EXECUTION COPY
EXHIBIT 10.3
CREDIT AGREEMENT
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DEVON ENERGY CORPORATION
AND
DEVON FINANCING CORPORATION, U.L.C.
as Borrowers
UBS AG, STAMFORD BRANCH
as Administrative Agent
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
as Arrangers
BANK OF AMERICA, N.A.
as Syndication Agent
AND CERTAIN FINANCIAL INSTITUTIONS
as Lenders
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$3,032,000,000
October 12, 2001
TABLE OF CONTENTS
<Table>
<Caption>
Page
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ARTICLE I
THE LOANS
Section 1.1. Commitments to Lend; Notes..................................................................1
Section 1.2. Requests for New Loans......................................................................3
Section 1.3. Continuations and Conversions of Existing Loans.............................................4
Section 1.4. Use of Proceeds.............................................................................5
Section 1.5. Interest Rates and Fees.....................................................................5
Section 1.6. Prepayments of Loans........................................................................6
ARTICLE II
DEFINED TERMS
Section 2.1. Defined Terms...............................................................................7
ARTICLE III
PAYMENTS TO LENDERS
Section 3.1. General Procedures.........................................................................31
Section 3.2. Increased Cost and Reduced Return..........................................................32
Section 3.3. Limitation on Types of Loans...............................................................33
Section 3.4. Illegality.................................................................................33
Section 3.5. Treatment of Affected Loans................................................................34
Section 3.6. Compensation...............................................................................34
Section 3.7. Change of Applicable Lending Office........................................................35
Section 3.8. Replacement of Lenders.....................................................................35
Section 3.9. Taxes......................................................................................35
ARTICLE IV
CONDITIONS PRECEDENT TO LENDING
Section 4.1. Documents to be Delivered..................................................................38
Section 4.2. Additional Conditions Precedent to First Loan..............................................39
Section 4.3. Conditions to Initial Mitchell Loans.......................................................39
Section 4.4. Conditions to Initial Anderson Loans.......................................................40
Section 4.5. Conditions Precedent to General Purpose Loans..............................................42
Section 4.6. Additional Conditions Precedent to All Loans...............................................42
</Table>
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<Table>
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. No Default.................................................................................42
Section 5.2. Organization and Good Standing.............................................................42
Section 5.3. Authorization..............................................................................43
Section 5.4. No Conflicts or Consents...................................................................43
Section 5.5. Enforceable Obligations....................................................................43
Section 5.6. Full Disclosure............................................................................43
Section 5.7. Litigation.................................................................................43
Section 5.8. [Reserved].................................................................................44
Section 5.9. [Reserved].................................................................................44
Section 5.10. US Borrower's Subsidiaries.................................................................44
Section 5.11. Title to Properties; Licenses..............................................................44
Section 5.12. Government Regulation......................................................................44
Section 5.13. Solvency...................................................................................44
ARTICLE VI
AFFIRMATIVE COVENANTS OF BORROWERS
Section 6.1. Payment and Performance....................................................................45
Section 6.2. Books, Financial Statements and Reports....................................................45
Section 6.3. Other Information and Inspections..........................................................46
Section 6.4. Notice of Material Events and Change of Address............................................46
Section 6.5. Maintenance of Properties..................................................................47
Section 6.6. Maintenance of Existence and Qualifications................................................47
Section 6.7. Payment of Trade Liabilities, Taxes, etc...................................................47
Section 6.8. Insurance..................................................................................47
Section 6.9. Performance on Borrower's Behalf...........................................................47
Section 6.10. Interest...................................................................................48
Section 6.11. Compliance with Law........................................................................48
Section 6.12. Environmental Matters......................................................................48
Section 6.13. Bank Accounts; Offset......................................................................48
ARTICLE VII
NEGATIVE COVENANTS OF BORROWERS
Section 7.1. Indebtedness...............................................................................49
Section 7.2. Limitation on Liens........................................................................50
Section 7.3. Limitation on Mergers......................................................................50
Section 7.4. Limitation on Issuance of Securities by Subsidiaries of US Borrower;
Ownership of Certain Restricted Subsidiaries by US Borrower.............................51
Section 7.5. Transactions with Affiliates...............................................................51
</Table>
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<Table>
<Caption>
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Section 7.6. Prohibited Contracts.......................................................................51
Section 7.7. Funded Debt to Total Capitalization........................................................51
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1. Events of Default..........................................................................52
Section 8.2. Remedies...................................................................................54
ARTICLE IX
AGENTS
Section 9.1. Appointment, Powers, and Immunities........................................................54
Section 9.2. Reliance by Agent..........................................................................55
Section 9.3. Defaults...................................................................................55
Section 9.4. Rights as Lender...........................................................................56
Section 9.5. Indemnification............................................................................56
Section 9.6. Non-Reliance on Administrative Agent and Other Lenders.....................................56
Section 9.7. [Reserved].................................................................................57
Section 9.8. Sharing of Set-Offs and Other Payments.....................................................57
Section 9.9. Investments................................................................................57
Section 9.10. Benefit of Article IX......................................................................58
Section 9.11. Resignation................................................................................58
Section 9.12. [Reserved].................................................................................58
Section 9.13. Other Agents...............................................................................58
ARTICLE X
MISCELLANEOUS
Section 10.1. Waivers and Amendments; Acknowledgments....................................................58
Section 10.2. Survival of Agreements; Cumulative Nature..................................................61
Section 10.3. Notices....................................................................................62
Section 10.4. Payment of Expenses; Indemnity.............................................................62
Section 10.5. Parties in Interest........................................................................63
Section 10.6. Assignments and Participations.............................................................63
Section 10.7. Confidentiality............................................................................65
Section 10.8. Governing Law; Submission to Process.......................................................66
Section 10.9. Limitation on Interest.....................................................................66
Section 10.10. Termination; Limited Survival..............................................................67
Section 10.11. Severability...............................................................................67
Section 10.12. Counterparts; Fax..........................................................................67
Section 10.13. Waiver of Jury Trial, Punitive Damages, etc................................................67
Section 10.14. Defined Terms..............................................................................68
Section 10.15. Annexes, Exhibits and Schedules............................................................68
</Table>
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<Table>
<Caption>
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Section 10.16. Amendment of Defined Instruments...........................................................68
Section 10.17. References and Titles......................................................................68
Section 10.18. Calculations and Determinations............................................................69
Section 10.19. Construction of Indemnities and Releases...................................................69
Signatures......................................................................................................S-1
</Table>
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Schedules and Exhibits:
<Table>
Annex I - Lenders Schedule
Schedule 1 - Disclosure Schedule
Schedule 2 - Surety Bond and Letter of Credit Obligations
Schedule 7.1 - Existing Indebtedness
Exhibit A - Promissory Note
Exhibit B - Borrowing Notice
Exhibit C - Continuation/Conversion Notice
Exhibit D - Certificate Accompanying Financial Statements
Exhibit E-1 - Opinion of Counsel for US Borrower
Exhibit E-2 - Opinion of Counsel for Canadian Borrower
Exhibit F - Assignment and Acceptance Agreement
Exhibit G-1 - Form of Parent Guaranty
Exhibit G-2 - Form of Subsidiary Guaranty
Exhibit G-3 - Form of Devon HoldCo Guaranty
Exhibit H - Form of Amended and Restated Agreement
</Table>
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made as of October
12, 2001, by and among Devon Energy Corporation, a Delaware corporation ("US
Borrower"), Devon Financing Corporation, U.L.C., an unlimited liability company
organized under the laws of Nova Scotia, Canada ("Canadian Borrower" and,
together with US Borrower, the "Borrowers"), UBS AG, Stamford Branch, as
administrative agent ("Administrative Agent"), and the undersigned Lenders. In
consideration of the mutual covenants and agreements contained herein the
parties hereto agree as follows:
ARTICLE I
THE LOANS
Section 1.1. Commitments to Lend; Notes.
(a) Subject to the terms and conditions hereof, each Lender
agrees to make loans to each Borrower in the amounts and at the times set forth
in Section 1.1(b) below, (all loans are to be denominated in US Dollars and are
referred to herein collectively as the "Loans" and the commitments to provide
such Loans are referred to collectively as the "Commitments") upon the
Applicable Borrower's request from time to time during the Facility Commitment
Period, provided, that (i) subject to Sections 3.3, 3.4 and 3.5, all Lenders are
requested to make Loans of the same Type in accordance with their respective
Percentage Shares and as part of the same Borrowing and (ii) each Lender's
Percentage Share of the Facility Usage shall never exceed such Lender's
Percentage Share of the Maximum Credit Amount. The aggregate amount of all Loans
in any Borrowing must be in an integral multiple of $1,000,000 which (i) with
respect to new Loans which at the time requested pursuant to Section 1.2
constitute a Borrowing of a Type not then outstanding, equals or exceeds
$10,000,000 and (ii) with respect to new Loans which at the time requested
constitute a Borrowing of a Type then outstanding equals or exceeds, when taken
together with then outstanding, Loans of such Type, $20,000,000 or (iii) must
equal the unadvanced portion of the Maximum Credit Amount. If requested by such
Lender, the obligation of each Borrower to repay to each Lender the aggregate
amount of all Loans made to such Borrower by such Lender, together with interest
accruing in connection therewith, shall be evidenced by a single promissory note
(herein called such Lender's "Note") made by such Borrower payable to the order
of such Lender in the form of Exhibit A with appropriate insertions. Each
Borrower has guaranteed the other Borrower's obligations hereunder pursuant to a
Guaranty substantially in the form of Exhibit G-1 or -2 hereto. The amount of
principal owing on each Lender's Note at any given time shall be the aggregate
amount of all Loans represented by such Note theretofore made by such Lender
minus all payments of principal theretofore received by such Lender on such
Note. Interest on the Loans shall accrue and be due and payable as provided
herein. Each Loan shall be due and payable as provided herein, and shall be due
and payable in full on the Maturity Date. The date, amount, Type and duration of
the Interest Period (if applicable) of each Loan made by each Lender to each
Borrower and each payment made on account of the principal thereof, shall be
recorded by such Lender (or its nominee) on its books and, prior to any transfer
of any Loans held by it, such Lender (or its nominee) may endorse such
information on the schedule attached to its Note (if any) evidencing such Loans
or any continuation thereof; provided, however, that the failure of such Lender
(or its nominee) to make any such recordation or endorsement or any error
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in such recordation or endorsement shall not affect the obligations of the
Applicable Borrower to make a payment when due of any amount owing hereunder.
(b) Loans will be available, subject to the other terms and
conditions set forth herein, in up to eight draws, as follows: (i) to fund the
cash portion of the consideration with respect to the Mitchell Merger and the
payment of related expenses (the "Mitchell Merger Borrowing"); (ii) to (a)
refinance indebtedness of Mitchell and pay related fees and expenses and (b)
fund up to $51.5 million of a working capital deficit of Mitchell; provided, any
borrowing pursuant to this clause (ii) must be made within 90 days of the
Mitchell Merger Closing Date (the amount available for the borrowings pursuant
to clause (i) above and this clause (ii), the "Mitchell Available Amount", which
amount shall not exceed $1.7 billion and shall be borrowed by US Borrower (all
such Loans provided in respect of the Mitchell Available Amount, the "Mitchell
Loans")); (iii) to fund the consummation of the Anderson Tender Offer and the
payment of any related fees and expenses (the "Anderson Tender Offer
Borrowing"); (iv) to (a) fund the purchase of Anderson Shares not otherwise
acquired pursuant to the Anderson Tender Offer and the consideration paid in
respect of the Anderson Merger and pay related fees and expenses and (b) fund up
to $130.0 million of a working capital deficit of Anderson; provided, no such
borrowing may be made unless the Anderson Tender Offer shall have been
consummated; (v) to refinance indebtedness of Anderson and pay related fees and
expenses; provided, any borrowing pursuant to this clause (v) must be made
within 180 days of the Anderson Tender Offer Closing Date (the amount available
for the borrowings pursuant to clauses (iii) and (iv) above and this clause (v),
the "Anderson Available Amount," which amount shall not exceed $1,332,000,000
and may be borrowed by either Borrower (all such Loans provided in respect of
the Anderson Available Amount, the "Anderson Loans")); and (vi) up to
$200,000,000 in the aggregate from the Mitchell Available Amount and/or the
Anderson Available Amount (to the extent not applied pursuant to the foregoing
clauses (i) through (v)) for general corporate purposes; provided, no drawing
may be made pursuant to this clause (vi) unless (x) the transactions and the
borrowings contemplated by clauses (i) through (v) above have been consummated
(other than clause (b) of each of clauses (ii) and (iv)) or (y) either
Acquisition has been abandoned and the transactions and borrowings contemplated
by clauses (i) through (v) except as aforesaid in respect of the other
Acquisition have been consummated; provided, further, all borrowings pursuant to
this clause (vi) must be made prior to September 13, 2002 (all Loans provided in
respect of such general corporate purposes, the "General Purpose Loans"; the
Anderson Available Amount and the Mitchell Available Amount (including any
portion thereof applied to General Purpose Loans) are referred to collectively
as the "Available Amount"). Amounts borrowed hereunder that are repaid or
prepaid may not be reborrowed.
(c) To the extent any Borrower consummates an Offering on or
after October 4, 2001 but prior to the drawing of the first Loan pursuant to
Section 4.1, the Commitments will be automatically and permanently reduced by an
amount equal to the Net Offering Proceeds thereof, such reduction to be
allocated to the Mitchell Available Amount and the Anderson Available Amount as
directed by the US Borrower, with the consent (which consent shall not be
unreasonably withheld) of the Administrative Agent.
(d) The US Borrower may from time to time terminate in full or
permanently reduce the unused portion of the Commitments upon three Business
Days' prior written or telecopied notice to the Administrative Agent; provided,
however, that any such partial reduction shall be in a minimum aggregate amount
of $5,000,000 or any integral multiple of $1,000,000 in excess thereof
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(or, if less, the full remaining amount of the then applicable Commitments). The
Administrative Agent shall promptly notify each Lender of the receipt by the
Administrative Agent of any notice from the US Borrower pursuant to this Section
1.1(d). Any partial reduction of the Commitments pursuant to this Section 1.1(d)
shall be allocated to the Mitchell Available Amount and the Anderson Available
Amount as directed by the US Borrower, with the consent (which consent shall not
be unreasonably withheld) of the Administrative Agent, and shall be applied to
the Commitments of the Lenders pro-rata based upon their respective Percentage
Shares. The US Borrower shall pay to the Administrative Agent for the account of
the Lenders in accordance with the terms of Section 1.5(b), on the date of each
termination or reduction of the Commitments, any fees accrued through the date
of such termination or reduction on the amount of the Commitments so terminated
or reduced.
(e) The Commitments shall be automatically and permanently
terminated to the extent undrawn on the earlier of (A) the date that is six
months after the later of the Anderson Tender Offer Closing Date and the
Mitchell Merger Closing Date and (B) September 13, 2002 (the "Commitment
Termination Date"). The Commitments to provide the Loans will automatically and
permanently be terminated on the date of the making of any such Loan by the
amount of the Loans made on such date.
Section 1.2. Requests for New Loans. Subject to the provisions
of Section 1.1(a), the Applicable Borrower must give to Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of any
requested Borrowing of new Loans to be advanced by Lenders. Each such notice
constitutes a "Borrowing Notice" hereunder and must:
(a) specify the aggregate amount of any such Borrowing of new
Base Rate Loans and the date on which such Base Rate Loans are to be
advanced, the aggregate amount of any such Borrowing of new Eurodollar
Loans, the date on which such Eurodollar Loans are to be advanced
(which shall be the first day of the Interest Period which is to apply
thereto), and the length of the applicable Interest Period; provided, a
request for a Interest Period of nine or twelve months shall be deemed
by Administrative Agent a request for the longest available Interest
Period (which shall be at least six months) if all Lenders are not able
to make Loans available for such nine or twelve month period, as the
case may be; and
(b) be received by Administrative Agent not later than 11:00
a.m., New York City time, on the Business Day preceding the day on
which any such Base Rate Loans are to be made, or the third Business
Day preceding the day on which any such Eurodollar Loans are to be
made.
Each such written request or confirmation must be made in the
form and substance of the "Borrowing Notice" attached hereto as Exhibit B, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by the Applicable Borrower as to the
matters which are required to be set out in such written confirmation. Upon
receipt of any such Borrowing Notice, Administrative Agent shall give each
Lender notice of the terms thereof not later than 2:00 p.m., New York City time,
on the day it receives such Borrowing Notice from the Applicable Borrower if it
receives such Borrowing Notice by 11:00 a.m., New York City time, otherwise on
the next Business Day. If all conditions precedent to such new Loans have been
met, each Lender will on the date requested promptly remit to Administrative
Agent at Administrative Agent's
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office in New York City the amount of such Lender's new Loan in immediately
available funds, and upon receipt of such funds, unless to its actual knowledge
any conditions precedent to such Loans have been neither met nor waived as
provided herein, Administrative Agent shall promptly make such Loans available
to the Applicable Borrower. Unless Administrative Agent shall have received
prompt notice from a Lender that such Lender will not make available to
Administrative Agent such Lender's new Loan, Administrative Agent may in its
discretion assume that such Lender has made such Loan available to
Administrative Agent in accordance with this section and Administrative Agent
may if it chooses, in reliance upon such assumption, make such Loan available to
the Applicable Borrower. If and to the extent such Lender shall not so make its
new Loan available to Administrative Agent, such Lender and the Applicable
Borrower severally agree to pay or repay to Administrative Agent within three
days after demand the amount of such Loan together with interest thereon, for
each day from the date such amount was made available to the Applicable Borrower
until the date such amount is paid or repaid to Administrative Agent, with
interest at (1) the Federal Funds Rate, if such Lender is making such payment;
provided that Administrative Agent gave notice of the terms of the Borrowing
Notice to such Lender in accordance with the terms of this Section 1.2, and (2)
the interest rate applicable at the time to the other new Loans made on such
date, if the Applicable Borrower is making such repayment. If neither such
Lender nor the Applicable Borrower pays or repays to Administrative Agent such
amount within such three-day period, Administrative Agent shall in addition to
such amount be entitled to recover from such Lender and from the Applicable
Borrower, on demand, interest thereon at the Default Rate for Base Rate Loans,
calculated from the date such amount was made available to the Applicable
Borrower. The failure of any Lender to make any new Loan to be made by it
hereunder shall not relieve any other Lender of its obligation hereunder, if
any, to make its new Loan, but no Lender shall be responsible for the failure of
any other Lender to make any new Loan to be made by such other Lender.
Section 1.3. Continuations and Conversions of Existing Loans.
The Applicable Borrower may make the following elections with respect to Loans
already outstanding under this Agreement: to convert Base Rate Loans to
Eurodollar Loans, to convert Eurodollar Loans to Base Rate Loans on the last day
of the Interest Period applicable thereto or to continue Eurodollar Loans beyond
the expiration of such Interest Period by designating a new Interest Period to
take effect at the time of such expiration. To make any such election, the
Applicable Borrower must give to Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of any such Conversion or
Continuation of existing Loans, with a separate notice given for each new
Borrowing. Each such notice constitutes a "Continuation/Conversion Notice"
hereunder and must:
(a) specify the existing Loans made under this Agreement which
are to be continued or converted;
(b) specify the aggregate amount of any Borrowing of Base Rate
Loans into which such existing Loans are to be continued or converted
and the date on which such Continuation or Conversion is to occur, or
the aggregate amount of any Borrowing of Eurodollar Loans into which
such existing Eurodollar Loans are to be continued or converted, the
date on which such Continuation or Conversion is to occur (which shall
be the first day of the Interest Period which is to apply to such
Eurodollar Loans), and the length of the applicable Interest Period;
and
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(c) be received by Administrative Agent not later than 10:00
a.m., New York City time, on the day on which any such Continuation or
Conversion to Base Rate Loans is to occur, or the third Business Day
preceding the day on which any such Continuation or Conversion to
Eurodollar Loans is to occur.
Each such written request or confirmation must be made in the
form and substance of the "Continuation/Conversion Notice" attached hereto as
Exhibit C, duly completed. Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by the Applicable
Borrower as to the matters which are required to be set out in such written
confirmation. Upon receipt of any such Continuation/Conversion Notice,
Administrative Agent shall give each Lender prompt notice of the terms thereof.
Each Continuation/Conversion Notice shall be irrevocable and binding on the
Applicable Borrower. During the continuance of any Default, the Applicable
Borrower may not make any election to convert existing Base Rate Loans made
under this Agreement into Eurodollar Loans or continue existing Eurodollar Loans
made under this Agreement as Eurodollar Loans. If (due to the existence of a
Default or for any other reason) the Applicable Borrower fails to timely and
properly give any Continuation/Conversion Notice with respect to a Borrowing of
existing Eurodollar Loans at least three Business Days prior to the end of the
Interest Period applicable thereto, such Eurodollar Loans shall automatically be
converted into Base Rate Loans at the end of such Interest Period. No new funds
shall be repaid by the Applicable Borrower or advanced by any Lender in
connection with any Continuation or Conversion of existing Loans pursuant to
this section, and no such Continuation or Conversion shall be deemed to be a new
advance of funds for any purpose; such Continuations and Conversions merely
constitute a change in the interest rate applicable to already outstanding
Loans.
Section 1.4. Use of Proceeds. Subject to the terms and
conditions set forth herein, the Borrowers shall use the Loans for the purposes
described in Section 1.1(b). If any Loan is used for a purpose which is governed
by Regulation U, the Borrowers shall comply with Regulation U in all respects.
In no event shall the funds from any Loan be used directly or indirectly by any
Person for personal, family, household or agricultural purposes. Each Borrower
represents and warrants that it is not engaged principally, or as one of its
important activities, in the business of extending credit to others for the
purpose of purchasing or carrying Margin Stock.
Section 1.5. Interest Rates and Fees.
(a) Interest. Each Loan that is a Base Rate Loan shall bear
interest on each day outstanding at the Base Rate in effect on such day. Each
Loan that is a Eurodollar Loan shall bear interest on each day during the
related Interest Period at the related Adjusted Eurodollar Rate in effect on
such day.
(b) Availability Fees. In consideration of each Lender's
commitment to make Loans under this Agreement, Borrowers will pay to
Administrative Agent for the account of each Lender the Availability Fee. The
Availability Fee shall be due and payable in arrears on the last day of each
Fiscal Quarter and at the end of the Facility Commitment Period.
(c) Reserved.
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(d) Administrative Agent's Fees. In addition to all other
amounts due to Administrative Agent under the Loan Documents, Borrowers will pay
fees in US Dollars to Administrative Agent as described in a letter agreement
dated August 31, 2001 between Administrative Agent and US Borrower.
Section 1.6. Prepayments of Loans.
(a) Optional Prepayments. The Applicable Borrower may, upon
giving notice to Administrative Agent by 11:00 a.m., New York City time, on the
Business Day of prepayment, from time to time and without premium or penalty,
prepay the Loans, in whole or in part, so long as all partial prepayments of
principal concurrently paid on the Loans are in increments of $100,000 and in an
aggregate amount greater than or equal to $5,000,000, and so long as the
Applicable Borrower pays all amounts owing in connection with the prepayment of
any Eurodollar Loan owing under Section 3.6. Administrative Agent shall give
each Lender notice thereof by 2:00 p.m., New York City time, on the date such
notice is received from the Applicable Borrower. Optional prepayments under this
Section 1.6(a) will be applied to scheduled payments set forth in Section 1.6(b)
in forward order of maturity or applied to a specific maturity as directed by
the Applicable Borrower, including by directing that such payment be applied to
the Loans of the other Borrower.
(b) Amortization. The Applicable Borrower hereby promises to
pay to Administrative Agent for the account of Lenders on each payment date
specified in the chart below in repayment of the principal of the Loans made to
such Borrower hereunder (i) in the case of Mitchell Loans made to such Borrower,
an amount (subject to adjustment for any prepayments made under Section 1.6(a)
or any reduction in Commitments in respect of Loans under Section 1.1(c))
calculated by multiplying the percentage shown opposite such payment date under
the heading "Percentage of the Amount of Mitchell Loans Outstanding on the
Commitment Termination Date" by the aggregate principal amount of such Mitchell
Loans outstanding on the Commitment Termination Date plus (ii) in the case of
Andersen Loans made to such Borrower, an amount (subject to adjustment for any
prepayments made under Section 1.6(a) or any reduction in Commitments in respect
of Loans under Section 1.1(c)) calculated by multiplying the percentage shown
opposite such payment date under the heading "Percentage of the Amount of
Anderson Loans Outstanding on the Commitment Termination Date" by the aggregate
principal amount of such Anderson Loans outstanding on the Commitment
Termination Date plus (iii) in the case of General Purpose Loans made to such
Borrower, an amount (subject to adjustment for any prepayments made under
Section 1.6(a) or any reduction in Commitments in respect of Loans under Section
1.1(c)) calculated by multiplying the percentage shown opposite such payment
date under the heading "Percentage of the Amount of General Purpose Loans
Outstanding" on the Commitment Termination Date by the aggregate principal
amount of such General Purpose Loans outstanding on the Commitment Termination
Date:
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<Table>
<Caption>
PERCENTAGE OF THE AMOUNT
PERCENTAGE OF THE PERCENTAGE OF THE OF
AMOUNT OF MITCHELL AMOUNT OF ANDERSON GENERAL PURPOSE LOANS
LOANS OUTSTANDING ON LOANS OUTSTANDING ON OUTSTANDING ON THE
THE COMMITMENT THE COMMITMENT COMMITMENT
TERMINATION TERMINATION TERMINATION
PAYMENT DATE DATE DATE DATE
------------ -------------------- -------------------- ------------------------
October 15, 2004 7.651715040% 7.651715040% 7.651715040%
April 15, 2005 19.788918206% 19.788918206% 19.788918206%
October 15, 2005 19.788918206% 19.788918206% 19.788918206%
April 15, 2006 26.385224274% 26.385224274% 26.385224274%
October 15, 2006 26.385224274% 26.385224274% 26.385224274%
</Table>
If the Commitments in respect of Loans are reduced pursuant to Section 1.1(c),
the amount of such reduction shall be deemed an optional prepayment applied in
forward order of maturity of the above specified amortization payments.
(c) Procedures. Each prepayment of principal under this
Section 1.6 shall be accompanied by all interest then accrued and unpaid on the
principal so prepaid. Any principal or interest prepaid pursuant to this Section
1.6 shall be in addition to, and not in lieu of, all payments otherwise required
to be paid under the Loan Documents at the time of such prepayment.
ARTICLE II
DEFINED TERMS
Section 2.1. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Acquired Debt" means, with respect to any specified Person,
(a) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (b) Indebtedness secured by a Lien
encumbering any assets acquired by such specified Person, and any refinancing of
the foregoing indebtedness on similar terms, taking into account current market
conditions.
"Acquisitions" means, collectively, the Mitchell Acquisition
and the Anderson Acquisition and the transactions contemplated in connection
therewith.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the per annum rate equal to the sum of (a) the
Applicable Margin plus (b) the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by Administrative Agent to be equal to the
quotient obtained by dividing (i) the Eurodollar Rate for such Eurodollar Loan
for such Interest Period by (ii) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period. The Adjusted Eurodollar Rate for any
Eurodollar Loan shall change whenever the Applicable Margin or the Reserve
Requirement changes. No Adjusted Eurodollar Rate charged by any Person shall
ever exceed the Highest Lawful Rate.
-8-
"Administrative Agent" has the meaning assigned thereto in the
preamble to this Agreement.
"Affiliate" means, as to any Person, each other Person that
directly or indirectly (through one or more intermediaries or otherwise)
controls, is controlled by, or is under common control with, such Person. A
Person shall be deemed to be "controlled by" any other Person if such other
Person possesses, directly or indirectly, power
(a) to vote 20% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agent-Related Persons" means Administrative Agent and its
Affiliates, the Arrangers, any successors to Administrative Agent appointed in
accordance with the Loan Documents, and the officers, directors, employees,
agents and attorneys-in-fact of such Persons.
"Agreement" means this Credit Agreement, as it may be amended,
supplemented, restated or otherwise modified and in effect from time to time.
"Anderson" means Anderson Exploration Ltd., a corporation
organized under the laws of Canada.
"Anderson Acquisition" means the acquisition by the US
Borrower, directly or indirectly, pursuant to the Anderson Tender Offer and the
Anderson Merger, of 100% of the Anderson Shares.
"Anderson Acquisition Agreement" means that certain
acquisition agreement by and among the US Borrower and Anderson and
substantially in the form delivered to the Arrangers on August 31, 2001, as the
same may be amended, supplemented or modified from time to time.
"Anderson Available Amount" has the meaning assigned thereto
in Section 1.1(b) of this Agreement.
"Anderson Loans" has the meaning assigned thereto in Section
1.1(b) of this Agreement.
"Anderson Merger" means one or more transactions, including a
Second Stage Transaction, undertaken subsequent to the consummation of the
Anderson Tender Offer which results in all of the Anderson Shares being acquired
directly or indirectly by the US Borrower.
"Anderson Shares" means all of the outstanding common shares
of Anderson.
"Anderson Tender Offer" means the tender offer by a
wholly-owned Subsidiary of US Borrower for the Anderson Shares.
-9-
"Anderson Tender Offer Borrowing" has the meaning assigned
thereto in Section 1.1(b) of this Agreement.
"Anderson Tender Offer Closing Date" means the date of
consummation of the Anderson Tender Offer.
"Anderson Tendered Shares" means all of the shares tendered
pursuant to the Anderson Tender Offer.
"Applicable Borrower" means either US Borrower or Canadian
Borrower, as the case may be.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an Affiliate of
such Lender) designated for such Type of Loan on Annex I hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to Administrative Agent and Borrowers by written notice in
accordance with the terms hereof as the office by which its Loans of such Type
are to be made and maintained.
"Applicable Margin" means on any date, the number of Basis
Points per annum set forth below based on the Applicable Rating Level on such
date:
<Table>
<Caption>
APPLICABLE EURODOLLAR
RATING LEVEL LOANS BASE RATE LOANS
------------- ---------- ---------------
Level I 0.625% 0.000%
Level II 0.750% 0.000%
Level III 1.000% 0.000%
Level IV 1.250% 0.250%
Level V 1.500% 0.500%
</Table>
Changes in the Applicable Margin will occur automatically without prior notice
as changes in the Applicable Rating Level occur. Agent will give notice promptly
to Borrowers and the Lenders of changes in the Applicable Margin.
"Applicable Rating Level" means for any day, the highest
Rating Level (as such term is defined below in this paragraph) issued by S&P or
Moody's (collectively, in this definition called the "Designated Rating
Agencies"). As used in this definition, (a) the term "Rating Level" means for
any day with respect to any of the Designated Rating Agencies, the rating level
described below (or its then equivalent) applicable on such day, issued by such
Designated Rating Agency, from time to time, with respect to US Borrower's
Long-Term Debt or if such rating is unavailable, equivalents thereof, including
counterparty ratings, implied ratings and corporate ratings; (b) "US Borrower's
Long-Term Debt" means senior, unsecured, non-credit enhanced (other than by
guaranties of
-10-
Affiliates of US Borrower) long-term indebtedness for borrowed money of US
Borrower; and (c) "greater or = to" means a rating equal to or more favorable
than and "<" means a rating less favorable than.
<Table>
<Caption>
RATING LEVEL S&P MOODY'S
------------ --- -------
Level I greater or = to A- greater or = to A3
Level II BBB+ Baa1
Level III BBB Baa2
Level IV BBB- Baa3
Level V less or = to BB+ less or = to Ba1
</Table>
If the ratings established by Moody's and S&P shall fall within different
levels, the rating in the inferior level (e.g., Level II is inferior to Level I)
shall be disregarded: provided that in the event that the ratings differential
is (i) two levels (e.g., Levels I and III), the intermediate level shall be
used, (ii) three levels (e.g., Levels I and IV), the higher of the two
intermediate levels shall be used (e.g., Level II is higher than Level III) and
(iii) four levels (i.e., Levels I and V), Level III shall be used.
If any of the Designated Rating Agencies shall not have in
effect a rating for US Borrower's Long-Term Debt or if the rating system of any
of the Designated Rating Agencies shall change, or if either of the Designated
Rating Agencies shall cease to be in the business of rating corporate debt
obligations, US Borrower and Required Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such Designated Rating Agency, but until such an
agreement shall be reached, the Applicable Rating Level shall be based only upon
the rating by the remaining Designated Rating Agency.
"Arrangers" means UBS Warburg LLC and Banc of America
Securities LLC, in their capacities as joint lead arrangers and book managers.
"Availability Fee" means a per annum fee in an aggregate
amount for both Borrowers equal to the Applicable Availability Fee Rate, which
shall accrue in US Dollars on the daily average unused amounts of the
Commitments in respect of the Loans.
"Availability Fee Rate" means, on any date, the number of
Basis Points per annum set forth below based on the Applicable Rating Level on
such date:
-11-
<Table>
<Caption>
APPLICABLE AVAILABILITY
RATING LEVEL FEE RATE
------------ ------------
Level I 10.0
Level II 12.5
Level III 15.0
Level IV 20.0
Level V 30.0
</Table>
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Reference Rate for such day. Any change in the Base
Rate due to a change in the Reference Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Reference Rate or Federal
Funds Rate. No Base Rate charged by any Person shall ever exceed the Highest
Lawful Rate.
"Base Rate Loan" means a Loan made in US Dollars which bears
interest at the Base Rate.
"Basis Point" means one one-hundredth of one percent (0.01%).
"Borrower" means any of US Borrower and Canadian Borrower.
"Borrowing" means a borrowing of new Loans of a single Type
pursuant to Section 1.2 or a Continuation or Conversion of existing Loans into a
single Type (and, in the case of Eurodollar Loans, with the same Interest
Period) pursuant to Section 1.3 of this Agreement.
"Borrowing Notice" means a written or telephonic request, or a
written confirmation, made by any Borrower which meets the requirements of
Section 1.2 of this Agreement.
"Business Day" means a day, other than a Saturday or Sunday,
on which commercial banks are open for business with the public in New York, New
York. Any Business Day in any way relating to Eurodollar Loans (such as the day
on which an Interest Period begins or ends) must also be a day on which, in the
judgment of Administrative Agent, significant transactions in US Dollars are
carried out in the interbank eurocurrency market.
"Canadian Borrower" means Devon Financing Corporation, U.L.C.,
an unlimited liability company organized under the laws of Nova Scotia, Canada
which is a wholly-owned Subsidiary of US Borrower.
"Canadian Dollar" or "C$" means the lawful currency of Canada.
-12-
"Change in Control" means the occurrence of either of the
following events: (a) any Person (or syndicate or group of Persons which is
deemed a "person" for the purposes of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) acquires more than fifty percent (50%) of the
voting power of the outstanding stock of US Borrower having ordinary voting
power (disregarding changes in voting power based on the occurrence of
contingencies) for the election of directors, or (b) during any period of twelve
successive months a majority of the Persons who were directors of US Borrower at
the beginning of such period cease to be directors of US Borrower, unless such
cessation relates to a voluntary reduction by US Borrower of the number of
directors that comprise the board of directors of US Borrower.
"Closing Date" means October 12, 2001.
"Commitment" means with respect to each Lender, its commitment
to provide its Percentage Share as set forth in Annex I or, if such Lender has
entered into one or more Assignment and Acceptances, the commitment set forth
for such Lender in the Register maintained by the Administrative Agent pursuant
to Section 10.06(b), as such commitment may be reduced from time to time
pursuant to Section 1.1(c), Section 1.1(d) or Section 1.1(e).
"Commitment Letter" means that certain commitment letter by
and among the US Borrower, UBS, UBS Warburg LLC, Bank of America, N.A. and Banc
of America Securities LLC dated August 31, 2001.
"Commitment Termination Date" has the meaning assigned thereto
in Section 1.1(e) of this Agreement.
"Consolidated" refers to the consolidation of any Person, in
accordance with US GAAP, with its properly consolidated subsidiaries. References
herein to a Person's Consolidated financial statements, financial position,
financial condition, liabilities, etc. refer to the consolidated financial
statements, financial position, financial condition, liabilities, etc. of such
Person and its properly consolidated subsidiaries.
"Consolidated Assets" means the total assets of US Borrower
and its Restricted Subsidiaries which would be shown as assets on a Consolidated
balance sheet of US Borrower and its Restricted Subsidiaries prepared in
accordance with US GAAP, after eliminating all amounts properly attributable to
minority interest, if any, in the stock and surplus of the Restricted
Subsidiaries.
"Continuation" shall refer to the continuation pursuant to
Section 1.3 of this Agreement of a Eurodollar Loan as a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Continuation/Conversion Notice" means a written or telephonic
request, or a written confirmation, made by the Applicable Borrower which meets
the requirements of Section 1.3 of this Agreement.
"Conversion" shall refer to a conversion pursuant to Section
1.3 or Article III, as the case may be, of one Type of Loan into another Type of
Loan.
-13-
"Default" means any Event of Default and any default, event or
condition which would, with the giving of any requisite notices and the passage
of any requisite periods of time, constitute an Event of Default.
"Default Rate" means at the time in question (a) with respect
to any Eurodollar Loan, the rate two percent (2%) per annum above the Adjusted
Eurodollar Rate then in effect for such Loan and (b) with respect to any Base
Rate Loan or other Obligations, the rate two percent (2%) per annum above the
Base Rate then in effect. No Default Rate charged by any Person shall ever
exceed the Highest Lawful Rate.
"Devon Financing Debentures" means (a) the aggregate amount of
$1,750,000,000 6.875% Notes due 2011 and (b) the aggregate amount of
$1,250,000,000 7.875% Debentures due 2031, issued pursuant to an indenture dated
October 3, 2001 by and among Devon Financing Corporation, U.L.C., as issuer,
Devon Energy Corporation, as guarantor, and The Chase Manhattan Bank, as
trustee.
"Devon Financing Guaranty" means the guaranty of the
obligations of the US Borrower under this Agreement by Canadian Borrower.
"Devon Holdco" shall have the meaning assigned thereto in
Section 10.1(d).
"Devon Trust" means Devon Financing Trust II, a statutory
business trust formed under the laws of the State of Delaware.
"Devon Trust Registration Statement" means the Registration
Statement on Form S-3 filed by US Borrower under the Securities Act of 1933 on
November 16, 2000 with respect to the issuance by US Borrower of Common Stock,
Preferred Stock, Debt Securities, Stock Purchase Agreements and Stock Purchase
Units, and the issuance by Devon Trust of Trust Preferred Securities guaranteed
by US Borrower, as amended and supplemented from time to time.
"Devon Trust Securities" means those certain Trust Preferred
Securities, which may be issued by Devon Trust pursuant to the Devon Trust
Registration Statement in an aggregate face amount not to exceed $447,261,200.
"Disclosure Report" means a written notice given by US
Borrower to all Lender Parties or a certificate given by the Senior Vice
President - Finance or the Treasurer of US Borrower under Sections 6.2(a) and
(b) of this Agreement.
"Disclosure Schedule" means Schedule 1 attached to this
Agreement.
"Domestic Lending Office" means (a) with respect to any
Lender, the office of such Lender specified as its "Domestic Lending Office"
below its name on Annex I to this Agreement, or such other office as such Lender
may from time to time specify to any Borrower and Administrative Agent; and (b)
with respect to Administrative Agent, the office, branch, or agency through
which it administers this Agreement.
-14-
"Eligible Transferee" means a Person which either (a) is a
Lender or an Affiliate of a Lender, (b) is an Approved Fund or (c) is consented
to as an Eligible Transferee by Administrative Agent and, so long as no Default
or Event of Default is continuing, by US Borrower, in each case which consent
will not be unreasonably withheld or delayed; provided that US Borrower's
consent shall not be required for a Person to be an "Eligible Transferee" for
purposes of Section 10.6(d) of this Agreement. As used in this definition,
"Fund" means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business,
and "Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Environmental Laws" means any and all Laws relating to the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA Affiliate" means US Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control that, together with US Borrower, are treated
as a single employer under Section 414 of the Internal Revenue Code.
"ERISA Plan" means any employee pension benefit plan (other
than a Multiemployer Plan) subject to Title IV of ERISA maintained by any ERISA
Affiliate with respect to which any Restricted Person has a fixed or contingent
liability.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" below its
name on Annex I to this Agreement (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such Lender may
from time to time specify to Borrowers and Administrative Agent.
"Eurodollar Loan" means a Loan which bears interest at the
Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan within a
Borrowing and with respect to the related Interest Period therefor, (a) the
interest rate per annum (carried out to the fifth decimal place) equal to the
rate determined by Administrative Agent to be the offered rate that appears on
the page of the Telerate Screen that displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number
3750) for deposits in US Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, or (b) in the event the rate referenced in the
preceding subsection (a) does not appear on such
-15-
page or service or such page or service shall cease to be available, the rate
per annum (carried out to the fifth decimal place) equal to the rate determined
by Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest Settlement
Rate for deposits in US Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, or (c) in the event the rates referenced in the
preceding subsections (a) and (b) are not available, the rate per annum
determined by Administrative Agent as the rate of interest at which deposits in
US Dollars (for delivery on the first day of such Interest Period) in same day
funds in the approximate amount of the applicable Eurodollar Loan and with a
term equivalent to such Interest Period would be offered by its London branch to
major banks in the offshore U.S. dollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period.
"Event of Default" has the meaning given to such term in
Section 8.1 of this Agreement.
"Existing Canadian Credit Facility" means that certain
$275,000,000 Canadian Credit Agreement dated August 29, 2000 (as amended) by and
amongst Northstar Energy, as borrower, Bank of America Canada, as administrative
agent, Banc of America Securities LLC, as lead arranger, Banc One Capital
Markets, Inc., as syndication agent, The Chase Manhattan Bank and First Union
National Bank, as co-documentation agents, and certain financial institutions
from time to time party thereto as lenders.
"Existing Credit Facilities" means, collectively, the Existing
US Credit Facility and the Existing Canadian Credit Facility.
"Existing US Credit Facility" means that certain $725,000,000
US Credit Agreement dated August 29, 2000 (as amended) by and amongst Devon
Energy Corporation, as borrower, Bank of America, N.A., as administrative agent,
Banc of America Securities LLC, as lead arranger, Banc One Capital Markets,
Inc., as syndication agent, The Chase Manhattan Bank and First Union National
Bank, as co-documentation agents, and certain financial institutions from time
to time party thereto as lenders.
"Facility" means the Loans to be provided pursuant to the
terms of this Agreement.
"Facility Commitment Period" means the period from and
including the Closing Date until the Commitment Termination Date.
"Facility Usage" means, at the time in question, the aggregate
amount of Loans outstanding at such time under this Agreement.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of one percent) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York, New York on the
Business Day next succeeding such day, provided that (a) if the day for which
such rate is to be
-16-
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 (b) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate quoted to Administrative Agent on such day on such transactions as
determined by Administrative Agent.
"Fee Letter" means that certain fee letter by and among the US
Borrower, UBS, UBS Warburg LLC, Bank of America, N.A. and Banc of America
Securities LLC dated August 31, 2001.
"Fiscal Quarter" means a three-month period ending on March
31, June 30, September 30 or December 31 of any year.
"Fiscal Year" means a twelve-month period ending on December
31 of any year.
"General Purpose Loans" has the meaning assigned thereto in
Section 1.1(b) of this Agreement.
"Governmental Authority" means any domestic or foreign,
national, federal, provincial, state, municipal or other local government or
body and any division, agency, ministry, commission, board or authority or any
quasi-governmental or private body exercising any statutory, regulatory,
expropriation or taxing authority under the authority of any of the foregoing,
and any domestic, foreign or international judicial, quasi-judicial, arbitration
or administrative court, tribunal, commission, board or panel acting under the
authority of any of the foregoing.
"Guaranty" means any of the guaranty agreements in the form of
Exhibit G-1, G-2 and G-3 to this Agreement.
"Hazardous Materials" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.
"Hedging Contract" means (a) any agreement providing for
options, swaps, floors, caps, collars, forward sales or forward purchases
involving interest rates, commodities or commodity prices, equities, currencies,
bonds, or indexes based on any of the foregoing, (b) any option, futures or
forward contract traded on an exchange, and (c) any other derivative agreement
or other similar agreement or arrangement.
"Highest Lawful Rate" means, with respect to each Lender Party
to whom Obligations are owed, the maximum nonusurious rate of interest that such
Lender Party is permitted under applicable Law to contract for, take, charge, or
receive with respect to such Obligations. All determinations herein of the
Highest Lawful Rate, or of any interest rate determined by reference to the
Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.
-17-
"Indebtedness" of any Person means Liabilities in any of the
following categories:
(a) Liabilities for borrowed money,
(b) Liabilities constituting an obligation to pay the deferred
purchase price of property or services, other than customary
payment terms taken in the ordinary course of such Person's
business,
(c) Liabilities evidenced by a bond, debenture, note or similar
instrument;
(d) Liabilities arising under conditional sales or other title
retention agreements or under leases capitalized in accordance
with US GAAP, but excluding customary oil, gas or mineral
leases and operating leases,
(e) Liabilities with respect to payments received in consideration
of oil, gas, or other minerals yet to be acquired or produced
at the time of payment (including 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);
(f) Liabilities under Hedging Contracts,
(g) Liabilities with respect to letters of credit or applications
or reimbursement agreements therefor, or --
(h) Liabilities under direct or indirect guaranties of Liabilities
of any Person or constituting obligations to purchase or
acquire or to otherwise protect or insure a creditor against
loss in respect of Indebtedness of the types described in
paragraphs (a) through (g) above of any Person (such as
obligations under working capital maintenance agreements,
agreements to keep-well, or agreements to purchase debt,
assets, goods, securities or services, but excluding
endorsements in the ordinary course of business of negotiable
instruments in the course of collection),
provided, however, that the "Indebtedness" of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor. Any Indebtedness owed by a partnership shall be deemed
Indebtedness of any partner in such partnership to the extent such partner has
any liability of any kind therefor.
"Initial Financial Statements" means (a) the audited annual
Consolidated financial statements of US Borrower dated as of December 31, 2000,
(b) the unaudited quarterly Consolidated financial statements of US Borrower
dated as of June 30, 2001.
"Interest Act (Canada)" means the Interest Act, R.S.C. 1985,
c. I-15, including the regulations made and, from time to time, in force under
that Act.
-18-
"Interest Payment Date" means (a) with respect to each Base
Rate Loan and the last day of each March, June, September and December beginning
December 31, 2001, and (b) with respect to each Eurodollar Loan, the last day of
the Interest Period that is applicable thereto or, if such Interest Period is
greater than three months in length, quarterly beginning on the date specified
by Agent which is approximately three months after such Interest Period begins;
provided that the last day of each calendar month shall also be an Interest
Payment Date for each such Loan so long as any Event of Default exists under
Section 8.1(a) or (b).
"Interest Period" means, with respect to each particular
Eurodollar Loan in a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one, two, three, six, nine or twelve
months thereafter, as the Applicable Borrower may elect in such notice; provided
that: (a) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day; (b) any Interest Period which
begins on the last Business Day in a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day in a calendar month; (c)
notwithstanding the foregoing, no Interest Period for any Loan may commence
before and end after any scheduled amortization payment date set forth in
Sections 1.6, unless, after giving effect thereto, the aggregate principal
amount of the Loans having Interest Periods that end after such date shall be
equal to or less than the aggregate principal amount of the Loans scheduled to
be outstanding after giving effect to the payments of principal required to be
made on such date; and (d) Administrative Agent shall limit the Interest Period
applicable to the Loans to seven days until the 60th day after the Closing Date,
unless prior to such 60th day the Arrangers have notified Agent that the
syndication of the Facility has been consummated; provided, the Borrowers shall
not be permitted to select Interest Periods to be in effect at any time which
have expiration dates occurring on more than eight different dates.
"Internal Revenue Code" means the United States Internal
Revenue Code of 1986, as amended from time to time and any successor statute or
statutes.
"Investment" means any investment made directly or indirectly,
in any Person, whether by acquisition of shares of capital stock, indebtedness
or other obligations or securities or by loan, advance, capital contribution or
otherwise and whether made in cash, by the transfer of property, or by any other
means.
"Law" means any statute, law, regulation, ordinance, rule,
treaty, judgment, order, decree, permit, concession, franchise, license,
agreement or other governmental restriction of the United States or Canada or
any state, province or political subdivision thereof or of any foreign country
or any department, province or other political subdivision thereof.
"Lender Parties" means Administrative Agent and all Lenders.
"Lenders" means each Lender that provides a Loan and the
successors of each such party as a holder of a Note
-19-
"Lenders Schedule" means Annex I to this Agreement.
"Liabilities" means, as to any Person, all indebtedness,
liabilities and obligations of such Person, whether matured or unmatured,
liquidated or unliquidated, primary or secondary, direct or indirect, absolute,
fixed or contingent, and whether or not required to be considered pursuant to US
GAAP.
"Lien" means, with respect to any property or assets, any
lien, mortgage, security interest, pledge, deposit, production payment, rights
of a vendor under any title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or materialman's lien, or
any other charge or encumbrance for security purposes, whether arising by Law or
agreement or otherwise, but excluding any right of offset. "Lien" also means any
filed financing statement, any registration of a pledge (such as with an issuer
of uncertificated securities), or any other arrangement or action which would
serve to perfect a Lien described in the preceding sentence, regardless of
whether such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.
"Loan Documents" means this Agreement, the Notes issued under
this Agreement, each Guaranty executed in connection therewith, and all other
agreements, certificates, documents, instruments and writings at any time
delivered in connection therewith.
"Loans" has the meaning given such term in Section 1.1(a) of
this Agreement.
"Margin Stock" means "margin stock" as defined in Regulation
U.
"Material Adverse Effect" means, when used in connection with
a specified Person, any change or effect (or any development that, insofar as
can reasonably be foreseen, is likely to result in any change or effect) that is
materially adverse to the business, properties, assets and liabilities (taken
together), financial condition or results of operations of such Person and its
subsidiaries taken as a whole; provided, however, that (a) any adverse change,
effect or development that is caused by or results from conditions affecting the
United States economy generally or the economy of any nation or region in which
such Person or its subsidiaries conduct business that is material to the
business of such Person and its subsidiaries, taken as whole, shall not be taken
into account in determining whether there has been (or whether there could
reasonably be foreseen) a "Material Adverse Effect" with respect to such Person,
and (b) any adverse change, effect or development that is caused by or results
from conditions generally affecting the industries (including the oil and gas
industry) in which such Person conducts its business shall not be taken into
account in determining whether there has been (or whether there could reasonably
be foreseen) a "Material Adverse Effect" with respect to such Person.
"Material Subsidiary" means a Subsidiary of US Borrower which
owns assets having a book value that exceeds ten percent (10%) of the book value
of US Borrower's Consolidated assets; provided, so long as Canadian Borrower has
any outstanding Obligations, it shall be deemed a Material Subsidiary.
"Maturity Date" means October 15, 2006.
-20-
"Maximum Credit Amount" means $3,032,000,000, which amount is
subject to reduction to the extent of the reduction of any Commitments.
"Mitchell" means Mitchell Energy & Development Corp., a Texas
corporation, and its successors and assigns.
"Mitchell Acquisition" means the acquisition by the US
Borrower, directly or indirectly, of all of the outstanding common shares of
common stock of Mitchell.
"Mitchell Available Amount" has the meaning assigned thereto
in Section 1.1(b) of this Agreement.
"Mitchell Loans" has the meaning assigned thereto in Section
1.1(b) of this Agreement.
"Mitchell Merger" means that portion of the Mitchell
Acquisition pursuant to which Mitchell shall merge with and into Mitchell Newco,
with Mitchell Newco as the survivor.
"Mitchell Merger Agreement" means that certain merger
agreement by and among the US Borrower and Mitchell dated as of August 13, 2001,
as the same may be amended, supplemented or modified from time to time.
"Mitchell Merger Borrowing" has the meaning assigned thereto
in Section 1.1(b) of this Agreement.
"Mitchell Merger Closing Date" means the date of consummation
of the Mitchell Merger.
"Mitchell Newco" means a new subsidiary of the US Borrower
created for the purpose of effecting the Mitchell Merger.
"Mitchell Restructuring Event" shall have the meaning assigned
thereto in Section 10.1(d).
"Mitchell Shares" means all of the outstanding common shares
of Mitchell.
"Moody's" means Moody's Investors Service, Inc., or its
successor.
"Multiemployer Plan" mean a multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA to which any ERISA Affiliate is making or
is obligated to make contributions or, during the five preceding plan years, has
made or has been obligated to make contributions.
"Net Offering Proceeds" means with respect to any offering of
Indebtedness or equity securities, the gross amount of cash proceeds paid to or
received by the US Borrower or the Canadian Borrower, as applicable, in respect
of such offering, as the case may be, net of underwriting discounts and
commissions or placement fees, investment banking fees, legal fees, consulting
fees, accounting
-21-
fees and other customary fees and expenses incurred by the US Borrower and its
Subsidiaries in connection therewith.
"Northstar Energy" means Northstar Energy Corporation, a
corporation organized under the laws of Alberta, Canada.
"Notes" means each Lender's "Note", as defined in Section
1.1(a) of this Agreement.
"Obligations" means all Liabilities from time to time owing by
the Borrowers to any Lender Party under or pursuant to any of the Loan
Documents. "Obligation" means any part of the Obligations.
"Offering" means a public or private offering by either
Borrower of Indebtedness or equity securities the Net Offering Proceeds of which
exceed $50,000,000; provided, however, that under no circumstances shall any (i)
incurrence of Indebtedness by either Borrower pursuant to this Agreement, the
Existing Credit Facilities or any other commitment to lend in effect on the
Closing Date, (ii) capital leases or other Indebtedness incurred by either
Borrower in the ordinary course of business, (iii) issuance of equity securities
by either Borrower as consideration for an Acquisition, (iv) issuance of equity
securities by the US Borrower upon the exercise of options, warrants or other
rights to acquire equity securities which rights were outstanding on the Closing
Date or issued thereafter in the ordinary course of business and consistent with
past practices, or (v) issuances of equity by the Canadian Borrower to, or
capital contributions to the Canadian Borrower by, the US Borrower or one or
more of its wholly-owned subsidiaries constitute or be deemed to constitute an
"Offering" for purposes of this Agreement.
"PennzEnergy Exchangeable Debentures" means the following
Exchangeable Debentures of PennzEnergy Company, which were issued prior to the
merger of PennzEnergy Company with and into US Borrower:
(a) 4.90% Exchangeable Senior Debentures due August 15, 2008 in
the aggregate principal amount of $443,807,000; and
(b) 4.95% Exchangeable Senior Debentures due August 15, 2008 in
the aggregate principal amount of $316,506,000.
"Percentage Share" means with respect to any Lender (i) when
used in Article I of this Agreement, in any Borrowing Notice thereunder or when
no Loans are outstanding, the percentage of the Commitments set forth opposite
such Lender's name on the Lenders Schedule as modified by assignments of a
Lender's rights and obligations under this Agreement made by or to such Lender
in accordance with the terms of this Agreement, and (ii) when used otherwise,
the percentage obtained by dividing (x) the sum of the unpaid principal balance
of such Lender's Loans by (y) the sum of the aggregate unpaid principal balance
of all Loans outstanding at such time.
"Permitted Liens" means:
(a) Liens for taxes, assessments or governmental charges which are
not due or delinquent, or the validity of which US Borrower or
any Restricted Subsidiary shall be
-22-
contesting in good faith; provided US Borrower or such
Restricted Subsidiary shall have made adequate provision
therefor in accordance with US GAAP;
(b) the Lien of any judgment rendered, or claim filed, against US
Borrower or any Restricted Subsidiary which does not
constitute an Event of Default and which US Borrower or any
such Restricted Subsidiary shall be contesting in good faith;
provided US Borrower or such Restricted Subsidiary shall have
made adequate provision therefor in accordance with US GAAP;
(c) Liens, privileges or other charges imposed or permitted by law
such as statutory liens and deemed trusts, carriers' liens,
builders' liens, materialmens' liens and other liens,
privileges or other charges of a similar nature which relate
to obligations not due or delinquent, including any lien or
trust arising in connection with workers' compensation,
unemployment insurance, pension, employment and similar laws
or regulations;
(d) Liens arising in the ordinary course of and incidental to
construction, maintenance or current operations which have not
been filed pursuant to law against US Borrower or any
Restricted Subsidiary or in respect of which no steps or
proceedings to enforce such lien have been initiated or which
relate to obligations which are not due or delinquent or if
due or delinquent, which US Borrower or such Restricted
Subsidiary shall be contesting in good faith; provided US
Borrower or such Restricted Subsidiary shall have made
adequate provision therefor in accordance with US GAAP;
(e) Liens incurred or created in the ordinary course of business
and in accordance with sound oil and gas industry practice in
respect of the exploration, development or operation of oil
and gas properties or related production or processing
facilities or the transmission of petroleum substances as
security in favor of any other Person conducting the
exploration, development, operation or transmission of the
property to which such Liens relate, for US Borrower's or any
of its Restricted Subsidiaries' portion of the costs and
expenses of such exploration, development, operation or
transmission, provided that such costs or expenses are not due
or delinquent or, if due or delinquent, which US Borrower or
such Restricted Subsidiary shall be contesting in good faith;
provided US Borrower or such Restricted Subsidiary shall have
made adequate provision therefor in accordance with US GAAP;
(f) overriding royalty interests, net profit interests,
reversionary interests and carried interests or other similar
burdens on production in respect of US Borrower's or any of
its Restricted Subsidiaries' oil and gas properties that are
entered into with or granted to arm's length third parties in
the ordinary course of business and in accordance with sound
oil and gas industry practice in the area of operation;
(g) Liens for penalties arising under non-participation provisions
of operating agreements in respect of US Borrower's or any of
its Restricted Subsidiaries' oil and gas properties if such
Liens do not materially detract from the value of any material
part of the property of US Borrower and its Subsidiaries taken
as a whole;
-23-
(h) easements, rights-of-way, servitudes, zoning or other similar
rights or restrictions in respect of land held by US Borrower
or any Restricted Subsidiary (including, without limitation,
rights-of-way and servitudes for railways, sewers, drains,
pipe lines, gas and water mains, electric light and power and
telephone or telegraph or cable television conduits, poles,
wires and cables) which, either alone or in the aggregate, do
not materially detract from the value of such land or
materially impair its use in the operation of the business of
US Borrower and its Restricted Subsidiaries taken as a whole;
(i) security given by US Borrower or any Restricted Subsidiary to
a public utility or any Governmental Authority when required
by such public utility or Governmental Authority in the
ordinary course of the business of US Borrower or any
Restricted Subsidiary in connection with operations of US
Borrower or any Restricted Subsidiary if such security does
not, either alone or in the aggregate, materially detract from
the value of any material part of the property of US Borrower
and its Restricted Subsidiaries taken as a whole;
(j) the right reserved to or vested in any Governmental Authority
by the terms of any lease, license, grant or permit or by any
statutory or regulatory provision to terminate any such lease,
license, grant or permit or to require annual or other
periodic payments as a condition of the continuance thereof;
(k) all reservations in the original grant of any lands and
premises or any interests therein and all statutory
exceptions, qualifications and reservations in respect of
title;
(l) any Lien from time to time disclosed by US Borrower or any
Restricted Subsidiary to the Administrative Agent and which is
consented to by the Required Lenders;
(m) any right of first refusal in favor of any Person granted in
the ordinary course of business with respect to all or any of
the oil and gas properties of US Borrower or any Restricted
Subsidiary;
(n) Liens on cash or marketable securities of US Borrower or any
Restricted Subsidiary granted in connection with any Hedging
Contract permitted under this Agreement;
(o) Liens in respect of Indebtedness permitted by Sections 7.1(b),
7.1(f) and 7.1(i) of this Agreement, and Liens in respect of
Indebtedness permitted by Section 7.1(c), but only to the
extent that such Liens encumber the assets expressly permitted
to secure such Indebtedness by the terms of Section 7.1(c);
(p) Liens in favor of Administrative Agent for the benefit of the
Lender Parties;
(q) Liens to collateralize moneys held in a cash collateral
account by a lender in respect of the prepayment of bankers'
acceptances, letters of credit or similar obligations accepted
or issued by such lender but only if at the time of such
prepayment no default
-24-
or event of default has occurred and is continuing under the
credit facility pursuant to which the bankers' acceptances or
letters of credit have been accepted or issued;
(r) purchase money Liens upon or in any tangible personal property
and fixtures (including real property surface rights upon
which such fixtures are located and contractual rights and
receivables relating to such property) acquired by US Borrower
or a Restricted Subsidiary in the ordinary course of business
to secure the purchase price of such property or to secure
Indebtedness incurred solely for the purpose of financing the
acquisition of such property, including any Liens existing on
such property at the time of its acquisition (other than any
such Lien created in contemplation of any such acquisition);
(s) the rights of buyers under production sale contracts related
to US Borrower's or a Restricted Subsidiary's share of
petroleum substances entered into in the ordinary course of
business, provided that the contracts create no rights
(including any Lien) in favor of the buyer or any other Person
in, to or over any reserves of petroleum substances or other
assets of US Borrower or a Restricted Subsidiary, other than a
dedication of reserves (not by way of Lien or absolute
assignment) on usual industry terms;
(t) Liens arising in respect of operating leases of personal
property under which US Borrower or any of its Subsidiaries
are lessees;
(u) Liens on property of a Person existing at the time such Person
becomes a Restricted Subsidiary, is merged into or
consolidated with US Borrower or any of its Subsidiaries;
provided, such Liens were in existence prior to the
contemplation of such stock acquisition, merger or
consolidation and do not extend to any assets other than those
of the Person so acquired or merged into or consolidated with
US Borrower or any of its Subsidiaries;
(v) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part,
of any Lien referred to in the preceding paragraphs (a) to (u)
inclusive of this definition, so long as any such extension,
renewal or replacement of such Lien is limited to all or any
part of the same property that secured the Lien extended,
renewed or replaced (plus improvements on such property), the
indebtedness or obligation secured thereby is not increased
and such Lien is otherwise permitted by the applicable section
above;
(w) Liens on Margin Stock; provided, in the case of Mitchell
Shares or Anderson Shares that constitute Margin Stock, only
to the extent that the Mitchell Shares or Anderson Shares, as
the case may be, exceed 25% of the value of the total assets
of US Borrower and its Subsidiaries;
(x) in addition to Liens permitted by clauses (a) through (w)
above, Liens on property or assets if the aggregate
Indebtedness secured thereby does not exceed two percent (2%)
of Consolidated Assets;
-25-
provided that nothing in this definition shall in and of itself constitute or be
deemed to constitute an agreement or acknowledgment by the Administrative Agent
or any Lender that the Indebtedness subject to or secured by any such Permitted
Lien ranks (apart from the effect of any Lien included in or inherent in any
such Permitted Liens) senior in priority to the Obligations.
"Person" means an individual, corporation, partnership,
limited liability company, association, joint stock company, trust or trustee
thereof, estate or executor thereof, unincorporated organization or joint
venture, Tribunal, or any other legally recognizable entity.
"Rating Agency" means any of S&P or Moody's, or their
respective successors.
"Reference Rate" means, for any day, the rate of interest in
effect for such day as publicly announced from time to time by UBS as its "prime
rate." Such rate is a rate set by UBS based upon various factors including UBS's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such rate announced by UBS shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect.
"Regulation U" means Regulation U promulgated by the Board of
Governors of the Federal Reserve System.
"Required Lenders" means Lenders whose aggregate Percentage
Shares under this Agreement equal or exceed fifty percent (50%).
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including any marginal, special, supplemental, or emergency
reserves) are required to be maintained under regulations issued from time to
time by the Board of Governors of the Federal Reserve System of the United
States of America (or any successor) by member banks of such Federal Reserve
System against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (a) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (b) any category
of extensions of credit or other assets which include Eurodollar Loans.
"Restricted Person" means any of the Borrowers and each
Restricted Subsidiary.
"Restricted Subsidiary" means each Subsidiary of US Borrower
that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Services (a division of
The McGraw Hill Companies, Inc.), or its successor.
-26-
"Second Stage Transaction" means an amalgamation, statutory
arrangement, consolidation, compulsory acquisition or other type of acquisition
transaction in which the remainder of the Anderson Shares are acquired, directly
or indirectly, by US Borrower.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership, limited liability company, joint venture,
business trust, or other business or corporate entity, enterprise or
organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by such Person,
provided that (a) associations, joint ventures or other relationships (i) which
are established pursuant to a standard form operating agreement or similar
agreement or which are partnerships for purposes of federal income taxation
only, (ii) which are not corporations or partnerships (or subject to the Uniform
Partnership Act) under applicable state Law, and (iii) whose businesses are
limited to the exploration, development and operation of oil, gas or mineral
properties, transportation and related facilities and interests owned directly
by the parties in such associations, joint ventures or relationships, shall not
be deemed to be "Subsidiaries" of such Person and (b) associations, joint
ventures or other relationships (i) which are not corporations or partnerships
under applicable provincial Law, and (ii) whose businesses are limited to the
exploration, development and operation of oil, gas or mineral properties,
transportation and related facilities and interests owned directly by the
parties in such associations, joint ventures or relationships, shall not be
deemed to be "Subsidiaries" of such Person.
"Termination Event" means (a) the occurrence with respect to
any ERISA Plan of (i) a reportable event described in Sections 4043(c)(5) or (6)
of ERISA or (ii) any other reportable event described in Section 4043(c) of
ERISA other than a reportable event not subject to the provision for 30-day
notice to the Pension Benefit Guaranty Corporation pursuant to a waiver by such
corporation under Section 4043(a) of ERISA; or (b) the withdrawal of any ERISA
Affiliate from an ERISA Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; or (c) a complete or
partial withdrawal by any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; or (d) the filing
of a notice of intent to terminate any ERISA Plan or Multiemployer Plan or the
treatment of any ERISA Plan amendment or Multiemployer Plan amendment as a
termination under Section 4041 or 4041A of ERISA; or (e) the institution of
proceedings to terminate any ERISA Plan or Multiemployer Plan by the Pension
Benefit Guaranty Corporation under Section 4042 of ERISA; or (f) 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 ERISA Plan or
Multiemployer Plan.
"Total Capitalization" means the sum (without duplication) of
(a) US Borrower's Consolidated Total Funded Debt plus (b) US Borrower's
Consolidated shareholder's equity plus (c) 60% of the outstanding balance of the
Devon Trust Securities. Total Capitalization shall be calculated excluding
non-cash write-downs and related charges which are required under Rule 4-10
(Financial Accounting and Reporting for Oil and Gas Producing Activities
Pursuant to the Federal Securities Laws and the Energy Policy and Conservation
Act of 1975) of Regulation S-X promulgated by Securities and Exchange Commission
Regulation, or by US GAAP.
"Total Funded Debt" means (a) Liabilities referred to in
clauses (a), (b), (c), (d) and (e) of the definition of "Indebtedness", plus (b)
40% of the outstanding balance of the Devon Trust Securities. Total Funded Debt
shall not include the PennzEnergy Exchangeable Debentures.
-27-
"Tribunal" means any government, any arbitration panel, any
court or any governmental department, commission, board, bureau, agency or
instrumentality of the United States of America or Canada or any state,
province, commonwealth, nation, territory, possession, county, parish, town,
township, village or municipality, whether now or hereafter constituted or
existing.
"Type" means the characterization of such Loans as either Base
Rate Loans or Eurodollar Loans.
"UBS" means UBS AG, Stamford Branch.
"Unrestricted Subsidiary" means any corporation, association,
partnership, limited liability company, joint venture, or other business or
corporate entity, enterprise or organization (a) which is listed below in this
definition, or (b) in which US Borrower did not own an interest (directly or
indirectly) as of the Closing Date, which thereafter became a Subsidiary of US
Borrower and which, within 90 days after becoming a Subsidiary of US Borrower,
was designated as an Unrestricted Subsidiary by US Borrower to Administrative
Agent; provided that in the event any such Subsidiary becomes a Material
Subsidiary at any time, such Subsidiary shall cease to be an Unrestricted
Subsidiary at such time and shall automatically become a Restricted Subsidiary.
The following Subsidiaries of US Borrower shall initially be designated as
Unrestricted Subsidiaries:
(1) 167496 Canada Ltd.
(2) 172173 Canada Inc.
(3) 410760 Alberta Ltd.
(4) 655945 Alberta Ltd.
(5) 658387 Alberta Inc.
(6) 659502 Alberta Inc.
(7) 661151 Alberta Ltd.
(8) 728098 Alberta Ltd.
(9) 746481 Alberta Ltd.
(10) 853843 Alberta Ltd.
(11) 892306 Alberta Ltd.
(12) Adobe Offshore Pipeline Company
(13) American Sulphur Export Corporation
(14) Amsulex, Inc.
(15) Azerbaijan International Operating Corporation
(16) B&N Co. A Limited Partnership
(17) Blackwood & Nichols Co. A Limited Partnership
(18) BN Coal, L.L.C.
(19) BN Non-Coal, L.L.C.
(20) Bonito Pipe Line Company
(21) Braemar Shipping Company Limited
(22) Cachuma Gas Processing Company
(23) Canadian Gas Gathering Systems II, Inc.
(24) Canoa Ranch Corporation
(25) Canyon Reef Carriers, Inc.
(26) Capitan Oil Pipeline Company
-28-
(27) Caspian International Petroleum Company
(28) Catclaw Pipeline, Inc.
(29) Ceara Star (Malta) Ltd.
(30) David Limited Partnership
(31) DBC, Inc.
(32) Devon Energy Petroleum Pipeline Company
(33) Devon Energy Offshore Pipeline Company
(34) Devon Acquisition Corp.
(35) Devon Energy Sinai, Inc.
(36) Devon Energy Intrastate Pipeline Company
(37) Devon Energy Brasil, Ltda.
(38) Devon Energy Suez, Inc.
(39) Devon Energy Red Sea, Inc.
(40) Devon Energy Egypt, Inc.
(41) Devon Energy International Company
(42) Devon Energy Partners A Limited Partnership
(43) Devon Energy Qatar Production, Inc.
(44) Devon Financing Trust
(45) Devon Energy Insurance Company Limited
(46) Devon Energy Canada, Ltd.
(47) Devon Production Corporation, a Nevada corporation
(48) Devon Energy Exploration Brazil, Inc.
(49) Devon Energy Caspian Corporation
(50) Devon Energy Canada Holding Corporation, an Alberta
corporation
(51) Devon Energy Management Company, L.L.C.
(52) Devon Energy Beni Suef Inc.
(53) Devon-Blanco Company, an Oklahoma general partnership
(54) Fanar Petroleum Company
(55) Foothills Partnership
(56) Gulf Coast American Corp.
(57) Mexican Flats Service Company, Inc.
(58) Morrison Petroleums (Alberta) Ltd.
(59) Morrison Petroleums, Ltd.
(60) Morrison Gas Gathering Inc.
(61) Morrison Administration Corporation
(62) Morrison Nuclear Inc.
(63) Morrison Operating Company Ltd.
(64) Mountain Energy Inc.
(65) Northstar Energy Partnership
(66) Northstar Energy Inc.
(67) Northstar Energy Cogeneration Partnership #2
(68) Nueces Intrastate Pipe Line Company
(69) PennzEnergy (U.K.) Company
(70) Pennzoil Caspian Development Corporation
(71) Pennzoil Energy Marketing Company
(72) Pennzoil Qatar Inc.
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(73) Pennzoil Gas Marketing Company
(74) Pennzoil Asiatic Inc.
(75) Pennzoil Petroleums Ltd.
(76) Pennzoil Resources Canada Ltd.
(77) Pennzoil Venezuela Corporation SA
(78) Pepco Partners, L.P.
(79) Petrolera Santa Fe (Colombia), Ltd.
(80) Polar Energy Marketing Corporation
(81) Richland Development Corporation
(82) Richland Properties Company, L.L.C.
(83) Richland Translation Company
(84) Sage Creek Processors, L.L.C.
(85) Santa Fe Energy Resources of Malaysia, Ltd.
(86) Santa Fe Energy Resources (Thai Holding), Ltd.
(87) Santa Fe Energy Resources South East Asia Limited
(88) Santa Fe Energy Resources Gabon (Agali), Ltd.
(89) Santa Fe Energy Resources (Bermuda) Limited
(90) Santa Fe Energy Resources (Brazil Holdings I), Ltd.
(91) Santa Fe Energy Resources Port Bouet Ltd.
(92) Santa Fe Energy Resources Bangkok Ltd.
(93) Santa Fe Energy Resources Kepala Burung Limited
(94) Santa Fe Energy Resources of Gabon, Ltd.
(95) Santa Fe Platform Management, Inc.
(96) Santa Fe Energy Resources (Brazil Holdings II), Ltd.
(97) Santa Fe Energy Resources (New Ventures IV), Ltd.
(98) Santa Fe Energy Resources (Jabung), Ltd.
(99) Santa Fe Energy Company of Argentina
(100) Santa Fe Energy Resources of Bolivia, Inc.
(101) Santa Fe Energy Resources of Peru, Ltd.
(102) Santa Fe Energy Resources of Myanmar, Ltd.
(103) Santa Fe Energy Resources of Canada, Inc.
(104) Santa Fe Energy Resources (New Ventures III), Ltd.
(105) Santa Fe Energy Resources of Gabon (Mondah Bay), Ltd.
(106) Santa Fe Energy Resources (Cote D'Ivoire) Ltd.
(107) Santa Fe Energy Resources Congo, Ltd.
(108) Santa Fe Energy Resources (Thailand), Ltd.
(109) Santa Fe Energy Resources Limited
(110) Santa Fe Energy Resources (New Ventures II), Ltd.
(111) Santa Fe Energy Resources International, Ltd.
(112) Santa Fe Energy Resources of Ghana, Ltd.
(113) Santa Fe Energy Resources (Delaware), Ltd.
(114) Santa Fe Pacific Fuels Company
(115) Santa Fe Energy Resources of China, Ltd.
(116) Santa Fe Energy Resources of Morocco, Ltd.
(117) Santa Fe Energy Resources Pagatan Ltd.
(118) Security Purchasing, Inc.
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(119) SFERI, Inc.
(120) SFR Petroleo Do Brazil Ltda.
(121) SFS (International), Ltd.
(122) SFS Malta Holding Company Ltd.
(123) SFS (France) SARL
(124) SFS Malta One, Inc.
(125) SFS (Holdings), Ltd.
(126) SFS Malta Two, Inc.
(127) SFS Malta International Trading Company Ltd.
(128) Sisquoc Gas Pipeline Company
(129) Snyder Gas Marketing, Inc.
(130) Snyder Fluid Technology, Inc.
(131) SOCO International Holdings, Inc.
(132) SOCO Louisiana Leasing, Inc.
(133) SOCO Gas Systems, Inc.
(134) SOCO International, Inc.
(135) SOCO Technologies, Inc.
(136) Strategic Trust Company
(137) Thunder Creek Gas Services, L.L.C.
(138) Tiburon Transport Company
(139) Trend Exploration (PNG) Party Ltd.
(140) Trend Argentina S.A.
(141) Vermejo Park Corporation
(142) Vermejo Minerals Corporation
(143) Wyoming Gathering and Production Company, Inc.
(144) Tall Grass Services, L.L.C.
(145) Devon Energy Charitable Foundation
(146) Canadian Mustang Energy Inc.
"US Account" means an account established by Administrative
Agent in New York into which funds to be advanced to Canadian Borrower by
Lenders in US Dollars and funds to be paid by Canadian Borrower to Lenders in US
Dollars will be deposited.
"US Dollar" or "$" means the lawful currency of the United
States of America.
"US GAAP" means those generally accepted accounting principles
and practices which are recognized as such from time to time by the Financial
Accounting Standards Board (or any generally recognized successor) and which, in
the case of US Borrower and its Consolidated Subsidiaries, are applied for all
periods after the Closing Date in a manner consistent with the manner in which
such principles and practices were applied to the Initial Financial Statements.
-31-
ARTICLE III
PAYMENTS TO LENDERS
Section 3.1. General Procedures. Each payment in respect of
the Loans or Commitments shall be made by or on behalf of the Applicable
Borrower to Administrative Agent for the account of the Lender Party to whom
such payment is owed, in lawful money of the United States of America, without
set-off, deduction or counterclaim, except as otherwise provided in Section 3.9,
and in immediately available funds. Each such payment must be received by
Administrative Agent not later than 11:00 a.m., New York City time, on the date
such payment becomes due and payable. Any payment received by Administrative
Agent after such time will be deemed to have been made on the next following
Business Day. Should any such payment become due and payable on a day other than
a Business Day, the maturity of such payment shall be extended to the next
succeeding Business Day, and, in the case of a payment of principal or past due
interest, interest shall accrue and be payable thereon for the period of such
extension as provided in the Loan Document under which such payment is due. Each
payment under a Loan Document shall be due and payable at the place provided
therein and, if no specific place of payment is provided, shall be due and
payable at the place of payment of Administrative Agent's Note. When
Administrative Agent collects or receives money on account of the Obligations,
Administrative Agent shall distribute all money so collected or received by 2:00
p.m. New York City time on the Business Day received, if received by 11:00 a.m.,
New York City time, otherwise on the day of deemed receipt, and each Lender
Party shall apply all such money so distributed, as follows:
(a) first, for the payment of all Obligations which are then
due (and if such money is insufficient to pay all such Obligations,
first to any reimbursements due Administrative Agent under Section 6.9
or 10.4, then to any reimbursement due any other Lender Party under
Section 10.4, and then to the partial payment of all other Obligations
then due in proportion to the amounts thereof, or as Lender Parties
shall otherwise agree);
(b) then for the prepayment of amounts owing under the Loan
Documents (other than principal of the Loans) if so specified by the
Applicable Borrower;
(c) then for the prepayment of principal of the Loans,
together with accrued and unpaid interest on the principal so prepaid;
and
(d) last, for the payment or prepayment of any other
Obligations.
All payments applied to principal or interest on any Loan shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
1.6 and 2.1. All distributions of amounts described in any of clauses (b), (c)
and (d) of the sentence immediately prior to the preceding sentence shall be
made by Administrative Agent pro rata to each Lender Party then owed Obligations
described in such clauses in proportion to all amounts owed to all Lender
Parties which are described in such clauses.
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Section 3.2. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable
Law, rule, or regulation, or any change in any applicable Law, rule, or
regulation, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender Party (or
its Applicable Lending Office) with any request or directive (whether or not
having the force of Law) of any such Governmental Authority, central bank, or
comparable agency (the occurrence of any of the foregoing events being referred
to as a "Change in Law"):
(i) shall subject such Lender Party (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, or its obligation to make Eurodollar Loans, or change
the basis of taxation of any amounts payable to such Lender Party (or
its Applicable Lending Office) under any Loan Document in respect of
any Eurodollar Loans (other than taxes (including franchise taxes)
imposed on the overall net income of such Lender Party by the
jurisdiction in which such Lender Party has its principal office or
such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender Party (or its Applicable Lending Office), including the
commitment of such Lender Party hereunder; or
(iii) shall impose on such Lender Party (or its Applicable
Lending Office) or the London interbank market any other condition
affecting any Loan Document or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
Party (or its Applicable Lending Office) of making, converting into, continuing,
or maintaining any Eurodollar Loans or to reduce any sum received or receivable
by such Lender Party (or its Applicable Lending Office) under this Agreement or
its Notes with respect to any Eurodollar Loans, then the Applicable Borrower
shall pay to such Lender Party on demand such amount or amounts as will
compensate such Lender Party for such increased cost or reduction. If any Lender
Party requests compensation by the Applicable Borrower under this Section
3.2(a), such Borrower may, by notice to such Lender Party (with a copy to
Administrative Agent), suspend the obligation of such Lender Party to make or
continue Loans of the Type with respect to which such compensation is requested,
or to convert Loans of any other Type into Loans of such Type, until the
condition or event giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.5 shall be applicable); provided that such
suspension shall not affect the right of such Lender Party to receive the
compensation so requested.
(b) If, after the date hereof, any Lender Party shall have
determined that the adoption of any applicable Law, rule, or regulation
regarding capital adequacy or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of Law) of any such Governmental
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Authority, central bank, or comparable agency, has or would have the effect of
reducing the rate of return on the capital of such Lender Party or any
corporation controlling such Lender Party as a consequence the obligations of
such Lender Party hereunder to a level below that which such Lender Party or
such corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Applicable Borrower shall pay
such Lender Party such additional amount or amounts as will compensate such
Lender Party for such reduction, but only to the extent that such Lender Party
has not been compensated therefor by any increase in the Adjusted Eurodollar
Rate; provided that if such Lender Party fails to give notice to the Applicable
Borrower or Borrowers of any additional costs within ninety (90) days after it
has actual knowledge thereof, such Lender Party shall not be entitled to
compensation for such additional costs incurred more than ninety (90) days prior
to the date on which notice is given by such Lender Party.
(c) Each Lender Party shall promptly notify Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Lender Party to compensation pursuant to this Section
and will designate a different Applicable Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Lender Party, be otherwise disadvantageous to it.
Any Lender Party claiming compensation under this Section shall furnish to
Borrowers and Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender Party shall
act in good faith and may use any reasonable averaging and attribution methods.
Section 3.3. Limitation on Types of Loans. If on or prior to
the first day of any Interest Period for any Eurodollar Loan:
(a) Administrative Agent determines (which determination shall
be conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify Administrative Agent that the Adjusted
Eurodollar Rate will not adequately and fairly reflect the cost to the
Lenders of funding Eurodollar Loans for such Interest Period,
then Administrative Agent shall give the Applicable Borrower prompt notice
thereof specifying the relevant amounts or periods, and so long as such
condition remains in effect, the Lender Parties shall be under no obligation to
make additional Eurodollar Loans, continue Eurodollar Loans or convert Base Rate
Loans into Eurodollar Loans, and the Applicable Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Eurodollar
Loans, either prepay such Loans or convert such Loans into Base Rate Loans in
accordance with the terms of this Agreement.
Section 3.4. Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any Lender Party or
its Applicable Lending Office to make, maintain, or fund Eurodollar Loans
hereunder, then such Lender Party shall promptly notify the Applicable Borrowers
thereof and such Lender Party's obligation to make or continue Eurodollar Loans,
as the case may be, and to convert Base Rate Loans into Eurodollar Loans, shall
be suspended until such
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time as such Lender Party may again make, maintain, and fund the Eurodollar
Loans (in which case the provisions of Section 3.5 shall be applicable).
Section 3.5. Treatment of Affected Loans. If the obligation of
any Lender Party to make a particular Type of Loan or to continue, or to convert
Loans of any other Type into, Loans of a particular Type shall be suspended
pursuant to Section 3.2, 3.3 or 3.4 hereof (Loans of such Type being herein
called "Affected Loans" and such Type being herein called the "Affected Type"),
such Lender Party's Affected Loans shall be automatically converted into Base
Rate Loans on the last day(s) of the then current Interest Period(s) for
Affected Loans (or, in the case of a Conversion required by Section 3.4 hereof,
on such earlier date as such Lender Party may specify to the Applicable Borrower
with a copy to Administrative Agent) and, unless and until such Lender Party
gives notice as provided below that the circumstances specified in Section 3.2,
3.3 or 3.4 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender Party's Affected Loans have
been so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender Party's Affected Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by
such Lender Party as Loans of the Affected Type shall be made or
continued instead as Base Rate Loans and all Loans of such Lender Party
that would otherwise be converted into Loans of the Affected Type shall
be converted instead into (or shall remain as) Base Rate Loans.
If such Lender Party gives notice to the Applicable Borrower (with a copy to
Administrative Agent) that the circumstances specified in Section 3.2, 3.3 or
3.4 hereof that gave rise to the Conversion of such Lender Party's Affected
Loans pursuant to this Section no longer exist (which such Lender Party agrees
to do promptly upon such circumstances ceasing to exist) at a time when Loans of
the Affected Type made by other Lender Parties are outstanding, such Lender
Party's Base Rate Loans shall be automatically converted, on the first day(s) of
the next succeeding Interest Period(s) for such outstanding Loans of the
Affected Type, to the extent necessary so that, after giving effect thereto, all
Loans held by the Lender Parties holding Loans of the Affected Type and by such
Lender Party are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their Percentage Shares.
Section 3.6. Compensation. Upon the request of any Lender
Party, the applicable Borrower shall pay to such Lender Party such amount or
amounts as shall be sufficient (in the reasonable opinion of such Lender Party)
to compensate it for any loss, cost, or expense (including loss of anticipated
profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Loan, for any reason (including, without limitation, the acceleration
of the Loans pursuant to Section 8.1) on a date other than the last day
of the Interest Period for such Loan; or
(b) any failure by such Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article IV to be satisfied) to borrow, convert, continue, or prepay a
Eurodollar Loan, on the date for such borrowing, Conversion,
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Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this
Agreement.
Section 3.7. Change of Applicable Lending Office. Each Lender
Party agrees that, upon the occurrence of any event giving rise to the operation
of Sections 3.2 through 3.5 with respect to such Lender Party, it will, if
requested by the Applicable Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender Party) to designate another Applicable
Lending Office, provided that such designation is made on such terms that such
Lender Party and its Applicable Lending Office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such section. Nothing in this section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender Party provided in Sections 3.2 through 3.5.
Section 3.8. Replacement of Lenders. If (i) any Lender Party
seeks reimbursement for increased costs under Sections 3.2 through 3.5, or if a
Borrower is required to increase any such payment under Section 3.9 or (ii) any
Lender has failed to consent to a proposed amendment, waiver, discharge or
termination which pursuant to the terms of Section 10.1 requires the consent of
all of the Lenders and with respect to which the Required Lenders shall have
granted their consent, then within ninety days thereafter, -- provided no Event
of Default then exists -- US Borrower shall have the right (unless such Lender
Party withdraws its request for additional compensation or grants such consent)
to replace such Lender Party by requiring such Lender Party to assign its Loans
and Notes, and its Commitments hereunder to an Eligible Transferee reasonably
acceptable to all Borrowers, provided that: (a) all Obligations of Borrowers
owing to such Lender Party being replaced (including such increased costs, but
excluding principal and accrued interest on the Notes being assigned) shall be
paid in full to such Lender Party concurrently with such assignment, and (b) the
replacement Eligible Transferee shall purchase the foregoing by paying to such
Lender Party a price equal to the principal amount thereof plus accrued and
unpaid interest thereon. In connection with any such assignment the applicable
Borrower, Administrative Agent, such Lender Party and the replacement Eligible
Transferee shall otherwise comply with Section 10.6. Notwithstanding the
foregoing rights of Borrowers under this section, however, a Borrower may not
replace any Lender Party which seeks reimbursement for increased costs under
Sections 3.2 through 3.5 unless such Borrower is at the same time replacing all
Lender Parties which are then seeking such compensation. In connection with any
such replacement of a Lender Party, Borrowers shall pay all costs that would
have been due to such Lender Party pursuant to Section 3.6 if such Lender
Party's Loans had been prepaid at the time of such replacement.
Section 3.9. Taxes.
(a) Except as otherwise provided herein, any and all payments
by any Borrower to or for the account of any Lender Party or Administrative
Agent hereunder or under any other Loan Document shall be made free and clear of
and without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender Party and the Administrative
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the Laws of which such Lender Party (or its Applicable
Lending Office) or the Administrative Agent is organized or is a resident for
tax purposes or any political subdivision thereof or by any other jurisdiction,
as a result of a
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present or former connection between such Lender Party or the Administrative
Agent (or any Applicable Lending Office, branch or affiliate of such Lender
Party or the Administrative Agent) and such other jurisdiction, other than a
connection with such other jurisdiction solely by reason of making the Loans
hereunder, the receipt of payments in respect of such Loans or the enforcement
of any rights of such Lender Party or the Administrative Agent in respect of
such Loans (all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter in this Section 3.9
referred to as "Taxes"). Except as otherwise provided herein, if a Borrower
shall be required by Law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to any Lender Party, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this section) such Lender Party receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrower shall
make such deductions, and (iii) such Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable Law.
(b) In addition, each Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter in this Section 3.9 referred to as "Other Taxes").
(c) Each Borrower agrees to indemnify each Lender Party and
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this section) paid by such Lender Party or
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses, other than penalties and interest (i) that
accrued during any periods of time beginning on the 10th Business Day following
the day on which the Lender Party or Administrative Agent, as applicable, has
actual knowledge of the imposition or assertion of such Taxes or Other Taxes,
and ending on the Business Day on which the Lender Party or Administrative
Agent, as applicable, delivers notice thereof to the Borrower and enables the
Borrower to make payment thereof on behalf of such Lender Party or the
Administrative Agent (including the delivery to the Borrowers of any relevant
documentation and consents) or (ii) that are otherwise imposed or asserted on
account of the bad faith or willful misconduct of such Lender Party or
Administrative Agent) arising therefrom or with respect thereto. For purposes of
this Section 3.9(c), "Taxes" and "Other Taxes" shall not include any penalties,
interest or expenses described in the third parenthetical of the immediately
preceding sentence. Any Lender Party or Administrative Agent claiming such
indemnification shall do so by making written demand therefor, accompanied by a
calculation in reasonable detail of the amount demanded and evidence of the
Taxes or Other Taxes paid by the Administrative Agent or such Lender Party.
(d) Each Lender Party that is, or is treated for U.S. tax
purposes as, a Person organized under the Laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender Party listed on the signature pages hereof
and on or prior to the date on which it becomes a Lender Party in the case of
each other Lender Party, and from time to time thereafter if requested in
writing by the Applicable Borrower or Administrative Agent (but only so long as
such Lender Party remains lawfully able to do so), shall provide
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the Applicable Borrower and Administrative Agent with a properly executed (i)
Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender
Party is entitled to benefits under an income tax treaty to which the United
States is a party which eliminates U.S. withholding tax on payments of interest
or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States, or (ii) any other form or certificate required by any United States
taxing authority (including any certificate required by Sections 871(h) and
881(c) of the Internal Revenue Code) or, at the reasonable request of a
Borrower, any other form or certificate required by any other taxing authority
that such Lender Party is legally entitled to deliver, in each case certifying
or establishing that such Lender Party is entitled to an exemption (or in the
case of a form or certificate of a non-U.S. taxing authority, a reduced rate of
withholding) from tax on payments pursuant to this Agreement or any of the other
Loan Documents.
(e) For any period with respect to which a Lender Party (x)
has failed to provide the Applicable Borrower and Administrative Agent with the
appropriate form pursuant to Section 3.9(d) (unless such failure is due to a
change in treaty, Law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), (y) provides the Applicable
Borrower and Administrative Agent with forms, certificates, information or
documentation that contains any information that is untrue or inaccurate in any
material respect as of the date of delivery, or (z) constitutes a "conduit
entity" within the meaning of U.S. Treasury Regulations Section 1.881-3 (or any
successor provision), such Lender Party shall not be entitled to payments of any
additional amounts or indemnification under Section 3.9(a), 3.9(b) or 3.9(c)
with respect to Taxes imposed by the United States to the extent resulting from
the facts described in clauses (x), (y) and (z); provided, however, that should
a Lender Party which is otherwise exempt from or subject to a reduced rate of
withholding tax become subject to Taxes because of its failure to deliver a form
required hereunder, US Borrower shall take such steps as such Lender Party shall
reasonably request to assist such Lender Party to recover such Taxes, provided,
however, that US Borrower shall not be required to take any such steps as it
determines, in its reasonable judgment, would be disadvantageous to it. Further,
the Applicable Borrower shall not be required to indemnify such Lender Party for
such withholding taxes which the Applicable Borrower is required to withhold and
remit in respect of any principal, interest or other amount paid or payable by
the Applicable Borrower to or for account of any Lender Party hereunder or under
any other Loan Document.
(f) If a Borrower is required to pay additional amounts to or
for the account of any Lender Party pursuant to this Section 3.9, then such
Lender Party will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office or to assign its Commitments and any Loans made
thereunder to an Affiliate so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender Party, is not otherwise disadvantageous to such Lender Party and in the
event the Lender Party is reimbursed for an amount paid by a Borrower pursuant
to this Section 3.9, it shall promptly return such amount to such Borrower.
(g) Each Lender Party agrees to indemnify and hold harmless
each Borrower from and against any taxes, penalties, interest or other costs or
losses (including, without limitation, reasonable attorneys' fees and expenses)
incurred or payable by the Applicable Borrower as a result of the failure of the
Applicable Borrower to withhold any Taxes imposed by the United States or any
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other jurisdiction at the appropriate rate from any payments made pursuant to
this Agreement to such Lender Party or Administrative Agent, which failure
resulted from the Applicable Borrower's reliance on any form, statement,
certificate or other information provided to it by such Lender Party pursuant to
clause (d) of this Section 3.9.
(h) If any Lender Party or Administrative Agent, as the case
may be, receives a refund of any Taxes for which a payment or indemnification
has been made by the Applicable Borrower, then such Lender Party or
Administrative Agent, as the case may be, shall reimburse the Applicable
Borrower for such amount as such Lender Party or Administrative Agent, as the
case may be, determines to be the portion of the refund as will leave it, after
such reimbursement, in no better or worse position than it would have been if
the Tax giving rise to the payment or indemnification had not been imposed and
the corresponding additional amount or indemnification payment not been made. No
Lender Party nor Administrative Agent shall be obligated to disclose the
information regarding its tax affairs or computations to a Borrower in
connection with its obligations under this clause (h).
(i) Within thirty (30) days after the date of any payment of
Taxes, the applicable Borrower shall furnish to Administrative Agent the
original or a certified copy of a receipt evidencing such payment.
(j) Without prejudice to the survival of any other agreement
of Borrowers hereunder, the agreements and obligations of Borrowers contained in
this section shall survive the termination of the Facility Commitment Period and
the payment in full of the Loans.
ARTICLE IV
CONDITIONS PRECEDENT TO LENDING
Section 4.1. Documents to be Delivered. No Lender has any
obligation to make its first Loan unless Administrative Agent shall have
received all of the following, at Administrative Agent's office in Stamford,
Connecticut, duly executed and delivered and in form, substance and date
satisfactory to Administrative Agent:
(a) This Agreement and any other documents that Lenders are to
execute in connection herewith.
(b) To the extent requested by a Lender, each Note issuable to
such Lender hereunder.
(c) The Guaranties of US Borrower and Canadian Borrower.
(d) The following certificates of each Borrower:
(i) An "Omnibus Certificate" of the Secretary or
Assistant Secretary and of the Chairman of the Board,
President or Senior Vice President - Finance of such Borrower,
which shall contain the names and signatures of the officers
of such Borrower authorized to execute Loan Documents and
which shall certify to the truth,
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correctness and completeness of the following exhibits
attached thereto: (1) a copy of resolutions duly adopted by
the Board of Directors of such Borrower and in full force and
effect at the time this Agreement is entered into, authorizing
the execution of this Agreement and the other Loan Documents
delivered or to be delivered in connection herewith and the
consummation of the transactions contemplated herein and
therein, (2) a copy of the charter documents of such Borrower
and all amendments thereto, certified by the appropriate
official of its jurisdiction of organization, and (3) a copy
of the bylaws of such Borrower or comparable organizational
document; and
(ii) A "Compliance Certificate" of the Senior Vice
President - Finance and of the Treasurer or Vice President -
Accounting of such Borrower, of even date with such Loan, in
which such officers certify to the satisfaction of the
conditions set out in subsections (a) and (b) of Section 4.6.
(e) Certificate (or certificates) of the due formation, valid
existence and good standing (or equivalent status) of each Borrower in
its jurisdiction of organization, issued by the appropriate official of
such jurisdiction.
(f) A favorable opinion of Mayer, Brown & Platt, counsel for
US Borrower, substantially in the form set forth in Exhibit E-1, and a
favorable opinion of Stewart McKelvey Stirling Scales, counsel for
Canadian Borrower, substantially in the form of Exhibit E-2.
(g) The Initial Financial Statements.
Section 4.2. Additional Conditions Precedent to First Loan. No
Lender has any obligation to make its first Loan unless on the date thereof:
(a) All commitment, facility, agency, legal and other fees
required to be paid or reimbursed to any Lender prior to the requested
date of such Loan pursuant to any Loan Documents or any commitment
agreement heretofore entered into shall have been paid.
(b) US Borrower shall have certified to Administrative Agent
and Lenders that the Initial Financial Statements fairly present US
Borrower's Consolidated financial position at the respective dates
thereof and the Consolidated results of US Borrower's operations and US
Borrower's Consolidated cash flows for the respective periods thereof.
(c) All legal matters relating to the Loan Documents and the
consummation of the transactions contemplated thereby shall be
satisfactory to Cahill Gordon & Reindel, counsel to Administrative
Agent.
Section 4.3. Conditions to Initial Mitchell Loans. No Lender
has any obligation to make the initial Mitchell Loan unless on the date thereof:
(a) The structure, terms and conditions of the Mitchell
Acquisition, the Mitchell Merger Agreement and the Mitchell Merger have
not changed from those in the Mitchell Merger Agreement as in effect on
the date hereof in any material respect that could reasonably be
expected to be adverse to the Lenders.
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(b) To the extent reasonably requested by the Arrangers, the
Arrangers shall have received copies, certified by US Borrower, of all
filings made with any governmental authority in connection with the
Mitchell Merger.
(c) The Mitchell Merger Agreement includes, without
limitation, conditions to the effect that any "poison pill" or similar
security or contractual arrangement of Mitchell or any statutory
provisions restricting the ability of the US Borrower to effect the
Mitchell Merger and other provisions of law which could reasonably be
expected to materially impede or delay the Mitchell Merger or result in
a Material Adverse Effect on the US Borrower or Mitchell have been
effectively rendered inapplicable to the Mitchell Merger.
(d) The Lenders shall have received an internally prepared,
unaudited pro forma Consolidated balance sheet and income statement of
the US Borrower and its Consolidated subsidiaries as of June 30, 2001
after giving effect to the Acquisitions and the financings therefor
and, if requested by the Arrangers, updates thereof for any quarter
that has ended at least 45 days prior to the Mitchell Merger Closing
Date.
(e) Simultaneously with the making of the initial Mitchell
Loan, the Mitchell Merger shall have been consummated in all material
respects in accordance with the terms of the Mitchell Merger Agreement,
and all conditions in the Mitchell Merger Agreement and related
documents that are to be satisfied at the Mitchell Merger Closing Date
shall have been satisfied, and not waived, amended, supplemented or
otherwise modified in any material respect except with the consent of
the Arrangers (which consent shall not be unreasonably withheld or
delayed and which shall be deemed to have been given if after
notification of any such waiver, amendment, supplement or modification
the Arrangers have not objected to a specific amendment, supplement or
modification in writing within one Business Day of such notification to
Administrative Agent and Borrowers).
(f) The Mitchell Merger, the Mitchell Acquisition, the making
of the Mitchell Loans and the other transactions contemplated hereby
with respect to the Mitchell Acquisition are in full compliance with
all legal requirements, including without limitation and to the extent
applicable Regulations T, U and X of the Board of Governors of the
Federal Reserve System, and all necessary governmental and third party
approvals in connection with such borrowings and the Mitchell Merger
and the Mitchell Acquisition shall have been obtained and remain in
effect (other than approvals the failure of which to obtain would not
reasonably be expected to have a Material Adverse Effect on the US
Borrower or Mitchell or to prevent the consummation of the Mitchell
Merger).
Section 4.4. Conditions to Initial Anderson Loans. No Lender
has any obligation to make the initial Anderson Loan unless on the date thereof:
(a) The structure, terms and conditions of the Anderson
Acquisition, the Anderson Tender Offer and the Anderson Merger shall
not have changed from those described in the Anderson Acquisition
Agreement as in effect on the date hereof in any material respect that
could reasonably be expected to be adverse to the Lenders.
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(b) To the extent reasonably requested by the Arrangers, the
Arrangers shall have received copies, certified by the US Borrower, of
all filings made with any governmental authority in connection with the
Anderson Acquisition.
(c) All Anderson Tendered Shares shall have been accepted for
payment in accordance with the terms of the Anderson Tender Offer in an
amount such that US Borrower shall, directly or indirectly, upon
consummation of the Anderson Tender Offer, own and control not less
than 66-2/3% of the Anderson Shares (on a fully diluted basis) or such
greater amount as shall be necessary to effect a Second Stage
Transaction.
(d) The Canadian Lenders shall have received an internally
prepared, unaudited pro forma Consolidated balance sheet and income
statement of the US Borrower and its Consolidated subsidiaries dated as
of the quarter ended as of June 30, 2001 after giving effect to the
Acquisitions and the financings therefor and, if requested by the
Arrangers, updates thereof for any quarter that has ended at least 45
days prior to the Anderson Tender Offer Closing Date.
(e) The Anderson Tender Offer includes, without limitation,
conditions to the effect that any "poison pill" or similar security or
contractual arrangement of Anderson or any statutory provisions
restricting the ability of the US Borrower to effect the Anderson
Merger or other transaction with Anderson and other provisions of law
which could reasonably be expected to materially impede or delay the
Anderson Merger or result in a Material Adverse Effect on the US
Borrower or Anderson have been effectively rendered inapplicable to the
Anderson Tender Offer and the Anderson Merger.
(f) Simultaneously with the making of the initial Anderson
Loan, the Anderson Tender Offer shall have been consummated in all
material respects in accordance with the terms of the Anderson
Acquisition Agreement and the other documents therefor, and all
conditions that are to be satisfied at the Anderson Tender Offer
Closing Date have been satisfied, and not waived, amended, supplemented
or otherwise modified in any material respect except with the consent
of the Arrangers (which consent shall not be unreasonably withheld or
delayed and which shall be deemed to have been given if after
notification of any such waiver, amendment, supplement or modification
the Arrangers have not objected to a specific amendment, supplement or
modification in writing within one Business Day of such notification to
Administrative Agent and Borrowers).
(g) The Anderson Tender Offer, the Anderson Merger, the
Anderson Acquisition, the making of the Anderson Loans and the other
transactions contemplated hereby with respect to the Anderson
Acquisition are in full compliance with all legal requirements,
including without limitation and to the extent applicable, Regulations
T, U and X of the Board of Governors of the Federal Reserve System, and
all necessary governmental and third party approvals in connection with
such borrowings and the Anderson Tender Offer, the Anderson Merger and
the Anderson Acquisition shall have been obtained and remain in effect
(other than approvals the failure of which to obtain would not
reasonably be expected to have a Material Adverse Effect on any of the
US Borrower or Anderson or to prevent the consummation of the Anderson
Merger).
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Section 4.5. Conditions Precedent to General Purpose Loans. No
Lender has any obligation to make the initial General Purpose Loan unless on or
before the date thereof an officer of the US Borrower delivers a certificate to
Administrative Agent stating either (x) that the transactions and borrowings
contemplated in connection with the Mitchell Available Amount and the Anderson
Available Amount have been consummated to the extent required by Section 1.1(b)
or (y) one of the Acquisitions has been abandoned and the transactions and
borrowings in respect of the other Acquisition have been consummated to the
extent required by Section 1.1(b).
Section 4.6. Additional Conditions Precedent to All Loans. No
Lender has any obligation to make any Loan (including its first), unless the
following conditions precedent have been satisfied:
(a) All representations and warranties made by any Restricted
Person in Sections 5.2 through 5.6, inclusive, and Sections 5.10
through 5.13, inclusive, of this Agreement or in any other Loan
Document shall be true in all material respects on and as of the date
of such Loan (except to the extent that the facts upon which such
representations are based have been changed by the extension of credit
hereunder) as if such representations and warranties had been made as
of the date of such Loan.
(b) No Default shall exist at the date of such Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To confirm each Lender's understanding concerning Restricted
Persons and Restricted Persons' businesses, properties and obligations and to
induce each Lender to enter into this Agreement and to extend credit hereunder,
each Borrower represents and warrants to each Lender that:
Section 5.1. No Default. No event has occurred and is
continuing which constitutes a Default.
Section 5.2. Organization and Good Standing. Each Borrower and
each Material Subsidiary is duly organized, validly existing and in good
standing under the Laws of its jurisdiction of organization, having all powers
required to carry on its business and enter into and carry out the transactions
contemplated hereby. Each Borrower and each Material Subsidiary is duly
qualified, in good standing, and authorized to do business in all other
jurisdictions within the United States wherein the character of the properties
owned or held by it or the nature of the business transacted by it makes such
qualification necessary except where failure to so qualify would not have a
Material Adverse Effect. Each Borrower and each Material Subsidiary has taken
all actions and procedures customarily taken in order to enter, for the purpose
of conducting business or owning property, each jurisdiction outside the United
States wherein the character of the properties owned or held by it or the nature
of the business transacted by it makes such actions and procedures desirable
except where failure to so qualify would not have a Material Adverse Effect.
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Section 5.3. Authorization. Each Borrower has duly taken all
action necessary to authorize the execution and delivery by it of the Loan
Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder and each Borrower is duly authorized to borrow funds hereunder.
Section 5.4. No Conflicts or Consents. The execution and
delivery by the various Restricted Persons of the Loan Documents to which each
is a party, the performance by each of its obligations under such Loan
Documents, and the consummation of the transactions contemplated by the various
Loan Documents, do not and will not (i) conflict with any provision of (A) any
Law, (B) the organizational documents of any Restricted Person, or (C) any
agreement, judgment, license, order or permit applicable to or binding upon any
Restricted Person unless such conflict would not reasonably be expected to have
a Material Adverse Effect, or (ii) result in the acceleration of any
Indebtedness owed by any Restricted Person which would reasonably be expected to
have a Material Adverse Effect, or (iii) result in or require the creation of
any Lien upon any assets or properties of any Restricted Person which would
reasonably be expected to have a Material Adverse Effect, except as expressly
contemplated or permitted in the Loan Documents. Except as expressly
contemplated in the Loan Documents, no consent, approval, authorization or order
of, and no notice to or filing with, any Tribunal or third party is required in
connection with the execution, delivery or performance by any Restricted Person
of any Loan Document or to consummate any transactions contemplated by the Loan
Documents to which it is a party, unless failure to obtain such consent would
not reasonably be expected to have a Material Adverse Effect.
Section 5.5. Enforceable Obligations. This Agreement is, and
the other Loan Documents when duly executed and delivered will be, legal, valid
and binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors' rights.
Section 5.6. Full Disclosure. No certificate, statement or
other information delivered herewith or heretofore by any Restricted Person to
any Lender in connection with the negotiation of this Agreement or in connection
with any transaction contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact known to any Restricted Person
(other than industry-wide risks normally associated with the types of businesses
conducted by Restricted Persons) necessary to make the statements contained
herein or therein not misleading as of the date made or deemed made (provided
that all such certificates, statements and other information is to be viewed in
conjunction with the reports, statements, schedules and other information
included in filings (collectively, "Securities Filings") made by the US
Borrower, the Canadian Borrower, Mitchell or Anderson with the Securities and
Exchange Commission or, to the extent publicly available, analogous Canadian
Regulatory authorities). There is no fact known to any Restricted Person (other
than industry-wide risks normally associated with the types of businesses
conducted by Restricted Persons) that has not been disclosed to each Lender in
writing or in one or more Securities Filings which would reasonably be expected
to have a Material Adverse Effect.
Section 5.7. Litigation. Except as disclosed in the Initial
Financial Statements, in the financial statements delivered to Administrative
Agent and Lenders pursuant to Section 6.2, in the Disclosure Schedule or in a
Disclosure Report, (a) there are no actions, suits or legal, equitable,
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arbitrative or administrative proceedings pending, or to the knowledge of any
Restricted Person threatened, against any Restricted Person before any Tribunal
which would reasonably be expected to have a Material Adverse Effect, and (b)
there are no outstanding judgments, injunctions, writs, rulings or orders by any
such Tribunal against any Restricted Person which would reasonably be expected
to have a Material Adverse Effect.
Section 5.8. [Reserved]
Section 5.9. [Reserved]
Section 5.10. US Borrower's Subsidiaries. As of the date of
this Agreement, US Borrower does not have any Material Subsidiaries except those
listed in the Disclosure Schedule or in a Disclosure Report (it being understood
that inclusion of a Subsidiary on the Disclosure Schedule does not mean that
such Subsidiary is a Material Subsidiary). US Borrower owns, directly or
indirectly, the equity interest in each of its Subsidiaries which is indicated
in the Disclosure Schedule or in a Disclosure Report.
Section 5.11. Title to Properties; Licenses. Each Restricted
Person has good and defensible title to all of its material properties and
assets, free and clear of all Liens other than Permitted Liens and of all
impediments to the use of such properties and assets in such Restricted Person's
business except to the extent failure to have such title would not have a
Material Adverse Effect. Each Restricted Person possesses all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, and other
intellectual property (or otherwise possesses the right to use such intellectual
property without violation of the rights of any other Person) which are
necessary to carry out its business as presently conducted and as presently
proposed to be conducted hereafter except to the extent failure to possess such
licenses, permits, franchises, and intellectual property would not have a
Material Adverse Effect, and no Restricted Person is in violation in any
material respect of the terms under which it possesses such intellectual
property or the right to use such intellectual property except to the extent any
such violation would not have a Material Adverse Effect.
Section 5.12. Government Regulation. Neither US Borrower nor
any other Restricted Person owing Obligations is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 (as any of the preceding acts have been amended)
or any other Law which regulates the incurring by such Person of Indebtedness,
including Laws relating to common contract carriers or the sale of electricity,
gas, steam, water or other public utility services.
Section 5.13. Solvency. Upon giving effect to the issuance of
the Notes, the execution of the Loan Documents by each Borrower and the
consummation of the transactions contemplated hereby, each Borrower will be
solvent (as such term is used in applicable bankruptcy, liquidation,
receivership, insolvency or similar Laws).
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ARTICLE VI
AFFIRMATIVE COVENANTS OF BORROWERS
To conform with the terms and conditions under which each
Lender is willing to have credit outstanding to US Borrower or Canadian
Borrower, as the case may be, and to induce each Lender to enter into this
Agreement and extend credit hereunder, each Borrower warrants, covenants and
agrees that until the full and final payment of the Obligations and the
termination of this Agreement, unless Required Lenders have previously agreed
otherwise:
Section 6.1. Payment and Performance. Each Borrower will pay
all amounts due under the Loan Documents in accordance with the terms thereof
and will observe, perform and comply with every covenant, term and condition
expressed or implied in the Loan Documents. US Borrower will cause each other
Restricted Person to observe, perform and comply with every such term, covenant
and condition in any Loan Document.
Section 6.2. Books, Financial Statements and Reports. Each
Restricted Person will at all times maintain full and accurate books of account
and records. US Borrower will maintain and will cause its Subsidiaries to
maintain a standard system of accounting, will maintain its Fiscal Year, and
will furnish the following statements and reports to each Lender Party at US
Borrower's expense:
(a) As soon as available, and in any event within ninety (90)
days after the end of each Fiscal Year, complete Consolidated financial
statements of US Borrower and its consolidated Subsidiaries together
with all notes thereto, prepared in reasonable detail in accordance
with US GAAP, together with an unqualified opinion, based on an audit
using generally accepted auditing standards, by KPMG Peat Marwick
L.L.P., or other independent certified public accountants selected by
the US Borrower and acceptable to Administrative Agent, stating that
such Consolidated financial statements have been so prepared. These
financial statements shall contain a Consolidated balance sheet as of
the end of such Fiscal Year and Consolidated statements of earnings, of
cash flows, and of changes in owners' equity for such Fiscal Year, each
setting forth in comparative form the corresponding figures for the
preceding Fiscal Year. In addition, within ninety (90) days after the
end of each Fiscal Year US Borrower will furnish to Administrative
Agent and each Lender a certificate in the form of Exhibit D signed by
the President, Senior Vice President - Finance, Treasurer or Vice
President - Accounting of US Borrower, stating that such financial
statements are accurate and complete, stating that such Person has
reviewed the Loan Documents, containing all calculations required to be
made to show compliance or non-compliance with the provisions of
Section 7.7, and further stating that there is no condition or event at
the end of such Fiscal Year or at the time of such certificate which
constitutes a Default and specifying the nature and period of existence
of any such condition or event.
(b) As soon as available, and in any event within forty-five
(45) days after the end of each Fiscal Quarter, US Borrower's
Consolidated balance sheet and income statement as of the end of such
Fiscal Quarter and a Consolidated statement of cash flows for the
period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter, all in reasonable detail and prepared in
accordance with US GAAP, subject to changes resulting
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from normal year-end adjustments. In addition US Borrower will,
together with each such set of financial statements, furnish a
certificate in the form of Exhibit D signed by the President, Senior
Vice President - Finance, Treasurer or Vice President - Accounting of
US Borrower stating that such financial statements are accurate and
complete (subject to normal year-end adjustments), stating that such
Person has reviewed the Loan Documents, containing all calculations
required to be made by US Borrower to show compliance or non-compliance
with the provisions of Section 7.7 and further stating that there is no
condition or event at the end of such Fiscal Quarter or at the time of
such certificate which constitutes a Default and specifying the nature
and period of existence of any such condition or event.
(c) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by any
Restricted Person to its stockholders and all registration statements,
periodic reports and other statements and schedules filed by any
Restricted Person with any securities exchange, the Securities and
Exchange Commission or any similar Governmental Authority, including
any information or estimates with respect to US Borrower's oil and gas
business (including its exploration, development and production
activities) which are required to be furnished in US Borrower's annual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended.
Section 6.3. Other Information and Inspections. Each
Restricted Person will furnish to each Lender any information which
Administrative Agent may from time to time reasonably request concerning any
covenant, provision or condition of the Loan Documents or any matter in
connection with Restricted Person's businesses and operations. Each Restricted
Person will permit representatives appointed by Administrative Agent (including
independent accountants, auditors, agents, attorneys, appraisers and any other
Persons) to visit and inspect upon prior written notice during normal business
hours any of such Restricted Person's property, including its books of account,
other books and records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs thereof, and to
write down and record any information such representatives obtain, and each
Restricted Person shall permit Administrative Agent or its representatives to
investigate and verify the accuracy of the information furnished to
Administrative Agent or any Lender in connection with the Loan Documents and to
discuss all such matters with its officers, employees and representatives.
Section 6.4. Notice of Material Events and Change of Address.
Each Borrower will promptly notify each Lender in writing, stating that such
notice is being given pursuant to this Agreement, of:
(a) the occurrence of any event which would have a Material
Adverse Effect,
(b) the occurrence of any Default,
(c) the acceleration of the maturity of any Indebtedness owed
by any Restricted Person having a principal balance of more than
$150,000,000, or of any default by any Restricted Person under any
indenture, mortgage, agreement, contract or other instrument to which
any of them is a party or by which any of them or any of their
properties is bound, if such default would have a Material Adverse
Effect,
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(d) the occurrence of any Termination Event which could
reasonably be expected to cause (i) the total amount of withdrawal
liability that would be incurred by all ERISA Affiliates upon their
complete withdrawal from all Multiemployer Plans to exceed
$250,000,000, or (ii) the aggregate Liabilities of the ERISA Affiliates
to ERISA Plans to exceed $250,000,000,
(e) any claim of $250,000,000 or more, any notice of potential
liability under any Environmental Laws which might exceed such amount,
or any other material adverse claim asserted against any Restricted
Person or with respect to any Restricted Person's properties, and
(f) the filing of any suit or proceeding against any
Restricted Person in which an adverse decision would reasonably be
expected to have a Material Adverse Effect.
Section 6.5. Maintenance of Properties. Each Restricted Person
will maintain, preserve, protect, and keep all property used or useful in the
conduct of its business in good condition, and will from time to time make all
repairs, renewals and replacements needed to enable the business and operations
carried on in connection therewith to be promptly and advantageously conducted
at all times except to the extent failure to do so would not reasonably be
expected to have a Material Adverse Effect.
Section 6.6. Maintenance of Existence and Qualifications. Each
Restricted Person will maintain and preserve its existence and its rights and
franchises in full force and effect and will qualify to do business in all
states or jurisdictions where required by applicable Law, except where the
failure so to qualify will not have a Material Adverse Effect.
Section 6.7. Payment of Trade Liabilities, Taxes, etc. Each
Restricted Person will (a) timely file all required tax returns; (b) timely pay
all taxes, assessments, and other governmental charges or levies imposed upon it
or upon its income, profits or property; and (c) maintain appropriate accruals
and reserves for all of the foregoing in accordance with US GAAP. Each
Restricted Person may, however, delay paying or discharging any of the foregoing
so long as it is in good faith contesting the validity thereof by appropriate
proceedings and has set aside on its books adequate reserves therefor.
Section 6.8. Insurance. Each Restricted Person will keep or
cause to be kept insured in accordance with industry standards by financially
sound and reputable insurers, its surface equipment and other property of a
character usually insured by similar Persons engaged in the same or similar
businesses.
Section 6.9. Performance on Borrower's Behalf. If any
Restricted Person fails to pay any taxes, insurance premiums, expenses,
attorneys' fees or other amounts it is required to pay under any Loan Document,
Administrative Agent, may pay the same, and shall use its best efforts to give
at least five (5) Business Days' notice to each Borrower prior to making any
such payment; provided, however, that any failure by Administrative Agent to so
notify each Borrower shall not limit or otherwise impair Administrative Agent's
ability to make any such payment. Each Borrower shall immediately reimburse
Administrative Agent for any such payments and each amount paid by
Administrative
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Agent shall constitute an Obligation owed hereunder which is due and payable on
the date such amount is paid by Administrative Agent.
Section 6.10. Interest. The Applicable Borrower hereby
promises to each Lender Party to pay interest at the Default Rate on all
Obligations (including Obligations to pay fees or to reimburse or indemnify any
Lender) which the Applicable Borrower has in this Agreement promised to pay to
such Lender Party and which are not paid when due. Such interest shall accrue
from the date such Obligations become due until they are paid.
Section 6.11. Compliance with Law. Each Restricted Person will
conduct its business and affairs in compliance with all Laws applicable thereto
except to the extent failure to do so would not reasonably be expected to have a
Material Adverse Effect.
Section 6.12. Environmental Matters.
(a) Each Restricted Person will comply in all material
respects with all Environmental Laws now or hereafter applicable to such
Restricted Person, as well as all contractual obligations and agreements with
respect to environmental remediation or other environmental matters, and shall
obtain, at or prior to the time required by applicable Environmental Laws, all
environmental, health and safety permits, licenses and other authorizations
necessary for its operations and will maintain such authorizations in full force
and effect, unless such failure to so comply or so obtain would not reasonably
be expected to have a Material Adverse Effect.
(b) US Borrower will promptly furnish to Administrative Agent
all written notices of violation, orders, claims, citations, complaints, penalty
assessments, suits or other proceedings received by US Borrower or Canadian
Borrower, or of which it has notice, pending or threatened against any
Restricted Person, by any Governmental Authority with respect to any alleged
violation of or non-compliance with any Environmental Laws or any permits,
licenses or authorizations in connection with its ownership or use of its
properties or the operation of its business which involve a potential liability
or claim in excess of $250,000,000.
Section 6.13. Bank Accounts; Offset. Each Borrower hereby
agrees that each Lender shall have the right to offset, which shall be in
addition to all other interests, liens, and rights of any Lender at common Law,
under the Loan Documents, or otherwise, (a) any and all moneys, securities or
other property (and the proceeds therefrom) of such Borrower now or hereafter
held or received by or in transit to such Lender for the account of such
Borrower, (b) any and all deposits (general or special, time or demand,
provisional or final) of such Borrower with such Lender, (c) any other credits
and balances of such Borrower at any time existing against such Lender,
including claims under certificates of deposit, and (d) any Indebtedness owed or
payable by such Lender to such Borrower against Obligations due to it that have
not been paid when due. At any time and from time to time after the occurrence
of any Event of Default and during the continuance thereof, each Lender is
hereby authorized to offset against the Obligations then due and payable to it
(in either case without notice to either Borrower), any and all items
hereinabove referred to. To the extent that either Borrower has accounts
designated as royalty or joint interest owner accounts, the foregoing right of
offset shall not extend to funds in such accounts which belong to, or otherwise
arise from payments to such Borrower for the account of, third party royalty or
joint interest owners.
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ARTICLE VII
NEGATIVE COVENANTS OF BORROWERS
To conform with the terms and conditions under which each
Lender is willing to have credit outstanding to US Borrower or Canadian
Borrower, as the case may be, and to induce each Lender to enter into this
Agreement and make the Loans, each Borrower warrants, covenants and agrees that
until the full and final payment of the Obligations and the termination of this
Agreement, unless Required Lenders have previously agreed otherwise:
Section 7.1. Indebtedness. No Restricted Subsidiary will in
any manner owe or be liable for Indebtedness except:
(a) with respect to Canadian Borrower, (i) its Obligations
hereunder and (ii) so long as the Devon Financing Guaranty is in
effect, (A) the Indebtedness in respect of the Devon Financing
Debentures and the Devon Financing Guaranty and (B) guaranties by the
Canadian Borrower of Indebtedness of the US Borrower which is otherwise
permitted to be incurred by the US Borrower in accordance with this
Agreement.
(b) capital lease obligations (excluding oil, gas or mineral
leases) entered into in the ordinary course of such Restricted Person's
business in arm's length transactions at competitive market rates under
competitive terms and conditions in all respects, provided that such
capital lease obligations required to be paid in any Fiscal Year do not
in the aggregate exceed $50,000,000 for all Restricted Subsidiaries.
(c) unsecured Liabilities owed among Restricted Persons;
provided, that Liabilities owed by any Restricted Subsidiary to US
Borrower may be secured by any and all assets of such Restricted
Subsidiary.
(d) guaranties by one Restricted Person of Liabilities owed by
another Restricted Person, if such Liabilities either (i) are not
Indebtedness, or (ii) are allowed under subsection (a), (b) or (c) of
this Section 7.1.
(e) Indebtedness of the Restricted Persons for plugging and
abandonment bonds or for letters of credit issued by any Lender in
place thereof which are required by regulatory authorities in the area
of operations, and Indebtedness of the Restricted Persons for other
bonds or letters of credit issued by any Lender which are required by
such regulatory authorities with respect to other normal oil and gas
operations.
(f) non-recourse Indebtedness as to which no Restricted Person
(i) provides any guaranty or credit support of any kind (including any
undertaking, guarantee, indemnity, agreement or instrument that would
constitute Indebtedness) or (ii) is directly or indirectly liable (as a
guarantor or otherwise); provided, that after giving effect to such
Indebtedness outstanding from time to time, US Borrower is not in
violation of Section 7.7.
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(g) Indebtedness that is subordinated to the Obligations on
terms acceptable to Required Lenders.
(h) Indebtedness in the approximate amount of C$3,459,000 owed
to Indeck Gas Supply Corporation by Northstar Energy pursuant to a Gas
Sales and Purchase Agreement dated as of March 9, 1989, as heretofore
or hereafter amended from time to time.
(i) Acquired Debt.
(j) Indebtedness under Hedging Contracts.
(k) Indebtedness relating to the surety bonds and letter of
credit obligations (including replacements thereof) listed on Schedule
2.
(l) Indebtedness relating to the undrawn amount of surety
bonds and letters of credit (exclusive of the surety bonds and letters
of credit obligations described in clause (k) above) incurred in the
ordinary course of business not to exceed 2% of Consolidated Assets at
any time.
(m) Indebtedness arising under the Devon Trust Securities.
(n) Indebtedness under the Existing Canadian Credit Facility
as in effect on the date hereof or as the same may be amended,
supplemented or modified from time to time or extended, renewed,
restructured, refinanced or replaced so long as the aggregate principal
amount outstanding at any time under this subsection (n) does not
exceed $750.0 million.
(o) Indebtedness outstanding on the Closing Date or thereafter
incurred pursuant to funding commitments in existence on the Closing
Date and listed in Schedule 7.1 hereto, as the same may be amended,
supplemented or modified from time to time or extended, renewed,
restructured, refinanced or replaced, so long as the aggregate
principal amount outstanding at any time under this subsection (o) does
not exceed the sum of such Indebtedness and commitments on the Closing
Date.
(p) miscellaneous items of Indebtedness of all Restricted
Persons not otherwise permitted in subsections (a) through (o) which do
not in the aggregate exceed $800,000,000 in principal amount at any one
time outstanding.
Section 7.2. Limitation on Liens. Except for Permitted Liens,
no Restricted Person will create, assume or permit to exist any Lien upon any of
the properties or assets which it now owns or hereafter acquires. No Restricted
Person will allow the filing or continued existence of any financing statement
describing as collateral any assets or property of such Restricted Person, other
than financing statements which describe only collateral subject to a Lien
permitted under this Section 7.2 and which name as secured party or lessor only
the holder of such Lien.
Section 7.3. Limitation on Mergers. No Restricted Person will
merge with or into or consolidate with any other Person except that any
Restricted Subsidiary of US Borrower may be merged into or consolidated with (a)
another Subsidiary of US Borrower so long as the surviving
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business entity of such merger or consolidation is a Restricted Subsidiary, or
(b) US Borrower, so long as US Borrower is the surviving business entity.
Section 7.4. Limitation on Issuance of Securities by
Subsidiaries of US Borrower; Ownership of Certain Restricted Subsidiaries by US
Borrower.
(a) No Restricted Subsidiary of US Borrower will issue any
additional shares of its capital stock, additional partnership interests or
other securities or any options, warrants or other rights to acquire such
additional shares, partnership interests or other securities except to another
Restricted Person which is a wholly-owned direct or indirect Subsidiary of US
Borrower unless (i) such securities are being issued to acquire a business,
directly or indirectly through the use of the proceeds of such issuance, and
(ii) such securities are convertible into the common or similar securities of US
Borrower and/or may be redeemed in cash at the option of the Restricted Person
that issued such securities. Notwithstanding the foregoing, this Section 7.4
shall not prohibit any transaction permitted pursuant to Section 7.4 of the
Existing US Credit Facility as in effect on the date hereof whether or not
terminated.
(b) US Borrower shall never own (directly or indirectly) less
than one hundred percent (100%) of the outstanding capital stock of Canadian
Borrower having ordinary voting power (disregarding changes in voting power
based on the occurrence of contingencies) for the election of directors.
Section 7.5. Transactions with Affiliates. No Restricted
Person will engage in any material transaction with any of its Affiliates on
terms which are less favorable in any material respect to it than those which
would have been obtainable at the time in arm's-length dealing with Persons
other than such Affiliates, provided that such restriction shall not apply to
transactions among Borrower and the other Restricted Persons that are
wholly-owned, directly or indirectly, by US Borrower.
Section 7.6. Prohibited Contracts. Except as expressly
provided for in the Loan Documents, the Support Agreement dated December 10,
1998 between US Borrower and Northstar Energy and in documents and instruments
evidencing or governing Indebtedness (or commitments with respect thereto) in
existence on the date hereof or Acquired Debt, no Restricted Person will,
directly or indirectly, enter into, create, or otherwise allow to exist any
contract or other consensual restriction on the ability of any Restricted Person
that is a Subsidiary of any Borrower: (a) to pay dividends or make other
distributions to such Borrower, (b) to redeem equity interests held in it by
such Borrower, (c) to repay loans and other indebtedness owing by it to such
Borrower, or (d) to transfer any of its assets to such Borrower.
Section 7.7. Funded Debt to Total Capitalization. The ratio of
US Borrower's Consolidated Total Funded Debt to US Borrower's Total
Capitalization will not exceed (i) seventy percent (70%) at the end of any
Fiscal Quarter ending on or before June 30, 2002,or (ii) sixty-five percent
(65%) at the end of any Fiscal Quarter thereafter.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1. Events of Default. Each of the following events
constitutes an Event of Default under this Agreement:
(a) Any Restricted Person fails to pay any principal component
of any Obligation when due and payable or fails to pay any other
Obligation within three (3) days after the date when due and payable,
whether at a date for the payment of a fixed installment or as a
contingent or other payment becomes due and payable or as a result of
acceleration or otherwise;
(b) Any "default" or "event of default" occurs under any Loan
Document which defines either such term, and the same is not remedied
within the applicable period of grace (if any) provided in such Loan
Document;
(c) Any Restricted Person fails (other than as referred to in
subsection (a) or (b) above) to (i) duly comply with Section 1.4 or
Section 7.4(b) of this Agreement or (ii) duly observe, perform or
comply with any other covenant, agreement, condition or provision of
any Loan Document, and such failure remains unremedied for a period of
thirty (30) days after notice of such failure is given by
Administrative Agent to US Borrower;
(d) Any representation or warranty previously, presently or
hereafter made in writing by or on behalf of any Restricted Person in
connection with any Loan Document shall prove to have been false or
incorrect in any material respect on any date on or as of which made
provided that if such falsity or lack of correctness is capable of
being remedied or cured within a 30-day period, Borrowers shall
(subject to the other provisions of this Section 8.1) have a period of
30 days after written notice thereof has been given to US Borrower by
Administrative Agent within which to remedy or cure such lack of
correctness, or this Agreement or any Note is asserted to be or at any
time ceases to be valid, binding and enforceable in any material
respect as warranted in Section 5.5 for any reason other than its
release or subordination by Administrative Agent;
(e) Any Restricted Person (i) fails to duly pay any
Indebtedness in excess of $150,000,000 constituting principal or
interest owed by it with respect to borrowed money or money otherwise
owed under any note, bond, or similar instrument or (ii) breaches or
defaults in the performance of any agreement or instrument by which any
such Indebtedness is issued, evidenced, governed, or secured, other
than a breach or default described in clause (i) above, and any such
failure, breach or default results in the acceleration of such
Indebtedness; provided, that notwithstanding any provision of this
subsection (e) to the contrary, to the extent that the terms of any
such agreement or instrument governing the sale, pledge or disposal of
Margin Stock or utilization of the proceeds of such Indebtedness in
connection therewith would result in such acceleration and in a Default
or an Event of Default under this Agreement, and would cause this
Agreement or any Loan to be subject to the margin requirements or any
other restriction under Regulation U, then such acceleration shall not
constitute a Default or an Event of Default under this subsection (e);
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(f) Either of the following occurs: (i) a Termination Event
occurs and the total amount of withdrawal liability that would be
incurred by all ERISA Affiliates upon their complete withdrawal from
all Multiemployer Plans would reasonably be expected to exceed
$250,000,000 or (ii) a Termination Event occurs and the total present
value of all unfunded benefit liabilities within the meaning of Title
IV of ERISA of all ERISA Plans (based upon the actuarial assumptions
used to fund each such Plan) would reasonably be expected to exceed
$250,000,000;
(g) Any Change in Control occurs; or
(h) Either Borrower or any other Restricted Person having
assets with a book value of at least $250,000,000:
(i) suffers the entry against it of a judgment,
decree or order for relief by a Tribunal of competent
jurisdiction in an involuntary proceeding commenced under any
applicable bankruptcy, insolvency or other similar Law of any
jurisdiction now or hereafter in effect, including the federal
Bankruptcy Code, as from time to time amended, or has any such
proceeding commenced against it which remains undismissed for
a period of thirty days; or
(ii) commences a voluntary case under any applicable
bankruptcy, insolvency or similar Law now or hereafter in
effect, including the federal Bankruptcy Code, as from time to
time amended; or applies for or consents to the entry of an
order for relief in an involuntary case under any such Law; or
makes a general assignment for the benefit of creditors; or
fails generally to pay (or admits in writing its inability to
pay) its debts as such debts become due; or takes corporate or
other action to authorize any of the foregoing; or
(iii) suffers the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of all or a substantial part
of its property in a proceeding brought against or initiated
by it, and such appointment or taking possession is neither
made ineffective nor discharged within thirty days after the
making thereof, or such appointment or taking possession is at
any time consented to, requested by, or acquiesced to by it;
or
(iv) suffers the entry against it of a final judgment
for the payment of money in an amount that exceeds (x) the
valid and collectible insurance in respect thereof or (y) the
amount of an indemnity with respect thereto reasonably
acceptable to the Required Lenders by $250,000,000 or more,
unless the same is discharged within thirty days after the
date of entry thereof or an appeal or appropriate proceeding
for review thereof is taken within such period and a stay of
execution pending such appeal is obtained; or
(v) suffers a writ or warrant of attachment or
similar process to be issued by any Tribunal against all or
any part of its property having a book value of at least
$250,000,000, and such writ or warrant of attachment or any
similar process is not
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stayed or released within thirty days after the entry or levy
thereof or after any stay is vacated or set aside.
Upon the occurrence of an Event of Default described in subsection (h)(i),
(h)(ii) or (h)(iii) of this section with respect to either Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by each Borrower and each Restricted Person who at any
time ratifies or approves this Agreement. Upon any such acceleration, any
obligation of any Lender to make any further Loans shall be permanently
terminated. During the continuance of any other Event of Default, Administrative
Agent at any time and from time to time may (and upon written instructions from
Required Lenders, Administrative Agent shall), without notice to either Borrower
or any other Restricted Person, do either or both of the following: (1)
terminate any obligation of Lenders to make Loans hereunder, and (2) declare any
or all of the Obligations immediately due and payable, and all such Obligations
shall thereupon be immediately due and payable, without demand, presentment,
notice of demand or of dishonor and nonpayment, protest, notice of protest,
notice of intention to accelerate, declaration or notice of acceleration, or any
other notice or declaration of any kind, all of which are hereby expressly
waived by each Borrower and each Restricted Person who at any time ratifies or
approves this Agreement.
Section 8.2. Remedies. If any Event of Default shall occur and
be continuing, each Lender Party may protect and enforce its rights under the
Loan Documents by any appropriate proceedings, including proceedings for
specific performance of any covenant or agreement contained in any Loan
Document, and each Lender Party may enforce the payment of any Obligations due
it or enforce any other legal or equitable right which it may have. All rights,
remedies and powers conferred upon Lender Parties under the Loan Documents shall
be deemed cumulative and not exclusive of any other rights, remedies or powers
available under the Loan Documents or at Law or in equity.
ARTICLE IX
AGENTS
Section 9.1. Appointment, Powers, and Immunities. Each Lender
hereby irrevocably appoints and authorizes UBS to act as the Administrative
Agent under this Agreement and the other Loan Documents with such powers and
discretion as are specifically delegated to the Administrative Agent by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Each Agent-Related Person: (i)
shall not have any duties or responsibilities except those expressly set forth
in this Agreement and shall not be a trustee or fiduciary for any Lender; (ii)
shall not be responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in or in connection
with any Loan Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability, or sufficiency of
any Loan Document, or any other document referred to or provided for therein or
for any failure by any Restricted Person or any other Person to perform any of
its obligations thereunder; (iii) shall not be responsible for or have any duty
to ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Restricted Person or the satisfaction of any
condition or to
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inspect the property (including the books and records) of any Restricted Person
or any of its Subsidiaries or Affiliates or for the failure of any Restricted
Person or Lender Party to perform its obligations under any Loan Document; (iv)
shall not be required to initiate or conduct any litigation or collection
proceedings under any Loan Document; and (v) shall not be responsible for any
action taken or omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the number of
Lenders herein specified with respect to a particular action shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
The Administrative Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
the other Loan Documents with reference to an agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
Section 9.2. Reliance by Agent.
(a) The Administrative Agent shall be entitled to rely upon
any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Restricted Person), independent accountants,
and other experts selected by Administrative Agent. Administrative Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until Administrative Agent receives and accepts an Assignment
and Acceptance executed in accordance with Section 10.6 hereof. Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders, if required hereunder, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all Lenders and participants. Where this Agreement expressly permits or
prohibits an action unless the Required Lenders otherwise determine,
Administrative Agent shall, and in all other instances, Administrative Agent
may, but shall not be required to, initiate any solicitation for the consent or
a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender; provided,
however that the Administrative Agent shall not be required to take any action
that exposes Administrative Agent to personal liability or that is contrary to
any Loan Document or applicable Law or unless it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking any such action.
Section 9.3. Defaults. Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default or Event of
Default unless the Administrative Agent has
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received written notice from a Lender or Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default." In the
event that Administrative Agent receives such a notice of the occurrence of a
Default or Event of Default, Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section 9.1
hereof) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders. Notwithstanding the
foregoing, unless and until Administrative Agent shall have received such
directions, Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders.
Section 9.4. Rights as Lender. With respect to its Percentage
Share of the Maximum Credit Amount and the Loans made by it, the Administrative
Agent (and any successor) in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include Administrative
Agent in its individual capacity. Administrative Agent (and any successor) and
its Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make Investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Restricted Person or any of its Subsidiaries or Affiliates as if it were not
acting as Administrative Agent, and Administrative Agent (and any successor) and
its Affiliates may accept fees and other consideration from any Restricted
Person or any of its Subsidiaries or Affiliates for services in connection with
this Agreement or otherwise without having to account for the same to the
Lenders.
Section 9.5. Indemnification. The Lenders agree to indemnify
each Agent-Related Person (to the extent not reimbursed under Section 10.4
hereof, but without limiting the obligations of Borrower under such section)
ratably in accordance with their respective Percentage Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against
Administrative Agent (including by any Lender) in any way relating to or arising
out of any Loan Document or the transactions contemplated thereby or any action
taken or omitted by Administrative Agent under any Loan Document (INCLUDING ANY
OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF AN AGENT); provided, that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person to be indemnified; and
provided, further, that no action taken in accordance with the directions of the
number of Lenders herein specified with respect to a particular action shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender agrees to reimburse
Administrative Agent promptly upon demand for its ratable share of any costs or
expenses payable by Borrowers under Section 10.4, to the extent that
Administrative Agent is not promptly reimbursed for such costs and expenses by
Borrowers. The agreements contained in this section shall survive payment in
full of the Loans and all other amounts payable under this Agreement.
Section 9.6. Non-Reliance on Administrative Agent and Other
Lenders. Each Lender agrees that it has, independently and without reliance on
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
Borrowers and their respective Subsidiaries and decision to enter into this
Agreement and
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that it will, independently and without reliance upon Administrative Agent or
any other Lender, 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 the Loan Documents. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Lenders by Administrative Agent hereunder, Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Restricted Person or any of its Subsidiaries or Affiliates that may come into
the possession of Administrative Agent or any of its Affiliates.
Section 9.7. [Reserved]
Section 9.8. Sharing of Set-Offs and Other Payments. Each
Lender Party agrees that if it shall, whether through the exercise of rights
under Loan Documents or rights of banker's lien, set-off, or counterclaim
against Borrowers or otherwise, obtain payment of a portion of the aggregate
Obligations owed to it which, taking into account all distributions made by
Administrative Agent under Section 3.1, causes such Lender Party to have
received more than it would have received had such payment been received by
Administrative Agent and distributed pursuant to Section 3.1, then (a) it shall
be deemed to have simultaneously purchased and shall be obligated to purchase
interests in the Obligations as necessary to cause all Lender Parties to share
all payments as provided for in Section 3.1, and (b) such other adjustments
shall be made from time to time as shall be equitable to ensure that
Administrative Agent and all Lender Parties share all payments of Obligations as
provided in Section 3.1; provided, however, that nothing herein contained shall
in any way affect the right of any Lender Party to obtain payment (whether by
exercise of rights of banker's lien, set-off or counterclaim or otherwise) of
indebtedness other than the Obligations. Each Borrower expressly consents to the
foregoing arrangements and agrees that any holder of any such interest may to
the fullest extent permitted by Law exercise any and all rights of banker's
lien, set-off, or counterclaim as fully as if such holder were a holder of the
Obligations in the amount of such interest. If all or any part of any funds
transferred pursuant to this section is thereafter recovered from the seller
under this section which received the same, the purchase provided for in this
section shall be deemed to have been rescinded to the extent of such recovery,
together with interest, if any, if interest is required pursuant to the order of
a Tribunal to be paid on account of the possession of such funds prior to such
recovery.
Section 9.9. Investments. Whenever Administrative Agent in
good faith determines that it is uncertain about how to distribute to Lender
Parties any funds which it has received, or whenever Administrative Agent in
good faith determines that there is any dispute among Lender Parties about how
such funds should be distributed, Administrative Agent may choose to defer
distribution of the funds which are the subject of such uncertainty or dispute.
If Administrative Agent in good faith believes that the uncertainty or dispute
will not be promptly resolved, or if Administrative Agent is otherwise required
to invest funds pending distribution to Lender Parties, Administrative Agent
shall invest such funds pending distribution; all interest on any such
Investment shall be distributed upon the distribution of such Investment and in
the same proportion and to the same Persons as such Investment. All moneys
received by Administrative Agent for distribution to Lender Parties (other than
to the Person who is Administrative Agent in its separate capacity as a Lender
Party) shall be held by Administrative Agent pending such distribution solely as
Administrative Agent for such Lender Parties, and Administrative Agent shall
have no equitable title to any portion thereof.
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Section 9.10. Benefit of Article IX. The provisions of this
Article (other than the following Section 9.11) are intended solely for the
benefit of Lender Parties, and no Restricted Person shall be entitled to rely on
any such provision or assert any such provision in a claim or defense against
any Lender. Lender Parties may waive or amend such provisions as they desire
without any notice to or consent of Borrowers or any other Restricted Person.
Section 9.11. Resignation. The Administrative Agent may resign
at any time by giving written notice thereof to Lenders and Borrowers. Each such
notice shall set forth the date of such resignation. Upon any such resignation
of the Administrative Agent, Required Lenders shall have the right to appoint a
successor Administrative Agent and if no Default or Event of Default has
occurred and is continuing, Required Lenders shall obtain the consent of
Borrowers. A successor must be appointed for any retiring Administrative Agent,
and such Administrative Agent's resignation shall become effective when such
successor accepts such appointment. If, within thirty days after the date of the
retiring Administrative Agent's resignation, no successor Administrative Agent
has been appointed and has accepted such appointment, then the retiring
Administrative Agent may appoint a successor Administrative Agent, which in the
case of the Administrative Agent, shall be a commercial bank organized or
licensed to conduct a banking or trust business under the Laws of the United
States of America or of any state thereof and if no Default or Event of Default
has occurred and is continuing, retiring Administrative Agent shall obtain the
consent of Borrowers. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Administrative Agent's
resignation hereunder the provisions of this Article IX shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
Section 9.12. [Reserved]
Section 9.13. Other Agents. None of the Lenders identified on
the facing page or signature pages of this Agreement as "syndication agent" or
"documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
Section 10.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether by
course of conduct or otherwise) by any Lender Party in exercising any right,
power or remedy which such Lender Party may have under any of the Loan Documents
shall operate as a waiver thereof or of any other right, power or remedy, nor
shall any single or partial exercise by any Lender Party of any such right,
power or remedy preclude any other or further exercise thereof or of any other
right, power or
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remedy. No waiver of any provision of any Loan Document and no consent to any
departure therefrom shall ever be effective unless it is in writing and signed
as provided below in this section, and then such waiver or consent shall be
effective only in the specific instances and for the purposes for which given
and to the extent specified in such writing. No notice to or demand on any
Restricted Person shall in any case of itself entitle any Restricted Person to
any other or further notice or demand in similar or other circumstances. This
Agreement and the other Loan Documents set forth the entire understanding
between the parties hereto with respect to the transactions contemplated herein
and therein and supersede all prior discussions and understandings with respect
to the subject matter hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this Agreement or the other Loan
Documents shall be valid or effective against any party hereto unless the same
is in writing and signed by (i) if such party is a Borrower, by such Borrower,
(ii) if such party is the Administrative Agent, by such party and (iii) if such
party is a Lender, by such Lender or by Administrative Agent on behalf of
Lenders with the written consent of Required Lenders (which consent has already
been given as to the termination of the Loan Documents as provided in Section
10.10). Notwithstanding the foregoing or anything to the contrary herein, (i)
Administrative Agent shall not, without the prior consent of Required Lenders,
execute and deliver on behalf of such Lender any waiver or amendment which would
increase the Maximum Credit Amount hereunder, and (ii) Administrative Agent
shall not execute any waiver or amendment that would amend the definition of
"Required Lenders" without the consent of each Lender. Notwithstanding the
foregoing or anything to the contrary herein, Administrative Agent shall not,
without the prior consent of each individual Lender, execute and deliver on
behalf of such Lender any waiver or amendment which would: (1) increase the
maximum amount which such Lender is committed hereunder to lend, (2) reduce any
fees payable to such Lender hereunder, or the principal of, or interest on, such
Lender's Loan, (3) postpone any date fixed for any payment of any such fees or
interest or principal due on the Maturity Date, it being understood and agreed
that changes to the amortization schedules set forth in Section 1.6(b),
including changes which would postpone the date for payment of any principal of
any Loans, other than extending the Maturity Date, shall require the approval of
Lenders holding in the aggregate a Percentage Share equal to or in excess of 66
2/3%, (4) amend the definition herein of "Required Lenders" or otherwise change
the aggregate amount of Percentage Shares which is required for Administrative
Agent, Lenders or any of them to take any particular action under the Loan
Documents, (5) release any Borrower or a Guarantor (to the extent not otherwise
released pursuant to the terms of the Guaranty to which such Guarantor is a
party) from its obligation to pay such Lender's Loan (it being understood and
agreed that neither any assignment by the Canadian Borrower pursuant to Section
10.6(i) nor the termination of any Guaranty in accordance with the terms thereof
shall constitute a release of either Borrower or any Guarantor within the
meaning of this Section 10.1(a) or shall require the consent of any Lender
Party), or (6) amend this Section 10.1(a).
(b) Acknowledgments and Admissions. Each Borrower hereby
represents, warrants, acknowledges and admits that (i) it has been advised by
counsel in the negotiation, execution and delivery of the Loan Documents to
which it is a party, (ii) it has made an independent decision to enter into this
Agreement and the other Loan Documents to which it is a party, without reliance
on any representation, warranty, covenant or undertaking by Administrative Agent
or Lender, whether written, oral or implicit, other than as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof, (iii) there are no representations, warranties, covenants, undertakings
or agreements by any Lender as to the Loan Documents except as expressly set out
in this Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Lender has
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any fiduciary obligation toward any Borrower with respect to any Loan Document
or the transactions contemplated thereby, (v) the relationship pursuant to the
Loan Documents between Borrowers and the other Restricted Persons, on one hand,
and each Lender, on the other hand, is and shall be solely that of debtor and
creditor, respectively, (vi) no partnership or joint venture exists with respect
to the Loan Documents between any Restricted Person and any Lender, (vii)
Administrative Agent is not Borrower's agent, but agent for Lenders, (viii)
without limiting any of the foregoing, Borrower is not relying upon any
representation or covenant by any Lender, or any representative thereof, and no
such representation or covenant has been made, that any Lender will, at the time
of an Event of Default or Default, or at any other time, waive, negotiate,
discuss, or take or refrain from taking any action permitted under the Loan
Documents with respect to any such Event of Default or Default or any other
provision of the Loan Documents, and (ix) all Lender Parties have relied upon
the truthfulness of the acknowledgments in this section in deciding to execute
and deliver this Agreement and to become obligated hereunder.
(c) Joint Acknowledgment. This written Agreement and the other
Loan Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties; provided, it is understood and agreed that the terms
and provisions of the third and fourth paragraph of Section 1 of the Commitment
Letter, the third paragraph of Section 4 of the Commitment Letter and the third
and fifth paragraph of the Fee Letter shall survive the Closing Date. There are
no oral agreements between the parties.
(d) Mitchell Restructuring Event. US Borrower may, in
connection with the Mitchell Acquisition, consummate one or more transactions
(collectively, the "Mitchell Restructuring Event") pursuant to which US Borrower
would (i) cause a new holding company ("Devon Holdco") to be formed under the
laws of the United States or any state thereof or the District of Columbia; and
(ii) pursuant to one or more mergers or other transactions, Devon HoldCo would
acquire, directly or indirectly, all of the issued and outstanding common stock
of each of the US Borrower and Mitchell. On or prior to the Mitchell
Restructuring Event:
(i) US Borrower shall notify the Administrative Agent that
such Mitchell Restructuring Event will occur;
(ii) prior to or concurrently with the consummation of the
Mitchell Restructuring Event, Devon HoldCo shall execute and deliver to
the Administrative Agent, for the benefit of the Lenders, a full and
unconditional guaranty of the Obligations of the Borrowers under this
Agreement, such guaranty to be in form and substance substantially
similar to Exhibit G-3 hereto;
(iii) concurrently with the consummation of the Mitchell
Restructuring Event, the Amended and Restated Credit Agreement attached
hereto as Exhibit H shall become effective, and this Agreement shall be
deemed to be amended and restated to read in its entirety as set forth
in Exhibit H hereto, in each case automatically and without any further
action or consent by any Lender Party or any other Person; and
(iv) with the consent of the Administrative Agent but without
the separate consent of any other Lender Party, US Borrower may amend,
supplement or otherwise modify this
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Agreement, Exhibit H hereto or any other Loan Document in connection
with the Mitchell Restructuring Event and the related addition of Devon
HoldCo as a Restricted Person in the Loan Documents (i) to cure any
ambiguity or correct or supplement any provision contained in any Loan
Document which may thereby become defective or inconsistent with any
other provisions contained therein, so long as such amendment,
supplement or other modification would not have an adverse effect on
the interests of the Lender Parties under the Loan Documents or (ii) to
add to the covenants and agreements of the Restricted Persons under the
Loan Documents such further covenants, agreements, restrictions,
conditions or provisions as the Administrative Agent shall consider to
be for the protection of the Lender Parties.
Notwithstanding anything to the contrary, nothing in this Agreement or in any
other Loan Document shall prohibit the Mitchell Restructuring Event or shall be
deemed to give rise to a Change of Control, a Default or an Event of Default as
a result of such Mitchell Restructuring Event. The rights and obligations of the
parties to this Agreement with respect to periods following the time the Amended
and Restated Credit Agreement attached hereto as Exhibit H becomes effective in
accordance with this Section 10.1 (the "Amendment Effective Date") shall be
governed exclusively by such Amended and Restated Credit Agreement. The rights
and obligations of the parties to this Agreement with respect to the period
prior to the Amendment Effective Date shall not be affected by such amendment
and restatement. The parties hereto agree that on the Amendment Effective Date,
the Borrowers and the Administrative Agent, acting on behalf of the Lenders (it
being understood and agreed that each Lender hereby expressly consents to the
Administrative Agent's so acting), shall execute and deliver counterparts to the
Amended and Restated Credit Agreement attached thereto as Exhibit H, provided,
however, that neither the failure of either Borrower or the Administrative Agent
to execute and deliver such Amended and Restated Credit Agreement nor the fact
that such Amended and Restated Credit Agreement shall not be executed and
delivered by each Lender shall delay or otherwise affect the effectiveness of
such Amended and Restated Credit Agreement or alter the rights or obligations of
either Borrower, the Administrative Agent, either Arranger or any Lender
thereunder.
Section 10.2. Survival of Agreements; Cumulative Nature. All
of Restricted Persons' various representations, warranties, covenants and
agreements in the Loan Documents shall survive the execution and delivery of
this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans and the delivery of the
Notes and the other Loan Documents, and shall further survive until all of the
Obligations are paid in full to each Lender Party and all of Lender Parties'
obligations to Borrowers are terminated. All statements and agreements contained
in any certificate or other instrument delivered by any Restricted Person to any
Lender Party under any Loan Document shall be deemed representations and
warranties by Borrowers or agreements and covenants of Borrowers under this
Agreement. The representations, warranties, indemnities, and covenants made by
Restricted Persons in the Loan Documents, and the rights, powers, and privileges
granted to Lender Parties in the Loan Documents, are cumulative, and, except for
expressly specified waivers and consents, no Loan Document shall be construed in
the context of another to diminish, nullify, or otherwise reduce the benefit to
any Lender Party of any such representation, warranty, indemnity, covenant,
right, power or privilege. In particular and without limitation, no exception
set out in this Agreement to any representation, warranty, indemnity, or
covenant herein contained shall apply to any similar representation, warranty,
indemnity, or covenant contained in any other Loan Document, and each such
similar representation, warranty, indemnity, or covenant shall be
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subject only to those exceptions which are expressly made applicable to it by
the terms of the various Loan Documents.
Section 10.3. Notices. All notices, requests, consents,
demands and other communications required or permitted under any Loan Document
shall be in writing, unless otherwise specifically provided in such Loan
Document (provided that Administrative Agent may give telephonic notices to the
other Lender Parties), and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by facsimile, e-mail or other electronic
transmission, by delivery service with proof of delivery, or by registered or
certified United States or Canadian mail, postage prepaid, to US Borrower and
Canadian Borrower at their respective addresses specified on the signature pages
hereto and to each Lender Party at its address specified on Annex I hereto
(unless changed by similar notice in writing given by the particular Person
whose address is to be changed; provided, however, that notices given by e-mail
transmission shall be followed by notice given by another permitted method
described above and, unless sooner acknowledged by the intended recipient, shall
be deemed to have been given only when such follow-up notice is deemed to have
been given as provided below). Any such notice or communication shall be deemed
to have been given (a) in the case of personal delivery or delivery service, as
of the date of first attempted delivery during normal business hours at the
address provided herein, (b) in the case of facsimile or other electronic
transmission, upon receipt, or (c) in the case of registered or certified United
States or Canadian mail, three days after deposit in the mail; provided,
however, that no Borrowing Notice shall become effective until actually received
by Administrative Agent.
Section 10.4. Payment of Expenses; Indemnity.
(a) Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, US Borrower will promptly (and
in any event, within 30 days after any invoice or other statement or notice) pay
or cause Canadian Borrower to promptly pay: (i) all reasonable out-of-pocket
costs and expenses incurred by or on behalf of Administrative Agent (including
without limitation, attorneys' fees) in connection with (1) the negotiation,
preparation, execution and delivery of the Loan Documents, and any and all
consents, waivers or other documents or instruments relating thereto (including
but not limited to expenses incurred in connection with due diligence and
travel, courier, reproduction, printing and delivery expenses) and (2)
monitoring or confirming (or preparation or negotiation of any document related
to) each Borrower's compliance with any covenants or conditions contained in
this Agreement or in any Loan Document, and (ii) all reasonable costs and
expenses incurred by or on behalf of any Lender Party (including without
limitation, attorneys' fees, consultants' fees and accounting fees) in
connection with the defense or enforcement of any of the Loan Documents
(including this section) or the defense of any Lender Party's exercise of its
rights thereunder.
(b) Indemnity. Each Borrower agrees to indemnify each
Agent-Related Person and each Lender Party, upon demand, from and against any
and all reasonable out-of-pocket liabilities, obligations, claims, losses,
damages, penalties, fines, actions, judgments, suits, settlements, costs,
expenses or disbursements (including reasonable fees of attorneys, accountants,
experts and advisors) of any kind or nature whatsoever (in this section
collectively called "liabilities and costs") which to any extent (in whole or in
part) may be imposed on, incurred by, or asserted against such Agent-Related
Person or such Lender Party, as the case may be, growing out of, resulting from
or in any
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other way associated with the Loan Documents and the transactions and events
(including the enforcement or defense thereof) at any time associated therewith,
including but not limited to the Acquisitions, or contemplated therein (whether
arising in contract or in tort or otherwise and including any violation or
noncompliance with any Environmental Laws by any Agent-Related Person or Lender
Party or any other Person or any liabilities or duties of any Agent-Related
Person or Lender Party or any other Person with respect to Hazardous Materials
found in or released into the environment); provided, no Borrower shall be
required to pay the fees and disbursements of more than one separate counsel of
any such indemnified Person in any jurisdiction in any single proceeding. The
foregoing indemnification shall apply whether or not such liabilities and costs
are in any way or to any extent owed, in whole or in part, under any claim or
theory of strict liability or caused, in whole or in part by any negligent act
or omission of any kind by any Agent-Related Person or Lender Party, provided
only that no Agent-Related Person or Lender Party shall be entitled under this
section to receive indemnification for that portion, if any, of any liabilities
and costs which is proximately caused by its own individual gross negligence or
willful misconduct, as determined in a final judgment. If any Person (including
Borrowers or any of their Affiliates) ever alleges such gross negligence or
willful misconduct by any Lender Party, the indemnification provided for in this
section shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. As used in this section the term "Lender Party" shall refer
not only to each Person designated as such in Section 1.1 but also to each
director, officer, agent, attorney, employee, representative, attorney-in-fact
and Affiliate of such Person.
Section 10.5. Parties in Interest. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that except as set forth in Section 10.6(i) no Restricted Person may
assign or transfer any of its rights or delegate any of its duties or
obligations under any Loan Document without the prior consent of all Lenders
(and any attempted assignment or transfer by any Restricted Person without such
consent shall be null and void). Neither Borrower and no Affiliate of a Borrower
shall directly or indirectly purchase or otherwise retire any Obligations owed
to any Lender nor will any Lender accept any offer to do so, unless each Lender
shall have received substantially the same offer with respect to the same
Percentage Share of the Obligations owed to it. If any Borrower or any Affiliate
of a Borrower at any time purchases some but less than all of the Obligations
owed to all Lender Parties, such purchaser shall not be entitled to any rights
of any Lender under the Loan Documents unless and until Borrowers or their
respective Affiliates have purchased all of the Obligations.
Section 10.6. Assignments and Participations.
(a) Each Lender may assign to one or more Eligible Transferees
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans, its Note, and its Percentage
Share of the Maximum Credit Amount); provided, however, that
(i) each such assignment shall be to an Eligible Transferee;
(ii) except in the case of such an assignment to another Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement (or, as otherwise consented to
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by the Administrative Agent and the US Borrower), any partial
assignment of such Lender's rights and obligations under this Agreement
shall be in a collective amount at least equal to $10,000,000 or an
integral multiple of $5,000,000 in excess thereof (so long as such
Lender's remaining rights and obligations under this Agreement shall be
at least equal to $10,000,000) and shall apply pro rata to such
Lender's Loans and Commitments;
(iii) the parties to such assignment shall execute and deliver
to Administrative Agent, for its acceptance an Assignment and
Acceptance in the form of Exhibit F hereto, together with any Note
subject to such assignment and a processing fee of $2,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance and
registration of such assignment in the Register as provided in clause (c) below,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this section, the assignor,
Administrative Agent and Borrowers shall make appropriate arrangements so that,
if required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the Laws of the United States of America or a
state thereof, it shall, as a condition to the effectiveness of such assignment,
deliver to Borrowers and Administrative Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section 3.9.
(b) Administrative Agent shall maintain at its address
referred to in Section 10.3 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders, their respective Commitments and their Percentage
Share of the Maximum Credit Amount of, and principal amount of the Loans owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
Borrowers, Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Borrowers or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit F
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
parties thereto. No assignment shall be effective unless such assignment shall
have been recorded in the Register by Administrative Agent as provided in this
clause (c). A Lender may assign all or a portion of its rights and obligations
under this Agreement only by registration of such assignment in the Register.
(d) Each Lender may sell participations to one or more Persons
that are Eligible Transferees in all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Maximum Credit Amount
and its Loans); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be
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entitled to the benefit of the yield protection provisions contained in Article
III (provided that a participant shall not be entitled to receive any greater
payment under Section 3.1 or 3.2 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such participant,
unless the sale of the participation to such participant is made with each
Borrower's prior written consent. A participant that would have been subject to
Section 3.9 if it were a Lender shall not be entitled to the benefit of Section
3.1 unless each Borrower has been notified of the participation sold to such
participant, and such participant agrees, for the benefit of each Borrower, to
comply with such Section as if it were a Lender, and (iv) each Borrower shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of each Borrower relating to
its Loans and its Note and to approve any amendments, modification, or waiver of
any provision of this Agreement (provided that such Lender may agree that it
will not approve amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans or Note,
extending the Maturity Date or any date fixed for the payment of interest on
such Loans or Note, or extending the aggregate amount of its share of the
Maximum Credit Amount without the consent of the participant). Each Lender that
sells a participation shall, as agent of the Borrowers solely for the purpose of
this Section 10.6(d), record in book entries maintained by such Lender the name
and amount of the participating interest of each Participant entitled to receive
payments in respect of such participating interest.
(e) If the consent of Borrowers to an assignment to an
Eligible Transferee is required hereunder, each Borrower shall be deemed to have
given its consent ten (10) Business Days after the date notice thereof has been
delivered by the assigning Lender (through Administrative Agent) unless such
consent is expressly refused by Borrowers prior to such tenth Business Day.
(f) [Reserved]
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any portion of
its Loans and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(h) Any Lender may furnish any information concerning
Borrowers or any of their Subsidiaries in the possession of such Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 10.7 hereof.
(i) The Canadian Borrower may assign, at any time and from
time to time, all or any portion of its Obligations hereunder to the US Borrower
without the consent of Administrative Agent or any Lender.
Section 10.7. Confidentiality. Administrative Agent and each
Lender (each, a "Lending Party") agrees to keep confidential any information
furnished or made available to it by Borrowers in connection with the Loan
Documents that is marked confidential; provided that nothing herein shall
prevent any Lending Party from disclosing such information (a) to any other
Lending
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Party or any Affiliate of any Lending Party, or any officer, director, employee,
agent, or advisor of any Lending Party or Affiliate of any Lending Party, (b) to
any other Person if reasonably incidental to the administration of the credit
facility provided herein, (c) as required by any Law, rule, or regulation, (d)
upon the order of any court or administrative agency, (e) upon the request or
demand of any regulatory agency or authority, (f) that is or becomes available
to the public or that is or becomes available to any Lending Party other than as
a result of a disclosure by any Lending Party prohibited by this Agreement, (g)
in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Loan Document, and (i)
subject to provisions substantially similar to those contained in this section,
to any actual or proposed participant or assignee.
Section 10.8. Governing Law; Submission to Process. Except to
the extent that the law of another jurisdiction is expressly elected in a Loan
Document, the Loan Documents shall be deemed contracts and instruments made
under the laws of the State of New York and shall be construed and enforced in
accordance with and governed by the laws of the State of New York and the laws
of the United States of America. Each Borrower hereby irrevocably submits itself
and each other Restricted Person and Administrative Agent hereby irrevocably
submits itself and each Lender hereby irrevocably submits itself to the
non-exclusive jurisdiction of the state and federal courts sitting in New York
City and agrees and consents that service of process may be made upon it or any
Restricted Person in any legal proceeding relating to the Loan Documents or the
obligations by any means allowed under New York or federal law.
Section 10.9. Limitation on Interest. Lender Parties,
Restricted Persons and any other parties to the Loan Documents intend to
contract in strict compliance with applicable usury Law from time to time in
effect. In furtherance thereof such Persons stipulate and agree that none of the
terms and provisions contained in the Loan Documents shall ever be construed to
create a contract to pay, for the use, forbearance or detention of money,
interest in excess of the maximum amount of interest permitted to be charged by
applicable Law from time to time in effect. Neither any Restricted Person nor
any present or future guarantors, endorsers, or other Persons hereafter becoming
liable for payment of any Obligation shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable Law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Loan Documents which may be in conflict or apparent conflict
herewith. Lender Parties expressly disavow any intention to charge or collect
excessive unearned interest or finance charges in the event the maturity of any
Obligation is accelerated. If (a) the maturity of any Obligation is accelerated
for any reason, (b) any Obligation is prepaid and as a result any amounts held
to constitute interest are determined to be in excess of the legal maximum, or
(c) any Lender or any other holder of any or all of the Obligations shall
otherwise collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Obligations to an amount in
excess of that permitted to be charged by applicable Law then in effect, then
all sums determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal of
the related Obligations or, at such Lender's or holder's option, promptly
returned to Borrowers or the other payor thereof upon such determination. In
determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under applicable Law, Lender
Parties and Restricted Persons (and any other payors thereof) shall to the
greatest extent permitted under applicable Law, (i) characterize any
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non-principal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum legal
rate of interest from time to time in effect under applicable Law in order to
lawfully charge the maximum amount of interest permitted under applicable Law.
As used in this section the term "applicable Law" means the Laws of the State of
New York or the Laws of the United States of America, whichever Laws allow the
greater interest, as such Laws now exist or may be changed or amended or come
into effect in the future.
Section 10.10. Termination; Limited Survival. In their sole
and absolute discretion Borrowers may at any time that no Obligations are owing
elect in a written notice delivered to Administrative Agent to terminate this
Agreement. Upon receipt by Administrative Agent of such a notice, if no
Obligations are then owing this Agreement and all other Loan Documents shall
thereupon be terminated and the parties thereto released from all prospective
Obligations thereunder. Notwithstanding the foregoing or anything herein to the
contrary, any waivers or admissions made by any Restricted Person in any Loan
Document, any Obligations under Sections 3.2 through 3.6, and any obligations
which any Person may have to indemnify or compensate any Lender Party shall
survive any termination of this Agreement or any other Loan Document. At the
request and expense of Borrowers, Administrative Agent shall prepare and execute
all necessary instruments to reflect and effect such termination of the Loan
Documents. Administrative Agent is hereby authorized to execute all such
instruments on behalf of all Lenders, without the joinder of or further action
by any Lender.
Section 10.11. Severability. If any term or provision of any
Loan Document shall be determined to be illegal or unenforceable all other terms
and provisions of the Loan Documents shall nevertheless remain effective and
shall be enforced to the fullest extent permitted by applicable Law.
Section 10.12. Counterparts; Fax. This Agreement may be
separately executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to constitute one and the same Agreement. This Agreement and the Loan Documents
may be validly executed and delivered by facsimile or other electronic
transmission.
Section 10.13. Waiver of Jury Trial, Punitive Damages, etc.
Each Borrower and each Lender Party hereby knowingly, voluntarily,
intentionally, and irrevocably (a) waives, to the maximum extent not prohibited
by Law, any right it may have to a trial by jury in respect of any litigation
based hereon, or directly or indirectly at any time arising out of, under or in
connection with the Loan Documents or any transaction contemplated thereby or
associated therewith, before or after maturity, in each case whether now
existing or hereafter arising, and whether founded in contract or tort or
otherwise; and each such party hereby agrees and consents that any such claim,
demand, action or cause of action shall be decided by court trial without a
jury, and that any party to this Agreement may file an original counterpart or a
copy of this section with any court as written evidence of the consent of the
signatories hereto to the waiver of their right to trial by jury, (b) waives, to
the maximum extent not prohibited by Law, any right it may have to claim or
recover in any such litigation any "Special Damages", as defined below, (c)
certifies 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,
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in the event of litigation, seek to enforce the foregoing waivers, and (d)
acknowledges 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.
As used in this section, "Special Damages" includes all special, consequential,
exemplary, or punitive damages (regardless of how named), but does not include
any payments or funds which any party hereto has expressly promised to pay or
deliver to any other party hereto. If any Lender Party receives any payment or
payments pursuant to any judgment or order in any currency other than US
Dollars, and the amount of the US Dollars which the relevant Lender Party is
able to purchase on the Business Day next following such receipt with the
proceeds of such payment or payments in accordance with its normal procedures
and after deducting any premiums and costs of exchange is less than the amount
of the US Dollars due in respect of such Obligations immediately prior to such
judgment or order, then the Applicable Borrower on demand shall, and Applicable
Borrower hereby agrees to, indemnify and save such Lender Party harmless from
and against any loss, cost or expense arising out of or in connection with such
deficiency.
Section 10.14. Defined Terms. Capitalized terms and phrases
used and not otherwise defined herein shall for all purposes of this Agreement
have the meaning given to such terms and phrases in Article II herein.
Section 10.15. Annexes, Exhibits and Schedules. Annex I and
all Exhibits and Schedules attached to this Agreement are a part hereof for all
purposes.
Section 10.16. Amendment of Defined Instruments. Unless the
context otherwise requires or unless otherwise provided herein the terms defined
in this Agreement which refer to a particular agreement, instrument or document
also refer to and include all renewals, extensions, modifications, amendments
and restatements of such agreement, instrument or document, provided that
nothing contained in this section shall be construed to authorize any such
renewal, extension, modification, amendment or restatement. Unless the context
otherwise requires or unless otherwise provided herein, the references in this
Agreement to a particular statute, rule or regulation also refer to and include
all amendments, supplements and other modifications to such statute, rule or
regulation.
Section 10.17. References and Titles. All references in this
Agreement to Exhibits, Schedules, articles, sections, subsections and other
subdivisions refer to the Exhibits, Schedules, articles, sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning of any subdivisions are for convenience only
and do not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
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Section 10.18. Calculations and Determinations. All
calculations under the Loan Documents of interest chargeable with respect to
Eurodollar Loans and of fees shall be made on the basis of actual days elapsed
(including the first day but excluding the last) and a year of 360 days. All
other calculations of interest made under the Loan Documents shall be made on
the basis of actual days elapsed (including the first day but excluding the
last) and a year of 365 or 366 days, as appropriate. Each determination by a
Lender Party of amounts to be paid under Article III or any other matters which
are to be determined hereunder by a Lender Party (such as any Eurodollar Rate,
Adjusted Eurodollar Rate, Business Day, Interest Period, or Reserve Requirement)
shall, in the absence of manifest error, be conclusive and binding. Unless
otherwise expressly provided herein, or unless Required Lenders otherwise
consent, all financial statements and reports furnished to any Lender Party
hereunder shall be prepared and all financial computations and determinations
pursuant hereto shall be made in accordance with US GAAP. For the purposes of
the Interest Act (Canada), when ever interest payable pursuant to this Agreement
is calculated on the basis of a period other than a calendar year, each rate of
interest determined pursuant to such calculation expressed as an annual rate is
equivalent to such rate as so determined multiplied by the actual number of days
in the calendar year in which the same is to be ascertained and divided by the
number of days in such interest period.
Section 10.19. Construction of Indemnities and Releases. All
indemnification and release provisions of this Agreement shall be construed
broadly (and not narrowly) in favor of the Persons receiving indemnification or
being released.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
S-1
IN WITNESS WHEREOF, this Agreement is executed as of the date
first written above.
DEVON ENERGY CORPORATION, as
US Borrower
By: /s/ WILLIAM T. VAUGHN
-----------------------------------------
Name: William T. Vaughn
Title: Senior Vice President - Finance
Address:
20 North Broadway, Suite 1500
Oklahoma City, Oklahoma 73102
Attention: Senior Vice
President - Finance
Telephone: (405) 552-4700
Fax: (405) 228-7538
E-mail: BILL.VAUGHN@DVN.COM
DEVON FINANCING CORPORATION, U.L.C.,
as Canadian Borrower
By: /s/ JOHN RICHELS
-----------------------------------------
Name: John Richels
Title: Senior Vice President
Address: 3000 400 3rd Avenue SW
Calgary Alberta T2P 4H2
Telephone: (403) 213-8000
Fax: (403) 213-8100
E-mail: JOHNR@NORTHSNRG.COM
S-2
UBS WARBURG LLC, as
Joint Lead Arranger
By: /s/ DAVID A. JUGE
-----------------------------------------
Name: David A. Juge
Title: Managing Director
By: /s/ DANIEL W. LADD III
-----------------------------------------
Name: Daniel W. Ladd III
Title: Executive Director
Address:
Telephone:
Fax:
E-mail:
BANC OF AMERICA SECURITIES LLC,
as Joint Lead Arranger
By: /s/ STEPHANIE PENDLETON
-----------------------------------------
Name: Stephanie Pendleton
Title: Principal
S-3
UBS AG, STAMFORD BRANCH,
as Administrative Agent and Lender
By: /s/ DAVID A. JUGE
----------------------------------------------
Name: David A. Juge
Title: Managing Director
By: /s/ DANIEL W. LADD III
----------------------------------------------
Name: Daniel W. Ladd III
Title: Executive Director
Address: 677 Washington Boulevard, 6th Floor
Stamford, CT 06912
Telephone: (203) 719-4308
Fax: (203) 719-3888
E-mail:
BANK OF AMERICA, N.A.,
as Syndication Agent and Lender
By: /s/ JAMES R. ALLRED
----------------------------------------------
Name: James R. Allred
Title: Managing Director
Address: 901 Main Street, 14th Floor
Dallas, TX 75202
Attention: Renita Cummings
Telephone: (214) 209-1233
Fax: (214) 290-8371
E-mail: RENITA.CUMMINGS@BANKOFAMERICA.COM
S-4
ABN AMRO BANK N.V., as Lender
By: /s/ FRANK R. RUSSO, JR.
----------------------------------------------
Name: Frank R. Russo, Jr.
Title: Group Vice President
By: /s/ JEFFERY WHITE
----------------------------------------------
Name: Jeffery White
Title: Vice President
Address: 3 Riverway, Suite 1700
Houston, Texas 77056
Telephone: (713) 964-3326
Fax: (713) 629-1115
E-mail: JEFF.G.WHITE@ABNAMRO.COM
S-5
BANK OF MONTREAL, as Lender
By: /s/ JAMES B. WHITMORE
-----------------------------------------
Name: James B. Whitmore
Title: Managing Director
Address: 700 Louisiana, Suite 4400
Houston, TX 77002
Telephone: (713) 546-9734
Fax: (713) 223-4007
E-mail: JAMES.WHITMORE@BMO.COM
S-6
THE CHASE MANHATTAN BANK, as Lender
By: /s/ RUSSELL A. JOHNSON
----------------------------------------
Name: Russell A. Johnson
Title: Vice President
Address: 600 Travis St., 20th Floor
Houston, TX 77002-8086
Telephone: (713) 216-5617
Fax: (713) 216-8870
E-mail: RUSSELL.JOHNSON@JPMORGAN.COM
S-7
CITIBANK, N.A., as Lender
By: /s/ TODD J. MOGIL
-----------------------------------------
Name: Todd J. Mogil
Title: Attorney-in-fact
Address: 399 Park Avenue
New York, NY 10022
Copy to: 1200 Smith Street, Suite 2000
Houston, TX 77002
Attention: Todd Mogil
Telephone: (713) 654-3559
Fax: (713) 654-2849
E-mail: TODD.J.MOGIL@citi.COM
S-8
CREDIT SUISSE FIRST BOSTON, TORONTO BRANCH
as Lender
By: /s/ BILL MCFARLAND
-----------------------------------------
Name: Bill McFarland
Title: Vice President
By: /s/ PETER CHAUVIN
-----------------------------------------
Name: Peter Chauvin
Title: Vice President
Address: 1 First Canadian Place
P.O. Box 301
Toronto, Ontario, Canada M5X 1C9
Telephone: (416) 352-4528
Fax: (416) 352-4576
E-mail: BILL.MCFARLAND@CSFB.COM
DEUTSCHE BANK AG, NEW YORK BRANCH, as Lender
By: /s/ JOEL MAKOWSKY
-----------------------------------------
Name: Joel Makowsky
Title: Vice President
By: /s/ HANS C. NARBERHAUS
-----------------------------------------
Name: Hans C. Narberhaus
Title: Vice President
Address: 31 West. 52nd Street
New York, NY 10019
Attention: Noble Samuel
Telephone: (732) 981 7440
Fax: (732) 981-7470
E-mail: NOBLE.SAMUEL@DB.COM
CREDIT SUISSE FIRST BOSTON
as Lender
By: /s/ JAMES MORAN
-----------------------------------------
Name: James Moran
Title: Director
By: /s/ DAVID KOCZAN
-----------------------------------------
Name: David Koczan
Title: Associate
Address: 11 Madison Avenue
New York, New York 10010
Telephone: (212) 325-9176
Fax: (212) 743-1878
E-mail: James.Moran@csfb.com
S-9
FIRST UNION NATIONAL BANK, as Lender
By: /s/ DAVID E. HUMPHREYS
-----------------------------------------
Name: David E. Humphreys
Title: Vice President
Address: 1001 Fannin Street, Suite 2255
Houston, TX 77002-6709
Telephone: (713) 346-2717
Fax: (713) 650-1071
E-mail: DAVID.HUMPHREYS@FUND.COM
ROYAL BANK OF CANADA, as Lender
By: /s/ LORNE GARTNER
-----------------------------------------
Name: Lorne Gartner
Title: Vice President
Address: 2800 Post Oak Blvd.
5700 Williams Tower
Houston, TX 77056
Telephone: (713) 403-5662
Fax: (713) 403-5624
E-mail: LORNE.GARTNER@ROYALUSA.COM