address as shall be designated by such party
in a notice to each other party. Except as otherwise provided in
this Agreement or in the other Tranche B Loan Documents, all such
communications shall be deemed to have been duly given when
transmitted, if transmitted before 1:00 p.m. local time on a
Business Day (otherwise on the next succeeding Business Day) by
telecopier to the extent that confirmation of receipt is obtained,
or personally delivered or, in the case of a mailed notice, three
(3) Business Days after the date deposited in the mails, postage
prepaid, or, in the case of a nationally recognized overnight
courier, one (1) day after the date delivered to such courier with
guaranteed next day delivery, in each case given or addressed as
aforesaid.
Section 12.03 Payment of Expenses, Indemnities, etc.
The Borrower agrees:
(a) whether or not the transactions hereby contemplated
are consummated, to pay all reasonable expenses of the Agent
in the administration (both before and after the execution
hereof and including advice of counsel as to the rights and
duties of the Agent and the Lenders with respect thereto) of,
and in connection with the negotiation, syndication,
investigation, preparation, execution and delivery of,
recording or filing of, preservation of rights under,
enforcement of, and refinancing, renegotiation or
restructuring of, the Tranche B Loan Documents and any
amendment, waiver or consent relating thereto (including,
without limitation, travel, photocopy, mailing, courier,
telephone and other similar expenses of the Agent, the cost of
environmental audits, surveys and appraisals at reasonable
intervals, the reasonable fees and disbursements of counsel
and other outside consultants for the Agent and, in the case
of enforcement, the reasonable fees and disbursements of
counsel for the Agent and any of the Lenders); and promptly
reimburse the Agent for all amounts expended, advanced or
incurred by the Agent or the Lenders to satisfy any obligation
of the Borrower under this Agreement or any Tranche B Security
Instrument, including without limitation, all costs and
expenses of foreclosure;
(b) TO INDEMNIFY THE AGENT AND EACH LENDER AND EACH OF
THEIR AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND
EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM
HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE
EACH OF THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE INCURRED
BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT
ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF,
ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR
PROPOSED USE BY THE BORROWER OF THE PROCEEDS OF ANY OF THE
TRANCHE B LOANS OR TRANCHE B LETTERS OF CREDIT, (II) THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE TRANCHE B LOAN
DOCUMENTS, (III) THE OPERATIONS OF THE BUSINESS OF THE
BORROWER AND THE SUBSIDIARIES, (IV) THE FAILURE OF THE
BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY
TRANCHE B SECURITY INSTRUMENT OR THIS AGREEMENT, OR WITH ANY
GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF THE BORROWER
SET FORTH IN ANY OF THE TRANCHE B LOAN DOCUMENTS, (VI) THE
ISSUANCE, EXECUTION AND DELIVERY OR TRANSFER OF OR PAYMENT OR
FAILURE TO PAY UNDER ANY TRANCHE B LETTER OF CREDIT, OR (VII)
THE PAYMENT OF A DRAWING UNDER ANY TRANCHE B LETTER OF CREDIT
NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER
IMPROPER PRESENTATION OF THE MANUALLY EXECUTED DRAFT(S) AND
CERTIFICATION(S), (VIII) ANY ASSERTION THAT THE LENDERS WERE
NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE
TRANCHE B SECURITY INSTRUMENTS OR (IX) ANY OTHER ASPECT OF THE
TRANCHE B LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE
REASONABLE FEES AND DISBURSEMENTS OF COUNSEL AND ALL OTHER
EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING
OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING
(INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR
CLAIM AND INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF
THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY, BUT
EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY REASON OF
CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE AGENT OR A
LENDER'S SHAREHOLDERS AGAINST THE AGENT OR LENDER OR BY REASON
OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF
THE INDEMNIFIED PARTY OR ITS AFFILIATE; AND
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES,
CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH PERSON
MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE
TO THE BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES,
INCLUDING WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (II) AS A
RESULT OF THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY
SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE
BORROWER OR ANY SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE
BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST
ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND
FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT
OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY
SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE TRANCHE B LOAN DOCUMENTS,
PROVIDED, HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER THIS
SECTION 12.03(C) IN RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE
ARISING FROM THE ACTS OR OMISSIONS OF THE AGENT OR ANY LENDER
DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR
ASSIGNS SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY
(WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS
MORTGAGEE-IN-POSSESSION OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be
indemnified without the consent of the indemnitor, such
consent not to be unreasonably withheld; provided, that the
indemnitor may not reasonably withhold consent to any
settlement that an Indemnified Party proposes, if the
indemnitor does not have the financial ability to pay all its
obligations outstanding and asserted against the indemnitor at
that time, including the maximum potential claims against the
Indemnified Party to be indemnified pursuant to this
Section 12.03.
(e) In the case of any indemnification hereunder, the
Agent or Lender, as appropriate shall give notice to the
Borrower of any such claim or demand being made against the
Indemnified Party and the Borrower shall have the
non-exclusive right to join in the defense against any such
claim or demand provided that if the Borrower provides a
defense, the Indemnified Party shall bear its own cost of
defense unless there is a conflict between the Borrower and
such Indemnified Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE
INDEMNIFIED PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER (OTHER THAN
GROSS NEGLIGENCE), WHETHER ACTIVE OR PASSIVE, WHETHER AN
AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION,
ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT
(SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR
BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE
OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN
INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION
OF INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE
PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY REASON
OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE INDEMNIFIED PARTY.
(g) The Borrower's obligations under this Section 12.03
shall survive any termination of this Agreement and the
payment of the Tranche B Notes and shall continue thereafter
in full force and effect.
(h) The Borrower shall pay any amounts due under this
Section 12.03 within thirty (30) days of the receipt by the
Borrower of notice of the amount due.
Section 12.04 Amendments, Etc.
(a) Any provision of this Agreement or any Tranche B
Security Instrument may be amended, modified or waived with the
Borrower's and the Majority Lenders' prior written consent;
provided that: (i) no amendment, modification or waiver which
extends the final maturity of the Tranche B Loans, increases the
Aggregate Maximum Tranche B Credit Amounts (except as provided in
Section 2.03(d)), forgives the principal amount of any Tranche B
Indebtedness outstanding under this Agreement, releases any
guarantor of the Tranche B Indebtedness, releases any of the
collateral securing the Tranche B Indebtedness (except as
identified in Section 12.19), reduces the interest rate applicable
to the Tranche B Loans or the fees payable to the Lenders
generally, affects Section 2.03, this Section 12.04 or Section
12.06(a) or modifies the definition of "Majority Lenders" shall be
effective without consent of all Lenders; (ii) no amendment,
modification or waiver which increases the Maximum Tranche B Credit
Amount of any Lender shall be effective without the consent of such
Lender (except as set forth in Section 2.03(d)); (iii) no
amendment, modification or waiver which modifies the rights, duties
or obligations of the Agent shall be effective without the consent
of the Agent; and (iv) no amendment, modification or waiver of
Sections 3.03 through 3.18, inclusive, and Section 12.04 shall be
effective without the consent of the Agent and the Senior Creditor
or Senior Creditors against whom enforcement is being sought.
Following the date on which the Tranche B Indebtedness and the
Tranche B Loan Documents are assigned pursuant to Section 3.17,
this provision shall not preclude an amendment to the Credit
Agreement (excluding this Agreement) without any consent or
involvement from the Tranche B Lenders.
(b) Except as set forth in Sections 3.12 and 12.19, in
addition to the requirements of Section 12.04(a), (i) no waiver of
the provisions of this Agreement and no waiver with respect to any
Tranche B Security Instrument shall be effective without the
written consent of Halliburton unless a comparable waiver is made
with respect to the provisions of the Credit Agreement (or any
Conventional Senior Debt facility replacing the Credit Agreement)
or a comparable waiver is made with respect to the Tranche A
Security Instruments (or the Liens securing any Conventional Senior
Debt facility replacing the Credit Agreement); (ii) no amendment,
modification, renewal, extension or release and no waiver, other
than as provided in (i) above, to this Agreement and other than the
following shall be effective without the written consent of
Halliburton (A) any provisions of Sections 7.08, 7.10, 7.11, 7.14,
7.15, 7.17, 7.18, 7.19, 7.21, 7.22 or 7.23 if a comparable
amendment, modification, renewal, extension, release or waiver is
made to the provisions of the Credit Agreement (or any Conventional
Senior Debt facility replacing the Credit Agreement), (B) any
provisions that provide for a minimum period for any notices, other
than notices under Article III or (C) any provisions that provide
for a minimum borrowing or prepayment amount although no amendment,
modification, renewal, extension, release or waiver permitted by
this Section 12.04(b)(ii)(C) shall alter the Borrower's obligations
to make prepayments associated with Initial Participation Payments
and Shortfall, provided that if a Conventional Senior Debt facility
shall no longer exist with respect to the Borrower, effective as of
such date, the provisions of this Agreement that existed, but for
any amendment, modification, renewal, extension, release or waiver
permitted by this Section 12.04(b)(ii), shall automatically be
restored to their condition as of the Effective Date (as amended,
modified, renewed, extended or released with Halliburton's
consent), without the necessity for any amendment or other
modification of this Agreement; (iii) no amendment, modification,
renewal, extension or release and no waiver, other than as provided
in (i) above, of any Tranche B Security Instrument shall be
effective without the written consent of Halliburton; and (iv) if
the Credit Agreement is replaced with a credit facility other than
a Conventional Senior Debt facility, no further amendment,
modification, renewal, extension, waiver or release of this
Agreement nor any Tranche B Security Instrument shall be effective
without the written consent of Halliburton.
(c) In the event that the holders of the Conventional Senior
Debt waive any term or provision thereof, which term or provision
is also included in this Agreement, the Lenders hereby authorize
and instruct the Agent to execute any and all documents reasonably
requested by the Borrower to waive the corresponding provision of
this Agreement in the same manner as the waiver with respect to the
Conventional Senior Debt, without the need for the consent of the
Majority Lenders, but with any additional consents required by
Section 12.04(a) and (b). Any such waiver shall be executed by the
Agent contemporaneously with the waiver under the Conventional
Senior Debt. Furthermore, even though the proviso to Section
12.04(b)(ii) results in an automatic restoration and deemed
amendment of this Agreement, at either the Agent's or Halliburton's
request, a formal amendment shall be entered into to document the
restoration of the provisions of this Agreement that existed but
for the amendment, modification, renewal, extension, release or
waiver permitted by this Section 12.04(b)(ii), which amendment
shall not require the prior consent of the Borrower, and the
Borrower hereby irrevocably appoints both the Agent and Halliburton
as the Borrower's attorney-in-fact, each with full authority in the
place and stead of the Borrower and in the name of the Borrower or
otherwise, from time to time in the Agent's or Halliburton's
discretion, to take any action and to execute any instrument which
the Agent may deem necessary or advisable in connection with such
amendment.
Section 12.05 Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
Section 12.06 Assignments and Participations. Subject
expressly to subsection (g) below and the provisions of Sections
3.08, 3.11 and 3.17:
(a) The Borrower may not assign its rights or
obligations hereunder or under the Tranche B Notes or any
Tranche B Letters of Credit without the prior consent of all
of the Lenders, the Agent and Halliburton.
(b) Any Lender may assign to one or more of its
Affiliates or, upon the written consent of the Agent and the
Borrower (which consent will not be unreasonably withheld),
assign to one or more assignees who are not Affiliates of such
Lender, all or a portion of its rights and obligations under
this Agreement pursuant to an Assignment Agreement
substantially in the form of Exhibit F (an "Assignment")
provided, however, that (i) any such assignment shall be in
the amount of at least $5,000,000 or such lesser amount to
which the Borrower has consented and (ii) the assignee or
assignor shall pay to the Agent a processing and recordation
fee of $2,500 for each assignment. Any such assignment will
become effective upon the execution and delivery to the Agent
of the Assignment and the consent of the Agent. Promptly
after receipt of an executed Assignment, the Agent shall send
to the Borrower a copy of such executed Assignment. Upon
receipt of such executed Assignment, the Borrower, will, at
its own expense, execute and deliver new Tranche B Notes to
the assignor and/or assignee, as appropriate, in accordance
with their respective interests as they appear. Upon the
effectiveness of any assignment pursuant to this Section
12.06(b), the assignee will become a "Lender," if not already
a "Lender," for all purposes of this Agreement and the Tranche
B Security Instruments. The assignor shall be relieved of its
obligations hereunder to the extent of such assignment (and if
the assigning Lender no longer holds any rights or obligations
under this Agreement, such assigning Lender shall cease to be
a "Lender" hereunder except that its rights under Sections
4.06, 5.01, 5.05 and 12.03 shall not be affected). The Agent
will prepare on the last Business Day of each month during
which an assignment has become effective pursuant to this
Section 12.06(b), a new Annex I giving effect to all such
assignments effected during such month, and will promptly
provide the same to the Borrower and each of the Lenders.
(c) Each Lender may transfer, grant or assign
participations in all or any part of such Lender's interests
hereunder pursuant to this Section 12.06(c) to any Person,
provided that: (i) such Lender shall remain a "Lender" for all
purposes of this Agreement and the transferee of such
participation shall not constitute a "Lender" hereunder; and
(ii) no participant under any such participation shall have
rights to approve any amendment to or waiver of any of the
Tranche B Loan Documents except to the extent such amendment
or waiver would (x) forgive any principal owing on any Tranche
B Indebtedness or extend the final maturity of the Tranche B
Loans, (y) reduce the interest rate (other than as a result of
waiving the applicability of any post-default increases in
interest rates) or fees applicable to any of the Tranche B
Commitments or Tranche B Loans or Tranche B Letters of Credit
in which such participant is participating, or postpone the
payment of any thereof, or (z) release any guarantor of the
Tranche B Indebtedness or release all or substantially all of
the collateral (except as provided in the Tranche B Loan
Documents) supporting any of the Tranche B Commitments or
Tranche B Loans or Tranche B Letters of Credit in which such
participant is participating. In the case of any such
participation, the participant shall not have any rights under
this Agreement or any of the Tranche B Security Instruments
(the participant's rights against the granting Lender in
respect of such participation to be those set forth in the
agreement with such Lender creating such participation), and
all amounts payable by the Borrower hereunder shall be deter-
mined as if such Lender had not sold such participation,
provided that such participant shall be entitled to receive
additional amounts under Article V on the same basis as if it
were a Lender and be indemnified under Section 12.03 as if it
were a Lender. In addition, each agreement creating any
participation must include an agreement by the participant to
be bound by the provisions of Section 12.15.
(d) The Lenders may furnish any information concerning
the Borrower in the possession of the Lenders from time to
time to assignees and participants (including prospective
assignees and participants); provided that, such Persons agree
to be bound by the provisions of Section 12.15 hereof.
(e) Notwithstanding anything in this Section 12.06 to
the contrary, any Lender may assign and pledge all or any of
its Tranche B Notes to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and
any operating circular issued by such Federal Reserve System
and/or such Federal Reserve Bank. No such assignment and/or
pledge shall release the assigning and/or pledging Lender from
its obligations hereunder.
(f) Notwithstanding any other provisions of this Section
12.06, no transfer or assignment of the interests or
obligations of any Lender or any grant of participations
therein shall be permitted if such transfer, assignment or
grant would require the Borrower to file a registration
statement with the SEC or to qualify the Tranche B Loans under
the "Blue Sky" laws of any state.
(g) Notwithstanding any other provisions of this Section
12.06, no transfer or assignment of the interest or
obligations of any Lender or any grant of participations
therein shall be permitted hereunder unless a prorata portion
of such Lender's Tranche A Commitment is contemporaneously
transferred, assigned or conveyed or participated and the
transferee agrees to be bound by these transfer restrictions
with respect to any future transfer, assignment, conveyance or
grant of participations with respect to the Tranche B
Commitments and Tranche B Indebtedness.
Section 12.07 Invalidity. In the event that any one or
more of the provisions contained in any of the Tranche B Loan
Documents or the Tranche B Letters of Credit or the Tranche B
Letter of Credit Agreements shall, for any reason, be held invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
of the Tranche B Notes, this Agreement or any Tranche B Security
Instrument.
Section 12.08 Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart.
Section 12.09 References. The words "herein," "hereof,"
"hereunder" and other words of similar import when used in this
Agreement refer to this Agreement as a whole, and not to any
particular article, section or subsection. Any reference herein to
a Section shall be deemed to refer to the applicable Section of
this Agreement unless otherwise stated herein. Any reference
herein to an exhibit or schedule shall be deemed to refer to the
applicable exhibit or schedule attached hereto unless otherwise
stated herein.
Section 12.10 Survival. The obligations of the parties
under Section 4.06, Article V, and Sections 11.05 and 12.03 shall
survive the repayment of the Tranche B Loans and the termination of
the Tranche B Commitments. To the extent that any payments on the
Tranche B Indebtedness or proceeds of any collateral are
subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee,
debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the
Tranche B Indebtedness so satisfied shall be revived and continue
as if such payment or proceeds had not been received and the
Agent's and the Lenders' Liens, security interests, rights, powers
and remedies under this Agreement and each Tranche B Security
Instrument shall continue in full force and effect. In such event,
each Tranche B Security Instrument shall be automatically
reinstated and the Borrower shall take such action as may be
reasonably requested by the Agent and the Lenders to effect such
reinstatement.
Section 12.11 Captions. Captions and section headings
appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any provision
of this Agreement.
Section 12.12 NO ORAL AGREEMENTS. THE TRANCHE B LOAN
DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
PARTIES AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS
BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF. THE TRANCHE B LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE TRANCHE B NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL
LAW PERMITS ANY LENDER TO CHARGE INTEREST AT THE RATE ALLOWED
BY THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED. TEX.
REV. CIV. STAT. XXX. ART. 0000, XX. 15 (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY
ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR THE TRANCHE B
NOTES.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE
TRANCHE B LOAN DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE
STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF AND (TO
THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-
EXCLUSIVE AND DOES NOT PRECLUDE THE AGENT OR ANY LENDER FROM
OBTAINING JURISDICTION OVER THE BORROWER IN ANY COURT
OTHERWISE HAVING JURISDICTION.
(c) THE BORROWER HEREBY IRREVOCABLY DESIGNATES C.T.
CORPORATION LOCATED IN HOUSTON, TEXAS, AS THE DESIGNEE,
APPOINTEE AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON
BEHALF OF THE BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THE TRANCHE B LOAN DOCUMENTS. IT IS UNDERSTOOD THAT A COPY
OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY
FORWARDED BY OVERNIGHT COURIER TO THE BORROWER AT ITS ADDRESS
SET FORTH UNDER ITS SIGNATURE BELOW, BUT THE FAILURE OF THE
BORROWER TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. THE BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER AT ITS SAID ADDRESS, SUCH
SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT
OR ANY LENDER OR ANY HOLDER OF A TRANCHE B NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN
ANY OTHER JURISDICTION.
(e) EACH OF THE BORROWER AND EACH LENDER HEREBY (I)
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY TRANCHE B
SECURITY INSTRUMENT AND FOR ANY COUNTERCLAIM THEREIN; (II)
IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; (III) CERTIFY THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE TRANCHE B SECURITY
INSTRUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 12.13.
Section 12.14 Interest. It is the intention of the
parties hereto that each Lender shall conform strictly to usury
laws applicable to it. Accordingly, if the transactions
contemplated hereby would be usurious as to any Lender under laws
applicable to it (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable to such Lender notwithstanding the
other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Tranche B
Loan Documents or any agreement entered into in connection with or
as security for the Tranche B Notes, it is agreed as follows:
(i) the aggregate of all consideration which constitutes interest
under law applicable to any Lender that is contracted for, taken,
reserved, charged or received by such Lender under any of the
Tranche B Loan Documents or agreements or otherwise in connection
with the Tranche B Notes shall under no circumstances exceed the
maximum amount allowed by such applicable law, and any excess shall
be canceled automatically and if theretofore paid shall be credited
by such Lender on the principal amount of the Tranche B
Indebtedness (or, to the extent that the principal amount of the
Tranche B Indebtedness shall have been or would thereby be paid in
full, refunded by such Lender to the Borrower); and (ii) in the
event that the maturity of the Tranche B Notes is accelerated by
reason of an election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event
of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such
applicable law, and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically by such
Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal
amount of the Tranche B Indebtedness (or, to the extent that the
principal amount of the Tranche B Indebtedness shall have been or
would thereby be paid in full, refunded by such Lender to the
Borrower). All sums paid or agreed to be paid to any Lender for
the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to such Lender, be
amortized, prorated, allocated and spread throughout the full term
of the Tranche B Loans evidenced by the Tranche B Notes until
payment in full so that the rate or amount of interest on account
of any Tranche B Loans hereunder does not exceed the maximum amount
allowed by such applicable law. If at any time and from time to
time (i) the amount of interest payable to any Lender on any date
shall be computed at the Highest Lawful Rate applicable to such
Lender pursuant to this Section 12.14 and (ii) in respect of any
subsequent interest computation period the amount of interest
otherwise payable to such Lender would be less than the amount of
interest payable to such Lender computed at the Highest Lawful Rate
applicable to such Lender, then the amount of interest payable to
such Lender in respect of such subsequent interest computation
period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest
payable to such Lender shall equal the total amount of interest
which would have been payable to such Lender if the total amount of
interest had been computed without giving effect to this Section
12.14. To the extent that Article 5069-1.04 of the Texas Revised
Civil Statutes is relevant for the purpose of determining the
Highest Lawful Rate, such Lender elects to determine the applicable
rate ceiling under such Article by the indicated weekly rate
ceiling from time to time in effect.
Section 12.15 Confidentiality. In the event that the
Borrower provides to the Agent or the Lenders written confidential
information belonging to the Borrower, if the Borrower shall
denominate such information in writing as "confidential", the Agent
and the Lenders shall thereafter maintain such information in
confidence in accordance with the standards of care and diligence
that each utilizes in maintaining its own confidential information.
This obligation of confidence shall not apply to such portions of
the information which (i) are in the public domain, (ii) hereafter
become part of the public domain without the Agent or the Lenders
breaching their obligation of confidence to the Borrower, (iii) are
previously known by the Agent or the Lenders from some source other
than the Borrower, (iv) are hereafter developed by the Agent or the
Lenders without using the Borrower's information, (v) are hereafter
obtained by or available to the Agent or the Lenders from a third
party who owes no obligation of confidence to the Borrower with
respect to such information or through any other means other than
through disclosure by the Borrower, (vi) are disclosed with the
Borrower's consent, (vii) must be disclosed either pursuant to any
Governmental Requirement or to Persons regulating the activities of
the Agent or the Lenders, or (viii) as may be required by law or
regulation or order of any Governmental Authority in any judicial,
arbitration or governmental proceeding. Further, the Agent or a
Lender may disclose any such information to any other Lender, any
Affiliate of any Lender, any independent petroleum engineers or
consultants, any independent certified public accountants, any
legal counsel employed by such Person in connection with this
Agreement or any Tranche B Security Instrument, including without
limitation, the enforcement or exercise of all rights and remedies
thereunder, or any assignee or participant (including prospective
assignees and participants) in the Tranche B Loans; provided,
however, that the Agent or the Lenders shall receive a
confidentiality agreement from the Person to whom such information
is disclosed such that said Person shall have the same obligation
to maintain the confidentiality of such information as is imposed
upon the Agent or the Lenders hereunder. Notwithstanding anything
to the contrary provided herein, this obligation of confidence
shall cease three (3) years from the date the information was
furnished, unless the Borrower requests in writing at least thirty
(30) days prior to the expiration of such three year period, to
maintain the confidentiality of such information for an additional
three year period. The Borrower waives any and all other rights it
may have to confidentiality as against the Agent and the Lenders
arising by contract, agreement, statute or law except as expressly
stated in this Section 12.15.
Section 12.16 Effectiveness. This Agreement shall be
effective on the Closing Date (the "Effective Date").
Section 12.17 EXCULPATION PROVISIONS. EACH OF THE
PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS
AGREEMENT AND THE TRANCHE B SECURITY INSTRUMENTS AND AGREES THAT IT
IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT
AND THE TRANCHE B SECURITY INSTRUMENTS; THAT IT HAS IN FACT READ
THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT;
THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS
CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS
AGREEMENT AND THE TRANCHE B SECURITY INSTRUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE
TRANCHE B SECURITY INSTRUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN
OF THE TERMS OF THIS AGREEMENT AND THE TRANCHE B SECURITY
INSTRUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN
SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF
ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES
AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND
THE TRANCHE B SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY
HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION
IS NOT "CONSPICUOUS."
Section 12.18 Coordinating Provision. The Tranche B
Lenders and each of their successors and permitted assigns hereby
acknowledge by the execution of this Agreement or their acceptance
of a transfer, sale, assignment or participation interest in the
Tranche B Indebtedness and Tranche B Loan Documents that it is the
intention of the parties to this Agreement that each Lender under
this Agreement own a "Percentage Share" (as defined in the Credit
Agreement) in the Tranche A Indebtedness and the Tranche A
Commitments that is equal to the Percentage Share that such Lender
holds in the Tranche B Indebtedness and the Tranche B Commitments.
Notwithstanding this fact, the Credit Agreement and this Agreement
are established as two separate facilities to more easily
accommodate the potential assignment to Halliburton in accordance
with Section 3.17, but it is the intention of the parties to this
Agreement that this Agreement and the Credit Agreement be read
together as one agreement until such time as there is an assignment
to Halliburton pursuant to Section 3.17 hereof. As a result, there
are a number of provisions in the Credit Agreement and this
Agreement that need to be coordinated to better account for the
fact that the same group of Lenders will be holding both the
Tranche A Indebtedness and the Tranche B Indebtedness prior to the
assignment contemplated pursuant to Section 3.17 hereof. Without
limiting the generality of the foregoing, prior to the assignment
to Halliburton contemplated by Section 3.17 hereof: (a) any notice
that is given to a Lender under this Agreement shall also be deemed
to be notice to such Lender under the Credit Agreement; (b)
delivery of any item that is required to be delivered under this
Agreement shall also be deemed to constitute delivery of such item
under the Credit Agreement; (c) any amounts that the Borrower is
required to pay to any Lender or to the Agent under this Agreement
and the Credit Agreement for expenses, indemnities and other
similar matters shall be payable to each Lender or the Agent only
once, without duplication; (d) any consent by a Lender to an
amendment, waiver or modification to this Agreement shall also
constitute consent to the amendment, waiver or modification of the
similar provisions of the Credit Agreement, unless expressly
indicated otherwise in writing; and (e) any notice by any Lender to
the Borrower with respect to any matter that relates equally to
this Agreement and the Credit Agreement need only be given by such
Lender once, without duplication.
Section 12.19 Lien Releases. Except with respect to
Brazos A-19, each Lender hereby (a) authorizes the Agent to execute
any and all releases of Liens in favor of the Agent in connection
with any transfer or conveyance of any Property of the Borrower
permitted by Section 9.03, 9.04 or 9.11; (b) authorizes the Agent
to execute any and all subordinations required to subordinate the
Liens securing the Tranche B Indebtedness to any Liens replacing
the Tranche A Security Instruments which are permitted to be
granted by Borrower and are permitted to be senior to Liens
securing the Tranche B Indebtedness pursuant to Section 9.02(a);
(c) authorizes the Agent to execute any and all releases of Liens
in favor of the Agent in the event that the Borrower maintains a
facility of Senior Debt with an initial committed principal amount
that is available to be drawn of not less than $100,000,000 and
such Senior Debt facility is or becomes unsecured, provided that
the committed principal amount that is available to be drawn under
such Senior Debt facility is not less than $100,000,000 at such
time; (d) agrees to the releases described in Section 3.14 hereof
and (e) agrees to execute, or to authorize the Agent to execute,
any and all releases requested by the Borrower as necessary to
permit Borrower to conduct its ordinary course of business with
respect to the exploration, production and development of Oil and
Gas Properties, including, without limitation, any and all releases
required to convey interests in Oil and Gas Properties to (i)
Halliburton or its designee as provided in Article 5 of the
Participation Agreement; provided, however, in Halliburton's sole
discretion, Halliburton may instruct the Agent and Lenders not to
release any Tranche B Lien pursuant to this Section 12.19(e)(i) but
instead to subordinate such Tranche B Lien to a new Lien to be
granted by the Borrower in favor of Halliburton upon the interest
in Oil and Gas Properties that is contemplated by Section 5.9 of
the Participation Agreement, (ii) MOXY Program Participants (as
such term is defined in the Participation Agreement), including,
without limitation, Xxxxxx X. Xxxx, and (iii) Laid Off Interest
Participants (as such term is defined in the Participation
Agreement). Notwithstanding anything herein to the contrary, in
the event (i) MMR has delivered to the Agent the MMR Guaranty in
the form of Exhibit D hereto and (ii) there has been no MMR
Material Adverse Effect since March 24, 2000, as determined by
Halliburton in its reasonable discretion, then Halliburton shall
consent to either of the following at the direction of the
Borrower: (x) the execution by the Tranche A Agent and the Tranche
B Agent of a document nullifying the subordination contained in the
Subordination Agreement concerning the Liens upon Brazos A-19 or
(y) the release by the Tranche B Agent of the Liens on Brazos A-19
securing the Tranche B Indebtedness. Each Lender hereby authorizes
the Agent to release the Liens on Brazos A-19 securing the Tranche
B Indebtedness or the subordination as to the Liens on Brazos A-19
in accordance with the provisions of the preceding sentence.
The parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWER: McMoRan OIL & GAS LLC
By:/s/Xxxxxx X. Xxxxx
--------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
Address for Notices:
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Treasurer
with copy to:
Jones, Walker, Waechter,
Poitevent,Carrere & Xxxxxxx, L.L.P.
000 Xx. Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Relationship
Partner
LENDER AND AGENT: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, Individually and as Agent
By:/s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Lending Office for Tranche B
Base Rate Loans
and Tranche B Eurodollar Loans
and Address
for Notice:
Chase Bank of Texas, National
Association
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. 212/000-0000
Telephone No. 212/000-0000
Attn: Xxxx Anemone
with copies to:
Chase Bank of Texas, National
Association
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No. 713/000-0000
Telephone No. 713/000-0000
Attn: Xxxxx Xxxxxxx
Chase Bank of Texas, National
Association
One Chase Xxxxxxxxx Xxxxx, 0xx
Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. 212/000-0000
Telephone No. 212/000-0000
Attn: Xxxxxxx Xxxxxxx
BANK OF MONTREAL
By:/s/ Xxxxx Xxxxxxxx
------------------
Name: Xxxxx Xxxxxxxx
Title: Director
Lending Office for Tranche B
Base Rate
Loans and Tranche B Eurodollar Loans
and Address for Notice:
Bank of Montreal
000 X. XxXxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: 312/000-0000
Telephone No.: 312/000-0000
Attention: Keiko Kuze
with copies to:
Bank of Montreal
000 Xxxxxxxxx Xxxxxx, Xxxxx
0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
HIBERNIA NATIONAL BANK
By:
________________________________
Name:
______________________________
Title:
_______________________________
Lending Office for Tranche B
Base Rate
Loans and Tranche B Eurodollar
Loans and
Address for Notice:
Hibernia National Bank
313 Carondelet, Ste. 1300
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Hibernia National Bank
313 Carondelet, Ste. 1300
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
