CREDIT AGREEMENT
CREDIT AGREEMENT (this "AGREEMENT") dated as of September 1, 1998, between
THE MERIDIAN RESOURCE CORPORATION, a Texas corporation (the "BORROWER"), and
NATIONSBANK, N.A., a national banking association (the "BANK").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. BASIC DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
"APPLICABLE MARGIN" means 2.00%.
"COMMITMENT" means the obligation of the Bank to make Loans to the
Borrower in an aggregate principal amount at any time outstanding up to
but not exceeding $10,000,000, as the same may be reduced or terminated
pursuant to this Agreement.
"FEE" means a commitment fee in the amount of $25,000.
"GUARANTY" means the guaranty of Cairn Energy USA, Inc., The
Meridian Resource & Exploration Company, The Meridian Production
Corporation, The Meridian Resource Corporation, a Delaware corporation,
and Louisiana Onshore Properties, Inc., in substantially the form of
Exhibit B.
"PRINCIPAL OFFICE" means the office of the Bank located at 000 Xxxx
Xxxxxx, Xxxxxx, Xxxxx 00000.
"TERMINATION DATE" means December 31, 1998.
SECTION 1.02. ADDITIONAL DEFINITIONS. As used in this Agreement, the
following terms have the following meanings.
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Bank to be equal
to the quotient obtained by dividing (a) the Eurodollar Rate for such
Eurodollar Loan for such Interest Period by (b) 1 minus the Reserve
Requirement for such Eurodollar Loan for such Interest Period.
"BASE RATE" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (.5%) and (b) the Prime Rate for such day. Any change in the Base
Rate due to a change in the Prime Rate or the Federal
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Funds Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
"BASE RATE LOANS" means Loans that bear interest at rates based upon
the Base Rate.
"Business Day" means any day except a Saturday, Sunday, or other day
on which banks in the State where the Principal Office is located are
authorized by law to close and, if the applicable Business Day relates to
Eurodollar Loans, on which commercial banks in London are open for
international business (including dealings in Dollar deposits in the
London interbank market).
"COMMITTED LOANS" has the meaning specified in Section 2.01.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to a
continuation pursuant to Section 2.07 of a Eurodollar Loan or Money Market
Loan as a Loan of the same Type from one Interest Period to the next
Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to the
conversion pursuant to Section 2.07 or Article III of one Type of Loan
into another Type of Loan.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States
of America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, or similar debtor relief laws from
time to time in effect affecting the rights of creditors generally.
"DEFAULT" means an Event of Default or the occurrence of an event or
condition that with notice or lapse of time or both would become an Event
of Default.
"DEFAULT RATE" means, with respect to any principal of any Loan or
any other amount payable by the Borrower under this Agreement or any other
Loan Document that is not paid when due (whether at stated maturity, by
acceleration, or otherwise), a rate per annum during the period from and
including the due date to but excluding the date on which such amount is
paid in full equal to two percent (2%) plus the Base Rate as in effect
from time to time plus the Applicable Margin for Base Rate Loans (provided
that, if the amount in default is principal of a Eurodollar Loan and the
due date thereof is a day other than the last of the Interest Period
therefor, two percent (2%) plus the interest rate for such Loan as
provided in Section 2.05(b) and, thereafter, the rate provided for above
in this definition).
"DOLLARS" and "$" mean lawful money of the United States of America.
"EURODOLLAR LOANS" means Loans that bear interest at rates based
upon the Adjusted Eurodollar Rate.
"EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two
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Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Eurodollar Loan
for any Interest Period therefor, the rate per annum appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period; PROVIDED, HOWEVER, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean
of all such rates.
"EVENT OF DEFAULT" has the meaning specified in Section 7.01.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
day next succeeding such day; PROVIDED that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so published
on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Bank on such day on such
transactions as determined by the Bank.
"FINANCIAL STATEMENTS" means the unaudited June 30, 1998 financial
statements of the Borrower and the Subsidiaries most recently furnished to
the Bank prior to the date of this Agreement.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or political subdivision thereof, any central bank (or similar monetary or
regulatory authority), and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"INTEREST PERIOD" means: (i) with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made or
Converted from a Loan of another Type or the last day of the next
preceding Interest Period with respect to such Eurodollar Loan, and ending
on the numerically corresponding day in the first, second, third, or sixth
calendar money thereafter, as the Borrower may select as provided in
Section 2.09, except, that each such Interest Period which commences on
the last Business Day of a calendar month (or on any day for which there
is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month, and (ii) with respect to any Money Market Loan, each
period commencing on the date such Loan is made or converted from a Loan
of another Type or on the last day of the preceding Interest Period with
respect to such Loan, and ending on the number of days thereafter (but not
less than 7 or more than 180 days) as may be agreed to by the Borrower and
the Bank pursuant to Section 2.02.
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Notwithstanding the foregoing: (a) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, in the case of Eurodollar Loans, if such
succeeding Business Day falls in the next succeeding calendar month, on
the next preceding Business Day); (b) any Interest Period which would
otherwise extend beyond the Termination Date shall end on the Termination
Date; (c) no more than 3 Interest Periods for Eurodollar Loans or Money
Market Loans shall be in effect at the same time; and (d) no Interest
Period shall have a duration of less than 1 month (in the case of
Eurodollar Loans) or 7 days (in the case of Money Market Loans) and, if
the Interest Period for any Eurodollar Loan or Money Market Loan would
otherwise be a shorter period, such Eurodollar Loan or Money Market Loan
shall not be available hereunder.
"LOAN DOCUMENTS" means this Agreement, the Note, the Guaranty and
all other documents, instruments, and agreements executed or delivered
pursuant to or in connection with this Agreement, ad the same may be
amended, modified, renewed, extended or supplemented.
"LOANS" means Committed Loans and Money Market Loans.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
financial condition or business operations of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of the Borrower to pay and
perform its obligations under any Loan Document, or (c) the validity or
enforceability of any Loan Document or the rights and remedies of the Bank
thereunder.
"MONEY MARKET LOAN" has the meaning specified in Section 2.02.
"MONEY MARKET RATE" has the meaning specified in Section 2.02.
"NOTE" has the meaning specified in Section 2.03.
"PERSON" means any individual, corporation, company, joint venture,
association, partnership, trust, unincorporated organization, Governmental
Authority, or other entity.
"PRIME RATE" means the per annum rate of interest established from
time to time by the Bank as its prime rate, which rate may not be the
lowest rate of interest charged by the Bank to its customers.
"QUARTERLY DATE" means the last day of each March, June, September
and December of each year, the first of which shall be the first such day
after the date of this Agreement.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including any marginal, special, supplemental or emergency
reserves) are required to be maintained under regulations issued from time
to time by the Board of Governors of the
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Federal Reserve System (or any successor) by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion
dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by
such member banks with respect to (i) any category of liabilities which
includes deposits by reference to which the Adjusted Eurodollar Rate is to
be determined, or (ii) any category of extensions of credit or other
assets which include Eurodollar Loans. The Adjusted Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any change in
the Reserve Requirement.
"SUBSIDIARY" means, any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned by the
Borrower.
"TYPE" means any type of Loan (i.e., Base Rate Loan, Eurodollar Loan
or Money Market Loan).
ARTICLE II
LOANS
SECTION 2.01. LOANS. Subject to the terms and conditions of this
Agreement, the Bank agrees to make one or more loans ("COMMITTED LOANS") to the
Borrower from time to time from and including the date hereof to but excluding
the Termination Date, provided that the aggregate principal amount of the Loans
at any time outstanding to the Borrower shall not exceed the amount of the
Commitment. Subject to the foregoing limitations, and the other terms and
provisions of this Agreement, the Borrower may borrow, repay, and reborrow
hereunder the amount of the Commitment by means of Base Rate Loans and
Eurodollar Loans.
SECTION 2.02. MONEY MARKET LOANS. In addition to Committed Loans pursuant
to Section 2.01, the Borrower in accordance with the terms hereof may from time
to time to but excluding the Termination Date request offers from the Bank for
loans (each a "MONEY MARKET LOAN") on a specific date, at a fixed rate of
interest (the "MONEY MARKET RATE"), and for an Interest Period quoted by the
Bank. Upon receipt of each such request for a Money Market Loan offer, the Bank
may, but shall have no obligation to, offer to make such Money Market Loan on
such terms and conditions as the Bank may determine at such time. The Borrower
may accept each such offer for a Money Market Loan by submitting to the Bank a
notice of borrowing pursuant to Section 2.09.
SECTION 2.03. NOTE. The Loans made by the Bank to the Borrower shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A, dated the date hereof, payable to the order of the Bank in a
principal amount equal to the Commitment as originally in effect and otherwise
duly completed (as from time to time amended, modified, renewed, or extended,
the "NOTE").
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SECTION 2.04. REPAYMENT OF LOANS. The Borrower shall pay to the Bank the
outstanding principal amount of the Loans borrowed by it on the Termination Date
and, in the case of Money Market Loans, on the last day of the applicable
Interest Period quoted by the Bank pursuant to Section 2.02.
SECTION 2.05. INTEREST. The Borrower shall pay to the Bank interest on the
unpaid principal amount of each Loan borrowed by it for the period commencing on
the date of such Loan to but excluding the date such Loan shall be paid in full,
at the following rates per annum:
(a) during the periods such Loan is a Base Rate Loan, the Base Rate;
(b) during the period such Loan is a Eurodollar Loan, the Adjusted
Eurodollar Rate PLUS the Applicable Margin; and
(c) during such periods such Loan is a Money Market Loan, the Money
Market Rate for such Loan.
Notwithstanding the foregoing, the Borrower shall pay to the Bank interest at
the Default Rate on any principal of any Loan borrowed by it and (to the fullest
extent permitted by law) on any other amount payable by the Borrower under this
Agreement or any other Loan Document which is not paid in full when due (whether
at stated maturity, by acceleration, or otherwise), for the period from and
including the due date thereof to but excluding the date the same in paid in
full. Accrued interest on the Loans shall be due and payable as follows: (i) in
the case of the Base Rate Loans, on each Quarterly Date; (ii) in the case of
each Eurodollar Loan, on the last day of the Interest Period with respect
thereto and, in the case of an Interest Period greater than three months, at
three-month intervals after the first day of such Interest Period; (iii) in the
case of each Money Market Loan on the last day of the Interest Period in respect
thereto, and in the case of an Interest Period greater than 90 days, at 90-day
intervals after the first day of such Interest Period; (iv) upon the payment or
prepayment of any Loan or the Conversion of any Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid or Converted); and (v) on the
Termination Date; provided that interest payable at the Default Rate shall be
payable from time to time on demand.
SECTION 2.06. BORROWING PROCEDURE. The Borrower shall give the Bank notice
of each borrowing by it hereunder in accordance with Section 2.09. Not later
than 2:00 p.m. (at the Principal Office) on the date specified for each
borrowing hereunder, the Bank will make available the amount of the Loan to be
made by it on such date to the Borrower by depositing the same, in immediately
available funds, in an account of the Borrower (designated by the Borrower)
maintained with the Bank at the Principal Office or as otherwise directed by the
Borrower.
SECTION 2.07. PREPAYMENTS, CONVERSIONS AND CONTINUATIONS OF LOANS. Subject
to Section 2.08, the Borrower shall have the right from time to time to prepay
the Loans borrowed by it, or to Convert all or part of a Loan borrowed by it of
one Type into a Loan of another Type or to Continue Eurodollar Loans or Money
Market Loans borrowed by it, provided that: (a) the Borrower shall give the Bank
notice of each such prepayment, Conversion or Continuation as provided in
Section 2.09, (b) Eurodollar Loans and Money Market Loans may only be Converted
on the last day of the Interest Period, (c) the Borrower may not Continue a
Money Market Loan or Convert a Loan borrowed by
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it into a Money Market Loan unless the Borrower and the Bank shall have agreed
upon the rate of interest and the Interest Period for such Loan in accordance
with Section 2.02, and (d) except for Conversions into Base Rate Loans, no
Conversions or Continuations shall be made while a Default has occurred and is
continuing.
SECTION 2.08. MINIMUM AMOUNTS. Except for Conversions and prepayments
pursuant to Article III, each borrowing, each Conversion and each prepayment of
principal of the Loans shall be in an amount at least equal to $1,000,000.
Anything in this Agreement to the contrary notwithstanding, the aggregate
principal amount of Eurodollar Loans having the same Interest Period shall be at
least equal to $1,000,000.
SECTION 2.09. CERTAIN NOTES. Notices by the Borrower to the Bank of a
termination or reduction of the Commitment, of borrowing, Conversions,
Continuations and optional prepayments of Loans and of the duration of Interest
Periods shall be irrevocable and shall be effective only if received by the Bank
not later than 11:00 a.m. (local time at the Principal Office) on the number of
business Days prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
NUMBER OF BUSINESS
NOTICE DAYS PRIOR
------------------------------------ ------------------------
Termination or reduction of Commitment 2
Borrowing or prepayment of, or
Conversion into, Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations as, or
duration of Interest Periods for,
Eurodollar Loans
Borrowing or prepayment of, 2
Conversions into, Continuations as
duration of Interest Periods for,
Money Market Loans , or same day
Each such notice of termination or reduction shall specify the amount of the
Commitment to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or optional prepayment shall specify (a) the amount and
Type of the Loan to be borrowed, Converted, Continued or prepaid (and, in the
case of a Conversion, the Type of Loan to result from such Conversion), (b) the
date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day), and (c) in the case of a Eurodollar Loan or Money Market Loan, or
Conversion to or Continuation of a Eurodollar Loan or Money Market Loan, the
duration of the Interest Period. In the event the Borrower fails to select the
Type of Loan, or the duration of any Interest Period for any Eurodollar Loan or
Money Market Loan, within the time period and otherwise as provided in this
Section 2.08, such Loan (if outstanding as a Eurodollar Loan or Money Market
Loan) will be automatically
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Converted into a Base Rate Loan on the last day of the preceding Interest Period
for such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan.
SECTION 2.10. USE OF PROCEEDS. The proceeds of the Loans shall be used by
the Borrower for working capital and other lawful corporate purposes in the
ordinary course of business. The Borrower will not, directly or indirectly, use
any part of such proceeds for the purpose of purchasing or carrying any margin
stock within the meaning of Regulations G, U, T or X of the Board of Governors
of the Federal Reserve System.
SECTION 2.11. FEE. In consideration of the commitment of the Bank
hereunder, the Borrower agrees to pay to the Bank the Fee on the date hereof.
SECTION 2.12. COMPUTATIONS. Interest payable by the Borrower hereunder and
under the other Loan Documents shall be computed on the basis of a year of 360
days and the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
SECTION 2.13. REDUCTION OR TERMINATION OF COMMITMENT. The Borrower shall
have the right to irrevocably terminate or reduce in part the unused portion of
the Commitment at any time and from time to time, provided that: (a) the
Borrower shall give notice of each such termination or reduction s provided in
Section 2.09; and (b) each partial reduction shall be in an aggregate amount at
least equal to $1,000,000.
SECTION 2.14. PAYMENTS. All payments of principal, interest and other
amounts to be made by the Borrower under this Agreement and other Loan Documents
shall be made to the Bank at the Principal Office in Dollars and in immediately
available funds, without setoff, deduction or counterclaim. Whenever any payment
under this Agreement or any other Loan Document shall be stated to be due on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time in such case shall be included in the
computation of interest, as applicable.
ARTICLE III
CHANGE IN CIRCUMSTANCES
SECTION 3.01. INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, or
compliance by the Bank with any request or directive (whether or not having the
force of law) of any such Governmental Authority:
(i) shall subject the Bank to any tax, duty or other charge with
respect to any Eurodollar Loans or Money Market Loans, the Note execute by
the Borrower, or its
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obligation to make Eurodollar Loans or Money Market Loans, or change the
basis of taxation of any amounts payable to the Bank under this Agreement
or the Note in respect of any Eurodollar Loans or Money Market Loans
(other than taxes imposed on the overall net income of the Bank by the
jurisdiction in which the Bank has its Principal Office);
(ii) shall impose or modify any reserve, special deposit, or similar
requirement (other than the Reserve Requirement utilized in the
determination of the Adjusted Eurodollar Rate) relating to any extensions
of credit or other assets of, or any deposits with or other liabilities or
commitments of, the Bank (including the Commitment); or
(iii) shall impose on the Bank or on the London interbank market any
other condition affecting this Agreement or the Note or any of such
extensions of credit or liabilities or commitments:
and the result of any of the foregoing is to increase the cost to the Bank of
making, Converting into, Continuing, or maintaining any Eurodollar Loans or
Money Market Loans or to reduce any sum received or receivable by the Bank under
this Agreement or the Note executed by the Borrower with respect to any
Eurodollar Loans or Money Market Loans, then the Borrower shall pay to the Bank
on demand such amount or amounts as will compensate the Bank for such increased
cost or reduction.
(b) If the Bank shall have determined that the adoption of any applicable
law, rule, or regulation regarding capital adequacy or any change therein or in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, has or would have the effect of reducing the
rate of return on the capital of the Bank or any corporation controlling the
Bank as a consequence of the Bank's obligations hereunder to a level below that
which the Bank or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by the Bank to be material,
then from time to time upon demand the Borrower shall pay to the Bank such
additional amount or amounts as will compensate the Bank for such reduction.
(c) A certificate of the Bank claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of clearly demonstrable error. In determining such
amount, the Bank may use any reasonable averaging and attribution methods.
SECTION 3.02. LIMITATION ON EURODOLLAR LOANS. If on or prior to the first
day of any Interest Period for any Eurodollar Loan:
(a) the Bank determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate, for such Interest
Period; or
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(b) the Bank determines (which determination shall be conclusive) that the
Adjusted Eurodollar Rate will not adequately and fairly reflect the cost to the
Bank of funding Eurodollar Loans, for such Interest Period; than the Bank shall
give the Borrower prompt notice thereof, and so long as such condition remains
in effect, the Bank shall be under no obligation to make additional Eurodollar
Loans, Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar
Loans and the Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, either prepay such Loans or
Convert such Loans into Base Rate Loans in accordance with the terms of this
Agreement.
SECTION 3.03. ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Bank to make, maintain,
or fund Eurodollar Loans hereunder, then the Bank shall promptly notify the
Borrower thereof and the Bank's obligation to make or Continue Eurodollar Loans
and to Convert Base Rate Loans into Eurodollar Loans shall be suspended until
such time as the Bank may again make, maintain, and fund Eurodollar Loans and
the Borrower shall, on the last day of the Interest Period for each outstanding
Eurodollar Loan (or earlier, if required by law), either prepay such Loans or
Convert such Loans into Base Rate Loans in accordance with the terms of this
Agreement.
SECTION 3.04. COMPENSATION. Upon the request of the Bank, the Borrower
shall pay to the Bank such amount or amounts as shall be sufficient (in the
reasonable opinion of the Bank) to compensate it for any loss, cost, or expense
incurred by it as a result of:
(a) any payment, prepayment or Conversion of a Eurodollar Loan or Money
Market Loan for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 7.02) on a date other than the last day or an
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article IV to
be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan or Money
Market Loan on the date for such borrowing, Conversion, Continuation, or
Conversion or prepayment specified in the relevant notice of borrowing,
prepayment, Continuation, or Conversion under this Agreement.
Without limiting the effect of the preceding sentence, such compensation shall
include any loss, cost, or expense incurred in obtaining, liquidating, or
employing deposits from third parties (including loss of margin).
SECTION 3.05. TAXES.
(a) Any and all payments by the Borrower to or for the account of the Bank
hereunder or under any other Loan document shall be made free and clear of and
without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING, in the case of the Bank, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which the
Bank is organized or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions,
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charges, withholdings, and liabilities being hereinafter referred to as
"TAXES"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under any Loan Document to the Bank,
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 3.05) the Bank receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law, and (iv) the Borrower shall furnish to the Bank, at its address referred to
in Section 8.07 the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made hereunder or under any Loan
Document or from the execution or delivery of, or otherwise with respect to,
this Agreement or any other Loan Document (hereinafter referred to as "OTHER
TAXES").
(c) The Borrower agrees to indemnify the bank for the full amount of Taxes
and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section 3.05) paid
by the Bank and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto.
ARTICLE IV
CONDITIONS
SECTION 4.01. INITIAL LOAN. The obligation of the Bank to make the initial
Loan to the Borrower hereunder is subject to the satisfaction of the following
conditions:
(a) receipt by the Bank of the duly executed Note and Guaranty; and
(b) receipt by the Bank of all documents that the Bank may request
relating to the existence of the Borrower, the authorization for and the
validity of the Loan Documents, and any other matters relevant thereto, all in
form and substance satisfactory to the bank.
SECTION 4.02. EACH LOAN. The obligation of the Bank to make any Loan
(including the initial Loan) to the Borrower is subject to the satisfaction of
the following conditions precedent:
(a) receipt by the Bank of a notice of borrowing in accordance with
Section 2.06;
(b) the fact that immediately after the making of such Loan, the aggregate
outstanding principal amount of the Loans made to the Borrower will not exceed
the amount of the Commitment;
(c) the fact that immediately before and after such Loan, no Default shall
have occurred and be continuing; and
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(d) the fact that the representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents shall be true and
correct on and as of the date of such Loan.
Each borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such borrowing that the conditions precedent
specified in clauses (b), (c), and (d) of this Section have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. EXISTENCE. Each of the Borrower and the Subsidiaries (a) is
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization; and (b) has the requisite power and authority
and legal right to own its assets and carry on its business as now being or as
proposed to be conducted. Each of the Borrower and the Subsidiaries has the
power, authority, and legal right to execute, deliver, and perform its
obligations under the Loan Documents to which it is a party.
SECTION 5.02. FINANCIAL STATEMENTS. The Financial Statements are complete
and correct, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, and fairly and accurately present the
financial condition of the Borrower and the Subsidiaries as of the respective
dates indicated therein and the results of operations for the respective periods
indicated therein. Since the effective date of the Financial Statements, no
event or condition has occurred that could have a Material Adverse Effect.
SECTION 5.03. AUTHORIZATION: NO BREACH. The execution, delivery, and
performance by each of the Borrower and the Subsidiaries of the Loan Documents
to which it is a party and compliance with the terms and provisions thereof have
been duly authorized by all requisite action on the part of the Borrower and
each such Subsidiary and do not and will not (a) violate or conflict with, or
result in a breach of, or require any consent under (i) the articles of
incorporation, bylaws, rule, or regulation or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (iii) any agreement or
instrument to which the Borrower or any such Subsidiary is a party or by which
any of them or any of their property is bound or subject, or (b) constitute a
default under any such agreement or instrument.
SECTION 5.04. LITIGATION. Except as disclosed in the Borrower's Form 10-Q
for the fiscal quarter ended June 30, 1998 filed with the Securities and
Exchange Commission, there is no action, suit, investigation, or proceeding
before or by any Governmental Authority or arbitrator pending, or to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary, that could, if adversely determined, have a Material Adverse Effect.
SECTION 5.05. ENFORCEABILITY. This Agreement constitutes, and the other
Loan Documents when executed and delivered by the Borrower and each Subsidiary
party thereto shall constitute, the legal, valid, and binding obligations of the
Borrower and such Subsidiary, enforceable against the
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Borrower and such Subsidiary in accordance with their respective terms, except
as limited by applicable Debtor Relief Laws and general principles of equity.
SECTION 5.06. APPROVALS. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower or
any Subsidiary of any of the Loan Documents to which it is a party or for the
validity or enforceability thereof.
SECTION 5.07. DISCLOSURE. No statement, information, report,
representation, or warranty made by the Borrower in any Loan Document or
furnished to the Bank in connection with any Loan Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading.
ARTICLE VI
COVENANTS
The Borrower agrees that, so long as the Bank has any Commitment hereunder
or any amount payable under either Note remains unpaid:
SECTION 6.01. INFORMATION. The Borrower shall deliver to the Bank:
(a) as soon as available and in any event within 105 days after the end of
each fiscal year of the Borrower a consolidated balance sheet of the Borrower
and the Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all prepared in accordance with generally accepted accounting principles applied
on a consistent basis and certified by independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 50 days after the end of
each of the first three quarters of each fiscal year of the Borrower a
consolidated balance sheet of the Borrower and the Subsidiaries as of the end of
such quarter and the related consolidated statements of income and cash flows
for such quarter, setting forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all in reasonable detail and duly certified (subject to
normal year-end adjustments) by the chief financial officer of the Borrower as
having been prepared in accordance with generally accepted accounting principles
applied on a consistent basis;
(c) within three (3) days after any officer of the Borrower obtains
knowledge of any Default, a certificate of the chief financial officer of the
Borrower setting forth the details thereof and any action that the Borrower is
taking or proposes to take with respect thereto; and
(d) from time to time such additional information regarding the financial
condition or business of the Borrower and the Subsidiaries as the Bank may
reasonably request.
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SECTION 6.02. OBLIGATIONS. The Borrower shall, and shall cause each of the
Subsidiaries to:
(a) preserve and maintain all of its right, privileges, and franchises
necessary or desirable in the normal conduct of its business;
(b) except as, individually or in the aggregate, would not have a Material
Adverse Effect, comply with the requirements of all applicable laws, rules,
regulations, and orders of Governmental Authorities:
(c) pay and discharge when due all taxes, assessments, and governmental
charges or levies imposed on it or on its income or profits or any of its
property, except for any such tax, assessment, charge, or levy the payment of
which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained;
(d) maintain all of its properties useful and necessary in its business in
accordance with past practices and customary industry norms, (x) ordinary wear
and tear and (y) casualty events which could not reasonably be expected to have
a Material Adverse Effect, excepted;
(e) permit representatives of the Bank, during normal business hours, to
examine, copy, and make abstracts from its books and records, to inspect its
properties, and to discuss its business and affairs with its officers,
directors, and accountants; and
(f) maintain insurance in such amounts, with such deductibles, and against
such risks as is customary for similarly situated businesses.
ARTICLE VII
DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. Each of the following shall constitute an
"EVENT OF DEFAULT":
(a) the Borrower shall fail to pay when due any principal of any Loan, or
the Borrower shall fail to pay when due any interest or other amount payable by
it under any Loan Document and such failure continues for a period of three
Business Days.
(b) any representation, warranty, certification, or statement made or
deemed made by the Borrower in any Loan document or in any certificate,
financial statement, or other document delivered pursuant thereto shall be
false, misleading, or incorrect in any material respect when made or deemed
made.
(c) the Borrower shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in Section 6.01 of this Agreement.
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(d) the Borrower shall fail to perform, observe, or comply with any other
covenant, agreement, or term contained in any Loan Document (other than a
failure covered elsewhere in this Section 7.01 and such failure shall continue
for a period of thirty (30) days after notice thereof to the Borrower by the
Bank.
(e) an "Event of Default" shall occur under and as defined in that certain
$250,000,000 Amended and Restated Credit Agreement dated as of May 22, 1998,
among the Borrower, the several lenders party thereto including the Lender, and
certain agents, as such Amended and Restated Credit Agreement has been or is
hereafter amended so long as the Lender is a party thereto.
SECTION 7.02. REMEDIES. If any Event of Default shall occur and be
continuing, the Bank may do any one or more of the following:
(a) ACCELERATION. Declare all outstanding principal of and accrued and
unpaid interest on the Note and all other amounts payable by the Borrower under
the Loan Documents immediately due and payable, and the same shall thereupon
become immediately due and payable, without presentment, demand, protest, notice
of acceleration, notice of intent to accelerate, or other notices or formalities
of any kind, all of which are hereby expressly waived by the Borrower.
(b) TERMINATION OF COMMITMENT. Terminate the Commitment without notice to
the Borrower.
(c) RIGHTS. Exercise any and all rights and remedies afforded by
applicable law or otherwise including making demand under the Guaranty.
Notwithstanding the foregoing, upon the occurrence of an "Event of Default"
under Section 9.01(f) of the above-described Amended and Restated Credit
Agreement, the Commitment shall automatically terminate, and the outstanding
principal of and accrued and unpaid interest on the Note and all other amounts
payable by the Borrower under the Loan Documents shall thereupon become
immediately due and payable without presentment, demand, protest, notice of
acceleration, notice of intent to accelerate, or other notices or formalities of
any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. EXPENSES. The Borrower shall on demand pay or reimburse the
Bank for paying (a) all reasonable costs and expenses of the Bank, including the
fees and disbursements of counsel for the Bank in connection with the
administration of the Loan documents, the preparation of any waiver or consent
thereunder or any amendment thereof or any Default or alleged Default and (b) if
an Event of Default occurs, all costs and expenses incurred by the Bank,
including the fees and disbursements of counsel (including the allocated cost of
internal counsel), in connection with such Event of Default and any collection,
bankruptcy, insolvency, and other enforcement proceedings resulting therefrom.
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SECTION 8.02. INDEMNIFICATION. THE BORROWER AGREES TO INDEMNIFY THE BANK
AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS, AND AGENTS (EACH AN INDEMNIFIED PERSON") FROM, AND HOLD EACH OF THEM
HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES, INCLUDING ALL FEES AND
DISBURSEMENTS OF COUNSEL (INCLUDING THE ALLOCATED COST OF INTERNAL COUNSEL)
(COLLECTIVELY THE "INDEMNIFIED LIABILITIES"), WHICH DIRECTLY OR INDIRECTLY ARISE
FROM OR RELATE TO ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREBY, BUT EXCLUDING ANY OF THE FOREGOING TO THE EXTENT CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PERSON. WITHOUT LIMITING ANY
PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH INDEMNIFIED PERSON SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
AGAINST ANY AND ALL INDEMNIFIED LIABILITIES ARISING OUT OF OR RESULTING FROM THE
SOLE OR CONTRIBUTORY NEGLIGENCE OF THE INDEMNIFIED PERSON.
SECTION 8.03. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the 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 Bank (or
any of its affiliates) to or for the credit or the account of the Borrower
against any and all of the obligations of the borrower now or hereafter existing
under the Loan Documents, irrespective of whether the Bank shall have made any
demand under the Loan Documents and although such obligations may be unmatured.
The Bank agrees promptly to notify the Borrower after any such set-off and
application made by the Bank; PROVIDED, HOWEVER, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Bank under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Bank may have.
SECTION 8.04. NO WAIVER: CUMULATIVE REMEDIES. No failure on the part of
the Bank to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under any Loan document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power, or privilege under any Loan document preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in the Loan Documents are cumulative and not
exclusive of any rights and remedies provided by law.
SECTION 8.05. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, except that the Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the Bank.
The Bank may at any time and from time to time (a) grant participating interests
in the commitment and the Loans to any Person(s), and (b) assign all or any
portion of its rights and/or obligations under the Loan Documents to any
Person(s); PROVIDED, that the Bank may not assign its Commitment to any Person
(other than an affiliate of the Bank) without the prior written consent of the
Borrower. All information provided by the Borrower to the Bank may be furnished
by the Bank to its affiliates and to any actual or proposed assignee or
participant.
SECTION 8.06. AMENDMENTS. No amendment or waiver of any provision of any
Loan Document to which the Borrower is a party, nor any consent to any departure
by the Borrower
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therefrom, shall be effective unless the same shall be agreed or consented to in
writing by the Bank and the Borrower, and each such waiver or consent shall be
effectively only in the specific instance and for the specific purpose for which
given.
SECTION 8.07. NOTICES. All notices, requests, and other communications to
either party hereunder shall be in writing (including facsimile transmission)
and shall be given to such party at its address or facsimile number set forth on
the signature pages hereof. Each such notice, request, or other communication
shall be effective (i) if given by facsimile transmission, when transmitted to
the facsimile number referred to in this Section and confirmation of receipt is
received, (ii) if given by mail, three (3) Business Days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered at
the address referred to in this Section; PROVIDED that notices to the Bank shall
not be effective until received.
SECTION 8.08. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 8.09. SEVERABILITY. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
SECTION 8.10. CONTROLLING AGREEMENT. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable law (the "MAXIMUM RATE"). If the Bank shall
receive interest in an amount that exceeds the Maximum Rate, the excessive
interest shall be applied to the principal of the Loans or, if it exceeds the
unpaid principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Bank exceeds the Maximum Rate, the
Bank may, to the extent permitted by applicable law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Loans.
SECTION 8.11. SURVIVAL. All representations and warranties made or deemed
made by the Borrower in the Loan Documents shall survive the execution and
delivery thereof and the making of the Loans, and no investigation by the Bank
or any closing shall affect the representations and warranties by the Borrower
or the right of the Bank to rely upon them. Without prejudice to the survival of
any other obligation of the Borrower hereunder, the obligations of the Borrower
under Article III and Sections 8.01 and 8.02 shall survive repayment of the Note
and termination of the Commitment.
SECTION 8.12. GOVERNING LAW. This Agreement and the Note shall be governed
by and construed in accordance with, the law of the State where the Principal
Office is located and the applicable laws of the United States of America. The
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court and each state court in the city where the Principal Office is
located for the purposes of all legal proceedings arising out of or relating to
any of the Loan
-17-
Documents or the transactions contemplated thereby. The Borrower irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to the Borrower at its address set
forth underneath its signature hereto. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
SECTION 8.13. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS
OF THE BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
SECTION 8.14. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER: THE MERIDIAN RESOURCE CORPORATION
By: /s/ P. XXXXXXX XXXXXXXXX
Title: Executive Vice President
Address for Notices:
00000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.:(000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Xx.
BANK: NATIONSBANK, N.A.
By: /s/ AUTHORIZED SIGNATORY
Title:______________________________
Address for Notices:
000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile No.:(000) 000-0000
Attention: Xxx Xxxxxx
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EXHIBIT A
PROMISSORY NOTE
$10,000,000 September 1, 1998
FOR VALUE RECEIVED, the undersigned, THE MERIDIAN RESOURCE
CORPORATION, a Texas corporation (the "BORROWER"), hereby promises to pay to the
order of NATIONSBANK, N.A., a national banking association (the "BANK"), at the
Principal Office, in lawful money of the United States of America and in
immediately available funds, the principal amount of Ten Million Dollars
($10,000,000) or such lesser amount as shall equal the aggregate unpaid
principal amount of the Loans made by the Bank to the Borrower under the Credit
Agreement referred to below, on the dates and in the principal amounts provided
in the Credit Agreement, and to pay interest on the unpaid principal amount of
each such Loan, at such office, in like money and funds, for the period
commencing on the date of such Loan until such Loan shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.
The books and records of the Bank shall be prima facie evidence of all
amounts outstanding hereunder.
This Note is the Note referred to in the Credit Agreement of even date
herewith, between the Borrower and the Bank (such Credit Agreement, as the same
may be amended, modified, or supplemented from time to time, being referred to
herein as the "CREDIT AGREEMENT"), and evidences Loans made by the Bank
thereunder. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events and for prepayments of Loans prior to the maturity of this Note upon the
terms and conditions specified in the Credit Agreement. Capitalized terms used
in this Note have the respective meanings assigned to them in the Credit
Agreement.
This Note shall be governed by and construed in accordance with the laws
of the State where the Principal Office is located and the applicable laws of
the United States of America.
THE MERIDIAN RESOURCE CORPORATION
By:_________________________________
Title:______________________________
A-1
EXHIBIT B
GUARANTY
For value received, the sufficiency of which is hereby acknowledged, and,
in consideration of any credit and/or financial accommodation heretofore or
hereafter from time to time made or granted to The Meridian Resource
Corporation, a Texas corporation ("BORROWER"), by NationsBank, N.A. ("BANK"),
the undersigned (singly and collectively, "GUARANTOR") hereby jointly and
severally absolutely and unconditionally guarantee, as a guarantee of payment
and not merely as a guarantee of collection, prompt payment when due, whether at
stated maturity, upon acceleration or otherwise, and at all times thereafter, of
any and all existing and future indebtedness and liability of every kind, nature
and character, direct or indirect, absolute or contingent of Borrower to Bank
arising under that certain Credit Agreement dated September 1, 1998 between
Borrower and Bank (the "Credit Agreement") and all instruments, agreements and
other documents of every kind and nature now or hereafter executed in connection
with the Credit Agreement (including all renewals, extensions and modifications
thereof and all costs, attorneys' fees and expenses incurred by Bank in
connection with the collection or enforcement thereof) (collectively the
"GUARANTEED DEBT"). All payments by Guarantor hereunder shall be paid in full,
without setoff or counterclaim or and deduction or withholding whatsoever, or,
in the event that Guarantor or Bank is required by law to make any such
deduction or withholding, Guarantor shall pay to Bank such additional amounts as
will result in the receipt by Bank of the full amount payable hereunder. If and
to the extent any payment is not made when due hereunder, Bank may setoff and
charge from time to time any amount so due against any or all of Guarantor's
accounts or deposits with Bank or its affiliates.
The obligations of Guarantor hereunder shall be limited to an aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance under Section 548 of the United States Bankruptcy
Code or any comparable provisions of any applicable state law.
This Guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Guaranteed Debt or any instrument or
agreement evidencing any Guaranteed Debt, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor, or by any fact
or circumstance relating to the Guaranteed Debt which might otherwise constitute
a defense to the Guaranty. Guarantor waives notice of the acceptance of this
Guaranty and of the extension or continuation of the Guaranteed Debt or any part
thereof. Guarantor further waives presentment, protest, notices of any kind,
demand, and diligence by Bank and action on delinquency in respect of the
Guaranteed Debt or any part thereof, including, without limitation any
provisions of law requiring Bank to exhaust any right or remedy or to take any
action against Borrower, any other guarantor or any other person, entity or
property before enforcing this Guaranty against Guarantor, including but not
limited to the benefits of Chapter 34 of the Texas Business and Commerce Code,
ss.17.001 of the Texas Civil Practice and Remedies Code, and Rule 31 of the
Texas Rules of Civil Procedure.
This Guaranty is a continuing and irrevocable guaranty of all Guaranteed
Debt now or hereafter existing and shall remain in full force and effect until
all Guaranteed Debt and any other amounts payable under this Guaranty are
indefeasibly paid and performed in full and any commitments of Bank or
facilities provided by Bank with respect to the Guaranteed Debt are
B-1
terminated. Notwithstanding the preceding sentence, this Guaranty shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any portion of Guaranteed Debt is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of Borrower or
otherwise, as if such payment had not been made and whether or not Bank is in
possession of or has released this Guaranty. Guarantor shall exercise no right
of subrogation, contribution or similar rights with respect to any payments it
makes under this Guaranty until all of the Guaranteed Debt and any amounts
payable under this Guaranty are indefeasibly paid and performed in full and any
commitments of Bank or facilities provided by Bank with respect to the
Guaranteed Debt are terminated. If any amounts are paid to Guarantor in
violation of the foregoing limitation, then such amounts shall be held in trust
for the benefit of Bank and shall forthwith be paid to Bank to reduce the amount
of the Guaranteed Debt, whether matured or unmatured.
Guarantor agrees that Bank may, at any time and from time to time, and
without notice to Guarantor, make any agreement with Borrower or with any other
person or entity liable on any of the Guaranteed Debt or providing collateral as
security for the Guaranteed Debt, for the extension, renewal, payment,
compromise, discharge or release of the Guaranteed Debt or any collateral (in
whole or in part), or for any modification or amendment of the terms thereof or
of any instrument or agreement evidencing the Guaranteed Debt or the provision
of collateral, all without in any way impairing, releasing, discharging or
otherwise affecting the obligations of Guarantor under this Guaranty. Further,
Guarantor consents to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of Guarantor under this Guaranty
or which, but for this provision, might operate as a discharge of Guarantor.
Guarantor hereby subordinates the payment of all obligations and
indebtedness of Borrower owing to Guarantor, whether now existing or hereafter
arising, to the indefeasible payment in full of all Guaranteed Debt.
Guarantor agrees to furnish promptly to Bank any and all financial or
other information regarding Guarantor or its property as Bank may reasonably
request in writing.
In the event that acceleration of the time for payment of any of the
Guaranteed Debt is stayed, upon the insolvency, bankruptcy or reorganization of
Borrower, or otherwise, all such amounts shall nonetheless by payable by
Guarantor immediately upon demand by Bank.
Guarantor shall pay on demand all out-of-pocket expenses (including
reasonable attorneys' fees and expenses) in any way relating to the enforcement
or protection of Bank's rights under this Guaranty. The obligations of Guarantor
under the preceding sentence shall survive termination of this Guaranty.
No provision of this Guaranty may be waived, amended, supplemented or
modified, except by a written instrument executed by Bank and Guarantor. No
failure by Bank to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy or power hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and
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not exclusive of any remedies provided by law. The unenforceability or
invalidity of any provision of this Guaranty shall not affect the enforceability
or validity of any other provision herein.
This Guaranty shall (i) bind Guarantor and its successors and assigns,
PROVIDED that Guarantor may not assign its rights or obligations under this
Guaranty without the prior written consent of Bank, (ii) inure to the benefit of
Bank and its successors and assigns and (iii) be governed by the internal laws
of the State of Texas. Guarantor hereby irrevocably (a) submits to the
non-exclusive jurisdiction of any United States Federal or State court sitting
in Houston, Texas in any action or proceeding arising out of or relating to this
Guaranty and (b) waives to the fullest extent permitted by law any defense
asserting an inconvenient forum in connection therewith. Service of process by
Bank in connection with such action or proceeding shall be binding on Guarantor
if sent to Guarantor by registered or certified mail at its address specified
below.
Unless otherwise agreed by Bank and Guarantor in writing, this Guaranty is
not intended to supersede or otherwise affect any other guaranty now or
hereafter given by Guarantor for the benefit of Bank or any term or provision
thereof.
TO THE EXTENT ALLOWED BY APPLICABLE LAW, GUARANTOR AND BANK EACH WAIVE
TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM , SUIT OR PROCEEDING ON OR
ARISING OUT OF THIS GUARANTY. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Executed this day of September 1, 1998.
CAIRN ENERGY USA, INC.
By:_________________________________
Title:______________________________
Address: 00000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
THE MERIDIAN RESOURCE & EXPLORATION COMPANY
By:_________________________________
Title:______________________________
Address: 00000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
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THE MERIDIAN PRODUCTION CORPORATION
By:_________________________________
Title:______________________________
Address: 00000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
THE MERIDIAN RESOURCE CORPORATION,
a Delaware corporation
By:_________________________________
Title:______________________________
Address: 00000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
LOUISIANA ONSHORE PROPERTIES, INC.
By:_________________________________
Title:______________________________
Address: 00000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
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