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Exhibit 2.4
DECEMBER 30, 1993
CREDIT AGREEMENT
U.S. $175,000,000 REDUCING REVOLVING CREDIT FACILITY
AMONG
SEAGULL ENERGY CANADA LTD.
AND
CHEMICAL BANK OF CANADA,
INDIVIDUALLY AND AS ARRANGER AND ADMINISTRATIVE AGENT,
THE BANK OF NOVA SCOTIA,
INDIVIDUALLY AND AS PAYING AGENT AND CO-AGENT,
CANADIAN IMPERIAL BANK OF COMMERCE,
INDIVIDUALLY AND AS CO-AGENT,
AND
THE OTHER BANKS SIGNATORY HERETO
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . 24
1.3 Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1.4 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2. COMMITMENTS; DESIGNATION OF MAXIMUM OUTSTANDING AMOUNT. . . . . . . . . 25
2.1 Loans and Bankers' Acceptances . . . . . . . . . . . . . . . . . . . . . 25
2.2 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.3 Reductions and Changes of Commitments. . . . . . . . . . . . . . . . . . 29
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.5 Affiliates; Lending Offices. . . . . . . . . . . . . . . . . . . . . . . 31
2.6 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.7 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.8 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3. BORROWINGS, PREPAYMENTS AND SELECTION OF INTEREST RATES. . . . . . . . . 32
3.1 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.2 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.3 Selection of Interest Rates . . . . . . . . . . . . . . . . . . . . . . 33
3.4 Conditions Applicable to Bankers' Acceptances . . . . . . . . . . . . . 33
3.5 Paying Agent's Duties Re Bankers' Acceptances . . . . . . . . . . . . . 36
3.6 Certain Provisions Relating to Bankers' Acceptances Forms . . . . . . . 37
SECTION 4. PAYMENTS OF PRINCIPAL AND INTEREST. . . . . . . . . . . . . . . . . . . 37
4.1 Repayment of Loans and Reimbursement Obligations . . . . . . . . . . . . 37
4.2 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.3 Acceptance Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC. . . . . . . . . . . . . 39
5.1 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.3 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.4 Minimum and Maximum Amounts . . . . . . . . . . . . . . . . . . . . . . 40
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5.5 Certain Actions, Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.6 Non-Receipt of Funds by the Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.7 Sharing of Payments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6. YIELD PROTECTION AND ILLEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.1 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.2 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.3 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.4 Substitute Alternate Base Rate Loans or Canadian Prime Rate Loans . . . . . . . . . . . . . . 46
6.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.6 Additional Costs in Respect of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . 47
6.7 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.8 Limitation on Additional Charges; Substitute Banks; Non-Discrimination . . . . . . . . . . . . 49
SECTION 7. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.1 Initial Loans and Acceptance and Purchase of Bankers' Acceptances . . . . . . . . . . . . . . 49
7.2 Initial and Subsequent Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.1 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.2 Corporate Power and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.3 Binding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.4 No Legal Bar or Resultant Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.5 No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.7 Investments and Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.8 Liabilities and Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.9 Taxes and Governmental Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.10 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.11 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.12 Location of Businesses and Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.13 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.14 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.16 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.17 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.18 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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8.19 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.20 Claims and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.21 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.1 Financial Statements and Reports . . . . . . . . . . . . . . . . . . . . . . . . 58
9.2 Officers' Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.3 Taxes and Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.4 Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.6 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.7 Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.9 Accounts and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.10 Rights of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.11 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.12 ERISA Information and Compliance . . . . . . . . . . . . . . . . . . . . . . . . 65
9.13 Minimum APC Dividends and/or ENSTAR Alaska Advances . . . . . . . . . . . . . . 66
9.14 Minimum ENSTAR Alaska Management Fees . . . . . . . . . . . . . . . . . . . . . 67
9.15 Minimum ENSTAR Alaska Tax Payments . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.1 Debts, Guarantees and Other Obligations . . . . . . . . . . . . . . . . . . . . 67
10.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.3 Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . 73
10.4 Dividend Payment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.5 Mergers, Amalgamations and Sales of Assets . . . . . . . . . . . . . . . . . . . 74
10.6 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.7 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.8 Amendment of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.9 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.10 ENSTAR Alaska Financial Ratios . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.11 Parent Debt/Capitalization Ratio . . . . . . . . . . . . . . . . . . . . . . . . 77
10.12 EBITDA/Interest Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.13 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.14 Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.15 Covenants in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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11.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.2 Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.3 Preservation of Security for Unmatured Reimbursement Obligations . . . . . . . . . 81
11.4 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 12. THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.1 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . 82
12.2 Reliance by Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.3 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.4 Rights as a Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
12.6 Non-Reliance on Agents and Other Banks . . . . . . . . . . . . . . . . . . . . . . 85
12.7 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
12.8 Resignation or Removal of Agents . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 13. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.3 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.4 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
13.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
13.6 Limitation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
13.7 Interest Act (Canada); Interest Generally . . . . . . . . . . . . . . . . . . . . 92
13.8 Certain Saskatchewan Legislation . . . . . . . . . . . . . . . . . . . . . . . . . 92
13.9 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
13.10 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
13.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
13.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
13.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
13.14 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
13.15 Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
13.16 Judgement Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
13.17 Withholding Tax Remittances . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
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EXHIBIT A OIL AND GAS SUBSIDIARIES
EXHIBIT B FORM OF REQUEST FOR EXTENSION OF CREDIT
EXHIBIT C-1 FORM OF REVOLVING CREDIT LOAN NOTE (U.S. DOLLARS)
EXHIBIT C-2 FORM OF REVOLVING CREDIT LOAN NOTE (CANADIAN DOLLARS)
EXHIBIT D SUBSIDIARIES (WITH ADDRESSES)
EXHIBIT E FORM OF COMPLIANCE CERTIFICATE
EXHIBIT F ASSIGNMENT AND ACCEPTANCE
EXHIBIT G FORM OF ENGINEERING REPORT CERTIFICATE
EXHIBIT H PARAMETERS INTEREST RATE PROTECTION AND COMMODITIES FUTURES
PROGRAMS
EXHIBIT I INTERCREDITOR AGREEMENT
EXHIBIT J AMENDMENT TO U.S. FACILITY
EXHIBIT K FORM OF BANKERS' ACCEPTANCE
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CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of December 30, 1993, is by and among
SEAGULL ENERGY CANADA LTD. (the "Company"), a corporation duly organized and
validly existing under the laws of the Province of Alberta, Canada; each of the
banks which is or which may from time to time become a signatory hereto
(individually, a "Bank" and, collectively, the "Banks"); CHEMICAL BANK OF
CANADA ("Chemical"), as arranger and administrative agent for the Banks (in
such capacity, together with its successors in such capacity, the
"Administrative Agent"); THE BANK OF NOVA SCOTIA ("BNS"), as paying agent and
co-agent for the Banks (in such capacity, together with its successors in such
capacity, the "Paying Agent"), and CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"),
as co-agent for the Banks (in such capacity, together with its successors in
such capacity, the "Co-Agent").
The parties hereto agree as follows:
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS
1.1 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.1 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Additional Costs" shall have the meaning ascribed to such term in
Section 6.1 hereof.
"Affiliate" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person and, if such Person is an individual, any member of
the immediate family (including parents, siblings, spouse, children,
stepchildren, grandchildren, nephews and nieces) of such individual and any
trust whose principal beneficiary is such individual or one or more members of
such immediate family and any Person who is controlled by any such member or
trust. As used in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Agents" shall mean the Administrative Agent, the Paying Agent and the
Co-Agent, collectively.
"Agreement" shall mean this Credit Agreement, as the same may be
amended, modified, restated or supplemented from time to time.
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"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the higher of (a) the U.S. Prime Rate in effect on such day or (b) 1/2 of 1%
plus the Federal Funds Rate in effect for such day (rounded upwards, if
necessary, to the nearest 1/16th of 1%). For purposes hereof, "Federal Funds
Rate" shall mean, for any period, a fluctuating interest rate per annum equal
for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on such
transactions received by the Paying Agent from three Federal funds brokers of
recognized standing selected by it. For purposes of this Agreement, any change
in the Alternate Base Rate due to a change in the Federal Funds Rate shall be
effective on the effective date of such change in the Federal Funds Rate. If
for any reason the Paying Agent shall have determined (which determination
shall be conclusive and binding, absent manifest error) that it is unable to
ascertain the Federal Funds Rate for any reason, including, without limitation,
the inability or failure of the Paying Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Base Rate shall
be the U.S. Prime Rate until the circumstances giving rise to such inability no
longer exist. For the purposes hereof, "U.S. Prime Rate" shall mean the annual
rate of interest announced from time to time by the Paying Agent in Canada as
its U.S. Base Rate for U.S. Dollar loans made by the Paying Agent in Canada.
Without notice to the Company or any other Person, the U.S. Prime Rate shall
change automatically from time to time as and in the amount by which said
annual rate of interest shall fluctuate. The U.S. Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. Chemical Bank, any Agent or any Bank may make
commercial loans or other loans at rates of interest at, above or below the
U.S. Prime Rate. For purposes of this Agreement any change in the Alternate
Base Rate due to a change in the U.S. Prime Rate shall be effective on the date
such change in the U.S. Prime Rate is announced.
"Alternate Base Rate Loans" shall mean Loans which bear interest at a
rate based upon the Alternate Base Rate.
"APC" shall mean Alaska Pipeline Company, an Alaska corporation, a
Subsidiary of the Parent.
"APC Long Term Financing Documents" shall mean that certain Inducement
Agreement and that certain Note Agreement (together with the Notes, as defined
therein), each dated as of May 14, 1992, by and among the Parent, Aid
Association for Lutherans, The Equitable Life Assurance Society of the United
States, Equitable Variable Life Insurance Company, Provident Life and Accident
Insurance Company and Teachers Insurance & Annuity Association of America, any
documentation executed in connection with any renewal, extension or
rearrangement of the Indebtedness that is the subject of the foregoing
documents, the Gas Sales Contract, the Intercompany Mortgage, as defined in the
above-mentioned Note Agreement, and
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any documents executed in replacement of any of the foregoing documents, if
any, and only if the Administrative Agent has received notice thereof pursuant
to Section 10.8.
"Applicable Lending Office" shall mean, for each Bank and for each
Type of Loan and for each Bankers' Acceptance, such office of such Bank (or of
an affiliate of such Bank) as such Bank may from time to time specify to the
Paying Agent and the Company as the office by which its Loans of such Type are
to be made and/or issued and maintained and at which Bankers' Acceptances are
to be accepted and purchased; provided, however, that each such office shall be
located in Canada.
"Applicable Margin" shall mean, on any day and with respect to any
Loan, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Debt/Capitalization Ratio
as of the last day of the most recently ending fiscal quarter of the Parent and
its Subsidiaries with respect to which the Administrative Agent shall have
received the financial statements and other information (the "Current
Information") required to be delivered to the Administrative Agent pursuant to
Section 9.1 hereof (said calculation to be made by the Administrative Agent as
soon as practicable after receipt by the Administrative Agent of all required
Current Information):
Applicable Margin
For Alternate Base Applicable Margin
Debt/Capitalization Ratio Rate Loans and Canadian For Eurodollar Loans
------------------------- Prime Rate Loans --------------------
-----------------------
Greater than or equal to 65% 1.50 2.50
Greater than or equal to 60%
but less than 65% 0.75 1.75
Greater than or equal to 55%
but less than 60% 0.25 1.25
Less than 55% 0.00 1.00
Notwithstanding the foregoing, (i) at all times that the Parent shall
have received an investment grade senior debt rating from two nationally known
agencies (one of which must be either Standard & Poor's Corporation or Moody's
Investors Service, Inc.) of BBB-/Baa3 (or the equivalent) and the
Debt/Capitalization Ratio shall be less than 50%, the Applicable Margin for
Alternate Base Rate Loans and Canadian Prime Rate Loans shall be 0% per annum
and the Applicable Margin for Eurodollar Loans shall be .75% per annum, (ii) at
all times that the Parent shall have received an investment grade senior debt
rating from two nationally known agencies (one of which must be either Standard
& Poor's Corporation or Moody's Investors
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Service, Inc.) of BBB/Baa2 (or the equivalent) or better and the
Debt/Capitalization Ratio shall be less than 45%, the Applicable Margin for
Alternate Base Rate Loans and Canadian Prime Rate Loans shall be 0% per annum
and the Applicable Margin for Eurodollar Loans shall be .625% per annum, and
(iii) at all times that a Borrowing Base Deficiency shall exist and is
continuing for more than 30 days, the Applicable Margins provided for in this
definition shall each be increased by adding 1.00%; provided that the
Applicable Margin for Alternate Base Rate Loans and Canadian Prime Rate Loans
shall never exceed 2.50% and the Applicable Margin for Eurodollar Loans shall
never exceed 3.50%. Each change in the Applicable Margin based on a change in
the Current Information shall be effective as of the fifteenth day of the month
during which the Current Information used to calculate the new Applicable
Margin was delivered to the Agent.
"Applications" shall mean all applications and agreements for Letters
of Credit, or similar instruments or agreements, now or hereafter executed by
any Person in connection with any Letter of Credit now or hereafter issued or
to be issued.
"Bank Guarantee" shall mean that certain Guarantee dated concurrently
herewith executed by the Parent in favour of the Administrative Agent.
"Bankers' Acceptances" means bankers' acceptances issued by the
Company and denominated in Canadian Dollars, which are accepted and purchased
by the Banks at the request of the Company pursuant to Section 2.1.
"B/A Stamping Rate" means, with respect to Bankers' Acceptances
accepted by a Bank, the Applicable Margin for Eurodollar Loans in effect on the
date of acceptance of the Bankers' Acceptance.
"Bankruptcy Code" shall mean (i) the United States Bankruptcy Code, as
amended, and any successor statute and (ii) the Bankruptcy and Insolvency Act
(Canada), as amended, and any successor statute.
"Beluga Financing Documents" shall mean that certain Inducement
Agreement and that certain Note Agreement (together with the Notes, as defined
therein), each dated June 17, 1985, and amended as of June 15, 1990, by and
among the Parent and The Equitable Life Assurance Society of the United States
and the Travelers Insurance Company, any documentation executed in connection
with any renewal, extension or rearrangement of the Indebtedness that is the
subject of the foregoing documents, the Gas Sales Contract, the Intercompany
Mortgage, as defined in the above-mentioned Note Agreement, and any documents
executed in replacement of any of the foregoing documents, if and only if the
Administrative Agent has received notice thereof pursuant to Section 10.8.
"Borrowing Base" shall have the meaning ascribed to such term in the
U.S. Facility (without amendment except as permitted pursuant to the
Intercreditor Agreement).
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"Borrowing Base Debt" shall have the meaning ascribed to such term in
the U.S. Facility (without amendment except as permitted pursuant to the
Intercreditor Agreement).
"Borrowing Base Deficiency" shall have the meaning ascribed to such
term in the U.S. Facility (without amendment except as permitted pursuant to
the Intercreditor Agreement).
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas, United States,
Calgary, Alberta, Canada, or Toronto, Ontario, Canada, and where such term is
used in the definition of "Quarterly Date" in this Section 1.1 or if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, or an Interest Period for, a Eurodollar Loan or a notice by the Company
with respect to any such borrowing, payment, prepayment or Interest Period, a
day which is also a day on which dealings in U.S. Dollar deposits are carried
out in the relevant interbank market.
"Canadian Bankers' Acceptance Discount Proceeds" means, in respect of
any Bankers' Acceptance required to be accepted and purchased by a Bank
hereunder, an amount (rounded to the nearest whole cent with one-half of one
cent being rounded up) calculated on the date of acceptance of the Bankers'
Acceptance by multiplying:
(a) the face amount of such Bankers' Acceptance divided by one
hundred (100); by
(b) the price, where the price is determined by dividing one
hundred (100) by the sum of one plus the product of:
(i) the Canadian Bankers' Acceptance Discount Rate
(expressed as a decimal); and
(ii) a fraction, the numerator of which is the term
(expressed in days) of such Bankers' Acceptance and
the denominator of which is three hundred sixty-five
(365);
with the price as so determined being rounded up or down to the fifth decimal
place and .000005 being rounded up;
"Canadian Bankers' Acceptance Discount Rate" shall mean, with respect
to each Bankers' Acceptance which is required to be accepted and purchased by a
Bank hereunder, the percentage discount rate (expressed to two decimal places)
for Canadian Dollar Bankers' Acceptances having a comparable issue and maturity
date which is quoted on the Reuter's Canadian Discount Offer Rate Screen for
"Schedule 1" accepting banks (or if such screen shall not be available, any
successor or similar services may be selected by the Paying Agent and the
Company) as of 11:00 a.m. Toronto, Ontario time (or as soon thereafter as
practicable) on the day of acceptance of the Bankers' Acceptances. If none of
such screen nor any successor or similar services is
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available then the "Canadian Bankers' Acceptance Discount Rate" shall mean,
with respect to each Bankers' Acceptance which is required to be accepted and
purchased by a Bank hereunder, the percentage discount rate (expressed to two
decimal places) determined by the Paying Agent to be the average of the quoted
discount rates at which Canadian Dollar Bankers' Acceptances having a
comparable issue and maturity date are being bid for discount by the Reference
Banks at approximately 11:00 a.m. Toronto, Ontario time (or as soon thereafter
as practicable) on the day of the issuance and acceptance of the Bankers'
Acceptances. If any Reference Bank does not furnish a timely quotation, the
Paying Agent shall determine the relevant discount rate on the basis of the
quotation or quotations furnished by the remaining Reference Bank or Banks; if
none of such quotations is available on a timely basis, the provisions of
Section 6.2 shall apply. Each determination of the Canadian Bankers'
Acceptance Discount Rate shall be conclusive and binding, absent manifest
error, and may be computed using any reasonable averaging and attribution
method.
"Canadian Dollars" and "Canadian $" shall mean lawful money of Canada.
"Canadian Prime Rate" for any day shall mean the variable lending rate
of interest (expressed as a rate per annum) established on such day by the
Paying Agent from time to time as the reference rate of interest which the
Paying Agent employs in order to determine the interest rate it will charge for
demand loans denominated in Canadian Dollars to its customers in Canada and
which it designates as its prime rate. Without notice to the Company or any
other Person, the Canadian Prime Rate shall change automatically from time to
time as and in the amount by which said prime rate shall fluctuate. The
Canadian Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Any Agent or any Bank
may make commercial loans or other loans at rates of interest at, above or
below the Canadian Prime Rate. For purposes of this Agreement any change in
the Canadian Prime Rate due to a change in the said prime rate shall be
effective on the date such change in said prime rate is announced.
"Canadian Prime Rate Loans" shall mean Loans which bear interest at a
rate based upon the Canadian Prime Rate.
"Capital Expenditures" shall mean expenditures in respect of fixed or
capital assets (calculated in accordance with GAAP) excluding expenditures for
the restoration, repair or replacement of any fixed or capital asset which was
destroyed or damaged, in whole or in part, to the extent financed by the
proceeds of an insurance policy. Expenditures in respect of replacements and
maintenance consistent with the business practices of the Parent and its
Subsidiaries in respect of plant facilities, machinery, fixtures and other like
capital assets utilized in the ordinary course of business are not Capital
Expenditures to the extent such expenditures are not capitalized in preparing a
balance sheet of the Parent in accordance with GAAP.
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use)
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real and/or personal property which obligations are required to be classified
and accounted for as a capital lease on a balance sheet of such Person under
GAAP and, for purposes of this Agreement, the amount of such obligations shall
be the capitalized amount thereof, determined in accordance with GAAP.
"Capitalization" shall mean an amount equal to the sum of (a) Funded
Indebtedness of the Parent and its Subsidiaries on a consolidated basis plus
(b) Current Maturities of the Parent and its Subsidiaries on a consolidated
basis plus (c) borrowed money Indebtedness of the Parent and its Subsidiaries
on a consolidated basis that is not Funded Indebtedness plus (d) Indebtedness
of the Parent and its Subsidiaries on a consolidated basis constituting
obligations payable out of Hydrocarbons (except such obligations payable solely
by recourse to properties not included in the Borrowing Base) plus (e) Tangible
Net Worth of the Parent and its Subsidiaries on a consolidated basis.
"Change of Control" shall mean a change resulting when any Unrelated
Person or any Unrelated Persons acting together which would constitute a Group
together with any Affiliates or Related Persons thereof (in each case also
constituting Unrelated Persons) shall at any time either (i) Beneficially Own
more than 50% of the aggregate voting power of all classes of Voting Stock of
the Parent or (ii) succeed in having sufficient of its or their nominees
elected to the Board of Directors of the Parent such that such nominees, when
added to any existing director remaining on the Board of Directors of the
Parent after such election who is an Affiliate or Related Person of such Person
or Group, shall constitute a majority of the Board of Directors of the Parent.
As used herein (a) "Beneficially Own" means "beneficially own" as defined in
Rule 13d-3 of the United States Securities Exchange Act of 1934, as amended, or
any successor provision thereto; provided, however, that, for purposes of this
definition, a Person shall not be deemed to Beneficially Own securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates until such tendered securities are
accepted for purchase or exchange; (b) "Group" means a "group" for purposes of
Section 13(d) of the United States Securities Exchange Act of 1934, as amended;
(c) "Unrelated Person" means at any time any Person other than the Parent or
any Subsidiary and other than any trust for any employee benefit plan of the
Parent or any Subsidiary of the Parent; (d) "Related Person" of any Person
shall mean any other Person owning (1) 5% or more of the outstanding common
stock of such Person or (2) 5% or more of the Voting Stock of such Person; and
(e) "Voting Stock" of any Person shall mean capital stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Code" shall mean, as applicable, (i) the Internal Revenue Code of
1986, as amended, or any successor statute, together with all regulations,
rulings and interpretations thereof or thereunder by the Internal Revenue
Service or (ii) the Income Tax Act (Canada), as amended, or any successor
statute, together with all regulations, rulings and interpretations thereof or
thereunder.
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"Commitment Percentage" shall mean, as to any Bank, the percentage
equivalent of a fraction the numerator of which is the amount of such Bank's
Commitment and the denominator of which is the aggregate amount of the
Commitments of all Banks.
"Commitments" shall mean, as to any Bank, the obligation, if any, of
such Bank to make Loans, accept and purchase Bankers' Acceptances and incur
Letter of Credit Liabilities in an aggregate principal amount (including
therein the full face amount of all Bankers' Acceptances then outstanding) at
any one time outstanding up to but not exceeding the amount, if any, set forth
opposite such Bank's name on the signature pages hereof under the caption
"Commitment" (as the same may be reduced from time to time pursuant to Section
2.3).
"Cover" for Letter of Credit Liabilities shall be effected by paying
to the Paying Agent immediately available funds, to be held by the Paying Agent
in a collateral account maintained by Paying Agent at its Payment Office and
collaterally assigned as security for the financial accommodations extended
pursuant to this Agreement using documentation satisfactory to the
Administrative Agent, in an amount equal to any required prepayment. Such
amount shall be retained by the Paying Agent in such collateral account until
such time as (x) in the case of Cover being provided pursuant to Section
2.2(a), the applicable Letter of Credit shall have expired and Reimbursement
Obligations, if any, with respect thereto shall have been fully satisfied or
(y) in the case of Cover being provided pursuant to Section 3.2(b)(1), the
outstanding principal amount of all Revolving Credit Obligations is not greater
than the aggregate amount of the Commitments.
"Current Maturities" shall mean, on any day on which Current
Maturities are calculated, the sum of (a) scheduled principal payments on
Funded Indebtedness which are payable within one (1) year after such day plus
(b) the principal component of payments required to be made with respect to
Capital Lease Obligations within one (1) year of said date plus (c), to the
extent not included above, all items which in accordance with GAAP would be
classified as current maturities of long term debt.
"Debt/Capitalization Ratio" shall mean the ratio of (a) the sum of
Funded Indebtedness of the Parent and its Subsidiaries on a consolidated basis
plus Current Maturities of the Parent and its Subsidiaries on a consolidated
basis plus borrowed money Indebtedness of the Parent and its Subsidiaries on a
consolidated basis that is not Funded Indebtedness plus Indebtedness of the
Parent and its Subsidiaries on a consolidated basis constituting obligations
payable out of Hydrocarbons (except such obligations payable solely by recourse
to properties not included in the Borrowing Base) to (b) Capitalization.
"Default" shall mean an Event of Default or an event which with notice
or lapse of time or both would, unless cured or waived, become an Event of
Default.
"Disclosure Statement" shall mean the Disclosure Statement dated
concurrently herewith delivered to the Administrative Agent by the Company.
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"Dividend Payment" shall mean, with respect to any Person, dividends
(in cash, property or obligations) on, or other payments or distributions on
account of, or the redemption of, or the setting apart of money for a sinking
or other analogous fund for the purchase, redemption, retirement or other
acquisition of, any shares of any class of capital stock of such Person, or the
exchange or conversion of any shares of any class of capital stock of such
Person for or into any obligations of or shares of any other class of capital
stock of such Person or any other property, but excluding dividends payable
solely in, or exchanges or conversions for or into, shares of common stock of
the Parent or options or warrants to purchase common stock of the Parent.
"Dividend Tests" shall mean compliance with each of the following
restrictions (both before and immediately after giving effect to the applicable
Dividend Payments):
(i) Tangible Net Worth shall not be less than U.S.
$350,000,000;
(ii) the EBITDA/Interest Ratio shall be not less than
3.5:1.0;
(iii) the Debt/Capitalization Ratio shall be less than 60%;
(iv) there shall exist no Borrowing Base Deficiency;
(v) no Default or Event of Default shall have occurred
and be continuing; and
(vi) the applicable Dividend Payment, when aggregated with
any prior permitted Dividend Payment, shall not
exceed the amount by which (a) 33-1/3% of net income
of the Parent and its Subsidiaries on a consolidated
basis for the period commencing on January 1, 1993
through the then current date exceeds (b) the
aggregate of any prior Investments made during such
period in excess of U.S. $30,000,000.
"EBITDA" shall mean net earnings (excluding gains and losses on sales
and retirement of assets, non-cash write downs and charges resulting from
accounting convention changes) before deduction for federal, provincial,
municipal and state taxes, interest expense (including capitalized interest),
operating lease rentals or depreciation, depletion and amortization expense,
all determined in accordance with GAAP.
"EBITDA/Interest Ratio" shall mean the ratio of (a) EBITDA of the
Parent and its Subsidiaries on a consolidated basis to (b) operating lease
rentals and interest expense (including capitalized interest) on all
Indebtedness of the Parent and its Subsidiaries on a consolidated basis for any
twelve-month period ending on the last day of every calendar quarter during the
period with respect to which the EBITDA/Interest Ratio is to be calculated.
"Engineering Report" shall mean one or more reports, in form
satisfactory to the Administrative Agent and the Majority Banks, prepared by
one or more independent consulting
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firms acceptable to the Administrative Agent and the Majority Banks in their
reasonable business judgment, which shall evaluate at least 85% of the present
value of the producing and non-producing proved oil and gas reserves of the
Parent and its Oil and Gas Subsidiaries as of the immediately preceding January
1. Each Engineering Report shall set forth a projection of the future rate of
production, Net Proceeds of Production and present value of the Net Proceeds of
Production, in each case based upon economic assumptions acceptable to the
Administrative Agent and approved by the Majority Banks.
"ENSTAR Alaska" shall collectively mean (i) the gas distribution
system in south-central Alaska known as ENSTAR Natural Gas Company, a division
of the Parent, and (ii) APC.
"Environmental Claim" means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture, processing, distribution
in commerce or use of Hazardous Substances. An "Environmental Claim" includes,
but is not limited to, a common law action, as well as a proceeding to issue,
modify or terminate an Environmental Permit, or to adopt or amend a regulation
to the extent that such a proceeding attempts to redress violations of an
applicable permit, license, or regulation as alleged by any Governmental
Authority.
"Environmental Liabilities" includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and
obligations, and all costs and expenses necessary to cause the issuance,
reissuance or renewal of any Environmental Permit including reasonable
attorneys' fees and court costs.
"Environmental Permit" means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or
wastes into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants or Hazardous
Substances.
"Equivalent U.S. Dollar Amount" shall mean, with respect to any amount
of Canadian Dollars, the equivalent amount of U.S. Dollars determined by using
the Bank of Canada noon
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day rate at which it offers to provide U.S. Dollars in exchange for such amount
of Canadian Dollars on the date as of which such Equivalent U.S. Dollar Amount
is to be determined.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and all rules, regulations and
interpretations by the Internal Revenue Service or the Department of Labor
thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which the Parent is a member and
which is under common control within the meaning of the regulations under
Section 414 of the Code.
"Eurodollar Base Rate" shall mean, with respect to any Interest Period
for any Eurodollar Loan, the lesser of (A) the rate per annum (rounded upwards,
if necessary, to the nearest 1/16th of 1%) equal to the average of the offered
quotations appearing on Telerate Page 3750 (or if such Telerate Page shall not
be available, any successor or similar service as may be selected by the Paying
Agent and the Company) as of 11:00 a.m., Toronto, Ontario time (or as soon
thereafter as practicable) on the day two Business Days prior to the first day
of such Interest Period for U.S. Dollar deposits having a term comparable to
such Interest Period and in an amount comparable to the principal amount of the
Eurodollar Loan to which such Interest Period relates or (B) the Highest Lawful
Rate. If none of such Telerate Page 3750 nor any successor or similar service
is available, then the "Eurodollar Base Rate" shall mean, with respect to any
Interest Period for any applicable Eurodollar Loan, the lesser of (A) the rate
per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
determined by the Paying Agent to be the average of the rates quoted by the
Reference Banks at approximately 11:00 a.m., Toronto, Ontario time (or as soon
thereafter as practicable) on the day two Business Days prior to the first day
of such Interest Period for the offering by such Reference Banks to leading
banks in the interbank market of U.S. Dollar deposits having a term comparable
to such Interest Period and in an amount comparable to the principal amount of
the Eurodollar Loan to which such Interest Period relates or (B) the Highest
Lawful Rate. If any Reference Bank does not furnish a timely quotation, the
Paying Agent shall determine the relevant interest rate on the basis of the
quotation or quotations furnished by the remaining Reference Bank or Banks; if
none of such quotations is available on a timely basis, the provisions of
Section 6.2 shall apply. Each determination of the Eurodollar Base Rate shall
be conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
"Eurodollar Loans" shall mean Loans the interest on which is
determined on the basis of rates referred to in the definition of "Eurodollar
Base Rate" in this Section 1.1.
"Eurodollar Rate" shall mean, for any Interest Period for any
Eurodollar Loan, a rate per annum determined by the Paying Agent to be equal to
the Eurodollar Base Rate for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
Section 11 hereof.
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"Financial Statements" shall mean the financial statement or
statements, together with the notes and schedules thereto, described or
referred to in Sections 8.6 and 9.1.
"Funded Indebtedness" shall mean all Indebtedness which by its terms
matures more than one (1) year from the date as of which any calculation of
Funded Indebtedness is made, and any Indebtedness maturing within one (1) year
from such date which is renewable at the option of the obligor to a date beyond
one (1) year from such date.
"GAAP" shall mean as to a particular Person, such accounting practice
as, in the opinion of KPMG Peat Marwick or other independent accountants of
recognized national standing retained by such Person and acceptable to the
Majority Banks, conforms at the time to generally accepted accounting
principles, consistently applied. Generally accepted accounting principles
means those principles and practices (a) which are recognized as such by the
Financial Accounting Standards Board, (b) which are applied for all periods
after the date hereof in a manner consistent with the manner in which such
principles and practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Banks, except only for such
changes in principles and practices with which the applicable independent
public accountants concur and which are disclosed to the Banks in writing, and
(c) which are consistently applied for all periods after the date hereof so as
to reflect properly the financial condition and results of operations of such
Person.
"Gas and Liquids Pipeline Subsidiaries" shall mean each company (which
may include the Parent) engaged in the Pipeline Operations.
"Gas Sale Contract" shall mean that certain Gas Sale Contract dated
January 1, 1984, between APC, as Seller, and ENSTAR Natural Gas Company, as
Purchaser, as amended on June 17, 1985, and from time to time thereafter, if
and only if the Administrative Agent has received notice thereof pursuant to
Section 10.8.
"Governmental Authority" shall mean any sovereign governmental
authority, Canada, the United States of America, any Province of Canada, any
State of the United States and any political subdivision of any of the
foregoing, and any central bank, agency, instrumentality, department,
commission, board, bureau, authority, court or other tribunal or
quasi-governmental authority in each case whether executive, legislative,
judicial, regulatory or administrative, having jurisdiction over the Parent,
any of its Subsidiaries, any of their respective property, any Agent or any
Bank.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of any such Person directly or indirectly guaranteeing any
Indebtedness of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to
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maintain financial statement conditions or otherwise, other than agreements to
purchase assets, goods, securities or services at an arm's length price in the
ordinary course of business) or (ii) entered into for the purpose of assuring
in any other manner the holder of such Indebtedness of the payment thereof or
to protect such holder against loss in respect thereof (in whole or in part),
provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hazardous Substance" shall mean petroleum products, and any hazardous
or toxic waste or substance defined or regulated as such from time to time by
any law, rule, regulation or order described in the definition of "Requirements
of Environmental Law".
"Highest Lawful Rate" shall mean, on any day, the maximum nonusurious
rate of interest permitted for that day by whichever of applicable Canadian or
provincial law permits the higher interest rate, stated as a rate per annum.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate and all other liquid or gaseous hydrocarbons and
related minerals, in each case whether in a natural or a processed state.
"Indebtedness" shall mean, as to any Person: (i) indebtedness of such
Person for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase or acquisition price of property or
services, including, without limitation, obligations (excluding volumetric
obligations with respect to pre-sales of Hydrocarbon production which have
already been accounted for in the calculation of the Borrowing Base) payable
out of Hydrocarbon production; (ii) obligations, whether fixed or contingent,
of such Person in respect of letters of credit, acceptances or similar
instruments issued or accepted by banks and other financial institutions for
the account of such Person or any other Person; (iii) Capital Lease Obligations
of such Person; (iv) Redemption Obligations of such Person and other
obligations of such Person to redeem or otherwise retire shares of capital
stock of such Person or any other Person; (v) indebtedness of others of the
type described in clause (i), (ii), (iii) or (iv) above secured by a Lien on
the property of such Person, whether or not the respective obligation so
secured has been assumed by such Person; and (vii) indebtedness of others of
the type described in clause (i), (ii), (iii) or (iv) above Guaranteed by such
Person.
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement dated concurrently herewith executed by and among the Company, the
Parent, the Administrative Agent and the "Administrative Agent" under the U.S.
Facility.
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"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, the period commencing on
(i) the date such Loan is made or converted into or continued as a Eurodollar
Loan or (ii) in the case of a roll-over to a successive Interest Period, the
last day of the immediately preceding Interest Period and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as the Company may select as provided in Section 3.3 hereof,
except that each such Interest Period which commences on any day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month shall end on the last Business Day of the appropriate subsequent
calendar month.
(b) With respect to any Alternate Base Rate Loan or any Canadian
Prime Rate Loan, the period commencing on the date such Loan is made and ending
on the next succeeding Quarterly Date.
Notwithstanding the foregoing: (i) no Interest Period with respect to a
Eurodollar Loan may commence before and end after the date of any scheduled
reduction in the Commitments if, after giving effect thereto, the aggregate
principal amount of the Eurodollar Loans having Interest Periods which end
after such reduction date shall be greater than the aggregate principal amount
of the Commitments scheduled to be in effect after such reduction date; (ii)
each Interest Period which would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day (or, in the case of an
Interest Period for Eurodollar Loans, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day); (iii) no Interest Period with respect to a Eurodollar Loan shall extend
beyond the end of the scheduled Revolving Credit Availability Period; and (iv)
no Interest Period for any Eurodollar Loans shall have a duration of less than
one month and, if the Interest Period therefor would otherwise be a shorter
period, such Loans shall not be available hereunder.
"Investments" shall have the meaning assigned to such term in Section
10.3 hereof.
"Investments Tests" shall mean compliance with each of the following
restrictions (both before and immediately after giving effect to the applicable
Investments):
(i) there shall exist no Borrowing Base Deficiency;
(ii) no Default or Event of Default shall have occurred
and be continuing; and
(iii) the applicable Investment, when aggregated with any
prior permitted Investments, shall not exceed the
greater of (I) 10% of Tangible Net Worth of the
Parent and its Subsidiaries on a consolidated basis
or (II) the sum of (a) U.S. $30,000,000 plus (b) the
amount, if any, by which 33-1/3% of net income of the
Parent and its Subsidiaries on a consolidated basis
for the period commencing on January 1, 1993 through
the then
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current date exceeds the aggregate of any prior
Dividend Payments made during such period.
"Issuer" shall mean each Bank issuing a Letter of Credit hereunder.
"Key Contracts" shall mean all contracts, permits, licenses and other
rights acquired by the Parent and its Subsidiaries from third parties or each
other and from time to time material to the ownership of assets, or operations,
of the Parent and its Subsidiaries.
"Legal Requirement" shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, now or hereafter in effect.
"Letter of Credit" shall have the meaning assigned to such term in
Section 2.2 hereof.
"Letter of Credit Fee" shall mean a per annum rate equal to the
Applicable Margin for Eurodollar Loans in effect from time to time.
"Letter of Credit Liabilities" shall mean, at any time and in respect
of any Letter of Credit, the sum of (i) the amount available for drawings under
such Letter of Credit plus (ii) the aggregate unpaid amount of all
Reimbursement Obligations at the time due and payable in respect of previous
drawings made under such Letter of Credit.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, collateral assignment, security interest or encumbrance of any
kind in respect of such asset. For the purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Liquid Investments" shall mean:
(I) in the case of investments of U.S. Dollars
(i) securities issued or directly, fully and
unconditionally guaranteed or insured by the United
States of America or any agency or instrumentality
thereof provided that the full faith and credit of
the United States of America is pledged in support
thereof) having maturities of not more than one year
from the date of issue;
(ii) U.S. Dollar time deposits and certificates of deposit
(A) of any Bank having capital and surplus in excess
of U.S. $300,000,000, or (B) of any commercial bank
incorporated in the United States, of recognized
standing, having capital and surplus in excess of
U.S. $500,000,000 and
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which has (or which is a Subsidiary of a holding
company which has) publicly traded debt securities
rated, at the time of issuance of such time deposits,
AA or higher by Standard & Poor's Corporation or Aa-2
or higher by Moody's Investors Service, Inc. with
maturities of not more than one year from the date of
issue;
(iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types
described inclause (I)(i) above entered into with any
bank meeting the qualifications specified in clause
(I)(ii)above, provided that the terms of such
agreements comply with the guidelines set forth in
the Federal Financial Institution Examination Counsel
Supervisory Policy--Repurchase Agreements of
Depository Institutions With Securities Dealers and
Others, as adopted by the Comptroller of the Currency
on October 31, 1985;
(iv) commercial paper or other U.S. Dollar obligations
issued by the parent corporation (A) of any Bank
having capital and surplus in excess of U.S.
$300,000,000, or (B) of any commercial bank (provided
that the parent corporation and the bank are both
incorporated in the United States) of recognized
standing having capital and surplus in excess of U.S.
$500,000,000 and commercial paper or other U.S.
Dollar obligations issued by any Person incorporated
in the United States, which commercial paper is rated
at least A-2 or the equivalent thereof by Standard &
Poor's Corporation or at least P-2 or the equivalent
thereof by Moody's Investors Service, Inc. and in
each case maturing not more than six months after the
date of issue;
(v) obligations of any state or political subdivision
thereof rated at least F-1 by Fitch Investors
Service, Inc. or AA by Standard & Poor's Corporation
with an original maturity of 180 days or less; and
(vi) investments in money market funds substantially all
the assets of which are comprised of securities of
the types described inclauses (I)(i) through (v)
above; and
(II) in the case of investments of Canadian dollars
(i) bonds or other evidences of indebtedness of, or the
principal and interest of which is fully guaranteed
by, the Government of Canada or any province of
Canada, payable in Canadian dollars and (in the case
of any provincial obligations and any Government of
Canada obligations that are rated) rated AAA or AA
(or the then equivalent grade) by Dominion Bond
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Rating Service Limited, or any other nationally
recognized bond rating service, having a maturity
not in excess of one year,
(ii) certificates of deposit issued or guaranteed by a
bank or trust company organized under the laws of
Canada or any province thereof, provided such bank or
trust company has capital and retained earnings in
the aggregate in excess of Canadian $500,000,000 on
its most recent balance sheet (whether audited or
unaudited), having a maturity not in excess of one
year,
(iii) bankers' acceptances of any bank or trust company the
certificates of deposit of which would constitute
Liquid Investments as provided in clause (II)(ii)
above, if outstanding unsecured debt of such bank or
trust company is rated no less than AA (or the then
equivalent grade) by Dominion Bond Rating Service
Limited, or any other nationally recognized bond
rating service; and
(iv) commercial paper rated no less than R-1 (or the then
equivalent grade) by Dominion Bond Rating Service
Limited or A-1 (or the then equivalent grade) by CBRS
Inc., having a maturity not in excess of one year;
excluding any bonds or other evidences of
indebtedness, certificates of deposit or commercial
paper which a Canadian chartered bank may not hold as
security under the Bank Act (Canada).
"Loan Documents" shall mean this Agreement, the Notes, the Bank
Guarantee, the Intercreditor Agreement, the Bankers' Acceptances, all
Applications, all instruments, certificates and agreements now or hereafter
executed or delivered to any Agent or any Bank pursuant to any of the
foregoing, and all amendments, modifications, renewals, extensions, increases
and rearrangements of, and substitutions for, any of the foregoing.
"Loans" shall mean the loans provided for by Section 2.1 hereof.
"Majority Banks" shall mean Banks having greater than 66-2/3% of the
aggregate amount of Commitments.
"Material Adverse Effect" shall mean a material adverse effect on the
business, condition (financial or otherwise), operations, properties (including
proven oil and gas reserves) or prospects of the Parent and its Subsidiaries,
taken as a whole, or on the ability of any Relevant Party to perform its
material obligations under any Loan Document to which it is a party.
"Maximum Outstanding Amount" shall have the meaning ascribed to such
term in Section 2.9 hereof.
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"Maximum Revolving Credit Available Amount" shall mean, at any date,
an amount equal to the lesser of (i) the aggregate of the Commitments or (ii)
the Maximum Outstanding Amount designated from time to time by the Company in
accordance with the terms hereof.
"Mesa Contract" shall mean that certain Purchase and Sale Agreement
dated February 6, 1991 executed by and among Mesa Limited Partnership, a
Delaware limited partnership, Mesa Operating Limited Partnership, a Delaware
limited partnership, and Mesa Midcontinent Limited Partnership, a Delaware
limited partnership, as Sellers, and the Parent, as Buyer, as amended by that
certain First Amendment to Purchase and Sale Agreement dated February 22, 1991
and as further amended by that certain Second Amendment to Purchase and Sale
Agreement dated March 8, 1991.
"Midcon" shall mean Seagull Midcon Inc., a Delaware corporation.
"Net Proceeds of Production" shall mean, with respect to any Person,
all revenue received by or credited to the account of such Person from the sale
of Hydrocarbons and other minerals in, under or produced from their respective
oil, gas and mineral properties after deducting royalties, overriding
royalties, volumetric production payments with respect to pre-sales of
Hydrocarbon production, production payments pledged to secure non-recourse
financing payable solely out of such production payments, net profits interests
and other burdens payable out of production, normal and reasonable operating
expenses and severance, ad valorem, excise, freehold mineral and windfall
profit taxes.
"Notes" shall mean the promissory notes of the Company evidencing the
Loans, in the form of Exhibit C hereto, together with all renewals, extensions,
modifications and replacements thereof and substitutions therefor.
"Novalta" shall mean Novalta Resources Inc., a corporation
incorporated under the laws of the Province of Alberta.
"Novalta Contract" shall mean that certain Sale Agreement dated
November 19, 1993 executed by and between Novacor Petrochemicals Ltd., as
Vendor, and the Parent, as Purchaser.
"Obligations" shall mean, as at any date of determination thereof, the
sum of the following: (i) the aggregate principal amount of Loans outstanding
hereunder plus (ii) the aggregate face amount of all outstanding Bankers'
Acceptances plus (iii) the aggregate amount of the Letter of Credit Liabilities
hereunder plus (iv) all other liabilities, obligations and indebtedness of the
Parent or any Subsidiary of the Parent under any Loan Document.
"Oil and Gas Subsidiaries" shall mean any Subsidiary of the Parent
whose assets consist primarily of oil and gas properties. As of the date
hereof, the Oil and Gas Subsidiaries are listed as such on Exhibit A hereto.
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"Organizational Documents" shall mean, with respect to a corporation,
the certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all
modifications thereof as of the date of the Loan Document referring to such
Organizational Document.
"Parent" shall mean Seagull Energy Corporation, a Texas corporation.
"Parent Report" shall mean one or more reports, in form satisfactory
to the Administrative Agent and the Majority Banks, prepared by petroleum
engineers employed by the Parent or its Subsidiaries, which shall evaluate (i)
at least 85% of the present value of the producing and non-producing proved oil
and gas reserves of the Parent and its Oil and Gas Subsidiaries evaluated in
the most recent Engineering Report delivered pursuant hereto and (ii) any other
properties as to which the Parent has conducted successful exploration
activities subsequent to the most recent Engineering Report, in each case
effective as of the immediately preceding July 1. Each Parent Report shall set
forth production, drilling and acquisition information and other information
requested by the Administrative Agent and shall be based upon updated economic
assumptions acceptable to the Administrative Agent and approved by the Majority
Banks at the beginning of the applicable year.
"Payment Office" shall mean the Toronto, Ontario office of the Paying
Agent, presently located at The Bank of Nova Scotia, International Banking
Division-Loan Accounting, 14th Floor, 44 King Street West, Toronto, Ontario,
Canada M5H 1H1.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a company, a bank, a
voluntary association, a partnership, a trust, an unincorporated organization,
any Governmental Authority or any other entity.
"Plan" shall mean an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (a) maintained by the Parent or any ERISA Affiliate
for employees of the Parent or any ERISA Affiliate or (b) maintained pursuant
to a collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which the Parent or any ERISA
Affiliate is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
"Post-Default Rate" shall mean, in respect of any principal of any
Loan, any Reimbursement Obligation or any other amount payable by the Company
under this Agreement or any other Loan Document which is not paid when due
(whether at stated maturity, by acceleration,
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or otherwise), a rate per annum during the period commencing on the due date
until such amount is paid in full equal to the lesser of (a) the sum of (w)
with respect to Eurodollar Loans, 2% per annum plus the applicable Eurodollar
Rate then in effect plus the Applicable Margin for Eurodollar Loans until the
expiration of the applicable Interest Period, (x) with respect to Canadian
Prime Rate Loans, 2% per annum plus the applicable Canadian Prime Rate as in
effect from time to time plus the Applicable Margin for Canadian Prime Rate
Loans, and (y) with respect to Alternate Base Rate Loans and with respect to
Eurodollar Loans after the expiration of the applicable Interest Period (and
also with respect to indebtedness other than Loans), 2% plus the Alternate Base
Rate as in effect from time to time plus the Applicable Margin for Alternate
Base Rate Loans or (b) the Highest Lawful Rate.
"Quarterly Dates" shall mean the last day of each March, June,
September and December, provided that, if any such date is not a Business Day,
then the relevant Quarterly Date shall be the next succeeding Business Day.
"Quarterly Equivalent" shall mean, as of any date, the Bank of Canada
noon day rate at which it offers to provide U.S. Dollars in exchange for
Canadian Dollars on the later of (i) the last Business Day immediately
preceding the then current calendar quarter or (ii) the last Business Day
immediately preceding the most recent revision of the Maximum Outstanding
Amount pursuant to Section 2.9.
"Redemption Obligations" shall mean with respect to any Person all
mandatory redemption obligations of such Person with respect to preferred stock
or other equity securities issued by such Person or put rights in favour of the
holder of such preferred stock or other equity securities.
"Reference Banks" shall mean The Bank of Nova Scotia and Chemical Bank
of Canada and such other Banks (up to a maximum of two (2) additional Banks) as
the Company, with the approval of the Paying Agent (which approval shall not be
unreasonably withheld), may from time to time designate.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time and any successor or other regulation relating to reserve requirements.
"Regulatory Change" shall mean, with respect to any Bank, any change
on or after the date of this Agreement in Legal Requirements (including
Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of banks including
such Bank under any Legal Requirements (whether or not having the force of law)
by any Governmental Authority.
"Reimbursement Obligations" shall mean, as at any date, the
obligations of the Company then outstanding in respect of Letters of Credit
under this Agreement, to reimburse the Paying
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Agent for the account of the applicable Issuer for the amount paid by the
applicable Issuer in respect of any drawing under such Letter of Credit.
"Relevant Party" shall mean the Company, the Parent and each other
party to any of the Loan Documents other than (a) the Banks and (b) the Agents.
"Request for Extension of Credit" shall mean a request for extension
of credit duly executed by the chief executive officer, chief financial
officer, or treasurer of the Company, appropriately completed and substantially
in the form of Exhibit B attached hereto.
"Requirements of Environmental Law" means all requirements imposed by
any law (including for example and without limitation The Resource Conservation
and Recovery Act (U.S.) and The Comprehensive Environmental Response,
Compensation, and Liability Act (U.S.), the Environmental Protection and
Enhancement Act (Alberta) and the Canadian Environmental Protection Act), rule,
regulation, or order of any federal, state, provincial or local executive,
legislative, judicial, regulatory or administrative agency, board or authority
in effect at the applicable time which relate to (i) noise; (ii) pollution,
protection or clean-up of the air, surface water, ground water or land; (iii)
solid, gaseous or liquid waste generation, treatment, storage, disposal or
transportation; (iv) exposure to Hazardous Substances; (v) the safety or health
of employees or (vi) regulation of the manufacture, processing, distribution in
commerce, use, discharge or storage of Hazardous Substances.
"Reserve Requirement" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the stated maximum rate for all reserves (including
any marginal, supplemental or emergency reserves) required to be maintained
during such Interest Period under applicable Legal Requirements by any Bank
against eurocurrency liabilities. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect and include any other reserves
required to be maintained by any Bank by reason of any Regulatory Change
against (i) any category of liabilities which includes deposits by reference to
which the Eurodollar Rate is to be determined as provided in the definition of
"Eurodollar Base Rate" in this Section 1.1 or (ii) any category of extensions
of credit or other assets which include Eurodollar Loans. Any determination by
the Paying Agent of the Reserve Requirement shall be conclusive and binding,
absent manifest error, and may be made using any reasonable averaging and
attribution method.
"Responsible Officer" shall mean the chairman of the board, the
president, any executive vice president, the vice president of finance and
administration, the chief executive officer or the chief operating officer or
any equivalent officer (regardless of title) and in the case of the Company,
any other vice president, and in respect of financial or accounting matters,
shall also include the chief financial officer, the treasurer and the
controller or any equivalent officer (regardless of title).
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"Revolving Credit Availability Period" shall mean the period from and
including the date hereof to but not including December 31, 1999 or the date
the Commitments are terminated pursuant to Section 11.1, whichever is first to
occur.
"Revolving Credit Commitment Fee Percentage" shall mean (i) for any
day that the Debt/Capitalization Ratio shall be less than 60%, .375% per annum
and (ii) at all other times, .50% per annum.
"Revolving Credit Obligations" shall mean, as at any date of
determination thereof, the sum of the following (determined without
duplication): (i) the aggregate principal amount of Loans outstanding
hereunder plus (ii) the aggregate of the face amounts of all outstanding
Bankers' Acceptances plus (iii) the aggregate amount of the Letter of Credit
Liabilities hereunder.
"Senior Debt" shall mean Indebtedness having a weighted average
maturity at least seven (7) years from the date of issuance and having no
conditions precedent or covenants materially more onerous to the Parent than
the conditions precedent and covenants contained herein and in the other Loan
Documents with respect to the Loans. The documents evidencing any Senior Debt
shall contain a provision substantially identical to Section 10.2(y) hereof
permitting Liens securing the Notes and the other Obligations on a pari passu
basis with such Senior Debt.
"Subordinated Debt" shall mean Indebtedness of the Parent having a
weighted average maturity at least seven (7) years from the date of issuance
and having no conditions precedent or covenants materially more onerous to the
Parent than the conditions precedent and covenants contained in the U.S.
Facility, in this Agreement and in the other Loan Documents with respect to the
Loans and which is expressly made subordinate and junior in right of payment to
the Obligations and in respect of any collateral or security by the express
terms of the instruments evidencing the Subordinated Debt or the indenture or
other similar instrument under which the Subordinated Debt is issued (which
indenture or other instrument will be binding on all holders of such
Subordinated Debt), by provisions not more favourable to the holders of the
Subordinated Debt than the following:
(a) in the event a Default exists and is continuing, no payment of
principal or interest will be made on account of Subordinated Debt and no
remedy for default shall be exercised until (i) such Default will have been
cured or waived or until the Obligations will have been paid in full (or
provisions made therefor reasonably satisfactory to the Banks) or (ii) 179 days
after the occurrence of such Default (as to which the Banks have knowledge as a
result of having received notice from the Company pursuant to this Agreement or
otherwise) and no action being taken by the Banks with respect to such Default,
whichever occurs earlier;
(b) upon the occurrence of any of the events or proceedings
specified in Subsections 11.1(f) or (g) hereof (or, as to any Subsidiary of the
Parent, Subsection 11.1(j) to the extent that it refers to Subsections 11.1(f)
or (g)), the holders of any Obligations will be entitled
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to receive payment in full of all principal or interest on all Obligations
before the holders of the Subordinated Debt are entitled to receive any payment
on account of principal or interest on the Subordinated Debt, and to that end
(but subject to the power of a court of competent jurisdiction to make other
provision) the holders of the Obligations will be entitled to receive
distributions of any kind or character, whether in cash or property or
securities (other than equity securities and other securities establishing
rights in the holders thereof which are subordinate to the rights of the
holders of the Obligations in accordance with this definition of Subordinated
Debt), which may be or would otherwise be payable or deliverable in any such
proceedings in respect of the Subordinated Debt (provided that, the
Subordinated Debt may provide that if the Obligations have been paid in full or
provision therefor reasonably satisfactory to the Banks has been made, the
holders of the Subordinated Debt will be subrogated to the rights of the
holders of the Obligations);
(c) in the event that any Subordinated Debt is declared due and
payable before its expressed maturity because of the occurrence of an event of
default thereunder (under circumstances when the provisions of the foregoing
clauses (a) and (b) will not be applicable), the holders of the Obligations at
the time such Subordinated Debt becomes due and payable because of such an
event of default will be entitled to receive payment in full of all Obligations
(or have provision therefor satisfactory to the Banks made) before the holders
of the Subordinated Debt are entitled to receive any payment on account of the
principal or interest on the Subordinated Debt; and
(e) no holder of the Obligations will be prejudiced in its right
to enforce subordination of the Subordinated Debt by any act or failure to act
on the part of the Parent or the part of the holders of the Obligations;
provided that, the Subordinated Debt may provide that the foregoing provisions
are solely for the purpose of defining the relative rights of the holders of
the Obligations on the one hand, and the holders of the Subordinated Debt on
the other hand, and that nothing therein will impair, as between the Parent and
the holders of the Subordinated Debt, the obligation of the Parent, which may
be unconditional and absolute, to pay to the holders of the Subordinated Debt
the principal and interest thereon in accordance with its terms, nor will
anything herein prevent the holders of the Subordinated Debt from exercising
all remedies otherwise permitted by applicable law or thereunder upon default
thereunder, subject to the rights under clauses (a), (b) and (c) above of the
holders of the Obligations to receive cash, property or securities otherwise
payable or deliverable to the holders of the Subordinated Debt.
"Subsidiary" shall mean, with respect to any Person (the "parent"),
(a) any corporation of which at least a majority of the outstanding shares of
stock having by the terms thereof ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by the parent or one or
more of the Subsidiaries
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of the parent or by the parent and one or more of the Subsidiaries of the
parent, and (b) any partnership, limited partnership, joint venture or other
form of entity, the majority of the legal or beneficial ownership of which is
at the time directly or indirectly owned or controlled by the parent or one or
more of the Subsidiaries of the parent or by the parent and one or more of the
Subsidiaries of the parent.
"Tangible Net Worth" shall mean the sum of preferred stock, par value
of common stock, capital in excess of par value of common stock (additional
paid-in capital) and retained earnings, less treasury stock, goodwill, deferred
development costs, franchises, licenses, patents, trademarks and copyrights and
all other assets which are properly classified as intangible assets in
accordance with GAAP less any Redemption Obligations.
"Type" shall have the meaning assigned to such term in Section 1.3
hereof.
"Unfunded Liabilities" shall mean, with respect to any Plan, at any
time, the amount (if any) by which (a) the present value of all benefits under
such Plan exceeds (b) the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent actuarial valuation
report for such Plan, but only to the extent that such excess represents a
potential liability of any ERISA Affiliate to the PBGC or a Plan under Title IV
of ERISA.
"U.S. Dollars" and "U.S. $" shall mean lawful money of the United
States of America.
"U.S. Facility" shall mean that certain Amended and Restated Credit
Agreement dated June 25, 1993 executed by and among the Parent, Texas Commerce
Bank National Association, as Administrative Agent, and certain banks therein
named, as amended by First Amendment to Amended and Restated Credit Agreement
dated concurrently herewith and as amended by the Intercreditor Agreement.
1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.
To enable the ready determination of compliance with the provisions hereof, the
Parent will not change from December 31 in each year the date on which its
fiscal year ends, nor from March 31, June 30 and September 30 the dates on
which the first three fiscal quarters in each fiscal year end.
1.3 Types of Loans. Loans hereunder are distinguished by "Type".
The "Type" of a Loan refers to the determination whether such Loan is a
Eurodollar Loan, an Alternate Base Rate Loan or a Canadian Prime Rate Loan.
1.4 Miscellaneous. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to
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any particular provision of this Agreement. Any reference to Sections shall
refer to Sections of this Agreement. Whenever it is necessary to convert an
amount denominated in Canadian Dollars to U.S. Dollars, such as calculating the
aggregate outstanding principal amount of the Revolving Credit Obligations,
such conversion shall be effected using the Equivalent U.S. Dollar Amount or,
where applicable, the Quarterly Equivalent. Unless payments are otherwise
required by the terms of this Agreement or by any other applicable Loan
Document to be made in U.S. Dollars or Canadian Dollars, such payment shall be
made in U.S. Dollars or in Canadian Dollars converted by using the Equivalent
U.S. Dollar Amount as of the date of such payment calculated, where applicable,
using the Quarterly Equivalent.
SECTION 2. COMMITMENTS; DESIGNATION OF MAXIMUM OUTSTANDING
AMOUNT.
2.1 Loans and Bankers' Acceptances. From time to time on or after
the date hereof and during the Revolving Credit Availability Period, each Bank
shall:
(a) make Loans under this Section 2.1, in Canadian Dollars or U.S.
Dollars, to the Company; and
(b) accept and purchase Bankers' Acceptances and deliver the
Canadian Bankers' Acceptance Discount Proceeds (less the
applicable acceptance fees payable by the Company to such Bank
pursuant to Sections 4.3) in respect thereof for the account
of the Company through the Paying Agent at the Payment Office,
in an aggregate principal amount (including therein the aggregate face amount
of any outstanding Bankers' Acceptances) at any one time outstanding (including
its Commitment Percentage of all Letter of Credit Liabilities at such time) up
to but not exceeding such Bank's Commitment Percentage of the Maximum Revolving
Credit Available Amount. Subject to the conditions herein, any such Loan or
Bankers' Acceptance repaid prior to the end of the Revolving Credit
Availability Period may be reborrowed or reissued, as the case may be, pursuant
to the terms of this Agreement; provided, that any and all such Loans and the
full face amount of all outstanding Bankers' Acceptances shall be due and
payable in full at the end of the Revolving Credit Availability Period. For
purposes of determining the amount available for borrowing hereunder (or the
maximum availability for the issuance of Bankers' Acceptances or Letters of
Credit), the Equivalent U.S. Dollar Amount as of the Business Day preceding the
Loan request, Bankers' Acceptance Request or Letter of Credit request shall be
used to determine availability hereunder, rather than the Quarterly Equivalent.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions
hereof, and on the condition that aggregate Letter of Credit Liabilities shall
never exceed U.S. $10,000,000, the Company shall have the right, in addition to
Loans provided for in Section 2.1 hereof, to utilize the Commitments from time
to time from and after the date hereof through the expiration of the
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Revolving Credit Availability Period by obtaining the issuance of letters of
credit for the account of the Company and on behalf of the Company by the
applicable Issuer if the Company shall so request in the notice referred to in
Section 2.2(b)(i) (such letters of credit being collectively referred to as the
"Letters of Credit"). Letters of Credit may, upon written request of the
Company, be denominated in Canadian Dollars and if so all payments and fees
with respect thereto shall be paid in Canadian Dollars. Upon the date of the
issuance of a Letter of Credit, the applicable Issuer shall be deemed, without
further action by any party hereto, to have sold to each Bank, and each Bank
shall be deemed, without further action by any party hereto, to have purchased
from the applicable Issuer, a participation, to the extent of such Bank's
Commitment Percentage, in such Letter of Credit and the related Letter of
Credit Liabilities. No Letter of Credit issued pursuant to this Agreement
shall have an expiry date later than one (1) year from date of issuance,
provided that any Letter of Credit having an expiry date after the end of the
Revolving Credit Availability Period shall have been fully Covered or shall be
backed by a letter of credit in form and substance, and issued by an issuer,
acceptable to the Administrative Agent in its reasonably exercised discretion.
Subject to the terms and conditions hereof, upon the request of the Company, if
BNS is the designated Issuer, BNS shall issue the applicable Letter of Credit
and if any other Bank is the designated Issuer, such Bank may, but shall not be
obligated to, issue such Letter of Credit.
(b) Additional Provisions. The following additional provisions
shall apply to each Letter of Credit:
(i) The Company shall give the Administrative Agent and
the Paying Agent at least three (3) Business Days' prior notice (effective upon
receipt) specifying the proposed Issuer and the date such Letter of Credit is
to be issued and describing the proposed terms of such Letter of Credit and the
nature of the transaction proposed to be supported thereby, and shall furnish
such additional information regarding such transaction as the Administrative
Agent, the Paying Agent or the applicable Issuer may reasonably request. Upon
receipt of such notice the Paying Agent shall promptly notify each Bank of the
contents thereof and of such Bank's Commitment Percentage of the amount of such
proposed Letter of Credit.
(ii) No Letter of Credit may be issued if after giving
effect thereto the sum of (i) the aggregate outstanding principal amount of
Loans plus (ii) the aggregate Letter of Credit Liabilities would exceed the
Maximum Revolving Credit Available Amount. On each day during the period
commencing with the issuance of any Letter of Credit and until such Letter of
Credit shall have expired or been terminated, the Commitment of each Bank shall
be deemed to be utilized for all purposes hereof in an amount equal to such
Bank's Commitment Percentage of the amount then available for drawings under
such Letter of Credit.
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, the applicable Issuer shall
promptly notify the Company and each Bank as to the amount to be paid as a
result of such demand and the payment date. If at any time the applicable
Issuer shall have made a payment to a beneficiary of a Letter of Credit in
respect of
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a drawing under such Letter of Credit, each Bank will pay to the applicable
Issuer immediately upon demand by the applicable Issuer at any time during the
period commencing after such payment until reimbursement thereof in full by the
Company, an amount equal to such Bank's Commitment Percentage of such payment,
together with interest on such amount for each day from the date of demand for
such payment (or, if such demand is made after 11:00 a.m. Toronto, Ontario time
on such date, from the next succeeding Business Day) to the date of payment by
such Bank of such amount at a per annum rate of interest determined by the
Issuer (such rate to be conclusive and binding on the Banks) in accordance with
the Issuer's usual banking practice for similar advances to financial
institutions of like standing to the applicable Bank.
(iv) The Company shall be irrevocably and unconditionally
obligated forthwith to reimburse the applicable Issuer for any amount paid by
the applicable Issuer upon any drawing under any Letter of Credit, without
presentment, demand, protest or other formalities of any kind. Such
reimbursement may, subject to satisfaction of the conditions in Sections 7.1
and 7.2 hereof and to the existence of the Maximum Revolving Credit Available
Amount (after adjustment in the same to reflect the elimination of the
corresponding Letter of Credit Liability) be made by borrowing of Loans. In
the event any such reimbursement is not made by borrowing of Loans, the Company
shall make such reimbursement in immediately available funds within five (5)
days after demand therefor by the applicable Issuer. The applicable Issuer
will pay to each Bank such Bank's Commitment Percentage of all amounts received
from the Company for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only to the
extent such Bank has made payment to the applicable Issuer in respect of such
Letter of Credit pursuant to clause (iii) above.
(v) The Company will pay to the Paying Agent at the
Payment Office for the account of each Bank a fee on such Bank's Commitment
Percentage of the daily average amount available for drawings under each Letter
of Credit, in each case for the period from and including the date of issuance
of such Letter of Credit to and including the date of expiration or termination
thereof at a rate per annum equal to the Letter of Credit Fee in effect from
time to time, such fee to be paid in arrears on the Quarterly Dates and on the
date of the expiration or termination thereof. The Paying Agent will pay to
each Bank, promptly after receiving any payment in respect of letter of credit
fees referred to in the preceding sentence of this clause (v), an amount equal
to such Bank's Commitment Percentage of such fees. The Company shall pay to
the applicable Issuer an administration and issuance fee in an amount equal to
1/8 of 1% per annum of the daily average amount available for drawings under
such Letter of Credit, in each case for the period from and including the date
of issuance of such Letter of Credit to and including the date of expiration or
termination thereof, such fee to be paid in arrears on the Quarterly Dates and
on the date of the expiration or termination thereof. Such administration and
issuance fee shall be retained by the applicable Issuer.
(vi) The issuance by the applicable Issuer of each Letter
of Credit shall, in addition to the conditions precedent set forth in Section 7
hereof, be subject to the conditions
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precedent that such Letter of Credit shall be in such form and contain such
terms as shall be reasonably satisfactory to the applicable Issuer and that the
Company shall have executed and delivered such other instruments and agreements
relating to such Letter of Credit as the applicable Issuer shall have
reasonably requested and are not inconsistent with the terms of this Agreement
including an Application therefor. In the event of a conflict between the
terms of this Agreement and the terms of any Application, the terms of this
Agreement shall control. Without limiting the generality of the foregoing
sentence, in the event any such Application shall include requirements for
Cover, it is agreed that there shall be no requirements for the Company to
provide Cover except as expressly required in this Agreement.
(c) Indemnification. The Company hereby indemnifies and holds
harmless each Agent, the applicable Issuer and each Bank from and against any
and all claims and damages, losses, liabilities, costs or expenses which such
Bank, the applicable Issuer or such Agent may incur (or which may be claimed
against such Bank, the applicable Issuer or such Agent by any Person
whatsoever) in connection with the execution and delivery or transfer of or
payment or failure to pay under any Letter of Credit, including, without
limitation, any claims, damages, losses, liabilities, costs or expenses which
such Agent, the applicable Issuer or such Bank, as the case may be, may incur
(whether incurred as a result of its own negligence or otherwise) by reason of
or in connection with the failure of any other Bank (whether as a result of its
own negligence or otherwise) to fulfill or comply with its obligations to such
Agent, the applicable Issuer or such Bank, as the case may be, hereunder (but
nothing herein contained shall affect any rights the Company may have against
such defaulting Bank); provided that, the Company shall not be required to
indemnify any Bank, the applicable Issuer or any Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the party seeking
indemnification, or (ii) by such Bank's, the applicable Issuer's or such
Agent's, as the case may be, failure to pay under any Letter of Credit after
the presentation to it of a request required to be paid under applicable law.
Nothing in this Section 2.2(c) is intended to limit the obligations of the
Company under any other provision of this Agreement.
(d) Co-issuance or Separate Issuance of Letters of Credit. The
Company may, at its option, request that any requested Letter of Credit which
exceeds U.S. $1,000,000 be issued severally, but not jointly, by any two or
more of the Banks or issued through separate Letters of Credit issued by any
two or more of the Banks, respectively, each in an amount equal to a portion of
the amount of the applicable Letter of Credit requested by the Company. In
either such event, the Banks issuing such Letters of Credit shall each
constitute an "Issuer" and the Letters of Credit so issued shall each
constitute a "Letter of Credit" for all purposes hereunder and under the Loan
Documents. Notwithstanding the foregoing, no Bank other than BNS shall have
any obligation to issue any Letter of Credit, but may do so at its option.
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2.3 Reductions and Changes of Commitments.
(a) Mandatory.
(i) The total Commitment of the Banks shall be reduced as follows:
Reduction Resulting Revolving
Reduction Date Amount Credit Commitment
-------------- --------------- -----------------
March 31, 1996 U.S. $10,937,500 U.S. $164,062,500
June 30, 1996 U.S. $10,937,500 U.S. $153,125,000
September 30, 1996 U.S. $10,937,500 U.S. $142,187,500
December 31, 1996 U.S. $10,937,500 U.S. $131,250,000
March 31, 1997 U.S. $10,937,500 U.S. $120,312,500
June 30, 1997 U.S. $10,937,500 U.S. $109,375,000
September 30, 1997 U.S. $10,937,500 U.S. $ 98,437,500
December 31, 1997 U.S. $10,937,500 U.S. $ 87,500,000
March 31, 1998 U.S. $10,937,500 U.S. $ 76,562,500
June 30, 1998 U.S. $10,937,500 U.S. $ 65,625,000
September 30, 1998 U.S. $10,937,500 U.S. $ 54,687,500
December 31, 1998 U.S. $10,937,500 U.S. $ 43,750,000
March 31, 1999 U.S. $10,937,500 U.S. $ 32,812,500
June 30, 1999 U.S. $10,937,500 U.S. $ 21,875,000
September 30, 1999 U.S. $10,937,000 U.S. $ 10,937,500
December 31, 1999 U.S. $10,937,000 U.S. $ 0
(ii) On December 31, 1999, all Commitments shall be terminated in
their entirety unless terminated at an earlier date pursuant
to Section 11.1.
(b) Optional. The Company shall have the right to terminate or
reduce the unused portion of the Commitments at any time or from time to time,
provided that: (i) the Company shall give notice of each such termination or
reduction to the Administrative Agent and the Paying Agent as provided in
Section 5.5 hereof and (ii) each such partial reduction shall be permanent and
in an aggregate amount at least equal to U.S. $5,000,000.
(c) No Reinstatement. Any reduction in or termination of the
Commitments may not be reinstated without the approval of the Administrative
Agent and each of the Banks.
2.4 Fees.
(a) The Company shall pay to the Paying Agent for the account of each
Bank a commitment fee with respect to such Bank's Commitment accruing from the
date hereof, computed for each day at a rate per annum equal to the Revolving
Credit Commitment Fee
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Percentage with respect to the Commitments of the respective Banks and based on
the amount, if any, by which such Bank's pro rata share of the lesser of the
aggregate Commitments or the Maximum Outstanding Amount on such day exceeds the
sum of (i) the unpaid principal balance of such Bank's Note outstanding on such
day plus (ii) the full face amount of all outstanding Bankers' Acceptances
accepted by such Bank plus (iii) such Bank's allocated share of the aggregate
Letter of Credit Liabilities outstanding on such day. Commitment fees accruing
pursuant to this clause (a) shall be payable on the Quarterly Dates and on the
earlier of the date the Commitments are terminated or the last day of the
Revolving Credit Availability Period. Such fees shall be calculated in U.S.
Dollars, but paid in Canadian Dollars converted by using the Equivalent U.S.
Dollar Amount as of the date of payment.
(b) The Company shall pay to the Paying Agent for the account of each
Bank an additional commitment fee with respect to such Bank's Commitment
accruing from the date hereof, computed for each day at a rate per annum equal
to one-half (1/2) of the Revolving Credit Commitment Fee Percentage with
respect to the Commitments of the respective Banks and based on the amount, if
any, by which the amount set forth opposite such Bank's name on the signature
pages hereto under the heading "Commitment" (but only to the extent that such
amount has not been permanently and irrevocably terminated and reduced by
written notice from the Company to the Administrative Agent, with a copy to the
Paying Agent; provided, however that any such termination or reduction must be
allocated among the Banks pro rata in accordance with their respective
Commitment Percentages) exceeds such Bank's pro rata share of the Maximum
Outstanding Amount on such day. Commitment fees accruing pursuant to this
clause (b) shall be payable on the Quarterly Dates and on the earlier of the
date the Commitments are terminated or the last day of the Revolving Credit
Availability Period. Such fees shall be calculated in U.S. Dollars, but paid
in Canadian Dollars converted by using the Equivalent U.S. Dollar Amount as of
the date of payment.
(c) The Company shall pay to the Paying Agent for the account of
each Bank an additional commitment fee effective upon any increase in borrowing
availability hereunder. Such additional commitment fee shall be in an amount
equal to the amount by which the commitment fee which such Bank would have
received under Sections 2.4(a) and (b) if such increased borrowing availability
had been effective six (6) calendar months earlier exceeds the commitment fee
actually received by such Bank under Sections 2.4(a) and (b) during such six
(6) calendar month period. Payment of such additional commitment fee shall be
due and payable upon the effective date of such increase in the Maximum
Outstanding Amount. The commitment fee provided for in this Section 2.4(c)
shall be payable notwithstanding any prior decrease in the available
Commitments which may have occurred. Such fees shall be calculated in U.S.
Dollars, but paid in Canadian Dollars converted by using the Equivalent U.S.
Dollar Amount as of the date of payment.
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(d) For purposes of determining the amount of any payment required
to be made under this Section 2.4, the Quarterly Equivalent shall be used as
the conversion rate with respect to Canadian Dollars.
2.5 Affiliates; Lending Offices.
(a) Any Bank may, if it so elects, fulfill its Commitment as to
any Eurodollar Loan by causing a branch, foreign or otherwise, or Affiliate of
such Bank to make such Loan and may transfer and carry such Loan at, to or for
the account of any branch office or Affiliate of such Bank which is a resident
of Canada under the Income Tax Act (Canada); provided that, in such event for
the purposes of this Agreement such Loan shall be deemed to have been made by
such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed to be held by such Bank and,
to the extent of such Loan, to have been made for the account of such branch or
Affiliate.
(b) Notwithstanding any provision of this Agreement to the
contrary, each Bank shall be entitled to fund and maintain its funding of all
or any part of its Loans hereunder in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if such Bank had actually funded and maintained each
Eurodollar Loan during each Interest Period through the purchase of deposits
having a maturity corresponding to such Interest Period and bearing an interest
rate equal to the Eurodollar Rate, as the case may be, for such Interest Period
for such Interest Period.
2.6 Several Obligations. The failure of any Bank to make any Loan
to be made by it or accept and purchase Bankers' Acceptances to be purchased by
it on the date specified therefor shall not relieve any other Bank of its
obligation to make its Loan or accept and purchase such Bankers' Acceptances on
such date, but neither any Agent nor any Bank shall be responsible for the
failure of any other Bank to make a Loan to be made by such other Bank or to
accept and purchase any Bankers' Acceptances to be accepted and purchased by
such other Bank.
2.7 Notes. The Loans made by each Bank shall be evidenced by a
single Canadian Dollar denominated Note of the Company in the case of Loans
denominated in Canadian Dollars and by a single U.S. Dollar denominated Note of
the Company in the case of Loans denominated in U.S. Dollars, such notes to be
in substantially the forms of Exhibit C-1 and C-2, respectively, hereto payable
to the order of such Bank in a principal amount equal to the Commitment of such
Bank, and otherwise duly completed. Each Bank is hereby authorized by the
Company to endorse on the schedule (or a continuation thereof) attached to the
Note of such Bank, to the extent applicable, the date, amount and Type of and
the Interest Period for each Loan made by such Bank to the Company hereunder,
and the amount of each payment or prepayment of principal of such Loan received
by such Bank, provided, that any failure by such Bank to make any such
endorsement shall not affect the obligations of the Company under such Note or
hereunder in respect of such Loan.
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2.8 Use of Proceeds. The proceeds of the Loans and the Canadian
Bankers' Acceptance Discount Proceeds, as the case may be, shall be used to
finance a portion of the costs of acquiring the equity and other capital of
Novalta (consisting of common and preferred stock and a note payable from
Novalta to Novacor Petrochemicals Ltd.) and for general corporate purposes.
2.9 Designation of Maximum Outstanding Amount. The Company shall
from time to time designate a maximum principal amount, denominated in U.S.
Dollars, permitted to be outstanding hereunder for the period during which such
designation is effective (such amount being herein called the "Maximum
Outstanding Amount"). The initial Maximum Outstanding Amount, effective from
the date hereof, is U.S. $160,000,000. The Company may, at any time, by
written notice delivered to the Administrative Agent and the Paying Agent no
later than two (2) Business Days prior to the effective date thereof, revise
the Maximum Outstanding Amount upwards or downwards; provided, however, that
(i) the Maximum Outstanding Amount may not at any time exceed the aggregate
amount of the Commitments, as reduced from time to time pursuant to Section 2.3
hereof and (ii) the Maximum Outstanding Amount may not at any time exceed the
amount by which the Borrowing Base from time to time in effect exceeds the sum
of the aggregate amount of all "Revolving Credit Obligations" from time to time
outstanding under the U.S. Facility plus the aggregate amount of all other
Borrowing Base Debt of the Parent and its Subsidiaries from time to time
outstanding.
SECTION 3. BORROWINGS, PREPAYMENTS AND SELECTION OF INTEREST
RATES.
3.1 Borrowings. The Company shall give the Administrative Agent
and the Paying Agent notice of each borrowing or the issuance of each Bankers'
Acceptance to be made hereunder as provided in Section 5.5 hereof. Not later
than 2:00 p.m. Toronto, Ontario time on the date specified for each such
borrowing or the issuance of each such Bankers' Acceptance hereunder, each Bank
shall make available the amount of the Loan, if any, to be made by it on such
date or make available Canadian Bankers' Acceptance Discount Proceeds in
respect of Bankers' Acceptances to be accepted and purchased by it on such date
(less the applicable acceptance fees payable by the Company in respect of such
Bankers' Acceptances), in each case to the Paying Agent, at the Payment Office,
in immediately available funds, for the account of the Company. The amount so
received by the Paying Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Company by depositing the same, in
immediately available funds, in an account designated by the Company maintained
with the Paying Agent at the Payment Office.
3.2 Prepayments.
(a) Optional Prepayments. Subject to the provisions of Sections
4, 5 and 6, the Company shall have the right to prepay, on any Business Day, in
whole or in part, without the payment of any penalty or fee, Loans at any time
or from time to time, provided that, the Company shall give the Administrative
Agent and the Paying Agent notice of each such
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prepayment as provided in Section 5.5 hereof. Eurodollar Loans may be prepaid
on the last day of an Interest Period applicable thereto and Bankers'
Acceptances may be prepaid on their stated maturity date. Eurodollar Loans and
Bankers' Acceptances may not be otherwise prepaid unless prepayment is
accompanied by payment of all compensation required by Section 6.
(b) Mandatory Prepayments and Cover.
(1) Reduction of Commitments. The Company shall from time to time
on demand by the Administrative Agent prepay the Loans (or provide Cover for
Letter of Credit Liabilities and the face amount of Bankers' Acceptances) in
such amounts as shall be necessary so that at all times the aggregate
outstanding principal amount (including therein the face amount of all
outstanding Bankers' Acceptances) of all Revolving Credit Obligations shall not
be in excess of the Maximum Outstanding Amount plus any Cover provided under
this Section 3.2(b)(1).
(2) Borrowing Base Deficiency. Any payments required to cure any
Borrowing Base Deficiency shall be made by Parent to the lenders under the U.S.
Facility and by the Company to the Banks (with the Maximum Outstanding Amount
to be reduced by the amount of such payments by the Company) in the manner
provided in the Intercreditor Agreement.
(3) Use of Quarterly Equivalent. For purposes of determining
whether any payment is required to be made under this Section 3.2, and the
amount thereof, when such determination requires a conversion of U.S. Dollars
into Canadian Dollars and vice versa, the Quarterly Equivalent shall be used as
the conversion rate.
3.3 Selection of Interest Rates. Subject to Section 5.1 and
Section 6 hereof, the Company shall have the right, by giving written notice to
the Administrative Agent and the Paying Agent as provided in Section 5.5
hereof, either to convert any Bankers' Acceptance (in whole or in part) into a
Loan, to convert any Loan (in whole or in part) into a Bankers' Acceptance, to
convert any Loan (in whole or in part) into a Loan of another Type (provided
that no such conversion of Eurodollar Loans shall be permitted other than on
the last day of an Interest Period applicable thereto and no conversion of
Bankers' Acceptances shall be permitted other than on the maturity date
thereof), to continue any Bankers' Acceptance (in whole or in part) or to
continue any Loan (in whole or in part) as a Loan of the same Type. Any such
notice of conversion of a Bankers' Acceptance into a Loan or of conversion of a
Loan into, or continuation of a Loan as, a Eurodollar Loan or a Bankers'
Acceptance shall specify the new Interest Period or maturity date, as
applicable. In the event the Company fails to so give such notice prior to the
end of any Interest Period for any Eurodollar Loan, such Loan shall become an
Alternate Base Rate Loan on the last day of such Interest Period.
3.4 Conditions Applicable to Bankers' Acceptances.
(a) Acceptance and Purchase of Bankers' Acceptances. Subject to
the terms and conditions of this Agreement, each Bank agrees to accept its
Commitment Percentage of
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Bankers' Acceptances issued by the Company and to purchase same at the
applicable Canadian Bankers' Acceptance Discount Rate and to provide to the
Paying Agent for the account of the Company the Canadian Bankers' Acceptance
Discount Proceeds in respect thereof less the applicable acceptance fees
payable by the Company to such Bank pursuant to Section 4.3. Each such Bank
may at any time and from time to time hold, sell, rediscount or otherwise
dispose of any or all Bankers' Acceptances purchased by it.
(b) Waiver of Presentment and Other Conditions. The Company
waives presentment for payment and any other defence to payment of any amounts
due to a Bank in respect of a Bankers' Acceptance accepted and purchased by it
pursuant to this Agreement which might exist solely by reason of such Bankers'
Acceptance being held, at the maturity thereof, by such Bank in its own right
and the Company agrees not to claim any days of grace if such Bank as holder
sues the Company on the Bankers' Acceptance for payment of the amount payable
by the Company thereunder. On the specified maturity date of a Bankers'
Acceptance, or such earlier date as may be required or permitted pursuant to
the provisions of this Agreement, the Company shall pay the Bank that has
accepted and purchased such Bankers' Acceptance the full face amount of such
Bankers' Acceptance.
(c) Terms of Each Bankers' Acceptance: Each Bankers' Acceptance
shall:
(1) have a maturity date which shall be on a Business Day;
(2) have a term of not less than thirty (30) days and not
more than one hundred and eighty (180) days
(excluding days of grace);
(3) be in the form of Exhibit K attached hereto or in
such other form as the Company may agree to in
writing;
(4) be issued in face amounts of Canadian $100,000 or
whole multiples thereof (each of the Banks agrees
that it will use its best efforts to minimize the
number of separate Bankers' Acceptances required to
be executed); and
(5) not have a maturity date which extends beyond the end
of the scheduled Revolving Credit Availability
Period.
(d) Delivery of Blank Bankers' Acceptances. As a condition
precedent to each Banks' obligation to accept and purchase Bankers' Acceptances
hereunder, the Company shall have delivered to such Bank through the Paying
Agent at the Payment Office sufficient bankers' acceptances endorsed in blank
in sufficient time for such Bank to forward to and hold the same for issuance
in accordance with a request from the Company. Each Bank is hereby authorized
to issue such bankers' acceptances endorsed in blank in such face amounts as
may be determined by such Bank; provided that the aggregate amount thereof is
equal to the aggregate amount of
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Bankers' Acceptances required to be accepted and purchased by such Bank
hereunder. No Bank shall be liable for any damage, loss or other claim arising
by reason of any loss or improper use of any bankers' acceptance endorsed in
blank except any loss arising by reason of the negligence or wilful misconduct
of such Bank or its officers, employees, agents or representatives. The Paying
Agent shall maintain a record with respect to bankers' acceptances endorsed in
blank that are received from the Company and that are delivered to a Bank
hereunder. Each Bank shall maintain a record with respect to bankers'
acceptances endorsed in blank that are:
(1) received by such Bank from the Paying Agent hereunder;
(2) voided by such Bank for any reason;
(3) accepted and purchased by such Bank hereunder; and
(4) cancelled by such Bank at the maturity thereof.
Each Bank agrees to provide such record to the Paying Agent upon request
therefor by the Paying Agent as well as concurrently with any request by such
Bank to the Paying Agent for any additional bankers' acceptances endorsed in
blank required from the Company. The Paying Agent shall provide a report of
such records received by the Paying Agent to the Company upon request from the
Company.
(e) Failure to Give Notice of Repayment. If the Company fails to
give notice to the Paying Agent at the Payment Office of the method of
repayment of a Bankers' Acceptance prior to the date of maturity of such
Bankers' Acceptance in accordance with the same period of notice required for
the original acceptance of such Bankers' Acceptance as set forth herein, the
face amount of such Bankers' Acceptance shall, on its maturity, automatically
be converted to a Canadian Prime Rate Loan.
(f) Execution of Bankers' Acceptances. Bankers' acceptances of
the Company which are endorsed in blank and are to be accepted as Bankers'
Acceptances hereunder shall be signed by a duly authorized signatory or duly
authorized signatories of the Company, and may, at the option of the Company,
be signed by way of affixing a reproduction of the signature or signatures of
such duly authorized signatory or signatories. Notwithstanding that any person
whose signature appears on any Bankers' Acceptance as a signatory may no longer
be an authorized signatory of the Company at the date of issuance of a Bankers'
Acceptance, and notwithstanding that the signature affixed may be a
reproduction only, such signature shall nevertheless be valid and sufficient
for all purposes as if such authority had remained in force at the time of such
issuance and as if such signature had been manually applied, and any such
Bankers' Acceptance so signed shall be binding on the Company.
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3.5 Paying Agent's Duties Re Bankers' Acceptances.
(a) Advice to the Lenders. The Paying Agent, promptly following
receipt of a Request for Extension of Credit by way of Bankers' Acceptance,
shall so advise the Banks and shall advise each Bank of the amount of each
issue of Bankers' Acceptances to be accepted and purchased by it and the term
thereof, which term shall be identical for all Banks.
(b) Agent's Confirmation of Bankers' Acceptance Issuance. At or
prior to 11:00 a.m. (Toronto, Ontario time) on the date on which the Bankers'
Acceptances are to be accepted and purchased hereunder, the Paying Agent shall
provide telephone advice to the Company and each Bank confirming the
particulars with respect to the issuance, acceptance and purchase of such
Bankers' Acceptances. Such advice shall be confirmed in writing at or prior to
4:30 p.m. (Toronto, Ontario time) on such date by delivery to the Company and
each Bank of a written confirmation of such telephone advice with respect to
the issuance, acceptance and purchase of such Bankers' Acceptances. Each Bank
will forthwith advise the Paying Agent of the particulars of the Bankers'
Acceptances accepted and purchased by it.
(c) Completion of Bankers' Acceptance. Upon receipt of the
telephone advice referred to in Section 3.5(a), each Bank is thereupon
authorized to complete bankers' acceptances held by it in blank in accordance
with the particulars so advised by the Paying Agent.
(d) Paying Agent's Discretion on Allocation. In the event it is
not practicable to allocate Bankers' Acceptances to each Lender in accordance
with Section 5.2 such that the aggregate amount of Bankers' Acceptances
required to be accepted and purchased by such Bank hereunder is in a whole
multiple of Canadian $100,000, the Paying Agent is authorized by the Company
and each Bank to make such allocation as the Paying Agent determines in its
sole and unfettered discretion may be equitable in the circumstances.
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3.6 Certain Provisions Relating to Bankers' Acceptances Forms.
(a) The Company shall hold and use prudently the bankers'
acceptance forms delivered to it in blank from time to time and shall return
them from time to time to the Paying Agent for onward conveyance to the
respective Banks, properly pre-signed and pre-endorsed and in sufficient
quantities to be dealt with by each Bank in conformity with this Agreement.
The Paying Agent shall provide to the Company written acknowledgment of the
receipt of such pre-signed and pre-endorsed bankers' acceptance forms.
(b) The Paying Agent and each Bank shall deal prudently with any
bankers' acceptance forms pre-signed and pre-endorsed by the Company and
delivered from time to time by the Company and shall use them only in
accordance with the instructions of the Company given to the Paying Agent, in
conformity with this Agreement.
(c) In accordance with the instructions given from time to time by
the Company, each Bank is hereby authorized to complete the aforementioned
bankers' acceptance forms, to provide its acceptance thereon and, at such
Bank's option, to put them into circulation, the whole as provided in and
subject to this Agreement.
(d) Neither the Paying Agent nor any Bank shall be responsible or
liable for any failure to make credit available by way of Bankers' Acceptances
under the terms of the Credit Agreement if such failure is due to the failure
of the Company to return duly pre-signed and pre-endorsed bankers' acceptance
forms to the Paying Agent on a timely basis.
(e) On request by the Paying Agent on behalf of the Banks, the
Company shall return to the Paying Agent all bankers' acceptance forms then
held by the Company, provided that all such bankers' acceptance forms which
have been pre-signed or pre-endorsed by the Company may be cancelled prior to
their return and on request by the Company made to the Paying Agent, a Bank
shall cancel all pre-signed or pre-endorsed bankers' acceptance forms held by
such Bank and not yet issued in accordance with the Company's instructions and
shall confirm such cancellation to the Paying Agent who shall in turn inform
the Company.
SECTION 4. PAYMENTS OF PRINCIPAL AND INTEREST.
4.1 Repayment of Loans and Reimbursement Obligations. The Company
will pay to the Paying Agent for the account of each Bank (a) the principal of
each Loan made by such Bank on the dates provided in the respective Notes and
as provided hereunder, (b) the face amount of each Bankers' Acceptance on its
maturity date and (c) the amount of each Reimbursement Obligation promptly upon
its occurrence. The face amount of any Bankers' Acceptance or the amount of
any Reimbursement Obligation may, if the applicable conditions precedent
specified in Section 7 hereof have been satisfied, be paid with the proceeds of
Loans. Repayments of Loans or Reimbursement Obligations denominated in
Canadian Dollars and
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repayments of Bankers' Acceptances shall be made in Canadian Dollars and
repayments of Loans or Reimbursement Obligations denominated in U.S. Dollars
shall be made in U.S. Dollars.
4.2 Interest. (a) Subject to Section 13.6 hereof, the
Company will pay to the Paying Agent for the account of each Bank interest on
the unpaid principal amount of each Loan made by such Bank for the period
commencing on the date of such Loan to but excluding the date such Loan shall
be paid in full, in the currency in which the Loan is denominated, at the
lesser of (I) the following rates per annum:
(i) if such Loan is an Alternate Base Rate Loan, the
Alternate Base Rate plus the Applicable Margin, and
(ii) if such Loan is a Canadian Prime Rate Loan, the
Canadian Prime Rate plus the Applicable Margin, and
(iii) if such Loan is a Eurodollar Loan, the applicable
Eurodollar Rate plus the Applicable Margin,
or (II) the Highest Lawful Rate.
(b) Notwithstanding any of the foregoing but subject to Section
13.6 hereof, the Company will pay to the Paying Agent for the account of each
Bank interest in the applicable currency at the applicable Post-Default Rate on
any principal of any Loan made by such Bank, on any Reimbursement Obligation
and on any other amount payable by the Company hereunder to or for the account
of such Bank (but, if such amount is interest, only to the extent legally
allowed), which shall not be paid in full when due (whether at stated maturity,
by acceleration or otherwise), for the period commencing on the due date
thereof until the same is paid in full.
(c) Accrued interest on each Loan shall be payable on the last day
of each Interest Period for such Loan (and, if such Interest Period exceeds
three months' duration, quarterly, commencing on the first quarterly
anniversary of the first day of such Interest Period), except that (i) accrued
interest payable at the Post-Default Rate shall be due and payable from time to
time on demand of the Administrative Agent or the Majority Banks (through the
Administrative Agent) and (ii) accrued interest on any amount prepaid or
converted pursuant to Section 6 hereof shall be paid on the amount so prepaid
or converted.
4.3 Acceptance Fees. The Company shall pay to each Bank
acceptance fees in Canadian Dollars forthwith upon the acceptance by such Bank
of each Bankers' Acceptance issued by the Company at a rate per annum equal to
the B/A Stamping Rate in effect at the time of the acceptance of such Bankers'
Acceptance, calculated on the face amount of such Bankers' Acceptance and on
the basis of the number of days in the term of such Bankers' Acceptance divided
by three hundred sixty-five (365). Acceptance fees payable to the Banks
pursuant to this Section 4.3 shall be paid in the manner specified in Section
3.4(a).
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SECTION 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC.
5.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, the full face amount of Bankers' Acceptances,
Reimbursement Obligations and other amounts to be made by the Company hereunder
and under the Notes and the other Loan Documents shall be made in U.S. Dollars
or Canadian Dollars, as the case may be, in immediately available funds, to the
Paying Agent at the Payment Office (or in the case of a successor Paying Agent,
at the payment office designated by such successor Paying Agent in Canada), not
later than 11:00 a.m. Toronto, Ontario time on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Paying
Agent, or any Bank for whose account any such payment is made, may (but shall
not be obligated to) debit the amount of any such payment which is not made by
such time to any ordinary deposit account of the Company with the Paying Agent
or such Bank, as the case may be.
(b) The Company shall, at the time of making each payment
hereunder or under any Note or any other Loan Document, specify to the Paying
Agent the Loans, the Bankers' Acceptances or other amounts payable by the
Company hereunder or thereunder to which such payment is to be applied. Each
payment received by the Paying Agent hereunder or under any Note, Bankers'
Acceptance or any other Loan Document for the account of a Bank shall be paid
promptly to such Bank, in immediately available funds for the account of such
Bank's Applicable Lending Office.
(c) If the due date of any payment hereunder or under any Note or
any other Loan Document falls on a day which is not a Business Day, the due
date for such payment (subject to the definition of Interest Period) shall be
extended to the next succeeding Business Day and interest shall be payable for
any principal so extended for the period of such extension.
5.2 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Banks under Section 2.1 hereof shall be
made ratably from the Banks on the basis of their respective Commitments and
each payment of commitment fees shall be made for the account of the Banks, and
each termination or reduction of the Commitments of the Banks under Section 2.3
hereof shall be applied, pro rata, according to the Banks' respective
Commitments; (b) each payment by the Company of the full face amount of
Bankers' Acceptances and principal of or interest on Loans of a particular Type
shall be made to the Paying Agent for the account of the Banks pro rata in
accordance with the respective full face amount of such Bankers' Acceptances or
the unpaid principal amounts of such Loans held by the Banks; and (c) the Banks
(other than the applicable Issuer) shall purchase from the applicable Issuer
participations in the Letters of Credit to the extent of their respective
Commitment Percentages.
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5.3 Computations. Subject to Section 13.7, interest based on the
Eurodollar Base Rate or the Federal Funds Rate will be computed on the basis of
a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable, unless the
effect of so computing shall be to cause the rate of interest to exceed the
Highest Lawful Rate, in which case interest shall be calculated on the basis of
the actual number of days elapsed in a year composed of 365 or 366 days, as the
case may be. All other interest and fees shall be computed on the basis of a
year of 365 (or 366) days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
5.4 Minimum and Maximum Amounts. Except for prepayments made
pursuant to Section 3.2(b) hereof, each borrowing and repayment of principal of
Loans, each acceptance, purchase and repayment of Bankers' Acceptances and each
termination or reduction of Commitments, each optional prepayment and each
conversion of Type shall be in an aggregate principal amount at least equal to
(a) in the case of Eurodollar Loans, U.S. $5,000,000,(b) in the case of
Bankers' Acceptances, Canadian $5,000,000, (c) in the case of Canadian Prime
Rate Loans, Canadian $1,000,000, and (d) in the case of Alternate Base Rate
Loans, U.S. $1,000,000 (borrowings or prepayments of Loans of different Types
or, in the case of Eurodollar Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings and prepayments for
purposes of the foregoing, one for each Type or Interest Period). Upon any
mandatory prepayment that would reduce Eurodollar Loans having the same
Interest Period to less than U.S. $5,000,000 such Loans shall automatically be
converted into Alternate Base Rate Loans. Notwithstanding anything to the
contrary contained in this Agreement, there shall not be, at any one time, more
than eight (8) Interest Periods in effect with respect to Eurodollar Loans.
5.5 Certain Actions, Notices, Etc. Notices to the Administrative
Agent and the Paying Agent of any termination or reduction of Commitments, of
borrowings and prepayments, of issuance, acceptance and purchase of Bankers'
Acceptances, of conversions and continuations of Loans and Bankers'
Acceptances, of the term of Bankers' Acceptances and of the duration of
Interest Periods shall be irrevocable and shall be effective only if received
by the Administrative Agent and the Paying Agent not later than 11:00 a.m.
Toronto, Ontario time on the number of Business Days prior to the date of the
relevant termination, reduction, borrowing and/or repayment, conversion or
continuance specified below:
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Number of
Business
Notice Days Prior
------ ----------
Termination or
Reduction of Commitments 2
Borrowing or prepayment
of or conversion into or
continuance of
Alternate Base Rate 11:00 a.m. (Toronto,
Loans or Canadian Ontario time) of
Prime Rate Loans the same day
which are equal to or less
than (in the aggregate with
respect to all Loans
requested on a given day)
U.S. $20,000,000
Borrowing or prepayment
of or conversion into or
continuance of
Alternate Base Rate 1
Loans or Canadian
Prime Rate Loans
which exceed
(in the aggregate with
respect to all Loans
requested on a given day)
U.S. $20,000,000
Issuance of Bankers' Acceptances 2
Borrowing or
prepayment of or conversion
into or continuance of 3
Eurodollar Loans
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Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing or
prepayment shall specify the amount of Bankers' Acceptances to be accepted and
purchased or prepaid and the Type of the Loans to be borrowed or prepaid
(subject to Sections 3.2(a) and 5.4 hereof), the date of borrowing, acceptance
and purchase or prepayment (which shall be a Business Day) and, in the case of
Eurodollar Loans, the duration of the Interest Period therefor (subject to the
definition of "Interest Period") and, in the case of Bankers' Acceptances, the
term and maturity date therefor (subject to Section 3.4(c)). Each such notice
of conversion of a Bankers' Acceptance into a Loan or conversion of a Loan into
a Loan of another Type or a Bankers' Acceptance shall identify such Bankers'
Acceptance or Loan (or portion thereof) being converted and specify the Type of
Loan into which such Bankers' Acceptance or Loan is being converted (subject to
Section 5.4 hereof) and the date for conversion (which shall be a Business Day)
and, unless such Bankers' Acceptance or Loan is being converted into an
Alternate Base Rate Loan or a Canadian Prime Rate Loan, the duration (subject
to the definition of "Interest Period") of the Interest Period therefor which
is to commence as of the last day of the then current Interest Period therefor
(or the date of conversion, if such Loan is being converted from an Alternate
Base Rate Loan or a Canadian Prime Rate Loan). In the case of any such notice
for a Bankers' Acceptance, the term and maturity date of such Bankers'
Acceptance shall also be specified. Each such notice of continuation of a Loan
(or portion thereof) as the same Type of Loan shall identify such Loan (or
portion thereof) being continued (subject to Section 5.4 hereof) and, unless
such Loan is an Alternate Base Rate Loan or a Canadian Prime Rate Loan, the
duration (subject to the definition of "Interest Period") of the Interest
Period therefor which is to commence as of the last day of the then current
Interest Period therefor. The Paying Agent shall promptly notify the affected
Banks of the contents of each such notice. Notice of any prepayment having
been given, the principal amount specified in such notice, together with
interest thereon to the date of prepayment, shall be due and payable on such
prepayment date.
5.6 Non-Receipt of Funds by the Paying Agent. Unless the
Paying Agent shall have been notified by a Bank or the Company (the "Payor")
prior to the date on which such Bank is to make payment to the Paying Agent of
the Canadian Bankers' Acceptance Discount Proceeds in respect of a Bankers'
Acceptance to be purchased by it or the proceeds of a Loan to be made by it
hereunder (or the payment of any amount by such Bank to reimburse the
applicable Issuer for a drawing under any Letter of Credit) or the Company is
to make a payment to the Paying Agent for the account of one or more of the
Banks, as the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does
not intend to make the Required Payment to the Paying Agent, the Paying Agent
may assume that the Required Payment has been made and may, in reliance upon
such assumption (but shall not be required to), make the amount thereof
available to the intended recipient on such date and, if the Payor has not in
fact made the Required Payment to the Paying Agent on or before such date, the
recipient of such payment (or, if such recipient is the beneficiary of a Letter
of Credit, the Company and, if the Company fails to pay the amount thereof to
the Paying Agent forthwith upon demand, the Banks ratably in proportion to
their respective Commitment Percentages) shall, on demand, pay to the Paying
Agent the amount
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made available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by the Paying Agent
until the date the Paying Agent recovers such amount at a per annum rate of
interest determined by the Paying Agent (such rate to be conclusive and binding
on the Banks) in accordance with the Paying Agent's usual banking practice for
similar advances to financial institutions of like standing to the applicable
Bank.
5.7 Sharing of Payments, Etc. If a Bank shall obtain
payment of the full face amount of an outstanding Bankers' Acceptance accepted
and purchased by it under this Agreement or of any principal of or interest on
any Loan made by it under this Agreement, or on any Reimbursement Obligation or
other obligation then due to such Bank hereunder, through the exercise of any
right of set-off, banker's lien, counterclaim or similar right, or otherwise,
it shall promptly purchase from the other Banks participations in the Loans
made, the outstanding Bankers' Acceptances or Reimbursement Obligations or
other obligations held, by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Banks shall share the benefit of such payment (net of any expenses which may be
incurred by such Bank in obtaining or preserving such benefit) pro rata in
accordance with the unpaid principal and interest on the Obligations then due
to each of them. To such end all the Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored. The Company agrees, to the
fullest extent it may effectively do so under applicable law, that any Bank so
purchasing a participation in the Loans made, the outstanding Bankers'
Acceptances or Reimbursement Obligations or other obligations held, by other
Banks may exercise all rights of set-off, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Bank were
a direct holder of Loans, Bankers' Acceptances and Reimbursement Obligations or
other obligations in the amount of such participation. Nothing contained
herein shall require any Bank to exercise any such right or shall affect the
right of any Bank to exercise, and retain the benefits of exercising, any such
right with respect to any other Indebtedness or obligation of the Company.
SECTION 6. YIELD PROTECTION AND ILLEGALITY.
6.1 Additional Costs.
(a) Subject to Section 13.6, the Company shall pay to the
Paying Agent, on demand for the account of each Bank from time to time such
amounts as such Bank may determine to be necessary to compensate it for any
costs incurred by such Bank which such Bank determines are attributable to its
making or maintaining of any Eurodollar Loan or any Bankers' Acceptance
hereunder or its obligation to make any such Loan hereunder, or any reduction
in any amount receivable by such Bank hereunder in respect of any of such Loans
or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), in each case resulting from
any Regulatory Change which:
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(i) subjects such Bank (or makes it apparent that
such Bank is subject) to any tax, levy, impost, duty, charge or fee
(collectively, "Taxes"), or any deduction or withholding for any Taxes on or
from the payment due in respect of any Bankers' Acceptance or under any
Eurodollar Loan or other amounts due hereunder, other than income and franchise
taxes of the jurisdiction (or any subdivision thereof) in which such Bank has
an office or its Applicable Lending Office; or
(ii) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in respect of any of
such Loans or in respect of Bankers' Acceptances (other than changes which
affect taxes measured by or imposed on the overall net income or franchise
taxes of such Bank or of its Applicable Lending Office for any of such Loans by
the jurisdiction (or any subdivision thereof) in which such Bank has an office
or such Applicable Lending Office); or
(iii) imposes or modifies or increases or deems
applicable any reserve, special deposit or similar requirements (including,
without limitation, any such requirement imposed by the Office of the
Superintendent of Financial Institutions Canada) relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Bank or loans made by such Bank, or Bankers' Acceptances accepted by such Bank
or against any other funds, obligations or other property owned or held by such
Bank (including any of such Loans or, where applicable, any deposits referred
to in the definition of "Eurodollar Base Rate" in Section 1.1 hereof or any
Bankers' Acceptances) and such Bank actually incurs such additional costs; or
(iv) imposes any other condition affecting this
Agreement (or any of such extensions of credit or liabilities).
Each Bank (if so requested by the Company through the Administrative Agent)
will designate a different available Applicable Lending Office for the
Eurodollar Loans or the Bankers' Acceptances of such Bank or take such other
action as the Company may request if such designation or action will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Bank, be disadvantageous to such Bank (provided that such Bank
shall have no obligation so to designate an Applicable Lending Office for
Eurodollar Loans located in the United States of America or to designate an
Applicable Lending Office for Bankers' Acceptances located in any jurisdiction
that is not located in Canada). Each Bank will furnish the Company with a
statement setting forth the basis and amount of each request by such Bank for
compensation under this Section 6.1(a); subject to Section 6.8, such
certificate shall be conclusive, absent manifest error, and may be prepared
using any reasonable averaging and attribution methods.
(b) Without limiting the effect of the foregoing
provisions of this Section 6.1, in the event that, by reason of any Regulatory
Change, any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of
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51
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 Bankers' Acceptances or (ii) becomes
subject to restrictions on the amount of such a category of liabilities or
assets which it may hold, then, if such Bank so elects by notice to the Company
(with a copy to the Administrative Agent and the Paying Agent), the obligation
of such Bank to make Eurodollar Loans or accept and purchase Bankers'
Acceptances, as applicable, hereunder shall be suspended until the date such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 6.4 hereof shall be applicable).
(c) Good faith determinations and allocations by any Bank
for purposes of this Section 6.1 of the effect of any Regulatory Change on its
costs of maintaining its obligations to make Loans or accept and purchase
Bankers' Acceptances or of making or maintaining Loans or accepting and
purchasing Bankers' Acceptances on amounts receivable by it in respect of Loans
or Bankers' Acceptances, and of the additional amounts required to compensate
such Bank in respect of any Additional Costs, shall be conclusive, absent
manifest error.
(d) The Company's obligation to pay Additional Costs and
compensation with regard to each Eurodollar Loan and each Bankers' Acceptance
shall survive termination of this Agreement.
6.2 Limitations. Anything herein to the contrary
notwithstanding, if, with respect to any Eurodollar Loans or Bankers'
Acceptance:
(a) the Paying Agent determines in good faith (which
determination shall be conclusive) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Base Rate" in
Section 1.1 hereof are not being provided by the Reference Banks in the
relevant amounts or for the relevant maturities for purposes of determining the
rate of interest for such Loans for Interest Periods therefor as provided in
this Agreement; or
(b) the Paying Agent determines in good faith (which
determination shall be conclusive) that quotations of discount rates for the
purchase of Canadian Dollar bankers' acceptances referred to in the definition
of "Canadian Bankers' Acceptance Discount Rate" in Section 1.1 hereof are not
being provided by the Reference Banks in the relevant amounts or for the
relevant maturities for purposes of determining the Canadian Bankers'
Acceptance Discount Rate therefor as provided in this Agreement; or
(c) the Majority Banks determine (which determination
shall be conclusive) and notify the Paying Agent (with a copy to the
Administrative Agent) that the relevant rates of interest referred to in the
definition of "Eurodollar Base Rate" in Section 1.1 hereof upon the basis of
which the rates of interest for such Loans (where applicable) are to be
determined do not accurately reflect the cost to such Banks of making or
maintaining such Loans for Interest Periods therefor; or
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(d) the Paying Agent determines in good faith (which
determination shall be conclusive) that by reason of circumstances affecting
the interbank U.S. Dollar market generally, deposits in United States dollars
in the relevant interbank U.S. Dollar market are not being offered for the
applicable Interest Period and in an amount equal to the amount of the
Eurodollar Loan requested by the Company;
then the Paying Agent shall promptly notify the Company and each Bank thereof,
and, so long as such condition remains in effect, the Banks shall be under no
obligation to make Eurodollar Loans or accept and purchase Bankers'
Acceptances, as the case may be (but shall maintain until the end of the
Interest Period then in effect the Eurodollar Loans and until the specified
maturity date of the Bankers' Acceptances, as the case may be, then
outstanding).
6.3 Illegality. Notwithstanding any other provision of
this Agreement to the contrary, if (x) by reason of the adoption of any
applicable Legal Requirement or any change in any applicable Legal Requirement
or in the interpretation or administration thereof by any Governmental
Authority or compliance by any Bank with any request or directive (whether or
not having the force of law) of any central bank or other Governmental
Authority or (y) with respect to Eurodollar Loans, circumstances affecting the
relevant interbank U.S. Dollar market or the position of a Bank therein or (z)
with respect to Bankers' Acceptances, circumstances affecting the market for
Canadian Dollar bankers' acceptance or the position of a Bank therein shall at
any time make it unlawful or impracticable in the sole discretion of a Bank
exercised in good faith for such Bank or its Applicable Lending Office to (a)
honour its obligation to make Eurodollar Loans or accept and purchase Bankers'
Acceptances, as the case may be, hereunder, or (b) maintain Eurodollar Loans or
Bankers' Acceptances, as the case may be, hereunder, then such Bank shall
promptly notify the Company thereof through the Paying Agent and such Bank's
obligation to make or maintain Eurodollar Loans or accept and purchase Bankers'
Acceptances, as the case may be, hereunder shall be suspended until such time
as such Bank may again make and maintain Eurodollar Loans or accept and
purchase Bankers' Acceptances, as the case may be (in which case the provisions
of Section 6.4 hereof shall be applicable). Before giving such notice pursuant
to this Section 6.3 with respect to Eurodollar Loans only, such Bank will
designate a different available Applicable Lending Office for the Eurodollar
Loans of such Bank or take such other action as the Company may request if such
designation or action will avoid the need to suspend such Bank's obligation to
make Eurodollar Loans hereunder and will not, in the sole opinion of such Bank
exercised in good faith, be disadvantageous to such Bank (provided, that such
Bank may not designate an Applicable Lending Office that is not located in
Canada).
6.4 Substitute Alternate Base Rate Loans or Canadian Prime
Rate Loans. If the obligation of any Bank to make or maintain Eurodollar Loans
shall be suspended pursuant to Section 6.1, 6.2 or 6.3 hereof, all Loans which
would otherwise be made by such Bank as Eurodollar Loans shall be made instead
as Alternate Base Rate Loans (and, if an event referred to in Section 6.1(b) or
6.3 hereof has occurred and such Bank so requests by notice to the Company with
a copy to the Paying Agent, each Eurodollar Loan of such Bank then outstanding
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shall be automatically converted into an Alternate Base Rate Loan on the date
specified by such Bank in such notice) and, to the extent that Eurodollar Loans
are so made as (or converted into) Alternate Base Rate Loans, all payments of
principal which would otherwise be applied to such Eurodollar Loans shall be
applied instead to such Alternate Base Rate Loans. If the obligation of any
Bank to accept and purchase Bankers' Acceptances shall be suspended pursuant to
Section 6.1, 6.2 or 6.3 hereof, all advances which would otherwise be made by
such Bank by way of acceptance and purchase of Bankers' Acceptances shall be
made instead as Canadian Prime Rate Loans (and, if an event referred to in
Section 6.1(b) or 6.3 hereof has occurred and such Bank so requests by notice
to the Company with a copy to the Paying Agent, the face amount of each
Bankers' Acceptance of such Bank then outstanding shall be automatically
converted into a Canadian Prime Rate Loan on the date specified by such Bank in
such notice).
6.5 Compensation. Subject to Section 13.6 hereof, the
Company shall pay to the Paying Agent for the account of each Bank, within four
(4) Business Days after demand therefor by such Bank through the Administrative
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Bank) to compensate it for any loss, cost or expense incurred by it as
a result of:
(a) any payment, prepayment or conversion of a Eurodollar
Loan made by such Bank or a Bankers' Acceptance accepted by such Bank on a date
other than the last day of an Interest Period for such Eurodollar Loan or the
specified maturity date for such Bankers' Acceptance, as the case may be; or
(b) any failure by the Company to borrow a Eurodollar Loan
to be made by such Bank or to issue a Bankers' Acceptance to be accepted and
purchased by such Bank on the date for such borrowing or such issuance
specified in the relevant notice under Section 5.5 hereof or to convert a
Eurodollar Loan into a Bankers' Acceptance or a Loan of another Type or to
convert a Bankers' Acceptance into a Loan on such date after giving notice of
such conversion;
such compensation to include, without limitation, any loss or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by the applicable Bank to fund or maintain its share of any Loan or to
fund the acceptance and purchase of any Bankers' Acceptance. Compensation due
pursuant to this Section with respect to Bankers' Acceptances shall be
calculated using the Canadian Bankers' Acceptance Discount Rate for bankers'
acceptances maturing on (or as close as reasonably possible) to the maturity
date of the Bankers' Acceptances with respect to which such compensation arises
(versus the actual Canadian Bankers' Acceptance Discount Rate for such Bankers'
Acceptances). Subject to Section 6.8, each determination of the amount of such
compensation by a Bank shall be conclusive and binding, absent manifest error,
and may be computed using any reasonable averaging and attribution method.
6.6 Additional Costs in Respect of Letters of Credit. If
as a result of any Regulatory Change there shall be imposed, modified or deemed
applicable any tax, reserve, special deposit
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or similar requirement against or with respect to or measured by reference to
Letters of Credit issued or to be issued hereunder or participations in such
Letters of Credit, and the result shall be to increase the cost to any Bank of
issuing or maintaining any Letter of Credit or any participation therein, or
reduce any amount receivable by any Bank hereunder in respect of any Letter of
Credit or any participation therein (which increase in cost, or reduction in
amount receivable, shall be the result of such Bank's reasonable allocation of
the aggregate of such increases or reductions resulting from such event), then
such Bank shall notify the Company through the Administrative Agent, and upon
demand therefor by such Bank through the Administrative Agent, the Company
(subject to Section 13.6 hereof) shall pay to such Bank, from time to time as
specified by such Bank, such additional amounts as shall be sufficient to
compensate such Bank for such increased costs or reductions in amount. Before
making such demand pursuant to this Section 6.6, such Bank will designate a
different available Applicable Lending Office for the Letter of Credit of such
Bank or take such other action as the Company may request, if such designation
or action will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Bank exercised in good faith, be
disadvantageous to such Bank. A statement as to such increased costs or
reductions in amount incurred by such Bank, submitted by such Bank to the
Company, shall be conclusive as to the amount thereof, absent manifest error.
6.7 Capital Adequacy. If any Bank shall have determined
that the adoption after the date hereof or effectiveness after the date hereof
(whether or not previously announced) of any applicable law, rule, regulation
or treaty regarding capital adequacy, or any change therein after the date
hereof, or any change in the interpretation or administration thereof after the
date hereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive after the date hereof regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority has or would have the effect of reducing the rate of return on such
Bank's capital as a consequence of such Bank's obligations hereunder, under the
Loans made by it, under the Bankers' Acceptances accepted and purchased by it,
under the Letters of Credit and under the Notes held by it to a level below
that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, upon satisfaction of the conditions precedent set forth in this
Section 6.7, upon demand by such Bank (with a copy to the Administrative Agent
and the Paying Agent), the Company (subject to Section 13.6 hereof) shall pay
to such Bank such additional amount or amounts as will compensate such Bank for
such reduction. A certificate as to such amounts, submitted to the Company and
the Administrative Agent and the Paying Agent by such Bank, setting forth the
basis for such Bank's determination of such amounts, shall constitute a demand
therefor and shall be conclusive and binding for all purposes, absent manifest
error. The Company shall pay the amount shown as due on any such certificate
within four (4) Business Days after delivery of such certificate. Subject to
Section 6.8, in preparing such certificate, a Bank may employ such assumptions
and allocations of costs and expenses as it shall in good faith deem reasonable
and may use any reasonable averaging and attribution method.
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6.8 Limitation on Additional Charges; Substitute Banks;
Non-Discrimination. Anything in this Section 6 notwithstanding:
(a) the Company shall not be required to pay to any Bank
reimbursement with regard to any costs or expenses, unless such Bank notifies
the Company of such costs or expenses within 90 days after the date paid or
incurred;
(b) none of the Banks shall be permitted to pass through
to the Company charges and costs under this Section 6 on a discriminatory basis
(i.e., which are not also passed through by such Bank to other customers of
such Bank similarly situated where such customer is subject to documents
providing for such pass through); and
(c) if any Bank elects to pass through to the Company any
material charge or cost under this Section 6 or elects to terminate the
availability of Eurodollar Loans or Bankers' Acceptances for any material
period of time, the Company may, within 60 days after the date of such event
and so long as no Default shall have occurred and be continuing, elect to
terminate such Bank as a party to this Agreement; provided that, concurrently
with such termination the Company shall (i) if the Administrative Agent and
each of the other Banks shall consent, pay that Bank all principal, interest
and fees and other amounts owed to such Bank through such date of termination
or (ii) have arranged for another financial institution approved by the
Administrative Agent (such approval not to be unreasonably withheld) as of such
date, to become a substitute Bank for all purposes under this Agreement in the
manner provided in Section 13.5; provided further that, prior to substitution
for any Bank, the Company shall have given written notice to the Administrative
Agent and the Paying Agent of such intention and the Banks shall have the
option, but no obligation, for a period of 60 days after receipt of such
notice, to increase their Commitments in order to replace the affected Bank in
lieu of such substitution.
SECTION 7. CONDITIONS PRECEDENT.
7.1 Initial Loans and Acceptance and Purchase of Bankers'
Acceptances. The obligation of each Bank or any applicable Issuer to make its
initial Loans after the date hereof or to accept and purchase the initial
Bankers' Acceptance after the date hereof or issue or participate in a Letter
of Credit after the date hereof (whichever shall first occur) hereunder is
subject to the following conditions precedent, each of which shall have been
fulfilled or waived to the satisfaction of the Majority Banks:
(a) Corporate Action and Status. The Administrative Agent
shall have received from the appropriate Governmental Authorities certified
copies of the Organizational Documents (other than bylaws) of the Parent and
each of its Subsidiaries, and evidence satisfactory to the Administrative Agent
of all corporate action taken by the Parent or any of its Subsidiaries
authorizing the execution, delivery and performance of the Loan Documents and
all other documents related to this Agreement to which it is a party
(including, without limitation, a certificate of the secretary of each such
party setting forth the resolutions of its Board of
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Directors authorizing the transactions contemplated thereby and attaching a
copy of its bylaws), together with such certificates as may be appropriate to
demonstrate the qualification and good standing of and payment of taxes by the
Parent and each of its Subsidiaries in each state or province in which such
qualification is necessary.
(b) Incumbency. The Parent and each Relevant Party shall
have delivered to the Administrative Agent a certificate in respect of the name
and signature of each of the officers (i) who is authorized to sign on its
behalf the applicable Loan Documents related to any Loan or the issuance of any
Letter of Credit and (ii) who will, until replaced by another officer or
officers duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other communications in
connection with any Loan or the issuance of any Letter of Credit. The Agents
and each Bank may conclusively rely on such certificates until they receive
notice in writing from the Parent or the appropriate Relevant Party to the
contrary.
(c) Notes. The Administrative Agent shall have received
the appropriate Notes of the Company for each Bank, duly completed and
executed.
(d) Loan Documents. The Company and each other Relevant
Party shall have duly executed and delivered the other Loan Documents to which
it is a party (in such number of copies as the Administrative Agent shall have
requested) and each such Loan Document shall be in form satisfactory to
Administrative Agent. Each such Loan Document shall be in substantially the
form furnished to the Banks prior to their execution of this Agreement,
together with such changes therein as the Administrative Agent may approve.
(e) Fees and Expenses. The Company shall have paid to the
Paying Agent for the account of each Bank all accrued and unpaid commitment
fees and other fees in the amounts previously agreed upon in writing among the
Company and the respective Agents; and shall have in addition paid to the
Paying Agent all amounts payable under Section 9.7 hereof, on or before the
date of this Agreement.
(f) Opinions of Counsel. The Administrative Agent shall
have received (1) an opinion of Vinson & Elkins L.L.P., counsel to the Parent
and its Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agent and (2) an opinion of Bennett Jones Verchere, Canadian
counsel to the Parent and its Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent.
(g) Execution by Banks. The Administrative Agent shall
have received counterparts of this Agreement executed and delivered by or on
behalf of each of the Banks or the Administrative Agent shall have received
evidence satisfactory to it of the execution and delivery by each of the Banks
of a counterpart hereof.
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(h) Consents. The Administrative Agent shall have
received evidence satisfactory to it that, except as disclosed in the
Disclosure Statement, all material consents of each Governmental Authority and
of each other Person, if any, reasonably required in connection with (a) the
Loans, the Bankers' Acceptances and the Letters of Credit and (b) the
execution, delivery and performance of this Agreement and the other Loan
Documents have been satisfactorily obtained.
(i) Disclosure Statement. The Administrative Agent shall
have received the Disclosure Statement, which shall be in form and substance
satisfactory to it.
(j) Novalta Closing Documents. The Administrative Agent
shall have received true, correct and complete copies of each of the closing
documents required to be delivered pursuant to the Novalta Contract, together
with such evidence as the Administrative Agent may reasonably require to
confirm that the transactions therein contemplated will be closed in accordance
with the terms of Novalta Contract upon funding and disbursement of the initial
advance hereunder.
(k) Intercreditor Agreement. The Administrative Agent
shall have received a fully executed original counterpart of the Intercreditor
Agreement in the form of Exhibit I hereto.
(l) Amendment to U.S. Facility. The Administrative Agent
shall have received a fully executed original counterpart of an amendment to
the U.S. Facility in the form of Exhibit J hereto.
(m) Other Documents. The Administrative Agent shall have
received such other documents consistent with the terms of this Agreement and
relating to the transactions contemplated hereby as the Administrative Agent
may reasonably request.
All provisions and payments required by thisSection 7.1 are subject to
the provisions of Section 13.6.
7.2 Initial and Subsequent Loans. The obligation of each
Bank or any applicable Issuer to make any Loan (including, without limitation,
its initial Loan) to be made by it hereunder or to accept and purchase Bankers'
Acceptances or to issue or participate in any Letter of Credit is subject to
the additional conditions precedent that (i) the Administrative Agent and the
Paying Agent shall have received a Request for Extension of Credit and such
other certifications as the Administrative Agent may reasonably require and
(ii) as of the date of such Loan or such acceptance and purchase or such
issuance, and after giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) except for facts timely disclosed to the
Administrative Agent from time to time in writing, which facts (I) are not
materially more adverse to the Parent and its Subsidiaries, (II)
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do not materially decrease the ability of the Banks to collect the Obligations
as and when due and payable and (III) do not materially increase the liability
of any of the Agent or any of the Banks, in each case compared to those facts
existing on the date hereof and the material details of which have been set
forth in the Financial Statements delivered to the Administrative Agent prior
to the date hereof or in the Disclosure Statement, and except for the
representations set forth in the Loan Documents which, by their terms, are
expressly (or by means of similar phrasing) made as of the date hereof only,
the representations and warranties made in each Loan Document shall be true and
correct in all material respects on and as of the date of the making of such
Loan or such acceptance and purchase or such issuance, with the same force and
effect as if made on and as of such date;
(c) the making of such Loan or the acceptance and purchase
of such Bankers' Acceptance or the issuance of such Letter of Credit shall not
violate any Legal Requirement applicable to any Bank.
Each Request for Extension of Credit by the Company hereunder or
request for issuance of a Letter of Credit shall include a representation and
warranty by the Company to the effect set forth in Subsections 7.2(a) and (b)
(both as of the date of such notice and, unless the Company otherwise notifies
the Administrative Agent prior to the date of such borrowing or issuance, as of
the date of such borrowing or issuance).
SECTION 8. REPRESENTATIONS AND WARRANTIES.To induce the Banks to
enter into this Agreement and to make the Loans, accept and purchase Bankers'
Acceptances and issue or participate in the Letters of Credit, the Company (or,
where applicable, the Parent) represents and warrants (such representations and
warranties to survive any investigation and the making of the Loans, the
acceptance and purchase Bankers' Acceptances and the issuance of the Letters of
Credit) to the Banks and the Agents as follows:
8.1 Corporate Existence. The Parent and each Subsidiary
of the Parent are corporations duly incorporated and organized, legally
existing and in good standing under the laws of the respective jurisdictions in
which they are incorporated, and are duly qualified as foreign corporations in
all jurisdictions wherein the property owned or the business transacted by them
makes such qualification necessary and the failure to so qualify could
reasonably be expected to result in a Material Adverse Effect.
8.2 Corporate Power and Authorization. Each of the
Company and the other Relevant Parties is duly authorized and empowered to
execute, deliver, and perform the Loan Documents to which it is a party; and
all corporate action on the part of the Company and the other Relevant Parties
requisite for the due creation and issuance of the Notes and for the due
execution, delivery, and performance of this Agreement and the other Loan
Documents to which each of the Company and the other Relevant Parties is a
party has been duly and effectively taken.
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8.3 Binding Obligations. This Agreement, the Notes and
the other Loan Documents constitute legal, valid and binding obligations of the
Company and the other Relevant Parties, to the extent each is a party thereto,
enforceable against the Company and the other Relevant Parties, to the extent
each is a party thereto, in accordance with their respective terms, except as
may be limited by (i) any applicable bankruptcy, insolvency, fraudulent
transfer, winding up, arrangement, liquidation, reorganization, moratorium or
other similar laws affecting creditors' rights generally, (ii) equitable
limitations on the availability of remedies, (iii) the statutory power of a
court to grant relief from forfeiture, (iv) applicable laws regarding
limitations of actions, (v) general principles of equity which may apply to any
proceeding in equity or at law, and (vi) the powers of a court to stay
proceedings before it and to stay the execution of judgments.
8.4 No Legal Bar or Resultant Lien. The Company's and
each of the other Relevant Parties' creation, issuance, execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents, to the
extent they are parties thereto, do not and will not violate any provisions of
the Organizational Documents of the Company or any other Relevant Party or any
Subsidiary of the Parent, or any Key Contract or any Legal Requirement to which
the Company or any other Relevant Party or any Subsidiary of the Parent is
subject or by which its property may be presently bound or encumbered, or
result in the creation or imposition of any Lien upon any properties of the
Company or any other Relevant Party or any Subsidiary of the Parent, other than
those permitted by this Agreement.
8.5 No Consent. Except as set forth in the Disclosure
Statement, the Company's creation and issuance of the Notes and the Company's
and each of the other Relevant Parties' execution, delivery, and performance of
this Agreement, the Notes and the other Loan Documents to which they are
parties do not and will not require the consent or approval of any Person other
than such consents and/or approvals obtained contemporaneously with or prior to
the execution of this Agreement, including, without limitation, any
Governmental Authorities, other than those consents the failure to obtain which
could not be reasonably expected to have a Material Adverse Effect.
8.6 Financial Condition. The audited consolidated and
unaudited consolidating annual financial statements of the Parent and its
Subsidiaries for the year ended December 31, 1992 and the unaudited
consolidated interim financial statements of the Parent and its Subsidiaries
for the quarter and three-month period ended September 30, 1993, which have
been delivered to the Banks, have been prepared in accordance with GAAP, and
present fairly the financial condition and results of the operations of the
Parent and its Subsidiaries for the period or periods stated (subject only to
normal year-end audit adjustments with respect to the unaudited interim
statements). No material adverse change, either in any case or in the
aggregate, has occurred since September 30, 1993 in the assets, liabilities,
financial condition, business, operations, affairs or circumstances of the
Parent and its Subsidiaries taken as a whole, except as disclosed to the Banks
in the Disclosure Statement. Each Engineering Report and Parent Report fairly
presents the values and prospective performances of the property described
therein and there are
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no statements or conclusions therein which were based upon or included
materially misleading information or fail to take into account material
information.
8.7 Investments and Guaranties. As of the date hereof,
neither the Parent nor any Subsidiary of the Parent had made Investments in,
advances to, or Guarantees of, the obligations of any Person, except as (a)
disclosed to the Banks in the Disclosure Statement or (b) not prohibited by
applicable provisions of Section 10.
8.8 Liabilities and Litigation. Neither the Parent nor
any Subsidiary of the Parent has any material (individually or in the
aggregate) liabilities, direct or contingent, except as (a) disclosed or
referred to in the Financial Statements, (b) disclosed to the Banks in the
Disclosure Statement, (c) disclosed in a notice to the Administrative Agent
pursuant to Section 9.11 with respect to such as could reasonably be expected
to have a Material Adverse Effect or (d) not prohibited by applicable
provisions of Section 10. Except as (a) described in the Financial Statements,
(b) otherwise disclosed to the Banks in the Disclosure Statement, (c) disclosed
in a notice to the Administrative Agent pursuant to Section 9.11 with respect
to such as could reasonably be expected to have a Material Adverse Effect or
(d) not prohibited by applicable provisions of Section 10, no litigation,
legal, administrative or arbitral proceeding, investigation, or other action of
any nature exists or (to the knowledge of the Parent or the Company) is
threatened against or affecting the Parent or any Subsidiary of the Parent
which could reasonably be expected to result in any judgment which could
reasonably be expected to have a Material Adverse Effect, or which in any
manner challenges or may challenge or draw into question the validity of this
Agreement, the Notes or any other Loan Document, or enjoins or threatens to
enjoin or otherwise restrain any of the transactions contemplated by any of
them.
8.9 Taxes and Governmental Charges. The Parent and its
Subsidiaries have filed, or obtained extensions with respect to the filing of,
all material tax returns and reports required to be filed and have paid all
material taxes, assessments, fees and other governmental charges levied upon
any of them or upon any of their respective properties or income which are due
and payable, including interest and penalties, or have provided adequate
reserves for the payment thereof.
8.10 Title to Properties. The Parent and its Subsidiaries
have good and defensible title to their respective properties included in the
Borrowing Base (including, without limitation, all fee and leasehold
interests), free and clear of all Liens except (a) those referred to in the
Financial Statements, (b) as disclosed to the Banks in the Disclosure Statement
or (c) as permitted by Section 10.2.
8.11 Defaults. Neither the Parent nor any Subsidiary of
the Parent is in default, which default could reasonably be expected to have a
Material Adverse Effect, under any indenture, mortgage, deed of trust,
agreement or other instrument to which the Parent or any Subsidiary of the
Parent is a party or by which the Parent or any Subsidiary of the Parent or the
property of the Parent or any Subsidiary of the Parent is bound, except as (a)
disclosed to the Banks in
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the Disclosure Statement, (b) disclosed in a notice to the Administrative Agent
pursuant to Section 9.11 with respect to such as could reasonably be expected
to have a Material Adverse Effect or (c) specifically permitted by applicable
provisions of Section 10. No Default under this Agreement, the Notes or any
other Loan Document has occurred and is continuing.
8.12 Location of Businesses and Offices. Except to the
extent that the Administrative Agent has been furnished written notice to the
contrary or of additional locations, pursuant to Section 9.11, the Company's
principal place of business and chief executive offices are located at the
address stated on the signature page hereof and the principal places of
business and chief executive offices of each Subsidiary of the Parent are
described on Exhibit D hereto. The Parent's principal place of business and
chief executive office is at 1001 Fannin, Suite 1700, Houston, Texas 77002.
8.13 Compliance with Law. Neither the Parent nor any
Subsidiary of the Parent (except as (a) disclosed to the Banks in the
Disclosure Statement, (b) disclosed in a notice to the Administrative Agent
pursuant to Section 9.11 with respect to such as could reasonably be expected
to have a Material Adverse Effect or (c) not prohibited by applicable
provisions of Section 10):
(a) is in violation of any Legal Requirement; or
(b) has failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of any of their
respective properties or the conduct of their respective business;
which violation or failure could reasonably be expected to have a Material
Adverse Effect.
8.14 Margin Stock. None of the proceeds of the Loans will
be used for the purpose of, and neither the Parent nor any Subsidiary of the
Parent is engaged in the business of extending credit for the purpose of (a)
purchasing or carrying any "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System (12 C.F.R. Part 221) or (b)
reducing or retiring any indebtedness which was originally incurred to purchase
or carry margin stock, if such purpose under either (a) or (b) above would
constitute this transaction a "purpose credit" within the meaning of said
Regulation U, or for any other purpose which would constitute this transaction
a "purpose credit". Neither the Parent nor any Subsidiary of the Parent is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stocks.
Neither the Parent nor any Subsidiary of the Parent nor any Person acting on
behalf of the Parent or any Subsidiary of the Parent has taken or will take any
action which might cause the Notes or any of the Loan Documents, including this
Agreement, to violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System, or to violate any similar provision of
the Securities Exchange Act of 1934 or any rule or regulation under any such
provision thereof.
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8.15 Subsidiaries. The Parent has no Subsidiaries as of
the date of this Agreement except those shown in Exhibit D hereto.
8.16 ERISA. With respect to each Plan, the Parent and each
ERISA Affiliate have fulfilled their obligations, including obligations under
the minimum funding standards of ERISA and the Code, and are in compliance in
all material respects with the provisions of ERISA and the Code. The Parent
has no knowledge of any event which could result in a liability of the Parent
or any ERISA Affiliate to the PBGC or a Plan (other than to make contributions
in the ordinary course). Since the effective date of Title IV of ERISA, there
have not been any nor are there now existing any events or conditions that
would cause the Lien provided under Section 4068 of ERISA to attach to any
property of the Parent or any ERISA Affiliate. There are no Unfunded
Liabilities with respect to any Plan other than those specifically described in
the certificate delivered in accordance with Section 7.1(i). No "prohibited
transaction" has occurred with respect to any Plan.
8.17 Investment Company Act. Neither the Parent nor any of
its Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly, controlled by or
acting on behalf of any Person which is an investment company, within the
meaning of said Act.
8.18 Public Utility Holding Company Act. Neither the
Parent nor any of its Subsidiaries (i) is subject to regulation under the
Public Utility Holding Company Act of 1935, as amended (the "PUHC Act"), except
as to Section 9(a)(2) thereof (15 U.S.C.A. Section 79(i)(a)(2)), or (ii) is in
violation of any of the provisions, rules, regulations or orders of or under
the PUHC Act. Further, none of the transactions contemplated under this
Agreement, including without limitation, the making of the Loans, the issuance
of the Letters of Credit and the creation of any Liens pursuant to the Loan
Documents, shall cause or constitute a violation of any of the provisions,
rules, regulations or orders of or under the PUHC Act and the PUHC Act does not
in any manner impair the legality, validity or enforceability of the Notes or
any Liens created pursuant to the Loan Documents. The Parent has duly filed
with the Securities and Exchange Commission good faith applications (each an
"Application") under Section 2(a)(8) of the PUHC Act (15 U.S.C.A. Section
79(b)(a)(8)) for a declaration of non-subsidiary status pursuant to such
Section 2(a)(8) with respect to each Person (each a "Specified Shareholder")
which owns, controls or holds with power to vote, directly or indirectly, a
sufficient quantity of the voting securities of the Parent to be construed as a
"holding company", as such term is defined in the PUHC Act, in respect of the
Parent. All of the information contained in such Applications, as amended, was
true as of the most recent filing date with respect thereto (provided that the
Parent may, unless it has actual current knowledge to the contrary, rely solely
upon written information furnished by any Specified Shareholder with respect to
background information about the Specified Shareholder and the nature of the
ownership by such Specified Shareholder or its Affiliates of the voting
securities of the Parent), and the Parent knows of no reason why each such
Application, if acted upon by the Securities and Exchange Commission, would not
be approved. True and correct copies of each such Application and any
amendments thereto, as
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filed, have been furnished to the Administrative Agent. The Parent has not
received any written notice from the Securities and Exchange Commission with
respect to any such Application other than as disclosed in writing to the
Administrative Agent.
8.19 Environmental Matters. Except as disclosed in the
Disclosure Statement, (i) the Parent and it Subsidiaries have obtained and
maintained in effect all Environmental Permits (or has initiated the necessary
steps to transfer the Environmental Permits into its name), the failure to
obtain which could reasonably be expected to have a Material Adverse Effect,
(ii) the Parent and its Subsidiaries and their properties, assets, business and
operations have been and are in compliance with all applicable Requirements of
Environmental Law and Environmental Permits failure to comply with which could
reasonably be expected to have a Material Adverse Effect, (iii) the Parent and
its Subsidiaries and their properties, assets, business and operations are not
subject to any (A) Environmental Claims or (B) Environmental Liabilities, in
either case direct or contingent, and whether known or unknown, arising from or
based upon any act, omission, event, condition or circumstance occurring or
existing on or prior to the date hereof which could reasonably be expected to
have a Material Adverse Effect, and (iv) no Responsible Officer of the Parent
or any of its Subsidiaries has received any notice of any violation or alleged
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with its assets, properties, business or
operations which could reasonably be expected to have a Material Adverse
Effect. The liability (including without limitation any Environmental
Liability and any other damage to persons or property), if any, of the Parent
and its Subsidiaries and with respect to their properties, assets, business and
operations which is reasonably expected to arise in connection with
Requirements of Environmental Laws currently in effect and other environmental
matters presently known by a Responsible Officer of the Parent will not have a
Material Adverse Effect. No Responsible Officer of the Parent knows of any
event or condition with respect to Environmental Matters with respect to any of
its properties or the properties of any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect. For purposes of this
Section 8.19, "Environmental Matters" shall mean matters relating to pollution
or protection of the environment, including, without limitation, emissions,
discharges, releases or threatened releases of Hazardous Substances into the
environment (including, without limitation, ambient air, surface water or
ground water, or land surface or subsurface), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
8.20 Claims and Liabilities. Except as disclosed to the
Banks in writing, neither the Parent nor any of its Subsidiaries has accrued
any liabilities under gas purchase contracts for gas not taken, but for which
it is liable to pay if not made up and which, if not paid, would have a
Material Adverse Effect. Except as disclosed to the Banks in writing, no
claims exist against the Parent or its Subsidiaries for gas imbalances which
claims if adversely determined would have a Material Adverse Effect. No
purchaser of product supplied by the Parent or any of its Subsidiaries has any
claim against the Parent or any of its Subsidiaries for product paid for, but
for which delivery was not taken as and when paid for, which claim if adversely
determined would have a Material Adverse Effect.
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8.21 Solvency. Neither the Parent nor the Parent and its
Subsidiaries, on a consolidated basis, is "insolvent", as such term is used
(and, where applicable, defined) in (i) the Bankruptcy Code and (ii) the
Companies' Creditors Arrangement Act (Canada).
SECTION 9. AFFIRMATIVE COVENANTS. A deviation from the
provisions of this Section 9 will not constitute a Default under this Agreement
if such deviation is consented to in writing by the Majority Banks. Without
the prior written consent of the Majority Banks, the Company (or, where
applicable, the Parent) agrees with the Banks and the Agents that, so long as
any of the Commitments is in effect and until payment in full of all Loans
hereunder, the repayment in full of the full face amount of all outstanding
Bankers' Acceptances, the termination or expiry of all Letters of Credit and
payment in full of Letter of Credit Liabilities, all interest thereon and all
other amounts payable by the Company hereunder:
9.1 Financial Statements and Reports. The Parent will
promptly furnish to any Bank from time to time upon request such information
regarding the business and affairs and financial condition of the Parent and
its Subsidiaries as such Bank may reasonably request, and will furnish to the
Administrative Agent and each of the Banks:
(a) Annual Reports - promptly after becoming available and
in any event within 100 days after the close of each fiscal year of the Parent:
(i) the audited consolidated balance sheet,
statement of earnings and statement of cash
flows of ENSTAR Alaska each as of the end of
such year or for such year, as applicable;
(ii) the audited consolidated balance sheet of the
Parent and its Subsidiaries as of the end of
such year;
(iii) the audited consolidated statement of
earnings of the Parent and its Subsidiaries
for such year;
(iv) the audited consolidated statement of cash
flows of the Parent and its Subsidiaries for
such year;
(v) the unaudited consolidating balance sheet and
statement of earnings of ENSTAR Alaska, each
for such year or as of the end of such year,
as the case may be;
(vi) the unaudited consolidating balance sheet and
statement of earnings of the Parent and its
Subsidiaries, each for such year or as of the
end of such year, as the case may be;
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(vii) the unaudited consolidated balance sheet,
statement of earnings and statement of cash
flows and unaudited consolidating balance
sheet and statement of earnings of the
Company and its Subsidiaries, each for such
year or as of the end of such year, as the
case may be;
(viii) a report prepared by a petroleum engineer,
who may be an employee of the Parent or its
Subsidiaries, setting forth the historical
monthly production data for Hydrocarbons
produced and sold by the Parent and its
Subsidiaries for such year;
setting forth in each case in comparative form the corresponding figures for
the preceding fiscal year, and, in the case of the audited Financial
Statements, audited and accompanied by the related opinion of KPMG Peat Marwick
or other independent certified public accountants of recognized national
standing acceptable to the Majority Banks, which opinion shall state that such
audited balance sheets and statements have been prepared in accordance with
GAAP consistently followed throughout the period indicated and fairly present
the consolidated financial condition and results of operations of the
applicable Persons as at the end of, and for, such fiscal year; and
(b) Quarterly Reports - as soon as available and in any
event within 50 days after the end of each of the first three quarterly periods
in each fiscal year of the Parent:
(i) the unaudited consolidated balance sheet,
statement of earnings and statement of cash
flows of ENSTAR Alaska, each as of the end of
such quarter or for such quarter and for the
period from the beginning of the fiscal year
to the close of such quarter, as the case may
be;
(ii) the unaudited consolidated balance sheet of
the Parent and its Subsidiaries as of the end
of such quarter;
(iii) the unaudited consolidated statement of
earnings of the Parent and its Subsidiaries
for such quarter and for the period from the
beginning of the fiscal year to the close of
such quarter;
(iv) the unaudited consolidated statement of cash
flows of the Parent and its Subsidiaries for
such quarter and for the period from the
beginning of the fiscal year to the close of
such quarter;
(v) the unaudited consolidating balance sheet and
statement of earnings of the Parent and its
Subsidiaries, each for such quarter and for
the period from the beginning of the fiscal
year to the close of such quarter;
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(vi) the unaudited consolidated balance sheet,
statement of earnings and statement of cash
flows and unaudited consolidating balance
sheet and statement of earnings of the
Company and its Subsidiaries, each for such
quarter and for the period from the beginning
of the fiscal year to the close of such
quarter;
(vii) a report prepared by a petroleum engineer,
who may be an employee of the Parent or its
Subsidiaries, setting forth the historical
monthly production data for Hydrocarbons
produced and sold by the Parent and its
Subsidiaries for such quarter;
all of items (i) through (v) above prepared on substantially the same
accounting basis as the annual reports described in Subsection 9.1(a), subject
to normal changes resulting from year-end adjustments; and
(c) Parent Report - promptly after becoming available and
in any event on or before September 1 of each year, a Parent Report; and
(d) Other Bank Requirements - at such time as the same are
required to be furnished to other lenders under other financing arrangements to
which the Parent or any of its Subsidiaries may be a party or be bound from
time to time, a copy of any report, certificate, affidavit or other information
required to be furnished to any such lender; and
(e) SEC and Other Reports - promptly upon their becoming
publicly available, one copy of each financial statement, report, notice or
definitive proxy statement sent by the Parent or any of its Subsidiaries to
shareholders generally, and of each regular or periodic report and any
registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by the Parent or any of its
Subsidiaries with, or received by the Parent or any of its Subsidiaries in
connection therewith from, any securities exchange or the Securities and
Exchange Commission or any successor agency; and
(f) Engineering Report - promptly after becoming available
and in any event on or before March 15 of each year, commencing with March 15,
1994, an Engineering Report, together with unaudited financial reports with
respect to the Pipeline Operations (as defined in the U.S. Facility, without
amendment except as permitted under the Intercreditor Agreement).
All of the balance sheets and other financial statements referred to
in this Section 9.1 will be in such detail as any Bank may reasonably request
and will conform to GAAP applied on a basis consistent with those of the
Financial Statements as of December 31, 1992. In addition, if GAAP shall
change with respect to any matter relative to determination of compliance with
this Agreement, the Parent will also provide financial information necessary
for the Banks to determine compliance with this Agreement.
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9.2 Officers' Certificates. (a) Concurrently with the
furnishing of the annual financial statements pursuant to Subsection 9.1(a),
commencing with the annual financial statements required to be delivered in
1994, the Parent will furnish or cause to be furnished to the Administrative
Agent certificates of compliance, as follows:
(i) a certificate signed by the principal
financial officer of the Parent and the
principal financial officer of the Company in
the form of Exhibit E; and
(ii) a certificate from the independent public
accountants stating that their audit has not
disclosed the existence of any condition
which constitutes a Default, or if their
audit has disclosed the existence of any such
condition, specifying the nature and period
of existence.
(b) Concurrently with the furnishing of the quarterly
financial statements pursuant to Subsection 9.1(b), the Parent will furnish to
the Administrative Agent a certificate signed by the principal financial
officer of the Parent and the principal financial officer of the Company in the
form of Exhibit E.
(c) Concurrently with the delivery of any Borrowing Base
Certificate under the U.S. Facility, the Parent will furnish to the
Administrative Agent and the Paying Agent a true, correct and complete copy
thereof.
(d) Concurrently with the furnishing of any Engineering
Report or Parent Report, the Company will furnish to the Administrative Agent a
certificate signed by an appropriate officer of the Parent and any other
applicable Relevant Party in the form of Exhibit G.
9.3 Taxes and Other Liens. The Parent will and will cause
each Subsidiary of the Parent to pay and discharge promptly all taxes,
assessments and governmental charges or levies imposed upon the Parent or such
Subsidiary, or upon the income or any property of the Parent or such
Subsidiary, as well as all claims of any kind (including claims for labor,
materials, supplies, rent and payment of proceeds attributable to Hydrocarbon
production) which, if unpaid, might result in or become a Lien upon any or all
of the property of the Parent or such Subsidiary; provided, however, that
neither the Parent nor such Subsidiary will be required to pay any such tax,
assessment, charge, levy or claims if the amount, applicability or validity
thereof will currently be contested in good faith by appropriate proceedings
diligently conducted and if the Parent or such Subsidiary will have set up
reserves therefor adequate under GAAP.
9.4 Maintenance. Except as referred to in Section 8.1 and
8.13, the Parent will and will cause each Subsidiary of the Parent to: (i)
maintain its corporate existence; (ii) maintain its rights and franchises,
except for any mergers or consolidations otherwise permitted by this Agreement
and except to the extent failure to so maintain the same would not have a
Material Adverse Effect; (iii) observe and comply (to the extent that any
failure would have a Material Adverse Effect) with all valid Legal Requirements
(including without limitation Requirements
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of Environmental Law); and (iv) maintain (except to the extent failure to so
maintain the same would not have a Material Adverse Effect) its properties (and
any properties leased by or consigned to it or held under title retention or
conditional sales contracts) consistent with the standards of a reasonably
prudent operator at all times and make all repairs, replacements, additions,
betterments and improvements to its properties consistent with the standards of
a reasonably prudent operator.
9.5 Further Assurances. The Parent will and will cause
each Subsidiary of the Parent to cure promptly any defects in the creation and
issuance of the Notes and the execution and delivery of the Loan Documents,
including this Agreement. The Parent at its expense will promptly execute and
deliver to the Administrative Agent upon request all such other and further
documents, agreements and instruments (or cause any of its Subsidiaries to take
such action) in compliance with or accomplishment of the covenants and
agreements of the Parent or any of its Subsidiaries in the Loan Documents,
including this Agreement, or to correct any omissions in the Loan Documents, or
to make any recordings, to file any notices, or obtain any consents, all as may
be necessary or appropriate in connection therewith.
9.6 Performance of Obligations. The Company will pay the
Notes according to the reading, tenor and effect thereof; and the Company will
do and perform every act and discharge all of the obligations provided to be
performed and discharged by the Company under this Agreement and the other Loan
Documents at the time or times and in the manner specified, and cause each of
its Subsidiaries to take such action with respect to their obligations to be
performed and discharged under the Loan Documents to which they respectively
are parties.
9.7 Reimbursement of Expenses. Whether or not any Loan is
ever made or any Letter of Credit is ever issued, the Company agrees to pay or
reimburse the Administrative Agent for paying the reasonable fees and expenses
of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P., special counsel to the
Administrative Agent, together with the reasonable fees and expenses of local
counsel engaged by the Administrative Agent, in connection with the negotiation
of the terms and structure of the Obligations, the preparation, execution and
delivery of this Agreement and the other Loan Documents and the making of the
Loans and the issuance of Letters of Credit hereunder, as well as any
modification, supplement or waiver of any of the terms of this Agreement and
the other Loan Documents. The Company will promptly upon request and in any
event within 30 days from the date of receipt by the Company of a copy of a
bill for such amounts, reimburse any Bank or any Agent for all amounts
reasonably expended, advanced or incurred by such Bank or such Agent to satisfy
any obligation of the Company or any other Relevant Party under this Agreement
or any other Loan Document, to protect the properties or business of the Parent
or any Subsidiary of the Parent, to collect the Obligations, or to enforce the
rights of such Bank or such Agent under this Agreement or any other Loan
Document, which amounts will include without limitation all court costs,
attorneys' fees (but not including allocated costs of in-house counsel), any
engineering fees and expenses, fees of auditors, accountants and appraisers,
investigation expenses, all transfer, stamp, documentary or similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of any
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of the Loan Documents or any other document referred to therein, all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any Lien contemplated by any
of the Loan Documents or any document referred to therein, fees and expenses
incurred in connection with such Bank's participation as a member of a
creditors' committee in a case commenced under the Bankruptcy Code or other
similar law of the United States or any state thereof or of Canada or any
province thereof, fees and expenses incurred in connection with lifting the
automatic stay prescribed in Section 362 Title 11 of the United States Code or
in connection with any similar proceeding under the laws of Canada or any
province thereof, and fees and expenses incurred in connection with any action
pursuant to Section 1129 Title 11 of the United States Code or in connection
with any similar proceeding under the laws of Canada or any province thereof,
and all other customary out-of-pocket expenses incurred by such Bank or such
Agent in connection with such matters, together with interest after the
expiration of the 30-day period stated above in this Section if no Event of
Default has occurred and is continuing, or from the date of the request to the
Company if an Event of Default has occurred and is continuing, at either (i)
the Post-Default Rate on each such amount until the date of reimbursement to
such Bank or such Agent, or (ii) if no Event of Default will have occurred and
be continuing, the Alternate Base Rate plus the highest Applicable Margin for
Alternate Base Rate Loans (not to exceed the Highest Lawful Rate) on each such
amount until the date of the Company's receipt of written demand or request by
such Bank or such Agent for the reimbursement of same, and thereafter at the
applicable Post-Default Rate until the date of reimbursement to such Bank or
such Agent. The obligations of the Company under this Section are compensatory
in nature, shall be deemed liquidated as to amount upon receipt by the Company
of a copy of any invoice therefor, and will survive the non-assumption of this
Agreement in a case commenced under the Bankruptcy Code or other similar law of
the United States or any state thereof or of Canada or any province thereof,
and will remain binding on the Company and any trustee, receiver, or liquidator
of the Company appointed in any such case.
9.8 Insurance. The Parent and its Subsidiaries will
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and business against such liabilities,
casualties, risks and contingencies and in such types and amounts as is
customary in the case of corporations engaged in the same or similar businesses
and similarly situated. Upon the request of the Administrative Agent acting at
the instruction of the Majority Banks, the Parent will furnish or cause to be
furnished to the Administrative Agent from time to time a summary of the
insurance coverage of the Parent and its Subsidiaries in form and substance
satisfactory to the Majority Banks in their reasonable judgment, and if
requested will furnish the Administrative Agent copies of the applicable
policies. Subject to the terms of Section 3 hereof, in the case of any fire,
accident or other casualty causing loss or damage to any properties of the
Parent or any of its Subsidiaries, the proceeds of such policies will be used
(i) to repair or replace the damaged property or (ii) to prepay the
Obligations, at the election of the Company.
9.9 Accounts and Records. The Parent will keep and will
cause each Subsidiary of the Parent to keep books of record and account which
fairly reflect all dealings or transactions in relation to their respective
businesses and activities, in accordance with GAAP, which books
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of record and account will be maintained, to the extent necessary to enable
compliance with all provisions of this Agreement, separately for each such
Subsidiary, the Parent and any division of the Parent.
9.10 Rights of Inspection. The Parent will permit and will
cause each of its Subsidiaries to permit any officer, employee, or agent of any
Agent or any Bank to meet with the consultants who prepared any applicable
Engineering Report and to review such Engineering Report with such consultants
and to visit and inspect any of the properties of the Parent or such
Subsidiary, examine the Parent's or such Subsidiary's books of record and
accounts, take copies and extracts therefrom, and discuss the affairs, finances
and accounts of the Bank or such Subsidiary with the Parent's or such
Subsidiary's officers, accountants and auditors, all at such reasonable times
during normal business hours and as often as such Agent or such Bank may
reasonably desire, and will assist in all such matters.
9.11 Notice of Certain Events. The Parent will promptly
notify the Administrative Agent (and the Administrative Agent will then notify
all of the Banks) if a Responsible Officer of the Parent learns of the
occurrence of, or if the Parent causes or intends to cause, as the case may be:
(i) any event which constitutes a Default,
together with a detailed statement by a responsible officer of the Parent of
the steps being taken to cure the effect of such Default; or
(ii) the receipt of any notice from, or the taking
of any other action by, the holder of any promissory note, debenture or other
evidence of indebtedness of the Parent or any Subsidiary of the Parent or of
any security (as defined in the Securities Act of 1933, as amended) of the
Parent or any Subsidiary of the Parent with respect to a claimed default,
together with a detailed statement by a Responsible Officer of the Parent
specifying the notice given or other action taken by such holder and the nature
of the claimed default and what action the Parent or such Subsidiary is taking
or proposes to take with respect thereto; or
(iii) any legal, judicial or regulatory proceedings
affecting the Parent or any Subsidiary of the Parent or any of the properties
of the Parent or any Subsidiary of the Parent in which the amount involved is
materially adverse to the Parent and its Subsidiaries taken as a whole, and is
not covered by insurance or which, if adversely determined, would have a
Material Adverse Effect; or
(iv) any dispute between the Parent or any
Subsidiary of the Parent and any Governmental Authority or any other Person
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect; or
(v) any material adverse change, either in any
case or in the aggregate, in the assets, liabilities, financial condition,
proven oil and gas reserves, business, operations, affairs
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or circumstances of the Parent and its Subsidiaries taken as a whole, from
those reflected in the Financial Statements or by the facts warranted or
represented in any Loan Document, including this Agreement; or
(vi) the occurrence of a default or event of
default by the Parent or any Subsidiary of the Parent under any other agreement
to which it is a party, which default or event of default could reasonably be
expected to have a Material Adverse Effect; or
(vii) any change in the accuracy of the
representations and warranties of the Parent or any Subsidiary contained in
this Agreement or any other Loan Document; or
(viii) any material violation or alleged material
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim or any Environmental Liability; or
(ix) any tariff and rate cases and other material
reports filed by the Parent or any of its Subsidiaries with any Governmental
Authority and any notice to the Parent or any of its Subsidiaries from any
Governmental Authority concerning noncompliance with any applicable Legal
Requirement; or
(x) the existence of any Borrowing Base
Deficiency; or
(xi) within 10 days after the date on which a
Responsible Officer of the Parent has actual knowledge thereof, the receipt of
any notice by the Parent or any of its Subsidiaries of any claim of nonpayment
of, or any attempt to collect or enforce, accounts payable of the Parent or any
of its Subsidiaries exceeding, in the case of any one account payable at one
time outstanding, U.S. $1,000,000 and in the case of all accounts payable in
the aggregate at any one time outstanding, U.S. $3,000,000; or
(xii) any requirement for the payment of all or any
portion of any Indebtedness of the Parent or any of its Subsidiaries prior to
the stated maturity thereof (whether by acceleration or otherwise) or as the
result of any failure to maintain or the reaching of any threshold amount
provided in any promissory note, bond, debenture, or other evidence of
Indebtedness or under any credit agreement, loan agreement, indenture or
similar agreement executed in connection with any of the foregoing; or
(xiii) any notice from the Securities and Exchange
Commission with respect to any Application (as defined in Section 8.18 hereof).
9.12 ERISA Information and Compliance. The Parent will
promptly furnish to the Administrative Agent (i) immediately upon receipt, a
copy of any notice of complete or partial withdrawal liability under Title IV
of ERISA and any notice from the PBGC under Title IV of ERISA of an intent to
terminate or appoint a trustee to administer any Plan, (ii) if requested by
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the Administrative Agent, acting on the instruction of the Majority Banks,
promptly after the filing thereof with the United States Secretary of Labor or
the PBGC or the Internal Revenue Service, copies of each annual and other
report with respect to each Plan or any trust created thereunder, (iii)
immediately upon becoming aware of the occurrence of any "reportable event", as
such term is defined in Section 4043 of ERISA, for which the disclosure
requirements of Regulation Section 2615.3 promulgated by the PBGC have not been
waived, or of any "prohibited transaction", as such term is defined in Section
4975 of the Code, in connection with any Plan or any trust created thereunder,
a written notice signed by the President or the principal financial officer of
the Parent or the applicable ERISA Affiliate specifying the nature thereof,
what action the Parent or the applicable ERISA Affiliate is taking or proposes
to take with respect thereto, and, when known, any action taken by the PBGC,
the Internal Revenue Service or the Department of Labor with respect thereto,
(iv) promptly after the filing or receiving thereof by the Parent or any ERISA
Affiliate of any notice of the institution of any proceedings or other actions
which may result in the termination of any Plan, and (v) each request for
waiver of the funding standards or extension of the amortization periods
required by Sections 303 and 304 of ERISA or Section 412 of the Code promptly
after the request is submitted by the Parent or any ERISA Affiliate to the
Secretary of the Treasury, the Department of Labor or the Internal Revenue
Service, as the case may be. To the extent required under applicable statutory
funding requirements, the Parent will fund, or will cause each ERISA Affiliate
to fund, all current service pension liabilities as they are incurred under the
provisions of all Plans from time to time in effect, and comply with all
applicable provisions of ERISA, except to the extent that any such failure to
comply could not reasonably be expected to have a Material Adverse Effect. The
Parent covenants that it shall and shall cause each ERISA Affiliate to (1) make
contributions to each Plan in a timely manner and in an amount sufficient to
comply with the contribution obligations under such Plan and the minimum
funding standards requirements of ERISA; (2) prepare and file in a timely
manner all notices and reports required under the terms of ERISA including but
not limited to annual reports; and (3) pay in a timely manner all required PBGC
premiums, in each case, to the extent failure to do so would have a Material
Adverse Effect.
9.13 Minimum APC Dividends and/or ENSTAR Alaska Advances.
The Parent will receive Dividend Payments from APC and/or permanent advances of
funds from ENSTAR Alaska without any repayment obligation on the part of the
Parent and that would be accounted for as a reduction of the equity of ENSTAR
Alaska not less than, in the aggregate, U.S. $8,000,000 for any 15-month period
ending on the last day of any calendar quarter (unless and to the extent the
same is not permitted by the Alaska Public Utilities Commission or any
successor; provided that if the Alaska Public Utilities Commission or any
successor shall not permit such Dividend Payments and advances, the
Administrative Agent, the Banks and the Company shall endeavor in good faith to
agree on an alternate method of determining the applicable component value of
the Borrowing Base to take such action into account, with the decision of the
Majority Banks to be binding on all of the Banks hereunder).
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9.14 Minimum ENSTAR Alaska Management Fees. The Parent
will receive management fees from ENSTAR Alaska during each calendar year not
less than the amount permitted to be recovered by the Alaska Public Utilities
Commission.
9.15 Minimum ENSTAR Alaska Tax Payments. The Parent will
receive from ENSTAR Alaska during each calendar year not less than 100% of the
federal income tax liability which would have been payable by ENSTAR Alaska for
the previous year if ENSTAR Alaska were a separate taxable Person.
SECTION 10. NEGATIVE COVENANTS. A deviation from the provisions
of this Section 10 will not constitute a Default under this Agreement if such
deviation is consented to in writing by the Majority Banks. The Company (or,
where applicable, the Parent) agrees with the Banks and the Agents that, so
long as any of the Commitments is in effect and until payment in full of all
Loans hereunder, the payment in full of the full face amount of all outstanding
Bankers' Acceptances, the termination or expiry of all Letters of Credit and
payment in full of Letter of Credit Liabilities, all interest thereon and all
amounts payable by the Company hereunder:
10.1 Debts, Guarantees and Other Obligations. The Parent
will not and will not permit any of its Subsidiaries (other than APC) to incur,
create, assume or in any manner become or be liable in respect of any
Indebtedness (including obligations for the payment of rentals); and the Parent
will not and will not permit any of its Subsidiaries (other than APC) to
Guarantee or otherwise in any way become or be responsible for obligations of
any other Person, whether by agreement to purchase the Indebtedness of any
other Person or agreement for the furnishing of funds to any other Person
through the purchase or lease of goods, supplies or services (or by way of
stock purchase, capital contribution, advance or loan) for the purpose of
paying or discharging the Indebtedness of any other Person, or otherwise,
except that the foregoing restrictions will not apply to:
(a) the Notes, the Bankers' Acceptances or other
Indebtedness under the Loan Documents;
(b) liabilities, direct or contingent, of the Parent or
any Subsidiary of the Parent existing on the date of this Agreement which are
reflected in the Financial Statements or the Disclosure Statement and all
renewals, extensions, refinancings and rearrangements, but not increases,
thereof;
(c) endorsements of negotiable or similar instruments for
collection or deposit in the ordinary course of business;
(d) trade payables, lease acquisition and lease
maintenance obligations, extensions of credit from suppliers or contractors,
liabilities incurred in exploration, development and operation of the Parent's
or any of its Subsidiaries' oil and gas properties or similar obligations from
time to time incurred in the ordinary course of business, other than for
borrowed money,
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which are paid within 90 days after the invoice date (inclusive of applicable
grace periods) or (i) are being contested in good faith, if such reserve as
required by GAAP has been made therefor or (ii) trade accounts payable of the
Parent and its Subsidiaries (with respect to which no legal proceeding to
enforce collection has been commenced or, to the knowledge of a Responsible
Officer of the Parent, threatened) not exceeding, in the aggregate at any time
outstanding, U.S. $5,000,000;
(e) taxes, assessments or other government charges which
are not yet due or are being contested in good faith by appropriate action
promptly initiated and diligently conducted, if such reserve as will be
required by GAAP will have been made therefor;
(f) Borrowing Base Debt of the Parent; provided that the
aggregate of all Indebtedness permitted under this Subsection 10.1(f) shall not
exceed the amount by which the then current Borrowing Base exceeds the then
current "Revolving Credit Obligations" under the U.S. Facility;
(g) to the extent, if any, not covered by Subsection (b)
hereinabove, the Indebtedness of the Parent to APC evidenced solely by the
Intercompany Notes, as defined in the Beluga Financing Documents and the APC
Long Term Financing Documents, together with any renewals, extensions,
amendments, refinancings, rearrangements, modifications, restatements or
supplements, but not increases (other than increases which are permitted under
the present terms of the Beluga Financing Documents and the APC Long Term
Financing Documents) thereof from time to time;
(h) intercompany Indebtedness owed to the Parent by any
Subsidiary of the Parent and intercompany Indebtedness owed to any Subsidiary
of the Parent by the Parent or any other Subsidiary of the Parent which is
fully subordinated to the Obligations;
(i) loans, advances or extensions of credit to the Parent
for the purpose of financing no more than 75% of the purchase price of any
fixed assets which are not included in the property taken into account in
determining the Borrowing Base and which are considered in the categories of
property, plant or equipment according to GAAP applied on a consistent basis;
(j) obligations of the Parent under the Gas Sales
Contract, together with any renewals, extensions, amendments, refinancings,
rearrangements, modifications, restatements or supplements, but not increases,
thereof from time to time;
(k) obligations of the Parent and Midcon pursuant to the
Contingent Gas Price Payment Agreement (as defined in the Mesa Contract),
together with any renewals, extensions, amendments, refinancings,
rearrangements, modifications, restatements or supplements, but not increases,
thereof from time to time;
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(l) the Guarantee by the Parent or any Subsidiary of the
Parent of payment or performance by any Subsidiary of the Parent under any
agreement so long as the obligation guaranteed does not constitute Indebtedness
for borrowed money;
(m) obligations of the Parent and Wacker Oil Inc. pursuant
to that certain Agreement Regarding Contingent Payments For Well No. 3 and Well
No. 9 dated as of June 18, 1990, by and among Costain Holdings Inc., Wacker Oil
Inc. and the Parent;
(n) obligations of the Parent or any of its Subsidiaries
under gas purchase contracts for gas not taken, as to which the Parent or its
respective Subsidiary is liable to pay if not made up;
(o) obligations of the Parent or any of its Subsidiaries
under any contract for sale for future delivery of oil or gas (whether or not
the subject oil or gas is to be delivered), hedging contract, forward contract,
swap agreement, futures contract or other similar agreement;
(p) obligations of the Parent or any of its Subsidiaries
under any interest rate swap agreement, or any contract implementing any
interest rate cap, collar or floor, or any similar interest hedging contract;
(q) obligations in connection with gas imbalances arising
in the ordinary course of business;
(r) Indebtedness not exceeding U.S. $1,000,000 in the
aggregate borrowed from the Amarillo Economic Development Commission and
related Guarantees and related obligations of the Parent and its Subsidiaries;
(s) liabilities under leases and lease agreements which do
not cover oil and gas properties to the extent the incurrence and existence of
such liabilities will still enable the Parent and each Subsidiary to comply
with all other requirements of this Agreement and the other Loan Documents to
which they respectively are parties;
(t) Subordinated Debt;
(u) Funded Indebtedness of any Oil and Gas Subsidiary for
borrowed money payable solely by recourse to properties not included in the
Borrowing Base and Indebtedness incurred by any Gas and Liquids Pipeline
Subsidiary in connection with the construction or acquisition of new assets
(exclusive of any assets with respect to which EBITDA or Projected Cash Flow
[as defined in the U.S. Facility, without amendment except as permitted under
the Intercreditor Agreement] is included in the Pipeline Component Value [as
defined in the U.S. Facility, without amendment except as permitted under the
Intercreditor Agreement] ) in connection with the Pipeline Operations (as
defined in the U.S. Facility, without amendment except as permitted under the
Intercreditor Agreement) which is payable solely by recourse to the assets so
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constructed or acquired, each to the extent not otherwise expressly permitted
by this Section 10.1;
(v) the note payable which is to be assumed by the Company
in connection with the consummation of the Novalta Contract and is to be fully
paid and satisfied out of the initial proceeds available under this Agreement
from the making of Loans or the acceptance and purchase of Bankers'
Acceptances; and
(w) the U.S. Facility.
10.2 Liens. The Parent will not and will not permit any of
its Subsidiaries to create, incur, assume or permit to exist any Lien on any of
its or their properties (now owned or hereafter acquired), except:
(a) Liens securing the Indebtedness described in
Subsection 10.1(a) or 10.1(w);
(b) Liens for taxes, assessments or other governmental
charges or levies not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted, if such reserve
as will be required by GAAP will have been made therefor;
(c) Liens of landlords, vendors, contractors,
subcontractors, carriers, warehousemen, mechanics, laborers or materialmen or
other like Liens arising by law in the ordinary course of business for sums not
yet due or being contested in good faith by appropriate action promptly
initiated and diligently conducted, if such reserve as will be required by GAAP
will have been made therefor;
(d) Liens existing on property owned by the Parent or any
of its Subsidiaries on the date of this Agreement which have been disclosed to
the Banks in the Disclosure Statement, together with any renewals, extensions,
amendments, refinancings, rearrangements, modifications, restatements or
supplements, but not increases, thereof from time to time;
(e) pledges or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance,
social security and other like laws;
(f) inchoate liens arising under ERISA to secure the
contingent liability of the Parent permitted by Section 9.12;
(g) Liens in the ordinary course of business, not to
exceed in the aggregate U.S. $2,000,000 as to the Parent and its Subsidiaries
at any time in effect, regarding (i) the performance of bids, tenders,
contracts (other than for the repayment of borrowed money or the deferred
purchase price of property or services) or leases, (ii) statutory obligations,
(iii) surety appeal bonds or (iv) Liens to secure progress or partial payments
made to the Parent or any of its Subsidiaries and other Liens of like nature;
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(h) covenants, restrictions, easements, servitudes,
permits, conditions, exceptions, reservations, minor rights, minor
encumbrances, minor irregularities in title or conventional rights of
reassignment prior to abandonment which do not materially interfere with the
occupation, use and enjoyment by the Parent or any Subsidiary of the Parent of
its respective assets in the normal course of business as presently conducted,
or materially impair the value thereof for the purpose of such business;
(i) Liens of operators under joint operating agreements or
similar contractual arrangements with respect to the relevant entity's
proportionate share of the expense of exploration, development and operation of
oil, gas and mineral leasehold or fee interests owned jointly with others, to
the extent that same relate to sums not yet due or which are being contested in
good faith by appropriate action promptly initiated and diligently conducted,
if such reserve as will be required by GAAP will have been made therefor;
(j) Liens created pursuant to the creation of trusts or
other arrangements funded solely with cash, cash equivalents or other
marketable investments or securities of the type customarily subject to such
arrangements in customary financial practice with respect to long-term or
medium-term indebtedness for borrowed money, the sole purpose of which is to
make provision for the retirement or defeasance, without prepayment, of
Indebtedness permitted under Section 10.1;
(k) Liens on the assets or properties of ENSTAR Alaska;
(l) the Vendor Financing Arrangements (as defined in the
Mesa Contract), to the extent that the same shall have been deducted in
calculating the Borrowing Base;
(m) purchase money Liens for the acquisition of fixed
assets pursuant to Subsection 10.1(i), so long as such Liens exist solely
against the relevant fixed asset acquired and secure only the purchase money
debt; provided, that the aggregate amount of Indebtedness which is secured by
Liens described in this subsection (other than Indebtedness which is payable
solely by recourse to the applicable property) shall not exceed U.S.
$10,000,000 at any one time outstanding;
(n) any Lien existing on any real or personal property of
any corporation or partnership at the time it becomes a Subsidiary of the
Parent or of any other Subsidiary of the Parent, or existing prior to the time
of acquisition upon any real or personal property acquired by the Parent or any
of its Subsidiaries; provided, that such Liens may at all times be deducted in
calculating the Borrowing Base from time to time in effect;
(o) legal or equitable encumbrances deemed to exist by
reason of the existence of any litigation or other legal proceeding or arising
out of a judgment or award with respect to which an appeal is being prosecuted
in good faith by appropriate action promptly initiated and diligently
conducted, if such reserve as will be required by GAAP will have been made
therefor;
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(p) any Liens securing Indebtedness neither assumed nor
guaranteed by the Parent or any of its Subsidiaries nor on which it customarily
pays interest, existing upon real estate or rights in or relating to real
estate acquired by the Parent or any of its Subsidiaries for substation,
metering station, pump station, storage, gathering line, transmission line,
transportation line, distribution line or right-of-way purposes, and any Liens
reserved in leases for rent and full compliance with the terms of the leases in
the case of leasehold estates, to the extent that any such Lien referred to in
this clause arises in the normal course of business as presently conducted and
does not materially impair the use of the property covered by such Lien for the
purposes for which such property is held by the Parent or its applicable
Subsidiary;
(q) rights reserved to or vested in any municipality or
governmental, statutory or public authority by the terms of any right, power,
franchise, grant, license or permit, or by any provision of law, to terminate
such right, power, franchise, grant, license or permit or to purchase, condemn,
expropriate or recapture or to designate a purchaser of any of the property of
the Parent or any of its Subsidiaries;
(r) rights reserved to or vested in any municipality or
governmental, statutory or public authority to control or regulate any property
of the Parent or any of its Subsidiaries, or to use such property in a manner
which does not materially impair the use of such property for the purposes for
which it is held by the Parent or its applicable Subsidiary;
(s) any obligations or duties affecting the property of
the Parent or any of its Subsidiaries to any municipality, governmental,
statutory or public authority with respect to any franchise, grant, license or
permit;
(t) rights of a common owner of any interest in real
estate, rights-of-way or easements held by the Parent or any of its
Subsidiaries and such common owner as tenants in common or through other common
ownership;
(u) any Liens arising from the matters described in
Schedule 3.19 of the Mesa Contract;
(v) Liens securing Indebtedness permitted under Section
10.1(u) hereof (to the extent such Liens are permitted under such Section
10.1(u));
(w) reservations, limitations, provisos and conditions in
any original grant from the Crown or freehold lessor of any of the properties
of the Company or its Subsidiaries;
(x) other Liens securing Indebtedness not exceeding, in
the aggregate, U.S. $3,000,000 at any one time outstanding; and
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(y) other Liens securing Senior Debt, but only so long as
such Liens shall also secure the Obligations on a pari passu basis, in a manner
and pursuant to documentation acceptable to the Majority Banks.
10.3 Investments, Loans and Advances. The Parent will not
and will not permit its Subsidiaries to make or permit to remain outstanding
any advances, loans or other extensions of credit or capital contributions
(other than prepaid expenses in the ordinary course of business) to (by means
of transfers of property or assets or otherwise), or purchase or own any
stocks, bonds, notes, debentures or other securities of, or incur contingent
liability with respect to (except for the endorsement of checks in the ordinary
course of business and except for the Indebtedness and Liens permitted under
this Agreement) any Person (all such transactions being herein called
"Investments"), except that the foregoing restriction will not apply to:
(a) Investments (all prior to the date hereof) the
material details of which have been set forth in the Financial Statements
delivered to the Administrative Agent prior to the date hereof or the
Disclosure Statement;
(b) Liquid Investments;
(c) advances or extensions of credit in the form of
accounts receivable incurred in the ordinary course of business;
(d) the acquisition of all of the capital stock of wholly
owned Subsidiaries incorporated or acquired subsequent to the date of this
Agreement;
(e) investments where the consideration paid is capital
stock of the Parent, plus cash paid in lieu of issuing fractional shares and
cash paid in settlement of claims of dissenters, such cash not to exceed 10% of
the aggregate purchase price in any such transaction;
(f) Investments in any Person which after giving effect
thereto will be a Subsidiary of the Parent, so long as the Investment in such
Person, when consummated, would not result in a breach of the covenants set
forth in Section 10.1;
(g) intercompany loans, advances or investments by the
Parent to or in any Subsidiary of the Parent or, to the extent permitted under
Section 10.1(h) hereof, by any Subsidiary of the Parent to or in the Parent or
to or in any other Subsidiary of the Parent, provided, however, that APC may
not make any intercompany loans, advances or investments in any Subsidiary of
the Parent pursuant to this clause (g);
(h) intercompany loans, advances or investments by the
Parent, solely from income or cash flow of the Parent subject to the Beluga
Financing Documents, to APC as required under the Beluga Financing Documents
and the APC Long Term Financing Documents;
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(i) to the extent, if any, not covered by Subsection (a)
hereinabove, the Indebtedness of the Parent to APC evidenced solely by the
Intercompany Notes, as defined in the Beluga Financing Documents and the APC
Long Term Financing Documents, together with any renewals, extensions,
amendments, refinancings, rearrangements, modifications, restatements or
supplements, but not increases (other than increases which are permitted under
the present terms of the Beluga Financing Documents and the APC Long Term
Financing Documents) thereof from time to time;
(j) loans or advances to employees made in the ordinary
course of business, up to the aggregate principal amount at any one time
outstanding of U.S. $500,000;
(k) Investments in reasonable amounts of securities for
purposes of funding employee benefit plans maintained by the Parent;
(l) advances or extensions of credit made in the ordinary
course of business to third parties under applicable contracts and agreements
in connection with (i) oil, gas or other mineral exploration, development and
production activities or (ii) Hydrocarbon or chemical pipeline gathering or
transportation activities;
(m) Investments where the consideration paid is assets of
the Parent or its Subsidiaries other than capital stock, cash or oil and gas
reserves;
(n) Investments in EBOC Energy Ltd. made in connection
with and pursuant to the Novalta Contract; and
(o) any other Investments which in the aggregate do not
cause the Parent to be in violation of the Investments Tests.
10.4 Dividend Payment Restrictions. The Parent will not
declare or make any Dividend Payment other than Dividend Payments which do not
cause the Parent to be in violation of the Dividends Tests and other than
dividends on up to U.S. $100,000,000 of preferred stock to extent that, in the
reasonable good faith determination of the Parent and the Administrative Agent,
such dividends are not materially in excess of dividends on similar securities
issued in transactions of comparable type and magnitude for issuers similarly
situated to the Parent at the time of issuance of such preferred stock;
provided, however, that, with respect to any particular issue of preferred
stock, the Administrative Agent shall be deemed to have agreed with any
determination of the Parent that the dividends for such issue satisfy the
foregoing requirements if the Administrative Agent shall not have objected to
such determination within 10 days after the Parent has informed the
Administrative Agent of the maximum dividend that could be paid with respect to
such issue.
10.5 Mergers, Amalgamations and Sales of Assets. The
Parent will not (a) merge, amalgamate or consolidate with, or sell, assign,
lease or otherwise dispose of, whether in one
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transaction or in a series of transactions, more than ten percent (10%) in the
aggregate of the Parent's and its Subsidiaries' consolidated total assets
(whether now owned or hereafter acquired) to any Person or Persons during the
period since the most recent "Borrowing Base Determination" (as defined in the
U.S. Facility, without amendment except as permitted under the Intercreditor
Agreement), or permit any Subsidiary of the Parent to do so (other than to the
Parent or another Subsidiary of the Parent or the issuance by any Subsidiary of
the Parent of any stock to the Parent or another Subsidiary of the Parent), or
(b) sell, assign, lease or otherwise dispose of, whether in one transaction or
in a series of transactions, any other properties if receiving therefor
consideration other than cash or other consideration readily convertible to
cash or which is less than the fair market value of the relevant properties, or
permit any Subsidiary of the Parent to do so; provided that the Parent or any
Subsidiary of the Parent may merge, amalgamate or consolidate with any other
Person and any Subsidiary of the Parent may transfer properties to any other
Subsidiary of the Parent or to the Parent so long as, in each case, (i)
immediately thereafter and giving effect thereto, no event will occur and be
continuing which constitutes a Default, (ii) in the case of any such merger,
amalgamation or consolidation to which the Parent is a party, the Parent is the
surviving Person, (iii) in the case of any such merger, amalgamation or
consolidation to which any Subsidiary of the Parent is a party (but not the
Parent), such Subsidiary is the surviving Person and (iv) the surviving Person
ratifies each applicable Loan Document and provided further that any Subsidiary
of the Parent may merge or consolidate with any other Subsidiary of the Parent
so long as, in each case (i) immediately thereafter and giving effect thereto,
no event will occur and be continuing which constitutes a Default and (ii) the
surviving Person ratifies each applicable Loan Document.
10.6 Use of Proceeds. The Company will not permit the
proceeds of the Loans or the Canadian Bankers' Acceptance Discount Proceeds to
be used for any purpose other than those permitted by this Agreement.
10.7 ERISA Compliance. The Parent will not at any time
permit any Plan maintained by it or any Subsidiary of the Parent to:
(a) engage in any "prohibited transaction" as such term is
defined in Section 4975 of the Code;
(b) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA; or
(c) terminate or be terminated in a manner which could
result in the imposition of a Lien on the property of the Parent or any
Subsidiary of the Parent pursuant to Section 4068 of ERISA,
in each case, to the extent that permitting the Plan to do so would have a
Material Adverse Effect.
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10.8 Amendment of Certain Documents. The Parent will not
amend, modify or obtain or grant a waiver of (except for waivers only of
cross-defaults created by a Default under this Agreement), or allow APC to
enter into any amendment or modification or obtain or grant any waiver of
(except for waivers only of cross-defaults created by a Default under this
Agreement), any provision of those documents relating to or constituting the
Beluga Financing Documents or the APC Long Term Financing Documents, without
prior written notification to the Administrative Agent.
10.9 Tangible Net Worth. The Parent will not permit the
Tangible Net Worth of the Parent and its Subsidiaries, on a consolidated basis,
at any time to be less than U.S. $225,000,000 plus
(i) 50% of net income of the Parent and its
Subsidiaries on a consolidated basis, if
positive, beginning with the fiscal year
ended December 31, 1993 and calculated
annually thereafter based upon positive net
income of the Parent and its Subsidiaries for
each applicable fiscal year taken
cumulatively;
plus
(ii) 75% of the net cash proceeds of any issuance
of equity in the Parent during the period
referred to in clause (i) above.
10.10 ENSTAR Alaska Financial Ratios. The Parent will not
permit the ratio of (A) the sum of Funded Indebtedness of ENSTAR Alaska plus
Current Maturities of ENSTAR Alaska to (B) the sum of Funded Indebtedness of
ENSTAR Alaska plus Current Maturities of ENSTAR Alaska plus the Tangible Net
Worth of ENSTAR Alaska, to be, at any time, more than 60%. The Parent will not
permit the ratio of (a) the sum of Funded Indebtedness of ENSTAR Alaska plus
Current Maturities of ENSTAR Alaska plus borrowed money Indebtedness of ENSTAR
Alaska that is not Funded Indebtedness to (b) the sum of Funded Indebtedness
of ENSTAR Alaska plus Current Maturities of ENSTAR Alaska plus borrowed money
Indebtedness of ENSTAR Alaska that is not Funded Indebtedness plus the Tangible
Net Worth of ENSTAR Alaska, to be, at any time, more than 75%.
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10.11 Parent Debt/Capitalization Ratio. The Parent will not
permit the Debt/Capitalization Ratio to be, at any time, more than
(i) for the period from and after the date hereof
through December 31, 1993, 75%;
(ii) for the period from and after January 1, 1994
through December 31, 1994, 67.5%;
(iii) for the period from and after January 1, 1995
through December 31, 1995, 65%; and
(iv) thereafter, 60%.
10.12 EBITDA/Interest Ratio. The Parent will not permit the
EBITDA/Interest Ratio to be, at any time, less than
(i) 3.25:1.0 for any twelve month period ending
on the last day of any calendar quarter
during the calendar year 1993; and
(ii) 3.5:1.0 for any twelve month period ending
on the last day of any calendar quarter
thereafter.
10.13 Nature of Business. The Parent will not engage in,
and will not permit any Subsidiary of the Parent to engage in, businesses other
than oil and gas exploration and production, gas processing, transmission,
distribution, marketing and storage and gas and liquids pipeline operations and
activities related or ancillary thereto.
10.14 Futures Contracts. The Parent will not, and will not
permit any Subsidiary of the Parent to, enter into or be obligated under any
contract for sale for future delivery of oil or gas (whether or not the subject
oil or gas is to be delivered), hedging contract, forward contract, swap
agreement, futures contract or other similar agreement except for (i) such
contracts (x) which fall within the parameters set forth on Exhibit H hereto or
are otherwise approved in writing by the Majority Banks and (y) which in the
aggregate do not cover at any time a volume of oil and/or gas equal to or
greater than 50% of the proved producing reserves attributable to the oil and
gas properties of the Parent and its Subsidiaries, taken as a whole, as
evidenced by the most current Engineering and Parent Reports and (ii)
production sales contracts entered into in the ordinary course of the Parent's
or the applicable Subsidiary's business.
10.15 Covenants in Other Agreements. The Parent will not
and will not permit any of its Subsidiaries to become a party to or to agree
that it or any of its property is bound by any agreement, indenture, mortgage,
deed of trust or any other instrument directly or indirectly
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(i) restricting any loans, advances or any other
Investments to or in the Parent by any of its Subsidiaries;
(ii) restricting the ability of any Subsidiary of
the Parent to make tax payments or management fee payments;
(iii) restricting the capitalization structure of
any Subsidiary of the Parent; or
(iv) restricting the ability or capacity of any
Subsidiary of the Parent to make Dividend Payments.
Notwithstanding the foregoing, either of ENSTAR Alaska or APC may become a
party to, or grant a Lien in any of its property by way of, or agree that it
will be bound by, any indenture, mortgage, deed of trust or other instrument
containing provisions of the types described above in this Section 10.15 so
long as the terms and provisions thereof are not materially more restrictive
than the terms or provisions which were legally binding on ENSTAR Alaska or APC
on the date hereof.
SECTION 11. DEFAULTS.
11.1 Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) Payments - (i) the Company or any other Relevant Party
fails to make any payment or prepayment of any installment of principal on the
Loans or any Reimbursement Obligation payable under the Notes, this Agreement
or the other Loan Documents or the full face amount of any outstanding Bankers'
Acceptances when due or (ii) the Company or any other Relevant Party fails to
make any payment or prepayment of interest with respect to the Loans, any
Reimbursement Obligation or any other fee or amount under the Notes, the
Bankers' Acceptances, this Agreement or the other Loan Documents and such
failure to pay continues unremedied for a period of five (5) Business Days; or
(b) Representations and Warranties - any representation or
warranty made by the Company or any other Relevant Party in this Agreement or
in any other Loan Document or in any instrument executed in connection herewith
or therewith proves to have been incorrect in any material respect as of the
date thereof; or any representation, statement (including Financial
Statements), certificate or data furnished or made by the Company or any other
Relevant Party (or any officer of the Company or any other Relevant Party)
under or in connection with this Agreement or any other Loan Document,
including without limitation in the Disclosure Statement, proves to have been
untrue in any material respect, as of the date as of which the facts therein
set forth were stated or certified; or
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(c) Affirmative Covenants - (i) default shall be made in
the due observance or performance of any of the covenants or agreements
contained in Sections 9.11 (or in Section 9.6 to the extent such default is
considered an Event of Default under the other Subsections of this Section
11.1) or (ii) default is made in the due observance or performance of any of
the other covenants or agreements contained in Section 9 of this Agreement or
any other affirmative covenant of the Company or any other Relevant Party
contained in this Agreement or any other Loan Document and such default
continues unremedied for a period of 30 days after (x) notice thereof is given
by the Administrative Agent to the Company or (y) such default otherwise
becomes known to the Company, whichever is earlier; or
(d) Negative Covenants - (i) default shall be made in the
observance or performance of any of the covenants or agreements contained in
Section 10.8 and such default continues unremedied for a period of five (5)
Business Days after (x) notice thereof is given by the Administrative Agent to
the Company or (y) such default otherwise becomes known to the Parent,
whichever is earlier, or (ii) default is made in the due observance or
performance by the Company or the Parent, as the case may be, of any of the
other covenants or agreements contained in Section 10 of this Agreement or of
any other negative covenant of the Company or any other Relevant Party
contained in this Agreement or any other Loan Document; or
(e) Other Obligations - default is made in the due
observance or performance by the Parent or any of its Subsidiaries (as
principal or guarantor or other surety) of any of the covenants or agreements
contained in any bond, debenture, note or other evidence of Indebtedness in
excess of U.S. $3,000,000 (singly or aggregating several such bonds,
debentures, notes or other evidence of Indebtedness) which default gives the
holder the right to accelerate the maturity of such Indebtedness, other than
the Loan Documents, or under any credit agreement, loan agreement, indenture,
promissory note or similar agreement or instrument executed in connection with
any of the foregoing, to which it (respectively) is a party and such default is
unwaived or continues unremedied beyond the expiration of any applicable grace
period which may be expressly allowed under such instrument or agreement; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a
receiver, conservator, liquidator or trustee of the Parent or of any of its
property is appointed by the order or decree of any court or agency or
supervisory authority having jurisdiction, and such decree or order remains in
effect for more than 60 days; or the Parent is adjudicated bankrupt or
insolvent; or any of its property is sequestered by court order and such order
remains in effect for more than 60 days; or a petition is filed against the
Parent under any provincial, state or federal bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
receivership law of any jurisdiction, whether now or hereafter in effect, and
is not dismissed within 60 days after such filing; or
(g) Voluntary Petitions or Consents - the Parent commences
a voluntary case or other proceeding seeking liquidation, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
other relief with respect to itself or its debt or other liabilities under
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any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or consents to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
fails generally to, or cannot, pay its debts generally as they become due or
takes any corporate action to authorize or effect any of the foregoing, or
files a notice of intention to make a proposal under the Bankruptcy Code; or
(h) Assignments for Benefit of Creditors or Admissions of
Insolvency - the Parent makes an assignment for the benefit of its creditors,
or admits in writing its inability to pay its debts generally as they become
due, or consents to the appointment of a receiver, trustee, or liquidator of
the Parent or of all or any part of its property; or
(i) Undischarged Judgments - judgments (individually or in
the aggregate) for the payment of money in excess of U.S. $10,000,000 is
rendered by any court or other governmental body against the Parent or any of
its Subsidiaries and the Parent or such Subsidiary does not discharge the same
or provide for its discharge in accordance with its terms, or procure a stay of
execution thereof within 60 days from the date of entry thereof, and within
said period of 60 days from the date of entry thereof or such longer period
during which execution of such judgment will have been stayed, the Parent or
such Subsidiary fails to appeal therefrom and cause the execution thereof to be
stayed during such appeal while providing such reserves therefor as may be
required under GAAP; or
(j) Subsidiary Defaults - any Subsidiary of the Parent
takes, suffers, or permits to exist any of the events or conditions referred to
in Subsections 11.1(f), (g) or (h); or
(k) Change in Control - there should occur any Change of
Control.
THEREUPON: the Administrative Agent may (and, if directed by the Majority
Banks, shall) (a) declare the Commitments terminated (whereupon the Commitments
shall be terminated) and/or (b) terminate any Letter of Credit providing for
such termination by sending a notice of termination as provided therein and/or
(c) declare the principal amount then outstanding of and the accrued interest
on the Loans and Reimbursement Obligations and all fees and all other amounts
payable hereunder and under the Notes to be forthwith due and payable and/or
(d) declare the full face amount of all outstanding Bankers' Acceptances to be
forthwith due and payable, whereupon such amounts shall be and become
immediately due and payable, without notice (including without limitation
notice of acceleration and notice of intent to accelerate), presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the Company; provided that in the case of the occurrence of
an Event of Default with respect to the Parent referred to in clause (f) or (g)
of this Section 11.1 or in clause (j) of this Section 11.1 to the extent it
refers to clauses (f) or (g), the Commitments shall be automatically terminated
and the principal amount then outstanding of and the accrued interest on the
Loans and Reimbursement Obligations and all fees and all other amounts payable
hereunder and under
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the Notes and the full face amount of all outstanding Bankers' Acceptances
shall be and become automatically and immediately due and payable, without
notice (including but not limited to notice of intent to accelerate and notice
of acceleration) and without presentment, demand, protest or other formalities
of any kind, all of which are hereby expressly waived by the Company and/or (d)
exercise any and all other rights available to it under the Loan Documents, at
law or in equity.
11.2 Collateral Account. The Company hereby agrees, in
addition to the provisions of Section 11.1 hereof, that upon the occurrence and
during the continuance of any Event of Default, it shall, if requested by the
Administrative Agent or the Majority Banks (through the Administrative Agent),
pay to the Paying Agent an amount in immediately available funds equal to the
then aggregate amount available for drawings under all Letters of Credit issued
for the account of the Company, which funds shall be held by the Paying Agent
as Cover.
11.3 Preservation of Security for Unmatured Reimbursement
Obligations. In the event that, following (i) the occurrence of an Event of
Default and the exercise of any rights available to any Agent under the Loan
Documents, and (ii) payment in full of the principal amount then outstanding of
and the accrued interest on the Loans and Reimbursement Obligations and fees
and all other amounts payable hereunder and under the Notes and under the other
Loan Documents, and (iii) payment in full of the full face amount of all
outstanding Bankers' Acceptances, any Letters of Credit shall remain
outstanding and undrawn upon, the each Agent shall be entitled to hold (and the
Company hereby grants and conveys to each Agent a security interest in and to)
all cash or other property ("Proceeds of Remedies") realized or arising out of
the exercise by such Agent of any rights available to it under the Loan
Documents, at law or in equity, including, without limitation, the proceeds of
any foreclosure, as collateral for the payment of any amounts due or to become
due under or in respect of such Letters of Credit. Such Proceeds of Remedies
shall be held for the ratable benefit of the applicable Issuers. Such Proceeds
of Remedies shall constitute collateral for all purposes under the terms and
provisions of the Loan Documents, and the rights, titles, benefits, privileges,
duties and obligations of each applicable Agent with respect thereto shall be
governed by the terms and provisions of this Agreement and, to the extent not
inconsistent with this Agreement, the other Loan Documents. The applicable
Agent may, but shall have no obligation to, invest any such Proceeds of
Remedies in such manner as such Agent, in the exercise of its sole discretion,
deems appropriate. Such Proceeds of Remedies shall be applied to Reimbursement
Obligations arising in respect of any such Letters of Credit and/or the payment
of any Issuer's obligations under any such Letter of Credit when such Letter of
Credit is drawn upon. The Company hereby agrees to execute and deliver to the
Administrative Agent and the Banks such security agreements, pledges or other
documents as the Administrative Agent or any of the Banks may, from time to
time, require to perfect the pledge, lien and security interest in and to any
such Proceeds of Remedies provided for in this Section 11.3.
11.4 Right of Setoff. Upon (i) the occurrence and during
the continuance of any Event of Default referred to in clauses (f), (g) or (h)
of Section 11.1, or in clause (j) of Section 11.1
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to the extent it refers to clauses (f), (g) or (h), or upon (ii) the occurrence
and continuance of any other Event of Default and upon the making of the notice
specified in Section 11.1 to authorize the Administrative Agent to declare the
Notes and the full face amount of all Bankers' Acceptances outstanding due and
payable pursuant to the provisions thereof, or if (iii) the Parent or any of
its Subsidiaries becomes insolvent, however evidenced, the Banks are hereby
authorized at any time and from time to time, without notice to the Parent or
any of its Subsidiaries (any such notice being expressly waived by the Parent
and its Subsidiaries), to setoff and apply any and all deposits (general or
special, time or demand, provisional or final, whether or not such setoff
results in any loss of interest or other penalty, and including without
limitation all certificates of deposit) at any time held, and any other funds
or property at any time held, and other Indebtedness at any time owing by any
Bank to or for the credit or the account of the Company against any and all of
the Obligations irrespective of whether or not such Bank will have made any
demand under this Agreement, any Bankers' Acceptances or the Notes and although
such obligations may be unmatured. Should the right of any Bank to realize
funds in any manner set forth hereinabove be challenged and any application of
such funds be reversed, whether by court order or otherwise, the Banks shall
make restitution or refund to the Company pro rata in accordance with their
Commitments. The Banks agree promptly to notify the Company and the
Administrative Agent and the Paying Agent after any such setoff and
application, provided that the failure to give such notice will not affect the
validity of such setoff and application. The rights of the Agents and the
Banks under this Section are in addition to other rights and remedies
(including without limitation other rights of setoff) which the Agents or the
Banks may have.
SECTION 12. THE AGENTS.
12.1 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as arranger
and administrative agent hereunder and under the Letters of Credit and the
other Loan Documents with such powers as are specifically delegated to the
Administrative Agent by the terms hereof and thereof, together with such other
powers as are reasonably incidental thereto. Each Bank hereby irrevocably
appoints and authorizes the Paying Agent to act as co-agent and paying agent
hereunder and under the Bankers' Acceptances, the Letters of Credit and the
other Loan Documents with such powers as are specifically delegated to the
Paying Agent by the terms hereof and thereof, together with such other powers
as are reasonably incidental thereto. Each Bank hereby irrevocably appoints
and authorizes the Co-Agent to act as co-agent hereunder and under the Letters
of Credit and the other Loan Documents with such powers as are specifically
delegated to the Co- Agent by the terms hereof and thereof, together with such
other powers as are reasonably incidental thereto. None of the Agents (which
term as used in this Section 12 shall include reference to their affiliates and
their own and their affiliates' officers, directors, employees and agents) (a)
shall have any duties or responsibilities except those expressly set forth in
this Agreement, the Bankers' Acceptances, the Letters of Credit, and the other
Loan Documents, or shall by reason of this Agreement or any other Loan Document
be a trustee or fiduciary for any Bank; (b) shall be responsible to any Bank
for any recitals, statements, representations or warranties contained
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in this Agreement, the Bankers' Acceptances, the Letters of Credit or any other
Loan Document, or in any certificate or other document referred to or provided
for in, or received by any of them under, this Agreement, the Bankers'
Acceptances, the Letters of Credit or any other Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the Bankers' Acceptances, the Letters of Credit, or any other
Loan Document or any other document referred to or provided for herein or
therein or any property covered thereby or for any failure by any Relevant
Party or any other Person to perform any of its obligations hereunder or
thereunder; (c) shall be required to initiate or conduct any litigation or
collection proceedings hereunder or under the Bankers' Acceptances, the Letters
of Credit or any other Loan Document except to the extent requested by the
Majority Banks, and (d) shall be responsible for any action taken or omitted to
be taken by them hereunder or under the Bankers' Acceptances, the Letters of
Credit or any other Loan Document or any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith,
including, without limitation, pursuant to their own negligence, except for
their own gross negligence or wilful misconduct. The Agents may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by them with
reasonable care. Without in any way limiting any of the foregoing, each Bank
acknowledges that neither any Agent nor any Issuer shall have any greater
responsibility in the operation of the Letters of Credit than is specified in
the Uniform Customs and Practice for Documentary Credits (1983 Revision,
International Chamber of Commerce Publication No. 400). In any foreclosure
proceeding concerning any collateral for the Obligations, each holder of an
Obligation if bidding for its own account or for its own account and the
accounts of other Banks is prohibited from including in the amount of its bid
an amount to be applied as a credit against its Obligation or Obligations or
the Obligations of the other Banks; instead, such holder must bid in cash only;
provided that this provision is for the sole benefit of the Agents and the
Banks and shall not inure to the benefit of the Parent or any of its
Subsidiaries. However, in any such foreclosure proceeding, the Administrative
Agent may (but shall not be obligated to) submit a bid for all Banks (including
itself) in the form of a credit against the Notes of all of the Banks, and the
Administrative Agent or its designee may (but shall not be obligated to) accept
title to such collateral for and on behalf of all Banks.
12.2 Reliance by Agents. Each of the Agents shall be
entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by them
to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel
(which may be counsel for the Company and/or the Parent and/or any Subsidiary
of the Parent), independent accountants and other experts selected by any
Agent. As to any matters not expressly provided for by this Agreement, the
Bankers' Acceptances, the Letters of Credit, or any other Loan Document, the
Agents shall in all cases be fully protected in acting, or in refraining from
acting, hereunder and thereunder in accordance with instructions of the
Majority Banks (or, where unanimous consent is required by the terms hereof or
of the other Loan Documents, all of the Banks), and any action taken or failure
to act pursuant thereto shall be binding on all of the Banks. Pursuant to
instructions of the Majority Banks (except as otherwise
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provided in Section 13.4 hereof), the Administrative Agent shall have the
authority to execute releases of any Liens created by the Loan Documents on
behalf of the Banks without the joinder of any Bank.
12.3 Defaults. The Agents shall not be deemed to have
knowledge of the occurrence of a Default unless they have received notice from
a Bank or the Company specifying such Default and stating that such notice is a
"Notice of Default"; provided, however, that the Paying Agent shall be deemed
to have knowledge of the non-payment of principal of or interest on Loans or
the full face amount of outstanding Bankers' Acceptances or Reimbursement
Obligations at the time of such non-payment. In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Banks. The Paying
Agent shall give each Bank prompt notice to the Banks of each non-payment of
principal of or interest on Loans, the full face amount of outstanding Bankers'
Acceptances or Reimbursement Obligations. The Administrative Agent shall
(subject to Section 12.7 hereof) take such action with respect to such Default
as shall be directed by the Majority Banks and within its rights under the Loan
Documents and at law or in equity, provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, permitted hereby with respect to such Default as it shall
deem advisable in the best interests of the Banks and within its rights under
the Loan Documents, at law or in equity.
12.4 Rights as a Bank. With respect to their Commitments
and the Loans made, Bankers' Acceptances accepted and purchased and Letter of
Credit Liabilities, the Agents in their capacities as Banks hereunder shall
have the same rights and powers hereunder as any other Bank and may exercise
the same as though they were not acting as Agents, and the term "Bank" or
"Banks" shall, unless the context otherwise indicates, include the Agents in
their individual capacities. The Agents may (without having to account
therefor to any Bank) accept deposits from, lend money to and generally engage
in any kind of banking, trust, letter of credit, agency or other business with
the Parent or its Subsidiaries (and any of their Affiliates) as if they were
not acting as Agents, and the Agents may accept fees and other consideration
from the Parent or its Subsidiaries (and any of their Affiliates), in addition
to the fees heretofore agreed to between the Company and the Agents, for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
12.5 Indemnification. The Banks agree to indemnify the
Agents (to the extent not reimbursed under Section 2.2(c), Section 9.7 or
Section 13.3 hereof, but without limiting the obligations of the Company under
said Sections 2.2(c), 9.7 and 13.3), ratably in accordance with their
respective Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever (including but not limited to, the
consequences of the negligence of the Agents) which may be imposed on, incurred
by or asserted against the Agents in any way relating to or arising out of this
Agreement, the Bankers' Acceptances, the Letters of Credit or any other Loan
Document or any other documents contemplated by or referred to herein or
therein or the transactions
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contemplated hereby or thereby (including, without limitation, the costs and
expenses which the Company is obligated to pay under Sections 2.2(c), 9.8 and
13.3 hereof but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of their
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, including but not limited to the
negligence of the Agents, 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 party to be indemnified. The obligations of the Banks under
this Section 12.5 shall survive the termination of this Agreement and the
repayment of the Obligations.
12.6 Non-Reliance on Agents and Other Banks. Each Bank
agrees that it has received current financial information with respect to the
Parent and its Subsidiaries and that it has, independently and without reliance
on the Agents or any other Bank and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Parent and its
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agents or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any of the other Loan Documents. The Agents shall not
be required to keep themselves informed as to the performance or observance by
any Relevant Party of this Agreement, the Bankers' Acceptances, the Letters of
Credit or any of the other Loan Documents or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Parent or its Subsidiaries. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by the Agents
hereunder, under the Bankers' Acceptances, under the Letters of Credit or the
other Loan Documents, the Agents 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 Parent or its Subsidiaries (or any of
their Affiliates) which may come into the possession of the Agents.
12.7 Failure to Act. Except for action expressly required
of the Agents hereunder, under the Bankers' Acceptances, under the Letters of
Credit and under the other Loan Documents, the Agents shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless
they shall receive further assurances to their satisfaction by the Banks of
their indemnification obligations under Section 12.5 hereof against any and all
liability and expense which may be incurred by them by reason of taking or
continuing to take any such action.
12.8 Resignation or Removal of Agents. Subject to the
appointment and acceptance of a successor Agent as provided below, any Agent
may resign at any time by giving notice thereof to the Banks and the Company,
and any Agent may be removed at any time with or without cause by the Majority
Banks. Upon any such resignation or removal, the Majority Banks shall have the
right to appoint a successor Agent, provided deposits with such successor Agent
shall be insured by the Canada Deposit Insurance Corporation or its successor.
If no
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successor Agent shall have been so appointed by the Majority Banks and shall
have accepted such appointment within 30 days after the retiring Agent's giving
of notice of resignation or the Majority Banks' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Banks, appoint a successor Agent.
Any successor Agent shall be a bank which has an office in Canada and a
combined capital and surplus of at least U.S. $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. Any
successor Paying Agent shall promptly specify by notice to the Company its
Payment Office referred to in Sections 3.1 and 5.1. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 12
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
SECTION 13. MISCELLANEOUS.
13.1 Waiver. No waiver of any Default shall be a waiver of
any other Default. No failure on the part of any Agent or any Bank to exercise
and no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under any Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege thereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The remedies provided in the
Loan Documents are cumulative and not exclusive of any remedies provided by law
or in equity.
13.2 Notices. All notices and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made by telex,
telegraph, telecopy (confirmed by mail), cable, mail or other writing and
telexed, telecopied, telegraphed, cabled, mailed or delivered to the intended
recipient at the "Address for Notices" specified below its name on the
signature pages hereof; or, as to any party, at such other address as shall be
designated by such party in a notice to the Company and the Administrative
Agent given in accordance with this Section 13.2. Except as otherwise provided
in this Agreement, all such communications shall be deemed to have been duly
received when transmitted by telex or telecopier during regular business hours,
delivered to the telegraph or cable office or personally delivered or, in the
case of a mailed notice, three (3) days after deposit in the Canadian mails,
postage prepaid, registered mail with return receipt requested (or upon actual
receipt, if earlier), in each case given or addressed as aforesaid.
13.3 Indemnification. The Company shall indemnify the
Agents, the Banks, and each Affiliate thereof and their respective directors,
officers, employees and agents from, and hold each of them harmless against,
any and all losses, liabilities, claims or damages to which any of them may
become subject (except as provided in clause (c) of this Section 13.3,
regardless of whether caused in whole or in part by the simple (but not gross)
negligence of the Person indemnified), insofar as such losses, liabilities,
claims or damages arise out of or result from any
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(i) actual or proposed use by the Company of the proceeds of any extension of
credit (whether a Loan, Bankers' Acceptance or a Letter of Credit) by any Bank
hereunder, (ii) breach by the Company or any other Relevant Party of this
Agreement or any other Loan Document, (iii) violation by the Parent or any of
its Subsidiaries of any Legal Requirement, including but not limited to those
relating to Hazardous Substances, (iv) Liens or security interests previously
or hereafter granted on any real or personal property, to the extent resulting
from any Hazardous Substance located in, on or under any such property, (v)
ownership by the Banks or the Agents of any real or personal property following
foreclosure, to the extent such losses, liabilities, claims or damages arise
out of or result from any Hazardous Substance located in, on or under such
property, including, without limitation, losses, liabilities, claims or damages
which are imposed upon Persons under laws relating to or regulating Hazardous
Substances solely by virtue of ownership, (vi) Banks' or Agents' being deemed
an operator of any such real or personal property by a court or other
regulatory or administrative agency or tribunal in circumstances in which
neither any of the Agents nor any of the Banks is generally operating or
generally exercising control over such property, to the extent such losses,
liabilities, claims or damages arise out of or result from any Hazardous
Substance located in, on or under such property, (vii) investigation,
litigation or other proceeding (including any threatened investigation or
proceeding) relating to any of the foregoing, and the Company shall reimburse
each Agent, each Bank, and each Affiliate thereof and their respective
directors, officers, employees and agents, upon demand, for any expenses
(including legal fees) incurred in connection with any such investigation or
proceeding or (viii) taxes (excluding income taxes and franchise taxes) payable
or ruled payable by any Governmental Authority in respect of the principal and
interest of the Loans, the Bankers' Acceptances or any other Loan Document,
together with interest and penalties, if any; provided, however, that the
Company shall not have any obligations pursuant to this Section 13.3 with
respect to any losses, liabilities, claims, damages or expenses (a) arising
from or relating solely to events, conditions or circumstances which, as to
clauses (iv), (v) or (vi) above, first came into existence or which first
occurred after the date on which the Parent or any of its Subsidiaries conveyed
to an unrelated third party all of the Parent's or the applicable Subsidiary's
rights, titles and interests to the applicable real or personal property
(whether by deed, deed-in-lieu, foreclosure or otherwise) other than a
conveyance made in violation of any Loan Document, (b) incurred by the Person
seeking indemnification by reason of the gross negligence or wilful misconduct
of such Person, (c) in the case of liability arising with respect to Bankers'
Acceptances, incurred by the Person seeking indemnification by reason of the
negligence or wilful misconduct of such Person or (d) resulting from
withholding tax liability incurred in connection with payments made by the
Company to any Agent, any Bank or any Affiliate thereof. If the Company ever
disputes a good faith claim for indemnification under this Section 13.3 on the
basis of the proviso set forth in the preceding sentence, the full amount of
indemnification provided for shall nonetheless be paid, subject to later
adjustment or reimbursement at such time (if any) as a court of competent
jurisdiction enters a final judgment as to the applicability of any such
exceptions.
13.4 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, the Notes or any other Loan Document, nor any
consent to any departure by the Company or
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any other Relevant Party therefrom, shall in any event be effective unless the
same shall be agreed or consented to by the Majority Banks and the Company, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, that no amendment,
waiver or consent shall, unless in writing and signed by each Bank affected
thereby, do any of the following: (a) increase the Commitment of such Bank (it
being understood that the waiver of any reduction in the Commitments or any
mandatory repayment other than (x) the repayment of all Loans at the end of the
Revolving Credit Availability Period and (y) the mandatory reductions of the
Commitments provided for in Section 2.3(a) and (z) the mandatory prepayments
required by the terms of Section 3.2(b), shall not be deemed to be an increase
in any Commitment) or subject the Banks to any additional obligation; (b)
reduce the principal of, or interest on, any Loan, Reimbursement Obligation or
fee hereunder or the face amount of any outstanding Bankers' Acceptances; (c)
postpone any scheduled date fixed for any payment or mandatory prepayment of
principal of, or interest on, any Loan, Reimbursement Obligation, fee or the
face amount of any outstanding Bankers' Acceptances or other sum to be paid
hereunder; (d) change the percentage of any of the Commitments or of the
aggregate unpaid principal amount of any of the Loans or the face amount of any
outstanding Bankers' Acceptances and Letter of Credit Liabilities, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Agreement; (e) change any provision contained in Sections
2.2(c), 9.7 or 13.3 hereof or this Section 13.4 or Section 6.7 hereof, or (f)
release all or substantially all of any security for the obligations of the
Company under this Agreement or any Note or all or substantially all of the
personal liability of any obligor created under any of the Loan Documents.
Anything in this Section 13.4 to the contrary, no amendment, waiver or consent
shall be made with respect to Section 12 without the consent of the applicable
Agent or Agents affected thereby.
13.5 Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of the Company, the Agents and the Banks
and their respective successors and assigns. The Company may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all of the Banks. Each Bank may sell participations to any Person
which is a resident of Canada under the Income Tax Act (Canada) in all or part
of any Loan, Bankers' Acceptance or Letter of Credit, or all or part of its
Notes or Commitments, in which event, without limiting the foregoing, the
provisions of Section 6 shall inure to the benefit of each purchaser of a
participation and the pro rata treatment of payments, as described in Section
5.2, shall be determined as if such Bank had not sold such participation. In
the event any Bank shall sell any participation, such Bank shall retain the
sole right and responsibility to enforce the obligations of the Company or any
other Relevant Party relating to the Loans, Bankers' Acceptances or Letters of
Credit, including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement other than
amendments, modifications or waivers with respect to (i) any fees payable
hereunder to the Banks and (ii) the amount of principal or the rate of interest
payable on, or the dates fixed for the scheduled repayment of principal of, the
Loans.
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(b) Each Bank may assign to one or more Banks or any other
Person, in each case which is a resident of Canada under the Income Tax Act
(Canada), all or a portion of its interests, rights and obligations under this
Agreement, provided, however, that (i) other than in the case of an assignment
to another Bank that is, at the time of such assignment, a party hereto or an
Affiliate of such Bank which is a resident of Canada under the Income Tax Act
(Canada), the Company must give its prior written consent, which consent will
not be unreasonably withheld, (ii) the aggregate amount of the Commitment
and/or Loans, the face amount of all outstanding Bankers' Acceptances or
Letters of Credit of the assigning Bank subject to each such assignment
(determined as of the date the Assignment and Acceptance (as defined below)
with respect to such assignment is delivered to the Administrative Agent) shall
in no event be less than U.S. $10,000,000 (or U.S. $5,000,000 in the case of an
assignment to an Affiliate of a Bank or between Banks), (iii) no assignment
shall have the effect of reducing the pro rata share of the Loans, the face
amount of all outstanding Bankers' Acceptances or Letters of Credit and the
Commitments held by the assignor and its Affiliates below U.S. $10,000,000,
(iv) notwithstanding any other term or provision of this Agreement, unless the
Company shall have otherwise consented in writing (such consent not to be
unreasonably withheld), each such assignment shall be pro rata with respect to
the Loans, the Bankers' Acceptances, the Letters of Credit and the Commitment
of the assignor, and (v) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance in the form of
Exhibit F hereto (each an "Assignment and Acceptance") with blanks
appropriately completed, together with any Note or Notes subject to such
assignment and a processing and recordation fee of U.S. $2,500 paid by the
assignee (for which the Company shall have no liability). Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder and (B) the Bank thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement.
(c) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse claim,
such Bank assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any of the other Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant thereto; (ii) such Bank assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Parent or any of its Subsidiaries or the
performance or observance by the Company or any other Relevant Party of any of
its obligations under this Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto; (iii) such assignee
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confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 8.6 and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon any Agent, such Bank assignor or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (v) such
assignee appoints and authorizes the Agents to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agents by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all obligations that by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Bank.
(d) The Administrative Agent shall maintain at its office
a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Banks and the Commitments of, and
principal amount of the Loans owing to, and the face amount of all Bankers'
Acceptances accepted and purchased by, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive, in the absence
of manifest error, and the Company, the Agents and the Banks may treat each
person the name of which is recorded in the Register as a Bank hereunder for
all purposes of this Agreement and the other Loan Documents. The Register
shall be available for inspection by the Company or any Bank at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and the assignee thereunder together with any
Note or Notes subject to such assignment, the written consent to such
assignment executed by the Company and the fee payable in respect thereto, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed with blanks appropriately filled, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company. Within five Business Days
after receipt of notice, the Company, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the surrendered Notes new
Notes to the order of such assignee in an amount equal to the Commitments
and/or Loans or the face amount of outstanding Bankers' Acceptances or Letters
of Credit assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained Commitments and/or Loans hereunder, new Notes to
the order of the assigning Bank in an amount equal to the Commitment and/or
Loans retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the respective Note.
Thereafter, such surrendered Notes shall be marked renewed and substituted and
the originals delivered to the Company (with copies, certified by the Company
as true, correct and complete, to be retained by the Administrative Agent).
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(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
13.5, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Parent or its Subsidiaries
furnished to such Bank by or on behalf of the Parent or its Subsidiaries;
provided, however, that, prior to any such disclosure, the Parent shall have
consented thereto, which consent shall not be unreasonably withheld, and each
such assignee or participant, or proposed assignee or participant, shall
execute an agreement whereby such assignee or participant shall agree to
preserve the confidentiality of any Confidential Information (defined in
Section 13.12) on terms substantially the same as those provided in Section
13.12.
(g) The Company will have the right to consent to any material
intercreditor arrangements in connection with an assignment by any Bank of any
interest, right or obligation under this Agreement which is not pro rata with
respect to the Loans, or the face amount of outstanding Bankers' Acceptances,
the Letters of Credit and the Commitment of the assignor and the Company may
deny its consent to any such arrangements which, in the reasonable judgement of
the Company, would adversely affect the Company in a material respect.
13.6 Limitation of Interest. The Company and the Banks
intend to strictly comply with all applicable laws, including applicable usury
laws. Accordingly, the provisions of this Section 13.6 shall govern and
control over every other provision of this Agreement or any other Loan Document
which conflicts or is inconsistent with this Section, even if such provision
declares that it controls. As used in this Section, the term "interest"
includes the aggregate of all charges, fees, benefits or other compensation
which constitute interest under applicable law, provided that, to the maximum
extent permitted by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something other than the
use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of the Obligations. In no event shall the Company or any other Person be
obligated to pay, or any Bank have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the laws of the Province of Alberta or the applicable
laws (if any) of Canada or of any other applicable jurisdiction, or (b) total
interest in excess of the amount which such Bank could lawfully have contracted
for, reserved, received, retained or charged had the interest been calculated
for the full term of the Obligations at the Highest Lawful Rate. On each day,
if any, that the interest rate (the "Stated Rate") called for under this
Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate
at which interest shall accrue shall automatically be fixed by operation of
this sentence at the Highest Lawful Rate for that day, and shall remain fixed
at the Highest Lawful Rate for each day thereafter until the total amount of
interest accrued equals the total amount of interest which would have accrued
if there were no such ceiling rate as is imposed by this sentence. Thereafter,
interest shall accrue at the Stated Rate unless and until the Stated Rate again
exceeds the Highest Lawful Rate when the provisions of the immediately
preceding sentence shall again automatically operate to limit the interest
accrual rate. The daily interest rates to be used in calculating interest at
the Highest Lawful
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Rate shall be determined by dividing the applicable Highest Lawful Rate per
annum by the number of days in the calendar year for which such calculation is
being made. None of the terms and provisions contained in this Agreement or in
any other Loan Document which directly or indirectly relate to interest shall
ever be construed without reference to this Section 13.6, or be construed to
create a contract to pay for the use, forbearance or detention of money at an
interest rate in excess of the Highest Lawful Rate. If the term of any
Obligation is shortened by reason of acceleration of maturity as a result of
any Default or by any other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason any Bank at any time,
including but not limited to, the stated maturity, is owed or receives (and/or
has received) interest in excess of interest calculated at the Highest Lawful
Rate, then and in any such event all of any such excess interest shall be
canceled automatically as of the date of such acceleration, prepayment or other
event which produces the excess, and, if such excess interest has been paid to
such Bank, it shall be credited pro tanto against the then-outstanding
principal balance of the Company's obligations to such Bank, effective as of
the date or dates when the event occurs which causes it to be excess interest,
until such excess is exhausted or all of such principal has been fully paid and
satisfied, whichever occurs first, and any remaining balance of such excess
shall be promptly refunded to its payor.
13.7 Interest Act (Canada); Interest Generally. For the
purposes of this Agreement, the Notes and the other Loan Documents, whenever
interest or fees to be paid hereunder are to be calculated on the basis of a
year of 365 or 360 days, the yearly rate of interest to which the rate
determined pursuant to such calculation is equivalent is the rate so determined
multiplied by the actual number of days in the 12 month period commencing on
the first day of the period for which such calculation is made and divided by
365 or 360, as applicable. The theory of deemed reinvestment shall not apply
to the calculation of interest or payment of fees or other amounts hereunder or
under the Notes or under the other Loan Documents, notwithstanding anything
contained in this Agreement or in the Notes or in the other Loan Documents, or
in any other instrument referred to herein or in the Notes or in the other Loan
Documents, and all interest and fees payable by the Borrower to the Lender
shall accrue from day to day and be computed as described herein or in the
Notes or in the other Loan Documents in accordance with the "nominal rate"
method of interest calculation. To the extent permitted by law, any provision
of the Judgment Interest Act (Alberta) and the Interest Act (Canada) which
restricts the rate of interest on any judgment debt shall be inapplicable to
this Agreement and is hereby waived by the Borrower.
13.8 Certain Saskatchewan Legislation. The Land Contracts
(Actions) Act of the Province of Saskatchewan shall have no application to any
action, as defined in the said Land Contracts (Actions) Act, with respect to
this Agreement; and the Limitation of Civil Rights Act in the Province of
Saskatchewan shall have no application to this Agreement. The Company agrees
that the provisions of both the Land Contracts (Actions) Act and the Limitation
of Civil Rights Act are hereby waived.
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13.9 Survival. The obligations of the Company under
Sections 2.2(c), 6, 9.7 and 13.3 hereof and the obligations of the Banks under
Section 13.6 hereof shall survive the repayment of the Loans and Reimbursement
Obligations and the termination of the Commitments and the Letters of Credit.
13.10 Captions. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
13.11 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same agreement and any of the parties hereto may execute this Agreement by
signing any such counterpart.
13.12 Governing Law. This Agreement and the Notes and the
Bankers' Acceptances and (except as therein provided) the other Loan Documents
are performable in Calgary, Alberta, Canada, which shall be a proper place of
venue for suit on or in respect thereof. The Company irrevocably agrees that
any legal proceeding in respect of this Agreement or the other Loan Documents
shall be brought in the courts of the Province of Alberta and the courts of
appeal therefrom (collectively, the "Specified Courts"). The Company hereby
irrevocably submits to the nonexclusive jurisdiction of such courts. The
Company hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to any Loan Document
brought in any Specified Court, and hereby further irrevocably waives any
claims that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. The Company further (1) agrees to
designate and maintain an agent for service of process in Calgary, Alberta,
Canada in connection with any such suit, action or proceeding and to deliver to
the Administrative Agent evidence thereof and (2) irrevocably consents to the
service of process out of any of the aforementioned courts in any such suit,
action or proceeding by the mailing of copies thereof by registered mail,
return receipt requested, postage prepaid, to the Company at its address as
provided in this Agreement or as otherwise provided by governing law. Nothing
herein shall affect the right of any Agent or any Bank to commence legal
proceedings or otherwise proceed against the Company in any jurisdiction or to
serve process in any manner permitted by applicable law. The Company agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED) THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
APPLICABLE LAWS (OTHER THAN THE CONFLICT OF LAWS RULES) OF THE PROVINCE OF
ALBERTA AND OF CANADA FROM TIME TO TIME IN EFFECT.
13.13 Severability. Whenever possible, each provision of
the Loan Documents shall be interpreted in such manner as to be effective and
valid under applicable law. If any provision of any Loan Document shall be
invalid, illegal or unenforceable in any respect under any
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applicable law, the validity, legality and enforceability of the remaining
provisions of such Loan Document shall not be affected or impaired thereby.
13.14 Confidential Information. Each Agent and each Bank
separately agrees that:
(a) As used herein, the term "Confidential Information"
means written information about the Parent or its Subsidiaries or the
transactions contemplated herein furnished by the Parent or its Subsidiaries to
the Agents and/or the Banks which is specifically designated as confidential by
the Parent; Confidential Information, however, shall not include information
which (i) was publicly known or available, or otherwise available on a
non-confidential basis to any Bank, at the time of disclosure from a source
other than the Parent or its Subsidiaries, (ii) subsequently becomes publicly
known through no act or omission by such Bank, (iii) otherwise becomes
available on a non-confidential basis to any Bank other than through disclosure
by the Parent or its Subsidiaries or (iv) has been in the possession of any
Bank for a period of more than two years from the date on which such
information originally was furnished to such Bank by the Parent or its
Subsidiaries, unless the Parent shall have requested the Agents and the Banks
in writing, at least 30 days prior to the end of such two-year period, to
maintain the confidentiality of such information for another two (2) year
period (or for successive two (2) year periods); provided that the Parent shall
not unreasonably withhold its consent to a request made after the initial two
(2) year period to eliminate information from "Confidential Information".
(b) Each Agent and each Bank agrees that it will take
normal and reasonable precautions to maintain the confidentiality of any
Confidential Information furnished to such Person; provided, however, that such
Person may disclose Confidential Information (i) upon the Parent's consent;
(ii) to its auditors; (iii) when required by any Legal Requirement; (iv) as may
be required or appropriate in any report, statement or testimony submitted to
any Governmental Authority having or claiming to have jurisdiction over it; (v)
to such Person's and its Subsidiaries' or Affiliates' officers, directors,
employees, agents, representatives and professional consultants in connection
with this Agreement or administration of the Loans and Letters of Credit; (vi)
as may be required or appropriate, should such Bank elect to assign or grant
participations in any of the Obligations in connection with (1) the enforcement
of the Obligations to any such Person under any of the Loan Documents or
related agreements, or (2) any potential transfer pursuant to this Agreement of
any Obligation owned by any Bank (provided any potential transferee has been
approved by the Company if required by this Agreement, which approval shall not
be unreasonably withheld, and has agreed in writing to be bound by
substantially the same provisions regarding Confidential Information contained
in this Section); (vii) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation or administrative
proceeding; (viii) to any other Bank; (ix) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under the other Loan
Documents; or (x) to correct any false or misleading information which may
become public concerning such Person's relationship to the Parent or its
Subsidiaries.
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13.15 Intercreditor Agreement. Reference is hereby made to
the Intercreditor Agreement, which provides for certain matters relating to
both the Obligations and the Canadian Facility. To the extent of any conflict
between the terms hereof and the terms of the Intercreditor Agreement, the
Intercreditor Agreement shall control. The Administrative Agent is hereby
authorized and directed to execute and deliver the Intercreditor Agreement in
the form attached hereto as Exhibit I on behalf of the Banks. Any Bank that
becomes a party to this Agreement after the date hereof agrees to be bound by
the terms and provisions of the Intercreditor Agreement.
13.16 Judgement Currency. Notwithstanding that this
Agreement is governed by the laws of the Province of Alberta, Canada, monies
outstanding in connection herewith may be stipulated in terms of lawful money
of the United States of America (which stipulation or expression is of the
essence) and payments to be made in regard thereto pursuant to this Agreement,
or otherwise, are and are intended to be payable in lawful money of the United
States of America; and to the extent permitted by law any judgment in respect
of any such monies outstanding as aforesaid or any obligation pertaining
thereto arising under this Agreement may be obtained or enforced either in
lawful money of the United States of America or the equivalent in lawful money
of Canada, as the Administrative Agent may elect, and the Administrative Agent
shall to the extent permitted by law be entitled to such election and the
benefit (if any) from the consequent conversion of currency at the date of
payment or enforcement of the judgment. Any such payment obligation stipulated
or expressed in lawful money of the United States of America shall not be
discharged by an amount paid in lawful money of Canada, whether pursuant to a
judgment or otherwise, to the extent that the amount so paid on prompt
conversion into lawful money of the United States of America does not, after
deduction of any and all premiums and/or costs of exchange paid or payable by
the Administrative Agent in connection with such conversion, yield the required
amount of payment expressed in terms of lawful money of the United States of
America. In the event that any payment in lawful money of Canada in respect of
a payment in lawful money of Canada in respect of a payment obligation
stipulated or expressed in terms of lawful money of the United States of
America as aforesaid, whether pursuant to a judgment or otherwise, upon
conversion as aforesaid does not, after deduction of any and all premiums
and/or costs of exchange paid or payable by any Agent or any Bank in connection
with such conversion, yield the required amount expressed in terms of lawful
money of the United States of America, the Administrative Agent shall, on
behalf of and for the benefit of the affected Person, have a separate cause of
action for the additional amount required to yield the required amount
expressed in terms of lawful money of the United States of America.
13.17 Withholding Tax Remittances. If any withholding for,
or on account of, any present or future tax, duty or charge of whatsoever
nature is imposed or levied by or on behalf of any taxing jurisdiction or
authority (together with any interest and penalties thereon and additions
thereto) in respect of any payments to be made pursuant to this Agreement or
the Notes, the Company shall be entitled to withhold and remit such payment to
the applicable taxing authority whereupon such payment, for the purposes of
this Agreement and the Notes,
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shall be deemed to have been made as required hereunder or under the Notes,
notwithstanding anything contained elsewhere in this Agreement or in the Notes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
SEAGULL ENERGY CANADA LTD.
By: ____________________________________
Robert M. King,
Vice President
Address for Notices:
1001 Fannin, Suite 1700
Houston, Texas 77002
Attention: Robert M. King
with a copy to:
2900 Western Canadian Place
707 8th Avenue S.W.
Calgary, Alberta T2P 2M7
Attention: Mr. Lorne Martin
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CHEMICAL BANK OF CANADA, as Arranger,
as Administrative Agent and as a Bank
By: ____________________________________
Name: __________________________________
Commitment: Title: _________________________________
U.S. $15,000,000
By: ____________________________________
Name: __________________________________
Title: _________________________________
Address for Notices:
100 Yonge Street, Suite 90
Toronto, Ontario CANADA M5C 2W1
Attention: Mr. David McGorman
with a copy to:
Texas Commerce Bank National
Association 712 Main Street
Houston, Texas 77002
Attention: Manager, Energy Division
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THE BANK OF NOVA SCOTIA, as Paying
Agent, as Co-Agent and as a Bank
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $40,000,000
By: ____________________________________
Name: __________________________________
Title: _________________________________
Address for Notices:
International Banking Division-Loan
Accounting
14th Floor
44 King Street West
Toronto, Ontario CANADA M5H 1H1
Attention: Assistant Manager
with a copies to:
The Bank of Nova Scotia
Corporate Banking Calgary
Suite #3820, 700-2nd Street S.W.
Calgary, Alberta CANADA T2P 2N7
Attention: Vice President
and to:
The Bank of Nova Scotia
Suite 3000, 1100 Louisiana
Houston, Texas 77002
Attention: Mr. Mark A. Ammerman
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CANADIAN IMPERIAL BANK OF COMMERCE, as
Co-Agent and as a Bank
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $40,000,000
Address for Notices:
Oil and Gas Group
10th Floor, 855 2nd Street, S.W.
Calgary, Alberta CANADA T2P 2P2
Attention: Director
with a copy to:
Canadian Imperial Bank of Commerce
Two Houston Center, Suite 1200
909 Fannin Street
Houston, Texas 77010
Attention: Brian R. Swinford,
Vice President
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ABN AMRO BANK CANADA
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $15,000,000
By: ____________________________________
Name: __________________________________
Title: _________________________________
Address for Notices:
2500-650 West Georgia Street
Vancouver, British Columbia
CANADA V6B 4N8
Attention: Mr. Andre Nel
with a copy to:
ABN AMRO Bank N.V., Houston Agency
Three Riverway, Suite 1600
Houston, Texas 77056
Attention: Ms. Cheryl Lipshutz,
Vice President
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PARIBAS BANK OF CANADA
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $15,000,000
By: ____________________________________
Name: __________________________________
Title: _________________________________
Address for Notices:
Toronto-Dominion Centre
Royal Trust Tower
Suite 4100
Toronto, Ontario CANADA M5K 1N8
Attention: Mr. Francois LaPlace
with a copy to:
Banque Paribas, Houston Agency
1200 Smith, Suite 3100
Houston, Texas 77002
Attention: Barton D. Schouest,
Group Vice President
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BANK OF BOSTON CANADA
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $10,000,000
Address for Notices:
Attention: _____________________________
with a copy to:
First National Bank of Boston
100 Federal Street
Energy & Utilities 01-15-04
Boston, Massachusetts 02110
Attention: George W. Passela,
Managing Director
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NBD BANK, CANADA
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $10,000,000
Address for Notices:
BCE Place
161 Bay Street
P.O. Box 613
Toronto, Ontario CANADA M5J 2S1
Attention: Mr. Raymond W. Wise
with a copy to:
NBD Bank, N.A.
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Mr. Douglas R. Liftman,
Second Vice President
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SOCIETE GENERALE (CANADA)
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $10,000,000
Address for Notices:
Scotia Plaza
100 Yonge Street, Suite 1002
Toronto, Ontario CANADA M5C 2W1
Attention: Mr. Bert Coish
with a copy to:
Societe Generale, Southwest Agency
1111 Bagby, Suite 2020
Houston, Texas 77002
Attention: Mr. Richard Erbert,
Vice President
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THE BANK OF TOKYO CANADA
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $10,000,000
Address for Notices:
Park Place, 666 Burrard Street
Suite 2410
Vancouver, British Columbia CANADA
V6C 3L1
Attention: Mr. Ivan Hopkins
with a copy to:
The Bank of Tokyo, Ltd., Dallas Agency
909 Fannin, Suite 1104
Two Houston Center
Houston, Texas 77010
Attention: Mr. John M. McIntyre,
Vice President
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CREDIT LYONNAIS CANADA
By: ____________________________________
Commitment: Name: __________________________________
Title: _________________________________
U.S. $10,000,000
Address for Notices:
Bow Valley Square One
6th Avenue S.W., Suite 1670
Calgary, Alberta CANADA T2P 2R9
Attention: Mr. Robert K. McCutcheon
with a copy to:
Credit Lyonnais New York Branch
c/o Credit Lyonnais Houston
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attention: Mr. David Dodd
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