EXHIBIT I
[FORM OF NOTE]
PROMISSORY NOTE
$25,000,000 Houston, Texas November 14, 2000
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned ("Maker")
promises to pay to the order of BANK ONE, TEXAS, NATIONAL ASSOCIATION ("Payee"),
at its banking quarters in Houston, Harris County, Texas, the sum of TWENTY-FIVE
MILLION DOLLARS ($25,000,000), or so much thereof as may be advanced against
this Note pursuant to the Credit Agreement dated of even date herewith by and
between Maker and Payee (as amended, restated, or supplemented from time to
time, the "Credit Agreement"), together with interest at the rates and
calculated as provided in the Credit Agreement.
Reference is hereby made to the Credit Agreement for matters governed
thereby, including, without limitation, certain events which will entitle the
holder hereof to accelerate the maturity of all amounts due hereunder.
Capitalized terms used but not defined in this Note shall have the meanings
assigned to such terms in the Credit Agreement.
This Note is issued pursuant to, is the "Note" under, and is payable
as provided in the Credit Agreement. Subject to compliance with applicable
provisions of the Credit Agreement, Maker may at any time pay the full amount or
any part of this Note without the payment of any premium or fee, but such
payment shall not, until this Note is fully paid and satisfied, excuse the
payment as it becomes due of any payment on this Note provided for in the Credit
Agreement.
Without being limited thereto or thereby, this Note is secured by the
Security Instruments.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF
TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW;
PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL
NOT APPLY TO THIS NOTE.
PLAYA MINERALS & ENERGY, INC.
By:
John N. Ehrman
President and Chief Executive Officer
EXHIBIT II
[FORM OF BORROWING REQUEST]
BANK ONE, TEXAS, NATIONAL ASSOCIATION
910 TRAVIS
HOUSTON, TEXAS 77002
Attention: Energy Group, 6th Floor
Re: Credit Agreement dated as of November 14, 2000, by and between PLAYA
MINERALS & ENERGY, INC. and BANK ONE, TEXAS, NATIONAL ASSOCIATION (as
amended, restated, or supplemented from time to time, the "Credit
Agreement")
Ladies and Gentlemen:
Pursuant to the Credit Agreement, the Borrower hereby requests a Loan
on the date and in the amount as follows:
Amount: $
---------------
Requested funding date: , 19
------------- --
The undersigned certifies that [she is the [___________ of the
Borrower, has obtained all consents necessary, and as such [she is authorized to
execute this request on behalf of the Borrower. The undersigned further
certifies, represents, and warrants on behalf of the Borrower that the Borrower
is entitled to receive the requested Loan under the terms and conditions of the
Credit Agreement.
Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Credit Agreement.
Very truly yours,
PLAYA MINERALS & ENERGY, INC.
By:
----------------------------------
John N. Ehrman
President and Chief Executive
Officer
EXHIBIT III
[FORM OF COMPLIANCE CERTIFICATE]
, 19
-------------- --
BANK ONE, TEXAS, NATIONAL ASSOCIATION
910 TRAVIS
HOUSTON, TEXAS 77002
Attention: Energy Group, 6th Floor
Re: Credit Agreement dated as of November 14, 2000, by and between PLAYA
MINERALS & ENERGY, INC. and BANK ONE, TEXAS, NATIONAL ASSOCIATION (as
amended, restated, or supplemented from time to time, the "Credit
Agreement")
Ladies and Gentlemen:
Pursuant to applicable requirements of the Credit Agreement, the
undersigned, as a Responsible Officer of the Borrower, hereby certifies to you
the following information as true and correct as of the date hereof or for the
period indicated, as the case may be:
[1. To the best of the knowledge of the undersigned, no Default or
Event of Default exists as of the date hereof or has occurred since
the date of our previous certification to you, if any.
[1. To the best of the knowledge of the undersigned, the following
Defaults or Events of Default exist as of the date hereof or have
occurred since the date of our previous certification to you, if any,
and the actions set forth below are being taken to remedy such
circumstances:
2. The compliance of the Borrower with the financial covenants of the
Credit Agreement, as of the close of business on , is evidenced by the
following: --------------------
(a) 6.13 Current Ratio. Permit the ratio of Current Assets to
Current Liabilities to be less than 1.00 to 1.00 at any
time.
Actual
(b) 6.14 Debt Coverage Ratio. Permit, as of the close of any
fiscal quarter, the ratio of (a) EBITDA to (b) the sum of
monthly Borrowing Base reductions plus interest to be less
than 1.0 to 1.0.
Actual
3. No Material Adverse Effect has occurred since the date of
the Financial Statements dated as of.
Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Credit Agreement.
Very truly yours,
PLAYA MINERALS & ENERGY, INC.
By:
------------------------------
John N. Ehrman
President and Chief Executive
Officer
EXHIBIT IV
[FORM OF OPINION OF COUNSEL]
[Closing Date]
BANK ONE, TEXAS, NATIONAL ASSOCIATION
910 TRAVIS
HOUSTON, TEXAS 77002
Attention: Energy Group, 6th Floor
Re: Credit Agreement dated as of November 14, 2000, by and between PLAYA
MINERALS & ENERGY, INC. and BANK ONE, TEXAS, NATIONAL ASSOCIATION (as
amended, restated, or supplemented from time to time, the "Credit
Agreement")
Ladies and Gentlemen:
We have acted as counsel to PLAYA MINERALS & ENERGY, INC. (the
"Borrower") in connection with the transactions contemplated in the Credit
Agreement. This Opinion is delivered pursuant to Section 3.1(m) of the Credit
Agreement, and the Lender is hereby authorized to rely upon this Opinion in
connection with the transactions contemplated in the Credit Agreement. Each
capitalized term used but not defined herein shall have the meaning assigned to
such term in the Credit Agreement.
In our representation of the Borrower, we have examined an executed
counterpart of each of the following (the "Loan Documents"):
(a) the Credit Agreement;
(b) the Note;
(c) Mortgage, Deed of Trust, Indenture, Security Agreement,
Assignment of Production, and Financing Statement dated of
even date herewith from the Borrower in favor of the Lender
(the "Mortgage"); and
(d) Financing Statements from the Borrower, as debtor,
constituent to the Mortgage (the "Financing Statement").
We have also examined the originals, or copies certified to our
satisfaction, of such other records of the Borrower, certificates of public
officials and officers of the Borrower agreements, instruments, and documents as
we have deemed necessary as a basis for the opinions hereinafter expressed.
In making such examinations, we have, with your permission, assumed:
(a) the genuineness of all signatures to the Loan Documents
other than those of the Borrower;
(b) the authenticity of all documents submitted to us as
originals and the conformity with the originals of all
documents submitted to us as copies;
(c) the Lender is authorized and has the power to enter into and
perform its obligations under the Credit Agreement;
(d) the due authorization, execution, and delivery of all Loan
Documents by each party thereto other than the Borrower; and
(e) the Borrower has title to all Property covered or affected
by the Mortgage.
Based upon the foregoing and subject to the qualifications set forth
herein, we are of the opinion that:
1. The Borrower is a corporation duly organized, legally
existing, and in good standing under the laws of its state of
incorporation and is duly qualified as a foreign corporation and is in
good standing in all jurisdictions wherein the ownership of its
Property or the operation of its business necessitates same.
2. The execution and delivery by the Borrower of the Credit
Agreement and the borrowings thereunder, the execution and delivery by
the Borrower of the other Loan Documents to which the Borrower is a
party, and the payment and performance of all Obligations of the
Borrower thereunder are within the power of the Borrower, have been
duly authorized by all necessary corporate action, and do not (a)
require the consent of any Governmental Authority, (b) contravene or
conflict with any Requirement of Law, (c) to our knowledge after due
inquiry, contravene or conflict with any indenture, instrument, or
other agreement to which the Borrower is a party or by which any
Property of the Borrower may be presently bound or encumbered, or (d)
result in or require the creation or imposition of any Lien upon any
Property of the Borrower other than as contemplated by the Loan
Documents.
3. The Loan Documents to which the Borrower is a party
constitute legal, valid, and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective
terms.
4. The forms of the Mortgage and the Financing Statement and
the description of the Mortgaged Property (as such term is defined in
the Mortgage and so used herein) situated in the State of Texas (the
"State") satisfy all applicable Requirements of Law of the State and
are legally sufficient under the laws of the State to enable the
Lender to realize the practical benefits purported to be afforded by
the Mortgage.
5. The Mortgage creates a valid lien upon and security
interest in all Mortgaged Property situated in the State to secure the
Indebtedness (as such term is defined in the Mortgage and so used
herein).
6. The Mortgage and the Financing Statement are in
satisfactory form for filing and recording in the offices described
below.
7. The filing and/or recording, as the case may be, of (a)
the Mortgage in the office of the county clerk of each county in the
State in which any portion of the Mortgaged Property is located, and
as a financing statement and utility security instrument in the office
of the Secretary of State of the State, and (b) the Financing
Statement in the Uniform Commercial Code records in each county in the
State in which any portion of the Mortgaged Property is located are
the only recordings or filings in the State necessary to perfect the
liens and security interests in the Mortgaged Property created by the
Mortgage or to permit the Lender to enforce in the State its rights
under the Mortgage. No subsequent filing, re-filing, recording, or
re-recording will be required in the State in order to continue the
perfection of the liens and security interests created by the Mortgage
except that (a) a continuation statement must be filed with respect to
the Mortgage filed as a financing statement in the office of the
Secretary of State of the State and with respect to the Financing
Statement in the Uniform Commercial Code records in each county in the
State in which any portion of the Mortgaged Property is located, each
within six months prior to the expiration of five years from the date
of the relevant initial financing statement filing, (b) a subsequent
continuation statement must be filed within six months prior to the
expiration of each subsequent five-year period from the date of each
initial financing statement filing, and (c) amendments or supplements
to the Mortgage filed as a financing statement and the Financing
Statement and/or additional financing statements may be required to be
filed in the event of a change in the name, identity, or structure of
the Borrower or in the event the financing statement filing otherwise
becomes inaccurate or incomplete.
8. To our knowledge after due inquiry, except as disclosed
in Exhibit to the Credit Agreement, no litigation or other action of
any nature affecting the Borrower is pending before any Governmental
Authority or threatened against the Borrower. To our knowledge after
due inquiry, no unusual or unduly burdensome restriction, restraint,
or hazard exists by contract, Requirement of Law, or otherwise
relative to the business or operations of the Borrower or the
ownership and operation of any Properties of the Borrower other than
such as relate generally to Persons engaged in business activities
similar to those conducted by the Borrower.
9. No authorization, consent, approval, exemption,
franchise, permit or license of, or filing (other than filing of
Security Instruments in appropriate filing offices) with, any
Governmental Authority or any other Person is required to authorize or
is otherwise required in connection with the valid execution and
delivery by the Borrower of the Loan Documents or any instrument
contemplated thereby, or the payment performance by the Borrower of
the Obligations.
10. No transaction contemplated by the Loan Documents is in
violation of any regulations promulgated by the Board of Governors of
the Federal Reserve System, including, without limitation, Regulations
G, T, U, or X.
11. The Borrower is not, nor is the Borrower directly or
indirectly controlled by or acting on behalf of any Person which is,
an "investment company" or an "affiliated person" of an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
12. The Borrower is not a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
The opinions expressed herein are subject to the following
qualifications and limitations:
A. We are licensed to practice law only in the State and other
jurisdictions whose laws are not applicable to the opinions
expressed herein; accordingly, the foregoing opinions are
limited solely to the laws of the State, applicable United
States federal law, and the corporation laws of the State of
[_______________.
B. The validity, binding effect, and enforceability of the Loan
Documents may be limited or affected by bankruptcy,
insolvency, moratorium, reorganization, or other similar
laws affecting rights of creditors generally, including,
without limitation, statutes or rules of law which limit the
effect of waivers of rights by a debtor or grantor;
provided, however, that the limitations and other effects of
such statutes or rules of law upon the validity and binding
effect of the Loan Documents should not differ materially
from the limitations and other effects of such statutes or
rules of law upon the validity and binding effect of credit
agreements, promissory notes, and security instruments
generally.
C. The enforceability of the respective obligations of the
Borrower under the Loan Documents is subject to general
principles of equity (whether such enforceability is
considered in a suit in equity or at law).
This Opinion is furnished by us solely for the benefit of the Lender
in connection with the transactions contemplated by the Loan Documents and is
not to be quoted in whole or in part or otherwise referred to or disclosed in
any other transaction.
Very truly yours,
EXHIBIT V
DISCLOSURES
Section Liabilities
None
Litigation
None
Section Environmental Matters
None
Section Refunds
None
Section Gas Contracts
None
Section Casualties
None
Section Subsidiaries
None