Exhibit 99.1
CREDIT AGREEMENT
Dated as of December 17, 1997
Among
XXXXXX PETROLEUM CORPORATION
as Borrower,
BANK OF MONTREAL,
as Agent,
and
THE LENDERS SIGNATORY HERETO
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Accounting Matters
Section 1.01 Terms Defined Above......................................... 1
Section 1.02 Certain Defined Terms....................................... 1
Section 1.03 Accounting Terms and Determinations......................... 16
ARTICLE II Commitments
Section 2.01 Loans and Letters of Credit................................. 16
Section 2.02 Borrowings, Continuations and Conversions,Letters of Credit 17
Section 2.03 Changes of Commitments...................................... 19
Section 2.04 Fees ...................................................... 19
Section 2.05 Several Obligations......................................... 20
Section 2.06 Notes ...................................................... 21
Section 2.07 Prepayments................................................. 21
Section 2.08 Borrowing Base.............................................. 22
Section 2.09 Assumption of Risks......................................... 23
Section 2.10 Obligation to Reimburse and to Prepay....................... 24
Section 2.11 Lending Offices............................................. 26
ARTICLE III Payments of Principal and Interest
Section 3.01 Repayment of Loans.......................................... 26
Section 3.02 Interest.................................................... 26
ARTICLE IV Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments.................................................... 27
Section 4.02 Pro Rata Treatment.......................................... 28
Section 4.03 Computations................................................ 28
Section 4.04 Non-receipt of Funds by the Agent........................... 28
Section 4.05 Set-off, Sharing of Payments, Etc........................... 29
Section 4.06 Taxes ...................................................... 29
ARTICLE V Capital Adequacy
Section 5.01 Additional Costs............................................ 32
Section 5.02 Limitation on Eurodollar Loans.............................. 34
Section 5.03 Illegality.................................................. 35
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03.... 35
Section 5.05 Compensation................................................ 35
Section 5.06 Replacement Lenders......................................... 35
ARTICLE VI Conditions Precedent
Section 6.01 Initial Funding............................................. 37
Section 6.02 Initial and Subsequent Loans and Letters of Credit.......... 38
Section 6.03 Conditions Precedent for the Benefit of Lenders............. 39
Section 6.04 No Waiver................................................... 39
ARTICLE VII Representations and Warranties
Section 7.01 Corporate Existence......................................... 39
Section 7.02 Financial Condition......................................... 39
Section 7.03 Litigation.................................................. 40
Section 7.04 No Breach................................................... 40
Section 7.05 Authority................................................... 40
Section 7.06 Approvals................................................... 40
Section 7.07 Use of Loans................................................ 41
Section 7.08 ERISA ...................................................... 41
Section 7.09 Taxes ...................................................... 42
Section 7.10 Titles, etc................................................. 42
Section 7.11 No Material Misstatements................................... 43
Section 7.12 Investment Company Act...................................... 43
Section 7.13 Public Utility Holding Company Act.......................... 43
Section 7.14 Subsidiaries................................................ 43
Section 7.15 Location of Business and Offices............................ 43
Section 7.16 Defaults.................................................... 43
Section 7.17 Environmental Matters....................................... 44
Section 7.18 Compliance with the Law..................................... 45
Section 7.19 Insurance................................................... 45
Section 7.20 Hedging Agreements.......................................... 46
Section 7.21 Restriction on Liens........................................ 46
Section 7.22 Material Agreements......................................... 46
ARTICLE VIII Affirmative Covenants
Section 8.01 Reporting Requirements...................................... 46
Section 8.02 Litigation.................................................. 48
Section 8.03 Maintenance, Etc............................................ 48
Section 8.04 Environmental Matters....................................... 49
Section 8.05 Further Assurances.......................................... 49
Section 8.06 Performance of Obligations.................................. 50
Section 8.07 Reserve Reports.............................................. 50
Section 8.08 Title and Mortgage Information.............................. 51
Section 8.09 Mortgages.................................................. 52
Section 8.10 ERISA Information and Compliance............................ 52
Section 8.11 Minimum Capital. .......................................... 53
ARTICLE IX Negative Covenants
Section 9.01 Debt ...................................................... 53
Section 9.02 Liens ...................................................... 54
Section 9.03 Investments, Loans and Advances............................. 55
Section 9.04 Dividends, Distributions and Redemptions.................... 56
Section 9.05 Sales and Leasebacks........................................ 56
Section 9.06 Nature of Business.......................................... 56
Section 9.07 Limitation on Leases........................................ 56
Section 9.08 Mergers, Etc................................................ 56
Section 9.09 Proceeds of Notes; Letters of Credit........................ 56
Section 9.10 ERISA Compliance............................................ 57
Section 9.11 Sale or Discount of Receivables............................. 58
Section 9.12 Current Ratio............................................... 58
Section 9.13 [Intentionally Omitted]..................................... 58
Section 9.14 Interest Coverage Ratio..................................... 58
Section 9.15 Sale of Oil and Gas Properties.............................. 58
Section 9.16 Environmental Matters....................................... 59
Section 9.17 Transactions with Affiliates................................ 59
Section 9.18 Subsidiaries................................................ 59
Section 9.19 Negative Pledge Agreements and Subsidiary Dividends......... 59
Section 9.20 Payments on Certain Debt to Xxxxxx Corporation.............. 59
ARTICLE X Events of Default; Remedies
Section 10.01 Events of Default.......................................... 60
Section 10.02 Remedies................................................... 62
ARTICLE XI The Agent
Section 11.01 Appointment, Powers and Immunities......................... 62
Section 11.02 Reliance by Agent.......................................... 63
Section 11.03 Defaults................................................... 63
Section 11.04 Rights as a Lender......................................... 63
Section 11.05 Indemnification............................................ 64
Section 11.06 Non-Reliance on Agent and other Lenders.................... 64
Section 11.07 Action by Agent............................................ 65
Section 11.08 Resignation or Removal of Agent............................ 65
ARTICLE XII Miscellaneous
Section 12.01 Waiver..................................................... 65
Section 12.02 Notices.................................................... 66
Section 12.03 Payment of Expenses, Indemnities, etc...................... 66
Section 12.04 Amendments, Etc............................................ 68
Section 12.05 Successors and Assigns..................................... 69
Section 12.06 Assignments and Participations............................. 69
Section 12.07 Invalidity................................................. 70
Section 12.08 Counterparts............................................... 70
Section 12.09 References................................................. 70
Section 12.10 Survival................................................... 71
Section 12.11 Captions................................................... 71
Section 12.12 No Oral Agreements......................................... 71
Section 12.13 Governing Law; Submission to Jurisdiction.................. 71
Section 12.14 Interest................................................... 72
Section 12.15 Confidentiality............................................ 73
Section 12.16 Effectiveness.............................................. 74
Section 12.17 Exculpation Provisions..................................... 74
ANNEXES, EXHIBITS AND SCHEDULES
Annex I - List of Facility A Maximum Credit Amounts and Facility B Loans
Exhibit A-1 - Form of Facility A Note
Exhibit A-2 - Form of Facility B Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - List of Loan Documents
Exhibit E - Form of Assignment Agreement
Exhibit F - Form of Letter of Credit Agreement
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.17 - Environmental Matters
Schedule 7.19 - Insurance
Schedule 7.20 - Hedging Agreements
Schedule 7.22 - Material Agreements
Schedule 9.01 - Debt
Schedule 9.02 - Liens
Schedule 9.03 - Investments, Loans and Advances
THIS CREDIT AGREEMENT dated as of December 17 1997 is among:
XXXXXX PETROLEUM CORPORATION, a corporation formed under the laws of the
State of Delaware (the "Borrower"); each of the lenders that is a signatory
hereto or which becomes a signatory hereto as provided in Section 12.06
(individually, together with its successors and assigns, a "Lender" and,
collectively, the "Lenders"); and BANK OF MONTREAL, a Canadian bank (in its
individual capacity, "BMO"), 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; and
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 agree as follows:
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above. As used in this Agreement, the
terms "Agent," "BMO," "Borrower," "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 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 10%
or more of the securities having ordinary voting power for the election of
directors or other governing body of a corporation or 10% or more of the
partnership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to "control" (including,
with its correlative meanings, "controlled by" and "under common control
with") such corporation or other Person.
"Agreement" shall mean this Credit Agreement, as the same may from time
to time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the sum of the Aggregate
Facility A Commitments and the Aggregate Facility B Commitments.
"Aggregate Facility A Commitments" at any time shall equal the amount
calculated in accordance with Section 2.03.
"Aggregate Facility A Maximum Credit Amounts" at any time shall equal
the sum of the Facility A Maximum Credit Amounts of the Lenders (not to
exceed $215,000,000), as the same may be reduced pursuant to Section 2.03(b).
"Aggregate Facility B Commitments" at any time shall equal the sum of
the Facility B Commitments of the Lenders (not to exceed $105,000,000).
"Amoco Acquisition" shall mean the acquisition of the Amoco Properties
pursuant to the Amoco Purchase and Sale Agreement.
"Amoco Properties" shall mean the Oil and Gas Properties covered by the
appraisal report of XxXxxxxx and XxXxxxxxxx, dated December 1, 1997, intended
to be acquired by the Borrower pursuant to the Amoco Purchase and Sale
Agreement.
"Amoco Purchase and Sale Agreement"shall mean that certain Purchase and
Sale Agreement dated November 20, 1997, between Amoco Production Company, as
seller and the Borrower, as buyer.
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, the lending office of such Lender (or an Affiliate of such
Lender) designated for such Type of 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 Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean (i) after Borrower completes the Beaver
Creek Acquisition, if either Facility B is outstanding or the Minimum Capital
has not been raised, for the first six (6) months after the Borrower has
completed the Beaver Creek Acquisition, 0% per annum with respect to Base
Rate Loans and one and one-half percent (1 1/2%) per annum with respect to
Eurodollar Loans, with the Applicable Margin thereafter increasing by
one-half of one percent (1/2%) for Base Rate Loans and Eurodollar Loans at each
of six and nine months after closing Beaver Creek Acquisition and (ii) prior
to Borrower's completion of the Beaver Creek Acquisition and after Borrower
has completed the Beaver Creek Acquisition, if the Minimum Capital has been
raised and Facility B has been repaid, the applicable per annum percentage
set forth at the appropriate intersection in the table shown below, based on
the Borrowing Base Utilization Percentage as in effect from time to time:
Borrowing Base Utilization Percentage Eurodollar Rate Base Rate
_____________________________________ _______________ _________
Less than or equal to 25% 0.500% 0.000%
Greater than 25%,
but less than or equal to 50% 0.625% 0.000%
Greater than 50%,
but less than or equal to 75% 0.875% 0.000%
Greater than 75%
but less than or equal to 100% 1.125% 0.000%
Greater than 100% 1.375% 0.000%
Each change in the Applicable Margin resulting from a change in the Borrowing
Base Utilization Percentage shall take effect at the time of such change in
the Borrowing Base Utilization Percentage.
"Assignment" shall have the meaning assigned such term in
Section 12.06(b).
"Base Rate" shall mean, with respect to any 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.
"Base Rate Loans" shall mean Loans that bear interest at rates based
upon the Base Rate.
"Beaver Creek Acquisition" shall mean Borrower's acquisition pursuant to
the Amoco Purchase and Sale Agreement of the portion of the Amoco Properties
identified as the Beaver Creek Unit.
"Beaver Creek Conversion Termination Date" shall mean December 16, 1998.
"Borrowing Base" shall mean at any time an amount equal to the amount
determined in accordance with Section 2.08.
"Borrower Base Letter" shall mean that certain letter agreement of even
date herewith between the Borrower and the Agent.
"Borrowing Base Utilization Percentage" shall mean, as of any day, the
fraction expressed as a percentage, the numerator of which is the balance of
all Loans and the LC Exposure outstanding on such day, and the denominator of
which is the Borrowing Base in effect on such day.
"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
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 [December 15,] 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and any successor statute.
"Commitment" shall mean for any Lender, its Facility A Commitment and/or
its Facility B Commitment, as applicable.
"Consolidated Net Income" shall mean with respect to the Borrower and
its Consolidated Subsidiaries, for any period, the aggregate of the net
income (or loss) of the Borrower and its Consolidated Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded from the calculation of such net income (to the
extent otherwise included therein) the following: (i) the net income of any
Person in which the Borrower or any Consolidated Subsidiary has an interest
(which interest does not cause the net income of such other Person to be
consolidated with the net income of the Borrower and its Consolidated
Subsidiaries in accordance with GAAP), except to the extent of the amount of
dividends or distributions actually paid in such period by such other Person
to the Borrower or to a Consolidated Subsidiary, as the case may be; (ii) the
net income (but not loss) of any Consolidated Subsidiary to the extent that
the declaration or payment of dividends or similar distributions or transfers
or loans by that Consolidated Subsidiary is not at the time permitted by
operation of the terms of its charter or any agreement, instrument or
Governmental Requirement applicable to such Consolidated Subsidiary, or is
otherwise restricted or prohibited in each case determined in accordance with
GAAP; (iii) the net income (or loss) of any Person acquired in a
pooling-of-interests transaction for any period prior to the date of such
transaction; (iv) any extraordinary gains or losses, including gains or
losses attributable to Property sales not in the ordinary course of business;
and (v) the cumulative effect of a change in accounting principles and any
gains or losses attributable to writeups or write downs of assets.
"Consolidated Subsidiaries" shall mean each Subsidiary of the Borrower
(or for purposes of the definition of Tangible Net Worth, the Guarantor)
(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 the Borrower (or, as appropriate, the Guarantor) in
accordance with GAAP.
"Debt" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments (including
principal, interest, fees and charges); (ii) all obligations of such Person
(whether contingent or otherwise) in respect of bankers' acceptances, letters
of credit, surety or other bonds and similar instruments; (iii) all
obligations of such Person to pay the deferred purchase price of Property or
services (other than for borrowed money); (iv) all obligations under leases
which shall have been, or should have been, in accordance with GAAP, recorded
as capital leases in respect of which such Person is liable (whether
contingent or otherwise); (v) all Debt (as described in the other clauses of
this definition) and other obligations of others secured by a Lien (other
than a Lien permitted by Section 9.02) on any asset of such Person, whether
or not such Debt is assumed by such Person; (vi) all Debt (as described in
the other clauses of this definition) and other obligations of others
guaranteed by such Person or in which such Person otherwise assures a
creditor against loss of the Debt or obligations of others; (vii) 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; (viii) obligations to deliver goods or services
including Hydrocarbons in consideration of advance payments, except as
permitted by Section 9.20 and disclosed by Section 8.07(c); (ix) obligations
to pay for goods or services whether or not such goods or services are
actually received or utilized by such Person; (x) any capital stock of such
Person in which such Person has a mandatory obligation to redeem such stock;
and (xi) any Debt of a Special Entity for which such Person is liable either
by agreement or because of a Governmental Requirement; (xii) the undischarged
balance of any production payment created by such Person or for the creation
of which such Person directly or indirectly received payment; and (xiii) all
obligations of such Person under Hedging Agreements.
"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.
"EBITDA" shall mean, for any period, the sum of Consolidated Net Income
for such period plus the following expenses or charges to the extent deducted
in determining Consolidated Net Income in such period: interest, taxes,
depreciation, depletion, amortization and other non-cash charges.
"Effective Date" shall have the meaning assigned such term in Section
12.16.
"Environmental Laws" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all
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) 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 Loans" shall mean Loans the interest rates on which are
determined on the basis of rates referred to in the definition of "Eurodollar
Rate".
"Eurodollar Rate" shall mean, with respect to any 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 Loan for the offering by the Agent 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 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 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 120 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), encroachments, easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations (collectively called "Encumbrances") 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 Encumbrances, defects, irregularities, zoning
restrictions and other title exceptions 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
(including, without limitation, deposits of royalty payments in Wyoming banks
as provided by Wyoming statutory law) incurred in the ordinary course of
business; and (vii) Liens permitted by the Loan Documents.
"Facility A" shall mean the facility pursuant to Sections 2.01(a) and (c).
"Facility A Commitment" shall mean, for any Lender, its obligation to (i)
make Loans up to the lesser of such Lender's Facility A Maximum Credit Amount or
the Lender's Percentage Share of the then effective Borrowing Base and (ii)
participate in the issuance of Letters of Credit as provided in Section 2.01(b).
"Facility A Loans" shall mean Loans made pursuant to Section 2.01(a).
"Facility B Maturity Date" shall mean December 15, 1998.
"Facility A Maximum Credit Amount" shall mean, as to each Lender, the
amount set forth opposite such Lender's name on Annex I under the caption
"Facility A Maximum Credit Amounts" (as the same may be reduced pursuant to
Section 2.03(b) 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).
"Facility A Notes" shall mean the promissory note or notes (whether one
or more) of the Borrower described in Section 2.06 and being in the form of
Exhibit A-1.
"Facility A Termination Date" shall mean the earlier to occur of (i)
December 15, 2002 or (ii) the date that the Commitments are sooner terminated
pursuant to Sections 2.03(b) or 10.02.
"Facility B" shall mean the facility pursuant to Section 2.01(b).
"Facility B Commitment" shall mean, as to each Lender, its obligation to
make a Facility B Loan in the amount set forth opposite such Lender's name under
"Facility B Loans" on Annex I, as the same may be modified from time to time to
reflect any assignment permitted by Section 12.06(b).
"Facility B Loans" shall mean the term loans made pursuant to Section
2.01(b).
"Facility B Notes" shall mean the promissory note or notes (whether one
or more) of the Borrower described in Section 2.06 and being in the form of
Exhibit A-2.
"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 the Agent on such day on
such transactions as determined by the Agent.
"Fee Letter" shall mean that certain letter agreement from the Agent to
the Borrower dated of even date with this Agreement concerning certain fees
in connection with this Agreement and any agreements or instruments executed
in connection therewith, as the same may be amended 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.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time, except that, in the case of
the Borrower and its Subsidiaries, the effects of income taxes shall be
excluded.
"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
exercise 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, its 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.
"Guarantor" shall mean Xxxxxx Corporation, a Delaware corporation.
"Guaranty Agreement" shall mean an agreement executed by the Guarantor
in form and substance satisfactory to the Agent guarantying, unconditionally,
payment of the Indebtedness, as the same may be amended, modified or
supplemented from time to time.
"Hedging Agreements" shall mean any commodity, interest rate or currency
swap, cap, floor, collar, forward agreement or other similar exchange or
protection agreements or any option with respect to any such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes
or on other Indebtedness under laws applicable to such Lender which are
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.
"Xxxxxx Corporation" shall mean Xxxxxx Corporation, a Delaware
corporation, and owner of 100% of all of the Borrower's capital stock.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates now or hereafter acquired in and to oil and gas leases, oil, gas and
mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee
interests, overriding royalty and royalty interests, net profit interests and
production payment interests, including any reserved or residual interests of
whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined or separated therefrom.
"Indebtedness" shall mean any and all amounts owing or to be owing by
the Borrower to the Agent, the Issuing Bank and/or the Lenders in connection
with the Loan Documents and the Letter of Credit Agreements, and any Hedging
Agreements now or hereafter arising between the Borrower and any Lender and
permitted by the terms of this Agreement and all renewals, extensions and/or
rearrangements of any of the foregoing.
"Indemnified Parties" shall have the meaning assigned such term in
Section 12.03(a)(ii).
"Indemnity Matters" shall mean any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent
negligence of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Loans or
issuance of the initial Letters of Credit upon satisfaction of the conditions
set forth in Sections 6.01 and 6.02.
"Initial Reserve Reports" shall mean (i) the appraisal report of
XxXxxxxx and XxXxxxxxxx, dated December 1, 1997 with respect to the Oil and
Gas Properties intended to be purchased by the Borrower pursuant to the Amoco
Purchase and Sale Agreement, and (ii) the audit report of X. X. Xxxx and
Associates dated as of January 1, 1997, copies of each of which have been
delivered to the Agent.
"Interest Period" shall mean, with respect to any Eurodollar Loan, the
period commencing on the date such 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 other period as may be requested by the Borrower and agreed to by the
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 with respect to
Facility A Loans may end after the Facility A Termination Date and no
Interest Period with respect to Facility B Loans may end after the Facility B
Maturity Date; (ii) no Interest Period for any Eurodollar Loan may end after
the due date of any installment, if any, provided for in Section 3.01 to the
extent that such Eurodollar Loan would need to be prepaid prior to the end of
such Interest Period in order for such installment to be paid when due; (iii)
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 (iv) no Interest Period shall have a
duration of less than one month (unless otherwise agreed to by the Lenders)
and, if the Interest Period for any Eurodollar Loans would otherwise be for a
shorter period, such Loans shall not be available hereunder.
"Issuing Bank" shall mean BMO or any other Lender agreed to among the
Borrower and the Agent to issue Letters of Credit.
"LC Commitment" at any time shall mean $5,000,000.
"LC Exposure" at any time shall mean the difference between (i)
aggregate face amount of all undrawn and uncancelled Letters of Credit and
the aggregate of all amounts drawn under all Letters of Credit and not yet
reimbursed, minus (ii) the aggregate amount of all cash securing outstanding
Letters of Credit pursuant to Section 2.10(b).
"Letter of Credit Agreements" shall mean the written agreements with the
Issuing Bank, as issuing lender for any Letter of Credit, executed in
connection with the issuance by the Issuing Bank of the Letters of Credit,
such agreements to be on the Issuing Bank's customary form attached hereto as
Exhibit F or as otherwise agreed to by the Borrower and the Issuing Bank.
"Letters of Credit" shall mean the letters of credit issued pursuant to
Section 2.01(c) and all reimbursement obligations pertaining to any such
letters of credit, and "Letter of Credit" shall mean any one of the Letters
of Credit and the reimbursement obligations pertaining thereto.
"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.
"Loan Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Letter of Credit Agreements, the Fee Letter, the agreements or
instruments described or referred to in Exhibit D, and any and all other
agreements or instruments now or hereafter executed and delivered by the
Borrower or any other Person (other than assignments, participation or
similar agreements between any Lender and any other lender or creditor with
respect to any Indebtedness pursuant to this Agreement) in connection with,
or as security for the payment or performance of the Notes, or this
Agreement, or reimbursement obligations under the Letters of Credit, as such
agreements may be amended, supplemented or restated from time to time.
"Loans" shall mean the loans as provided for by Sections 2.01(a) and
(b). "Loans" shall include the Facility A Loans and the Facility B Loans.
"Majority Lenders" shall mean, at any time while no Loans are
outstanding, Lenders having at least sixty-six and two-thirds percent
(66-2/3%) of the Aggregate Commitments and, at any time while Loans are
outstanding, Lenders holding at least sixty-six and two-thirds percent
(66-2/3%) of the outstanding aggregate principal amount of the Loans (without
regard to any sale by a Lender of a participation in any Loan under Section
12.06(c)).
"Material Adverse Effect" shall mean any material and adverse effect on
(i) the assets, liabilities, financial condition, business or operations of
the Borrower and its Subsidiaries taken as a whole or the Guarantor and its
Subsidiaries taken as a whole different from those reflected in the Financial
Statements or from the facts represented or warranted in any Loan Document,
or (ii) the ability of the Borrower and its Subsidiaries taken as a whole or
the Guarantor and its Subsidiaries taken as a whole to carry out their
business in the normal course or meet their obligations under the Loan
Documents on a timely basis.
"Minimum Capital" shall mean the Subordinated Debt and/or equity
required by Section 8.11.
"Mortgages" shall have the meaning assigned such term in Section 8.09.
"Mortgaged Property" shall mean the Property owned by the Borrower and
which is subject to the Liens existing and to exist under the terms of the
Loan Documents.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37)
or 4001(a)(3) of ERISA.
"Notes" shall mean the Notes provided for by Section 2.06, together with
any and all renewals, extensions for any period, increases, rearrangements,
substitutions or modifications thereof. The "Notes" shall include the
Facility A Notes and the Facility B Notes.
"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).
"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
Commitments to be provided by a Lender under this Agreement as indicated on
Annex I hereto, as modified from time to time to reflect any assignments
permitted by Section 12.06(b).
"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 Loan
or any other amount payable by the Borrower under this Agreement or any other
Loan Document , a rate per annum during the period commencing on the date of
occurrence of an Event of Default until such amount is paid in full or all
Events of Default 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 however, for a
Eurodollar Loan, the "Post-Default Rate" for such principal shall be, for the
period commencing on the date of occurrence of an 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 Loan as provided in Section 3.02(a)(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 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June, September
and December, in each year, the first of which shall be December 31, 1997;
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.
"Required Lenders" shall mean, at any time while no Loans are
outstanding, Lenders (one of which must be the Agent) having at least
seventy-five percent (75%) of the Aggregate Commitments and, at any time
while Loans are outstanding, Lenders (one of which must be the Agent) holding
at least seventy-five percent (75%) of the outstanding aggregate principal
amount of the Loans (without regard to any sale by a Lender of a
participation in any Loan under Section 12.06(c)).
"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, setting forth, as of each January 1 (or such other date in the event
of an unscheduled redetermination): the oil and gas reserves attributable to
substantially all of the Borrower's proved 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. Each Reserve Report shall be accompanied by such other information
relating thereto as the Agent may reasonably request. The term "Reserve Report"
shall also include the Initial Reserve Reports and the Reserve Report to be
provided by the Borrower by September 1 of each year pursuant to Section
8.07(a).
"Responsible Officer" shall mean, as to any Person, the Chief Executive
Officer, the President or any Vice President of such Person and, with respect
to financial matters, the term "Responsible Officer" shall include the Chief
Financial Officer of such Person. Unless otherwise specified, all references
to a Responsible Officer herein shall mean a Responsible Officer of the
Borrower.
"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.
"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 a Person or one or
more of its other Subsidiaries is a member, owner, partner or joint venturer
and owns, directly or indirectly, at least a majority of the equity of such
entity or controls such entity, but excluding any tax partnerships that are
not classified as partnerships under state law. 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). Unless otherwise indicated herein, each reference to the term
Special Entity shall mean a Special Entity of the Borrower.
"Subordinated Debt" shall mean any Debt of the Borrower expressly
subordinated to the Indebtedness pursuant to agreements in form and substance
satisfactory to the Lenders.
"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 by a Person or one or more of its Subsidiaries or by a
Person 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.
"Tangible Net Worth" shall mean, as at any date, the sum of the
following for the Guarantor and its Consolidated Subsidiaries determined
(without duplication) in accordance with GAAP:
(i) the amount of preferred stock and common stock at par plus the
amount of surplus of the Guarantor, plus
(ii) the retained earnings (or, in the case of retained earnings
deficit, minus the amount of such deficit), minus
(iii)the sum of the following: cost of treasury shares and the book
value of all assets of the Guarantor and its Consolidated Subsidiaries which
should be classified as intangibles in accordance with GAAP (without
duplication of deductions in respect of items already deducted in arriving at
surplus and retained earnings) but in any event including as such intangibles
the following: goodwill, research and development costs, trademarks, trade
names, copyrights, patents and franchises, unamortized debt discount and
expense, all reserves and any writeup in the book value of assets resulting
from a revaluation thereof or resulting from any changes in GAAP subsequent
to September 30, 1997; but excluding any item classified as "oil and gas
properties" utilizing the full cost method of accounting as shown on the
Guarantor's balance sheet.
"Taxes" shall have the meaning assigned such term in Section 4.06(a).
"Type" shall mean, with respect to any Loan, a Base Rate Loan or a
Eurodollar Loan.
"Wholly-Owned Subsidiary" shall mean, as to the Borrower, any Subsidiary
of which all of the outstanding shares of capital stock or other equity
interests, on a fully-diluted basis, are owned 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 the Borrower referred to
in Section 7.02 (except for changes concurred with by the Borrower's
independent public accountants).
ARTICLE II
Commitments
Section 2.01 Loans and Letters of Credit.
(a) Facility A Loans. Each Lender severally agrees, on the terms
and conditions of this Agreement, to make 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 and up to, but excluding, the Facility A
Termination Date in an aggregate principal amount at any one time
outstanding up to, but not exceeding, the amount of such Lender's
Facility A Commitment as then in effect; provided, however, that the
aggregate principal amount of all such Loans by all Lenders hereunder at
any one time outstanding together with the LC Exposure shall not exceed
the Aggregate Facility A Commitments. Subject to the terms of this
Agreement, during the period from the Closing Date to and up to, but
excluding, the Facility A Termination Date, the Borrower may borrow,
repay and reborrow the amount described in this Section 2.01(a).
(b) Facility B Loans. Each Lender severally agrees, subject to
the terms and conditions of this Agreement, to make a term loan to the
Borrower not to exceed its Facility B Commitment. Such Facility B Loan
shall be made by way of up to two (2) advances as follows: (i) on the
Initial Funding date an aggregate Facility B Loan advance of up to
$20,000,000; and (ii) when and if the Borrower makes the Beaver Creek
Acquisition, provided such event occurs on or prior to the Beaver Creek
Conversion Termination Date, an additional aggregate Facility B Loan
advance of up to $85,000,000, less the amount of long term subordinated
debt (to the extent the issuance of subordinated debt did not result in
a reduction to the Borrowing Base pursuant to a redetermination as
provided in Section 2.08(d)) or equity capital raised by the Borrower
pursuant to Section 8.11; provided, however, such reduction shall not be
made to the extent that the proceeds of such subordinated debt or equity
is used to pay the Facility B Loan.
Any portion of each Lender's Facility B Commitment not utilized by
such borrowings on such dates shall be permanently canceled. Any
repayments of the Facility B Loans are not available to be redrawn.
(c) Letters of Credit. During the period from and including the
Closing Date to, but excluding, the Facility A Termination Date, the
Issuing Bank, as issuing bank for the Lenders, agrees to extend credit
for the account of the Borrower at any time and from time to time by
issuing, renewing, extending or reissuing Letters of Credit; provided
however, the LC Exposure at any one time outstanding shall not exceed
the lesser of (i) the LC Commitment or (ii) the Aggregate Facility A
Commitments, as then in effect, minus the aggregate principal amount of
all Facility A Loans then outstanding. The Lenders shall participate in
such Letters of Credit according to their respective Percentage Shares.
Each of the Letters of Credit shall (i) be issued by the Issuing Bank,
(ii) contain such terms and provisions as are reasonably required by the
Issuing Bank, (iii) be for the account of the Borrower and (iv) expire
not later than the earlier of (x) fourteen (14) months from the date of
issuance and (y) the Facility A Termination Date.
(d) Limitation on Types of Loans. Subject to the other terms and
provisions of this Agreement, at the option of the Borrower, the Loans
may be Base Rate Loans or Eurodollar Loans; provided that, without the
prior written consent of the Majority Lenders, no more than eight (8)
Eurodollar Loans may be outstanding at any time.
Section 2.02 Borrowings, Continuations and Conversions, 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 (i) the aggregate amount
of such borrowing, (ii) the Type and (iii) the date (which shall be a
Business Day) of the Loans to be borrowed, and (iv) (in the case of
Eurodollar Loans) the duration of the Interest Period therefor.
(b) Minimum Amounts. All Base Rate Loan borrowings shall be in
amounts of at least $500,000 or the remaining balance of the Aggregate
Facility A Commitments, if less, or any whole multiple of $500,000 in
excess thereof, and all 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. All borrowings, continuations and conversions shall
require advance written notice to the Agent (which shall promptly notify
the Lenders) in the form of Exhibit B (or telephonic notice promptly
confirmed by such a written notice), which in each case shall be
irrevocable, from the Borrower to be received by the Agent not later
than 11:00 a.m. Houston, Texas time at least one Business Day prior to
the date of each Base Rate Loan borrowing and three Business Days prior
to the date of each Eurodollar Loan borrowing, continuation or
conversion ; provided, however, for Base Rate Loans Borrower may request
a same day advance of up to $10,000,000 if the request is received by
the Agent not later than 9:00 a.m. on such day. Without in any way
limiting the Borrower's obligation to confirm in writing any telephonic
notice for a borrowing, continuation or conversion, 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 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 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
Eurodollar Loan to a Base Rate Loan pursuant to Section 2.02(e). All or
any part of any Eurodollar Loan may be continued as provided herein,
provided that (i) any continuation of any such Loan shall be (as to each
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 Event of Default shall have occurred and be continuing. If
an Event of Default shall have occurred and be continuing, each
Eurodollar Loan shall be converted to 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 Eurodollar Loan on the last day of the then current
Interest Period relating thereto to 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 Base Rate Loan at
any time and from time to time to 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 Loan may be converted as provided herein, provided that (i)
any conversion of any Base Rate Loan into a Eurodollar Loan shall be (as
to each such 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 Event of Default shall have
occurred and be continuing. If an Event of Default shall have occurred
and be continuing, no Base Rate Loan may be converted into a Eurodollar
Loan.
(f) Advances. Not later than 11:00 a.m. Houston, Texas time on
the date specified for each borrowing hereunder, each Lender shall make
available the amount of the Loan to be made by it on such date to the
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) Letters of Credit. The Borrower shall give the Issuing Bank
(which shall promptly notify the Lenders of such request and their
Percentage Share of such Letter of Credit) advance notice to be received
by the Issuing Bank 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 three (3) Business Days prior to the date of the
renewal or extension, of a Letter of Credit hereunder which request
shall specify (i) the amount of such Letter of Credit, (ii) the date
(which shall be a Business Day) such Letter of Credit is to be issued,
renewed or extended, (iii) the duration thereof, (iv) the name and
address of the beneficiary thereof, (v) the form and type of the Letter
of Credit and (vi) such other information as the Issuing Bank may
reasonably request, all of which shall be reasonably satisfactory to the
Issuing Bank. Subject to the terms and conditions of this Agreement, on
the date specified for the issuance, renewal or extension of a Letter of
Credit, the Issuing Bank shall issue, renew or extend such Letter of
Credit to the beneficiary thereof.
In conjunction with the issuance of each Letter of Credit, the
Borrower shall execute a Letter of Credit Agreement. In the event of
any conflict between any provision of a Letter of Credit Agreement and
this Agreement, the Borrower, the Issuing Bank, the Agent and the
Lenders hereby agree that the provisions of this Agreement shall govern.
The Issuing Bank will send to the Borrower and each Lender,
immediately upon issuance of any Letter of Credit, or an amendment
thereto, a true and complete copy of such Letter of Credit, or such
amendment thereto.
Section 2.03 Changes of Commitments.
(a) The Aggregate Facility A Commitments shall at all times be
equal to the lesser of (i) the Aggregate Facility A Maximum Credit
Amounts after adjustments resulting from reductions pursuant to
Section 2.03(b) or (ii) the Borrowing Base as determined from time to
time.
(b) The Borrower shall have the right to terminate or to reduce
the amount of the Aggregate Facility A Maximum 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 shall be irrevocable and effective only upon receipt
by the Agent.
(c) The Aggregate Facility A Maximum Credit Amounts once
terminated or reduced may not be reinstated.
Section 2.04 Fees.
(a) Commitment Fee. The Borrower shall pay to the Agent for the
account of each Lender a commitment fee on the daily average unused
amount of the Aggregate Facility A Commitments for the period from and
including the Closing Date up to but excluding the earlier of the date
the Aggregate Facility A Commitments are terminated or the Facility A
Termination Date at a rate per annum set forth at the appropriate
intersection in the table shown below based upon the Borrowing Base
Utilization Percentage as in effect from time to time:
Borrowing Base Utilization Percentage Commitment Fee
_____________________________________ ______________
Less than or equal to 50% .25%
Greater than 50% .30%
Accrued commitment fees shall be payable quarterly in arrears on each
Quarterly Date and on the earlier of the date the Aggregate Facility A
Commitments are terminated or the Facility A Termination Date.
(b) Letter of Credit Fees.
(i) The Borrower agrees to pay the Agent, for the account of
the Lenders, commissions for issuing the Letters of Credit on the
daily average outstanding of the maximum liability of the Issuing
Bank existing from time to time under such Letter of Credit
(calculated separately for each Letter of Credit) at the rate per
annum equal to the Applicable Margin then in effect for Eurodollar
Loans, provided that each Letter of Credit shall bear a minimum
commission of $500. Each Letter of Credit shall be deemed to be
outstanding up to the full face amount of the Letter of Credit
until the Issuing Bank has received the canceled Letter of Credit
or a written cancellation of the Letter of Credit from the
beneficiary of such Letter of Credit in form and substance
acceptable to the Issuing Bank, or for any reductions in the amount
of the Letter of Credit (other than from a drawing), written
notification from the beneficiary of such Letter of Credit. Such
commissions are payable quarterly in arrears on each Quarterly Date
and upon cancellation or expiration of each such Letter of Credit.
(ii) The Borrower agrees to pay the Issuing Bank, for its own
account, an issuing fee for issuing Letters of Credit on the daily
average outstanding of the maximum liability of the Issuing Bank
existing from time to time under such Letter of Credit (calculated
separately for each Letter of Credit) at the rate of .10% per
annum, payable quarterly in arrears on each Quarterly Date and upon
cancellation or expiration of each such Letter of Credit.
(c) 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 Loan to be made by it or to provide funds for disbursements or
reimbursements under Letters of Credit on the date specified therefor shall
not relieve any other Lender of its obligation to make its Loan or provide
funds on such date, but no Lender shall be responsible for the failure of any
other Lender to make a Loan to be made by such other Lender or to provide
funds to be provided by such other Lender.
Section 2.06 Notes. The Facility A Loans made by each Lender
shall be evidenced by a single promissory note of the Borrower in
substantially the form of Exhibit A-1, 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 Facility A Maximum
Credit Amount as originally in effect and otherwise duly completed and such
substitute Notes as required by Section 12.06(b). The Facility B Loans made
by each Lender shall be evidenced by a single promissory note of the Borrower
in substantially the form of Exhibit A-2, dated as of (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 and otherwise duly completed. The date,
amount, Type, interest rate and Interest Period of each Loan made by each
Lender, and all payments made on account of the principal thereof, shall be
recorded by such Lender on its books for its Notes, and, prior to any
transfer may be endorsed by such Lender on the schedule attached to such
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 Loans or affect the validity of such transfer by any Lender of its Note.
Section 2.07 Prepayments.
(a) Voluntary Prepayments. The Borrower may prepay the Base Rate
Loans upon not less than 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 $500,000 or the
remaining aggregate principal balance outstanding on the Notes) and
shall be 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 Eurodollar Loans on the same conditions as for Base Rate Loans
(except that prior notice to the Agent shall be not less than three (3)
Business Days for Eurodollar Loans) and in addition such prepayments of
Eurodollar Loans shall be subject to the terms of Section 5.05 and shall
be in an amount equal to all of the Eurodollar Loans for the Interest
Period prepaid.
(b) Mandatory Prepayments.
(i) If, after giving effect to any termination or reduction
of the Aggregate Facility A Maximum Credit Amounts pursuant to
Section 2.03(b), the outstanding aggregate principal amount of the
Facility A Loans plus the LC Exposure exceeds the Aggregate Facility A
Maximum Credit Amounts, the Borrower shall (i) prepay the Facility 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 Facility A Loans because
of LC Exposure, 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.
(ii) Upon any redetermination of the amount of the Borrowing
Base in accordance with Section 2.08, if the redetermined Borrowing Base
is less than the aggregate outstanding principal amount of the Facility
A Loans plus the LC Exposure, then the Borrower shall within thirty (30)
days of receipt of written notice thereof: (i) prepay the Facility A
Loans in an aggregate principal amount equal to such excess, together
with interest on the principal amount paid accrued to the date of such
prepayment and (ii) if a Borrowing Base deficiency remains after
prepaying all of the Facility A Loans because of LC Exposure, the
Borrower shall pay to the Agent on behalf of the Lenders an amount equal
to such Borrowing Base deficiency to be held as cash collateral as
provided in Section 2.10(b).
(iii)Upon receipt by the Borrower of any adjustment payment
from Amoco Production Company ("Amoco") pursuant to Section 4.2 or 5.2
of the Amoco Purchase and Sale Agreement, Borrower will give written
notice thereof to the Agent and the Facility A Borrowing Base will be
automatically reduced by the amount of such adjustment.
(c) Generally. Prepayments permitted or required under this
Section 2.07 shall be without premium or penalty, except as required
under Section 5.05 for prepayment of Eurodollar Loans. Any prepayments
on the Facility A Loans may be reborrowed subject to the then effective
Aggregate Facility A Commitments. Any prepayments on the Facility B
Loans may not be reborrowed and shall be applied to installments on the
Facility B Notes in the inverse order of maturity.
Section 2.08 Borrowing Base.
(a) During the period from and after the Closing Date until the
first redetermination pursuant to Section 2.08(d) or adjustment pursuant
to Section 8.08(d), the amount of the Borrowing Base shall be as defined
in Borrowing Base Letter. The Borrowing Base shall be redetermined in
accordance with Section 2.08(b) by the Agent with the concurrence of the
Required Lenders and is subject to redetermination in accordance with
Section 2.08(d). Upon any redetermination of the Borrowing Base, such
redetermination shall remain in effect until the next successive
Redetermination Date, except as provided in the Borrowing Base Letter
with respect to the Beaver Creek Acquisition. "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. So long as any of the Commitments are in effect or
any LC Exposure or Facility A Loans are outstanding hereunder, this
facility shall be governed by the then effective Borrowing Base.
(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 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 oil and
gas reserves and related assets shall include proved developed producing
reserves, proved developed non-producing reserves, proved undeveloped
reserves and related processing and gathering assets. The Agent shall
propose to the Lenders a new Borrowing Base no less than 20 days before
the Scheduled Redetermination Date. After having received notice of
such proposal by the Agent, the Required Lenders shall have 10 Business
Days to agree or disagree with such proposal. If at the end of the 10
Business Days, any Lender has not communicated its approval or
disapproval, such silence shall be deemed to be an approval. If the
Required Lenders have not approved within 10 Business Days, the Required
Lenders shall, within a reasonable period of time, agree on a new
Borrowing Base.
(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 assignable, or such Property is not
Mortgaged Property (if required pursuant to Section 8.09). Although the
Agent may exclude any Property from the Borrowing Base to the extent
title thereto is not reasonably satisfactory, it is understood that the
Borrower is only required to furnish title information with respect to
80% of the value of its Oil and Gas Properties covered by the subject
Reserve Report(s).
(d) So long as any of the Commitments are in effect and until
payment in full of all Facility A Loans hereunder and termination of all
outstanding Letters of Credit, on or around the first Business Day of
each May 1 and November 1, commencing May 1, 1998 (each being a
"Scheduled Redetermination Date"), the Lenders shall redetermine the
amount of the Borrowing Base in accordance with Section 2.08(b). In
addition, each of the Required Lenders and the Borrower may initiate one
additional redetermination of the Borrowing Base by specifying in
writing the date on which such redetermination is to occur while
Facility B is outstanding. Upon the repayment of Facility B, one such
unscheduled redetermination may occur during any consecutive twelve (12)
month period thereafter. In addition, upon issuance of Subordinated
Debt permitted pursuant to Section 9.01(g) hereof the Borrowing Base
shall be redetermined to give weight to the interest carry on such
Subordinated Debt as provided in the Borrowing Base Letter.
(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.
Section 2.09 Assumption of Risks. The Borrower assumes all risks
of the acts or omissions of any beneficiary of any Letter of Credit or any
transferee thereof with respect to its use of such Letter of Credit. Neither
the Issuing Bank (except in the case of gross negligence or willful
misconduct on the part of the Issuing Bank 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 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 Letter of Credit to comply fully with conditions
required in order to draw upon any Letter of Credit; or for any other
consequences arising from causes beyond the Issuing Bank's control or the
control of the Issuing Bank's correspondents. In addition, neither the
Issuing Bank, the Agent nor any Lender shall be responsible for any error,
neglect, or default of any of the Issuing Bank's correspondents; and none of
the above shall affect, impair or prevent the vesting of any of the Issuing
Bank's, the Agent's or any Lender's rights or powers hereunder or under the
Letter of Credit Agreements, all of which rights shall be cumulative. The
Issuing Bank 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 Issuing Bank or by any correspondent for
the Issuing Bank in good faith in connection with any Letter of Credit, or
any related drafts, certificates, documents or instruments, shall be binding
on the Borrower and shall not put the Issuing Bank 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 Issuing Bank is made under any 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 Issuing Bank under the
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 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 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 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 such disbursement
to and including the date of repayment in full of such disbursed
amount. The obligations of the Borrower under this Agreement with
respect to each 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 Letter of Credit or any of the
Loan Documents; (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 Letter of Credit or any of
the Loan Documents; (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 Letter of Credit or any transferee of any Letter of
Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank, the Agent, any Lender or
any other Person, whether in connection with this Agreement, any Letter
of Credit, the Loan Documents, the transactions contemplated hereby or
any unrelated transaction; (iv) any statement, certificate, draft,
notice or any other document presented under any 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 Issuing Bank under any 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 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 Issuing Bank, except (i)
where the Borrower or any Subsidiary actually recovers the proceeds for
itself or the Issuing Bank of any payment made by the Issuing Bank in
connection with such gross negligence or willful misconduct or (ii) in
cases where the Agent makes payment to the named beneficiary of a Letter
of Credit in accordance with the terms thereof.
(b) In the event the principal amount then outstanding on and the
accrued interest on the Loans has been accelerated pursuant to Section
10.02 or in the event of a payment or prepayment pursuant to Section
2.07(b), an amount equal to the 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 Issuing Bank, 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 Letter of Credit has attempted to draw down
all or a portion of such amount under the terms of 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 Issuing Bank, the Agent, the Lenders
or any other Person for any reason whatsoever. Such payments shall be
held by the Issuing Bank on behalf of the Lenders as cash collateral
securing the LC Exposure in an 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 Letters of Credit and in the event that
thereafter drafts or other demands for payment complying with the terms
of such 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 Notes or the Loan Documents, to remit to the
Borrower amounts for which the contingent obligations evidenced by the
Letters of Credit have ceased.
(c) Each Lender severally and unconditionally agrees that it shall
promptly reimburse the Issuing Bank an amount equal to such Lender's
Percentage Share of any disbursement made by the Issuing Bank under any
Letter of Credit that is not reimbursed according to this Section 2.10.
(d) Notwithstanding anything to the contrary contained herein, if no
Event of Default has occurred and is continuing and subject to
availability under Section 2.01(a), to the extent the Borrower has not
reimbursed the Issuing Bank for any drawn upon Letter of Credit within
one (1) Business Days after notice of such disbursement has been
received by the Borrower, the amount of such Letter of Credit
reimbursement obligation shall automatically be funded by the Lenders as
a Facility A Loan hereunder and used by the Lenders to pay such Letter of
Credit reimbursement obligation. If an Event of Default has occurred and
is continuing, or if the funding of such Letter of Credit reimbursement
obligation as a Facility A Loan would cause the aggregate amount of all
Facility A Loans outstanding to exceed the Aggregate Facility A
Commitments (after reduction for LC Exposure), such Letter of Credit
reimbursement obligation shall not be funded as a Facility A Loan, but
instead shall accrue interest as provided in Section 2.10(a).
Section 2.11 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending
Office for Loans of such Type.
ARTICLE III
Payments of Principal and Interest
Section 3.01 Repayment of Loans.
(a) Facility A Loans. In addition to any Mandatory Prepayments
required by Section 2.07, on the Facility A Termination Date the Borrower
shall repay the outstanding aggregate principal and accrued and unpaid
interest under the Facility A Notes.
(b) Facility B Loans. On the Facility B Maturity Date the Borrower
shall repay the outstanding aggregate principal and accrued and unpaid
interest under the Facility B Notes.
(c) Generally. The Borrower will pay to the Agent, for the account of
each Lender, the principal payments required by this Section 3.01.
Section 3.02 Interest.
(a) Interest Rates. The Borrower will pay to the Agent, for the
account of each Lender, interest on the unpaid principal amount of each
Loan made by such Lender for the period commencing on the date such Loan
is made to, but excluding, the date such Loan shall be paid in full, at
the following rates per annum:
(i) if such a Loan is 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 Loan is a Eurodollar Loan, for each
Interest Period relating thereto, the Eurodollar Rate for such Loan
plus the Applicable Margin (as in effect from time to time), but in
no event to exceed the Highest Lawful Rate.
(b) Post-Default 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 Loan made by
such Lender, and (to the fullest extent permitted by law) on any other
amount payable by the Borrower hereunder, under any Loan Document or
under any 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.
(c) Due Dates. Accrued interest on Base Rate Loans shall be
payable on each Quarterly Date and accrued interest on each 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 Eurodollar Loan that is converted
into a Base Rate Loan (pursuant to Section 5.04) shall be payable on the
date of conversion (but only to the extent so converted).
(d) Determination of Rates. 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.
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 this Agreement, the Notes and the Letter of Credit
Agreements 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 Note for account of a
Lender shall be paid promptly to such Lender in immediately available funds.
Except as otherwise provided in the definition of "Interest Period", if the
due date of any payment under this Agreement or any Note would otherwise fall
on a day which is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension. 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 Loans to which such payment shall apply. In
the absence of such notice the Agent may specify the Loans to which such
payment shall apply, but to the extent possible such payment or prepayment
will be applied first to the Loans comprised of 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 Section 2.04(a) and
Section 2.04(b) 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 Facility A Maximum Credit Amounts under
Section 2.03(b) shall be applied to the Commitment of each Lender, pro rata
according to the amounts of its respective Commitment; (ii) each payment of
principal of Loans by the Borrower shall be made for account of the Lenders
pro rata in accordance with the respective unpaid principal amount of the
Loans held by the Lenders; and (iii) each payment of interest on Loans by 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 Letters of Credit
shall be made for account of the Issuing Bank 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 Eurodollar Loans and fees
shall be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day) occurring in the period
for which 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
Base Rate Loans 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 Loan or a payment under 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 at any of its offices, in Dollars or in any other currency,
against any principal of or interest on any of such Lender's Loans, or
any other amount payable to such Lender hereunder, which is not paid
when due (regardless of whether such balances are then due to 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 Loan made by it to the Borrower under this Agreement (or
reimbursement as to any 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 Loans (or participations in
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 Loans held by each of the Lenders (or
reimbursements of 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 Loans made by
other Lenders (or in interest due thereon, as the case may be) may
exercise all rights of set-off, banker's lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender
were a direct holder of Loans (or 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,
the Issuing Bank 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, the Issuing Bank 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, the Issuing Bank
or such Lender is organized, or (iii) any jurisdiction (or political
subdivision thereof) in which such Lender, the Issuing Bank or the Agent
is presently doing business which taxes are imposed solely as a result
of doing business in such jurisdiction (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders, the Issuing Bank 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, the Issuing Bank 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 or any Loan Documents (hereinafter referred to as "Other
Taxes").
(c) Indemnification. To the fullest extent permitted by
applicable law, the Borrower will indemnify each Lender and the Issuing
Bank 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, the Issuing Bank 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, the Issuing Bank 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, Issuing Bank 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, the Issuing Bank 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 banking
association or corporation organized under the laws of the United
States of America or any state thereof or (2) it is entitled to
complete exemption from United States withholding tax imposed on or
with respect to any payments, including fees, to be made to it
pursuant to this Agreement (A) under an applicable provision of a
tax convention to which the United States of America is a party or
(B) because it is acting through a branch, agency or office in the
United States of America and any payment to be received by it
hereunder is effectively connected with a trade or business in the
United States of America. Each Lender that is not a banking
association or corporation organized under the laws of the United
States of America or any state thereof agrees to provide to 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 if a Lender, which is otherwise
exempt from or subject to a reduced rate of withholding tax,
becomes subject to taxes because of its failure to deliver a form
required hereunder, 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.
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
Eurodollar Loans or issuing or participating in Letters of Credit
hereunder or its obligation to make any Eurodollar Loans or issue or
participate in any Letters of Credit hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of such
Eurodollar Loans, 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 Note in respect of any of such Eurodollar
Loans or 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 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 Commitment or Loans of such Lender or the Eurodollar interbank
market; or (iii) imposes any other condition affecting this Agreement or
any Note (or any of such extensions of credit or liabilities) or such
Lender's Commitment or 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 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 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 at any time (by reason
of any Regulatory Change arising after the Closing Date affecting
(A) any Lender, (B) the Eurodollar interbank market or (C) such Lender's
position in such market), the Eurodollar Rate, as determined in good
faith by such Lender, will not adequately and fairly reflect the cost to
such Lender of funding its Eurodollar Loans, then, if such Lender so
elects, by notice to the Borrower and the Agent, the obligation of such
Lender to make additional 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 Regulatory Change, of capital in respect of its
Commitment, its Note, or its Loans or any interest held by it in any
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 Regulatory Change. 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 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 Loans or its obligation to make
Loans or issue Letters of Credit, or on amounts receivable by it in
respect of Loans or 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 and provided such
compensation procedure is on a basis similar to the basis upon which
such Lender is charging other similarly situated borrowers. 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). No Lender shall be entitled
to recover costs under this Section 5.01 incurred or accrued more than
180 days prior to the notice described in this Section 5.01(d).
Section 5.02 Limitation on 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 Eurodollar Loans as provided
herein; or
(ii) the Majority Lenders determine (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
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 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 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
Eurodollar Loans hereunder, then such Lender shall promptly notify the
Borrower thereof and such Lender's obligation to make Eurodollar Loans shall
be suspended until such time as such Lender may again make and maintain
Eurodollar Loans (in which case the provisions of Section 5.04 shall be
applicable).
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and
5.03. If the obligation of any Lender to make Eurodollar Loans shall be
suspended pursuant to Sections 5.01, 5.02 or 5.03 ("Affected Loans"), all
Affected Loans which would otherwise be made by such Lender shall be made
instead as 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 Loans of such Lender then outstanding shall be
automatically converted into Base Rate Loans on the date specified by such
Lender in such notice) and, to the extent that Affected Loans are so made as
(or converted into) Base Rate Loans, all payments of principal which would
otherwise be applied to such Lender's Affected Loans shall be applied instead
to its 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 (excluding loss of anticipated
profits), cost, expense or liability which such Lender determines are
attributable to:
(i) any payment, prepayment or conversion of a Eurodollar
Loan properly made by such Lender or the Borrower for any reason
(including, without limitation, the acceleration of the Loans
pursuant to Section 10.01) on a date other than the last day of the
Interest Period for such Loan; or
(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 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).
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 or has required the
Borrower to make payments for Taxes under Section 4.06, 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 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 Commitment of the
Terminated Lender, the Borrower shall: (i) obtain an agreement with one
or more Lenders to increase their Commitment or Commitments and/or (ii)
request any one or more other banking institutions to become parties to
this Agreement in place and instead of such Terminated Lender and agree
to accept a Commitment or Commitments; provided, however, that such one
or more other 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
Commitment of the Terminated Lender being referred to herein as the
"Replacement Lenders"), such that the aggregate increased and/or
accepted Commitments of the Replacement Lenders under clauses (i) and
(ii) above equal the Commitment of the Terminated Lender.
(c) The Notice of Termination shall include the name of the
Terminated Lender, the date the termination will occur (the "Lender
Termination Date"), and the Replacement Lender or Replacement Lenders to
which the Terminated Lender will assign its Commitment and, if there
will be more than one Replacement Lender, the portion of the Terminated
Lender's Commitment to be assigned to each Replacement Lender.
(d) On the Lender Termination Date, (i) the Terminated Lender
shall by execution and delivery of an Assignment assign its Commitment
to the Replacement Lender or Replacement Lenders (pro rata, if there is
more than one Replacement Lender, in proportion to the portion of the
Terminated Lender's Commitment to be assigned to each Replacement
Lender) indicated in the Notice of Termination and shall assign to the
Replacement Lender or Replacement Lenders each of its Loans (if any)
then outstanding and participation interests in Letters of Credit (if
any) then outstanding pro rata as aforesaid), (ii) the Terminated Lender
shall endorse its 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 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 and
Replacement Lenders, as set forth in Section 5.05.
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 or an Assistant Secretary of
the Borrower setting forth (i) resolutions of its board of directors
with respect to the authorization of the Borrower to execute and deliver
the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of the
Borrower (y) who are authorized to sign the Loan Documents to which
Borrower is a party and (z) who will, until replaced by another officer
or officers duly authorized for that purpose, act as its representative
for the purposes of signing documents and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized
officers, and (iv) the articles or certificate of incorporation and
bylaws of the Borrower, certified as being true and complete. The Agent
and the Lenders may conclusively rely on such certificates until the
Agent receives notice in writing from the Borrower to the contrary.
(b) A certificate of the Secretary or an Assistant Secretary of
the Guarantor setting forth (i) resolutions of its board of directors
with respect to the authorization of the Guarantor to execute and
deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of the
Guarantor (y) who are authorized to sign the Loan Documents to which
Guarantor is a party and (z) who will, until replaced by another officer
or officers duly authorized for that purpose, act as its representative
for the purposes of signing documents and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized
officers, and (iv) the articles or certificate of incorporation and
bylaws of the Guarantor, certified as being true and complete. The
Agent and the Lenders may conclusively rely on such certificate until
they receive notice in writing from the Guarantor to the contrary.
(c) Certificates of the appropriate state agencies with respect to
the existence, qualification and good standing of the Borrower and
Guarantor.
(d) A compliance certificate which shall be substantially in the
form of Exhibit C, duly and properly executed by a Responsible Officer
and dated as of the Closing Date.
(e) The Notes, duly completed and executed.
(f) The other Loan Documents, including those described on Exhibit
D, duly completed and executed in sufficient number of counterparts for
recording, if necessary.
(g) Opinions of (i) Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to the
Borrower and Guarantor and (ii) Borrower's and the Guarantor's General
Counsel, in form and substance satisfactory to the Agent, as to such
matters incident to the transactions herein contemplated as the Agent
may reasonably request.
(h) A certificate of insurance coverage of the Borrower evidencing
that the Borrower is carrying insurance in accordance with Section 7.19.
(i) Concurrent with the Initial Funding, the Borrower shall have
acquired from Amoco Production Company the Amoco Properties other than
the Beaver Creek Unit (except for the Beaver Creek gas plant).
(j) Such other documents as the Agent or any Lender or special
counsel to the Agent may reasonably request.
(k) All indebtedness and other obligations of the Borrower and its
Subsidiaries under that certain Credit Agreement among the Borrower,
Bank One, Texas, N.A., Bank of Montreal, Compass Bank-Houston and
DenNorske Bank AS, dated as of March 31, 1995, shall have been paid and
satisfied in full.
Section 6.02 Initial and Subsequent Loans and Letters of Credit.
The obligation of the Lenders to make Loans to the Borrower upon the occasion
of each borrowing hereunder and to issue, renew, extend or reissue 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
Loans and after giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) no Material Adverse Effect shall have occurred and be continuing; and
(c) the representations and warranties made by the Borrower in Article
VII and in the Loan Documents shall be true in all material respects on and
as of the date of the making of such Loans or issuance, renewal, extension or
reissuance of a Letter of Credit with the same force and effect as if made on
and as of such date and following such new borrowing, except to the extent
such representations and warranties are expressly limited to an earlier date
or the Majority Lenders may expressly consent in writing to the contrary.
Each request for a borrowing or issuance, renewal, extension or
reissuance of a Letter of Credit by the Borrower hereunder shall constitute a
certification by the Borrower to the effect set forth in Section 6.02(c)
(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 Letter of Credit
as of the date thereof).
In addition to the foregoing for any advances or issuances of Letters of
Credit following the time for performance of Borrower's covenants under
Section 8.08(a) and Section 8.12, the Lenders must be satisfied with the
Borrower's title to and the environmental condition of the Amoco Properties
acquired by the Borrower.
Section 6.03 Conditions Precedent for the Benefit of Lenders. All
conditions precedent to the obligations of the Lenders to make any Loan are
imposed hereby solely for the benefit of the Lenders, and no other Person may
require satisfaction of any such condition precedent or be entitled to assume
that the Lenders will refuse to make any Loan in the absence of strict
compliance with such conditions precedent.
Section 6.04 No Waiver. No waiver of any condition precedent
shall preclude the Agent or the Lenders from requiring such condition to be
met prior to making any subsequent Loan or preclude the Lenders from
thereafter declaring that the failure of the Borrower to satisfy such
condition precedent constitutes a Default.
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 Letter of Credit as provided
in Section 6.02):
Section 7.01 Corporate Existence. Each of the Borrower and each
Subsidiary: (i) is a corporation duly organized, legally existing and in
good standing under the laws of the jurisdiction of its incorporation if, in
the case of Subsidiaries, the failure to be so organized, existing and in
good standing would have a Material Adverse Effect; (ii) has all requisite
corporate power, and has all material governmental licenses, authorizations,
consents and approvals necessary in all material respects 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 unaudited consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as at
December 31, 1996 and the related consolidated statement of income, of the
Borrower and its Consolidated Subsidiaries for the fiscal year ended on said
date and the unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at September 30, 1997 and the related
consolidated statement of income, of the Borrower and its Consolidated
Subsidiaries for the nine 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 dates and the results of its operations for the
fiscal year and the nine month period on said dates, all in accordance with
GAAP (except that the financial statements of the Borrower need not contain
footnotes or provisions for income taxes), 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, material contingent liabilities, material liabilities
for taxes, material unusual forward or long-term commitments or material
unrealized or anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in the Financial Statements or in
Schedule 7.02. Since December 31, 1996, there has been no change or event
having a Material Adverse Effect. Since the date of the Financial
Statements, neither the business nor the Properties of the Borrower or any
material 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 material litigation,
legal, administrative or arbitral proceeding, investigation or other action
of any nature pending or, to the knowledge of the Borrower threatened against
the Borrower or any Subsidiary which involves the reasonable possibility of
any judgment or liability against the Borrower or any Subsidiary not fully
covered by insurance (except for normal deductibles).
Section 7.04 No Breach. Neither the execution and delivery of the
Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent which has not
been obtained as of the Closing Date under, the respective charter or by-laws
of the Borrower or any Subsidiary, or any Governmental Requirement or any
agreement or instrument to which the Borrower or any Subsidiary is a party or
by which it is bound or to which it or its Properties are subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of the
Borrower or any Subsidiary pursuant to the terms of any such agreement or
instrument other than the Liens created by the Loan Documents.
Section 7.05 Authority. The Borrower has all necessary corporate
power and authority to execute, deliver and perform its obligations under the
Loan Documents to which it is a party; and the execution, delivery and
performance by the Borrower of the Loan Documents to which it is a party, has
been duly authorized by all necessary corporate action on its part; and the
Loan Documents constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general application relating to or affecting creditor's rights and general
principals of equity.
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 of the
Loan Documents or for the validity or enforceability thereof, except for the
recording and filing of the Loan Documents as required by this Agreement and
except in the case of performance (i) those matters customarily done after
execution and (ii) those matters required in raising the Minimum Capital.
Section 7.07 Use of Loans. The proceeds of the Loans shall be
used to finance the Amoco Acquisition, refinance existing bank debt and for
working capital and 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, T, U
or X of the Board of Governors of the Federal Reserve System) and no part of
the proceeds of any Loan hereunder will be used to buy or carry any margin
stock.
Section 7.08 ERISA.
(a) No act, omission or transaction has occurred with respect to
any Plan which would have a Material Adverse Effect.
(b) 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 that would have a
Material Adverse Effect.
(c) 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.
(d) 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.
(e) None of the Borrower, any Subsidiary or any ERISA Affiliate
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, a Subsidiary or
any ERISA Affiliate in its sole discretion at any time without any
material liability.
(f) 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.
(g) 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 its Subsidiaries has filed all United States Federal income
tax returns and all other material tax returns which are required to be filed
by them and have paid all material taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower or any Subsidiary. The
charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Borrower, adequate. No material tax lien (other than any
Excepted Lien) has been filed and, to the knowledge of the Borrower, no
material 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 Schedule 7.10, each of the Borrower and
its material Subsidiaries has good and defensible title to its material
(individually or in the aggregate) Properties, free and clear of all
Liens, except Liens permitted by Section 9.02. Except as set forth in
Schedule 7.10, after giving full effect to the Excepted Liens, the
Borrower (i) owns the net interests in production attributable to the
Hydrocarbon Interests reflected in the most recently delivered Reserve
Report (except, until the Beaver Creek Acquisition, the Properties to be
acquired thereby) and the ownership of such Properties shall not in any
material respect obligate the Borrower to bear the costs and expenses
relating to the maintenance, development and operations of each such
Property in an amount in excess of the working interest of each Property
set forth in the most recently delivered Reserve Report and (ii) subject
to determination of any Alleged Title Defects within the 90 day period
provided in Section 4.2 of the Amoco Purchase and Sale Agreement, the
Borrower owns the net interests in production in the Amoco Properties
set forth in the Initial Reserve Reports (except, until the Beaver Creek
Acquisition, the Properties to be acquired thereby) and such Properties
shall not in any material respect obligate the Borrower to bear the
costs and expenses relating to the maintenance, development and
operations of each such Property in an amount in excess of the working
interest of each Property reflected in the Initial Reserve Reports. All
information contained in the Initial Reserve Reports and the most
recently delivered Reserve Report is true and correct in all material
respects as of the date thereof.
(b) All material leases and material agreements necessary for the
conduct of the business of the Borrower and its 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 its Subsidiaries.
(c) The rights, Properties and other assets presently owned,
leased or licensed by the Borrower and its Subsidiaries including,
without limitation, all easements and rights of way, include all rights,
Properties and other assets necessary to permit the Borrower and its
Subsidiaries to conduct their business with respect to the Amoco
Properties acquired by the Borrower in all material respects in the same
manner as its business has been conducted prior to the Closing Date.
(d) All of the assets and Properties of the Borrower and its
material Subsidiaries which are reasonably necessary for the operation
of its business are in good working condition in all material respects
and are maintained in all material respects 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 its Subsidiaries taken as a whole. It is understood that any
financial or other future projections included in any such information are
based upon Borrower's best available information and reasonable opinion and
no warranty is hereby given with respect to such projections. 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 reasonably foresee as of the date hereof) 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,
the Borrower has no Subsidiaries.
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 Borrower's 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 Borrower's Oil and Gas
Properties; specifically in this connection, (i) after the Closing Date, no
Oil and Gas Property of the Borrower is subject to having allowable
production materially 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 Borrower's Oil and Gas Properties
(or properties unitized therewith) are deviated from the vertical more than
the maximum permitted by applicable laws, regulations, rules and orders, and
such xxxxx are, in fact, bottomed under and are producing from, and the well
bores are wholly within, the Borrower's 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 owned or held
by the Borrower and each Subsidiary. All such policies are in full force and
effect, all premiums that are due with respect thereto covering all periods
up to and including the Closing Date have been paid, and no notice of
cancellation or termination has been received with respect to any such
policy. Such policies are sufficient, in all material respects, for
compliance with all requirements of law and of all agreements to which the
Borrower or any Subsidiary is a party; are valid, outstanding and enforceable
policies; provide adequate insurance coverage in at least such amounts and
against at least such risks (but including in any event public liability) as
are usually insured against in the same general area by companies engaged in
the same or a similar business for the assets and operations of the Borrower
and each Subsidiary; will remain in full force and effect through the
respective dates set forth in Schedule 7.19 without the payment of additional
premiums except those which are not yet due; 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 its Subsidiaries and their respective Board of
Directors or officers have designated as being self insured. Neither the
Borrower nor any Subsidiary has been refused any insurance with respect to
its assets or operations, nor has its coverage been limited below usual and
customary policy limits, by an insurance carrier to which it has applied for
any such insurance or with which it has carried insurance during the last
three years.
Section 7.20 Hedging Agreements. Schedule 7.20 sets forth, as of
the Closing Date, a true and complete list of all Hedging Agreements of the
Borrower and each Subsidiary, the material terms thereof (including the type,
term, effective date, termination date and notional amounts or volumes), the
net xxxx to market value thereof, all credit support agreements relating
thereto (including any margin required or supplied), and the counter party to
each such agreement.
Section 7.21 Restriction on Liens. Neither the Borrower nor any
of its Subsidiaries is a party to any agreement or arrangement (other than
this Agreement and the other Loan Documents), 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 other than those permitted by Section 9.19 hereof.
Section 7.22 Material Agreements. Set forth on Schedule 7.22
hereto 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 as defined in
clauses (i), (ii), (iv), (v), (vi), (vii) and (xii) of the definition thereof
of the Borrower or any of its Subsidiaries, and all obligations in effect on
the Closing Date of the Borrower or any of its Subsidiaries to issuers of
surety or appeal bonds issued for account of the Borrower or any such
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.
ARTICLE VIII
Affirmative Covenants
The Borrower covenants and agrees that, so long as any of the
Commitments are in effect and until payment in full of all Loans and LC
Exposure hereunder and all interest thereon:
Section 8.01 Reporting Requirements. The Borrower shall deliver,
or shall cause to be delivered, to the Agent with sufficient copies of each
for the Lenders:
(a) Annual Financial Statements. As soon as available and in any
event within 95 days after the end of each fiscal year of the Borrower,
the audited consolidated and unaudited consolidating statements of
income, stockholders' equity, changes in financial position and cash
flow of the Guarantor and its Consolidated Subsidiaries for such fiscal
year, and the related consolidated and consolidating balance sheets of
the Guarantor and its Consolidated Subsidiaries as at the end of such
fiscal year, and setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, and accompanied by
the related opinion of independent public accountants of recognized
national standing which opinion shall state that said financial
statements fairly present the consolidated and consolidating financial
condition and results of operations of the Guarantor 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.
(b) Quarterly Financial Statements. 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 Guarantor, consolidated and
consolidating statements of income, stockholders' equity, changes in
financial position and cash flow of the Guarantor and its Consolidated
Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated and consolidating balance sheets as at the end of such
period, and setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding
fiscal year, accompanied by the certificate of a Responsible Officer,
which certificate shall state that said financial statements fairly
present the consolidated and consolidating financial condition and
results of operations of the Guarantor 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) Notice of Default, Etc. Promptly after the Borrower knows
that any Default (other than with respect to Section 8.01) 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) Other Accounting Reports. Promptly upon receipt thereof, a
copy of each interim or special audit made by Guarantor's or the
Borrower's independent accountants of the books of the Guarantor,
Borrower and their Subsidiaries.
(e) SEC Filings, Etc. Promptly upon its becoming available, each
financial statement, report, notice or proxy statement sent by Xxxxxx
Corporation to stockholders generally and each regular or periodic
report and any final registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed
by Xxxxxx Corporation with or received by the Guarantor in connection
therewith from any securities exchange or the SEC or any successor
agency.
(f) Notices Under Other Loan Agreements. Promptly after the
furnishing thereof, copies of any statement, report or notice furnished
to any Person pursuant to the terms of any indenture, loan or credit or
other similar agreement, other than this Agreement and not otherwise
required to be furnished to the Lenders pursuant to any other provision
of this Section 8.01.
(g) Other Matters. From time to time such other information
regarding the business, affairs or financial condition of the Xxxxxx
Corporation, the Borrower or any Subsidiary (including, without
limitation, any Plan or Multiemployer Plan) as any Lender or the Agent
may reasonably request.
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 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 9.12, 9.13 and 9.14 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: (i) all legal or arbitral proceedings, and of all
proceedings before any Governmental Authority involving the Borrower or any
Subsidiary, except proceedings which, if adversely determined, would not have
a Material Adverse Effect, and (ii) of any material litigation or material
proceeding against the Borrower or any Subsidiary in which the amount
involved is not covered in full by insurance (subject to normal and customary
deductibles), or in which injunctive or similar relief is sought. The
Borrower will, and will cause each of its 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 Subsidiary if the
value of the claim, judgment, Lien, or other encumbrance affecting such
Property shall exceed $2,000,000.
Section 8.03 Maintenance, Etc.
(a) Generally. The Borrower shall preserve and maintain its
corporate existence and all of its material rights, privileges and
franchises; keep books of record and account in which full, true and
correct entries will be made in accordance with GAAP 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 material
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,
environmental risk insurance to the extent reasonably available.
(b) Proof of Insurance. 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) Operation of Properties. The Borrower will and will cause
each Subsidiary to operate, in all material respects, its Properties or
cause such Properties to be operated, in all material respects, in a
careful and efficient manner in accordance with the practices of the
industry and in compliance, in all material respects, with all
applicable contracts and agreements and in compliance in all material
respects with all Governmental Requirements.
(d) Oil and Gas Properties. The Borrower will and will cause each
Subsidiary to, at its own expense, maintain, preserve, protect and keep
all its material Oil and Gas Properties in good repair, working order
and condition in all material respects, and make necessary and proper
repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times in all
material respects, all in accordance with approved practices of prudent
operators and standards prevailing in the oil and gas industry and
within limits imposed by joint operating agreements.
Section 8.04 Environmental Matters.
(a) Establishment of Procedures. The Borrower will and will cause
each Subsidiary 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 its Subsidiaries and the operations
conducted thereon and other activities of the Borrower and its
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) Notice of Action. 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.
Section 8.05 Further Assurances. The Borrower will and will cause
each Subsidiary to cure promptly any defects in the creation and issuance of
the Notes and the execution and delivery of the other Loan Documents. The
Borrower at its expense will and will cause each 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 Subsidiary, as the case may be, in the Loan
Documents, or to further evidence and more fully describe the collateral
intended as security for the Notes, or to correct any omissions in the Loan
Documents, or to state more fully the security obligations set out herein or
in any of the Loan Documents, or to perfect, protect or preserve any Liens
created pursuant to any of the Loan Documents, 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 Notes according to the reading, tenor and effect thereof; and the
Borrower will and will cause each Subsidiary to do and perform every act and
discharge all of the obligations to be performed and discharged by them under
the Loan Documents, at the time or times and in the manner specified.
Section 8.07 Reserve Reports.
(a) Not less than 60 days prior to each Scheduled Redetermination
Date, commencing with the Scheduled Redetermination Date to occur on May
1, 1998 the Borrower shall furnish to the Agent and the Lenders a
Reserve Report. The March 1 Reserve Report of each year, other than the
Report as of January 1, 1998, shall be as of January 1 of such year and
prepared by X. X. Xxxx and Associates or other certified independent
petroleum engineers acceptable to the Agent. The January 1, 1998
Reserve Report shall be audited by X. X. Xxxx or Xxxxx Xxxxx. The
September 1 Reserve Report of each year shall be as of July 1 of such
year and prepared by or under the supervision of the chief engineer of
the Borrower who shall certify such Reserve Report to be true and
accurate (in accordance with customary prudent industry standards) and
to have been prepared, in all material respects, in accordance with the
procedures used in the immediately proceeding 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 all material respects, in accordance with the procedures
used in the immediately preceding Reserve Report. For any unscheduled
redetermination requested by the Required 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 Required Lenders as soon
as possible, but in any event no later than 30 days following the
receipt of the request by the Agent.
(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 in all material respects, (ii) the Borrower 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 its Oil and Gas Properties
evaluated in such Reserve Report which would require the Borrower 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 its 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 its Oil and Gas
Properties sold and in such detail as reasonably required by the
Majority Lenders, (v) attached to the certificate is a list of its 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 its 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 from its Oil and Gas
Properties and (vii) following delivery of the Mortgages called for in
Section 8.09 below, 80% of all of the Oil and Gas Properties evaluated
by such Reserve Report will be Mortgaged Property unless such Mortgages
are not required pursuant to Section 8.09.
Section 8.08 Title and Mortgage Information.
(a) Title Re Amoco Properties. As soon as reasonably practicable,
but in no event later than the end of the 90 day period provided in
Section 4.2 of the Amoco Purchase and Sale Agreement, the Borrower will
conduct reasonable title review of the Amoco Properties acquired by the
Borrower to determine any "Alleged Title Defects" as provided in Section
4.2 of the Amoco Purchase and Sale Agreement and shall make such demands
for price adjustment as it may be entitled pursuant to the Amoco
Purchase and Sale Agreement.
(b) Delivery. 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 title information and, unless mortgages are not required
pursuant to Section 8.09, mortgages, deeds of trust, security agreements
and financing statements, as appropriate, in form and substance
acceptable to the Agent covering enough of the Oil and Gas Properties
evaluated by such Reserve Report that were not included in the
immediately preceding Reserve Report, so that the Agent shall have
received together with title information and Liens previously delivered
to the Agent, satisfactory title information and, if required, Liens on
at least eighty percent (80%) of the value of the Oil and Gas Properties
evaluated by such Reserve Report.
(c) Cure of Title Defects. The Borrower shall cure any title
defects or exceptions which are not Excepted Liens raised by the
information required by Section 8.08(b) above, or, if mortgages are
required pursuant to Section 8.09, substitute acceptable Mortgaged
Properties with no title defects or exceptions except for Excepted Liens
covering Mortgaged Properties of an equivalent value, within 45 days
after a request by the Agent or the Lenders to cure such defects or
exceptions.
(d) Failure to Cure Title Defects. If the Borrower is unable to
cure any title defect requested by the Agent or the Lenders to be cured
or the Borrower does not comply with the requirement to provide
acceptable title information covering eighty percent (80%) 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
Oil and Gas Property after the time period in Section 8.08(c) has
elapsed, such unacceptable Oil and Gas Property shall not count towards
the eighty percent (80%) 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 all of the Lenders to
cause the Borrower to be in compliance with the requirement to provide
acceptable title information on eighty percent (80%) of the value of the
Oil and Gas Properties. This new Borrowing Base shall become effective
immediately after receipt of such notice.
Section 8.09 Mortgages. Within fifty six (56) days after the
Borrower's completion of the Beaver Creek Acquisition, the Borrower will
grant to the Agent as security for the Indebtedness a first-priority Lien
interest (subject only to Excepted Liens) on the Borrower's interest on at
least eighty percent (80%) of the value of the Oil and Gas Properties
evaluated by the Initial Reserve Reports, which Liens will be created by and
in accordance with the provisions of mortgages, deeds of trust, security
agreements and financing statements, or other Loan Documents (the
"Mortgages"), 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. The Mortgages will not be
filed by the Lenders until the first to occur of (1) the occurrence of a
Default and (2) six (6) months after the Borrower has completed the Beaver
Creek Acquisition. If Facility B has been repaid and the Minimum Capital has
been raised within six (6) months after the Borrower has completed the Beaver
Creek Acquisition and no Default has occurred and is then continuing, the
Mortgages will not be recorded and will be returned to the Borrower. In
connection with the delivery of Mortgages, as aforesaid, the Borrower will
furnish (i) title information to the Agent which establishes to the Agent's
satisfaction that Borrower has good and defensible title to the Oil and Gas
Properties covered by the Mortgage and the Mortgage is first and prior and
(ii) opinions of counsel satisfactory to the Agent with respect to the
enforceability of the Mortgage and such other matters in connection therewith
as the Agent may reasonably request.
Section 8.10 ERISA Information and Compliance. 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 (i)
immediately upon becoming aware of the occurrence of any ERISA Event or
breach or violation of or default by the Borrower or any Subsidiary under any
Plan which, individually or in the aggregate, would have a Material Adverse
Effect, 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, and (ii) immediately
upon receipt thereof, copies of any notice of the PBGC's intention to
terminate or to have a trustee appointed to administer any Plan. With
respect to each Plan (other than a Multiemployer Plan), the Borrower will,
and will cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full
and in a timely manner, without incurring any late payment or underpayment
charge or penalty and without giving rise to any lien, all of the
contribution and funding requirements of section 412 of the Code (determined
without regard to subsections (d), (e), (f) and (k) thereof) and of section
302 of ERISA (determined without regard to sections 303, 304 and 306 of
ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely manner,
without incurring any late payment or underpayment charge or penalty, all
premiums required pursuant to sections 4006 and 4007 of ERISA.
Section 8.11 Minimum Capital. Within twelve (12) months of the
Closing Date, the Borrower shall raise (i) unless the Borrower completes the
Beaver Creek Acquisition, Subordinated Debt or equity in a principal amount
of not less than $50,000,000; (ii) if the Beaver Creek Acquisition has been
completed a minimum of $175,000,000 additional new long term Subordinated
Debt or equity capital including at least $75,000,000 of equity.
Section 8.12 Environmental. As soon as reasonably practicable,
but in no event later than the end of the two hundred seventy (270) day
period provided in Section 5.2 of the Amoco Purchase and Sale Agreement, the
Borrower will conduct reasonable environmental due diligence with respect to
the Amoco Properties acquired by it to determine any "Alleged Adverse
Conditions" as provided for in Section 5.2 of the Amoco Purchase and Sale
Agreement and make such demands for price adjustment as it may be entitled
pursuant to said Amoco Purchase and Sale Agreement.
ARTICLE IX
Negative Covenants
The Borrower covenants and agrees that, so long as any of the
Commitments are in effect and until payment in full of Loans and LC Exposure
hereunder and all interest thereon without the prior written consent of the
Majority Lenders:
Section 9.01 Debt. Neither the Borrower nor any Subsidiary will
incur, create, assume or permit to exist any Debt, except the following
(including the interest, fees and charges in connection therewith):
(a) the Notes or other Indebtedness or any guaranty of or
suretyship arrangement for the Notes or other Indebtedness;
(b) Debt of the Borrower existing on the Closing Date which is
reflected in the Financial Statements or is disclosed in Schedule 9.01,
and any renewals or extensions (but not increases) thereof;
(c) accounts payable (for the deferred purchase price of Property
or services) from time to time incurred in the ordinary course of
business which, if greater than 120 days past the invoice or billing
date, are being contested in good faith by appropriate proceedings if
reserves adequate under GAAP shall have been established therefor;
(d) Debt under capital leases (as required to be reported on the
financial statements of the Borrower pursuant to GAAP) not to exceed
$5,000,000;
(e) Debt associated with bonds or surety obligations required by
Governmental Requirements in connection with the operation of Oil and
Gas Properties;
(f) Debt of the Borrower under Hedging Agreements the notional
amounts on which do not exceed 95% of Borrower's anticipated oil and/or
gas production to be produced during the term of such Hedging Agreements
and which are 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 operations;
(g) the Subordinated Debt not to exceed $150,000,000 of principal
outstanding at any time;
(h) to the extent Subordinated Debt permitted by (g) above is
evidenced by Borrower's guarantee of indebtedness of Xxxxxx Corporation,
intercompany Subordinated Debt of the Borrower to Xxxxxx Corporation
pursuant to which the proceeds of such Xxxxxx Corporation indebtedness
have been advanced to the Borrower;
(i) Debt permitted by Section 9.03(g);
(j) Debt evidenced by interest rate Hedging Agreements entered
into by the Borrower in the normal course of business and not for
speculative purposes; and
(k) intercompany Subordinated Debt evidenced by advances from
Xxxxxx Corporation to the Borrower from time to time in the normal
course of business; and
(l) Debt not included within clauses (a) through (k) above not to
exceed $5,000,000 at any time outstanding.
Section 9.02 Liens. Neither the Borrower nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties
(now owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness;
(b) Excepted Liens;
(c) Liens securing leases allowed under Section 9.01(d), but only
on the Property under lease;
(d) Liens arising under leases permitted under Section 9.07.
(e) Liens disclosed on Schedule 9.02;
(f) Liens on cash or securities of the Borrower securing the Debt
described in Section 9.01(e); and
(g) Liens not included within clauses (a) through (f) above
securing Debt permitted under Section 9.01 not to exceed $2,500,000.
Section 9.03 Investments, Loans and Advances. Neither the
Borrower nor any Subsidiary will make or permit to remain outstanding any
loans or advances to or investments in any Person, 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) accounts receivable arising in the ordinary course of business;
(c) 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 acquisition thereof;
(d) commercial paper maturing within one year from the date of
creation thereof rated in investment grade by Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc.;
(e) 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 & Poor's Corporation or Xxxxx'x Investors Service,
Inc., respectively;
(f) deposits in money market funds investing exclusively in
investments described in Section 9.03(c), 9.03(d) or 9.03(e);
(g) investments, loans or advances made by the Borrower in or to
the Guarantor or any of its Subsidiaries, not to exceed at any one time
outstanding $1,000,000 in the aggregate;
(h) other investments, loans or advances not to exceed $1,000,000
in the aggregate at any time;
(i) sums required in the normal course of business to be placed in
escrow for the payment of royalties on Borrowers or Subsidiaries oil and
gas production; and
(j) loans to Xxxxxx Corporation in lieu of and for the same
purposes as dividends and other distributions to the extent permitted by
Section 9.04 below.
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 stock now or hereafter outstanding, return any
capital to its stockholders or make any distribution of its assets to its
stockholders except (so long as no Default has occurred and is continuing) as
follows:
(a) cash dividends to the extent necessary (i) to permit Xxxxxx
Corporation to pay regular installments of interest from time to time
owing on Subordinated Debt not to exceed $150,000,000 in principal
amount to the extent the net proceeds thereof have been advanced to the
Borrower and (ii) to cover Xxxxxx Corporation's reasonable on-going
operating expenses as a holding company; and
(b) cash dividends (to the extent necessary for Xxxxxx Corporation
to continue to pay regular dividends on its preferred and common stock
at historical levels.
Section 9.05 Sales and Leasebacks. Neither the Borrower nor any
Subsidiary will enter into any arrangement, directly or indirectly, with any
Person whereby the Borrower or any Subsidiary shall sell or transfer any of
its Property, whether now owned or hereafter acquired, and whereby the
Borrower or any Subsidiary shall then or thereafter rent or lease as lessee
such Property or any part thereof or other Property which the Borrower or any
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
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 Limitation on Leases. Neither the Borrower nor any
Subsidiary will create, incur, assume or permit to exist any obligation for
the payment of rent or hire of Property of any kind whatsoever (real or
personal including capital leases, but excluding leases of Hydrocarbon
Interests), under leases or lease agreements which would cause the aggregate
amount of all payments made by the Borrower and its Subsidiaries pursuant to
all such leases or lease agreements to exceed [$2,000,000] in any period of
twelve consecutive calendar months during the life of such leases.
Section 9.08 Mergers, Etc. Neither the Borrower nor any 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, provided, however, any Subsidiary of the Borrower may merge into the
Borrower provided the Borrower is the surviving entity and no Default exists
or will be created thereby.
Section 9.09 Proceeds of Notes; Letters of Credit. The Borrower
will not permit the proceeds of the Notes or Letters of Credit 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 Loan Documents to violate Regulation G,
T, U or X or any other regulation of the Board of Governors of the Federal
Reserve System or to violate Section 7 of the Securities Exchange Act of 1934
or any rule or regulation thereunder, in each case as now in effect or as the
same may hereinafter be in effect.
Section 9.10 ERISA Compliance. The Borrower will not at any time:
(a) Engage in, or permit any Subsidiary or ERISA Affiliate to
engage in, any transaction in connection with which the Borrower, any
Subsidiary or any ERISA Affiliate could be subjected to either a civil
penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a
tax imposed by Chapter 43 of Subtitle D of the Code which individually
or in the aggregate could reasonably have a Material Adverse Effect;
(b) Terminate, or permit any Subsidiary or ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with respect
to any Plan, which could result in any liability to the Borrower, any
Subsidiary or any ERISA Affiliate to the PBGC which individually or in
the aggregate could reasonably have a Material Adverse Effect;
(c) Fail to make, or permit any Subsidiary or ERISA Affiliate to
fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law,
the Borrower, a Subsidiary or any ERISA Affiliate is required to pay as
contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the meaning
of Section 302 of ERISA or section 412 of the Code, whether or not
waived, with respect to any Plan which individually or in the aggregate
could reasonably have a Material Adverse Effect;
(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 by an
amount which could reasonably have a Material Adverse Effect. 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 which individually or in the aggregate could
reasonably have a Material Adverse Effect;
(i) Contribute to or assume an obligation to contribute to, or
permit any Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any employee welfare benefit plan, as
defined in section 3(1) of ERISA, including, without limitation, any
such plan maintained to provide benefits to former employees of such
entities, that may not be terminated by such entities in their sole
discretion at any time without any material liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a
Plan resulting in an increase in current liability such that 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 9.11 Sale or Discount of Receivables. Neither the
Borrower nor any Subsidiary will discount or sell (with or without recourse)
any of its notes receivable or accounts receivable.
Section 9.12 Current Ratio. The Borrower will not permit its
ratio of (i) consolidated current assets plus availability under Facility A
to (ii) consolidated current liabilities (excluding current maturities of the
Notes) to be less than 1.0 to 1.0 at any time.
Section 9.13 [Intentionally Omitted].
Section 9.14 Interest Coverage Ratio. The Borrower will not
permit its Interest Coverage Ratio as of the end of any calendar quarter
(calculated quarterly at the end of each calendar quarter) to be less than
2.0 to 1.00 for each calendar quarter in calendar year 1998 and 2.5 to 1.00
for the earlier of (a) each calendar quarter thereafter, or (b) such earlier
calendar quarter during which the Borrower has raised the Minimum Capital
required by Section 8.11(ii). For the purposes of this Section 9.14,
"Interest Coverage Ratio" shall mean the ratio of (i) EBITDA 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 Consolidated Subsidiaries.
Section 9.15 Sale of Oil and Gas Properties. The Borrower will
not, and will not permit any Subsidiary to, sell, assign, farm-out, convey or
otherwise transfer any Oil and Gas Property or any interest in any Oil and
Gas Property except for (i) the sale of Hydrocarbons in the ordinary course
of business; (ii) farmouts of undeveloped acreage (including undeveloped
horizons) and assignments in connection with such farmouts; (iii) the sale or
transfer of equipment that is no longer necessary for the business of the
Borrower or such Subsidiary or is replaced by equipment of at least
comparable value and use and (iv) between any two Scheduled Redeterminations,
sales in the ordinary course of business of Oil and Gas Properties which
shall not exceed $15,000,000 in the aggregate, provided that so long as (1)
the Facility B Loans are outstanding, or (2) a Default exists and is
continuing, (a) the net cash proceeds received in such sale pursuant to this
clause (iv) are applied as a prepayment on the Facility A Notes and (b) the
Borrowing Base is automatically reduced by the amount of the value of such
Property as reflected in the most current Reserve Report.
Section 9.16 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 9.17 Transactions with Affiliates. Neither the Borrower
nor any 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 not prohibited 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 9.18 Subsidiaries. The Borrower shall not, and shall not
permit any Subsidiary to, create any additional Subsidiaries. The Borrower
shall not and shall not permit any Subsidiary to sell or to issue any stock
or ownership interest of a Subsidiary, except to the Borrower or the
Guarantor and except in compliance with Section 9.03.
Section 9.19 Negative Pledge Agreements and Subsidiary Dividends.
Neither the Borrower nor any Subsidiary will create, incur, assume or permit
to exist any contract, agreement or understanding (other than Loan Documents)
which in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property or otherwise restricts any
Subsidiary from paying dividends to the Borrower, or which requires the
consent of or notice to other Persons in connection therewith. Restrictions
in a partnership, joint venture or other contract prohibiting Liens on a
Person's interest therein and restrictions in contracts (including Liens
permitted under Section 9.02) covering Property of deminimus value are not
prohibited by this Section 9.19.
Section 9.20 Payments on Certain Debt to Xxxxxx Corporation. The
Borrower will not make any payments on the $64,296,029 indebtedness payable
to Xxxxxx Corporation described in Schedule 9.01 hereof except for payments
thereon which are in lieu of and for the same purposes as dividends and other
distributions to the extent permitted by Section 9.04 above.
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 when
due of any principal of or interest on any Loan, or any reimbursement
obligation for a disbursement made under any Letter of Credit, or any
fees or other amount payable by it hereunder or under any Loan Documents
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 three (3) Business Days; or
(b) the Borrower or any Subsidiary or Xxxxxx Corporation shall
default in the payment when due of any principal of or interest on any
of its other Debt aggregating $5,000,000 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 Loan Documents by the Borrower or any Subsidiary
or the Guarantor, or any certificate furnished to any Lender or the
Agent pursuant to the provisions hereof or any Loan Documents, 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 all Sections under Article VIII except Sections 8.08(a), 8.09
and 8.12; or the Borrower shall default in the performance of any of its
obligations under Article VIII except Sections 8.08(a), 8.09 and 8.12 or
any Loan Documents (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
$5,000,000 in the aggregate shall be rendered by a court against the
Borrower or any Subsidiary and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within thirty (30) days from the date of
entry thereof and the Borrower or such 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 Loan Documents 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) the Borrower discontinues its usual business or suffers to
exist any material change in its ownership, control or management; or
(k) Guarantor takes, suffers or permits to exist any of the events
or conditions referred to in paragraphs (e), (f), (g) or (h) or if any
provision of the Guaranty Agreement shall for any reason cease to be
valid and binding on Guarantor or if Guarantor shall so state in writing
or if the Guarantor defaults in any covenant or term of the Guaranty
Agreement; or
(l) any Subsidiary takes, suffers or permits to exist any of the
events or conditions referred to in paragraphs (e), (f), (g) or (h); or
(m) the Guarantor's Tangible Net Worth shall at any time be less
than $76,408,000, plus 75% of the proceeds received by the Guarantor from
equity capital offerings after the Closing Date, plus 75% of the
Guarantor's consolidated net income for each fiscal year for which net
income is positive beginning with the fiscal year ending December 31,
1997. Such test shall be measured at the end of each fiscal quarter and
at fiscal year end.
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 clauses (k) or (l) to
the extent they relate to clauses (e), (f) or (g), the Agent, upon
request of the Majority Lenders, shall, by notice to the Borrower,
cancel the Commitments and/or declare the principal amount then
outstanding of, and the accrued interest on, the Loans and all other
amounts payable by the Borrower hereunder and under the Notes (including
without limitation the payment of cash collateral to secure the LC
Exposure as provided in Section 2.10(b)) 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 clauses (k) or (l)
to the extent they relate to clauses (e), (f) or (g), the Commitments
shall be automatically canceled and the principal amount then
outstanding of, and the accrued interest on, the Loans and all other
amounts payable by the Borrower hereunder and under the Notes (including
without limitation the payment of cash collateral to secure the LC
Exposure as provided in Section 2.10(b)) 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 Notes, whether by
acceleration or otherwise shall be applied first to reimbursement of
expenses and indemnities provided for in this Agreement and the other
Loan Documents; second to accrued interest on the Notes; third to fees;
fourth pro rata to principal outstanding on the Notes and other
Indebtedness; fifth to serve as cash collateral to be held by the Agent
to secure the LC Exposure; and any excess shall be paid to the Borrower
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 other Loan Documents with such powers as are
specifically delegated to the Agent by the terms of the Loan Documents,
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 Loan Documents, and shall not by reason of
the Loan Documents be a trustee or fiduciary for any Lender; (ii) makes no
representation or warranty to any Lender and shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained
in this Agreement, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement, or for the
value, validity, effectiveness, genuineness, execution, effectiveness,
legality, enforceability or sufficiency of this Agreement, any 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, its Subsidiaries or any other obligor or guarantor; (iii)
except pursuant to Section 11.07 shall not be required to initiate or conduct
any litigation or collection proceedings hereunder; and (iv) shall not be
responsible for any action taken or omitted to be taken by it hereunder or
under any other document or instrument referred to or provided for herein or
in connection herewith including its own ordinary negligence, except for its
own gross negligence or willful misconduct. The 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 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 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 Loans or of fees or failure to reimburse for
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 Commitments
and the Loans made by it and its participation in the issuance of Letters of
Credit, BMO (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. BMO (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 BMO 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 and the Issuing Bank 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
or the Issuing Bank in any way relating to or arising out of: (i) this
Agreement, the other Loan Documents or any other documents contemplated by or
referred to herein or the transactions contemplated hereby, but excluding,
unless a Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder or
(ii) the enforcement of any of the terms of this Agreement, any other Loan
Documents 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 or the Issuing Bank, 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 Notes, the other Loan Documents 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 Loan Document. Each Lender will
consult with its own legal counsel to the extent that it deems necessary in
connection with the Loan Documents and the matters contemplated therein.
Section 11.07 Action by 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 other Loan
Documents 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 subject to the
approval of the Borrower, which approval may not be unreasonably withheld.
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.
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 Loan Documents
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right, power or privilege under any of the Loan Documents preclude any
other or further exercise thereof or the exercise of any other right, power
or privilege. The remedies provided herein are cumulative and not exclusive
of any remedies provided by law.
Section 12.02 Notices. All notices and other communications
provided for herein and in the other Loan Documents (including, without
limitation, any modifications of, or waivers or consents under, this
Agreement or the other Loan Documents) shall be given or made by telex,
telecopy, courier or U.S. Mail or in writing and telexed, telecopied, mailed
or delivered to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof or in the 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 Loan Documents, all such communications shall be deemed to
have been duly given when transmitted, if transmitted before 1:00 p.m. local
time on a Business Day (otherwise on the next succeeding Business Day) by
telex or telecopier and evidence or confirmation of receipt is obtained, or
personally delivered or, in the case of a mailed notice, three (3) Business
Days after the date deposited in the mails, postage prepaid, in each case
given or addressed as aforesaid.
Section 12.03 Payment of Expenses, Indemnities, etc.
(a) The Borrower agrees:
(i) 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
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 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 other Loan Documents, including without limitation, all
costs and expenses of foreclosure;
(ii) 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 Loans or
Letters of Credit, (ii) the execution, delivery and performance of the
Loan Documents, (iii) the operations of the business of the Borrower and
its Subsidiaries, (iv) the failure of the Borrower or any Subsidiary to
comply with the terms of any Loan Documents or this Agreement, or with
any Governmental Requirement, (v) any inaccuracy of any representation
or any breach of any warranty of the Borrower [or any Guarantor] set
forth in any of the Loan Documents, (vi) the issuance, execution and
delivery or transfer of or payment or failure to pay under any Letter of
Credit, (vii) the payment of a drawing under any 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 Loan Documents or (ix) any other
aspect of the Loan Documents, including, without limitation, the
reasonable fees and disbursements of counsel and all other expenses
incurred in connection with investigating, defending or preparing to
defend any such action, suit, proceeding (including any investigations,
litigation or inquiries) or claim and including all Indemnity Matters
arising by reason of the ordinary negligence of any Indemnified Party,
but excluding all Indemnity Matters to the extent arising 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;
and
(iii) 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 Loan
Documents; provided, however, no indemnity shall be afforded under this
section 12.03(a)(iii) in respect of any Property for any occurrence
arising from the acts or omissions of the Agent or any Lender during the
period after which such Person, its successors or assigns shall have
obtained possession of such Property (whether by foreclosure or deed in
lieu of foreclosure, as mortgagee-in-possession or otherwise).
(b) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be
unreasonably withheld; provided, that the indemnitor may not reasonably
withhold consent to any settlement that an Indemnified Party proposes,
if the indemnitor does not have the financial ability to pay all its
obligations outstanding and asserted against the indemnitor at that
time, including the maximum potential claims against the Indemnified
Party to be indemnified pursuant to this Section 12.03.
(c) 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.
(d) The foregoing indemnities shall extend to the Indemnified
Parties notwithstanding the sole or concurrent negligence of every kind
or character whatsoever, whether active or passive, whether an
affirmative act or an omission, including without limitation, all types
of negligent conduct 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 has occurred by reason of events other than the gross
negligence or willful misconduct of the Indemnified Party.
(e) The Borrower's obligations under this Section 12.03 shall
survive any termination of this Agreement and the payment of the Notes
and shall continue thereafter in full force and effect.
(f) 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 other Loan Documents 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
Loans, increases the Aggregate Facility A Maximum Credit Amounts, modifies
the Borrowing Base, forgives the principal amount of any Indebtedness
outstanding under this Agreement, releases any guarantor of the Indebtedness
or releases all or substantially all of the collateral, reduces the interest
rate applicable to the Loans or the fees payable to the Lenders generally,
affects Section 2.03(a), 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
Facility A Maximum Credit Amount or the Facility B Commitment of any Lender
shall be effective without the consent of such Lender; and (iii) no
amendment, modification or waiver which modifies the rights, duties or
obligations of the 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.
(a) The Borrower may not assign its rights or obligations
hereunder or under the Notes or any Letters of Credit without the prior
consent of all of the Lenders and the Agent.
(b) Any Lender may, upon the written consent of the Agent and, if
no Event of Default has occurred and is continuing, the Borrower (which
consent will not be unreasonably withheld), assign to one or more
assignees all or a portion of its rights and obligations under this
Agreement pursuant to an Assignment Agreement substantially in the form
of Exhibit E (an "Assignment"); provided, however, that (i) any such
assignment shall be in the amount of at least $10,000,000 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
$3,500 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 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
other Loan Documents. 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 Loan Documents except
to the extent such amendment or waiver would (x) forgive any principal
owing on any Indebtedness or extend the final maturity of the Loans,
(y) reduce the interest rate (other than as a result of waiving the
applicability of any post-default increases in interest rates) or fees
applicable to any of the Commitments or Loans or Letters of Credit in
which such participant is participating, or postpone the payment of any
thereof, or (z) release any guarantor of the Indebtedness or release all
or substantially all of the collateral (except as provided in the Loan
Documents) supporting any of the Commitments or Loans or 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 Loan Documents (the participant's rights against
the granting Lender in respect of such participation to be those set
forth in the agreement with such Lender creating such participation),
and all amounts payable by 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.
(e) Notwithstanding anything in this Section 12.06 to the
contrary, any Lender may assign and pledge all or any of its Notes to
any Federal Reserve Bank as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve System and/or such
Federal Reserve Bank. No such assignment and/or pledge shall release
the assigning and/or pledging Lender from its obligations hereunder.
(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 Loans under the "Blue Sky" laws
of any state.
Section 12.07 Invalidity. In the event that any one or more of
the provisions contained in any of the Loan Documents or the Letters of
Credit, the 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 Notes, this
Agreement or any other Loan Documents.
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 Loans and the termination of the Commitments. To the extent
that any payments on the Indebtedness or proceeds of any collateral are
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, debtor in possession, receiver
or other Person under any bankruptcy law, common law or equitable cause, then
to such extent, the Indebtedness so satisfied shall be revived and continue
as if such payment or proceeds had not been received and the Agent's and the
Lenders' Liens, security interests, rights, powers and remedies under this
Agreement and each other Loan Document shall continue in full force and
effect. In such event, each Loan Document 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 Loan Documents embody the
entire agreement and understanding between the parties and supersede all
other agreements and understandings between such parties relating to the
subject matter hereof and thereof. The Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There
are no unwritten oral agreements between the parties.
Section 12.13 Governing Law; Submission to Jurisdiction.
(a) This Agreement and the 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 Notes.
(b) Any legal action or proceeding with respect to the 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) Nothing herein shall affect the right of the Agent or any
Lender or any holder of a Note to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
(d) 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
Loan Documents 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
Loan Documents 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 Loan Documents or any agreement entered into in
connection with or as security for the Notes, it is agreed as follows:
(i) the aggregate of all consideration which constitutes interest under law
applicable to any Lender that is contracted for, taken, reserved, charged or
received by such Lender under any of the Loan Documents or agreements or
otherwise in connection with the Notes shall under no circumstances exceed
the maximum amount allowed by such applicable law, and any excess shall be
canceled automatically and if theretofore paid shall be credited by such
Lender on the principal amount of the Indebtedness (or, to the extent that
the principal amount of the Indebtedness shall have been or would thereby be
paid in full, refunded by such Lender to the Borrower); and (ii) in the event
that the maturity of the Notes is accelerated by reason of an election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Lender
may never include more than the maximum amount allowed by such applicable
law, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically by such Lender as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by
such Lender on the principal amount of the Indebtedness (or, to the extent
that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by such Lender to 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 Loans evidenced by the Notes until payment in full so that the
rate or amount of interest on account of any Loans hereunder does not exceed
the maximum amount allowed by such applicable law. If at any time and from
time to time (i) the amount of interest payable to any Lender on any date
shall be computed at the Highest Lawful Rate applicable to such Lender
pursuant to this Section 12.14 and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Lender
would be less than the amount of interest payable to such Lender computed at
the Highest Lawful Rate applicable to such Lender, then the amount of
interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable
to such Lender if the total amount of interest had been computed without
giving effect to 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 or Xxxxxx Corporation or any Subsidiary thereof
(hereinafter called the "Subject Entities"), 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 any Subject Entity, (iii) are
previously known by the Agent or the Lenders from some source other than any
Subject Entity, (iv) are hereafter developed by the Agent or the Lenders
without using the Subject Entities' 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 Subject Entities with respect to such
information or through any other means other than through disclosure by the
Subject Entities, (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 in connection with its duties and rights under the Loan Documents
disclose any such information to any other Lender, any independent petroleum
engineers or consultants, any independent certified public accountants, any
legal counsel employed by such Person in connection with this Agreement or
any other Loan Document, including without limitation, the enforcement or
exercise of all rights and remedies thereunder, or any assignee or
participant (including prospective assignees and participants) in the Loans;
provided, however, that the 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.
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 other
Loan Documents and agrees that it is charged with notice and knowledge of the
terms of this Agreement and the other Loan Documents; 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 other Loan
Documents; and has received the advice of its attorney in entering into this
Agreement and the other Loan Documents; and that it recognizes that certain
of the terms of this Agreement and the other Loan Documents 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 or the other
Loan Documents on the basis that the party had no notice or knowledge of such
provision or that the provision is not "conspicuous."
The parties hereto have caused this Agreement to be duly executed
as of the day and year first above written.
BORROWER: XXXXXX PETROLEUM CORPORATION
By:_____________________________
Name:
Title:
Address for Notices:
1500 Xxxxxx Building
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention:__________________
LENDER AND AGENT: BANK OF MONTREAL
By:_____________________________
Name: Xxxxxx X. Xxxxxxx
Title: Director, U.S. Corporate Banking
Lending Office for Base Rate Loans and
LIBOR Loans:
000 Xxxxx XxXxxxx
Xxxxxxx, Xxxxxxxx 00000
Address for Notices:
000 Xxxxx XxXxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: 312/750-6061
Telephone No.: 312/000-0000
Attention: Xxxxx Xxx
With copy to:
Xxxxxx X. Xxxxxxx
Director, U.S. Corporate Banking
Bank of Montreal
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
ANNEX 1
LIST OF FACILITY A MAXIMUM CREDIT AMOUNTS
Facility A
Name of Lender Percentage Share Maximum Credit Amount
A. Prior to Beaver Creek Acquisition
Bank of Montreal 100% $130,000,000
------------
Aggregate Facility A Maximum Credit Amounts $130,000,000
until the Beaver Creek Acquisition closes ============
B. Available for Beaver Creek Acquisition
Bank of Montreal 100% $ 85,000,000
------------
Aggregate Facility A Maximum Credit Amounts $215,000,000
upon closing of the Beaver Creek Acquisition ============
LIST OF FACILITY B COMMITMENTS
Facility B
Name of Lender Percentage Share Commitments
A. Prior to Beaver Creek Acquisition
Bank of Montreal 100% $ 20,000,000
-------------
Aggregate Facility B Commitments until $ 20,000,000
the Beaver Creek Acquisition closes =============
B. Available for Beaver Creek Acquisition
Bank of Montreal 100% $ 85,000,000
------------
Aggregate Facility B Commitments upon $105,000,000
the closing of the Beaver Creek Acquisition ============
X-0
XXXXXXX X-0
FORM OF FACILITY A NOTE
$_____________________________ ___________________, 199__
FOR VALUE RECEIVED, XXXXXX PETROLEUM CORPORATION, a Delaware corporation
(the "Borrower") hereby promises to pay to the order of
______________________________ (the "Lender"), at the Principal Office of
BANK OF MONTREAL (the "Agent"), at 000 XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, the principal sum of _____________ Dollars ($____________) (or such
lesser amount as shall equal the aggregate unpaid principal amount of the
Loans made by the Lender to the Borrower under the Credit Agreement, as
hereinafter defined), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the unpaid principal
amount of each such Loan, at such office, in like money and funds, for the
period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate, Interest Period and maturity of
each Loan made by the Lender to the Borrower, and each payment made on
account of the principal thereof, shall be recorded by the Lender on its
books and, prior to any transfer of this Facility A Note, shall be endorsed
by the Lender on the schedules attached hereto or any continuation thereof or
on any separate record maintained by the Lender.
This Facility A Note is one of the Notes referred to in the Credit
Agreement dated as of December 17, 1997 among the Borrower, the Lenders which
are or become parties thereto (including the Lender) and the Agent, and
evidences Loans made by the Lender thereunder (such Credit Agreement as the
same may be amended or supplemented from time to time, the "Credit
Agreement"). Capitalized terms used in this Facility A Note have the
respective meanings assigned to them in the Credit Agreement.
This Facility A Note is issued pursuant to the Credit Agreement and is
entitled to the benefits provided for in the Credit Agreement and the other
Loan Documents. The Credit Agreement provides for the acceleration of the
maturity of this Facility A Note upon the occurrence of certain events, for
prepayments of Loans upon the terms and conditions specified therein and
other provisions relevant to this Facility A Note.
THIS FACILITY A NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS.
XXXXXX PETROLEUM CORPORATION
By:
Name:
Title:
EXHIBIT A-2
FORM OF FACILITY B NOTE
$_____________________________ ___________________, 199__
FOR VALUE RECEIVED, XXXXXX PETROLEUM CORPORATION, a Delaware corporation
(the "Borrower") hereby promises to pay to the order of
__________________________ (the "Lender"), at the Principal Office of BANK OF
MONTREAL (the "Agent"), at 000 XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, the
principal sum of _____________ Dollars ($____________) (or such lesser amount
as shall equal the aggregate unpaid principal amount of the Facility B Loans
made by the Lender to the Borrower under the Credit Agreement, as hereinafter
defined), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Loan, at such office, in like money and funds, for the period commencing
on the date of such Loan until such Loan shall be paid in full, at the rates
per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate, Interest Period and maturity of
each Loan made by the Lender to the Borrower, and each payment made on
account of the principal thereof, shall be recorded by the Lender on its
books and, prior to any transfer of this Facility B Note, shall be endorsed
by the Lender on the schedules attached hereto or any continuation thereof or
on any separate record maintained by the Lender.
This Facility B Note is one of the Notes referred to in the Credit
Agreement dated as of December 17, 1997 among the Borrower, the Lenders which
are or become parties thereto (including the Lender) and the Agent, and
evidences Facility B Loans made by the Lender thereunder (such Credit
Agreement as the same may be amended or supplemented from time to time, the
"Credit Agreement"). Capitalized terms used in this Facility B Note have the
respective meanings assigned to them in the Credit Agreement.
This Facility B Note is issued pursuant to the Credit Agreement and is
entitled to the benefits provided for in the Credit Agreement and the other
Loan Documents. The Credit Agreement provides for the acceleration of the
maturity of this Facility B Note upon the occurrence of certain events, for
prepayments of Loans upon the terms and conditions specified therein and
other provisions relevant to this Facility B Note.
THIS FACILITY B NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS.
XXXXXX PETROLEUM CORPORATION
By:
Name:____________________________
Title:___________________________
A-2
EXHIBIT B
FORM OF BORROWING, CONTINUATION AND CONVERSION REQUEST
_____________________, 199__
XXXXXX PETROLEUM CORPORATION, a ___________ corporation (the "Borrower"),
pursuant to the Credit Agreement dated as of December 17, 1997 (together with
all amendments or supplements thereto, the "Credit Agreement") among the
Borrower, BANK OF MONTREAL, as Agent and the lenders (the "Lenders") which
are or become parties thereto, and such Lenders, hereby makes the requests
indicated below (unless otherwise defined herein, capitalized terms are
defined in the Credit Agreement):
/__/ 1. Facility A Loans:
(a) Aggregate amount of new Facility A Loans to be
$______________________;
(b) Requested funding date is _________________, 199__;
(c) $_____________________ of such borrowings are to be Eurodollar
Loans;
$_____________________ of such borrowings are to be Base Rate
Loans; and
(d) Length of Interest Period for Eurodollar Loans is:
_________________________.
/__/ 2. Facility B Loans:
(a) Aggregate amount of new Facility B Loans to be
$______________________;
(b) Requested funding date is _________________, 199__;
(c) $_____________________ of such borrowings are to be Eurodollar
Loans;
$_____________________ of such borrowings are to be Base Rate
Loans; and
(d) Length of Interest Period for Eurodollar Loans is:
_________________________.
/__/ 3. Eurodollar Loan Continuation for Eurodollar Loans maturing on
_____________________:
(a) Aggregate amount to be continued as Eurodollar Loans is
$____________________;
(b) Aggregate amount to be converted to Base Rate Loans is
$____________________;
(c) Length of Interest Period for continued Eurodollar Loans is
________________________.
/__/ 4. Conversion of Outstanding Base Rate Loans to Eurodollar Loans:
Convert $__________________ of the outstanding Base Rate Loans to
Eurodollar Loans on ____________________ with an Interest Period of
______________________.
/__/ 5. Conversion of outstanding Eurodollar Loans to Base Rate Loans:
Convert $__________________ of the outstanding Eurodollar Loans
with Interest Period maturing on ______________________, 199_, to
Base Rate Loans.
The undersigned certifies that he is the _____________________ of the
Borrower, and that as such he is authorized to execute this certificate on
behalf of the Borrower. The undersigned further certifies, represents and
warrants on behalf of the Borrower that the Borrower is entitled to receive
the requested borrowing, continuation or conversion under the terms and
conditions of the Credit Agreement.
XXXXXX PETROLEUM CORPORATION
By:_________________________________
Name:
Title:
B-2
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the ________________ of
XXXXXX PETROLEUM CORPORATION, a ____________ corporation (the "Borrower") and
that as such he is authorized to execute this certificate on behalf of the
Borrower. With reference to the Credit Agreement dated as of December 17,
1997 (together with all amendments or supplements thereto being the
"Agreement") among the Borrower, BANK OF MONTREAL, as Agent for the lenders
(the "Lenders") which are or become a party thereto, and such Lenders, the
undersigned represents and warrants as follows (each capitalized term used
herein having the same meaning given to it in the Agreement unless otherwise
specified):
(a) Except as expressly stated in Schedule 1 hereto, the
representations and warranties of the Borrower contained in Article
VII of the Agreement and in the other Loan Documents and otherwise
made in writing by or on behalf of the Borrower pursuant to the
Agreement and the Loan Documents were true and correct in all
material respects when made, and are repeated at and as of the time
of delivery hereof and are true and correct in all material respects
at and as of the time of delivery hereof, except to the extent such
representations and warranties are expressly limited to an earlier
date or the Majority Lenders have expressly consented in writing to
the contrary.
(b) The Borrower has performed and complied with all
agreements and conditions contained in the Agreement and in the
other Loan Documents required to be performed or complied with by it
prior to or at the time of delivery hereof.
(c) Since __________________, no change has occurred, either
in any case or in the aggregate, in the condition, financial or
otherwise, of the Borrower or any Subsidiary which would have a
Material Adverse Effect.
(d) Except as expressly stated in Schedule 1 hereto, there
exists, and, after giving effect to the loan or loans with respect
to which this certificate is being delivered, will exist, no Default
under the Agreement or any event or circumstance which constitutes,
or with notice or lapse of time (or both) would constitute, an event
of default under any material loan or credit agreement, indenture,
deed of trust, security agreement or other agreement or instrument
evidencing or pertaining to any Debt of the Borrower or any
Subsidiary, or under any other material agreement or instrument to
which the Borrower or any Subsidiary is a party or by which the
Borrower or any Subsidiary is bound.
(e) Attached hereto are the detailed computations necessary
to determine whether the Borrower is in compliance with Sections
9.12, 9.13 and 9.14 as of the end of the [fiscal quarter][fiscal
year] ending .
EXECUTED AND DELIVERED this ____ day of ______________.
XXXXXX PETROLEUM CORPORATION
By:
Name:
Title:
D-1
EXHIBIT D
LIST OF LOAN DOCUMENTS
1. Guaranty Agreement executed by Xxxxxx Corporation.
E-1
EXHIBIT E
FORM OF
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("Agreement") dated as of ________________,
199___ is between: _________________________________ (the "Assignor") and
__________________________ (the "Assignee").
RECITALS
A. The Assignor is a party to the Credit Agreement dated as of
December 17, 1997 (as amended and supplemented and in effect from time to
time, the "Credit Agreement") among XXXXXX PETROLEUM CORPORATION, a
corporation (the "Borrower"), each of the lenders
that is or becomes a party thereto as provided in Section 12.06 of the Credit
Agreement (individually, together with its successors and assigns, a
"Lender", and collectively, together with their successors and assigns, the
"Lenders"), and BANK OF MONTREAL, in its individual capacity, ("BMO") and as
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Agent").
B. The Assignor proposes to sell, assign and transfer to the Assignee,
and the Assignee proposes to purchase and assume from the Assignor, [all][a
portion] of the Assignor's Maximum Facility A Credit Amount and Facility B
Commitment, outstanding Loans and its Percentage Share of the outstanding LC
Exposure, all on the terms and conditions of this Agreement.
C. In consideration of the foregoing and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
Definitions.
Section 1.0 1Definitions. All capitalized terms used but not defined herein
have the respective meanings given to such terms in the Credit Agreement.
Section 1.02 Other Definitions. As used herein, the following terms have
the following respective meanings:
"Assigned Interest" shall mean all of Assignor's (in its capacity
as a "Lender") rights and obligations (i) under the Credit Agreement and
the other Loan Documents in respect of the Maximum Facility A Credit
Amount of the Assignor in the principal amount equal to
$____________________, including, without limitation, any obligation to
participate pro rata in any LC Exposure, and Facility B Commitment of
the Assignor in the principal amount equal to $________________ and (ii)
to make Loans under the Maximum Facility A Credit Amount and Facility B
Commitment and any right to receive payments for the Loans outstanding
under the Maximum Facility A Credit Amount and Facility B Commitment
assigned hereby of the following amounts:
Loans Amount
Facility A $__________________
Facility B $__________________
(the "Loan Balance"), plus the interest and fees which will accrue from
and after the Assignment Date.
"Assignment Date" shall mean _____________________, 199___.
ARTICLE II
Sale and Assignment.
Section 2.01 Sale and Assignment. On the terms and conditions set forth
herein, effective on and as of the Assignment Date, the Assignor hereby sells,
assigns and transfers to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, all of the right, title and interest of the Assignor
in and to, and all of the obligations of the Assignor in respect of, the
Assigned Interest. Such sale, assignment and transfer is without recourse and,
except as expressly provided in this Agreement, without representation or
warranty.
Section 2.02 Assumption of Obligations. The Assignee agrees with the
Assignor (for the express benefit of the Assignor and the Borrower) that the
Assignee will, from and after the Assignment Date, perform all of the
obligations of the Assignor in respect of the Assigned Interest. From and after
the Assignment Date: (a) the Assignor shall be released from the Assignor's
obligations in respect of the Assigned Interest, and (b) the Assignee shall be
entitled to all of the Assignor's rights, powers and privileges under the Credit
Agreement and the other Loan Documents in respect of the Assigned Interest.
Section 2.03 Consent by Agent. By executing this Agreement as provided
below, in accordance with Section 12.06(b) of the Credit Agreement, the Agent
hereby acknowledges notice of the transactions contemplated by this Agreement
and consents to such transactions.
ARTICLE III
Payments.
Section 3.01 Payments. As consideration for the sale, assignment and
transfer contemplated by Section 2.01 hereof, the Assignee shall, on the
Assignment Date, assume Assignor's obligations in respect of the Assigned
Interest and pay to the Assignor an amount equal to the Loan Balance, if
any. An amount equal to all accrued and unpaid interest and fees shall be
paid to the Assignor as provided in Section 3.02 (iii) below. Except as
otherwise provided in this Agreement, all payments hereunder shall be made in
Dollars and in immediately available funds, without setoff, deduction or
counterclaim.
Section 3.02 Allocation of Payments. The Assignor and the Assignee
agree that (i) the Assignor shall be entitled to any payments of principal
with respect to the Assigned Interest made prior to the Assignment Date,
together with any interest and fees with respect to the Assigned Interest
accrued prior to the Assignment Date, (ii) the Assignee shall be entitled to
any payments of principal with respect to the Assigned Interest made from and
after the Assignment Date, together with any and all interest and fees with
respect to the Assigned Interest accruing from and after the Assignment Date,
and (iii) the Agent is authorized and instructed to allocate payments
received by it for account of the Assignor and the Assignee as provided in
the foregoing clauses. Each party hereto agrees that it will hold any
interest, fees or other amounts that it may receive to which the other party
hereto shall be entitled pursuant to the preceding sentence for account of
such other party and pay, in like money and funds, any such amounts that it
may receive to such other party promptly upon receipt.
Section 3.03 Delivery of Notes. Promptly following the receipt by the
Assignor of the consideration required to be paid under Section 3.01 hereof,
the Assignor shall, in the manner contemplated by Section 12.06(b) of the
Credit Agreement, (i) deliver to the Agent (or its counsel) the Notes held by
the Assignor and (ii) notify the Agent to request that the Borrower execute
and deliver new Notes to the Assignor, if Assignor continues to be a Lender,
and the Assignee, dated the date of this Agreement in respective principal
amounts equal to the respective Maximum Facility A Credit Amounts and
Facility B Commitments of the Assignor (if appropriate) and the Assignee
after giving effect to the sale, assignment and transfer contemplated hereby.
Section 3.04 Further Assurances. The Assignor and the Assignee hereby
agree to execute and deliver such other instruments, and take such other
actions, as either party may reasonably request in connection with the
transactions contemplated by this Agreement.
ARTICLE IV
Conditions Precedent.
Section 4.01 Conditions Precedent. The effectiveness of the sale,
assignment and transfer contemplated hereby is subject to the satisfaction of
each of the following conditions precedent:
(a) the execution and delivery of this Agreement by the
Assignor and the Assignee;
(b) the receipt by the Assignor of the payment required to be
made by the Assignee under Section 3.01 hereof; and
(c) the acknowledgment and consent by the Agent contemplated by
Section 2.03 hereof.
ARTICLE V
Representations and Warranties.
Section 5.01 Representations and Warranties of the Assignor. The Assignor
represents and warrants to the Assignee as follows:
(a) it has all requisite power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill
its obligations under, and consummate the transactions contemplated by,
this Agreement;
(b) the execution, delivery and compliance with the terms
hereof by Assignor and the delivery of all instruments required to be
delivered by it hereunder do not and will not violate any Governmental
Requirement applicable to it;
(c) this Agreement has been duly executed and delivered by it
and constitutes the legal, valid and binding obligation of the Assignor,
enforceable against it in accordance with its terms;
(d) all approvals and authorizations of, all filings with and
all actions by any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained;
(e) the Assignor has good title to, and is the sole legal and
beneficial owner of, the Assigned Interest, free and clear of all Liens,
claims, participations or other charges of any nature whatsoever; and
(f) the transactions contemplated by this Agreement are
commercial banking transactions entered into in the ordinary course of
the banking business of the Assignor.
Section 5.02 Disclaimer. Except as expressly provided in Section 5.01
hereof, the Assignor does not make any representation or warranty, nor shall
it have any responsibility to the Assignee, with respect to the accuracy of
any recitals, statements, representations or warranties contained in the
Credit Agreement or in any certificate or other document referred to or
provided for in, or received by any Lender under, the Credit Agreement, or
for the value, validity, effectiveness, genuineness, execution,
effectiveness, legality, enforceability or sufficiency of the Credit
Agreement, the Notes or any other document referred to or provided for
therein or for any failure by the Borrower or any other Person (other than
Assignor) to perform any of its obligations thereunder or for the existence,
value, perfection or priority of any collateral security or the financial or
other condition of the Borrower or the Subsidiaries [or any other obligor or
guarantor], or any other matter relating to the Credit Agreement or any other
Loan Documents or any extension of credit thereunder.
Section 5.03 Representations and Warranties of the Assignee. The
Assignee represents and warrants to the Assignor as follows:
(a) it has all requisite power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill
its obligations under, and consummate the transactions contemplated by,
this Agreement;
(b) the execution, delivery and compliance with the terms
hereof by Assignee and the delivery of all instruments required to be
delivered by it hereunder do not and will not violate any Governmental
Requirement applicable to it;
(c) this Agreement has been duly executed and delivered by it
and constitutes the legal, valid and binding obligation of the Assignee,
enforceable against it in accordance with its terms;
(d) all approvals and authorizations of, all filings with and
all actions by any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained;
(e) the Assignee has fully reviewed the terms of the Credit
Agreement and the other Loan Documents and has independently and without
reliance upon the Assignor, and based on such information as the
Assignee has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement;
(f) the Assignee hereby affirms that the representations
contained in Section 4.06(d)(i)(1) of the Credit Agreement are true and
accurate as to Assignee. If Section 4.06(d)(i)(2) is applicable to the
Assignee, Assignee shall promptly deliver to the Agent and the Borrower
such certifications as are required thereby to avoid the withholding
taxes referred to in Section 4.06; and
(g) the transactions contemplated by this Agreement are
commercial banking transactions entered into in the ordinary course of
the banking business of the Assignee.
ARTICLE VI
Miscellaneous.
Section 6.01 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telex or telecopy) to the intended recipient
at its "Address for Notices" specified below its name on the signature pages
hereof or, as to either party, at such other address as shall be designated by
such party in a notice to the other party.
Section 6.02 Amendment, Modification or Waiver. No provision of this
Agreement may be amended, modified or waived except by an instrument in writing
signed by the Assignor and the Assignee, and consented to by the Agent.
Section 6.03 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. The representations and warranties made herein by the
Assignee are also made for the benefit of the Agent and the Borrower, and the
Assignee agrees that the Agent and the Borrower are entitled to rely upon such
representations and warranties.
Section 6.04 Assignments. Neither party hereto may assign any of its rights
or obligations hereunder except in accordance with the terms of the Credit
Agreement.
Section 6.05 Captions. The 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 6.06 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be identical and all of which, taken together,
shall constitute one and the same instrument, and each of the parties hereto may
execute this Agreement by signing any such counterpart.
Section 6.07 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Texas.
Section 6.08 Expenses. To the extent not paid by the Borrower pursuant to
the terms of the Credit Agreement, each party hereto shall bear its own expenses
in connection with the execution, delivery and performance of this Agreement.
Section 6.09 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed and delivered as of the date first above written.
ASSIGNOR
By:
Name:
Title:
Address for Notices:
__________________________________
__________________________________
__________________________________
Telecopier No.: __________________
Telephone No.: __________________
Attention: __________________
E-7
ASSIGNEE
___________________________________
By: _______________________________
Name:
Title:
Address for Notices:
___________________________________
___________________________________
___________________________________
Telecopier No.: __________________
Telephone No.: __________________
Attention: __________________
ACKNOWLEDGED AND CONSENTED TO:
______________________________________,
as Agent
By: _______________________________
Name:
Title:
F-4
EXHIBIT F
APPLICATION AND REIMBURSEMENT AGREEMENT
FOR IRREVOCABLE STANDBY LETTER OF CREDIT
Bank of Montreal Date: _________________
Letter of Credit Processing Center SLDC 3896/_____________
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
We request you to open and transmit by cable/airmail/courier your Irrevocable
Letter of Credit in favor of:
available by their drafts, drawn at sight on: Bank of Montreal, _______________
or not exceeding a total of: ______________________________
accompanied by the following document(s):
Drafts drawn under this Letter of Credit must be drawn and presented together
with accompanying documentation at your principal office in Chicago, Illinois
not later than:
In consideration of your issuing at our request your Irrevocable Letter of
Credit (hereinafter called "Credit") on the terms mentioned above:
1. We hereby agree to pay you in immediately available and freely
transferable funds the amount of each draft or acceptance drawn under, or
purporting to be drawn under, the Credit, such payment to be made at the
maturity of each respective draft or acceptance or, if so demanded by you, on
demand in advance of any drawing or maturity.
2. Payment shall be made by us at your office in Chicago, Illinois in
lawful money of the United States, provided that, if a draft or other request
for payment under the Credit is drawn in a currency other than United States
currency, we shall pay the equivalent in United States currency, at the rate
of exchange then current in Chicago for cable transfers to the place of
payment in the currency in which such drawing was made, as determined by you
and notified to us, or, if you so request of us at your option, we shall pay
you the amount of such drawing in the currency in which the drawing was made
in a place, form and manner acceptable to you.
3. We also agree to pay you, on demand, a commission at the rate of:
of the Credit or such other rate as you and we may agree, and all charges and
expenses legal and/or otherwise (including court costs and attorneys' fees),
paid or incurred by you in connection therewith or in your endeavoring to
collect any liability of us or any one or more of us hereunder, including all
costs and expenses arising out of any reserve requirements for, or any
assessment of deposit insurance premiums on, the Credit and including all
expenses, legal or otherwise (including without limitation court costs and
attorneys' fees and expenses) paid or incurred by you or any of your
correspondents in connection with endeavoring to collect any liability of
ours hereunder or in connection with any other legal proceeding brought or
threatened in connection with the Credit, including any attempt by us or
anyone to enjoin payment under the Credit. In addition, if you shall
determine that any law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by you (or any of
your branches) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of requiring you to
maintain additional capital to support your obligations hereunder or under
the Credit, then from time to time, within 15 days after demand by you, we
shall pay to you such additional amount or amounts reasonably determined by
you as will compensate you for such requirement.
4. Any amounts not paid when due hereunder shall bear interest (computed
on the basis of a 360 day year and actual days elapsed) from the due date
thereof until paid in full at a rate per annum determined by adding 2 1/2% to
the rate from time to time announced by you as your prime commercial rate,
with any change in such interest rate resulting from a change in such prime
commercial rate to be and become effective as of and on the day of the
relevant change in such prime commercial rate, payable on demand. You are
hereby authorized to charge any depository or other account of ours or any of
us maintained with you for the full amount of any drawing paid by you under
the Credit and for payment of any other amount payable by us hereunder not
paid to you on demand. If by charging such account you create an overdraft in
one of our accounts, we shall pay interest to you on such overdrawn amount at
the rate specified in our agreement with you establishing such account or, if
no such rate is specified, at the rate of interest provided for in the first
sentence of this paragraph.
5. We agree that in the event of any extension of the maturity or time for
presentation of drafts, acceptances or documents, or any other modification
of the terms of the Credit, at the request of any of us, with or without
notification to the others, or in the event of any increase in the amount of
the Credit at our request, this agreement shall be binding upon us with
regard to the credit extended, increased or otherwise modified, to drafts,
documents and property covered thereby, and to any action taken by you or any
of your correspondents, in accordance with such extension, increase or other
modification.
6. The users of the Credit shall be deemed our agents and we assume all
risks of their acts, omissions, or misrepresentations. Neither you nor your
correspondents shall be responsible for the validity, sufficiency,
truthfulness, or genuineness of any documents even if such documents should
in fact prove to be in any or all respects invalid, insufficient, fraudulent
or forged; for failure of any draft to bear any reference or adequate
reference to the Credit, or failure of any person to note the amount of any
draft on the reverse of the Credit, or to surrender or to take up the Credit
as required by the terms of the Credit; each of which provisions, if
contained in the Credit itself, it is agreed may be waived by you, or for
errors, omissions, interruptions or delays in transmission or delivery of any
message, by mail, cable, telegraph, wireless, or otherwise, whether or not
they be in cipher; nor shall you be responsible for any error, neglect or
default of any of your correspondents; and none of the above shall affect,
impair or prevent the vesting of any of your rights or powers hereunder. In
furtherance and extension and not in limitation of the specific provisions
hereinbefore set forth, we agree that any action taken by you or by any
correspondent of yours under or in connection with the Credit or the relative
drafts, documents or property, if taken in good faith, shall be binding on us
and shall not put you or your correspondent under any resulting liability to
us; and we make like agreement as to any inaction or omission, unless in
breach of good faith.
7. We agree, to the extent required by the Credit Agreement dated as of
December 17, 1997 among us, other lenders signatory thereto and the Bank of
Montreal, as Agent (the "Credit Agreement") at any time and from time to
time, on demand, to deliver, convey, transfer or assign to you, as security
for any and all obligations and liabilities of us or any one or more of us
hereunder, and also for any and all other obligations and liabilities,
absolute or contingent due or to become due, which are now or may at any time
hereafter be owing by us or any one or more of us to you, additional security
of a value and character satisfactory to you, or to make such payment as you
may require.
8. You shall not be deemed to have waived any of your rights hereunder,
unless you or your authorized agent shall have signed such waiver in writing.
No such waiver, unless expressly as stated therein, shall be effective as to
any transaction which occurs subsequent to the date of such waiver, or as to
any continuance of a breach after such waiver.
9. The word "property", as used in this agreement, includes goods,
merchandise, securities, funds, choses in action, and any and all other forms
of property, whether real, personal or mixed, and any right or interest
therein.
10. Without limiting the foregoing and in addition to the provisions of
paragraph numbered 6 hereof, you are hereby expressly authorized and directed
to honor any request for payment which is made under and in compliance with
the terms of said Credit without regard to, and without any duty on your part
to inquire into, the existence of any disputes or controversies between any
of the undersigned, the beneficiary of the Credit or any other person, firm
or corporation, or the respective rights, duties or liabilities of any of
them or whether any facts or occurrences represented in any of the documents
presented under the Credit are true or correct. Furthermore, we fully
understand and agree that your sole obligation to us shall be limited to
honoring requests for payment made under and in compliance with the terms of
the Credit and this application and your obligation remains so limited even
if you may have assisted us in the preparation of the wording of the Credit
or any documents required to be presented thereunder or you may otherwise be
aware of the underlying transaction giving rise to the Credit and this
application. In addition, and without limiting any of the other provisions
hereof, you and your correspondents may (a) act in reliance upon any oral,
telephonic, telegraphic, electronic or written request or notice believed by
you or your relevant correspondent in good faith to have been authorized by
us or any one of us, whether or not given or signed by an authorized person,
and (b) receive, accept or pay as complying with the terms of the Credit any
drafts or other document, otherwise in order, that may be signed by, or
issued to, the administrator or executor of, or the trustee in bankruptcy of,
or the receiver for any of the property of, or any other person or entity
acting as the representative of, in the place of or as the successor in
interest to, the party in whose name the Credit provides that any drafts or
other documents should be drawn or issued.
11. If this agreement is signed by one party, the terms "we," "our," "us,"
shall be read throughout as "I," "my," "me," as the case may be. If this
agreement is signed by two or more parties, it shall constitute the joint and
several agreement of such parties. This agreement shall be deemed to be made
under and shall in all respects be governed by the law of the State of
Illinois. The Credit and, to the extent not inconsistent with the laws of the
State of Illinois, this agreement will be subject to the Uniform Customs and
Practice for Documentary Credits as most recently published by the
International Chamber of Commerce (the "UCP"), except that Article 41 and 43
of the UCP (1993 Revision) published by the International Chamber of Commerce
as Publication No. 500 shall not apply nor shall any equivalent provision in
any future version of the UCP.
Very truly yours,
___________________________________________
(Firm's name, if applicable)
For Bank Use Only By ___________________
_______ _____ Title_____________________
Approved by Date By ________________________
Title______________________________
C60092 N7/94
