CREDIT AGREEMENT
DATED AS OF JANUARY 23, 2001
AMONG
NEWFIELD EXPLORATION COMPANY
AS THE COMPANY
AND
THE CHASE MANHATTAN BANK
AS AGENT
AND
THE BANKS SIGNATORY HERETO
CO-ARRANGERS AND JOINT BOOK RUNNERS:
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
SYNDICATION AGENT:
BANK OF AMERICA, NATIONAL ASSOCIATION
DOCUMENTATION AGENT:
BANK OF MONTREAL
SENIOR MANAGING AGENTS:
CREDIT LYONNAIS NEW YORK BRANCH
FIRST UNION NATIONAL BANK
BANK ONE, NA
FLEET NATIONAL BANK
TABLE OF CONTENTS
Page
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Section 1. Definitions and Accounting Matters....................................................................1
1.01 Terms Defined Above................................................................................1
1.02 Certain Defined Terms..............................................................................1
1.03 Accounting Terms and Determinations...............................................................14
Section 2. Commitments..........................................................................................15
2.01 Loans and Letters of Credit.......................................................................15
2.02 Borrowings, Continuations and Conversions; Letters of Credit......................................16
2.03 Changes of Commitments............................................................................17
2.04 Commitment Fee and Other Fees.....................................................................18
2.05 Several Obligations...............................................................................19
2.06 Notes.............................................................................................19
2.07 Prepayments.......................................................................................20
2.08 Borrowing Base....................................................................................20
2.09 Assumption of Risks...............................................................................21
2.10 Obligation to Reimburse and to Prepay.............................................................22
2.11 Lending Offices...................................................................................23
Section 3. Payments of Principal and Interest...................................................................23
3.01 Repayment of Loans................................................................................23
3.02 Interest..........................................................................................23
3.03 Prior Credit Agreement............................................................................24
Section 4. Payments; Pro Rata Treatment; Computations; Etc......................................................24
4.01 Payments..........................................................................................24
4.02 Pro Rata Treatment................................................................................24
4.03 Computations......................................................................................25
4.04 Non-receipt of Funds by the Agent.................................................................25
4.05 Sharing of Payments, Etc..........................................................................25
4.06 Taxes.............................................................................................26
Section 5. Capital Adequacy.....................................................................................28
5.01 Additional Costs..................................................................................28
5.02 Limitation on Eurodollar Loans....................................................................30
5.03 Illegality........................................................................................30
5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03..........................................30
5.05 Compensation......................................................................................30
5.06 Replacement of Banks..............................................................................31
Section 6. Conditions Precedent.................................................................................31
6.01 Initial Funding...................................................................................31
6.02 Initial and Subsequent Loans and Letters of Credit...............................................33
6.03 Conditions Relating to Letters of Credit..........................................................33
Section 7. Representations and Warranties.......................................................................33
7.01 Corporate Existence...............................................................................33
7.02 Financial Condition...............................................................................34
7.03 Litigation........................................................................................34
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7.04 No Breach.........................................................................................34
7.05 Corporate Action..................................................................................34
7.06 Approvals.........................................................................................34
7.07 Use of Loans......................................................................................35
7.08 ERISA.............................................................................................35
7.09 Taxes.............................................................................................36
7.10 Titles, etc.......................................................................................36
7.11 No Material Misstatements.........................................................................37
7.12 Investment Company Act............................................................................37
7.13 Public Utility Holding Company Act................................................................37
7.14 Subsidiaries and Partnerships.....................................................................37
7.15 Location of Business and Offices..................................................................37
7.16 Environmental Matters.............................................................................37
7.17 Defaults..........................................................................................38
7.18 Compliance with the Law...........................................................................39
7.19 Insurance.........................................................................................39
7.20 Fiscal Periods....................................................................................39
Section 8. Affirmative Covenants................................................................................39
8.01 Financial Statements..............................................................................39
8.02 Litigation........................................................................................41
8.03 Maintenance, Etc..................................................................................41
8.04 Engineering Reports...............................................................................42
8.05 Further Assurances................................................................................43
8.06 Performance of Obligations........................................................................43
8.07 ERISA Information and Compliance..................................................................43
8.08 Environmental Matters.............................................................................44
8.09 Guarantees........................................................................................44
Section 9. Negative Covenants...................................................................................44
9.01 Debt..............................................................................................44
9.02 Liens.............................................................................................46
9.03 Investments, Loans and Advances...................................................................46
9.04 Dividends, Distributions and Redemptions..........................................................48
9.05 [reserved].....................................................................................48
9.06 Nature of Business................................................................................49
9.07 Limitation on Sale Leaseback Transactions.........................................................49
9.08 Mergers, Etc......................................................................................49
9.09 Proceeds of Notes.................................................................................49
9.10 ERISA Compliance..................................................................................49
9.11 Sale or Discount of Receivables...................................................................50
9.12 Working Capital Ratio.............................................................................50
9.13 Funded Debt to EBITDA Ratio.......................................................................50
9.14 Net Worth.........................................................................................50
9.15 Sale of Oil and Gas Properties....................................................................50
9.16 Environmental Matters.............................................................................51
9.17 Transactions with Affiliates......................................................................51
9.18 Subsidiaries and Partnerships.....................................................................51
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9.19 Hydrocarbon Sales Contract........................................................................51
9.20 Negative Pledge Agreements........................................................................51
9.21 Senior Unsecured Notes............................................................................51
9.22 QUIPS.............................................................................................51
9.23 Subordinated Debt.................................................................................52
9.24 Fiscal Periods....................................................................................52
9.25 NFXD..............................................................................................52
Section 10. Events of Default; Remedies.........................................................................52
10.01 Events of Default................................................................................52
10.02 Remedies.........................................................................................54
Section 11. The Agent...........................................................................................54
11.01 Appointment, Powers and Immunities...............................................................54
11.02 Reliance by Agent................................................................................55
11.03 Defaults.........................................................................................55
11.04 Rights as a Bank.................................................................................55
11.05 INDEMNIFICATION..................................................................................55
11.06 Non-Reliance on Agent and other Banks............................................................56
11.07 Action by Agent..................................................................................56
11.08 Resignation or Removal of Agent..................................................................56
Section 12. Miscellaneous.......................................................................................57
12.01 Waiver...........................................................................................57
12.02 Notices..........................................................................................57
12.03 Payment of Expenses, Indemnities, etc............................................................57
12.04 Amendments, Etc..................................................................................59
12.05 Successors and Assigns...........................................................................60
12.06 Assignments and Participations...................................................................60
12.07 Invalidity.......................................................................................61
12.08 Counterparts.....................................................................................61
12.09 References.......................................................................................61
12.10 Survival.........................................................................................61
12.11 Captions.........................................................................................61
12.12 NO ORAL AGREEMENTS...............................................................................61
12.13 GOVERNING LAW....................................................................................62
12.14 Interest.........................................................................................63
12.15 Confidentiality..................................................................................64
12.16 Copies...........................................................................................64
Annex I - Maximum Credit Amounts
Annex II - Pricing
Annex III - Pricing
Exhibit A - Form of Note
Exhibit B - Form of Borrowing, Continuation or Conversion Request Exhibit C -
Form of Compliance Certificate Exhibit D - Form of Opinion of Company's Counsel
Exhibit E - Form of Assignment Agreement Exhibit F - Form of Acceptance
Agreement
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Schedule 7.02 - Liabilities Schedule 7.03 - Litigation Schedule 7.10 - Titles,
etc. Schedule 7.14 - Subsidiaries and Partnerships Schedule 7.16 -
Environmental Matters Schedule 7.19 - Insurance Schedule 9.01(b) - Debt
Schedule 9.01(h) - Certain Subsidiaries Schedule 9.01(k) - Certain Properties
Schedule 9.03 - Investments, Loans and Advances
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CREDIT AGREEMENT dated as of January 23, 2001 among: NEWFIELD
EXPLORATION COMPANY, a corporation duly organized and validly existing under
the laws of the State of Delaware (the "Company"); each of the banks that is or
becomes a party hereto as provided in Section 12.06 or Section 5.06 and their
successors and assigns (individually, a "Bank" and, collectively, the "Banks");
and THE CHASE MANHATTAN BANK, as agent for the Banks (in such capacity,
together with its successors in such capacity, the "Agent"). In consideration
of the mutual covenants and agreements herein contained and of the loans,
extensions of credit and commitments hereinafter referred to, the parties
hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Terms Defined Above. As used in this Agreement, the terms
"Agent", "Bank", "Banks" and "Company" shall have the meanings indicated above.
1.02 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1 or
in other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Acquired Entity" means Lariat Petroleum, Inc., a Delaware
corporation.
"Additional Costs" shall have the meaning assigned to that
term in Section 5.01(a).
"Adjusted Consolidated Net Worth" shall mean the consolidated
net worth of the Company and its Consolidated Subsidiaries (other than
Special Purpose Subsidiaries), determined in accordance with GAAP,
except that in determining Adjusted Consolidated Net Worth, such
consolidated net worth shall be adjusted to exclude the after-tax
effects of each of the following matters: (i) write-downs after
September 30, 2000 under FASB Statement No. 19, (ii) non-cash
write-downs of assets after September 30, 2000 under FASB Statement
No. 121, and (iii) non-cash gains, losses or adjustments under FASB
Statement No. 133 as a result of changes in the fair value of
derivatives.
"Affected Loans" shall have the meaning assigned to that term
in Section 5.04.
"Affiliate" of any Person shall mean (i) any Person directly
or indirectly controlled by, controlling or under common control with
such first Person, (ii) any director or officer of such first Person
or of any Person referred to in clause (i) above and (iii) if any
Person in clause (i) above is an individual, any member of the
immediate family (including parents, spouse and children) 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. For purposes of
this definition, any Person which owns directly or indirectly 10% or
more of the securities having ordinary voting power for the election
of directors or other governing body of a corporation or 10% or more
of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed
to "control" (including, with its correlative meanings, "controlled
by" and "under common control with") such corporation or other Person.
"Aggregate LC Exposure" shall mean at any time the aggregate
face amount of all undrawn and uncancelled Letters of Credit and the
aggregate of all amounts drawn under all Letters of Credit and not yet
reimbursed.
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"Aggregate Commitments" at any time shall equal the amount
calculated in accordance with Section 2.03 hereof.
"Agreement" shall mean this Credit Agreement, as the same may
from time to time be amended, modified or supplemented.
"Aggregate Maximum Credit Amounts" at any time shall equal
$300,000,000, as the same may be reduced pursuant to Section 2.03(b)
or increased pursuant to Section 2.03(d).
"Applicable EBITDA Period" means each period after November
14, 2000 commencing on and including the 46th day of each calendar
quarter and ending on and including the 45th day of the next calendar
quarter, with the first such period commencing on November 15, 2000.
"Applicable Funded Debt to EBITDA Ratio" shall mean, for any
day during an Applicable EBITDA Period, the Funded Debt to EBITDA
Ratio as of the end of the fiscal quarter of the Company most recently
ended prior to the first day of such Applicable EBITDA Period;
provided that the Applicable Funded Debt to EBITDA Ratio for any day
prior to February 15, 2001, shall be deemed to be less than 1.75 to
1.00.
"Applicable Lending Office" shall mean, for each Bank and for
each Type of Loan, the lending office of such Bank (or an Affiliate of
such Bank) designated for such Type of Loan on the signature pages
hereof or such other offices of such Bank (or of an Affiliate of such
Bank) as such Bank may from time to time specify to the Agent and the
Company as the office by which its Loans of such Type are to be made
and maintained.
"Applicable Margin" shall mean, for commitment fees under
Section 2.04(a), Base Rate Loans or Eurodollar Loans for any day, the
applicable rate per annum specified in Annex II or Annex III, which is
based on the Applicable Funded Debt to EBITDA Ratio for such day and
the ratings by Moody's and S&P of the senior unsecured long-term debt
of the Company in effect on such day. For any day on which the
Applicable Funded Debt to EBITDA Ratio is equal to or less than 1.75
to 1.00 Annex II shall apply, and for any day on which the Applicable
Funded to EBITDA Ratio is greater than 1.75 to 1.00 Annex III shall
apply.
"Assignment" shall have the meaning assigned such term in
Section 12.06(b).
"Attributable Obligation" shall mean, with respect to any
Sale Leaseback Transaction as of any particular time, the present
value at such time discounted at the rate of interest implicit in the
terms of the lease of the obligations of the lessee under such lease
for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended or may,
at the option of the Company or any Subsidiary, be extended).
"Base Rate" shall mean, with respect to any Base Rate Loan,
for any day, the higher of (a) the highest Federal Funds Rate for any
such day plus 1/2 of 1% or (b) the Prime Rate for such day. Each
change in any interest rate provided for herein based upon the Base
Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at
rates based upon the Base Rate.
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"Borrowing Base" in effect from time to time shall equal the
excess, if any, of the Calculated Borrowing Base over the aggregate
principal then outstanding on all Senior Unsecured Notes.
"Borrowing Base Notice" shall mean a written notice sent to
the Company by the Agent notifying the Company of the Calculated
Borrowing Base and the Borrowing Base determined by the Banks for the
upcoming Borrowing Base Period.
"Borrowing Base Period" shall mean (a) initially, the period
from the Closing Date through April 30, 2001; and (b) thereafter, each
six month period beginning on May 1 or November 1 of each year.
"Business Day" shall mean any day other than a day on which
commercial banks are authorized or required to close in New York, New
York and, where such term relates to a borrowing or continuation of, a
payment or prepayment of principal of or interest on, or a conversion
of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Company with respect to any such borrowing or continuation,
payment, prepayment, conversion or Interest Period, any day which is
also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"Calculated Borrowing Base" shall mean at any time an amount
equal to the amount determined in accordance with Section 2.08.
"Change of Control" shall mean (i) any Person or two or more
Persons acting in concert shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the SEC under the Securities
Exchange Act of 1934), directly or indirectly, of securities of the
Company (or other securities convertible into such securities)
representing 30% or more of the combined voting power of all
securities of the Company entitled to vote in the election of
directors, other than securities having such power only by reason of
the happening of a contingency, or (ii) during any period of 12
consecutive months, commencing before, on or after the date of this
Agreement, individuals who at the beginning of such 12-month period
were directors of the Company or who were elected or nominated for
election by individuals who at the beginning of such period were such
directors or by individuals elected or nominated in accordance with
this clause (ii) shall cease for any reason to constitute a majority
of the board of directors of the Company.
"Chase" shall mean The Chase Manhattan Bank.
"Closing Date" shall mean January 23, 2001.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commitment" shall mean for any Bank its obligation to make
Loans up to the lesser of the Bank's Maximum Credit Amount or the
Bank's Percentage Share of the then effective Aggregate Commitments
and to participate in the Letters of Credit as provided in Section
2.01(b).
"Company Report" shall have the meaning assigned to that term
in Section 8.04(a).
"Consolidated Subsidiaries" shall mean each Subsidiary of the
Company (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been)
consolidated with the financial statements of the Company in
accordance with GAAP.
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"Debt" shall mean, for any Person the sum of the following
(without duplication): (a) all obligations of such Person for borrowed
money or evidenced by bonds, debentures, notes or other similar
instruments or mandatory redeemable preferred stock with maturities
before January 23, 2008; (b) all obligations of such Person (whether
contingent or otherwise) with respect to bankers' acceptances, letters
of credit, surety or other bonds and similar instruments; (c) all
obligations of such Person to pay the deferred purchase price of
Property or services; (d) all obligations under leases which shall
have been, or should have been, in accordance with GAAP, recorded as
capital leases in respect of which such Person is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against
loss; (e) all Debt and other obligations of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed by
such Person, but excluding the pledge of the shares or equity in any
Special Purpose Subsidiary; (f) all Debt and other obligations of
others guaranteed by such Person; (g) all obligations or undertakings
of such Person to maintain or cause to be maintained the financial
position or covenants of other Persons other than obligations to
perform certain administrative functions which are not of a material
financial nature; (h) all obligations or undertakings of such Person
with respect to payments received in consideration of oil, gas, or
other minerals yet to be acquired or produced at the time of payment
(including without limitation obligations under "take-or-pay"
contracts to deliver gas in return for payments already received and
the undischarged balance of any production payment created by such
Person or for the creation of which such Person directly or indirectly
received payment) or with respect to other obligations to deliver
goods or services in consideration of advance payments therefor but
excluding gas imbalances arising in the ordinary course of business
between joint working interest owners of production; and (i)
obligations arising under futures contracts, swap contracts or similar
hedging agreements.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"EBITDA" shall mean, for any period, the sum of (i) the
consolidated net income (or loss) of the Company and its Consolidated
Subsidiaries (other than Special Purpose Subsidiaries) for such period
determined in accordance with GAAP plus (ii) to the extent included in
the determination of such net income (or loss), the consolidated
charges for such period for interest, depreciation, depletion and
amortization including without duplication interest on the QUIPS
Debentures outstanding on the Closing Date, plus (or, if there is a
benefit from income taxes, minus) (iii) to the extent included in the
determination of such net income, the amount of the provision for or
benefit from income taxes; provided that in determining such
consolidated net income and such consolidated charges, there shall be
excluded therefrom (to the extent otherwise included therein) (a) the
net income (but not loss) of, and charges for interest, depreciation,
depletion and amortization of, any Person which is subject to any
restriction, contractual or otherwise, which prevents the payment of
dividends or the making of dividends or distributions on equity
interests of such Person to the extent of such restrictions, (b)
pre-tax gains or losses on the sale, transfer or other disposition of
any property by the Company or its Subsidiaries (other than sales,
transfers and other dispositions in the ordinary course of business),
(c) all extraordinary gains and extraordinary losses, prior to
applicable income taxes, and (d) any item constituting the cumulative
effect of a change in accounting principles, prior to applicable
income taxes; provided further that in determining EBITDA, there shall
be disregarded the after-tax effects of each of the following matters:
(i) write-downs after September 30, 2000 under FASB Statement No. 19,
(ii) non-cash write-downs of assets after September 30, 2000 under
FASB Statement No. 121, and (iii) non-cash gains, losses or
adjustments under FASB Statement
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No. 133; provided further that for purposes of Section 9.13 only, if
during such period the Company or any of its Consolidated Subsidiaries
(other than Special Purpose Subsidiaries) acquires or disposes of any
Person (or any equity interest in any Person other than the Company)
or all or substantially all of the assets of any Person, the EBITDA
attributable to such assets (or an amount equal to the percentage of
ownership of the Company or Consolidated Subsidiary, as the case may
be, in such Person so acquired or disposed times the EBITDA of such
Person) for such period determined on a pro forma basis (which
determination, in each case, shall be subject to approval of the
Agent, not to be unreasonably withheld) shall be included (in the case
of an acquisition) or excluded (in the case of a disposition) as
EBITDA for such period; except that during the portion of such period
that follows such acquisition or disposition, the computation in
respect of the EBITDA of such Person or such assets, as the case may
be, shall be made on the basis of actual (rather than pro forma)
results; provided further that (a) EBITDA for the quarter ended March
31, 2000 shall be deemed to be $80,000,000, (b) EBITDA for the quarter
ended June 30, 2000 shall be deemed to be $107,000,000 and (c) EBITDA
for the quarter ended September 30, 2000 shall be deemed to be
$134,000,000.
"Engineering Reports" shall have the meaning assigned to that
term in Section 2.08(b).
"Environmental Laws" shall mean any and all Governmental
Requirements pertaining to health or the environment in effect in any
and all jurisdictions in which the Company or any Subsidiary is
conducting or at any time has conducted business, or where any
Property of the Company or any Subsidiary is located, including
without limitation, the Oil Pollution Act of 1990 ("OPA"), the Clean
Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation
and Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water
Act, as amended, the Toxic Substances Control Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection laws. The term "oil" shall
have the meaning specified in OPA, the terms "hazardous substance" and
"release" (or "threatened release") have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal" (or "disposed")
have the meanings specified in RCRA; provided, however, that (i) in
the event either OPA, CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment, and (ii) to the
extent the laws of the state in which any Property of the Company or
any Subsidiary is located establish a meaning for "oil," "hazardous
substance," "release," "solid waste" or "disposal" which is broader
than that specified in either OPA, CERCLA or RCRA, such broader
meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which together with the Company would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder, (ii)
the withdrawal of the Company, any Subsidiary or any ERISA Affiliate
from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, (iii) the filing
of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, (iv) the
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institution of proceedings to terminate a Plan by the PBGC or (v) any
other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan.
"Eurodollar Loans" shall mean Loans the interest rates on
which are determined on the basis of rates referred to in the
definition of "Fixed Eurodollar Rate" in this Section 1.02.
"Event of Default" shall have the meaning assigned to that
term in Section 10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments
or other governmental charges or levies not yet due or which are being
contested in good faith by appropriate action and for which adequate
reserves have been maintained; (ii) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age
pension or public liability obligations not yet due or which are being
contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP; (iii)
operator's, vendors', carriers', warehousemen's, repairmen's,
mechanics', workmen's, materialmen's, construction or other like Liens
arising by operation of law in the ordinary course of business or
incident to the exploration, development, operation and maintenance of
Oil and Gas Properties or statutory landlord's liens, each of which is
in respect of obligations that have not been outstanding more than 90
days or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been maintained in
accordance with GAAP; (iv) any Liens reserved in leases or farmout
agreements for rent or royalties and for compliance with the terms of
the farmout agreements or leases in the case of leasehold estates, to
the extent that any such Lien referred to in this clause 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 materially
impair the value of such Property subject thereto; (v) encumbrances
(other than to secure the payment of borrowed money or the deferred
purchase price of Property or services), easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations
in any rights of way or other Property of the Company for the purpose
of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil, coal or other minerals
or timber, and other like purposes, or for the joint or common use of
real estate, rights of way, facilities and equipment which in the
aggregate do not have a Material Adverse Effect; (vi) defects,
irregularities, zoning restrictions and deficiencies in title of any
Property which in the aggregate do not have a Material Adverse Effect;
and (vii) deposits not exceeding $5,000,000 in the aggregate
outstanding at any one time to secure the performance of Governmental
Requirements, bids, trade contracts, leases, statutory obligations and
other obligations of a like nature incurred in the ordinary course of
business.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with a member of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day,
provided that (i) if the date for which such rate is to be determined
is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if such
rate is not so published for any day, the Federal Funds Rate for such
day shall be the average rate charged to Chase on such day on such
transactions as determined by the Agent.
"Fee Letters" shall mean (i) the letter agreement from Chase
and J.P. Morgan, a division of Chase Securities Inc., to the Company
dated January 16, 2001 concerning certain fees in
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connection with this Agreement and any agreements or instruments
executed in connection therewith, as the same may be amended or
replaced from time to time (the "Chase Fee Letter") (ii) the letter
agreement from Bank of America, N.A. and Banc of America Securities
LLC to the Company dated January 16, 2001 concerning certain fees in
connection with this Agreement and any agreements or instruments
executed in connection therewith, as the same may be amended or
replaced from time to time (the "BOA Fee Letter") and (iii) the letter
agreement from J.P. Morgan, a division of Chase Securities Inc., Bank
of America Securities LLC and the Banks listed on the signature pages
hereto to the Company dated January 16, 2001 concerning certain fees
in connection with this Agreement and any agreements or instruments
executed in connection therewith, as the same may be amended or
replaced from time to time (the "Banks' Fee Letter").
"Financial Statements" shall mean the financial statement or
statements of the Company described or referred to in Section 7.02.
"Fixed Eurodollar Rate" shall mean, for the Interest Period
for any Eurodollar Loan, the rate appearing on Page 3750 of the Dow
Jones Markets (Telerate) Service (or on any successor or substitute
page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for the offering of
Dollar deposits with a maturity comparable to such Interest Period. In
the event that such rate is not available at such time for any reason,
then the Fixed Eurodollar Rate for such Interest Period shall be with
respect to any Eurodollar Loan for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%)
quoted by Chase at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two Business Days prior to the first day of
such Interest Period for such Loan for the offering by Chase to
leading banks in the London 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 be made by the Banks
for such Interest Period.
"Funded Debt" means Debt of the Company and its Consolidated
Subsidiaries (other than Special Purpose Subsidiaries) of the types
referred to in clause (a), (d) or (to the extent relating to Debt of
any other Person of the type referred to in clause (a) or (d) of the
definition herein of Debt) (e), (f) or (g) of the definition herein of
Debt.
"Funded Debt to EBITDA Ratio" shall mean, as of any day, the
ratio of (i) the aggregate principal amount of Funded Debt outstanding
on such day to (ii) EBITDA for the four consecutive fiscal quarters of
the Company most recently ended prior to such day (or, if such day is
the last day of a fiscal quarter of the Company, for the four
consecutive fiscal quarters of the Company ended on such day).
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Governmental Authority" shall include the country, the state,
county, city and political subdivisions in which any Person or such
Person's Property is located or which exercises valid jurisdiction over
any such Person or such Person's Property, and any court, agency,
department, commission, board, bureau or instrumentality of any of them
including monetary authorities which exercises valid jurisdiction over
any such Person or such Person's Property. Unless
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otherwise specified, all references to Governmental Authority herein
shall mean a Governmental Authority having jurisdiction over, where
applicable, the Company or any of its Properties or the Agent, any
Bank or any Applicable Lending Office.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or
other directive or requirement (whether or not having the force of
law), including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls,
of any Governmental Authority.
"Highest Lawful Rate" shall mean, with respect to each Bank,
the maximum nonusurious interest rate, if any, that at any time or
from time to time may be contracted for, taken, reserved, charged or
received on the Notes or on other Indebtedness under laws applicable
to such Bank which are presently in effect or, to the extent allowed
by law, under such applicable laws which may hereafter be in effect
and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles,
interests and estates now or hereafter acquired in and to oil and gas
leases, oil, gas and mineral leases, or other liquid or gaseous
hydrocarbon leases, mineral fee interests, overriding royalty and
royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons and all products refined or
separated therefrom.
"Indebtedness" shall mean any and all amounts owing or to be
owing by the Company to the Banks (including the Loans and the
Aggregate LC Exposure) in connection with the Notes or any Loan
Document and all renewals, extensions and/or rearrangements of any of
the above.
"Indemnified Parties" shall have the meaning assigned to that
term in Section 12.03(b).
"Indemnity Matters" shall mean any and all actions, suits,
proceedings (including any investigations, litigation or inquiries),
claims, demands and causes of action made or threatened against a
Person and, in connection therewith, all losses, liabilities, damages
(including, without limitation, consequential damages) or reasonable
costs and expenses of any kind or nature whatsoever incurred by such
Person whether caused by the sole or concurrent negligence of such
Person seeking indemnification.
"Indenture" shall mean the Indenture dated October 15, 1997
between the Company and First Union National Bank, as trustee,
pursuant to which the Senior Unsecured Notes have been issued.
"Initial Funding" shall mean the funding of the initial Loans
or issuance of the initial Letter of Credit pursuant to Section 6.01
hereof.
"Interest Period" shall mean with respect to any Eurodollar
Loan, the period commencing on the date such Eurodollar Loan is made
and ending on the fourteenth day thereafter (subject to availability)
("Irregular Interest Period") or on the numerically corresponding day
in the first, second, third or sixth calendar month thereafter, as the
Company may select as provided in
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Section 2.02 or such other period as may be requested by the Company
and agreed to by all Banks (also an "Irregular Interest Period")),
except that each Interest Period (other than an Irregular Interest
Period) which commences on the last Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may
commence before and end after the scheduled maturity of the Notes;
(ii) no Interest Period for any Eurodollar Loan may end after the
Maturity Date; (iii) 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, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day
(other than an Irregular Interest Period)); (iv) no Interest Period
(other than an Irregular Interest Period) shall have a duration of
less than one month and, if the Interest Period for any Eurodollar
Loans would otherwise be for a shorter period (other than an Irregular
Interest Period), such Loans shall not be available hereunder; and (v)
any Interest Period commencing on the Closing Date shall end on
January 31, 2001.
"Lariat Reserve Report" shall mean the oil and gas reserve
report for the Acquired Entity prepared by the Acquired Entity as of
January 1, 2001.
"LC Exposure" at any time shall mean the difference between
(i) the aggregate face amount of all undrawn and uncancelled Letters
of Credit and the aggregate of all amounts drawn under all Letters of
Credit and not yet reimbursed and (ii) the aggregate amount of all
cash securing outstanding Letters of Credit pursuant to Section
2.10(b).
"Letters of Credit" shall mean the letters of credit issued
pursuant to Section 2.01(b) and all reimbursement obligations
pertaining to any such letter of credit, and "Letter of Credit" shall
mean any one of the Letters of Credit and the reimbursement
obligations pertaining thereto.
"Letter of Credit Agreements" shall mean the written
agreements with the Agent, as issuing bank for any Letter of Credit,
executed or hereafter executed in connection with the issuance by the
Agent of the Letters of Credit, such agreements to be on the Agent's
customary form for letters of credit of comparable amount and purpose,
as from time to time in effect or otherwise agreed to by the Company
and the Agent.
"Lien" shall mean any interest in Property securing an
obligation (whether such obligation arises out of a Debt, Swap
Contract, contingent liability or otherwise) owed to, or a claim by, a
Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not
limited to (i) the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes or
(ii) production payments and the like payable out of Oil and Gas
Properties. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purposes of this Agreement, the Company
shall be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person in a
transaction intended to create a financing.
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"Loan Documents" shall mean the Notes, this Agreement, the
Letters of Credit, the Letter of Credit Agreements, the Fee Letters
and any and all other agreements or instruments now or hereafter
executed and delivered by the Company or any other Person (other than
participation or similar agreements between any Bank and any other
bank or creditor with respect to any Indebtedness pursuant to this
Agreement) in connection with, or as security for the payment or
performance of, the Notes, this Agreement or reimbursement obligations
under the Letters of Credit, as such agreements may be amended,
supplemented or restated from time to time.
"Loans" shall mean the loans as provided for by Section
2.01(a).
"Majority Banks" shall mean, at any time while no Loans are
outstanding, Banks having at least sixty-six and two-thirds percent
(66-2/3%) of the Aggregate Commitments and, at any time while Loans
are outstanding, Banks holding at least sixty-six and two-thirds
percent (66-2/3%) of the outstanding aggregate principal amount of the
Loans (without regard to any sale by a Bank of a participation in any
Loan under Section 12.06(c)).
"Material Adverse Effect" shall mean the occurrence or
non-occurrence of any condition, event, or state of affairs (a) which
has a present (as of the time in question) material and adverse effect
on the financial condition or affairs of the Company and its
Subsidiaries or (b) which has a reasonable probability of having a
material and adverse effect, after the time in question, on the
financial condition or affairs of the Company and its Subsidiaries.
Periodic and/or seasonal declines in energy prices shall not
constitute a Material Adverse Effect.
"Maturity Date" shall mean January 23, 2004.
"Maximum Credit Amount" shall mean, as to each Bank, the
amount set forth opposite such Bank's name on Annex I under the
caption "Maximum Credit Amount", as the same may be: (i) reduced
pursuant to Section 2.03(b) hereof pro rata to each Bank based on its
Percentage Share, (ii) increased, with the consent of such Bank,
pursuant to Section 2.03(d), or (iii) modified from time to time to
reflect any assignments permitted by Section 12.06(b).
"Merger Agreement" shall mean the Agreement and Plan of
Merger dated as of December 28, 2000 among the Company, the Acquired
Entity, NFXD and various stockholders of the Acquired Entity.
"Moody's" means Moody's Investors Service, Inc. or any
successor to its debt ratings business.
"Multiemployer Plan" shall mean a Plan defined as such in
Section 3(37) or 4001(a)(3) of ERISA.
"NFXD" shall mean Newfield Exploration Mid-Continent Inc., a
Delaware corporation.
"Notes" shall mean the Notes provided for in Section 2.06,
together with any and all renewals, extensions for any period,
increases, rearrangements, substitutions or modifications thereof.
"Oil and Gas Properties" shall mean Hydrocarbon Interests;
the Properties now or hereafter pooled or unitized with Hydrocarbon
Interests; all presently existing or future unitization, pooling
agreements and declarations of pooled units and the units created
thereby (including without limitation all units created under orders,
regulations and rules of any
-10-
Governmental Authority) which may affect all or any portion of the
Hydrocarbon Interests; all operating agreements, contracts and other
agreements which relate to any of the Hydrocarbon Interests or the
production, sale, purchase, exchange or processing of Hydrocarbons
from or attributable to such Hydrocarbon Interests; all Hydrocarbons
in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, the lands
covered thereby and all rents, issues, profits, proceeds, products,
revenues and other incomes from or attributable to the Hydrocarbon
Interests; all tenements, hereditaments, appurtenances and Properties
in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests and all Properties, rights, titles, interests
and estates described or referred to above, including any and all
Property, real or personal, now owned or hereafter acquired and
situated upon, used, held for use or useful in connection with the
operating, working or development of any of such Hydrocarbon Interests
or Property (excluding drilling rigs, automotive equipment or other
personal property which may be on such premises for the purpose of
drilling a well or for other similar temporary uses) and including any
and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants,
plant compressors, pumps, pumping units, field gathering systems,
tanks and tank batteries, fixtures, valves, fittings, machinery and
parts, engines, boilers, meters, apparatus, equipment, appliances,
tools, implements, cables, wires, towers, casing, tubing and rods,
surface leases, rights-of-way, easements and servitudes together with
all additions, substitutions, replacements, accessions and attachments
to any and all of the foregoing.
"Other Taxes" shall have the meaning assigned to such term in
Section 4.06(b).
"Outside Report" shall have the meaning assigned to such term
in Section 8.04(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Loans and
Commitments to be provided by a Bank under this Agreement as indicated
on Annex I hereto, as modified from time to time to reflect any
increases in the Aggregate Maximum Credit Amounts permitted by Section
2.03(d) or any assignments permitted by Section 12.06(b).
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust,
unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form of
entity.
"Plan" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA, which (a) is currently or hereafter
sponsored, maintained or contributed to by the Company, any Subsidiary
or an ERISA Affiliate or (b) was at any time during the preceding six
calendar years sponsored, maintained or contributed to, by the
Company, any Subsidiary or an ERISA Affiliate.
"Post-Default Rate" shall mean, in respect of any principal
of any Loan or any other amount payable by the Company under this
Agreement or any Note 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 or
the default is cured or waived equal to 2% per annum above the Base
Rate as in effect from time to time plus the Applicable Margin (as in
effect from time to time) for Base Rate Loans, but in no event to
exceed the Highest Lawful Rate provided that, if such amount in
default is principal of a Eurodollar Loan, the "Post-Default Rate" for
such principal shall be, for the period commencing on the due date and
ending
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on the last day of the Interest Period therefor, 2% per annum above
the interest rate for such Loan as provided in Section 3.02(b), but in
no event to exceed the Highest Lawful Rate.
"Prime Rate" shall mean the rate of interest from time to
time announced publicly by Chase at the Principal Office as its prime
commercial lending rate. Such rate is set by Chase as a general
reference rate of interest, taking into account such factors as Chase
may deem appropriate, it being understood that many of Chase's
commercial or other loans are priced in relation to such rate, that it
is not necessarily the lowest or best rate actually charged to any
customer and that Chase may make various commercial or other loans at
rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the
Agent, presently located at 270 Park Avenue, New York, New York 10017
or such other location as designated by the Agent from time to time.
"Prior Credit Agreement" shall mean the Amended and Restated
Credit Agreement dated as of October 9, 1997, as amended, among Chase,
the Company and others.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last Business Day of each
June, September, December, and March in each year, the first of which
shall be March 31, 2001, provided, however, that if such day is not a
Business Day, such Quarterly Date shall be the next succeeding
Business Day.
"QUIPS" shall mean the 6.50% Cumulative Quarterly Income
Convertible Preferred Securities, Series A issued or to be issued by
the QUIPS Trust for an aggregate liquidation preference amount not to
exceed $145,000,000, plus any prepayment premiums.
"QUIPS Debentures" shall mean the 6.50% Junior Subordinated
Convertible Debentures, Series A due 2029 issued by the Company to the
QUIPS Trust in an aggregate principal amount not to exceed
$149,000,000.
"QUIPS Guaranty" shall mean the Company's guarantee of the
payment of the distributions on and redemption of the QUIPS.
"QUIPS Trust" shall mean Newfield Financial Trust I, a
Delaware business trust and Subsidiary of the Company.
"Redetermination Date" shall have the meaning assigned to
that term in Section 2.08(a).
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as the
same may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Bank, any
change after the Closing Date in any Governmental Requirement
(including Regulation D) or the adoption or making after such date of
any interpretations, directives or requests applying to a class of
banks (including such Bank or its Applicable Lending Office) of or
under any Governmental Requirement (whether or not having the force of
law) by any court or Governmental Authority charged with the
interpretation or administration thereof.
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"Required Banks" shall mean, at any time while no Loans are
outstanding, Banks having at least seventy-five percent (75%) of the
Aggregate Commitments and, at any time while Loans are outstanding,
Banks holding at least seventy-five percent (75%) of the outstanding
aggregate principal amount of the Loans (without regard to any sale by
a Bank of a participation in any Loan under Section 12.06(c)).
"Required Payment" shall have the meaning assigned to that
term in Section 4.04.
"Reserve Report" shall mean a report, in form and substance
satisfactory to the Agent, setting forth, as of the last day of each
December (the "December 31 Reserve Report") and as of the last day of
June (the "June 30 Reserve Report") (or such other date in the event
of an unscheduled redetermination) the proved oil and gas reserves
attributable to the Oil and Gas Properties of the Company and its
Subsidiaries (other than Special Purpose Subsidiaries), together with
a projection of the rate of production and future net income,
production, severance or similar taxes, operating expenses and capital
expenditures with respect thereto as of such date, based upon the
pricing assumptions consistent with SEC reporting requirements at the
time. Furthermore, such information shall be provided for each
individual well, unit or lease comprising the Oil and Gas Properties
of the Company and its Subsidiaries and by category of the reserves
contained in each well, unit or lease including proved producing,
proved non-producing and proved undeveloped.
"Responsible Officer" shall mean as to any Person, the Chief
Executive Officer, the President or any Vice President of such Person
and, with respect to financial matters, the term "Responsible Officer"
shall also include the principal financial officer of such Person.
Unless otherwise specified, all references to a Responsible Officer
herein shall mean a Responsible Officer of the Company.
"Sale Leaseback Transaction" shall mean any arrangement
entered into by the Company or any Subsidiary, directly or indirectly,
whereby the Company or any Subsidiary shall sell or transfer any
Property and whereby the Company or any Subsidiary shall then or
thereafter rent or lease as lessee such property or any part thereof
or other property which the Company or any Subsidiary intends to use
for substantially the same purpose or purposes as the property sold or
transferred.
"Scheduled Redetermination Date" shall have the meaning
assigned to that term in Section 2.08(d).
"SEC" shall mean the Securities and Exchange Commission or
any successor Governmental Authority.
"Senior Unsecured Notes" shall mean those certain unsecured
senior notes in the aggregate original principal amount of
$325,000,000 issued or to be issued under the Indenture or any other
indenture with covenants and default provisions no more restrictive
than this Agreement and all obligations relating thereto.
"Special Entity" shall mean any joint venture, limited
liability company or partnership, limited duration company, general or
limited partnership or any other type of partnership or company other
than a corporation in which the Company and/or one or more of its
other Subsidiaries is a member, owner, partner or joint venturer and
owns, directly or indirectly, at least a majority of the equity of
such entity or controls such entity, but excluding any tax
partnerships
-13-
that are not classified as partnerships under state law. For purposes
of this definition, any Person which owns directly or indirectly an
equity investment in another Person which allows the first Person to
manage or elect managers who manage the normal activities of such
second Person will be deemed to "control" such second Person (e.g. a
sole general partner controls a limited partnership).
"Special Purpose Subsidiary" shall mean any Subsidiary
incurring Debt for the purpose of acquisition and/or exploration and
development of Oil and Gas Properties if and only if the Company and
all other Subsidiaries are not liable, whether directly or indirectly,
contingently or otherwise, for such Debt and designated as a "Special
Purpose Subsidiary" in writing by the Company to the Agent; provided
that in no event shall any Subsidiary that owns any Oil and Gas
Properties or other Property included in the determination of the
Calculated Borrowing Base be a Special Purpose Subsidiary.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc. on the date hereof, or any successor to its debt
ratings business.
"Subordinated Debt" shall mean any Debt issued by the Company
containing provisions subordinating such Debt to the Indebtedness and
other terms and conditions which are substantially similar to
subordinated debt issued by companies of similar credit rating in the
same industry, but in any event such Debt shall not have any covenants
or default provisions more restrictive than this Agreement.
"Subsidiary" shall mean (i) any corporation of which 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 Company or one or more of the Subsidiaries or by the Company
and one or more of the Subsidiaries and (ii) any Special Entity. For
the purposes of Section 9.12 and Section 9.13 of this Agreement, the
definition of Subsidiary shall not include any Special Purpose
Subsidiaries.
"Swap Contract" shall mean any crude oil or natural gas price
swap, price cap, price floor, price collar, forward agreement, or
other exchange or price protection transaction or any combination of
such transactions or agreements or options with respect to any such
transaction or agreement.
"Taxes" shall have the meaning assigned such term in Section
4.06(a).
"Type" shall mean, with respect to any Loan, a Base Rate Loan
or a Eurodollar Loan.
1.03 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 furnished to the Agent or the Banks hereunder shall be prepared,
in accordance with GAAP as in effect from time to time, applied on a basis
consistent with the audited financial statements of the Company referred to in
Section 7.02 (except for changes concurred with by the Company's independent
public accountants.
1.04 Ratings. A rating, whether public or private, by S&P or
Moody's shall be deemed to be in effect on the date of announcement or
publication by S&P or Moody's, as the case may be, of
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such rating or, in the absence of such announcement or publication, on the
effective date of such rating and will remain in effect until the announcement
or publication of, or (in the absence of such announcement or publication) the
effective date of, any change in such rating. In the event the standards for
any rating by Moody's or S&P are revised, or such rating is designated
differently (such as by changing letter designations to numerical
designations), then the references herein to such rating shall be deemed to
refer to the revised or redesignated rating for which the standards are closest
to, but not lower than, the standards at the date hereof for the rating which
has been revised or redesignated, all as determined by the Majority Banks in
good faith. Long-term debt supported by a letter of credit, guaranty or other
similar credit enhancement mechanism shall not be considered as senior
unsecured long-term debt. If either Moody's or S&P has at any time more than
one rating applicable to senior unsecured long-term debt of any Person, the
lowest such rating shall be applicable for purposes hereof. For example, if
Moody's rates some senior unsecured long-term debt of the Company Ba1 and other
such debt of the Company Ba2, the senior unsecured long-term debt of the
Company shall be deemed to be rated Ba2 by Moody's.
Section 2. Commitments.
2.01 Loans and Letters of Credit.
(a) Each Bank severally agrees, on the terms of this
Agreement, to make Loans to the Company during the period from and
including (i) the Closing Date or (ii) such later date that such Bank
becomes a party to this Agreement as provided in Section 12.06(b), to
and up to, but excluding the Maturity Date in an aggregate principal
amount at any one time outstanding up to but not exceeding an amount
equal to (x) the amount of such Bank's Commitment as then in effect
minus (y) such Bank's Percentage Share of the Aggregate LC Exposure
then existing; provided, however, that the aggregate principal amount
of all such Loans by all Banks hereunder at any one time outstanding
together with the Aggregate LC Exposure then existing shall not exceed
the Aggregate Commitments as then in effect. Subject to the terms of
this Agreement, during the period from the Closing Date to and up to,
but excluding the Maturity Date, the Company may borrow, repay and
reborrow the amount described in this Section 2.01(a).
(b) During the period from and including the Closing Date to
but excluding the date that is four Business Days prior to the
Maturity Date, the Agent, as issuing bank for the Banks, agrees to
extend credit for the account of the Company at any time and from time
to time by issuing, renewing, extending or reissuing Letters of
Credit; provided however, the Aggregate LC Exposure at any one time
outstanding shall not exceed the lesser of (A) $35,000,000 or (B) the
Aggregate Commitments, as then in effect, minus the aggregate
principal amount of all Loans then outstanding. The Banks shall
automatically participate in such Letters of Credit according to their
respective Percentage Shares.
(c) Subject to the other terms and provisions of this
Agreement, at the option of the Company, the Loans may be Base Rate
Loans or Eurodollar Loans; provided that, without the prior written
consent of the Majority Banks, no more than six (6) Eurodollar Loans
may be outstanding at any time; and provided further that until
January 31, 2001 only the Loans made on the Closing Date may be
Eurodollar Loans.
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2.02 Borrowings, Continuations and Conversions; Letters of
Credit.
(a) The Company shall give the Agent (which shall promptly
notify the Banks) advance notice as hereinafter provided of each
borrowing hereunder, which shall specify the aggregate amount of such
borrowing and the date (which shall be a Business Day) of the Loans to
be borrowed and, in the case of Eurodollar Loans, the duration of the
Interest Period therefor.
(b) All Base Rate Loan borrowings shall be in amounts of at
least $500,000, or the remaining balance of the Aggregate Commitments,
if less or any whole multiple of $500,000 in excess thereof and all
Eurodollar Loans shall be in amounts of at least $1,000,000 or any
whole multiple of $1,000,000 in excess thereof.
(c) All borrowings, continuations and conversions shall
require advance written notice to the Agent (which shall promptly
notify the Banks) in the form of Exhibit B hereto (or telephonic
notice promptly confirmed by such a written notice), which in each
case shall be irrevocable, from the Company to be received by the
Agent not later than 11:00 a.m. New York time at least one Business
Day prior to the date of such Base Rate borrowing and three Business
Days prior to the date of each Eurodollar Loan borrowing, continuation
or conversion. Without in any way limiting the Company's obligation to
confirm in writing any telephonic notice, the Agent may act without
liability upon the basis of telephonic notice believed by the Agent in
good faith to be from the Company prior to receipt of written
confirmation. In each such case, the Company hereby waives the right
to dispute the Agent's record of the terms of such telephonic notice
except in the case of gross negligence or wilful misconduct by the
Agent.
(d) Subject to the provisions made in this Section 2.02(d),
the Company may elect to continue all or any part of any Eurodollar
Loan beyond the expiration of the then current Interest Period
relating thereto by giving advance notice as provided in Section
2.02(c) to the Agent (which shall promptly notify the Banks) of such
election, specifying the amount of such Loan to be continued and the
Interest Period therefor. In the absence of such a timely and proper
election, the Company shall be deemed to have elected to convert such
Eurodollar Loan to a Base Rate Loan pursuant to Section 2.02(e). All
or any part of any Eurodollar Loan may be continued as provided
herein, provided that (i) any continuation of any such Loan shall be
(as to each Loan as continued for an applicable Interest Period) in
amounts of at least $1,000,000 or any whole multiple of $1,000,000 in
excess thereof and (ii) no Default shall have occurred and be
continuing. If a Default shall have occurred and be continuing, each
Eurodollar Loan shall be converted to a Base Rate Loan on the last day
of the Interest Period applicable thereto.
(e) The Company may elect to convert all or any part of any
Eurodollar Loan on the last day of the then current Interest Period
relating thereto to a Base Rate Loan by giving advance notice to the
Agent (which shall promptly notify the Banks) of such election.
Subject to the provisions made in this Section 2.02(e), the Company
may elect, at any time after January 31, 2001, to convert all or any
part of any Base Rate Loan at any time and from time to time to a
Eurodollar Loan by giving advance notice as provided in Section
2.02(c) to the Agent (which shall promptly notify the Banks) of such
election. All or any part of any outstanding Loan may be converted as
provided herein, provided that (i) any conversion of any Base Rate
Loan into a Eurodollar Loan shall be (as to each such Loan into which
there is a conversion for an applicable Interest Period) in amounts of
at least $1,000,000 or any whole multiple of $1,000,000 in excess
thereof and (ii) no Default shall have occurred and be continuing. If
a Default shall have occurred and be continuing, no Loan may be
converted into a Eurodollar Loan.
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(f) Not later than 11:00 a.m. New York time on the date
specified for each borrowing hereunder, each Bank shall make available
the amount of the Loan to be made by it on such date to the Agent, to
an account which the Agent shall specify, in immediately available
funds, for the account of the Company. The amounts so received by the
Agent shall, subject to the terms and conditions of this Agreement, be
made available to the Company by transferring the same, in immediately
available funds, to an account of the Company, designated by the
Company and maintained with Chase at the Principal Office.
(g) The Company shall give the Agent (which shall promptly
notify the Banks of such request and their Percentage Share of such
Letter of Credit) advance notice to be received by the Agent not later
than 11:00 a.m. New York time not less than three (3) Business Days
prior thereto of each request for the issuance and at least three (3)
Business Days (or such longer notice as may be required by the Agent
to allow the Agent to comply with the notice requirement for extension
embodied in the Letter of Credit) prior to the date of the renewal,
extension or reissuance of a Letter of Credit hereunder which request
shall specify the amount of such Letter of Credit, the date (which
shall be a Business Day) such Letter of Credit is to be issued,
renewed or extended, the duration thereof, the name and address of the
beneficiary thereof, the form of the Letter of Credit and such other
information as the Agent may reasonably request all of which shall be
reasonably satisfactory to the Agent. Subject to the terms and
conditions of this Agreement, on the date specified for the issuance,
renewal or extension of a Letter of Credit, the Agent shall issue such
Letter of Credit to the beneficiary thereof.
In conjunction with the issuance of each Letter of Credit,
the Company shall execute a Letter of Credit Agreement. In the event
of any conflict between any provision of a Letter of Credit Agreement
and this Agreement, the Company, the Agent and the Banks hereby agree
that the provisions of this Agreement shall govern.
The Agent will send to the Company and each Bank, immediately
upon issuance of any Letter of Credit, or an amendment thereto, a true
and complete copy of such Letter of Credit, or such amendment thereto.
2.03 Changes of Commitments.
(a) The Aggregate Commitments shall at all times be equal to
the lesser of (i) the Aggregate Maximum Credit Amounts after
adjustments resulting from reductions pursuant to Section 2.03(b) or
increases pursuant to Section 2.03(d), and (ii) the Borrowing Base as
determined from time to time.
(b) The Company shall have the right to terminate or to
reduce the amount of the Aggregate Maximum Credit Amounts at any time
or from time to time upon not less than three (3) Business Days' prior
notice to the Agent (which shall promptly notify the Banks) of each
such termination or reduction, which notice shall specify the
effective date thereof and the amount of any such reduction (which
shall not be less than $10,000,000, or any whole multiple of
$5,000,000 in excess thereof) and shall be irrevocable and effective
only upon receipt by the Agent. The Aggregate Maximum Credit Amounts
once terminated or reduced may not be reinstated.
(c) [reserved]
(d) The Company shall have the right, without the consent of
the Banks but subject to the approval of the Agent (which consent
shall not be unreasonably withheld), to effectuate
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from time to time an increase in the Aggregate Maximum Credit Amounts
under this Agreement by adding to this Agreement one or more
commercial banks or other financial institutions (who shall, upon
completion of the requirements stated in this Section 2.03(d),
constitute Banks hereunder), or by allowing one or more Banks to
increase their Maximum Credit Amount hereunder, so that such added and
increased Maximum Credit Amount(s) shall equal the increase in
Aggregate Maximum Credit Amounts effectuated pursuant to this Section
2.03(d); provided that: (i) no increase in the Aggregate Maximum
Credit Amounts pursuant to this Section 2.03(d) shall result in the
Aggregate Maximum Credit Amounts exceeding $500,000,000, (ii) no
Bank's Maximum Credit Amount shall be increased without the consent of
such Bank, (iii) the Company shall prepay all of the Loans on the date
of such increase and the Company may (subject to Sections 2.01, 2.02
and 6.02 and the other provisions hereof) reborrow on such date from
the Banks based on the new Percentage Shares and shall make any
payments required pursuant to Section 5.05 as a result of such
prepayment, and (iv) the Company shall not have the right to increase
the Aggregate Maximum Credit Amounts pursuant to this Section 2.03(d)
if any Default shall have occurred and be continuing at the time of
such increase. The Company shall give the Agent three (3) Business
Days' prior written notice of its intent to increase the Aggregate
Maximum Credit Amounts pursuant to this Section 2.03(d). Such notice
shall specify each new commercial bank or other financial institution,
if any, the changes in amounts of Aggregate Maximum Credit Amounts
that will result, and such other information as is reasonably
requested by the Agent. Each new commercial bank or other financial
institution, and each Bank agreeing to increase its Maximum Credit
Amount, shall execute and deliver to the Agent an Acceptance Agreement
substantially in the form of Exhibit F pursuant to which it becomes a
party hereto or increases its Maximum Credit Amount, as the case may
be, which document, in the case of a new commercial bank or other
financial institution, shall (among other matters) specify the
Applicable Lending Office of such new commercial bank or other
financial institution. In addition, the Agent shall prepare and
deliver to the Company and each Bank a new Annex I reflecting the new
Percentage Share of each Bank and its Maximum Credit Amount. Finally,
the Company shall execute and deliver a Note, in substantially the
form of Exhibit A, in the principal amount of the Maximum Credit
Amount of each new commercial bank or other financial institution, or
a replacement Note in the principal amount of the increased Maximum
Credit Amount of each Bank agreeing to increase its Maximum Credit
Amount, as the case may be. The Company shall also deliver other
documents of the nature referred to in Section 6.01(a) to the Agent in
such form and substance as may be reasonably required by it. Upon
execution and delivery of the appropriate documentation and the
delivery to it of its Note, such new commercial bank or other
financial institution shall constitute a "Bank" hereunder with a
Maximum Credit Amount as specified in the new Annex I delivered
pursuant to this Section 2.03(d), or such Bank's Maximum Credit Amount
shall increase as specified therein, as the case may be.
2.04 Commitment Fee and Other Fees.
(a) The Company shall pay to the Agent for the account of
each Bank a Commitment Fee on the daily average unused amount of the
Aggregate Commitments for the period from and including the Closing
Date up to but excluding the earlier of the date the Aggregate
Commitments are terminated or the Maturity Date, at a rate per annum
equal to the Applicable Margin for commitment fees in effect from time
to time. For each day during any calendar quarter, the Applicable
Margin for commitment fees shall be the Applicable Margin for
commitment fees in effect on the first day of such calendar quarter.
Accrued commitment fees shall be payable on each Quarterly Date in
arrears and on the earlier of the date the Aggregate Commitments are
terminated or the Maturity Date.
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(b) The Company agrees to pay to the Agent for the pro rata
benefit of the Banks commissions for issuing each Letter of Credit
(calculated separately for each Letter of Credit) at the rate per
annum equal to the Applicable Margin for Eurodollar Loans in effect on
the date of the issuance of such Letter of Credit times the daily
average maximum amount from time to time of such Letter of Credit,
provided that each Letter of Credit shall bear a minimum commission of
$500.00 and that each Letter of Credit shall be deemed to be
outstanding up to the full face amount of the Letter of Credit until
the Agent has received the cancelled Letter of Credit or a written
cancellation of the Letter of Credit from the beneficiary of such
Letter of Credit in form and substance acceptable to the Agent, or for
any reductions in the amount of the Letter of Credit (other than from
a drawing), written notification from the beneficiary of such Letter
of Credit. Such commissions are due quarterly in arrears. In addition
the Company shall pay the Agent a fronting fee for issuing the Letters
of Credit (calculated separately for each Letter of Credit) of the sum
of (i) 1/8% per annum times the daily average maximum amounts from
time to time of such Letter of Credit plus (ii) $250. Such fronting
fee is payable in advance at issuance of the Letter of Credit.
(c) The Company shall pay (i) to Chase for the account of
Chase such other fees as are set forth in the Chase Fee Letter on the
dates specified therein to the extent not paid prior to the date of
this Agreement, or as may be mutually agreed upon in writing by the
Company and Chase, (ii) to Bank of America, N.A. for the account of
Bank of America, N.A. such other fees as are set forth in the BOA Fee
Letter on the dates specified therein to the extent not paid prior to
the date of this Agreement, or as may be mutually agreed upon in
writing by the Company and Bank of America, N.A. and (iii) to the
respective Banks listed on the signature pages hereof for the account
of such Banks such other fees as are set forth in the Banks' Fee
Letter on the dates specified thereunto to the extent not paid prior
to the date of this Agreement, or as may be mutually agreed upon in
writing by the Company and such Banks.
2.05 Several Obligations. The failure of any Bank to make any
Loan to be made by it or to provide funds for disbursements or reimbursements
under the Letters of Credit on the date specified therefor shall not relieve
any other Bank of its obligation to make its Loan or to provide funds on such
date, but no Bank shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank or to provide funds to be provided by
such other Bank. If a Bank (or Banks) fails or refuses to make any Loan or to
provide funds for disbursements or reimbursements under Letters of Credit under
circumstances contemplated in this subparagraph, then, the Company may replace
such Bank with a bank acceptable to the Agent. The nonperforming Bank shall
promptly assign its Loans and Commitment to the new bank as provided in Section
12.06(b). Nothing in this Section shall relieve the nonperforming Bank from its
liability, if any, for failure to make its Loan.
2.06 Notes. The Loans made by each Bank shall be evidenced by
a single promissory note of the Company in substantially the form of Exhibit A
hereto, dated (i) the Closing Date, (ii) the effective date of an Assignment
pursuant to Section 12.06(b) or (iii) the effective date of an increase of the
Aggregate Maximum Credit Amounts, payable to the order of such Bank in a
principal amount equal to its Maximum Credit Amount as in effect and otherwise
duly completed. The date, amount, Type, interest rate and Interest Period of
each Loan made by each Bank, and all payments made on account of the principal
thereof, shall be recorded by such Bank on its books for its Note, and, prior
to any transfer, endorsed by such Bank on the schedule attached to such Note or
any continuation thereof.
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2.07 Prepayments.
(a) The Company may prepay the Base Rate Loans upon not less
than one (1) Business Days' prior notice to the Agent (which shall
promptly notify the Banks), which notice shall specify the prepayment
date (which shall be a Business Day) and the amount of the prepayment
(which shall be at least $500,000 or the remaining aggregate principal
balance outstanding on the Notes, if less) and shall be irrevocable
and effective only upon receipt by the Agent, provided that interest
on the principal prepaid, accrued to the prepayment date, shall be
paid on the prepayment date. The Company may prepay Eurodollar Loans
on the same condition as for Base Rate Loans and in addition such
prepayments of Eurodollar Loans shall be subject to the terms of
Section 5.05 and shall be in an amount equal to all of the Eurodollar
Loans for the Interest Period prepaid.
(b) If, after giving effect to any termination or reduction
of the Aggregate Maximum Credit Amounts pursuant to Section 2.03(b),
the outstanding aggregate principal amount of the Loans plus the LC
Exposure exceeds the Aggregate Maximum Credit Amounts, the Company
shall (i) pay or prepay the Loans on the date of such termination or
reduction in an aggregate principal amount equal to the excess,
together with interest on the principal amount paid accrued to the
date of such prepayment and (ii) if any excess remains after prepaying
all of the Loans, pay to the Agent on behalf of the Banks an amount
equal to the excess, to be held as cash collateral as provided in
Section 2.10 hereof.
(c) Upon any redetermination of the amount of the Borrowing
Base in accordance with Section 2.08, if the redetermined Borrowing
Base is less than the aggregate outstanding principal amount of the
Loans plus the LC Exposure ("Borrowing Base Deficiency"), then the
Company shall within forty-five (45) days of receipt of written notice
thereof: (i) prepay the Loans (or reduce the LC Exposure) in an
aggregate principal amount equal to such Borrowing Base Deficiency
together with interest on the principal amount paid accrued to the
date of such prepayment and (ii) if a Borrowing Base Deficiency
remains after prepaying all of the Loans because of LC Exposure, pay
to the Agent on behalf of the Banks an amount equal to such remaining
Borrowing Base Deficiency to be held as cash collateral as provided in
Section 2.10(b) hereof.
(d) [reserved]
(e) Prepayments permitted or required under this Section 2.07
shall be without premium or penalty except as required under Section
5.05 for prepayment of Eurodollar Loans. Any prepayment made may be
reborrowed subject to the then effective Aggregate Commitments.
2.08 Borrowing Base.
(a) The Calculated Borrowing Base shall be determined in
accordance with Section 2.08(b) by the Agent with the concurrence of
the Required Banks and is subject to redetermination in accordance
with Section 2.08(d). Upon any redetermination of the Calculated
Borrowing Base, such redetermination shall remain in effect until the
next successive Redetermination Date. "Redetermination Date" shall
mean the date that the redetermined Borrowing Base becomes effective
subject to the notice requirements specified in Section 2.08(e) both
for scheduled redeterminations and unscheduled redeterminations. So
long as any of the Commitments is in effect or any Letter of Credit is
outstanding and until all of the Indebtedness is paid in full, this
facility shall be governed by the then effective Borrowing Base.
During the
-20-
period from and after the Closing Date until the next Redetermination
Date, the amount of the Calculated Borrowing Base shall be
$510,000,000.
(b) Upon receipt of the reports required by Section 8.04 and
such other reports, data and supplemental information as may from time
to time be reasonably requested by the Agent (the "Engineering
Reports"), the Agent will redetermine a new Calculated Borrowing Base.
Such redetermination will be in accordance with the Agent's normal and
customary procedures for evaluating oil and gas reserves and other
related assets as such exist at that particular time. The Agent in its
sole discretion, may make adjustments to the rates, volumes, prices
and other assumptions set forth therein. The Agent shall propose to
the Banks a new Calculated Borrowing Base within 30 days following
receipt by the Agent of the Engineering Reports in a timely and
complete manner. After having received notice of such proposal by the
Agent, each Bank shall have ten (10) days to agree or disagree with
such proposal. Any failure of a Bank to communicate its approval or
disapproval within such ten day period shall be deemed to be an
approval of such proposal. If the Required Banks approve (including
any such deemed approval) the Agent's proposal, then such proposal
shall be the new Calculated Borrowing Base. If however, the Required
Banks do not approve such proposal within 10 days, the Required Banks
shall, within a reasonable period of time, agree on a new Calculated
Borrowing Base.
(c) The Agent may exclude any Oil and Gas Property or portion
of production therefrom or any income from any other Property from the
Calculated Borrowing Base, at any time, because title information is
not reasonably satisfactory or such Property is not assignable.
(d) So long as any of the Commitments is in effect or any
Letter of Credit is outstanding and until payment in full of all
Indebtedness hereunder, on or around the first Business Day of each
May and November, commencing May 1, 2001 (each being a "Scheduled
Redetermination Date"), the Banks shall redetermine the amount of the
Calculated Borrowing Base in accordance with Section 2.08(b). In
addition, the Company may request an unscheduled redetermination of
the Calculated Borrowing Base at any other time but no more often than
once between Scheduled Redetermination Dates by specifying in writing
to the Agent the date on which such redetermination is to occur and
providing a Reserve Report in accordance with Section 8.04(b) at least
60 days prior to the requested redetermination date. Also, the
Majority Banks may initiate only one (1) unscheduled redetermination
during any consecutive twelve (12) month period by specifying in
writing to the Company the date on which the Company is to furnish a
Reserve Report in accordance with Section 8.04(b) and the date on
which such redetermination is to occur; provided that each time the
Company elects the option set forth in subclause (x) of clause (iii)
of Section 9.01(m) in respect of any Subordinated Debt, the Required
Banks may redetermine the Borrowing Base to take into account such
Subordinated Debt, and any redetermination pursuant to this proviso
shall not count as an unscheduled redetermination for purposes of this
sentence.
(e) The Agent shall promptly notify in writing the Company
and the Banks of the new Calculated Borrowing Base and the new
Borrowing Base. Any redetermination of the Calculated Borrowing Base
and the Borrowing Base shall not be in effect until after written
notice is received by the Company.
2.09 Assumption of Risks. The Company assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit or any
transferee thereof with respect to its use of such Letter of Credit. Neither
the Agent (except in the case of wilful misconduct or bad faith on the part of
the Agent or any of its employees), its correspondents nor any Bank shall be
responsible for the validity, sufficiency or genuineness of certificates or
other documents or any endorsements thereon, even if such certificates or
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other documents should in fact prove to be invalid, insufficient, fraudulent or
forged; for errors, omissions, interruptions or delays in transmissions or
delivery of any messages by mail, telex, or otherwise, whether or not they be
in code; for errors in translation or for errors in interpretation of technical
terms; the validity or sufficiency of any instrument transferring or assigning
or purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; the failure of any beneficiary or
any transferee of any Letter of Credit to comply fully with conditions required
in order to draw upon any Letter of Credit other than as expressly required by
such Letter of Credit; or for any other consequences arising from causes beyond
the Agent's control or the control of the Agent's correspondents. In addition,
neither the Agent nor any Bank shall be responsible for any error, neglect, or
default of any of the Agent's correspondents; and none of the above shall
affect, impair or prevent the vesting of any of the Agent's or any Bank's
rights or powers hereunder or under the Letter of Credit Agreements, all of
which rights shall be cumulative. The Agent and its correspondents may accept
certificates or other documents that appear on their face to be in order,
without responsibility for further investigation of any matter contained
therein regardless of any notice or information to the contrary. In furtherance
and not in limitation of the foregoing provisions, the Company agrees that any
action, inaction or omission taken or not taken by the Agent or by any
correspondent for the Agent in good faith in connection with any Letter of
Credit, or any related drafts, certificates, documents or instruments, shall be
binding on the Company and shall not put the Agent or its correspondents under
any resulting liability to the Company.
2.10 Obligation to Reimburse and to Prepay.
(a) If a disbursement by the Agent is made under any Letter
of Credit, the Company shall pay to the Agent within two (2) Business
Days after notice of any such disbursement is received by the Company,
the amount of each such disbursement made by the Agent under the
Letter of Credit (if such payment is not sooner effected as may be
required under this Section 2.10 or under other provisions of the
Letter of Credit), together with interest on the amount disbursed from
and including the date of disbursement until payment in full of such
disbursed amount at a varying rate per annum equal to (i) the then
applicable interest rate for Base Rate Loans through the second
Business Day after notice of such disbursement is received by the
Company and (ii) thereafter to and including the date of repayment in
full of such disbursed amount, the Post-Default Rate for Base Rate
Loans (but in no event to exceed the Highest Lawful Rate). The
obligations of the Company under this Agreement and each Letter of
Credit shall be absolute, unconditional and irrevocable and shall be
paid or performed strictly in accordance with the terms of this
Agreement under all circumstances whatsoever, including, without
limitation, but only to the fullest extent permitted by applicable
law, the following circumstances: (i) any lack of validity or
enforceability of this Agreement, any Letter of Credit or any other
Loan Document; (ii) any amendment or waiver of (including any
default), or any consent to departure from this Agreement, any Letter
of Credit or any other Loan Document (except to the extent permitted
by any amendment or waiver); (iii) the existence of any claim,
set-off, defense or other rights which the Company may have at any
time against the beneficiary of any Letter of Credit or any transferee
of any Letter of Credit (or any Persons for whom any such beneficiary
or any such transferee may be acting), the Agent, any Bank or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the other Loan Documents, the transactions contemplated hereby
or any unrelated transaction; (iv) any statement, certificate, draft,
notice or any other document presented under any Letter of Credit
proves to have been forged, fraudulent, insufficient or invalid in any
respect or any statement therein proves to have been untrue or
inaccurate in any respect whatsoever; (v) payment by the Agent under
any Letter of Credit against presentation of a draft or certificate
which appears on its face to comply, but does not comply, with the
terms of such Letter of Credit; and (vi) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing.
-22-
Notwithstanding anything in this Agreement to the contrary, the
Company will not be liable for payment or performance that results
from the gross negligence or wilful misconduct of the Agent, except
(i) where the Company or any Subsidiary actually recovers the proceeds
for itself or the Agent of any payment made by the Agent in connection
with such gross negligence or wilful misconduct or (ii) in cases where
the Agent makes payment to the named beneficiary of a Letter of
Credit.
(b) In the event of the occurrence of any Event of Default, a
payment or prepayment pursuant to Sections 2.07(b) and (c) hereof or
the maturity of the Notes, whether by acceleration or otherwise, an
amount equal to the LC Exposure shall be deemed to be forthwith due
and owing by the Company to the Agent and the Banks as of the date of
any such occurrence; and the Company's obligation to pay such amount
shall be absolute and unconditional, without regard to whether any
beneficiary of any such Letter of Credit has attempted to draw down
all or a portion of such amount under the terms of a Letter of Credit,
and, to the fullest extent permitted by applicable law, shall not be
subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Company may now or hereafter have
against any such beneficiary, the Agent, the Banks or any other Person
for any reason whatsoever. Such payments shall be held by the Agent on
behalf of the Banks as cash collateral securing the LC Exposure in an
account or accounts at the Principal Office; and the Company hereby
grants to and by its deposit with the Agent grants to the Agent a
security interest in such cash collateral. Such collateral payments
may be invested, by Agent, in investments that Agent may choose in its
sole discretion, but limited to investments specified in Sections
9.03(d), (e), (f) and (h). All interest on investments shall become
cash collateral and may also be reinvested. In the event of any such
payment by the Company of amounts contingently owing under outstanding
Letters of Credit and in the event that thereafter drafts or other
demands for payment complying with the terms of such Letters of Credit
are not made prior to the respective expiration dates thereof, the
Agent agrees, if no Event of Default has occurred and is continuing or
if no other amounts are outstanding under this Agreement, the Notes or
the other Loan Documents, to remit to the Company, out of such
collateral, an amount equal to the amount by which the contingent
obligations evidenced by the Letters of Credit have decreased as a
result of such expiration of Letters of Credit.
(c) Each Bank severally and unconditionally agrees that it
shall promptly reimburse the Agent an amount equal to such Bank's
Percentage Share of any disbursement made by the Agent under any
Letter of Credit that is not reimbursed according to this Section
2.10.
2.11 Lending Offices. The Loans of each Type made by each
Bank shall be made and maintained at such Bank's Applicable Lending Office for
Loans of such Type.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company will pay to the Agent,
for the account of each Bank, the aggregate outstanding principal balance on
the Notes on the Maturity Date.
3.02 Interest. The Company will pay to the Agent for account
of each Bank interest on the unpaid principal amount of each Loan owed to such
Bank for the period commencing on the date such Loan is made to but excluding
the date such Loan shall be paid in full, at the following rates per annum:
(a) if such a Loan is a Base Rate Loan, the Base Rate (as in
effect from time to time) plus the Applicable Margin (as in effect
from time to time) for Base Rate Loans, but in no event to exceed the
Highest Lawful Rate; and
-23-
(b) if such a Loan is a Eurodollar Loan, for each Interest
Period relating thereto, the Fixed Eurodollar Rate for such Loan and
such Interest Period plus the Applicable Margin (as in effect from
time to time) for Eurodollar Loans, but in no event to exceed the
Highest Lawful Rate.
Notwithstanding the foregoing, the Company will pay to the Agent for the
account of each Bank interest at the applicable Post-Default Rate on any
principal of any Loan owed to such Bank, and (to the fullest extent permitted
by law) on any other amount payable by the Company hereunder or under any Note
held by such Bank to or for account of such Bank, 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.
Accrued interest on Base Rate Loans shall be payable on each Quarterly Date
commencing on March 31, 2001 and accrued interest on each Eurodollar Loan shall
be payable on the last day of the Interest Period therefor and, if such
Interest Period is longer than three months at three-month intervals following
the first day of such Interest Period, except that interest payable at the
Post-Default Rate shall be payable from time to time on demand and interest on
any Eurodollar Loan that is converted into a Base Rate Loan (pursuant to
Section 5.04) shall be payable on the date of conversion (but only to the
extent so converted). Promptly after the determination of any interest rate
provided for herein or any change therein, the Agent shall notify the Banks to
which such interest is payable and the Company thereof.
3.03 Prior Credit Agreement. All principal, interest and fees
outstanding under the Prior Credit Agreement shall be paid in full by the
Company on the Closing Date.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by the
Company under this Agreement, the Notes and the Letters of Credit shall be made
in Dollars, in immediately available funds, to the Agent at such account as the
Agent shall specify by notice to the Company from time to time, not later than
11:00 a.m. New York time on the date on which such payments 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). Such payments shall be made
without (to the fullest extent permitted by applicable law) defense, set-off or
counterclaim. Each payment received by the Agent under this Agreement or any
Note for account of a Bank shall be paid promptly to such Bank, in immediately
available funds. If the due date of any payment under this Agreement or any
Note would otherwise fall on a day which is not a Business Day such date 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. At the time of
each payment to the Agent of any principal of or interest on any borrowing, the
Company shall notify the Agent of the Loans to which such payment shall apply.
In the absence of such notice, the Agent may specify the Loans to which such
payment shall apply, but to the extent possible, such payment or prepayment
will be applied first to the Loans comprised of Base Rate Loans.
4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein each Bank agrees that: (a) each borrowing from the Banks under
Section 2.01 shall be made from the Banks pro rata in accordance with their
Percentage Share, each payment of commitment fee or other fees under Sections
2.04(a) and 2.04(b) shall
-24-
be made for account of the Banks pro rata in accordance with their Percentage
Share, and each termination or reduction of the amount of the Aggregate Maximum
Credit Amounts under Section 2.03(b) shall be applied to the Commitment of each
Bank, pro rata according to the amounts of its respective Commitment, (b) each
payment of principal of Loans by the Company shall be made for account of the
Banks pro rata in accordance with the respective unpaid principal amount of the
Loans held by the Banks, (c) each payment of interest on Loans by the Company
shall be made for account of the Banks pro rata in accordance with the amounts
of interest due and payable to the respective Banks and (d) each reimbursement
by the Company of disbursements under Letters of Credit shall be made for
account of the Banks pro rata in accordance with the amounts of reimbursement
obligations due and payable to each respective Bank.
4.03 Computations. Interest on Eurodollar Loans and the
commitment fees shall 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 such interest or fee is payable, unless such calculation
would exceed the Highest Lawful Rate, in which case interest shall be
calculated on the per annum basis of a year of 365 or 366 days, as the case may
be. Interest on Base Rate Loans shall be computed on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed (including the first
day but excluding the last day) occurring in the period for which such interest
is payable.
4.04 Non-receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Bank or the Company prior to the date on which
such notifying party is scheduled to make payment to the Agent of (in the case
of a Bank) the proceeds of a Loan or a payment under a Letter of Credit to be
made by it hereunder or (in the case of the Company) a payment to the Agent for
account of one or more of the Banks hereunder (such payment being herein called
the "Required Payment"), which notice shall be effective upon receipt, that it
does not intend to make the Required Payment to the Agent, the 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(s) on such date and, if such Bank or the Company (as the
case may be) has not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until but excluding the date the Agent recovers such amount at a rate per annum
which, for any Bank as recipient, will be equal to the Federal Funds Rate and
for the Company as recipient, will be equal to the Base Rate plus the
Applicable Margin (as in effect from time to time) for Base Rate Loans.
4.05 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a
Bank may otherwise have, each Bank shall have the right and be
entitled (after consultation with the Agent), at its option, to offset
balances held by it or by any of its Affiliates for account of the
Company at any of its offices, in Dollars or in any other currency,
against any principal of or interest on any of such Bank's Loans, or
any other amount payable to such Bank hereunder, which is not paid
when due (including the expiration of any applicable grace period)
(regardless of whether such balances are then due to the Company), in
which case it shall promptly notify the Company and the Agent thereof,
provided that such Bank's failure to give such notice shall not affect
the validity thereof.
(b) If any Bank shall obtain payment of any principal of or
interest on any Loan made by it to the Company under this Agreement
through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise, and, as a result of such
payment, such Bank shall have received a greater percentage of the
principal or interest then due hereunder by the Company to such Bank
than the percentage received by any other Banks, it shall promptly (i)
notify the Agent and each other Bank thereof and (ii) purchase from
such other Banks participations in (or, if and to the extent specified
by such Bank, direct interests in) the Loans made by such other Banks
(or in interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be equitable,
to the end that all the Banks
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shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Bank in obtaining or preserving such
excess payment) pro rata in accordance with the unpaid principal
and/or interest on the Loans held by each of the Banks. 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 that any
Bank so purchasing a participation (or direct interest) in the Loans
made by other Banks (or in interest due thereon, as the case may be)
may exercise all rights of set-off, banker's lien, counterclaim or
similar rights with respect to such participation as fully as if such
Bank were a direct holder of Loans 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. If
under any applicable bankruptcy, insolvency or other similar law, any
Bank receives a secured claim in lieu of a set-off to which this
Section 4.05 applies, such Bank shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Banks entitled under this Section
4.05 to share the benefits of any recovery on such secured claim.
4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Company hereunder shall be made, in accordance with Section 4.01, free
and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank
and the Agent, taxes imposed on its income, and franchise or similar
taxes imposed on it, by (i) any jurisdiction (or political subdivision
thereof) of which the Agent or such Bank, as the case may be, is a
citizen or resident or in which such Bank has an Applicable Lending
Office, (ii) the jurisdiction (or any political subdivision thereof)
in which the Agent or such Bank is organized, or (iii) any
jurisdiction (or political subdivision thereof) in which such Bank or
the Agent is presently doing business which taxes are imposed solely
as a result of doing business in such jurisdiction (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the
Company shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Banks or the Agent (i) the
sum payable shall be increased by the amount necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 4.06) such Bank or the
Agent (as the case may be) shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company
shall make such deductions and (iii) the Company shall pay the full
amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent permitted
by applicable law, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any Assignment (hereinafter referred to
as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY WILL INDEMNIFY EACH BANK AND THE AGENT FOR
THE FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, BUT NOT LIMITED
TO, ANY TAXES OR OTHER TAXES IMPOSED BY ANY GOVERNMENTAL AUTHORITY ON
AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY SUCH BANK OR THE
AGENT (ON THEIR BEHALF OR ON BEHALF
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OF ANY BANK), AS THE CASE MAY BE, AND ANY LIABILITY (INCLUDING
PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR
LEGALLY ASSERTED UNLESS THE PAYMENT OF SUCH TAXES WERE NOT CORRECTLY
OR LEGALLY ASSERTED AND SUCH BANK'S PAYMENT OF SUCH TAXES OR OTHER
TAXES WAS THE RESULT OF ITS GROSS NEGLIGENCE OR WILFUL MISCONDUCT. ANY
PAYMENT PURSUANT TO SUCH INDEMNIFICATION SHALL BE MADE WITHIN THIRTY
(30) DAYS AFTER THE DATE ANY BANK OR THE AGENT, AS THE CASE MAY BE,
MAKES WRITTEN DEMAND THEREFOR. IF ANY BANK OR THE AGENT RECEIVES A
REFUND OR CREDIT IN RESPECT OF ANY TAXES OR OTHER TAXES FOR WHICH SUCH
BANK OR THE AGENT HAS RECEIVED PAYMENT FROM THE COMPANY HEREUNDER IT
SHALL PROMPTLY NOTIFY THE COMPANY OF SUCH REFUND OR CREDIT AND SHALL,
IF NO DEFAULT HAS OCCURRED AND IS CONTINUING, WITHIN THIRTY (30) DAYS
AFTER RECEIPT OF A REQUEST BY THE COMPANY (OR PROMPTLY UPON RECEIPT,
IF THE COMPANY HAS REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT
PURSUANT HERETO), PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE
COMPANY WITHOUT INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR
CREDITED), PROVIDED THAT THE COMPANY, UPON THE REQUEST OF SUCH BANK OR
THE AGENT, AGREES TO RETURN SUCH REFUND OR CREDIT (PLUS PENALTIES,
INTEREST OR OTHER CHARGES) TO SUCH BANK OR THE AGENT IN THE EVENT SUCH
BANK OR THE AGENT IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.
(d) Banks' Taxes.
(i) Each Bank represents that it is either (i) a
corporation organized under the laws of the United States of
America or any state thereof or (ii) it is entitled to
complete exemption from United States withholding tax imposed
on or with respect to any payments, including fees, to be
made to it pursuant to this Agreement (A) under an applicable
provision of a tax convention to which the United States of
America is a party or (B) because it is acting through a
branch, agency or office in the United States of America and
any payment to be received by it hereunder is effectively
connected with a trade or business in the United States of
America. Each Bank that is not a corporation organized under
the laws of the United States of America or any state thereof
agrees to provide to the Company and the Agent on the Closing
Date, or on the date of its delivery of the Assignment
pursuant to which it becomes a Bank, and at such other times
as required by United States law or as the Company or the
Agent shall reasonably request, two accurate and complete
original signed copies of either (A) Internal Revenue Service
Form W-8ECI (or successor form) certifying that all payments
to be made to it hereunder will be effectively connected to a
United States trade or business (the "Form W-8ECI
Certification") or (B) Internal Revenue Service Form W-8BEN
(or successor form) certifying that it is entitled to the
benefit of a provision of a tax convention to which the
United States of America is a party which completely exempts
from United States withholding tax all payments to be made to
it hereunder (the "Form W-8BEN Certification"). In addition,
each Bank agrees that if it previously filed a Form W-8ECI
Certification, it will deliver to the Company and the Agent a
new Form W-8ECI Certification prior to expiration of the
prior Form W-8ECI; and if it previously filed a Form W-8BEN
Certification, it will deliver to the Company and the Agent a
new certification prior to the expiration of the prior Form
W-8BEN. Each Bank also agrees to
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deliver to the Company and the Agent such other or
supplemental forms as may at any time be required as a result
of changes in applicable law or regulation in order to
confirm or maintain in effect its entitlement to exemption
from United States withholding tax on any payments hereunder,
provided that the circumstances of such Bank at the relevant
time and applicable laws permit it to do so. If a Bank
determines, as a result of any change in either (i) a
Governmental Requirement or (ii) its circumstances, that it
is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section 4.06, or that it
is required to withdraw or cancel any such form or
certificate previously submitted, it shall promptly notify
the Company and the Agent of such fact. If a Bank is
organized under the laws of a jurisdiction outside the United
States of America, unless the Company and the Agent have
received a Form W-8BEN Certification or Form W-8ECI
Certification satisfactory to them indicating that all
payments to be made to such Bank hereunder are not subject to
United States withholding tax, the Company shall withhold
taxes from such payments at the applicable statutory rate or
the reduced treaty rate. Each Bank agrees to indemnify and
hold harmless from any United States taxes, penalties,
interest and other expenses, costs and losses incurred or
payable by (i) the Agent as a result of such Bank's failure
to submit any form or certificate that it is required to
provide pursuant to this Section 4.06 or (ii) the Company or
the Agent as a result of their reliance on any such form or
certificate which such Bank has provided to them pursuant to
this Section 4.06.
(ii) For any period with respect to which a Bank has
failed to provide the Company with the form required pursuant
to this Section 4.06, if any, (other than if such failure is
due to a change in a Governmental Requirement occurring
subsequent to the date on which a form originally was
required to be provided), such Bank shall not be entitled to
indemnification under this Section 4.06 with respect to taxes
imposed by the United States which taxes would not have been
imposed but for such failure to provide such forms; provided,
however, that should a Bank, which is otherwise exempt from
or subject to a reduced rate of withholding tax becomes
subject to taxes because of its failure to deliver a form
required hereunder, the Company shall take such steps as such
Bank shall reasonably request to assist such Bank to recover
such taxes.
(iii) Any Bank claiming any additional amounts
payable pursuant to this Section 4.06 shall use reasonable
efforts (consistent with legal and regulatory restrictions)
to file any certificate or document requested by the Company
or the Agent or to change the jurisdiction of its Applicable
Lending Office or to contest any tax imposed if the making of
such a filing or change or contesting such tax would avoid
the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole
determination of such Bank, be otherwise disadvantageous to
such Bank.
Section 5. Capital Adequacy.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be necessary to
compensate such Bank for any costs which it determines are
attributable to its making or maintaining of any Eurodollar Loans or
issuing or participating in Letters of Credit hereunder or its
obligation to make any Eurodollar Loans or issue or participate in any
Letters of Credit hereunder, or any reduction in any amount receivable
by such Bank hereunder in respect of any of such Eurodollar Loans,
Letters of Credit or such obligation (such increases in costs and
reductions in amounts receivable being herein called
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"Additional Costs"), resulting from any Regulatory Change which: (i)
changes the basis of taxation of any amounts payable to such Bank
under this Agreement or any Note in respect of any of such Eurodollar
Loans or Letters of Credit (other than taxes imposed on the overall
net income of such Bank or of its Applicable Lending Office for any of
such Eurodollar Loans by the jurisdiction in which such Bank has its
principal office or Applicable Lending Office); or (ii) imposes or
modifies any reserve, special deposit, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of such Bank
(including any of such Eurodollar Loans or any deposits referred to in
the definition of "Fixed Eurodollar Rate" in Section 1.02 hereof), or
the Commitment of such Bank or the Eurodollar interbank market; or
(iii) imposes any other condition affecting this Agreement or any Note
(or any of such extensions of credit or liabilities) or such Bank's
Commitment. Each Bank will notify the Agent and the Company of any
event occurring after the Closing Date which will entitle such Bank to
compensation pursuant to this Section 5.01(a) as promptly as
practicable after it obtains knowledge thereof and determines to
request such compensation, and will designate a different Applicable
Lending Office for the Loans of such Bank affected by such event if
such designation 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 to so designate an Applicable Lending Office located in the
United States. If any Bank requests compensation from the Company
under this Section 5.01(a), the Company may, by notice to such Bank
suspend the obligation of such Bank to make additional Loans of the
Type with respect to which such compensation is requested until the
Regulatory Change giving rise to such request ceases to be in effect
(in which case the provisions of Section 5.04 shall be applicable).
(b) Without limiting the effect of the provisions of Section
5.01(a), in the event that, by reason of any Regulatory Change or any
other circumstances arising after the Closing Date affecting such
Bank, the Eurodollar interbank market or such Bank's position in such
market, 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 (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, the obligation of
such Bank to make additional Eurodollar Loans shall be suspended until
such Regulatory Change ceases to be in effect (in which case the
provisions of Section 5.04 shall be applicable).
(c) Without limiting the effect of the foregoing provisions
of this Section 5.01 (but without duplication), the Company shall pay
directly to any Bank from time to time on request such amounts as such
Bank may determine to be necessary to compensate such Bank or its
parent or holding company for any costs which it determines are
attributable to the maintenance by such Bank or its parent or holding
company (or any Applicable Lending Office), pursuant to any
Governmental Requirement following any Regulatory Change, of capital
in respect of its Commitment, its Note, its Loans or any interest held
by it in any Letter of Credit, such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on
assets or equity of such Bank or its parent or holding company (or any
Applicable Lending Office) to a level below that which such Bank or
its parent or holding company (or any Applicable Lending Office) could
have achieved but for such Governmental Requirement. Such Bank will
notify the Company that it is entitled to compensation pursuant to
this Section 5.01(c) as promptly as practicable after it determines to
request such compensation.
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(d) Any Bank notifying the Company of any amounts due
pursuant to Section 5.01 shall in such notice to the Company and the
Agent set forth in reasonable detail the basis and amount of its
request for compensation. Any request for additional compensation
under this Section 5.01 shall be paid by the Company within thirty
(30) Business Days of the receipt of the Company of the notice
described in this Section 5.01(d).
5.02 Limitation on Eurodollar Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Fixed
Eurodollar Rate for any Interest Period:
(a) the Agent determines that quotations of interest rates
for the relevant deposits referred to in the definition of "Fixed
Eurodollar Rate" in Section 1.02 are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein;
or
(b) the Agent determines that the relevant rates of interest
referred to in the definition of "Fixed Eurodollar Rate" in Section
1.02 upon the basis of which the rate of interest for Eurodollar Loans
for such Interest Period is to be determined are not sufficient to
adequately cover the cost to the Banks of making or maintaining
Eurodollar Loans;
then the Agent shall give the Company prompt notice thereof, and so long as
such condition remains in effect, the Banks shall be under no obligation to
make additional Eurodollar Loans.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain Eurodollar Loans
hereunder, then such Bank shall promptly notify the Company thereof and such
Bank's obligation to make Eurodollar Loans shall be suspended until such time
as such Bank may again make and maintain Eurodollar Loans (in which case the
provisions of Section 5.04 shall be applicable).
5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and
5.03. If the obligation of any Bank to make Eurodollar Loans shall be suspended
pursuant to Sections 5.01, 5.02 or 5.03 ("Affected Loans"), all Affected Loans
which would otherwise be made by such Bank shall be made instead as Base Rate
Loans (and, if an event referred to in Section 5.01(b) or Section 5.03 has
occurred and such Bank so requests by notice to the Company, all Affected Loans
of such Bank then outstanding shall be automatically converted into Base Rate
Loans on the date specified by such Bank in such notice) and, to the extent
that Affected Loans are so made as (or converted into) Base Rate Loans, all
payments of principal which would otherwise be applied to such Bank's Affected
Loans shall be applied instead to its Base Rate Loans.
5.05 Compensation. The Company shall pay to each Bank within
thirty (30) days of receipt of written request of such Bank (which request
shall set forth, in reasonable detail, the basis for requesting such amounts),
such amount or amounts as shall compensate it for any loss, cost, expense or
liability which such Bank determines are attributable to:
(a) any payment, prepayment or conversion of a Eurodollar
Loan properly made by such Bank or the Company for any reason
(including, without limitation, the acceleration of the Loans pursuant
to Section 10.02) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Company for any reason (including but
not limited to, the failure of any of the conditions precedent
specified in Section 6 to be satisfied) to borrow,
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continue or convert a Eurodollar Loan from such Bank on the date for
such borrowing, continuation or conversion specified in the relevant
notice of borrowing given pursuant to Section 2.02(c).
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of such payment,
prepayment or conversion or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for herein
over (ii) the interest component of the amount such Bank would have bid in the
London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by such Bank).
5.06 Replacement of Banks. If any Bank asserts illegality
under Section 5.03 or requests compensation under Section 5.01, or if the
Company is required to pay any additional amount to any Bank or any
Governmental Authority for the account of any Bank pursuant to Section 4.06, or
if any Bank defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Bank and the
Agent, require such Bank to assign and delegate, without recourse (in
accordance with Section 12.06), all its interests, rights and obligations under
this Agreement to an assignee(s) that shall assume such obligations (which
assignee(s) may be another Bank, if such Bank accepts such assignment);
provided that (i) such assigning Bank shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Company (in the case of all other amounts), (ii) no Default shall have
occurred and be continuing at such time, and (iii) the Agent shall have
consented to such assignee(s), such consent not to be unreasonably withheld.
Section 6. Conditions Precedent.
6.01 Initial Funding.
The obligation of the Banks to make the Initial Funding under
this Agreement is subject to the receipt by the Agent and the Banks of all fees
payable pursuant to Section 2.04 on or before the Closing Date or otherwise
under this Agreement and the following documents and satisfaction of the other
conditions provided in this Section 6.01, each of which shall be satisfactory
to the Agent in form and substance:
(a) A certificate of the Secretary or an Assistant Secretary
of the Company setting forth (i) resolutions of its board of directors
with respect to the authorization of the Company to execute the Loan
Documents to which it is a party and to enter into the transactions
contemplated in those documents, (ii) the officers of the Company (y)
who are authorized to sign the Loan Documents to which the Company is
a party and (z) 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 this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the officers so
authorized and (iv) the articles or certificate of incorporation and
bylaws of the Company, certified as being true and complete. The Agent
and the Banks may conclusively rely on such certificate until the
Agent receives notice in writing from the Company to the contrary.
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(b) Certificates of the appropriate state agencies with
respect to the existence and good standing of the Company.
(c) A compliance certificate which shall be substantially in
the form of Exhibit C, duly and properly executed by a Responsible
Officer, and dated as of the date of the Initial Funding.
(d) The Note or Notes, duly completed and executed.
(e) An opinion of Vinson & Elkins L.L.P., legal counsel to the
Company substantially in the form of Exhibit D hereto.
(f) A certificate of the insurance coverage of the Company
evidencing that the Company is carrying insurance in accordance with
Section 7.19 hereof.
(g) The Fee Letters shall have been executed and delivered by
the Company.
(h) (Reserved)
(i) An environmental review of the Acquired Entity.
(j) A certificate of a Responsible Officer certifying that
attached thereto is a true and correct copy of the Merger Agreement.
(k) A balance sheet of the Company and its Consolidated
Subsidiaries dated as of October 31, 2000, giving pro forma effect to
the acquisition by the Company of the Acquired Entity.
(l) Evidence that the Company has acquired (or simultaneously
with the Initial Funding will acquire) the Acquired Entity pursuant to
the Merger Agreement without waiver of any matter referred to in
Section 9.03 of the Merger Agreement and that the Merger (as defined
in the Merger Agreement) has occurred.
(m) Evidence that all Funded Debt of the Acquired Entity has
been (or simultaneously with the Initial Funding will be) paid in
full, that all related commitments to lend have terminated and that
all Liens securing such Funded Debt will be terminated simultaneously
with such payment.
(n) The Lariat Reserve Report and a certificate from a
Responsible Officer of the Company with respect thereto covering
matters of the type referred to in Section 8.04(d).
(o) Evidence of termination of all obligations to lend and to
issue letters of credit under the Prior Credit Agreement. Each Bank
that is a party to the Prior Credit Agreement (i) waives the
requirement of notice of termination of the "Commitments" under the
Prior Credit Agreement and the "Aggregate Maximum Credit Amounts"
under the Prior Credit Agreement, (ii) agrees to the termination of
such Commitments under the Prior Credit Agreement, such Aggregate
Maximum Credit Amounts under the Prior Credit Agreement and the Prior
Credit Agreement (other than Sections 5.12, 12.03 and 12.15 thereof,
which the Prior Credit Agreement provides will survive) and (iii)
agrees to the prepayment, without notice, of amounts outstanding under
the Prior Credit Agreement.
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(p) Such other documents as the Agent or any Bank or special
counsel to the Agent may reasonably request.
6.02 Initial and Subsequent Loans and Letters of Credit. The
obligation of the Banks to make Loans to the Company upon the occasion of each
borrowing hereunder and to issue, renew, extend or reissue Letters of Credit
for the account of the Company (including the Initial Funding) is subject to
the further conditions precedent that, as of the date of such Loans and after
giving effect thereto: (i) no Default shall have occurred and be continuing;
(ii) no Material Adverse Effect shall have occurred since the date of the
Financial Statements; and (iii) the representations and warranties made by the
Company in Section 7 shall be true on and as of the date of the making of such
Loans or issuance, renewal, extension or reissuance of a Letter of Credit with
the same force and effect as if made on and as of such date and following such
new borrowing, unless such representation or warranty was expressly limited to
an earlier date (which representation or warranty remains true as to such
earlier date) or except as such representations and warranties are modified to
give effect to transactions expressly permitted hereby or in the case of
Section 7.15 changes of which the Agent has been notified. Each request for a
borrowing or issuance, renewal, extension or reissuance of a Letter of Credit
by the Company hereunder shall constitute a certification by the Company to the
effect set forth in the preceding sentence (both as of the date of such notice
and, unless the Company otherwise notifies the Agent prior to the date of and
immediately following such borrowing or issuance, renewal, extension or
reissuance of a Letter of Credit, as of the date thereof).
6.03 Conditions Relating to Letters of Credit. In addition to
the satisfaction of all other conditions precedent set forth in this Section 6,
the issuance, renewal, extension or reissuance of the Letters of Credit
referred to in Section 2.01 hereof is subject to the following conditions
precedent:
(a) At least three (3) Business Days prior to the date of the
issuance and at least three (3) Business Days (or such longer notice
as may be required by the Agent to allow the Agent to comply with the
notice requirement for extension embodied in the Letter of Credit)
prior to the date of the renewal, extension or reissuance of each
Letter of Credit, the Agent shall have received a written request for
a Letter of Credit or renewal, extension or reissuance.
(b) Each of the Letters of Credit shall (i) be issued by the
Agent, (ii) contain such terms and provisions as are reasonably
required by the Agent, (iii) be for the account of the Company, and
(iv) expire not later than four Business Days prior to the Maturity
Date.
(c) The Company shall have duly and validly executed and
delivered to the Agent a Letter of Credit Agreement pertaining to the
Letter of Credit.
(d) All other conditions shall have been satisfied as set
forth in Section 2.01.
Section 7. Representations and Warranties. The Company
represents and warrants to the Banks that (each representation and warranty
herein is given as of the date of this Agreement and shall be deemed repeated
and reaffirmed as provided in Section 6.02):
7.01 Corporate Existence. Each of the Company and the
Subsidiaries: (a) is a corporation duly organized, legally existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify would have a Material Adverse Effect. All stock of NFXD, all other
equity interests of NFXD, and all warrants,
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options and other rights to acquire any such stock, equity interests or Debt
are owned by the Company free and clear of any Lien.
7.02 Financial Condition. The audited consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at December 31, 1999
and the related consolidated statement of income, stockholders' equity and cash
flows of the Company and its Consolidated Subsidiaries for the fiscal year
ended on said date, with the opinion thereon of PricewaterhouseCoopers LLP
heretofore furnished to each of the Banks and the unaudited consolidated
balance sheet of the Company and its Consolidated Subsidiaries as at September
30, 2000 and their related consolidated statements of income, stockholders'
equity and cash flows of the Company and its Consolidated Subsidiaries for the
nine-month period ended on such date heretofore furnished to the Agent, are
complete and correct and fairly present the consolidated financial condition of
the Company and its Consolidated Subsidiaries as at said dates and the results
of its operations for the fiscal year and the nine-month period on said dates,
all in accordance with GAAP, as applied on a consistent basis (subject, in the
case of the interim financial statements, to normal year-end adjustments).
Neither the Company nor any Subsidiary has on the Closing Date any material
Debt, contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the
Financial Statements or in Schedule 7.02. Since December 31, 1999, there has
been no change or event having a Material Adverse Effect. Since the date of the
Financial Statements, neither the business nor the Properties of the Company or
any Subsidiary have been materially and adversely affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by any Governmental
Authority, riot, activities of armed forces or acts of God or of any public
enemy.
7.03 Litigation. Except as disclosed to the Banks in Schedule
7.03 hereto, at the Closing Date there is no litigation, legal, administrative
or arbitral proceeding, investigation or other action of any nature pending or,
to the knowledge of the Company threatened against or affecting the Company or
any Subsidiary which involves the possibility of any judgment or liability
against the Company or any Subsidiary not fully covered by insurance (except
for normal deductibles), and which would have a Material Adverse Effect.
7.04 No Breach. Neither the execution and delivery of the
Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent, which has not
been obtained as of the Closing Date, under the respective charter or by-laws
of the Company, or any Governmental Requirement, or any agreement or instrument
to which the Company is a party or by which it is bound or to which it is
subject, or constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the revenues or
assets of the Company pursuant to the terms of any such agreement or
instrument.
7.05 Corporate Action. The Company has all necessary
corporate power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party; and the execution, delivery
and performance by the Company of the Loan Documents to which it is a party,
have been duly authorized by all necessary corporate action on its part; and
the Loan Documents constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their terms.
7.06 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority that have not
been obtained are necessary for the merger under the Merger Agreement or the
execution, delivery or performance by the Company of the Loan Documents or for
the validity or enforceability thereof.
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7.07 Use of Loans. The proceeds of the Loans shall be used
for general corporate and working capital purposes which shall include the
acquisition, exploration and development of Oil and Gas Properties. The Company
is not engaged principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulation
U or X of the Board of Governors of the Federal Reserve System) and no part of
the proceeds of any Loan hereunder will be used to purchase or carry, directly
or indirectly, any margin stock or for any purpose that would result in any
Loan being a "purpose credit" within the meaning of Regulation U. Neither the
Company nor any Person acting on behalf 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 X or any other regulation of the
Board of Governors of the Federal Reserve System or to violate Section 7 of the
SEC or any rule or regulation thereunder, in each case as now in effect or as
the same may hereinafter be in effect.
7.08 ERISA.
(a) The Company, each Subsidiary and each ERISA Affiliate
have complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan.
(b) Each Plan is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which could
result in imposition on the Company, any Subsidiary or any ERISA
Affiliate (whether directly or indirectly) of (i) either a civil
penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a
tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (ii)
breach of fiduciary duty liability damages under section 409 of ERISA.
(d) No Plan (other than a defined contribution plan) or any
trust created under any such Plan has been terminated since September
2, 1974. No liability to the PBGC (other than for the payment of
current premiums which are not past due) by the Company, any
Subsidiary or any ERISA Affiliate has been or is expected by the
Company, any Subsidiary or any ERISA Affiliate to be incurred with
respect to any Plan. No ERISA Event with respect to any Plan has
occurred.
(e) Full payment when due has been made of all amounts which
the Company, any Subsidiary or any ERISA Affiliate is required under
the terms of each Plan or applicable law to have paid as contributions
to such Plan, and no accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any Plan.
(f) The actuarial present value of the benefit liabilities
under each Plan which is subject to Title IV of ERISA does not, as of
the end of the Company's most recently ended fiscal year, exceed the
current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such
benefit liabilities. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in section 4041 of
ERISA.
(g) None of the Company, any Subsidiary or any ERISA
Affiliate sponsors, maintains, or contributes to an employee welfare
benefit plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former
employees of such entities, that may not be terminated by the Company,
a Subsidiary or any ERISA Affiliate in its sole discretion at any time
without any material liability.
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(h) None of the Company, any Subsidiary or any ERISA
Affiliate sponsors, maintains or contributes to, or has at any time in
the preceding six calendar years sponsored, maintained or contributed
to, any Multiemployer Plan.
(i) None of the Company, any Subsidiary or any ERISA
Affiliate is required to provide security under section 401(a)(29) of
the Code due to a Plan amendment that results in an increase in
current liability for the Plan.
7.09 Taxes. Each of the Company and the Subsidiaries has
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by it and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company,
except: (a) taxes that are being contested in good faith by appropriate
proceedings and for which such Person has set aside adequate reserves in
accordance with GAAP, applicable law and its customary business practice; or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
7.10 Titles, etc.
(a) Except as set out in Schedule 7.10 or in the certificates
delivered pursuant to Section 8.04(d), each of the Company and the
Subsidiaries has good and defensible title to its material
(individually or in the aggregate) Properties, free and clear of all
Liens except Liens permitted by Section 9.02. As used in this
Agreement, "good and defensible title" to Oil and Gas Properties of
the Company located in federal waters of the Gulf of Mexico shall be
based on the standard that a prudent Person engaged in the business of
ownership, development and operation of Oil and Gas Properties located
in federal waters of the Gulf of Mexico with knowledge of all of the
facts and their legal bearing would be willing to accept as good and
defensible title. Except as set forth in Schedule 7.10 or in the
certificates delivered pursuant to Section 8.04(d), after giving full
effect to the Excepted Liens and subject to permitted sales under this
Agreement, the Company and its Subsidiaries own the net interests in
production attributable to the Hydrocarbon Interests reflected in the
most recently delivered Reserve Report in all material respects and
the ownership of such Properties shall not in any material respect
obligate the Company or any Subsidiary to bear the costs and expenses
relating to the maintenance, development and operations of each such
Property in an amount in excess of the working interest of each
Property set forth in the most recently delivered Reserve Report. All
factual information contained in the most recently delivered Reserve
Report is true and correct in all material respects as of the date of
such Reserve Report. Except as set forth in Schedule 7.10, after
giving full effect to the Excepted Liens, as of the Closing Date NFXD
owns the net interests in production attributable to the Hydrocarbon
Interests reflected in the Lariat Reserve Report in all material
respects and the ownership of such Properties shall not in any
material respect obligate the Company or NFXD to bear the costs and
expenses relating to the maintenance, development and operations of
each such Property in an amount in excess of the working interest of
each Property set forth in the Lariat Reserve Report. All factual
information contained in the Lariat Reserve Report is true and correct
in all material respects as of the Closing Date.
(b) All leases and agreements necessary for the conduct of
the respective business of the Company and its Subsidiaries are, to
the best knowledge of the Company and its Subsidiaries, valid and
subsisting, in full force and effect and, to the best knowledge of the
Company and its Subsidiaries, there exists no default or event or
circumstance which with the giving of notice or the passage of time or
both would give rise to a default under any such lease or leases,
which would in the aggregate have a Material Adverse Effect.
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(c) The rights, properties and other assets presently owned,
leased or licensed by the Company and its Subsidiaries including,
without limitation, all easements and rights of way, include all
rights, Properties and other assets necessary to permit the Company
and its Subsidiaries to conduct their business in all reasonably
material respects in the same manner as their business has been
conducted prior to the Closing Date.
(d) All of the assets and Properties of the Company and its
Subsidiaries which are reasonably necessary for the operation of their
business are in good working condition and are maintained in
accordance with prudent business standards.
7.11 No Material Misstatements. To the best of the
information and belief of management of the Company after due inquiry, no
written information, statement, exhibit, certificate, document or report
furnished to the Agent and the Banks (or any of them) by the Company in
connection with the negotiation of this Agreement, taken together as a whole,
contained any material misstatement of fact or omitted to state a fact
necessary to make the statements contained therein not materially misleading in
the light of the circumstances in which made; provided that, with respect to
projected financial information and pro forma financial statements, the Company
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time; and provided further that
the Reserve Reports are based upon professional opinions, estimates and
projections and the Company does not warrant that such opinion, estimates and
projections will ultimately prove to be accurate. To the best of the
information and belief of management of the Company after due inquiry there is
no fact peculiar to the Company or any of its Subsidiaries which constitutes a
Material Adverse Effect or in the future is reasonably likely to have (so far
as management of the Company can now foresee) a Material Adverse Effect and
which has not been set forth in this Agreement or the other documents,
certificates and statements furnished to the Agent by or on behalf of the
Company prior to, or on, the Closing Date in connection with the transactions
contemplated hereby.
7.12 Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
7.13 Public Utility Holding Company Act. The Company is not a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.14 Subsidiaries and Partnerships. Except (i) as set forth
on Schedule 7.14 and (ii) for participation agreements existing or entered into
in the ordinary course of business of the Company with respect to the drilling,
development or acquisition of Oil and Gas Properties with participants under
arrangements which do not constitute state law partnerships, as of the Closing
Date the Company has no Subsidiaries and no interest in any partnerships.
7.15 Location of Business and Offices. As of the Closing
Date, the Company's principal place of business and chief executive offices are
located at the address stated on the signature page of this Agreement.
7.16 Environmental Matters. Except (i) as provided in
Schedule 7.16 or (ii) as would not have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions would
not have a Material Adverse Effect):
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(a) Neither any Property of the Company or any Subsidiary nor
the operations conducted thereon violate any order or requirement of
any court or Governmental Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of
the Company or any Subsidiary nor the operations currently conducted
thereon or, to the best knowledge of the Company, by any prior owner
or operator of such Property or operation, are in violation of or
subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under
Environmental Laws;
(c) All notices, permits, licenses or similar authorizations,
if any, required to be obtained or filed in connection with the
operation or use of any and all Property of the Company and each
Subsidiary, including without limitation, past or present treatment,
storage, disposal or release of a hazardous substance or solid waste
into the environment, have been duly obtained or filed, and the
Company and each Subsidiary is in compliance with the terms and
conditions of all such notices, permits, licenses and similar
authorizations;
(d) All hazardous substances, solid waste, and oil and gas
exploration and production wastes, if any, generated at any and all
Property of the Company have in the past been transported, treated and
disposed of in accordance with Environmental Laws and so as not to
pose an imminent and substantial endangerment to public health or
welfare or the environment, and, to the best knowledge of the Company,
all such transport carriers and treatment and disposal facilities have
been and are operating in compliance with Environmental Laws and so as
not to pose an imminent and substantial endangerment to public health
or welfare or the environment, and are not the subject of any
existing, pending or threatened action, investigation or inquiry by
any Governmental Authority in connection with any Environmental Laws;
(e) The Company has taken all steps reasonably necessary to
determine and has determined that no hazardous substances, solid
waste, or oil and gas exploration and production wastes, have been
disposed of or otherwise released and there has been no threatened
release of any hazardous substances on or to any Property of the
Company and each Subsidiary except in compliance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to
public health or welfare or the environment;
(f) To the extent applicable, all Property of the Company and
each Subsidiary currently satisfies all design, operation, and
equipment requirements imposed by the OPA or scheduled as of the
Closing Date to be imposed by OPA during the term of this Agreement,
and the Company does not have any reason to believe that such
Property, to the extent subject to OPA, will not be able to maintain
compliance with the OPA requirements during the term of this
Agreement; and
(g) Neither the Company nor any Subsidiary has any known
contingent liability in connection with any release or threatened
release of any oil, hazardous substance or solid waste into the
environment.
7.17 Defaults. Neither the Company nor any Subsidiary is in
default nor has any event or circumstance occurred which, but for the
expiration of any applicable grace period or the giving of notice, or both,
would constitute a default under any material agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound which default would have a Material Adverse Effect. No
Default hereunder has occurred and is continuing.
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7.18 Compliance with the Law. Neither the Company nor any
Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization necessary for
the ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
7.19 Insurance. Schedule 7.19 attached hereto contains an
accurate and complete description of all material policies of fire, liability,
workmen's compensation and other forms of insurance owned or held by the
Company and each Subsidiary. All such policies are in full force and effect,
all premiums with respect thereto covering all periods up to and including the
date of the closing have been paid, and no notice of cancellation or
termination has been received with respect to any such policy. Such policies
are valid, outstanding and enforceable policies; provide adequate insurance
coverage in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the
same general area by companies engaged in the same or a similar business for
the assets and operations of the Company and each Subsidiary; will remain in
full force and effect through the respective dates set forth in Schedule 7.19
without the payment of additional premiums; and will not in any way be affected
by, or terminate or lapse by reason of, the transactions contemplated by this
Agreement. Schedule 7.19 identifies all material risks, if any, which the
Company and its Subsidiaries and their respective Board of Directors or
officers have designated as being self insured. Neither the Company nor any
Subsidiary has been refused any insurance with respect to its assets or
operations, nor has its coverage been limited below usual and customary policy
limits, by an insurance carrier to which it has applied for any such insurance
or with which it has carried insurance during the last three years.
7.20 Fiscal Periods. The fiscal year of the Company and its
Consolidated Subsidiaries is the twelve-month period ending on December 31 of
each year, and the fiscal quarters of the Company and its Consolidated
Subsidiaries are each of the three-month periods ending on March 31, June 30,
September 30 and December 31 of each year.
Section 8. Affirmative Covenants. The Company covenants and
agrees that, so long as any of the Commitments are in effect or any Letter of
Credit is outstanding and until payment in full of all Loans, reimbursement
obligations under any Letter of Credit and all interest and fees due hereunder:
8.01 Financial Statements. The Company shall deliver, or shall
cause to be delivered, to the Agent with sufficient copies of each for the
Banks:
(a) As soon as available and in any event within 90 days
after the end of each fiscal year of the Company, the audited
consolidated (and if any Special Purpose Subsidiary existed during
such year, the consolidating) statements of income, stockholders'
equity, and cash flows of the Company and its Consolidated
Subsidiaries for such fiscal year, and the related consolidated (and
if any Special Purpose Subsidiary existed at the end of such year, the
consolidating) balance sheets of the Company and its Consolidated
Subsidiaries as at the end of such fiscal year, and setting forth in
each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by the related opinion of
independent public accountants of recognized national standing
acceptable to the Agent which opinion shall state that said financial
statements fairly present the consolidated financial condition and
results of operations of the Company and its Consolidated Subsidiaries
as at the end of, and for, such fiscal year and that such financial
statements have been prepared in accordance with GAAP except for such
changes in such principles with which the independent public
accountants shall have concurred and such opinion shall not contain a
"going concern" or like qualification or exception; and in the case of
the consolidating financial statements, if any, certified by a
Responsible Officers as being fairly
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stated in all material respects when considered in relation to the
consolidated financial statements of the Company and its Consolidated
Subsidiaries.
(b) As soon as available and in any event within 45 days
after the end of each the first three fiscal quarterly periods of each
fiscal year of the Company, consolidated (and if any Special Purpose
Subsidiary existed during such quarter, the consolidating) statements
of income, stockholders' equity, and cash flows of the Company and its
Consolidated Subsidiaries, for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and
the related consolidated (and if any Special Purpose Subsidiary
existed at the end of such period, the consolidating) balance sheets
as at the end of such period, and setting forth in each case in
comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, accompanied by the certificate of
a Responsible Officer, which certificate shall state that said
consolidated financial statements fairly present the consolidated
financial condition and results of operations of the Company and its
Consolidated Subsidiaries in accordance with GAAP, as at the end of,
and for, such period (subject to normal year-end audit adjustments)
and the consolidating financial statements, if any, are fairly stated
in all material respects when considered in relation to the
consolidated financial statements of the Company and its Consolidated
Subsidiaries.
(c) Promptly after the Company knows that any Default or any
Material Adverse Effect has occurred, a notice of such Default or
Material Adverse Effect, describing the same in reasonable detail and
the action the Company proposes to take with respect thereto.
(d) Promptly upon receipt thereof, a copy of each other
report or letter submitted to the Company or any Subsidiary by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Company and its
Subsidiaries, and a copy of any response by the Company or any
Subsidiary of the Company, or the Board of Directors of the Company or
any Subsidiary of the Company, to such letter or report.
(e) Promptly upon their becoming available, each financial
statement, report, notice or proxy statement sent by the Company to
stockholders generally and each regular or periodic report and any
registration statement or prospectus and any written communication
(other than transmittal letters) in respect thereof filed by the
Company with or received by the Company in connection therewith from
any securities exchange or the SEC.
(f) Promptly after the furnishing thereof, copies of any
statement, report or notice furnished to any Person pursuant to the
terms of any indenture, loan or credit or other similar agreement,
other than this Agreement and not otherwise required to be furnished
to the Banks pursuant to any other provision of this Section 8.01.
(g) Prompt notice of receipt by the Company or any of its
Subsidiaries of any claim for taxes (except claims for ad valorem,
severance or franchise taxes received in the ordinary course of
business) against the Company or any Subsidiary if the amount involved
is more than $500,000.
(h) Prompt notice of any transaction between the Company or
any of its Subsidiaries and any Affiliate or employee thereof other
than the payment of normal salaries, bonuses and benefits and
reimbursement of expenses in the ordinary course of business and
transactions permitted under Section 9.17 hereof.
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(i) From time to time such other information regarding the
business, affairs or financial condition of the Company (including,
without limitation, any Plan or Multiemployer Plan and any reports or
other information required to be filed under ERISA) as any Bank or the
Agent may reasonably request.
(j) No later than the 45th day after each fiscal quarter of
the Company a statement from the Company setting forth the Funded Debt
to EBITDA Ratio as of the last day of the immediately preceding fiscal
quarter.
The Company will furnish to the Agent, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate
substantially in the form of Exhibit C hereto executed by a Responsible Officer
(i) certifying as to the matters set forth therein and stating that no Default
has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail) and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Company
is in compliance with Sections 9.12, 9.13 and 9.14 as of the end of the
respective fiscal quarter or fiscal year.
8.02 Litigation. The Company shall promptly give to each Bank
notice of all legal or arbitral proceedings, and of all proceedings before any
Governmental Authority affecting the Company or any Subsidiary, except
proceedings which, if adversely determined, would not have a Material Adverse
Effect. The Company will, and will cause each of its Subsidiaries to, promptly
notify the Agent and each of the Banks of any claim, judgment, Lien or other
encumbrance affecting any Property of the Company or any Subsidiary if the
value of the claim, judgment, Lien or other encumbrance affecting such Property
shall exceed $2,000,000.
8.03 Maintenance, Etc.
(a) The Company shall and shall cause each Subsidiary to:
preserve and maintain its corporate existence and all of its material
rights, privileges and franchises except for such as are released,
surrendered or disposed of in the ordinary course of business and by
such release, surrender or disposal does not cause a Material Adverse
Effect; keep books of record and account in which full, true and
correct entries will be made of all dealings or transactions in
relation to its business and activities; comply with all Governmental
Requirements if failure to comply with such requirements will have a
Material Adverse Effect; pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its Property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained
in accordance with GAAP; upon reasonable notice, permit
representatives of the Agent or any Bank, during normal business
hours, to examine, copy and make extracts from its books and records,
to inspect its Properties, and to discuss its business and affairs
with its officers, all to the extent reasonably requested by such Bank
or the Agent (as the case may be); and keep insured by financially
sound and reputable insurers all Property of a character usually
insured by Persons engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against by such Persons and carry such other
insurance as is usually carried by such Persons including, without
limitation, environmental risk insurance to the extent reasonably
available.
(b) Contemporaneously with the delivery of the financial
statements required by Section 8.01(a) to be delivered for each year,
the Company will furnish or cause to be furnished to the Agent and the
Banks a certificate of insurance coverage from the insurer in form and
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substance satisfactory to the Agent and, if requested, will make
available to the Agent and the Banks copies of the applicable policies
at offices of the Company.
(c) The Company will operate its Oil and Gas Properties or
cause such Oil and Gas Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and
in compliance with all applicable contracts and agreements and in
compliance in all material respects with all Governmental
Requirements.
(d) The Company will and will cause each Subsidiary to, at
its own expense, do or cause to be done all things reasonably
necessary to preserve and keep in good repair, working order and
efficiency all of its Oil and Gas Properties and other material
Properties including, without limitation, all equipment, machinery and
facilities, and from time to time will make all the reasonably
necessary repairs, renewals and replacements so that at all times the
state and condition of its Oil and Gas Properties and other material
Properties will be fully preserved and maintained, except to the
extent a portion of such Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts. In a manner
consistent with the prudent operator standard, the Company will and
will cause each Subsidiary to promptly: (i) pay and discharge, or make
reasonable and customary efforts to cause to be paid and discharged,
all delay rentals, royalties, expenses and indebtedness accruing under
the leases or other agreements affecting or pertaining to its Oil and
Gas Properties, (ii) perform or make reasonable and customary efforts
to cause to be performed, in accordance with industry standards, the
obligations required by each and all of the assignments, deeds,
leases, sub-leases, contracts and agreements affecting its interests
in its Oil and Gas Properties and other material Properties, (iii)
will and will cause each Subsidiary to do all other things necessary
to keep unimpaired, except for Liens described in Section 9.02, its
rights with respect thereto and prevent any forfeiture thereof or a
default thereunder, except to the extent a portion of such Properties
is no longer capable of producing Hydrocarbons in economically
reasonable amounts and except for dispositions permitted by Section
9.15 hereof.
8.04 Engineering Reports.
(a) The Company shall deliver the December 31 Reserve Report
at least 60 days prior to the next following May 1 Scheduled
Redetermination Date. The Company shall deliver the June 30 Reserve
Report at least 60 days prior to the next following November 1
Scheduled Redetermination Date. The December 31 Reserve Report shall
include (a) a report prepared by Ryder-Scott Company, Petroleum
Engineers, or other certified independent engineer satisfactory to the
Agent (the "Outside Report"), which covers at least 80% of the proved
oil and gas reserves attributable to the Oil and Gas Properties of the
Company and its Subsidiaries (other than the Special Purpose
Subsidiaries), and (b) a report prepared by or under the supervision
of the Chief Engineer of the Company who shall certify such report to
be true and accurate and to have been prepared in accordance with the
procedures used in such Outside Report (the "Company Report"), which
covers the proved oil and gas reserves attributable to the Oil and Gas
Properties of the Company and its Subsidiaries (other than the Special
Purpose Subsidiaries) which were not covered by such Outside Report.
The June 30 Report shall include a Company Report which covers the
proved oil and gas reserves attributable to all of the Oil and Gas
Properties of the Company and its Subsidiaries (other than the Special
Purpose Subsidiaries). The Company may elect to use the December 31
Reserve Report instead of preparing the June 30 Reserve Report, in
which case reserve run off with no replacement will be assumed.
Further, the Company will be required to provide a review of the Oil
and Gas Properties which shall include a comparison of actual and
projected production volumes.
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(b) For each unscheduled redetermination, the Company shall
furnish to the Banks, a Reserve Report prepared by or under the
supervision of the chief engineer of the Company who shall certify
such Reserve Report to be true and accurate and to have been prepared
in accordance with the procedures used in the immediately preceding
December 31 Reserve Report. For any unscheduled redetermination
requested by the Majority Banks pursuant to Section 2.08(d), the
Company shall provide such Reserve Report as soon as possible, but in
any event no later than 30 days following the receipt of the request
by the Majority Banks.
(c) Concurrently with the delivery of each Reserve Report,
the Company shall provide the Banks production reports covering in the
aggregate the net production of oil and gas of the Company and its
Subsidiaries (other than the Special Purpose Subsidiaries), which
reports shall include quantities or volumes of production, realized
product prices, operating expenses, taxes, capital expenditures and
such other information as the Agent may reasonably request and
covering the six month period ending on the "as of" date of the
Reserve Report being delivered with such production report.
(d) With the delivery of each Reserve Report, the Company
shall provide to the Banks, a certificate from a Responsible Officer
of the Company that, to the best of his knowledge and in all material
respects, (i) the factual information contained in the Reserve Report
and Engineering Report is true and correct, (ii) the Company or a
Subsidiary (other than the Special Purpose Subsidiaries) owns good and
defensible title to the Oil and Gas Properties evaluated in such
Reserve Report free of all Liens except for Excepted Liens, (iii)
except as set forth on an exhibit to the certificate or in the Reserve
Report, on a net basis there are no gas imbalances, take or pay or
other prepayments with respect to the Oil and Gas Properties evaluated
in such Reserve Report which would require the Company or any
Subsidiary (other than the Special Purpose Subsidiaries) to deliver
Hydrocarbons produced from such Oil and Gas Properties at some future
time without then or thereafter receiving full payment therefor, (iv)
no Oil and Gas Properties have been sold since the date of the last
Borrowing Base determination except as consented to in writing by the
Majority Banks or as permitted by the terms of this Agreement, and (v)
attached to the certificate are statements of the Company's and each
Subsidiary's (other than the Special Purpose Subsidiaries) outstanding
Swap Contracts, which statements shall include for each such Swap
Contract (A) the termination date, (B) the notional amounts or volumes
and the periods covered by such volumes; and (C) the price to be paid
or the basis for calculating the price to be paid by the Company and
the other Person under each Swap Contract for each of the future
periods covered by each Swap Contract.
8.05 Further Assurances. The Company will cure promptly any
defects in the creation and issuance of the Notes and the execution and
delivery of the other Loan Documents. The Company at its expense will promptly
execute and deliver to the Agent upon request all such other and further
documents, agreements and instruments in compliance with or accomplishment of
the covenants and agreements of the Company in the Loan Documents.
8.06 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 the Loan Documents at the time or
times and in the manner specified.
8.07 ERISA Information and Compliance. The Company will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Agent with sufficient copies for each of the Banks (i)
promptly after the filing thereof with the United States Secretary of Labor,
the Internal Revenue Service or the PBGC, copies of each annual and other
report with respect to each Plan
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or any trust created thereunder, (ii) immediately upon becoming aware of the
occurrence of any ERISA Event or of any "prohibited transaction," as described
in section 406 of ERISA or in section 4975 of the Code, in connection with any
Plan or any trust created thereunder, a written notice signed by a Responsible
Officer specifying the nature thereof, what action the Company, the Subsidiary
or the ERISA Affiliate is taking or proposes to take with respect thereto, and,
when known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, and (iii) immediately
upon receipt thereof, copies of any notice of the PBGC's intention to terminate
or to have a trustee appointed to administer any Plan. With respect to each
Plan (other than a Multiemployer Plan), the Company will, and will cause each
Subsidiary and ERISA Affiliate to, (i) satisfy in full and in a timely manner,
without incurring any late payment or underpayment charge or penalty and
without giving rise to any lien, all of the contribution and funding
requirements of section 412 of the Code (determined without regard to
subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii)
pay, or cause to be paid, to the PBGC in a timely manner, without incurring any
late payment or underpayment charge or penalty, all premiums required pursuant
to sections 4006 and 4007 of ERISA.
8.08 Environmental Matters.
(a) The Company will and will cause each Subsidiary to
establish and implement such procedures as may be reasonably necessary
to continuously determine and assure that any failure of the following
does not have a Material Adverse Effect: (i) all Property of the
Company and its Subsidiaries and the operations conducted thereon are
in compliance with and do not violate the requirements of any
Environmental Laws, (ii) no oil, hazardous substances or solid wastes
are disposed of or otherwise released on or to any Property owned by
any such party except in compliance with Environmental Laws, (iii) no
hazardous substance will be released on or to any such Property in a
quantity equal to or exceeding that quantity which requires reporting
pursuant to Section 103 of CERCLA, and (iv) no oil, oil and gas
exploration and production wastes, or hazardous substance is released
on or to any such Property so as to pose an imminent and substantial
endangerment to public health or welfare or the environment.
(b) The Company will promptly notify the Bank in writing of
any threatened action, investigation or inquiry by any Governmental
Authority of which the Company has knowledge in connection with any
Environmental Laws, excluding routine testing and corrective action.
(c) The Company will and will cause each Subsidiary to
provide environmental audits and tests in accordance with ASTM
standards as reasonably requested by any Bank or as otherwise required
to be obtained by any Bank by any Governmental Authority in connection
with any future acquisitions of Oil and Gas Properties or other
material Properties.
8.09 Guarantees. If a Subsidiary guarantees any Debt of the
Company, it will cause the Indebtedness to be equally and ratably guaranteed by
such Subsidiary.
Section 9. Negative Covenants. The Company covenants and
agrees that, so long as any of the Commitments are in effect or any Letter of
Credit is outstanding and until payment in full of all Loans, reimbursement
obligations under any Letter of Credit and all interest and fees due hereunder:
9.01 Debt. Neither the Company nor any Subsidiary will incur,
create, assume or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness;
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(b) Debt of the Company existing on the Closing Date which is
reflected in the Financial Statements or is disclosed in Schedule
9.01(b) (but excluding under the Prior Credit Agreement), and any
renewals or extensions (but not increases) thereof;
(c) accounts payable (for the deferred purchase price of
Property or services) from time to time incurred in the ordinary
course of business which, if greater than 120 days past the invoice or
billing date, are being contested in good faith by appropriate
proceedings if reserves adequate under GAAP shall have been
established therefor;
(d) the Senior Unsecured Notes; provided that for any such
Debt issued after the Closing Date (i) the maturity of such Debt must
be no earlier than January 23, 2008, shall provide for no unscheduled
mandatory payments or prepayments of principal before such date (other
than upon acceleration following default under the related indenture)
and shall provide for no scheduled payments or prepayments of
principal before such date, (ii) no Default shall exist and be
continuing on the date of such issuance, and (iii) taking into account
the use (contemporaneously with such issuance) of proceeds from such
issuance, the Borrowing Base, adjusted for such issuance, must equal
or exceed the aggregate outstanding principal amount of the Loans plus
the LC Exposure;
(e) Debt associated with bonds or surety obligations required
by Governmental Requirements in connection with the operation of the
Oil and Gas Properties of the Company and its Subsidiaries; and
(f) obligations to establish or pay into escrow accounts or
other reserves amounts necessary to cover costs of abandonment of oil
and gas wells and/or drilling sites.
(g) Swap Contracts; provided, however, that (i) such Swap
Contracts related to oil production shall not, either individually or
in the aggregate, cover more than seventy-five percent (75%) of the
Company's and its Subsidiaries' estimates for the production of oil
for each individual period covered by the Swap Contracts, (ii) such
Swap Contracts related to natural gas production shall, not either
individually or in the aggregate, cover, more than seventy-five
percent (75%) of the Company's and its Subsidiaries' estimates for the
production of natural gas for each individual period covered by the
Swap Contracts, (iii) each counterparty to a Swap Contract shall have
senior unsecured long-term debt rated BBB or higher by S&P or Baa2 or
higher by Moody's at the commencement of such Swap Contract, and (iv)
no Swap Contract shall be secured by any Lien;
(h) Debt incurred by Special Purpose Subsidiaries and the
Subsidiaries listed on Schedule 9.01(h), if and only if, such Debt is
evidenced by a document or instrument containing language, in form and
substance satisfactory to the Agent, by which the lender or lenders
acknowledge that the Debt advanced by them to the Special Purpose
Subsidiary and the Subsidiaries listed on Schedule 9.01(h) to be
non-recourse to the Company and all other Subsidiaries;
(i) obligations arising under arrangements or agreements
designed to protect the Company or a Subsidiary entered into the
ordinary course of business to reduce the Company's or a Subsidiary's
exposure to fluctuations in interest rates;
(j) Without limitation of any other part of Section 9.01,
Debt of the Company created, incurred or assumed after the Closing
Date; provided that the aggregate outstanding principal amount of such
Debt shall not at any one time exceed $40,000,000;
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(k) Debt (as defined in clause (h) under the definition of
Debt) created by the KCS Production Payments as defined in Section
1.04 of the Purchase and Sale Agreement between Hall-Houston Oil
Company and Newfield Exploration Company dated August 11, 1998
covering the Property described on Schedule 9.01(k);
(l) The QUIPS Debentures, the QUIPS and the QUIPS Guaranty;
and
(m) Subordinated Debt of the Company; provided that for any
such Debt issued after the Closing Date (i) the maturity of such Debt
must be no earlier than January 23, 2008, shall provide for no
unscheduled mandatory payments or prepayments of principal before such
date (other than upon acceleration following default under the related
indenture) and shall provide for no scheduled payments or prepayments
of principal before such date, (ii) no Default shall exist and be
continuing on the date of such issuance, (iii) at the option of the
Company, (x) the Company shall have provided to the Banks information
about such Debt so that the Required Banks shall have been able to
redetermine before such issuance the Borrowing Base (giving effect to
such issuance) in accordance with Section 2.08 or (y) the Borrowing
Base shall be reduced by the amount of such Debt issued, and (iv)
taking into account the use (contemporaneously with such issuance) of
proceeds from such issuance, the Borrowing Base, adjusted for such
issuance, must equal or exceed the aggregate outstanding principal
amount of the Loans plus the LC Exposure.
9.02 Liens. Neither the Company nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:
(a) Excepted Liens;
(b) Liens securing permitted capitalized leases, but only on
the Property under lease;
(c) Liens on cash or securities securing the Debt described in
Section 9.01(f); and
(d) Liens on Property of a Special Purpose Subsidiary or a
Subsidiary listed on Schedule 9.01(h) securing the Debt of such
Subsidiary described in Section 9.01(h).
(e) Liens arising pursuant to the production payments
permitted by Section 9.01(k) and related mortgages and security
agreements covering the same Property covered by such production
payments.
Notwithstanding the foregoing exceptions, in no event will any Lien exist on
any stock of NFXD, any other equity interests of NFXD, or any warrant, option
or right to acquire any such stock or equity interests.
9.03 Investments, Loans and Advances. Neither the Company nor
any Subsidiary will make or permit to remain outstanding any loans or advances
to or investments in any Person, except that the foregoing restriction shall
not apply to:
(a) investments, loans or advances reflected in the Financial
Statements or which are disclosed to the Banks in Schedule 9.03;
(b) investments in additional Oil and Gas Properties and gas
gathering systems related thereto;
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(c) accounts receivable arising out of the sale of
Hydrocarbons, other assets or services in the ordinary course of
business;
(d) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case maturing within one year from the date of
creation thereof;
(e) commercial paper maturing within one year from the date
of creation thereof rated A2 or higher by S&P or P2 or higher by
Moody's;
(f) deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by,
any Bank or any office located in the United States of any other bank
or trust company which is organized under the laws of the United
States or any state thereof and has capital, surplus and undivided
profits aggregating at least $100,000,000.00 (as of the date of such
Bank's or bank or trust company's most recent financial reports) and
has a short term deposit rating of no lower than A2 or P2, as such
rating is set forth from time to time by S&P or Moody's, respectively;
(g) advances to operators under operating agreements entered
into by the Company or any Subsidiary in the ordinary course of
business;
(h) repurchase agreements of any commercial banks in the
United States and Canada, if the commercial paper of such bank or of
the bank holding company of which such bank is a wholly-owned
subsidiary is rated in the highest rating categories of S&P, Moody's
or any other rating agency satisfactory to the Majority Banks, that
are fully secured by securities described in Section 9.03(d);
(i) eurodollar investments maturing within one (1) year with
financial institutions meeting the qualifications established in
Section 9.03(f);
(j) investments, loans or advances in the aggregate not to
exceed $40,000,000 in Special Purpose Subsidiaries outstanding at any
one time, including any investments, loans or advances outstanding in
a Subsidiary when such Subsidiary is designated as a Special Purpose
Subsidiary (for purposes of this Section 9.03(j) and Section 9.03(k),
the amount of any investment, loan or advance shall be the original
amount thereof plus all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or
write-offs with respect thereto, less (x) in the case of any loan or
advance, any repayment of the principal thereof and (y) in the case of
any equity investment, any return of such equity investment to the
Person that made such equity investment (such as by dividend,
distribution or repurchase of such equity investment));
(k) investments, loans or advances in the aggregate
outstanding at any one time not to exceed 7.5% of the consolidated
assets of the Company in Subsidiaries that are not Special Purpose
Subsidiaries and are not Subsidiaries described in Section 9.03(l)
(for purposes of Section 9.03(j) and this Section 9.03(k), the amount
of any investment, loan or advance shall be the original amount
thereof plus all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or
write-offs with respect thereto, less (x) in the case of any loan or
advance, any repayment of the principal thereof and (y) in the case of
any equity investment, any return of such equity investment to the
Person that made such equity investment (such as by dividend,
distribution or repurchase of such equity investment));
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(l) investments, loans or advances by the Company or any of
its Subsidiaries in or to the Subsidiaries listed on Schedule 9.01(h)
for investment by such Person in either direct interests in Oil and
Gas Properties or in Persons owning, as its principle assets, Oil and
Gas Properties;
(m) investments in loan participations purchased from a bank
with which deposits may be made under Section 9.03(f), provided that
the remaining term of any such participation at the time such
participation is bought must be 90 days or less and that the borrower
obligated to pay such loan must then have a credit rating of A2 or
higher from S&P or of P2 or higher from Moody's on such borrower's
short term obligations;
(n) remarketed certificates of participation sold in private
placements, representing undivided interests in the assets of a trust
or similar entity owning debt instruments, provided that such
certificates of participation have received a credit rating of A2 or
higher from S&P or of P2 or higher from Moody's and are payable in
full within 90 days after purchase;
(o) money market funds which can be liquidated on a daily
basis, provided that at the time in question such money market funds
have been specifically approved by the Agent and such approval has not
been withdrawn;
(p) asset backed securities with an average life of 24 months
or less and rated in one of the top two rating categories of Moody's
or S&P;
(q) corporate notes or bonds rated A3 or better by Moody's or
A- or better by S&P maturing within one year;
(r) at such time when no Loans and LC Exposure are
outstanding, the investments permitted by Sections 9.03(d), (e), (f),
(i), (n) or (o) may have maturities of two years or less; and
(s) other investments approved in writing by the Majority
Banks.
9.04 Dividends, Distributions and Redemptions. The Company
will not (i) declare or pay any dividend, (ii) purchase, redeem or otherwise
acquire for value any of its stock now or hereafter outstanding or any warrant,
option or other right to acquire any such stock, (iii) return any capital to
its stockholders, (iv) make any distribution of its assets to its stockholders,
or (v) permit any Subsidiary to purchase, redeem or otherwise acquire any stock
of the Company now or hereafter outstanding or any warrant, option or other
right to acquire any such stock, except that the Company may (a) declare and
pay dividends with respect to its capital stock payable solely in additional
shares of its common stock and (b) declare and pay dividends on and redeem or
repurchase its common and preferred stock or redeem or repurchase its QUIPS
debentures and QUIPS; provided that for clause (b), (1) the dollar amount of
the dividends and redemption or repurchases in any four quarters does not
exceed in the aggregate 25% of consolidated net income of the Company and its
Consolidated Subsidiaries (other than Special Purpose Subsidiaries) for such
four quarter period, and (2) no Default has occurred and is continuing and such
payment shall not cause a Default. Payment of interest on the QUIPS Debentures
and payment of distributions on the QUIPS shall not be subject to the terms of
this Section 9.04. Withholding of shares of its common stock for withholding
tax obligations in connection with issuance of common stock to its employees
shall not be subject to the terms of this Section 9.04.
9.05 [reserved]
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9.06 Nature of Business. Neither the Company nor any
Subsidiary will allow any material change to be made in the character of its
business as an independent, oil and gas exploration and production company.
9.07 Limitation on Sale Leaseback Transactions. Neither the
Company nor any Subsidiary will enter into or suffer to exist any Sale
Leaseback Transaction unless the aggregate of all Attributable Obligations for
all Sale Leaseback Transactions would not exceed $25,000,000 at any time.
9.08 Mergers, Etc. Neither the Company nor any Subsidiary
(excluding Special Purpose Subsidiaries) will (a) merge into or with or
consolidate with any other Person unless, in the case of the Company, it is the
surviving Person and in the case of a Subsidiary, it, the Company or another
Subsidiary is the surviving Person or the surviving Person is a directly or
indirectly 100% owned Subsidiary of the Company and, in each case, no Default
exists immediately before or after giving effect to such merger or
consolidation, or (b) sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Property or assets that are not Oil and Gas Properties to any other Person.
9.09 Proceeds of Notes. The Company will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 7.07.
9.10 ERISA Compliance. The Company will not at any time:
(a) Engage in, or permit any Subsidiary or ERISA Affiliate to
engage in, any transaction in connection with which the Company, any
Subsidiary or any ERISA Affiliate could be subjected to either a civil
penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a
tax imposed by Chapter 43 of Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with respect
to any Plan, which could result in any liability to the Company, any
Subsidiary or any ERISA Affiliate to the PBGC;
(c) Fail to make, or permit any Subsidiary or ERISA Affiliate
to fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law,
the Company, a Subsidiary or any ERISA Affiliate is required to pay as
contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA
Affiliate to permit to exist, any accumulated funding deficiency
within the meaning of Section 302 of ERISA or section 412 of the Code,
whether or not waived, with respect to any Plan;
(e) Permit, or allow any Subsidiary or ERISA Affiliate to
permit, the actuarial present value of the benefit liabilities under
any Plan maintained by the Company, any Subsidiary or any ERISA
Affiliate which is regulated under Title IV of ERISA to exceed the
current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such
benefit liabilities. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in section 4041 of
ERISA;
(f) Contribute to or assume an obligation to contribute to,
or permit any Subsidiary or ERISA Affiliate to contribute to or assume
an obligation to contribute to, any Multiemployer Plan;
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(g) Acquire, or permit any Subsidiary or ERISA Affiliate to
acquire, an interest in any Person that causes such Person to become
an ERISA Affiliate with respect to the Company, any Subsidiary or any
ERISA Affiliate if such Person sponsors, maintains or contributes to,
or at any time in the six-year period preceding such acquisition has
sponsored, maintained, or contributed to, (1) any Multiemployer Plan,
or (2) any other Plan that is subject to Title IV of ERISA under which
the actuarial present value of the benefit liabilities under such Plan
exceeds the current value of the assets (computed on a plan
termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities;
(h) Incur, or permit any Subsidiary or ERISA Affiliate to
incur, a liability to or on account of a Plan under sections 515,
4062, 4063, 4064, 4201 or 4204 of ERISA;
(i) Contribute to or assume an obligation to contribute to,
or permit any Subsidiary or ERISA Affiliate to contribute to or assume
an obligation to contribute to, any employee welfare benefit plan, as
defined in section 3(1) of ERISA, including, without limitation, any
such plan maintained to provide benefits to former employees of such
entities, that may not be terminated by such entities in their sole
discretion at any time without any material liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to
amend, a Plan resulting in an increase in current liability such that
the Company, any Subsidiary or any ERISA Affiliate is required to
provide security to such Plan under section 401(a)(29) of the Code.
9.11 Sale or Discount of Receivables. Neither the Company nor
any Subsidiary will discount or sell (with or without recourse) any of its
notes receivable or accounts receivable unless the Company determines in its
reasonable judgment that such course of action is the only means of collection
with respect to any such note receivable or account receivable and provided
that it does not constitute a material portion of the Company's notes
receivable or accounts receivable outstanding at such time.
9.12 Working Capital Ratio. The Company, together with all
Consolidated Subsidiaries (except for Special Purpose Subsidiaries) on a
consolidated basis, will not allow its Working Capital Ratio to fall below at
any time 1.1 to 1.0. For the purposes of this section, Working Capital Ratio
shall mean the ratio of (i) current assets as determined in accordance with
GAAP plus unused availability under the Aggregate Commitments to (ii) current
liabilities as determined in accordance with GAAP less (to the extent included
in such current liabilities) current portions of the Indebtedness.
9.13 Funded Debt to EBITDA Ratio. The Company will not allow
the Funded Debt to EBITDA Ratio to exceed 3.0 to 1.0 at any time.
9.14 Net Worth. The Company will not permit its Adjusted
Consolidated Net Worth at any time to be less than $450,000,000 plus 25% of the
positive consolidated net income of the Company and its Consolidated
Subsidiaries (other than Special Purpose Subsidiaries) for each fiscal quarter
of the Company commencing with the quarter beginning January 1, 2001; provided
that in determining consolidated net income, there shall be disregarded the
after-tax effects of non-cash gains, losses or adjustments under FASB Statement
No. 133.
9.15 Sale of Oil and Gas Properties. Except for Hydrocarbons
sold in the ordinary course of business as and when produced, the Company and
its Subsidiaries (excluding Special Purpose Subsidiaries) will not sell,
assign, transfer, farm-out or convey, directly or indirectly, by way of merger
or sale of equity securities in a Subsidiary or otherwise, ("Transfer") any
interest in any of its Oil and Gas Properties in any calendar year in excess of
$40,000,000 in the aggregate as such value is determined by the most recent
December 31 Reserve Report (and when applicable before a new December 31
Reserve
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Report is delivered after the Closing Date, the Lariat Reserve Report) using a
10% discount rate and giving effect to production prior to the effective date
of the Transfer, without the prior written consent of Required Banks, which
consent will not be unreasonably withheld.
9.16 Environmental Matters. Neither the Company nor any
Subsidiary will cause or permit any of its Property to be in violation of, or
do anything or permit anything to be done which will subject any such Property
to any remedial obligations under any Environmental Laws, assuming disclosure
to the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violation or
remedial obligations would have a Material Adverse Effect.
9.17 Transactions with Affiliates. Neither the Company nor
any Subsidiary will enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of property or the rendering of any
service, with any Affiliate unless such transactions are otherwise permitted
under this Agreement, are in the ordinary course of the Company's or such
Subsidiary's, as the case may be, business, and are upon terms no less
favorable to the Company or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person not an Affiliate.
9.18 Subsidiaries and Partnerships. Neither the Company nor
any Subsidiary shall create or acquire any Subsidiary unless (i) the Company
shall give the Agent prompt notice of the creation of such Subsidiary and (ii)
the Company is in compliance with Section 9.03.
9.19 Hydrocarbon Sales Contract. Neither the Company nor any
Subsidiary (excluding Special Purpose Subsidiaries) will enter into any
contract for the sale of Hydrocarbons produced from any of its Oil and Gas
Properties in which the Company or such Subsidiary warrants quantities of
Hydrocarbons to be delivered thereunder.
9.20 Negative Pledge Agreements. Neither the Company nor any
Subsidiary (excluding Special Purpose Subsidiaries) will create, incur, assume
or suffer to exist any contract, agreement or understanding (other than this
Agreement) which in any way prohibits or restrict the granting, conveying,
creation or imposition of any Lien on any Property of the Company or of any
Subsidiary or restricts any Subsidiary from paying dividends to the Company or
which requires the consent of or notice to other Persons in connection
therewith, except for the documents creating the Liens permitted by Section
9.02(f), but such restrictions shall apply only to the Properties covered by
the Liens and except for the documents evidencing the Senior Unsecured Notes.
9.21 Senior Unsecured Notes. The Company will not modify or
amend the terms of the Indenture, any Senior Unsecured Note or any related
indentures or other document without the consent of the Majority Banks, if the
effect of such modification or amendment would be to shorten the time for
payment on any Senior Unsecured Note, increase the principal amount of the
Senior Unsecured Notes above $325,000,000, increase the rate of interest on any
Senior Unsecured Note or change the method of calculating interest so as to
effectively increase the rate of interest on any Senior Unsecured Note, change
any of the provisions of the covenants and events of default and any of the
definitions used in or relating thereto, or any other provisions which would
detrimentally affect the rights of the Banks.
9.22 QUIPS. The Company and its Subsidiaries will not modify
or amend the terms of the indenture under which the QUIPS Debentures are issued
and any related documents without the consent of the Majority Banks, if the
effect of such modification or amendment would be to shorten the maturity to
less than August 13, 2009 on any QUIPS Debenture, increase the aggregate
principal amount of the QUIPS Debentures above $149,000,000, increase the rate
of interest on any QUIPS Debenture or change the method of calculating interest
so as to effectively increase the rate of interest on any QUIPS
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Debenture, change any of the provisions of subordination, the covenants and
events of default and any of the definitions used in or relating thereto, or
any other provisions which would detrimentally affect the rights of the Banks.
The Company and its Subsidiaries will not modify or amend the terms of the
QUIPS or the QUIPS Trust and any related documents, including without
limitation, the QUIPS Guaranty, without the consent of the Majority Banks, if
the effect of such modification or amendment would be to shorten the maturity
to less than August 13, 2009 on any QUIPS, issue additional QUIPS above
$144,000,000 in the aggregate for the liquidation preference amount for all
QUIPS outstanding, increase the distribution rate on any QUIPS or change the
method of calculating the distribution rate so as to effectively increase the
distribution rate on any QUIPS, change any of the provisions of subordination,
the covenants and events of default and any of the definitions used in or
relating thereto, or any other provisions which would detrimentally affect the
rights of the Banks.
9.23 Subordinated Debt. The Company will not modify or amend
the terms of the Subordinated Debt or any related indentures or other document
without the consent of the Majority Banks, if the effect of such modification
or amendment would be to shorten the time for payment on any Subordinated Debt,
increase the rate of interest on any Subordinated Debt or change the method of
calculating interest so as to effectively increase the rate of interest on any
Subordinated Debt, change any of the provisions of the covenants, subordination
provisions and events of default and any of the definitions used in or relating
thereto, or any other provisions which would detrimentally affect the rights of
the Banks.
9.24 Fiscal Periods. The Company will not change, or permit
any of its Consolidated Subsidiaries to change, its fiscal year from the
calendar year.
9.25 NFXD. The Company will not permit any Person other than
the Company to own at any time any stock of NFXD, any other equity interest of
NFXD, or any warrant, option or right to acquire any such stock, equity
interest.
Section 10. Events of Default; Remedies.
10.01 Events of Default. Each of the following events shall
constitute an "Event of Default":
(a) The Company shall (i) default in the payment or
prepayment when due of any principal of or interest on any Loan, or
any reimbursement obligation for a disbursement made under any Letter
of Credit or (ii) shall default in the payment when due of any fees or
other amount payable by it hereunder or under any other Loan Document
and such default under this clause (ii) shall continued unremedied for
a period of three (3) Business Days; or
(b) The Company shall default in the payment when due of any
principal of or interest on any of its other Debt in an amount in
excess of $2,500,000 or any event specified in any note, agreement,
indenture or other document evidencing or relating to any such Debt
shall occur if the effect of such event is to cause, or (with the
giving of any notice or the lapse of time or both) to permit the
holder or holders of such Debt (or a trustee or agent on behalf of
such holder or holders) to cause, such Debt to become due prior to its
stated maturity; or
(c) Any representation, warranty or certification made or
deemed made herein or in any other Loan Document by the Company, or
any certificate furnished to any Bank or the Agent pursuant to the
provisions hereof or any other Loan Document, shall prove to have been
false or misleading as of the time made or furnished in any material
respect; or
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(d) (i) The Company shall default in the performance of any
of its obligations under Section 9 or any other Section of this
Agreement other than under Section 8; or (ii) the Company shall
default in the performance of any of its obligations under Section 8
or any Loan Document (other than payment of amounts due which shall be
governed by Section 10.01(a) and matters governed by clause (i) of
this Section 10.01(d)) and such default shall continue unremedied for
a period of 30 days after the earlier to occur of (i) notice thereof
to the Company by the Agent or any Bank (through the Agent) or (ii)
the Company otherwise becoming aware of such default; or
(e) The Company shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(f) The Company shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or readjustment
of debts, (v) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any
corporate action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the
application or consent of the Company, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution
or winding-up, or the composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the
like of the Company or of all or any substantial part of its assets,
or (iii) similar relief in respect of the Company under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed
and in effect, for a period of 60 days; or an order for relief against
the Company shall be entered in an involuntary case under the Federal
Bankruptcy Code; or
(h) A judgment or judgments for the payment of money in
excess of $1,000,000 (net of insured amounts) in the aggregate shall
be rendered by a court or courts against the Company and the same
shall not be discharged (or provision shall not be made for such
discharge) or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof and the Company shall
not, within said period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(i) Any Subsidiary (excluding Special Purpose Subsidiaries)
takes, suffers or permits to exist as to such Subsidiary any of the
events or conditions referred to in Sections 10(b), (e), (f), (g) or
(h); or
(j) If any Letter of Credit becomes the subject matter of any
order, judgment, injunction or any other such determination, or if the
Company or any other Person shall petition or apply for or obtain any
order restricting payment by the Agent under any Letter of Credit or
extending the Banks' liability under any Letter of Credit beyond the
expiration date stated therein or otherwise agreed to by the Agent; or
(k) Any Loan Document shall be illegal or unenforceable in any
material respect; or
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(l) Any Change of Control shall occur.
10.02 Remedies.
(a) In the case of an Event of Default other than one
referred to in clauses (e), (f) or (g) of Section 10.01 or in clause
(i) to the extent it relates to clauses (e), (f) or (g), the Agent may
and, upon request of the Majority Banks, shall, by notice to the
Company, cancel the Commitments and/or declare the principal amount
then outstanding of, and the accrued interest on the Loans and all
other amounts payable by the Company hereunder and under the Notes
(including without limitation the payment of cash collateral to secure
the LC Exposure as provided in Section 2.07(b) hereof) to be forthwith
due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Company.
(b) In the case of the occurrence of an Event of Default
referred to in clauses (e), (f) or (g) of Section 10.01 or in clause
(i) to the extent it relates to clauses (e), (f) or (g), the
Commitments shall be automatically cancelled and the principal amount
then outstanding of, and the accrued interest on, the Loans and all
other amounts payable by the Company hereunder and under the Notes
(including without limitation the payment of cash collateral to secure
the LC Exposure as provided in Section 2.07(b) hereof) shall become
automatically immediately due and payable without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or
other formalities of any kind, all of which are hereby expressly
waived by the Company.
(c) All proceeds received after maturity of the Notes,
whether by acceleration or otherwise shall be applied first to
reimbursement of expenses and indemnities provided for in this
Agreement and the other Loan Documents; second to accrued interest on
the Notes; third to fees; fourth pro rata to principal outstanding on
the Notes and other Indebtedness; fifth to serve as cash collateral to
be held by the Agent to secure the LC Exposure; and any excess shall
be paid to the Company or as otherwise required by any Governmental
Requirement.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder
with such powers as are specifically delegated to the Agent by the terms of
this Agreement and the Loan Documents, together with such other powers as are
reasonably incidental thereto. The Agent (which term as used in this sentence
and in Section 11.05 and the first sentence of Section 11.06 shall include
reference to its Affiliates and its and its Affiliates' respective officers,
directors, employees, attorneys, accountants, experts and agents): (a) shall
have no duties or responsibilities except those expressly set forth in the Loan
Documents, and shall not by reason of the Loan Documents be a trustee or
fiduciary for any Bank; (b) makes no representation or warranty to any Bank and
shall not be responsible to the Banks for any recitals, statements,
representations or warranties contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received by
any of them under, this Agreement, or for the value, validity, effectiveness,
genuineness, execution, legality, enforceability or sufficiency of this
Agreement, any Note or any other document referred to or provided for herein or
for any failure by the Company or any other Person (other than the Agent) to
perform any of its obligations hereunder or thereunder or for the existence,
value, perfection or priority of any collateral security or the financial or
other condition of the Company, its Subsidiaries or any other obligor; (c)
except pursuant to Section 11.07 shall not be required to initiate or
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conduct any litigation or collection proceedings hereunder; and (d) shall not
be responsible for any action taken or omitted to be taken by it hereunder or
under any other document or instrument referred to or provided for herein or in
connection herewith including its own ordinary negligence, except for its own
gross negligence or wilful misconduct. The Agent may employ agents,
accountants, attorneys and experts and shall not be responsible for the
negligence or misconduct of any such agents, accountants, attorneys or experts
selected by it in good faith or any action taken or omitted to be taken in good
faith by it in accordance with the advice of such agents, accountants,
attorneys or experts. The Agent may deem and treat the payee of any Note as the
holder thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof permitted hereunder shall have been filed with
the Agent.
11.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telecopier, 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, independent
accountants and other experts selected by the Agent.
11.03 Defaults. The 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 of fees or failure to reimburse for Letter
of Credit drawings) unless the Agent 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 the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Banks.
11.04 Rights as a Bank. With respect to its Commitments and
the Loans made by it and its participation in the issuance of Letters of
Credit, The Chase Manhattan Bank (and any successor acting as Agent) 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 the
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Chase Manhattan
Bank (and any successor acting as Agent) and its Affiliates may (without having
to account therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with the
Company (and any of its Affiliates) as if it were not acting as the Agent, and
The Chase Manhattan Bank and its Affiliates may accept fees and other
consideration from the Company for services in connection with this Agreement
or otherwise without having to account for the same to the Banks.
11.05 INDEMNIFICATION. THE BANKS AGREE TO INDEMNIFY THE AGENT
RATABLY IN ACCORDANCE WITH THEIR PERCENTAGE SHARES FOR THE INDEMNITY MATTERS AS
DESCRIBED IN SECTION 12.03 TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE
COMPANY UNDER SECTION 12.03, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
COMPANY UNDER SAID SECTION 12.03 AND FOR ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR
ARISING OUT OF: (A) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OTHER
DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THE TRANSACTIONS
CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS
CONTINUING, NORMAL ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE
PERFORMANCE OF ITS AGENCY DUTIES HEREUNDER OR (B) THE ENFORCEMENT OF ANY OF THE
TERMS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT; WHETHER OR NOT ANY OF THE
FOREGOING SPECIFIED IN THIS
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SECTION 11.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE AGENT,
PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT
THEY ARISE FROM THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE AGENT.
11.06 Non-Reliance on Agent and other Banks. Each Bank
acknowledges and agrees that it has, independently and without reliance on the
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 the Agent or any other Bank, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of the Loan Documents or any other document referred to or provided
for herein or to inspect the Properties or books of the Company. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Agent hereunder, the 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
of its Affiliates) which may come into the possession of the Agent or any of
its Affiliates. In this regard, each Bank acknowledges Bracewell & Patterson,
L.L.P. is acting in this transaction as special counsel to the Agent only,
except to the extent otherwise expressly stated in any legal opinion or any
Loan Document. Each Bank will consult with its own legal counsel to the extent
that it deems necessary in connection with the Loan Documents and the matters
contemplated therein.
11.07 Action by Agent. Except for action or other matters
expressly required of the Agent hereunder the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall (i) receive
written instructions from the Majority Banks specifying the action to be taken
and (ii) be indemnified to its satisfaction by the Banks against any and all
liability and expenses which may be incurred by it by reason of taking or
continuing to take any such action. The instructions of the Majority Banks and
any action taken or failure to act pursuant thereto by the Agent shall be
binding on all of the Banks. If a Default has occurred and is continuing, the
Agent shall take such action with respect to such Default as shall be directed
by the Majority Banks in the written instructions (with indemnities) described
in this Section 11.07, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
as it shall deem advisable in the best interests of the Banks. In no event,
however, shall the Agent be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement and the other Loan
Documents or applicable law.
11.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent
may resign at any time by giving notice thereof to the Banks and the Company
and the 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. 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. Upon the acceptance of such
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. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 11
and Section 12.03 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 the Agent.
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Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the 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 this Agreement, any Note or any other
Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement, any
Note or any other Loan Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
12.02 Notices. All notices and other communications provided
for herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other
Loan Documents) shall be given or made by telex, telecopy, telegraph, cable,
courier or U.S. Mail or in 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 in the other
Loan Documents; or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement or in the other Loan Documents, all such
communications shall be deemed to have been duly given when transmitted by
telex or telecopier, delivered to the telegraph or cable office or personally
delivered or, in the case of a mailed notice, three (3) Business Days after the
date deposited in the mails, postage prepaid, in each case given or addressed
as aforesaid.
12.03 Payment of Expenses, Indemnities, etc.
(a) The Company agrees, whether or not the transactions
hereby contemplated are consummated, to pay all reasonable expenses of
the Agent in the administration (both before and after the execution
hereof and including advice of counsel as to the rights and duties of
the Agent and the Banks with respect thereto) of, and in connection
with the negotiation, syndication, investigation, preparation,
execution and delivery of, recording or filing of, preservation of
rights under, enforcement of, and refinancing, renegotiation or
restructuring of, this Agreement, the Notes and the other Loan
Documents and any amendment, waiver or consent relating thereto
(including, without limitation, travel, photocopy, mailing, courier,
telephone and other similar expenses of the Agent, the cost of
environmental audits, surveys and appraisals at reasonable intervals,
the reasonable fees and disbursements of counsel for the Agent and in
the case of enforcement for any of the Banks); and promptly reimburse
the Agent for all amounts expended, advanced or incurred by the Agent
or the Banks to satisfy any obligation of the Company under this
Agreement or any Loan Document.
(b) THE COMPANY AGREES TO INDEMNIFY THE AGENT AND EACH BANK
AND EACH OF THEIR AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS
("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS AGAINST AND
PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY
MATTERS WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF
THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A
RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (i) ANY ACTUAL OR
PROPOSED USE BY THE COMPANY OF THE PROCEEDS OF ANY OF THE LOANS, (ii)
THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (iii)
THE OPERATIONS OF THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES,
(iv) THE FAILURE OF THE COMPANY OR ANY SUBSIDIARY TO
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COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT,
OR WITH ANY GOVERNMENTAL REQUIREMENT, (v) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF THE COMPANY SET FORTH
IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, (vi) THE ISSUANCE,
EXECUTION AND DELIVERY OR TRANSFER OF OR PAYMENT OR FAILURE TO PAY
UNDER ANY LETTER OF CREDIT, (vii) THE PAYMENT OF A DRAWING UNDER ANY
LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR
OTHER IMPROPER PRESENTATION OF THE MANUALLY EXECUTED DRAFT(S) AND
CERTIFICATION(S), (viii) ANY ASSERTION THAT THE BANKS WERE NOT
ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE LOAN
DOCUMENTS, OR (ix) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING,
WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING,
DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING
(INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND
INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY
NEGLIGENCE OF ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY
MATTERS ARISING SOLELY BY REASON OF CLAIMS BETWEEN THE BANKS OR ANY
BANK AND THE AGENT OR A BANK'S SHAREHOLDERS AGAINST THE AGENT OR BANK
OR BY REASON OF THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT ON THE PART
OF THE INDEMNIFIED PARTY.
(c) THE COMPANY AGREES TO INDEMNIFY AND HOLD HARMLESS FROM
TIME TO TIME THE INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH PERSON MAY
BECOME SUBJECT (i) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE
COMPANY OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING
WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES
ON ANY OF THEIR PROPERTIES, (ii) AS A RESULT OF THE BREACH OR
NON-COMPLIANCE BY THE COMPANY OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL
LAW APPLICABLE TO THE COMPANY OR ANY SUBSIDIARY, (iii) DUE TO PAST
OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES
OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND
FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (iv)
THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED
BY THE COMPANY OR ANY SUBSIDIARY, OR (v) ANY OTHER ENVIRONMENTAL,
HEALTH OR SAFETY CONDITION IN CONNECTION WITH ANY OF THE LOAN
DOCUMENTS, PROVIDED, HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER
THIS SECTION 12.03 (c) IN RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE
ARISING FROM THE ACTS OR OMISSIONS OF THE AGENT OR ANY BANK DURING THE
PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE
OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED
IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE).
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(d) No Indemnified Party may settle any claim to be
indemnified without the consent of the indemnitor, such consent not to
be unreasonably withheld; provided, that the indemnitor may not
reasonably withhold consent to any settlement that an Indemnified
Party proposes, if the indemnitor does not have the financial ability
to pay all its obligations outstanding and asserted against the
indemnitor at that time, including the maximum potential claims
against the Indemnified Party to be indemnified pursuant to this
Section 12.03.
(e) In the case of any indemnification hereunder, the Agent
or any Bank, as appropriate, shall give notice to the Company of any
such claim or demand being made against the Indemnified Party and the
Company shall have the non-exclusive right to join in the defense
against any such claim or demand provided that if the Company provides
a defense, the Indemnified Party shall bear its own cost of defense
unless there is a conflict between the Company and such Indemnified
Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED
PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY
KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN
AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF
TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF STRICT
LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED
PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE
COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILFUL MISCONDUCT, THIS
CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT SHALL
ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE
OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILFUL
MISCONDUCT OF THE INDEMNIFIED PARTY.
(g) The Company's obligations under this Section 12.03 shall
survive any termination of this Agreement and the payment of the Notes
and shall continue thereafter in full force and effect.
(h) The Company shall pay any amounts due under this Section
12.03 within thirty (30) days of the receipt by the Company of notice
of the amount due.
12.04 Amendments, Etc. Any provision of this Agreement or any
other Loan Document, may be amended, modified or waived with the Company's and
the Majority Banks' prior written consent; provided that (a) no amendment,
modification or waiver which extends the Maturity Date, the maturity of the
Loans, increases the Aggregate Maximum Credit Amounts above $500,000,000,
releases all or substantially all of the collateral, reduces the interest rate
or fees applicable to the Loans or the fees payable to the Banks generally,
affects Sections 2.03(a), this Section 12.04 or Section 12.06(a), modifies the
definition of "Majority Banks" or "Required Banks" shall be effective without
consent of all Banks; (b) no amendment, modification or waiver which changes
the Calculated Borrowing Base, affects Section 9.15, or modifies the definition
of "Borrowing Base" shall be effective without the consent of the Required
Banks, (c) no amendment, modification or waiver which increases the Maximum
Credit Amount of any Bank shall be effective without the consent of such Bank;
and (d) no amendment, modification or waiver which modifies the rights, duties
or obligations of the Agent shall be effective without the consent of the
Agent.
-59-
12.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06 Assignments and Participations.
(a) The Company may not assign its rights or obligations
hereunder or under the Notes or any Letters of Credit without the
prior consent of all of the Banks and the Agent.
(b) Any Bank may, upon the written consent of the Agent and
the Company (which consent will not be unreasonably withheld), assign
to one or more assignees all or a portion of its rights and
obligations under this Agreement pursuant to an Assignment Agreement
substantially in the form of Exhibit D (an "Assignment") provided,
however, that (i) any such assignment shall be in the amount of at
least $10,000,000 or such lesser amount to which the Company and the
Agent have consented and (ii) the assignee shall pay to the Agent a
processing and recordation fee of $2,500 for each assignment. Any such
assignment will become effective upon the execution and delivery to
the Agent of the Assignment and the consent of the Agent. Promptly
after receipt of an executed Assignment, the Agent shall send to the
Company a copy of such executed Assignment. Upon receipt of such
executed Assignment, the Company, will, at its own expense, execute
and deliver new Notes to the assignor and/or assignee, as appropriate,
in accordance with their respective interests as they appear. Upon the
effectiveness of any assignment pursuant to this Section 12.06(b), the
assignee will become a "Bank," if not already a "Bank," for all
purposes of this Agreement and the other Loan Documents. The assignor
shall be relieved of its obligations hereunder to the extent of such
assignment (and if the assigning Bank no longer holds any rights or
obligations under this Agreement, such assigning Bank shall cease to
be a "Bank" hereunder except that its rights under Sections 4.06,
5.01, 5.05 and 12.03 shall not be affected). The Agent will prepare on
the last Business Day of each month during which an assignment has
become effective pursuant to this Section 12.06(b), a new Annex I
giving effect to all such assignments effected during such month, and
will promptly provide the same to the Company and each of the Banks.
(c) Each Bank may transfer, grant or assign participations in
all or any part of such Bank's interests hereunder pursuant to this
Section 12.06(c) to any Person, provided that: (i) such Bank shall
remain a "Bank" for all purposes of this Agreement and the transferee
of such participation shall not constitute a "Bank" hereunder; and
(ii) no participant under any such participation shall have rights to
approve any amendment to or waiver of any of the Loan Documents,
except to the extent such amendment or waiver would (x) extend the
Maturity Date, (y) reduce the interest rate (other than as a result of
waiving the applicability of any post-default increases in interest
rates) or fees applicable to any of the Commitments or Loans or
Letters of Credit in which such participant is participating, or
postpone the payment of any thereof, or (z) release all or
substantially all of the collateral (except as provided in the Loan
Documents) supporting any of the Commitments or Loans or Letters of
Credit in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under
this Agreement or any of the Loan Documents (the participant's rights
against the granting Bank in respect of such participation to be those
set forth in the agreement with such Bank creating such
participation), and all amounts payable by the Company hereunder shall
be determined as if such Bank had not sold such participation,
provided that such participant shall be entitled to receive additional
amounts under Section 5 on the same basis as if it were a Bank and be
indemnified under Section 12.03 as if it were a Bank. In addition,
each agreement creating any participation must include an agreement by
the participant to be bound by the provisions of Section 12.15.
-60-
(d) The Banks may furnish any information concerning the
Company in the possession of the Banks from time to time to assignees
and participants (including prospective assignees and participants);
provided that, such Persons agree to be bound by the provisions of
Section 12.15 hereof.
(e) Notwithstanding anything in this Section 12.06 to the
contrary, any Bank may assign and pledge all or any of its Notes to
any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such
Federal Reserve System and/or such Federal Reserve Bank. No such
assignment and/or pledge shall release the assigning and/or pledging
Bank from its obligations hereunder.
(f) Notwithstanding any other provisions of this Section
12.06, no transfer or assignment of the interests or obligations of
any Bank or any grant of participations therein shall be permitted if
such transfer, assignment or grant would require the Company to file a
registration statement with the SEC or to qualify the Loans under the
"Blue Sky" laws of any state.
12.07 Invalidity. In the event that any one or more of the
provisions contained in any of the Loan Documents shall, for any reason, be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of the any
other Loan Document.
12.08 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.09 References. The words "herein," "hereof," "hereunder"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Subsection or Section shall be deemed to refer to the
applicable Section or Subsection of this Agreement unless otherwise stated
herein. Any reference herein to an annex, exhibit or schedule shall be deemed
to refer to the applicable annex, exhibit or schedule attached hereto unless
otherwise stated herein. The term "including" shall mean "including, without
limitation,", the term "include" shall mean "include, without limitation," and
the term "includes" shall mean "includes, without limitation,".
12.10 Survival. The obligations of the parties under Sections
5, 12.03, and 12.15 shall survive the repayment of the Loans and the
termination of the Commitments. To the extent that any payments on the
Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent, the
Indebtedness so satisfied shall be revived and continue as if such payment or
proceeds had not been received and the Agent's and the Banks' Liens, security
interests, rights, powers and remedies under this Agreement and each Loan
Document shall continue in full force and effect. In such event, each Loan
Document shall be automatically reinstated and the Company shall take such
action as may be reasonably requested by the Agent and the Banks to effect such
reinstatement.
12.11 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.
12.12 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE NOTES
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
-61-
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES (INCLUDING, BUT NOT LIMITED
TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR ITSELF AND (TO THE
EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND
DOES NOT PRECLUDE THE AGENT OR ANY BANK FROM OBTAINING JURISDICTION
OVER THE COMPANY IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE COMPANY HEREBY IRREVOCABLY DESIGNATES PRENTICE-HALL
CORPORATION SYSTEMS, INC. LOCATED AT 15 COLUMBUS CIRCLE, NEW YORK, NEW
YORK 10023-7773, AS THE DESIGNEE, APPOINTEE AND AGENT OF THE COMPANY
TO RECEIVE, FOR AND ON BEHALF OF THE COMPANY, SERVICE OF PROCESS IN
SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT AND THE NOTES. IT IS UNDERSTOOD THAT A COPY
OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY
OVERNIGHT COURIER TO THE COMPANY AT ITS ADDRESS SET FORTH UNDER ITS
SIGNATURE BELOW, BUT THE FAILURE OF THE COMPANY TO RECEIVE SUCH COPY
SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE COMPANY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE COMPANY AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30
DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY
BANK OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
(e) EACH OF THE COMPANY AND EACH BANK HEREBY (A) IRREVOCABLY
AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT
-62-
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (B) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C)
CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR
COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGE THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
12.14 Interest. It is the intention of the parties hereto
that each Bank shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to
any Bank under laws applicable to it (including the laws of the United States
of America and the State of New York or any other jurisdiction whose laws may
be mandatorily applicable to such Bank notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in the Notes, this Agreement or in any other Loan Document or agreement entered
into in connection with or as security for the Notes, it is agreed as follows:
(i) the aggregate of all consideration which constitutes interest under law
applicable to any Bank that is contracted for, taken, reserved, charged or
received by such Bank under the Notes, this Agreement or under any of the other
aforesaid Loan Documents or agreements or otherwise in connection with the
Notes shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be cancelled automatically and if
theretofore paid shall be credited by such Bank on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Bank to the
Company); and (ii) in the event that the maturity of the Notes is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Bank may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Agreement or otherwise shall be cancelled automatically by such Bank as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Bank on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by such Bank to the Company). All sums paid
or agreed to be paid to any Bank for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Bank, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Loans evidenced by the Notes until payment in full so that the rate
or amount of interest on account of any Loans hereunder does not exceed the
maximum amount allowed by such applicable law. If at any time and from time to
time (i) the amount of interest payable to any Bank on any date shall be
computed at the Highest Lawful Rate applicable to such Bank pursuant to this
Section 12.14 and (ii) in respect of any subsequent interest computation period
the amount of interest otherwise payable to such Bank would be less than the
amount of interest payable to such Bank computed at the Highest Lawful Rate
applicable to such Bank, then the amount of interest payable to such Bank in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Bank until the total
amount of interest payable to such Bank shall equal the total amount of
interest which would have been payable to such Bank if the total amount of
interest had been computed without giving effect to this Section.
-63-
12.15 Confidentiality. In the event that the Company provides
to the Agent or the Banks written confidential information belonging to the
Company, if the Company shall denominate such information in writing as
"confidential", the Agent and the Banks shall thereafter maintain such
information in confidence in accordance with the standards of care and
diligence that each utilizes in maintaining its own confidential information.
This obligation of confidence shall not apply to such portions of the
information which (i) are in the public domain, (ii) hereafter become part of
the public domain without the Agent or the Banks breaching their obligation of
confidence to the Company, (iii) are previously known by the Agent or the Banks
from some source other than the Company, (iv) are hereafter developed by the
Agent or the Banks without using the Company's information, (v) are hereafter
obtained by or available to the Agent or the Banks from a third party who owes
no obligation of confidence to the Company with respect to such information or
through any other means other than through disclosure by the Company, (vi) are
disclosed with the Company's consent, (vii) must be disclosed either pursuant
to any Governmental Requirement or to persons regulating the activities of the
Agent or the Banks or (viii) as may be required by law or regulation or order
of any Governmental Authority in any judicial, arbitration or governmental
proceeding. Further, the Agent or a Bank may disclose any such information to
any other Bank, any independent petroleum engineers or consultants, any
independent certified public accountants, any legal counsel employed by such
Person in connection with this Agreement or any Loan Document, including
without limitation, the enforcement or exercise of all rights and remedies
thereunder, or any assignee or participant (including prospective assignees and
participants) in the Loans; provided, however, that the Agent or Bank imposes
on the Person to whom such information is disclosed the same obligation to
maintain the confidentiality of such information as is imposed upon it
hereunder. Notwithstanding anything to the contrary provided herein, this
obligation of confidence shall cease three (3) years from the date the
information was furnished, unless the Company requests in writing at least
thirty (30) days prior to the expiration of such three year period, to maintain
the confidentiality of such information for an additional three year period.
The Company waives any and all other rights it may have to confidentiality as
against the Agent and the Banks arising by contract, agreement, statute or law
except as expressly stated in this Section 12.15.
12.16 Copies. When the Company is to provide a copy of any
report or notice to the Agent under this Agreement or any Loan Document, it
shall also provide enough copies of such report or notice to the Agent for the
Agent to provide a copy to each Bank.
[SIGNATURES BEGIN NEXT PAGE]
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The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
NEWFIELD EXPLORATION COMPANY
By: /s/ TERRY W. RATHERT
------------------------------------------
Name: Terry W. Rathert
Title: Chief Financial Officer
Address for Notices:
363 N. Sam Houston Parkway
Suite 2020
Houston, Texas 77060
Telecopier No.: (713) 847-6006
Telephone No.: (713) 847-6000
Attention:
Signature Page - 1
THE CHASE MANHATTAN BANK,
individually and as Agent
By: /s/ ROBERT C. MERTENSOTTO
----------------------------------------------
Name: Robert C. Mertensotto
Title: Managing Director
Lending Office for Base Rate Loans and Eurodollar
Loans:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: Loan and Agency Services
Address for Notices:
The Chase Manhattan Bank
One Chase Manhattan Plaza, 8th Floor
New York, NY 10081
Telecopier No.: (212) 552-5777
Telephone No.: (212) 552-7400
Attention: Loan and Agency Services
With a Copy to:
CHASE SECURITIES INC.
707 Travis Street - 5N86
Houston, TX 77002
Telecopier No.: (713) 216-8870
Telephone No.: (713) 216-8869
Attention: Peter Licalzi
Signature Page - 2
BANK OF AMERICA, NATIONAL ASSOCIATION
By: /s/ RONALD E. MCKAIG
----------------------------------------------
Name: Ronald E. McKaig
Title: Managing Director
Bank of America, National Association
333 Clay Street, Suite 4550
Houston, Texas 77002
Telecopier No.: (713) 651-4881
Telephone No.: (713) 651-4841
Lending Office for Base Rate Loans and Eurodollar
Loans:
Address for Notices:
Bank of America, National Association
901 Main Street
Dallas, Texas 75202-3714
Attn: Brandi Baker
Telecopier No.: (214) 290-9415
Telephone No.: (713) 651-4863
with a copy to:
Bank of America, National Association
333 Clay Street, Suite 4550
Houston, Texas 77002
Telecopier No.: (713) 651-4841
Telephone No.: (713) 651-4819
Attn: Phyllis Tennard
Signature Page - 3
BANK OF MONTREAL
By: /s/ MELISSA A BAUMAN
----------------------------------------------
Name: Melissa A. Bauman
Title: Director
Lending Office for Base Rate Loans and Eurodollar
Loans:
----------------------------------
----------------------------------
----------------------------------
Attention:
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
With a Copy to:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
Signature Page - 4
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ PHILLIPPE SOUSTRA
----------------------------------------------
Name: Phillippe Soustra
Title: Senior Vice President
Lending Office for Base Rate Loans and Eurodollar
Loans:
----------------------------------
----------------------------------
----------------------------------
Attention:
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
With a Copy to:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
Signature Page - 5
FIRST UNION NATIONAL BANK
By: /s/ ROBERT R. WETTEROFF
----------------------------------------------
Name: Robert R. Wetteroff
Title: Senior Vice President
Lending Office for Base Rate Loans and Eurodollar
Loans:
----------------------------------
----------------------------------
----------------------------------
Attention:
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
With a Copy to:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
Signature Page - 6
BANK ONE, NA
By: /s/ CHRISTINE M. MACAN
----------------------------------------------
Name: Christine M. Macan
Title: Vice President
Lending Office for Base Rate Loans and Eurodollar
Loans:
----------------------------------
----------------------------------
----------------------------------
Attention:
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
With a Copy to:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
Signature Page - 7
FLEET NATIONAL BANK
By: /s/ STEPHEN J. HOFFMAN
----------------------------------------------
Name: Stephan J. Hoffman
Title: Vice President
Lending Office for Base Rate Loans and Eurodollar
Loans:
----------------------------------
----------------------------------
----------------------------------
Attention:
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
With a Copy to:
----------------------------------
----------------------------------
----------------------------------
Telecopier No.:
Telephone No.:
Attention:
Signature Page - 8
ANNEX I
MAXIMUM CREDIT AMOUNTS
Percentage Maximum
Name of Bank Share Credit Amounts
- ---------------------- ---------- ----------------
The Chase Manhattan Bank 14.28571 $ 42,857,142.90
Bank of America, National Association 14.28571 $ 42,857,142.85
Bank of Montreal 14.28571 $ 42,857,142.85
Credit Lyonnais New York Branch 14.28571 $ 42,857,142.85
First Union National Bank 14.28571 $ 42,857,142.85
Bank One, NA 14.28571 $ 42,857,142.85
Fleet National Bank 14.28571 $ 42,857,142.85
--------- ----------------
Total 100.00000% $ 300,000,000.00
Annex I - 1
ANNEX II
(Applicable Funded Debt to EBITDA Ratio equal to or less than 1.75 to 1.00)
Rating Level Rating Level Rating Level Rating Level
*RATING LEVELS Level I Level II Level III Level IV
- ----------------- ----------------------- ------------------------ ----------------------- ---------------------------
If the Company's senior If the Company's senior If the Company's senior If the Company's senior
unsecured long-term unsecured long-term debt unsecured long-term debt unsecured long-term debt
debt is rated BBB- or is rated BB+ by S&P or is rated BB by S&P or is rated BB- or lower
better by S&P or Baa3 Ba1 by Moody's. Ba2 by Moody's. (or not rated) by S&P
or better by Moody's. and Ba3 or lower (or not
rated) by Moody's.
** Applicable Margin 0.225% 0.30% 0.375% 0.45%
for commitment fees
(per annum):
Applicable Margin for 0 0 0.125% 0.375%
Base Rate Loans (per
annum):
***Applicable Margin 1.125% 1.25% 1.375% 1.625%
for Eurodollar Loans
(per annum):
* The relevant Rating Level is determined by the higher of the S&P or
Moody's rating. However, if one rating is two or more levels below the
higher such rating, the Rating Level that is one level below the Rating
Level otherwise applicable shall apply. For example, if S&P rates the
Company's senior unsecured long-term debt BBB- and Moody's rates such
debt Ba3, then Rating Level II would apply. During such times as S&P
does not have a rating in effect for the Company's senior unsecured
long-term debt, such debt shall be deemed to be rated BB- by S&P, and
during such times as Moody's does not have a rating in effect for the
Company's senior unsecured long-term debt, such debt shall be deemed to
be rated Ba3 by Moody's.
** For purposes of determining the Applicable Margin for commitment fees,
the Rating Level for each calendar quarter shall be determined as of
the first day of such quarter.
*** For purposes of determining Applicable Margin for any Eurodollar Loan,
the Rating Level shall be determined as of the first day of the
applicable Interest Period for such Loan.
Annex II - 1
ANNEX III
(Applicable Funded Debt to EBITDA Ratio greater than 1.75 to 1.00)
Rating Level Rating Level Rating Level Rating Level
*RATING LEVELS Level I Level II Level III Level IV
- --------------------- ----------------------- ----------------------- ----------------------- -------------------------
If the Company's senior If the Company's senior If the Company's senior If the Company's senior
unsecured long-term unsecured long-term debt unsecured long-term unsecured long-term debt
debt is rated BBB- or is rated BB+ by S&P or debt is rated BB by S&P is rated BB- or lower
better by S&P or Baa3 Ba1 by Moody's. or Ba2 by Moody's. (or not rated) by S&P
or better by Moody's. and Ba3 or lower (or not
rated) by Moody's.
** Applicable Margin 0.275% 0.35% 0.425% 0.50%
for commitment fees
(per annum):
Applicable Margin for 0.125% 0.125% 0.25% 0.50%
Base Rate Loans (per
annum):
***Applicable Margin 1.25% 1.375% 1.50% 1.75%
for Eurodollar Loans
(per annum);
* The relevant Rating Level is determined by the higher of the S&P or
Moody's rating. However, if one rating is two or more levels below the
higher such rating, the Rating Level that is one level below the Rating
Level otherwise applicable shall apply. For example, if S&P rates the
Company's senior unsecured long-term debt BBB- and Moody's rates such
debt Ba3, then Rating Level II would apply. During such times as S&P
does not have a rating in effect for the Company's senior unsecured
long-term debt, such debt shall be deemed to be rated BB- by S&P, and
during such times as Moody's does not have a rating in effect for the
Company's senior unsecured long-term debt, such debt shall be deemed to
be rated Ba3 by Moody's.
** For purposes of determining the Applicable Margin for commitment fees,
the Rating Level for each calendar quarter shall be determined as of
the first day of such quarter.
*** For purposes of determining Applicable Margin for any Eurodollar Loan
the Rating Level shall be determined as of the first day of the
applicable Interest Period for such Loan.
Annex III - 1