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Exhibit 10.2
CREDIT AGREEMENT
AMONG
GREAT LAKES ENERGY PARTNERS, L.L.C., AS BORROWER
AND
BANK ONE, TEXAS, N.A.
AND THE INSTITUTIONS NAMED HEREIN
AS LENDERS
AND
BANK ONE, TEXAS, N.A.,
AS ADMINISTRATIVE AGENT
CHASE BANK OF TEXAS, N.A.,
AS SYNDICATION AGENT,
BANKERS TRUST COMPANY,
AS DOCUMENTATION AGENT
THE BANK OF NOVA SCOTIA
AND CREDIT LYONNAIS NEW YORK BRANCH,
AS MANAGING AGENTS
BANC ONE CAPITAL MARKETS, INC.,
AS CO-LEAD ARRANGER
AND
CHASE SECURITIES INC.,
AS CO-LEAD ARRANGER
SEPTEMBER 30, 1999
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TABLE OF CONTENTS
Page No.
1. Definitions 1
2. Commitments of the Lenders 12
(a) Terms of Commitment 12
(b) Procedure for Borrowing 12
(c) Letters of Credit 13
(d) Procedure for Obtaining Letters of Credit 14
(e) Voluntary Reduction of Commitment 14
(f) Several Obligations 14
(g) Type and Number of Advances 15
(h) Monthly Commitment Reduction 15
3. Notes Evidencing Loans. 15
(a) Form of Notes 15
(b) Issuance of Additional Notes 15
(c) Interest Rate 15
(d) Payment of Interest 16
(e) Payment of Principal 16
(f) Payment to Lenders 16
(g) Sharing of Payments, Etc. 16
(h) Non-Receipt of Funds by the Administrative Agent 16
4. Interest Rates. 17
(a) Options 17
(b) Interest Rate Determination 18
(c) Conversion Option 18
(d) Recoupment 18
(e) Interest Rates Applicable After Default 18
5. Special Provisions Relating to Loans 19
(a) Unavailability of Funds or Inadequacy of Pricing 19
(b) Change in Laws 19
(c) Increased Cost or Reduced Return 19
(d) Discretion of Lender as to Manner of Funding 21
(e) Breakage Fees 22
6. Collateral Security 22
7. Borrowing Base 23
(a) Initial Borrowing Base and Monthly Commitment Reduction 23
(b) Subsequent Determinations of Borrowing Base 23
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8. Fees 25
(a) Unused Commitment Fee 25
(b) The Letter of Credit Fee 25
(c) Agency Fees 25
9. Prepayments 25
(a) Voluntary Prepayments 25
(b) Mandatory Prepayments 26
10. Representations and Warranties 26
(a) Creation and Existence. 26
(b) Power and Authority. 26
(c) Binding Obligations 27
(d) No Legal Bar or Resultant Lien 27
(e) No Consent 27
(f) Financial Condition 27
(g) Liabilities 27
(h) Litigation 28
(i) Titles, Etc 28
(j) Defaults 28
(k) Casualties; Taking of Properties 28
(l) Use of Proceeds; Margin Stock 28
(m) Location of Business and Offices 29
(n) Compliance with the Law 29
(o) No Material Misstatements 29
(p) Not A Utility 29
(q) ERISA 29
(r) Public Utility Holding Company Act 29
(s) Subsidiaries 30
(t) Environmental Matters 30
(u) Liens 30
(v) Year 2000 Compliance 30
(w) Indebtedness 31
(x) Assets 31
11. Conditions of Lending 31
12. Affirmative Covenants 34
(a) Financial Statements and Reports 34
(b) Certificates of Compliance 35
(c) Accountants' Certificate 35
(d) Taxes and Other Liens 35
(e) Compliance with Laws 36
(f) Further Assurances 36
(g) Performance of Obligations 36
(h) Insurance 36
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(i) Accounts and Records 37
(j) Right of Inspection 37
(k) Notice of Certain Events 38
(l) ERISA Information and Compliance 38
(m) Environmental Reports and Notices 38
(n) Compliance and Maintenance 39
(o) Operation of Properties 39
(p) Compliance with Leases and Other Instruments 39
(q) Certain Additional Assurances Regarding
Maintenance and Operations of Properties 40
(r) Sale of Certain Assets/Prepayment of Proceeds 40
(s) Title Matters 40
(t) Curative Matters 41
(u) Change of Principal Place of Business 41
(v) Year 2000 Compatibility 41
(w) Sale of Equity 42
(x) Subsidiary 42
13. Negative Covenants 42
(a) Negative Pledge 42
(b) Current Ratio 42
(c) Total Debt to EBITDAX 42
(d) Consolidations and Mergers 43
(e) Debts, Guaranties and Other Obligations 43
(f) Distributions or Dividends 43
(g) Loans and Advances 44
(h) Sale or Discount of Receivables 44
(i) Nature of Business 44
(j) Transactions with Affiliates 44
(k) Rate Management Transactions 44
(l) Investments 44
(m) Amendment to Certificate of Formation or
Limited Liability Company Agreement 44
(n) Payment or Pre-Payment of Other Indebtedness 45
(o) Sale of Interests in Subsidiaries 45
14. Events of Xxxxxxx 00
00. The Agents and the Lenders 47
(a) Appointment and Authorization 47
(b) Note Holders 48
(c) Consultation with Counsel 49
(d) Documents 49
(e) Resignation or Removal of Administrative Agent 49
(f) Responsibility of Administrative Agent 49
(g) Independent Investigation 51
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(h) Indemnification 51
(i) Benefit of Section 15 52
(j) Pro Rata Treatment 52
(k) Assumption as to Payments 52
(l) Other Financings 52
(m) Interests of Lenders 53
(n) Investments 53
16. Exercise of Rights 53
17. Notices 54
18. Expenses 54
19. Indemnity 54
20. Governing Law 55
21. Invalid Provisions 55
22. Maximum Interest Rate 55
23. Amendments 56
24. Multiple Counterparts 56
25. Conflict 56
26. Survival 56
27. Parties Bound 56
28. Assignments and Participations 57
(a) Assignments 57
(b) Participations 58
(c) Financial Information 58
(d) Assignees' and Participants' Indemnity 58
29. Choice of Forum: Consent to Service of Process and Jurisdiction 58
30. Waiver of Jury Trial 59
31. Other Agreements 59
32. Financial Terms 59
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EXHIBITS
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Exhibit "A" - Notice of Borrowing
Exhibit "B" - Note
Exhibit "C" - Unlimited Guaranty
Exhibit "D" - Certificate of Compliance
Exhibit "E" - Assignment and Acceptance Agreement
Exhibit "F" - Pre-Approved Hedging Counterparties
SCHEDULES
Schedule 1 - Liens
Schedule 2 - Financial Condition
Schedule 3 - Liabilities
Schedule 4 - Litigation
Schedule 5 - Subsidiaries' Addresses
Schedule 6 - Owners
Schedule 7 - Environmental Matters
Schedule 8 - Title Matters
Schedule 9 - Curative Matters
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (hereinafter referred to as the "Agreement")
executed as of the 30th day of September, 1999, by and among GREAT LAKES ENERGY
PARTNERS, L.L.C., a Delaware limited liability company (hereinafter referred to
as "Borrower") and BANK ONE, TEXAS, N.A. ("Bank One"), CHASE BANK OF TEXAS, N.A.
("Chase"), BANKERS TRUST COMPANY ("BT") THE BANK OF NOVA SCOTIA ("Scotiabank"),
BANK OF SCOTLAND ("BOS") and CREDIT LYONNAIS NEW YORK BRANCH ("CL") and each of
the financial institutions which is a party hereto (as evidenced by the
signature pages to this Agreement) or which may from time to time become a party
hereto pursuant to the provisions of Section 28 hereof or any successor or
assignee thereof (hereinafter collectively referred to as "Lenders", and
individually, "Lender"), Bank One, as Administrative Agent, Chase, as
Syndication Agent, BT, as Documentation Agent and Scotiabank as Managing Agent.
W I T N E S S E T H:
WHEREAS, Borrower has requested the Lenders make available to it a
revolving loan facility in amounts of up to $275,000,000; and
WHEREAS, the Lenders have agreed to make such facility available to
Borrower.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereby agree as follows:
1. DEFINITIONS. When used herein the terms "Administrative Agent", "Agreement",
"Bank One", "Borrower", "BT", "Chase", "Documentation Agent", "Lender",
"Lenders", and "Syndication Agent" shall have the meanings indicated above. When
used herein the following terms shall have the following meanings:
ADMINISTRATIVE AGENT means Bank One, Texas, N.A. or any successor
Administrative Agent.
ADVANCE OR ADVANCES means a loan or loans hereunder.
AFFILIATE means any Person which, directly or indirectly, controls, is
controlled by or is under common control with the relevant Person. For the
purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as
used with respect to any Person, shall mean a member of the board of
directors, a partner or an officer of such Person, or any other Person with
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the
ownership (of record, as trustee, or by proxy) of voting shares,
partnership interests or voting rights, through a management contract or
otherwise. Any Person owning or controlling, directly or indirectly, ten
percent or more of the voting shares, partnership interests or voting
rights, or other equity interest of another Person shall be deemed to be an
Affiliate of such Person.
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AGENTS means the Administrative Agent, the Syndication Agent and the
Documentation Agent.
ALTERNATE BASE RATE shall mean, as of any date, a rate of interest per
annum equal to the higher of (i) the Corporate Base Rate for such date, and
(ii) the sum of the Federal Funds Effective Rate for such date plus
one-half of one percent (.50%) per annum.
ASSIGNMENT AND ACCEPTANCE means a document substantially in the form
of Exhibit "E" hereto.
BASE RATE shall mean, as of any date, the sum of the Alternate Base
Rate plus the Base Rate Margin.
BASE RATE LOANS shall mean any loan during any period which bears
interest based upon the Alternate Base Rate or which would bear interest
based upon the Alternate Base Rate if the Maximum Rate ceiling was not in
effect at that particular time.
BASE RATE MARGIN shall be:
(i) three-quarters of one percent (.75%) per annum whenever the
Borrowing Base Usage is equal to or greater than 90%;
(ii) five-eighths of one percent (.625%) per annum whenever the
Borrowing Base Usage is equal to or greater than 75%, but less than
90%;
(iii) one-half of one percent (.50%) per annum whenever the
Borrowing Base Usage is equal to or greater than 50% but less than
75%; or
(iv) one-quarter of one percent (.25%) per annum whenever the
Borrowing Base Usage is less than 50%.
BORROWING BASE means the value assigned by the Lenders from time to
time to the Oil and Gas Properties pursuant to Section 7 hereof. Until the
next determination of the Borrowing Base pursuant to Section 7(b) hereof,
the Borrowing Base shall be $195,000,000.
BORROWING BASE ASSETS shall mean, as of any date, (i) Oil and Gas
Properties either (A) given economic value in the most recent engineering
report provided to the Lenders pursuant to Section 6 hereof, or (B) other
material proved producing Oil and Gas Properties, and (ii) gas pipelines
and gas gathering systems which are owned by the Borrower and its
subsidiaries.
BORROWING BASE USAGE shall mean, as of any date, all amounts
outstanding on the Loan plus all outstanding Letters of Credit, divided by
the Borrowing Base.
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BORROWING DATE means the date elected by Borrower pursuant to Section
2(b) hereof for an Advance on the Loan.
BUSINESS DAY shall mean (i) with respect to any borrowing, payment or
note selection of Eurodollar Loans, a day (other than Saturdays or Sundays)
on which banks are legally open for business in Dallas, Texas and New York,
New York and on which dealings in United States dollars are carried on in
the London interbank market, and (ii) for all other purposes a day (other
than Saturdays and Sundays) on which banks are legally open for business in
Dallas, Texas.
CHANGE OF CONTROL shall occur if Marbel HoldCo, Inc. and Range HoldCo,
Inc. or their Affiliates cease to beneficially own and control at least
sixty-six and two-thirds (66-2/3%) of the membership interests of Borrower.
COMMITMENT shall mean (A) for all Lenders, the LESSER of (i)
$275,000,000 or (ii) the Borrowing Base, as reduced or increased from time
to time pursuant to Sections 2 and 7 hereof, and (B) as to any Lender, its
obligation to make Advances hereunder on the Loans and purchase
participations in Letters of Credit issued hereunder by the Administrative
Agent in amounts not exceeding, in the aggregate, an amount equal to such
Lender's Commitment Percentage times the total Commitment as of any date.
The Commitment of each Lender hereunder shall be adjusted from time to time
to reflect assignments made by such Lender pursuant to Section 28 hereof.
Each reduction in the Commitment shall result in a Pro Rata reduction in
each Lender's Commitment.
COMMITMENT PERCENTAGE shall mean, for each Lender, the percentage
derived by dividing its Commitment at the time of the determination by the
Commitment of all Lenders at the time of determination. The Commitment
Percentage of each Lender hereunder shall be adjusted from time to time to
reflect assignments made by such Lender pursuant to Section 28 hereof.
CONSOLIDATED CURRENT ASSETS means the total of the consolidated
current assets determined in accordance with GAAP, plus, as of any date,
the unused availability on the Commitment.
CONSOLIDATED CURRENT LIABILITIES means the total of consolidated
current obligations as determined in accordance with GAAP, excluding
therefrom, as of any date, current maturities due on the Loans.
CONSOLIDATED EBITDAX shall mean Consolidated Net Income (excluding
gains and losses from asset sales, extraordinary and non-recurring gains
and losses and non-recurring formation costs) plus the sum of (i) income
tax expense (but excluding income tax expense relating to the sales or
other disposition of assets, including capital stock, the gains and losses
from which are excluded in the determination of Consolidated Net Income),
plus (ii) Consolidated Interest Expense, plus (iii) depreciation, depletion
and amortization expense, plus (iv) exploration expenses.
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CONSOLIDATED INTEREST EXPENSE shall mean the aggregate amount of cash
and non-cash interest expense (including capitalized interest) of Borrower
as determined on a consolidated basis in accordance with GAAP in respect of
all indebtedness, excluding (i) accrued and unpaid interest to intercompany
indebtedness and (ii) amortization of deferred financing costs.
CONSOLIDATED NET INCOME shall mean Borrower's consolidated net income
after income taxes calculated in accordance with GAAP.
CONSOLIDATED TOTAL DEBT means, as of any date, without duplication,
(i) all obligations for borrowed money or for the purchase price of
property, (ii) all obligations evidenced by bonds, debentures, notes, or
other similar instruments, (iii) all other indebtedness (including
obligations under capital leases, other than usual and customary oil and
gas leases) on which interest charges are customarily paid or accrued, (iv)
all guarantees, (v) the unfunded or unreimbursed portion of all letters of
credit, (vi) any indebtedness or other obligation secured by a Lien on
assets, whether or not assumed, and (vii) all liability as a general
partner of a partnership for obligations of that partnership of the nature
described in (i) through (vii) preceding.
CORPORATE BASE RATE means a rate per annum equal to the Corporate Base
Rate announced by Administrative Agent from time to time, changing when and
as said Corporate Base Rate changes.
DEFAULT means all the events specified in Section 14 hereof,
regardless of whether there shall have occurred any passage of time or
giving of notice, or both, that would be necessary in order to constitute
such event as an Event of Default.
DEFAULT RATE shall mean a default rate of interest determined in
accordance with Section 4(e) hereof.
DEFAULTING LENDER is used herein as defined in Section 3(f) hereof.
DOCUMENTATION AGENT means Bankers Trust Company or any successor
Documentation Agent.
EFFECTIVE DATE means the date of this Agreement.
ELIGIBLE ASSIGNEE means any of (i) a Lender or any Affiliate of a
Lender; (ii) a commercial bank organized under the laws of the United
States, or any state thereof, and having a combined capital and surplus of
at least $100,000,000; (iii) a commercial bank organized under the laws of
any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such
country, and having a combined capital and surplus of at least
$100,000,000.00, provided that such bank is acting through a branch or
agency located in the United States; (iv) a Person that
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is primarily engaged in the business of commercial lending and that
(A) is a subsidiary of a Lender, (B) a subsidiary of a Person of which a
Lender is a subsidiary, or (C) a Person of which a Lender is a subsidiary;
(v) any other entity (other than a natural person) which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which
extends credit or buys loans as one of its businesses, including, but not
limited to, insurance companies, mutual funds, and lease financing
companies; and (vi) with respect to any Lender that is a fund that invests
in loans, any other fund that invests in loans and is managed by the same
investment advisor of such Lender or by an Affiliate of such investment
advisor (and treating all such funds so managed as a single Eligible
Assignee); provided, however, that any Affiliate of Borrower that acquires
an interest in any of the Commitment Loans shall not be entitled to vote as
a Lender.
ENGINEERED VALUE is used herein as defined in Section 6 hereof.
ENVIRONMENTAL LAWS means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C.A. Section 9601, ET
SEQ., the Resource Conservation and Recovery Act, as amended by the
Hazardous Solid Waste Amendment of 1984, 42 U.S.C.A. Section 6901, ET
SEQ., the Clean Water Act, 33 U.S.C.A. Section 1251, ET SEQ., the Clean
Air Act, 42 U.S.C.A Section 1251, ET SEQ., the Toxic Substances Control
Act, 15 U.S.C.A. Section 2601, ET SEQ., The Oil Pollution Act of 1990, 33
U.S.G. Section 2701, ET SEQ., and all other laws, statutes, codes, acts,
ordinances, orders, judgments, decrees,injunctions, rules, regulations,
orders, permits and restrictions of any federal, state, county, municipal
and other governments, departments, commissions, boards, agencies, courts,
authorities, officials and officers, domestic or foreign, relating to oil
pollution, air pollution, water pollution, noise control and/or the
handling, discharge, disposal or recovery of on-site or off-site asbestos,
radioactive materials, spilled or leaked petroleum products, distillates
or fractions and industrial solid waste or "hazardous substances" as
defined by 42 U.S.C. Section 9601, ET SEQ., as amended, as each of the
foregoing may be amended from time to time.
ENVIRONMENTAL LIABILITY means any claim, demand, obligation, cause of
action, order, violation, damage, injury, judgment, penalty or fine, cost
of enforcement, cost of remedial action or any other costs or expense
whatsoever, including reasonable attorneys' fees and disbursements,
resulting from the violation or alleged violation of any Environmental Law
or the release of any substance into the environment which is required to
be remediated by a regulatory agency or governmental authority or the
imposition of any Environmental Lien (as hereinafter defined) which could
reasonably be expected to individually or in the aggregate have a Material
Adverse Effect.
ENVIRONMENTAL LIEN means a Lien in favor of any court, governmental
agency or instrumentality or any other Person (i) for any Environmental
Liability or (ii) for damages arising from or cost incurred by such court
or governmental agency or instrumentality or other person in response to a
release or threatened release of asbestos or "hazardous substance" into the
environment, the imposition of which Lien could reasonably be expected to
have a Material Adverse Effect.
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ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
EURODOLLAR BASE RATE shall mean, with respect to any Eurodollar Loan
for the relevant Interest Period, the rate determined by the Administrative
Agent to be the rate at which the Administrative Agent offers to place
deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first date of such Interest Period, in the approximate amount
of the Administrative Agent's relevant Eurodollar Loan and having a
maturity equal to such Interest Period.
EURODOLLAR LOANS mean any Advance during any period which bears
interest at the Eurodollar Rate, or which would bear interest at such rate
if the Maximum Rate ceiling was not in effect at a particular time.
EURODOLLAR MARGIN shall be:
(i) two percent (2%) per annum whenever the Borrowing Base
Usage is equal to or greater than 90%;
(ii) one and seven-eighths percent (1.875%) per annum
whenever the Borrowing Base Usage is equal to or greater than
75%, but less than 90%;
(iii) one and three-quarters percent (1.75%) per annum
whenever the Borrowing Base Usage is equal to or greater than
50%, but less than 75%; or
(iv) one and one-half percent (1.50%) per annum whenever the
Borrowing Base Usage is less than 50%.
EURODOLLAR RATE means, with respect to a Eurodollar Loan for the
relevant Interest Period, the sum of (i) the quotient of (A) the Eurodollar
Base Rate applicable to such Interest Period, divided by (B) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus the Eurodollar Margin. The Eurodollar Rate shall be rounded to
the next higher multiple of 1/16th of one percent if the rate is not such a
multiple.
FEDERAL FUNDS EFFECTIVE RATE shall mean, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such
day is not a Business Day, for the immediately preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at
approximately 10:00 a.m. (Dallas, Texas time) on such day on such
transactions received by the Administrative Agent from three (3) Federal
funds brokers of recognized standing selected by the Administrative Agent
in its sole discretion.
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FINANCIAL STATEMENTS means balance sheets, income statements,
statements of cash flow and appropriate footnotes and schedules, prepared
in accordance with GAAP.
GAAP means generally accepted accounting principles, consistently
applied.
GUARANTORS means all Subsidiaries of Borrower.
GUARANTIES means unlimited guaranties of the Guarantors in the form of
Exhibit "C" hereto.
INTEREST PAYMENT DATE shall mean the last day of each calendar month
in the case of Base Rate Loans and, in the case of Eurodollar Loans, the
last day of the applicable Interest Period, and if such Interest Period is
longer than three (3) months, at three-month intervals following the first
day of such Interest Periods.
INTEREST PERIOD shall mean with respect to any Eurodollar Loan (i)
initially, the period commencing on the date such Eurodollar Loan is made
and ending one (1), two (2), three (3), six (6), nine (9) or twelve (12)
months thereafter as selected by the Borrower pursuant to Section 4(a)(ii),
and (ii) thereafter, each period commencing on the day following the last
day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one (1), two (2), three (3), six (6), nine (9) or twelve
(12) months thereafter, as selected by the Borrower pursuant to Section
4(a)(ii); provided, however, that (i) if any Interest Period would
otherwise expire on a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day unless the result of such
extension would be to extend such Interest Period into the next calendar
month, in which case such Interest Period shall end on the immediately
preceding Business Day, (ii) if any Interest Period begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) such Interest Period shall end on the last Business Day of
a calendar month, and (iii) any Interest Period which would otherwise
expire after the Maturity Date shall end on such Maturity Date.
LETTERS OF CREDIT is used herein as defined in Section 2(c) hereof.
LIEN means any mortgage, deed of trust, pledge, security interest,
assignment, encumbrance or lien (statutory or otherwise) of every kind and
character. LOANS means an Advance or Advances made under the Commitment.
LOAN DOCUMENTS means this Agreement, the Notes, the Security
Instruments and all other documents executed in connection with the
transaction described in this Agreement.
MAJORITY LENDERS means Lenders holding 66-2/3% or more of the
Commitments or if the Commitments have been terminated, Lenders holding
66-2/3% of the outstanding Loans.
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MANAGING AGENT means the Bank of Nova Scotia and Credit Lyonnais New
York Branch and any successor Managing Agent.
MATERIAL ADVERSE EFFECT shall mean a material adverse effect on (i)
the assets or properties, liabilities, financial condition, business,
operations, affairs or circumstances of the Borrower, (ii) the ability of
the Borrower to carry out its businesses as of the date of this Agreement
or as proposed at the date of this Agreement to be conducted, (iii) the
ability of Borrower to perform fully and on a timely basis its obligations
under any of the Loan Documents, or (iv) the validity or enforceability of
any of the Loan Documents or the rights and remedies of the Administrative
Agent or the Lenders thereunder.
MATURITY DATE shall mean September 30, 2002.
MAXIMUM RATE means at any particular time in question, the maximum
non-usurious rate of interest which under applicable law may then be
charged on the Note. If such Maximum Rate changes after the date hereof,
the Maximum Rate shall be automatically increased or decreased, as the case
may be, without notice to Borrower from time to time as the effective date
of each change in such Maximum Rate.
MONTHLY COMMITMENT REDUCTION is used herein as defined in Section 2(h)
hereof.
NOTES means the Notes described in Section 3 hereof, substantially in
the form of Exhibit "B" hereto issued or to be issued hereunder to each
Lender, respectively, to evidence the indebtedness to such Lender arising
by reason of the Advances on the Loan, together with all modifications,
renewals and extensions thereof or any part thereof.
OIL AND GAS PROPERTIES means all oil, gas and mineral properties and
interests, related personal properties (excluding gas pipelines and gas
gathering systems), in which Borrower grants to the Lenders a first and
prior lien and security interest pursuant to Section 6 hereof.
OTHER FINANCING is used herein as defined in Section 15(l) hereof.
PAYOR is used herein as defined in Section 3(h)hereof.
PERMITTED LIENS shall mean (i) royalties, overriding royalties,
reversionary interests, production payments and similar burdens; (ii) sales
contracts or other arrangements for the sale of production of oil, gas or
associated liquid or gaseous hydrocarbons which would not (when considered
cumulatively with the matters discussed in clause (i) above) deprive
Borrower of any material right in respect of Borrower's assets or
properties (except for rights customarily granted with respect to such
contracts and arrangements); (iii) statutory Liens for taxes or other
assessments that are not yet delinquent (or that, if delinquent, are being
contested in good faith by appropriate proceedings, levy and execution
thereon having been stayed and continue to be stayed and for which Borrower
has set aside on its books adequate reserves in accordance with GAAP); (iv)
easements, rights of way,
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servitudes, permits, surface leases and other rights in respect to
surface operations, pipelines, grazing, logging, canals, ditches,
reservoirs or the like, conditions, covenants and other restrictions, and
easements of streets, alleys, highways, pipelines, telephone lines, power
lines, railways and other easements and rights of way on, over or in
respect of Borrower's assets or properties and that do not individually or
in the aggregate, cause a Material Adverse Effect; (v) materialmen's,
mechanic's, repairman's, employee's, warehousemen's, landlord's, carrier's,
pipeline's, contractor's, sub-contractor's, operator's, non-operator's
(arising under operating or joint operating agreements), and other Liens
(including any financing statements filed in respect thereof) incidental to
obligations incurred by Borrower in connection with the construction,
maintenance, development, transportation, storage or operation of
Borrower's assets or properties to the extent not delinquent (or which, if
delinquent, are being contested in good faith by appropriate proceedings
and for which Borrower has set aside on its books adequate reserves in
accordance with GAAP); (vi) all contracts, agreements and instruments, and
all defects and irregularities and other matters affecting Borrower's
assets and properties which were in existence at the time Borrower's assets
and properties were originally acquired by Borrower and all routine
operational agreements entered into in the ordinary course of business,
which contracts, agreements, instruments, defects, irregularities and other
matters and routine operational agreements are not such as to, individually
or in the aggregate, interfere materially with the operation, value or use
of Borrower's assets and properties, considered in the aggregate; (vii)
liens in connection with workmen's compensation, unemployment insurance or
other social security, old age pension or public liability obligations;
(viii) legal or equitable encumbrances deemed to exist by reason of the
existence of any litigation or other legal proceeding or arising out of a
judgment or award with respect to which an appeal is being prosecuted in
good faith and levy and execution thereon have been stayed and continue to
be stayed; (ix) rights reserved to or vested in any municipality,
governmental, statutory or other public authority to control or regulate
Borrower's assets and properties in any manner, and all applicable laws,
rules and orders from any governmental authority; (x) landlord's liens;
(xi) Liens incurred pursuant to the Security Instruments; and (xii) Liens
existing at the date of this Agreement which have been disclosed to Lenders
in Schedule "1" hereto.
PERSON means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
PLAN means any plan subject to Title IV of ERISA and maintained by
Borrower, or any such plan to which Borrower is required to contribute on
behalf of its employees.
PRE-APPROVED CONTRACTS as used herein shall mean any contracts or
agreements entered into in connection with any Rate Management Transaction
designed (i) to hedge, forward, sell or swap crude oil or natural gas or
otherwise sell up to 80% of the Borrower's anticipated production from
proved, developed producing reserves of crude oil, and/or 80% of the
Borrower's anticipated production from proved, developed producing reserves
of natural gas, during the period from the immediately preceding settlement
date (or the
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commencement of the term of such hedge transactions if there is no
prior settlement date) to such settlement date, and (ii) with one or more
of the counterparties to the hedging agreement listed on Exhibit "F"
hereto.
PRO RATA OR PRO RATA PART means for each Lender, (i) for all purposes
where no Loan is outstanding, such Lender's Commitment Percentage and (ii)
otherwise, the proportion which the portion of the outstanding Loans owed
to such Lender bears to the aggregate outstanding Loans owed to all Lenders
at the time in question.
RATE MANAGEMENT TRANSACTION means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into
between Borrower and Administrative Agent or the Lenders which is a rate
swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond
option, interest rate option, forward exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect
to any of these transactions) or any combination thereof, whether linked to
one or more interest rates, foreign currencies, commodity prices, equity
prices or other financial measures.
REGULATION D shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto and other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
REIMBURSEMENT OBLIGATIONS means, at any time, the obligations of the
Borrower in respect of all Letters of Credit then outstanding to reimburse
amounts paid by any Lender in respect of any drawing or drawings under a
Letter of Credit.
RELEASE PRICE is used herein as defined in Section 12(r) hereof.
REQUIRED LENDERS means Lenders holding 75% or more of the Commitments
or if the Commitments have been terminated, Lenders holding 75% of the
outstanding Loans.
REQUIRED PAYMENT is used herein as defined in Section 3(h) hereof.
RESERVE REQUIREMENT means, with respect to any Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D or
Eurocurrency liabilities.
SECURITY INSTRUMENTS is used collectively herein to mean this
Agreement, all Deeds of Trust, Mortgages, Security Agreements, Assignments
of Production and Financing Statements and other collateral documents
covering the Oil and Gas Properties and related personal property,
equipment, oil and gas inventory and proceeds of the foregoing, all such
documents to be in form and substance satisfactory to Administrative Agent.
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SUBSIDIARY means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by Borrower or
another subsidiary.
SYNDICATION AGENT means Chase Bank of Texas, N.A. or any successor
Syndication Agent.
TOTAL OUTSTANDINGS means, as of any date, the sum of (i) the total
principal balance outstanding on the Notes, plus (ii) the total face amount
of all outstanding Letters of Credit, plus (iii) the total amount of all
unpaid Reimbursement Obligations.
TRANCHE means a set of Eurodollar Loans made by the Lenders at the
same time and for the same Interest Period.
UNSCHEDULED REDETERMINATIONS means a redetermination of the Borrowing
Base made at any time other than on the dates set for the regular
semi-annual redetermination of the Borrowing Base which are made (A) at the
request of Borrower (but only one between Borrowing Base redeterminations)
(B) at the request of Majority Lenders (but only once between Borrowing
Base redeterminations), provided, however, that Majority Lenders may
require an Unscheduled Redetermination at any time it appears to
Administrative Agent or Majority Lenders, in the exercise of their
reasonable discretion, that either (i) there has been a material decrease
in the value of the Oil and Gas Properties, or (ii) an event has occurred
which is reasonably expected to have a Material Adverse Effect.
UNUSED COMMITMENT FEE RATE shall be:
(i) one-half of one percent (.50%) per annum whenever the
Borrowing Base Usage is equal to or greater than 75%;
(ii) three-eighths of one percent (.375%) per annum whenever
the Borrowing Base Usage is equal to or greater than 50% but less
than 75% and
(iii) one-fourth of one percent (.25%) per annum whenever
the Borrowing Base Usage is less than 50%.
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1. COMMITMENTS OF THE LENDERS.
(a) TERMS OF COMMITMENT. On the terms and conditions hereinafter set forth, each
Lender agrees severally to make Advances to the Borrower from time to time
during the period beginning on the Effective Date and ending on the Maturity
Date in such amounts as the Borrower may request up to an amount not to exceed,
in the aggregate principal amount outstanding at any time, the Commitment less
Total Outstandings. The obligation of the Borrower hereunder shall be evidenced
by this Agreement and the Notes issued in connection herewith, said Notes to be
as described in Section 3 hereof. Notwithstanding any other provision of this
Agreement, no Advance shall be required to be made hereunder if any Default or
Event of Default (as hereinafter defined) has occurred and is continuing. Each
Advance under the Commitment shall be an aggregate amount of at least $1,000,000
or any whole multiples of $100,000 in excess thereof. Irrespective of the face
amount of the Note or Notes, the Lenders shall never have the obligation to
Advance any amount or amounts in excess of the Commitment or to increase the
Commitment.
(a) PROCEDURE FOR BORROWING. Whenever the Borrower desires an Advance hereunder,
it shall give Administrative Agent telegraphic, telex, facsimile or telephonic
notice ("Notice of Borrowing") of such requested Advance, which in the case of
telephonic notice, shall be promptly confirmed in writing. Each Notice of
Borrowing shall be in the form of Exhibit "A" attached hereto and shall be
received by Administrative Agent not later than 12:00 noon Dallas, Texas time,
(i) one Business Day prior to the Borrowing Date in the case of the Base Rate
Loan, or (ii) three Business Days prior to any proposed Borrowing Date in the
case of Eurodollar Loans. Each Notice of Borrowing shall specify (i) the
Borrowing Date (which shall be a Business Day), (ii) the principal amount to be
borrowed, (iii) the portion of the Advance constituting Base Rate Loans and/or
Eurodollar Loans, (iv) if any portion of the proposed Advance is to constitute
Eurodollar Loans, the initial Interest Period selected by Borrower pursuant to
Section 4 hereof to be applicable thereto, and (v) the date upon which such
Advance is required. Upon receipt of such Notice, Administrative Agent shall
advise each Lender thereof; provided, that if the Lenders have received at least
one (1) day's notice of such Advance prior to funding of a Base Rate Loan, or at
least three (3) days' notice of each Advance prior to funding in the case of a
Eurodollar Loan, each Lender shall provide Administrative Agent at its office at
0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, not later than 1:00 p.m., Dallas, Texas
time, on the Borrowing Date, in immediately available funds, its pro rata share
of the requested Advance, but the aggregate of all such fundings by each Lender
shall never exceed such Lender's Commitment. Not later than 2:00 p.m., Dallas,
Texas time, on the Borrowing Date, Administrative Agent shall make available to
the Borrower at the same office, in like funds, the aggregate amount of such
requested Advance. Neither Administrative Agent nor any Lender shall incur any
liability to the Borrower in acting upon any Notice referred to above which
Administrative Agent or such Lender believes in good faith to have been given by
a duly authorized officer or other person authorized to borrow on behalf of
Borrower or for otherwise acting in good faith under this Section 2(b). Upon
funding of Advances by Lenders in accordance with this Agreement, pursuant to
any such Notice, the Borrower shall have effected Advances hereunder.
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(a) LETTERS OF CREDIT. On the terms and conditions hereinafter set forth, the
Administrative Agent shall from time to time during the period beginning on the
Effective Date and ending on the Maturity Date upon request of Borrower issue
standby and/or commercial Letters of Credit for the account of Borrower (the
"Letters of Credit") in such face amounts as Borrower may request, but not to
exceed in the aggregate face amount at any time outstanding the sum of Twenty
Million Dollars ($20,000,000.00). The face amount of all Letters of Credit
issued and outstanding hereunder shall be considered as Advances on the
Commitment for Borrowing Base purposes and all payments made by the
Administrative Agent on such Letters of Credit shall be considered as Advances
under the Notes. Each Letter of Credit issued for the account of Borrower
hereunder shall (i) be in favor of such beneficiaries as specifically requested
by Borrower, (ii) have an expiration date not exceeding the earlier of (a) one
year or (b) the Maturity Date, and (iii) contain such other terms and provisions
as may be required by issuing Lender. Each Lender (other than Administrative
Agent) agrees that, upon issuance of any Letter of Credit hereunder, it shall
automatically acquire a participation in the Administrative Agent's liability
under such Letter of Credit in an amount equal to such Lender's Commitment
Percentage of such liability, and each Lender (other than Administrative Agent)
thereby shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and shall be unconditionally obligated to
Administrative Agent to pay and discharge when due, its Commitment Percentage of
Administrative Agent's liability under such Letter of Credit. The Borrower
hereby unconditionally agrees to pay and reimburse the Administrative Agent for
the amount of each demand for payment under any Letter of Credit that is in
substantial compliance with the provisions of any such Letter of Credit at or
prior to the date on which payment is to be made by the Administrative Agent to
the beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind. Upon receipt from any beneficiary of any Letter of
Credit of any demand for payment under such Letter of Credit, the Administrative
Agent shall promptly notify the Borrower of the demand and the date upon which
such payment is to be made by the Administrative Agent to such beneficiary in
respect of such demand. Forthwith upon receipt of such notice from the
Administrative Agent, Borrower shall advise the Administrative Agent whether or
not it intends to borrow hereunder to finance its obligations to reimburse the
Administrative Agent, and if so, submit a Notice of Borrowing as provided in
Section 2(b) hereof. If Borrower fails to so advise Administrative Agent and
thereafter fails to reimburse Administrative Agent, the Administrative Agent
shall notify each Lender of the demand and the failure of the Borrower to
reimburse the Administrative Agent, and each Lender shall reimburse the
Administrative Agent for its Commitment Percentage of each such draw paid by the
Administrative Agent and unreimbursed by the Borrower. All such amounts paid by
Administrative Agent and/or reimbursed by the Lenders shall be treated as an
Advance or Advances under the Commitment, which Advances shall be immediately
due and payable and shall bear interest at the Maximum Rate.
(a) PROCEDURE FOR OBTAINING LETTERS OF CREDIT. The amount and date of issuance,
renewal, extension or reissuance of a Letter of Credit pursuant to the
Commitments shall be designated by Borrower's written request delivered to
Administrative Agent at least three (3) Business Days prior to the date of such
issuance, renewal, extension or reissuance. Concurrently with or promptly
following the delivery of the request for a Letter of Credit, Borrower shall
execute and deliver to the Administrative Agent an application and agreement
with respect to the
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Letters of Credit, said application and agreement to be in the form used by the
Administrative Agent. The Administrative Agent shall not be obligated to issue,
renew, extend or reissue such Letters of Credit if (A) the amount thereon when
added to the face amount of the outstanding Letters of Credit plus any
Reimbursement Obligations exceeds Twenty Million Dollars ($20,000,000.00) or (B)
the amount thereof when added to the Total Outstandings would exceed the
Commitment. Borrower agrees to pay the Administrative Agent for the benefit of
the Lenders commissions for issuing the Letters of Credit (calculated separately
for each Letter of Credit) in an amount equal to the Eurodollar Margin
multiplied by the maximum face amount of the Letter of Credit. Borrower further
agrees to pay Administrative Agent for its own account an additional fronting
fee equal to one-quarter of one percent (.25%) per annum multiplied times the
maximum face amount of each Letter of Credit. Such commissions shall be payable
prior to the issuance of each Letter of Credit and thereafter on each
anniversary date of such issuance while such Letter of Credit is outstanding.
Such commissions and fronting fee will be calculated based on the basis of a
year consisting of 360 days.
(a) VOLUNTARY REDUCTION OF COMMITMENT. The Borrower may at any time, or from
time to time, upon not less than three (3) Business Days' prior written notice
to Administrative Agent, reduce or terminate the Commitment; provided, however,
that (i) each reduction in the Commitment must be in the amount of $1,000,000 or
more, in increments of $1,000,000 and (ii) each reduction must be accompanied by
a prepayment of the Notes in the amount by which the outstanding principal
balance of the Notes exceeds the Commitment as reduced pursuant to this Section
2.
(a) SEVERAL OBLIGATIONS. The obligations of the Lenders under the Commitments
are several and not joint. The failure of any Lender to make an Advance required
to be made by it shall not relieve any other Lender of its obligation to make
its Advance, and no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender. No Lender shall be
required to lend hereunder any amount in excess of its legal lending limit.
(a) TYPE AND NUMBER OF ADVANCES. Any Advance under the Commitment may be a Base
Rate Loan or a Eurodollar Loan, or a combination thereof, as selected by the
Borrower pursuant to Section 4 hereof. The total number of Tranches which may be
outstanding at any time shall never exceed four (4).
(a) MONTHLY COMMITMENT REDUCTION. The Borrowing Base and the Commitment shall be
reduced as of the first day of each month by $1,000,000 (the "Monthly Commitment
Reduction") per month beginning on December 1, 1999 with like reductions
continuing on the first day of each month thereafter through April 1, 2000. If
as a result of any such Monthly Commitment Reduction, the Total Outstandings
ever exceed the Commitment then in effect, the Borrower shall make the mandatory
prepayment of principal required pursuant to Section 9(b) hereof.
1. NOTES EVIDENCING LOANS. The loans described above in Section 2 shall be
evidenced by promissory notes of Borrower as follows:
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(a) FORM OF NOTES. The Loans shall be evidenced by a Note or Notes in the
aggregate face amount of $275,000,000, and shall be in the form of Exhibit "B"
hereto with appropriate insertions (each a " Note"). Notwithstanding the face
amount of the Notes, the actual principal amount due from the Borrower to
Lenders on account of the Notes, as of any date of computation, shall be the sum
of Advances then and theretofore made on account thereof, less all principal
payments actually received by Lenders in collected funds with respect thereto.
Although the Notes may be dated as of the Effective Date, interest in respect
thereof shall be payable only for the period during which the loans evidenced
thereby are outstanding and, although the stated amount of the Notes may be
higher, the Notes shall be enforceable, with respect to Borrower's obligation to
pay the principal amount thereof, only to the extent of the unpaid principal
amount of the Loans. Irrespective of the face amount of the Notes, no Lender
shall ever be obligated to advance on the Commitment any amount in excess of its
Commitment then in effect.
(a) ISSUANCE OF ADDITIONAL NOTES. At the Effective Date there shall be
outstanding Notes in the aggregate face amount of $275,000,000. From time to
time new Notes may issued to other Lenders as such Lenders become parties to
this Agreement. Upon request from Administrative Agent, the Borrower shall
execute and deliver to Administrative Agent any such new or additional Notes.
From time to time as new Notes are issued the Administrative Agent shall require
that each Lender exchange its Note(s) for newly issued Note(s) to better reflect
the extent of each Lender's Commitments hereunder.
(a) INTEREST RATES. The unpaid principal balance of the Notes shall bear
interest from time to time as set forth in Section 4 hereof.
(a) PAYMENT OF INTEREST. Interest on the Notes shall be payable on each Interest
Payment Date.
(a) PAYMENT OF PRINCIPAL. Principal of the Note or Notes shall be due and
payable to the Administrative Agent for the ratable benefit of the Lenders on
the Maturity Date unless earlier due in whole or in part as a result of an
acceleration of the amount due or pursuant to the mandatory prepayment
provisions of Section 9(b) hereof.
(a) PAYMENT TO LENDERS. Each Lender's Pro Rata Part of payment or prepayment of
the Loans shall be directed by wire transfer to such Lender by the
Administrative Agent at the address provided to the Administrative Agent for
such Lender for payments no later than 2:00 p.m., Dallas, Texas, time on the
Business Day such payments or prepayments are deemed hereunder to have been
received by Administrative Agent; provided, however, in the event that any
Lender shall have failed to make an Advance as contemplated under Section 2
hereof (a "Defaulting Lender") and the Administrative Agent or another Lender or
Lenders shall have made such Advance, payment received by Administrative Agent
for the account of such Defaulting Lender or Lenders shall not be distributed to
such Defaulting Lender or Lenders until such Advance or Advances shall have been
repaid in full to the Lender or Lenders who funded such Advance or Advances. Any
payment or prepayment received by Administrative Agent at any time after 12:00
noon, Dallas, Texas, time on a Business Day shall be deemed to have been
received on the next
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Business Day. Interest shall cease to accrue on any principal as of the end of
the day preceding the Business Day on which any such payment or prepayment is
deemed hereunder to have been received by Administrative Agent. If
Administrative Agent fails to transfer any principal amount to any Lender as
provided above, then Administrative Agent shall promptly direct such principal
amount by wire transfer to such Lender together with interest thereon with
respect of the period commencing on the date one (1) day after such amount was
made available to the Administrative Agent until the date the Administrative
Agent pays such principal amount to the Lender at the rate applicable to such
portion of the applicable loan.
(a) SHARING OF PAYMENTS, ETC. If any Lender shall obtain any payment (whether
voluntary, involuntary, or otherwise) on account of the Loans, (including,
without limitation, any set-off) which is in excess of its Pro Rata Part of
payments on either of the Loans, as the case may be, obtained by all Lenders,
such Lender shall purchase from the other Lenders such participation as shall be
necessary to cause such purchasing Lender to share the excess payment pro rata
with each of them; provided that, if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of the recovery. The
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of offset) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
(a) NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the Administrative
Agent shall have been notified by a Lender or the Borrower (the "Payor") prior
to the date on which such Lender is to make payment to the Administrative Agent
of the proceeds of a Loan to be made by it hereunder or the Borrower is to make
a payment to the Administrative Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Administrative Agent, the recipient
of such payment shall, on demand, pay to the Administrative Agent the amount
made available to it together with interest thereon in respect of the period
commencing on the date such amount was made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at the rate
applicable to such portion of the applicable Loan.
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1. INTEREST RATES.
(a) OPTIONS.
(i) BASE RATE LOANS. On all Base Rate Loans the Borrower agrees to pay interest
on the Notes calculated on the basis of the actual days elapsed in a year
consisting of 360 days with respect to the unpaid principal amount of each Base
Rate Loan from the date the proceeds thereof are made available to Borrower
until maturity (whether by acceleration or otherwise), at a varying rate per
annum equal to the lesser of (i) the Maximum Rate (defined herein), or (ii) the
sum of the Base Rate plus the Base Rate Margin. Subject to the provisions of
this Agreement as to prepayment, the principal of the Notes representing Base
Rate Loans shall be payable as specified in Section 3(d) hereof and the interest
in respect of each Base Rate Loan shall be payable on each Interest Payment
Date. Past due principal and, to the extent permitted by law, past due interest
in respect to each Base Rate Loan, shall bear interest, payable on demand, at a
rate per annum equal to the Maximum Rate.
(i) EURODOLLAR LOANS. On all Eurodollar Loans the Borrower agrees to pay
interest calculated on the basis of a year consisting of 360 days with respect
to the unpaid principal amount of each Eurodollar Loan from the date the
proceeds thereof are made available to Borrower until maturity (whether by
acceleration or otherwise), at a varying rate per annum equal to the lesser of
(i) the Maximum Rate, or (ii) the Eurodollar Rate plus the Eurodollar Margin.
Subject to the provisions of this Agreement with respect to prepayment, the
principal of the Notes shall be payable as specified in Section 3(d) hereof and
the interest with respect to each Eurodollar Loan shall be payable on each
Interest Payment Date. Past due principal and, to the extent permitted by law,
past due interest shall bear interest, payable on demand, at a rate per annum
equal to the Maximum Rate. Upon three (3) Business Days' written notice prior to
the making by the Lenders of any Eurodollar Loan (in the case of the initial
Interest Period therefor) or the expiration date of each succeeding Interest
Period (in the case of subsequent Interest Periods therefor), Borrower shall
have the option, subject to compliance by Borrower with all of the provisions of
this Agreement, as long as no Event of Default exists, to specify whether the
Interest Period commencing on any such date shall be a one (1), two (2), three
(3), six (6) or nine (9) month period. If Administrative Agent shall not have
received timely notice of a designation of such Interest Period as herein
provided, Borrower shall be deemed to have elected to convert all maturing
Eurodollar Loans to Base Rate Loans.
(a) INTEREST RATE DETERMINATION. The Administrative Agent shall determine each
interest rate applicable to the Loans hereunder. The Administrative Agent shall
give prompt notice to the Borrower and the Lenders of each rate of interest so
determined and its determination thereof shall be conclusive absent error.
(a) CONVERSION OPTION. Borrower may elect from time to time (i) to convert all
or any part of its Eurodollar Loans to Base Rate Loans by giving Administrative
Agent irrevocable notice of such election in writing prior to 10:00 a.m.
(Dallas, Texas time) on the conversion date and such conversion shall be made on
the requested conversion date, provided that any such
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conversion of a Eurodollar Loan shall only be made on the last day of the
Eurodollar Interest Period with respect thereof, (ii) to convert all or any part
of its Base Rate Loans to Eurodollar Loans by giving the Administrative Agent
irrevocable written notice of such election three (3) Business Days prior to the
proposed conversion and such conversion shall be made on the requested
conversion date or, if such requested conversion date is not a Business Day, on
the next succeeding Business Day. Any such conversion shall not be deemed to be
a prepayment of any of the loans for purposes of this Agreement on the Notes.
(a) RECOUPMENT. If at any time the applicable rate of interest selected pursuant
to Sections 4(a)(i) or 4(a)(ii) above shall exceed the Maximum Rate, thereby
causing the interest on the Notes to be limited to the Maximum Rate, then any
subsequent reduction in the interest rate so selected or subsequently selected
shall not reduce the rate of interest on the Notes below the Maximum Rate until
the total amount of interest accrued on the Note equals the amount of interest
which would have accrued on the Notes if the rate or rates selected pursuant to
Sections 4(a)(i) or (ii), as the case may be, had at all times been in effect.
(a) INTEREST RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in this Section 4, during the continuance of a Default or an
Event of Default the Majority Lenders may, at their option, by notice from
Administrative Agent to the Borrower (which notice may be revoked at the option
of the Majority Lenders notwithstanding the provisions of Section 15 hereof,
which requires all Lenders to consent to changes in interest rates) declare that
no Advance may be made as, converted into, or continued as a Eurodollar Loan.
During the continuance of an Event of Default, the Majority Lenders, may, at
their option, by notice from Administrative Agent to the Borrower (which notice
may be revoked at the option of Majority Lenders notwithstanding the provisions
of Section 15 hereof, which requires all Lenders to consent to changes in
interest rates) declare that (i) each Eurodollar Loan shall bear interest for
the remainder of the applicable Interest Period at the rate otherwise applicable
to such Interest Period plus two percent (2%) per annum and (ii) each Base Rate
Loan shall bear interest at the rate otherwise applicable to such Interest
Period plus two percent (2%), provided that, during the continuance of an Event
of Default under Section 14(f) or 14(g), the interest rate set forth in clauses
(i) and (ii) above shall be applicable to all outstanding Loans without any
election or action on the part of the Administrative Agent or any Lender.
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1. SPECIAL PROVISIONS RELATING TO LOANS.
(a) UNAVAILABILITY OF FUNDS OR INADEQUACY OF PRICING. In the event that, in
connection with any proposed Eurodollar Loan, the Administrative Agent
determines, which determination shall, absent manifest error, be final,
conclusive and binding upon all parties, due to changes in circumstances since
the date hereof, adequate and fair means do not exist for determining the
Eurodollar Rate or such rate will not accurately reflect the costs to the
Lenders of funding Eurodollar Loan for such Eurodollar Interest Period, the
Administrative Agent shall give notice of such determination to the Borrower and
the Lenders, whereupon, until the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such suspension no longer
exist, the obligations of the Lenders to make, continue or convert a Loan into a
Eurodollar Loan shall be suspended, and all loans to Borrower shall be Base Rate
Loans during the period of suspension.
(a) CHANGE IN LAWS. If at any time any new law or any change in existing laws or
in the interpretation of any new or existing laws shall make it unlawful for any
Lender to make or continue to maintain or fund a Eurodollar Loan hereunder, then
such Lender shall promptly notify Borrower in writing and such Lender's
obligation to make, continue or convert Loans into Eurodollar Loans under this
Agreement shall be suspended until it is no longer unlawful for such Lender to
make or maintain Eurodollar Loans. Upon receipt of such notice, Borrower shall
either repay the outstanding Eurodollar Loan owed to the Lenders, without
penalty, on the last day of the current Interest Periods (or, if any Lender may
not lawfully continue to maintain and fund such Eurodollar Loan, immediately),
or Borrower may convert such Eurodollar Loan at such appropriate time to Base
Rate Loan.
(a) INCREASED COST OR REDUCED RETURN.
(i) If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, 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 any Lender with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency:
(A) shall subject such Lender to any tax,
duty, or other charge with respect to any Eurodollar
Loan, its Notes, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts
payable to such Lender under this Agreement or its
Notes in respect of any Eurodollar Loan (other than
franchise taxes and taxes imposed on the overall net
income of such Lender);
(B) shall impose, modify, or deem applicable
any reserve, special deposit, assessment, or similar
requirement (other than reserve requirements, if any,
taken into account in the determination of the
Eurodollar Rate) relating to any extensions of credit
or other assets of, or
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any deposits with or other liabilities or commitments
of, such Lender, including the Commitment of such
Lender hereunder; or
(C) shall impose on such Lender or on the
London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions
of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost
to such Lender of making, converting into, continuing, or
maintaining any Eurodollar Loan or to reduce any sum received
or receivable by such Lender under this Agreement or its Notes
with respect to any Eurodollar Loan, then Borrower shall pay
to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction.
If any Lender requests compensation by Borrower under this
Section 5(c), Borrower may, by notice to such Lender (with a
copy to Administrative Agent), suspend the obligation of such
Lender to make or continue Eurodollar Loans, or to convert all
or part of the Base Rate Loan owing to such Lender to a
Eurodollar Loan, until the event or condition giving rise to
such request ceases to be in effect (in which case the
provisions of Section 5(c) shall be applicable); PROVIDED that
such suspension shall not affect the right of such Lender to
receive the compensation so requested.
(i) If, after the date hereof, any Lender shall have determined that the
adoption of any applicable law, rule, or regulation regarding capital adequacy
or any change therein or in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(i) Each Lender shall promptly notify Borrower and Administrative Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 5(c) and will
designate a separate lending office, if applicable, if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 5(c) shall furnish to Borrower and
Administrative Agent a statement setting forth the additional amount or amounts
to be paid to it hereunder which shall be conclusive in the absence of manifest
error. In determining such amount, such Lender may use any reasonable averaging
and attribution methods.
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(i) Any Lender giving notice to the Borrower through the Administrative Agent,
pursuant to Sections 3(k) or 5(c) shall give to the Borrower a statement signed
by an officer of such Lender setting forth in reasonable detail the basis for,
and the calculation of such additional cost, reduced payments or capital
requirements, as the case may be, and the additional amounts required to
compensate such Lender therefor.
(i) Within five (5) Business Days after receipt by the Borrower of any notice
referred to in Sections 3(k) or 5(c), the Borrower shall pay to the
Administrative Agent for the account of the Lender issuing such notice such
additional amounts as are required to compensate such Lender for the increased
cost, reduce payments or increase capital requirements identified therein, as
the case may be.
(a) DISCRETION OF LENDER AS TO MANNER OF FUNDING. Notwithstanding any provisions
of this Agreement to the contrary, each Lender shall be entitled to fund and
maintain its funding of all or any part of its Loan in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded and
maintained each Eurodollar Loan through the purchase of deposits having a
maturity corresponding to the last day of the Eurodollar Interest Period
applicable to such Eurodollar Loan and bearing an interest rate to the
applicable interest rate for such Eurodollar Period.
(a) BREAKAGE FEES. Without duplication under any other provision hereof, if any
Lender incurs any loss, cost or expense including, without limitation, any loss
of profit and loss, cost, expense or premium reasonably incurred by reason of
the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund or maintain any Eurodollar Loan or the relending or reinvesting
of such deposits or amounts paid or prepaid to the Lenders as a result of any of
the following events other than any such occurrence as a result in the change of
circumstances described in Sections 5(a) and (b):
(i) any payment, prepayment or conversion of a
Eurodollar Loan on a date other than the last day of its
Eurodollar Interest Period (whether by acceleration,
prepayment or otherwise);
(ii) any failure to make a principal payment of a
Eurodollar Loan on the due date thereof; or
(iii) any failure by the Borrower to borrow,
continue, prepay or convert to a Eurodollar Loan on the dates
specified in a notice given pursuant to Section 2(c) or 4(c)
hereof;
then the Borrower shall pay to such Lender such amount as will
reimburse such Lender for such loss, cost or expense. If any Lender
makes such a claim for compensation, it shall furnish to Borrower and
Administrative Agent a statement setting forth the amount of such loss,
cost or expense in reasonable detail (including an explanation of the
basis for
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and the computation of such loss, cost or expense) and the amounts
shown on such statement shall be conclusive and binding absent
manifest error.
1. COLLATERAL SECURITY. To secure the performance by Borrower and the Guarantors
of their respective obligations hereunder, and under the Notes, the Guaranties
and Security Instruments, whether now or hereafter incurred, matured or
unmatured, direct or contingent, joint or several, or joint and several,
including extensions, modifications, renewals and increases thereof, and
substitutions therefore, Borrower and each Guarantor shall grant and assign to
Administrative Agent for the ratable benefit of the Lenders a first and prior
Lien on certain of its Oil and Gas Properties, certain related equipment, oil
and gas inventory, stock and membership interest in Borrower's subsidiaries, and
proceeds of the foregoing. The Oil and Gas Properties herewith or hereafter
mortgaged to the Administrative Agent shall represent not less than 80% of the
Engineered Value (as hereinafter defined) of Borrower's and Guarantors' Oil and
Gas Properties as of the Effective Date. All Rate Management Agreements shall be
secured by the Collateral and repaid on a pari passu basis with the indebtedness
and obligations of the Borrower and the Guarantors under the Loan Documents. All
Oil and Gas Properties and other collateral in which Borrower and the Guarantors
herewith grant or hereafter grants to Administrative Agent for the ratable
benefit of the Lenders a first and prior Lien (to the satisfaction of the
Administrative Agent) in accordance with this Section 6, as such properties and
interests are from time to time constituted, are hereinafter collectively called
the "Collateral".
The granting and assigning of such security interests and Liens by
Borrower and the Guarantors shall be pursuant to Security Instruments in form
and substance reasonably satisfactory to the Administrative Agent. Concurrently
with the delivery of each of the Security Instruments or within a reasonable
time thereafter, Borrower and the Guarantors shall furnish to the Administrative
Agent mortgage and title opinions and other title information satisfactory to
Administrative Agent with respect to the title and Lien status of Borrower's and
Guarantors' interests in not less than 80% of the Engineered Value of the Oil
and Gas Properties covered by the Security Instruments as Administrative Agent
shall have designated. "Engineered Value" for this purpose shall mean future net
revenues discounted at the discount rate being used by the Administrative Agent
as of the date of any such determination utilizing the pricing parameters used
in the engineering report furnished to the Administrative Agent for the ratable
benefit of the Lenders, pursuant to Sections 7 and 12 hereof. Borrower and the
Guarantors will cause to be executed and delivered to the Administrative Agent,
in the future, additional Security Instruments if the Administrative Agent
reasonably deems such are necessary to insure perfection or maintenance of
Lenders' security interests and Liens in the Oil and Gas Properties or any part
thereof.
1. BORROWING BASE.
(a) INITIAL BORROWING BASE AND MONTHLY COMMITMENT REDUCTION. At the Effective
Date, the Borrowing Base shall be $195,000,000 and the Monthly Commitment
Reduction shall be $1,000,000 per month beginning December 1, 1999.
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(a) SUBSEQUENT DETERMINATIONS OF BORROWING BASE. Subsequent determinations of
the Borrowing Base shall be made by the Lenders at least semi-annually on April
1 and October 1 of each year beginning April 1, 2000 or as Unscheduled
Redeterminations. The Borrower shall furnish to the Lenders as soon as possible
but in any event no later than March 1 of each year, beginning March 1, 2000,
with (i) an engineering report in form and substance satisfactory to the
Administrative Agent prepared by Xxxxxx & Company or another independent
petroleum engineering firm acceptable to Administrative Agent covering at least
80% of the Oil and Gas Properties and (ii) an engineering report in form and
substance acceptable to Administrative Agent prepared by Borrower's in-house
engineering staff covering the remaining 20% of the Oil and Gas Properties, both
of said engineering reports to utilize economic and pricing parameters used by
Administrative Agent as established from time to time, together with such other
information concerning the value of the Oil and Gas Properties as the
Administrative Agent shall deem necessary to determine the value of the Oil and
Gas Properties. Each such engineering report required to be furnished by March 1
of each year shall be dated as of December 31 of the preceding year. By
September 1 of each year, or within thirty (30) days after either (i) receipt of
notice from Administrative Agent that the Lenders require an Unscheduled
Redetermination, or (ii) the Borrower gives notice to Administrative Agent of
its desire to have an Unscheduled Redetermination performed, the Borrower shall
furnish to the Lenders an engineering report in form and substance satisfactory
to Administrative Agent prepared by Borrower's in-house engineering staff
valuing all of the Oil and Gas Properties utilizing economic and pricing
parameters used by the Administrative Agent as established from time to time,
together with such other information, reports and data concerning the value of
the Oil and Gas Properties as Administrative Agent shall deem reasonably
necessary to determine the value of such Oil and Gas Properties. Each such
engineering report required to furnished by September 1 of each year, shall be
dated as of the preceding June 30. Administrative Agent shall by notice to the
Borrower no later than April 1 and October 1 of each year, or within a
reasonable time thereafter (herein called the "Determination Date"), notify the
Borrower of the designation by the Lenders of the new Borrowing Base for the
period beginning on such Determination Date and continuing until, but not
including, the next Determination Date. If an Unscheduled Redetermination is
made by the Lenders, the Administrative Agent shall notify the Borrower within a
reasonable time after receipt of all requested information of the new Borrowing
Base, and such new Borrowing Base shall continue until the next Determination
Date. If the Borrower does not furnish all such information, reports and data by
any date specified in this Section 7(b), unless such failure is of no fault of
the Borrower, the Lenders may nonetheless designate the Borrowing Base at such
amount which the Lenders in their discretion determine and may redesignate the
Borrowing Base from time to time thereafter until the Lenders receive all such
information, reports and data, whereupon the Lenders shall designate a new
Borrowing Base as described above. The procedure for determining the Borrowing
Base at each redetermination shall be that the Agents shall determine the
Borrowing Base and submit the same to the Lenders. If, at any time, the Agents
cannot otherwise agree upon the Borrowing Base to be recommended, the Borrowing
Base to be recommended by the Agents shall be determined based upon the weighted
arithmetic average of the amounts proposed by each Agent. Said proposals to be
weighted according to each Agent's Commitment. Increases in the Borrowing Base
will require approval of all Lenders, but all other changes to the Borrowing
Base will be subject to approval by Required Lenders; provided, however, that
notwithstanding the foregoing, the Borrowing Base to be redetermined as of April
1, 2000 shall
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require the approval of all Lenders. If any redetermined Borrowing Base is not
approved by the required percentage of Lenders within twenty (20) days after it
is submitted to the Lenders by the Agents, the Administrative Agent shall notify
each of the Lenders that the proposed Borrowing Base has not been approved and
each Lender will submit within ten (10) days thereafter its proposed Borrowing
Base. The redetermined Borrowing Base shall be then determined based upon the
weighted arithmetic average of the proposed amounts submitted by each Lender,
said proposals to be weighted according to each Lender's Commitment. Each Lender
shall determine the amount of its proposed Borrowing Base based upon the loan
collateral value which such Lender in its discretion (using such methodology,
assumptions and discounts rates as such Lender customarily uses in assigning
collateral value to oil and gas properties, oil and gas gathering systems, gas
processing and plant operations) assigns to such Oil and Gas Properties of the
Borrower at the time in question and based upon such other credit factors
consistently applied (including, without limitation, the assets, liabilities,
cash flow, business, properties, prospects, management and ownership of the
Borrower and its affiliates) as such Lender customarily considers in evaluating
similar oil and gas credits, but such Lender in its discretion shall not be
required to give any additional positive value to any Oil and Gas Property over
the current economic and pricing parameters used by such Lender for such
Determination Date which additional value is derived directly from a hedging,
forward sale or swap agreement covering such Oil and Gas Property as of the date
of such determination. If at any time any of the Oil and Gas Properties are
sold, the Borrowing Base then in effect shall automatically be reduced by a sum
equal to the amount of prepayment required to be made pursuant to Section 12(r)
hereof. The Borrowing Base shall be additionally reduced from time to time
pursuant to the provisions of Section 2(e) hereof. It is expressly understood
that the Lenders have no obligation to designate the Borrowing Base at any
particular amount, except in the exercise of their discretion, whether in
relation to the Commitment or otherwise. Provided, however, that the Lenders
shall not have the obligation to designate a Borrowing Base in an amount in
excess of the Commitment.
1. FEES.
(a) UNUSED COMMITMENT FEE. The Borrower shall pay to Administrative Agent for
the ratable benefit of the Lenders an unused commitment fee (the "Unused
Commitment Fee") equivalent to the Unused Commitment Fee Rate times the daily
average of the unadvanced amount of the Commitment. Such Unused Commitment Fee
shall be calculated on the basis of a year consisting of 360 days. The Unused
Commitment Fee shall be payable in arrears on the last Business Day of each
calendar quarter beginning December 31, 1999 with the final fee payment due on
the Maturity Date for any period then ending for which the Unused Commitment Fee
shall not have been theretofore paid. In the event the Commitment terminates on
any date prior to the end of any such monthly period, the Borrower shall pay to
the Administrative Agent for the ratable benefit of the Lenders, on the date of
such termination, the total Unused Commitment Fee due for the period in which
such termination occurs.
(a) THE LETTER OF CREDIT FEE. Borrower shall pay to the Administrative Agent the
Letter of Credit fees required above in Section 2(d).
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a) AGENCY FEES. The Borrower shall pay to the Administrative Agent certain fees
for acting as Administrative Agent hereunder in amounts to be negotiated between
the Borrower and the Administrative Agent.
1. PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. Subject to the provisions of Section 5(g) hereof, the
Borrower may at any time and from time to time, without penalty or premium,
prepay the Notes, in whole or in part. Each such prepayment shall be made on at
least three (3) Business Days' notice to Administrative Agent in the case of
Eurodollar Loans and not later than 11:00 a.m., Dallas, Texas time, in the case
of Base Rate Loans and shall be in a minimum amount of (i) $500,000 or any whole
multiples of $100,000 in excess thereof (or the unpaid balance of the Notes,
whichever is less), for Base Rate Loans, and (ii) $1,000,000 or any whole
multiple of $100,000 in excess thereof (or the unpaid balance of the Notes,
whichever is less), on Eurodollars Loans, plus accrued interest thereon to the
date of prepayment.
(a) MANDATORY PREPAYMENTS.
(i) BORROWING BASE DEFICIENCY. In the event the Total
Outstandings ever exceed the Borrowing Base as determined by Lenders
pursuant to Section 7(b) hereof, the Borrower shall either (A) within
ninety (90) days after notification from the Administrative Agent, by
instruments reasonably satisfactory in form and substance to the
Lender, provide the Administrative Agent with collateral with value
and quality in amounts satisfactory to all of the Lenders in their
discretion in order to increase the Borrowing Base by an amount at
least equal to such excess, or (B) prepay, without premium or penalty,
the principal amount of the Notes in an amount, of 50% of such excess
plus accrued interest thereon to the date of prepayment within ninety
(90) days after such notification, and the remaining amount of such
excess plus accrued interest thereon within one hundred eighty (180)
days after such notification. If the Total Outstandings ever exceed
the Commitment as a result of a Monthly Commitment Reduction or any
other required reduction in the Commitment, then in such event,
Borrower shall immediately prepay the principal amount of the Notes in
an amount at least equal to such excess plus accrued interest to the
date of prepayment.
(ii) SALE OF ASSETS AND/OR EQUITY. The prepayments required to be
made pursuant to the provisions of Sections 12(r) and 12(w) hereof.
1. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to enter into
this Agreement, the Borrower hereby represents and warrants to the Lenders
(which representations and warranties will survive the delivery of the Notes)
that:
(a) CREATION AND EXISTENCE. Borrower and Oceana Exploration Company, L.C. are
both limited liability companies duly organized, validly existing and in good
standing under the laws of the jurisdiction in which they were formed and are
duly qualified in all jurisdictions
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wherein failure to qualify may result in a Material Adverse Effect. Ohio
Intrastate Gas Transmission Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which is was
formed and is duly qualified in all jurisdictions wherein failure to qualify may
result in a Material Adverse Effect. Borrower and each of its Subsidiaries has
all power and authority to own their respective properties and assets and to
transact the business in which they are engaged.
(a) POWER AND AUTHORITY. Borrower is duly authorized and empowered to create and
issue the Notes; and Borrower and each of its Subsidiaries is duly authorized
and empowered to execute, deliver and perform their respective Loan Documents,
including this Agreement; and all action on Borrower's part requisite for the
due creation and issuance of the Notes on Borrower's and each Subsidiary's part
for the due execution, delivery and performance of their respective Loan
Documents, including this Agreement, has been duly and effectively taken.
(a) BINDING OBLIGATIONS. This Agreement does, and the Notes and other Loan
Documents upon their creation, issuance, execution and delivery will, constitute
valid and binding obligations of Borrower, enforceable in accordance with their
respective terms (except that enforcement may be subject to any applicable
bankruptcy, insolvency, or similar debtor relief laws now or hereafter in effect
and relating to or affecting the enforcement of creditors' rights generally).
The Guaranties, upon their execution and delivery will constitute valid and
binding obligations of the Guarantors, enforceable in accordance with their
respective terms (except that enforcement may be subject to any applicable
bankruptcy, insolvency, or similar debtor relief laws now or hereafter in effect
and relating to or affecting the enforcement of creditors' rights generally).
(a) NO LEGAL BAR OR RESULTANT LIEN. The Notes and the Loan Documents, including
this Agreement, do not and will not, to the best of the Borrower's knowledge
violate any provisions of any contract, agreement, law, regulation, order,
injunction, judgment, decree or writ to which Borrower or any Subsidiary is
subject, or result in the creation or imposition of any lien or other
encumbrance upon any assets or properties of Borrower or any Subsidiary, other
than those contemplated by this Agreement.
(a) NO CONSENT. The execution, delivery and performance by Borrower of the Notes
and the Loan Documents, including this Agreement, and the execution, delivery
and performance by the Guarantors of their respective Guaranties, do not require
the consent or approval of any other person or entity, including without
limitation any regulatory authority or governmental body of the United States or
any state thereof or any political subdivision of the United States or any state
thereof except for consents required for federal, state and, in some instances,
private leases, right of ways and other conveyances or encumbrances of oil and
gas leases, which consents have been obtained by the Borrower or its
Subsidiaries, as the case may be.
(a) FINANCIAL CONDITION. No change from the pro forma financial information
furnished by Borrower to the Agents has occurred which is reasonably expected to
have a Material Adverse Effect, except as disclosed to the Lenders in Schedule
"2" attached hereto.
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(a) LIABILITIES. Neither Borrower nor any Subsidiary has any material liability,
direct or contingent, except as disclosed to the Lenders in the Financial
Statements and on Schedule "3" attached hereto. No unusual or unduly burdensome
restrictions, restraint, or hazard exists by contract, law or governmental
regulation or otherwise relative to the business, assets or properties of
Borrower or any Subsidiary which is reasonably expected to have a Material
Adverse Effect.
(a) LITIGATION. Except as described in the Financial Statements, or as otherwise
disclosed to the Lenders in Schedule "4" attached hereto, there is no
litigation, legal or administrative proceeding, investigation or other action of
any nature pending or, to the knowledge of the officers of Borrower threatened
against or affecting Borrower or any Subsidiary which involves the possibility
of any judgment or liability not fully covered by insurance, and which is
reasonably expected to have a Material Adverse Effect.
(a) TITLES, ETC. Borrower and each Subsidiary has good and defensible title to
their respective assets, including without limitation, the Oil and Gas
Properties, free and clear of all liens or other encumbrances except Permitted
Liens.
(a) DEFAULTS. Neither Borrower nor any Subsidiary is in default and no event or
circumstance has occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default under any loan or credit agreement,
indenture, mortgage, deed of trust, security agreement or other agreement or
instrument to which Borrower or any Subsidiary is a party in any respect that
would be reasonably expected to have a Material Adverse Effect. No Default or
Event of Default hereunder has occurred and is continuing.
(a) CASUALTIES; TAKING OF PROPERTIES. Since the dates of the pro forma financial
statements of the Borrower delivered to Lenders, neither the business nor the
assets or properties of Borrower or any Subsidiary has been affected (to the
extent it is reasonably likely to cause a Material Adverse Effect), 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 domestic or foreign
government or any agency thereof, riot, activities of armed forces or acts of
God or of any public enemy.
(a) USE OF PROCEEDS; MARGIN STOCK. The proceeds of the Commitment may be used by
the Borrower for the purposes of (i) working capital, (ii) Letters of Credit,
and (iii) general corporate purposes. Borrower is not engaged principally or as
one of its important activities in the business of extending credit for the
purpose of purchasing or carrying any "margin stock " as defined in Regulation U
of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221), or
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of said
Regulation U.
Neither Borrower, any Subsidiary nor any other Person or
entity acting on behalf of Borrower or any Subsidiary has taken or will
take any action which might cause the loans hereunder or any of the
Loan Documents, including this Agreement, to violate Regulation U or
any other regulation of the Board of Governors of the Federal Reserve
System or to
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violate the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereafter
be in effect.
(a) LOCATION OF BUSINESS AND OFFICES. The principal place of business and chief
executive offices of the Borrower is located at the address stated in Section 17
hereof. The principal place of business and chief executive office of each of
the Subsidiaries is located at the addresses shown on Schedule "5" hereto.
(a) COMPLIANCE WITH THE LAW. To the best of Borrower's knowledge, neither
Borrower or any Subsidiary:
(i) is in violation of any law, judgment, decree, order, ordinance, or
governmental rule or regulation to which Borrower, or any of its assets or
properties are subject; or
(i) has failed to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of any of its assets or properties or
the conduct of its business;
which violation or failure is reasonably expected to have a Material
Adverse Effect.
(a) NO MATERIAL MISSTATEMENTS. No information, exhibit or report furnished by
Borrower to the Lenders in connection with the negotiation of this Agreement or
in the preparation of the offering memo 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.
(a) NOT A UTILITY. Borrower is not an entity engaged in the State of Texas in
the (i) generation, transmission, or distribution and sale of electric power;
(ii) transportation, distribution and sale through a local distribution system
of natural or other gas for domestic, commercial, industrial, or other use;
(iii) provision of telephone or telegraph service to others; (iv) production,
transmission, or distribution and sale of steam or water; (v) operation of a
railroad; or (vii) provision of sewer service to others.
(a) ERISA. Borrower and each Subsidiary is in compliance in all material
respects with the applicable provisions of ERISA, and no "reportable event", as
such term is defined in Section 403 of ERISA, has occurred with respect to any
Plan of Borrower or any Subsidiary.
(a) PUBLIC UTILITY HOLDING COMPANY ACT. Borrower is not a "holding company", or
"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" subject to the registration requirements of the Public Utility Holding
Company Act of 1935, as amended.
(a) SUBSIDIARIES. Ohio Intrastate Gas Transmission Company and Oceana
Exploration Company, L.C. are the only Subsidiaries of Borrower as of the
Effective Date. Borrower is owned by the parties shown on Schedule "6" hereto.
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(a) ENVIRONMENTAL MATTERS. Except as disclosed on Schedule "7", neither Borrower
nor any Subsidiary (i) has received notice or otherwise learned of any
Environmental Liability which would be reasonably likely to individually or in
the aggregate have a Material Adverse Effect arising in connection with (A) any
non-compliance with or violation of the requirements of any Environmental Law or
(B) the release or threatened release of any toxic or hazardous waste into the
environment, (ii) has received notice of any threatened or actual liability in
connection with the release or notice of any threatened release of any toxic or
hazardous waste into the environment which would be reasonably likely to
individually or in the aggregate have a Material Adverse Effect or (iii) has
received notice or otherwise learned of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release or
threatened release of any toxic or hazardous waste into the environment for
which Borrower or any Subsidiary is or may be liable which may reasonably be
expected to result in a Material Adverse Effect.
(a) LIENS. Except (i) as disclosed on Schedule "1" hereto and (ii) for Permitted
Liens, the assets and properties of the Borrower and each Subsidiary are free
and clear of all liens and encumbrances.
(a) YEAR 2000 COMPLIANCE. Borrower represents and warrants to Lenders that:
(i) It will use its best efforts to cause all devices, systems, machinery,
information technology, computer software and hardware, and other date sensitive
technology (jointly and severally the "Systems") necessary for Borrower and each
Subsidiary to carry on its respective business as presently conducted and as
contemplated to be conducted in the future to be Year 2000 Compliant within a
period of time calculated to result in no material disruption of any of
Borrower's or its Subsidiaries' business operations. For purposes of these
provisions, "Year 2000 Compliant" means that such Systems are designed to be
used prior to, during and after the Gregorian calendar year 2000 A.D. and will
operate during each such time period without error relating to date data,
specifically including any error relating to, or the product of, date data which
represents or references different centuries or more than one century.
(i) Borrower and each Subsidiary has: (A) undertaken, or will undertake, an
inventory, review, and assessment of all areas within its business and
operations that could be adversely affected by the failure of Borrower or any
Subsidiary to be Year 2000 Compliant on a timely basis; (B) developed, or will
develop, a plan and time line for becoming Year 2000 Compliant on a timely
basis; (C) to date, implemented, or will implement, that plan in accordance with
that timetable in all material respects on a best-efforts basis.
(i) Borrower and each Subsidiary has either made, or will make, written inquiry
of each of its vendors, and has obtained, or will obtain, in writing
confirmations from all such persons, as to whether such persons have initiated
programs to become Year 2000 Compliant and on the basis of such confirmations.
Borrower reasonably believes that all such persons will be or become so
compliant. For purposes hereof, "vendors" refers to those vendors of Borrower or
any Subsidiary whose business failure would, with reasonable probability, result
in a Material Adverse Effect.
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(i) The fair market value of all Collateral pledged to Lenders to secure the
Loan and the Notes and all of Borrower's obligations hereunder are not and shall
not be less than currently anticipated or subject to deterioration in value
because of the failure of such Collateral to be Year 2000 Compliant.
(a) INDEBTEDNESS. At the Effective Date, Borrower's Consolidated Total Debt does
not exceed $ 190,000,000,which includes indebtedness transferred to Borrower in
connection with its organization.
(a) ASSETS. All assets, including, but not limited to the Collateral indicated
in the Borrower's pro forma financial statement or other information furnished
to the Administrative Agent and the Lenders are to be owned by Borrower and its
Subsidiaries are, in fact, owned by Borrower or one of its Subsidiaries as of
the Effective Date.
1. CONDITIONS OF LENDING.
(a) The effectiveness of this Agreement, and the obligation to make the initial
Advance or issue any initial Letter of Credit under the Commitment shall be
subject to satisfaction of the following conditions precedent:
(i) EXECUTION AND DELIVERY. The Borrower has executed and delivered the
Agreement, the Notes and other required Loan Documents, all in form and
substance satisfactory to the Administrative Agent;
(i) LEGAL OPINION. The Administrative Agent shall have received from Borrower's
and the Guarantors' legal counsel a favorable legal opinion in form and
substance satisfactory to it (i) as to the matters set forth in Subsections
10(a), (b), (c), (d), (e) and (h) hereof, (ii) as to the matters required below
in Sections 11(a)(vii) and (ii) as to such other matters as Administrative Agent
or its counsel may reasonably request;
(i) RESOLUTIONS. The Administrative Agent shall have received appropriate
certified resolutions of Borrower and each Guarantor;
(i) GOOD STANDING. The Administrative Agent shall have received evidence of
existence and good standing for Borrower and each Guarantor;
(i) INCUMBENCY. The Administrative Agent shall have received a signed
certificate of Borrower and each Guarantor, certifying the names of the officers
of Borrower and each Guarantor authorized to sign loan documents on behalf of
Borrower and each Guarantor, together with the true signatures of each such
officer. The Administrative Agent may conclusively rely on such certificate
until the Administrative Agent receives a further certificate of Borrower or any
Guarantor canceling or amending the prior certificate and submitting signatures
of the officers named in such further certificate;
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(i) CORPORATE AND LIMITED LIABILITY COMPANY DOCUMENTS. The Administrative Agent
shall have received copies of (i) the Certificates of Formation of Borrower and
any limited liability company Subsidiary and all amendments thereto, certified
by the Secretary of State of the State of its organization, and a copy of the
Limited Liability Company Agreements of Borrower and any limited liability
company Subsidiary and all amendments thereto, certified by one or more officers
of Borrower as being true, correct and complete and (ii) Articles of
Incorporation of any corporate Subsidiary and all amendments thereto, certified
by the Secretary of State of the State of its organization, and a copy of the
Bylaws of such Subsidiaries, and all amendments thereto, certified by one or
more officers of such Subsidiary as being true, correct and complete;
(i) COMPLETION OF ALL MERGERS, ETC. The Administrative Agent shall have received
an opinion of counsel from Borrower's counsel to the effect that all mergers and
transfers entered into or in connection with the formation of Borrower and the
acquisition by the Borrower of all of the equity ownership of the Subsidiaries
have been completed, are in compliance with, and not in violation of, all
applicable laws, regulations and agreements and are binding on all of the
parties thereto.
(i) ASSETS OF BORROWER. The Administrative Agent shall have received
satisfactory evidence that all the assets that are purported to be owned by the
Borrower and its Subsidiaries pursuant to pro forma financial statements and
other information delivered to the Lenders are in fact owned by Borrower and its
Subsidiaries.
(i) MORTGAGE AND TITLE. The Administrative Agent shall have received executed
mortgages and other collateral documents satisfactory to it covering at least
50% of the Oil and Gas Properties required to be mortgaged pursuant to Section 6
hereof with the remaining 50% of the required mortgages to be executed and
delivered within sixty (60) days thereafter. In addition, the Administrative
Agent and its counsel shall have satisfactorily completed title review covering
50% of the PW10 of such mortgaged Oil and Gas Properties with the remaining 50%
to be completed within sixty (60) days thereafter;
(i) ENVIRONMENTAL REPORT. The Administrative Agent shall have received a copy of
the Borrower's environmental report showing any and all material environmental
matters and concerns relating to the Borrower and/or any of its assets,
including all assets merged into or transferred to the Borrower in connection
with the formation of the Borrower, said report to be in form and substance
satisfactory to the Administrative Agent;
(i) REPRESENTATION AND WARRANTIES. The representations and warranties of
Borrower under this Agreement are true and correct in all material respects as
of such date, as if then made (except to the extent that such representations
and warranties related solely to an earlier date);
(i) NO EVENT OF DEFAULT. No Event of Default shall have occurred and be
continuing nor shall any event have occurred or failed to occur which, with the
passage of time or service of notice, or both, would constitute an Event of
Default;
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(i) OTHER DOCUMENTS. Administrative Agent shall have received such other
instruments and documents incidental and appropriate to the transaction provided
for herein as Administrative Agent or its counsel may reasonably request, and
all such documents shall be in form and substance reasonably satisfactory to the
Administrative Agent; and
(i) LEGAL MATTERS SATISFACTORY. All legal matters incident to the consummation
of the transactions contemplated hereby shall be reasonably satisfactory to
special counsel for Administrative Agent retained at the expense of the
Borrower.
(a) The obligation of the Lenders to make any Advance or issue any Letter of
Credit under the Commitment (including the initial Advance) shall be subject to
the following additional conditions precedent that, at the date of making each
such Advance and after giving effect thereto:
(i) REPRESENTATION AND WARRANTIES. The representations and warranties of
Borrower under this Agreement are true and correct in all material respects as
of such date, as if then made (except to the extent that such representations
and warranties related solely to an earlier date);
(i) NO EVENT OF DEFAULT. No Event of Default shall have occurred and be
continuing nor shall any event have occurred or failed to occur which, with the
passage of time or service of notice, or both, would constitute an Event of
Default;
(i) OTHER DOCUMENTS. Administrative Agent shall have received such other
instruments and documents incidental and appropriate to the transaction provided
for herein as Administrative Agent or its counsel may reasonably request, and
all such documents shall be in form and substance reasonably satisfactory to the
Administrative Agent; and
(i) LEGAL MATTERS SATISFACTORY. All legal matters incident to the consummation
of the transactions contemplated hereby shall be reasonably satisfactory to
special counsel for Administrative Agent retained at the expense of Borrower.
1. AFFIRMATIVE COVENANTS. A deviation from the provisions of this Section 12
shall not constitute an Event of Default under this Agreement if such deviation
is consented to in writing by Majority Lenders prior to the date of deviation.
The Borrower will at all times comply with the covenants contained in this
Section 12 from the date hereof and for so long as the Commitments are in
existence or any amount is owed to the Administrative Agent or the Lenders under
this Agreement or the other Loan Documents.
(a) FINANCIAL STATEMENTS AND REPORTS. Borrower shall promptly furnish to the
Administrative Agent from time to time upon request such information regarding
the business and affairs and financial condition of Borrower, as the
Administrative Agent may reasonably request, and will furnish to the
Administrative Agent:
(i) ANNUAL AUDITED FINANCIAL STATEMENTS. As soon as available, and in any event
within ninety (90) days after the close of each fiscal year beginning with the
fiscal year ended
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December 31, 1999, the annual audited consolidated and consolidating Financial
Statements of Borrower, prepared in accordance with GAAP accompanied by an
unqualified opinion rendered by an independent accounting firm reasonably
acceptable to the Administrative Agent;
(i) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and in any event
within forty-five (45) days after the end of each fiscal quarter of each year,
beginning with the fiscal quarter ended March 31, 2000, the quarterly unaudited,
consolidated and consolidating Financial Statements of Borrower prepared in
accordance with GAAP;
(i) REPORT ON PROPERTIES. As soon as available and in any event on or before
March 1 and September 1 of each calendar year, and at such other times as any
Lender, in accordance with Section 7 hereof, may request, the engineering
reports required to be furnished to the Administrative Agent under such Section
7 on the Oil and Gas Properties;
(i) ADDITIONAL INFORMATION. Promptly upon request of the Administrative Agent
from time to time any additional financial information or other information that
the Administrative Agent may reasonably request.
All such reports, information, balance sheets and Financial Statements
referred to in Subsection 12(a) above shall be in such detail as the
Administrative Agent may reasonably request and shall be prepared in a
manner consistent with the Financial Statements.
(a) CERTIFICATES OF COMPLIANCE. Concurrently with the furnishing of the annual
audited Financial Statements pursuant to Subsection 12(a)(i) hereof and the
quarterly unaudited Financial Statements pursuant to Subsection 12(a)(ii) hereof
for the months coinciding with the end of each calendar quarter, Borrower will
furnish or cause to be furnished to the Administrative Agent a certificate in
the form of Exhibit "D" attached hereto, signed by the President, Chief
Financial Officer, Treasurer or Controller of Borrower, (i) stating that
Borrower has fulfilled in all material respects its obligations under the Notes
and the Loan Documents, including this Agreement, and that all representations
and warranties made herein and therein continue (except to the extent they
relate solely to an earlier date) to be true and correct in all material
respects (or specifying the nature of any change), or if a Default has occurred,
specifying the Default and the nature and status thereof; (ii) to the extent
requested from time to time by the Administrative Agent, specifically affirming
compliance of Borrower in all material respects with any of its representations
(except to the extent they relate solely to an earlier date) or obligations
under said instruments; (iii) setting forth the computation, in reasonable
detail as of the end of each period covered by such certificate, of compliance
with Sections 13(b) and (c); and (iv) containing or accompanied by such
financial or other details, information and material as the Administrative Agent
may reasonably request to evidence such compliance.
(a) ACCOUNTANTS' CERTIFICATE. Concurrently with the furnishing of the annual
audited Financial Statement pursuant to Section 12(a)(i) hereof, Borrower will
furnish a statement from the firm of independent public accountants which
prepared such Financial Statement to the effect that nothing has come to their
attention to cause them to believe that there existed on the date of
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such statements any Event of Default and specifically calculating Borrower's
compliance with Sections 13(b) and (c) of this Agreement.
(a) TAXES AND OTHER LIENS. The Borrower will pay and discharge, and will cause
each Subsidiary to pay and discharge, promptly all taxes, assessments and
governmental charges or levies imposed upon the Borrower or any Subsidiary, or
upon the income or any assets or property of Borrower or any Subsidiary, as well
as all claims of any kind (including claims for labor, materials, supplies and
rent) which, if unpaid, might become a Lien or other encumbrance upon any or all
of the assets or property of Borrower or any Subsidiary and which could
reasonably be expected to result in a Material Adverse Effect; provided,
however, that neither Borrower nor any Subsidiary shall be required to pay any
such tax, assessment, charge, levy or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by appropriate
proceedings diligently conducted, levy and execution thereon have been stayed
and continue to be stayed and if Borrower or such Subsidiary shall have set up
adequate reserves therefor, if required, under GAAP.
(a) COMPLIANCE WITH LAWS. Borrower will observe and comply, and will cause each
of its Subsidiaries to observe and comply, in all material respects, with all
applicable laws, statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, orders and restrictions relating to
environmental standards or controls or to energy regulations of all federal,
state, county, municipal and other governments, departments, commissions,
boards, agencies, courts, authorities, officials and officers, domestic or
foreign.
(a) FURTHER ASSURANCES. The Borrower will cure promptly any defects in the
creation and issuance of the Notes and the execution and delivery of the Notes
and the Loan Documents, including this Agreement. The Borrower will cause the
Guarantors to promptly cure any defects in the issuance of the Guaranties. The
Borrower at its sole expense will promptly execute and deliver, and will cause
its Subsidiaries to execute and deliver, to Administrative Agent upon its
reasonable request all such other and further documents, agreements and
instruments in compliance with or accomplishment of the covenants and agreements
in this Agreement, or to correct any omissions in the Notes or more fully to
state the obligations set out herein. The Borrower shall cause each existing
Subsidiary and each new Subsidiary to execute and deliver Guaranties to
Administrative Agent. The Borrower shall and shall cause each of its
Subsidiaries to pledge to Administrative Agent, for the ratable benefit of the
Lenders, as security for the obligations under the Loan Documents, any interest
in a Subsidiary.
(a) PERFORMANCE OF OBLIGATIONS. The Borrower will pay the Notes and other
obligations incurred by it hereunder according to the reading, tenor and effect
thereof and hereof; and Borrower will, and will cause each of its Subsidiaries
to, do and perform every act and discharge all of the obligations provided to be
performed and discharged by the Borrower under the Loan Documents, including
this Agreement, at the time or times and in the manner specified.
(a) INSURANCE. The Borrower and each Subsidiary will have in force as of the
Effective Date and will continue to maintain insurance with financially sound
and reputable insurers with respect to its assets against such liabilities,
fires, casualties, risks and contingencies and in such
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types and amounts as is customary in the case of persons engaged in the same or
similar businesses and similarly situated. Upon request of the Administrative
Agent, the Borrower will furnish or cause to be furnished to the Administrative
Agent from time to time a summary of the insurance coverage of Borrower and each
Subsidiary in form and substance satisfactory to the Administrative Agent, and,
if requested, will furnish the Administrative Agent copies of the applicable
policies. Upon demand by Administrative Agent any insurance policies covering
any such property shall be endorsed (i) to provide that such policies may not be
canceled, reduced or affected in any manner for any reason without fifteen (15)
days prior notice to Administrative Agent, (ii) to provide for insurance against
fire, casualty and other hazards normally insured against, in the amount of the
full value (less a reasonable deductible not to exceed amounts customary in the
industry for similarly situated business and properties) of the property
insured, and (iii) to provide for such other matters as the Administrative Agent
may reasonably require. The Borrower shall at all times maintain, and shall
cause each Subsidiary to maintain, adequate insurance with respect to all of its
assets, including but not limited to, the Oil and Gas Properties or any
collateral against its liability for injury to persons or property, which
insurance shall be by financially sound and reputable insurers and shall without
limitation provide the following coverages: comprehensive general liability
(including coverage for damage to underground resources and equipment, damage
caused by blowouts or cratering, damage caused by explosion, damage to
underground minerals or resources caused by saline substances, broad form
property damage coverage, broad form coverage for contractually assumed
liabilities and broad form coverage for acts of independent contractors),
worker's compensation and automobile liability. The Borrower shall at all times
maintain, and shall cause each Subsidiary owning Oil and Gas Properties, to
maintain cost of control of well insurance with respect to the Oil and Gas
Properties which shall insure the Borrower and such Subsidiary against seepage
and pollution expense; redrilling expense; and cost of control of well; fires,
blowouts, etc., if deemed economical in the reasonable discretion of the
Borrower and such Subsidiary. Additionally, the Borrower shall at all times
maintain, and cause its Subsidiaries to maintain, adequate insurance with
respect to all of its other assets and xxxxx in accordance with prudent business
practices.
(a) ACCOUNTS AND RECORDS. Borrower will keep books, records and accounts and
will cause each Subsidiary to keep books, records and accounts, in which full,
true and correct entries will be made of all dealings or transactions in
relation to its business and activities, prepared in a manner consistent with
prior years, subject to changes suggested by Borrower's or any Subsidiary's
auditors.
(a) RIGHT OF INSPECTION. Borrower will permit, and will cause each Subsidiary to
permit, any officer, employee or agent of the Lenders to examine Borrower's or
any Subsidiary's books, records and accounts, and take copies and extracts
therefrom, all at such reasonable times during normal business hours and as
often as the Lenders may reasonably request. The Lenders will use best efforts
to keep all Confidential Information (as herein defined) confidential and will
not disclose or reveal the Confidential Information or any part thereof other
than (i) as required by law, and (ii) to the Lenders', and the Lenders'
subsidiaries', Affiliates, officers, employees, legal counsel and regulatory
authorities or advisors to whom it is necessary to reveal such information for
the purpose of effectuating the agreements and undertakings specified herein or
as otherwise required in connection with the enforcement of the Lenders' and the
Administrative Agent's rights
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and remedies under the Notes, this Agreement and the other Loan Documents. As
used herein, "Confidential Information" means information about the Borrower or
any Subsidiary furnished by the Borrower or any Subsidiary to the Lenders, but
does not include information (i) which was publicly known, or otherwise known to
the Lenders (except not in violation of any confidentiality agreement), at the
time of the disclosure, (ii) which subsequently becomes publicly known through
no act or omission by the Lenders (except not in violation of any
confidentiality agreement), or (iii) which otherwise becomes known to the
Lenders, other than through disclosure by the Borrower.
(a) NOTICE OF CERTAIN EVENTS. The Borrower shall, and shall cause each
Subsidiary to, promptly notify the Administrative Agent if Borrower or any
Subsidiary learns of the occurrence of (i) any event which constitutes an Event
of Default together with a detailed statement by Borrower of the steps being
taken to cure such Event of Default; (ii) any legal, judicial or regulatory
proceedings affecting Borrower or any Subsidiary, or any of the assets or
properties of Borrower or any Subsidiary which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect; (iii) any dispute
between Borrower, any Subsidiary and any governmental or regulatory body or any
other Person or entity which, if adversely determined, might reasonably be
expected to cause a Material Adverse Effect; (iv) any other matter which in
Borrower's reasonable opinion could have a Material Adverse Effect.
(a) ERISA INFORMATION AND COMPLIANCE. The Borrower will, and will cause each
Subsidiary to, promptly furnish to the Administrative Agent immediately upon
becoming aware of the occurrence of any "reportable event", as such term is
defined in Section 4043 of ERISA, or of any "prohibited transaction", as such
term is defined in Section 4975 of the Internal Revenue Code of 1954, as
amended, in connection with any Plan or any trust created thereunder, a written
notice signed by the chief financial officer of Borrower or such Subsidiary
specifying the nature thereof, what action Borrower or any such Subsidiary is
taking or proposes to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect thereto.
(a) ENVIRONMENTAL REPORTS AND NOTICES. The Borrower will, and will cause each
Subsidiary to, deliver to the Administrative Agent (i) promptly upon its
becoming available, one copy of each report sent by Borrower or any Subsidiary
to any court, governmental agency or instrumentality pursuant to any
Environmental Law, (ii) notice, in writing, promptly upon Borrower's or any
Subsidiary's receipt of notice or otherwise learning of any claim, demand,
action, event, condition, report or investigation indicating any potential or
actual liability arising in connection with (x) the non-compliance with or
violation of the requirements of any Environmental Law which reasonably could be
expected to have a Material Adverse Effect; (y) the release or threatened
release of any toxic or hazardous waste into the environment which reasonably
could be expected to have a Material Adverse Effect or which release Borrower or
any Subsidiary would have a duty to report to any court or government agency or
instrumentality, or (iii) the existence of any Environmental Lien on any
properties or assets of Borrower or any Subsidiary, and Borrower shall
immediately deliver, and shall cause any such Subsidiary to immediately deliver,
a copy of any such notice to Administrative Agent.
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(a) COMPLIANCE AND MAINTENANCE. The Borrower will, and will cause each
Subsidiary to, (i) observe and comply in all material respects with all
Environmental Laws; (ii) except as provided in Subsections 12(o) and 12(p)
below, maintain the Oil and Gas Properties and other assets and properties in
good and workable condition at all times and make all repairs, replacements,
additions, betterments and improvements to the Oil and Gas Properties and other
assets and properties as are needed and proper so that the business carried on
in connection therewith may be conducted properly and efficiently at all times
in the opinion of the Borrower or any Subsidiary exercised in good faith; (iii)
take or cause to be taken whatever actions are necessary or desirable to prevent
an event or condition of default by Borrower or any Subsidiary under the
provisions of any gas purchase or sales contract or any other contract,
agreement or lease comprising a part of the Oil and Gas Properties or other
collateral security hereunder which default could reasonably be expected to
result in a Material Adverse Effect; and (iv) furnish Administrative Agent upon
request evidence satisfactory to Administrative Agent that there are no Liens,
claims or encumbrances on the Oil and Gas Properties, except laborers',
vendors', repairmen's, mechanics', worker's, or materialmen's liens arising by
operation of law or incident to the construction or improvement of property if
the obligations secured thereby are not yet due or are being contested in good
faith by appropriate legal proceedings or Permitted Liens.
(a) OPERATION OF PROPERTIES. Except as provided in Subsection 12(p) and (q)
below, the Borrower will and will cause each Subsidiary to, operate, or use
reasonable efforts to cause to be operated, all Oil and Gas Properties in a
careful and efficient manner in accordance with the practice of the industry and
in compliance in all material respects with all applicable laws, rules, and
regulations, and in compliance in all material respects with all applicable
proration and conservation laws of the jurisdiction in which the properties are
situated, and all applicable laws, rules, and regulations, of every other agency
and authority from time to time constituted to regulate the development and
operation of the properties and the production and sale of hydrocarbons and
other minerals therefrom; provided, however, that the Borrower and any such
Subsidiary shall have the right to contest in good faith by appropriate
proceedings, the applicability or lawfulness of any such law, rule or regulation
and pending such contest may defer compliance therewith, as long as such
deferment shall not subject the properties or any part thereof to foreclosure or
loss.
(a) COMPLIANCE WITH LEASES AND OTHER INSTRUMENTS. The Borrower will, and will
cause each Subsidiary to, pay or cause to be paid and discharge all rentals,
delay rentals, royalties, production payment, and indebtedness required to be
paid by Borrower or any Subsidiary (or required to keep unimpaired in all
material respects the rights of Borrower or any Subsidiary in the Oil and Gas
Properties) accruing under, and perform or cause to be performed in all material
respects each and every act, matter, or thing required of Borrower or any
Subsidiary by each and all of the assignments, deeds, leases, subleases,
contracts, and agreements in any way relating to Borrower or any Subsidiary or
any of the Oil and Gas Properties and do all other things necessary of Borrower
or any Subsidiary to keep unimpaired in all material respects the rights of
Borrower or any Subsidiary thereunder and to prevent the forfeiture thereof or
default thereunder; provided, however, that nothing in this Agreement shall be
deemed to require Borrower or any Subsidiary to perpetuate or renew any oil and
gas lease or other lease by payment of rental or delay rental or by commencement
or continuation of operations nor to prevent Borrower or any Subsidiary from
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abandoning or releasing any oil and gas lease or other lease or well thereon
when, in any of such events, in the opinion of Borrower or any Subsidiary
exercised in good faith, it is not in the best interest of the Borrower or such
Subsidiary to perpetuate the same.
(a) CERTAIN ADDITIONAL ASSURANCES REGARDING MAINTENANCE AND OPERATIONS OF
PROPERTIES. With respect to those Oil and Gas Properties which are being
operated by operators other than the Borrower or its Subsidiaries, the Borrower
or its Subsidiaries shall not be obligated to perform any undertakings
contemplated by the covenants and agreement contained in Subsections 12(o) or
12(p) hereof which are performable only by such operators and are beyond the
control of the Borrower or its Subsidiaries; however, the Borrower agrees to
promptly take, and cause each Subsidiary to take, all reasonable actions
available under any operating agreements or otherwise to bring about the
performance of any such material undertakings required to be performed
thereunder.
(a) SALE OF CERTAIN ASSETS/PREPAYMENT OF PROCEEDS. The Borrower or any
Subsidiary will immediately pay over to the Administrative Agent for the ratable
benefit of the Lenders as a prepayment of principal on the Notes, an amount
equal to 100% of the "Release Price" received by Borrower or any Subsidiary from
the sale of Borrowing Base Assets. The term "Release Price" as used herein shall
mean the Borrowing Base value assigned to the Borrowing Base Assets sold as of
the last Borrowing Base determination. Any such prepayment of principal on the
Notes required by this Section 12(r), shall not be in lieu of, but shall be in
addition to, any mandatory prepayment of principal required to be paid pursuant
to Section 9(b) hereof.
(a) TITLE MATTERS. Within sixty (60) days after the Effective Date with respect
to the Oil and Gas Properties the title to which were not examined prior to the
Effective Date and to the Oil and Gas Properties referred to on Schedule "8"
hereto, furnish, and cause its Subsidiaries to furnish, Administrative Agent
with title opinions and/or title information reasonably satisfactory to
Administrative Agent showing good and defensible title of Borrower or any
Subsidiary to such Oil and Gas Properties subject only to the Permitted Liens.
As to any Oil and Gas Properties hereafter mortgaged to Administrative Agent,
Borrower will, and will cause each Subsidiary to, promptly (but in no event more
than thirty (30) days following such mortgaging), furnish Administrative Agent
with title opinions and/or title information reasonably satisfactory to
Administrative Agent showing good and defensible title of Borrower or any such
Subsidiary to such Oil and Gas Properties subject only to Permitted Liens.
(a) CURATIVE MATTERS. Within sixty (60) days after the Effective Date with
respect to matters listed on Schedule "9" and, thereafter, within sixty (60)
days after receipt by Borrower from Administrative Agent or its counsel of
written notice of title defects the Administrative Agent reasonably requires to
be cured, Borrower shall, and shall cause each Subsidiary to, either (i) provide
such curative information, in form and substance satisfactory to Administrative
Agent, or (ii) substitute Oil and Gas Properties of value and quality
satisfactory to the Administrative Agent for all of Oil and Gas Properties for
which such title curative was requested but upon which Borrower or any
Subsidiary elected not to provide such title curative information, and, within
sixty (60) days of such substitution, provide title opinions or title
information satisfactory to the Administrative Agent covering the Oil and Gas
Properties so substituted. If the Borrower or any
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Subsidiary fails to satisfy (i) or (ii) above within the time specified, the
loan collateral value assigned by the Lenders to the Oil and Gas Properties for
which such curative information was requested shall be deducted from the
Borrowing Base resulting in a reduction thereof.
(a) CHANGE OF PRINCIPAL PLACE OF BUSINESS. Borrower shall, and shall cause each
Subsidiary to, give Administrative Agent at least thirty (30) days prior written
notice of its intention to move its principal place of business from the address
set forth in Section 17 hereof.
(a) YEAR 2000 COMPATIBILITY. Borrower covenants and agrees with Lenders that it
will:
(i) Furnish such additional information, statements and other reports with
respect to Borrower's and its Subsidiaries' activities, course of action and
progress towards becoming Year 2000 Compliant as Lenders may reasonably request
from time to time;
(i) In the event of any change in circumstances that causes or will likely cause
any of Borrower's representations and warranties with respect to its being or
becoming Year 2000 Compliant to no longer be true (hereinafter, referred to as a
"Change in Circumstances") then Borrower shall promptly, and in any event within
ten (10) days of receipt of information regarding a Change in Circumstances,
provide Lenders with written notice (the "Notice") that describes in reasonable
detail the Change in Circumstances and how such Change in Circumstances caused
or will likely cause Borrower's representations and warranties with respect to
being or becoming Year 2000 Compliant no longer to be true. Borrower shall,
within ten (10) days of a request, also provide Lenders with any additional
information Lenders reasonably request of Borrower in connection with the Notice
and/or a Change in Circumstances.
(a) SALE OF EQUITY. The Borrower or any Subsidiary will immediately pay over to
the Administrative Agent for the ratable benefit of the Lenders as a prepayment
of principal on the Notes, an amount equal to 100% of the proceeds (net of
direct costs of sale) received by Borrower or any Subsidiary from the sale of
any equity interest in, or securities of, the Borrower or any such Subsidiary.
(a) SUBSIDIARY. Borrower will acquire all of the issued and outstanding voting
securities of Gas Transport, Inc. within one-hundred and twenty (120) days of
the Effective Date.
1. NEGATIVE COVENANTS. A deviation from the provisions of this Section 13 shall
not constitute an Event of Default under this Agreement if such deviation is
consented to in writing by Majority Lenders prior to the date of deviation. The
Borrower will at all times comply with the covenants contained in this Section
13 from the date hereof and for so long as the Commitment is in existence or any
amount is owed to the Administrative Agent or the Lenders under this Agreement
or the other Loan Documents.
(a) NEGATIVE PLEDGE. Borrower shall not, and shall not allow its Subsidiaries
to, without the prior written consent of the Lenders:
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(i) create, incur, assume or permit to exist any Lien, security interest or
other encumbrance on any of its assets or properties except Permitted Liens; or
(i) sell, lease, transfer or otherwise dispose of, in any fiscal year, any of
its assets except for (A) sales, leases, transfers or other dispositions made in
the ordinary course of Borrower's oil and gas businesses, (B) sales made with
the consent of Majority Lenders which are made pursuant to, and in full
compliance with, Section 12(r) hereof; and (C) sales, leases or transfers or
other dispositions (including those referred to in Section 13(a)(ii)(B)) made by
Borrower and its Subsidiaries which do not exceed $10,000,000 in the aggregate
during any fiscal year.
(a) CURRENT RATIO. Borrower shall not allow its ratio of Consolidated Current
Assets to Consolidated Current Liabilities to be less than 1.0 to 1.0 as of the
end of any fiscal quarter.
(a) TOTAL DEBT TO EBITDAX. The Borrower will not allow its ratio of Consolidated
Total Debt to Consolidated EBITDAX to be less than (i) 4.75 to 1.0 as of the end
of the calendar quarters ended December 31, 1999, March 31, 2000 and June 30,
2000; (ii) 4.50 to 1.0 for the calendar quarter ended September 30, 2000; (iii)
4.25 to 1.0 for the calendar quarter ended December 31, 2000; and (iv) 4.0 to
1.0 as of the end of any calendar quarter thereafter beginning with the calendar
quarter ending March 31, 2001. For each calendar quarter through June 30, 2000,
EBITDAX will be annualized from October 1, 1999 through the end of the period
being calculated. Thereafter, beginning September 30, 2000 the ratio shall be
calculated on a trailing four-quarters basis.
(a) CONSOLIDATIONS AND MERGERS. Borrower will not, and will not allow any of its
Subsidiaries to, consolidate or merge with or into any other Person, except that
Borrower or any such Subsidiary may merge with another Person if Borrower or
such Subsidiary is the surviving entity in a non-hostile merger and if, after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing.
(a) DEBTS, GUARANTIES AND OTHER OBLIGATIONS. Without the consent of Majority
Lenders, Borrower will not, and will not allow any of its Subsidiaries to,
incur, create, assume or in any manner become or be liable in respect of any
indebtedness, nor will Borrower or any Subsidiary guarantee or otherwise in any
manner become or be liable in respect of any indebtedness, liabilities or other
obligations of any other person or entity, whether by agreement to purchase the
indebtedness of any other person or entity or agreement for the furnishing of
funds to any other person or entity through the purchase or lease of goods,
supplies or services (or by way of stock purchase, capital contribution, advance
or loan) for the purpose of paying or discharging the indebtedness of any other
person or entity, or otherwise, except that the foregoing restrictions shall not
apply to:
(i) the Notes and any renewal or increase thereof, or other indebtedness of the
Borrower and any Subsidiary heretofore disclosed to Lenders in the Borrower's
Financial Statements or on Schedule "4" hereto; or
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i) taxes, assessments or other government charges which are not yet due or are
being contested in good faith by appropriate action promptly initiated and
diligently conducted, if such reserve as shall be required by GAAP shall have
been made therefor and levy and execution thereon have been stayed and continue
to be stayed; or
(i) indebtedness not exceeding in the aggregate outstanding at any time the sum
of $10,000,000; or
(i) any renewals or extensions of any of the foregoing.
(a) DISTRIBUTIONS OR DIVIDENDS. Borrower will not (i) declare or pay any cash
distribution, or dividend; (ii) purchase, redeem or otherwise acquire for value
any of its stock now or hereafter outstanding; (iii) return any capital to its
stockholders, or (iv) make any distribution of its assets to its stockholders as
such, except the foregoing shall not apply to cash distributions to its owners
in amounts not exceeding such owners' income tax and franchise tax liability
(calculated at the highest of such owner's actual tax rates) directly
attributable to Borrower's income; provided, however, that immediately before
and after giving effect thereto no (A) Default or Event of Default or (B)
Borrowing Base deficiency or requirement to make any mandatory prepayment of
principal pursuant to Section 9(b) hereof, shall exist.
(a) LOANS AND ADVANCES. Borrower shall not, and shall not allow any Subsidiary
to, make or permit to remain outstanding any loans or advances to or in any
person or entity, except that the foregoing restriction shall not apply to:
(i) loans or advances to any person, the material details of which have been set
forth in the Financial Statements of the Borrower or any Subsidiary heretofore
furnished to Lenders; or
(i) loans or advances not exceeding $1,000,000 a year in the aggregate.
(a) SALE OR DISCOUNT OF RECEIVABLES. Borrower will not, nor will Borrower allow
any of its Subsidiaries to, discount or sell with recourse, or sell for less
than the greater of the face or market value thereof, any of its notes
receivable or accounts receivable.
(a) NATURE OF BUSINESS. Borrower will not, nor will Borrower allow any of its
Subsidiaries to, permit any material change to be made in the character of its
business as carried on at the date hereof.
(a) TRANSACTIONS WITH AFFILIATES. Borrower will not, nor will Borrower allow any
of its Subsidiaries to, enter into any transaction with any Affiliate, except
transactions upon terms that are no less favorable to it than would be obtained
in a transaction negotiated at arm's length with an unrelated third party.
(a) RATE MANAGEMENT TRANSACTIONS. Borrower will not, and will not permit any
Subsidiary to, enter into any Rate Management Transaction, except the foregoing
prohibitions
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shall not apply to (x) non-speculative transactions consented to in
writing by the Administrative Agent, or (y) Pre-Approved Contracts.
(a) INVESTMENTS. Borrower shall not make, nor will Borrower allow any of its
Subsidiaries to make, any investments in any person or entity, except such
restriction shall not apply to investments not exceeding $3,000,000 in the
aggregate per year for Borrower and all of its Subsidiaries.
(a) AMENDMENT TO CERTIFICATE OF FORMATION OR LIMITED LIABILITY COMPANY
AGREEMENT. Without the consent of the Administrative Agent, Borrower will not
permit any material amendment to, or any material alteration of, its Certificate
of Formation or Limited Liability Company Agreement. Borrower will not allow any
Subsidiary to make any material amendment or alteration to any of their
Certificates of Formation, Articles of Incorporation, Limited Liability Company
Agreements or Bylaws. Borrower shall provide a copy of any such amendment,
whether the same requires consent or not pursuant to this Section 13(l), to the
Administrative Agent as soon as reasonably possible after adoption thereof.
(a) PAYMENT OR PRE-PAYMENT OF OTHER INDEBTEDNESS. Except as otherwise provided
for in this Agreement, Borrower shall not make, nor allow any of its
Subsidiaries to make, any unscheduled principal payments or redeem any of its
indebtedness (other than indebtedness owed the Lenders hereunder), or redeem any
of its equity unless such payment, prepayment, redemption or purchase is
approved by Majority Lenders.
(a) SALE OF INTERESTS IN SUBSIDIARIES. Other than as may be permitted under
Section 13(d) hereof, Borrower will not sell or otherwise transfer any its
ownership interests in any of its Subsidiaries.
(p) ACQUISITION OR FORMATION OF SUBSIDIARIES. Except for the
acquisition of the voting securities of Gas Transport, Inc. by Borrower as
required pursuant to the provisions of Section 12(x) hereof, Borrower will
not, nor allow any of its Subsidiaries to, acquire or form any Subsidiary
unless Administrative Agent shall have consented to such in writing and
Borrower and such Subsidiary have complied with Section 12(f) hereof.
1. EVENTS OF DEFAULT. Any one or more of the following events shall be
considered an "Event of Default" as that term is used herein:
(a) The Borrower shall fail to pay when due or declared due the principal of,
and the interest on, the Notes, or any fee or any other indebtedness of the
Borrower incurred pursuant to this Agreement or any other Loan Document; or
(a) Any representation or warranty made by Borrower under this Agreement, or in
any certificate or statement furnished or made to the Lenders pursuant hereto,
or in connection herewith, or in connection with any document furnished
hereunder, shall prove to be untrue in any material respect as of the date on
which such representation or warranty is made (or deemed made), or any
representation, statement (including financial statements), certificate, report
or
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other data furnished or to be furnished or made by Borrower under any Loan
Document, including this Agreement, proves to have been untrue in any material
respect, as of the date as of which the facts therein set forth were stated or
certified; or
(a) Default shall be made in the due observance or performance of any of the
covenants or agreements of the Borrower or any Subsidiary contained in the Loan
Documents, including this Agreement (excluding covenants contained in Section
12(m) or Section 13 of the Agreement for which there is no cure period), and
such default shall continue for more than thirty (30) days; or
(a) Default shall be made in the due observance or performance of the covenants
of Borrower contained in Section 12(m) or Section 13 of this Agreement; or
(a) Default shall be made in respect of any obligation for borrowed money, other
than the Notes, for which Borrower or any of its Subsidiaries is liable
(directly, by assumption, as guarantor or otherwise), or any obligations secured
by any mortgage, pledge or other security interest, lien, charge or encumbrance
with respect thereto, on any asset or property of Borrower or any of its
Subsidiaries or in respect of any agreement relating to any such obligations
unless Borrower or any of its Subsidiaries is not liable for same (i.e., unless
remedies or recourse for failure to pay such obligations is limited to
foreclosure of the collateral security therefor), and if such default shall
continue beyond the applicable grace period, if any; or
(a) Borrower or any of its Subsidiaries shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking an appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action authorizing the foregoing; or
(a) An involuntary case or other proceeding, shall be commenced against Borrower
or any of its Subsidiaries seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for relief
shall be entered against Borrower or any of its Subsidiaries under the federal
bankruptcy laws as now or hereinafter in effect; or
(a) A final judgment or order for the payment of money in excess of $1,500,000
(or judgments or orders aggregating in excess of $1,500,000) shall be rendered
against Borrower or any of its Subsidiaries and such judgments or orders shall
continue unsatisfied and unstayed for a period of thirty (30) days; or
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(a) In the event the Total Outstandings shall at any time exceed the Borrowing
Base established for the Notes, and the Borrower shall fail to comply with the
provisions of Section 9(b) hereof; or
(a) A Change of Control shall occur; or
(a) An Event of Default shall have occurred under any agreement entered into in
connection with a Rate Management Transaction.
Upon occurrence of any Event of Default specified in Subsections 14(f)
and (g) hereof, the entire principal amount due under the Notes and all interest
then accrued thereon, and any other liabilities of the Borrower hereunder, shall
become immediately due and payable all without notice and without presentment,
demand, protest, notice of protest or dishonor or any other notice of default of
any kind, all of which are hereby expressly waived by the Borrower. In any other
Event of Default, the Administrative Agent, upon request of Majority Lenders,
shall by notice to the Borrower declare the principal of, and all interest then
accrued on, the Notes and any other liabilities hereunder to be forthwith due
and payable, whereupon the same shall forthwith become due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which the Borrower hereby
expressly waives, anything contained herein or in the Notes to the contrary
notwithstanding. Nothing contained in this Section 14 shall be construed to
limit or amend in any way the Events of Default enumerated in the Notes, or any
other document executed in connection with the transaction contemplated herein.
Upon the occurrence and during the continuance of any Event of Default,
the Lenders are hereby authorized at any time and from time to time, without
notice to the Borrower or any of its Subsidiaries, (any such notice being
expressly waived by the Borrower), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by any of the Lenders to or for the credit
or the account of the Borrower or any of its Subsidiaries against any and all of
the indebtedness of the Borrower or any Subsidiaries under the Notes and the
Loan Documents, including this Agreement, irrespective of whether or not the
Lenders shall have made any demand under the Loan Documents, including this
Agreement or the Notes and although such indebtedness may be unmatured. Any
amount set-off by any of the Lenders shall be applied against the indebtedness
owed the Lenders by the Borrower pursuant to this Agreement and the Notes. The
Lenders agree promptly to notify the Borrower and the affected Subsidiary after
any such setoff and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Lenders may
have.
1. THE AGENTS AND THE LENDERS.
(a) APPOINTMENT AND AUTHORIZATION. Each Lender hereby appoints Administrative
Agent as its nominee and Administrative Agent, in its name and on its behalf:
(i) to act as nominee for and on behalf of such Lender in and under all Loan
Documents; (ii) to arrange the means whereby the funds of Lenders are to be made
available to the Borrower under the Loan
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Documents; (iii) to take such action as may be requested by any Lender under the
Loan Documents (when such Lender is entitled to make such request under the Loan
Documents); (iv) to receive all documents and items to be furnished to Lenders
under the Loan Documents; (v) to be the secured party, mortgagee, beneficiary,
and similar party in respect of, and to receive, as the case may be, any
collateral for the benefit of Lenders; (vi) to promptly distribute to each
Lender all material information, requests, documents and items received from the
Borrower under the Loan Documents; (vii) to promptly distribute to each Lender
such Lender's Pro Rata Part of each payment or prepayment (whether voluntary, as
proceeds of insurance thereon, or otherwise) in accordance with the terms of the
Loan Documents and (viii) to deliver to the appropriate Persons requests,
demands, approvals and consents received from Lenders. Each Lender hereby
authorizes Administrative Agent to take all actions and to exercise such powers
under the Loan Documents as are specifically delegated to Administrative Agent
by the terms hereof or thereof, together with all other powers reasonably
incidental thereto. With respect to its Commitments hereunder and the Notes
issued to it, Administrative Agent and any successor Administrative Agent shall
have the same rights under the Loan Documents as any other Lender and may
exercise the same as though it were not the Administrative Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Administrative Agent and any successor Administrative Agent in its capacity as a
Lender. Administrative Agent and any successor Administrative Agent and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of and generally engage in any kind of business with the Borrower and
any person which may do business with the Borrower, all as if Administrative
Agent and any successor Administrative Agent was not Administrative Agent
hereunder and without any duty to account therefor to the Lenders; provided
that, if any payments in respect of any property (or the proceeds thereof) now
or hereafter in the possession or control of Administrative Agent which may be
or become security for the obligations of the Borrower arising under the Loan
Documents by reason of the general description of indebtedness secured or of
property contained in any other agreements, documents or instruments related to
any such other business shall be applied to reduction of the obligations of the
Borrower arising under the Loan Documents, then each Lender shall be entitled to
share in such application according to its pro rata part thereof. Each Lender,
upon request of any other Lender, shall disclose to all other Lenders all
indebtedness and liabilities, direct and contingent, of the Borrower to such
Lender as of the time of such request.
(a) NOTE HOLDERS. From time to time as other Lenders become a party to this
Agreement, Administrative Agent shall obtain execution by the Borrower of
additional Notes in amounts representing the Commitment of each such new Lender,
up to an aggregate face amount of all Notes not exceeding $275,000,000. The
obligation of such Lender shall be governed by the provisions of this Agreement,
including but not limited to, the obligations specified in Section 2 hereof.
From time to time, Administrative Agent may require that the Lenders exchange
their Notes for newly issued Notes to better reflect the Commitments of the
Lenders. Administrative Agent may treat the payee of any Note as the holder
thereof until written notice of transfer has been filed with it, signed by such
payee and in form satisfactory to Administrative Agent.
(a) CONSULTATION WITH COUNSEL. Lenders agree that Administrative Agent may
consult with legal counsel selected by Administrative Agent and shall not be
liable for any action taken or suffered in good faith by it in accordance with
the advice of such counsel. LENDERS ACKNOWLEDGE
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THAT GARDERE & XXXXX, L.L.P. IS COUNSEL FOR BANK ONE, BOTH AS ADMINISTRATIVE
AGENT AND AS A LENDER, AND THAT SUCH FIRM DOES NOT REPRESENT ANY OF THE OTHER
LENDERS IN CONNECTION WITH THIS TRANSACTION.
(a) DOCUMENTS. Administrative Agent shall not be under a duty to examine or pass
upon the validity, effectiveness, enforceability, genuineness or value of any of
the Loan Documents or any other instrument or document furnished pursuant
thereto or in connection therewith, and Administrative Agent shall be entitled
to assume that the same are valid, effective, enforceable and genuine and what
they purport to be.
(a) RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below,
Administrative Agent may resign at any time by giving written notice thereof to
Lenders and the Borrower, and Administrative Agent may be removed at any time
with or without cause by all Lenders (other than Administrative Agent). If no
successor Administrative Agent has been so appointed by Majority Lenders (and
approved by the Borrower) and has accepted such appointment within 30 days after
the retiring Administrative Agent's giving of notice of resignation or removal
of the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of Lenders, appoint a successor Administrative Agent. Any
successor Administrative Agent must be approved by Borrower, which approval will
not be unreasonably withheld. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent, as the case may be, shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 15
shall continue in effect for its benefit in respect to any actions taken or
omitted to be taken by it while it was acting as Administrative Agent. To be
eligible to be an Administrative Agent hereunder the party serving, or to serve,
in such capacity must own a Pro Rata Part of the Commitments equal to the level
of Commitment required to be held by any Lender pursuant to Section 28 hereof.
(a) RESPONSIBILITY OF ADMINISTRATIVE AGENT. It is expressly understood and
agreed that the obligations of Administrative Agent under the Loan Documents are
only those expressly set forth in the Loan Documents as to each and that
Administrative Agent, shall be entitled to assume that no Default or Event of
Default has occurred and is continuing, unless Administrative Agent has actual
knowledge of such fact or has received notice from a Lender or the Borrower that
such Lender or the Borrower considers that a Default or an Event of Default has
occurred and is continuing and specifying the nature thereof. Neither
Administrative Agent nor any of its directors, officers, attorneys or employees
shall be liable for any action taken or omitted to be taken by them under or in
connection with the Loan Documents, except for its or their own gross negligence
or willful misconduct. Administrative Agent shall not incur liability under or
in respect of any of the Loan Documents by acting upon any notice, consent,
certificate, warranty or other paper or instrument believed by it to be genuine
or authentic or to be signed by the proper party or parties, or with respect to
anything which it may do or refrain from doing in the reasonable exercise of its
judgment, or which may seem to it to be necessary or desirable.
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Administrative Agent shall not be responsible to Lenders for
any of the Borrower's recitals, statements, representations or
warranties contained in any of the Loan Documents, or in any
certificate or other document referred to or provided for in, or
received by any Lender under, the Loan Documents, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of
or any of the Loan Documents or for any failure by the Borrower to
perform any of its obligations hereunder or thereunder. Administrative
Agent may employ agents and attorneys-in-fact and shall not be
answerable, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care.
The relationship between Administrative Agent and each Lender
is only that of Administrative Agent and principal and has no fiduciary
aspects. Nothing in the Loan Documents or elsewhere shall be construed
to impose on Administrative Agent any duties or responsibilities other
than those for which express provision is therein made. In performing
its duties and functions hereunder, Administrative Agent does not
assume and shall not be deemed to have assumed, and hereby expressly
disclaims, any obligation or responsibility toward or any relationship
of agency or trust with or for the Borrower or any of its beneficiaries
or other creditors. As to any matters not expressly provided for by the
Loan Documents, Administrative Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of all Lenders and such
instructions shall be binding upon all Lenders and all holders of the
Notes; provided, however, that Administrative Agent shall not be
required to take any action which is contrary to the Loan Documents or
applicable law.
Administrative Agent shall have the right to exercise or
refrain from exercising, without notice or liability to the Lenders,
any and all rights afforded to Administrative Agent by the Loan
Documents or which Administrative Agent may have as a matter of law;
provided, however, Administrative Agent shall not (i) except as
provided in Section 7(b) hereof, without the consent of Required
Lenders designate the amount of the Borrowing Base (except for increase
thereof) or (ii) without the consent of Majority Lenders, take any
other action with regard to amending the Loan Documents, waiving any
default under the Loan Documents or taking any other action with
respect to the Loan Documents which requires consent of Majority
Lenders. Provided further, however, that no amendment, waiver, or other
action shall be effected pursuant to the preceding clause (ii) without
the consent of all Lenders which: (i) would increase the Borrowing Base
or decrease the Monthly Commitment Reduction, (ii) would reduce any
fees hereunder, or the principal of, or the interest on, any Lender's
Note or Notes, (iii) would postpone any date fixed for any payment of
any fees hereunder, or any principal or interest of any Lender's Note
or Notes, (iv) would materially increase any Lender's obligations
hereunder or would materially alter Administrative Agent's obligations
to any Lender hereunder, (v) would release Borrower from its obligation
to pay any Lender's Note or Notes, (vi) would change the definition of
Majority or Required Lenders, (vii) would amend, modify or
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change any rovision of this Agreement requiring the consent of all the
Lenders, (viii) would waive any of the conditions precedent to the
Effective Date or the making of any Loan or issuance of any Letter of
Credit or (ix) would extend the Maturity Date or (x) would amend this
sentence or the previous sentence. Administrative Agent shall not have
liability to Lenders for failure or delay in exercising any right or
power possessed by Administrative Agent pursuant to the Loan Documents
or otherwise unless such failure or delay is caused by the gross
negligence of the Administrative Agent, in which case only the
Administrative Agent responsible for such gross negligence shall have
liability therefor to the Lenders.
(a) INDEPENDENT INVESTIGATION. Each Lender severally represents and warrants to
the Agents that it has made its own independent investigation and assessment of
the financial condition and affairs of the Borrower in connection with the
making and continuation of its participation hereunder and has not relied
exclusively on any information provided to such Lender by the Agents in
connection herewith, and each Lender represents, warrants and undertakes to
Agents that it shall continue to make its own independent appraisal of the
credit worthiness of the Borrower while the Notes are outstanding or its
commitments hereunder are in force. The Agents shall not be required to keep
themselves informed as to the performance or observance by the Borrower of this
Agreement or any other document referred to or provided for herein or to inspect
the properties or books of the Borrower. Other than as provided in this
Agreement, the Agents shall not have any duty, responsibility or liability to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrower which may come into the
possession of Administrative Agent.
(a) INDEMNIFICATION. Lenders agree to indemnify the Agents, ratably according to
their respective Commitments on a Pro Rata basis, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any proper and reasonable kind or nature
whatsoever which may be imposed on, incurred by or asserted against any of the
Agents in any way relating to or arising out of the Loan Documents or any action
taken or omitted by Administrative Agent under the Loan Documents, provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from any of the Agent's gross negligence or willful
misconduct. Each Lender shall be entitled to be reimbursed by the Agents for any
amount such Lender paid to the Agents under this Section 15(h) to the extent the
Agents have been reimbursed for such payments by the Borrower or any other
Person. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION TO APPLY TO AND
PROTECT THE AGENTS FROM THE CONSEQUENCES OF ANY LIABILITY INCLUDING STRICT
LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON THE AGENTS AS WELL AS FROM THE
CONSEQUENCES OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE,
CONTRIBUTING OR CONCURRING CAUSE OF ANY SUCH LIABILITY.
(a) BENEFIT OF SECTION 15. The agreements contained in this Section 15 are
solely for the benefit of Administrative Agent and the Lenders and are not for
the benefit of, or to be relied upon by, the Borrower, any affiliate of the
Borrower or any other person.
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(a) PRO RATA TREATMENT. Subject to the provisions of this Agreement, each
payment (including each prepayment) by the Borrower and collection by Lenders
(including offsets) on account of the principal of and interest on the Notes and
fees provided for in this Agreement, payable by the Borrower shall be made Pro
Rata; provided, however, in the event that any Defaulting Lender shall have
failed to make an Advance as contemplated under Section 3 hereof and
Administrative Agent or another Lender or Lenders shall have made such Advance,
payment received by Administrative Agent for the account of such Defaulting
Lender or Lenders shall not be distributed to such Defaulting Lender or Lenders
until such Advance or Advances shall have been repaid in full to the Lender or
Lenders who funded such Advance or Advances.
(a) ASSUMPTION AS TO PAYMENTS. Except as specifically provided herein, unless
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to Lenders hereunder that the Borrower will not
make such payment in full, Administrative Agent may, but shall not be required
to, assume that the Borrower has made such payment in full to Administrative
Agent on such date and Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to Administrative Agent, each Lender
shall repay to Administrative Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to Administrative Agent, at the interest rate applicable to such portion
of the Loan.
(a) OTHER FINANCINGS. Without limiting the rights to which any Lender otherwise
is or may become entitled, such Lender shall have no interest, by virtue of this
Agreement or the Loan Documents, in (a) any present or future loans from,
letters of credit issued by, or leasing or other financial transactions by, any
other Lender to, on behalf of, or with the Borrower (collectively referred to
herein as "Other Financings") other than the obligations hereunder; (b) any
present or future guarantees by or for the account of the Borrower which are not
contemplated by the Loan Documents; (c) any present or future property taken as
security for any such Other Financings; or (d) any property now or hereafter in
the possession or control of any other Lender which may be or become security
for the obligations of the Borrower arising under any loan document by reason of
the general description of indebtedness secured or property contained in any
other agreements, documents or instruments relating to any such Other
Financings.
(a) INTERESTS OF LENDERS. Nothing in this Agreement shall be construed to create
a partnership or joint venture between Lenders for any purpose. The Agents,
Lenders and the Borrower recognize that the respective obligations of Lenders
under the Commitments shall be several and not joint and that neither the Agents
nor any of Lenders shall be responsible or liable to perform any of the
obligations of the other under this Agreement. Each Lender is deemed to be the
owner of an undivided interest in and to all rights, titles, benefits and
interests belonging and accruing to Administrative Agent under the Security
Instruments, including, without limitation, liens and security interests in any
collateral, fees and payments of principal and interest by the Borrower under
the Commitments on a Pro Rata basis. Each Lender shall perform all
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duties and obligations of Lenders under this Agreement in the same proportion as
its ownership interest in the Loans outstanding at the date of determination
thereof.
(a) INVESTMENTS. Whenever Administrative Agent in good faith determines that it
is uncertain about how to distribute to Lenders any funds which it has received,
or whenever Administrative Agent in good faith determines that there is any
dispute among the Lenders about how such funds should be distributed,
Administrative Agent may choose to defer distribution of the funds which are the
subject of such uncertainty or dispute. If Administrative Agent in good faith
believes that the uncertainty or dispute will not be promptly resolved, or if
Administrative Agent is otherwise required to invest funds pending distribution
to the Lenders, Administrative Agent may invest such funds pending distribution
(at the risk of the Borrower). All interest on any such investment shall be
distributed upon the distribution of such investment and in the same proportions
and to the same Persons as such investment. All monies received by
Administrative Agent for distribution to the Lenders (other than to the Person
who is Administrative Agent in its separate capacity as a Lender) shall be held
by the Administrative Agent pending such distribution solely as Administrative
Agent for such Lenders, and Administrative Agent shall have no equitable title
to any portion thereof.
1. EXERCISE OF RIGHTS. No failure to exercise, and no delay in exercising, on
the part of the Administrative Agent or the Lenders, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right. The rights of the Administrative Agent and the Lenders hereunder shall be
in addition to all other rights provided by law. No modification or waiver of
any provision of the Loan Documents, including this Agreement, or the Notes nor
consent to departure therefrom, shall be effective unless in writing, and no
such consent or waiver shall extend beyond the particular case and purpose
involved. No notice or demand given in any case shall constitute a waiver of the
right to take other action in the same, similar or other circumstances without
such notice or demand.
1. NOTICES. Any notices or other communications required or permitted to be
given by this Agreement or any other documents and instruments referred to
herein must be given in writing (which may be by facsimile transmission) and
must be personally delivered or mailed by prepaid certified or registered mail
to the party to whom such notice or communication is directed at the address of
such party as follows: (a) BORROWER: GREAT LAKES ENERGY PARTNERS, L.L.C., 000
Xxxxx Xxxxx 00, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx X. Xxxxxx, Chief
Financial Officer, Facsimile No. (000) 000-0000; (b) Administrative Agent: BANK
ONE, TEXAS, N.A., 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, Facsimile No. (214)
290-2332, Attention: Wm. Xxxx Xxxxxxx, Vice President. Any such notice or other
communication shall be deemed to have been given (whether actually received or
not) on the day it is personally delivered or delivered by facsimile as
aforesaid or, if mailed, on the third day after it is mailed as aforesaid. Any
party may change its address for purposes of this Agreement by giving notice of
such change to the other party pursuant to this Section 17. Any notice required
to be given to the Lenders shall be given to the Administrative Agent and
distributed to all Lenders by the Administrative Agent.
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1. EXPENSES. The Borrower shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Administrative Agent, including reasonable fees
and disbursements of special counsel for the Administrative Agent, in connection
with the preparation of this Agreement, any waiver or consent hereunder or any
amendment hereof or any default or Event of Default or alleged default or Event
of Default hereunder, (ii) all reasonable and necessary out-of-pocket expenses
of the Administrative Agent, including reasonable fees and disbursements of
special counsel for the Administrative Agent in connection with the preparation
of any participation agreement for a participant or participants requested by
the Borrower or any amendment thereof and (iii) if an Event of Default occurs
and is continuing, all reasonable and necessary out-of-pocket expenses incurred
by the Lenders, including fees and disbursements of counsel, in connection with
such default and Event of Default and collection and other enforcement
proceedings resulting therefrom. THE BORROWER HEREBY ACKNOWLEDGES THAT GARDERE &
XXXXX, L.L.P. IS SPECIAL COUNSEL TO BANK ONE, AS ADMINISTRATIVE AGENT AND AS A
LENDER, UNDER THIS AGREEMENT AND THAT IT IS NOT COUNSEL TO, NOR DOES IT
REPRESENT THE BORROWER IN CONNECTION WITH THE TRANSACTIONS DESCRIBED IN THIS
AGREEMENT. The Borrower is relying on separate counsel in the transaction
described herein. The Borrower shall indemnify the Lenders against any transfer
taxes, document taxes, assessments or charges made by any governmental authority
by reason of the execution, delivery and filing of the Loan Documents. The
obligations of this Section 18 shall survive any termination of this Agreement,
the expiration of the Loans and the payment of all indebtedness of the Borrower
to the Lenders hereunder and under the Notes.
1. INDEMNITY. The Borrower agrees to indemnify and hold harmless the Agents and
the Lenders and their respective officers, employees, agents, attorneys and
representatives (singularly, an "Indemnified Party", and collectively, the
"Indemnified Parties") from and against any loss, cost, liability, damage or
expense (including the reasonable fees and out-of-pocket expenses of counsel to
the Lenders, including all local counsel hired by such counsel) ("Claim")
incurred by the Lenders in investigating or preparing for, defending against, or
providing evidence, producing documents or taking any other action in respect of
any commenced or threatened litigation, administrative proceeding or
investigation under any federal securities law, federal or state environmental
law, or any other statute of any jurisdiction, or any regulation, or at common
law or otherwise, which is alleged to arise out of or is based upon any acts,
practices or omissions or alleged acts, practices or omissions of the Borrower
or its agents or arises in connection with the duties, obligations or
performance of the Indemnified Parties in negotiating, preparing, executing,
accepting, keeping, completing, countersigning, issuing, selling, delivering,
releasing, assigning, handling, certifying, processing or receiving or taking
any other action with respect to the Loan Documents and all documents, items and
materials contemplated thereby even if any of the foregoing arises out of an
Indemnified Party's ordinary negligence. The indemnity set forth herein shall be
in addition to any other obligations or liabilities of the Borrower to the
Agents and the Lenders hereunder or at common law or otherwise, and shall
survive any termination of this Agreement, the expiration of the Loans and the
payment of all indebtedness of the Borrower to the Lenders hereunder and under
the Notes, provided that the Borrower shall have no obligation under this
Section to the Lenders with respect to any of the foregoing arising out of the
gross negligence or willful misconduct of the Lenders. If any Claim is asserted
against any Indemnified Party, the Indemnified Party shall endeavor to notify
the Borrower of such Claim (but failure to do so shall not affect the
indemnification herein made except to the extent of the
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actual harm caused by such failure). The Indemnified Party shall have the right
to employ, at the Borrower's expense, counsel of the Indemnified Parties'
choosing and to control the defense of the Claim. The Borrower may at its own
expense also participate in the defense of any Claim. Each Indemnified Party may
employ separate counsel in connection with any Claim to the extent such
Indemnified Party believes it reasonably prudent to protect such Indemnified
Party. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION TO APPLY TO AND
PROTECT EACH INDEMNIFIED PARTY FROM THE CONSEQUENCES OF ANY LIABILITY INCLUDING
STRICT LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON ADMINISTRATIVE AGENT AS
WELL AS FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT
NEGLIGENCE IS THE SOLE, CONTRIBUTING, OR CONCURRING CAUSE OF ANY CLAIM.
1. GOVERNING LAW. THIS AGREEMENT IS BEING EXECUTED AND DELIVERED, AND IS
INTENDED TO BE PERFORMED, IN DALLAS, DALLAS COUNTY, TEXAS, AND THE SUBSTANTIVE
LAWS OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF THIS AGREEMENT AND ALL OTHER DOCUMENTS AND INSTRUMENTS
REFERRED TO HEREIN, UNLESS OTHERWISE SPECIFIED THEREIN.
1. INVALID PROVISIONS. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
of this Agreement, such provisions shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part of this Agreement, and the remaining
provisions of the Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement.
1. MAXIMUM INTEREST RATE. Regardless of any provisions contained in this
Agreement or in any other documents and instruments referred to herein, the
Lenders shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Notes any amount in excess of the Maximum
Rate, and in the event any Lender ever receives, collects or applies as interest
any such excess, or if an acceleration of the maturities of any Notes or if any
prepayment by the Borrower results in the Borrower having paid any interest in
excess of the Maximum Rate, such amount which would be excessive interest shall
be applied to the reduction of the unpaid principal balance of the Notes for
which such excess was received, collected or applied, and, if the principal
balance of such Note is paid in full, any remaining excess shall forthwith be
paid to the Borrower. All sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of the indebtedness evidenced by the Notes and/or
this Agreement shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Rate. In determining whether or not the
interest paid or payable under any specific contingency exceeds the Maximum Rate
of interest permitted by law, the Borrower and the Lenders shall, to the maximum
extent permitted under applicable law, (i) characterize any non-principal
payment as an expense, fee or premium, rather than as interest; and (ii) exclude
voluntary prepayments and the effect thereof; and (iii) compare the total amount
of interest contracted for, charged or received with the total amount of
interest which could be contracted for, charged or received throughout the
entire contemplated term of the Note at the Maximum Rate.
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1. AMENDMENTS. This Agreement may be amended only by an instrument in writing
executed by an authorized officer of the party against whom such amendment is
sought to be enforced.
1. MULTIPLE COUNTERPARTS. This Agreement may be executed in a number of
identical separate counterparts, each of which for all purposes is to be deemed
an original, but all of which shall constitute, collectively, one agreement. No
party to this Agreement shall be bound hereby until a counterpart of this
Agreement has been executed by all parties hereto.
1. CONFLICT. In the event any term or provision hereof is inconsistent with or
conflicts with any provision of the Loan Documents, the terms or provisions
contained in this Agreement shall be controlling.
1. SURVIVAL. All covenants, agreements, undertakings, representations and
warranties made in the Loan Documents, including this Agreement, the Notes or
other documents and instruments referred to herein shall survive all closings
hereunder and shall not be affected by any investigation made by any party.
1. PARTIES BOUND. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, assigns, heirs, legal
representatives and estates, provided, however, that the Borrower may not,
without the prior written consent of all of the Lenders, assign any rights,
powers, duties or obligations hereunder.
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1. ASSIGNMENTS AND PARTICIPATIONS.
(a) ASSIGNMENTS. Each Lender shall have the right to sell, assign or transfer
all or any part of its Note or Notes, its Commitment and its rights and
obligations hereunder to one or more Affiliates, banks, financial institutions,
pension plans, insurance companies, investment funds, or similar Persons who are
Eligible Assignees or to a Federal Reserve Bank; PROVIDED, that in connection
with each sale, assignment or transfer (other than to an Affiliate, a Lender or
a Federal Reserve Bank), shall require the consent of Administrative Agent and
the Borrower, which consents will not be unreasonably withheld; provided,
however, that if an Event of Default has occurred and is continuing, the consent
of the Borrower shall not be required. Any such assignee, transferee or
recipient shall have, to the extent of such sale, assignment, or transfer, the
same rights, benefits and obligations as it would if it were such Lender and a
holder of such Note, Commitment and rights and obligations, including, without
limitation, the right to vote on decisions requiring consent or approval of all
Lenders, Required Lenders or Majority Lenders and the obligation to fund its
Commitment; provided, that (1) each such sale, assignment, or transfer (other
than to an Affiliate, a Lender or a Federal Reserve Bank) shall be in an
aggregate principal amount not less than $5,000,000, (2) each remaining Lender
shall at all times maintain Commitment then outstanding in an aggregate
principal amount at least equal to $5,000,000; (3) each such sale, assignment or
transfer shall be of a Pro Rata portion of such Lender's Commitment, (4) no
Lender may offer to sell its Note or Notes, Commitment, rights and obligations
or interests therein in violation of any securities laws; and (5) no such
assignments (other than to a Federal Reserve Bank) shall become effective until
the assigning Lender and its assignee delivers to Administrative Agent and
Borrower an Assignment and Acceptance and the Note or Notes subject to such
assignment and other documents evidencing any such assignment. An assignment fee
in the amount of $3,500 for each such assignment (other than to an Affiliate, a
Lender or the Federal Reserve Bank) will be payable to Administrative Agent by
assignor or assignee. Within five (5) Business Days after its receipt of copies
of the Assignment and Acceptance and the other documents relating thereto and
the Note or Notes, the Borrower shall execute and deliver to Administrative
Agent (for delivery to the relevant assignee) a new Note or Notes evidencing
such assignee's assigned Commitment and if the assignor Lender has retained a
portion of its Commitment, a replacement Note in the principal amount of the
Commitment retained by the assignor (except as provided in the last sentence of
this paragraph (a) such Note or Notes to be in exchange for, but not in payment
of, the Note or Notes held by such Lender). On and after the effective date of
an assignment hereunder, the assignee shall for all purposes be a Lender, party
to this Agreement and any other Loan Document executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party thereto (except that an Affiliate of
Borrower shall not have the right to vote as a Lender on matters that other
Lenders have the right to vote on under the provisions of the Agreement), and no
further consent or action by Borrower, Lenders or the Administrative Agent shall
be required to release the transferor Lender with respect to its Commitment
assigned to such assignee and the transferor Lender shall henceforth be so
released.
(a) PARTICIPATIONS. Each Lender shall have the right to grant participations in
all or any part of such Lender's Notes and Commitment hereunder to one or more
pension plans, investment funds, insurance companies, financial institutions or
other Persons, provided, that:
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(i) each Lender granting a participation shall retain the right to vote
hereunder, and no participant shall be entitled to vote hereunder on decisions
requiring consent or approval of Lenders, Required Lenders or Majority Lenders
(except as set forth in (iii) below);
(i) in the event any Lender grants a participation hereunder, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the holder of any such Note or Notes
for all purposes under the Loan Documents, and Administrative Agent, each Lender
and Borrower shall be entitled to deal with the Lender granting a participation
in the same manner as if no participation had been granted; and
(i) no participant shall ever have any right by reason of its participation to
exercise any of the rights of Lenders hereunder, except that any Lender may
agree with any participant that such Lender will not, without the consent of
such participant (which consent may not be unreasonably withheld) consent to any
amendment or waiver requiring approval of all Lenders.
(a) FINANCIAL INFORMATION. It is understood and agreed that any Lender may
provide to assignees and participants and prospective assignees and participants
financial information and reports and data concerning Borrower's properties and
operations which was provided to such Lender pursuant to this Agreement.
(a) ASSIGNEES' AND PARTICIPANTS' INDEMNITY. Upon the reasonable request of
either Administrative Agent or Borrower, each Lender will identify those to whom
it has assigned or participated any part of its Notes and Commitment, and
provide the amounts so assigned or participated.
1. CHOICE OF FORUM: CONSENT TO SERVICE OF PROCESS AND JURISDICTION. THE
OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS
COUNTY, TEXAS. ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT
TO THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF,
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS, COUNTY OF DALLAS, OR IN THE
UNITED STATES COURTS LOCATED IN DALLAS COUNTY, TEXAS AND THE BORROWER HEREBY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY
SUCH SUIT, ACTION OR PROCEEDING. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURT BY THE
MAILING THEREOF BY LENDER BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE BORROWER, AS APPLICABLE, AT THE ADDRESS FOR NOTICES AS PROVIDED IN SECTION
17. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENT BROUGHT IN THE COURTS LOCATED IN THE
STATE OF TEXAS, COUNTY OF DALLAS, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM
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THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
1. WAIVER OF JURY TRIAL. THE BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
1. OTHER AGREEMENTS. THIS WRITTEN CREDIT AGREEMENT REPRESENTS 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.
1. FINANCIAL TERMS. All accounting terms used in this Agreement which are not
specifically defined herein shall be construed in accordance with GAAP.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWER:
GREAT LAKES ENERGY PARTNERS, L.L.C.,
a Delaware limited liability company
BY ITS MEMBERS:
MARBEL HOLDCO, INC.
By:
Name:
Title:
RANGE HOLDCO, INC.
By:
Name: Xxxx X. Xxxxxxxxx
Title: President
ADMINISTRATIVE AGENT:
BANK ONE, TEXAS, N.A.
By:
Name: Wm. Xxxx Xxxxxxx
Title: Vice President
SYNDICATION AGENT:
CHASE BANK OF TEXAS, N.A.
By:
Name:
Title:
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DOCUMENTATION AGENT:
BANKERS TRUST COMPANY
By:
Name:
Title:
MANAGING AGENTS:
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