CREDIT AGREEMENT
$650,000,000 REDUCING REVOLVING CREDIT
AND COMPETITIVE BID FACILITY
AMONG
SEAGULL ENERGY CORPORATION,
THE CHASE MANHATTAN BANK,
Individually and as Agent,
AND
THE OTHER BANKS SIGNATORY HERETO
December 23, 1996
TABLE OF CONTENTS
Section 1. Definitions and Accounting Matters
1.1 Certain Defined Terms......................................1
1.2 Accounting Terms and Determinations.......................24
1.3 Types of Loans............................................24
1.4 Miscellaneous.............................................24
Section 2. Commitments; Borrowing Base Determinations;
Competitive Bid Facility..................................25
2.1 Committed Loans...........................................25
2.2 Letters of Credit.........................................25
2.3 Reductions and Changes of Commitments.....................28
2.4 Fees......................................................29
2.5 Affiliates; Lending Offices...............................30
2.6 Several Obligations.......................................30
2.7 Notes.....................................................30
2.8 Use of Proceeds...........................................31
2.9 Borrowing Base Determinations.............................31
2.10 Competitive Bid Procedure.................................31
Section 3. Borrowings, Prepayments and Selection of Interest Rates...33
3.1 Borrowings................................................33
3.2 Prepayments...............................................34
3.3 Selection of Interest Rates...............................35
Section 4. Payments of Principal and Interest........................36
4.1 Repayment of Loans and Reimbursement Obligations..........36
4.2 Interest..................................................36
Section 5. Payments; Pro Rata Treatment; Computations, Etc...........37
5.1 Payments..................................................37
5.2 Pro Rata Treatment........................................37
5.3 Computations..............................................38
5.4 Minimum and Maximum Amounts...............................38
5.5 Certain Actions, Notices, Etc.............................38
5.6 Non-Receipt of Funds by Agent.............................40
5.7 Sharing of Payments, Etc..................................40
Section 6. Yield Protection and Illegality...........................41
6.1 Additional Costs..........................................41
6.2 Limitation on Types of Loans..............................42
6.3 Illegality................................................43
6.4 Substitute Alternate Base Rate Loans......................43
6.5 Compensation..............................................44
6.6 Additional Costs in Respect of Letters of Credit..........44
6.7 Capital Adequacy..........................................45
6.8 Limitation on Additional Charges; Substitute Banks;
Non-Discrimination........................................45
Section 7. Conditions Precedent......................................46
7.1 Initial Loans.............................................46
7.2 Initial and Subsequent Loans..............................48
Section 8. Representations and Warranties............................48
8.1 Corporate Existence.......................................49
8.2 Corporate Power and Authorization.........................49
8.3 Binding Obligations.......................................49
8.4 No Legal Bar or Resultant Lien............................49
8.5 No Consent................................................49
8.6 Financial Condition.......................................50
8.7 Investments and Guaranties................................50
8.8 Liabilities and Litigation................................50
8.9 Taxes and Governmental Charges............................50
8.10 Title to Properties.......................................51
8.11 Defaults..................................................51
8.12 Location of Businesses and Offices........................51
8.13 Compliance with Law.......................................51
8.14 Margin Stock..............................................51
8.15 Subsidiaries..............................................52
8.16 ERISA.....................................................52
8.17 Investment Company Act....................................52
8.18 Public Utility Holding Company Act........................52
8.19 Environmental Matters.....................................53
8.20 Claims and Liabilities....................................54
8.21 Solvency..................................................54
Section 9. Affirmative Covenants.....................................54
9.1 Financial Statements and Reports..........................54
9.2 Officers' Certificates....................................56
9.3 Taxes and Other Liens.....................................57
9.4 Maintenance...............................................57
9.5 Further Assurances........................................58
9.6 Performance of Obligations................................58
9.7 Reimbursement of Expenses.................................58
9.8 Insurance.................................................59
9.9 Accounts and Records......................................59
9.10 Rights of Inspection......................................59
9.11 Notice of Certain Events..................................60
9.12 ERISA Information and Compliance..........................61
Section 10. Negative Covenants........................................62
10.1 Debts, Guaranties and Other Obligations...................62
10.2 Liens.....................................................65
10.3 Investments, Loans and Advances...........................68
10.4 Dividend Payment Restrictions.............................70
10.5 Mergers and Sales of Assets...............................70
10.6 Proceeds of Notes.........................................70
10.7 ERISA Compliance..........................................70
10.8 Amendment of Certain Documents............................71
10.9 Tangible Net Worth........................................71
10.10 Company Debt/Capitalization Ratio.........................71
10.11 EBITDAX/Interest Ratio....................................71
10.12 Nature of Business........................................71
10.13 Futures Contracts.........................................72
10.14 Covenants in Other Agreements.............................72
Section 11. Defaults..................................................73
11.1 Events of Default.........................................73
11.2 Collateral Account........................................75
11.3 Preservation of Security for Unmatured
Reimbursement Obligations.................................75
11.4 Right of Setoff...........................................76
Section 12. Agent.....................................................76
12.1 Appointment, Powers and Immunities........................76
12.2 Reliance by Agent.........................................77
12.3 Defaults..................................................78
12.4 Rights as a Bank..........................................78
12.5 Indemnification...........................................78
12.6 Non-Reliance on Agent and Other Banks.....................79
12.7 Failure to Act............................................79
12.8 Resignation or Removal of Agent...........................79
Section 13. Miscellaneous.............................................80
13.1 Waiver....................................................80
13.2 Notices...................................................80
13.3 Indemnification...........................................80
13.4 Amendments, Etc...........................................81
13.5 Successors and Assigns....................................82
13.6 Limitation of Interest....................................85
13.7 Survival..................................................86
13.8 Captions..................................................86
13.9 Counterparts..............................................86
13.10 Governing Law.............................................86
13.11 Severability..............................................87
13.12 Chapter 15 Not Applicable.................................87
13.13 Confidential Information..................................87
13.14 Tax Forms.................................................88
13.15 Amendment and Restatement.................................88
13.16 Intercreditor Agreement...................................88
EXHIBITS:
Exhibit A Oil and Gas Subsidiaries
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Request for Extension of Credit
Exhibit D Existing Competitive Loans
Exhibit E Form of Committed Note
Exhibit F Subsidiaries (with Addresses)
Exhibit G Form of Compliance Certificate
Exhibit H Assignment and Acceptance
Exhibit I Form of Engineering Report Certificate
Exhibit J Parameters Interest Rate Protection and Commodities
Futures Programs
Exhibit K Form of Competitive Bid Request
Exhibit L Form of Notice to Banks of Competitive Bid Request
Exhibit M Form of Competitive Bid
Exhibit N Form of Competitive Bid Administrative Questionnaire
Exhibit O Form of Competitive Note
Exhibit P Form of Second Amendment to Intercreditor Agreement
CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of December 23, 1996 (the "Effective
Date"), is by and among SEAGULL ENERGY CORPORATION (the "Company"), a
corporation duly organized and validly existing under the laws of the State of
Texas; each of the banks which is or which may from time to time become a
signatory hereto (individually, a "Bank" and, collectively, the "Banks"); THE
CHASE MANHATTAN BANK ("Chase"), as agent for the Banks (in such capacity,
together with its successors in such capacity, "Agent").
The parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.1 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.1 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"Additional Costs" shall have the meaning ascribed to such term in
Section 6.1 hereof.
"Affiliate" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person and, if such Person is an individual, any member of
the immediate family (including parents, siblings, spouse, children,
stepchildren, grandchildren, nephews and nieces) of such individual and any
trust whose principal beneficiary is such individual or one or more members of
such immediate family and any Person who is controlled by any such member or
trust. As used in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise).
"Agreement" shall mean this Credit Agreement, as the same may be
amended, modified, restated or supplemented from time to time.
"Alaskan Gas Component Value" shall mean (A) prior to the initial
Borrowing Base Determination, $60,000,000 and (B) thereafter, the amount by
which (i) the product of 5-1/2 times an amount equal to (I) the average annual
EBITDA of ENSTAR Alaska on a consolidated basis for the three year period ended
on the most recent December 31st plus (II) 70% of the average annual management
fees paid to the Company by ENSTAR Alaska during such three year period minus
(III) average annual Capital Expenditures attributable to ENSTAR Alaska in
accordance with GAAP and on a consolidated basis during such three year period
exceeds (ii) the Alaskan Gas Debt determined as of (x) the preceding January 1
(in the case of a Scheduled Redetermination) or (y) the last day of the second
month prior to the month in which the effective date of the Borrowing Base
Determination occurs (in the case of a Requested Redetermination).
"Alaskan Gas Debt" shall mean the sum of (i) Funded Indebtedness of
ENSTAR Alaska plus (ii) Current Maturities of ENSTAR Alaska plus (iii)
Redemption Obligations of ENSTAR Alaska plus (iv) the highest amount of Short
Term Borrowings outstanding during the Short Term Borrowings Measuring Period.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the higher of (a) the Prime Rate in effect on such day or (b) 1/2 of 1% plus
the Federal Funds Rate in effect for such day (rounded upwards, if necessary, to
the nearest 1/16th of 1%). For purposes hereof, "Federal Funds Rate" shall mean,
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 such day on such transactions received by Agent
from three Federal funds brokers of recognized standing selected by it. For
purposes of this Agreement, any change in the Alternate Base Rate due to a
change in the Federal Funds Rate shall be effective on the effective date of
such change in the Federal Funds Rate. If for any reason Agent shall have
determined (which determination shall be conclusive and binding, absent manifest
error) that it is unable to ascertain the Federal Funds Rate for any reason,
including, without limitation, the inability or failure of Agent to obtain
sufficient bids or publications in accordance with the terms hereof, the
Alternate Base Rate shall be the Prime Rate until the circumstances giving rise
to such inability no longer exist. For the purposes hereof, "Prime Rate" shall
mean the prime rate as announced from time to time by Agent, and thereafter
entered in the minutes of Agent's Loan and Discount Committee. Without notice to
the Company or any other Person, the Prime Rate shall change automatically from
time to time as and in the amount by which said prime rate shall fluctuate. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Agent may make commercial loans or
other loans at rates of interest at, above or below the Prime Rate. For purposes
of this Agreement any change in the Alternate Base Rate due to a change in the
Prime Rate shall be effective on the date such change in the Prime Rate is
announced.
"Alternate Base Rate Loans" shall mean Loans which bear interest at a
rate based upon the Alternate Base Rate.
"APC" shall mean Alaska Pipeline Company, an Alaska corporation, a
Subsidiary of the Company.
"APC Long Term Financing Documents" shall mean that certain Inducement
Agreement and that certain Note Agreement (together with the Notes, as defined
therein), each dated as of May 14, 1992, by and among the Company, Aid
Association for Lutherans, The Equitable Life Assurance Society of the United
States, Equitable Variable Life Insurance Company, Provident Life and Accident
Insurance Company and Teachers Insurance & Annuity Association of America, any
documentation executed in connection with any renewal, extension or
rearrangement of the Indebtedness that is the subject of the foregoing
documents, the Gas Sales Contract, the Intercompany Mortgage, as defined in the
above-mentioned Note Agreement, and any documents executed in replacement of any
of the foregoing documents, if any, and only if Agent has received notice
thereof pursuant to Section 10.8.
"Applicable Lending Office" shall mean, for each Bank and for each
Type of Loan, such office of such Bank (or of an affiliate of such Bank) as such
Bank may from time to time specify to Agent and the Company as the office by
which its Loans of such Type are to be made and/or issued and maintained.
"Applicable Margin" shall mean, on any day and with respect to any
Loan, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Debt/Capitalization Ratio as
of the last day of the most recently ending fiscal quarter of the Company and
its Subsidiaries with respect to which Agent shall have received the financial
statements and other information (the "Current Information") required to be
delivered to Agent pursuant to Section 9.1 hereof (said calculation to be made
by Agent as soon as practicable after receipt by Agent of all required Current
Information):
Eurodollar
Alternate Base Rate Loan
Loan Applicable Applicable
Debt/Capitalization Ratio Margin Margin
- ---------------------------- --------------------- -----------
Greater than or equal to 60% 0.375 1.1875
Greater than or equal to 55%
but less than 60% 0.00 0.8125
Greater than or equal to 50%
but less than 55% 0.00 0.5625
Less than 50% 0.00 0.4375
Notwithstanding the foregoing, at all times that a Borrowing Base Deficiency
shall exist and is continuing for more than 30 days, the Applicable Margins
provided for in this definition shall each be increased by adding 1.00%. Each
change in the Applicable Margin based on a change in the Current Information
shall be effective as of the fifteenth day of the month during which the Current
Information used to calculate the new Applicable Margin was delivered to Agent.
"Applications" shall mean all applications and agreements for Letters
of Credit, or similar instruments or agreements, now or hereafter executed by
any Person in connection with any Letter of Credit now or hereafter issued or to
be issued.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as
amended, and any successor statute.
"Beluga Financing Documents" shall mean that certain Inducement
Agreement and that certain Note Agreement (together with the Notes, as defined
therein), each dated June 17, 1985, and amended as of June 15, 1990, by and
among the Company and The Equitable Life Assurance Society of the United States
and the Travelers Insurance Company, any documentation executed in connection
with any renewal, extension or rearrangement of the Indebtedness that is the
subject of the foregoing documents, the Gas Sales Contract, the Intercompany
Mortgage, as defined in the above-mentioned Note Agreement, and any documents
executed in replacement of any of the foregoing documents, if and only if Agent
has received notice thereof pursuant to Section 10.8.
"Borrowing Base" shall mean, as at any date, the sum of
(i) the Oil and Gas Reserves Component Value plus
(ii) the Alaskan Gas Component Value.
If the Company fails to provide a current Borrowing Base Certificate as required
by Section 9.2(c), two (2) Business Days after notice to the Company the
Majority Banks may determine the Alaskan Gas Component Value comprising the
Borrowing Base from time to time in their reasonable discretion, taking into
account all information reasonably available to them, and the Alaskan Gas
Component Value from time to time so determined shall be the Alaskan Gas
Component Value for all purposes of this Agreement until a current Borrowing
Base Certificate is furnished.
"Borrowing Base Certificate" shall mean a certificate with respect to
the Alaskan Gas Component Value, duly executed by the chief executive officer,
chief financial officer, treasurer or controller of the Company, appropriately
completed and in substantially the form of Exhibit B hereto.
"Borrowing Base Debt" shall mean, without duplication, the sum of (i)
borrowed money Indebtedness (including without limitation contingent obligations
in respect of borrowed money Indebtedness under any Guarantee or letter of
credit) plus (ii) the "Maximum Outstanding Amount" in effect from time to time
under the Canadian Facility plus (iv) Redemption Obligations payable within five
(5) years after any applicable determination date, together with obligations
(excluding volumetric obligations with respect to pre-sales of Hydrocarbon
production which have already been accounted for in the calculation of the
Borrowing Base) payable out of Hydrocarbon production (except such obligations
payable solely by recourse to properties not included in the Borrowing Base and
Indebtedness permitted by Section 10.1(l)) to the extent such obligations have
not already been deducted in the calculation of the Borrowing Base; provided,
however, that Borrowing Base Debt shall not include the Loans, the Letter of
Credit Liabilities or any Subordinated Debt.
"Borrowing Base Deficiency" shall mean the amount by which (a) the sum
of (i) the aggregate outstanding amount of all Revolving Credit Obligations plus
(ii) the aggregate outstanding amount of all Borrowing Base Debt of the Company
and its Subsidiaries (other than ENSTAR Alaska) exceeds (b) the then current
Borrowing Base.
"Borrowing Base Deficiency Notification Date" shall mean the date on
which any notice of a Borrowing Base Deficiency is received by the Company.
"Borrowing Base Determination" shall mean a Scheduled Redetermination
or a Requested Redetermination.
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas or New York, New
York, and where such term is used in the definition of "Quarterly Date" in this
Section 1.1 or if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment or
Interest Period, a day which is also a day on which dealings in Dollar deposits
are carried out in the relevant interbank market.
"Canadian Facility" shall mean that certain Credit Agreement dated
December ____, 1996 executed by and among Seagull Energy Canada Ltd., The Chase
Manhattan Bank of Canada, as Arranger and as Agent, The Bank of Nova Scotia, as
Paying Agent and as Co-Agent, Canadian Imperial Bank of Commerce, as Co-Agent,
and certain banks therein named, as amended by the Intercreditor Agreement, and
as the same may be further amended or modified from time to time.
"Capital Expenditures" shall mean expenditures in respect of fixed or
capital assets (calculated in accordance with GAAP) excluding expenditures for
the restoration, repair or replacement of any fixed or capital asset which was
destroyed or damaged, in whole or in part, to the extent financed by the
proceeds of an insurance policy. Expenditures in respect of replacements and
maintenance consistent with the business practices of the Company and its
Subsidiaries in respect of plant facilities, machinery, fixtures and other like
capital assets utilized in the ordinary course of business are not Capital
Expenditures to the extent such expenditures are not capitalized in preparing a
balance sheet of the Company in accordance with GAAP.
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Capitalization" shall mean an amount equal to the sum of (a) Funded
Indebtedness of the Company and its Subsidiaries on a consolidated basis plus
(b) Current Maturities of the Company and its Subsidiaries on a consolidated
basis plus (c) borrowed money Indebtedness of the Company and its Subsidiaries
on a consolidated basis that is not Funded Indebtedness plus (d) Indebtedness of
the Company and its Subsidiaries on a consolidated basis constituting
obligations payable out of Hydrocarbons (except such obligations payable solely
by recourse to properties not included in the Borrowing Base) plus (e) Tangible
Net Worth of the Company and its Subsidiaries on a consolidated basis.
"Change of Control" shall mean a change resulting when any Unrelated
Person or any Unrelated Persons acting together which would constitute a Group
together with any Affiliates or Related Persons thereof (in each case also
constituting Unrelated Persons) shall at any time either (i) Beneficially Own
more than 50% of the aggregate voting power of all classes of Voting Stock of
the Company or (ii) succeed in having sufficient of its or their nominees
elected to the Board of Directors of the Company such that such nominees, when
added to any existing director remaining on the Board of Directors of the
Company after such election who is an Affiliate or Related Person of such Person
or Group, shall constitute a majority of the Board of Directors of the Company.
As used herein (a) "Beneficially Own" means "beneficially own" as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended, or any successor
provision thereto; provided, however, that, for purposes of this definition, a
Person shall not be deemed to Beneficially Own securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates until such tendered securities are accepted for purchase or
exchange; (b) "Group" means a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended; (c) "Unrelated Person" means at any
time any Person other than the Company or any Subsidiary and other than any
trust for any employee benefit plan of the Company or any Subsidiary of the
Company; (d) "Related Person" of any Person shall mean any other Person owning
(1) 5% or more of the outstanding common stock of such Person or (2) 5% or more
of the Voting Stock of such Person; and (e) "Voting Stock" of any Person shall
mean capital stock of such Person which ordinarily has voting power for the
election of directors (or persons performing similar functions) of such Person,
whether at all times or only so long as no senior class of securities has such
voting power by reason of any contingency.
"Chapter One" shall mean Chapter One of the Texas Credit Code, as in
effect on the date the document using such term was executed.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any successor statute, together with all regulations, rulings and
interpretations thereof or thereunder by the Internal Revenue Service.
"Commitment Percentage" shall mean, as to any Bank, the percentage
equivalent of a fraction the numerator of which is the amount of such Bank's
Commitment and the denominator of which is the aggregate amount of the
Commitments of all Banks.
"Commitment" shall mean, as to any Bank, the obligation, if any, of
such Bank to make Committed Loans and incur Letter of Credit Liabilities in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount, if any, set forth opposite such Bank's name on the signature pages
hereof under the caption "Commitment" (as the same may be reduced from time to
time pursuant to Section 2.3).
"Committed Loans" shall mean the loans provided for in Section 2.1
hereof.
"Committed Notes" shall mean the promissory notes of the Company
evidencing the Committed Loans, in the form of Exhibit E hereto, together with
all renewals, extensions, modifications and replacements thereof and
substitutions therefor.
"Company Report" shall mean one or more reports, in form satisfactory
to Agent and the Majority Banks, prepared by petroleum engineers employed by the
Company or its Subsidiaries, which shall evaluate (i) at least 85% of the
present value of the Included Reserves and (ii) any other properties as to which
the Company has conducted successful exploration activities subsequent to the
most recent Engineering Report, in each case effective as of the immediately
preceding July 1. Each Company Report shall set forth production, drilling and
acquisition information and other information requested by Agent and shall be
based upon updated economic assumptions acceptable to Agent and approved by the
Majority Banks at the beginning of the applicable year.
"Competitive Bid" shall mean an offer by a Bank to make a Competitive
Loan pursuant to Section 2.10 hereof.
"Competitive Bid Administrative Questionnaire" shall mean a
questionnaire substantially in the form of Exhibit N hereto.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Bank pursuant to Section 2.10 hereof, the fixed rate of interest, in each case,
offered by the Bank making such Competitive Bid.
"Competitive Bid Request" shall have the meaning ascribed to such term
in Section 2.10 hereof.
"Competitive Loans" shall mean the Existing Competitive Loans and
loans provided for in Section 2.10 hereof.
"Competitive Notes" shall mean the promissory notes of the Company
evidencing the Competitive Loans, in the form of Exhibit O hereto, together with
all renewals, extensions, modifications and replacements thereof and
substitutions therefor.
"Cover" for Letter of Credit Liabilities shall be effected by paying
to Agent immediately available funds, to be held by Agent in a collateral
account maintained by Agent at its Principal Office and collaterally assigned as
security for the financial accommodations extended pursuant to this Agreement
using documentation satisfactory to Agent, in an amount equal to any required
prepayment. Such amount shall be retained by Agent in such collateral account
until such time as (x) in the case of Cover being provided pursuant to Section
2.2(a), the applicable Letter of Credit shall have expired and Reimbursement
Obligations, if any, with respect thereto shall have been fully satisfied or (y)
in the case of Cover being provided pursuant to Section 3.2(b)(1), the
outstanding principal amount of all Revolving Credit Obligations is not greater
than the aggregate amount of the Commitments.
"Current Maturities" shall mean, on any day on which Current
Maturities are calculated, the sum of (a) scheduled principal payments on Funded
Indebtedness which are payable within one (1) year after such day plus (b) the
principal component of payments required to be made with respect to Capital
Lease Obligations within one (1) year of said date plus (c), to the extent not
included above, all items which in accordance with GAAP would be classified as
current maturities of long term debt.
"Debt/Capitalization Ratio" shall mean the ratio of (a) the sum of
Funded Indebtedness of the Company and its Subsidiaries on a consolidated basis
plus Current Maturities of the Company and its Subsidiaries on a consolidated
basis plus borrowed money Indebtedness of the Company and its Subsidiaries on a
consolidated basis that is not Funded Indebtedness plus Indebtedness of the
Company and its Subsidiaries on a consolidated basis constituting obligations
payable out of Hydrocarbons (except such obligations payable solely by recourse
to properties not included in the Borrowing Base) to (b) Capitalization.
"Default" shall mean an Event of Default or an event which with notice
or lapse of time or both would, unless cured or waived, become an Event of
Default.
"Disclosure Statement" shall mean the Disclosure Statement dated
December 31, 1992 delivered to Agent by the Company.
"Dividend Payment" shall mean, with respect to any Person, dividends
(in cash, property or obligations) on, or other payments or distributions on
account of, or the redemption of, or the setting apart of money for a sinking or
other analogous fund for the purchase, redemption, retirement or other
acquisition of, any shares of any class of capital stock of such Person, or the
exchange or conversion of any shares of any class of capital stock of such
Person for or into any obligations of or shares of any other class of capital
stock of such Person or any other property, but excluding dividends to the
extent payable in, or exchanges or conversions for or into, shares of common
stock of the Company or options or warrants to purchase common stock of the
Company.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean net earnings (excluding gains and losses on sales
and retirement of assets, non-cash write downs, charges resulting from
accounting convention changes) before deduction for federal and state taxes,
interest expense (including capitalized interest), operating lease rentals or
depreciation, depletion and amortization expense, all determined in accordance
with GAAP.
"EBITDAX" shall mean net earnings (excluding gains and losses on sales
and retirement of assets, non-cash write downs, charges resulting from
accounting convention changes and deductions for dry hole expenses) before
deduction for federal and state taxes, interest expense (including capitalized
interest), operating lease rentals or depreciation, depletion and amortization
expense, all determined in accordance with GAAP.
"EBITDAX/Interest Ratio" shall mean the ratio of (a) EBITDAX of the
Company and its Subsidiaries on a consolidated basis to (b) operating lease
rentals and interest expense (including capitalized interest but excluding
non-cash amortization of deferred financing costs) on all Indebtedness of the
Company and its Subsidiaries on a consolidated basis for any twelve-month period
ending on the last day of every calendar quarter during the period with respect
to which the EBITDAX/Interest Ratio is to be calculated.
"Engineering Report" shall mean one or more reports, in form
satisfactory to Agent and the Majority Banks, prepared by one or more
independent consulting firms acceptable to Agent and the Majority Banks in their
reasonable business judgment, which shall evaluate at least 85% of the present
value of the Included Reserves as of the immediately preceding January 1. Each
Engineering Report shall set forth a projection of the future rate of
production, Net Proceeds of Production and present value of the Net Proceeds of
Production, in each case based upon economic assumptions acceptable to Agent and
approved by the Majority Banks.
"ENSTAR Alaska" shall collectively mean (i) the gas distribution
system in south-central Alaska known as ENSTAR Natural Gas Company, a division
of the Company, and (ii) APC.
"Environmental Claim" means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture, processing, distribution
in commerce or use of Hazardous Substances. An "Environmental Claim" includes,
but is not limited to, a common law action, as well as a proceeding to issue,
modify or terminate an Environmental Permit, or to adopt or amend a regulation
to the extent that such a proceeding attempts to redress violations of an
applicable permit, license, or regulation as alleged by any Governmental
Authority.
"Environmental Liabilities" includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.
"Environmental Permit" means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or wastes
into ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and all rules, regulations and
interpretations by the Internal Revenue Service or the Department of Labor
thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a member and
which is under common control within the meaning of the regulations under
Section 414 of the Code.
"Eurodollar Base Rate" shall mean, with respect to any Interest Period
for any Eurodollar Loan, the lesser of (A) the rate per annum (rounded upwards,
if necessary, to the nearest 1/16th of 1%) equal to the average of the offered
quotations appearing on Telerate Page 3750 (or if such Telerate Page shall not
be available, any successor or similar service as may be selected by Agent and
the Company) as of 11:00 a.m., Houston, Texas time (or as soon thereafter as
practicable) on the day two Business Days prior to the first day of such
Interest Period for Dollar deposits having a term comparable to such Interest
Period and in an amount comparable to the principal amount of the Eurodollar
Loan to which such Interest Period relates or (B) the Highest Lawful Rate. If
none of such Telerate Page 3750 nor any successor or similar service is
available, then the "Eurodollar Base Rate" shall mean, with respect to any
Interest Period for any applicable Eurodollar Loan, the lesser of (A) the rate
per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
determined by Agent to be the average of the rates quoted by the Reference Banks
at approximately 11:00 a.m., Houston, Texas time (or as soon thereafter as
practicable) on the day two Business Days prior to the first day of such
Interest Period for the offering by such Reference Banks to leading banks in the
interbank market of Dollar deposits having a term comparable to such Interest
Period and in an amount comparable to the principal amount of the Eurodollar
Loan to which such Interest Period relates or (B) the Highest Lawful Rate. If
any Reference Bank does not furnish a timely quotation, Agent shall determine
the relevant interest rate on the basis of the quotation or quotations furnished
by the remaining Reference Bank or Banks; if none of such quotations is
available on a timely basis, the provisions of Section 6.2 shall apply. Each
determination of the Eurodollar Base Rate shall be conclusive and binding,
absent manifest error, and may be computed using any reasonable averaging and
attribution method.
"Eurodollar Loans" shall mean Loans the interest on which is
determined on the basis of rates referred to in the definition of "Eurodollar
Base Rate" in this Section 1.1.
"Eurodollar Rate" shall mean, for any Interest Period for any
Eurodollar Loan, a rate per annum determined by Agent to be equal to the
Eurodollar Base Rate for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
Section 11 hereof.
"Existing Competitive Loans" shall mean the Competitive Loans
described on Exhibit D hereto.
"Facility Fee Percentage" shall mean 0.1875%; provided, however, that
at all times that the Company shall have received an investment grade senior
debt rating from two nationally known agencies (one of which must be either
Standard & Poor's Ratings Group or Moody's Investors Service, Inc.) of BBB-/Baa3
(or the equivalent), the Facility Fee Percentage shall be reduced to 0.125%.
"Financial Statements" shall mean the financial statement or
statements, together with the notes and schedules thereto, described or referred
to in Sections 8.6 and 9.1.
"Funded Indebtedness" shall mean all Indebtedness which by its terms
matures more than one (1) year from the date as of which any calculation of
Funded Indebtedness is made, and any Indebtedness maturing within one (1) year
from such date which is renewable at the option of the obligor to a date beyond
one (1) year from such date.
"GAAP" shall mean as to a particular Person, such accounting practice
as, in the opinion of KPMG Peat Marwick or other independent accountants of
recognized national standing retained by such Person and acceptable to the
Majority Banks, conforms at the time to generally accepted accounting
principles, consistently applied. Generally accepted accounting principles means
those principles and practices (a) which are recognized as such by the Financial
Accounting Standards Board, (b) which are applied for all periods after the date
hereof in a manner consistent with the manner in which such principles and
practices were applied to the most recent audited financial statements of the
relevant Person furnished to the Banks, except only for such changes in
principles and practices with which the applicable independent public
accountants concur and which are disclosed to the Banks in writing, and (c)
which are consistently applied for all periods after the date hereof so as to
reflect properly the financial condition and results of operations of such
Person.
"Gas and Liquids Pipeline Subsidiaries" shall mean each company (which
may include the Company) engaged in the Pipeline Operations.
"Gas Sale Contract" shall mean that certain Gas Sale Contract dated
January 1, 1984, between APC, as Seller, and ENSTAR Natural Gas Company, as
Purchaser, as amended on June 17, 1985, and from time to time thereafter, if and
only if Agent has received notice thereof pursuant to Section 10.8.
"Governmental Authority" shall mean any sovereign governmental
authority, the United States of America, any State of the United States and any
political subdivision of any of the foregoing, and any central bank, agency,
instrumentality, department, commission, board, bureau, authority, court or
other tribunal or quasi-governmental authority in each case whether executive,
legislative, judicial, regulatory or administrative, having jurisdiction over
the Company, any of its Subsidiaries, any of their respective property, Agent or
any Bank.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of any such Person directly or indirectly guaranteeing any
Indebtedness of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness (whether arising by virtue of partnership
arrangements, by agreement to keep- well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement conditions or
otherwise, other than agreements to purchase assets, goods, securities or
services at an arm's length price in the ordinary course of business) or (ii)
entered into for the purpose of assuring in any other manner the holder of such
Indebtedness of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term "Guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substance" shall mean petroleum products, and any hazardous
or toxic waste or substance defined or regulated as such from time to time by
any law, rule, regulation or order described in the definition of "Requirements
of Environmental Law".
"Highest Lawful Rate" shall mean, on any day, the maximum nonusurious
rate of interest permitted for that day by whichever of applicable federal or
Texas law permits the higher interest rate, stated as a rate per annum. On each
day, if any, that Chapter One establishes the Highest Lawful Rate, the Highest
Lawful Rate shall be the "indicated rate ceiling" (as defined in Chapter One)
for that day.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate and all other liquid or gaseous hydrocarbons and
related minerals, in each case whether in a natural or a processed state.
"Included Reserves" shall mean those producing and non-producing
proved oil and gas reserves of the Company and its Oil and Gas Subsidiaries
which are to be taken into account in the determination of the Oil and Gas
Reserves Component Value from time to time in effect, as designated by the
Company.
"Indebtedness" shall mean, as to any Person: (i) indebtedness of such
Person for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase or acquisition price of property or
services, including, without limitation, obligations (excluding volumetric
obligations with respect to pre-sales of Hydrocarbon production which have
already been accounted for in the calculation of the Borrowing Base) payable out
of Hydrocarbon production; (ii) obligations, whether fixed or contingent, of
such Person in respect of letters of credit, acceptances or similar instruments
issued or accepted by banks and other financial institutions for the account of
such Person or any other Person; (iii) Capital Lease Obligations of such Person;
(iv) Redemption Obligations of such Person and other obligations of such Person
to redeem or otherwise retire shares of capital stock of such Person or any
other Person, in each case to the extent that the redemption obligations will
arise prior to the stated maturity of the Obligations; (v) indebtedness of
others of the type described in clause (i), (ii), (iii) or (iv) above secured by
a Lien on the property of such Person, whether or not the respective obligation
so secured has been assumed by such Person; and (vii) indebtedness of others of
the type described in clause (i), (ii), (iii) or (iv) above Guaranteed by such
Person.
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement dated December 30, 1993 executed by and among the Company, Seagull
Energy Canada Ltd., Agent and the "Administrative Agent" under the Canadian
Facility, as amended by that certain First Amendment to Intercreditor Agreement
dated May 24, 1994 and by that certain Second Amendment to Intercreditor
Agreement in the form of Exhibit P hereto dated concurrently herewith, and as
the same may be further amended or modified from time to time.
"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, the period commencing on (i)
the date such Loan is made or converted into or continued as a Eurodollar Loan
or (ii) in the case of a roll-over to a successive Interest Period, the last day
of the immediately preceding Interest Period and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Company may select as provided in Section 3.3 hereof, except
that each such Interest Period which commences 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.
(b) With respect to any Alternate Base Rate Loan, the period
commencing on the date such Loan is made and ending on the next succeeding
Quarterly Date.
(c) With respect to any Existing Competitive Loan, the applicable
interest period specified on Exhibit D hereto, and with respect to any other
Competitive Loan, the period commencing on the date such Loan is made and ending
on the date specified in the Competitive Bid in which the offer to make the
Competitive Loan was extended; provided, however, that each such period shall
have a duration of not less than seven calendar days or more than 180 calendar
days.
Notwithstanding the foregoing: (i) no Interest Period applicable to any
Eurodollar Loan or any Competitive Loan may commence before and end after the
date of any scheduled reduction in the Commitments if, after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans or Competitive
Loans which have Interest Periods which end after such reduction date shall be
greater than the aggregate principal amount of the Commitments scheduled to be
in effect after such reduction date; (ii) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, in the case of an Interest Period for Eurodollar
Loans, if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); (iii) no Interest Period
applicable to any Eurodollar Loan or any Competitive Loan shall extend beyond
the end of the scheduled Revolving Credit Availability Period, and (iv) no
Interest Period for any Eurodollar Loans shall have a duration of less than one
month and, if the Interest Period therefor would otherwise be a shorter period,
such Loans shall not be available hereunder.
"Investments" shall have the meaning assigned to such term in Section
10.3 hereof.
"Investments Tests" shall mean compliance with each of the following
restrictions (both before and immediately after giving effect to the applicable
Investments):
(i) there shall exist no Borrowing Base Deficiency;
(ii) no Default or Event of Default shall have occurred and be
continuing; and
(iii) the applicable Investment, when aggregated with any prior
permitted Investments, shall not exceed 10% of Tangible Net
Worth of the Company and its Subsidiaries on a consolidated
basis.
"Issuer" shall mean each Bank issuing a Letter of Credit hereunder.
"Legal Requirement" shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, now or hereafter in effect.
"Letter of Credit" shall have the meaning assigned to such term in
Section 2.2 hereof.
"Letter of Credit Fee" shall mean a per annum rate equal to the
Applicable Margin for Eurodollar Loans in effect from time to time.
"Letter of Credit Liabilities" shall mean, at any time and in respect
of any Letter of Credit, the sum of (i) the amount available for drawings under
such Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, collateral assignment, security interest or encumbrance of any
kind in respect of such asset. For the purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Liquid Investments" shall mean:
(I) in the case of investments of U.S. Dollars
(i) securities issued or directly, fully and
unconditionally guaranteed or insured by the United
States of America or any agency or instrumentality
thereof (provided that the full faith and credit of
the United States of America is pledged in support
thereof) having maturities of not more than one year
from the date of issue;
(ii) U.S. Dollar time deposits and certificates of deposit
(A) of any Bank having capital and surplus in excess
of U.S. $300,000,000, or (B) of any commercial bank
incorporated in the United States, of recognized
standing, having capital and surplus in excess of
U.S. $500,000,000 and which has (or which is a
Subsidiary of a holding company which has) publicly
traded debt securities rated, at the time of issuance
of such time deposits, AA or higher by Standard &
Poor's Corporation or Aa-2 or higher by Moody's
Investors Service, Inc. with maturities of not more
than one year from the date of issue;
(iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types
described in clause (I)(i) above entered into with
any bank meeting the qualifications specified in
clause (I)(ii) above, provided that the terms of such
agreements comply with the guidelines set forth in
the Federal Financial Institution Examination Counsel
Supervisory Policy -- Repurchase Agreements of
Depository Institutions With Securities Dealers and
Others, as adopted by the Comptroller of the Currency
on October 31, 1985;
(iv) commercial paper or other U.S. Dollar obligations
issued by the parent corporation (A) of any Bank
having capital and surplus in excess of U.S.
$300,000,000, or (B) of any commercial bank (provided
that the parent corporation and the bank are both
incorporated in the United States) of recognized
standing having capital and surplus in excess of U.S.
$500,000,000 and commercial paper or other U.S.
Dollar obligations issued by any Person incorporated
in the United States, which commercial paper is rated
at least A-2 or the equivalent thereof by Standard &
Poor's Corporation or at least P-2 or the equivalent
thereof by Moody's Investors Service, Inc. and in
each case maturing not more than six months after the
date of issue;
(v) obligations of any state or political subdivision
thereof rated at least F-1 by Fitch Investors
Service, Inc. or AA by Standard & Poor's Corporation
with an original maturity of 180 days or less; and
(vi) investments in money market funds substantially all
the assets of which are comprised of securities of
the types described in clauses (I)(i) through (v)
above; and
(II) in the case of investments of Canadian dollars
(i) bonds or other evidences of indebtedness of, or the
principal and interest of which is fully guaranteed
by, the Government of Canada or any province of
Canada, payable in Canadian dollars and (in the case
of any provincial obligations and any Government of
Canada obligations that are rated) rated AAA or AA
(or the then equivalent grade) by Dominion Bond
Rating Service Limited, or any other nationally
recognized bond rating service, having a maturity not
in excess of one year,
(ii) certificates of deposit issued or guaranteed by a
bank or trust company organized under the laws of
Canada or any province thereof, provided such bank or
trust company has capital and retained earnings in
the aggregate in excess of Canadian $500,000,000 on
its most recent balance sheet (whether audited or
unaudited), having a maturity not in excess of one
year,
(iii) bankers' acceptances of any bank or trust company the
certificates of deposit of which would constitute
Liquid Investments as provided in clause (II)(ii)
above, if outstanding unsecured debt of such bank or
trust company is rated no less than AA (or the then
equivalent grade) by Dominion Bond Rating Service
Limited, or any other nationally recognized bond
rating service; and
(iv) commercial paper rated no less than R-1 (or the then
equivalent grade) by Dominion Bond Rating Service
Limited or A-1 (or the then equivalent grade) by CBRS
Inc., having a maturity not in excess of one year;
excluding any bonds or other evidences of
indebtedness, certificates of deposit or commercial
paper which a Canadian chartered bank may not hold as
security under the Bank Act (Canada).
"Loan Documents" shall mean this Agreement, the Notes, the
Intercreditor Agreement, all Applications, all instruments, certificates and
agreements now or hereafter executed or delivered to Agent or any Bank pursuant
to any of the foregoing, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
"Loans" shall mean Committed Loans and Competitive Loans.
"Majority Banks" shall mean (a) prior to the termination of the
Commitments, Banks having greater than 66-2/3% of the aggregate amount of the
Commitments and (b) after the termination of the Commitments, Banks having
greater than 66-2/3% of the aggregate principal amount of the Loans and the
Letter of Credit Liabilities.
"Material Adverse Effect" shall mean a material adverse effect on the
business, condition (financial or otherwise), operations, properties (including
proven oil and gas reserves) or prospects of the Company and its Subsidiaries,
taken as a whole, or on the ability of the Company to perform its material
obligations under any Loan Document to which it is a party.
"Maximum Revolving Credit Available Amount" shall mean, at any date,
an amount equal to the lesser of (i) the aggregate of the Commitments or (ii)
the amount by which (a) the Borrowing Base exceeds (b) the aggregate outstanding
amount of all Borrowing Base Debt of the Company and its Subsidiaries (other
than ENSTAR Alaska).
"Mesa Contract" shall mean that certain Purchase and Sale Agreement
dated February 6, 1991 executed by and among Mesa Limited Partnership, a
Delaware limited partnership, Mesa Operating Limited Partnership, a Delaware
limited partnership, and Mesa Midcontinent Limited Partnership, a Delaware
limited partnership, as Sellers, and the Company, as Buyer, as amended by that
certain First Amendment to Purchase and Sale Agreement dated February 22, 1991
and as further amended by that certain Second Amendment to Purchase and Sale
Agreement dated March 8, 1991.
"Net Proceeds of Production" shall mean, with respect to any Person,
all revenue received by or credited to the account of such Person from the sale
of Hydrocarbons and other minerals in, under or produced from their respective
oil, gas and mineral properties after deducting royalties, overriding royalties,
volumetric production payments with respect to pre-sales of Hydrocarbon
production, production payments pledged to secure non-recourse financing payable
solely out of such production payments, net profits interests and other burdens
payable out of production, normal and reasonable operating expenses and
severance, ad valorem, excise and windfall profit taxes.
"Notes" shall mean the Committed Notes and the Competitive Notes.
"Obligations" shall mean, as at any date of determination thereof, the
sum of the following: (i) the aggregate principal amount of Loans outstanding
hereunder plus (ii) the aggregate amount of the Letter of Credit Liabilities
hereunder plus (iii) all other liabilities, obligations and indebtedness of the
Company or any Subsidiary of the Company under any Loan Document.
"Oil and Gas Reserves Component Value" shall mean (A) prior to the
initial Borrowing Base Determination, $490,000,000 and (B) thereafter, that
amount of Indebtedness that the Super Majority Banks shall agree can be
supported by the Included Reserves, after an engineering and economic review of
the Included Reserves conducted by the Banks using customary standards for oil
and gas lending.
"Oil and Gas Subsidiaries" shall mean any Subsidiary of the Company
whose assets consist primarily of oil and gas properties. As of the date hereof,
the Oil and Gas Subsidiaries are listed as such on Exhibit A hereto.
"Organizational Documents" shall mean, with respect to a corporation,
the certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all
modifications thereof as of the date of the Loan Document referring to such
Organizational Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a company, a bank, a
voluntary association, a partnership, a trust, an unincorporated organization,
any Governmental Authority or any other entity.
"Pipeline Operations" shall mean the natural gas gathering and
transmission, gas liquids plant, gas marketing, engineering and construction and
liquids pipeline operations of the Company and its Subsidiaries, excluding any
portion of such operations attributable to ENSTAR Alaska.
"Plan" shall mean an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (a) maintained by the Company or any ERISA Affiliate
for employees of the Company or any ERISA Affiliate or (b) maintained pursuant
to a collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which the Company or any ERISA
Affiliate is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
"Post-Default Rate" shall mean, in respect of any principal of any
Loan, any Reimbursement Obligation or any other amount payable by the Company
under this Agreement or any other Loan Document which is not paid when due
(whether at stated maturity, by acceleration, or otherwise), a rate per annum
during the period commencing on the due date until such amount is paid in full
equal to the lesser of (a) the sum of (x) with respect to Eurodollar Loans, 2%
per annum plus the applicable Eurodollar Rate then in effect plus the Applicable
Margin for Eurodollar Loans until the expiration of the applicable Interest
Period, (y) with respect to Competitive Loans, 2% per annum plus the applicable
fixed rate offered by the applicable Bank and accepted by the Company in
accordance with Section 2.10 hereof (or, in the case of the Existing Competitive
Loans, the applicable fixed rate specified on Exhibit D hereto), and (z) with
respect to Alternate Base Rate Loans and with respect to Eurodollar Loans after
the expiration of the applicable Interest Period (and also with respect to
indebtedness other than Loans), 2% plus the Alternate Base Rate as in effect
from time to time plus the Applicable Margin for Alternate Base Rate Loans or
(b) the Highest Lawful Rate.
"Principal Office" shall mean the principal office of Agent, presently
located at 1 Chase Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention: Agent Services.
"Quarterly Dates" shall mean the last day of each March, June,
September and December, provided that, if any such date is not a Business Day,
then the relevant Quarterly Date shall be the next succeeding Business Day.
"Redemption Obligations" shall mean with respect to any Person all
mandatory redemption obligations of such Person with respect to preferred stock
or other equity securities issued by such Person or put rights in favor of the
holder of such preferred stock or other equity securities, to the extent that
the redemption obligations will arise prior to the stated maturity of the
Obligations.
"Reference Banks" shall mean Chase and such other Banks (up to a
maximum of two (2) additional Banks) as the Company, with the approval of Agent
(which approval shall not be unreasonably withheld), may from time to time
designate.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time and any successor or other regulation relating to reserve requirements.
"Regulatory Change" shall mean, with respect to any Bank, any change
on or after the date of this Agreement in Legal Requirements (including
Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of banks including such
Bank under any Legal Requirements (whether or not having the force of law) by
any Governmental Authority.
"Reimbursement Obligations" shall mean, as at any date, the
obligations of the Company then outstanding in respect of Letters of Credit
under this Agreement, to reimburse Agent for the account of the applicable
Issuer for the amount paid by the applicable Issuer in respect of any drawing
under such Letter of Credit.
"Relevant Party" shall mean the Company and each other party to any of
the Loan Documents other than (a) the Banks and (b) Agent.
"Request for Extension of Credit" shall mean a request for extension
of credit duly executed by the chief executive officer, chief financial officer,
or treasurer of the Company, appropriately completed and substantially in the
form of Exhibit C attached hereto.
"Requested Redetermination" shall have the meaning assigned to such
term in Section 2.9 hereof.
"Requesting Banks" shall mean (a) prior to the termination of the
Commitments, Banks having greater than 50% of the aggregate amount of the
Commitments and (b) after the termination of the Commitments, Banks having
greater than 50% of the aggregate principal amount of the Loans and the Letter
of Credit Liabilities.
"Requirements of Environmental Law" means all requirements imposed by
any law (including for example and without limitation The Resource Conservation
and Recovery Act and The Comprehensive Environmental Response, Compensation, and
Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, protection or clean-up of the air, surface water, ground water or
land; (iii) solid, gaseous or liquid waste generation, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the manufacture, processing,
distribution in commerce, use, discharge or storage of Hazardous Substances.
"Reserve Requirement" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the stated maximum rate for all reserves (including
any marginal, supplemental or emergency reserves) required to be maintained
during such Interest Period under Regulation D by any member bank of the Federal
Reserve System or any Bank against "Eurocurrency liabilities" (as such term is
used in Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect and include any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (i)
any category of liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined as provided in the definition of "Eurodollar
Base Rate" in this Section 1.1 or (ii) any category of extensions of credit or
other assets which include Eurodollar Loans. Any determination by Agent of the
Reserve Requirement shall be conclusive and binding, absent manifest error, and
may be made using any reasonable averaging and attribution method.
"Responsible Officer" shall mean the chairman of the board, the
president, any executive vice president, the vice president of finance and
administration, the chief executive officer or the chief operating officer or
any equivalent officer (regardless of title) and in the case of the Company, any
other vice president, and in respect of financial or accounting matters, shall
also include the chief financial officer, the treasurer and the controller or
any equivalent officer (regardless of title).
"Revolving Credit Availability Period" shall mean the period from and
including the date hereof to but not including December 31, 2002 or the date the
Commitments are terminated pursuant to Section 11.1, whichever is first to
occur.
"Revolving Credit Obligations" shall mean, as at any date of
determination thereof, the sum of the following (determined without
duplication): (i) the aggregate principal amount of Loans outstanding hereunder
plus (ii) the aggregate amount of the Letter of Credit Liabilities hereunder.
"Scheduled Redetermination" shall having the meaning assigned to such
term in Section 2.9 hereof.
"Senior Debt" shall mean Indebtedness having a weighted average
maturity at least seven (7) years from the date of issuance and having no
conditions precedent or covenants materially more onerous to the Company than
the conditions precedent and covenants contained herein and in the other Loan
Documents with respect to the Loans. The documents evidencing any Senior Debt
shall contain a provision substantially identical to Section 10.2(y) hereof
permitting Liens securing the Notes and the other Obligations on a pari passu
basis with such Senior Debt.
"Short Term Borrowings" shall mean, as of any date, the aggregate
outstanding principal amount of ENSTAR Alaska's borrowed money Indebtedness
(other than borrowed money Indebtedness owed by ENSTAR Natural Gas Company to
APC or by APC to ENSTAR Natural Gas Company) which is not Funded Indebtedness.
"Short Term Borrowings Measuring Period" shall mean that period of
ninety (90) consecutive days during the twelve-month period ending on the
applicable date that average Short Term Borrowings were lower than any other
period of ninety (90) consecutive days during such twelve-month period.
"Subordinated Debt" shall mean Indebtedness of the Company having a
weighted average maturity at least seven (7) years from the date of issuance and
having no conditions precedent or covenants materially more onerous to the
Company than the conditions precedent and covenants contained herein and in the
other Loan Documents with respect to the Loans and which is expressly made
subordinate and junior in right of payment to the Obligations and in respect of
any collateral or security by the express terms of the instruments evidencing
the Subordinated Debt or the indenture or other similar instrument under which
the Subordinated Debt is issued (which indenture or other instrument will be
binding on all holders of such Subordinated Debt), by provisions not more
favorable to the holders of the Subordinated Debt than the following:
(a) in the event a Default exists and is continuing, no payment of
principal or interest will be made on account of Subordinated Debt and no remedy
for default shall be exercised until (i) such Default will have been cured or
waived or until the Obligations will have been paid in full (or provisions made
therefor reasonably satisfactory to the Banks) or (ii) 179 days after the
occurrence of such Default (as to which the Banks have knowledge as a result of
having received notice from the Company pursuant to this Agreement or otherwise)
and no action being taken by the Banks with respect to such Default, whichever
occurs earlier;
(b) upon the occurrence of any of the events or proceedings specified
in Subsections 11.1(f) or (g) hereof (or, as to any Subsidiary of the Company,
Subsection 11.1(j) to the extent that it refers to Subsections 11.1(f) or (g)),
the holders of any Obligations will be entitled to receive payment in full of
all principal or interest on all Obligations before the holders of the
Subordinated Debt are entitled to receive any payment on account of principal or
interest on the Subordinated Debt, and to that end (but subject to the power of
a court of competent jurisdiction to make other provision) the holders of the
Obligations will be entitled to receive distributions of any kind or character,
whether in cash or property or securities (other than equity securities and
other securities establishing rights in the holders thereof which are
subordinate to the rights of the holders of the Obligations in accordance with
this definition of Subordinated Debt), which may be or would otherwise be
payable or deliverable in any such proceedings in respect of the Subordinated
Debt (provided that, the Subordinated Debt may provide that if the Obligations
have been paid in full or provision therefor reasonably satisfactory to the
Banks has been made, the holders of the Subordinated Debt will be subrogated to
the rights of the holders of the Obligations);
(c) in the event that any Subordinated Debt is declared due and
payable before its expressed maturity because of the occurrence of an event of
default thereunder (under circumstances when the provisions of the foregoing
clauses (a) and (b) will not be applicable), the holders of the Obligations at
the time such Subordinated Debt becomes due and payable because of such an event
of default will be entitled to receive payment in full of all Obligations (or
have provision therefor satisfactory to the Banks made) before the holders of
the Subordinated Debt are entitled to receive any payment on account of the
principal or interest on the Subordinated Debt; and
(d) no holder of the Obligations will be prejudiced in its right to
enforce subordination of the Subordinated Debt by any act or failure to act on
the part of the Company or the part of the holders of the Obligations; provided
that, the Subordinated Debt may provide that the foregoing provisions are solely
for the purpose of defining the relative rights of the holders of the
Obligations on the one hand, and the holders of the Subordinated Debt on the
other hand, and that nothing therein will impair, as between the Company and the
holders of the Subordinated Debt, the obligation of the Company, which may be
unconditional and absolute, to pay to the holders of the Subordinated Debt the
principal and interest thereon in accordance with its terms, nor will anything
herein prevent the holders of the Subordinated Debt from exercising all remedies
otherwise permitted by applicable law or thereunder upon default thereunder,
subject to the rights under clauses (a), (b) and (c) above of the holders of the
Obligations to receive cash, property or securities otherwise payable or
deliverable to the holders of the Subordinated Debt.
"Subsidiary" shall mean, with respect to any Person (the "parent"),
(a) any corporation of which at least a majority of the outstanding shares of
stock having by the terms thereof ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by the parent or one or more of
the Subsidiaries of the parent or by the parent and one or more of the
Subsidiaries of the parent, and (b) any partnership, limited partnership, joint
venture or other form of entity, the majority of the legal or beneficial
ownership of which is at the time directly or indirectly owned or controlled by
the parent or one or more of the Subsidiaries of the parent or by the parent and
one or more of the Subsidiaries of the parent.
"Super Majority Banks" shall mean (a) prior to the termination of the
Commitments, Banks having 75% or more of the aggregate amount of the Commitments
and (b) after the termination of the Commitments, Banks having 75% or more of
the aggregate principal amount of the Loans and the Letter of Credit
Liabilities.
"Tangible Net Worth" shall mean the sum of the redemption price of
preferred stock, par value of common stock, capital in excess of par value of
common stock (additional paid-in capital) and retained earnings, less treasury
stock, goodwill, deferred development costs, franchises, licenses, patents,
trademarks and copyrights and all other assets which are properly classified as
intangible assets in accordance with GAAP less any Redemption Obligations.
"Type" shall have the meaning assigned to such term in Section 1.3
hereof.
"Unfunded Liabilities" shall mean, with respect to any Plan, at any
time, the amount (if any) by which (a) the present value of all benefits under
such Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent actuarial valuation report
for such Plan, but only to the extent that such excess represents a potential
liability of any ERISA Affiliate to the PBGC or a Plan under Title IV of ERISA.
1.2 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.
To enable the ready determination of compliance with the provisions hereof, the
Company will not change from December 31 in each year the date on which its
fiscal year ends, nor from March 31, June 30 and September 30 the dates on which
the first three fiscal quarters in each fiscal year end.
1.3 Types of Loans. Loans hereunder are distinguished by "Type". The
"Type" of a Loan refers to the determination whether such Loan is a Eurodollar
Loan, a Competitive Loan or an Alternate Base Rate Loan.
1.4 Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. Any
reference to Sections shall refer to Sections of this Agreement.
Section 2. Commitments; Borrowing Base Determinations; Competitive Bid
Facility.
2.1 Committed Loans. From time to time on or after the date hereof and
during the Revolving Credit Availability Period, each Bank shall make Committed
Loans under this Section 2.1 to the Company in an aggregate principal amount at
any one time outstanding (including its Commitment Percentage of all Letter of
Credit Liabilities at such time) up to but not exceeding such Bank's Commitment
Percentage of the amount by which the Maximum Revolving Credit Available Amount
exceeds the aggregate unpaid principal balance of all Competitive Loans and
Letter of Credit Liabilities from time to time outstanding. Subject to the
conditions herein, any such Committed Loan repaid prior to the end of the
Revolving Credit Availability Period may be reborrowed pursuant to the terms of
this Agreement; provided, that any and all such Committed Loans shall be due and
payable in full at the end of the Revolving Credit Availability Period.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions hereof, and
on the condition that aggregate Letter of Credit Liabilities shall never exceed
$100,000,000, the Company shall have the right, in addition to Committed Loans
provided for in Section 2.1 hereof, to utilize the Commitments from time to time
from and after the Effective Date through the expiration of the Revolving Credit
Availability Period by obtaining the issuance of letters of credit for the
account of the Company and on behalf of the Company by the applicable Issuer if
the Company shall so request in the notice referred to in Section 2.2(b)(i)
(such letters of credit being collectively referred to as the "Letters of
Credit"). Upon the date of the issuance of a Letter of Credit, the applicable
Issuer shall be deemed, without further action by any party hereto, to have sold
to each Bank, and each Bank shall be deemed, without further action by any party
hereto, to have purchased from the applicable Issuer, a participation, to the
extent of such Bank's Commitment Percentage, in such Letter of Credit and the
related Letter of Credit Liabilities. Any Letter of Credit having an expiry date
after the end of the Revolving Credit Availability Period shall have been fully
Covered or shall be backed by a letter of credit in form and substance, and
issued by an issuer, acceptable to Agent in its reasonably exercised discretion.
Subject to the terms and conditions hereof, upon the request of the Company, if
Chase is the designated Issuer, Chase shall issue the applicable Letter of
Credit and if any other Bank is the designated Issuer, such Bank may, but shall
not be obligated to, issue such Letter of Credit.
(b) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:
(i) The Company shall give Agent at least three (3) Business Days'
prior notice (effective upon receipt) specifying the proposed Issuer and the
date such Letter of Credit is to be issued and describing the proposed terms of
such Letter of Credit and the nature of the transaction proposed to be supported
thereby, and shall furnish such additional information regarding such
transaction as Agent or the applicable Issuer may reasonably request. Upon
receipt of such notice Agent shall promptly notify each Bank of the contents
thereof and of such Bank's Commitment Percentage of the amount of such proposed
Letter of Credit.
(ii) No Letter of Credit may be issued if after giving effect thereto
(A) the aggregate outstanding principal amount of Committed Loans plus the
aggregate Letter of Credit Liabilities would exceed (B) the amount by which the
Maximum Revolving Credit Available Amount exceeds the aggregate unpaid principal
balance of all Competitive Loans and Letter of Credit Liabilities from time to
time outstanding. On each day during the period commencing with the issuance of
any Letter of Credit and until such Letter of Credit shall have expired or been
terminated, the Commitment of each Bank shall be deemed to be utilized for all
purposes hereof in an amount equal to such Bank's Commitment Percentage of the
amount then available for drawings under such Letter of Credit.
(iii) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment thereunder, the applicable Issuer shall promptly notify the
Company and each Bank as to the amount to be paid as a result of such demand and
the payment date. If at any time the applicable Issuer shall have made a payment
to a beneficiary of a Letter of Credit in respect of a drawing under such Letter
of Credit, each Bank will pay to the applicable Issuer immediately upon demand
by the applicable Issuer at any time during the period commencing after such
payment until reimbursement thereof in full by the Company, an amount equal to
such Bank's Commitment Percentage of such payment, together with interest on
such amount for each day from the date of demand for such payment (or, if such
demand is made after 11:00 a.m. Houston, Texas time on such date, from the next
succeeding Business Day) to the date of payment by such Bank of such amount at a
rate of interest per annum equal to the Federal Funds Rate for such period.
(iv) The Company shall be irrevocably and unconditionally obligated
forthwith to reimburse the applicable Issuer for any amount paid by the
applicable Issuer upon any drawing under any Letter of Credit, without
presentment, demand, protest or other formalities of any kind. Such
reimbursement may, subject to satisfaction of any other applicable conditions
set forth in this Agreement, including the existence of the Maximum Revolving
Credit Available Amount (after adjustment in the same to reflect the elimination
of the corresponding Letter of Credit Liability) be made by borrowing of Loans.
In the event any such reimbursement is not made by borrowing of Loans, the
Company shall make such reimbursement in immediately available funds within five
(5) days after demand therefor by the applicable Issuer. The applicable Issuer
will pay to each Bank such Bank's Commitment Percentage of all amounts received
from the Company for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only to the
extent such Bank has made payment to the applicable Issuer in respect of such
Letter of Credit pursuant to clause (iii) above.
(v) The Company will pay to Agent at the Principal Office for the
account of each Bank a fee on such Bank's Commitment Percentage of the daily
average amount available for drawings under each Letter of Credit, in each case
for the period from and including the date of issuance of such Letter of Credit
to and including the date of expiration or termination thereof at a rate per
annum equal to the Letter of Credit Fee in effect from time to time, such fee to
be paid in arrears on the Quarterly Dates and on the date of the expiration or
termination thereof. Agent will pay to each Bank, promptly after receiving any
payment in respect of letter of credit fees referred to in the preceding
sentence of this clause (v), an amount equal to such Bank's Commitment
Percentage of such fees. The Company shall pay to the applicable Issuer an
administration and issuance fee in an amount equal to 1/8 of 1% per annum of the
daily average amount available for drawings under such Letter of Credit, in each
case for the period from and including the date of issuance of such Letter of
Credit to and including the date of expiration or termination thereof, such fee
to be paid in arrears on the Quarterly Dates and on the date of the expiration
or termination thereof. Such administration and issuance fee shall be retained
by the applicable Issuer.
(vi) The issuance by the applicable Issuer of each Letter of Credit
shall, in addition to the conditions precedent set forth in Section 7 hereof, be
subject to the conditions precedent that such Letter of Credit shall be in such
form and contain such terms as shall be reasonably satisfactory to the
applicable Issuer and that the Company shall have executed and delivered such
other instruments and agreements relating to such Letter of Credit as the
applicable Issuer shall have reasonably requested and are not inconsistent with
the terms of this Agreement including an Application therefor. In the event of a
conflict between the terms of this Agreement and the terms of any Application,
the terms of this Agreement shall control. Without limiting the generality of
the foregoing sentence, in the event any such Application shall include
requirements for Cover, it is agreed that there shall be no requirements for the
Company to provide Cover except as expressly required in this Agreement.
(c) Indemnification. The Company hereby indemnifies and holds harmless
Agent, the applicable Issuer and each Bank from and against any and all claims
and damages, losses, liabilities, costs or expenses which such Bank, the
applicable Issuer or Agent may incur (or which may be claimed against such Bank,
the applicable Issuer or Agent by any Person whatsoever) in connection with the
execution and delivery or transfer of or payment or failure to pay under any
Letter of Credit, including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which Agent, the applicable Issuer or such Bank,
as the case may be, may incur (whether incurred as a result of its own
negligence or otherwise) by reason of or in connection with the failure of any
other Bank (whether as a result of its own negligence or otherwise) to fulfill
or comply with its obligations to Agent, the applicable Issuer or such Bank, as
the case may be, hereunder (but nothing herein contained shall affect any rights
the Company may have against such defaulting Bank); provided that, the Company
shall not be required to indemnify any Bank, the applicable Issuer or Agent for
any claims, damages, losses, liabilities, costs or expenses to the extent, but
only to the extent, caused by (i) the willful misconduct or gross negligence of
the party seeking indemnification, or (ii) by such Bank's, the applicable
Issuer's or Agent's, as the case may be, failure to pay under any Letter of
Credit after the presentation to it of a request required to be paid under
applicable law. Nothing in this Section 2.2(c) is intended to limit the
obligations of the Company under any other provision of this Agreement.
(d) Co-issuance or Separate Issuance of Letters of Credit. The Company
may, at its option, request that any requested Letter of Credit which exceeds
$1,000,000 be issued severally, but not jointly, by any two or more of the Banks
or issued through separate Letters of Credit issued by any two or more of the
Banks, respectively, each in an amount equal to a portion of the amount of the
applicable Letter of Credit requested by the Company. In either such event, the
Banks issuing such Letters of Credit shall each constitute an "Issuer" and the
Letters of Credit so issued shall each constitute a "Letter of Credit" for all
purposes hereunder and under the Loan Documents. Notwithstanding the foregoing,
no Bank other than Chase shall have any obligation to issue any Letter of
Credit, but may do so at its option.
2.3 Reductions and Changes of Commitments.
(a) Mandatory.
(i) The total Commitment of the Banks shall be reduced as follows:
Reduction Resulting Revolving
Reduction Date Amount Credit Commitment
March 31, 1999 $40,000,000 $610,000,000
June 30, 1999 $40,000,000 $570,000,000
September 30, 1999 $40,000,000 $530,000,000
December 31, 1999 $40,000,000 $490,000,000
March 31, 2000 $40,000 000 $450,000,000
June 30, 2000 $40,000,000 $410,000,000
September 30, 2000 $40,000,000 $370,000,000
December 31, 2000 $40,000,000 $330,000,000
March 31, 2001 $40,000,000 $290,000,000
June 30, 2001 $40,000,000 $250,000,000
September 30, 2001 $40,000,000 $210,000,000
December 31, 2001 $40,000,000 $170,000,000
March 31, 2002 $40,000,000 $130,000,000
June 30, 2002 $40,000,000 $90,000,000
September 30, 2002 $40,000,000 $50,000,000
December 31, 2002 $50,000,000 $0
(ii) On December 31, 2002, all Commitments shall be terminated in
their entirety unless terminated at an earlier date pursuant to Section 11.1.
(b) Optional. The Company shall have the right to terminate or reduce
the unused portion of the Commitments at any time or from time to time, provided
that: (i) the Company shall give notice of each such termination or reduction to
Agent as provided in Section 5.5 hereof and (ii) each such partial reduction
shall be permanent and in an aggregate amount at least equal to $5,000,000.
(c) No Reinstatement. Any reduction in or termination of the
Commitments may not be reinstated without the approval of Agent and any Bank
whose Commitment (or the applicable part thereof) is to be so reinstated.
2.4 Fees.
(a) The Company shall pay to Agent for the account of each Bank a
facility fee accruing from the Effective Date, computed for each day at a rate
per annum equal to the Facility Fee Percentage times such Bank's pro rata share
(based on its respective Commitment) of the Maximum Revolving Credit Available
Amount on such day. Such facility fees shall be payable on the Quarterly Dates
and on the earlier of the date the Commitments are terminated in their entirety
or the last day of the Revolving Credit Availability Period.
(b) The Company shall pay to Agent for the account of each Bank a
commitment fee with respect to such Bank's Commitment accruing from the
Effective Date, computed for each day at a rate per annum equal to 0.05% times
the amount of such Bank's pro rata share (based on its respective Commitment) of
(i) the aggregate Commitments on such day minus (ii) the sum of the aggregate
outstanding Loans on such day plus the aggregate Letter of Credit Liabilities
outstanding on such day. Commitment fees accruing pursuant to this clause (b)
shall be payable on the Quarterly Dates and on the earlier of the date the
Commitments are terminated in their entirety or the last day of the Revolving
Credit Availability Period.
(c) The Company shall pay to Agent for the account of each Bank an
additional facility fee upon any increase in such Bank's available Commitment as
a result of an increase in the Borrowing Base or a decrease in Borrowing Base
Debt. Such additional facility fee shall be in an amount equal to such Bank's
pro rata share (based on its respective Commitment) of the product of (i)
one-fourth (1/4th) of the amount (if any) by which the then current Facility Fee
Percentage exceeds 0.125% times (ii) the amount of such increase in a Bank's
available Commitment as a result of an increase in the Borrowing Base or a
decrease in Borrowing Base Debt. Payment of such additional fee resulting from
an increase in the Borrowing Base shall be due and payable upon the effective
date of such increase in the Borrowing Base. Payment of such additional fee
resulting from a decrease in Borrowing Base Debt shall be due and payable upon
delivery of a Request for Extension of Credit pursuant to Section 7.2 hereof or
a certificate of compliance pursuant to Sections 9.2(a)(i) or 9.2(b) hereof,
whichever shall first occur, reflecting such decrease in Borrowing Base Debt.
The facility fee provided for in this Section 2.4(c) shall be payable
notwithstanding any prior decrease in the available Commitments which may have
occurred as a result of a decrease in the Borrowing Base or an increase in
Borrowing Base Debt.
(d) The Company agrees to pay to Agent fees as provided in the
separate letter agreements executed by and between Agent and the Company.
2.5 Affiliates; Lending Offices.
(a) Any Bank may, if it so elects, fulfill any obligation to make a
Eurodollar Loan or Competitive Loan by causing a branch, foreign or otherwise,
or Affiliate of such Bank to make such Loan and may transfer and carry such Loan
at, to or for the account of any branch office or Affiliate of such Bank;
provided that, in such event for the purposes of this Agreement such Loan shall
be deemed to have been made by such Bank and the obligation of the Company to
repay such Loan shall nevertheless be to such Bank and shall be deemed to be
held by such Bank and, to the extent of such Loan, to have been made for the
account of such branch or Affiliate.
(b) Notwithstanding any provision of this Agreement to the contrary,
each Bank shall be entitled to fund and maintain its funding of all or any part
of its Loans hereunder in any manner it sees fit, it being understood, however,
that for the purposes of this Agreement all determinations hereunder shall be
made as if such Bank had actually funded and maintained each Eurodollar Loan
during each Interest Period through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
Eurodollar Rate for such Interest Period.
2.6 Several Obligations. The failure of any Bank to make any Loan to
be made by it on the date specified therefor shall not relieve any other Bank of
its obligation to make its Loan on such date, but neither Agent nor any Bank
shall be responsible for the failure of any other Bank to make a Loan to be made
by such other Bank.
2.7 Notes. The Committed Loans made by each Bank shall be evidenced by
a single Committed Note of the Company in substantially the form of Exhibit E
hereto payable to the order of such Bank in a principal amount equal to the
Commitment of such Bank, and otherwise duly completed. The Competitive Loans
made by each Bank shall be evidenced by a single Competitive Note of the Company
in substantially the form of Exhibit O hereto payable to the order of such Bank
and otherwise duly completed. Each Bank is hereby authorized by the Company to
endorse on the schedules (or a continuations thereof) attached to the Notes of
such Bank, to the extent applicable, the date, amount and Type of and the
Interest Period for each Loan made by such Bank to the Company hereunder, and
the amount of each payment or prepayment of principal of such Loan received by
such Bank, provided, that any failure by such Bank to make any such endorsement
shall not affect the obligations of the Company under such Note or hereunder in
respect of such Loan.
2.8 Use of Proceeds. The proceeds of the Loans shall be used for
general corporate purposes.
2.9 Borrowing Base Determinations.
(a) Within 45 days after receipt of the Engineering Report required to
be delivered each year, commencing with the Engineering Report required to be
delivered in 1994, Agent shall notify the Company, in writing, of the Oil and
Gas Reserves Component Value determined on the basis of such Engineering Report
and the Borrowing Base determined on the basis of such Oil and Gas Reserves
Component Value, together with the determination of the Alaskan Gas Component
Value. Each such determination is herein called a "Scheduled Redetermination".
Each Scheduled Redetermination shall be effective when the Company is notified
of the amount of the redetermined Borrowing Base by Agent.
(b) The Requesting Banks or the Company may, from time to time (but
not more frequently than one time during any calendar year by the Requesting
Banks and one time during any calendar year by the Company), request a
redetermination of the Oil and Gas Reserves Component Value based upon the most
recently received Engineering Report or Company Report, as the case may be, and
of the Borrowing Base based upon such redetermination of the Oil and Gas
Reserves Component Value, together with the determination of the Alaskan Gas
Component Value. Each such requested redetermination is herein called a
"Requested Redetermination." Each Requested Redetermination shall be effective
when the Company is notified, in writing, of the amount of the redetermined
Borrowing Base by Agent.
2.10 Competitive Bid Procedure.
(a) In order to request Competitive Bids, the Company shall hand
deliver, telex or telecopy to Agent a duly completed request substantially in
the form of Exhibit K, with the blanks appropriately completed (a "Competitive
Bid Request"), to be received by Agent not later than 11:00 a.m., Houston, Texas
time, five Business Days before the date specified for a proposed Competitive
Loan. No Alternate Base Rate Loan shall be requested in, or, except pursuant to
Section 6, made pursuant to, a Competitive Bid Request. A Competitive Bid
Request that does not conform substantially to the format of Exhibit K may be
rejected at Agent's sole discretion, and Agent shall promptly notify the Company
of such rejection by telecopier. Each Competitive Bid Request shall in each case
refer to this Agreement and specify (x) the date of such Competitive Loans
(which shall be a Business Day) and the aggregate principal amount thereof
(which shall not be less than $25,000,000 or greater than the unused portion of
the Maximum Revolving Credit Available Amount on such date and shall be an
integral multiple of $5,000,000) and (y) the Interest Period with respect
thereto (which may not end after the termination of the Revolving Credit
Availability Period). Promptly after its receipt of a Competitive Bid Request
that is not rejected as aforesaid, Agent shall invite by telecopier (in
substantially the form set forth in Exhibit L hereto) the Banks to bid, on the
terms and conditions of this Agreement, to make Competitive Loans pursuant to
such Competitive Bid Request. Notwithstanding the foregoing, Agent shall have no
obligation to invite any Bank to make a Competitive Bid pursuant to this Section
2.10(a) until such Bank has delivered a properly completed Competitive Bid
Administrative Questionnaire to Agent.
(b) Each Bank may, in its sole discretion, make one or more
Competitive Bids to the Company responsive to each Competitive Bid Request. Each
Competitive Bid by a Bank must be received by Agent via telecopier, in the form
of Exhibit M hereto, not later than 11:00 a.m., Houston, Texas time, four
Business Days before the date specified for a proposed Competitive Loan.
Competitive Bids that do not conform substantially to the format of Exhibit M
may be rejected by Agent after conferring with, and upon the instruction of, the
Company, and Agent shall notify the Bank of such rejection as soon as
practicable. Each Competitive Bid shall refer to this Agreement and (x) specify
the principal amount (which shall be in a minimum principal amount of
$10,000,000 and in an integral multiple of $1,000,000 and which may equal the
entire aggregate principal amount of the Competitive Loan requested by the
Company) of the Competitive Loan that the Bank is willing to make to the
Company, (y) specify the Competitive Bid Rate at which the Bank is prepared to
make the Competitive Loan and (z) confirm the Interest Period with respect
thereto specified by the Company in its Competitive Bid Request. A Competitive
Bid submitted by a Bank pursuant to this paragraph (b) shall be irrevocable.
(c) Agent shall, by 2:00 p.m. four Business Days before the date
specified for a proposed Competitive Loan, notify the Company by telecopier of
all the Competitive Bids made, the Competitive Bid Rate and the maximum
principal amount of each Competitive Loan in respect of which a Competitive Bid
was made and the identity of the Bank that made each bid. Agent shall send a
copy of all Competitive Bids to the Company for its records as soon as
practicable after completion of the bidding process set forth in this Section
2.10.
(d) The Company may in its sole and absolute discretion, subject only
to the provisions of this Section 2.10(d), accept or reject any Competitive Bid
referred to in Section 2.10(c); provided, however, that the aggregate amount of
the Competitive Bids so accepted by the Company may not exceed the principal
amount of the Competitive Loan requested by the Company. The Company shall
notify Agent by telecopier whether and to what extent it has decided to accept
or reject any or all of the bids referred to in Section 2.10(c), not later than
11:00 a.m., Houston, Texas time, three Business Days before the date specified
for a proposed Competitive Loan; provided, however, that (w) the failure by the
Company to give such notice shall be deemed to be a rejection of all the bids
referred to in Section 2.10(c) and (x) no bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $10,000,000 and an integral multiple of $1,000,000. Notwithstanding the
foregoing, if it is necessary for the Company to accept a pro rata allocation of
the bids made in response to a Competitive Bid Request (whether pursuant to the
events specified in clause (x) above or otherwise) and the available principal
amount of Competitive Loans to be allocated among the Banks is not sufficient to
enable Competitive Loans to be allocated to each Bank in a minimum principal
amount of $10,000,000 and in integral multiples of $1,000,000, then the Company
shall select the Banks to be allocated such Competitive Loans and shall round
allocations up or down to the next higher or lower multiple of $1,000,000 as it
shall deem appropriate. In addition, the Company shall be permitted under the
foregoing procedures to accept a bid or bids in a principal amount of less than
$10,000,000 (i) in order to enable the Company to accept bids equal to (but not
in excess of) the principal amount of the Competitive Loan requested by the
Company or (ii) in order to enable the Company to accept all remaining bids, or
all remaining bids at a particular Competitive Bid Rate. A notice given by
Company pursuant to this paragraph (d) shall be irrevocable.
(e) Agent shall promptly notify each bidding Bank whether or not its
Competitive Bid has been accepted (and if so, in what amount and at what
Competitive Bid Rate) by telex or telecopier sent by Agent, and each successful
bidder will thereupon become bound, subject to the other applicable conditions
hereof, to make the Competitive Loan in respect of which its bid has been
accepted. After completing the notifications referred to in the immediately
preceding sentence, Agent shall (i) notify Agent of each Competitive Bid that
has been accepted, the amount thereof and the Competitive Bid Rate therefor and
(ii) notify each Bank of the aggregate principal amount of all Competitive Bids
accepted.
(f) No Competitive Loan shall be made within five Business Days of the
date of any other Competitive Loan, unless the Company and Agent shall mutually
agree otherwise.
(g) If Agent shall at any time have a Commitment hereunder and shall
elect to submit a Competitive Bid in its capacity as a Bank, it shall submit
such bid directly to the Company one quarter of an hour earlier than the latest
time at which the other Banks are required to submit their bids to Agent
pursuant to paragraph (b) above.
(h) All notices required by this Section 2.10 shall be made in
accordance with Section 13.2 and the Competitive Bid Administrative
Questionnaire most recently placed on file by each Bank with Agent.
Section 3. Borrowings, Prepayments and Selection of Interest Rates.
3.1 Borrowings. The Company shall give Agent notice of each borrowing
to be made hereunder as provided in Sections 2.10 and 5.5 hereof. Not later than
2:00 p.m. Houston, Texas time on the date specified for each such borrowing
hereunder, each Bank shall make available the amount of the Loan, if any, to be
made by it on such date to Agent, at its Principal Office, in immediately
available funds, for the account of the Company. The amount so received by Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Company by depositing the same, in immediately available funds, in an
account designated by the Company maintained with Agent at the Principal Office.
3.2 Prepayments.
(a) Optional Prepayments. Subject to the provisions of Sections 4, 5
and 6, the Company shall have the right to prepay, on any Business Day, in whole
or in part, without the payment of any penalty or fee, Loans at any time or from
time to time, provided that, the Company shall give Agent notice of each such
prepayment as provided in Section 5.5 hereof. Eurodollar Loans and Competitive
Loans may be prepaid on the last day of an Interest Period applicable thereto.
Neither Eurodollar Loans nor Competitive Loans may be otherwise prepaid unless
prepayment is accompanied by payment of all compensation required by Section 6.
(b) Mandatory Prepayments and Cover; Borrowing Base Deficiency.
(1) Reduction of Commitments. The Company shall from time to time on
demand by Agent prepay the Loans (or provide Cover for Letter of Credit
Liabilities) in such amounts as shall be necessary so that at all times the
aggregate outstanding principal amount of all Revolving Credit Obligations shall
not be in excess of the aggregate amount of the Commitments, as reduced from
time to time pursuant to Section 2.3 hereof plus any Cover provided under this
Section 3.2(b)(1).
(2) Borrowing Base Deficiency. Should a Borrowing Base Deficiency
occur, Agent may (and, at the direction of the Majority Banks, shall) notify the
Company in writing of such Borrowing Base Deficiency. Within 30 days from and
after the Borrowing Base Deficiency Notification Date, the Company shall, at its
election, take one of the following actions:
(i) execute and deliver to Agent security documents, in
form and substance satisfactory to Agent and its
counsel, securing the Notes and the other Obligations
and covering additional assets, which are not
included in the Borrowing Base and which are not then
covered by any security documents securing the Notes
or the other Obligations, of a type and nature, and
having a value (determined by the Majority Banks
using customary standards for lending) satisfactory
to the Majority Banks; or
(ii) make a payment on the Loans or Borrowing Base Debt of
the Company or its Subsidiaries, as the Company may
elect, in an amount sufficient to eliminate such
Borrowing Base Deficiency, and deliver to Agent
evidence satisfactory to Agent of any such payment of
Borrowing Base Debt of the Company or its
Subsidiaries.
If the Company shall elect to execute and deliver security documents to Agent
pursuant to subsection (i) above, it shall provide Agent and each Bank with
descriptions of the assets to be collaterally assigned (together with current
valuations, Engineering Reports and title evidence applicable thereto, each of
which shall be in form and substance satisfactory to Agent) within 20 days after
the Borrowing Base Deficiency Notification Date.
If the Company fails to take either of the actions described above within such
30-day period, then without any necessity for notice to the Company or any other
person, the Company shall become obligated to pay on the Loans three (3)
installments, each in an amount equal to one-third (1/3rd) of the applicable
Borrowing Base Deficiency, such installments to be due and payable on or before
three (3), six (6) and nine (9) calendar months after the Borrowing Base
Deficiency Notification Date, respectively. Payments of principal otherwise
required hereunder shall be credited against such installments.
(3) Asset Dispositions. If the Company or any Subsidiary sells,
transfers or otherwise disposes of assets that have been given value in the most
recent determination of the Borrowing Base and having a fair market value in the
aggregate for the Company and such Subsidiaries in excess of $50,000,000 during
the period from the effective date of any Borrowing Base Determination until the
effective date of the next Borrowing Base Determination, the Borrowing Base
shall be immediately reduced, until the effective date of the next Borrowing
Base Determination, by an amount equal to (i) in the case of sale, transfer or
other disposition of all or substantially all of the assets comprising (x)
ENSTAR Alaska or (y) the Included Reserves, the value of such assets reflected
in the most recent Borrowing Base, or if the value of the applicable asset
reflected in the most recent Borrowing Base cannot be readily determined, the
net sales proceeds realized from the sale, transfer or other disposition of such
assets and (ii) in the case of sale, transfer or other disposition of less than
all or substantially all of the assets comprising any of the business segments
described in (x) or (y) above, the value of such assets reflected in the most
recent Borrowing Base (if such value can be readily determined), or if the value
of the applicable asset reflected in the most recent Borrowing Base cannot be
readily determined, the net sales proceeds realized from the sale, transfer or
other disposition of such assets. If such reduction shall result in a Borrowing
Base Deficiency, then in lieu of the provisions of Section 3.2(b)(2) hereof,
the Company shall immediately make a payment on the Loans in an amount equal to
such Borrowing Base Deficiency. In addition to and cumulative of the foregoing,
if a Borrowing Base Deficiency exists prior to such sale, transfer or other
disposition of assets, then in lieu of the provisions of Section 3.2(b)(2)
hereof, the Company shall immediately make a payment on the Loans in an amount
equal to the lesser of the amount of the Borrowing Base Deficiency (after giving
effect to the applicable sale, transfer or other disposition) or 100% of the net
sales proceeds realized from the applicable sale, transfer or other disposition.
3.3 Selection of Interest Rates. Subject to the terms and provisions
of this Agreement, the Company shall have the right either to convert any Loan
(in whole or in part) into a Loan of another Type (provided that no such
conversion of Eurodollar Loans or Competitive Loans shall be permitted other
than on the last day of an Interest Period applicable thereto) or to continue
such Loan (in whole or in part) as a Loan of the same Type. In the event the
Company fails to so give such notice prior to the end of the applicable Interest
Period with respect to any Eurodollar Loan or Competitive Loan, such Loan shall
become an Alternate Base Rate Loan on the last day of such Interest Period.
Section 4. Payments of Principal and Interest.
4.1 Repayment of Loans and Reimbursement Obligations. The Company will
pay to Agent for the account of each Bank (a) the principal of each Loan made by
such Bank on the dates provided in the respective Notes and as provided
hereunder and (b) the amount of each Reimbursement Obligation promptly upon its
occurrence. The amount of any Reimbursement Obligation may, if the applicable
conditions precedent specified in Section 7 hereof have been satisfied, be paid
with the proceeds of Loans.
4.2 Interest.
(a) Subject to Section 13.6 hereof, the Company will pay to Agent for
the account of each Bank interest on the unpaid principal amount of each Loan
made by such Bank for the period commencing on the date of such Loan to but
excluding the date such Loan shall be paid in full, at the lesser of (I) the
following rates per annum:
(i) if such Loan is an Alternate Base Rate Loan, the Alternate Base
Rate plus the Applicable Margin,
(ii) if such Loan is a Eurodollar Loan, the applicable Eurodollar Rate
plus the Applicable Margin, and
(iii) if such Loan is a Competitive Loan, the applicable fixed rate
offered by the applicable Bank and accepted by the Company in accordance with
Section 2.10 hereof (or, in the case of Existing Competitive Loans, the
applicable fixed rate specified on Exhibit D hereto), or (II) the Highest Lawful
Rate.
(b) Notwithstanding any of the foregoing but subject to Section 13.6
hereof, the Company will pay to Agent for the account of each Bank interest at
the applicable Post-Default Rate on any principal of any Loan made by such Bank,
on any Reimbursement Obligation and on any other amount payable by the Company
hereunder to or for the account of such Bank (but, if such amount is interest,
only to the extent legally allowed), which shall not be paid in full when due
(whether at stated maturity, by acceleration or otherwise), for the period
commencing on the due date thereof until the same is paid in full.
(c) Accrued interest on each Loan shall be payable on the last day of
each Interest Period for such Loan (and, if such Interest Period exceeds three
months' duration, quarterly, commencing on the first quarterly anniversary of
the first day of such Interest Period), except that (i) accrued interest payable
at the Post-Default Rate shall be due and payable from time to time on demand of
Agent or the Majority Banks (through Agent) and (ii) accrued interest on any
amount prepaid or converted pursuant to Section 6 hereof shall be paid on the
amount so prepaid or converted.
Section 5. Payments; Pro Rata Treatment; Computations, Etc.
5.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
the Company hereunder and under the Notes shall be made in Dollars, in
immediately available funds, to Agent at the Principal Office (or in the case of
a successor Agent, at the principal office of such successor Agent in the United
States), not later than 11:00 a.m. Houston, Texas time on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day). Agent,
or any Bank for whose account any such payment is made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Company with Agent or such Bank, as
the case may be.
(b) The Company shall, at the time of making each payment hereunder or
under any Note, specify to Agent the Loans or other amounts payable by the
Company hereunder or thereunder to which such payment is to be applied. Each
payment received by Agent hereunder or under any Note or any other Loan Document
for the account of a Bank shall be paid promptly to such Bank, in immediately
available funds for the account of such Bank's Applicable Lending Office.
(c) If the due date of any payment hereunder or under any Note or any
other Loan Document falls on a day which is not a Business Day, the due date for
such payment (subject to the definition of Interest Period) shall be extended to
the next succeeding Business Day and interest shall be payable for any principal
so extended for the period of such extension.
5.2 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Banks under Section 2.1 hereof shall be made
ratably from the Banks on the basis of their respective Commitments and each
payment of commitment or facility fees shall be made for the account of the
Banks, and each termination or reduction of the Commitments of the Banks under
Section 2.3 hereof shall be applied, pro rata, according to the Banks'
respective Commitments; (b) each payment by the Company of principal of or
interest on Loans of a particular Type shall be made to Agent for the account of
the Banks pro rata in accordance with the respective unpaid principal amounts of
such Loans held by the Banks; and (c) the Banks (other than the applicable
Issuer) shall purchase from the applicable Issuer participations in the Letters
of Credit to the extent of their respective Commitment Percentages.
5.3 Computations. Interest on Competitive Loans and interest based on
the Eurodollar Base Rate or the Federal Funds Rate will be computed on the basis
of a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable, unless the
effect of so computing shall be to cause the rate of interest to exceed the
Highest Lawful Rate, in which case interest shall be calculated on the basis of
the actual number of days elapsed in a year composed of 365 or 366 days, as the
case may be. All other interest and fees shall be computed on the basis of a
year of 365 (or 366) days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
5.4 Minimum and Maximum Amounts. Except for prepayments made pursuant
to Section 3.2(b) hereof, and subject to the provisions of Section 2.10 hereof
with respect to Competitive Loans, each borrowing and repayment of principal of
Loans, each termination or reduction of Commitments, each optional prepayment
and each conversion of Type shall be in an aggregate principal amount at least
equal to (a) in the case of Eurodollar Loans and Competitive Loans, $5,000,000,
and (b) in the case of Alternate Base Rate Loans, $1,000,000 (borrowings or
prepayments of Loans of different Types or, in the case of Eurodollar Loans and
Competitive Loans, having different Interest Periods at the same time hereunder
to be deemed separate borrowings and prepayments for purposes of the foregoing,
one for each Type or Interest Period). Upon any mandatory prepayment that would
reduce Eurodollar Loans or Competitive Loans, respectively, having the same
Interest Period to less than $5,000,000 such Loans shall automatically be
converted into Alternate Base Rate Loans. Notwithstanding anything to the
contrary contained in this Agreement, there shall not be, at any one time, more
than eight (8) Interest Periods in effect with respect to Eurodollar Loans or
Competitive Loans, in the aggregate.
5.5 Certain Actions, Notices, Etc. Notices to Agent of any termination
or reduction of Commitments, of borrowings and prepayments, conversions and
continuations of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by Agent not later than
11:00 a.m. Houston, Texas time on the number of Business Days prior to the date
of the relevant termination, reduction, borrowing and/or repayment, conversion
or continuance specified below:
Number of
Business
Notice Days Prior
Termination or
Reduction of Commitments 2
Borrowing or prepayment
of or conversion into or
continuance of Alternate Base
Rate Loans same day
Borrowing or
prepayment of or conversion
into or continuance of
Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount
of the Commitments to be terminated or reduced. Each such notice of borrowing or
prepayment shall specify the amount and Type of the Loans to be borrowed or
prepaid (subject to Sections 3.2(a) and 5.4 hereof), the date of borrowing or
prepayment (which shall be a Business Day) and, in the case of Eurodollar Loans,
the duration of the Interest Period therefor (subject to the definition of
"Interest Period"). Each such notice of conversion of a Loan into a Loan of
another Type shall identify such Loan (or portion thereof) being converted and
specify the Type of Loan into which such Loan is being converted (subject to
Section 5.4 hereof) and the date for conversion (which shall be a Business Day)
and, unless such Loan is being converted into an Alternate Base Rate Loan, the
duration (subject to the definition of "Interest Period") of the Interest Period
therefor which is to commence as of the last day of the then current Interest
Period therefor (or the date of conversion, if such Loan is being converted from
an Alternate Base Rate Loan). Each such notice of continuation of a Loan (or
portion thereof) as the same Type of Loan shall identify such Loan (or portion
thereof) being continued (subject to Section 5.4 hereof) and, unless such Loan
is an Alternate Base Rate Loan, the duration (subject to the definition of
"Interest Period") of the Interest Period therefor which is to commence as of
the last day of the then current Interest Period therefor. Agent shall promptly
notify the affected Banks of the contents of each such notice. Notice of any
prepayment having been given, the principal amount specified in such notice,
together with interest thereon to the date of prepayment, shall be due and
payable on such prepayment date. Section 2.10 hereof shall control the time
periods applicable to Competitive Loans.
5.6 Non-Receipt of Funds by Agent. Unless Agent shall have been
notified by a Bank or the Company (the "Payor") prior to the date on which such
Bank is to make payment to Agent of the proceeds of a Loan to be made by it
hereunder (or the payment of any amount by such Bank to reimburse the applicable
Issuer for a drawing under any Letter of Credit) or the Company is to make a
payment to Agent for the account of one or more of the Banks, as the case may be
(such payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to Agent, Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to Agent on or before such date,
the recipient of such payment (or, if such recipient is the beneficiary of a
Letter of Credit, the Company and, if the Company fails to pay the amount
thereof to Agent forthwith upon demand, the Banks ratably in proportion to their
respective Commitment Percentages) shall, on demand, pay to Agent the amount
made available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by Agent until the date
Agent recovers such amount at a rate per annum equal to the Federal Funds Rate
for such period.
5.7 Sharing of Payments, Etc. If a Bank shall obtain payment of any
principal of or interest on any Loan made by it under this Agreement, or on any
Reimbursement Obligation or other obligation then due to such Bank hereunder,
through the exercise of any right of set-off, banker's lien, counterclaim or
similar right, or otherwise, it shall promptly purchase from the other Banks
participations in the Loans made, or Reimbursement Obligations or other
obligations held, by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Banks shall share the benefit of such payment (net of any expenses which may be
incurred by such Bank in obtaining or preserving such benefit) pro rata in
accordance with the unpaid principal and interest on the Obligations then due to
each of them (provided, however, that the foregoing shall not apply to payments
of Competitive Loans made prior to the termination of the Commitments following
the occurrence of an Event of Default). To such end all the Banks shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored. The
Company agrees, to the fullest extent it may effectively do so under applicable
law, that any Bank so purchasing a participation in the Loans made, or
Reimbursement Obligations or other obligations held, by other Banks may exercise
all rights of set-off, bankers' lien, counterclaim or similar rights with
respect to such participation as fully as if such Bank were a direct holder of
Loans and Reimbursement Obligations or other obligations in the amount of such
participation. Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other Indebtedness or
obligation of the Company.
Section 6. Yield Protection and Illegality.
6.1 Additional Costs.
(a) Subject to Section 13.6, the Company shall pay to Agent, on demand
for the account of each Bank from time to time such amounts as such Bank may
determine to be necessary to compensate it for any costs incurred by such Bank
which such Bank determines are attributable to its making or maintaining of any
Eurodollar Loan or any Competitive Loan hereunder or its obligation to make any
such Loan hereunder, or any reduction in any amount receivable by such Bank
hereunder in respect of any of such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called "Additional
Costs"), in each case resulting from any Regulatory Change which:
(i) subjects such Bank (or makes it apparent that such Bank is
subject) to any tax (including without limitation any United States interest
equalization tax), levy, impost, duty, charge or fee (collectively, "Taxes"), or
any deduction or withholding for any Taxes on or from the payment due under any
Eurodollar Loan or any Competitive Loan or other amounts due hereunder, other
than income and franchise taxes of the jurisdiction (or any subdivision thereof)
in which such Bank has an office or its Applicable Lending Office; or
(ii) changes the basis of taxation of any amounts payable to such Bank
under this Agreement or its Notes in respect of any of such Loans (other than
changes which affect taxes measured by or imposed on the overall net income or
franchise taxes of such Bank or of its Applicable Lending Office for any of such
Loans by the jurisdiction (or any subdivision thereof) in which such Bank has an
office or such Applicable Lending Office); or
(iii) imposes or modifies or increases or deems applicable any
reserve, special deposit or similar requirements (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System) relating to any extensions of credit or other assets of, or any deposits
with or other liabilities of, such Bank or loans made by such Bank, or against
any other funds, obligations or other property owned or held by such Bank
(including any of such Loans or any deposits referred to in the definition of
"Eurodollar Base Rate" in Section 1.1 hereof) and such Bank actually incurs such
additional costs.
Each Bank (if so requested by the Company through Agent) will designate a
different available Applicable Lending Office for the Eurodollar Loans or the
Competitive Loans of such Bank or take such other action as the Company may
request if such designation or action will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such Bank, be
disadvantageous to such Bank (provided that such Bank shall have no obligation
so to designate an Applicable Lending Office for Eurodollar Loans located in the
United States of America). Each Bank will furnish the Company with a statement
setting forth the basis and amount of each request by such Bank for compensation
under this Section 6.1(a); subject to Section 6.8, such certificate shall be
conclusive, absent manifest error, and may be prepared using any reasonable
averaging and attribution methods.
(b) Without limiting the effect of the foregoing provisions of this
Section 6.1, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes Eurodollar
Loans or Competitive Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets which it may hold, then, if such
Bank so elects by notice to the Company (with a copy to Agent), the obligation
of such Bank to make Eurodollar Loans or Competitive Loans, as the case may be,
hereunder shall be suspended until the date such Regulatory Change ceases to be
in effect (in which case the provisions of Section 6.4 hereof shall be
applicable).
(c) Good faith determinations and allocations by any Bank for purposes
of this Section 6.1 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Loans or of making or maintaining Loans or
on amounts receivable by it in respect of Loans, and of the additional amounts
required to compensate such Bank in respect of any Additional Costs, shall be
conclusive, absent manifest error.
(d) The Company's obligation to pay Additional Costs and compensation
with regard to each Eurodollar Loan and each Competitive Loan shall survive
termination of this Agreement.
6.2 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, with respect to any Eurodollar Loans:
(a) Agent determines in good faith (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof are not
being provided by the Reference Banks in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest for such
Loans for Interest Periods therefor as provided in this Agreement; or
(b) the Majority Banks determine (which determination shall be
conclusive) and notify Agent that the relevant rates of interest referred to in
the definition of "Eurodollar Base Rate" in Section 1.1 hereof upon the basis of
which the rates of interest for such Loans are to be determined do not
accurately reflect the cost to such Banks of making or maintaining such Loans
for Interest Periods therefor; or
(c) Agent determines in good faith (which determination shall be
conclusive) that by reason of circumstances affecting the interbank Dollar
market generally, deposits in United States dollars in the relevant interbank
Dollar market are not being offered for the applicable Interest Period and in an
amount equal to the amount of the Eurodollar Loan requested by the Company; then
Agent shall promptly notify the Company and each Bank thereof, and, so long as
such condition remains in effect, the Banks shall be under no obligation to make
Eurodollar Loans (but shall maintain until the end of the Interest Period then
in effect the Eurodollar Loans then outstanding).
6.3 Illegality. Notwithstanding any other provision of this Agreement
to the contrary, if (x) by reason of the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Bank with any request or directive (whether or not having the
force of law) of any central bank or other Governmental Authority or (y)
circumstances affecting the relevant interbank Dollar market or the position of
a Bank therein shall at any time make it unlawful or impracticable in the sole
discretion of a Bank exercised in good faith for such Bank or its Applicable
Lending Office to (a) honor its obligation to make Eurodollar Loans or
Competitive Loans hereunder, or (b) maintain Eurodollar Loans or Competitive
Loans hereunder, then such Bank shall promptly notify the Company thereof
through Agent and such Bank's obligation to make or maintain Eurodollar Loans or
Competitive Loans, as the case may be, hereunder shall be suspended until such
time as such Bank may again make and maintain Eurodollar Loans or Competitive
Loans, as the case may be (in which case the provisions of Section 6.4 hereof
shall be applicable). Before giving such notice pursuant to this Section 6.3,
such Bank will designate a different available Applicable Lending Office for the
Eurodollar Loans or the Competitive Loans, as the case may be, of such Bank or
take such other action as the Company may request if such designation or action
will avoid the need to suspend such Bank's obligation to make Eurodollar Loans
or Competitive Loans, as the case may be, hereunder and will not, in the sole
opinion of such Bank exercised in good faith, be disadvantageous to such Bank
(provided, that such Bank shall have no obligation so to designate an Applicable
Lending Office for Eurodollar Loans located in the United States of America).
6.4 Substitute Alternate Base Rate Loans. If the obligation of any
Bank to make or maintain Eurodollar Loans or Competitive Loans, as the case may
be, shall be suspended pursuant to Section 6.1, 6.2 or 6.3 hereof, all Loans
which would otherwise be made by such Bank as Eurodollar Loans or Competitive
Loans, as the case may be, shall be made instead as Alternate Base Rate Loans
(and, if an event referred to in Section 6.1(b) or 6.3 hereof has occurred and
such Bank so requests by notice to the Company with a copy to Agent, each
Eurodollar Loan or each Competitive Loan, as the case may be, of such Bank then
outstanding shall be automatically converted into an Alternate Base Rate Loan on
the date specified by such Bank in such notice) and, to the extent that
Eurodollar Loans or Competitive Loans, as the case may be, are so made as (or
converted into) Alternate Base Rate Loans, all payments of principal which would
otherwise be applied to such Eurodollar Loans or such Competitive Loans, as the
case may be, shall be applied instead to such Alternate Base Rate Loans.
6.5 Compensation. Subject to Section 13.6 hereof, the Company shall
pay to Agent for the account of each Bank, within four (4) Business Days after
demand therefor by such Bank through Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense actually incurred by it (exclusive of any lost profits or
opportunity costs) as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Loan or a
Competitive Loan made by such Bank on a date other than the last day of an
Interest Period for such Loan; or
(b) any failure by the Company to borrow a Eurodollar Loan or a
Competitive Loan to be made by such Bank on the date for such borrowing
specified in the relevant notice of borrowing under Section 5.5 or Section 2.10
hereof or to convert a Eurodollar Loan or a Competitive Loan into an Alternate
Base Rate Loan on such date after giving notice of such conversion; such
compensation to include, without limitation, any loss or expense actually
incurred (exclusive of any lost profits or opportunity costs) by reason of the
liquidation or reemployment of deposits or other funds acquired by the
applicable Bank to fund or maintain its share of any Loan. Subject to Section
6.8, each determination of the amount of such compensation by a Bank shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method. No costs shall be payable under
this Section solely by reason of the conversion of loans designated as
"Eurodollar Loans" under that certain Amended and Restated Credit Agreement
referred to in Section 13.15 hereof into the Existing Competitive Loans.
6.6 Additional Costs in Respect of Letters of Credit. If as a result
of any Regulatory Change there shall be imposed, modified or deemed applicable
any tax, reserve, special deposit or similar requirement against or with respect
to or measured by reference to Letters of Credit issued or to be issued
hereunder or participations in such Letters of Credit, and the result shall be
to increase the cost to any Bank of issuing or maintaining any Letter of Credit
or any participation therein, or reduce any amount receivable by any Bank
hereunder in respect of any Letter of Credit or any participation therein (which
increase in cost, or reduction in amount receivable, shall be the result of such
Bank's reasonable allocation of the aggregate of such increases or reductions
resulting from such event), then such Bank shall notify the Company through
Agent, and upon demand therefor by such Bank through Agent, the Company (subject
to Section 13.6 hereof) shall pay to such Bank, from time to time as specified
by such Bank, such additional amounts as shall be sufficient to compensate such
Bank for such increased costs or reductions in amount. Before making such demand
pursuant to this Section 6.6, such Bank will designate a different available
Applicable Lending Office for the Letter of Credit of such Bank or take such
other action as the Company may request, if such designation or action will
avoid the need for, or reduce the amount of, such compensation and will not, in
the sole opinion of such Bank exercised in good faith, be disadvantageous to
such Bank. A statement as to such increased costs or reductions in amount
incurred by such Bank, submitted by such Bank to the Company, shall be
conclusive as to the amount thereof, absent manifest error.
6.7 Capital Adequacy. If any Bank shall have determined that the
adoption after the date hereof or effectiveness after the date hereof (whether
or not previously announced) of any applicable law, rule, regulation or treaty
regarding capital adequacy, or any change therein after the date hereof, or any
change in the interpretation or administration thereof after the date hereof by
any Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with any
request or directive after the date hereof 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 such Bank's capital as a
consequence of such Bank's obligations hereunder, under the Loans made by it,
under the Letters of Credit and under the Notes held by it to a level below that
which such Bank could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time to
time, upon satisfaction of the conditions precedent set forth in this Section
6.7, upon demand by such Bank (with a copy to Agent), the Company (subject to
Section 13.6 hereof) shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction. A certificate as to such amounts,
submitted to the Company and Agent by such Bank, setting forth the basis for
such Bank's determination of such amounts, shall constitute a demand therefor
and shall be conclusive and binding for all purposes, absent manifest error. The
Company shall pay the amount shown as due on any such certificate within four
(4) Business Days after delivery of such certificate. Subject to Section 6.8, in
preparing such certificate, a Bank may employ such assumptions and allocations
of costs and expenses as it shall in good faith deem reasonable and may use any
reasonable averaging and attribution method.
6.8 Limitation on Additional Charges; Substitute Banks;
Non-Discrimination. Anything in this Section 6 notwithstanding:
(a) the Company shall not be required to pay to any Bank reimbursement
with regard to any costs or expenses, unless such Bank notifies the Company of
such costs or expenses within 90 days after the date paid or incurred;
(b) none of the Banks shall be permitted to pass through to the
Company charges and costs under this Section 6 on a discriminatory basis (i.e.,
which are not also passed through by such Bank to other customers of such Bank
similarly situated where such customer is subject to documents providing for
such pass through); and
(c) if any Bank elects to pass through to the Company any material
charge or cost under this Section 6 or elects to terminate the availability of
Eurodollar Loans for any material period of time, the Company may, within 60
days after the date of such event and so long as no Default shall have occurred
and be continuing, elect to terminate such Bank as a party to this Agreement;
provided that, concurrently with such termination the Company shall (i) if Agent
and each of the other Banks shall consent, pay that Bank all principal, interest
and fees and other amounts owed to such Bank through such date of termination or
(ii) have arranged for another financial institution approved by Agent (such
approval not to be unreasonably withheld) as of such date, to become a
substitute Bank for all purposes under this Agreement in the manner provided in
Section 13.5; provided further that, prior to substitution for any Bank, the
Company shall have given written notice to Agent of such intention and the Banks
shall have the option, but no obligation, for a period of 60 days after receipt
of such notice, to increase their Commitments in order to replace the affected
Bank in lieu of such substitution.
Section 7. Conditions Precedent.
7.1 Initial Loans. The obligation of each Bank or any applicable
Issuer to make its initial Loans after the date hereof or issue or participate
in a Letter of Credit after the date hereof (if such Letter of Credit is issued
prior to the funding of the initial Loans after the date hereof) hereunder is
subject to the following conditions precedent, each of which shall have been
fulfilled or waived to the satisfaction of the Majority Banks:
(a) Corporate Action and Status. Agent shall have received from the
appropriate Governmental Authorities certified copies of the Organizational
Documents (other than bylaws) of the Company and each of its Subsidiaries, and
evidence satisfactory to Agent of all corporate action taken by the Company or
any of its Subsidiaries authorizing the execution, delivery and performance of
the Loan Documents and all other documents related to this Agreement to which it
is a party (including, without limitation, a certificate of the secretary of
each such party setting forth the resolutions of its Board of Directors
authorizing the transactions contemplated thereby and attaching a copy of its
bylaws), together with such certificates as may be appropriate to demonstrate
the qualification and good standing of and payment of taxes by the Company and
each of its Subsidiaries in each state in which such qualification is necessary.
(b) Incumbency. The Company and each Relevant Party shall have
delivered to Agent a certificate in respect of the name and signature of each of
the officers (i) who is authorized to sign on its behalf the applicable Loan
Documents related to any Loan or the issuance of any Letter of Credit and (ii)
who will, until replaced by another officer or officers duly authorized for that
purpose, act as its representative for the purposes of signing documents and
giving notices and other communications in connection with any Loan or the
issuance of any Letter of Credit. Agent and each Bank may conclusively rely on
such certificates until they receive notice in writing from the Company or the
appropriate Relevant Party to the contrary.
(c) Notes. Agent shall have received the appropriate Note of the
Company for each Bank, duly completed and executed.
(d) Loan Documents. The Company and each other Relevant Party shall
have duly executed and delivered the other Loan Documents to which it is a party
(in such number of copies as Agent shall have requested) and each such Loan
Document shall be in form satisfactory to Agent. Each such Loan Document shall
be in substantially the form furnished to the Banks prior to their execution of
this Agreement, together with such changes therein as Agent may approve.
(e) Fees and Expenses. The Company shall have paid to Agent for the
account of each Bank all accrued and unpaid commitment fees and other fees in
the amounts previously agreed upon in writing among the Company and Agent; and
shall have in addition paid to Agent all amounts payable under the letter
agreements referred to Section 2.4(d) hereof and under Section 9.7 hereof on or
before the date of this Agreement.
(f) Opinions of Counsel. Agent shall have received (1) an opinion of
Vinson & Elkins L.L.P., counsel to the Company, in form and substance reasonably
satisfactory to Agent and (2) such opinions of counsel to the Company and other
Relevant Parties and special local counsel of Agent as Agent shall reasonably
request with respect to the Company and the Loan Documents.
(g) Execution by Banks. Agent shall have received counterparts of this
Agreement executed and delivered by or on behalf of each of the Banks or Agent
shall have received evidence satisfactory to it of the execution and delivery by
each of the Banks of a counterpart hereof.
(h) Consents. Agent shall have received evidence satisfactory to it
that, except as disclosed in the Disclosure Statement, all material consents of
each Governmental Authority and of each other Person, if any, reasonably
required in connection with (a) the Loans and the Letters of Credit and (b) the
execution, delivery and performance of this Agreement and the other Loan
Documents have been satisfactorily obtained.
(i) Amendment to Intercreditor Agreement. Agent shall have received
counterparts of the Second Amendment to Intercreditor Agreement referred to in
the definition of "Intercreditor Agreement" in Section 1.1 hereof executed and
delivered by or on behalf of each of the Company and by the "Administrative
Agent" under the Canadian Facility or Agent shall have received evidence
satisfactory to it of the execution and delivery by each such Person of a
counterpart of such Second Amendment to Intercreditor Agreement.
(j) Canadian Facility. Agent shall have received counterparts of the
Credit Agreement referred to in the definition of "Canadian Facility" in Section
1.1 hereof executed and delivered by or on behalf of each of Seagull Energy
Canada Ltd., The Chase Manhattan Bank of Canada, as Arranger and as Agent, The
Bank of Nova Scotia, as Paying Agent and as Co-Agent, Canadian Imperial Bank of
Commerce, as Co-Agent, and certain banks parties thereto or Agent shall have
received evidence satisfactory to it of the execution and delivery by each such
Person of a counterpart of such Credit Agreement.
(k) Other Documents. Agent shall have received such other documents
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agent may reasonably request.
All provisions and payments required by this Section 7.1 are subject
to the provisions of Section 13.6.
7.2 Initial and Subsequent Loans. The obligation of each Bank or any
applicable Issuer to make any Loan (including, without limitation, its initial
Loan) to be made by it hereunder or to issue or participate in any Letter of
Credit is subject to the additional conditions precedent that (i) Agent shall
have received a Request for Extension of Credit and such other certifications as
Agent may reasonably require, (ii) in the case of Competitive Loans, the Company
shall have complied with the provisions of Section 2.10 hereof and (iii) as of
the date of such Loan or such issuance, and after giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) except for facts timely disclosed to Agent from time to time in
writing, which facts (I) are not materially more adverse to the Company and its
Subsidiaries, (II) do not materially decrease the ability of the Banks to
collect the Obligations as and when due and payable and (III) do not materially
increase the liability of Agent or any of the Banks, in each case compared to
those facts existing on the date hereof and the material details of which have
been set forth in the Financial Statements delivered to Agent prior to the date
hereof or in the Disclosure Statement, and except for the representations set
forth in the Loan Documents which, by their terms, are expressly (or by means of
similar phrasing) made as of the Effective Date or as of the date hereof, as the
case may be, only, the representations and warranties made in each Loan Document
shall be true and correct in all material respects on and as of the date of the
making of such Loan or such issuance, with the same force and effect as if made
on and as of such date;
(c) the making of such Loan or the issuance of such Letter of Credit
shall not violate any Legal Requirement applicable to any Bank.
Each Request for Extension of Credit by the Company hereunder or
request for issuance of a Letter of Credit shall include a representation and
warranty by the Company to the effect set forth in Subsections 7.2(a) and (b)
(both as of the date of such notice and, unless the Company otherwise notifies
Agent prior to the date of such borrowing or issuance, as of the date of such
borrowing or issuance).
Section 8. Representations and Warranties. To induce the Banks to
enter into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Company represents and warrants (such representations and
warranties to survive any investigation and the making of the Loans and the
issuance of the Letters of Credit) to the Banks and Agent as follows:
8.1 Corporate Existence. The Company and each Subsidiary of the
Company are corporations duly incorporated and organized, legally existing and
in good standing under the laws of the respective jurisdictions in which they
are incorporated, and are duly qualified as foreign corporations in all
jurisdictions wherein the property owned or the business transacted by them
makes such qualification necessary and the failure to so qualify could
reasonably be expected to result in a Material Adverse Effect.
8.2 Corporate Power and Authorization. The Company is duly authorized
and empowered to create and issue the Notes; each of the Company and each
Subsidiary of the Company is duly authorized and empowered to execute, deliver,
and perform this Agreement and the other Loan Documents to which it is a party;
and all corporate action on the Company's part requisite for the due creation
and issuance of the Notes and on the Company's part and on the part of each
Subsidiary of the Company for the due execution, delivery, and performance of
this Agreement and the other Loan Documents to which each of the Company and
each such Subsidiary is a party has been duly and effectively taken.
8.3 Binding Obligations. This Agreement, the Notes and the other Loan
Documents constitute legal, valid and binding obligations of the Company and its
Subsidiaries, to the extent each is a party thereto, enforceable against the
Company and its Subsidiaries, to the extent each is a party thereto, in
accordance with their respective terms, except as may be limited by any
bankruptcy, insolvency, moratorium or other similar laws or judicial decisions
affecting creditors' rights generally.
8.4 No Legal Bar or Resultant Lien. The Company's and each of its
Subsidiaries' creation, issuance, execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents, to the extent they are
parties thereto, do not and will not violate any provisions of the
Organizational Documents of the Company or any Subsidiary of the Company or any
Legal Requirement to which the Company or any Subsidiary of the Company is
subject or by which its property may be presently bound or encumbered, or result
in the creation or imposition of any Lien upon any properties of the Company or
any Subsidiary of the Company, other than those permitted by this Agreement.
8.5 No Consent. Except as set forth in the Disclosure Statement, the
Company's creation and issuance of the Notes and the Company's and each of its
Subsidiaries' execution, delivery, and performance of this Agreement, the Notes
and the other Loan Documents to which they are parties do not and will not
require the consent or approval of any Person other than such consents and/or
approvals obtained by the Company contemporaneously with or prior to the
execution of this Agreement, including, without limitation, any Governmental
Authorities, other than those consents the failure to obtain which could not be
reasonably expected to have a Material Adverse Effect.
8.6 Financial Condition. The audited consolidated and unaudited
consolidating annual financial statements of the Company and its Subsidiaries
for the year ended December 31, 1995 and the unaudited consolidated interim
financial statements of the Company and its Subsidiaries for the quarters and
three-month periods ended March 31, 1996 and June 30, 1996, which have been
delivered to the Banks, have been prepared in accordance with GAAP, and present
fairly the financial condition and results of the operations of the Company and
its Subsidiaries for the period or periods stated (subject only to normal
year-end audit adjustments with respect to the unaudited interim statements). No
material adverse change, either in any case or in the aggregate, has occurred
since June 30, 1996 in the assets, liabilities, financial condition, business,
operations, affairs or circumstances of the Company and its Subsidiaries taken
as a whole, except as disclosed to the Banks in the Disclosure Statement. Each
Engineering Report and Company Report fairly presents the values and prospective
performances of the property described therein and there are no statements or
conclusions therein which were based upon or included materially misleading
information or fail to take into account material information.
8.7 Investments and Guaranties. As of the Effective Date, neither the
Company nor any Subsidiary of the Company had made Investments in, advances to,
or Guarantees of, the obligations of any Person, except as (a) disclosed to the
Banks in the Disclosure Statement or (b) not prohibited by applicable provisions
of Section 10.
8.8 Liabilities and Litigation. Neither the Company nor any Subsidiary
of the Company has any material (individually or in the aggregate) liabilities,
direct or contingent, except as (a) disclosed or referred to in the Financial
Statements, (b) disclosed to the Banks in the Disclosure Statement, (c)
disclosed in a notice to Agent pursuant to Section 9.11 with respect to such as
could reasonably be expected to have a Material Adverse Effect or (d) not
prohibited by applicable provisions of Section 10. Except as (a) described in
the Financial Statements, (b) otherwise disclosed to the Banks in the Disclosure
Statement, (c) disclosed in a notice to Agent pursuant to Section 9.11 with
respect to such as could reasonably be expected to have a Material Adverse
Effect or (d) not prohibited by applicable provisions of Section 10, no
litigation, legal, administrative or arbitral proceeding, investigation, or
other action of any nature exists or (to the knowledge of the Company) is
threatened against or affecting the Company or any Subsidiary of the Company
which could reasonably be expected to result in any judgment which could
reasonably be expected to have a Material Adverse Effect, or which in any manner
challenges or may challenge or draw into question the validity of this
Agreement, the Notes or any other Loan Document, or enjoins or threatens to
enjoin or otherwise restrain any of the transactions contemplated by any of
them.
8.9 Taxes and Governmental Charges. The Company and its Subsidiaries
have filed, or obtained extensions with respect to the filing of, all material
tax returns and reports required to be filed and have paid all material taxes,
assessments, fees and other governmental charges levied upon any of them or upon
any of their respective properties or income which are due and payable,
including interest and penalties, or have provided adequate reserves for the
payment thereof.
8.10 Title to Properties. The Company and its Subsidiaries have good
and defensible title to their respective properties included in the Borrowing
Base (including, without limitation, all fee and leasehold interests), free and
clear of all Liens except (a) those referred to in the Financial Statements, (b)
as disclosed to the Banks in the Disclosure Statement or (c) as permitted by
Section 10.2.
8.11 Defaults. Neither the Company nor any Subsidiary of the Company
is in default, which default could reasonably be expected to have a Material
Adverse Effect, under any indenture, mortgage, deed of trust, agreement or other
instrument to which the Company or any Subsidiary of the Company is a party or
by which the Company or any Subsidiary of the Company or the property of the
Company or any Subsidiary of the Company is bound, except as (a) disclosed to
the Banks in the Disclosure Statement, (b) disclosed in a notice to Agent
pursuant to Section 9.11 with respect to such as could reasonably be expected to
have a Material Adverse Effect or (c) specifically permitted by applicable
provisions of Section 10. No Default under this Agreement, the Notes or any
other Loan Document has occurred and is continuing.
8.12 Location of Businesses and Offices. Except to the extent that
Agent has been furnished written notice to the contrary or of additional
locations, pursuant to Section 9.11, the Company's principal place of business
and chief executive offices are located at the address stated on the signature
page hereof and the principal places of business and chief executive offices of
each Subsidiary are described on Exhibit F hereto.
8.13 Compliance with Law. Neither the Company nor any Subsidiary of
the Company (except as (a) disclosed to the Banks in the Disclosure Statement,
(b) disclosed in a notice to Agent pursuant to Section 9.11 with respect to such
as could reasonably be expected to have a Material Adverse Effect or (c) not
prohibited by applicable provisions of Section 10):
(a) is in violation of any Legal Requirement; or
(b) has failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of any of their respective
properties or the conduct of their respective business; which violation or
failure could reasonably be expected to have a Material Adverse Effect.
8.14 Margin Stock. None of the proceeds of the Notes will be used for
the purpose of, and neither the Company nor any Subsidiary of the Company is
engaged in the business of extending credit for the purpose of (a) purchasing or
carrying any "margin stock" as defined in Regulation U of the Board of Governors
of the Federal Reserve System (12 C.F.R. Part 221) or (b) reducing or retiring
any indebtedness which was originally incurred to purchase or carry margin
stock, if such purpose under either (a) or (b) above would constitute this
transaction a "purpose credit" within the meaning of said Regulation U, or for
any other purpose which would constitute this transaction a "purpose credit".
Neither the Company nor any Subsidiary of the Company is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stocks. Neither the Company nor any
Subsidiary of the Company nor any Person acting on behalf of the Company or any
Subsidiary of the Company has taken or will take any action which might cause
the Notes or any of the Loan Documents, including this Agreement, to violate
Regulation U or any other regulation of the Board of Governors of the Federal
Reserve System, or to violate any similar provision of the Securities Exchange
Act of 1934 or any rule or regulation under any such provision thereof.
8.15 Subsidiaries. The Company has no Subsidiaries as of the date of
this Agreement except those shown in Exhibit F hereto.
8.16 ERISA. With respect to each Plan, the Company and each ERISA
Affiliate have fulfilled their obligations, including obligations under the
minimum funding standards of ERISA and the Code, and are in compliance in all
material respects with the provisions of ERISA and the Code. The Company has no
knowledge of any event which could result in a liability of the Company or any
ERISA Affiliate to the PBGC or a Plan (other than to make contributions in the
ordinary course). Since the effective date of Title IV of ERISA, there have not
been any nor are there now existing any events or conditions that would cause
the Lien provided under Section 4068 of ERISA to attach to any property of the
Company or any ERISA Affiliate. There are no Unfunded Liabilities with respect
to any Plan other than those specifically described in the certificate delivered
in accordance with Section 7.1(i). No "prohibited transaction" has occurred with
respect to any Plan.
8.17 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly, controlled by or
acting on behalf of any Person which is an investment company, within the
meaning of said Act.
8.18 Public Utility Holding Company Act. Neither the Company nor any
of its Subsidiaries (i) is subject to regulation under the Public Utility
Holding Company Act of 1935, as amended (the "PUHC Act"), except as to Section
9(a)(2) thereof (15 U.S.C.A. ss.79(i)(a)(2)), or (ii) is in violation of any of
the provisions, rules, regulations or orders of or under the PUHC Act. Further,
none of the transactions contemplated under this Agreement, including without
limitation, the making of the Loans and the issuance of the Letters of Credit,
shall cause or constitute a violation of any of the provisions, rules,
regulations or orders of or under the PUHC Act and the PUHC Act does not in any
manner impair the legality, validity or enforceability of the Notes. The Company
has duly filed with the Securities and Exchange Commission good faith
applications (each an "Application") under Section 2(a)(8) of the PUHC Act (15
U.S.C.A. ss.79(b)(a)(8)) for a declaration of non-subsidiary status pursuant to
such Section 2(a)(8) with respect to each Person (each a "Specified
Shareholder") which owns, controls or holds with power to vote, directly or
indirectly, a sufficient quantity of the voting securities of the Company to be
construed as a "holding company", as such term is defined in the PUHC Act, in
respect of the Company. All of the information contained in such Applications,
as amended, was true as of the most recent filing date with respect thereto
(provided that the Company may, unless it has actual current knowledge to the
contrary, rely solely upon written information furnished by any Specified
Shareholder with respect to background information about the Specified
Shareholder and the nature of the ownership by such Specified Shareholder or its
Affiliates of the voting securities of the Company), and the Company knows of no
reason why each such Application, if acted upon by the Securities and Exchange
Commission, would not be approved. True and correct copies of each such
Application and any amendments thereto, as filed, have been furnished to Agent.
The Company has not received any written notice from the Securities and Exchange
Commission with respect to any such Application other than as disclosed in
writing to Agent.
8.19 Environmental Matters. Except as disclosed in the Disclosure
Statement, (i) the Company and it Subsidiaries have obtained and maintained in
effect all Environmental Permits (or has initiated the necessary steps to
transfer the Environmental Permits into its name), the failure to obtain which
could reasonably be expected to have a Material Adverse Effect, (ii) the Company
and its Subsidiaries and their properties, assets, business and operations have
been and are in compliance with all applicable Requirements of Environmental Law
and Environmental Permits failure to comply with which could reasonably be
expected to have a Material Adverse Effect, (iii) the Company and its
Subsidiaries and their properties, assets, business and operations are not
subject to any (A) Environmental Claims or (B) Environmental Liabilities, in
either case direct or contingent, and whether known or unknown, arising from or
based upon any act, omission, event, condition or circumstance occurring or
existing on or prior to the date hereof which could reasonably be expected to
have a Material Adverse Effect, and (iv) no Responsible Officer of the Company
or any of its Subsidiaries has received any notice of any violation or alleged
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with its assets, properties, business or
operations which could reasonably be expected to have a Material Adverse Effect.
The liability (including without limitation any Environmental Liability and any
other damage to persons or property), if any, of the Company and its
Subsidiaries and with respect to their properties, assets, business and
operations which is reasonably expected to arise in connection with Requirements
of Environmental Laws currently in effect and other environmental matters
presently known by a Responsible Officer of the Company will not have a Material
Adverse Effect. No Responsible Officer of the Company knows of any event or
condition with respect to Environmental Matters with respect to any of its
properties or the properties of any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect. For purposes of this Section
8.19, "Environmental Matters" shall mean matters relating to pollution or
protection of the environment, including, without limitation, emissions,
discharges, releases or threatened releases of Hazardous Substances into the
environment (including, without limitation, ambient air, surface water or ground
water, or land surface or subsurface), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances.
8.20 Claims and Liabilities. Except as disclosed to the Banks in
writing, neither the Company nor any of its Subsidiaries has accrued any
liabilities under gas purchase contracts for gas not taken, but for which it is
liable to pay if not made up and which, if not paid, would have a Material
Adverse Effect. Except as disclosed to the Banks in writing, no claims exist
against the Company or its Subsidiaries for gas imbalances which claims if
adversely determined would have a Material Adverse Effect. No purchaser of
product supplied by the Company or any of its Subsidiaries has any claim against
the Company or any of its Subsidiaries for product paid for, but for which
delivery was not taken as and when paid for, which claim if adversely determined
would have a Material Adverse Effect.
8.21 Solvency. Neither the Company nor the Company and its
Subsidiaries, on a consolidated basis, is "insolvent", as such term is used and
defined in (i) the Bankruptcy Code and (ii) the Texas Uniform Fraudulent
Transfer Act, Tex. Bus. & Com. Code Ann. ss.24.001 et seq.
Section 9. Affirmative Covenants. A deviation from the provisions of
this Section 9 will not constitute a Default under this Agreement if such
deviation is consented to in writing by the Majority Banks. Without the prior
written consent of the Majority Banks, the Company agrees with the Banks and
Agent that, so long as any of the Commitments is in effect and until payment in
full of all Loans hereunder, the termination or expiry of all Letters of Credit
and payment in full of Letter of Credit Liabilities, all interest thereon and
all other amounts payable by the Company hereunder:
9.1 Financial Statements and Reports. The Company will promptly
furnish to any Bank from time to time upon request such information regarding
the business and affairs and financial condition of the Company and its
Subsidiaries as such Bank may reasonably request, and will furnish to Agent and
each of the Banks:
(a) Annual Reports - promptly after becoming available and in any
event within 100 days after the close of each fiscal year of the Company:
(i) the audited consolidated balance sheet of the Company and
its Subsidiaries as of the end of such year;
(ii) the audited consolidated statement of earnings of the
Company and its Subsidiaries for such year;
(iii) the audited consolidated statement of cash flows of the
Company and its Subsidiaries for such year;
(iv) the unaudited consolidating balance sheet and statement of
earnings of the Company and its Subsidiaries, each for such
year or as of the end of such year, as the case may be;
(v) a report prepared by a petroleum engineer, who may be an
employee of the Company or its Subsidiaries, setting forth
the historical monthly production data for Hydrocarbons
produced and sold by the Company and its Subsidiaries for
such year; setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year,
and, in the case of the audited Financial Statements,
audited and accompanied by the related opinion of KPMG Peat
Marwick or other independent certified public accountants of
recognized national standing acceptable to the Majority
Banks, which opinion shall state that such audited balance
sheets and statements have been prepared in accordance with
GAAP consistently followed throughout the period indicated
and fairly present the consolidated financial condition and
results of operations of the applicable Persons as at the
end of, and for, such fiscal year; and
(b) Quarterly Reports - as soon as available and in any event within
50 days after the end of each of the first three quarterly periods in each
fiscal year of the Company:
(i) the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of the end of such
quarter;
(ii) the unaudited consolidated statement of earnings of
the Company and its Subsidiaries for such quarter and
for the period from the beginning of the fiscal year
to the close of such quarter;
(iii) the unaudited consolidated statement of cash flows of
the Company and its Subsidiaries for such quarter and
for the period from the beginning of the fiscal year
to the close of such quarter;
(iv) the unaudited consolidating balance sheet and
statement of earnings of the Company and its
Subsidiaries, each for such quarter and for the
period from the beginning of the fiscal year to the
close of such quarter;
(v) a report prepared by a petroleum engineer, who may be
an employee of the Company or its Subsidiaries,
setting forth the historical monthly production data
for Hydrocarbons produced and sold by the Company and
its Subsidiaries for such quarter; all of items
(i) through (iv) above prepared on substantially
the same accounting basis as the annual reports
described in Subsection 9.1(a), subject to normal
changes resulting from year-end adjustments; and
(c) Company Report - promptly after becoming available and in any
event on or before September 1 of each year, a Company Report; and
(d) Other Bank Requirements - at such time as the same are required to
be furnished to other lenders under other financing arrangements to which the
Company or any of its Subsidiaries may be a party or be bound from time to time,
a copy of any report, certificate, affidavit or other information required to be
furnished to any such lender; and
(e) SEC and Other Reports - promptly upon their becoming publicly
available, one copy of each financial statement, report, notice or definitive
proxy statement sent by the Company or any Subsidiary to shareholders generally,
and of each regular or periodic report and any registration statement,
prospectus or written communication (other than transmittal letters) in respect
thereof filed by the Company or any of its Subsidiaries with, or received by the
Company or any of its Subsidiaries in connection therewith from, any securities
exchange or the Securities and Exchange Commission or any successor agency; and
(f) Engineering Report and other Component Values - promptly after
becoming available and in any event on or before March 15 of each year,
commencing with March 15, 1997, an Engineering Report.
All of the balance sheets and other financial statements referred to
in this Section 9.1 will be in such detail as any Bank may reasonably request
and will conform to GAAP applied on a basis consistent with those of the
Financial Statements as of December 31, 1995. In addition, if GAAP shall change
with respect to any matter relative to determination of compliance with this
Agreement, the Company will also provide financial information necessary for the
Banks to determine compliance with this Agreement.
9.2 Officers' Certificates.
(a) Concurrently with the furnishing of the annual financial
statements pursuant to Subsection 9.1(a), commencing with the annual financial
statements required to be delivered in 1997, the Company will furnish or cause
to be furnished to Agent certificates of compliance, as follows:
(i) a certificate signed by the principal financial officer of the
Company in the form of ExhiHbit G; and
(ii) a certificate from the independent public accountants
stating that their audit has not disclosed the existence of
any condition which constitutes a Default, or if their audit
has disclosed the existence of any such condition,
specifying the nature and period of existence.
(b) Concurrently with the furnishing of the quarterly financial
statements pursuant to Subsection 9.1(b), the Company will furnish to Agent a
principal financial officer's certificate in the form of Exhibit G.
(c) Not later than concurrently with the furnishing of any annual
reports pursuant to Section 9.1(a) or concurrently with any request by the
Company for a Requested Redetermination (using then available Financial
Statements) and within ten (10) Business Days after any request by the
Requesting Banks for a Requested Redetermination (using then available Financial
Statements), the Company will furnish to Agent a Borrowing Base Certificate.
(d) Concurrently with the furnishing of any Engineering Report or
Company Report, the Company will furnish to Agent a certificate signed by an
appropriate officer of the Company and the applicable Relevant Party in the form
of Exhibit I.
9.3 Taxes and Other Liens. The Company will and will cause each
Subsidiary of the Company to pay and discharge promptly all taxes, assessments
and governmental charges or levies imposed upon the Company or such Subsidiary,
or upon the income or any property of the Company or such Subsidiary, as well as
all claims of any kind (including claims for labor, materials, supplies, rent
and payment of proceeds attributable to Hydrocarbon production) which, if
unpaid, might result in or become a Lien upon any or all of the property of the
Company or such Subsidiary; provided, however, that neither the Company nor such
Subsidiary will be required to pay any such tax, assessment, charge, levy or
claims if the amount, applicability or validity thereof will currently be
contested in good faith by appropriate proceedings diligently conducted and if
the Company or such Subsidiary will have set up reserves therefor adequate under
GAAP.
9.4 Maintenance. Except as referred to in Sections 8.1 and 8.13 and
except as permitted under Section 10.5 the Company will and will cause each
Subsidiary of the Company to: (i) maintain its corporate existence; (ii)
maintain its rights and franchises, except for any mergers or consolidations
otherwise permitted by this Agreement and except to the extent failure to so
maintain the same would not have a Material Adverse Effect; (iii) observe and
comply (to the extent that any failure would have a Material Adverse Effect)
with all valid Legal Requirements (including without limitation Requirements of
Environmental Law); and (iv) maintain (except to the extent failure to so
maintain the same would not have a Material Adverse Effect) its properties (and
any properties leased by or consigned to it or held under title retention or
conditional sales contracts) consistent with the standards of a reasonably
prudent operator at all times and make all repairs, replacements, additions,
betterments and improvements to its properties consistent with the standards of
a reasonably prudent operator.
9.5 Further Assurances. The Company will and will cause each
Subsidiary of the Company to cure promptly any defects in the creation and
issuance of the Notes and the execution and delivery of the Loan Documents,
including this Agreement. The Company at its expense will promptly execute and
deliver to Agent upon request all such other and further documents, agreements
and instruments (or cause any of its Subsidiaries to take such action) in
compliance with or accomplishment of the covenants and agreements of the Company
or any of its Subsidiaries in the Loan Documents, including this Agreement, or
to correct any omissions in the Loan Documents, or to make any recordings, to
file any notices, or obtain any consents, all as may be necessary or appropriate
in connection therewith.
9.6 Performance of Obligations. The Company will pay the Notes
according to the reading, tenor and effect thereof; and the Company will do and
perform every act and discharge all of the obligations provided to be performed
and discharged by the Company under this Agreement and the other Loan Documents
at the time or times and in the manner specified, and cause each of its
Subsidiaries to take such action with respect to their obligations to be
performed and discharged under the Loan Documents to which they respectively are
parties.
9.7 Reimbursement of Expenses. Whether or not any Loan is ever made or
any Letter of Credit is ever issued, the Company agrees to pay or reimburse
Agent for paying the reasonable fees and expenses of Liddell, Sapp, Zivley, Hill
& LaBoon, L.L.P., special counsel to Agent, together with the reasonable fees
and expenses of local counsel engaged by Agent, in connection with the
negotiation of the terms and structure of the Obligations, the preparation,
execution and delivery of this Agreement and the other Loan Documents and the
making of the Loans and the issuance of Letters of Credit hereunder, as well as
any modification, supplement or waiver of any of the terms of this Agreement and
the other Loan Documents. The Company will promptly upon request and in any
event within 30 days from the date of receipt by the Company of a copy of a bill
for such amounts, reimburse any Bank or Agent for all amounts reasonably
expended, advanced or incurred by such Bank or Agent to satisfy any obligation
of the Company under this Agreement or any other Loan Document, to protect the
properties or business of the Company or any Subsidiary of the Company, to
collect the Obligations, or to enforce the rights of such Bank or Agent under
this Agreement or any other Loan Document, which amounts will include without
limitation all court costs, attorneys' fees (but not including allocated costs
of in-house counsel), any engineering fees and expenses, fees of auditors,
accountants and appraisers, investigation expenses, all transfer, stamp,
documentary or similar taxes, assessments or charges levied by any governmental
or revenue authority in respect of any of the Loan Documents or any other
document referred to therein, all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration, recording or
perfection of any lien contemplated by any of the Loan Documents or any document
referred to therein, fees and expenses incurred in connection with such Bank's
participation as a member of a creditors' committee in a case commenced under
the Bankruptcy Code or other similar law of the United States or any state
thereof, fees and expenses incurred in connection with lifting the automatic
stay prescribed in ss.362 Title 11 of the United States Code, and fees and
expenses incurred in connection with any action pursuant to ss.1129 Title 11 of
the United States Code and all other customary out-of-pocket expenses incurred
by such Bank or Agent in connection with such matters, together with interest
after the expiration of the 30-day period stated above in this Section if no
Event of Default has occurred and is continuing, or from the date of the request
to the Company if an Event of Default has occurred and is continuing, at either
(i) the Post-Default Rate on each such amount until the date of reimbursement to
such Bank or Agent, or (ii) if no Event of Default will have occurred and be
continuing, the Alternate Base Rate plus the highest Applicable Margin for
Alternate Base Rate Loans (not to exceed the Highest Lawful Rate) on each such
amount until the date of the Company's receipt of written demand or request by
such Bank or Agent for the reimbursement of same, and thereafter at the
applicable Post-Default Rate until the date of reimbursement to such Bank or
Agent. The obligations of the Company under this Section are compensatory in
nature, shall be deemed liquidated as to amount upon receipt by the Company of a
copy of any invoice therefor, and will survive the non-assumption of this
Agreement in a case commenced under the Bankruptcy Code or other similar law of
the United States or any state thereof, and will remain binding on the Company
and any trustee, receiver, or liquidator of the Company appointed in any such
case.
9.8 Insurance. The Company and its Subsidiaries will maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and business against such liabilities, casualties, risks
and contingencies and in such types and amounts as is customary in the case of
corporations engaged in the same or similar businesses and similarly situated.
Upon the request of Agent acting at the instruction of the Majority Banks, the
Company will furnish or cause to be furnished to Agent from time to time a
summary of the insurance coverage of the Company and its Subsidiaries in form
and substance satisfactory to the Majority Banks in their reasonable judgment,
and if requested will furnish Agent copies of the applicable policies. Subject
to the terms of Section 3 hereof, in the case of any fire, accident or other
casualty causing loss or damage to any properties of the Company or any of its
Subsidiaries, the proceeds of such policies will be used (i) to repair or
replace the damaged property or (ii) to prepay the Obligations, at the election
of the Company.
9.9 Accounts and Records. The Company will keep and will cause each
Subsidiary of the Company to keep books of record and account which fairly
reflect all dealings or transactions in relation to their respective businesses
and activities, in accordance with GAAP, which books of record and account will
be maintained, to the extent necessary to enable compliance with all provisions
of this Agreement, separately for each such Subsidiary, the Company and any
division of the Company.
9.10 Rights of Inspection. The Company will permit and will cause each
of its Subsidiaries to permit any officer, employee, or agent of Agent or any
Bank to meet with the consultants who prepared any applicable Engineering Report
and to review such Engineering Report with such consultants and to visit and
inspect any of the properties of the Company or such Subsidiary, examine the
Company's or such Subsidiary's books of record and accounts, take copies and
extracts therefrom, and discuss the affairs, finances and accounts of the Bank
or such Subsidiary with the Company's or such Subsidiary's officers, accountants
and auditors, all at such reasonable times during normal business hours and as
often as Agent or such Bank may reasonably desire, and will assist in all such
matters.
9.11 Notice of Certain Events. The Company will promptly notify Agent
(and Agent will then notify all of the Banks) if a Responsible Officer of the
Company learns of the occurrence of, or if the Company causes or intends to
cause, as the case may be:
(i) any event which constitutes a Default, together with a detailed
statement by a responsible officer of the Company of the steps being taken to
cure the effect of such Default; or
(ii) the receipt of any notice from, or the taking of any other action
by, the holder of any promissory note, debenture or other evidence of
indebtedness of the Company or any Subsidiary of the Company or of any security
(as defined in the Securities Act of 1933, as amended) of the Company or any
Subsidiary of the Company with respect to a claimed default, together with a
detailed statement by a Responsible Officer of the Company specifying the notice
given or other action taken by such holder and the nature of the claimed default
and what action the Company or such Subsidiary is taking or proposes to take
with respect thereto; or
(iii) any legal, judicial or regulatory proceedings affecting the
Company or any Subsidiary of the Company or any of the properties of the Company
or any Subsidiary of the Company in which the amount involved is materially
adverse to the Company and its Subsidiaries taken as a whole, and is not covered
by insurance or which, if adversely determined, would have a Material Adverse
Effect; or
(iv) any dispute between the Company or any Subsidiary of the Company
and any Governmental Authority or any other Person which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect; or
(v) the occurrence of a default or event of default by the Company or
any Subsidiary of the Company under any other agreement to which it is a party,
which default or event of default could reasonably be expected to have a
Material Adverse Effect; or
(vi) any change in the accuracy of the representations and warranties
of the Company or any Subsidiary contained in this Agreement or any other Loan
Document; or
(vii) any material violation or alleged material violation of any
Requirements of Environmental Law or Environmental Permit or any Environmental
Claim or any Environmental Liability; or
(viii) any tariff and rate cases and other material reports filed by
the Company or any of its Subsidiaries with any Governmental Authority and any
notice to the Company or any of its Subsidiaries from any Governmental Authority
concerning noncompliance with any applicable Legal Requirement; or
(ix) the existence of any Borrowing Base Deficiency; or
(x) within 10 days after the date on which a Responsible Officer of
the Company has actual knowledge thereof, the receipt of any notice by the
Company or any of its Subsidiaries of any claim of nonpayment of, or any attempt
to collect or enforce, accounts payable of the Company or any of its
Subsidiaries exceeding, in the case of any one account payable at one time
outstanding, $1,000,000 and in the case of all accounts payable in the aggregate
at any one time outstanding, $3,000,000; or
(xi) any requirement for the payment of all or any portion of any
Indebtedness of the Company or any of its Subsidiaries prior to the stated
maturity thereof (whether by acceleration or otherwise) or as the result of any
failure to maintain or the reaching of any threshold amount provided in any
promissory note, bond, debenture, or other evidence of Indebtedness or under any
credit agreement, loan agreement, indenture or similar agreement executed in
connection with any of the foregoing; or
(xii) any notice from the Securities and Exchange Commission with
respect to any Application (as defined in Section 8.18 hereof).
9.12 ERISA Information and Compliance. The Company will promptly
furnish to Agent (i) immediately upon receipt, a copy of any notice of complete
or partial withdrawal liability under Title IV of ERISA and any notice from the
PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to
administer any Plan, (ii) if requested by Agent, acting on the instruction of
the Majority Banks, promptly after the filing thereof with the United States
Secretary of Labor or the PBGC or the Internal Revenue Service, copies of each
annual and other report with respect to each Plan or any trust created
thereunder, (iii) immediately upon becoming aware of the occurrence of any
"reportable event", as such term is defined in Section 4043 of ERISA, for which
the disclosure requirements of Regulation Section 2615.3 promulgated by the PBGC
have not been waived, or of any "prohibited transaction", as such term is
defined in Section 4975 of the Code, in connection with any Plan or any trust
created thereunder, a written notice signed by the President or the principal
financial officer of the Company or the applicable ERISA Affiliate specifying
the nature thereof, what action the Company or the applicable ERISA Affiliate is
taking or proposes to take with respect thereto, and, when known, any action
taken by the PBGC, the Internal Revenue Service or the Department of Labor with
respect thereto, (iv) promptly after the filing or receiving thereof by the
Company or any ERISA Affiliate of any notice of the institution of any
proceedings or other actions which may result in the termination of any Plan,
and (v) each request for waiver of the funding standards or extension of the
amortization periods required by Sections 303 and 304 of ERISA or Section 412 of
the Code promptly after the request is submitted by the Company or any ERISA
Affiliate to the Secretary of the Treasury, the Department of Labor or the
Internal Revenue Service, as the case may be. To the extent required under
applicable statutory funding requirements, the Company will fund, or will cause
each ERISA Affiliate to fund, all current service pension liabilities as they
are incurred under the provisions of all Plans from time to time in effect, and
comply with all applicable provisions of ERISA, except to the extent that any
such failure to comply could not reasonably be expected to have a Material
Adverse Effect. The Company covenants that it shall and shall cause each ERISA
Affiliate to (1) make contributions to each Plan in a timely manner and in an
amount sufficient to comply with the contribution obligations under such Plan
and the minimum funding standards requirements of ERISA; (2) prepare and file in
a timely manner all notices and reports required under the terms of ERISA
including but not limited to annual reports; and (3) pay in a timely manner all
required PBGC premiums, in each case, to the extent failure to do so would have
a Material Adverse Effect.
Section 10. Negative Covenants. A deviation from the provisions of
this Section 10 will not constitute a Default under this Agreement if such
deviation is consented to in writing by the Majority Banks. The Company agrees
with the Banks and Agent that, so long as any of the Commitments is in effect
and until payment in full of all Loans hereunder, the termination or expiry of
all Letters of Credit and payment in full of Letter of Credit Liabilities, all
interest thereon and all amounts payable by the Company hereunder:
10.1 Debts, Guaranties and Other Obligations. The Company will not and
will not permit any of its Subsidiaries (other than APC) to incur, create,
assume or in any manner become or be liable in respect of any Indebtedness
(including obligations for the payment of rentals); and the Company will not and
will not permit any of its Subsidiaries (other than APC) to Guarantee or
otherwise in any way become or be responsible for obligations of any other
Person, whether by agreement to purchase the Indebtedness of any other Person or
agreement for the furnishing of funds to any other Person through the purchase
or lease of goods, supplies or services (or by way of stock purchase, capital
contribution, advance or loan) for the purpose of paying or discharging the
Indebtedness of any other Person, or otherwise, except that the foregoing
restrictions will not apply to:
(a) the Notes or other Indebtedness under the Loan Documents;
(b) liabilities, direct or contingent, of the Company or any
Subsidiary of the Company existing on the date of this Agreement which are
reflected in the Financial Statements or the Disclosure Statement and all
renewals, extensions, refinancings and rearrangements, but not increases,
thereof;
(c) endorsements of negotiable or similar instruments for collection
or deposit in the ordinary course of business;
(d) trade payables, lease acquisition and lease maintenance
obligations, extensions of credit from suppliers or contractors, liabilities
incurred in exploration, development and operation of the Company's or any
Subsidiary's oil and gas properties or similar obligations from time to time
incurred in the ordinary course of business, other than for borrowed money,
which are paid within 90 days after the invoice date (inclusive of applicable
grace periods) or (i) are being contested in good faith, if such reserve as
required by GAAP has been made therefor or (ii) trade accounts payable of the
Company and its Subsidiaries (with respect to which no legal proceeding to
enforce collection has been commenced or, to the knowledge of a Responsible
Officer of the Company, threatened) not exceeding, in the aggregate at any time
outstanding, $25,000,000;
(e) taxes, assessments or other government charges which are not yet
due or are being contested in good faith by appropriate action promptly
initiated and diligently conducted, if such reserve as will be required by GAAP
will have been made therefor;
(f) Borrowing Base Debt of the Company; provided that the aggregate of
all Indebtedness permitted under this Subsection 10.1(f) shall not exceed the
amount by which the then current Borrowing Base exceeds the then current
Revolving Credit Obligations;
(g) to the extent, if any, not covered by Subsection (b) hereinabove,
the Indebtedness of the Company to APC evidenced solely by the Intercompany
Notes, as defined in the Beluga Financing Documents and the APC Long Term
Financing Documents, together with any renewals, extensions, amendments,
refinancings, rearrangements, modifications, restatements or supplements, but
not increases (other than increases which are permitted under the present terms
of the Beluga Financing Documents and the APC Long Term Financing Documents)
thereof from time to time;
(h) intercompany Indebtedness owed to the Company by any Subsidiary of
the Company and intercompany Indebtedness owed to any Subsidiary of the Company
by the Company or any other Subsidiary of the Company which is fully
subordinated to the Obligations;
(i) loans, advances or extensions of credit to the Company for the
purpose of financing no more than 75% of the purchase price of any fixed assets
which are not included in the property taken into account in determining the
Borrowing Base and which are considered in the categories of property, plant or
equipment according to GAAP applied on a consistent basis;
(j) obligations of the Company under the Gas Sales Contract, together
with any renewals, extensions, amendments, refinancings, rearrangements,
modifications, restatements or supplements, but not increases, thereof from time
to time;
(k) the Guarantee by the Company or any Subsidiary of the Company of
payment or performance by any Subsidiary of the Company under any agreement so
long as the obligation guaranteed does not constitute Indebtedness for borrowed
money;
(l) obligations of the Company or any of its Subsidiaries under gas
purchase contracts for gas not taken, as to which the Company or its respective
Subsidiary is liable to pay if not made up;
(m) obligations of the Company or any of its Subsidiaries under any
contract for sale for future delivery of oil or gas (whether or not the subject
oil or gas is to be delivered), hedging contract, forward contract, swap
agreement, futures contract or other similar agreement;
(n) obligations of the Company or any of its Subsidiaries under any
interest rate swap agreement, or any contract implementing any interest rate
cap, collar or floor, or any similar interest hedging contract;
(o) obligations in connection with gas imbalances arising in the
ordinary course of business;
(p) Indebtedness not exceeding $1,000,000 in the aggregate borrowed
from the Amarillo Economic Development Commission and related Guarantees and
related obligations of the Company and its Subsidiaries;
(q) liabilities under leases and lease agreements which do not cover
oil and gas properties to the extent the incurrence and existence of such
liabilities will still enable the Company and each Subsidiary to comply with all
other requirements of this Agreement and the other Loan Documents to which they
respectively are parties;
(r) Subordinated Debt;
(s) Funded Indebtedness of any Oil and Gas Subsidiary for borrowed
money payable solely by recourse to properties not included in the Borrowing
Base and Indebtedness incurred by any Gas and Liquids Pipeline Subsidiary in
connection with the construction or acquisition of new assets in connection with
the Pipeline Operations which is payable solely by recourse to the assets so
constructed or acquired, each to the extent not otherwise expressly permitted by
this Section 10.1;
(t) the Canadian Facility (and the "Bankers' Acceptances" provided for
therein) and the guaranty by the Company of the Canadian Facility; and
(u) Indebtedness of Seagull Energy Canada Ltd. having a maturity of
364 days or less from the date of its incurrence in an aggregate principal
amount not exceeding Canadian $10,000,000 at any one time outstanding.
10.2 Liens. The Company will not and will not permit any of its
Subsidiaries to create, incur, assume or permit to exist any Lien on any of its
or their properties (now owned or hereafter acquired), except:
(a) Liens securing the Indebtedness described in Subsection 10.1(a);
(b) Liens for taxes, assessments or other governmental charges or
levies not yet due or which are being contested in good faith by appropriate
action promptly initiated and diligently conducted, if such reserve as will be
required by GAAP will have been made therefor;
(c) Liens of landlords, vendors, contractors, subcontractors,
carriers, warehousemen, mechanics, laborers or materialmen or other like Liens
arising by law in the ordinary course of business for sums not yet due or being
contested in good faith by appropriate action promptly initiated and diligently
conducted, if such reserve as will be required by GAAP will have been made
therefor;
(d) Liens existing on property owned by the Company or any of its
Subsidiaries on the date of this Agreement which have been disclosed to the
Banks in the Disclosure Statement, together with any renewals, extensions,
amendments, refinancings, rearrangements, modifications, restatements or
supplements, but not increases, thereof from time to time;
(e) pledges or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance, social security
and other like laws;
(f) inchoate liens arising under ERISA to secure the contingent
liability of the Company permitted by Section 9.12;
(g) Liens in the ordinary course of business, not to exceed in the
aggregate $10,000,000 as to the Company and its Subsidiaries at any time in
effect, regarding (i) the performance of bids, tenders, contracts (other than
for the repayment of borrowed money or the deferred purchase price of property
or services) or leases, (ii) statutory obligations, (iii) surety appeal bonds or
(iv) Liens to secure progress or partial payments made to the Company or any of
its Subsidiaries and other Liens of like nature;
(h) covenants, restrictions, easements, servitudes, permits,
conditions, exceptions, reservations, minor rights, minor encumbrances, minor
irregularities in title or conventional rights of reassignment prior to
abandonment which do not materially interfere with the occupation, use and
enjoyment by the Company or any Subsidiary of the Company of its respective
assets in the normal course of business as presently conducted, or materially
impair the value thereof for the purpose of such business;
(i) Liens of operators under joint operating agreements or similar
contractual arrangements with respect to the relevant entity's proportionate
share of the expense of exploration, development and operation of oil, gas and
mineral leasehold or fee interests owned jointly with others, to the extent that
same relate to sums not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted, if such reserve
as will be required by GAAP will have been made therefor;
(j) Liens created pursuant to the creation of trusts or other
arrangements funded solely with cash, cash equivalents or other marketable
investments or securities of the type customarily subject to such arrangements
in customary financial practice with respect to long-term or medium-term
indebtedness for borrowed money, the sole purpose of which is to make provision
for the retirement or defeasance, without prepayment, of Indebtedness permitted
under Section 10.1;
(k) Liens on the assets or properties of ENSTAR Alaska;
(l) the Vendor Financing Arrangements (as defined in the Mesa
Contract), to the extent that the same shall have been deducted in calculating
the Borrowing Base;
(m) purchase money Liens for the acquisition of fixed assets pursuant
to Subsection 10.1(i), so long as such Liens exist solely against the relevant
fixed asset acquired and secure only the purchase money debt; provided, that the
aggregate amount of Indebtedness which is secured by Liens described in this
subsection (other than Indebtedness which is payable solely by recourse to the
applicable property) shall not exceed $10,000,000 at any one time outstanding;
(n) any Lien existing on any real or personal property of any
corporation or partnership at the time it becomes a Subsidiary of the Company or
of any other Subsidiary of the Company, or existing prior to the time of
acquisition upon any real or personal property acquired by the Company or any of
its Subsidiaries; provided, that such Liens may at all times be deducted in
calculating the Borrowing Base from time to time in effect;
(o) legal or equitable encumbrances deemed to exist by reason of the
existence of any litigation or other legal proceeding or arising out of a
judgment or award with respect to which an appeal is being prosecuted in good
faith by appropriate action promptly initiated and diligently conducted, if such
reserve as will be required by GAAP will have been made therefor;
(p) any Liens securing Indebtedness neither assumed nor guaranteed by
the Company or any of its Subsidiaries nor on which it customarily pays
interest, existing upon real estate or rights in or relating to real estate
acquired by the Company or any of its Subsidiaries for substation, metering
station, pump station, storage, gathering line, transmission line,
transportation line, distribution line or right-of-way purposes, and any Liens
reserved in leases for rent and full compliance with the terms of the leases in
the case of leasehold estates, to the extent that any such Lien referred to in
this clause arises in the normal course of business as presently conducted and
does not materially impair the use of the property covered by such Lien for the
purposes for which such property is held by the Company or its applicable
Subsidiary;
(q) rights reserved to or vested in any municipality or governmental,
statutory or public authority by the terms of any right, power, franchise,
grant, license or permit, or by any provision of law, to terminate such right,
power, franchise, grant, license or permit or to purchase, condemn, expropriate
or recapture or to designate a purchaser of any of the property of the Company
or any of its Subsidiaries;
(r) rights reserved to or vested in any municipality or governmental,
statutory or public authority to control or regulate any property of the Company
or any of its Subsidiaries, or to use such property in a manner which does not
materially impair the use of such property for the purposes for which it is held
by the Company or its applicable Subsidiary;
(s) any obligations or duties affecting the property of the Company or
any of its Subsidiaries to any municipality, governmental, statutory or public
authority with respect to any franchise, grant, license or permit;
(t) rights of a common owner of any interest in real estate,
rights-of-way or easements held by the Company or any of its Subsidiaries and
such common owner as tenants in common or through other common ownership;
(u) any Liens arising from the matters described in Schedule 3.19 of
the Mesa Contract;
(v) Liens securing Indebtedness permitted under Section 10.1(s) hereof
(to the extent such Liens are permitted under such Section 10.1(s));
(w) as to assets located in Canada, reservations, limitations,
provisos and conditions in any original grant from the Crown or freehold lessor
of any of the properties of the Company or its Subsidiaries;
(x) other Liens securing Indebtedness not exceeding, in the aggregate,
$10,000,000 at any one time outstanding;
(y) other Liens securing Senior Debt, but only so long as such Liens
shall also secure the Obligations on a pari passu basis, in a manner and
pursuant to documentation acceptable to the Majority Banks;
(z) Liens (i) granted to or existing in favor of third parties on
margin accounts of the Company or any of its Subsidiaries relating to exchange
traded contracts for the delivery of natural gas pursuant to which the Company
or any such Subsidiary intends to take actual delivery of such natural gas
within forty (40) days from the then current date in the ordinary course of
business and not for speculative purposes, and (ii) on margin accounts of the
Company or any of its Subsidiaries relating to exchange traded contracts for the
delivery of natural gas, provided, however, the aggregate balance of the margin
accounts subject to the Liens permitted by this clause (ii) shall not exceed
from time to time $10,000,000.
10.3 Investments, Loans and Advances. The Company will not and will
not permit its Subsidiaries to make or permit to remain outstanding any
advances, loans or other extensions of credit or capital contributions (other
than prepaid expenses in the ordinary course of business) to (by means of
transfers of property or assets or otherwise), or purchase or own any stocks,
bonds, notes, debentures or other securities of, or incur contingent liability
with respect to (except for the endorsement of checks in the ordinary course of
business and except for the Indebtedness and Liens permitted under this
Agreement) any Person (all such transactions being herein called "Investments"),
except that the foregoing restriction will not apply to:
(a) Investments (all prior to the date hereof) the material details of
which have been set forth in the Financial Statements delivered to Agent prior
to the date hereof or the Disclosure Statement;
(b) Liquid Investments;
(c) advances or extensions of credit in the form of accounts
receivable incurred in the ordinary course of business;
(d) the acquisition of all of the capital stock of wholly owned
Subsidiaries incorporated or acquired subsequent to the date of this Agreement;
(e) investments where the consideration paid is capital stock of the
Company, plus cash paid in lieu of issuing fractional shares and cash paid in
settlement of claims of dissenters, such cash not to exceed 10% of the aggregate
purchase price in any such transaction;
(f) Investments in any Person which after giving effect thereto will
be a Subsidiary of the Company, so long as the Investment in such Person, when
consummated, would not result in a breach of the covenants set forth in Section
10.1;
(g) intercompany loans, advances or investments by the Company to or
in any Subsidiary of the Company (other than a Subsidiary that is obligated to
pay Funded Indebtedness for borrowed money payable solely by recourse to
properties not included in the Borrowing Base) or, to the extent permitted under
Section 10.1(h) hereof, by any Subsidiary of the Company to or in the Company or
to or in any other Subsidiary of the Company, provided, however, that APC may
not make any intercompany loans, advances or investments in any Subsidiary of
the Company pursuant to this clause (g);
(h) intercompany loans, advances or investments by the Company, solely
from income or cash flow of the Company subject to the Beluga Financing
Documents, to APC as required under the Beluga Financing Documents and the APC
Long Term Financing Documents;
(i) to the extent, if any, not covered by Subsection (a) hereinabove,
the Indebtedness of the Company to APC evidenced solely by the Intercompany
Notes, as defined in the Beluga Financing Documents and the APC Long Term
Financing Documents, together with any renewals, extensions, amendments,
refinancings, rearrangements, modifications, restatements or supplements, but
not increases (other than increases which are permitted under the present terms
of the Beluga Financing Documents and the APC Long Term Financing Documents)
thereof from time to time;
(j) loans or advances to employees made in the ordinary course of
business, up to the aggregate principal amount at any one time outstanding of
$5,000,000;
(k) Investments in reasonable amounts of securities for purposes of
funding employee benefit plans maintained by the Company;
(l) advances or extensions of credit made in the ordinary course of
business to third parties under applicable contracts and agreements in
connection with (i) oil, gas or other mineral exploration, development and
production activities or (ii) Hydrocarbon or chemical pipeline gathering or
transportation activities;
(m) Investments where the consideration paid is assets of the Company
or its Subsidiaries other than capital stock, cash or oil and gas reserves;
(n) Investments in EBOC Energy Ltd. made in connection with and
pursuant to that certain Sale Agreement dated November 19, 1993 executed by and
between Novacor Petrochemicals Ltd., as Vendor, and the Company, as Purchaser;
(o) any payment, prepayment, purchase or retirement of Indebtedness of
the Company (other than payments, prepayments, purchases or retirement of
Subordinated Debt prohibited under the definition of "Subordinated Debt"); and
(p) any other Investments which in the aggregate do not cause the
Company to be in violation of the Investments Tests.
10.4 Dividend Payment Restrictions. The Company will not declare or
make any Dividend Payment if any Default or Event of Default has occurred and is
continuing or if there exists any Borrowing Base Deficiency.
10.5 Mergers and Sales of Assets. The Company will not (a) merge or
consolidate with, or sell, assign, lease or otherwise dispose of, whether in one
transaction or in a series of transactions, more than ten percent (10%) in the
aggregate of the Company's and its Subsidiaries' consolidated total assets
(whether now owned or hereafter acquired) to any Person or Persons during the
period since the most recent Borrowing Base Determination, or permit any
Subsidiary of the Company to do so (other than to the Company or another
Subsidiary of the Company or the issuance by any Subsidiary of the Company of
any stock to the Company or another Subsidiary of the Company), or (b) sell,
assign, lease or otherwise dispose of, whether in one transaction or in a series
of transactions, any other properties if receiving therefor consideration other
than cash or other consideration readily convertible to cash or which is less
than the fair market value of the relevant properties, or permit any Subsidiary
of the Company to do so; provided that the Company or any Subsidiary of the
Company may merge or consolidate with any other Person and any Subsidiary of the
Company may transfer properties to any other Subsidiary of the Company or to the
Company so long as, in each case, (i) immediately thereafter and giving effect
thereto, no event will occur and be continuing which constitutes a Default, (ii)
in the case of any such merger or consolidation to which the Company is a party,
the Company is the surviving Person, (iii) in the case of any such merger or
consolidation to which any Subsidiary of the Company is a party (but not the
Company), after giving effect to all transactions closing concurrently relating
to such merger or consolidation, the surviving Person is a Subsidiary of the
Company and (iv) the surviving Person ratifies each applicable Loan Document and
provided further that any Subsidiary of the Company may merge or consolidate
with any other Subsidiary of the Company so long as, in each case (i)
immediately thereafter and giving effect thereto, no event will occur and be
continuing which constitutes a Default and (ii) the surviving Person ratifies
each applicable Loan Document.
10.6 Proceeds of Notes. The Company will not permit the proceeds of
the Notes to be used for any purpose other than those permitted by this
Agreement.
10.7 ERISA Compliance. The Company will not at any time permit any
Plan maintained by it or any Subsidiary of the Company to:
(a) engage in any "prohibited transaction" as such term is defined in
Section 4975 of the Code;
(b) incur any "accumulated funding deficiency" as such term is defined
in Section 302 of ERISA; or
(c) terminate or be terminated in a manner which could result in the
imposition of a Lien on the property of the Company or any Subsidiary of the
Company pursuant to Section 4068 of ERISA, in each case, to the extent that
permitting the Plan to do so would have a Material Adverse Effect.
10.8 Amendment of Certain Documents. The Company will not amend,
modify or obtain or grant a waiver of (except for waivers only of cross-defaults
created by a Default under this Agreement), or allow APC to enter into any
amendment or modification or obtain or grant any waiver of (except for waivers
only of cross-defaults created by a Default under this Agreement), any provision
of those documents relating to or constituting the Beluga Financing Documents or
the APC Long Term Financing Documents, without prior written notification to
Agent.
10.9 Tangible Net Worth. The Company will not permit the Tangible Net
Worth of the Company and its Subsidiaries, on a consolidated basis, at any time
to be less than $465,000,000 plus 50% of net income of the Company and its
Subsidiaries on a consolidated basis, if positive, beginning with the fiscal
year ended December 31, 1997 and calculated annually thereafter based upon
positive net income of the Company and its Subsidiaries for each applicable
fiscal year taken cumulatively.
10.10 Company Debt/Capitalization Ratio. The Company will not permit
the Debt/Capitalization Ratio to be, at any time, more than 65%.
10.11 EBITDAX/Interest Ratio. The Company will not permit the
EBITDAX/Interest Ratio to be, at any time, less than
(a) 3.00:1.00 for any twelve month period ending on the last day
of any calendar quarter for the period from the Effective
Date through and including March 31, 1997; and
(b) 3.50:1.00 for any twelve month period ending on the last day
of any calendar quarter thereafter.
10.12 Nature of Business. The Company will not engage in, and will not
permit any Subsidiary of the Company to engage in, businesses other than oil and
gas exploration and production, gas processing, transmission, distribution,
marketing and storage and gas and liquids pipeline operations and activities
related or ancillary thereto; provided, that if the Company acquires one or more
Subsidiaries in transactions otherwise permitted by the terms hereof, any such
Subsidiary may be engaged in businesses other than those listed in this Section
so long as the assets of such Subsidiaries which are used in the conduct of such
other businesses do not constitute more than five percent (5%) of the
consolidated total assets of the Company (inclusive of the assets of the
Subsidiary so acquired).
10.13 Futures Contracts. The Company will not, and will not permit any
Subsidiary of the Company to, enter into or be obligated under any contract for
sale for future delivery of oil or gas (whether or not the subject oil or gas is
to be delivered), hedging contract, forward contract, swap agreement, futures
contract or other similar agreement except for (i) such contracts (x) which fall
within the parameters set forth on Exhibit J hereto or are otherwise approved in
writing by the Majority Banks and (y) which in the aggregate do not cover at any
time a volume of oil and/or gas equal to or greater than 50% of the proved
producing reserves attributable to the oil and gas properties of the Company and
its Subsidiaries, taken as a whole, as evidenced by the most current Engineering
and Company Reports and (ii) production sales contracts entered into in the
ordinary course of the Company's or the applicable Subsidiary's business.
10.14 Covenants in Other Agreements. The Company will not and will not
permit any of its Subsidiaries to become a party to or to agree that it or any
of its property is bound by any agreement, indenture, mortgage, deed of trust or
any other instrument directly or indirectly
(i) restricting any loans, advances or any other Investments to or in
the Company by any of its Subsidiaries;
(ii) restricting the ability of any Subsidiary of the Company to make
tax payments or management fee payments;
(iii) restricting the capitalization structure of any Subsidiary of
the Company; or
(iv) restricting the ability or capacity of any Subsidiary of the
Company to make Dividend Payments; provided, however, nothing in this Section
10.14 shall restrict the existence of negative covenants otherwise prohibited by
this Section in documentation evidencing or related to Indebtedness permitted by
Subsection 10.1(t) and, to the extent that the applicable Subsidiary does not
own any property included in the Borrowing Base, Subsections 10.1(m), (n) and
(s). Notwithstanding the foregoing, either of ENSTAR Alaska or APC may become a
party to, or grant a Lien in any of its property by way of, or agree that it
will be bound by, any indenture, mortgage, deed of trust or other instrument
containing provisions of the types described above in this Section 10.14 so long
as the terms and provisions thereof are not materially more restrictive than the
terms or provisions which are legally binding on ENSTAR Alaska or APC on the
Effective Date.
Section 11. Defaults.
11.1 Events of Default. If one or more of the following events (herein
called "Events of Default") shall occur and be continuing:
(a) Payments - (i) the Company or any other Relevant Party fails to
make any payment or prepayment of any installment of principal on the Loans or
any Reimbursement Obligation payable under the Notes, this Agreement or the
other Loan Documents when due or (ii) the Company or any other Relevant Party
fails to make any payment or prepayment of interest with respect to the Loans,
any Reimbursement Obligation or any other fee or amount under the Notes, this
Agreement or the other Loan Documents and such failure to pay continues
unremedied for a period of five (5) Business Days; or
(b) Representations and Warranties - any representation or warranty
made by the Company or any other Relevant Party in this Agreement or in any
other Loan Document or in any instrument executed in connection herewith or
therewith proves to have been incorrect in any material respect as of the date
thereof; or any representation, statement (including Financial Statements),
certificate or data furnished or made by the Company or any other Relevant Party
(or any officer of the Company or any other Relevant Party) under or in
connection with this Agreement or any other Loan Document, including without
limitation in the Disclosure Statement, proves to have been untrue in any
material respect, as of the date as of which the facts therein set forth were
stated or certified; or
(c) Affirmative Covenants - (i) default shall be made in the due
observance or performance of any of the covenants or agreements contained in
Sections 9.11 (or in Section 9.6 to the extent such default is considered an
Event of Default under the other Subsections of this Section 11.1) or (ii)
default is made in the due observance or performance of any of the other
covenants or agreements contained in Section 9 of this Agreement or any other
affirmative covenant of the Company or any other Relevant Party contained in
this Agreement or any other Loan Document and such default continues unremedied
for a period of 30 days after (x) notice thereof is given by Agent to the
Company or (y) such default otherwise becomes known to the Company, whichever is
earlier; or
(d) Negative Covenants - (i) default shall be made in the observance
or performance of any of the covenants or agreements contained in Section 10.8
and such default continues unremedied for a period of five (5) Business Days
after (x) notice thereof is given by Agent to the Company or (y) such default
otherwise becomes known to the Company, whichever is earlier, or (ii) default is
made in the due observance or performance by the Company of any of the other
covenants or agreements contained in Section 10 of this Agreement or of any
other negative covenant of the Company or any other Relevant Party contained in
this Agreement or any other Loan Document; or
(e) Other Obligations - default is made in the due observance or
performance by the Company or any of its Subsidiaries (as principal or guarantor
or other surety) of any of the covenants or agreements contained in any bond,
debenture, note or other evidence of Indebtedness in excess of $25,000,000
(singly or aggregating several such bonds, debentures, notes or other evidence
of Indebtedness) which default gives the holder the right to accelerate the
maturity of such Indebtedness, other than the Loan Documents, or under any
credit agreement, loan agreement, indenture, promissory note or similar
agreement or instrument executed in connection with any of the foregoing, to
which it (respectively) is a party and such default is unwaived or continues
unremedied beyond the expiration of any applicable grace period which may be
expressly allowed under such instrument or agreement; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a receiver,
conservator, liquidator or trustee of the Company or of any of its property is
appointed by the order or decree of any court or agency or supervisory authority
having jurisdiction, and such decree or order remains in effect for more than 60
days; or the Company is adjudicated bankrupt or insolvent; or any of its
property is sequestered by court order and such order remains in effect for more
than 60 days; or a petition is filed against the Company under any state or
federal bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or receivership law of any jurisdiction, whether
now or hereafter in effect, and is not dismissed within 60 days after such
filing; or
(g) Voluntary Petitions or Consents - the Company commences a
voluntary case or other proceeding seeking liquidation, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or other
relief with respect to itself or its debt or other liabilities under any
bankruptcy, insolvency or other similar law nor or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or consents to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
fails generally to, or cannot, pay its debts generally as they become due or
takes any corporate action to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of Insolvency -
the Company makes an assignment for the benefit of its creditors, or admits in
writing its inability to pay its debts generally as they become due, or consents
to the appointment of a receiver, trustee, or liquidator of the Company or of
all or any part of its property; or
(i) Undischarged Judgments - judgments (individually or in the
aggregate) for the payment of money in excess of $10,000,000 is rendered by any
court or other governmental body against the Company or any of its Subsidiaries
and the Company or such Subsidiary does not discharge the same or provide for
its discharge in accordance with its terms, or procure a stay of execution
thereof within 60 days from the date of entry thereof, and within said period of
60 days from the date of entry thereof or such longer period during which
execution of such judgment will have been stayed, the Company or such Subsidiary
fails to appeal therefrom and cause the execution thereof to be stayed during
such appeal while providing such reserves therefor as may be required under
GAAP; or
(j) Subsidiary Defaults - any Subsidiary of the Company takes,
suffers, or permits to exist any of the events or conditions referred to in
Subsections 11.1(f), (g) or (h); or
(k) Change in Control - there should occur any Change of Control.
THEREUPON: Agent may (and, if directed by the Majority Banks, shall) (a) declare
the Commitments terminated (whereupon the Commitments shall be terminated)
and/or (b) terminate any Letter of Credit providing for such termination by
sending a notice of termination as provided therein and/or (c) declare the
principal amount then outstanding of and the accrued interest on the Loans and
Reimbursement Obligations and all fees and all other amounts payable hereunder
and under the Notes to be forthwith due and payable, whereupon such amounts
shall be and become immediately due and payable, without notice (including
without limitation notice of acceleration and notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Company; provided that in the case of the
occurrence of an Event of Default with respect to the Company referred to in
clause (f) or (g) of this Section 11.1 or in clause (j) of this Section 11.1 to
the extent it refers to clauses (f) or (g), the Commitments shall be
automatically terminated and the principal amount then outstanding of and the
accrued interest on the Loans and Reimbursement Obligations and all fees and all
other amounts payable hereunder and under the Notes shall be and become
automatically and immediately due and payable, without notice (including but not
limited to notice of intent to accelerate and notice of acceleration) and
without presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly waived by the Company and/or (d) exercise any and all
other rights available to it under the Loan Documents, at law or in equity.
11.2 Collateral Account. The Company hereby agrees, in addition to the
provisions of Section 11.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by Agent or the
Majority Banks (through Agent), pay to Agent an amount in immediately available
funds equal to the then aggregate amount available for drawings under all
Letters of Credit issued for the account of the Company, which funds shall be
held by Agent as Cover.
11.3 Preservation of Security for Unmatured Reimbursement Obligations.
In the event that, following (i) the occurrence of an Event of Default and the
exercise of any rights available to Agent under the Loan Documents, and (ii)
payment in full of the principal amount then outstanding of and the accrued
interest on the Loans and Reimbursement Obligations and fees and all other
amounts payable hereunder and under the Notes, any Letters of Credit shall
remain outstanding and undrawn upon, Agent shall be entitled to hold (and the
Company hereby grants and conveys to Agent a security interest in and to) all
cash or other property ("Proceeds of Remedies") realized or arising out of the
exercise by Agent of any rights available to it under the Loan Documents, at law
or in equity, including, without limitation, the proceeds of any foreclosure, as
collateral for the payment of any amounts due or to become due under or in
respect of such Letters of Credit. Such Proceeds of Remedies shall be held for
the ratable benefit of the applicable Issuers. The rights, titles, benefits,
privileges, duties and obligations of Agent with respect thereto shall be
governed by the terms and provisions of this Agreement. Agent may, but shall
have no obligation to, invest any such Proceeds of Remedies in such manner as
Agent, in the exercise of its sole discretion, deems appropriate. Such Proceeds
of Remedies shall be applied to Reimbursement Obligations arising in respect of
any such Letters of Credit and/or the payment of any Issuer's obligations under
any such Letter of Credit when such Letter of Credit is drawn upon. The Company
hereby agrees to execute and deliver to Agent and the Banks such security
agreements, pledges or other documents as Agent or any of the Banks may, from
time to time, require to perfect the pledge, lien and security interest in and
to any such Proceeds of Remedies provided for in this Section 11.3.
11.4 Right of Setoff. Upon (i) the occurrence and during the
continuance of any Event of Default referred to in clauses (f), (g) or (h) of
Section 11.1, or in clause (j) of Section 11.1 to the extent it refers to
clauses (f), (g) or (h), or upon (ii) the occurrence and continuance of any
other Event of Default and upon the making of the notice specified in Section
11.1 to authorize Agent to declare the Notes due and payable pursuant to the
provisions thereof, or if (iii) the Company or any of its Subsidiaries becomes
insolvent, however evidenced, the Banks are hereby authorized at any time and
from time to time, without notice to the Company or any of its Subsidiaries (any
such notice being expressly waived by the Company and its Subsidiaries), to
setoff and apply any and all deposits (general or special, time or demand,
provisional or final, whether or not such setoff results in any loss of interest
or other penalty, and including without limitation all certificates of deposit)
at any time held, and any other funds or property at any time held, and other
Indebtedness at any time owing by any Bank to or for the credit or the account
of the Company against any and all of the Obligations irrespective of whether or
not such Bank will have made any demand under this Agreement or the Notes and
although such obligations may be unmatured. Should the right of any Bank to
realize funds in any manner set forth hereinabove be challenged and any
application of such funds be reversed, whether by court order or otherwise, the
Banks shall make restitution or refund to the Company pro rata in accordance
with their Commitments. The Banks agree promptly to notify the Company and Agent
after any such setoff and application, provided that the failure to give such
notice will not affect the validity of such setoff and application. The rights
of Agent and the Banks under this Section are in addition to other rights and
remedies (including without limitation other rights of setoff) which Agent or
the Banks may have.
Section 12. Agent.
12.1 Appointment, Powers and Immunities. Each Bank hereby irrevocably
appoints and authorizes Agent to act as its agent hereunder and under the
Letters of Credit and the other Loan Documents with such powers as are
specifically delegated to Agent by the terms hereof and thereof, together with
such other powers as are reasonably incidental thereto. Agent (which term as
used in this Section 12 shall include reference to its affiliates and its own
and their affiliates' officers, directors, employees and agents) shall not (a)
have any duties or responsibilities except those expressly set forth in this
Agreement, the Letters of Credit, and the other Loan Documents, or shall by
reason of this Agreement or any other Loan Document be a trustee or fiduciary
for any Bank; (b) be responsible to any Bank for any recitals, statements,
representations or warranties contained in this Agreement, the Letters of Credit
or any other Loan Document, or in any certificate or other document referred to
or provided for in, or received by any of them under, this Agreement, the
Letters of Credit or any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, the
Letters of Credit, or any other Loan Document or any other document referred to
or provided for herein or therein or any property covered thereby or for any
failure by any Relevant Party or any other Person to perform any of its
obligations hereunder or thereunder; (c) be required to initiate or conduct any
litigation or collection proceedings hereunder or under the Letters of Credit or
any other Loan Document except to the extent Agent is so requested by the
Majority Banks, or (d) be responsible for any action taken or omitted to be
taken by it hereunder or under the Letters or Credit or any other Loan Document
or any other document or instrument referred to or provided for herein or
therein or in connection herewith or therewith, including, without limitation,
pursuant to their own negligence, except for its own gross negligence or willful
misconduct. Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Without in any way
limiting any of the foregoing, each Bank acknowledges that neither Agent nor any
Issuer shall have any greater responsibility in the operation of the Letters of
Credit than is specified in the Uniform Customs and Practice for Documentary
Credits (1993 Revision, International Chamber of Commerce Publication No. 500).
In any foreclosure proceeding concerning any collateral for the Notes, each
holder of a Note if bidding for its own account or for its own account and the
accounts of other Banks is prohibited from including in the amount of its bid an
amount to be applied as a credit against its Note or Notes or the Notes of the
other Banks; instead, such holder must bid in cash only; provided that this
provision is for the sole benefit of Agent and the Banks and shall not inure to
the benefit of the Company or any of its Subsidiaries. However, in any such
foreclosure proceeding, Agent may (but shall not be obligated to) submit a bid
for all Banks (including itself) in the form of a credit against the Notes of
all of the Banks, and Agent or its designee may (but shall not be obligated to)
accept title to such collateral for and on behalf of all Banks.
12.2 Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel (which may be counsel for the
Company), independent accountants and other experts selected by Agent. As to any
matters not expressly provided for by this Agreement, the Letters of Credit, or
any other Loan Document, Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder and thereunder in accordance with
instructions of the Majority Banks (or, where unanimous consent is required by
the terms hereof or of the other Loan Documents, all of the Banks), and any
action taken or failure to act pursuant thereto shall be binding on all of the
Banks. Pursuant to instructions of the Majority Banks (except as otherwise
provided in Section 13.4 hereof), Agent shall have the authority to execute
releases of security documents on behalf of the Banks without the joinder of any
Bank.
12.3 Defaults. Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest
on Loans or Reimbursement Obligations) unless it has received notice from a Bank
or the Company specifying such Default and stating that such notice is a "Notice
of Default". In the event that Agent receives such a notice of the occurrence of
a Default, Agent shall give prompt notice thereof to the Banks (and shall give
each Bank prompt notice of each such non-payment). Agent shall (subject to
Section 12.7 hereof) take such action with respect to such Default as shall be
directed by the Majority Banks and within its rights under the Loan Documents
and at law or in equity, provided that, unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, permitted hereby with respect to
such Default as it shall deem advisable in the best interests of the Banks and
within its rights under the Loan Documents, at law or in equity.
12.4 Rights as a Bank. With respect to its Commitments and the Loans
made and Letter of Credit Liabilities, Chase in its capacity as a Bank hereunder
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not acting as Agent and the term "Bank" or
"Banks" shall, unless the context otherwise indicates, include the Chase in its
individual capacity. Agent may (without having to account therefor to any Bank)
accept deposits from, lend money to and generally engage in any kind of banking,
trust, letter of credit, agency or other business with the Company (and any of
its Affiliates) as if it were not acting as Agent, and Agent may accept fees and
other consideration from the Company and its Affiliates (in addition to the fees
heretofore agreed to between the Company and Agent) for services in connection
with this Agreement or otherwise without having to account for the same to the
Banks.
12.5 Indemnification. The Banks agree to indemnify Agent (to the
extent not reimbursed under Section 2.2(c), Section 9.7 or Section 13.3 hereof,
but without limiting the obligations of the Company under said Sections 2.2(c),
9.7 and 13.3), ratably in accordance with their respective Commitments, for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever (including but not limited to, the consequences of the negligence of
Agent) which may be imposed on, incurred by or asserted against Agent in any way
relating to or arising out of this Agreement, the Letters of Credit or any other
Loan Document or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Company is obligated to pay under
Sections 2.2(c), 9.8 and 13.3 hereof but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of their respective agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified.
The obligations of the Banks under this Section 12.5 shall survive the
termination of this Agreement and the repayment of the Obligations.
12.6 Non-Reliance on Agent and Other Banks. Each Bank agrees that it
has received current financial information with respect to the Company and that
it has, independently and without reliance on Agent or any other Bank and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Company and decision to enter into this Agreement and
that it will, independently and without reliance upon 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 analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents. Agent shall not
be required to keep itself informed as to the performance or observance by any
Relevant Party of this Agreement, the Letters of Credit or any of the other Loan
Documents or any other document referred to or provided for herein or therein or
to inspect the properties or books of the Company or any Relevant Party. Except
for notices, reports and other documents and information expressly required to
be furnished to the Banks by Agent hereunder, under the Letters of Credit or the
other Loan Documents, Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the affairs, financial
condition or business of the Company or any other Relevant Party (or any of
their affiliates) which may come into the possession of Agent.
12.7 Failure to Act. Except for action expressly required of Agent
hereunder, under the Letters of Credit and under the other Loan Documents, Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Banks of their indemnification obligations under Section 12.5 hereof against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
12.8 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving notice thereof to the Banks and the Company, and Agent may be removed
at any time with or without cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right to appoint a
successor Agent, provided deposits with a successor Agent shall be insured by
the Federal Deposit Insurance Corporation or its successor. If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent. Any
successor Agent shall be a bank which has an office in the United States and a
combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. A successor Agent shall
promptly specify by notice to the Company and the Banks its Principal Office
referred to in Sections 3.1 and 5.1. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 12 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as an Agent.
Section 13. Miscellaneous.
13.1 Waiver. No waiver of any Default shall be a waiver of any other
Default. No failure on the part of any Agent or any 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 thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law or in equity.
13.2 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, telecopy
(confirmed by mail), cable, mail or other writing and telexed, telecopied,
telegraphed, cabled, mailed or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party, at such other address as shall be designated by such party
in a notice to the Company, Agent given in accordance with this Section 13.2.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly received when transmitted by telex or telecopier during
regular business hours, delivered to the telegraph or cable office or personally
delivered or, in the case of a mailed notice, three (3) days after deposit in
the United States mails, postage prepaid, certified mail with return receipt
requested (or upon actual receipt, if earlier), in each case given or addressed
as aforesaid.
13.3 Indemnification. The Company shall indemnify Agent, the Banks,
and each Affiliate thereof and their respective directors, officers, employees
and agents from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject
(regardless of whether caused in whole or in part by the simple (but not gross)
negligence of the Person indemnified), insofar as such losses, liabilities,
claims or damages arise out of or result from any (i) actual or proposed use by
the Company of the proceeds of any extension of credit (whether a Loan or a
Letter of Credit) by any Bank hereunder, (ii) breach by the Company of this
Agreement or any other Loan Document, (iii) violation by the Company or any of
its Subsidiaries of any Legal Requirement, including but not limited to those
relating to Hazardous Substances, (iv) Liens or security interests previously or
hereafter granted on any real or personal property, to the extent resulting from
any Hazardous Substance located in, on or under any such property, (v) ownership
by the Banks or Agent of any real or personal property following foreclosure, to
the extent such losses, liabilities, claims or damages arise out of or result
from any Hazardous Substance located in, on or under such property, including,
without limitation, losses, liabilities, claims or damages which are imposed
upon Persons under laws relating to or regulating Hazardous Substances solely by
virtue of ownership, (vi) Bank's or Agent's being deemed an operator of any such
real or personal property by a court or other regulatory or administrative
agency or tribunal in circumstances in which neither Agent nor any of the Banks
is generally operating or generally exercising control over such property, to
the extent such losses, liabilities, claims or damages arise out of or result
from any Hazardous Substance located in, on or under such property, (vii)
investigation, litigation or other proceeding (including any threatened
investigation or proceeding) relating to any of the foregoing, and the Company
shall reimburse Agent, each Bank, and each Affiliate thereof and their
respective directors, officers, employees and agents, upon demand, for any
expenses (including legal fees) incurred in connection with any such
investigation or proceeding or (viii) taxes (excluding income taxes and
franchise taxes) payable or ruled payable by any Governmental Authority in
respect of the Notes or any other Loan Document, together with interest and
penalties, if any; provided, however, that the Company shall not have any
obligations pursuant to this Section 13.3 with respect to any losses,
liabilities, claims, damages or expenses (a) arising from or relating solely to
events, conditions or circumstances which, as to clauses (iv), (v) or (vi)
above, first came into existence or which first occurred after the date on which
the Company or any of its Subsidiaries conveyed to an unrelated third party all
of the Company's or the applicable Subsidiary's rights, titles and interests to
the applicable real or personal property (whether by deed, deed-in-lieu,
foreclosure or otherwise) other than a conveyance made in violation of any Loan
Document or (b) incurred by the Person seeking indemnification by reason of the
gross negligence or willful misconduct of such Person. If the Company ever
disputes a good faith claim for indemnification under this Section 13.3 on the
basis of the proviso set forth in the preceding sentence, the full amount of
indemnification provided for shall nonetheless be paid, subject to later
adjustment or reimbursement at such time (if any) as a court of competent
jurisdiction enters a final judgment as to the applicability of any such
exceptions.
13.4 Amendments, Etc. No amendment or waiver of any provision of this
Agreement, the Notes or any other Loan Document, nor any consent to any
departure by the Company therefrom, shall in any event be effective unless the
same shall be agreed or consented to by the Majority Banks and the Company, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, that no amendment, waiver or
consent shall, unless in writing and signed by each Bank affected thereby, do
any of the following: (a) increase the Commitment of such Bank (it being
understood that the waiver of any reduction in the Commitments or any mandatory
repayment other than (x) the repayment of all Loans at the end of the Revolving
Credit Availability Period and (y) the mandatory reductions of the Commitments
provided for in Section 2.3(a) and (z) the mandatory prepayments required by the
terms of Section 3.2(b), shall not be deemed to be an increase in any
Commitment) or subject the Banks to any additional obligation; (b) reduce the
principal of, or interest on, any Loan, Reimbursement Obligation or fee
hereunder; (c) postpone any scheduled date fixed for any payment or mandatory
prepayment of principal of, or interest on, any Loan, Reimbursement Obligation,
fee or other sum to be paid hereunder; (d) change the percentage of any of the
Commitments or of the aggregate unpaid principal amount of any of the Loans and
Letter of Credit Liabilities, or the number of Banks, which shall be required
for the Banks or any of them to take any action under this Agreement; (e) change
any provision contained in Sections 2.2(c), 9.7 or 13.3 hereof or this Section
13.4 or Section 6.7 hereof, or (f) release all or substantially all of any
security for the obligations of the Company under this Agreement or any Note or
all or substantially all of the personal liability of any obligor created under
any of the Loan Documents. Anything in this Section 13.4 to the contrary, no
amendment, waiver or consent shall be made with respect to Section 12 without
the consent of Agent. The consent of the Super Majority Banks shall be required
to any amendment of any requirement under this Agreement or the other the Loan
Documents that the consent of the Super Majority Banks be obtained.
13.5 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company, Agent and the Banks and their respective successors and assigns.
The Company may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of all of the Banks. Each Bank may
sell participations to any Person in all or part of any Loan or Letter of
Credit, or all or part of its Notes or Commitments, in which event, without
limiting the foregoing, the provisions of Section 6 shall inure to the benefit
of each purchaser of a participation and the pro rata treatment of payments, as
described in Section 5.2, shall be determined as if such Bank had not sold such
participation. In the event any Bank shall sell any participation, such Bank
shall retain the sole right and responsibility to enforce the obligations of the
Company relating to the Loans or Letters of Credit, including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement other than amendments, modifications or waivers with
respect to (i) any fees payable hereunder to the Banks and (ii) the amount of
principal or the rate of interest payable on, or the dates fixed for the
scheduled repayment of principal of, the Loans.
(b) Each Bank may assign to one or more Banks or any other Person all
or a portion of its interests, rights and obligations under this Agreement,
provided, however, that (i) other than in the case of an assignment to another
Bank that is, at the time of such assignment, a party hereto or an Affiliate of
such Bank, the Company must give its prior written consent, which consent will
not be unreasonably withheld, (ii) the aggregate amount of the Commitment and/or
Loans or Letters of Credit of the assigning Bank subject to each such assignment
(determined as of the date the Assignment and Acceptance (as defined below) with
respect to such assignment is delivered to Agent) shall in no event be less than
$10,000,000 (or $5,000,000 in the case of an assignment to an Affiliate of a
Bank or between Banks), (iii) no assignment shall have the effect of reducing
the pro rata share of the Loans or Letters of Credit and the Commitments held by
the assignor and its Affiliates below $10,000,000, (iv) notwithstanding any
other term or provision of this Agreement, unless the Company shall have
otherwise consented in writing (such consent not to be unreasonably withheld),
each such assignment shall be pro rata with respect to the Loans, the Letters of
Credit and the Commitment of the assignor, and (v) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording
in the Register (as defined below), an Assignment and Acceptance in the form of
Exhibit H hereto (each an "Assignment and Acceptance") with blanks appropriately
completed, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $2,500 paid by the assignee (for which the
Company shall have no liability). 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 five Business Days after the
execution thereof, (A) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and (B) the Bank thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement. Notwithstanding anything contained in this Agreement to
the contrary, any Bank may at any time assign all or any portion of its rights
under this Agreement and the Notes issued to it as collateral to a Federal
Reserve Bank; provided, that no such assignment shall release the assigning Bank
from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Bank assignor 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 any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any of the other Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such Bank assignor makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Company or the performance or observance by the Company of any of its
obligations under this Agreement or any of the other Loan Documents 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 8.6 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any Agent, such Bank assignor 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 and the other Loan Documents; (v) such
assignee appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to 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 obligations that by the terms
of this Agreement and the other Loan Documents are required to be performed by
it as a Bank.
(d) Agent shall maintain at its office a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Banks and the Commitments of, and principal amount of the Loans
owing to, each Bank from time to time (the "Register"). The entries in the
Register shall be conclusive, in the absence of manifest error, and the Company,
Agent and the Banks may treat each person the name of which is recorded in the
Register as a Bank hereunder for all purposes of this Agreement and the other
Loan Documents. The Register shall be available for inspection by the Company or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and the assignee thereunder together with any Note or Notes
subject to such assignment, the written consent to such assignment executed by
the Company and the fee payable in respect thereto, Agent shall, if such
Assignment and Acceptance has been completed with blanks appropriately filled,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Company.
Within five Business Days after receipt of notice, the Company, at its own
expense, shall execute and deliver to Agent in exchange for the surrendered
Notes new Notes to the order of such assignee in an amount equal to the
Commitments and/or Loans or Letters of Credit assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Bank has retained Commitments
and/or Loans hereunder, new Notes to the order of the assigning Bank in an
amount equal to the Commitment and/or Loans retained by it hereunder. Such new
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the respective Note. Thereafter, such surrendered Notes shall be marked renewed
and substituted and the originals delivered to the Company (with copies,
certified by the Company as true, correct and complete, to be retained by
Agent).
(f) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 13.5, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Company furnished to such Bank by or on behalf of
the Company; provided, however, that, prior to any such disclosure, the Company
shall have consented thereto, which consent shall not be unreasonably withheld,
and each such assignee or participant, or proposed assignee or participant,
shall execute an agreement whereby such assignee or participant shall agree to
preserve the confidentiality of any Confidential Information (defined in Section
13.13) on terms substantially the same as those provided in Section 13.13.
(g) The Company will have the right to consent to any material
intercreditor arrangements in connection with an assignment by any Bank of any
interest, right or obligation under this Agreement which is not pro rata with
respect to the Loans, the Letters of Credit and the Commitment of the assignor
and the Company may deny its consent to any such arrangements which, in the
reasonable judgement of the Company, would adversely affect the Company in a
material respect.
(h) The provisions of this Section shall not apply to the assignment
and pledge of a Bank's rights hereunder or under any Note to any Federal Reserve
Bank for collateral purposes pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank; provided that such assignment and pledge shall not relieve such
Bank of any of its obligations hereunder.
13.6 Limitation of Interest. The Company and the Banks intend to
strictly comply with all applicable laws, including applicable usury laws.
Accordingly, the provisions of this Section 13.6 shall govern and control over
every other provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section, even if such provision declares
that it controls. As used in this Section, the term "interest" includes the
aggregate of all charges, fees, benefits or other compensation which constitute
interest under applicable law, provided that, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as an
expense or as compensation for something other than the use, forbearance or
detention of money and not as interest, and (b) all interest at any time
contracted for, reserved, charged or received shall be amortized, prorated,
allocated and spread, in equal parts during the full term of the Obligations. In
no event shall the Company or any other Person be obligated to pay, or any Bank
have any right or privilege to reserve, receive or retain, (a) any interest in
excess of the maximum amount of nonusurious interest permitted under the laws of
the State of Texas or the applicable laws (if any) of the United States or of
any other applicable state, or (b) total interest in excess of the amount which
such Bank could lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of the Obligations at
the Highest Lawful Rate. On each day, if any, that the interest rate (the
"Stated Rate") called for under this Agreement or any other Loan Document
exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Highest Lawful Rate
for that day, and shall remain fixed at the Highest Lawful Rate for each day
thereafter until the total amount of interest accrued equals the total amount of
interest which would have accrued if there were no such ceiling rate as is
imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate
unless and until the Stated Rate again exceeds the Highest Lawful Rate when the
provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate. The daily interest rates to be used
in calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of days in
the calendar year for which such calculation is being made. None of the terms
and provisions contained in this Agreement or in any other Loan Document which
directly or indirectly relate to interest shall ever be construed without
reference to this Section 13.6, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Highest Lawful Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason any Bank at any time, including but not limited to, the stated maturity,
is owed or receives (and/or has received) interest in excess of interest
calculated at the Highest Lawful Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to such Bank, it shall be credited pro tanto
against the then-outstanding principal balance of the Company's obligations to
such Bank, effective as of the date or dates when the event occurs which causes
it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.
13.7 Survival. The obligations of the Company under Sections 2.2(c),
6, 9.7 and 13.3 hereof and the obligations of the Banks under Section 13.6
hereof shall survive the repayment of the Loans and Reimbursement Obligations
and the termination of the Commitments and the Letters of Credit.
13.8 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
13.9 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
13.10 Governing Law. This Agreement and the Notes and (except as
therein provided) the other Loan Documents are performable in Harris County,
Texas, which shall be a proper place of venue for suit on or in respect thereof.
The Company irrevocably agrees that any legal proceeding in respect of this
Agreement or the other Loan Documents shall be brought in the district courts of
Harris County, Texas or the United States District Court for the Southern
District of Texas, Houston Division (collectively, the "Specified Courts"). The
Company hereby irrevocably submits to the nonexclusive jurisdiction of the state
and federal courts of the State of Texas. The Company hereby irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to any Loan Document brought in any Specified Court, and
hereby further irrevocably waives any claims that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
The Company further (1) agrees to designate and maintain an agent for service of
process in the City of Houston in connection with any such suit, action or
proceeding and to deliver to Agent evidence thereof and (2) irrevocably consents
to the service of process out of any of the aforementioned courts in any such
suit, action or proceeding by the mailing of copies thereof by certified mail,
return receipt requested, postage prepaid, to the Company at its address as
provided in this Agreement or as otherwise provided by Texas law. Nothing herein
shall affect the right of any Agent or any Bank to commence legal proceedings or
otherwise proceed against the Company in any jurisdiction or to serve process in
any manner permitted by applicable law. The Company agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED) THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS (OTHER
THAN THE CONFLICT OF LAWS RULES) OF THE STATE OF TEXAS AND THE UNITED STATES OF
AMERICA FROM TIME TO TIME IN EFFECT.
13.11 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of any Loan Document shall be invalid, illegal
or unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions of such Loan Document shall not
be affected or impaired thereby.
13.12 Chapter 15 Not Applicable. Chapter 15, Subtitle 3, Title 79,
Revised Civil Statutes of Texas, 1925, as amended, shall not apply to this
Agreement or to any Loan or Letter of Credit, nor shall this Agreement or any
Loan or Letter of Credit be governed by or be subject to the provisions of such
Chapter 15 in any manner whatsoever.
13.13 Confidential Information. Agent and each Bank separately agrees
that:
(a) As used herein, the term "Confidential Information" means written
information about the Company or the transactions contemplated herein furnished
by the Company to Agent and/or the Banks which is specifically designated as
confidential by the Company; Confidential Information, however, shall not
include information which (i) was publicly known or available, or otherwise
available on a non-confidential basis to any Bank, at the time of disclosure
from a source other than the Company, (ii) subsequently becomes publicly known
through no act or omission by such Bank, (iii) otherwise becomes available on a
non-confidential basis to any Bank other than through disclosure by the Company
or (iv) has been in the possession of any Bank for a period of more than two
years from the date on which such information originally was furnished to such
Bank by the Company, unless the Company shall have requested Agent and the Banks
in writing, at least 30 days prior to the end of such two-year period, to
maintain the confidentiality of such information for another two (2) year period
(or for successive two (2) year periods); provided that the Company shall not
unreasonably withhold its consent to a request made after the initial two (2)
year period to eliminate information from "Confidential Information".
(b) Agent and each Bank agrees that it will take normal and reasonable
precautions to maintain the confidentiality of any Confidential Information
furnished to such Person; provided, however, that such Person may disclose
Confidential Information (i) upon the Company's consent; (ii) to its auditors;
(iii) when required by any Legal Requirement; (iv) as may be required or
appropriate in any report, statement or testimony submitted to any Governmental
Authority having or claiming to have jurisdiction over it; (v) to such Person's
and its Subsidiaries' or Affiliates' officers, directors, employees, agents,
representatives and professional consultants in connection with this Agreement
or administration of the Loans and Letters of Credit; (vi) as may be required or
appropriate, should such Bank elect to assign or grant participations in any of
the Obligations in connection with (1) the enforcement of the Obligations to any
such Person under any of the Loan Documents or related agreements, or (2) any
potential transfer pursuant to this Agreement of any Obligation owned by any
Bank (provided any potential transferee has been approved by the Company if
required by this Agreement, which approval shall not be unreasonably withheld,
and has agreed in writing to be bound by substantially the same provisions
regarding Confidential Information contained in this Section); (vii) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation or administrative proceeding; (viii) to any other Bank; (ix)
to the extent reasonably required in connection with the exercise of any remedy
hereunder or under the other Loan Documents; or (x) to correct any false or
misleading information which may become public concerning such Person's
relationship to the Company.
13.14 Tax Forms. With respect to each Bank which is organized under
the laws of a jurisdiction outside the United States, on the day of the initial
borrowing hereunder and from time to time thereafter if requested by the Company
or Agent, such Bank shall provide Agent and the Company with the forms
prescribed by the Internal Revenue Service of the United States certifying as to
such Bank's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Bank hereunder
or other documents satisfactory to the Bank and Agent indicating that all
payments to be made to such Bank hereunder are subject to such tax at a rate
reduced by an applicable tax treaty. Unless the Company and Agent shall have
received such forms or such documents indicating that payments hereunder are not
subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Company or Agent shall withhold taxes
from such payments at the applicable statutory rate in the case of payments to
or for any Bank organized under the laws of a jurisdiction outside the United
States.
13.15 Amendment and Restatement. This Agreement amends and restates in
its entirety that certain Credit Agreement dated as of May 24, 1994 executed by
and among the Company, the Banks and Agent, as amended.
13.16 Intercreditor Agreement. Reference is hereby made to the
Intercreditor Agreement, which provides for certain matters relating to both the
Loans and the Canadian Facility. To the extent of any conflict between the terms
hereof and the terms of the Intercreditor Agreement, the Intercreditor Agreement
shall control. The execution and delivery by Agent of the Intercreditor
Agreement on behalf of the Banks is hereby ratified and confirmed by each of the
Banks. Any Bank that becomes a party to this Agreement after the Effective Date
agrees to be bound by the terms and provisions of the Intercreditor Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
SEAGULL ENERGY CORPORATION,
a Texas corporation
By: /s/ William L. Transier
Name: William L. Transier
Title: Senior Vice
President and Chief
Financial Officer
Address for Notices:
1001 Fannin, Suite 1700
Houston, Texas 77002
Attention: Steve Thorington
THE CHASE MANHATTAN BANK,
as Agent
By: /s/ Edward L. Nelson, Jr.
Name: Edward L. Nelson, Jr.
Title: Managing Director
Commitment:
Address for Notices:
$62,000,000
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Agent Services
with a copy to:
Texas Commerce Bank National Association
712 Main Street
Houston, Texas 77002
Attention: Manager, Energy Division
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ John Kowalczuk
Commitment: Name: John Kowalczuk
Title: Vice President
$60,000,000
Address for Notices:
60 Wall Street
New York, New York 10260-0060
Attention: Loan Department
NATIONSBANK OF TEXAS, N.A.
By: /s/ Paul A. Squires
Commitment: Name: Paul A. Squires
Title: Senior Vice President
$60,000,000
Address for Notices:
700 Louisiana, 8th Floor
Houston, Texas 77002
Attention: Jo A. Tamalis
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ George W. Passela
Commitment: Name: George W. Passela
Title: Managing Director
$40,000,000
Address for Notices:
100 Federal Street
Energy & Utilities 01-15-04
Boston, Massachusetts 02110
Attention: George W. Passela
H1995A/73788
7002/3623
93
ABN AMRO BANK N.V., HOUSTON AGENCY
By: ABN AMRO North America, Inc., as agent
By: /s/ Cheryl I. Lipshutz
Commitment: Name: Cheryl I. Lipshutz
Title: Group Vice President and Director
$30,000,000
By: /s/ H. Gene Shiels
Name: H. Gene Shiels
Title: Vice President and Director
Address for Notices:
Three Riverway, Suite 1700
Houston, Texas 77056
Attention: Ms. Cheryl Lipshultz
THE BANK OF NEW YORK
By:
Commitment: Name:
Title:
$30,000,000
Address for Notices:
One Wall Street, 19th Floor
New York, New York 10296
Attention: Ms. Renee Bijlani
BANQUE PARIBAS HOUSTON AGENCY
By: /s/ Marian Livingston
Commitment: Name: Marian Livingston
Title: Vice President
$25,000,000
By: /s/ Barton D. Schouest
Name: Barton D. Schouest
Title: Group Vice President
Address for Notices:
1200 Smith, Suite 3100
Houston, Texas 77002
Attention: Barton D. Schouest
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Pascal Poupelle
Commitment: Name: Pascal Poupelle
Title: Senior Vice President
$40,000,000
Address for Notices:
1000 Louisiana, Suite #5360
Houston, Texas 77002
Attention: Mr. A. David Dodd
THE FUJI BANK, LIMITED HOUSTON AGENCY
By: /s/ Yoshiaki Inoue
Commitment: Name: Yoshiaki Inoue
Title: Vice President and Manager
$25,000,000
Address for Notices:
One Houston Center
Suite 4100
1221 McKinney Street
Houston, Texas 77010
Attention: Mr. Roger Frey
FIRST NATIONAL BANK OF CHICAGO
By: /s/ Dixon P. Schultz
Commitment: Name: Dixon P. Schultz
Title: Vice President
$30,000,000
Address for Notices:
1100 Louisiana, Suite 3200
Houston, Texas 77002
Attention: Mr. Dennis Petito
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Richard A. Erbert
Commitment: Name: Richard A. Erbert
Title: Vice President
$35,000,000
Address for Notices:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Ms. Angela Aldridge
with a copy to:
1111 Bagby, Suite 2020
Houston, Texas 77002
Attention: Mr. Richard Erbert
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ Michael G. Meiss
Commitment: Name: Michael G. Meiss
Title: Vice President
$16,500,000
Address for Notices:
1100 Louisiana, Suite 2800
Houston, Texas 770002-5216
Attention: Mr. John M. McIntyre
BANK OF SCOTLAND
By: /s/ Catherine M. Oniffrey
Commitment: Name: Catherine M. Oniffrey
Title: Vice President
Bank of Scotland
$25,000,000
Address for Notices:
565 Fifth Avenue
New York, New York 10017
Attention: Ms. Catherine Onifrey
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ David E. Bouhl
Commitment: Name: David E. Bouhl
Title: First Vice President
$16,500,000
Address for Notices:
600 Travis, Suite 2340
Houston, Texas 77002
Attention: Mr. Brian Knezeak
CHRISTIANIA BANK OG KREDITKASSE
By: /s/ Peter M. Dodge
Commitment: Name: Peter M. Dodge
Title: First Vice President
$30,000,000
By: /s/ Justin F. McCarty, III
Name: Justin F. McCarty, III
Title: Vice President
Address for Notices:
11 West 42nd Street
7th Floor
New York, New York 10036
Attention: Mr. Jahn Roising
DEN NORSKE BANK AS
By: /s/ Byron L. Cooley
Commitment: Name: Byron L. Cooley
Title: Senior Vice President
$21,000,000
By: /s/ William V. Moyer
Name: William V. Moyer
Title: Vice President
Address for Notices:
333 Clay
Suite 4890
Houston, Texas 77002
Attention: Mr. Byron L. Cooley
WELL FARGO BANK
By: /s/Gregory J. Petruska
Commitment: Name: Gregory J. Petruska
Title: Vice President
$21,000,000
Address for Notices:
1000 Louisiana
3rd Floor/MS #156
Houston, Texas 77002
Attention: Mr. John Fields
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
Commitment: Name: F.C.H. Ashby
Title: Senior Manager
Loan Operations
$17,500,000
Address for Notices:
Suite 3000, 1100 Louisiana
Houston, Texas 77002
Attention: Mr. Mark Ammerman
CIBC INC.
By: /s/ Aleksandra K. Dymanus
Commitment: Name: Aleksandra K. Dymanus
Title: Authorized Signatory
$17,500,000
Address for Notices:
Two Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, Georgia 30339
Attention: Loan Operations
with a copy to:
Canadian Imperial Bank of Commerce
Two Houston Center
909 Fannin Street
Houston, Texas 77010
Attention: Mr. Brian Myers
MELLON BANK
By: /s/ E. Marc Cuenod, Jr.
Commitment: Name: E. Marc Cuenod, Jr.
Title: First Vice President
$16,000,000
Address for Notices:
Mellon Bank
One Mellon Bank Center
Room 151-4425
Pittsburgh, Pennsylvania 15258-0001
Attention: Manager, Energy and Utilities Group
with a copy to:
Mellon Financial Services
1100 Louisiana, 36th Floor
Houston, Texas 77002-5210
Attention: Ms. Melissa Bauman
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
By: First Union Corporation of North Carolina
By: /s/ Michael J. Kolosowsky
Commitment: Name: Michael J. Kolosowsky
Title: Vice President
$21,000,000
Address for Notices:
First Union Corporation of North Carolina
1001 Fannin, Suite 2255
Houston, Texas 77002
Attention: Mr. Jay M. Chernosky
BANK OF MONTREAL
By: /s/ Michael P. Stuckey
Commitment: Name: Michael P. Stuckey
$11,000,000 Title: Managing Director
Address for Notices:
700 Louisiana, Suite 4400
Houston, Texas 77002
Attention: Ms. Christa Hash