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$72,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Among
RAMCO OPERATING COMPANY
as Borrower,
THE FINANCIAL INSTITUTIONS
NAMED IN THIS CREDIT AGREEMENT
as Banks,
and
UNION BANK OF CALIFORNIA, N. A.
as Agent
December 12, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Computation of Time Periods. . . . . . . . . . . . . . . . . . 20
Section 1.03. Accounting Terms; Changes in GAAP. . . . . . . . . . . . . . . 20
Section 1.04. Types of Advances. . . . . . . . . . . . . . . . . . . . . . . 21
Section 1.05. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE II
CREDIT FACILITIES
Section 2.01. Commitment for Advances. . . . . . . . . . . . . . . . . . . . 21
Section 2.02. Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.03. Method of Borrowing. . . . . . . . . . . . . . . . . . . . . . 24
Section 2.04. Reduction of the Revolving Commitment. . . . . . . . . . . . . 27
Section 2.05. Prepayment of Advances . . . . . . . . . . . . . . . . . . . . 28
Section 2.06. Repayment of Advances. . . . . . . . . . . . . . . . . . . . . 30
Section 2.07. Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.08. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.09. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.10. Payments and Computations. . . . . . . . . . . . . . . . . . . 37
Section 2.11. Sharing of Payments, Etc.. . . . . . . . . . . . . . . . . . . 38
Section 2.12. Breakage Costs . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.13. Increased Costs. . . . . . . . . . . . . . . . . . . . . . . . 39
Section 2.14. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Advances . . . . . . . . . . . 42
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Section 3.02. Conditions Precedent to All Borrowings . . . . . . . . . . . . 45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence; Subsidiaries. . . . . . . . . . . . . . . 45
Section 4.02. Corporate Power. . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.03. Authorization and Approvals. . . . . . . . . . . . . . . . . . 46
Section 4.04. Enforceable Obligations. . . . . . . . . . . . . . . . . . . . 46
Section 4.05. Financial Statements . . . . . . . . . . . . . . . . . . . . . 46
Section 4.06. True and Complete Disclosure . . . . . . . . . . . . . . . . . 47
Section 4.07. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.08. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.09. Investment Company Act . . . . . . . . . . . . . . . . . . . . 48
Section 4.10. Public Utility Holding Company Act . . . . . . . . . . . . . . 48
Section 4.11. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.12. Pension Plans. . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 4.13. Condition of Property; Casualties. . . . . . . . . . . . . . . 50
Section 4.14. No Burdensome Restrictions; No Defaults. . . . . . . . . . . . 50
Section 4.15. Environmental Condition. . . . . . . . . . . . . . . . . . . . 50
Section 4.16. Permits, Licenses, Etc.. . . . . . . . . . . . . . . . . . . . 51
Section 4.17. Gas Contracts. . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.18. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.19. Solvency.. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.20. Capitalization; Ownership. . . . . . . . . . . . . . . . . . . 52
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . 52
Section 5.02. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . 53
Section 5.03. Preservation of Corporate Existence, Etc.. . . . . . . . . . . 54
Section 5.04. Payment of Taxes, Etc. . . . . . . . . . . . . . . . . . . . . 54
Section 5.05. Visitation Rights. . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.06. Reporting Requirements . . . . . . . . . . . . . . . . . . . . 54
Section 5.07. Maintenance of Property. . . . . . . . . . . . . . . . . . . . 58
Section 5.08. Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . 58
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Section 5.09. Title Opinions.. . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.10. Interest Hedge Arrangements. . . . . . . . . . . . . . . . . . 59
Section 5.11. Agreement to Pledge. . . . . . . . . . . . . . . . . . . . . . 59
Section 5.12. Independent Directors. . . . . . . . . . . . . . . . . . . . . 59
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Liens, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.02. Debts, Guaranties, and Other Obligations . . . . . . . . . . . 61
Section 6.03. Agreements Restricting Liens and Distributions . . . . . . . . 62
Section 6.04. Merger or Consolidation; Asset Sales . . . . . . . . . . . . . 62
Section 6.05. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . 62
Section 6.06. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.07. Limitation on Speculative Hedging. . . . . . . . . . . . . . . 63
Section 6.08. Affiliate Transactions . . . . . . . . . . . . . . . . . . . . 63
Section 6.09. Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . 64
Section 6.11. Sale-and-Leaseback . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.12. No Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.13. Change of Business . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.14. Organizational Documents, Name Change. . . . . . . . . . . . . 64
Section 6.15. General and Administrative Expenses. . . . . . . . . . . . . . 65
Section 6.16. Capital Expenditures.. . . . . . . . . . . . . . . . . . . . . 65
Section 6.17. Rental Expense.. . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.18. Accounts Payable.. . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.19. Advance Payment Contracts. . . . . . . . . . . . . . . . . . . 65
Section 6.20. Current Ratio. . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.21. Interest Coverage Ratio. . . . . . . . . . . . . . . . . . . . 66
Section 6.22. Debt Service Ratio.. . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VII
REMEDIES
Section 7.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.02. Optional Acceleration of Maturity. . . . . . . . . . . . . . . 68
Section 7.03. Automatic Acceleration of Maturity . . . . . . . . . . . . . . 69
Section 7.04. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . 69
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Section 7.05. Actions Under Credit Documents . . . . . . . . . . . . . . . . 70
Section 7.06. Non-exclusivity of Remedies. . . . . . . . . . . . . . . . . . 70
ARTICLE VIII
THE AGENT AND THE ISSUING BANK
Section 8.01. Authorization and Action . . . . . . . . . . . . . . . . . . . 70
Section 8.02. Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . 70
Section 8.03. The Agent and Its Affiliates . . . . . . . . . . . . . . . . . 71
Section 8.04. Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . 71
Section 8.05. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.06. Successor Agent and Issuing Bank . . . . . . . . . . . . . . . 72
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . 73
Section 9.02. Notices, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 9.03. No Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . . 74
Section 9.04. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . 74
Section 9.05. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 9.06. Bank Assignments and Participations. . . . . . . . . . . . . . 75
Section 9.07. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 77
Section 9.08. Execution in Counterparts. . . . . . . . . . . . . . . . . . . 77
Section 9.09. Survival of Representations, Etc . . . . . . . . . . . . . . . 78
Section 9.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 9.11. Business Loans . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 9.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 78
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Compliance Certificate
Exhibit C-1 - Form of Guaranty
Exhibit C-2 - Form of Limited Guaranty
Exhibit D-1 - Form of Mortgage
Exhibit D-2 - Form of Mortgage Amendment
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Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Pledge Agreement
Exhibit H-1 - Form of Revolving Note
Exhibit H-2 - Form of Term Note
Exhibit I - Form of Security Agreement
Exhibit J - Form of Transfer Letters
Exhibit K-1 - Form of Borrower's Oklahoma Counsel Opinion
Exhibit K-2 - Form of Agent's Counsel Opinion
SCHEDULES:
Schedule 1 - Borrower, Agent, and Bank Information
Schedule 4.01 - Subsidiaries
Schedule 4.07 - Existing Litigation
Schedule 5.08 - Bank Accounts
Schedule 6.01 - Permitted Existing Liens
Schedule 6.02 - Permitted Existing Debt
Schedule 6.06 - Permitted Investments
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of December 12, 1997 is
among RAMCO Operating Company, a Delaware corporation, the Banks (as defined
below), and Union Bank of California, N.A., as Agent for the Banks.
The Borrower, the Banks, and the Agent agree as follows:
INTRODUCTION
A. RAMCO-NYL 1987 Limited Partnership, a Texas limited partnership (the
"Partnership"), the Banks and the Agent are parties to the Credit Agreement
dated as of November 27, 1996, as amended by Amendment No.1 dated as of May 30,
1997, and Amendment No. 2 dated as of August 5, 1997 (the "Existing Credit
Agreement").
B. The managing general partner and the limited partner of the
Partnership is RAMCO Operating Company, a Delaware corporation (the "Borrower"),
and the special general partner of the Partnership is Oklahoma Double R
Corporation, a Delaware corporation ("Double R"). Prior to its merger with and
into the Borrower, the limited partner of the Partnership was RB Operating
Company, an Oklahoma corporation and wholly-owned subsidiary of the Borrower
("Old RBOC"). Each of the Borrower, Double R and Old RBOC guaranteed the
Partnership's obligations under the Existing Credit Agreement and secured their
obligations under such guaranties by granting the Agent for its benefit and the
benefit of the Banks a security interest in substantially all of their assets.
C. Prior to the execution and delivery of this Agreement, the Partnership
has been dissolved, and all of the assets of the Partnership have been
distributed to the Borrower and Double R, its remaining partners. The assets
which would have otherwise been distributed to Double R were distributed to the
Borrower in partial satisfaction of certain debts owing by Double R to the
Borrower. The transactions described in this paragraph C are hereinafter
collectively referred to as the "Reorganization".
D. The Banks have consented to the Reorganization on the condition that
the Borrower assumes all of the obligations of the Partnership under the
Existing Credit Agreement and the other Credit Documents (as defined in the
Existing Credit Agreement) and that the parties hereto enter into an amendment
to effect certain amendments to the Existing Credit Agreement.
E. To evidence the credit facility requested hereunder, the Borrower, the
Agent and the Banks have agreed that this Agreement is an amendment and
restatement of the
Existing Credit Agreement, not a new or substitute credit agreement or
novation of the Existing Credit Agreement, and each reference to an "Advance"
or a "Letter of Credit" shall include each Advance made and each Letter of
Credit issued heretofore under the Existing Credit Agreement as well as each
Advance made and each Letter of Credit issued hereafter under this Credit
Agreement.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"ACCEPTABLE SECURITY INTEREST" in any Property means a Lien which
(a) exists in favor of the Agent for the benefit of the Agent and the Banks;
(b) is superior to all Liens or rights of any other Person in the Property
encumbered thereby, except to the extent that the rights of another Person are
permitted hereunder; (c) secures the Obligations; and (d) is perfected and
enforceable.
"ADJUSTED REFERENCE RATE" means, for any day, the fluctuating rate per
annum of interest equal to the greater of (a) the Reference Rate in effect on
such day and (b) the Federal Funds Rate in effect on such day plus 1/2%.
"ADVANCE PAYMENT CONTRACT" means any contract whereby the Borrower or a
Guarantor either (a) receives or becomes entitled to receive (either directly or
indirectly through a third party for the Borrower's or such Guarantor's account
or benefit) any payment ("Advance Payment") to be applied toward the payment of
the purchase price of Hydrocarbons produced or to be produced from any Leases
owned by the Borrower or such Guarantor and which Advance Payment is paid or to
be paid in advance of actual delivery of such production to or for the account
of the purchaser regardless of such production or (b) grants to the purchaser an
option or right of refusal to take delivery of such production in lieu of
payment, and, in either of the foregoing instances, the Advance Payment is, or
is to be, applied as payment in full for such production when sold and delivered
or is, or is to become applied as payment for a portion only of the purchase
price thereof or for a percentage or a share of such production.
"ADVANCE" means any Revolving Advance or Term Advance.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control
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with, such Person or any Subsidiary of such Person. The term "control"
(including the terms "controlled by" or "under common control with") means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of Voting Securities, by contract, or otherwise.
"AGENT" means Union Bank of California, N.A., in its capacity as an agent
pursuant to Article VIII and any successor agent pursuant to Section 8.06.
"AGENT'S FEE LETTER" has the meaning specified in Section 2.08(b).
"AGREEMENT" means this Amended and Restated Credit Agreement, as the same
may be amended, supplemented, and otherwise modified from time to time.
"AMENDED AND RESTATED REVOLVING NOTE" means a promissory note of the
Borrower payable to the order of any Bank, in substantially the form of the
attached EXHIBIT H-1, evidencing indebtedness of the Borrower to such Bank
resulting from Revolving Advances owing to such Bank.
"AMENDED AND TERM NOTE" means a promissory note of the Borrower payable to
the order of any Bank in substantially the form of the attached EXHIBIT H-2,
evidencing indebtedness of the Borrower to such Bank resulting from any
Term Advance to such Bank.
"APPLICABLE LENDING OFFICE" means, with respect to each Bank, such Bank's
Domestic Lending Office in the case of a Reference Rate Advance and such Bank's
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means:
(a) for each day that there is any principal amount outstanding under any
Term Advance, (i) for Revolving Advances, 0.50% per annum for Reference Rate
Advances and 2.50% per annum for Eurodollar Rate Advances and (ii) for Term
Advances (all of which shall be Reference Rate Advances), 3.50% per annum;
(b) for each day after the outstanding principal amount of all Term
Advances has been repaid in full, the following percentages based upon the ratio
of (i) the aggregate outstanding amount of Advances PLUS the Letter of Credit
Exposure on such day to (ii) the Borrowing Base as of such day:
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Ratio of Outstanding
Revolving Advances PLUS
Letter of Credit Exposure to Applicable Margin Applicable Margin
Borrowing Base Reference Rate Advances Eurodollar Rate Advances
-------------- ----------------------- ------------------------
Less than .50 0.00% 1.50%
Less than or equal
to .50 and .75 0.25% 2.125%
Greater than .75 0.50% 2.50%
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Bank and an Eligible Assignee, and accepted by the Agent, in substantially
the form of the attached EXHIBIT A.
"BANKS" means the lenders listed on the signature pages of this Agreement
and each Eligible Assignee that shall become a party to this Agreement pursuant
to Section 9.06.
"BORROWER" means RAMCO Operating Company, a Delaware corporation.
"BORROWING BASE" means at any particular time, the Dollar amount determined
in accordance with Section 2.02 on account of Proven Reserves attributable to
Oil and Gas Properties of the Borrower and the Guarantors described in the most
recent Independent Engineering Report or Internal Engineering Report, as
applicable, delivered to the Agent and the Banks pursuant to Section 2.02.
"BUSINESS DAY" means a day of the year on which banks are not required or
authorized to close in Dallas, Texas, Xxx Xxxx, Xxx Xxxx, xxx Xxx Xxxxxxx,
Xxxxxxxxxx and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on by banks in the London interbank
market.
"CAPITAL EXPENDITURES" means, for the Borrower and the Guarantors for any
period, the aggregate of all expenditures and costs paid by the Borrower and the
Guarantors during such period that are for items which are capital in nature,
including, without limitation, intangible drilling and development expenditures.
"CAPITAL LEASES" means, as applied to any Person, any lease of any Property
by such Person as lessee which would, in accordance with GAAP, be required to be
classified and accounted for as a capital lease on the balance sheet of such
Person.
"CASH COLLATERAL ACCOUNT" means a special interest bearing cash collateral
account pledged by the Borrower to the Agent for the ratable benefit of the
Banks containing cash deposited pursuant to Sections 2.05(b), 7.02(b), or
7.03(b) to be maintained at the Agent's
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office in accordance with Section 2.07(g) and bear interest or be invested in
the Agent's reasonable discretion.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.
"CLASS" has the meaning set forth in Section 1.04.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"COLLATERAL" means (a) all Collateral (as defined in each of the Mortgages,
the Security Agreements, and the Pledge Agreements) and (b) all amounts
contained in the Borrower's and the Guarantors' bank accounts.
"COMPLIANCE CERTIFICATE" means a compliance certificate in the form of the
attached EXHIBIT B signed by a Responsible Officer of the Borrower.
"CONTROLLED GROUP" means all members of a controlled group of corporations
and all businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Code.
"CONVERT," "CONVERSION," and "CONVERTED" each refers to a conversion of
Revolving Advances of one Type into Revolving Advances of another Type pursuant
to Section 2.03(b).
"CREDIT DOCUMENTS" means this Agreement, the Notes, the Letter of Credit
Documents, the Guaranties, the Security Documents, any Interest Hedge Agreements
with a Bank, any Hydrocarbon Hedge Agreements with a Bank, the Agent's Fee
Letter, and each other agreement, instrument, or document executed at any time
in connection with the foregoing documents.
"DEBT," for any Person, means without duplication:
(a) indebtedness of such Person for borrowed money, including, without
limitation, obligations under letters of credit and agreements relating to the
issuance of letters of credit or acceptance financing;
(b) obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
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(c) obligations of such Person to pay the deferred purchase price of
property or services;
(d) obligations of such Person as lessee under Capital Leases;
(e) obligations of such person under any Interest Hedge Agreement or
Hydrocarbon Hedge Agreement;
(f) obligations of such Person under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) of such Person to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in
clauses (a) through (e) above;
(g) any obligations in connection with any volumetric or production
prepayments;
(h) indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) secured by any Lien on or in respect of any Property of
such Person; and
(i) all liabilities of such Person in respect of unfunded vested benefits
under any Plan.
"DEFAULT" means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"DISSOLUTION AGREEMENT" means the Dissolution Agreement dated as of
December 1, 1997 between the Borrower and Double R.
"DOLLAR EQUIVALENT" means for all purposes of this Agreement, the
equivalent in another currency of an amount in Dollars to be determined by
reference to the rate of exchange quoted by Union Bank of California, N.A., at
10:00 a.m. (Los Angeles, California time) on the date of determination, for the
spot purchase in the foreign exchange market of such amount of Dollars with such
other currency.
"DOLLARS" and "$" means lawful money of the United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to any Bank, the office of
such Bank specified as its "Domestic Lending Office" opposite its name on
SCHEDULE 1 or such other office of such Bank as such Bank may from time to time
specify to the Borrower and the Agent.
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"EBITDA" means, for the Borrower and the Guarantors for any period, (a)
Net Income for the Borrower and the Guarantors for such period PLUS (b) to
the extent deducted in determining Net Income, Interest Expense, taxes, and
depreciation and amortization for such period.
"EFFECTIVE DATE" means December 12, 1997.
"ELIGIBLE ASSIGNEE" means any commercial bank or other financial
institution approved by the Agent in its sole discretion.
"ENGINEERING REPORT" means either an Independent Engineering Report or an
Internal Engineering Report.
"ENVIRONMENT" or "ENVIRONMENTAL" shall have the meanings set forth in 43
U.S.C. Section 9601(8) (1988).
"ENVIRONMENTAL CLAIM" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating
to health or safety of employees) which seeks to impose liability under any
Environmental Law.
"ENVIRONMENTAL LAW" means all Legal Requirements arising from, relating
to, or in connection with the Environment, health, or safety, including
without limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the
air, surface water, groundwater, land surface or subsurface strata, or other
natural resources; (b) solid, gaseous or liquid waste generation, treatment,
processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants, contaminants, hazardous, or toxic
substances, materials or wastes; (d) the safety or health of employees; or
(e) the manufacture, processing, handling, transportation, distribution in
commerce, use, storage or disposal of hazardous, or toxic substances,
materials or wastes.
"ENVIRONMENTAL PERMIT" means any permit, license, order, approval or
other authorization under Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect
from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Bank, the office
of such Bank specified as its "Eurodollar Lending Office" opposite its name
on SCHEDULE 1 (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Bank as such Bank may from time to time
specify to the Borrower and the Agent.
"EURODOLLAR RATE" means, for the Interest Period for each Eurodollar
Advance comprising part of the same Revolving Borrowing, an interest rate per
annum (rounded upward to the nearest whole multiple of 1/16 of 1% per annum)
equal to the rate per annum at which deposits in Dollars are offered by the
Los Angeles office of the Agent to prime banks in the London interbank market
at 11:00 a.m. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to the Agent's Eurodollar
Rate Advance comprising part of such Revolving Borrowing and for a period
equal to such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest as
provided in Section 2.09(b).
"EURODOLLAR RATE RESERVE PERCENTAGE" of any Bank for the Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental, or other marginal reserve requirement) for such
Bank with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"EVENT OF DEFAULT" has the meaning specified in Section 7.01.
"EXPIRATION DATE" means, with respect to any Letter of Credit, the date
on which such Letter of Credit will expire or terminate in accordance with
its terms.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next 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 for any
such
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day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any of its successors.
"FINANCIAL STATEMENTS" means the Partnership's audited balance sheet and
statements of income, retained earnings, and cash flow dated December 31,
1996 and the Partnership, the Borrower, Old RBOC and Gulf States' unaudited
combined balance sheet and statements of income, retained earnings, and cash
flow dated September 30, 1997 referred to in Section 4.05, copies of which
have been delivered to the Agent and the Banks.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements
of Section 1.03.
"GOVERNMENTAL AUTHORITY" means any foreign governmental authority, the
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Bank, the Borrower, or any Guarantor or any of their respective
Properties.
"GUARANTORS" means Gulf States and any other Person who executes and
delivers a Guaranty.
"GUARANTIES" means the Guaranties each in substantially the form of the
attached EXHIBIT C-1 and executed by a Guarantor.
"GULF STATES" means RLP Gulf States, L.L.C., an Oklahoma limited
liability company.
"HAZARDOUS SUBSTANCE" means the substances identified as such pursuant to
CERCLA and those regulated under any other Environmental Law, including
without limitation pollutants, contaminants, petroleum, petroleum products,
radionuclides, and radioactive materials.
"HAZARDOUS WASTE" means the substances regulated as such pursuant to any
Environmental Law.
"HYDROCARBON HEDGE AGREEMENT" means a swap, collar, floor, cap, option,
forward sale or purchase or other contract (including sales contracts with
known prices) which is intended to reduce or eliminate the risk of
fluctuations in the price of the Hydrocarbons.
-9-
"HYDROCARBONS" means oil, gas, coal seam gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, and all other liquid and
gaseous hydrocarbons produced or to be produced in conjunction therewith from
a well bore and all products, by-products, and other substances derived
therefrom or the processing thereof, and all other minerals and substances
produced in conjunction with such substances, including, but not limited to,
sulfur, geothermal steam, water, carbon dioxide, helium, and any and all
minerals, ores, or substances of value and the products and proceeds
therefrom.
"INDEPENDENT ENGINEER" means Xxxxxxx X. Xxxx and Associates or any other
engineering firm that the Borrower may engage with the Agent's consent, such
consent not to be unreasonably withheld.
"INDEPENDENT ENGINEERING REPORT" means a report, in form and substance
satisfactory to the Agent and each of the Banks, prepared by an Independent
Engineer, addressed to the Agent and the Banks with respect to the Oil and
Gas Properties owned by the Borrower and the Guarantors (or to be acquired by
the Borrower and the Guarantors, as applicable) which are or are to be
included in the Borrowing Base, which report shall (a) specify the location,
quantity, and type of the estimated Proven Reserves attributable to such Oil
and Gas Properties, (b) contain a projection of the rate of production of
such Oil and Gas Properties, (c) contain an estimate of the net operating
revenues to be derived from the production and sale of Hydrocarbons from such
Proven Reserves based on product price and cost escalation assumptions
specified by the Agent, and (d) contain such other information as is
customarily obtained from and provided in such reports or is otherwise
reasonably requested by the Agent or any Bank.
"INTEREST EXPENSE" means, for the Borrower and the Guarantors for any
period, total interest, letter of credit fees, and other fees incurred in
connection with any Debt for such period, whether paid or accrued, including,
without limitation, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and
net costs under Interest Hedge Agreements and Hydrocarbon Hedge Agreements,
all as determined in conformity with GAAP.
"INTEREST HEDGE AGREEMENT" means an interest hedge, rate swap, or cap, or
similar arrangement between the Borrower and one or more financial
institutions providing for the exchange of nominal interest obligations
between the Borrower and such financial institution or the cap of the
interest rate on any Debt of the Borrower.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising part
of the same Revolving Borrowing, the period commencing on the date of such
Advance or the date of the Conversion of any Reference Rate Advance into such
an Advance and ending on the last day of the period selected by the Borrower
pursuant to the provisions below or by
-10-
Section 2.03 and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day
of the period selected by the Borrower pursuant to the provisions below or by
Section 2.03. The duration of each such Interest Period shall be one, two,
three, or six months, in each case as the Borrower may, upon notice received
by the Agent not later than 10:00 a.m. (Los Angeles California time) on the
third Business Day prior to the first day of such Interest Period select;
PROVIDED, HOWEVER, that:
(a) the Borrower may not select any Interest Period for any Revolving
Advance which ends after the Revolving Maturity Date;
(b) Interest Periods commencing on the same date for Advances comprising
part of the same Revolving Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, PROVIDED that
if such extension would cause the last day of such Interest Period to occur
in the next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(d) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month in which it would have ended if
there were a numerically corresponding day in such calendar month.
"INTERNAL ENGINEERING REPORT" means a report, in form and substance
satisfactory to the Agent and each Bank, prepared by the Borrower and
certified by a Responsible Officer of the Borrower, addressed to the Agent
and the Banks with respect to the Oil and Gas Properties owned by the
Borrower and the Guarantors (or to be acquired by the Borrower and the
Guarantors, as applicable) which are or are to be included in the Borrowing
Base, which report shall (a) specify the location, quantity, and type of the
estimated Proven Reserves attributable to such Oil and Gas Properties, (b)
contain a projection of the rate of production of such Oil and Gas
Properties, (c) contain an estimate of the net operating revenues to be
derived from the production and sale of Hydrocarbons from such Proven
Reserves based on product price and cost escalation assumptions specified by
the Bank, and (d) contain such other information as is customarily obtained
from and provided in such reports or is otherwise reasonably requested by the
Agent or any Bank.
"INTERIM FINANCIAL STATEMENTS" means the Partnership's unaudited balance
sheet dated as of September 30, 1997 and the Partnership, the Borrower, Old
RBOC and Gulf States'
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combined unaudited balance sheet dated as of September 30, 1997 and the
related statements of income, retained earnings, and cash flow of the
Partnership, the Borrower, Old RBOC and Gulf States for the nine months then
ended, referred to in Section 4.05.
"ISSUING BANK" means Union Bank of California, N.A. and any successor
issuing bank pursuant to Section 8.06.
"LEASES" means all oil and gas leases, oil, gas and mineral leases, oil,
gas and casinghead leases or any other instruments, agreements, or
conveyances under and pursuant to which the owner thereof has or obtains the
right to enter upon lands and explore for, drill, and develop such lands for
the production of Hydrocarbons.
"LEGAL REQUIREMENT" means any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or official interpretation of
any of the foregoing) of, and the terms of any license or permit issued by,
any Governmental Authority, including, but not limited to, Regulations D, G,
T, U, and X.
"LETTER OF CREDIT" means, individually, any letter of credit issued by
the Issuing Bank which is subject to this Agreement and "LETTERS OF CREDIT"
means all such letters of credit collectively.
"LETTER OF CREDIT APPLICATION" means the Issuing Bank's standard form
letter of credit application for either a commercial or standby letter of
credit, as the case may be, which has been executed by the Borrower and
accepted by the Issuing Bank in connection with the issuance of a Letter of
Credit.
"LETTER OF CREDIT DOCUMENTS" means all Letters of Credit, Letter of
Credit Applications, and agreements, documents, and instruments entered into
in connection with or relating thereto.
"LETTER OF CREDIT EXPOSURE" means, at any time, the sum of (a) the
aggregate undrawn maximum face amount of each Letter of Credit at such time,
PLUS (b) the aggregate unpaid amount of all Reimbursement Obligations at such
time.
"LETTER OF CREDIT OBLIGATIONS" means any obligations of the Borrower
under this Agreement in connection with the Letters of Credit, including the
Reimbursement Obligations.
"LIEN" means any mortgage, lien, pledge, charge, deed of trust, security
interest, or encumbrance or other type of preferential arrangement to secure
or provide for the payment of any obligation of any Person, whether arising
by contract, operation of law, or otherwise
-12-
(including, without limitation, the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease, or other title retention
agreement).
"LIMITED GUARANTIES" means the Limited Guaranties executed by each of the
Series B Preferred Stockholders each in substantially the form of the
attached EXHIBIT C-2.
"LIQUID INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States maturing within
180 days from the date of any acquisition thereof;
(b) (i) negotiable or nonnegotiable certificates of deposit, time
deposits, or other similar banking arrangements maturing within 180 days from
the date of acquisition thereof ("bank debt securities"), issued by (A) the
Agent or (B) Liberty National Bank & Trust Company, any other bank or trust
company so long as such certificate of deposit is pledged to secure the
Borrower or any Guarantors ordinary course of business bonding requirements,
or any other bank or trust company which has primary capital of not less than
$500,000,000.00, if at the time of deposit or purchase, such bank debt
securities are rated not less than "AA" (or the then equivalent) by the
rating service of Standard & Poor's Corporation or of Xxxxx'x Investors
Service, Inc., and (ii) commercial paper issued by (A) the Agent or (B) any
other Person if at the time of purchase such commercial paper is rated not
less than "A-1" (or the then equivalent) by the rating service of Standard &
Poor's Corporation or not less than "P-1" (or the then equivalent) by the
rating service of Xxxxx'x Investors Service, Inc., or upon the discontinuance
of both of such services, such other nationally recognized rating service or
services, as the case may be, as shall be selected by the Borrower with the
consent of the Agent;
(c) repurchase agreements relating to investments described in clauses
(a) and (b) above with a market value at least equal to the consideration
paid in connection therewith, with any Person who regularly engages in the
business of entering into repurchase agreements and has a combined capital
surplus and undivided profit of not less than $500,000,000.00, if at the time
of entering into such agreement the debt securities of such Person are rated
not less than "AA" (or the then equivalent) by the rating service of Standard
& Poor's Corporation or of Xxxxx'x Investors Service, Inc.; and
(d) such other instruments (within the meaning of Article 9 of the Texas
Business and Commerce Code) as the Borrower may request and the Agent may
approve in writing, which approval will not be unreasonably withheld.
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"MAJORITY BANKS" means, at any time, Banks holding at least 66-2/3% of
the then aggregate unpaid principal amount of the Notes held by the Banks and
the Letter of Credit Exposure of the Banks at such time; provided that if no
such principal amount or Letter of Credit Exposure is then outstanding,
"Majority Banks" shall mean Banks having at least 66-2/3% of the aggregate
amount of the Revolving Commitments at such time.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change in the
business, assets (including the Oil and Gas Properties of the Borrower and
the Guarantors), financial condition, or results of operations of the
Borrower or any Guarantor or (b) a material adverse effect on the Borrower's
or any Guarantor's ability to perform its obligations under this Agreement,
any Note, any Guaranty, or any other Credit Document.
"MAXIMUM RATE" means the maximum nonusurious interest rate under
applicable law.
"MORTGAGE AMENDMENTS" means, collectively, each of the Mortgage
Amendments executed by any one or more of the Borrower or any of the
Guarantors in substantially the form of Exhibit D-2.
"MORTGAGES" means, collectively, each of (a) the Mortgages, Deeds of
Trust, Security Agreements, Assignments of Production and Financing
Statements executed by any one or more of the Partnership, the Borrower, or
any of the Guarantors in favor of the Agent for the ratable benefit of the
Agent and the Banks, as the same may be amended, modified or supplemented
from time-to-time, together with any assumptions or assignments of the
obligations thereunder by the Partnership, the Borrower or any Guarantor, in
substantially the form of the attached EXHIBIT D-1.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means, with respect to any sale, transfer, or other
disposition of any of the Borrower's or any Guarantor's Property (including
the sale or transfer of stock or other equity interest by the Borrower or
such Guarantor) all cash and Liquid Investments received by the Borrower or
any Guarantor from such sale, transfer or other disposition after (a) payment
of, or provision for, all brokerage commissions and other reasonable
out-of-pocket fees and expenses actually incurred; (b) payment of any
outstanding obligations relating to such Property paid in connection with,
and necessary for, any such sale, transfer, or other disposition; and (c) the
amount of reserves recorded in accordance with GAAP for indemnity or similar
obligations of the Borrower and the Guarantors directly related to such sale,
transfer or other disposition.
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"NET INCOME" means, for any Person and for any period of its
determination, the net income of such Person determined in accordance with
GAAP consistently applied, but excluding any gains and losses on sales and
retirements of assets and any noncash write-down of assets.
"NOTE" means an Amended and Restated Revolving Note or an Amended and
Restated Term Note.
"NOTICE OF BORROWING" means a notice of borrowing in the form of the
attached EXHIBIT E signed by a Responsible Officer of the Borrower.
"NOTICE OF CONVERSION OR CONTINUATION" means a notice of conversion or
continuation in the form of the attached EXHIBIT F signed by a Responsible
Officer of the Borrower.
"OBLIGATIONS" means all principal, interest, fees, reimbursements,
indemnifications, and other amounts payable by the Borrower and the
Guarantors to the Agent or the Banks under the Credit Documents.
"OIL AND GAS PROPERTIES" means fee mineral interests, term mineral
interests, Leases, subleases, farm-outs, royalties, overriding royalties, net
profit interests, carried interests, production payments and similar mineral
interests, and all unsevered and unextracted Hydrocarbons in, under, or
attributable to such oil and gas Properties and interests.
"PARTNERS" means RAMCO Partners, an Oklahoma general partnership.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED LIENS" means the Liens permitted to exist pursuant to Section
6.01.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability corporation or
company, limited liability partnership, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision
or agency thereof or any trustee, receiver, custodian or similar official.
"PLAN" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled
Group and covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code.
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"PLEDGE AGREEMENTS" means the Amended and Restated Pledge Agreements each
in the form of the attached EXHIBIT G, executed by the Borrower, as the same
may be amended, modified or supplemented from time to time.
"PROPERTY" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"PRO RATA SHARE" means, with respect to any Bank, either (a) the ratio
(expressed as a percentage) of such Bank's Revolving Commitments at such time
to the aggregate Revolving Commitments at such time or (b) if the Revolving
Commitments have been terminated, the ratio (expressed as a percentage) of
such Bank's aggregate outstanding Advances and Letter of Credit Exposure at
such time to the aggregate outstanding Advances and Letter of Credit Exposure
of all the Banks at such time.
"PROVED DEVELOPED PRODUCING RESERVES" means, with respect to any Oil and
Gas Properties, those quantities of Hydrocarbons, estimated with reasonable
certainty, as demonstrated by geological and engineering data, to be
economically recoverable from such Oil and Gas Properties by producing
methods under existing economic conditions using existing equipment and
operating methods from existing completion intervals open for production in
existing xxxxx which shall have had at least 30 days of continuous production.
"PROVEN RESERVES" means, at any particular time, the estimated quantities
of Hydrocarbons which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
attributable to Oil and Gas Properties included or to be included in the
Borrowing Base under then existing economic and operating conditions (i.e.,
prices and costs as of the date the estimate is made). The prices used may
include consideration of changes in existing prices provided only by
contractual arrangements, but not on escalations based upon future conditions.
"RBOC" means RB Operating Company, a Delaware corporation and a
wholly-owned subsidiary of the Borrower, formerly known as RLP Operating
Company.
"REFERENCE RATE" means a fluctuating interest rate per annum as shall be
in effect from time to time equal to the rate of interest publicly announced
by Union Bank of California, N.A., as its reference rate, whether or not the
Borrower has notice thereof.
"REFERENCE RATE ADVANCE" means an Advance which bears interest as
provided in Section 2.09(a).
"REGISTER" has the meaning set forth in paragraph (c) of Section 9.06.
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"REGULATIONS D, G, T, U, AND X" mean Regulations D, G, T, U, and X of the
Federal Reserve Board, as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"REIMBURSEMENT OBLIGATIONS" means all of the obligations of the Borrower
to reimburse the Issuing Bank for amounts paid by the Issuing Bank under
Letters of Credit as established by the Letter of Credit Applications and
Section 2.07(d).
"RELEASE" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"RENTAL EXPENSE" means, for any period, all amounts payable by the
Borrower and the Guarantors during such period under any lease, sublease, or
other instrument (other than a Capital Lease) pursuant to which the Borrower
or any of the Guarantors is entitled to use any Property of another Person,
all as determined in accordance with GAAP.
"REORGANIZATION" has the meaning set forth in the recitals to this
Agreement.
"REORGANIZATION DOCUMENTS" means the Dissolution Agreement and all of the
other documents which will be executed on or before the Effective Date with
respect to the Reorganization.
"RESCISSION" means the rescission of the transactions described in and
relating to the Section 29 Purchase Agreement.
"RESCISSION AGREEMENT" means the Rescission Agreement dated effective as
of July 1, 1997 between the Partnership and Partners.
"RESCISSION DOCUMENTS" means the Rescission Agreement and all of the
other documents which will be executed on or before the Effective Date with
respect to the Rescission.
"RESPONSE" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"RESPONSIBLE OFFICER" means, with respect to any Person, such Person's
Chief Executive Officer, President, Chief Financial Officer, or Vice
President.
"RESTRICTED PAYMENT" means, with respect to any Person, (a) any dividends
or other distributions (in cash, property, or otherwise) on, or any payment
for the purchase, redemption, or other acquisition of, any shares of any
capital stock or other equity interests
-17-
(including partnership interests) of such Person, other than dividends
payable in such Person's stock or other equity interests or (b) principal or
interest payments (in cash, property or otherwise) on or redemptions of
subordinated debt of such Person.
"REVOLVING ADVANCE" means any advance by a Bank to the Borrower as part
of a Revolving Borrowing and refers to a Reference Rate Advance or a
Eurodollar Rate Advance.
"REVOLVING BORROWING" means, subject to Sections 2.03(c)(iii) and
2.05(e), a borrowing consisting of simultaneous Revolving Advances of the
same Type made by each Bank pursuant to Section 2.03(a), continued by each
Bank pursuant to Section 2.03(b), or Converted by each Bank to Revolving
Advances of a different Type pursuant to Section 2.03(b).
"REVOLVING COMMITMENT" means, for any Bank, the amount set opposite such
Bank's name on the signature pages hereof as its Revolving Commitment, or if
such Bank has entered into any Assignment and Acceptance, as set forth for
such Bank as its Revolving Commitment in the Register maintained by the Agent
pursuant to Section 9.06(c), as such amount may be reduced or terminated
pursuant to Section 2.04 or Article VII.
"REVOLVING MATURITY DATE" means the earlier of (a) December 31, 2002 or
(b) the earlier termination in whole of the Revolving Commitments pursuant to
Section 2.04 or Article VII.
"REVOLVING SHARE" means, at any time with respect to any Bank with a
Revolving Commitment, the ratio (expressed as a percentage) of such Bank's
Revolving Commitment at such time to the aggregate Revolving Commitments at
such time.
"SECTION 29 PURCHASE AGREEMENT" means the Purchase and Sale Agreement
dated June 30, 1997 by and between the Borrower, as seller, and Partners, as
buyer, as the same may be amended, modified and supplemented from time to
time as permitted herein and each other material agreement, instrument, or
document executed at any time in connection with the foregoing document.
"SECURITY AGREEMENTS" means the Amended and Restated Security Agreements,
each in substantially the form of the attached Exhibit I, one executed by
each of the Borrower and each of the Guarantors, as the same may be amended,
modified, or supplemented from time to time.
"SECURITY DOCUMENTS" means, collectively, (a) the Mortgages and the
Mortgage Amendments, (b) the Transfer Letters, (c) the Pledge Agreements, (d)
the Security Agreements and the bank account letters in the form of Exhibit A
to the Security
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Agreements, (e) each other agreement, instrument or document executed at any
time in connection with the Pledge Agreements, the Security Agreements, or
the Mortgages, and (e) each other agreement, instrument or document executed
at any time in connection with securing the Obligations.
"SOLVENT" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including contingent liabilities, of such Person,
(b) the present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations, and other commitments as they mature in the normal
course of business, (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature, and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated
future capital requirements and current and anticipated future business
conduct and the prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any time, such
liabilities shall be computed at the amount which, in light of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SUBSIDIARY" of a Person means any corporation or other entity of which
more than 50% of the outstanding capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
similar governing body of such corporation or other entity (irrespective of
whether at such time capital stock or other ownership interests of any other
class or classes of such corporation or other entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly
or indirectly owned by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person.
"TERM ADVANCE" means all advances previously made by a Bank to the
Borrower pursuant to Section 2.01(b).
"TERM MATURITY DATE" means June 30, 1998.
"TERM SHARE" means, at any time with respect to any Bank with an
outstanding Term Advance, the ratio (expressed as a percentage) of such
Bank's outstanding Term Advances at such time to the aggregate outstanding
Term Advances at such time.
-19-
"TERMINATION EVENT" means (a) a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the PBGC under such
regulations), (b) the withdrawal of the Borrower or any of its Affiliates from a
Plan during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or
(e) any other event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.
"TRANSFER LETTERS" means, collectively, the letters in lieu of transfer
orders executed by the Borrower and any of the Guarantors executing a Mortgage
in the form of the attached EXHIBIT J, as each of the same may be amended,
modified or supplemented from time-to-time.
"TYPE" has the meaning set forth in Section 1.04.
"VOTING SECURITIES" means with respect to any corporation, capital stock of
the corporation having general voting power under ordinary circumstances to
elect directors of such corporation (irrespective of whether at the time stock
of any other class or classes shall have or might have special voting power or
rights by reason of the happening of any contingency).
Section 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03. ACCOUNTING TERMS; CHANGES IN GAAP.
(a) All accounting terms not specifically defined in this Agreement shall
be construed in accordance with GAAP applied on a consistent basis with those
applied in the preparation of the Financial Statements.
(b) Unless otherwise indicated, all financial statements of the Borrower,
all calculations for compliance with covenants in this Agreement and all
calculations of any amounts to be calculated under the definitions in
Section 1.01 shall be based upon the consolidated accounts of the Borrower and
the Guarantors in accordance with GAAP (or in compliance with the regulations
promulgated by the United States Securities and Exchange Commission regarding
financial reporting) and consistent with the principles applied in preparing the
Financial Statements.
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Section 1.04. TYPES OF ADVANCES. Advances are distinguished by "Type."
The "Type" of an Advance refers to the determination whether such Advance is a
Eurodollar Rate Advance or Reference Rate Advance. Advances are also
distinguished by "Class." The "Class" of an Advance refers to the determination
whether such Advance is a Revolving Advance or a Term Advance, as applicable.
Section 1.05. MISCELLANEOUS. Article, Section, Schedule, and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
ARTICLE II
CREDIT FACILITIES
Section 2.01. COMMITMENT FOR ADVANCES.
(a) REVOLVING ADVANCES. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make Revolving Advances to the
Borrower from time to time on any Business Day during the period from the
Effective Date until the Revolving Maturity Date in an aggregate outstanding
amount up to but not to exceed an amount equal to the lesser of (i) such Bank's
Revolving Commitment MINUS such Bank's Revolving Share of the Letter of Credit
Exposure and (ii) such Bank's Revolving Share of the Borrowing Base MINUS such
Bank's Revolving Share of the outstanding principal amount of the Term Advances
MINUS such Bank's Revolving Share of the Letter of Credit Exposure. Each
Revolving Borrowing shall, in the case of Revolving Borrowings consisting of
Reference Rate Advances, be in an aggregate amount not less than $1,000,000.00
and in integral multiples of $500,000.00 in excess thereof, and in the case of
Revolving Borrowings consisting of Eurodollar Rate Advances, be in an aggregate
amount not less than $2,000,000.00 or in integral multiples of $1,000,000.00 in
excess thereof, and in each case shall consist of Revolving Advances of the same
Type made on the same day by the Banks ratably according to their respective
Revolving Commitments. Within the limits of each Bank's Revolving Commitment,
and subject to the terms of this Agreement, the Borrower may from time to time
borrow, prepay, and reborrow Revolving Advances.
(b) TERM ADVANCES. On the Effective Date, each Bank has Term Advances in
the aggregate amount set forth opposite such Bank's name on the signature pages
hereof as its Term Advances. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to continue its outstanding
Term Advances to the Borrower. The Borrower may not reborrow any amount of the
Term Advances that have been repaid.
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(c) NOTES. The indebtedness of the Borrower to each Bank resulting from
the Revolving Advances owing to such Bank shall be evidenced by an Amended and
Restated Revolving Note of the Borrower payable to the order of such Bank. The
indebtedness of the Borrower to each Bank resulting from the Term Advances owing
to such Bank shall be evidenced by an Amended and Restated Term Note of the
Borrower payable to the order of such Bank.
Section 2.02. BORROWING BASE.
(a) BORROWING BASE. The Borrowing Base as of the Effective Date has been
set by the Agent and the Banks and acknowledged by the Borrower as
$62,000,000.00.
(b) CALCULATION OF BORROWING BASE.
(i) The Borrower shall deliver to the Agent and each of the Banks on
or before each September 30, beginning September 30, 1998, an Independent
Engineering Report and such other information as may be reasonably
requested by any Bank with respect to the Oil and Gas Properties included
or to be included in the Borrowing Base. Within 30 days after the Agent
and the Banks' receipt of such Independent Engineering Report and other
information, the Agent shall deliver to each Bank the Agent's
recommendation for the redetermined Borrowing Base. Within 15 days after
the Banks' receipt of the Agent's recommendation, the Agent and the Banks
shall redetermine the Borrowing Base in accordance with Section 2.02(d) and
the Agent shall promptly notify the Borrower in writing of the amount of
the Borrowing Base as so redetermined.
(ii) The Borrower shall deliver to the Agent and each Bank on or
before each March 31, beginning March 31, 1998, an Internal Engineering
Report and such other information as may be reasonably requested by the
Agent or any Bank with respect to the Oil and Gas Properties included or to
be included in the Borrowing Base. Within 30 days after the Agent and the
Banks' receipt of such Internal Engineering Report and other information,
the Agent shall deliver to each Bank the Agent's recommendation for the
redetermined Borrowing Base. Within 15 days after the Banks' receipt of
the Agent's recommendation, the Agent and the Banks shall redetermine the
Borrowing Base in accordance with Section 2.02(d) and the Agent shall
promptly notify the Borrower in writing of the amount of the Borrowing Base
as so redetermined.
(iii) In the event that the Borrower does not furnish to the Agent and
the Banks the Independent Engineering Report, Internal Engineering Report
or other information specified in clauses (i) and (ii) above by the date
specified therein, the
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Agent and the Banks may nonetheless redetermine the Borrowing Base and
redesignate the Borrowing Base from time-to-time thereafter in their sole
discretion until the Agent and the Banks receive the relevant Independent
Engineering Report, Internal Engineering Report, or other information, as
applicable, whereupon the Agent and the Banks shall redetermine the
Borrowing Base as otherwise specified in this Section 2.02.
(iv) Each delivery of an Engineering Report by the Borrower to the
Agent and the Banks shall constitute a representation and warranty by the
Borrower to the Agent and the Banks that (A) the Borrower and the
Guarantors, as applicable owns the Oil and Gas Properties specified therein
free and clear of any Liens (except Permitted Liens), and (B) on and as of
the date of such Engineering Report each Oil and Gas Property described as
"proved developed" therein was developed for oil and gas, and the xxxxx
pertaining to such Oil and Gas Properties that are described therein as
producing xxxxx ("XXXXX"), were each producing oil and gas in paying
quantities, except for Xxxxx that were unitized as water or gas injection
xxxxx or as water disposal xxxxx.
(c) INTERIM REDETERMINATION. In addition to the Borrowing Base
redeterminations provided for in Section 2.02(b), the Agent and the Banks may,
either in their sole discretion or at the request of the Borrower and based on
such information as the Agent and the Banks deem relevant (but in accordance
with Section 2.02(d)), make one additional redetermination of the Borrowing Base
during any 12-month period. The party requesting the redetermination shall give
the other party at least 10 days' prior written notice that a redetermination of
the Borrowing Base pursuant to this paragraph (c) is to be performed. In
connection with any redetermination of the Borrowing Base under this Section
2.02(c), the Borrower shall provide the Agent and the Banks with such
information regarding the Borrower and the Guarantors' business (including,
without limitation, its Oil and Gas Properties, the Proven Reserves, and
production relating thereto) as the Agent or any Bank may request, including, in
the case of requests for an increase to the Borrowing Base of $1,000,000.00 or
more, an updated Independent Engineering Report. The Agent shall promptly
notify the Borrower in writing of each redetermination of the Borrowing Base
pursuant to this Section 2.02(c) and the amount of the Borrowing Base as so
redetermined.
(d) STANDARDS FOR REDETERMINATION. Each redetermination of the Borrowing
Base by the Agent and the Banks pursuant to this Section 2.02 shall be made (i)
in the sole discretion of the Agent and the Banks (but in accordance with the
other provisions of this Section 2.02(d)), (ii) in accordance with the Agent and
the Banks' customary internal standards and practices for valuing and
redetermining the value of Oil and Gas Properties in connection with reserve
based oil and gas loan transactions, (iii) in conjunction with the most recent
Independent Engineering Report or Internal Engineering Report, as applicable, or
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other information received by the Agent and the Banks relating to the Proven
Reserves of the Borrower and the Guarantors, and (iv) based upon the estimated
value of the Proven Reserves owned by the Borrower and the Guarantors as
determined by the Agent and the Banks. In valuing and redetermining the
Borrowing Base, the Agent and the Banks may also consider the business,
financial condition, and Debt obligations of the Borrower and the Guarantors and
such other factors as the Agent and the Banks customarily deem appropriate. In
that regard, the Borrower acknowledges that the determination of the Borrowing
Base contains an equity cushion (market value in excess of loan value), which is
essential for the adequate protection of the Agent and the Banks. No Proven
Reserves shall be included or considered for inclusion in the Borrowing Base
unless the Agent and the Banks shall have received, at the Borrower's expense,
evidence of title satisfactory in form and substance to the Agent that the Agent
has an Acceptable Security Interest in the Oil and Gas Properties relating
thereto pursuant to the Security Documents. At all times after the Bank has
given the Borrower notification of a redetermination of the Borrowing Base under
this Section 2.02, the Borrowing Base shall be equal to the redetermined amount
or such lesser amount designated by the Borrower and disclosed in writing to the
Agent and the Banks until the Borrowing Base is subsequently redetermined in
accordance with this Section 2.02.
(e) ASSET SALES. The Borrowing Base shall automatically reduce by the
loan value assigned to each Oil and Gas Property in the Borrowing Base (as
determined by the Banks in their sole discretion) and sold by the Borrower or
any of the Guarantors to a Person other than the Borrower or any of the
Guarantors.
Section 2.03. METHOD OF BORROWING.
(a) NOTICE. Each Revolving Borrowing shall be made pursuant to a Notice
of Borrowing (or by telephone notice promptly confirmed in writing by a Notice
of Borrowing), given not later than 10:00 a.m. (Los Angeles, California, time)
(i) on the third Business Day before the date of the proposed Revolving
Borrowing, in the case of a Eurodollar Rate Borrowing or (ii) on the Business
Day of the proposed Revolving Borrowing, in the case of a Reference Rate
Borrowing, by the Borrower to the Agent, which shall in turn give to each Bank
prompt notice of such proposed Revolving Borrowing by telecopier or telex. Each
Notice of a Borrowing shall be given by telecopier or telex, confirmed
immediately in writing, specifying the information required therein. In the
case of a proposed Revolving Borrowing comprised of Eurodollar Rate Advances,
the Agent shall promptly notify each Bank of the applicable interest rate under
Section 2.09(b). Each Bank shall, before 10:00 a.m. (Los Angeles, California,
time) on the date of such Revolving Borrowing, make available for the account of
its Applicable Lending Office to the Agent at its address referred to in
Section 9.02, or such other location as the Agent may specify by notice to the
Banks, in same day funds, in the case of a Revolving Borrowing, such Bank's
Revolving Share of such Revolving Borrowing. After the Agent's receipt of such
funds and upon fulfillment of the
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applicable conditions set forth in Article III, the Agent shall make such
funds available to the Borrower at its account with the Agent.
(b) CONVERSIONS AND CONTINUATIONS. The Borrower may elect to Convert or
continue any Revolving Borrowing under this Section 2.03 by delivering an
irrevocable Notice of Conversion or Continuation to the Agent at the Agent's
office no later than 10:00 a.m. (Los Angeles, California, time) (i) on the date
which is at least three Business Days in advance of the proposed Conversion or
continuation date in the case of a Conversion to or a continuation of a
Revolving Borrowing comprised of Eurodollar Rate Advances and (ii) on the
Business Day of the proposed conversion date in the case of a Conversion to a
Revolving Borrowing comprised of Reference Rate Advances. Each such Notice of
Conversion or Continuation shall be in writing or by telex or telecopier
confirmed immediately in writing specifying the information required therein.
Promptly after receipt of a Notice of Conversion or Continuation under this
Section, the Agent shall provide each Bank with a copy thereof and, in the case
of a Conversion to or a Continuation of a Revolving Borrowing comprised of
Eurodollar Rate Advances, notify each Bank of the applicable interest rate under
Section 2.09(b).
(c) CERTAIN LIMITATIONS. Notwithstanding anything in paragraphs (a) and
(b) above:
(i) Term Advances may only be Reference Rate Advances;
(ii) at no time shall there be more than three Interest Periods
applicable to outstanding Eurodollar Rate Advances and the Borrower may not
select Eurodollar Advances for any Revolving Borrowing at any time that a
Default has occurred and is continuing;
(iii) if any Bank shall, at least one Business Day before the date of
any requested Revolving Borrowing, Conversion, or continuation, notify the
Agent that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful, for such Bank or its
Eurodollar Lending Office to perform its obligations under this Agreement
to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate
Advances, the right of the Borrower to select Eurodollar Rate Advances from
such Bank shall be suspended until such Bank shall notify the Agent that
the circumstances causing such suspension no longer exist, and the Advance
made by such Bank in respect of such Revolving Borrowing, Conversion, or
continuation shall be a Reference Rate Advance;
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(iv) if the Agent is unable to determine the Eurodollar Rate for
Eurodollar Rate Advances comprising any requested Revolving Borrowing, the
right of the Borrower to select Eurodollar Rate Advances for such Revolving
Borrowing or for any subsequent Revolving Borrowing shall be suspended
until the Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Revolving Borrowing shall be a Reference Rate Advance;
(v) if the Majority Banks shall, at least one Business Day before the
date of any requested Revolving Borrowing, notify the Agent that the
Eurodollar Rate for Eurodollar Rate Advances comprising such Revolving
Borrowing will not adequately reflect the cost to such Banks of making or
funding their respective Eurodollar Rate Advances, as the case may be, for
such Revolving Borrowing, the right of the Borrower to select Eurodollar
Rate Advances for such Revolving Borrowing or for any subsequent Revolving
Borrowing shall be suspended until the Agent shall notify the Borrower and
the Banks that the circumstances causing such suspension no longer exist,
and each Advance comprising such Revolving Borrowing shall be a Reference
Rate Advance; and
(vi) if the Borrower shall fail to select the duration or continuation
of any Interest Period for any Eurodollar Rate Advances in accordance with
the provisions contained in the definition of "Interest Period" in
Section 1.01 and paragraph (b) above, the Agent shall forthwith so notify
the Borrower and the Banks and such Advances shall be made available to the
Borrower on the date of such Revolving Borrowing as Reference Rate Advances
or, if an existing Advance, Convert into Reference Rate Advances.
(d) NOTICES IRREVOCABLE. Each Notice of Borrowing and Notice of
Conversion or Continuation shall be irrevocable and binding on the Borrower. In
the case of any Revolving Borrowing which the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Bank against any loss, out-of-pocket cost, or expense incurred by
such Bank as a result of any failure by the Borrower to fulfill on or before the
date specified in such Notice of Borrowing for such Revolving Borrowing the
applicable conditions set forth in Article III including, without limitation,
any loss (including any loss of anticipated profits), cost, or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Bank to fund the Advance to be made by such Bank as part of such
Revolving Borrowing when such Advance, as a result of such failure, is not made
on such date.
(e) AGENT RELIANCE. Unless the Agent shall have received notice from a
Bank before the date of any Revolving Borrowing that such Bank shall not make
available to the
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Agent such Bank's Revolving Share of a Revolving Borrowing, the Agent may
assume that such Bank has made its Revolving Share, as the case may be, of
such Revolving Borrowing available to the Agent on the date of such Revolving
Borrowing in accordance with paragraph (a) of this Section 2.03 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Bank shall not
have so made its Revolving Share, as the case may be, of such Revolving
Borrowing available to the Agent, such Bank and the Borrower severally agree
to immediately repay to the Agent on demand such corresponding amount,
together with interest on such amount, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable on
such day to Advances comprising such Revolving Borrowing and (ii) in the case
of such Bank, the Federal Funds Rate for such day. If such Bank shall repay
to the Agent such corresponding amount and interest as provided above, such
corresponding amount so repaid shall constitute such Bank's Advance as part
of such Revolving Borrowing for purposes of this Agreement even though not
made on the same day as the other Advances comprising such Revolving
Borrowing.
(f) BANK OBLIGATIONS SEVERAL. The failure of any Bank to make the Advance
to be made by it as part of any Revolving Borrowing shall not relieve any other
Bank of its obligation, if any, to make its Advance on the date of such
Revolving Borrowing. No Bank shall be responsible for the failure of any other
Bank to make the Advance to be made by such other Bank on the date of any
Revolving Borrowing.
Section 2.04. REDUCTION OF THE REVOLVING COMMITMENT.
(a) The Borrower shall have the right, upon at least three Business Days'
irrevocable notice to the Agent, to terminate in whole or reduce ratably in part
the unused portion of the Revolving Commitments; PROVIDED that each partial
reduction shall be in the aggregate amount of $1,000,000.00 or an integral
multiple of $1,000,000.00.
(b) The Revolving Commitments shall automatically and permanently reduce
by 1/16 of the Revolving Commitments outstanding on June 30, 1998 on each
January 31, April 30, July 31, and October 31 beginning with July 31, 1998.
(c) Any reduction and termination of the Revolving Commitments pursuant to
this Section 2.04 shall be applied ratably to each Bank's Revolving Commitment
and shall be permanent, with no obligation of the Banks to reinstate such
Revolving Commitments and the commitment fees provided for in Section 2.08(a)
shall thereafter be computed on the basis of the Revolving Commitments, as so
reduced. Additionally, each reduction or termination of Revolving Commitments
shall reduce the amount of any future scheduled
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Revolving Commitments reductions in the inverse order of such scheduled
Revolving Commitments reductions.
Section 2.05. PREPAYMENT OF ADVANCES.
(a) OPTIONAL. The Borrower may prepay Advances, after giving by
10:00 a.m. (Los Angeles, California, time) (i) in the case of Eurodollar Rate
Advances, at least two Business Days' or (ii) in case of Reference Rate
Advances, same Business Day's, irrevocable prior written notice to the Agent
stating the proposed date and aggregate principal amount of such prepayment. If
any such notice is given, the Borrower shall prepay Advances in whole or ratably
in part in an aggregate principal amount equal to the amount specified in such
notice, together with accrued interest to the date of such prepayment on the
principal amount prepaid and amounts, if any, required to be paid pursuant to
Section 2.12 as a result of such prepayment being made on such date; PROVIDED,
however, that each partial prepayment with respect to: (A) any Revolving
Advances shall be applied to Revolving Advances comprising part of the same
Revolving Borrowing; (B) any Reference Rate Advances shall be made in
$500,000.00 multiples and with respect to Revolving Advances only, in an
aggregate principal amount such that after giving effect thereto such Revolving
Borrowing shall have a principal amount outstanding of at least $1,000,000.00
and (C) any Revolving Borrowing comprised of Eurodollar Rate Advances shall be
made in $1,000,000.00 multiples and in an aggregate principal amount such that
after giving effect thereto such Revolving Borrowing shall have a principal
amount outstanding of at least $2,000,000.00. Full prepayments of the Term
Advances or any Revolving Borrowing are permitted without restriction of
amounts.
(b) BORROWING BASE DEFICIENCY. If the aggregate outstanding amount of
Advances plus the Letter of Credit Exposure ever exceeds the Borrowing Base, the
Borrower shall after receipt of written notice from the Agent, take one of the
following actions to remedy the Borrowing Base deficiency:
(i) prepay Advances or, if the Advances have been repaid in full,
make deposits into the Cash Collateral Account to provide cash collateral
for the Letter of Credit Exposure, such that the Borrowing Base deficiency
is cured within 10 days after the date such notice is received;
(ii) pledge as Collateral for the Obligations additional Oil and Gas
Properties acceptable to the Agent and each of Banks such that the
Borrowing Base deficiency is cured within 30 days after the date such
notice is received; or
(iii) prepay the Advances or, if the Advances have been repaid in full,
make deposits into the Cash Collateral Account to provide cash collateral
for the
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Letter of Credit Exposure in six monthly installments equal to one-sixth of
such Borrowing Base deficiency with the first such installment due 30 days
after the date such notice is received and each following installment due
30 days after the preceding installment.
Each prepayment pursuant to this Section 2.05(b) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.12 as a result of such prepayment
being made on such date. Each prepayment under clauses (i) and (iii) of this
Section 2.05(b) shall be applied to the Revolving Advances and the Term Advances
as determined by the Agent and agreed to by the Banks in their sole discretion.
(c) REDUCTION OF REVOLVING COMMITMENTS. On the date of each reduction of
the aggregate Revolving Commitments pursuant to Section 2.04, the Borrower
agrees to make a prepayment in respect of the outstanding amount of the
Revolving Advances to the extent, if any, that the aggregate unpaid principal
amount of all Revolving Advances exceeds the Revolving Commitments, as so
reduced. Each prepayment pursuant to this Section 2.05(c) shall be accompanied
by accrued interest on the amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 2.12 as a result of
such prepayment being made on such date.
(d) MANDATORY. The Borrower shall repay the Advances by an amount equal
to the Net Cash Proceeds received by the Borrower or any Guarantor from the sale
by the Borrower of the Borrower's capital stock or other equity interest, the
issuance by the Borrower of any additional Debt (other than Debt permitted by
Section 6.02), or any of the Borrower or any Guarantor's Oil and Gas Properties,
upon receipt of such proceeds, whether at closing of such sale or thereafter.
Upon the repayment of Advances pursuant to this Section 2.05(d) by reason of the
sale of Oil and Gas Properties, the Borrowing Base shall automatically reduce by
the loan value assigned to the Oil and Gas Property or Oil and Gas Properties
sold. Each prepayment under this paragraph (d) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.12 as a result of such prepayment
and shall be applied to the Revolving Advances and the Term Advances as
determined by the Agent and agreed to by the Banks in their sole discretion.
(e) ILLEGALITY. If any Bank shall notify the Agent and the Borrower that
the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful for such Bank or its Eurodollar Lending
Office to perform its obligations under this Agreement to maintain any
Eurodollar Rate Advances of such Bank then outstanding hereunder, (i) the
Borrower shall, no later than 10:00 a.m. (Los Angeles, California, time)
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(A) if not prohibited by law, on the last day of the Interest Period for each
outstanding Eurodollar Rate Advance made by such Bank or (B) if required by
such notice, on the second Business Day following its receipt of such notice
prepay all of the Eurodollar Rate Advances of made by such Bank then
outstanding, together with accrued interest on the principal amount prepaid
to the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.12 as a result of such prepayment being made on such
date, (ii) such Bank shall simultaneously make a Reference Rate Advance to
the Borrower on such date in an amount equal to the aggregate principal
amount of the Eurodollar Rate Advances prepaid to such Bank, and (iii) the
right of the Borrower to select Eurodollar Rate Advances from such Bank for
any subsequent Revolving Borrowing shall be suspended until such Bank gives
notice referred to above shall notify the Agent that the circumstances
causing such suspension no longer exist.
(f) NO ADDITIONAL RIGHT; RATABLE PREPAYMENT. The Borrower shall have no
right to prepay any principal amount of any Advance except as provided in this
Section 2.05, and all notices given pursuant to this Section 2.05 shall be
irrevocable and binding upon the Borrower. Each payment of any Revolving
Advance pursuant to this Section 2.05 shall be made in a manner such that all
Revolving Advances comprising part of the same Revolving Borrowing are paid in
whole or ratably in part.
Section 2.06. REPAYMENT OF ADVANCES. The Borrower shall repay to the
Agent for the ratable benefit of the Banks the outstanding principal amount of
each Revolving Advance on the Revolving Maturity Date. The Borrower shall repay
to the Agent for the ratable benefit of the Banks the outstanding principal
amount of each Term Advance on the Term Maturity Date.
Section 2.07. LETTERS OF CREDIT.
(a) COMMITMENT. From time to time from the Effective Date until the
Revolving Maturity Date, at the request of the Borrower, the Issuing Bank shall,
on the terms and conditions hereinafter set forth, issue, increase, or extend
the expiration date of Letters of Credit for the account of the Borrower on any
Business Day. No Letter of Credit shall be issued, increased, or extended:
(i) unless such issuance, increase, or extension would not cause the
Letter of Credit Exposure to exceed the lesser of (A) $5,000,000.00 or
(B) the lesser of (1) the aggregate Revolving Commitments LESS the
aggregate outstanding principal amount of all Revolving Advances and (2)
the Borrowing Base LESS the aggregate outstanding principal amount of all
Advances;
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(ii) unless such Letter of Credit has an Expiration Date not later
than the earlier of (A) 12 months after the date of issuance thereof (or,
if extendable beyond such period, unless such Letter of Credit is
cancelable upon at least 30 days' notice given by the Issuing Bank to the
beneficiary of such Letter of Credit) and (B) the Revolving Maturity Date;
(iii) unless such Letter of Credit Documents are in form and substance
acceptable to the Issuing Bank in its sole discretion;
(iv) unless such Letter of Credit is a standby letter of credit not
supporting the repayment of indebtedness for borrowed money of any Person;
and
(v) unless the Borrower has delivered to the Issuing Bank a completed
and executed Letter of Credit Application.
(b) PARTICIPATIONS. Upon the date of the issuance or increase of a Letter
of Credit, the Issuing Bank shall be deemed to have sold to each other Bank and
each other Bank shall have been deemed to have purchased from the Issuing Bank a
participation in the related Letter of Credit Obligations equal to such Bank's
Revolving Share at such date and such sale and purchase shall otherwise be in
accordance with the terms of this Agreement. The Issuing Bank shall promptly
notify each such participant Bank by telex, telephone, or telecopy of each
Letter of Credit issued, increased, or extended or converted and the actual
dollar amount of such Bank's participation in such Letter of Credit.
(c) ISSUING. Each Letter of Credit shall be issued, increased, or
extended pursuant to a Letter of Credit Application (or by telephone notice
promptly confirmed in writing by a Letter of Credit Application), given not
later than 10:00 a.m. (Los Angeles, California, time) on the fifth Business Day
before the date of the proposed issuance, increase, or extension of the Letter
of Credit, and the Agent shall give to each Bank prompt notice of thereof by
telex, telephone, or telecopy. Each Letter of Credit Application shall be given
by telecopier or telex, confirmed immediately in writing, specifying the
information required therein. After the Agent's receipt of such Letter of
Credit Application and upon fulfillment of the applicable conditions set forth
in Article III, the Agent shall issue, increase, or extend such Letter of Credit
for the account of the Borrower. Each Letter of Credit Application shall be
irrevocable and binding on the Borrower.
(d) REIMBURSEMENT. The Borrower hereby agrees to pay on demand to the
Issuing Bank an amount equal to any amount paid by the Issuing Bank under any
Letter of Credit. In the event the Issuing Bank makes a payment pursuant to a
request for draw presented under a Letter of Credit and such payment is not
promptly reimbursed by the Borrower upon demand, the Issuing Bank shall give the
Agent notice of the Borrower's
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failure to make such reimbursement and the Agent shall promptly notify each
Bank of the amount necessary to reimburse the Issuing Bank. Upon such notice
from the Agent, each Bank shall promptly reimburse the Issuing Bank for such
Bank's Revolving Share of such amount, and such reimbursement shall be deemed
for all purposes of this Agreement to be a Revolving Advance to the Borrower
transferred at the Borrower's request to the Issuing Bank. If such
reimbursement is not made by any Bank to the Issuing Bank on the same day on
which the Agent notifies such Bank to make reimbursement to the Issuing Bank
hereunder, such Bank shall pay interest on its Revolving Share thereof to the
Issuing Bank at a rate per annum equal to the Federal Funds Rate. The
Borrower hereby unconditionally and irrevocably authorizes, empowers, and
directs the Agent and the Banks to record and otherwise treat such
reimbursements to the Issuing Bank as Reference Rate Advances under a
Revolving Borrowing requested by the Borrower to reimburse the Issuing Bank
which have been transferred to the Issuing Bank at the Borrower's request.
(e) OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower under this
Agreement in respect of each Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of Credit
Documents;
(ii) any amendment or waiver of, or any consent to, departure from any
Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense, or other right
which the Borrower may have at any time against any beneficiary or
transferee of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, or any
other person or entity, whether in connection with this Agreement, the
transactions contemplated in this Agreement or in any Letter of Credit
Documents, or any unrelated transaction;
(iv) any statement or any other document presented under such Letter
of Credit proving to be forged, fraudulent, invalid, or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
to the extent the Issuing Bank would not be liable therefor pursuant to the
following paragraph (f); or
(v) payment by the Issuing Bank under such Letter of Credit against
presentation of a draft or certificate which does not comply with the terms
of such Letter of Credit;
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PROVIDED, HOWEVER, that nothing contained in this paragraph (e) shall be
deemed to constitute a waiver of any remedies of the Borrower in connection
with the Letters of Credit or the Borrower's rights under Section 2.07(f)
below.
(f) LIABILITY OF ISSUING BANK. The Borrower assumes all risks of the
acts or omissions of any beneficiary or transferee of any Letter of Credit
with respect to its use of such Letter of Credit. Neither the Issuing Bank
nor any of its officers or directors shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency, or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent, or forged;
(iii) payment by the Issuing Bank against presentation of documents
which do not comply with the terms of a Letter of Credit, including failure
of any documents to bear any reference or adequate reference to the
relevant Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (INCLUDING THE ISSUING BANK'S OWN
NEGLIGENCE),
EXCEPT that the Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Borrower, to the extent of any direct, as
opposed to consequential, damages suffered by the Borrower which the Borrower
proves were caused by (A) the Issuing Bank's willful misconduct or gross
negligence in determining whether documents presented under a Letter of
Credit comply with the terms of such Letter of Credit or (B) the Issuing
Bank's willful failure to make lawful payment under any Letter of Credit
after the presentation to it of a draft and certificate strictly complying
with the terms and conditions of such Letter of Credit. In furtherance and
not in limitation of the foregoing, the Issuing Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
(g) CASH COLLATERAL ACCOUNT.
(i) If the Borrower is required to deposit funds in the Cash
Collateral Account pursuant to Sections 2.05(b), 7.02(b), or 7.03(b), then
the Borrower and the Agent shall establish the Cash Collateral Account and
the Borrower shall execute any
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documents and agreements, including the Agent's standard form assignment
of deposit accounts, that the Agent requests in connection therewith to
establish the Cash Collateral Account and grant the Agent a first priority
security interest in such account and the funds therein. The Borrower
hereby pledges to the Agent and grants the Agent a security interest in the
Cash Collateral Account, whenever established, all funds held in the Cash
Collateral Account from time to time, and all proceeds thereof as security
for the payment of the Obligations.
(ii) So long as no Event of Default Exists, (A) the Agent may apply
the funds held in the Cash Collateral Account only to the reimbursement of
any Letter of Credit Obligations, and (B) the Agent shall release to the
Borrower at the Borrower's written request any funds held in the Cash
Collateral Account in an amount up to but not exceeding the excess, if any
(immediately prior to the release of any such funds), of the total amount
of funds held in the Cash Collateral Account over the Letter of Credit
Exposure. During the existence of any Event of Default, the Agent may
apply any funds held in the Cash Collateral Account to the Obligations in
any order determined by the Agent, regardless of any Letter of Credit
Exposure which may remain outstanding. The Agent may in its sole
discretion at any time release to the Borrower any funds held in the Cash
Collateral Account.
(iii) The Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own property,
it being understood that the Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with
respect to any such funds.
Section 2.08. FEES.
(a) COMMITMENT FEES.
(i) The Borrower agrees to pay to the Agent for the account of each
Bank a commitment fee of .50% per annum on the average daily amount by
which (A) such Bank's Revolving Share of (1) the Borrowing Base MINUS (2)
the outstanding Term Advances exceeds (B) the sum of (1) such Bank's
outstanding Revolving Advances and (2) such Bank's Revolving Share of the
Letter of Credit Exposure, from the Effective Date until the Revolving
Maturity Date.
(ii) The commitment fees shall be due and payable quarterly in arrears
on the last day of each March, June, September, and December during the
term of this Agreement and on the Revolving Maturity Date.
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(b) AGENT FEES. The Borrower agrees to pay to the Agent the fees
described in the letter dated August 5, 1997 and the letter dated December
12, 1997, each from the Agent to the Borrower (collectively, the "Agent's Fee
Letter").
(c) LETTER OF CREDIT FEES. The Borrower agrees to pay to the Agent for
the pro rata benefit of the Banks a fee per annum for each Letter of Credit
issued hereunder equal to the Applicable Margin for Eurodollar Advances on
the face amount of such Letter of Credit, but with a minimum annual fee of
$500.00 on each Letter of Credit. Each such fee shall be payable annually in
advance on the date of the issuance, increase or extension of the Letter of
Credit, but, in the case of an increase or extension only, on the amount of
such increase or for the period of such extension.
Section 2.09. INTEREST. The Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Bank from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(a) REFERENCE RATE ADVANCES. If such Advance is a Reference Rate
Advance, a rate per annum equal at all times to the Adjusted Reference Rate
in effect from time to time PLUS the Applicable Margin in effect from time to
time, payable in arrears on the last day of each month and on the date such
Reference Rate Advance shall be paid in full, PROVIDED that any amount of
principal which is not paid when due (whether at stated maturity, by
acceleration, or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to the Adjusted Reference Rate in effect from
time to time PLUS the Applicable Margin PLUS 3.00% per annum.
(b) EURODOLLAR RATE ADVANCES. If such Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the Interest Period for
such Advance to the Eurodollar Rate for such Interest Period PLUS the
Applicable Margin in effect from time to time, payable on the last day of
such Interest Period, and, in the case of six-month Interest Periods, on the
day which occurs during such Interest Period three months from the first day
of such Interest Period, PROVIDED that any amount of principal which is not
paid when due (whether at stated maturity, by acceleration, or otherwise)
shall bear interest from the date on which such amount is due until such
amount is paid in full, payable on demand, at a rate per annum equal at all
times to the Adjusted Reference Rate in effect from time to time PLUS the
Applicable Margin PLUS 3.00% per annum.
(c) ADDITIONAL INTEREST ON EURODOLLAR RATE ADVANCES. The Borrower shall
pay to each Bank, so long as any such Bank shall be required under
regulations of the Federal Reserve Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each
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Eurodollar Rate Advance of such Bank, from the effective date of such Advance
until such principal amount is paid in full, at an interest rate per annum
equal at all times to the remainder obtained by subtracting (A) the
Eurodollar Rate for the Interest Period for such Advance from (B) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Bank for such Interest Period,
payable on each date on which interest is payable on such Advance. Such
additional interest payable to any Bank shall be determined by such Bank and
notified to the Borrower through the Agent (such notice to include the
calculation of such additional interest, which calculation shall be
conclusive in the absence of manifest error).
(d) USURY RECAPTURE.
(i) If, with respect to any Bank, the effective rate of interest
contracted for under the Credit Documents, including the stated rates of
interest and fees contracted for hereunder and any other amounts contracted
for under the Credit Documents which are deemed to be interest, at any time
exceeds the Maximum Rate, then the outstanding principal amount of the
loans made by such Bank hereunder shall bear interest at a rate which would
make the effective rate of interest for such Bank under the Credit
Documents equal the Maximum Rate until the difference between the amounts
which would have been due at the stated rates and the amounts which were
due at the Maximum Rate (the "Lost Interest") has been recaptured by such
Bank.
(ii) If, when the loans made hereunder are repaid in full, the Lost
Interest has not been fully recaptured by such Bank pursuant to the
preceding paragraph, then, to the extent permitted by law, for the loans
made hereunder by such Bank the interest rates charged under Section 2.09
hereunder shall be retroactively increased such that the effective rate of
interest under the Credit Documents was at the Maximum Rate since the
effectiveness of this Agreement to the extent necessary to recapture the
Lost Interest not recaptured pursuant to the preceding sentence and, to the
extent allowed by law, the Borrower shall pay to such Bank the amount of
the Lost Interest remaining to be recaptured by such Bank.
(iii) NOTWITHSTANDING the foregoing or any other term in this Agreement
and the Credit Documents to the contrary, it is the intention of each Bank
and the Borrower to conform strictly to any applicable usury laws.
Accordingly, if any Bank contracts for, charges, or receives any
consideration which constitutes interest in excess of the Maximum Rate,
then any such excess shall be canceled automatically and, if previously
paid, shall at such Bank's option be applied to the outstanding amount of
the loans made hereunder by such Bank or be refunded to the Borrower.
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Section 2.10. PAYMENTS AND COMPUTATIONS.
(a) PAYMENT PROCEDURES. The Borrower shall make each payment under this
Agreement and under the Notes not later than 10:00 a.m. (Los Angeles,
California, time) on the day when due in Dollars to the Agent at 000 X.
Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (or such other location as the
Agent shall designate in writing to the Borrower), in same day funds and
shall send notice of such payments to the Agent at 000 X. Xxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000. The Agent shall promptly thereafter cause to be
distributed like funds relating to the payment of principal, interest or fees
ratably (other than amounts payable solely to the Agent, the Issuing Bank, or
a specific Bank pursuant to Section 2.08(b), 2.09(c), 2.12, 2.13, 2.14, 8.05,
or 9.07, but after taking into account payments effected pursuant to Section
9.04) (i) before the acceleration of the Advances pursuant to Section 7.02 or
7.03, (A) in the case of payments in respect of Revolving Advances and
Letters of Credit, in accordance with each Bank's Revolving Share and (B) in
the case of payments in respect of Term Advances, in accordance with each
Bank's Term Share and (ii) after the acceleration of the Advances pursuant to
Section 7.02 or 7.03, in accordance with each Bank's Pro Rata Share to the
Banks for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Bank or
the Issuing Bank to such Bank for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement.
(b) COMPUTATIONS. All computations of interest based on the Reference
Rate and of fees shall be made by the Agent on the basis of a year of 365 or
366 days, as the case may be, and all computations of interest based on the
Eurodollar Rate and the Federal Funds Rate shall be made by the Agent, on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day, but excluding the last day) occurring in the period
for which such interest or fees are payable. Each determination by the Agent
of an interest rate or fee shall be conclusive and binding for all purposes,
absent manifest error.
(c) NON-BUSINESS DAY PAYMENTS. Whenever any payment shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case
be included in the computation of payment of interest or fees, as the case
may be; PROVIDED, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) AGENT RELIANCE. Unless the Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to the Banks
that the Borrower shall not make such payment in full, the Agent may assume
that the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such
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assumption, cause to be distributed to each Bank on such date an amount equal
to the amount then due such Bank. If and to the extent the Borrower shall
not have so made such payment in full to the Agent, each Bank shall repay to
the Agent forthwith on demand such amount distributed to such Bank, together
with interest, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Agent, at the Federal
Funds Rate for such day.
Section 2.11. SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances or Letter of Credit
Obligations made by it in excess of its Pro Rata Share, Term Share, or
Revolving Share, as applicable, of payments on account of the Advances or
Letter of Credit Obligations obtained by all the Banks, such Bank shall
notify the Agent and forthwith purchase from the other Banks such
participations in the Advances made by them or Letter of Credit Obligations
held by them as shall be necessary to cause such purchasing Bank to share the
excess payment ratably with each of them; PROVIDED, however, that if all or
any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such
Bank shall repay to the purchasing Bank the purchase price to the extent of
such Bank's ratable share (according to the proportion of (a) the amount of
the participation sold by such Bank to the purchasing Bank as a result of
such excess payment to (b) the total amount of such excess payment) of such
recovery, together with an amount equal to such Bank's ratable share
(according to the proportion of (a) the amount of such Bank's required
repayment to the purchasing Bank to (b) the total amount of all such required
repayments to the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
The Borrower agrees that any Bank so purchasing a participation from another
Bank pursuant to this Section 2.11 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct
creditor of the Borrower in the amount of such participation.
Section 2.12. BREAKAGE COSTS. If (a) any payment of principal of any
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance, whether as a result of any payment pursuant to
Section 2.05, the acceleration of the maturity of the Notes pursuant to
Article VII, or otherwise, or (b) the Borrower fails to make a principal or
interest payment with respect to any Eurodollar Rate Advance on the date such
payment is due and payable, the Borrower shall, within 10 days of any written
demand sent by any Bank to the Borrower through the Agent, pay to the Agent
for the account of such Bank any amounts required to compensate such Bank for
any additional losses, out-of-pocket costs or expenses which it may
reasonably incur as a result of such payment or nonpayment, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense
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incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by any Bank to fund or maintain such Advance.
Section 2.13. INCREASED COSTS.
(a) EURODOLLAR RATE ADVANCES. If, due to either (i) the introduction of
or any change (other than any change by way of imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve Percentage) in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any
increase in the cost to any Bank of agreeing to make or making, funding, or
maintaining Eurodollar Rate Advances, then the Borrower shall from time to
time, upon demand by such Bank (with a copy of such demand to the Agent),
immediately pay to the Agent for the account of such Bank additional amounts
sufficient to compensate such Bank for such increased cost. A certificate as
to the amount of such increased cost and detailing the calculation of such
cost submitted to the Borrower and the Agent by such Bank shall be conclusive
and binding for all purposes, absent manifest error.
(b) CAPITAL ADEQUACY. If any Bank or the Issuing Bank determines in
good faith that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital
required or expected to be maintained by such Bank or the Issuing Bank or any
corporation controlling such Bank or the Issuing Bank and that the amount of
such capital is increased by or based upon the existence of such Bank's
commitment to lend or the Issuing Bank's commitment to issue the Letters of
Credit and other commitments of this type, then, upon 30 days' prior written
notice by such Bank or the Issuing Bank (with a copy of any such demand to
the Agent), the Borrower shall immediately pay to the Agent for the account
of such Bank or to the Issuing Bank, as the case may be, from time to time as
specified by such Bank or the Issuing Bank, additional amounts sufficient to
compensate such Bank or the Issuing Bank, in light of such circumstances, (i)
with respect to such Bank, to the extent that such Bank reasonably determines
such increase in capital to be allocable to the existence of such Bank's
commitment to lend under this Agreement and (ii) with respect to the Issuing
Bank, to the extent that the Issuing Bank reasonably determines such increase
in capital to be allocable to the issuance or maintenance of the Letters of
Credit. A certificate as to such amounts and detailing the calculation of
such amounts submitted to the Borrower by such Bank or the Issuing Bank shall
be conclusive and binding for all purposes, absent manifest error.
(c) LETTERS OF CREDIT. If any change in any law or regulation or in the
interpretation thereof by any court or administrative or Governmental
Authority charged with the administration thereof shall either (i) impose,
modify, or deem applicable any reserve,
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special deposit, or similar requirement against letters of credit issued by,
or assets held by, or deposits in or for the account of, the Issuing Bank or
(ii) impose on the Issuing Bank any other condition regarding the provisions
of this Agreement relating to the Letters of Credit or any Letter of Credit
Obligations, and the result of any event referred to in the preceding clause
(i) or (ii) shall be to increase the cost to the Issuing Bank of issuing or
maintaining any Letter of Credit (which increase in cost shall be determined
by the Issuing Bank's reasonable allocation of the aggregate of such cost
increases resulting from such event), then, upon demand by the Issuing Bank,
the Borrower shall pay to the Issuing Bank, from time to time as specified by
the Issuing Bank, additional amounts which shall be sufficient to compensate
the Issuing Bank for such increased cost. A certificate as to such increased
cost incurred by the Issuing Bank, as a result of any event mentioned in
clause (i) or (ii) above, and detailing the calculation of such increased
costs submitted by the Issuing Bank to the Borrower, shall be conclusive and
binding for all purposes, absent manifest error.
Section 2.14. TAXES.
(a) NO DEDUCTION FOR CERTAIN TAXES. Any and all payments by the
Borrower shall be made, in accordance with Section 2.10, free and clear of
and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank, the Issuing Bank, and
the Agent, taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Bank, the Issuing Bank, or the
Agent (as the case may be) is organized or any political subdivision of the
jurisdiction (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes") and, in the case of each Bank and the Issuing Bank, Taxes by the
jurisdiction of such Bank's Applicable Lending Office or any political
subdivision of such jurisdiction. If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable to any Bank, the
Issuing Bank, or the Agent, (i) the sum payable shall be increased as may be
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14), such Bank,
the Issuing Bank, or the Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made; PROVIDED,
however, that if the Borrower's obligation to deduct or withhold Taxes is
caused solely by such Bank's, the Issuing Bank's, or the Agent's failure to
provide the forms described in paragraph (d) of this Section 2.14 and such
Bank, the Issuing Bank, or the Agent could have provided such forms, no such
increase shall be required; (ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) OTHER TAXES. In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies
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which arise from any payment made or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Notes, or
the other Credit Documents (hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. THE BORROWER INDEMNIFIES EACH BANK, THE ISSUING
BANK, AND THE AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING,
WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED BY ANY JURISDICTION ON
AMOUNTS PAYABLE UNDER THIS SECTION 2.14) PAID BY SUCH BANK, THE ISSUING BANK,
OR THE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH
TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED. EACH PAYMENT
REQUIRED TO BE MADE BY THE BORROWER IN RESPECT OF THIS INDEMNIFICATION SHALL
BE MADE TO THE AGENT FOR THE BENEFIT OF ANY PARTY CLAIMING SUCH
INDEMNIFICATION WITHIN 30 DAYS FROM THE DATE THE BORROWER RECEIVES WRITTEN
DEMAND THEREFOR FROM THE AGENT ON BEHALF OF ITSELF AS AGENT, THE ISSUING
BANK, OR ANY SUCH BANK. IF ANY BANK, THE AGENT, OR THE ISSUING BANK RECEIVES
A REFUND IN RESPECT OF ANY TAXES PAID BY THE BORROWER UNDER THIS PARAGRAPH
(C), SUCH BANK, THE AGENT, OR THE ISSUING BANK, AS THE CASE MAY BE, SHALL
PROMPTLY PAY TO THE BORROWER THE BORROWER'S SHARE OF SUCH REFUND.
(d) FOREIGN BANK WITHHOLDING EXEMPTION. Each Bank and Issuing Bank that
is not incorporated under the laws of the United States of America or a state
thereof agrees that it shall deliver to the Borrower and the Agent (i) two
duly completed copies of United States Internal Revenue Service Form 1001 or
4224 or successor applicable form, as the case may be, certifying in each
case that such Bank is entitled to receive payments under this Agreement and
the Notes payable to it, without deduction or withholding of any United
States federal income taxes, (ii) if applicable, an Internal Revenue Service
Form W-8 or W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding tax, and (iii)
any other governmental forms which are necessary or required under an
applicable tax treaty or otherwise by law to reduce or eliminate any
withholding tax, which have been reasonably requested by the Borrower. Each
Bank which delivers to the Borrower and the Agent a Form 1001 or 4224 and
Form W-8 or W-9 pursuant to the next preceding sentence further undertakes to
deliver to the Borrower and the Agent two further copies of the said letter
and Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or
other manner of certification, as the case may be, on or before the date that
any such letter or form expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent letter and form previously
delivered by it to
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the Borrower and the Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower and the Agent certifying in the case
of a Form 1001 or 4224 that such Bank is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes. If an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any
delivery required by the preceding sentence would otherwise be required which
renders all such forms inapplicable or which would prevent any Bank from duly
completing and delivering any such letter or form with respect to it and such
Bank advises the Borrower and the Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax, and in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax, such Bank shall not be required to
deliver such letter or forms. The Borrower shall withhold tax at the rate
and in the manner required by the laws of the United States with respect to
payments made to a Bank failing to timely provide the requisite Internal
Revenue Service forms.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. CONDITIONS PRECEDENT TO INITIAL ADVANCES. This Agreement
shall become effective on the Effective Date, if on or prior to such date the
following conditions precedent shall have been satisfied:
(a) DOCUMENTATION. The Agent shall have received the following duly
executed by all the parties thereto, in form and substance satisfactory to
the Agent and the Banks, and, where applicable, in sufficient copies for each
Bank:
(i) this Agreement, an Amended and Restated Revolving Note and an
Amended and Restated Term Note payable to the order of each Bank in the
amount of its Revolving Commitment and outstanding principal amount of Term
Advances as of the Effective Date, respectively, the Guaranties, the
Limited Guaranties, the Pledge Agreement, the Security Agreements, and
Mortgages Amendments to each of the existing Mortgages encumbering
substantially all of the Borrower's and the Guarantors' Oil and Gas
Properties and all attached exhibits and schedules;
(ii) a favorable opinion of the Borrower's Oklahoma counsel, dated as
of the Effective Date and substantially in the form of the attached
EXHIBIT K-1 covering the matters discussed in such Exhibit and such other
matters as any Bank through the Agent may reasonably request;
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(iii) a favorable opinion of the Agent's counsel dated as of the
Effective Date and substantially in the form of the attached EXHIBIT K-2
covering the matters discussed in such Exhibit;
(iv) a certificate of the secretary or an assistant secretary of the
Borrower certifying its Certificate of Incorporation and Bylaws, the
resolutions of the board of directors of the Borrower authorizing this
Agreement and related transactions, and the incumbency and signatures of
the officers of the Borrower authorized to execute this Agreement and
related documents;
(v) a certificate of the secretary or an assistant secretary of each
Guarantor certifying the existence of such Guarantor, the certificate or
articles of incorporation and bylaws or other equivalent organizational
documents of such Guarantor, the resolutions of the board of directors or
other equivalent managing body of such Guarantor authorizing the Guaranty
of such Guarantor and related transactions, and the incumbency and
signatures of the officers of such Guarantor authorized to execute the
Guaranty of such Guarantor and related documents;
(vi) a certificate dated as of the Effective Date from the president
or chief financial officer of the Borrower stating that (A) all
representations and warranties of the Borrower set forth in this Agreement
are true and correct in all material respects; (B) no Default has occurred
and is continuing; and (C) the conditions in this Section 3.01 have been
met;
(vii) appropriate UCC-1 or UCC-3 Financing Statements covering the
Collateral for filing with the appropriate authorities;
(viii) stock certificates required in connection with the Pledge
Agreements and stock powers executed in blank for each such stock
certificate;
(ix) insurance certificates naming the Agent loss payee or additional
insured evidencing insurance which meets the requirements of this Agreement
and the Security Documents and which is satisfactory to insurance
consultants or brokers satisfactory to the Agent;
(x) certified copies of each of the Reorganization Documents, each
certified as of the Effective Date by a Responsible Officer of the Borrower
(A) as being true and correct copies of such documents as of the Effective
Date, (B) that to the knowledge of such Responsible Officer as having been
duly authorized by the Board of Directors of the Borrower, as managing
general partner of the Partnership, and by Double R, as special general
partner of the Partnership, and (C) that to the
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knowledge of such Responsible Officer as having been duly executed and
delivered by the Borrower, as managing general partner of the Partnership,
and by Double R, as special general partner of the Partnership;
(xi) certified copy of the Rescission Documents each certified as of
the Effective Date by a Responsible Officer of the Borrower (A) as being
true and correct copies of such documents as of the Effective Date, (B) as
having been duly authorized by the Board of Directors of the Borrower, as
managing general partner of the Partnership, and by the managing general
partner of Partners and (C) as having been duly executed and delivered by
the Borrower, as managing general partner of the Partnership, and by the
managing general partner of Partners; and
(xii) such other documents, governmental certificates, agreements, and
lien searches as the Agent or any Bank may reasonably request.
(b) REORGANIZATION. The Reorganization shall have been consummated and
all conditions to the Reorganization shall have been satisfied in form and
substance satisfactory to the Agent.
(c) RESCISSION. The Rescission shall have been consummated and all
conditions to the Rescission shall have been satisfied in form and substance
satisfactory to the Agent.
(d) PAYMENT OF FEES. On the date of this Agreement, the Borrower shall
have paid the fees required by Section 2.08(b) and all costs and expenses
which have been invoiced and are payable pursuant to Section 9.04.
(e) TITLE. The Agent shall be satisfied in its sole discretion with the
title to the Oil and Gas Properties included in the Borrowing Base and that
such Oil and Gas Properties constitute at least 60% of the present value of
the Proven Reserves of the Borrower and the Guarantors and 55% of the
present value of the Proved Developed Producing Reserves of the Borrower and
the Guarantors.
(f) AGENT'S LIENS. The Agent shall be satisfied that the Liens granted
to it under the Security Documents are Acceptable Security Interests and that
all actions or filings necessary to protect, preserve and validly perfect
such Liens have been made, taken or obtained, as the case may be, and are in
full force and effect.
(g) SECURITY INTERESTS. The Agent shall be satisfied that the Security
Documents encumber substantially all of Oil and Gas Properties of the
Borrower and the Guarantors.
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(h) MATERIAL ADVERSE CHANGE. No event or circumstance that could cause
a Material Adverse Change shall have occurred.
Section 3.02. CONDITIONS PRECEDENT TO ALL BORROWINGS. The obligation of
each Bank to make a Revolving Advance on the occasion of each Revolving
Borrowing and of the Issuing Bank to issue, increase, or extend any Letter of
Credit shall be subject to the further conditions precedent that on the date
of such Revolving Borrowing or the issuance, increase, or extension of such
Letter of Credit:
(a) the following statements shall be true (and each of the giving of
the applicable Notice of Borrowing or Letter of Credit Application and the
acceptance by the Borrower of the proceeds of such Revolving Borrowing or the
issuance, increase, or extension of such Letter of Credit shall constitute a
representation and warranty by the Borrower that on the date of such
Revolving Borrowing, the issuance, increase, or extension of such Letter of
Credit, such statements are true):
(i) the representations and warranties contained in Article IV of
this Agreement, the Security Documents, and the Guaranties are correct in
all material respects on and as of the date of such Revolving Borrowing or
the date of the issuance, increase, or extension of such Letter of Credit,
before and after giving effect to such Revolving Borrowing or to the
issuance, increase, or extension of such Letter of Credit and to the
application of the proceeds from such Borrowing, as though made on and as
of such date; and
(ii) no Default has occurred and is continuing or would result from
such Revolving Borrowing or from the application of the proceeds therefrom,
from the issuance, increase, or extension of such Letter of Credit; and
(b) the Agent shall have received such other approvals, opinions, or
documents reasonably deemed necessary or desirable by any Bank as a result of
circumstances occurring after the date of this Agreement, as any Bank through
the Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01. CORPORATE EXISTENCE; SUBSIDIARIES. The Borrower is a
corporation duly organized and validly existing under the laws of Delaware
and in good standing and qualified
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to do business in each jurisdiction where its ownership or lease of Property
or conduct of its business requires such qualification. Each Guarantor is
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of formation and in good standing and qualified to do business
in each jurisdiction where its ownership or lease of property or conduct of
its business requires such qualification and where a failure to be qualified
could reasonably be expected to cause a Material Adverse Change. The
Borrower and the Guarantors have the Subsidiaries listed on Schedule 4.01.
Section 4.02. CORPORATE POWER. The execution, delivery, and performance
by the Borrower of this Agreement, the Notes, and the other Credit Documents
to which it is a party and by the Guarantors of the Guaranties and the other
Credit Documents to which they are a party and the consummation of the
transactions contemplated hereby and thereby (a) are within the Borrower's
and the Guarantors' corporate powers, (b) have been duly authorized by all
necessary corporate action, (c) do not contravene (i) the Borrower's or any
Guarantor's certificate or articles of incorporation, bylaws or other similar
governance documents or (ii) any law or any contractual restriction binding
on or affecting the Borrower or any Guarantor, and (d) will not result in or
require the creation or imposition of any Lien prohibited by this Agreement.
Section 4.03. AUTHORIZATION AND APPROVALS. No consent, order,
authorization, or approval or other action by, and no notice to or filing
with, any Governmental Authority is required for the due execution, delivery,
and performance by the Borrower of this Agreement, the Notes, or the other
Credit Documents to which the Borrower is a party or by each Guarantor of its
Guaranty or the other Credit Documents to which it is a party or the
consummation of the transactions contemplated thereby. At the time of each
Revolving Borrowing, no authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority will be required for
such Revolving Borrowing or the use of the proceeds of such Revolving
Borrowing.
Section 4.04. ENFORCEABLE OBLIGATIONS. This Agreement, the Notes, and
the other Credit Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower and the Guaranties and the other
Credit Documents to which each Guarantor is a party have been duly executed
and delivered by the Guarantors. Each Credit Document is the legal, valid,
and binding obligation of the Borrower and each Guarantor which is a party to
it enforceable against the Borrower and each such Guarantor in accordance
with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors' rights generally and by general principles of equity.
Section 4.05. FINANCIAL STATEMENTS. The audited balance sheet of the
Partnership and the combined unaudited balance sheet of the Partnership, the
Borrower, and Old RBOC
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as at December 31, 1996 and the related audited statements of income, cash
flow, and retained earnings of the Partnership and the related unaudited
combined statements of income, cash flow, and retained earnings of the
Partnership, the Borrower, and Old RBOC for the fiscal year then ended,
copies of which have been furnished to each Bank, and the balance sheet of
the Partnership and the combined balance sheet of the Partnership, the
Borrower, Old RBOC and Gulf States as at September 30, 1997, and the related
statements of income, cash flow, and retained earnings of the Partnership and
the related combined statements of income, cash flow, and retained earnings
of the Partnership, the Borrower, Old RBOC and Gulf States for the nine
months then ended, copies of which have been furnished to each Bank, fairly
present, subject, in the case of the balance sheets as at September 30, 1997,
and said statements of income, cash flow, and retained earnings for the nine
months then ended, to year-end audit adjustments, the financial condition of
the Partnership and the combined financial condition of the Partnership, the
Borrower, Old RBOC and Gulf States as at such dates and the results of
operations of the Partnership and the combined results of the operations of
the Partnership, the Borrower, Old RBOC and Gulf States for the periods ended
on such dates, and such balance sheets and statements of income, cash flow,
and retained earnings were prepared in accordance with GAAP. Since the date
of the Financial Statements, no event or circumstance that could cause a
Material Adverse Change has occurred.
Section 4.06. TRUE AND COMPLETE DISCLOSURE. All factual information
(excluding estimates) heretofore or contemporaneously furnished by or on
behalf of the Borrower or any of the Guarantors in writing to any Bank or the
Agent for purposes of or in connection with this Agreement, any other Credit
Document or any transaction contemplated hereby or thereby is, and all other
such factual information hereafter furnished by or on behalf of the Borrower
and the Guarantors in writing to the Agent or any of the Banks shall be, true
and accurate in all material respects on the date as of which such
information is dated or certified and does not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements contained therein not misleading at such time. All projections,
estimates, and pro forma financial information furnished by the Borrower were
prepared on the basis of assumptions, data, information, tests, or conditions
believed to be reasonable at the time such projections, estimates, and pro
forma financial information were furnished.
Section 4.07. LITIGATION. Set forth on SCHEDULE 4.07 is an accurate
description of all of the Borrower's and the Guarantors' pending litigation
existing on the Effective Date. There is no pending or, to the best
knowledge of the Borrower, threatened action or proceeding affecting the
Borrower or any of the Guarantors before any court, Governmental Agency or
arbitrator, which could reasonably be expected to cause a Material Adverse
Change or which purports to affect the legality, validity, binding effect, or
enforceability of this Agreement, any Note, or any other Credit Document.
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Section 4.08. USE OF PROCEEDS. All Advances and Letters of Credit shall
be used to finance the acquisition and development of oil and gas reserves,
but in no event for the payment of dividends or other distributions to the
shareholders or partners of the Borrower or any Guarantor, except as
expressly permitted under Section 6.05 of this Agreement. The Borrower is
not engaged in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation U). No proceeds
of any Advance will be used to purchase or carry any margin stock in
violation of Regulation G, T, U or X.
Section 4.09. INVESTMENT COMPANY ACT. Neither the Borrower nor any of
the Guarantors is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
Section 4.10. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any of the Guarantors is a "holding company," or a "Subsidiary company"
of a "holding company," or an "affiliate" of a "holding company" or of a
"Subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended. Neither the Agent nor any
of the Banks, solely by virtue of the execution, delivery and performance of,
and the consummation of the transactions contemplated by, the Credit
Documents shall not be or become subject to regulation (a) as a "holding
company", or an "affiliate" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended, (b) under the Federal
Power Act, as amended, (c) as a "public utility" or "public service
corporation" or the equivalent under the applicable law of any state, or (d)
under the applicable laws of any state relating to public utilities or public
service corporations.
Section 4.11. TAXES.
(a) REPORTS AND PAYMENTS. All Returns required to be filed by or on
behalf of the Borrower, the Guarantors, or any member of the Controlled Group
(hereafter collectively called the "Tax Group") have been duly filed on a
timely basis or appropriate extensions have been obtained and such Returns
are and will be true, complete and correct, except where the failure to so
file would not be reasonably expected to cause a Material Adverse Change; and
all Taxes shown to be payable on the Returns or on subsequent assessments
with respect thereto will have been paid in full on a timely basis, and no
other Taxes will be payable by the Tax Group with respect to items or periods
covered by such Returns, except in each case to the extent of (i) reserves
reflected in the Financial Statements and the Interim Financial Statements,
(ii) taxes that are being contested in good faith, or (iii) such Taxes, the
failure to pay which would not cause a Material Adverse Change. The reserves
for accrued Taxes reflected in the financial statements delivered to the
Banks under this Agreement are adequate in the aggregate for the payment of
all unpaid Taxes, whether or not disputed, for
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the period ended as of the date thereof and for any period prior thereto, and
for which the Tax Group may be liable in its own right, as withholding agent
or as a transferee of the assets of, or successor to, any Person, except for
such Taxes or reserves therefor, the failure to pay or provide for which does
not and could not cause a Material Adverse Change.
(b) TAXES DEFINITION. "Taxes" in this Section 4.11 shall mean all
taxes, charges, fees, levies, or other assessments imposed by any federal,
state, local, or foreign taxing authority, including without limitation,
income, gross receipts, excise, real or personal property, sales, occupation,
use, service, leasing, environmental, value added, transfer, payroll, and
franchise taxes (and including any interest, penalties, or additions to tax
attributable to or imposed on with respect to any such assessment).
(c) RETURNS DEFINITION. "Returns" in this Section 4.11 shall mean any
federal, state, local, or foreign report, estimate, declaration of estimated
Tax, information statement or return relating to, or required to be filed in
connection with, any Taxes, including any information return or report with
respect to backup withholding or other payments of third parties.
Section 4.12. PENSION PLANS. All Plans are in compliance in all
material respects with all applicable provisions of ERISA. No Termination
Event has occurred with respect to any Plan, and each Plan has complied with
and been administered in all material respects with applicable provisions of
ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. No Reportable Event has occurred with
respect to any Multiemployer Plan, and each Multiemployer Plan has complied
with and been administered in all material respects with applicable
provisions of ERISA and the Code. The present value of all benefits vested
under each Plan (based on the assumptions used to fund such Plan) did not, as
of the last annual valuation date applicable thereto, exceed the value of the
assets of such Plan allocable to such vested benefits. Neither the Borrower
nor any member of the Controlled Group has had a complete or partial
withdrawal from any Multiemployer Plan for which there is any withdrawal
liability. As of the most recent valuation date applicable thereto, neither
the Borrower nor any member of the Controlled Group would become subject to
any liability under ERISA if the Borrower or any member of the Controlled
Group has received notice that any Multiemployer Plan is insolvent or in
reorganization. Based upon GAAP existing as of the Effective Date and
current factual circumstances, the Borrower has no reason to believe that the
annual cost during the term of this Agreement to the Borrower or any member
of the Controlled Group for post-retirement benefits to be provided to the
current and former employees of the Borrower or any member of the Controlled
Group under Plans that are welfare benefit plans (as defined in Section 3(a)
of ERISA) could, in the aggregate, reasonably be expected to cause a Material
Adverse Change.
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Section 4.13. CONDITION OF PROPERTY; CASUALTIES. The Borrower and each
of the Guarantors has good and indefeasible title to all of its Properties as
is customary in the oil and gas industry in all material respects, free and
clear of all Liens except for Permitted Liens. The material Properties used
or to be used in the continuing operations of the Borrower and each of the
Guarantors are in good repair, working order and condition. Since the date
of the Financial Statements, neither the business nor the material properties
of the Borrower and each of the Guarantors, taken as a whole, has been
materially and adversely affected as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of property or cancellation of
contracts, permits, or concessions by a Governmental Authority, riot,
activities of armed forces, or acts of God or of any public enemy.
Section 4.14. NO BURDENSOME RESTRICTIONS; NO DEFAULTS.
(a) Neither the Borrower nor any of the Guarantors is a party to any
indenture, loan, or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction or provision of
applicable law or governmental regulation which could reasonably be expected
to cause a Material Adverse Change. The Borrower and the Guarantors are not
in default under or with respect to any contract, agreement, lease, or other
instrument to which the Borrower or any Guarantor is a party and which could
reasonably be expected to cause a Material Adverse Change. Neither the
Borrower nor any Guarantor has received any notice of default under any
material contract, agreement, lease, or other instrument to which the
Borrower or such Guarantor is a party.
(b) No Default has occurred and is continuing.
Section 4.15. ENVIRONMENTAL CONDITION.
(a) PERMITS, ETC. The Borrower and the Guarantors (i) have obtained all
Environmental Permits necessary for the ownership and operation of their
respective Properties and the conduct of their respective businesses; (ii)
have been and are in material compliance with all terms and conditions of
such Environmental Permits and with all other material requirements of
applicable Environmental Laws; (iii) have not received notice of any material
violation or alleged violation of any Environmental Law or Environmental
Permit; and (iv) are not subject to any actual or contingent Environmental
Claim, which could reasonably be expected to cause a Material Adverse Change.
(b) CERTAIN LIABILITIES. To the Borrower's actual knowledge, none of
the present or previously owned or operated Property of the Borrower or any
Guarantor or of any of their former Subsidiaries, wherever located, (i) has
been placed on or proposed to be placed on the National Priorities List, the
Comprehensive Environmental Response Compensation
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Liability Information System list, or their state or local analogs, or have
been otherwise investigated, designated, listed, or identified as a potential
site for removal, remediation, cleanup, closure, restoration, reclamation, or
other response activity under any Environmental Laws; (ii) is subject to a
Lien, arising under or in connection with any Environmental Laws, that
attaches to any revenues or to any Property owned or operated by the Borrower
or any of the Guarantors, wherever located, which could reasonably be
expected to cause a Material Adverse Change; or (iii) has been the site of
any Release of Hazardous Substances or Hazardous Wastes from present or past
operations which has caused at the site or at any third-party site any
condition that has resulted in or could reasonably be expected to result in
the need for Response that would cause a Material Adverse Change.
(c) CERTAIN ACTIONS. Without limiting the foregoing, (i) all necessary
notices have been properly filed, and no further action is required under
current Environmental Law as to each Response or other restoration or
remedial project undertaken by the Borrower or the Guarantors or any of their
former Subsidiaries on any of their presently or formerly owned or operated
Property and (ii) the present and, to the Borrower's best knowledge, future
liability, if any, of the Borrower and the Guarantors which could reasonably
be expected to arise in connection with requirements under Environmental Laws
will not result in a Material Adverse Change.
Section 4.16. PERMITS, LICENSES, ETC. The Borrower and the Guarantors
possess all authorizations, permits, licenses, patents, patent rights or
licenses, trademarks, trademark rights, trade names rights and copyrights
which are material to the conduct of their business. The Borrower and the
Guarantors manage and operate their business in all material respects in
accordance with all applicable Legal Requirements and good industry practices.
Section 4.17. GAS CONTRACTS. Neither the Borrower nor any of the
Guarantors, as of the date hereof, (a) is obligated in any material respect
by virtue of any prepayment made under any contract containing a
"take-or-pay" or "prepayment" provision or under any similar agreement to
deliver hydrocarbons produced from or allocated to any of the Borrower's and
the Guarantors' Oil and Gas Properties at some future date without receiving
full payment therefor at the time of delivery, or (b) except as has been
disclosed to the Agent, has produced gas, in any material amount, subject to,
and none of the Borrower's and the Guarantors' Oil and Gas Properties is
subject to, balancing rights of third parties or subject to balancing duties
under governmental requirements.
Section 4.18. LIENS. On the Effective Date, all governmental actions
and all other filings, recordings, registrations, third party consents and
other actions which are necessary to create and perfect the Liens provided
for in the Security Documents will have been made, obtained and taken in all
relevant jurisdictions.
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Section 4.19. SOLVENCY. Before and after giving effect to the making of
the initial Advances, the Borrower is Solvent.
Section 4.20. CAPITALIZATION; OWNERSHIP.
(a) Except as otherwise permitted by Section 6.14, the authorized
capital stock of the Borrower consists of 222 shares of common stock, par
value $225.00 per share, of which 101 shares are issued and outstanding as of
the Effective Date; 100,000 shares of Series A Preferred Stock, par value
$0.01 per share, of which 77,714 shares are issued and outstanding as of the
Effective Date; and 100,000 shares of Series B Preferred Stock, par value
$0.01 per share, of which 69,652 shares are issued and outstanding on the
Effective Date. The authorized capital stock of RBOC consists of 1,000
shares of common stock, par value $1.00 per share, of which 1,000 shares are
issued and outstanding. Xxxxxxx X. Xxxxxx, XX, individually and as trustee
of the Xxxxxxx X. Xxxxxx XX, 1982 Revocable Trust, Xxxxx X. Xxx, and M. Xxxxx
Xxxxxxx, formerly Xxxxxx, individually and as trustee of the M. Xxxxx Xxxxxx
1992 Trust, and Xxxxxxx Xxxxxx Xxxxx collectively own all of the Borrower's
issued and outstanding shares of common stock and Series B Preferred Stock.
All of the issued and outstanding stock of the Borrower and RBOC are duly and
validly issued and outstanding and are fully paid and nonassessable. None of
the outstanding shares of capital stock of the Borrower or RBOC has been
issued in violation of any preemptive rights of the current or past
shareholders of such entity.
(b) There are no shares of capital stock or other equity securities of
the Borrower or RBOC other than those indicated in the foregoing paragraph
and there are no outstanding rights against the Borrower, RBOC or their
shareholders relating to the capital stock of the Borrower or RBOC. There
are no voting trusts, voting agreements, proxies or any other agreements or
understandings with respect to the voting of any voting securities of the
Borrower or RBOC.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Revolving Commitment hereunder, the Borrower agrees, unless the Majority
Banks shall otherwise consent in writing, to comply with the following
covenants.
Section 5.01. COMPLIANCE WITH LAWS, ETC. The Borrower shall comply, and
cause each of the Guarantors to comply, in all material respects with all
Legal Requirements.
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Without limiting the generality and coverage of the foregoing, the Borrower
shall comply, and shall cause each of the Guarantors to comply, in all
material respects, with all Environmental Laws and all laws, regulations, or
directives with respect to equal employment opportunity and employee safety
in all jurisdictions in which the Borrower, or any of the Guarantors do
business; PROVIDED, however, that this Section 5.01 shall not prevent the
Borrower, and shall cause each of the Guarantors to, or any of the Guarantors
from, in good faith and with reasonable diligence, contesting the validity or
application of any such laws or regulations by appropriate legal proceedings.
Without limitation of the foregoing, the Borrower shall, and shall cause
each of the Guarantors to, (a) maintain and possess all authorizations,
permits, licenses, trademarks, trade names, rights and copyrights which are
necessary to the conduct of its business and (b) obtain, as soon as
practicable, all consents or approvals required from any states of the United
States (or other Governmental Authorities) necessary to grant the Agent an
Acceptable Security Interest in the Borrower's and the Guarantors' Oil and
Gas Properties.
Section 5.02. MAINTENANCE OF INSURANCE.
(a) The Borrower shall, and shall cause each of the Guarantors to,
procure and maintain or shall cause to be procured and maintained
continuously in effect policies of insurance in form and amounts and issued
by companies, associations or organizations reasonably satisfactory to the
Agent covering such casualties, risks, perils, liabilities and other hazards
reasonably required by the Agent.
(b) All certified copies of policies or certificates thereof, and
endorsements and renewals thereof shall be delivered to and retained by the
Agent. All policies of insurance shall either have attached thereto a
Lender's Loss Payable Endorsement for the benefit of the Agent, as loss payee
in form reasonably satisfactory to the Agent or shall name the Agent as an
additional insured, as applicable. The Borrower shall furnish the Agent with
a certificate of insurance or a certified copy of all policies of insurance
required. All policies or certificates of insurance shall set forth the
coverage, the limits of liability, the name of the carrier, the policy
number, and the period of coverage. In addition, all policies of insurance
required under the terms hereof shall contain an endorsement or agreement by
the insurer that any loss shall be payable in accordance with the terms of
such policy notwithstanding any act of negligence of the Borrower, or a
Guarantor or any party holding under the Borrower or a Guarantor which might
otherwise result in a forfeiture of the insurance and the further agreement
of the insurer waiving all rights of setoff, counterclaim or deductions
against the Borrower and the Guarantors. All such policies shall contain a
provision that notwithstanding any contrary agreements between the Borrower,
the Guarantors, and the applicable insurance company, such policies will not
be canceled, allowed to lapse without renewal, surrendered or amended (which
provision shall include any reduction in the scope or limits of coverage)
without at least 30 days' prior written notice to the Agent. In the event
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that, notwithstanding the "lender's loss payable endorsement" requirement of
this Section 5.02, the proceeds of any insurance policy described above are
paid to the Borrower or a Guarantor, the Borrower shall deliver such proceeds
to the Agent immediately upon receipt.
Section 5.03. PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower
shall preserve and maintain, and cause each of the Guarantors to preserve and
maintain, its corporate existence, rights, franchises, and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified, and
cause each such Guarantor to qualify and remain qualified, as a foreign
corporation in each jurisdiction in which qualification is necessary or
desirable in view of its business and operations or the ownership of its
Properties, and, in each case, where failure to qualify or preserve and
maintain its rights and franchises could reasonably be expected to cause a
Material Adverse Change.
Section 5.04. PAYMENT OF TAXES, ETC. The Borrower shall pay and
discharge, and cause each of the Guarantors to pay and discharge, before the
same shall become delinquent, (a) all taxes, assessments, and governmental
charges or levies imposed upon it or upon its income or profits or Property
that are material in amount, prior to the date on which penalties attach
thereto and (b) all lawful claims that are material in amount which, if
unpaid, might by law become a Lien upon its Property; PROVIDED, HOWEVER, that
neither the Borrower nor any such Guarantor shall be required to pay or
discharge any such tax, assessment, charge, levy, or claim which is being
contested in good faith and by appropriate proceedings, and with respect to
which reserves in conformity with GAAP have been provided.
Section 5.05. VISITATION RIGHTS. At any reasonable time and from time
to time, upon reasonable notice, the Borrower shall, and shall cause the
Guarantors to, permit the Agent and any Bank or any of its agents or
representatives thereof, to (a) examine and make copies of and abstracts from
the records and books of account of, and visit and inspect at its reasonable
discretion the properties of, the Borrower and any such Guarantor, and (b)
discuss the affairs, finances and accounts of the Borrower and any such
Guarantor with any of their respective officers or directors.
Section 5.06. REPORTING REQUIREMENTS. The Borrower shall furnish to the
Agent and each Bank:
(a) ANNUAL FINANCIALS. (i) As soon as available and in any event not
later that 90 days after the end of each fiscal year of the Borrower and the
Guarantors, the Borrower's unaudited balance sheet as of the end of such
fiscal year and statements of income, cash flows, and retained earnings for
such fiscal year and the Borrower and the Guarantors' unaudited consolidated
balance sheet as of the end of such fiscal year and the Borrower and the
Guarantors' consolidated unaudited statements of income, cash flows, and
retained earnings for such fiscal year and (ii) as soon as available and in
any event not later than 120
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days after the end of each fiscal year of the Borrower, (A)(1) a copy of the
annual audit report for such year for each of the Borrower, including therein
the Borrower's balance sheet as of the end of such fiscal year and the
Borrower's statements of income, cash flows, and retained earnings, in each
case certified by Ernst & Young, L.L.P. or other independent certified public
accountants of national standing and including any management letters
delivered by such accountants to the Borrower or any Guarantor in connection
with such audit, (2) a certificate of such accounting firm to the Agent and
the Banks stating that, in the course of the regular audit of the business of
the Borrower, which audit was conducted by such accounting firm in accordance
with generally accepted auditing standards, such accounting firm has obtained
no knowledge that a Default has occurred and is continuing, or if, in the
opinion of such accounting firm, a Default has occurred and is continuing, a
statement as to the nature thereof, and (3) a Compliance Certificate executed
by the Chief Financial Officer or Chief Accounting Officer of the Borrower
and (B) a copy of the unaudited annual consolidating financial statements of
each of the Guarantors, including therein such Guarantor's balance sheet and
statements of income, cash flows, and retained earnings for such fiscal year;
(b) QUARTERLY FINANCIALS. As soon as available and in any event not
later than 45 days after the end of each of the first three quarters of each
fiscal year of the Borrower, (i) the Borrower's unaudited balance sheet and
the Borrower's statements of income, cash flows, and retained earnings for
the period commencing at the end of the previous year and ending with the end
of such quarter, all in reasonable detail and duly certified with respect to
such consolidated statements (subject to year-end audit adjustments) by the
Chief Financial Officer or Chief Accounting Officer of the Borrower as having
been prepared in accordance with GAAP and (ii) a Compliance Certificate
executed by the Chief Financial Officer or Chief Accounting Officer of the
Borrower;
(c) OIL AND GAS RESERVE REPORTS.
(i) As soon as available but in any event on or before March 31 of
each year, an Independent Engineering Report dated as of January 1 for such
year.
(ii) As soon as available but in any event on or before September 30
of each year an Internal Engineering Report dated as of July 1 for such
year.
(iii) The Agent and the Banks acknowledge that the Engineering Reports
contain certain proprietary information including geological and
geophysical data, maps, models, and interpretations necessary for
determining the Borrowing Base and the creditworthiness of the Borrower and
the Guarantors. The Agent and the Banks agree to maintain the
confidentiality of such information except as required by law. The Agent
and the Banks may share such information with potential transferees of
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their interests under this Agreement if such transferees agree to maintain
the confidentiality of such information.
(d) QUARTERLY REPORTS. As soon as available and in any event within 60
days after the end of each quarter, such operational reports covering the Oil
and Gas Properties as the Agent or any Bank may reasonably request;
(e) MONTHLY REPORTS. As soon as available and in any event within 30
days after the end of each month, a report certified by a Responsible Officer
of the Borrower in form and substance satisfactory to the Bank prepared by
the Borrower (i) for each of the Borrower and the Guarantors' Oil and Gas
Properties detailing production, revenue, and price information and
associated operating expenses and further detailing any changes to any
producing reservoir, production equipment, or producing well which could
cause a Material Adverse Change and (ii) detailing which of the Borrower's
and the Guarantors' Oil and Gas Properties have been sold in the prior month;
(f) ANNUAL BUDGET. As soon as available and in any event within 90 days
before the end of each fiscal year, the Borrower's annual operating budget in
form and substance satisfactory to the Agent for the following fiscal year;
(g) DEFAULTS. As soon as possible and in any event within five days
after the occurrence of each Default known to a Responsible Officer of the
Borrower or any of the Guarantors which is continuing on the date of such
statement, a statement of the Chief Financial Officer of the Borrower setting
forth the details of such Default and the actions which the Borrower has
taken and proposes to take with respect thereto;
(h) SECURITIES LAW FILINGS. Promptly and in any event within 15 days
after the sending or filing thereof, copies of all final (as opposed to draft
or preliminary) proxy material, reports and other information which the
Borrower or any of the Guarantors sends to or files with the United States
Securities and Exchange Commission or sends to any equity holder of the
Borrower or a Guarantor;
(i) TERMINATION EVENTS. As soon as possible and in any event (i) within
30 days after the Borrower or any member of the Controlled Group knows or has
reason to know that any Termination Event described in clause (a) of the
definition of Termination Event with respect to any Plan has occurred, and
(ii) within 10 days after the Borrower or any of its Affiliates knows or has
reason to know that any other Termination Event with respect to any Plan has
occurred, a statement of the Chief Financial Officer of the Borrower
describing such Termination Event and the action, if any, which the Borrower
or such Affiliate proposes to take with respect thereto;
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(j) TERMINATION OF PLANS. Promptly and in any event within two Business
Days after receipt thereof by the Borrower or any member of the Controlled Group
from the PBGC, copies of each notice received by the Borrower or any such member
of the Controlled Group of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan;
(k) OTHER ERISA NOTICES. Promptly and in any event within five Business
Days after receipt thereof by the Borrower or any member of the Controlled Group
from a Multiemployer Plan sponsor, a copy of each notice received by the
Borrower or any member of the Controlled Group concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of ERISA;
(l) ENVIRONMENTAL NOTICES. Promptly upon the receipt thereof by the
Borrower or any of the Guarantors, a copy of any form of notice, summons or
citation received from the EPA, or any other Governmental Authority, concerning
(i) violations or alleged violations of Environmental Laws, which seeks to
impose liability therefor and could cause a Material Adverse Change, (ii) any
action or omission on the part of the Borrower or any Guarantor or any of their
former Subsidiaries in connection with Hazardous Waste or Hazardous Substances
which could reasonably result in the imposition of liability therefor that could
cause a Material Adverse Change, including without limitation any notice of
potential responsibility under CERCLA, or (iii) concerning the filing of a Lien
upon, against or in connection with the Borrower or any Guarantor or their
former Subsidiaries, or any of their leased or owned Property, wherever located;
(m) OTHER GOVERNMENTAL NOTICES. Promptly and in any event within five
Business Days after receipt thereof by the Borrower or any Guarantor, a copy of
any notice, summons, citation, or proceeding seeking to modify in any material
respect, revoke, or suspend any material contract, license, or agreement with
any Governmental Authority;
(n) MATERIAL CHANGES. Prompt written notice of any condition or event of
which the Borrower has knowledge, which condition or event has resulted or may
reasonably be expected to result in (i) a Material Adverse Change or (ii) a
breach of or noncompliance with any material term, condition, or covenant of any
material contract to which the Borrower or any of the Guarantors is a party or
by which they or their properties may be bound;
(o) DISPUTES, ETC. Prompt written notice of any claims, proceedings, or
disputes, or to the knowledge of the Borrower threatened, or affecting the
Borrower, or any of the Guarantors which, if adversely determined, could
reasonably be expected to cause a Material Adverse Change, or any material labor
controversy of which the Borrower or any of the Guarantors has knowledge
resulting in or reasonably considered to be likely to result in a strike against
the Borrower or any of the Guarantors; and
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(p) OTHER INFORMATION. Such other information respecting the business or
Properties, or the condition or operations, financial or otherwise, of the
Borrower or any of the Guarantors, as any Bank through the Agent may from time
to time reasonably request. The Agent agrees to provide the Banks with copies
of any material notices and information delivered solely to the Agent pursuant
to the terms of this Agreement.
Section 5.07. MAINTENANCE OF PROPERTY. The Borrower shall, and shall
cause each of the Guarantors to, maintain their owned, leased, or operated
Property in good condition and repair; and shall abstain, and cause each of the
Guarantors to abstain from, and not knowingly or willfully permit the commission
of waste or other injury, destruction, or loss of natural resources, or the
occurrence of pollution, contamination, or any other condition in, on or about
the owned or operated property involving the Environment that could reasonably
be expected to result in Response activities and that could reasonably be
expected to cause a Material Adverse Change.
Section 5.08. BANK ACCOUNTS. The Borrower and the Guarantors shall
maintain the bank accounts indicated on the attached SCHEDULE 5.08 for the
purposes indicated on such Schedule; shall cause each depositary institution
maintaining a lock box, collection, revenue or other account in which proceeds
of Collateral are deposited ("Revenue Accounts") to enter into an agreement with
the Agent in substantially the form of Exhibit A to the Security Agreements; and
agrees to deposit therein all proceeds of any sales of Hydrocarbons attributable
to the Borrower's and the Guarantors' Oil and Gas Properties unless and until
the Agent directs it to act otherwise. The Borrower or the Guarantors, as
applicable, may, prior to the occurrence and continuance of a Default or Event
of Default, make withdrawals from the Revenue Accounts to pay operating costs
and expenses or to other bank accounts used to pay operating costs and expenses.
After the occurrence and continuance of a Default or Event of Default, all
amounts deposited in the Revenue Accounts shall be retained by the Agent as
collateral for the Obligations. The Agent does not waive or relinquish any of
its rights or interests arising under the Credit Documents by permitting the
Borrower and the Guarantors to collect and deposit the proceeds of sales of
Hydrocarbons attributable to Borrower's Oil and Gas Properties. The Borrower
shall have no other bank accounts other than the accounts listed on SCHEDULE
5.08 and accounts for which the Agent has consented.
Section 5.09. TITLE OPINIONS. Not later than February 28, 1998 with
respect to Oil and Gas Properties included in the Collateral and prior to the
inclusion of any Oil and Gas Properties in the Borrowing Base, the Borrower
shall take such actions and execute and deliver such documents and
instruments as the Agent shall require to ensure that the Agent shall, at all
times, have received supplemental or new title opinions addressed to it
issued by counsel to the Borrower that is experienced in the examination of
title to Oil and Gas Properties (which title opinions shall be in form and
substance acceptable to the Agent in its sole discretion and shall include
opinions regarding the before payout and after payout ownership interests
held by the Borrower and the Guarantors for all xxxxx located on the Oil and
Gas Properties
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covered thereby) as to the ownership of Oil and Gas Properties of the
Borrower and the Guarantors included in the Borrowing Base, and reflecting
that the Agent has an Acceptable Security Interest in such Oil and Gas
Properties of the Borrower and the Guarantors, constituting at least 67.5% of
the present value of the Proven Reserves of the Borrower and the Guarantors
and at least 65% of the present value of the Proved Developed Producing
Reserves of the Borrower and the Guarantors as determined by the Agent. If
the Agent shall determine that, as of the date of any Borrowing Base
determination, the Borrower shall have failed to comply with the preceding
sentence, the Agent may notify the Borrower in writing of such failure and,
within 30 days from and after receipt of such written notice by the Borrower,
the Borrower shall execute and deliver to the Agent satisfactory title
evidence (including supplemental or new title opinions meeting the foregoing
requirements) in form and substance acceptable to the Agent in its reasonable
business judgment as to the Borrower's and the Guarantor's ownership of such
Oil and Gas Properties and the Agent's Lien and security interest therein as
are required to maintain compliance with this Section 5.09.
Section 5.10. INTEREST HEDGE ARRANGEMENTS. The Borrower shall have
entered into hedging transactions as reasonably agreed upon by the Agent and the
Borrower to fix, cap or collar the interest rate on the Revolving Advances at an
interest rates to be agreed to by the Agent and the Borrower.
Section 5.11. AGREEMENT TO PLEDGE. The Borrower shall, and shall cause
each Guarantor to, grant to the Agent an Acceptable Security Interest in any
Property of the Borrower or any Guarantor now owned or hereafter acquired
promptly after receipt of a written request from the Agent.
Section 5.12. INDEPENDENT DIRECTORS. If at any time hereafter while any
Term Advances remain outstanding, the Borrower shall, within 90 days after
receipt of a written request therefor from the Agent, obtain at least two
independent, outside directors and such directors shall constitute at least 30%
of the total directors of the Borrower, provided that, if the Term Advances are
repaid in full during such 90 days, the Borrower shall not be required to comply
with such request.
Section 5.13. RBOC. No later than ten days after RBOC receives any
assets, the Borrower will cause RBOC to execute and deliver to the Agent a
Guaranty in substantially the form of Exhibit C-1, a Security Agreement in
substantially the form of Exhibit I, and such other documents, governmental
certificates, agreement as the Agent may reasonably request, together with such
evidence of corporate authority to enter into such Credit Documents as the Agent
may reasonably request, including without limitation, opinions of legal counsel
regarding such corporate authority and the enforceability of such Credit
Documents.
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ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Revolving Commitment, the Borrower agrees, unless the Majority Banks
otherwise consent in writing, to comply with the following covenants.
Section 6.01. LIENS, ETC. The Borrower shall not create, assume, incur,
or suffer to exist, or permit any of the Guarantors to create, assume, incur, or
suffer to exist, any Lien on or in respect of any of its Property whether now
owned or hereafter acquired, or assign any right to receive income, except that
the Borrower and the Guarantors may create, incur, assume, or suffer to exist:
(a) Liens securing the Obligations;
(b) Liens specified in the attached SCHEDULE 6.01 on the Property owned by
the Borrower and the Guarantors which is specified therein securing only the
Debt disclosed to be secured by such Liens therein;
(c) Liens securing purchase money Debt or Capital Leases to the extent
such Debt is permitted under Section 6.02(f); PROVIDED that (i) each such Lien
only encumbers the property acquired in connection with the creation of such
Debt or Capital Lease and all proceeds therefrom and (ii) the fair market value
of the collateral securing any such Debt may exceed the outstanding principal
amount of such Debt only to the extent such excess is within customary
commercial bank lending and collateralization requirements;
(d) Liens for taxes, assessments, or other governmental charges or levies
not yet due or that (provided foreclosure, sale, or other similar proceedings
shall not have been initiated) are being contested in good faith by appropriate
proceedings, and such reserve as may be required by GAAP shall have been made
therefor;
(e) Liens in favor of vendors, carriers, warehousemen, repairmen,
mechanics, workmen, materialmen, construction, or similar Liens arising by
operation of law in the ordinary course of business in respect of obligations
that are not yet due or that are being contested in good faith by appropriate
proceedings, provided such reserve as may be required by GAAP shall have been
made therefor;
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(f) Liens to operators and non-operators under joint operating agreements
arising in the ordinary course of the business of the Borrower or the relevant
Guarantor to secure amounts owing, which amounts are not yet due or are being
contested in good faith by appropriate proceedings, if such reserve as may be
required by GAAP shall have been made therefor;
(g) easements, rights-of-way, restrictions, and other similar
encumbrances, and minor defects in the chain of title that are customarily
accepted in the oil and gas financing industry, none of which interfere with the
ordinary conduct of the business of Borrower or any Guarantor or materially
detract from the value or use of the Property to which they apply; and
(h) Liens of record under terms and provisions of the leases, unit
agreements, assignments, and other transfer of title documents in the chain of
title under which the Borrower or the relevant Guarantor acquired the Property,
which have been disclosed to the Agent.
Section 6.02. DEBTS, GUARANTIES, AND OTHER OBLIGATIONS. The Borrower
shall not, and shall not permit any of the Guarantors to, create, assume, suffer
to exist, or in any manner become or be liable in respect of, any Debt except:
(a) Debt of the Borrower and the Guarantors under the Credit Documents;
(b) Debt of the Borrower and the Guarantors and disclosed in the attached
SCHEDULE 6.02 and any extensions, rearrangements, and modifications thereof
which do not increase the principal amount thereof or the interest rate charged
thereon above a market rate of interest;
(c) Debt of RBOC or Gulf States owing to the Borrower; PROVIDED that such
Debt is incurred in the ordinary course of business and is subordinated to the
Obligations in a manner satisfactory to the Agent and does not exceed
$3,000,000.00 in the aggregate principal outstanding;
(d) Debt in the form of obligations for the deferred purchase price of
property or services incurred in the ordinary course of business which are not
yet due and payable or are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
established;
(e) Debt existing under Interest Hedge Agreements and Hydrocarbon Hedge
Agreements; and
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(f) Debt not otherwise permitted under this Section 6.02 in an aggregate
principal amount outstanding at any time not to exceed $500,000.00.
Section 6.03. AGREEMENTS RESTRICTING LIENS AND DISTRIBUTIONS. The
Borrower shall not, nor shall it permit any of the Guarantors to, enter into any
agreement (other than a Credit Document) which except with respect to specific
Property encumbered to secure payment of Debt related to such Property, imposes
restrictions upon the creation or assumption of any Lien upon its Properties,
revenues or assets, whether now owned or hereafter acquired.
Section 6.04. MERGER OR CONSOLIDATION; ASSET SALES. The Borrower shall
not, and shall not permit any of the Guarantors to:
(a) merge or consolidate with or into any other Person; or
(b) sell, lease, transfer, or otherwise dispose of any of its Property
outside of the ordinary course of business or any of its Oil and Gas Properties,
except (i) sales of Hydrocarbons in the ordinary course of business, (ii) sales
of assets (other than Oil and Gas Properties) outside the ordinary course of
business in an aggregate amount for any fiscal year not to exceed $100,000.00,
(iii) sales of Oil and Gas Properties outside the ordinary course of business in
a transaction or related series of transactions with aggregate consideration of
$100,000.00 or less or an aggregate consideration for all such transactions of
$300,000.00 or less; PROVIDED that the Borrower shall have made any prepayments
required by Section 2.05(d) contemporaneously with the closing of any such asset
sale; and (v) sales of equipment no longer used or useful in the Borrower or the
Guarantors' business or equipment salvaged in connection with any plugging or
abandonment of any well.
Section 6.05. RESTRICTED PAYMENTS. The Borrower shall not, and shall not
permit any of the Guarantors to, make or pay any Restricted Payment other than
any Restricted Payment made in connection with the redemption of the Borrower's
Series A Preferred Stock and Series B Preferred Stock; PROVIDED, however that
(a) no Default or Event of Default has occurred and is continuing, (b) each of
the Borrower's Series B Preferred Stockholders shall have executed and delivered
to the Agent for the benefit of the Banks a Limited Guaranty and (c) any
promissory notes issued by the Borrower to the Series B Preferred Stockholders
in an amount equal to the redemption amount of such Series B Preferred
Stockholder's Series B Preferred Stock shall be (i) in form and substance and
(ii) subordinated to the Obligations under the Credit Agreement on terms
satisfactory to the Agent.
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Section 6.06. INVESTMENTS. The Borrower shall not, and shall not permit
any of the Guarantors to, make or permit to exist any loans, advances, or
capital contributions to, or make any investment in, or purchase or commit to
purchase any stock or other securities or evidences of indebtedness of or
interests in any Person, except:
(a) Liquid Investments;
(b) trade and customer accounts receivable which are for goods furnished
or services rendered in the ordinary course of business and are payable in
accordance with customary trade terms;
(c) oil and gas farm-ins, oil and gas development joint ventures and
limited partnerships, and similar transactions, in each case in the ordinary
course of business; and
(d) loans, advances, or capital contributions to, or investment in, or
purchases or commitments to purchase any stock or other securities or evidences
of indebtedness of or interests in any Person, specified in the attached
SCHEDULE 6.06.
Section 6.07. LIMITATION ON SPECULATIVE HEDGING. The Borrower shall not,
and shall not permit any of the Guarantors to, purchase, assume, or hold a
speculative position in any commodities market or futures market.
Section 6.08. AFFILIATE TRANSACTIONS.
(a) Except as expressly permitted elsewhere in this Agreement or
otherwise approved in writing by the Agent, the Borrower shall not, and shall
not permit any of the Guarantors to, make, directly or indirectly: (i) any
investment in any Affiliate; (ii) any transfer, sale, lease, assignment, or
other disposal of any assets to any such Affiliate or any purchase or
acquisition of assets from any such Affiliate; or (iii) any arrangement or
other transaction directly or indirectly with or for the benefit of an such
Affiliate (including without limitation, guaranties and assumptions of
obligations of an Affiliate); PROVIDED that the Borrower and the Guarantors
may enter into any arrangement or other transaction with any such Affiliate
providing for the leasing of property, the rendering or receipt of services
or the purchase or sale of inventory and other assets in the ordinary course
of business if the monetary or business consideration arising therefrom would
be substantially as advantageous to the Borrower and the Guarantors as the
monetary or business consideration which it would obtain in a comparable
arm's length transaction with a Person not such an Affiliate.
(b) After the occurrence and during the continuance of any Default or
Event of Default, the Borrower shall not, and shall not permit any Guarantor to,
make any payment to any shareholder of the Borrower, including any payments for
directors fees, salaries,
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bonuses, loan payments, reimbursements, or otherwise (other than base salary,
which shall in no event exceed 85% of the base annual salary as of the
Effective Date, and reimbursements of actual out-of-pocket expenses incurred
in the ordinary course of business payable to Xxxxxxx X. Xxxxxx XX and Xxxxx
X. Xxx).
Section 6.09. COMPLIANCE WITH ERISA. The Borrower shall not, and shall
not permit any of the Guarantors to, (a) terminate, or permit any Affiliate to
terminate, any Plan so as to result in any material (in the opinion of the
Majority Banks) liability of the Borrower or any of its Affiliates to the PBGC
or (b) permit to exist any occurrence of any Reportable Event (as defined in
Title IV of ERISA), or any other event or condition, which presents a material
(in the opinion of the Majority Banks) risk of such a termination by the PBGC of
any Plan.
Section 6.11. SALE-AND-LEASEBACK. The Borrower shall not, nor shall it
permit any of the Guarantors to, sell or transfer to a Person any property,
whether now owned or hereafter acquired, if at the time or thereafter the
Borrower or a Guarantor shall lease as lessee such property or any part thereof
or other property which the Borrower or a Guarantor intends to use for
substantially the same purpose as the property sold or transferred.
Section 6.12. NO SUBSIDIARIES. The Borrower shall not, and shall not
permit any Guarantor to, have any Subsidiaries, except those Subsidiaries listed
on Schedule 4.01.
Section 6.13. CHANGE OF BUSINESS. The Borrower shall not, nor shall it
permit any of the Guarantors to, materially change the character of their
business as presently and normally conducted or engage in any type of business
not related to their business as presently and normally conducted.
Section 6.14. ORGANIZATIONAL DOCUMENTS, NAME CHANGE. The Borrower shall
not, nor shall it permit any of the Guarantors to, amend, supplement, modify or
restate their articles or certificate of incorporation and bylaws or other
equivalent organizational documents without the prior the written consent of the
Agent, which consent shall not be unreasonably withheld provided that such
amendments, supplements, modifications or restatements are in form and substance
reasonably satisfactory to the Agent. The Borrower shall not, nor shall it
permit any of the Guarantors to, change their name without giving the Agent
reasonable notice thereof. The Borrower agrees that at any time, at the
Borrower's expense, the Borrower will, or will cause any of the Guarantors to,
promptly execute and deliver all further instruments and documents, and take all
further action, that may be reasonably necessary or that the Agent or any Bank
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
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Section 6.15. GENERAL AND ADMINISTRATIVE EXPENSES. The Borrower shall not
permit the combined general and administrative expenses of the Borrower and the
Guarantors (which shall include directors fees, salaries, and other ordinary
course of business payments to the Borrower's shareholders, but which shall not
include expenses incurred in connection with this Agreement to the extent not
capitalized and expenses incurred in connection with the prosecution or defense
of any litigation), net of xxxxxxxx for third party reimbursements, to be more
than $4,400,000.00 for any four fiscal quarter period ending after the Effective
Date. The Borrower shall provide the Agent sufficient detail (including details
on all cash compensation and payments to all equity holders of the Borrower) to
support the incurrence of all of its general and administrative expenses. Upon
the occurrence of a Default, the permitted general and administrative expenses
shall be reduced by one-third but such reduction shall not adversely affect the
operations of the Borrower and the Guarantors.
Section 6.16. CAPITAL EXPENDITURES. The Borrower shall not permit the
consolidated Capital Expenditures of the Borrower and the Guarantors to exceed
in any fiscal year the amount agreed to for such fiscal year between the
Borrower, the Agent and the Majority Banks, which amount shall be based upon the
Borrower's operating budget for such fiscal year. Notwithstanding the
foregoing, the Borrower and the Guarantors may incur ordinary course of business
Capital Expenditures in connection with routine maintenance of capital assets
and Capital Expenditures of up to $50,000.00 for any single item or project not
included in the Borrower's operating budget as approved by the Agent and the
Majority Banks.
Section 6.17. RENTAL EXPENSE. The Borrower shall not permit the
consolidated Rental Expense of the Borrower and the Guarantors to exceed
$500,000.00 in any fiscal year of the Borrower.
Section 6.18. ACCOUNTS PAYABLE. The Borrower shall not, and shall not
permit any Guarantor to, to have any trade payable be due more than 90 days,
except for trade payable subject to a bona fide dispute and for which adequate
reserves are maintained in accordance with GAAP.
Section 6.19. ADVANCE PAYMENT CONTRACTS. The Borrower shall not, and
shall not permit any Guarantor to, enter into or be a party to any Advance
Payment Contract with respect to any Oil and Gas Properties that are Collateral.
Section 6.20. CURRENT RATIO. The Borrower shall not permit the ratio of
the consolidated current assets of the Borrower and the Guarantors to the
consolidated current liabilities of the Borrower and the Guarantors to be less
than 1.00 to 1.00 at any time.
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Section 6.21. INTEREST COVERAGE RATIO. The Borrower shall not permit as
of the last day of any fiscal quarter the ratio of (a) consolidated EBITDA for
the Borrower and the Guarantors for the four fiscal quarters ending on such date
to (b) Interest Expense for such period to be less than (i) 2.25 to 1.00 from
the Effective Date through December 31, 1997 and (ii) 2.50 to 1.00 thereafter.
Section 6.22. DEBT SERVICE RATIO. The Borrower shall not permit as of the
last day of any fiscal quarter the ratio of (a) consolidated EBITDA for the
Borrower and the Guarantors for the four fiscal quarters ending on such date to
(b) consolidated scheduled and required principal payments on Debt for the
Borrower and the Guarantors and Interest Expense for such period to be less than
1.25 to 1.00.
ARTICLE VII
REMEDIES
Section 7.01. EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an "Event of Default" under any Credit Document:
(a) PAYMENT. The Borrower shall fail to pay when due any principal,
interest, fees, reimbursements, indemnifications, or other amounts payable
hereunder, under the Notes, or under any other Credit Document;
(b) REPRESENTATION AND WARRANTIES. Any representation or warranty made or
deemed to be made (i) by the Borrower in this Agreement or in any other Credit
Document, (ii) by the Borrower (or any of its officers) in connection with this
Agreement or any other Credit Document, or (iii) by any Guarantor in any Credit
Document shall prove to have been incorrect in any material respect when made or
deemed to be made;
(c) COVENANT BREACHES. (i) The Borrower shall (A) fail to perform or
observe any covenant contained in Section 5.02(a), 5.05, or 5.08 or Article VI
of this Agreement or (B) fail to perform or observe any other term or covenant
set forth in this Agreement or in any other Credit Document which is not covered
by clause (i)(A) above or any other provision of this Section 7.01 if such
failure shall remain unremedied for 30 days after written notice of such default
shall have been given to such Person by the Agent or any Bank or for 10 days
after such Person had actual knowledge of such default PROVIDED that such Person
did not give written notice thereof to the Agent within such 10 days or (ii) any
Guarantor shall fail to perform or observe any covenant contained in its
Guaranty;
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(d) CROSS-DEFAULTS. (i) The Borrower or any Guarantor shall fail to pay
any principal of or premium or interest on its Debt which is outstanding in a
principal amount of at least $100,000.00 individually or when aggregated with
all such Debt of the Borrower or the Guarantors so in default (but excluding
Debt evidenced by the Notes) when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; (ii) any other event shall
occur or condition shall exist under any agreement or instrument relating to
Debt which is outstanding in a principal amount of at least $100,000.00
individually or when aggregated with all such Debt of the Borrower and the
Guarantors so in default, and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or (iii) any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) INSOLVENCY. The Borrower or any of the Guarantors shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Borrower
or any of the Guarantors seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against the Borrower or any such
Guarantor, either such proceeding shall remain undismissed for a period of 30
days or any of the actions sought in such proceeding shall occur; or the
Borrower or any of the Guarantors shall take any corporate action to authorize
any of the actions set forth above in this paragraph (e);
(f) JUDGMENTS. Any judgment or order for the payment of money in excess
of $100,000.00 shall be rendered against the Borrower or any of the Guarantors
and either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect;
(g) TERMINATION EVENTS. Any Termination Event with respect to a Plan
shall have occurred, and, 30 days after notice thereof shall have been given to
the Borrower by the Agent, (i) such Termination Event shall not have been
corrected and (ii) the then present value of such Plan's vested benefits exceeds
the then current value of assets accumulated in
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such Plan by more than the amount of $100,000.00 (or in the case of a
Termination Event involving the withdrawal of a "substantial employer" (as
defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess shall exceed such amount);
(h) PLAN WITHDRAWALS. The Borrower or any member of the Controlled Group
as employer under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an annual amount exceeding
$100,000.00;
(i) BORROWING BASE. Any failure to cure any Borrowing Base deficiency in
accordance with Section 2.05;
(j) GUARANTIES. Any provision of any Guaranty shall for any reason cease
to be valid and binding on the applicable Guarantor or the applicable Guarantor
shall so state in writing;
(k) SECURITY DOCUMENTS. Any Security Document shall at any time and for
any reason cease to create the Lien on the property purported to be subject to
such agreement in accordance with the terms of such agreement, or cease to be in
full force and effect, or shall be contested by the Borrower or any Guarantor;
(l) CHANGE OF CONTROL. Any change in the ownership of the Borrower from
the ownership on the Effective Date; or
(m) MANAGEMENT. Either Xxxxxxx X. Xxxxxx XX or Xxxxx X. Xxx shall cease
to serve actively as an officer of the Borrower by reason of resignation, action
by the board of directors or owners of the Borrower, or otherwise.
Section 7.02. OPTIONAL ACCELERATION OF MATURITY. If any Event of Default
(other than an Event of Default pursuant to paragraph (e) of Section 7.01) shall
have occurred and be continuing, then, and in any such event,
(a) the Agent (i) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Borrower, declare the obligation of each Bank
and the Issuing Bank to make extensions of credit hereunder, including making
Advances and issuing Letters of Credit, to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Banks, by notice to the Borrower, declare all
principal, interest, fees, reimbursements, indemnifications, and all other
amounts payable under this Agreement, the Notes, and the other Credit Documents
to be forthwith due and
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payable, whereupon all such amounts shall become and be forthwith due and
payable in full, without notice of intent to demand, demand, presentment for
payment, notice of nonpayment, protest, notice of protest, grace, notice of
dishonor, notice of intent to accelerate, notice of acceleration, and all
other notices, all of which are hereby expressly waived by the Borrower;
(b) the Borrower shall, on demand of the Agent at the request or with the
consent of the Majority Banks, deposit with the Agent into the Cash Collateral
Account an amount of cash equal to the Letter of Credit Exposure as security for
the Obligations; and
(c) the Agent shall at the request of, or may with the consent of, the
Majority Banks proceed to enforce its rights and remedies under the Security
Documents, the Guaranties, and any other Credit Document for the ratable benefit
of the Banks by appropriate proceedings.
Section 7.03. AUTOMATIC ACCELERATION OF MATURITY. If any Event of Default
pursuant to paragraph (e) of Section 7.01 shall occur,
(a) (i) the obligation of each Bank and the Issuing Bank to make
extensions of credit hereunder, including making Advances and issuing Letters of
Credit, shall terminate, and (ii) all principal, interest, fees, reimbursements,
indemnifications, and all other amounts payable under this Agreement, the Notes,
and the other Credit Documents shall become and be forthwith due and payable in
full, without notice of intent to demand, demand, presentment for payment,
notice of nonpayment, protest, notice of protest, grace, notice of dishonor,
notice of intent to accelerate, notice of acceleration, and all other notices,
all of which are hereby expressly waived by the Borrower;
(b) the Borrower shall deposit with the Agent into the Cash Collateral
Account an amount of cash equal to the outstanding Letter of Credit Exposure as
security for the Obligations; and
(c) the Agent shall at the request of, or may with the consent of, the
Majority Banks proceed to enforce its rights and remedies under the Security
Documents, the Guaranties, and any other Credit Document for the ratable benefit
of the Banks by appropriate proceedings.
Section 7.04. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Agent and each Bank is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, 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 the Agent or such Bank to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
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existing under this Agreement, the Notes held by the Agent or such Bank, and the
other Credit Documents, irrespective of whether or not the Agent or such Bank
shall have made any demand under this Agreement, such Notes, or such other
Credit Documents, and although such obligations may be unmatured. The Agent and
each Bank agrees to promptly notify the Borrower after any such set-off and
application made by the Agent or such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Agent and each Bank under this Section 7.04 are in addition to any
other rights and remedies (including, without limitation, other rights of
set-off) which the Agent or such Bank may have.
Section 7.05. ACTIONS UNDER CREDIT DOCUMENTS. Following an Event of
Default, the Agent shall at the request, or may with the consent, of the
Majority Banks, take any and all actions permitted under the other Credit
Documents, including enforcing its rights under the Security Documents and the
Guaranty for the ratable benefit of the Banks.
Section 7.06. NON-EXCLUSIVITY OF REMEDIES. No remedy conferred upon the
Agent is intended to be exclusive of any other remedy, and each remedy shall be
cumulative of all other remedies existing by contract, at law, in equity, by
statute or otherwise.
ARTICLE VIII
THE AGENT AND THE ISSUING BANK
Section 8.01. AUTHORIZATION AND ACTION. Each Bank hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof and of the other Credit Documents, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), the 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 the Majority Banks, and such instructions
shall be binding upon all Banks and all holders of Notes; PROVIDED, however,
that the Agent shall not be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement, any other Credit
Document, or applicable law.
Section 8.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable for any action taken
or omitted to be taken (INCLUDING THE AGENT'S OWN NEGLIGENCE) by it or them
under or in connection with this Agreement or the other Credit Documents, except
for its or their own
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gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, the Agent: (a) may treat the payee of any Note as the
holder thereof until the Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to the Agent;
(b) may consult with legal counsel (including counsel for the Borrower),
independent public accountants, and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by it
in accordance with the advice of such counsel, accountants, or experts; (c)
makes no warranty or representation to any Bank and shall not be responsible
to any Bank for any statements, warranties, or representations made in or in
connection with this Agreement or the other Credit Documents; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or any other
Credit Document on the part of the Borrower or the Guarantors or to inspect
the property (including the books and records) of the Borrower or the
Guarantors; (e) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency, or value of
this Agreement or any other Credit Document; and (f) shall incur no liability
under or in respect of this Agreement or any other Credit Document by acting
upon any notice, consent, certificate, or other instrument or writing (which
may be by telecopier or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
Section 8.03. THE AGENT AND ITS AFFILIATES. With respect to its
Commitments, the Advances made by it and the Notes issued to it, the Agent shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Agent. The term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include the Agent in its individual
capacity. The 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 or any of the Guarantors, and any Person who may do business
with or own securities of the Borrower or any such Guarantor, all as if the
Agent were not an agent hereunder and without any duty to account therefor to
the Banks.
Section 8.04. BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the Financial Statements and the Interim Financial Statements and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it shall, independently and without reliance upon the Agent or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
Section 8.05. INDEMNIFICATION. THE BANKS SEVERALLY AGREE TO INDEMNIFY THE
AGENT AND THE ISSUING BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES,
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AND AGENTS (TO THE EXTENT NOT REIMBURSED BY THE BORROWER), ACCORDING TO THEIR
RESPECTIVE PRO RATA SHARES FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES, OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT AND THE ISSUING BANK
IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN
OR OMITTED BY THE AGENT OR THE ISSUING BANK UNDER THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT (INCLUDING THE AGENT'S AND THE ISSUING BANK'S OWN
NEGLIGENCE), PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE AGENT'S AND THE
ISSUING BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF
THE FOREGOING, EACH BANK AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND
FOR ITS RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES)
INCURRED BY THE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER
THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH BY
THE BORROWER.
Section 8.06. SUCCESSOR AGENT AND ISSUING BANK. The Agent or the Issuing
Bank may resign at any time by giving written notice thereof to the Banks and
the Borrower and may be removed at any time with or without cause by the
Majority Banks upon receipt of written notice from the Majority Banks to such
effect. Upon receipt of notice of any such resignation or removal, the Majority
Banks shall have the right to appoint a successor Agent or Issuing Bank only
with the consent of the Borrower, which consent shall not be unreasonably
withheld. If no successor Agent or Issuing Bank shall have been so appointed by
the Majority Banks with the consent of the Borrower, and shall have accepted
such appointment, within 30 days after the retiring Agent's or Issuing Bank's
giving of notice of resignation or the Majority Banks' removal of the retiring
Agent or Issuing Bank, then the retiring Agent or Issuing Bank may, on behalf of
the Banks and the Borrower, appoint a successor Agent or Issuing Bank, which
shall be, in the case of a successor agent, a commercial bank organized under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000.00 and, in the case of the
Issuing Bank, a Bank. Upon the acceptance of any appointment as Agent or
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Issuing Bank by a successor Agent or Issuing Bank, such successor Agent or
Issuing Bank shall thereupon succeed to and become vested with all the rights,
powers, privileges, and duties of the retiring Agent or Issuing Bank, and the
retiring Agent or Issuing Bank shall be discharged from its duties and
obligations under this Agreement and the other Credit Documents, except that the
retiring Issuing Bank shall remain the Issuing Bank with respect to any Letters
of Credit outstanding on the effective date of its resignation or removal and
the provisions affecting the Issuing Bank with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Bank until the termination of
all such Letters of Credit. After any retiring Agent's or Issuing Bank's
resignation or removal hereunder as Agent or Issuing Bank, the provisions of
this Article VIII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent or Issuing Bank under this Agreement and
the other Credit Documents.
ARTICLE IX
MISCELLANEOUS
Section 9.01. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Banks
and the Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; PROVIDED,
however, that no amendment, waiver, or consent shall, unless in writing and
signed by all the Banks, do any of the following: (a) waive any of the
conditions specified in Section 3.01 or 3.02, (b) increase the Revolving
Commitment of the Banks, (c) reduce the principal of, or interest on, the Notes
or any fees or other amounts payable hereunder or under any other Credit
Document, (d) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder or extend
the Revolving Maturity Date or the Term Maturity Date, (e) change the percentage
of Banks which shall be required for the Banks or any of them to take any action
hereunder or under any other Credit Document, (f) amend Section 2.11 or this
Section 9.01, (g) amend the definition of "Majority Banks," (h) release any
Guarantor from its obligations under any Guaranty, or (i) release any collateral
securing the Obligations, except for releases of Collateral sold as permitted by
this Agreement; and PROVIDED, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Agent or the Issuing Bank in addition
to the Banks required above to take such action, affect the rights or duties of
the Agent or the Issuing Bank, as the case may be, under this Agreement or any
other Credit Document.
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Section 9.02. NOTICES, ETC. All notices and other communications shall be
in writing (including, without limitation, telecopy or telex) and mailed by
certified mail, return receipt requested, telecopied, telexed, hand delivered,
or delivered by a nationally recognized overnight courier, at the address for
the appropriate party specified in SCHEDULE 1 or at such other address as shall
be designated by such party in a written notice to the other parties. All such
notices and communications shall, when so mailed, telecopied, telexed, or hand
delivered or delivered by a nationally recognized overnight courier, be
effective when received if mailed, when telecopy transmission is completed, when
confirmed by telex answer-back, or when delivered by such messenger or courier,
respectively, except that notices and communications to the Agent pursuant to
Article II or VIII shall not be effective until received by the Agent.
Section 9.03. NO WAIVER; REMEDIES. No failure on the part of any Bank,
the Agent, or the Issuing Bank to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 9.04. COSTS AND EXPENSES. The Borrower agrees to pay on demand
(a) all reasonable out-of-pocket costs and expenses of the Agent in connection
with the preparation, execution, delivery, administration, modification, and
amendment of this Agreement, the Notes, the Guaranties, and the other Credit
Documents including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect to advising the Agent as to its
rights and responsibilities under this Agreement, and (b) all out-of-pocket
costs and expenses, if any, of the Agent, the Issuing Bank, and each Bank
(including, without limitation, reasonable counsel fees and expenses of the
Agent, the Issuing Bank, and each Bank) in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of this
Agreement, the Notes, the Guaranties, and the other Credit Documents.
Section 9.05. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by the Borrower and the Agent, and when the Agent
shall have, as to each Bank, either received a counterpart hereof executed by
such Bank or been notified by such Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent, the Issuing Bank, and each Bank and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
or delegate its duties under this Agreement or any interest in this Agreement
without the prior written consent of each Bank.
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Section 9.06. BANK ASSIGNMENTS AND PARTICIPATIONS.
(a) ASSIGNMENTS. Any Bank may assign to one or more banks or other
entities all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it, the Notes held by it, and the participation interest in
the Letter of Credit Obligations held by it); PROVIDED, HOWEVER, that (i) each
such assignment shall be of a constant, and not a varying, percentage of such
Bank's rights and obligations assigned under this Agreement, (ii) the amount of
the Commitments and Advances of such Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall be, if to an entity other than a Bank, not
less than $5,000,000.00 and shall be an integral multiple of $1,000,000.00,
(iii) each such assignment shall be to an Eligible Assignee, (iv) the parties to
each such assignment shall execute and deliver to the Agent, for its acceptance
and recording in the Register, an Assignment and Acceptance, together with the
Notes subject to such assignment, and (v) each Eligible Assignee (other than the
Eligible Assignee of the Agent) shall pay to the Agent a $2,500 administrative
fee. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall be at least three Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto for all purposes and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
and (B) such Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(b) TERM OF ASSIGNMENTS. By executing and delivering an Assignment and
Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
Guarantors or the performance or observance by the Borrower or the Guarantors of
any of their obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.05 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
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to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Bank or any other
Bank and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to
be performed by it as a Bank.
(c) THE REGISTER. The Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the Banks
and the Commitments of, and principal amount of the Advances owing to, each Bank
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent, the Issuing Bank, and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(d) PROCEDURES. Upon its receipt of an Assignment and Acceptance executed
by a Bank and an Eligible Assignee, together with the Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of the attached EXHIBIT A, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register, and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower shall execute and
deliver to the Agent in exchange for the surrendered Notes (A) if such Eligible
Assignee has acquired a Revolving Commitment, a new Revolving Note to the order
of such Eligible Assignee in an amount equal to the Revolving Commitment assumed
by it pursuant to such Assignment and Acceptance and, if such Eligible Assignee
has acquired any Term Advances, a new Term Note to the order of such Eligible
Assignee in an amount equal to the outstanding principal amount of the Term
Advances assigned to such Eligible Assignee and (B) if such Bank has retained
any Revolving Commitment hereunder, a new Revolving Note to the order of such
Bank in an amount equal to the Revolving Commitment retained by it hereunder
and, if such Bank has retained any Term Advances, a new Term Note to the order
of such Bank in an amount equal to the outstanding principal amount of the Term
Advances retained by such Bank. Such new Notes shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the attached EXHIBIT H-1 AND H-2, respectively.
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(e) PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitments, the Advances owing to it, its participation interest in the Letter
of Credit Obligations, and the Notes held by it); PROVIDED, HOWEVER, that
(i) such Bank's obligations under this Agreement (including, without limitation,
its Commitments to the Borrower hereunder) shall remain unchanged, (ii) such
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Bank shall remain the holder of any
such Notes for all purposes of this Agreement, (iv) the Borrower, the Agent, and
the Issuing Bank and the other Banks shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under this
Agreement, and (v) such Bank shall not require the participant's consent to any
matter under this Agreement, except for change in the principal amount of the
Notes, reductions in fees or interest, releasing all or substantially all of any
collateral, or extending the Revolving Maturity Date or the Term Maturity Date.
The Borrower hereby agrees that participants shall have the same rights under
Sections 2.12, 2.13, 2.14(c), and 9.07 as a Bank to the extent of their
respective participations.
Section 9.07. INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE AGENT,
THE BANKS, THE ISSUING BANK, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM, AND DISCHARGE, RELEASE, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, OR
DAMAGES WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THEM IN ANY
WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED
BY THEM UNDER THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT (INCLUDING ANY SUCH
LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF THE
PERSON BEING INDEMNIFIED'S OWN NEGLIGENCE), BUT EXCLUDING ANY SUCH LOSSES,
LIABILITIES, CLAIMS, DAMAGES, OR EXPENSES INCURRED BY REASON OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
Section 9.08. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
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Section 9.09. SURVIVAL OF REPRESENTATIONS, ETC. All representations and
warranties contained in this Agreement or made in writing by or on behalf of the
Borrower in connection herewith shall survive the execution and delivery of this
Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Banks, none of which investigations
shall diminish any Bank's right to rely on such representations and warranties.
All obligations of the Borrower provided for in Sections 2.12, 2.13, 2.14(c),
9.04, and 9.07 and all of the obligations of the Banks in Section 8.05 shall
survive any termination of this Agreement and repayment in full of the
Obligations.
Section 9.10. SEVERABILITY. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality,
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired thereby.
Section 9.11. BUSINESS LOANS. The Borrower warrants and represents that
the Loans evidenced by the Notes are and shall be for business, commercial,
investment, or other similar purposes and not primarily for personal, family,
household, or agricultural use, as such terms are used in Chapter One ("Chapter
One") of the Texas Credit Code. At all such times, if any, as Chapter One shall
establish a Maximum Rate, the Maximum Rate shall be the "indicated rate ceiling"
(as such term is defined in Chapter One) from time to time in effect.
Section 9.12. GOVERNING LAW. This Agreement, the Notes and the other
Credit Documents shall be governed by, and construed and enforced in accordance
with, the laws of the State of Texas. Without limiting the intent of the parties
set forth above, (a) Chapter 15, Subtitle 3, Title 79, of the Revised Civil
Statutes of Texas, 1925, as amended (relating to revolving loans and revolving
tri-party accounts), shall not apply to this Agreement, the Notes, or the
transactions contemplated hereby and (b) to the extent that any Bank may be
subject to Texas law limiting the amount of interest payable for its account,
such Bank shall utilize the indicated (weekly) rate ceiling from time to time in
effect as provided in Article 5069-1.04 of the Revised Civil Statutes of Texas,
as amended. Each Letter of Credit shall be governed by the Uniform Customs and
Practice for Documentary Credits, International Chamber of Commerce Publication
No. 500 (1993 version).
-78-
THE BORROWER, THE BANKS, THE ISSUING BANK AND THE AGENT HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND IRREVOCABLY SUBMIT TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF XXXXXX COUNTY, TEXAS, AND THE
SOUTHERN DISTRICT OF TEXAS FOR THE RESOLUTION OF ANY DISPUTES UNDER THIS
AGREEMENT AND THE CREDIT DOCUMENTS, AND HEREBY IRREVOCABLY WAIVE ANY CLAIM THAT
SUCH JURISDICTION IS IMPRACTICAL OR INCONVENIENT.
THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THIS
AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG 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 AMONG THE PARTIES.
EXECUTED as of the date first above written.
BORROWER:
RAMCO OPERATING COMPANY
By: /s/ XXXXX X. XXX
---------------------------------
Xxxxx X. Xxx
President
-79-
AGENT:
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXX X. XXXXX
--------------------------------------
Xxxx X. Xxxxx
Senior Vice President and Manager
By: /s/ XXXX XXXXXXXX
--------------------------------------
Xxxx Xxxxxxxx
Vice President
BANKS:
REVOLVING COMMITMENT UNION BANK OF CALIFORNIA, N.A.
$32,500,000.00
TERM COMMITMENT
$3,500,000.00 By: /s/ XXXX X. XXXXX
--------------------------------------
Xxxx X. Xxxxx
Senior Vice President and Manager
By: /s/ XXXX XXXXXXXX
--------------------------------------
Xxxx Xxxxxxxx
Vice President
-80-
EXHIBIT H-1
FORM OF AMENDED AND RESTATED REVOLVING NOTE
$___________________ ______________ __,____
For value received, the undersigned RAMCO Operating Company, a Delaware
corporation ("Borrower"), hereby promises to pay to the order of
__________________________ ("Bank") the principal amount of
____________________ Dollars ($__________) or, if less, the aggregate
outstanding principal amount of the Revolving Advances (as defined in the
Credit Agreement referred to below) made by the Bank to the Borrower,
together with interest on the unpaid principal amount of the Revolving
Advances from the date of such Revolving Advances until such principal amount
is paid in full, at such interest rates, and at such times, as are specified
in the Credit Agreement.
This Note is one of the Amended and Restated Revolving Notes referred to
in, and is entitled to the benefits of, and is subject to the terms of, the
Amended and Restated Credit Agreement dated as of December 12, 1997 (as the
same may be amended or modified from time to time, the "Credit Agreement"),
among the Borrower, the banks party thereto (the "Banks") and Union Bank of
California, N.A., as agent for the Banks (the "Agent"). Capitalized terms
used in this Note that are defined in the Credit Agreement and not otherwise
defined in this Note have the meanings assigned to such terms in the Credit
Agreement. The Credit Agreement, among other things, (a) provides for the
making of the Revolving Advances by the Bank to the Borrower in an aggregate
amount not to exceed at any time outstanding the Dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such
Revolving Advance being evidenced by this Note and (b) contains provisions
for acceleration of the maturity of this Note upon the happening of certain
events stated in the Credit Agreement and for prepayments of principal prior
to the maturity of this Note upon the terms and conditions specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Agent at the location or address specified by the
Agent to the Borrower in same day funds. The Bank shall record payments of
principal made under this Note, but no failure of the Bank to make such
recordings shall affect the Borrower's repayment obligations under this Note.
This Note is secured by the Security Documents and guaranteed under the
Guaranties.
Except as specifically provided in the Credit Agreement, the Borrower
hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration, and any other notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the
holder of this Note shall operate as a waiver of such rights.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the state of Texas (except that Tex. Rev. Civ. Stat. Xxx.
Art. 0000, Xx. 15, which regulates certain revolving credit loan accounts
shall not apply to this Note).
RAMCO OPERATING COMPANY
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
EXHIBIT H-2
FORM OF AMENDED AND RESTATED TERM NOTE
$________________ ________________ __, ____
For value received, the undersigned RAMCO Operating Company, a Delaware
corporation ("Borrower"), hereby promises to pay to the order of
__________________________ ("Bank") the principal amount of
____________________ Dollars ($__________) or, if less, the aggregate
outstanding principal amount of the Term Advances (as defined in the Credit
Agreement referred to below) made by the Bank to the Borrower, together with
interest on the unpaid principal amount of each such Term Advance from the
date of such Term Advance until such principal amount is paid in full, at
such interest rates, and at such times, as are specified in the Credit
Agreement.
This Note is one of the Amended and Restated Term Notes referred to in,
and is entitled to the benefits of, and is subject to the terms of, the
Amended and Restated Credit Agreement dated as of December 12, 1997 (as the
same may be amended or modified from time to time, the "Credit Agreement"),
among the Borrower, the banks party thereto (the "Banks") and Union Bank of
California, N.A., as agent for the Banks (the "Agent"). Capitalized terms
used in this Note that are defined in the Credit Agreement and not otherwise
defined in this Note have the meanings assigned to such terms in the Credit
Agreement. The Credit Agreement, among other things, (a) provides for the
continuing of the Term Advances by the Bank to the Borrower in an aggregate
amount not to exceed at any time outstanding the Dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Term
Advance being evidenced by this Note and (b) contains provisions for
acceleration of the maturity of this Note upon the happening of certain
events stated in the Credit Agreement and for prepayments of principal prior
to the maturity of this Note upon the terms and conditions specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Agent at the location or address specified by the
Agent to the Borrower in same day funds. The Bank shall record payments of
principal made under this Note, but no failure of the Bank to make such
recordings shall affect the Borrower's repayment obligations under this Note.
This Note is secured by the Security Documents and guaranteed under the
Guaranties.
Except as specifically provided in the Credit Agreement, the Borrower
hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration, and any other notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the
holder of this Note shall operate as a waiver of such rights.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the state of Texas (except that Tex. Rev. Civ. Stat. Xxx.
Art. 0000, Xx. 15, which regulates certain revolving credit loan accounts
shall not apply to this Note).
RAMCO OPERATING COMPANY
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
