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$82,500,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 29, 1994
Among
MESA INC.
and
MESA OPERATING CO.
and
THE BANKS NAMED IN THIS CREDIT AGREEMENT
and
SOCIETE GENERALE, SOUTHWEST AGENCY
as Agent
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms............................... 3
Section 1.02. Computation of Time Periods......................... 23
Section 1.03. Accounting Terms; Changes in GAAP................... 23
Section 1.04. Miscellaneous....................................... 23
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01. The Advances........................................ 24
Section 2.02. Method of Borrowing................................. 24
Section 2.03. Fees................................................ 27
Section 2.04. Reduction of Commitments............................ 27
Section 2.05. Repayment of Advances; Reborrowings................. 28
Section 2.06. Interest on Advances................................ 29
Section 2.07. Prepayments......................................... 31
Section 2.08. Compensation........................................ 32
Section 2.09. Increased Costs..................................... 33
Section 2.10. Payments and Computations........................... 34
Section 2.11. Taxes............................................... 35
Section 2.12. Sharing of Payments, Etc. .......................... 37
Section 2.13. Letters of Credit................................... 38
Section 2.14. The Obligors Jointly and Severally Liable........... 41
Section 2.15. Use of Proceeds..................................... 41
Section 2.16. Interest on Overdue Amounts......................... 41
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to the Effectiveness of this
Agreement......................................... 42
Section 3.02. Conditions Precedent to Each Borrowing.............. 42
Section 3.03. Conditions Precedent to Certain Borrowings.......... 43
Section 3.04. Conditions Precedent to Letters of Credit........... 44
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Organization, etc. ................................. 45
Section 4.02. Authorization; No Conflict.......................... 45
Section 4.03. Validity and Binding Nature......................... 46
Section 4.04. Financial Statements................................ 46
Section 4.05. Status of Title to Properties....................... 46
Section 4.06. Governmental Approvals.............................. 47
Section 4.07. Pending or Threatened Litigation.................... 47
Section 4.08. Pension Plans....................................... 47
Section 4.09. Investment Company Act.............................. 48
Section 4.10. Public Utility Holding Company Act.................. 48
Section 4.11. True and Complete Disclosure........................ 48
Section 4.12. Defaults............................................ 49
Section 4.13. Investments and Guaranties.......................... 49
Section 4.14. Liabilities......................................... 49
Section 4.15. Permits, Licenses, etc. ............................ 50
Section 4.16. Taxes............................................... 50
Section 4.17. Issuance of Notes................................... 50
Section 4.18. Condition of Property; Casualties................... 51
Section 4.19. Insurance........................................... 51
Section 4.20. Principal Place of Business......................... 51
Section 4.21. Documents........................................... 51
Section 4.22. The Security Documents.............................. 52
Section 4.23. Federal Regulations................................. 52
Section 4.24. Environmental Condition............................. 52
Section 4.25. Senior Debt......................................... 53
Section 4.26. Ownership of HCLP Limited Partnership Interests..... 54
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Financial Statements and Other Information.......... 54
Section 5.02. Compliance with Laws, Etc. ......................... 58
Section 5.03. Maintenance of Insurance............................ 59
Section 5.04. Preservation of Existence, Etc. .................... 59
Section 5.05. Payment of Taxes, Etc. ............................. 59
Section 5.06. Visitation and Discussion........................... 60
Section 5.07. Maintenance of Property............................. 60
Section 5.08. Collateral.......................................... 60
Section 5.09. Title Assurances.................................... 60
Section 5.10. Tangible Equity..................................... 60
Section 5.11. Lock Box Account.................................... 60
Section 5.12. Further Assurances.................................. 60
Section 5.13. HCLP Related Collateral............................. 61
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Limitation on Sale or Transfer of Property.......... 61
Section 6.02. Restrictions on Dividends, Distributions
and Redemptions................................... 62
Section 6.03. Restrictions on Investments, Loans or Advances by MI or
Guaranteeing Affiliates........................... 6
Section 6.04. Restrictions on Investments, Loans or Advances by the
Borrower and its Subsidiaries..................... 63
Section 6.05. Limitation on Accommodation Obligations............. 64
Section 6.06. Limitation on Merger and Consolidation.............. 65
Section 6.07. Limitation on Liens................................. 65
Section 6.08. Prohibition Upon Payments on the Subordinated Notes. 67
Section 6.09. Operating Losses.................................... 67
Section 6.10. Limitation on Indebtedness.......................... 68
Section 6.11. Amendments.......................................... 68
Section 6.12. Compliance with ERISA............................... 68
Section 6.13. Other Agreements.................................... 68
Section 6.14. Available Cash...................................... 68
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default................................... 69
Section 7.02. Optional Acceleration............................... 72
Section 7.03. Automatic Acceleration.............................. 72
Section 7.04. Cash Collateral..................................... 73
Section 7.05. Non-exclusivity of Remedies......................... 73
ARTICLE VIII
THE AGENT
Section 8.01. Authorization and Action............................ 74
Section 8.02. Agent's Reliance, Etc. ............................. 74
Section 8.03. Societe Generale and Its Affiliates................. 75
Section 8.04. Bank Credit Decision................................ 75
Section 8.05. Indemnification..................................... 75
Section 8.06. Successor Agent..................................... 76
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. ................................... 76
Section 9.02. Notices, Etc. ...................................... 77
Section 9.03. No Waiver; Remedies................................. 77
Section 9.04. Costs and Expenses.................................. 78
Section 9.05. Right of Set-off.................................... 78
Section 9.06. Binding Effect...................................... 78
Section 9.07. Bank Assignments and Participations................. 79
Section 9.08. Indemnification..................................... 81
Section 9.09. Liability of the Agent as Issuing Bank.............. 83
Section 9.10. Survival of Certain Provisions...................... 84
Section 9.11. Execution in Counterparts........................... 84
Section 9.12. Survival of Representations, etc. .................. 84
Section 9.13. Severability........................................ 84
Section 9.14. Release of Guarantors............................... 84
Section 9.15. Joinder by MI....................................... 85
Section 9.16. Disclosures......................................... 85
Section 9.17. Business Loans...................................... 85
Section 9.18. Usury Not Intended.................................. 85
Section 9.19. Governing Law....................................... 86
Section 9.20. Waivers............................................. 87
EXHIBITS:
Exhibit A - Commitments
Exhibit B - Address Information
Exhibit C - Form of Promissory Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Request for Letter of Credit
Exhibit F - Form of Guaranty
Exhibit G - [INTENTIONALLY LEFT BLANK]
Exhibit H - [INTENTIONALLY LEFT BLANK]
Exhibit I - [INTENTIONALLY LEFT BLANK]
Exhibit J - Form of Assignment and Acceptance
Exhibit K-1 - Certificate of the Borrower
Exhibit K-2 - Certificate of MI
Exhibit L - [INTENTIONALLY LEFT BLANK]
Exhibit M - Form of Borrower's Counsel Opinion
Exhibit N - Form of Agent's Counsel Opinion
Exhibit O - Subordination Provisions
Exhibit P - Form of Deposit Account Agreement
Exhibit Q - Assignment and Assumption Agreement
Exhibit R - Form of Lockbox Report
Exhibit S - Form of HCLP Partners Agreement
SCHEDULES:
Schedule 1.01(a) - "B" Contract and Related Documents
Schedule 1.01(b) - Existing Letters of Credit
Schedule 1.01(c) - Existing Litigation
Schedule 1.01(d) - Existing West Panhandle Mortgages
Schedule 1.01(e) - Existing Indebtedness
Schedule 1.01(f) - Supply Contract and Related Documents
Schedule 4.01 - Subsidiaries of the Borrower and of MI
Schedule 4.22(a) - Filing Locations for MI Pledge Agreement
Schedule 4.22(b) - Filing Locations for Mortgage
Schedule 4.24(a) - Existing Environmental Concerns
Schedule 4.24(b) - Designated Environmental Sites
Schedule 6.04 - Existing Loans and Advances
Schedule 6.05 - Existing Accommodation Obligations
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Third Amended and Restated Credit Agreement dated as of November
29, 1994 is among Mesa Inc., a Texas corporation ("MI"), and Mesa Operating
Co., a Delaware corporation ("MOC" being herein sometimes called the
"Borrower" and collectively with MI sometimes called the "Obligors"), the
Banks (as herein defined), and Societe Generale, Southwest Agency, as Agent
for the Banks.
PRELIMINARY STATEMENTS
1. MI is a corporation formed in 1991 which, by transfer and
assignment, owns substantially all of the assets of and assumed
substantially all of the liabilities of Mesa Limited Partnership,
previously a Delaware limited partnership ("MLP"), of which Pickens
Operating Company, a Texas corporation ("POC") and Boone Pickens
were the sole general partners.
2. MOC is a corporation formed in 1994 which, by merger in accordance
with the Agreement of Merger dated as of January 5, 1994 among MI,
MOLP, and certain other affiliates of MI, owns all of the assets of
and assumed all of the liabilities of Mesa Operating Limited
Partnership, a Delaware limited partnership ("MOLP") of which Boone
Pickens and POC were the sole general partners.
3. MLP, MOLP, the Banks and the Agent previously entered into a Credit
Agreement dated as of June 3, 1991 ("Original Credit Agreement")
pursuant to which the Banks committed to make Advances to MOLP on
the terms and conditions set forth therein. The initial Borrowing
under the Original Credit Agreement was in the amount of
$100,000,000 and was utilized to repay a portion of the
indebtedness then outstanding under the Former Credit Agreement (as
defined hereafter).
4. The Banks and the Agent previously consented, to the transfer by
MLP of substantially all of its assets and liabilities to MI, and
to MLP's subsequent dissolution (together with related
transactions), all as more fully described in MLP's and MI's Proxy
Statement/Prospectus dated October 11, 1991, as the same was
supplemented by Supplement dated November 8, 1991, on the condition
that (a) MI assumed all of the obligations of MLP under the
Original Credit Agreement and (b) the parties entered into an
agreement to effect certain amendments to the Original Credit
Agreement.
5. In November, 1991, MI became a party to the Original Credit
Agreement in lieu of MLP and the parties amended and restated the
Original Credit Agreement in the form of the Amended and Restated
Credit Agreement dated as of November 15, 1991 among MI, MOLP, the
Banks and the Agent, as subsequently amended by Amendment No. 1
dated as of June 16, 1992 executed by MI, MOLP, the Required Banks
and the Agent (as so amended, the "First Amended and Restated
Credit Agreement").
6. As of May 1, 1993, the parties amended and restated the Amended and
Restated Credit Agreement in the form of the Second Amended and
Restated Credit Agreement dated as of May 1, 1993 among MI, MOLP,
the Banks, and the Agent, as subsequently amended by the First
Amendment Agreement dated as of March 31, 1994 executed by MI, the
Borrower (as successor to MOLP), the Agent and the Banks (as so
amended, the "Second Amended and Restated Credit Agreement").
7. The Banks and the Agent previously consented to the transfer by
MOLP of all of its assets and liabilities to MOC and to MOLP's
subsequent dissolution all as more fully described in the
Assignment and Assumption Agreement (as defined hereafter), on the
condition that MOC assumed all of the obligations of MOLP under the
Second Amended and Restated Credit Agreement.
8. MI and the Borrower have requested that the Banks (i) increase the
aggregate Commitments to $82,500,000 and (ii) make certain other
amendments to the Second Amended and Restated Credit Agreement.
9. In order to effect such further amendments, the parties have agreed
to restate the Second Amended and Restated Credit Agreement in its
entirety, and this Third Amended and Restated Credit Agreement
constitutes for all purposes an amendment to the Original Credit
Agreement, as amended by the Amended and Restated Credit Agreement
and the Second Amended and Restated Credit Agreement, and not a new
or substitute agreement and each reference to an "Advance" herein
shall include each Advance made heretofore under the Original
Credit Agreement, as amended by the Amended and Restated Credit
Agreement and the Second Amended and Restated Credit Agreement, as
well as each Advance made hereafter under this Third Amended and
Restated Credit Agreement.
In consideration of these premises and the mutual covenants and
agreements contained herein, the Obligors, the Banks, and the Agent agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (unless otherwise
indicated, such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Acceptable Security Interest" in any Property means a Lien (a) which
exists in favor of the Agent for the benefit of the Banks, (b) which is
superior to all other Liens other than Permitted Liens, (c) which secures
the Advances, all other amounts owed by the Obligors under this Agreement
and the other Credit Documents, and all costs, expenses and amounts provided
for in the Security Documents, and (d) which is filed of record or
perfected.
"Accommodation Obligation" means, as to any Person, any obligation,
contingent or otherwise, of such Person entered into for the purpose of
guaranteeing or assuring, or in effect guaranteeing or assuring, any owner
or holder of any Indebtedness of any other Person (the "primary obligor") of
the payment of such Indebtedness or to protect such owner or holder against
loss in respect thereof, whether directly or indirectly, and including,
without duplication and without limiting the generality of the foregoing,
any obligation of such Person, direct or indirect, contingent or otherwise,
for the benefit of any owner or holder of Indebtedness of a primary obligor,
(i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds
for the purchase of) any direct or indirect security therefor, (ii) to
purchase property, securities or services for the purpose of assuring any
owner or holder of such Indebtedness of the payment of such Indebtedness, or
(iii) to maintain working capital, equity capital or other financial
statement condition of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or otherwise to protect the owner or holder
thereof against loss in respect thereof; provided that the term
Accommodation Obligation shall not include endorsements for collection or
deposit, in either case, in the ordinary course of business.
"Adjusted Prime Rate" means, for any day, the fluctuating rate per
annum of interest equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Rate plus one half of one percent (1/2%)
in effect on such day.
"Advance" means an advance by a Bank to the Borrower pursuant to
Article II, and refers to a Prime Rate Advance or a Eurodollar Rate Advance.
"Affiliate" of any Person means any trade or business (whether or not
incorporated) which is a member of a group of which such Person is a member
and which is under common control within the meaning of the regulations
under Section 414 of the Code.
"Agent" means Societe Generale, Southwest Agency in its capacity as an
agent pursuant to Article VIII and any successor agent pursuant to Section
8.06.
"Agreement" means this Third Amended and Restated Credit Agreement
dated as of November 29, 1994 among MI, the Borrower, the Banks, and the
Agent, as it may be amended or supplemented from time to time.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of a Prime Rate Advance, and such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means (i) with respect to any Eurodollar Rate
Advance two and one-half percent (2-1/2%) and (ii) with respect to any Prime
Rate Advance, one half of one percent (1/2%).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of the attached Exhibit J.
"Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement dated as of January 5, 1994 among MOLP, MOC, MI, and
the Agent and the Banks in the form of Exhibit Q attached hereto.
"Authorized Officer" means (i) with respect to MI, the Chairman, the
President, any Vice President, the Treasurer or the Controller of MI, and
(ii) with respect to the Borrower, the Chairman, the President, any Vice
President, the Treasurer or the Controller of the Borrower.
"Available Cash" means, at any date, the sum of (i) the amount of all
cash, cash equivalents and Permitted Investments of MI and its Subsidiaries
other than HCLP at such date and (ii) Unrestricted Cash of HCLP at such
date.
""B" Contract" means that certain Agreement, dated January 3, 1928,
between Canadian River Gas Company, as Seller, and Amarillo Oil Company, as
Buyer, as heretofore supplemented and amended by the instruments listed in
Schedule 1.01(a) hereto, applicable to said parties' interests in (including
but not limited to, the sale and purchase of) natural gas produced from
certain acreage in the West Panhandle Field of Texas that is required to
supply customers located in the City of Amarillo or its environs in the
State of Texas.
"Banks" means each bank listed on the signature pages of this Agreement
and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 9.07.
"Borrower" has the meaning set forth in the Preliminary Statements to
this Agreement.
"Borrower Pledge Agreement" means the Amended and Restated Pledge
Agreement dated as of March 2, 1994, executed by the Borrower and the Agent,
as the same may be modified, amended or supplemented from time to time.
"Borrowing" means a borrowing consisting of Advances of the same Type
made by the Banks on the same day ratably according to their respective
Commitments (subject to the last sentence of Section 2.02(d)).
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and Dallas, Texas and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on by banks in the London interbank market.
"Calendar Quarter" means a three-month period ending on the last day
of any March, June, September or December.
"Capital Lease" means, as to any Person, a lease of any property by
that Person as lessee that is, or should be, in accordance with GAAP
(including Financial Accounting Standards Board Statement No. 13, as amended
or superseded from time to time), recorded as a "capital lease" on the
balance sheet of that Person prepared in accordance with GAAP consistently
applied.
"Cash Collateral Account" means a special noninterest bearing cash
collateral account maintained at the Agent's office pursuant to Section
7.04.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, state and local analogs, and all
rules, regulations, and requirements thereunder in each case as now or
hereafter in effect.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Collateral" means the Collateral (as such term is defined in the MI
Pledge Agreement and the Borrower Pledge Agreement, respectively), and the
Mortgaged Property (as defined in the Mortgage).
"Commitment" means, for any Bank at the time any determination thereof
is to be made, the amount of such Bank's commitment hereunder to extend
credit to the Borrower by means of Advances and Letters of Credit, which,
subject to the provisions hereof, shall be the amount set forth opposite the
name of such Bank under the heading "Amount of Commitment" on Exhibit "A"
attached hereto (or, if such Bank has entered into one or more Assignments
and Acceptances, set forth for such Bank in the Register), as such amount is
reduced or terminated pursuant to Section 2.04 or Article VII, and
"Commitments" means the sum of the Commitments for each Bank.
"Consolidated MI" means MI and its Subsidiaries, taken as a whole.
"Control Percentage" means, with respect to any Person, the percentage
of the outstanding capital stock (or other equivalent interests) of such
Person having ordinary voting power which gives the direct or indirect
holder of such stock (or equivalent interests) the power to elect a majority
of the Board of Directors or other Persons performing similar functions (or,
if there are no such directors or Persons, having general voting power) of
such Person.
"Controlled Group" means any entity which, together with the Borrower,
is considered under common control under Sections 414(b), (c), or (m) of the
Code.
"Credit Documents" means this Agreement, the Notes, the Security
Documents, the Guaranties, the Letter of Credit Documents, the Letters of
Credit, and each other agreement, instrument or document executed by MI or
the Borrower or any Guaranteeing Affiliate at any time in connection with
this Agreement.
"Default" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Default Rate" means for any amount of the Obligations which is not
paid when due, to the fullest extent permitted by law, a rate per annum
equal at all times to the lesser of (a) the Maximum Rate or (b) in the case