1
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF OCTOBER 9, 1997
AMONG
NEWFIELD EXPLORATION COMPANY
AS THE COMPANY,
AND
THE CHASE MANHATTAN BANK
AS AGENT
AND
THE BANKS SIGNATORY HERETO
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TABLE OF CONTENTS
Page
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Section 1. Definitions and Accounting Matters
1.01 Terms Defined Above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2. Commitments
2.01 Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.02 Borrowings, Continuations and Conversions; Letters of Credit . . . . . . . . . . . . . . . . . . . . . 18
2.03 Changes of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.04 Commitment Fee and Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.05 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.06 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.07 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.08 Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.09 Assumption of Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.10 Obligation to Reimburse and to Prepay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.11 Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3. Payments of Principal and Interest
3.01 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.02 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.03 Prior Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.03 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.04 Non-receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.05 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.06 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5. Capital Adequacy
5.01 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.02 Limitation on Eurodollar Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.03 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03 . . . . . . . . . . . . . . . . . . . . . . . 37
5.05 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Section 6. Conditions Precedent
6.01 Initial Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.02 Initial and Subsequent Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.03 Conditions Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7. Representations and Warranties
7.01 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.02 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.04 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.05 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.06 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.07 Use of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.10 Titles, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.11 No Material Misstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.12 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.13 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.14 Subsidiaries and Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.15 Location of Business and Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.17 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.18 Compliance with the Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8. Affirmative Covenants
8.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.02 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.03 Maintenance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.04 Engineering Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.05 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.06 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.07 ERISA Information and Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.08 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.09 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9. Negative Covenants
9.01 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.02 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.03 Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.04 Dividends, Distributions and Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.05 [reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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9.06 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.07 Limitation on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.08 Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.09 Proceeds of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.10 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.12 Working Capital Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.13 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.14 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.15 Sale of Oil and Gas Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.17 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.18 Subsidiaries and Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.19 Hydrocarbon Sales Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.20 Negative Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.21 Senior Unsecured Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 10. Events of Default; Remedies
10.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 11. The Agent
11.01 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.02 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.03 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.04 Rights as a Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.05 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.06 Non-Reliance on Agent and other Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.07 Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.08 Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 12. Miscellaneous
12.01 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
12.03 Payment of Expenses, Indemnities, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
12.04 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.05 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.06 Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.07 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.08 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.09 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.10 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
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12.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.12 NO ORAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.14 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
12.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.16 Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Annex I - Maximum Credit Amounts
Exhibit A - Form of Note
Exhibit B - Form of Borrowing, Continuation or Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Opinion of Agent's Counsel
Exhibit E - Form of Assignment Agreement
Exhibit F - Form of Acceptance Agreement
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.16 - Environmental Matters
Schedule 7.19 - Insurance
Schedule 9.01 - Debt
Schedule 9.01(h) - Certain Subsidiaries
Schedule 9.03 - Investments, Loans and Advances
Schedule 9.07 - Limitation on Leases
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 9,
1997 among: NEWFIELD EXPLORATION COMPANY, a corporation duly organized and
validly existing under the laws of the State of Delaware (the "Company"); each
of the banks that is or becomes a party hereto as provided in Section 12.06 and
their successors and assigns (individually, a "Bank" and, collectively, the
"Banks"); and THE CHASE MANHATTAN BANK, as agent for the Banks (in such
capacity, together with its successors in such capacity, the "Agent").
RECITALS
A. The Company, the Agent and certain of the Banks entered into a
Credit Agreement dated as of May 20, 1996 (as amended, the "Prior Credit
Agreement"). The Company has requested that the Banks amend and restate the
Prior Credit Agreement; and
B. The Banks have agreed to such request.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Terms Defined Above. As used in this Agreement, the
terms "Agent", "Bank", "Banks", "Company" and "Prior Credit Agreement" shall
have the meanings indicated above.
1.02 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1 or
in other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Additional Costs" shall have the meaning assigned to that
term in Section 5.01(a).
"Affected Loans" shall have the meaning assigned to that term
in Section 5.04.
"Affiliate" of any Person shall mean (i) any Person directly
or indirectly controlled by, controlling or under common control with
such first Person, (ii) any director or officer of such first Person
or of any Person referred to in clause (i) above and (iii) if any
Person in clause (i) above is an individual, any member of the
immediate family (including parents, spouse and children) of such
individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any
Person who is controlled by any
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such member or trust. For purposes of this definition, any Person
which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other governing
body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to "control" (including,
with its correlative meanings, "controlled by" and "under common
control with") such corporation or other Person.
"Agreement" shall mean this Amended and Restated Credit
Agreement, as the same may from time to time be amended, modified or
supplemented.
"Aggregate Commitments" at any time shall equal the amount
calculated in accordance with Section 2.03 hereof.
"Aggregate Maximum Credit Amounts" at any time shall equal
$125,000,000, as the same may be reduced pursuant to Section 2.03(b)
or increased pursuant to Section 2.03(d).
"Applicable Lending Office" shall mean, for each Bank and for
each type of Loan, the lending office of such Bank (or an Affiliate of
such Bank) designated for such type of Loan on the signature pages
hereof or such other offices of such Bank (or of an Affiliate of such
Bank) as such Bank may from time to time specify to the Agent and the
Company as the office by which its Loans of such Type are to be made
and maintained.
"Applicable Margin" shall mean for Base Rate Loans or
Eurodollar Loans the following rate per annum as applicable based on
the Borrowing Base Utilization Percentage in effect from time to time:
-----------------------------------------------------------------------------------------------
Greater than 30% but
Borrowing Base Less than or less than or equal
Utilization Percentage equal to 30% to 60% Greater than 60%
-----------------------------------------------------------------------------------------------
Eurodollar I II I II I II
.40% .50% .625% .75% .875% 1.00%
-----------------------------------------------------------------------------------------------
Base Rate 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------
I - Senior unsecured long - term debt of the Company is rated BBB - or
higher by Standard & Poors Corporation or Baa3 or higher by Moody's
Investors Service, Inc..
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II - Senior unsecured long-term debt of the Company is rated lower by
both Standard & Poors Corporation and Moody's Investors Service, Inc.
than the minimum rating in ranking I.
"Assignment" shall have the meaning assigned such term in
Section 12.06(b).
"Base Rate" shall mean, with respect to any Base Rate Loan,
for any day, the higher of (a) the highest Federal Funds Rate for any
such day plus 1/2 of 1% or (b) the Prime Rate for such day. Each
change in any interest rate provided for herein based upon the Base
Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates
based upon the Base Rate.
"Borrowing Base" in effect from time to time shall equal the
positive difference, if any, between the Calculated Borrowing Base and
the aggregate principal then outstanding on all Senior Unsecured Notes
of the Borrower.
"Borrowing Base Notice" shall mean a written notice sent to
the Company by the Agent notifying the Company of the Calculated
Borrowing Base and the Borrowing Base determined by the Banks for the
upcoming Borrowing Base Period.
"Borrowing Base Period" shall mean (a) initially, the period
from the Closing Date through April 30, 1998; and (b) thereafter, each
six month period beginning on May 1 or November 1 of each year.
"Borrowing Base Quarter " shall mean the period from the
Closing Date through January 31, 1998 and each subsequent three-month
period beginning with the first day of February, May, August or
November during the term of this Agreement.
"Borrowing Base Utilization Percentage" shall mean, as of any
day, the fraction expressed as a percentage, the numerator of which is
the balance of all Loans and the LC Exposure outstanding on such day,
and the denominator of which is the Borrowing Base in effect on such
day.
"Business Day" shall mean any day other than a day on which
commercial banks are authorized or required to close in New York, New
York and, where such term relates to a borrowing or continuation of, a
payment or prepayment of principal of or interest on, or a conversion
of or into, or the Interest Period for, a
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Eurodollar Loan or a notice by the Company with respect to any such
borrowing or continuation, payment, prepayment, conversion or Interest
Period, any day which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Calculated Borrowing Base" shall mean at any time an amount
equal to the amount determined in accordance with Section 2.08.
"Chase" shall mean The Chase Manhattan Bank.
"Closing Date" shall mean October 9, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commitment" shall mean for any Bank its obligation to make
Loans up to the lesser of the Bank's Maximum Credit Amount or the
Bank's Percentage Share of the then effective Aggregate Commitments
and to participate in the Letters of Credit as provided in Section
2.01(b).
"Consolidated Subsidiaries" shall mean each Subsidiary of the
Company (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been)
consolidated with the financial statements of the Company in
accordance with GAAP.
"Debt" shall mean, for any Person the sum of the following
(without duplication): (a) all obligations of such Person for borrowed
money or evidenced by bonds, debentures, notes or other similar
instruments; (b) all obligations of such Person (whether contingent or
otherwise) with respect to bankers' acceptances, letters of credit,
surety or other bonds and similar instruments; (c) all obligations of
such Person to pay the deferred purchase price of Property or services
(other than for borrowed money) arising in the ordinary course of
business of such Person; (d) all obligations under leases which shall
have been, or should have been, in accordance with GAAP, recorded as
capital leases in respect of which such Person is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against
loss; (e) all Debt and other obligations of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed by
such Person; (f) all Debt and other obligations of others guaranteed
by such Person; (g) all obligations or undertakings of such Person to
maintain or cause to be maintained the financial position or covenants
of other Persons; (h) all obligations or undertakings of such Person
with respect to payments received in consideration of oil, gas, or
other minerals yet to be acquired or produced at the
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time of payment (including without limitation obligations under
"take-or-pay" contracts to deliver gas in return for payments already
received and the undischarged balance of any production payment
created by such Person or for the creation of which such Person
directly or indirectly received payment) or with respect to other
obligations to deliver goods or services in consideration of advance
payments therefor but excluding gas imbalances arising in the ordinary
course of business between joint working interest owners of
production; and (i) obligations arising under future contracts, swap
contracts, or similar hedging agreements.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Designated Borrowing Base" shall mean an amount determined by
the Company for each Borrowing Base Quarter, of which the Company
gives notice to the Agent within three (3) days (i) after the
Company's receipt of a Borrowing Base Notice or (ii) prior to the
beginning of the second Borrowing Base Quarter during a Borrowing Base
Period; which amount shall be equal to or greater than the Designated
Borrowing Base Floor Amount, but less than or equal to 100 percent
(100%) of the Borrowing Base for the then current Borrowing Base
Period; provided, that the Designated Borrowing Base may be adjusted
from time to time pursuant to the terms and provisions of Sections
2.03(c) and 2.08(e) of this Agreement, and provided, further that the
Company may decrease the Designated Borrowing Base only (i) at the
beginning of each Borrowing Base Quarter to an amount equal to or
greater than the Designated Borrowing Base Floor Amount or (ii) in
accordance with the provisions of Section 2.03(c) hereof. The initial
Designated Borrowing Base for the first Borrowing Base Quarter is
$50,000,000.
"Designated Borrowing Base Floor Amount" shall mean (i) from
Closing Date through December 31, 1998, $50,000,000 and (ii)
thereafter, $75,000,000 or such other amount as is determined
pursuant to Section 2.03(c) hereof.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Engineering Reports" shall have the meaning assigned to that
term in Section 2.08.
"Environmental Laws" shall mean any and all Governmental
Requirements pertaining to health or the environment in effect in any
and all jurisdictions in which the Borrower or any Subsidiary is
conducting or at any time has conducted business, or where any
Property of the Borrower or any Subsidiary is located,
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including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 ("CERCLA"), as
amended, the Federal Water Pollution Control Act, as amended, the
Occupational Safety and Health Act of 1970, as amended, the Resource
Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and
other environmental conservation or protection laws. The term "oil"
shall have the meaning specified in OPA, the terms "hazardous
substance" and "release" (or "threatened release") have the meanings
specified in CERCLA, and the terms "solid waste" and "disposal" (or
"disposed") have the meanings specified in RCRA; provided, however,
that (i) in the event either OPA, CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning
shall apply subsequent to the effective date of such amendment, and
(ii) to the extent the laws of the state in which any Property of the
Borrower or any Subsidiary is located establish a meaning for "oil,"
"hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either OPA, CERCLA or RCRA, such
broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which together with the Company would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder, (ii) the
withdrawal of the Company, any Subsidiary or any ERISA Affiliate from
a Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as
a termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate a Plan by the PBGC or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer,
any Plan.
"Eurodollar Loans" shall mean Loans the interest rates on
which are determined on the basis of rates referred to in the
definition of "Fixed Eurodollar Rate" in this Section 1.02.
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"Event of Default" shall have the meaning assigned to that
term in Section 10.01(a).
"Excepted Liens" shall mean: (i) Liens for taxes, assessments
or other governmental charges or levies not yet due or which are being
contested in good faith by appropriate action and for which adequate
reserves have been maintained; (ii) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age
pension or public liability obligations not yet due or which are being
contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP; (iii)
operator's, vendors', carriers', warehousemen's, repairmen's,
mechanics', workmen's, materialmen's, construction or other like Liens
arising by operation of law in the ordinary course of business or
incident to the exploration, development, operation and maintenance of
Oil and Gas Properties or statutory landlord's liens, each of which is
in respect of obligations that have not been outstanding more than 90
days or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been maintained in
accordance with GAAP; (iv) any Liens reserved in leases or farmout
agreements for rent or royalties and for compliance with the terms of
the farmout agreements or leases in the case of leasehold estates, to
the extent that any such Lien referred to in this clause does not
materially impair the use of the Property covered by such Lien for the
purposes for which such Property is held by the Company or materially
impair the value of such Property subject thereto; (v) encumbrances
(other than to secure the payment of borrowed money or the deferred
purchase price of Property or services), easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations
in any rights of way or other Property of the Company for the purpose
of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil, coal or other minerals
or timber, and other like purposes, or for the joint or common use of
real estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any
rights of way or other Property which in the aggregate do not
materially impair the use of such rights of way or other Property for
the purposes of which such rights of way and other Property are held
by the Company or materially impair the value of such Property subject
thereto; and (vi) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations and other obligations of a
like nature incurred in the ordinary course of business.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with a member of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by
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the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the date for which such rate
is to be determined is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to Chase on such
day on such transactions as determined by the Agent.
"Fee Letter" shall mean the letter agreement from Chase and
Chase Securities Inc. to the Company dated October 3, 1997 concerning
certain fees in connection with this Agreement and any agreements or
instruments executed in connection therewith, as the same may be
amended or replaced from time to time.
"Financial Statements" shall mean the financial statement or
statements of the Company described or referred to in Section 7.02.
"Fixed Eurodollar Rate" shall mean, with respect to any
Eurodollar Loan, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) quoted by Chase at approximately 11:00 a.m.
London time (or as soon thereafter as practicable) two Business Days
prior to the first day of the Interest Period for such Loan for the
offering by Chase to leading banks in the London interbank market of
Dollar deposits having a term comparable to such Interest Period and
in an amount comparable to the principal amount of the Eurodollar Loan
to be made by the Banks for such Interest Period.
"Fixed Rate" shall mean, with respect to any Eurodollar Loan,
a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Agent to be equal to the Fixed Eurodollar
Rate for such Loan for the Interest Period for such Loan.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Governmental Authority" shall include the country, the state,
county, city and political subdivisions in which any Person or such
Person's Property is located or which exercises valid jurisdiction
over any such Person or such Person's Property, and any court, agency,
department, commission, board, bureau or instrumentality of any of
them including monetary authorities which exercises valid jurisdiction
over any such Person or such Person's Property. Unless otherwise
specified, all references to Governmental Authority herein shall mean
a Governmental Authority having jurisdiction over, where applicable,
the Company or any of its Properties or the Agent, any Bank or any
Applicable Lending Office.
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"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or
other directive or requirement (whether or not having the force of
law), including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls,
of any Governmental Authority.
"Highest Lawful Rate" shall mean, with respect to each Bank,
the maximum nonusurious interest rate, if any, that at any time or
from time to time may be contracted for, taken, reserved, charged or
received on the Notes or on other Indebtedness under laws applicable
to such Bank which are presently in effect or, to the extent allowed
by law, under such applicable laws which may hereafter be in effect
and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles,
interests and estates now or hereafter acquired in and to oil and gas
leases, oil, gas and mineral leases, or other liquid or gaseous
hydrocarbon leases, mineral fee interests, overriding royalty and
royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons and all products refined or
separated therefrom.
"Indebtedness" shall mean any and all amounts owing or to be
owing by the Company to the Banks including the Loans and the LC
Exposure in connection with the Notes or any Loan Document and all
renewals, extensions and/or rearrangements of any of the above.
"Indemnified Parties" shall have the meaning assigned to that
term in Section 12.03(b).
"Indemnity Matters" shall mean any and all actions, suits,
proceedings (including any investigations, litigation or inquiries),
claims, demands and causes of action made or threatened against a
Person and, in connection therewith, all losses, liabilities, damages
(including, without limitation, consequential damages) or reasonable
costs and expenses of any kind or nature whatsoever incurred by such
Person whether caused by the sole or concurrent negligence of such
Person seeking indemnification.
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"Indenture" shall mean the Indenture pursuant to which the
Senior Unsecured Notes will be issued on terms substantially similar
to those set forth in the offering circular of the Borrower dated
September 25, 1997.
"Initial Funding" shall mean the funding of the initial Loans
or issuance of the initial Letters of Credit pursuant to Section 6.01
hereof.
"Interest Period" shall mean with respect to any Eurodollar
Loan, the period commencing on the date such Eurodollar Loan is made
and ending on the fourteenth day thereafter (subject to availability)
("Irregular Interest Period") or on the numerically corresponding day
in the first, second, third or sixth calendar month thereafter, as the
Company may select as provided in Section 2.02 (or such longer period
as may be requested by the Company and agreed to by the Majority
Banks), except that each Interest Period (other than an Irregular
Interest Period) which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall
end on the last Business Day of the appropriate subsequent calendar
month.
Notwithstanding the foregoing: (i) no Interest Period may
commence before and end after the scheduled maturity of the Notes;
(ii) no Interest Period for any Eurodollar Loan may end after the due
date of any installment, if any, provided for in Section 3.01 hereof
to the extent that such Eurodollar Loan would need to be prepaid prior
to the end of such Interest Period in order for such installment to be
paid when due; (iii) each Interest Period which would otherwise end on
a day which is not a Business Day shall end on the next succeeding
Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day
(other than an Irregular Interest Period)); and (iv) no Interest
Period (other than an Irregular Interest Period) shall have a duration
of less than one month and, if the Interest Period for any Eurodollar
Loans would otherwise be for a shorter period (other than an Irregular
Interest Period), such Loans shall not be available hereunder.
"LC Exposure" at any time shall mean the difference between
(i) the aggregate face amount of all undrawn and uncancelled Letters
of Credit and the aggregate of all amounts drawn under all Letters of
Credit and not yet reimbursed and (ii) the aggregate amount of all
cash securing outstanding Letters of Credit pursuant to Section
2.10(b).
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"Letters of Credit" shall mean the letters of credit issued
pursuant to Section 2.01(b) and all reimbursement obligations
pertaining to any such letter of credit, and "Letter of Credit" shall
mean any one of the Letters of Credit and the reimbursement
obligations pertaining thereto.
"Letter of Credit Agreements" shall mean the written
agreements with the Agent, as issuing bank for any Letter of Credit,
executed or hereafter executed in connection with the issuance by the
Agent of the Letters of Credit, such agreements to be on the Agent's
customary form for letters of credit of comparable amount and purpose,
as from time to time in effect or otherwise agreed to by the Company
and the Agent.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of
the Property, whether such interest is based on the common law,
statute or contract, and whether such obligation or claim is fixed or
contingent, and including but not limited to (i) the lien or security
interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes or (ii) production payments and the
like payable out of Oil and Gas Properties. The term "Lien" shall
include reservations, exceptions, encroachments, easements, rights of
way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property. For the purposes of
this Agreement, the Company shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale
agreement, or leases under a financing lease or other arrangement
pursuant to which title to the Property has been retained by or vested
in some other Person in a transaction intended to create a financing.
"Loan Documents" shall mean the Notes, this Agreement, the
Letters of Credit, the Letter of Credit Agreements, the Fee Letter and
any and all other agreements or instruments now or hereafter executed
and delivered by the Company or any other Person (other than
participation or similar agreements between any Bank and any other
bank or creditor with respect to any Indebtedness pursuant to this
Agreement) in connection with, or as security for the payment or
performance of, the Notes, this Agreement or reimbursement obligations
under the Letters of Credit, as such agreements may be amended,
supplemented or restated from time to time.
"Loans" shall mean the loans as provided for by Section
2.01(a).
"Majority Banks" shall mean, at any time while no Loans are
outstanding, Banks having at least sixty-six and two-thirds percent
(66-2/3%) of the Aggregate
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Commitments and, at any time while Loans are outstanding, Banks
holding at least sixty-six and two-thirds percent (66-2/3%) of the
outstanding aggregate principal amount of the Loans (without regard to
any sale by a Bank of a participation in any Loan under Section
12.06(c)).
"Material Adverse Effect" shall mean the occurrence or
non-occurrence of any condition, event, or state of affairs (a) which
has a present (as of the time in question) material and adverse effect
on the financial condition or affairs of the Company and its
Subsidiaries or (b) which has a reasonable probability of having a
material and adverse effect, after the time in question, on the
financial or affairs of the Company and its Subsidiaries. Periodic
and/or seasonal declines in energy prices shall not constitute a
Material Adverse Effect.
"Maturity Date" shall mean October 31, 2002.
"Maximum Credit Amount" shall mean, as to each Bank, the
amount set forth opposite such Bank's name on Annex I under the
caption "Maximum Credit Amount", as the same may be: (i) reduced
pursuant to Section 2.03(b) hereof pro rata to each Bank based on its
Percentage Share, (ii) increased, with the consent of such Bank,
pursuant to Section 2.03(d), or (iii) modified from time to time to
reflect any assignments permitted by Section 12.06(b).
"Multiemployer Plan" shall mean a Plan defined as such in
Section 3(37) or 4001(a)(3) of ERISA.
"Notes" shall mean the Notes provided for in Section 2.06,
together with any and all renewals, extensions for any period,
increases, rearrangements, substitutions or modifications thereof.
"Oil and Gas Properties" shall mean Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon
Interests; all presently existing or future unitization, pooling
agreements and declarations of pooled units and the units created
thereby (including without limitation all units created under orders,
regulations and rules of any Governmental Authority) which may affect
all or any portion of the Hydrocarbon Interests; all operating
agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or
processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests; all Hydrocarbons in and under and which may be produced and
saved or attributable to the Hydrocarbon Interests, including all oil
in tanks, the lands covered thereby and all rents, issues, profits,
proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; all tenements, hereditaments, appurtenances
and
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Properties in any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests and all Properties, rights,
titles, interests and estates described or referred to above,
including any and all Property, real or personal, now owned or
hereafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such
Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment or other personal property which may be on such premises for
the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or
other wells, buildings, structures, fuel separators, liquid extraction
plants, plant compressors, pumps, pumping units, field gathering
systems, tanks and tank batteries, fixtures, valves, fittings,
machinery and parts, engines, boilers, meters, apparatus, equipment,
appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements and servitudes
together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.
"Other Taxes" shall have the meaning assigned to such term in
Section 4.06(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Loans and
Commitments to be provided by a Bank under this Agreement as indicated
on Annex I hereto, as modified from time to time to reflect any
increases in the Aggregate Maximum Credit Amounts permitted by Section
2.03(d) or any assignments permitted by Section 12.06(b).
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust,
unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form of
entity.
"Plan" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA, which (a) is currently or hereafter
sponsored, maintained or contributed to by the Company, any Subsidiary
or an ERISA Affiliate or (b) was at any time during the preceding six
calendar years sponsored, maintained or contributed to, by the
Company, any Subsidiary or an ERISA Affiliate.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or any other amount payable by the Company under this
Agreement or any Note which is not paid when due (whether at stated
maturity, by acceleration or
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otherwise), a rate per annum during the period commencing on the due
date until such amount is paid in full or the default is cured or
waived equal to 2% per annum above the Base Rate as in effect from
time to time plus the Applicable Margin (if any), but in no event to
exceed the Highest Lawful Rate provided that, if such amount in
default is principal of a Eurodollar Loan, the "Post-Default Rate" for
such principal shall be, for the period commencing on the due date and
ending on the last day of the Interest Period therefor, 2% per annum
above the interest rate for such Loan as provided in Section 3.02(b),
but in no event to exceed the Highest Lawful Rate.
"Prime Rate" shall mean the rate of interest from time to time
announced publicly by Chase at the Principal Office as its prime
commercial lending rate. Such rate is set by Chase as a general
reference rate of interest, taking into account such factors as Chase
may deem appropriate, it being understood that many of Chase's
commercial or other loans are priced in relation to such rate, that it
is not necessarily the lowest or best rate actually charged to any
customer and that Chase may make various commercial or other loans at
rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the
Agent, presently located at 270 Park Avenue, New York, New York 10017.
"Prior Credit Agreement" shall mean that certain Credit
Agreement dated as of May 20, 1996, as amended prior to the date of
this Agreement, among the Company, the Agent and the banks parties
thereto.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last Business Day of each
June, September, December, and March in each year, the first of which
shall be December 31, 1997, provided, however, that if such day is not
a Business Day, such Quarterly Date shall be the next succeeding
Business Day.
"Redetermination Date" shall have the meaning assigned to that
term in Section 2.08(a).
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as the
same may be amended or supplemented from time to time.
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"Regulatory Change" shall mean, with respect to any Bank, any
change after the Closing Date in any Governmental Requirement
(including Regulation D) or the adoption or making after such date of
any interpretations, directives or requests applying to a class of
banks (including such Bank or its Applicable Lending Office) of or
under any Governmental Requirement (whether or not having the force of
law) by any court or Governmental Authority charged with the
interpretation or administration thereof.
"Required Payment" shall have the meaning assigned to that
term in Section 4.04.
"Reserve Report" shall mean a report, in form and substance
satisfactory to the Agent, setting forth, as of the last day of each
December (the "December 31 Reserve Report") (or such other date in the
event of an unscheduled redetermination) the proved oil and gas
reserves attributable to the Company's Oil and Gas Properties,
together with a projection of the rate of production and future net
income, production, severance or similar taxes, operating expenses and
capital expenditures with respect thereto as of such date, based upon
the pricing assumptions consistent with SEC reporting requirements at
the time. Furthermore, such information shall be provided for each
individual well, unit or lease comprising the Company's Oil and Gas
Properties and by category of the reserves contained in each well,
unit or lease including proved producing, proved non-producing and
proved undeveloped. The term "Reserve Report" shall also include the
information to be provided by the Company by June 30 of each year
pursuant to Section 8.04(a) (the "June 30 Reserve Report").
"Responsible Officer" shall mean as to any Person, the Chief
Executive Officer, the President or any Vice President of such Person
and, with respect to financial matters, the term "Responsible Officer"
shall include the principal financial officer of such Person. Unless
otherwise specified, all references to a Responsible Officer herein
shall mean a Responsible Officer of the Company.
"Scheduled Redetermination Date" shall have the meaning
assigned to that term in Section 2.08(d).
"SEC" shall mean the Securities and Exchange Commission or any
successor Governmental Authority.
"Senior Unsecured Notes" shall mean those certain unsecured
senior notes in the aggregate original principal amount of up to
$150,000,000 to be issued under the Indenture and all obligations
relating thereto.
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"Special Entity" shall mean any joint venture, limited
liability company or partnership, limited duration company, general or
limited partnership or any other type of partnership or company other
than a corporation in which the Company and/or one or more of its
other Subsidiaries is a member, owner, partner or joint venturer and
owns, directly or indirectly, at least a majority of the equity of
such entity or controls such entity, but excluding any tax
partnerships that are not classified as partnerships under state law.
For purposes of this definition, any Person which owns directly or
indirectly an equity investment in another Person which allows the
first Person to manage or elect managers who manage the normal
activities of such second Person will be deemed to "control" such
second Person (e.g. a sole general partner controls a limited
partnership).
"Special Purpose Subsidiary" shall mean any Subsidiary
incurring Debt for the purpose of acquisition and/or exploration and
development of Oil & Gas Properties if and only if the Company and all
other Subsidiaries are not liable, whether directly or indirectly,
contingently or otherwise, for such Debt.
"Subsidiary" shall mean (i) any corporation of which a
majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled
by the Company or one or more of the Subsidiaries or by the Company
and one or more of the Subsidiaries and (ii) any Special Entity. For
the purposes of Section 9.12 and Section 9.13 of the Credit Agreement,
the definition of Subsidiary shall not include any Special Purpose
Subsidiaries.
"Swap Contract" shall mean any crude oil or natural gas price
swap, price cap, price floor, price collar, forward agreement, or
other exchange or price protection transaction or any combination of
such transactions or agreements or options with respect to any such
transaction or agreement.
"Taxes" shall have the meaning assigned such term in Section
4.06(a).
"Type" shall mean, with respect to any Loan, a Base Rate Loan
or a Eurodollar Loan.
"Unavailable Amount" shall mean, at any time, the difference
between the Aggregate Maximum Credit Amounts and the Aggregate
Commitments.
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1.03 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Banks hereunder shall be prepared,
in accordance with GAAP as in effect, applied on a basis consistent with the
audited financial statements of the Company referred to in Section 7.02 (except
for changes concurred with by the Company's independent public accountants).
Section 2. Commitments.
2.01 Loans and Letters of Credit.
(a) Each Bank severally agrees, on the terms of this
Agreement, to make Loans to the Company during the period from and
including (i) the Closing Date or (ii) such later date that such Bank
becomes a party to this Agreement as provided in Section 12.06(b), to
and up to, but excluding the Maturity Date in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount
of such Bank's Commitment as then in effect; provided, however, that
the aggregate principal amount of all such Loans by all Banks
hereunder at any one time outstanding together with the LC Exposure
shall not exceed the Aggregate Commitments. Subject to the terms of
this Agreement, during the period from the Closing Date to and up to,
but excluding the Maturity Date, the Company may borrow, repay and
reborrow the amount described in this Section 2.01(a).
(b) During the period from and including the Closing Date
to but excluding the Maturity Date, the Agent, as issuing bank for the
Banks, agrees to extend credit for the account of the Company at any
time and from time to time by issuing, renewing, extending or
reissuing Letters of Credit; provided however, the LC Exposure at any
one time outstanding shall not exceed the lesser of (A) $25,000,000 or
(B) the Aggregate Commitments, as then in effect, minus the aggregate
principal amount of all Loans then outstanding. The Banks shall
automatically participate in such Letters of Credit according to their
respective Percentage Shares.
(c) Subject to the other terms and provisions of this
Agreement, at the option of the Company, the Loans may be Base Rate
Loans or Eurodollar Loans; provided that, without the prior written
consent of the Majority Banks, no more than six (6) Eurodollar Loans
may be outstanding at any time.
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2.02 Borrowings, Continuations and Conversions; Letters of
Credit.
(a) The Company shall give the Agent (which shall
promptly notify the Banks) advance notice as hereinafter provided of
each borrowing hereunder, which shall specify the aggregate amount of
such borrowing and the date (which shall be a Business Day) of the
Loans to be borrowed and, in the case of Eurodollar Loans, the
duration of the Interest Period therefor.
(b) All Base Rate Loan borrowings shall be in amounts of
at least $500,000, or the remaining balance of the Aggregate
Commitments, if less or any whole multiple of $500,000 in excess
thereof and all Eurodollar Loans shall be in amounts of at least
$1,000,000 or any whole multiple of $1,000,000 in excess thereof.
(c) All borrowings, continuations and conversions shall
require advance written notice to the Agent (which shall promptly
notify the Banks) in the form of Exhibit B hereto (or telephonic
notice promptly confirmed by such a written notice), which in each
case shall be irrevocable, from the Company to be received by the
Agent not later than 11:00 a.m. New York time at least one Business
Day prior to the date of such Base Rate borrowing and three Business
Days prior to the date of each Eurodollar Loan borrowing, continuation
or conversion. Without in any way limiting the Company's obligation to
confirm in writing any telephonic notice, the Agent may act without
liability upon the basis of telephonic notice believed by the Agent in
good faith to be from the Company prior to receipt of written
confirmation. In each such case, the Company hereby waives the right
to dispute the Agent's record of the terms of such telephonic notice
except in the case of gross negligence or wilful misconduct by the
Agent.
(d) Subject to the provisions made in this Section
2.02(d), the Company may elect to continue all or any part of any
Eurodollar Loan beyond the expiration of the then current Interest
Period relating thereto by giving advance notice as provided in
Section 2.02(c) to the Agent (which shall promptly notify the Banks)
of such election, specifying the amount of such Loan to be continued
and the Interest Period therefor. In the absence of such a timely and
proper election, the Company shall be deemed to have elected to
convert such Eurodollar Loan to a Base Rate Loan pursuant to Section
2.02(e). All or any part of any Eurodollar Loan may be continued as
provided herein, provided that (i) any continuation of any such Loan
shall be (as to each Loan as continued for an applicable Interest
Period) in amounts of at least $1,000,000 or any whole multiple of
$1,000,000 in excess thereof and (ii) no Default shall have occurred
and be continuing. If a Default shall have occurred and be
continuing, each Eurodollar Loan shall be converted to a Base Rate
Loan on the last day of the Interest Period applicable thereto.
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(e) The Company may elect to convert all or any part of
any Eurodollar Loan on the last day of the then current Interest
Period relating thereto to a Base Rate Loan by giving advance notice
to the Agent (which shall promptly notify the Banks) of such election.
Subject to the provisions made in this Section 2.02(e), the Company
may elect to convert all or any part of any Base Rate Loan at any time
and from time to time to a Eurodollar Loan by giving advance notice as
provided in Section 2.02(c) to the Agent (which shall promptly notify
the Banks) of such election. All or any part of any outstanding Loan
may be converted as provided herein, provided that (i) any conversion
of any Base Rate Loan into a Eurodollar Loan shall be (as to each such
Loan into which there is a conversion for an applicable Interest
Period) in amounts of at least $1,000,000 or any whole multiple of
$1,000,000 in excess thereof and (ii) no Default shall have occurred
and be continuing. If a Default shall have occurred and be
continuing, no Loan may be converted into a Eurodollar Loan.
(f) Not later than 11:00 a.m. New York time on the date
specified for each borrowing hereunder, each Bank shall make available
the amount of the Loan to be made by it on such date to the Agent, to
an account which the Agent shall specify, in immediately available
funds, for the account of the Company. The amounts so received by the
Agent shall, subject to the terms and conditions of this Agreement, be
made available to the Company by transferring the same, in immediately
available funds, to an account of the Company, designated by the
Company and maintained with Chase at the Principal Office.
(g) The Company shall give the Agent (which shall
promptly notify the Banks of such request and their Percentage Share
of such Letter of Credit) advance notice to be received by the Agent
not later than 11:00 a.m. New York time not less than three (3)
Business Days prior thereto of each request for the issuance and at
least three (3) Business Days (or such longer notice as may be
required by the Agent to allow the Agent to comply with the notice
requirement for extension embodied in the Letter of Credit) prior to
the date of the renewal, extension or reissuance of a Letter of Credit
hereunder which request shall specify the amount of such Letter of
Credit, the date (which shall be a Business Day) such Letter of Credit
is to be issued, renewed or extended, the duration thereof, the name
and address of the beneficiary thereof, the form of the Letter of
Credit and such other information as the Agent may reasonably request
all of which shall be reasonably satisfactory to the Agent. Subject
to the terms and conditions of this Agreement, on the date specified
for the issuance, renewal or extension of a Letter of Credit, the
Agent shall issue such Letter of Credit to the beneficiary thereof.
In conjunction with the issuance of each Letter of Credit, the
Company shall execute a Letter of Credit Agreement. In the event of
any conflict between any provision of a Letter of Credit Agreement and
this Agreement, the Company, the Agent and the Banks hereby agree that
the provisions of this Agreement shall govern.
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The Agent will send to the Company and each Bank, immediately
upon issuance of any Letter of Credit, or an amendment thereto, a true
and complete copy of such Letter of Credit, or such amendment thereto.
2.03 Changes of Commitments.
(a) The Aggregate Commitments shall at all times be equal
to the lesser of (i) the Aggregate Maximum Credit Amounts after
adjustments resulting from reductions pursuant to Section 2.03(b) or
increases pursuant to Section 2.03(d), (ii) the Borrowing Base as
determined from time to time and (iii) the Designated Borrowing Base
as determined from time to time.
(b) The Company shall have the right to terminate or to
reduce the amount of the Aggregate Maximum Credit Amounts at any time
or from time to time upon not less than three (3) Business Days' prior
notice to the Agent (which shall promptly notify the Banks) of each
such termination or reduction, which notice shall specify the
effective date thereof and the amount of any such reduction (which
shall not be less than $5,000,000, or any whole multiple of $1,000,000
in excess thereof) and shall be irrevocable and effective only upon
receipt by the Agent. The Aggregate Maximum Credit Amounts once
terminated or reduced may not be reinstated.
(c) At each such time as the Aggregate Maximum Credit
Amounts are reduced pursuant to Section 2.03(b), the Designated
Borrowing Base Floor Amount shall be redetermined by the Majority
Banks and the Company and shall be mutually agreeable to the Majority
Banks and the Company. If no mutually agreeable Designated Borrowing
Base Floor Amount can be determined, the Designated Borrowing Base
Floor Amount shall be reduced by a proportionate amount.
(d) The Company shall have the right, without the consent
of the Banks but subject to the approval of the Agent (which consent
shall not be unreasonably withheld), to effectuate from time to time
an increase in the Aggregate Maximum Credit Amounts under this
Agreement by adding to this Agreement one or more commercial banks or
other financial institutions (who shall, upon completion of the
requirements stated in this Section 2.03(d), constitute Banks
hereunder), or by allowing one or more Banks to increase their Maximum
Credit Amount hereunder, so that such added and increased Maximum
Credit Amount(s) shall equal the increase in Aggregate Maximum Credit
Amounts effectuated pursuant to this Section 2.03(d); provided that:
(i) no increase in the Aggregate Maximum Credit Amounts pursuant to
this Section 2.03(d) shall result in the Aggregate Maximum Credit
Amounts exceeding $200,000,000, (ii) no Bank's Maximum Credit Amount
shall be increased without the consent of such Bank, and (iii) if as a
result of an increase in the Aggregate Maximum Credit Amounts pursuant
to this Section 2.03(d) the Percentage Share of any Bank is decreased
and such Bank is required to
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assign or have prepaid its then outstanding Eurodollar Loans to comply
with its new Percentage Share, such reallocation shall be subject to
Section 5.05. The Company shall give the Agent three (3) Business
Days' prior written notice of its intent to increase the Aggregate
Maximum Credit Amounts pursuant to this Section 2.03(d). Such notice
shall specify each new commercial bank or other financial institution,
if any, the changes in amounts of Aggregate Maximum Credit Amounts
that will result, and such other information as is reasonably
requested by the Agent. Each new commercial bank or other financial
institution, and each Bank agreeing to increase its Maximum Credit
Amount, shall execute and deliver to the Agent an Acceptance Agreement
substantially in the form of Exhibit F pursuant to which it becomes a
party hereto or increases its Maximum Credit Amount, as the case may
be, which document, in the case of a new commercial bank or other
financial institution, shall (among other matters) specify the
Applicable Lending Office of such new commercial bank or other
financial institution. In addition, the Agent shall prepare and
deliver to the Company and each Bank a new Annex I reflecting the new
Percentage Share of each Bank and its Maximum Credit Amount. Finally,
the Company shall execute and deliver a Note, in substantially the
form of Exhibit A, in the principal amount of the Maximum Credit
Amount of each new commercial bank or other financial institution, or
a replacement Note in the principal amount of the increased Maximum
Credit Amount of each Bank agreeing to increase its Maximum Credit
Amount, as the case may be. The Company shall also deliver other
documents of the nature referred to in Section 6.01(a) to the Agent in
such form and substance as may be reasonably required by it. Upon
execution and delivery of the appropriate documentation and the
delivery to it of its Note, such new commercial bank or other
financial institution shall constitute a "Bank" hereunder with a
Maximum Credit Amount as specified in the new Annex I delivered
pursuant to this Section 2.03(d), or such Bank's Maximum Credit Amount
shall increase as specified therein, as the case may be.
2.04 Commitment Fee and Other Fees.
(a) The Company shall pay to the Agent for the account of
each Bank the following fees:
(i) a Commitment Fee on the daily average unused
amount of the Aggregate Commitments for the period from and
including the Closing Date up to but excluding the earlier of
the date the Aggregate Commitments are terminated or the
Maturity Date, at a rate per annum equal to the applicable
Commitment Fee set forth in the table below based on the
Borrowing Base Utilization Percentage in effect from time to
time.
(ii) an Unavailable Fee on the Unavailable Amount
from time to time in effect for the period from and including
the Closing Date up to but excluding the earlier of the date
the Aggregate Commitments are terminated or the
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Maturity Date, at a rate per annum equal to the applicable
Unavailable Fee set forth in the table below based on the
Borrowing Base Utilization Percentage in effect from time to
time.
------------------------------------------------------------------------------------------------
Greater than 30% but
Borrowing Base Less than or less than or equal
Utilization equal to 30% to 60% Greater than 60%
Percentage
------------------------------------------------------------------------------------------------
Commitment Fee 0.20% 0.25% 0.30%
------------------------------------------------------------------------------------------------
Unavailable Fee 0.10% 0.10% 0.10%
------------------------------------------------------------------------------------------------
Accrued Commitment Fees and Unavailable Fees shall be payable on each
Quarterly Date in arrears and on the earlier of the date the Aggregate
Commitments are terminated or the Maturity Date.
(b) The Company agrees to pay to the Agent for the pro
rata benefit of the Banks commissions for issuing the Letters of
Credit (calculated separately for each Letter of Credit) at the rate
per annum equal to the then effective Applicable Margin for Eurodollar
Loans times the daily average outstanding of the maximum liability of
the Agent projected to be existing from time to time under such Letter
of Credit, provided that each Letter of Credit shall bear a minimum
commission of $500.00 and that each Letter of Credit shall be deemed
to be outstanding up to the full face amount of the Letter of Credit
until the Agent has received the cancelled Letter of Credit or a
written cancellation of the Letter of Credit from the beneficiary of
such Letter of Credit in form and substance acceptable to the Agent,
or for any reductions in the amount of the Letter of Credit (other
than from a drawing), written notification from the beneficiary of
such Letter of Credit. In addition the Company shall pay the Agent a
fronting fee for issuing the Letters of Credit (calculated separately
for each Letter of Credit) of 1/8% per annum times the daily average
outstanding of the maximum liability of the Agent projected to be
existing from time to time under such Letter of Credit. Such
commissions are payable in advance at issuance of the Letter of
Credit.
(c) The Company shall pay to Chase for the account of
Chase such other fees as are set forth in the Fee Letter on the dates
specified therein to the extent not paid prior to the date of this
Agreement, or as may be mutually agreed upon in writing by the Company
and Chase.
2.05 Several Obligations. The failure of any Bank to make
any Loan to be made by it or to provide funds for disbursements or
reimbursements under the Letters of Credit on the date specified therefor shall
not relieve any other Bank of its obligation to make its Loan or to
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provide funds on such date, but no Bank shall be responsible for the failure of
any other Bank to make a Loan to be made by such other Bank or to provide funds
to be provided by such other Bank. If a Bank (or Banks) fails or refuses to
make any Loan or to provide funds for disbursements or reimbursements under
Letters of Credit under circumstances contemplated in this subparagraph, then,
the Company may replace such Bank with a bank acceptable to the Agent. The
nonperforming Bank shall promptly assign its Loans and Commitment to the new
bank as provided in Section 12.06(b).
2.06 Notes. The Loans made by each Bank shall be evidenced
by a single promissory note of the Company in substantially the form of Exhibit
A hereto, dated (i) the Closing Date, (ii) the effective date of an Assignment
pursuant to Section 12.06(b) or (iii) the effective date of an increase of the
Aggregate Maximum Credit Amounts, payable to the order of such Bank in a
principal amount equal to its Maximum Credit Amount as in effect and otherwise
duly completed. The date, amount, Type, interest rate and Interest Period of
each Loan made by each Bank, and all payments made on account of the principal
thereof, shall be recorded by such Bank on its books for its Note, and, prior
to any transfer, endorsed by such Bank on the schedule attached to such Note or
any continuation thereof.
2.07 Prepayments.
(a) The Company may prepay the Base Rate Loans upon not
less than one (1) Business Days' prior notice to the Agent (which
shall promptly notify the Banks), which notice shall specify the
prepayment date (which shall be a Business Day) and the amount of the
prepayment (which shall be at least $500,000 or the remaining
aggregate principal balance outstanding on the Notes, if less) and
shall be irrevocable and effective only upon receipt by the Agent,
provided that interest on the principal prepaid, accrued to the
prepayment date, shall be paid on the prepayment date. The Company
may prepay Eurodollar Loans on the same condition as for Base Rate
Loans and in addition such prepayments of Eurodollar Loans shall be
subject to the terms of Section 5.05 and shall be in an amount equal
to all of the Eurodollar Loans for the Interest Period prepaid.
(b) If, after giving effect to any termination or
reduction of the Aggregate Maximum Credit Amounts pursuant to Section
2.03(b), the outstanding aggregate principal amount of the Loans plus
the LC Exposure exceeds the Aggregate Maximum Credit Amounts, the
Company shall (i) pay or prepay the Loans on the date of such
termination or reduction in an aggregate principal amount equal to the
excess, together with interest on the principal amount paid accrued to
the date of such prepayment and (ii) if any excess remains after
prepaying all of the Loans, pay to the Agent on behalf of the Banks an
amount equal to the excess, to be held as cash collateral as provided
in Section 2.10 hereof.
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(c) Upon any redetermination of the amount of the
Borrowing Base in accordance with Section 2.08, if the redetermined
Borrowing Base is less than the aggregate outstanding principal amount
of the Loans plus the LC Exposure ("Borrowing Base Deficiency"), then
the Company shall within ninety (90) days of receipt of written notice
thereof: (i) prepay the Loans in an aggregate principal amount equal
to such excess together with interest on the principal amount paid
accrued to the date of such prepayment and (ii) if a Borrowing Base
Deficiency remains after prepaying all of the Loans because of LC
Exposure, pay to the Agent on behalf of the Banks an amount equal to
such Borrowing Base Deficiency to be held as cash collateral as
provided in Section 2.10(b) hereof.
(d) Upon any change of the Designated Borrowing Base, if
the new Designated Borrowing Base is less than the aggregate
outstanding principal amount of the Loans plus the LC Exposure
("Designated Borrowing Base Deficiency"), then the Company shall on
the effective date of such new Designated Borrowing Base Deficiency:
(i) prepay the Loans in an aggregate principal amount equal to such
excess together with interest on the principal amount paid accrued to
the date of such prepayment and (ii) if a Designated Borrowing Base
Deficiency remains after prepaying all of the Loans because of LC
Exposure, pay to the Agent on behalf of the Banks an amount equal to
such Designated Borrowing Base Deficiency to be held as cash
collateral as provided in Section 2.10(b) hereof.
(e) Prepayments permitted or required under this Section
2.07 shall be without premium or penalty except as required under
Section 5.05 for prepayment of Eurodollar Loans. Any prepayment made
may be reborrowed subject to the then effective Aggregate Commitments.
2.08 Borrowing Base.
(a) The Calculated Borrowing Base shall be determined in
accordance with Section 2.08(b) by the Agent with the concurrence of
the Majority Banks and is subject to redetermination in accordance
with Section 2.08(d). Upon any redetermination of the Calculated
Borrowing Base, such redetermination shall remain in effect until the
next successive Redetermination Date. "Redetermination Date" shall
mean the date that the redetermined Borrowing Base becomes effective
subject to the notice requirements specified in Section 2.08(e) both
for scheduled redeterminations and unscheduled redeterminations. So
long as any of the Commitments are in effect and until all of the
Loans outstanding hereunder are paid in full, this facility shall be
governed by the then effective Borrowing Base. During the period from
and after the Closing Date until the next Redetermination Date, the
amount of the Calculated Borrowing Base shall be $225,000,000.
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(b) Upon receipt of the reports required by Section 8.04
and such other reports, data and supplemental information as may from
time to time be reasonably requested by the Agent (the "Engineering
Reports"), the Agent will redetermine a new Calculated Borrowing Base.
Such redetermination will be in accordance with the Agent's normal
and customary procedures for evaluating oil and gas reserves and other
related assets as such exist at that particular time. The Agent in
its sole discretion, may make adjustments to the rates, volumes,
prices and other assumptions set forth therein. The Agent shall
propose to the Banks a new Calculated Borrowing Base within 30 days
following receipt by the Agent of the Engineering Reports in a timely
and complete manner. After having received notice of such proposal by
the Agent, the Majority Banks shall have ten (10) days to agree or
disagree with such proposal. If at the end of 10 days, the Majority
Banks have not communicated their approval or disapproval, such
silence shall be deemed to be an approval and the Agent's proposal
shall be the new Calculated Borrowing Base. If however, the Majority
Banks notify the Agent within 10 days of their disapproval, the
Majority Banks shall, within a reasonable period of time, agree on a
new Calculated Borrowing Base.
(c) The Agent may exclude any Oil and Gas Property or
portion of production therefrom or any income from any other Property
from the Calculated Borrowing Base, at any time, because title
information is not reasonably satisfactory or such Property is not
assignable.
(d) So long as any of the Commitments are in effect and
until payment in full of all Loans hereunder, on or around the first
Business Day of each May and November, commencing May 1, 1997 (each
being a "Scheduled Redetermination Date"), the Banks shall redetermine
the amount of the Calculated Borrowing Base in accordance with Section
2.08(b). In addition, the Company may request an unscheduled
redetermination of the Calculated Borrowing Base at any other time but
no more often than once between Scheduled Redetermination Dates by
specifying in writing to the Agent the date on which such
redetermination is to occur and providing a Reserve Report in
accordance with Section 8.04(b) at least 60 days prior to the
requested redetermination date. Also, the Majority Banks may initiate
only one (1) unscheduled redetermination during any consecutive twelve
(12) month period by specifying in writing to the Company the date on
which the Company is to furnish a Reserve Report in accordance with
Section 8.04(b) and the date on which such redetermination is to
occur.
(e) The Agent shall promptly notify in writing the
Company and the Banks of the new Calculated Borrowing Base and the new
Borrowing Base. Any redetermination of the Calculated Borrowing Base
and the Borrowing Base shall not be in effect until three (3) days
after written notice is received by the Company. The Company shall
have the right, by giving notice to the Agent (i) within three (3)
days after its receipt of a Borrowing Base Notice for a Borrowing Base
Period or (ii) three (3) days prior to the
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first day of the second Borrowing Base Quarter during any Borrowing
Base Period, to elect to have a Designated Borrowing Base take effect
for such Borrowing Base Quarter; provided that if the Company has
elected a Designated Borrowing Base for a Borrowing Base Quarter, the
Company may, at any time prior to the end of such Borrowing Base
Quarter, by giving three (3) days prior written notice to the Agent,
elect to increase the Designated Borrowing Base for that Borrowing
Base Quarter to an amount not greater than the amount of the Borrowing
Base for such Borrowing Base Quarter; provided further that if the
Company so elects to increase the Designated Borrowing Base, then all
commitment fees payable pursuant to Section 2.04(a) with respect to
the Borrowing Base Quarter in which such increase took place shall be
calculated as if the increased Designated Borrowing Base had been in
effect for the entire Borrowing Base Quarter.
2.09 Assumption of Risks. The Company assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit or any
transferee thereof with respect to its use of such Letter of Credit. Neither
the Agent (except in the case of wilful misconduct or bad faith on the part of
the Agent or any of its employees), its correspondents nor any Bank shall be
responsible for the validity, sufficiency or genuineness of certificates or
other documents or any endorsements thereon, even if such certificates or other
documents should in fact prove to be invalid, insufficient, fraudulent or
forged; for errors, omissions, interruptions or delays in transmissions or
delivery of any messages by mail, telex, or otherwise, whether or not they be
in code; for errors in translation or for errors in interpretation of technical
terms; the validity or sufficiency of any instrument transferring or assigning
or purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; the failure of any beneficiary or
any transferee of any Letter of Credit to comply fully with conditions required
in order to draw upon any Letter of Credit other than as expressly required by
such Letter of Credit; or for any other consequences arising from causes beyond
the Agent's control or the control of the Agent's correspondents. In addition,
neither the Agent nor any Bank shall be responsible for any error, neglect, or
default of any of the Agent's correspondents; and none of the above shall
affect, impair or prevent the vesting of any of the Agent's or any Bank's
rights or powers hereunder or under the Letter of Credit Agreements, all of
which rights shall be cumulative. The Agent and its correspondents may accept
certificates or other documents that appear on their face to be in order,
without responsibility for further investigation of any matter contained
therein regardless of any notice or information to the contrary. In
furtherance and not in limitation of the foregoing provisions, the Company
agrees that any action, inaction or omission taken or not taken by the Agent or
by any correspondent for the Agent in good faith in connection with any Letter
of Credit, or any related drafts, certificates, documents or instruments, shall
be binding on the Company and shall not put the Agent or its correspondents
under any resulting liability to the Company.
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2.10 Obligation to Reimburse and to Prepay.
(a) If a disbursement by the Agent is made under any
Letter of Credit, the Company shall pay to the Agent within two (2)
Business Days after notice of any such disbursement is received by the
Company, the amount of each such disbursement made by the Agent under
the Letter of Credit (if such payment is not sooner effected as may be
required under this Section 2.10 or under other provisions of the
Letter of Credit), together with interest on the amount disbursed from
and including the date of disbursement until payment in full of such
disbursed amount at a varying rate per annum equal to (i) the then
applicable interest rate for Base Rate Loans through the second
Business Day after notice of such disbursement is received by the
Company and (ii) thereafter to and including the date of repayment in
full of such disbursed amount, the Post-Default Rate for Base Rate
Loans (but in no event to exceed the Highest Lawful Rate). The
obligations of the Company under this Agreement and each Letter of
Credit shall be absolute, unconditional and irrevocable and shall be
paid or performed strictly in accordance with the terms of this
Agreement under all circumstances whatsoever, including, without
limitation, but only to the fullest extent permitted by applicable
law, the following circumstances: (i) any lack of validity or
enforceability of this Agreement, any Letter of Credit or any other
Loan Document; (ii) any amendment or waiver of (including any
default), or any consent to departure from this Agreement, any Letter
of Credit or any other Loan Document (except to the extent permitted
by any amendment or waiver); (iii) the existence of any claim,
set-off, defense or other rights which the Company may have at any
time against the beneficiary of any Letter of Credit or any transferee
of any Letter of Credit (or any Persons for whom any such beneficiary
or any such transferee may be acting), the Agent, any Bank or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the other Loan Documents, the transactions contemplated
hereby or any unrelated transaction; (iv) any statement, certificate,
draft, notice or any other document presented under any Letter of
Credit proves to have been forged, fraudulent, insufficient or invalid
in any respect or any statement therein proves to have been untrue or
inaccurate in any respect whatsoever; (v) payment by the Agent under
any Letter of Credit against presentation of a draft or certificate
which appears on its face to comply, but does not comply, with the
terms of such Letter of Credit; and (vi) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing.
Notwithstanding anything in this Agreement to the contrary, the
Company will not be liable for payment or performance that results
from the gross negligence or wilful misconduct of the Agent, except
(i) where the Company or any Subsidiary actually recovers the proceeds
for itself or the Agent of any payment made by the Agent in connection
with such gross negligence or wilful misconduct or (ii) in cases where
the Agent makes payment to the named beneficiary of a Letter of
Credit.
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(b) In the event of the occurrence of any Event of
Default, a payment or prepayment pursuant to Sections 2.07(b) and (c)
hereof or the maturity of the Notes, whether by acceleration or
otherwise, an amount equal to the LC Exposure shall be deemed to be
forthright due and owing by the Company to the Agent and the Banks as
of the date of any such occurrence; and the Company's obligation to
pay such amount shall be absolute and unconditional, without regard to
whether any beneficiary of any such Letter of Credit has attempted to
draw down all or a portion of such amount under the terms of a Letter
of Credit, and, to the fullest extent permitted by applicable law,
shall not be subject to any defense or be affected by a right of
set-off, counterclaim or recoupment which the Company may now or
hereafter have against any such beneficiary, the Agent, the Banks or
any other Person for any reason whatsoever. Such payments shall be
held by the Agent on behalf of the Banks as cash collateral securing
the LC Exposure in an account or accounts at the Principal Office; and
the Company hereby grants to and by its deposit with the Agent grants
to the Agent a security interest in such cash collateral. Such
collateral payments may be invested, by Agent, in investments that
Agent may choose in its sole discretion, but limited to investments
specified in Sections 9.03(d), (e), (f) and (h). All interest on
investments shall become cash collateral and shall also be reinvested.
In the event of any such payment by the Company of amounts
contingently owing under outstanding Letters of Credit and in the
event that thereafter drafts or other demands for payment complying
with the terms of such Letters of Credit are not made prior to the
respective expiration dates thereof, the Agent agrees, if no Event of
Default has occurred and is continuing or if no other amounts are
outstanding under this Agreement, the Notes or the other Loan
Documents, to remit to the Company amounts for which the contingent
obligations evidenced by the Letters of Credit have ceased, plus
accrued interest.
(c) Each Bank severally and unconditionally agrees that
it shall promptly reimburse the Agent an amount equal to such Bank's
Percentage Share of any disbursement made by the Agent under any
Letter of Credit that is not reimbursed according to this Section
2.10.
2.11 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company will pay to the Agent,
for the account of each Bank, the aggregate outstanding principal balance on
the Notes on the Maturity Date.
3.02 Interest. The Company will pay to the Agent for account
of each Bank interest on the unpaid principal amount of each Loan made by such
Bank for the period
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commencing on the date such Loan is made to but excluding the date such Loan
shall be paid in full, at the following rates per annum:
(a) if such a Loan is a Base Rate Loan, the Base Rate (as
in effect from time to time) plus the Applicable Margin (as in effect
from time to time), but in no event to exceed the Highest Lawful Rate;
and
(b) if such a Loan is a Eurodollar Loan, for each
Interest Period relating thereto, the Fixed Rate for such Loan plus
the Applicable Margin (as in effect from time to time), but in no
event to exceed the Highest Lawful Rate.
Notwithstanding the foregoing, the Company will pay to the Agent for the
account of each Bank interest at the applicable Post-Default Rate on any
principal of any Loan made by such Bank, and (to the fullest extent permitted
by law) on any other amount payable by the Company hereunder or under any Note
held by such Bank to or for account of such Bank, which shall not be paid in
full when due (whether at stated maturity, by acceleration or otherwise), for
the period commencing on the due date thereof until the same is paid in full.
Accrued interest on Base Rate Loans shall be payable on each Quarterly Date
commencing on December 31, 1997 and accrued interest on each Eurodollar Loan
shall be payable on the last day of the Interest Period therefor and, if such
Interest Period is longer than three months at three-month intervals following
the first day of such Interest Period, except that interest payable at the
Post-Default Rate shall be payable from time to time on demand and interest on
any Eurodollar Loan that is converted into a Base Rate Loan (pursuant to
Section 5.04) shall be payable on the date of conversion (but only to the
extent so converted). Promptly after the determination of any interest rate
provided for herein or any change therein, the Agent shall notify the Banks to
which such interest is payable and the Company thereof.
3.03 Prior Credit Agreement. All Loans outstanding under the
Prior Credit Agreement on the Closing Date shall be continued as the same type
of Loan under this Agreement and with the same maturity. Any interest and fees
that have accrued under the Prior Credit Agreement, but have not been paid,
shall be due and payable on the next Quarterly Date or in the case of
Eurodollar Loans, at the end of the applicable Interest Period.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by the
Company under this Agreement, the Notes and the Letters of Credit shall be made
in Dollars, in immediately available funds, to the Agent at such account as the
Agent shall specify by notice to the Company from time to time, not later than
11:00 a.m. New York time on the date on which such payments shall become due
(each such payment made after such time on such due date to be deemed to have
been made on
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the next succeeding Business Day). Such payments shall be made without (to the
fullest extent permitted by applicable law) defense, set-off or counterclaim.
Each payment received by the Agent under this Agreement or any Note for account
of a Bank shall be paid promptly to such Bank, in immediately available funds.
If the due date of any payment under this Agreement or any Note would otherwise
fall on a day which is not a Business Day such date shall be extended to the
next succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension. At the time of each payment to the
Agent of any principal of or interest on any borrowing, the Company shall
notify the Agent of the Loans to which such payment shall apply. In the
absence of such notice, the Agent may specify the Loans to which such payment
shall apply, but to the extent possible, such payment or prepayment will be
applied first to the Loans comprised of Base Rate Loans.
4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein each Bank agrees that: (a) each borrowing from the Banks under
Section 2.01 shall be made from the Banks pro rata in accordance with their
Percentage Share, each payment of commitment fee or other fees under Sections
2.04(a) and 2.04(b) shall be made for account of the Banks pro rata in
accordance with their Percentage Share, and each termination or reduction of
the amount of the Aggregate Maximum Credit Amounts under Section 2.03(b) shall
be applied to the Commitment of each Bank, pro rata according to the amounts of
its respective Commitment, (b) each payment of principal of Loans by the
Company shall be made for account of the Banks pro rata in accordance with the
respective unpaid principal amount of the Loans held by the Banks, (c) each
payment of interest on Loans by the Company shall be made for account of the
Banks pro rata in accordance with the amounts of interest due and payable to
the respective Banks and (d) each reimbursement by the Company of disbursements
under Letters of Credit shall be made for account of the Banks pro rata in
accordance with the amounts of reimbursement obligations due and payable to
each respective Bank.
4.03 Computations. Interest on Eurodollar Loans and the
commitment fees shall be computed on the basis of a year of 360 days and actual
days elapsed (including the first day but excluding the last day) occurring in
the period for which such interest is payable, unless such calculation would
exceed the Highest Lawful Rate, in which case interest shall be calculated on
the per annum basis of a year of 365 or 366 days, as the case may be. Interest
on Base Rate Loans shall be computed on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which such interest is
payable.
4.04 Non-receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Bank or the Company prior to the date on which
such notifying party is scheduled to make payment to the Agent of (in the case
of a Bank) the proceeds of a Loan or a payment under a Letter of Credit to be
made by it hereunder or (in the case of the Company) a payment to the Agent for
account of one or more of the Banks hereunder (such payment being herein called
the "Required Payment"), which notice shall be effective upon receipt, that it
does not
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intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient(s) on such date and, if such Bank or the Company (as the case may be)
has not in fact made the Required Payment to the Agent, the recipient(s) of
such payment shall, on demand, repay to the Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Agent until but
excluding the date the Agent recovers such amount at a rate per annum which,
for any Bank as recipient, will be equal to the Federal Funds Rate and for the
Company as recipient, will be equal to the Base Rate plus the Applicable
Margin.
4.05 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a
Bank may otherwise have, each Bank shall have the right and be
entitled (after consultation with the Agent), at its option, to offset
balances held by it or by any of its Affiliates for account of the
Company at any of its offices, in Dollars or in any other currency,
against any principal of or interest on any of such Bank's Loans, or
any other amount payable to such Bank hereunder, which is not paid
when due (including the expiration of any applicable grace period)
(regardless of whether such balances are then due to the Company), in
which case it shall promptly notify the Company and the Agent thereof,
provided that such Bank's failure to give such notice shall not affect
the validity thereof.
(b) If any Bank shall obtain payment of any principal of
or interest on any Loan made by it to the Company under this Agreement
through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise, and, as a result of such
payment, such Bank shall have received a greater percentage of the
principal or interest then due hereunder by the Company to such Bank
than the percentage received by any other Banks, it shall promptly (i)
notify the Agent and each other Bank thereof and (ii) purchase from
such other Banks participations in (or, if and to the extent specified
by such Bank, direct interests in) the Loans made by such other Banks
(or in interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be equitable,
to the end that all the Banks shall share the benefit of such excess
payment (net of any expenses which may be incurred by such Bank in
obtaining or preserving such excess payment) pro rata in accordance
with the unpaid principal and/or interest on the Loans held by each of
the Banks. To such end all the Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored.
The Company agrees that any Bank so purchasing a participation (or
direct interest) in the Loans made by other Banks (or in interest due
thereon, as the case may be) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with
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respect to such participation as fully as if such Bank were a direct
holder of Loans in the amount of such participation. Nothing
contained herein shall require any Bank to exercise any such right or
shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Company. If under any applicable
bankruptcy, insolvency or other similar law, any Bank receives a
secured claim in lieu of a set-off to which this Section 4.05 applies,
such Bank shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights
of the Banks entitled under this Section 4.05 to share the benefits of
any recovery on such secured claim.
4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Company hereunder shall be made, in accordance with Section 4.01, free
and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank
and the Agent, taxes imposed on its income, and franchise or similar
taxes imposed on it, by (i) any jurisdiction (or political subdivision
thereof) of which the Agent or such Bank, as the case may be, is a
citizen or resident or in which such Bank has an Applicable Lending
Office, (ii) the jurisdiction (or any political subdivision thereof)
in which the Agent or such Bank is organized, or (iii) any
jurisdiction (or political subdivision thereof) in which such Bank or
the Agent is presently doing business which taxes are imposed solely
as a result of doing business in such jurisdiction (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the
Company shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Banks or the Agent (i) the
sum payable shall be increased by the amount necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 4.06) such Bank or the
Agent (as the case may be) shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company
shall make such deductions and (iii) the Company shall pay the full
amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent
permitted by applicable law, the Company agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made
hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any Assignment
(hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY WILL INDEMNIFY EACH BANK
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AND THE AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING,
BUT NOT LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED BY ANY
GOVERNMENTAL AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06)
PAID BY SUCH BANK OR THE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY
BANK), AS THE CASE MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES,
INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO,
WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY
ASSERTED UNLESS THE PAYMENT OF SUCH TAXES WERE NOT CORRECTLY OR
LEGALLY ASSERTED AND SUCH BANK'S PAYMENT OF SUCH TAXES OR OTHER TAXES
WAS THE RESULT OF ITS GROSS NEGLIGENCE OR WILFUL MISCONDUCT. ANY
PAYMENT PURSUANT TO SUCH INDEMNIFICATION SHALL BE MADE WITHIN THIRTY
(30) DAYS AFTER THE DATE ANY BANK OR THE AGENT, AS THE CASE MAY BE,
MAKES WRITTEN DEMAND THEREFOR. IF ANY BANK OR THE AGENT RECEIVES A
REFUND OR CREDIT IN RESPECT OF ANY TAXES OR OTHER TAXES FOR WHICH SUCH
BANK OR THE AGENT HAS RECEIVED PAYMENT FROM THE COMPANY HEREUNDER IT
SHALL PROMPTLY NOTIFY THE COMPANY OF SUCH REFUND OR CREDIT AND SHALL,
IF NO DEFAULT HAS OCCURRED AND IS CONTINUING, WITHIN THIRTY (30) DAYS
AFTER RECEIPT OF A REQUEST BY THE COMPANY (OR PROMPTLY UPON RECEIPT,
IF THE COMPANY HAS REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT
PURSUANT HERETO), PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE
COMPANY WITHOUT INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR
CREDITED), PROVIDED THAT THE COMPANY, UPON THE REQUEST OF SUCH BANK OR
THE AGENT, AGREES TO RETURN SUCH REFUND OR CREDIT (PLUS PENALTIES,
INTEREST OR OTHER CHARGES) TO SUCH BANK OR THE AGENT IN THE EVENT SUCH
BANK OR THE AGENT IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.
(d) Banks' Taxes.
(i) Each Bank represents that it is either (i) a
corporation organized under the laws of the United States of
America or any state thereof or (ii) it is entitled to
complete exemption from United States withholding tax imposed
on or with respect to any payments, including fees, to be made
to it pursuant to this Agreement (A) under an applicable
provision of a tax convention to which the United States of
America is a party or (B) because it is acting through a
branch, agency or office in the United States of America and
any payment to be received by it hereunder is effectively
connected with a trade or business in the United States of
America. Each Bank that is not a corporation organized under
the laws of the United States of America or any state thereof
agrees to provide to the
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Company and the Agent on the Closing Date, or on the date of
its delivery of the Assignment pursuant to which it becomes a
Bank, and at such other times as required by United States law
or as the Company or the Agent shall reasonably request, two
accurate and complete original signed copies of either (A)
Internal Revenue Service Form 4224 (or successor form)
certifying that all payments to be made to it hereunder will
be effectively connected to a United States trade or business
(the "Form 4224 Certification") or (B) Internal Revenue
Service Form 1001 (or successor form) certifying that it is
entitled to the benefit of a provision of a tax convention to
which the United States of America is a party which completely
exempts from United States withholding tax all payments to be
made to it hereunder (the "Form 1001 Certification"). In
addition, each Bank agrees that if it previously filed a Form
4224 Certification, it will deliver to the Company and the
Agent a new Form 4224 Certification prior to the first payment
date occurring in each of its subsequent taxable years; and if
it previously filed a Form 1001 Certification, it will deliver
to the Company and the Agent a new certification prior to the
first payment date falling in the third year following the
previous filing of such certification. Each Bank also agrees
to deliver to the Company and the Agent such other or
supplemental forms as may at any time be required as a result
of changes in applicable law or regulation in order to confirm
or maintain in effect its entitlement to exemption from United
States withholding tax on any payments hereunder, provided
that the circumstances of such Bank at the relevant time and
applicable laws permit it to do so. If a Bank determines, as
a result of any change in either (i) a Governmental
Requirement or (ii) its circumstances, that it is unable to
submit any form or certificate that it is obligated to submit
pursuant to this Section 4.06, or that it is required to
withdraw or cancel any such form or certificate previously
submitted, it shall promptly notify the Company and the Agent
of such fact. If a Bank is organized under the laws of a
jurisdiction outside the United States of America, unless the
Company and the Agent have received a Form 1001 Certification
or Form 4224 Certification satisfactory to them indicating
that all payments to be made to such Bank hereunder are not
subject to United States withholding tax, the Company shall
withhold taxes from such payments at the applicable statutory
rate. Each Bank agrees to indemnify and hold harmless from
any United States taxes, penalties, interest and other
expenses, costs and losses incurred or payable by (i) the
Agent as a result of such Bank's failure to submit any form or
certificate that it is required to provide pursuant to this
Section 4.06 or (ii) the Company or the Agent as a result of
their reliance on any such form or certificate which such Bank
has provided to them pursuant to this Section 4.06.
(ii) For any period with respect to which a Bank
has failed to provide the Company with the form required
pursuant to this Section 4.06, if any, (other than if such
failure is due to a change in a Governmental Requirement
occurring
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subsequent to the date on which a form originally was required
to be provided), such Bank shall not be entitled to
indemnification under this Section 4.06 with respect to taxes
imposed by the United States which taxes would not have been
imposed but for such failure to provide such forms; provided,
however, that should a Bank, which is otherwise exempt from or
subject to a reduced rate of withholding tax becomes subject
to taxes because of its failure to deliver a form required
hereunder, the Company shall take such steps as such Bank
shall reasonably request to assist such Bank to recover such
taxes.
(iii) Any Bank claiming any additional amounts
payable pursuant to this Section 4.06 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to
file any certificate or document requested by the Company or
the Agent or to change the jurisdiction of its Applicable
Lending Office or to contest any tax imposed if the making of
such a filing or change or contesting such tax would avoid the
need for or reduce the amount of any such additional amounts
that may thereafter accrue and would not, in the sole
determination of such Bank, be otherwise disadvantageous to
such Bank.
Section 5. Capital Adequacy.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from time
to time such amounts as such Bank may determine to be necessary to
compensate such Bank for any costs which it determines are
attributable to its making or maintaining of any Eurodollar Loans or
issuing or participating in Letters of Credit hereunder or its
obligation to make any Eurodollar Loans or issue or participate in any
Letters of Credit hereunder, or any reduction in any amount receivable
by such Bank hereunder in respect of any of such Eurodollar Loans,
Letters of Credit or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change which: (i) changes the
basis of taxation of any amounts payable to such Bank under this
Agreement or any Note in respect of any of such Eurodollar Loans or
Letters of Credit (other than taxes imposed on the overall net income
of such Bank or of its Applicable Lending Office for any of such
Eurodollar Loans by the jurisdiction in which such Bank has its
principal office or Applicable Lending Office); or (ii) imposes or
modifies any reserve, special deposit, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of such Bank
(including any of such Eurodollar Loans or any deposits referred to in
the definition of "Fixed Eurodollar Rate" in Section 1.02 hereof), or
the Commitment of such Bank or the Eurodollar interbank market; or
(iii) imposes any other condition affecting this Agreement or any Note
(or any of such extensions of credit or liabilities) or such Bank's
Commitment. Each Bank will notify the
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Agent and the Company of any event occurring after the Closing Date
which will entitle such Bank to compensation pursuant to this Section
5.01(a) as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation, and will designate a
different Applicable Lending Office for the Loans of such Bank
affected by such event if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole
opinion of such Bank, be disadvantageous to such Bank, provided that
such Bank shall have no obligation to so designate an Applicable
Lending Office located in the United States. If any Bank requests
compensation from the Company under this Section 5.01(a), the Company
may, by notice to such Bank suspend the obligation of such Bank to
make additional Loans of the Type with respect to which such
compensation is requested until the Regulatory Change giving rise to
such request ceases to be in effect (in which case the provisions of
Section 5.04 shall be applicable).
(b) Without limiting the effect of the provisions of
Section 5.01(a), in the event that, by reason of any Regulatory Change
or any other circumstances arising after the Closing Date affecting
such Bank, the Eurodollar interbank market or such Bank's position in
such market, any Bank either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of such Bank which includes
deposits by reference to which the interest rate on Eurodollar Loans
is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets which it may hold, then,
if such Bank so elects by notice to the Company, the obligation of
such Bank to make additional Eurodollar Loans shall be suspended until
such Regulatory Change ceases to be in effect (in which case the
provisions of Section 5.04 shall be applicable).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the Company
shall pay directly to any Bank from time to time on request such
amounts as such Bank may determine to be necessary to compensate such
Bank or its parent or holding company for any costs which it
determines are attributable to the maintenance by such Bank or its
parent or holding company (or any Applicable Lending Office), pursuant
to any Governmental Requirement following any Regulatory Change, of
capital in respect of its Commitment, its Note, its Loans or any
interest held by it in any Letter of Credit, such compensation to
include, without limitation, an amount equal to any reduction of the
rate of return on assets or equity of such Bank or its parent or
holding company (or any Applicable Lending Office) to a level below
that which such Bank or its parent or holding company (or any
Applicable Lending Office) could have achieved but for such
Governmental Requirement. Such Bank will notify the Company that it
is entitled to compensation pursuant to this Section 5.01(c) as
promptly as practicable after it determines to request such
compensation.
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(d) Any Bank notifying the Company of any amounts due
pursuant to Section 5.01 shall in such notice to the Company and the
Agent set forth in reasonable detail the basis and amount of its
request for compensation. Any request for additional compensation
under this Section 5.01 shall be paid by the Company within thirty
(30) Business Days of the receipt of the Company of the notice
described in this Section 5.01(d).
5.02 Limitation on Eurodollar Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Fixed
Eurodollar Rate for any Interest Period:
(a) the Agent determines that quotations of interest
rates for the relevant deposits referred to in the definition of
"Fixed Eurodollar Rate" in Section 1.02 are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein;
or
(b) the Agent determines that the relevant rates of
interest referred to in the definition of "Fixed Eurodollar Rate" in
Section 1.02 upon the basis of which the rate of interest for
Eurodollar Loans for such Interest Period is to be determined are not
sufficient to adequately cover the cost to the Banks of making or
maintaining Eurodollar Loans;
then the Agent shall give the Company prompt notice thereof, and so long as
such condition remains in effect, the Banks shall be under no obligation to
make additional Eurodollar Loans.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain Eurodollar Loans
hereunder, then such Bank shall promptly notify the Company thereof and such
Bank's obligation to make Eurodollar Loans shall be suspended until such time
as such Bank may again make and maintain Eurodollar Loans (in which case the
provisions of Section 5.04 shall be applicable).
5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and
5.03. If the obligation of any Bank to make Eurodollar Loans shall be
suspended pursuant to Sections 5.01, 5.02 or 5.03 ("Affected Loans"), all
Affected Loans which would otherwise be made by such Bank shall be made instead
as Base Rate Loans (and, if an event referred to in Section 5.01(b) or Section
5.03 has occurred and such Bank so requests by notice to the Company, all
Affected Loans of such Bank then outstanding shall be automatically converted
into Base Rate Loans on the date specified by such Bank in such notice) and, to
the extent that Affected Loans are so made as (or converted into) Base Rate
Loans, all payments of principal which would otherwise be applied to such
Bank's Affected Loans shall be applied instead to its Base Rate Loans.
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5.05 Compensation. The Company shall pay to each Bank within
thirty (30) days of receipt of written request of such Bank (which request
shall set forth, in reasonable detail, the basis for requesting such amounts),
such amount or amounts as shall compensate it for any loss, cost, expense or
liability which such Bank determines are attributable to:
(a) any payment, prepayment or conversion of a Eurodollar
Loan properly made by such Bank or the Company for any reason
(including, without limitation, the acceleration of the Loans pursuant
to Section 10.02) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Company for any reason (including
but not limited to, the failure of any of the conditions precedent
specified in Section 6 to be satisfied) to borrow, continue or convert
a Eurodollar Loan from such Bank on the date for such borrowing,
continuation or conversion specified in the relevant notice of
borrowing given pursuant to Section 2.02(c).
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of such payment,
prepayment or conversion or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for herein
over (ii) the interest component of the amount such Bank would have bid in the
London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by such Bank).
Section 6. Conditions Precedent.
6.01 Initial Funding.
The obligation of the Banks to make the Initial Funding under
this Agreement is subject to the receipt by the Agent and the Banks of all fees
payable pursuant to Section 2.04 on or before the Closing Date or otherwise
under this Agreement and the following documents and satisfaction of the other
conditions provided in this Section 6.01, each of which shall be satisfactory
to the Agent in form and substance:
(a) A certificate of the Secretary or an Assistant
Secretary of the Company setting forth (i) resolutions of its board of
directors with respect to the authorization of the Company to execute
the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of the
Company (y) who are authorized to sign the Loan Documents to
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which the Company is a party and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement and
the transactions contemplated hereby, (iii) specimen signatures of the
officers so authorized and (iv) the articles or certificate of
incorporation and bylaws of the Company, certified as being true and
complete. The Agent and the Banks may conclusively rely on such
certificate until the Agent receives notice in writing from the
Company to the contrary.
(b) Certificates of the appropriate state agencies with
respect to the existence and good standing of the Company.
(c) A compliance certificate which shall be substantially
in the form of Exhibit C, duly and properly executed by a Responsible
Officer, and dated as of the date of the Initial Funding.
(d) The Note or Notes, duly completed and executed.
(e) An opinion of Vinson & Elkins L.L.P., legal counsel
to the Agent substantially in the form of Exhibit D hereto.
(f) A certificate of the insurance coverage of the
Company evidencing that the Company is carrying insurance in
accordance with Section 7.19 hereof.
(g) The Fee Letter shall have been executed and delivered
by the Company.
(h) Such other documents as the Agent or any Bank or
special counsel to the Agent may reasonably request.
6.02 Initial and Subsequent Loans and Letters of Credit.
The obligation of the Banks to make Loans to the Company upon the occasion of
each borrowing hereunder and to issue, renew, extend or reissue Letters of
Credit for the account of the Company (including the Initial Funding) is
subject to the further conditions precedent that, as of the date of such Loans
and after giving effect thereto: (i) no Default shall have occurred and be
continuing; (ii) no Material Adverse Effect shall have occurred since the date
of the Financial Statements; and (iii) the representations and warranties made
by the Company in Section 7 shall be true on and as of the date of the making
of such Loans or issuance, renewal, extension or
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reissuance of a Letter of Credit with the same force and effect as if made on
and as of such date and following such new borrowing, except as such
representations and warranties are modified to give effect to transactions
expressly permitted hereby or in the case of Section 7.15 changes of which the
Agent has been notified. Each request for a borrowing or issuance, renewal,
extension or reissuance of a Letter of Credit by the Company hereunder shall
constitute a certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice and, unless the Company
otherwise notifies the Agent prior to the date of and immediately following
such borrowing or issuance, renewal, extension or reissuance of a Letter of
Credit as of the date thereof).
6.03 Conditions Relating to Letters of Credit. In addition to
the satisfaction of all other conditions precedent set forth in this Section 6,
the issuance, renewal, extension or reissuance of the Letters of Credit
referred to in Section 2.01 hereof is subject to the following conditions
precedent:
(a) At least three (3) Business Days prior to the date of
the issuance and at least three (3) Business Days (or such longer
notice as may be required by the Agent to allow the Agent to comply
with the notice requirement for extension embodied in the Letter of
Credit) prior to the date of the renewal, extension or reissuance of
each Letter of Credit, the Agent shall have received a written request
for a Letter of Credit or renewal, extension or reissuance.
(b) Each of the Letters of Credit shall (i) be issued by
the Agent, (ii) contain such terms and provisions as are reasonably
required by the Agent, (iii) be for the account of the Company, and
(iv) expire not later than two (2) days before the Maturity Date.
(c) The Company shall have duly and validly executed and
delivered to the Agent a Letter of Credit Agreement pertaining to the
Letter of Credit.
(d) All other conditions shall have been satisfied as set
forth in Section 2.01.
Section 7. Representations and Warranties. The Company
represents and warrants to the Banks that (each representation and warranty
herein is given as of the date of this Agreement and shall be deemed repeated
and reaffirmed as provided in Section 6.02):
7.01 Corporate Existence. Each of the Company and the
Subsidiaries: (a) is a corporation duly organized, legally existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify would have a Material Adverse Effect.
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7.02 Financial Condition. The audited consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at December 31, 1996
and the related consolidated statement of income, stockholders' equity and cash
flows of the Company and its Consolidated Subsidiaries for the fiscal year
ended on said date, with the opinion thereon of Coopers & Lybrand heretofore
furnished to each of the Banks and the unaudited consolidated balance sheet of
the Company and its Consolidated Subsidiaries as at June 30, 1997 and their
related consolidated statements of income, stockholders' equity and cash flows
of the Company and its Consolidated Subsidiaries for the three-month period
ended on such date heretofore furnished to the Agent, are complete and correct
and fairly present the consolidated financial condition of the Company and its
Consolidated Subsidiaries as at said dates and the results of its operations
for the fiscal year and the six-month period on said dates, all in accordance
with GAAP, as applied on a consistent basis (subject, in the case of the
interim financial statements, to normal year-end adjustments). Neither the
Company nor any Subsidiary has on the Closing Date any material Debt,
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the
Financial Statements or in Schedule 7.02. Since December 31, 1996, there has
been no change or event having a Material Adverse Effect. Since the date of
the Financial Statements, neither the business nor the Properties of the
Company or any Subsidiary have been materially and adversely affected as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of Property
or cancellation of contracts, permits or concessions by any Governmental
Authority, riot, activities of armed forces or acts of God or of any public
enemy.
7.03 Litigation. Except as disclosed to the Banks in
Schedule 7.03 hereto, at the Closing Date there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of the Company threatened against or
affecting the Company or any Subsidiary which involves the possibility of any
judgment or liability against the Company or any Subsidiary not fully covered
by insurance (except for normal deductibles), and which would have a Material
Adverse Effect.
7.04 No Breach. Neither the execution and delivery of the
Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent, which has not
been obtained as of the Closing Date, under the respective charter or by-laws
of the Company, or any Governmental Requirement, or any agreement or instrument
to which the Company is a party or by which it is bound or to which it is
subject, or constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the revenues or
assets of the Company pursuant to the terms of any such agreement or
instrument.
7.05 Corporate Action. The Company has all necessary
corporate power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party; and the execution, delivery
and performance by the Company of the Loan Documents
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to which it is a party, have been duly authorized by all necessary corporate
action on its part; and the Loan Documents constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their terms.
7.06 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority are necessary
for the execution, delivery or performance by the Company of the Loan Documents
or for the validity or enforceability thereof.
7.07 Use of Loans. The proceeds of the Loans shall be used
for general corporate and working capital purposes which shall include the
acquisition, exploration and development of Oil and Gas Properties. The
Company is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying margin stock (within the meaning of
Regulation U or X of the Board of Governors of the Federal Reserve System) and
no part of the proceeds of any Loan hereunder will be used to buy or carry any
margin stock. Neither the Company nor any Person acting on behalf of the
Company has taken or will take any action which might cause the Notes or any of
the Loan Documents, including this Agreement, to violate Regulation U or X or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate Section 7 of the SEC or any rule or regulation thereunder, in each
case as now in effect or as the same may hereinafter be in effect.
7.08 ERISA.
(a) The Company, each Subsidiary and each ERISA Affiliate
have complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan.
(b) Each Plan is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which
could result in imposition on the Company, any Subsidiary or any ERISA
Affiliate (whether directly or indirectly) of (i) either a civil
penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a
tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (ii)
breach of fiduciary duty liability damages under section 409 of ERISA.
(d) No Plan (other than a defined contribution plan) or
any trust created under any such Plan has been terminated since
September 2, 1974. No liability to the PBGC (other than for the
payment of current premiums which are not past due) by the Company,
any Subsidiary or any ERISA Affiliate has been or is expected by the
Company, any Subsidiary or any ERISA Affiliate to be incurred with
respect to any Plan. No ERISA Event with respect to any Plan has
occurred.
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(e) Full payment when due has been made of all amounts
which the Company, any Subsidiary or any ERISA Affiliate is required
under the terms of each Plan or applicable law to have paid as
contributions to such Plan, and no accumulated funding deficiency (as
defined in section 302 of ERISA and section 412 of the Code), whether
or not waived, exists with respect to any Plan.
(f) The actuarial present value of the benefit
liabilities under each Plan which is subject to Title IV of ERISA does
not, as of the end of the Company's most recently ended fiscal year,
exceed the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Plan allocable to
such benefit liabilities. The term "actuarial present value of the
benefit liabilities" shall have the meaning specified in section 4041
of ERISA.
(g) None of the Company, any Subsidiary or any ERISA
Affiliate sponsors, maintains, or contributes to an employee welfare
benefit plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former
employees of such entities, that may not be terminated by the Company,
a Subsidiary or any ERISA Affiliate in its sole discretion at any time
without any material liability.
(h) None of the Company, any Subsidiary or any ERISA
Affiliate sponsors, maintains or contributes to, or has at any time in
the preceding six calendar years sponsored, maintained or contributed
to, any Multiemployer Plan.
(i) None of the Company, any Subsidiary or any ERISA
Affiliate is required to provide security under section 401(a)(29) of
the Code due to a Plan amendment that results in an increase in
current liability for the Plan.
7.09 Taxes. Except as set out in Schedule 7.09, each of the
Company and the Subsidiaries has filed all United States Federal income tax
returns and all other material tax returns which are required to be filed by it
and has paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company. The charges, accruals and reserves on the
books of the Company and each Subsidiary in respect of taxes and other
governmental charges are, in the opinion of the Company, adequate. No tax lien
has been filed and, to the knowledge of the Company, no claim is being asserted
with respect to any such tax, fee or other charge.
7.10 Titles, etc.
(a) Except as set out in Schedule 7.10, each of the
Company and the Subsidiaries has good and defensible title to its
material (individually or in the aggregate) Properties, free and clear
of all Liens except Liens permitted by Section 9.02. As used in this
Agreement, "good and defensible title" to Oil and Gas Properties of
the Company
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located in federal waters of the Gulf of Mexico shall be based on the
standard that a prudent Person engaged in the business of ownership,
development and operation of Oil and Gas Properties located in federal
waters of the Gulf of Mexico with knowledge of all of the facts and
their legal bearing would be willing to accept as good and defensible
title. Except as set forth in Schedule 7.10, after giving full effect
to the Excepted Liens, the Company owns the net interests in
production attributable to the Hydrocarbon Interests reflected in the
most recently delivered Reserve Report and the ownership of such
Properties shall not in any material respect obligate the Company to
bear the costs and expenses relating to the maintenance, development
and operations of each such Property in an amount in excess of the
working interest of each Property set forth in the most recently
delivered Reserve Report. All information contained in the most
recently delivered Reserve Report is true and correct in all material
respects as of the Closing Date.
(b) All leases and agreements necessary for the conduct
of the respective business of the Company and its Subsidiaries are, to
the best knowledge of the Company and its Subsidiaries, valid and
subsisting, in full force and effect and, to the best knowledge of the
Company and its Subsidiaries, there exists no default or event or
circumstance which with the giving of notice or the passage of time or
both would give rise to a default under any such lease or leases,
which would in the aggregate have a material adverse effect.
(c) The rights, properties and other assets presently
owned, leased or licensed by the Company and its Subsidiaries
including, without limitation, all easements and rights of way,
include all rights, Properties and other assets necessary to permit
the Company and its Subsidiaries to conduct their business in all
reasonably material respects in the same manner as their business has
been conducted prior to the Closing Date.
(d) All of the assets and Properties of the Company and
its Subsidiaries which are reasonably necessary for the operation of
their business are in good working condition and are maintained in
accordance with prudent business standards.
7.11 No Material Misstatements. To the best of the
information and belief of management of the Company after due inquiry no
written information, statement, exhibit, certificate, document or report
furnished to the Agent and the Banks (or any of them) by the Company in
connection with the negotiation of this Agreement contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statement contained therein not materially misleading in the light
of the circumstances in which made and with respect to the Company and the
Subsidiaries taken as a whole. To the best of the information and belief of
management of the Company after due inquiry there is no fact peculiar to the
Company or any of its Subsidiaries which constitutes a Material Adverse Effect
or in the future is reasonably likely to have (so far as management of the
Company can now foresee) a
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Material Adverse Effect and which has not been set forth in this Agreement or
the other documents, certificates and statements furnished to the Agent by or
on behalf of the Company prior to, or on, the Closing Date in connection with
the transactions contemplated hereby.
7.12 Investment Company Act. The Company is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
7.13 Public Utility Holding Company Act. The Company is not
a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.14 Subsidiaries and Partnerships. Except (i) as set forth
on Schedule 7.14 and (ii) for participation agreements existing or entered into
in the ordinary course of business of the Company with respect to the drilling,
development or acquisition of Oil and Gas Properties with participants under
arrangements which do not constitute state law partnerships, as of the Closing
Date the Company has no Subsidiaries and no interest in any partnerships.
7.15 Location of Business and Offices. The Company's
principal place of business and chief executive offices are located at the
address stated on the signature page of this Agreement.
7.16 Environmental Matters. Except (i) as provided in
Schedule 7.16 or (ii) as would not have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions would
not have a Material Adverse Effect):
(a) Neither any Property of the Borrower or any
Subsidiary nor the operations conducted thereon violate any order or
requirement of any court or Governmental Authority or any
Environmental Laws;
(b) Without limitation of clause (a) above, no Property
of the Borrower or any Subsidiary nor the operations currently
conducted thereon or, to the best knowledge of the Borrower, by any
prior owner or operator of such Property or operation, are in
violation of or subject to any existing, pending or threatened action,
suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under
Environmental Laws;
(c) All notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed in connection
with the operation or use of any and all Property of the Borrower and
each Subsidiary, including without limitation, past or present
treatment, storage, disposal or release of a hazardous substance or
solid waste into the environment,
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have been duly obtained or filed, and the Borrower and each Subsidiary
is in compliance with the terms and conditions of all such notices,
permits, licenses and similar authorizations;
(d) All hazardous substances, solid waste, and oil and
gas exploration and production wastes, if any, generated at any and
all Property of the Borrower have in the past been transported,
treated and disposed of in accordance with Environmental Laws and so
as not to pose an imminent and substantial endangerment to public
health or welfare or the environment, and, to the best knowledge of
the Borrower, all such transport carriers and treatment and disposal
facilities have been and are operating in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and are
not the subject of any existing, pending or threatened action,
investigation or inquiry by any Governmental Authority in connection
with any Environmental Laws;
(e) The Borrower has taken all steps reasonably necessary
to determine and has determined that no hazardous substances, solid
waste, or oil and gas exploration and production wastes, have been
disposed of or otherwise released and there has been no threatened
release of any hazardous substances on or to any Property of the
Borrower and each Subsidiary except in compliance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to
public health or welfare or the environment;
(f) To the extent applicable, all Property of the
Borrower and each Subsidiary currently satisfies all design,
operation, and equipment requirements imposed by the OPA or scheduled
as of the Closing Date to be imposed by OPA during the term of this
Agreement, and the Borrower does not have any reason to believe that
such Property, to the extent subject to OPA, will not be able to
maintain compliance with the OPA requirements during the term of this
Agreement; and
(g) Neither the Borrower nor any Subsidiary has any known
contingent liability in connection with any release or threatened
release of any oil, hazardous substance or solid waste into the
environment.
7.17 Defaults. Neither the Company nor any Subsidiary is in
default nor has any event or circumstance occurred which, but for the
expiration of any applicable grace period or the giving of notice, or both,
would constitute a default under any material agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound which default would have a Material Adverse Effect. No
Default hereunder has occurred and is continuing.
7.18 Compliance with the Law. Neither the Company nor any
Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or
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other governmental authorization necessary for the ownership of any of its
Properties or the conduct of its business, which violation or failure would
have (in the event such violation or failure were asserted by any Person
through appropriate action) a Material Adverse Effect.
7.19 Insurance. Schedule 7.19 attached hereto contains an
accurate and complete description of all material policies of fire, liability,
workmen's compensation and other forms of insurance owned or held by the
Company and each Subsidiary. All such policies are in full force and effect,
all premiums with respect thereto covering all periods up to and including the
date of the closing have been paid, and no notice of cancellation or
termination has been received with respect to any such policy. Such policies
are valid, outstanding and enforceable policies; provide adequate insurance
coverage in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the
same general area by companies engaged in the same or a similar business for
the assets and operations of the Company and each Subsidiary; will remain in
full force and effect through the respective dates set forth in Schedule 7.19
without the payment of additional premiums; and will not in any way be affected
by, or terminate or lapse by reason of, the transactions contemplated by this
Agreement. Schedule 7.19 identifies all material risks, if any, which the
Company and its Subsidiaries and their respective Board of Directors or
officers have designated as being self insured. Neither the Company nor any
Subsidiary has been refused any insurance with respect to its assets or
operations, nor has its coverage been limited below usual and customary policy
limits, by an insurance carrier to which it has applied for any such insurance
or with which it has carried insurance during the last three years.
Section 8. Affirmative Covenants. The Company covenants and
agrees that, so long as any of the Commitments are in effect and until payment
in full of all Indebtedness hereunder, all interest thereon and all other
amounts payable by the Company hereunder:
8.01 Financial Statements. The Company shall deliver, or
shall cause to be delivered, to the Agent with sufficient copies of each for
the Banks:
(a) As soon as available and in any event within 90 days
after the end of each fiscal year of the Company, the audited
consolidated and unaudited consolidating statements of income,
stockholders' equity, and cash flows of the Company and its
Consolidated Subsidiaries for such fiscal year, and the related
consolidated and consolidating balance sheets of the Company and its
Consolidated Subsidiaries as at the end of such fiscal year, and
setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year, and accompanied by the related
opinion of independent public accountants of recognized national
standing acceptable to the Agent which opinion shall state that said
financial statements fairly present the consolidated and consolidating
financial condition and results of operations of the Company and its
Consolidated Subsidiaries as at the end of, and for, such fiscal year
and that such financial statements have been prepared in accordance
with GAAP except for
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such changes in such principles with which the independent public
accountants shall have concurred and such opinion shall not contain a
"going concern" or like qualification or exception; and in the case of
the consolidating financial statements, certified by a Responsible
Officer as being fairly stated in all material respects when
considered in relation to the consolidated financial statements of the
Company and its Consolidated Subsidiaries.
(b) As soon as available and in any event within 45 days
after the end of each the first three fiscal quarterly periods of
each fiscal year of the Company, consolidated and consolidating
statements of income, stockholders' equity, and cash flows of the
Company and its Consolidated Subsidiaries, for such period and for the
period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated and consolidating balance
sheets as at the end of such period, and setting forth in each case in
comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, accompanied by the certificate of
a Responsible Officer, which certificate shall state that said
consolidated financial statements fairly present the consolidated
financial condition and results of operations of the Company and its
Subsidiaries in accordance with GAAP, as at the end of, and for, such
period (subject to normal year-end audit adjustments) and the
consolidating financial statements are fairly stated in all material
respects when considered in relation to the consolidated financial
statements of the Company and its Consolidated Subsidiaries.
(c) Promptly after the Company knows that any Default or
any Material Adverse Effect has occurred, a notice of such Default or
Material Adverse Effect, describing the same in reasonable detail and
the action the Company proposes to take with respect thereto.
(d) Promptly upon receipt thereof, a copy of each other
report or letter submitted to the Company or any Subsidiary by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Company and its
Subsidiaries, and a copy of any response by the Company or any
Subsidiary of the Company, or the Board of Directors of the Company or
any Subsidiary of the Company, to such letter or report.
(e) Promptly upon their becoming available, each
financial statement, report, notice or proxy statement sent by the
Company to stockholders generally and each regular or periodic report
and any registration statement, prospectus or written communication
(other than transmittal letters) in respect thereof filed by the
Company with or received by the Company in connection therewith from
any securities exchange or the SEC.
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(f) Promptly after the furnishing thereof, copies of any
statement, report or notice furnished to any Person pursuant to the
terms of any indenture, loan or credit or other similar agreement,
other than this Agreement and not otherwise required to be furnished
to the Banks pursuant to any other provision of this Section 8.01.
(g) Prompt notice of receipt by the Company or any of its
Subsidiaries of any claim for taxes (except claims for ad valorem
taxes received in the ordinary course of business) against the Company
or any Subsidiary if the amount involved is more than $500,000.
(h) Prompt notice of any transaction between the Company
or any of its Subsidiaries and any affiliate or employee other than
the payment of normal salaries, bonuses and benefits and reimbursement
of expenses in the ordinary course of business and transactions
permitted under Section 9.17 hereof.
(i) From time to time such other information regarding
the business, affairs or financial condition of the Company
(including, without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under ERISA) as any
Bank or the Agent may reasonably request.
The Company will furnish to the Agent, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate
substantially in the form of Exhibit C hereto executed by a Responsible Officer
(i) certifying as to the matters set forth therein and stating that no Default
has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail) and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Company
is in compliance with Sections 9.12 and 9.13 as of the end of the respective
fiscal quarter or fiscal year.
8.02 Litigation. The Company shall promptly give to each
Bank notice of all legal or arbitral proceedings, and of all proceedings before
any Governmental Authority affecting the Company or any Subsidiary, except
proceedings which, if adversely determined, would not have a Material Adverse
Effect. The Company will, and will cause each of its Subsidiaries to, promptly
notify the Agent and each of the Banks of any claim, judgment, Lien or other
encumbrance affecting any Property of the Company or any Subsidiary if the
value of the claim, judgment, Lien or other encumbrance affecting such Property
shall exceed $1,000,000.
8.03 Maintenance, Etc.
(a) The Company shall and shall cause each Subsidiary to:
preserve and maintain its corporate existence and all of its material
rights, privileges and franchises except for such as are released,
surrendered or disposed of in the ordinary course of business and by
such release, surrender or disposal does not cause a Material Adverse
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Effect; keep books of record and account in which full, true and
correct entries will be made of all dealings or transactions in
relation to its business and activities; comply with all Governmental
Requirements if failure to comply with such requirements will have a
Material Adverse Effect; pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its Property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained
in accordance with GAAP; upon reasonable notice, permit
representatives of the Agent or any Bank, during normal business
hours, to examine, copy and make extracts from its books and records,
to inspect its Properties, and to discuss its business and affairs
with its officers, all to the extent reasonably requested by such Bank
or the Agent (as the case may be); and keep insured by financially
sound and reputable insurers all Property of a character usually
insured by Persons engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against by such Persons and carry such other
insurance as is usually carried by such Persons including, without
limitation, environmental risk insurance to the extent reasonably
available.
(b) Contemporaneously with the delivery of the financial
statements required by Section 8.01(a) to be delivered for each year,
the Company will furnish or cause to be furnished to the Agent and the
Banks a certificate of insurance coverage from the insurer in form and
substance satisfactory to the Agent and, if requested, will make
available to the Agent and the Banks copies of the applicable policies
at offices of the Company.
(c) The Company will operate its Oil and Gas Properties
or cause such Oil and Gas Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and
in compliance with all applicable contracts and agreements and in
compliance in all material respects with all Governmental
Requirements.
(d) The Company will and will cause each Subsidiary to,
at its own expense, do or cause to be done all things reasonably
necessary to preserve and keep in good repair, working order and
efficiency all of its Oil and Gas Properties and other material
Properties including, without limitation, all equipment, machinery and
facilities, and from time to time will make all the reasonably
necessary repairs, renewals and replacements so that at all times the
state and condition of its Oil and Gas Properties and other material
Properties will be fully preserved and maintained, except to the
extent a portion of such Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts. In a manner
consistent with the prudent operator standard, the Company will and
will cause each Subsidiary to promptly: (i) pay and discharge, or make
reasonable and customary efforts to cause to be paid and discharged,
all delay rentals, royalties, expenses and indebtedness accruing under
the leases or other agreements affecting or pertaining to its Oil and
Gas Properties, (ii) perform or make reasonable and customary
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efforts to cause to be performed, in accordance with industry
standards, the obligations required by each and all of the
assignments, deeds, leases, sub-leases, contracts and agreements
affecting its interests in its Oil and Gas Properties and other
material Properties, (iii) will and will cause each Subsidiary to do
all other things necessary to keep unimpaired, except for Liens
described in Section 9.02, its rights with respect thereto and prevent
any forfeiture thereof or a default thereunder, except to the extent a
portion of such Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts and except for
dispositions permitted by Section 9.15 hereof.
8.04 Engineering Reports.
(a) At least 60 days prior to each Scheduled
Redetermination Date commencing with the Scheduled Redetermination
Date to occur on May 1, 1998, the Company shall furnish to the Banks a
Reserve Report. The December 31 Reserve Report of each year to be
delivered for the May 1 Scheduled Redetermination Date shall be
prepared by Ryder-Scott Company, Petroleum Engineers ("Ryder Scott")
or other certified independent engineer satisfactory to the Agent and
the June 30 Reserve Report of each year to be delivered for the
November 1 Scheduled Redetermination Date shall be prepared by or
under the supervision of the chief engineer of the Company who shall
certify such Reserve Report to be true and accurate and to have been
prepared in accordance with the procedures used in the immediately
preceding December 31 Reserve Report. The Company may elect to use
the December 31 Reserve Report instead of preparing the June 30
Reserve Report, in which case reserve run-off with no replacement will
be assumed. Further, the Company will be required to provide a review
of the Oil and Gas Properties which shall include a comparison of
actual and projected production volumes.
(b) For each unscheduled redetermination, the Company
shall furnish to the Banks, a Reserve Report prepared by or under the
supervision of the chief engineer of the Company who shall certify
such Reserve Report to be true and accurate and to have been prepared
in accordance with the procedures used in the immediately preceding
December 31 Reserve Report. For any unscheduled redetermination
requested by the Majority Banks pursuant to Section 2.08(d), the
Company shall provide such Reserve Report as soon as possible, but in
any event no later than 30 days following the receipt of the request
by the Majority Banks.
(c) Concurrently with the delivery of each Reserve
Report, the Company shall provide the Banks production reports
covering in the aggregate, the Company's net production of oil and
gas, which reports shall include quantities or volumes of production,
realized product prices, operating expenses, taxes, capital
expenditures and such other information as the Agent may reasonably
request and covering the six month period ending on the "as of" date
of the Reserve Report being delivered with such production report.
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(d) With the delivery of each Reserve Report, the Company
shall provide to the Banks, a certificate from the Responsible Officer
of the Company that, to the best of his knowledge and in all material
respects, (a) the information contained in the Reserve Report and
Engineering Report is true and correct, (b) the Company owns good and
defensible title to the Oil and Gas Properties evaluated in such
Reserve Report free of all Liens except for Excepted Liens, (c) except
as set forth on an exhibit to the certificate, on a net basis there
are no gas imbalances, take or pay or other prepayments with respect
to the Oil and Gas Properties evaluated in such Reserve Report which
would require the Company to deliver Hydrocarbons produced from such
Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor, (d) no Oil and Gas Properties have
been sold since the date of the last Borrowing Base determination
except as consented to in writing by the Majority Banks or as
permitted by the terms of this Agreement, (e) attached to the
certificate is a list of the Oil and Gas Properties added to and
deleted from the immediately prior Reserve Report, and (f) attached to
the certificate are statements of the Company's outstanding Swap
Contracts, which statements shall include for each such Swap Contract
(A) the termination date, (B) the notional amounts or volumes and the
periods covered by such volumes; and (C) the price to be paid or the
basis for calculating the price to be paid by the Company and the
other Person under each Swap Contract for each of the future periods
covered by each Swap Contract.
8.05 Further Assurances. The Company will cure promptly any
defects in the creation and issuance of the Notes and the execution and
delivery of the other Loan Documents. The Company at its expense will promptly
execute and deliver to the Agent upon request all such other and further
documents, agreements and instruments in compliance with or accomplishment of
the covenants and agreements of the Company in the Loan Documents.
8.06 Performance of Obligations. The Company will pay the
Notes according to the reading, tenor and effect thereof; and the Company will
do and perform every act and discharge all of the obligations provided to be
performed and discharged by the Company under the Loan Documents at the time or
times and in the manner specified.
8.07 ERISA Information and Compliance. The Company will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Agent with sufficient copies for each of the Banks (i)
promptly after the filing thereof with the United States Secretary of Labor,
the Internal Revenue Service or the PBGC, copies of each annual and other
report with respect to each Plan or any trust created thereunder, (ii)
immediately upon becoming aware of the occurrence of any ERISA Event or of any
"prohibited transaction," as described in section 406 of ERISA or in section
4975 of the Code, in connection with any Plan or any trust created thereunder,
a written notice signed by a Responsible Officer specifying the nature
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thereof, what action the Company, the Subsidiary or the ERISA Affiliate is
taking or proposes to take with respect thereto, and, when known, any action
taken or proposed by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto, and (iii) immediately upon receipt thereof,
copies of any notice of the PBGC's intention to terminate or to have a trustee
appointed to administer any Plan. With respect to each Plan (other than a
Multiemployer Plan), the Company will, and will cause each Subsidiary and ERISA
Affiliate to, (i) satisfy in full and in a timely manner, without incurring any
late payment or underpayment charge or penalty and without giving rise to any
lien, all of the contribution and funding requirements of section 412 of the
Code (determined without regard to subsections (d), (e), (f) and (k) thereof)
and of section 302 of ERISA (determined without regard to sections 303, 304 and
306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely
manner, without incurring any late payment or underpayment charge or penalty,
all premiums required pursuant to sections 4006 and 4007 of ERISA.
8.08 Environmental Matters.
(a) The Borrower will and will cause each Subsidiary to
establish and implement such procedures as may be reasonably necessary
to continuously determine and assure that any failure of the following
does not have a Material Adverse Effect: (i) all Property of the
Borrower and its Subsidiaries and the operations conducted thereon are
in compliance with and do not violate the requirements of any
Environmental Laws, (ii) no oil, hazardous substances or solid wastes
are disposed of or otherwise released on or to any Property owned by
any such party except in compliance with Environmental Laws, (iii) no
hazardous substance will be released on or to any such Property in a
quantity equal to or exceeding that quantity which requires reporting
pursuant to Section 103 of CERCLA, and (iv) no oil, oil and gas
exploration and production wastes, or hazardous substance is released
on or to any such Property so as to pose an imminent and substantial
endangerment to public health or welfare or the environment.
(b) The Borrower will promptly notify the Bank in writing
of any threatened action, investigation or inquiry by any Governmental
Authority of which the Borrower has knowledge in connection with any
Environmental Laws, excluding routine testing and corrective action.
(c) The Borrower will and will cause each Subsidiary to
provide environmental audits and tests in accordance with ASTM
standards as reasonably requested by the Bank or as otherwise required
to be obtained by the Bank by any Governmental Authority in connection
with any future acquisitions of Oil and Gas Properties or other
material Properties.
8.09 Guarantees. If a Subsidiary guarantees any Debt of
the Company, it will cause the Indebtedness to be equally and ratably
guaranteed by such Subsidiary.
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Section 9. Negative Covenants. The Company covenants and
agrees that, so long as any of the Commitments are in effect and until payment
in full of all Indebtedness hereunder, all interest thereon and all other
amounts payable by the Company hereunder:
9.01 Debt. Neither the Company nor any Subsidiary will
incur, create, assume or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness;
(b) Debt of the Company existing on the Closing Date
which is reflected in the Financial Statements or is disclosed in
Schedule 9.01 (but excluding under the Prior Credit Agreement), and
any renewals or extensions (but not increases) thereof;
(c) accounts payable (for the deferred purchase price of
Property or services) from time to time incurred in the ordinary
course of business which, if greater than 90 days past the invoice or
billing date, are being contested in good faith by appropriate
proceedings if reserves adequate under GAAP shall have been
established therefor;
(d) the Senior Unsecured Notes;
(e) Debt associated with bonds or surety obligations
required by Governmental Requirements in connection with the operation
of the Company's Oil and Gas Properties; and
(f) obligations to establish or pay into escrow accounts
or other reserves amounts necessary to cover costs of abandonment of
oil and gas wells and/or drilling sites.
(g) Swap Contracts; provided, however, that (i) such Swap
Contracts related to oil production shall not, either individually or
in the aggregate, cover more than seventy-five percent (75%) of the
Company's and its Subsidiaries' estimates for the production of oil
for each individual period covered by the Swap Contracts, and (ii)
such Swap Contracts related to natural gas production shall, not
either individually or in the aggregate, cover, more than seventy-five
percent (75%) of the Company's and its Subsidiaries' estimates for the
production of natural gas for each individual period covered by the
Swap Contracts;
(h) Debt incurred by Special Purpose Subsidiaries and the
Subsidiaries listed on Schedule 9.01(h), if and only if, such Debt is
evidenced by a document or instrument containing language, in form and
substance satisfactory to the Agent, by which the lender or lenders
acknowledge that the Debt advanced by them to the Special Purpose
Subsidiary and the Subsidiaries listed on Schedule 9.01(h) to be
non-recourse to the Company and all other Subsidiaries;
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(i) obligations arising under arrangements or agreements
designed to protect the Company or a Subsidiary entered into the
ordinary course of business to reduce the Company's or a Subsidiary's
exposure to fluctuations in interest rates; and
(j) Without limitation of any other part of Section 9.01,
Debt of the Company created, incurred or assumed after the date
hereof; provided that the aggregate outstanding principal amount of
such Debt shall not at any one time exceed $25,000,000.
9.02 Liens. Neither the Company nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:
(a) Excepted Liens;
(b) Liens securing permitted capitalized leases, but only
on the Property under lease;
(c) Liens on cash or securities securing the Debt
described in Section 9.01(e);
(d) Liens on cash or securities securing the Debt
described in Section 9.01(f); and
(e) Liens on Property of a Special Purpose Subsidiary or
a Subsidiary listed on Schedule 9.01(h) securing the Debt of such
Subsidiary described in Section 9.01(h).
9.03 Investments, Loans and Advances. Neither the Company
nor any Subsidiary will make or permit to remain outstanding any loans or
advances to or investments in any Person, except that the foregoing restriction
shall not apply to:
(a) investments, loans or advances reflected in the
Financial Statements or which are disclosed to the Banks in Schedule
9.03;
(b) investments in additional Oil and Gas Properties and
gas gathering systems related thereto;
(c) accounts receivable arising out of the sale of
Hydrocarbons, other assets or services in the ordinary course of
business;
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(d) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case maturing within one year from the date of
creation thereof;
(e) commercial paper maturing within one year from the
date of creation thereof rated A2 or higher by Standard & Poors
Corporation or P2 or higher by Moody's Investors Service, Inc.;
(f) deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by,
any Bank or any office located in the United States of any other bank
or trust company which is organized under the laws of the United
States or any state thereof and has capital, surplus and undivided
profits aggregating at least $100,000,000.00 (as of the date of such
Bank's or bank or trust company's most recent financial reports) and
has a short term deposit rating of no lower than A2 or P2, as such
rating is set forth from time to time by Standard & Poors Corporation
or Moody's Investors Service, Inc., respectively;
(g) advances to operators under operating agreements
entered into by the Company in the ordinary course of business;
(h) repurchase agreements of any commercial banks in the
United States and Canada, if the commercial paper of such bank or of
the bank holding company of which such bank is a wholly-owned
subsidiary is rated in the highest rating categories of Standard &
Poors Corporation, Moody's Investors Service, Inc., or any other
rating agency satisfactory to the Majority Banks, that are fully
secured by securities described in Section 9.03(d);
(i) eurodollar investments maturing within one (1) year
with financial institutions meeting the qualifications established in
Section 9.03(f);
(j) investments, loans or advances in the aggregate not
to exceed $25,000,000 in Special Purpose Subsidiaries;
(k) investments, loans or advances in the aggregate not
to exceed 7.5% of the consolidated assets of the Company in
Subsidiaries that are not Special Purpose Subsidiaries and are not
Subsidiaries described in Section 9.03(l);
(l) investments, loans or advances by the Company or any
of its Subsidiaries in or to the Subsidiaries listed on Schedule
9.01(h) for investment by such Person in either direct interests in
Oil and Gas Properties or in Persons owning Oil and Gas Properties
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(m) investments in loan participations purchased from a
bank with which deposits may be made under Section 9.03(f), provided
that the remaining term of any such participation at the time such
participation is bought must be 90 days or less and that the borrower
obligated to pay such loan must then have a credit rating of A2 or
higher from Standard & Poor's Corporation or of P2 or higher from
Moody's Investors Service, Inc. on such borrower's short term
obligations;
(n) in remarketed certificates of participation sold in
private placements, representing undivided interests in the assets of
a trust or similar entity owning debt instruments, provided that such
certificates of participation have received a credit rating of A2 or
higher from Standard & Poor's Corporation or of P2 or higher from
Moody's Investors Service, Inc. and are payable in full within 90 days
after purchase;
(o) in money market funds which can be liquidated on a
daily basis, provided that at the time in question such money market
funds have been specifically approved by the Agent and such approval
has not been withdrawn;
(p) asset backed securities with an average life of 24
months or less and rated in one of the top two rating categories of
Moody's Investors Service, Inc. or Standard & Poors Corporation;
(q) corporate notes or bonds rated A3 or better by
Moody's Investors Service, Inc. or A- or better by Standard & Poors
Corporation maturing within one year;
(r) at such time when no Loans and LC Exposure are
outstanding, the investments permitted by Sections 9.03(d), (e), (f),
(i), (n) or (o) may have maturities of two years or less; and
(s) other investments approved in writing by the Majority
Lenders.
9.04 Dividends, Distributions and Redemptions. The Company
will not declare or pay any dividend, purchase, redeem or otherwise acquire for
value any of its stock now or hereafter outstanding, return any capital to its
stockholders, or make any distribution of its assets to its stockholders,
except that the Company may pay dividends on and redeem its common and
preferred stock provided that (a) the dollar amount of the dividends and
redemption in any four quarters does not exceed 50% of consolidated net income
for such four quarter period, (b) the Company maintains a Fixed Charge Coverage
Ratio (as defined in Section 9.13 hereof) of 2.0 to 1.0 in such fiscal quarter
that the dividend is made and (c) no Default has occurred and is continuing and
such payment shall not cause a Default.
9.05 [reserved]
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9.06 Nature of Business. The Company will not allow any
material change to be made in the character of its business as an independent,
oil and gas exploration and production company.
9.07 Limitation on Leases. Except as set forth on Schedule
9.07, the Company will not create, incur, assume or suffer to exist any
obligation for the payment of rent or hire of Property of any kind whatsoever
(real or personal including capital leases but excluding leases of Hydrocarbon
Interests), under leases or lease agreements which would cause the aggregate
amount of all payments made by the Company pursuant to such leases or lease
agreements to exceed $2,000,000 in any period of twelve consecutive calendar
months during the life of such leases.
9.08 Mergers, Etc. Neither the Company nor any Subsidiary
will (a) merge into or with or consolidate with any other Person unless the
Company or, provided that the Company is not involved in the merger or
consolidation, a wholly-owned Subsidiary of the Company, is the surviving
Person and no Default exists immediately before and after giving effect to such
merger or consolidation, or (b) sell, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
Property or assets that are not Oil and Gas Properties to any other Person.
9.09 Proceeds of Notes. The Company will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 7.07.
9.10 ERISA Compliance. The Company will not at any time:
(a) Engage in, or permit any Subsidiary or ERISA
Affiliate to engage in, any transaction in connection with which the
Company, any Subsidiary or any ERISA Affiliate could be subjected to
either a civil penalty assessed pursuant to section 502(c), (i) or (l)
of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA
Affiliate to terminate, any Plan in a manner, or take any other action
with respect to any Plan, which could result in any liability to the
Company, any Subsidiary or any ERISA Affiliate to the PBGC;
(c) Fail to make, or permit any Subsidiary or ERISA
Affiliate to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or
applicable law, the Company, a Subsidiary or any ERISA Affiliate is
required to pay as contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA
Affiliate to permit to exist, any accumulated funding deficiency
within the meaning of Section 302 of ERISA or section 412 of the Code,
whether or not waived, with respect to any Plan;
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(e) Permit, or allow any Subsidiary or ERISA Affiliate to
permit, the actuarial present value of the benefit liabilities under
any Plan maintained by the Company, any Subsidiary or any ERISA
Affiliate which is regulated under Title IV of ERISA to exceed the
current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such
benefit liabilities. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in section 4041 of
ERISA;
(f) Contribute to or assume an obligation to contribute
to, or permit any Subsidiary or ERISA Affiliate to contribute to or
assume an obligation to contribute to, any Multiemployer Plan;
(g) Acquire, or permit any Subsidiary or ERISA Affiliate
to acquire, an interest in any Person that causes such Person to
become an ERISA Affiliate with respect to the Company, any Subsidiary
or any ERISA Affiliate if such Person sponsors, maintains or
contributes to, or at any time in the six-year period preceding such
acquisition has sponsored, maintained, or contributed to, (1) any
Multiemployer Plan, or (2) any other Plan that is subject to Title IV
of ERISA under which the actuarial present value of the benefit
liabilities under such Plan exceeds the current value of the assets
(computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities;
(h) Incur, or permit any Subsidiary or ERISA Affiliate to
incur, a liability to or on account of a Plan under sections 515,
4062, 4063, 4064, 4201 or 4204 of ERISA;
(i) Contribute to or assume an obligation to contribute
to, or permit any Subsidiary or ERISA Affiliate to contribute to or
assume an obligation to contribute to, any employee welfare benefit
plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former
employees of such entities, that may not be terminated by such
entities in their sole discretion at any time without any material
liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to
amend, a Plan resulting in an increase in current liability such that
the Company, any Subsidiary or any ERISA Affiliate is required to
provide security to such Plan under section 401(a)(29) of the Code.
9.11 Sale or Discount of Receivables. Neither the Company
nor any Subsidiary will discount or sell (with or without recourse) any of its
notes receivable or accounts receivable unless the Company determines in its
reasonable judgment that such course of action is the only means of collection
with respect to any such note receivable or account receivable and provided
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that it does not constitute a material portion of the Company's notes
receivable or accounts receivable outstanding at such time.
9.12 Working Capital Ratio. The Company, together with all
Consolidated Subsidiaries (except for Special Purpose Subsidiaries) on a
consolidated basis, will not allow its Working Capital Ratio (calculated
quarterly and included in the quarterly financial report provided pursuant to
Section 8.01(b)) to fall below at any time 1.1 to 1.0. For the purposes of
this section, Working Capital Ratio shall mean the ratio of (i) current assets
as determined in accordance with GAAP plus unused availability under the
Aggregate Commitments to (ii) current liabilities as determined in accordance
with GAAP less current portions of the Indebtedness.
9.13 Fixed Charge Coverage Ratio. The Company, together with
all Consolidated Subsidiaries (except for Special Purpose Subsidiaries) on a
consolidated basis, will not allow its Fixed Charge Coverage Ratio (calculated
quarterly and included in the financial statements provided pursuant to Section
8.01(b)) to fall below 1.5 to 1.0 for any fiscal quarter. For the purposes of
this section, Fixed Charge Coverage Ratio shall mean the ratio of (i) net
income as determined in accordance with GAAP plus non-cash charges less
non-cash revenues plus interest expense plus lease expense plus, to the extent
not already included by GAAP, the positive difference, if any, between the
aggregate payments made by the Company and the aggregate payments received by
the Company under all Swap Contracts to (ii) interest expense plus scheduled
amortization of all of the Company's Debt plus lease expense plus, to the
extent not already included by GAAP, the positive difference, if any, between
the aggregate payments made by the Company and the aggregate payments received
by the Company under all Swap Contracts.
9.14 Net Worth. The Company will not permit its net worth
(determined in accordance with GAAP) at any time to be less than $185,000,000
plus 50% of the positive consolidated net income for any quarter commencing
with the quarter beginning July 1, 1997.
9.15 Sale of Oil and Gas Properties. Except for Hydrocarbons
sold in the ordinary course of business as and when produced, the Company will
not sell, assign, transfer, farm-out or convey ("Transfer") any interest in any
of its Oil and Gas Properties in any Borrowing Base Period in excess of
$5,000,000 in the aggregate as such value is determined by the most recent
December 31, Reserve Report, using a 10% discount rate and giving effect to
production prior to the effective date of the Transfer, without the prior
written consent of Majority Banks, which consent will not be unreasonably
withheld.
9.16 Environmental Matters. Neither the Borrower nor any
Subsidiary will cause or permit any of its Property to be in violation of, or
do anything or permit anything to be done which will subject any such Property
to any remedial obligations under any Environmental Laws, assuming disclosure
to the applicable Governmental Authority of all relevant facts,
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conditions and circumstances, if any, pertaining to such Property where such
violation or remedial obligations would have a Material Adverse Effect.
9.17 Transactions with Affiliates. The Company shall not
enter into any transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate unless such transactions are otherwise permitted under this
Agreement, are in the ordinary course of the Company's business and are upon
fair and reasonable terms no less favorable to the Company than it would obtain
in a comparable arm's length transaction with a Person not an Affiliate.
9.18 Subsidiaries and Partnerships. Neither the Company nor
any Subsidiary shall create or acquire any Subsidiary unless (i) the Company
shall give the Agent prompt notice of the creation of such Subsidiary and (ii)
the Company is in compliance with Section 9.03.
9.19 Hydrocarbon Sales Contract. The Company will not enter
into any contracts for the sale of Hydrocarbons produced from any of its Oil
and Gas Properties in which the Company warrants quantities of Hydrocarbons to
be delivered thereunder.
9.20 Negative Pledge Agreements. The Company will not
create, incur, assume or suffer to exist any contract, agreement or
understanding (other than this Agreement) which in any way prohibits or
restrict the granting, conveying, creation or imposition of any Lien on any of
its Property or restricts any Subsidiary from paying dividends to the Company
or which requires the consent of or notice to other Persons in connection
therewith.
9.21 Senior Unsecured Notes. The Borrower will not modify or
amend the terms of the Indenture and any related documents without the consent
of the Majority Lenders, if the effect of such modification or amendment would
be to shorten the time for payment on any Senior Unsecured Notes, increase the
principal amount of the Senior Unsecured Notes above $150,000,000, increase the
rate of interest on any Senior Unsecured Note or change the method of
calculating interest so as to effectively increase the rate of interest on any
Senior Unsecured Note, change any of the provisions of the covenants and events
of default and any of the definitions used in or relating thereto, or any other
provisions which would detrimentally effect the rights of the Lenders.
Section 10. Events of Default; Remedies.
10.01 Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) The Company shall default in the payment or
prepayment when due of any principal of or interest on any Loan, or
any reimbursement obligation for a disbursement made under any Letter
of Credit or any fees or other amount payable by it hereunder or
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under any other Loan Document and such default shall continued
unremedied for a period of three (3) Business Days; or
(b) The Company shall default in the payment when due of
any principal of or interest on any of its other Debt in an amount in
excess of $1,000,000.00; or any event specified in any note,
agreement, indenture or other document evidencing or relating to any
such Debt shall occur if the effect of such event is to cause, or
(with the giving of any notice or the lapse of time or both) to permit
the holder or holders of such Debt (or a trustee or agent on behalf of
such holder or holders) to cause, such Debt to become due prior to its
stated maturity; or
(c) Any representation, warranty or certification made or
deemed made herein or in any other Loan Document by the Company, or
any certificate furnished to any Bank or the Agent pursuant to the
provisions hereof or any other Loan Document, shall prove to have been
false or misleading as of the time made or furnished in any material
respect; or
(d) The Company shall default in the performance of any
of its obligations under Section 9 or any other Section of this
Agreement other than under Section 8; or the Company shall default in
the performance of any of its obligations under Section 8 or any Loan
Document (other than payment of amounts due which shall be governed by
Section 10.01(a)) and such default shall continue unremedied for a
period of 30 days after the earlier to occur of (i) notice thereof to
the Company by the Agent or any Bank (through the Agent) or (ii) the
Company otherwise becoming aware of such default; or
(e) The Company shall admit in writing its inability to,
or be generally unable to, pay its debts as such debts become due; or
(f) The Company shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or readjustment
of debts, (v) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any
corporate action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the
application or consent of the Company, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution
or winding-up, or the composition or readjustment of its
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debts, (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of the Company or of all or any substantial
part of its assets, or (iii) similar relief in respect of the Company
under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such proceeding
or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 days; or an order
for relief against the Company shall be entered in an involuntary case
under the Federal Bankruptcy Code; or
(h) A judgment or judgments for the payment of money in
excess of $500,000.00 in the aggregate shall be rendered by a court or
courts against the Company and the same shall not be discharged (or
provision shall not be made for such discharge) or a stay of execution
thereof shall not be procured, within 30 days from the date of entry
thereof and the Company shall not, within said period of 30 days, or
such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
(i) Any Subsidiary takes, suffers or permits to exist as
to such Subsidiary any of the events or conditions referred to in
Sections 10(b), (e), (f), (g) or (h); or
(j) If any Letter of Credit becomes the subject matter of
any order, judgment, injunction or any other such determination, or if
the Company or any other Person shall petition or apply for or obtain
any order restricting payment by the Agent under any Letter of Credit
or extending the Banks' liability under any Letter of Credit beyond
the expiration date stated therein or otherwise agreed to by the
Agent.
10.02 Remedies.
(a) In the case of an Event of Default other than one
referred to in clauses (e), (f) or (g) of Section 10.01 or in clause
(i) to the extent it relates to clauses (e), (f) or (g), the Agent may
and, upon request of the Majority Banks, shall, by notice to the
Company, cancel the Commitments and/or declare the principal amount
then outstanding of, and the accrued interest on the Loans and all
other amounts payable by the Company hereunder and under the Notes
(including without limitation the payment of cash collateral to secure
the LC Exposure as provided in Section 2.07(b) hereof) to be forthwith
due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Company.
(b) In the case of the occurrence of an Event of Default
referred to in clauses (e), (f) or (g) of Section 10.01 or in clause
(i) to the extent it relates to clauses (e), (f) or (g), the
Commitments shall be automatically cancelled and the principal amount
then
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outstanding of, and the accrued interest on, the Loans and all other
amounts payable by the Company hereunder and under the Notes
(including without limitation the payment of cash collateral to secure
the LC Exposure as provided in Section 2.07(b) hereof) shall become
automatically immediately due and payable without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or
other formalities of any kind, all of which are hereby expressly
waived by the Company.
(c) All proceeds received after maturity of the Notes,
whether by acceleration or otherwise shall be applied first to
reimbursement of expenses and indemnities provided for in this
Agreement and the other Loan Documents; second to accrued interest on
the Notes; third to fees; fourth pro rata to principal outstanding on
the Notes and other Indebtedness; fifth to serve as cash collateral to
be held by the Agent to secure the LC Exposure; and any excess shall
be paid to the Company or as otherwise required by any Governmental
Requirement.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder
with such powers as are specifically delegated to the Agent by the terms of
this Agreement and the Loan Documents, together with such other powers as are
reasonably incidental thereto. The Agent (which term as used in this sentence
and in Section 11.05 and the first sentence of Section 11.06 shall include
reference to its Affiliates and its Affiliates' officers, directors, employees,
attorneys, accountants, experts and agents): (a) shall have no duties or
responsibilities except those expressly set forth in the Loan Documents, and
shall not by reason of the Loan Documents be a trustee or fiduciary for any
Bank; (b) makes no representation or warranty to any Bank and shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness, execution,
legality, enforceability or sufficiency of this Agreement, any Note or any
other document referred to or provided for herein or for any failure by the
Company or any other Person (other than the Agent) to perform any of its
obligations hereunder or thereunder or for the existence, value, perfection or
priority of any collateral security or the financial or other condition of the
Company, its Subsidiaries or any other obligor; (c) except pursuant to Section
11.07 shall not be required to initiate or conduct any litigation or collection
proceedings hereunder; and (d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith including its own
ordinary negligence, except for its own gross negligence or wilful misconduct.
The Agent may employ agents, accountants, attorneys and experts and shall not
be responsible for the negligence or misconduct of any such agents,
accountants, attorneys or experts selected by it in good faith or any action
taken or omitted to be taken in good faith by it in accordance with the advice
of such agents, accountants, attorneys or experts. The Agent may deem and
treat the
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payee of any Note as the holder thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof permitted
hereunder shall have been filed with the Agent.
11.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telecopier, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent.
11.03 Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans or of fees or failure to reimburse for Letter
of Credit drawings) unless the Agent has received notice from a Bank or the
Company specifying such Default and stating that such notice is a "Notice of
Default." In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Banks.
11.04 Rights as a Bank. With respect to its Commitments and
the Loans made by it and its participation in the issuance of Letters of
Credit, The Chase Manhattan Bank (and any successor acting as Agent) in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not acting as the
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Chase Manhattan
Bank (and any successor acting as Agent) and its Affiliates may (without having
to account therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with the
Company (and any of its Affiliates) as if it were not acting as the Agent, and
The Chase Manhattan Bank and its Affiliates may accept fees and other
consideration from the Company for services in connection with this Agreement
or otherwise without having to account for the same to the Banks.
11.05 INDEMNIFICATION. THE BANKS AGREE TO INDEMNIFY THE
AGENT RATABLY IN ACCORDANCE WITH THEIR PERCENTAGE SHARES FOR THE INDEMNITY
MATTERS AS DESCRIBED IN SECTION 12.03 TO THE EXTENT NOT INDEMNIFIED OR
REIMBURSED BY THE COMPANY UNDER SECTION 12.03, BUT WITHOUT LIMITING THE
OBLIGATIONS OF THE COMPANY UNDER SAID SECTION 12.03 AND FOR ANY AND ALL OTHER
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH
MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF: (A) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR
ANY OTHER DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THE TRANSACTIONS
CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS
CONTINUING, NORMAL ADMINISTRATIVE COSTS AND
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EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY DUTIES HEREUNDER OR (B) THE
ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT;
WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN THIS SECTION 11.05 ARISES FROM
THE SOLE OR CONCURRENT NEGLIGENCE OF THE AGENT, PROVIDED THAT NO BANK SHALL BE
LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS
NEGLIGENCE OR WILFUL MISCONDUCT OF THE AGENT.
11.06 Non-Reliance on Agent and other Banks. Each Bank
acknowledges and agrees that it has, independently and without reliance on the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Company and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of the Loan Documents or any other document referred to or provided
for herein or to inspect the properties or books of the Company. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Company (or any
of its Affiliates) which may come into the possession of the Agent or any of
its affiliates. In this regard, each Bank acknowledges Vinson & Elkins L.L.P.
is acting in this transaction as special counsel to the Agent only, except to
the extent otherwise expressly stated in any legal opinion or any Loan
Document. Each Bank will consult with its own legal counsel to the extent that
it deems necessary in connection with the Loan Documents and the matters
contemplated therein.
11.07 Action by Agent. Except for action or other matters
expressly required of the Agent hereunder the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall (i) receive
written instructions from the Majority Banks specifying the action to be taken
and (ii) be indemnified to its satisfaction by the Banks against any and all
liability and expenses which may be incurred by it by reason of taking or
continuing to take any such action. The instructions of the Majority Banks and
any action taken or failure to act pursuant thereto by the Agent shall be
binding on all of the Banks. If a Default has occurred and is continuing, the
Agent shall take such action with respect to such Default as shall be directed
by the Majority Banks in the written instructions (with indemnities) described
in this Section 11.07, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
as it shall deem advisable in the best interests of the Banks. In no event,
however, shall the Agent be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement and the other Loan
Documents or applicable law.
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11.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent
may resign at any time by giving notice thereof to the Banks and the Company
and the Agent may be removed at any time with or without cause by the Majority
Banks. Upon any such resignation or removal, the Majority Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Banks and shall have accepted such appointment within
30 days after the retiring Agent's giving of notice of resignation or the
Majority Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent. Upon the acceptance of such
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 11
and Section 12.03 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Agent or any
Bank to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement, any Note or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement, any
Note or any other Loan Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
12.02 Notices. All notices and other communications provided
for herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other
Loan Documents) shall be given or made by telex, telecopy, telegraph, cable,
courier or U.S. Mail or in writing and telexed, telecopied, telegraphed,
cabled, mailed or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof or in the other
Loan Documents; or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement or in the other Loan Documents, all such
communications shall be deemed to have been duly given when transmitted by
telex or telecopier, delivered to the telegraph or cable office or personally
delivered or, in the case of a mailed notice, three (3) Business Days after the
date deposited in the mails, postage prepaid, in each case given or addressed
as aforesaid.
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12.03 Payment of Expenses, Indemnities, etc. The Company
agrees to:
(a) whether or not the transactions hereby contemplated
are consummated, pay all reasonable expenses of the Agent in the
administration (both before and after the execution hereof and
including advice of counsel as to the rights and duties of the Agent
and the Banks with respect thereto) of, and in connection with the
negotiation, syndication, investigation, preparation, execution and
delivery of, recording or filing of, preservation of rights under,
enforcement of, and refinancing, renegotiation or restructuring of,
this Agreement, the Notes and the other Loan Documents and any
amendment, waiver or consent relating thereto (including, without
limitation, travel, photocopy, mailing, courier, telephone and other
similar expenses of the Agent, the cost of environmental audits,
surveys and appraisals at reasonable intervals, the reasonable fees
and disbursements of counsel for the Agent and in the case of
enforcement for any of the Banks); and promptly reimburse the Agent
for all amounts expended, advanced or incurred by the Agent or the
Banks to satisfy any obligation of the Company under this Agreement or
any Loan Document;
(b) TO INDEMNIFY THE AGENT AND EACH BANK AND EACH OF
THEIR AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS
("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS AGAINST AND
PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY
MATTERS WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF
THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A
RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (i) ANY ACTUAL OR
PROPOSED USE BY THE COMPANY OF THE PROCEEDS OF ANY OF THE LOANS, (ii)
THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (iii)
THE OPERATIONS OF THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES,
(iv) THE FAILURE OF THE COMPANY OR ANY SUBSIDIARY TO COMPLY WITH THE
TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY
GOVERNMENTAL REQUIREMENT, (v) ANY INACCURACY OF ANY REPRESENTATION OR
ANY BREACH OF ANY WARRANTY OF THE COMPANY SET FORTH IN THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS, (vi) THE ISSUANCE, EXECUTION AND DELIVERY
OR TRANSFER OF OR PAYMENT OR FAILURE TO PAY UNDER ANY LETTER OF
CREDIT, (vii) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT
NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER
PRESENTATION OF THE MANUALLY EXECUTED DRAFT(S) AND CERTIFICATION(S),
(viii) ANY ASSERTION THAT THE BANKS WERE NOT ENTITLED TO RECEIVE THE
PROCEEDS RECEIVED PURSUANT TO THE LOAN DOCUMENTS, OR (ix) ANY OTHER
ASPECT OF
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THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES
AND DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN
CONNECTION WITH INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY
SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS,
LITIGATION OR INQUIRIES) OR CLAIM AND INCLUDING ALL INDEMNITY MATTERS
ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY,
BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS
BETWEEN THE BANKS OR ANY BANK AND THE AGENT OR A BANK'S SHAREHOLDERS
AGAINST THE AGENT OR BANK OR BY REASON OF THE GROSS NEGLIGENCE OR
WILFUL MISCONDUCT ON THE PART OF THE INDEMNIFIED PARTY; AND
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND
LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (i) UNDER ANY
ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY SUBSIDIARY OR ANY
OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ii) AS A
RESULT OF THE BREACH OR NON-COMPLIANCE BY THE COMPANY OR ANY
SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY
SUBSIDIARY, (iii) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY
SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY THEIR
PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME,
COULD RESULT IN PRESENT LIABILITY, (iv) THE PRESENCE, USE, RELEASE,
STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF
THE PROPERTIES OWNED OR OPERATED BY THE COMPANY OR ANY SUBSIDIARY, OR
(v) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION
WITH ANY OF THE LOAN DOCUMENTS, PROVIDED, HOWEVER, NO INDEMNITY SHALL
BE AFFORDED UNDER THIS SECTION 12.03 (c) IN RESPECT OF ANY PROPERTY
FOR ANY OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF THE AGENT OR
ANY BANK DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR
ASSIGNS SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION
OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be
indemnified without the consent of the indemnitor, such consent not to
be unreasonably withheld; provided, that
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the indemnitor may not reasonably withhold consent to any settlement
that an Indemnified Party proposes, if the indemnitor does not have
the financial ability to pay all its obligations outstanding and
asserted against the indemnitor at that time, including the maximum
potential claims against the Indemnified Party to be indemnified
pursuant to this Section 12.03.
(e) In the case of any indemnification hereunder, the
Agent or any Bank, as appropriate, shall give notice to the Company of
any such claim or demand being made against the Indemnified Party and
the Company shall have the non-exclusive right to join in the defense
against any such claim or demand provided that if the Company provides
a defense, the Indemnified Party shall bear its own cost of defense
unless there is a conflict between the Company and such Indemnified
Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE
INDEMNIFIED PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE
OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT
LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE
RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED
PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY
ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN
INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS
NEGLIGENCE OR WILFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF
INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF
THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY REASON OF EVENTS OTHER
THAN THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE INDEMNIFIED
PARTY.
(g) The Company's obligations under this Section 12.03
shall survive any termination of this Agreement and the payment of the
Notes and shall continue thereafter in full force and effect.
(h) The Company shall pay any amounts due under this
Section 12.03 within thirty (30) days of the receipt by the Company of
notice of the amount due.
12.04 Amendments, Etc. Any provision of this Agreement or
any other Loan Document, may be amended, modified or waived with the Company's
and the Majority Banks' prior written consent; provided that (a) no amendment,
modification or waiver which extends the Maturity Date, the maturity of the
Loans, increases the Aggregate Maximum Credit Amounts above $200,000,000,
releases all or substantially all of the collateral, reduces the interest rate
or fees applicable to the Loans or the fees payable to the Banks generally,
affects Sections 2.03(a),
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this Section 12.04 or Section 12.06(a) or modifies the definition of "Majority
Banks" shall be effective without consent of all Banks; (b) no amendment,
modification or waiver which increases the Maximum Credit Amount of any Bank
shall be effective without the consent of such Bank; and (c) no amendment,
modification or waiver which modifies the rights, duties or obligations of the
Agent shall be effective without the consent of the Agent.
12.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
12.06 Assignments and Participations.
(a) The Company may not assign its rights or obligations
hereunder or under the Notes or any Letters of Credit without the
prior consent of all of the Banks and the Agent.
(b) Any Bank may, upon the written consent of the Agent
and the Company (which consent will not be unreasonably withheld),
assign to one or more assignees all or a portion of its rights and
obligations under this Agreement pursuant to an Assignment Agreement
substantially in the form of Exhibit D (an "Assignment") provided,
however, that (i) any such assignment shall be in the amount of at
least $10,000,000 or such lesser amount to which the Company has
consented and (ii) the assignee shall pay to the Agent a processing
and recordation fee of $2,500 for each assignment. Any such
assignment will become effective upon the execution and delivery to
the Agent of the Assignment and the consent of the Agent. Promptly
after receipt of an executed Assignment, the Agent shall send to the
Company a copy of such executed Assignment. Upon receipt of such
executed Assignment, the Company, will, at its own expense, execute
and deliver new Notes to the assignor and/or assignee, as appropriate,
in accordance with their respective interests as they appear. Upon
the effectiveness of any assignment pursuant to this Section 12.06(b),
the assignee will become a "Bank," if not already a "Bank," for all
purposes of this Agreement and the other Loan Documents. The assignor
shall be relieved of its obligations hereunder to the extent of such
assignment (and if the assigning Bank no longer holds any rights or
obligations under this Agreement, such assigning Bank shall cease to
be a "Bank" hereunder except that its rights under Sections 4.06,
5.01, 5.05 and 12.03 shall not be affected). The Agent will prepare
on the last Business Day of each month during which an assignment has
become effective pursuant to this Section 12.06(b), a new Annex I
giving effect to all such assignments effected during such month, and
will promptly provide the same to the Company and each of the Banks.
(c) Each Bank may transfer, grant or assign
participations in all or any part of such Bank's interests hereunder
pursuant to this Section 12.06(c) to any Person, provided that: (i)
such Bank shall remain a "Bank" for all purposes of this Agreement and
the
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transferee of such participation shall not constitute a "Bank"
hereunder; and (ii) no participant under any such participation shall
have rights to approve any amendment to or waiver of any of the Loan
Documents, except to the extent such amendment or waiver would (x)
extend the Maturity Date, (y) reduce the interest rate (other than as
a result of waiving the applicability of any post-default increases in
interest rates) or fees applicable to any of the Commitments or Loans
or Letters of Credit in which such participant is participating, or
postpone the payment of any thereof, or (z) release all or
substantially all of the collateral (except as provided in the Loan
Documents) supporting any of the Commitments or Loans or Letters of
Credit in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under
this Agreement or any of the Loan Documents (the participant's rights
against the granting Bank in respect of such participation to be those
set forth in the agreement with such Bank creating such
participation), and all amounts payable by the Company hereunder shall
be determined as if such Bank had not sold such participation,
provided that such participant shall be entitled to receive additional
amounts under Article V on the same basis as if it were a Bank and be
indemnified under Section 12.03 as if it were a Bank. In addition,
each agreement creating any participation must include an agreement by
the participant to be bound by the provisions of Section 12.15.
(d) The Banks may furnish any information concerning the
Company in the possession of the Banks from time to time to assignees
and participants (including prospective assignees and participants);
provided that, such Persons agree to be bound by the provisions of
Section 12.15 hereof.
(e) Notwithstanding anything in this Section 12.06 to the
contrary, any Bank may assign and pledge all or any of its Notes to
any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such
Federal Reserve System and/or such Federal Reserve Bank. No such
assignment and/or pledge shall release the assigning and/or pledging
Bank from its obligations hereunder.
(f) Notwithstanding any other provisions of this Section
12.06, no transfer or assignment of the interests or obligations of
any Bank or any grant of participations therein shall be permitted if
such transfer, assignment or grant would require the Company to file a
registration statement with the SEC or to qualify the Loans under the
"Blue Sky" laws of any state.
12.07 Invalidity. In the event that any one or more of the
provisions contained in any of the Loan Documents shall, for any reason, be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of the any
other Loan Document.
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12.08 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.09 References. The words "herein," "hereof," "hereunder"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Subsection or Section shall be deemed to refer to the
applicable Section or Subsection of this Agreement unless otherwise stated
herein. Any reference herein to an exhibit or schedule shall be deemed to
refer to the applicable exhibit or schedule attached hereto unless otherwise
stated herein.
12.10 Survival. The obligations of the parties under Sections
5, 12.03, and 12.15 shall survive the repayment of the Loans and the
termination of the Commitments. To the extent that any payments on the
Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent, the
Indebtedness so satisfied shall be revived and continue as if such payment or
proceeds had not been received and the Agent's and the Banks' Liens, security
interests, rights, powers and remedies under this Agreement and each Loan
Document shall continue in full force and effect. In such event, each Loan
Document shall be automatically reinstated and the Company shall take such
action as may be reasonably requested by the Agent and the Banks to effect such
reinstatement.
12.11 Captions. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
12.12 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE
NOTES REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
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12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, OTHER THAN THE CONFLICT OF LAWS RULES THEREOF.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR ITSELF AND (TO THE
EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND
DOES NOT PRECLUDE THE AGENT OR ANY BANK FROM OBTAINING JURISDICTION
OVER THE COMPANY IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE COMPANY HEREBY IRREVOCABLY DESIGNATES
PRENTICE-HALL CORPORATION SYSTEMS, INC. LOCATED AT 15 COLUMBUS CIRCLE,
NEW YORK, NEW YORK 10023-7773, AS THE DESIGNEE, APPOINTEE AND AGENT OF
THE COMPANY TO RECEIVE, FOR AND ON BEHALF OF THE COMPANY, SERVICE OF
PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE NOTES. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE
PROMPTLY FORWARDED BY OVERNIGHT COURIER TO THE COMPANY AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, BUT THE FAILURE OF THE COMPANY
TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS SAID ADDRESS,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
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(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR
ANY BANK OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
(e) EACH OF THE COMPANY AND EACH BANK HEREBY (A)
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (B) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES,
OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR
ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
12.14 Interest. It is the intention of the parties hereto
that each Bank shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to
any Bank under laws applicable to it (including the laws of the United States
of America and the State of New York or any other jurisdiction whose laws may
be mandatorily applicable to such Bank notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in the Notes, this Agreement or in any other Loan Document or agreement entered
into in connection with or as security for the Notes, it is agreed as follows:
(i) the aggregate of all consideration which constitutes interest under law
applicable to any Bank that is contracted for, taken, reserved, charged or
received by such Bank under the Notes, this Agreement or under any of the other
aforesaid Loan Documents or agreements or otherwise in connection with the
Notes shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be cancelled automatically and if
theretofore paid shall be credited by such Bank on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Bank to the
Company); and (ii) in the event that the maturity of the Notes is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law
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applicable to any Bank may never include more than the maximum amount allowed
by such applicable law, and excess interest, if any, provided for in this
Agreement or otherwise shall be cancelled automatically by such Bank as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Bank on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by such Bank to the Company). All sums paid
or agreed to be paid to any Bank for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Bank, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Loans evidenced by the Notes until payment in full so that the rate
or amount of interest on account of any Loans hereunder does not exceed the
maximum amount allowed by such applicable law. If at any time and from time to
time (i) the amount of interest payable to any Bank on any date shall be
computed at the Highest Lawful Rate applicable to such Bank pursuant to this
Section 12.14 and (ii) in respect of any subsequent interest computation period
the amount of interest otherwise payable to such Bank would be less than the
amount of interest payable to such Bank computed at the Highest Lawful Rate
applicable to such Bank, then the amount of interest payable to such Bank in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Bank until the total
amount of interest payable to such Bank shall equal the total amount of
interest which would have been payable to such Bank if the total amount of
interest had been computed without giving effect to this Section.
12.15 Confidentiality. In the event that the Company
provides to the Agent or the Banks written confidential information belonging
to the Company, if the Company shall denominate such information in writing as
"confidential", the Agent and the Banks shall thereafter maintain such
information in confidence in accordance with the standards of care and
diligence that each utilizes in maintaining its own confidential information.
This obligation of confidence shall not apply to such portions of the
information which (i) are in the public domain, (ii) hereafter become part of
the public domain without the Agent or the Banks breaching their obligation of
confidence to the Company, (iii) are previously known by the Agent or the Banks
from some source other than the Company, (iv) are hereafter developed by the
Agent or the Banks without using the Company's information, (v) are hereafter
obtained by or available to the Agent or the Banks from a third party who owes
no obligation of confidence to the Company with respect to such information or
through any other means other than through disclosure by the Company, (vi) are
disclosed with the Company's consent, (vii) must be disclosed either pursuant
to any Governmental Requirement or to persons regulating the activities of the
Agent or the Banks or (viii) as may be required by law or regulation or order
of any Governmental Authority in any judicial, arbitration or governmental
proceeding. Further, the Agent or a Bank may disclose any such information to
any other Bank, any independent petroleum engineers or consultants, any
independent certified public accountants, any legal counsel employed by such
Person in connection with this Agreement or any Loan Document, including
without limitation, the enforcement or exercise of all rights and remedies
thereunder, or any assignee or participant (including prospective assignees and
participants) in the Loans; provided, however, that the
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Agent or Bank imposes on the Person to whom such information is disclosed the
same obligation to maintain the confidentiality of such information as is
imposed upon it hereunder. Notwithstanding anything to the contrary provided
herein, this obligation of confidence shall cease three (3) years from the date
the information was furnished, unless the Company requests in writing at least
thirty (30) days prior to the expiration of such three year period, to maintain
the confidentiality of such information for an additional three year period.
The Company waives any and all other rights it may have to confidentiality as
against the Agent and the Banks arising by contract, agreement, statute or law
except as expressly stated in this Section 12.15.
12.16 Copies. When the Company is to provide a copy of any
report or notice to the Agent under this Agreement or any Loan Document, it
shall also provide enough copies of such report or notice to the Agent for the
Agent to provide a copy to each Bank.
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The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
NEWFIELD EXPLORATION COMPANY
By: /s/ TERRY W. RATHERT
-----------------------------------
Name: Terry W. Rathert
Title: Vice President
Address for Notices:
363 N. Sam Houston Parkway
Suite 2020
Houston, Texas 77060
Telecopier No.: (713) 847-6006
Telephone No.: (713) 847-6000
Attention: Terry W. Rathert
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THE CHASE MANHATTAN BANK,
individually and as Agent
By: /s/
-----------------------------------
Name:
Title:
Lending Office for Base Rate Loans and
Eurodollar Loans:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: Loan and Agency Services
Address for Notices:
The Chase Manhattan Bank
One Chase Manhattan Plaza, 8th Floor
New York, NY 10081
Telecopier No.: (212) 552-5777
Telephone No.: (212) 552-7400
Attention: Loan and Agency Services
With a Copy to:
CHASE SECURITIES INC.
707 Travis Street - 5N86
Houston, TX 77002
Telecopier No.: (713) 216-8870
Telephone No.: (713) 216-8869
Attention: Peter Licalzi
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BANKBOSTON, N.A.
By: /s/ TERRENCE RONAN
-----------------------------------
Name: Terrence Ronan
Title: Vice President
Lending Office for Base Rate Loans and
Eurodollar Loans:
100 Federal Street
Mail Stop 01-08-02
Boston, MA 02110
Telecopier No.: (617) 434-9820
Telephone No.: (617) 434-9623
Attention: Debora Williams
Address for Notices:
100 Federal Street
Mail Stop 01-08-04
Boston, MA 02110
Telecopier No.: (617) 434-3652
Telephone No.: (617) 434-5472
Attention: Terrence Ronan
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BANK OF MONTREAL
By: /s/ ROBERT L. ROBERTS
-----------------------------------
Name: Robert L. Roberts
Title: Director, US Corporate Banking
Lending Office for Base Rate Loans and
Eurodollar Loans:
Bank of Montreal
700 Louisiana, Suite 4400
Houston, TX 77002
Telecopier No.: (713) 225-1845
Telephone No.: (713) 546-9744
Attention: Jane Wiley
Address for Notices:
Bank of Montreal
700 Louisiana, Suite 4400
Houston, TX 77002
Telecopier No.: (713) 223-4007
Telephone No.: (713) 546-9754
Attention: Robert L. Roberts
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FIRST UNION NATIONAL BANK
By: /s/ JOSEPH H. TOWELL
-----------------------------------
Name: Joseph H. Towell
Title: Senior Vice President
Lending Office for Base Rate Loans and
Eurodollar Loans:
First Union National Bank
301 South College Street
Charlotte, NC 28288
Address for Notices:
First Union Capital Markets Corp.
1001 Fannin Street, Suite 2255
Houston, TX 77002
Telecopier No.: (713) 650-6354
Telephone No.: (713) 650-3716
Attention: Paul N. Riddle
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SOCIETE GENERALE
SOUTHWEST AGENCY
By: /s/ RICHARD A. ERBERT
-----------------------------------
Name: Richard A. Erbert
Title: Vice President
Lending Office for Base Rate Loans and
Eurodollar Loans:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Address for Notices:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Telecopier No.: (214) 754-0171
Telephone No.: (214) 979-2767
Attention: Tequlla English
With a Copy to:
1111 Bagby Street, #2020
Houston, Texas 77002
Telecopier No.: (713) 650-0824
Telephone No.: (713) 759-6318
Attention: Richard Erbert
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FIRST NATIONAL BANK OF COMMERCE
By: /s/ DAVID R. REID
-----------------------------------
Name: David R. Reid
Title: Senior Vice President
Lending Office for Base Rate Loans and
Eurodollar Loans:
First National Bank of Commerce
201 St. Charles Avenue, 28th Floor
New Orleans, LA 70170
Telecopier No.: (504) 623-1316
Telephone No.: (504) 623-2150
Address for Notices:
First National Bank of Commerce
201 St. Charles Avenue, 28th Floor
New Orleans, LA 70170
Telecopier No.: (504) 623-1316
Telephone No.: (504) 623-1352
Attention: Lisa Glennon
With a Copy to:
First National Bank of Commerce
P. O. Box 90-F
Lafayette, LA 70509-7001
Attention: David Reid
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