EXHIBIT 10.20
CREDIT AGREEMENT
DATED AS OF
DECEMBER 18, 2003
AMONG
MEDUSA SPAR LLC,
AS BORROWER,
THE BANK OF NOVA SCOTIA,
AS ADMINISTRATIVE AGENT,
BANK ONE, N.A.
AND
SUNTRUST BANK,
AS SYNDICATION AGENTS,
AND
THE LENDERS PARTY HERETO
SOLE LEAD ARRANGER AND SOLE BOOKRUNNER
THE BANK OF NOVA SCOTIA
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above.......................................................................1
Section 1.02 Certain Defined Terms.....................................................................1
Section 1.03 Types of Loans...........................................................................19
Section 1.04 Terms Generally; Rules of Construction...................................................19
Section 1.05 Accounting Terms and Determinations; GAAP................................................19
ARTICLE II
THE TERM LOAN
Section 2.01 Term Loan................................................................................20
Section 2.02 Loans....................................................................................20
Section 2.03 Request for Term Loan....................................................................21
Section 2.04 Funding of Term Loan.....................................................................21
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
Section 3.01 Repayment of Loans.......................................................................22
Section 3.02 Interest.................................................................................22
Section 3.03 Alternate Rate of Interest...............................................................23
Section 3.04 Prepayments..............................................................................23
Section 3.05 Fees.....................................................................................23
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS
Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs..............................24
Section 4.02 Presumption of Payment by the Borrower...................................................25
Section 4.03 Certain Deductions by the Administrative Agent...........................................25
ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
Section 5.01 Increased Costs..........................................................................25
Section 5.02 Break Funding Payments...................................................................26
Section 5.03 Taxes....................................................................................26
Section 5.04 Mitigation Obligations...................................................................27
Section 5.05 Illegality...............................................................................28
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Effective Date...........................................................................28
i
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 Organization; Powers.....................................................................32
Section 7.02 Authority; Enforceability................................................................32
Section 7.03 Approvals; No Conflicts..................................................................32
Section 7.04 Financial Condition; No Material Adverse Change..........................................33
Section 7.05 Litigation...............................................................................33
Section 7.06 Environmental Matters....................................................................34
Section 7.07 Compliance with the Laws and Agreements; No Defaults.....................................35
Section 7.08 Investment Company Act...................................................................35
Section 7.09 Public Utility Holding Company Act.......................................................35
Section 7.10 Taxes....................................................................................35
Section 7.11 ERISA....................................................................................36
Section 7.12 Disclosure; No Material Misstatements....................................................36
Section 7.13 Insurance................................................................................36
Section 7.14 Restriction on Liens.....................................................................37
Section 7.15 Subsidiaries.............................................................................37
Section 7.16 Location of Business and Offices.........................................................37
Section 7.17 Properties; Titles, Etc..................................................................37
Section 7.18 Maintenance of Properties................................................................38
Section 7.19 Swap Agreements..........................................................................38
Section 7.20 Use of Loans.............................................................................38
Section 7.21 Solvency.................................................................................39
Section 7.22 Medusa Spar Documents....................................................................39
ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01 Financial Statements; Ratings Change; Other Information..................................39
Section 8.02 Notices of Material Events...............................................................42
Section 8.03 Existence; Conduct of Business...........................................................42
Section 8.04 Payment of Obligations...................................................................42
Section 8.05 Performance of Obligations under Loan Documents and Medusa Spar Documents................42
Section 8.06 Operation and Maintenance of Properties..................................................43
Section 8.07 Insurance................................................................................43
Section 8.08 Books and Records; Inspection Rights.....................................................44
Section 8.09 Compliance with Laws.....................................................................44
Section 8.10 Environmental Matters....................................................................44
Section 8.11 Further Assurances.......................................................................45
Section 8.12 Collateral...............................................................................45
Section 8.13 Swap Agreements..........................................................................45
Section 8.14 MEPC Restricted Account..................................................................45
ii
ARTICLE IX
NEGATIVE COVENANTS
Section 9.01 Debt.....................................................................................46
Section 9.02 Liens....................................................................................46
Section 9.03 Restricted Payments......................................................................47
Section 9.04 Investments..............................................................................47
Section 9.05 Nature of Business; International Operations.............................................47
Section 9.06 Limitation on Leases.....................................................................48
Section 9.07 Proceeds of Notes........................................................................48
Section 9.08 ERISA Compliance.........................................................................48
Section 9.09 Sale or Discount of Receivables..........................................................48
Section 9.10 Mergers, Etc.............................................................................48
Section 9.11 Dispositions.............................................................................48
Section 9.12 Environmental Matters....................................................................48
Section 9.13 Transactions with Affiliates.............................................................48
Section 9.14 Subsidiaries.............................................................................49
Section 9.15 Negative Pledge Agreements...............................................................49
Section 9.16 Swap Agreements..........................................................................49
Section 9.17 Amendments of Agreements.................................................................49
Section 9.18 Limitation on Capital Expenditures.......................................................49
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default........................................................................49
Section 10.02 Remedies.................................................................................52
ARTICLE XI
THE AGENTS
Section 11.01 Appointment; Powers......................................................................53
Section 11.02 Duties and Obligations of Administrative Agent...........................................53
Section 11.03 Action by Administrative Agent...........................................................54
Section 11.04 Reliance by Administrative Agent.........................................................55
Section 11.05 Subagents................................................................................55
Section 11.06 Resignation or Removal of Agents.........................................................55
Section 11.07 Agents as Lenders........................................................................56
Section 11.08 No Reliance..............................................................................56
Section 11.09 Administrative Agent May File Proofs of Claim............................................56
Section 11.10 Authority of Administrative Agent to Release Collateral and Liens........................57
Section 11.11 The Arranger and the Syndication Agents..................................................57
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices..................................................................................57
Section 12.02 Waivers; Amendments......................................................................58
Section 12.03 Expenses, Indemnity; Damage Waiver.......................................................59
Section 12.04 Successors and Assigns...................................................................61
Section 12.05 Survival; Revival; Reinstatement.........................................................64
Section 12.06 Counterparts; Integration; Effectiveness.................................................64
iii
Section 12.07 Severability.............................................................................65
Section 12.08 Right of Setoff..........................................................................65
Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS...............................65
Section 12.10 Headings.................................................................................67
Section 12.11 Confidentiality..........................................................................67
Section 12.12 Interest Rate Limitation.................................................................68
Section 12.13 EXCULPATION PROVISIONS...................................................................69
Section 12.14 Collateral Matters; Swap Agreements......................................................69
Section 12.15 No Third Party Beneficiaries.............................................................69
iv
ANNEXES, EXHIBITS AND SCHEDULES
Annex I ......... List of Commitments
Annex II ......... Amortization Schedule
Exhibit A......... Form of Note
Exhibit B......... Form of Borrowing Request
Exhibit C......... Form of Compliance Certificate
Exhibit D-1 Form of Legal Opinion of Baker Botts L.L.P., special counsel to the Borrower and OII
Exhibit D-2 Form of Legal Opinion of Lemle & Kelleher, L.L.P., special counsel to MEPC and MOC
Exhibit D-3 Form of Legal Opinion of Haynes and Boone, LLP, special counsel to CPC and CPOC
Exhibit D-4 Form of Legal Opinion of John Moore, in-house counsel to MEPC and MOC
Exhibit E-1....... Security Instruments
Exhibit E-2....... Form of Security Agreement
Exhibit E-3....... Form of MOC Parent Guarantee
Exhibit E-4....... Form of CPC Parent Guarantee
Exhibit E-5....... Form of Minimum Throughput Guarantee
Exhibit E-6....... Form of Pledge Agreement
Exhibit F......... Form of Assignment and Assumption
Schedule 1.02..... Description of Dedicated Blocks
Schedule 7.05..... Litigation
Schedule 7.19..... Swap Agreements
Schedule 9.03..... Restricted Payments
Schedule 9.04..... Investments
THIS CREDIT AGREEMENT dated as of December 18, 2003, is among: Medusa
Spar LLC, a limited liability company duly formed and existing under the laws of
the State of Delaware (the "Borrower"); each of the Lenders from time to time
party hereto; and The Bank of Nova Scotia, as administrative agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Administrative Agent"); and Bank One, N.A. and SunTrust Bank, as syndication
agents for the Lenders (each in such capacity, together with its successors in
such capacity, a "Syndication Agent").
R E C I T A L S
A. The Borrower has requested that the Lenders provide a single advance
term loan to the Borrower.
B. The Lenders have agreed to make such term loan subject to the terms
and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein
contained and of the term loan and commitments hereinafter referred to, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. As used in this Agreement, each term
defined above has the meaning indicated above.
Section 1.02 Certain Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or the Term Loan, refers to
whether such Loan, or the Loans comprising the Term Loan, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Account Bank" has the meaning assigned such term in the Security
Agreement.
"Actual CPOC Throughput Amount" means, with respect to any given
calendar quarter, that portion of the Tariff received by the Borrower which is
attributable to CPOC's actual throughput of production through the Medusa Spar.
"Adjusted LIBO Rate" means, with respect to the Term Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affected Loan" has the meaning assigned such term in Section 5.05.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" means, collectively, the Administrative Agent and the
Syndication Agents, and "Agent" shall mean either the Administrative Agent or a
Syndication Agent, as the context requires.
"Agreement" means this Credit Agreement, as the same may from time to
time be amended, modified, supplemented or restated.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Amortization Schedule" means the amortization schedule set forth in
Annex II.
"Applicable Margin" means, from time to time, the following
percentages, based upon the Debt Rating as set out below:
DEBT RATINGS
PRICING LEVEL S&P/MOODY'S APPLICABLE MARGIN +
- ------------------------ ------------------------- ------------------------
1 A-/A3 or better 0.75%
2 BBB+/Baa1 1.00%
3 BBB/Baa2 1.30%
4 BBB-/Baa3 1.50%
5 BB+/Ba1 or worse 2.50%
Initially, the Applicable Margin shall be determined based upon the
Debt Rating specified in the certificate delivered pursuant to Section 6.01(q).
Thereafter, each change in the Applicable Margin resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of an
upgrade, during the period commencing on the date of delivery by the Borrower to
the Administrative Agent of notice thereof pursuant to Section 8.01(l) and
ending on the date immediately preceding the effective date of the next such
change and, in the case of a downgrade, during the period commencing on the date
of the public announcement thereof and ending on the date immediately preceding
the effective date of the next such change. In the event of a split rating
between S&P and Moody's, (a) the higher rating will apply (with the Debt Rating
for Price Level 1 being the highest and the Debt Rating of Price Level 5 being
the lowest), (b) if the split rating is of a differential greater than one
level, the rating level immediately above the lower of the two ratings will
apply, and (c) notwithstanding clause (a) or clause (b), if the MOC Debt Rating
of either S&P or Moody's is less than BB+ or Ba1 or is unrated, the Applicable
Margin shall be 2.50%.
2
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment as
such percentage is set forth on Annex I.
"Approved Counterparty" means any Lender or any Affiliate of a Lender.
"Approved Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and 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.
"Approved Petroleum Engineers" means Knowledge Reservoir Inc. and any
other independent petroleum engineers reasonably acceptable to the
Administrative Agent and the Majority Lenders.
"Arranger" means The Bank of Nova Scotia, in its capacity as the sole
lead arranger and sole bookrunner hereunder.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 12.04(b)), and accepted by the Administrative Agent, in the
form of Exhibit F or any other form approved by the Administrative Agent.
"Available Cash" means the amount of "excess" cash as defined in
Section 11.7 of the Borrower's LLC Agreement as such agreement is in effect on
the date hereof.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America or any successor Governmental Authority.
"Borrower's LLC Agreement" means the Limited Liability Company
Agreement of Medusa Spar LLC dated as of December 18, 2003, as the same may from
time to time be amended, modified, supplemented or restated.
"Borrowing Request" means a written request by the Borrower for the
Term Loan in accordance with Section 2.03, in substantially the form of Exhibit
B.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City or Atlanta, Georgia are
authorized or required by law to remain closed; and if such day relates to a
borrowing or continuation of, a payment or prepayment of principal of or
interest on, or the Interest Period for, a Eurodollar Loan or a notice by the
Borrower with respect to any such borrowing or continuation, payment,
prepayment, or Interest Period, any day which is also a day on which dealings in
dollar deposits are carried out in the London interbank market.
"Capital Expenditures" means, in respect of any Person, for any period,
the aggregate (determined without duplication) of all expenditures and costs
that are capitalized or should have been capitalized on the balance sheet of
such Person in accordance with GAAP.
3
"Casualty Event" means any loss, casualty or other insured damage to,
or any nationalization, taking under power of eminent domain or by condemnation
or similar proceeding of, any Property of the Borrower having a fair market
value in excess of $2,500,000.
"Change in Control" occurs (a) upon the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
SEC thereunder as in effect on the date hereof) of Equity Interests representing
more than 35% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of MOC, other than by members of the Murphy
Family; (b) upon the occupation of a majority of the seats (other than vacant
seats) on the board of directors of MOC by Persons who were neither (i)
nominated by the board of directors of MOC nor (ii) appointed by directors so
nominated; (c) if MOC should at any time fail to own, directly or indirectly,
beneficially or of record, 100% of all of the issued and outstanding Equity
Interests of MEPC; (d) if MEPC should at any time fail to own, directly or
indirectly, beneficially or of record, 40% of all of the issued and outstanding
Equity Interests of the Borrower or (e) if OII should at any time fail to own,
directly or indirectly, beneficially or of record, 50% of all of the issued and
outstanding Equity Interests of the Borrower.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 5.01(b)), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make its Loan pursuant to Section 2.01, expressed as an amount
representing the maximum aggregate amount of such Lender's Credit Exposure
hereunder, as such commitment may be modified from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.04(b). The amount
representing each Lender's Commitment shall at any time be such Lender's
Applicable Percentage of the total Commitments.
"Collateral" means (a) 100% of the Equity Interests of the Borrower;
(b) all of the Borrower's Property (excluding the Medusa Spar and the Borrower's
related tangible assets), including, without limitation, all cash and cash
equivalents (including Dedicated Cash Receipts), accounts receivable, contracts,
guarantees, insurance, deposit accounts and securities accounts (and all cash
and financial assets credited thereto), and all of the Borrower's interest in
the Medusa Spar Documents and all other contracts relating to the ownership and
use of the Medusa Spar (including, without limitation, all production and
handling agreements) and (c) any other Property which at any time is subject to
a Lien under the Security Instruments.
"Consolidated Subsidiaries" means, as to any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be
4
(or should have been) consolidated with the financial statements of such Person
in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. For the
purposes of this definition, and without limiting the generality of the
foregoing, any Person that owns directly or indirectly 15% or more of the Equity
Interests having ordinary voting power for the election of the directors or
other governing body of a Person (other than as a limited partner of such other
Person) will be deemed to "control" such other Person. "Controlling" and
"Controlled" have meanings correlative thereto.
"CPC" means Callon Petroleum Company, a Delaware corporation.
"CPC Parent Guarantee" means that certain Guaranty and Consent
Agreement of even date herewith among the Borrower, the Administrative Agent and
CPC, in substantially the form of Exhibit E-4, as the same may from time to time
be amended, modified, supplemented or restated.
"CPOC" means Callon Petroleum Operating Company, a Delaware
corporation.
"Credit Exposure" means, with respect to any Lender at any time, the
outstanding principal amount of such Lender's Loan at such time.
"Debt" means, for any Person, the sum of the following (without
duplication): (a) all obligations of such Person for borrowed money or evidenced
by bonds, bankers' acceptances, debentures, notes or other similar instruments;
(b) all obligations of such Person (whether contingent or otherwise) in respect
of letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services; (d) all
obligations under capital leases; (e) all obligations under synthetic leases;
(f) all Debt (as defined in the other clauses of this definition) of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) a Lien on any Property of such
Person, whether or not such Debt is assumed by such Person; (g) all Debt (as
defined in the other clauses of this definition) of others guaranteed by such
Person or in which such Person otherwise assures a creditor against loss of the
Debt (howsoever such assurance shall be made) to the extent of the lesser of the
amount of such Debt and the maximum stated amount of such guarantee or assurance
against loss; (h) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the Debt or Property of others; (i) obligations to deliver commodities,
goods or services, including, without limitation, hydrocarbons, in consideration
of one or more advance payments, other than gas balancing arrangements in the
ordinary course of business; (j) obligations to pay for goods or services even
if such goods or services are not actually received or utilized by such Person;
(k) any Debt of a partnership for which such Person is liable either by
agreement, by operation of law or by a Governmental Requirement but only to the
extent of such liability; (l) Disqualified Capital Stock; and (m) the
undischarged balance of any production payment created by such Person or for the
creation of which such Person directly or indirectly received payment. The Debt
of any Person shall include all obligations of such Person of the character
described above to the extent
5
such Person remains legally liable in respect thereof notwithstanding that any
such obligation is not included as a liability of such Person under GAAP.
"Debt Rating" means, as of any date of determination, the rating as
determined by either S&P or Moody's of MOC's non-credit-enhanced, senior
unsecured long-term debt.
"Dedicated Blocks" means the Blocks of Mississippi Canyon, Outer
Continental Shelf, Gulf of Mexico described on Schedule 1.02.
"Dedicated Cash Receipts" means all cash or cash equivalents received
by or on behalf of the Borrower with respect to the following: (a) any amounts
payable to the Borrower by any Loan Party under the Minimum Throughput
Guarantee, the Guarantees, the Operating and Production Handling Agreement or
any other Loan Document or Medusa Spar Document; (b) cash representing operating
revenue earned or to be earned by the Borrower; (c) any proceeds from Swap
Agreements and (d) any other cash or cash equivalents received by the Borrower
from whatever source; provided that none of the following shall constitute
"Dedicated Cash Receipts: (i) proceeds from the Term Loan; (ii) capital
contributions received from the members of the Borrower; (iii) proceeds payable
to third parties under any policy in respect of third party liability insurance
or (iv) proceeds required to be deposited in the Casualty Account pursuant to
Section 3.04(a) of the Security Agreement.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disposition" or "Dispose" means the sale, transfer, license, lease,
assignment, farm-out, conveyance, abandonment or other transfer or disposition
(including any sale and leaseback transaction) of any Property by any Person,
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
"Disqualified Capital Stock" means any Equity Interest that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable) or upon the happening of any event, matures or is
mandatorily redeemable for any consideration other than other Equity Interests
(which would not constitute Disqualified Capital Stock), pursuant to a sinking
fund obligation or otherwise, or is convertible or exchangeable for Debt or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is one year after the earlier
of (a) the Maturity Date and (b) the date on which there are no Loans or other
obligations hereunder outstanding and all of the Commitments are terminated.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 6.01 are satisfied (or waived in accordance with Section 12.02).
"Environmental Laws" means any and all Governmental Requirements
pertaining in any way to health, safety, the environment or the preservation or
reclamation of natural resources, in effect in any and all jurisdictions in
which the Borrower is conducting or at any time has
6
conducted business, or where any Property of the Borrower or the Dedicated
Blocks are located, including without limitation, the Oil Pollution Act of 1990
("OPA"), as amended, the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980 ("CERCLA"), as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendments
and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and other environmental conservation or
protection Governmental Requirements. The term "oil" shall have the meaning
specified in OPA, the terms "hazardous substance" and "release" (or "threatened
release") have the meanings specified in CERCLA, the terms "solid waste" and
"disposal" (or "disposed") have the meanings specified in RCRA and the term "oil
and gas waste" shall have the meaning specified in Section 91.1011 of the Texas
Natural Resources Code ("Section 91.1011"); provided, however, that (a) in the
event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment and (b) to the extent the
laws of the state or other jurisdiction in which any Property of the Borrower or
the Dedicated Blocks are located establish a meaning for "oil," "hazardous
substance," "release," "solid waste," "disposal" or "oil and gas waste" which is
broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such
broader meaning shall apply.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such Equity Interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any corporation, trade, business or entity
under common control with the Borrower within the meaning of Section 414(b),
(c), (m) or (o) of the Code or Section 4001 of ERISA.
"Eurodollar", when used in reference to any Loan or the Term Loan,
refers to whether such Loan, or the Loans comprising the Term Loan, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned such term in Section 10.01.
"Excepted Liens" means: (a) Liens for Taxes, assessments or other
governmental charges or levies which are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (b) Liens in connection with
workers' compensation, unemployment insurance or other social security, old age
pension or public liability obligations (other than Liens imposed under ERISA)
which are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (c) statutory landlord's liens, operators', vendors',
carriers', warehousemen's, repairmen's, mechanics', suppliers', workers',
materialmen's, construction, maritime or other like Liens
7
arising by operation of law in the ordinary course of business or incident to
the exploration, development, operation and maintenance of oil and gas
properties each of which is in respect of obligations that are not delinquent or
which are being contested in good faith by appropriate action and for which
adequate reserves have been maintained in accordance with GAAP; (d) Liens
arising solely by virtue of any statutory or common law provision relating to
banker's liens, rights of set-off or similar rights and remedies and burdening
only deposit accounts or other funds maintained with a creditor depository
institution, provided that no such deposit account is a cash collateral account
or is subject to restrictions against access by the depositor in excess of those
set forth by regulations promulgated by the Board and no such deposit account is
intended by Borrower to provide collateral to the depository institution; (e)
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any Property of the Borrower or any similar Liens created or
resulting from zoning, planning and environmental laws and ordinances and other
governmental regulations for the purpose of pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals, and other like purposes, or for the joint or common use of real
estate, rights of way, facilities and equipment, that do not secure any monetary
obligations and which in the aggregate do not materially impair the use of such
Property for the purposes of which such Property is held by the Borrower or
materially impair the value of such Property subject thereto; (f) rights
reserved to or vested in any municipality or governmental, statutory or public
authority by the terms of any right, power, franchise, grant, license or permit,
or by any provision of law, to terminate such right, power, franchise, grant,
license or permit or to purchase, condemn, expropriate or recapture or to
designate a purchaser of any of the Property of a Person and rights reserved to
or vested in any municipality or governmental, statutory or public authority to
control, regulate or use any Property of a Person, in each case, that do not
secure any monetary obligations; (g) rights of a common owner of any interest in
Property held by a Person and such common owner as tenants in common or through
other common ownership and (h) judgment and attachment Liens not giving rise to
an Event of Default (and Liens in connection with bonding such judgments),
provided that any appropriate legal proceedings which may have been duly
initiated for the review of such judgment shall not have been finally terminated
or the period within which such proceeding may be initiated shall not have
expired and no action to enforce such Lien has been commenced; provided, further
that Liens described in clauses (a) through (d) and (f) shall remain "Excepted
Liens" only for so long as no action to enforce such Lien has been commenced and
no intention to subordinate the first priority Lien granted in favor of the
Administrative Agent and the Lenders is to be hereby implied or expressed by the
permitted existence of such Excepted Liens.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or any Guarantor hereunder or under any other Loan
Document, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America or such other jurisdiction under the laws
of which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender, any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 5.03(e),
except to the extent
8
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts with respect to such withholding tax pursuant to Section 5.03(a) or
Section 5.03(c).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means (a) as to the Borrower, any Person authorized
by the Managers of the Borrower pursuant to a unanimous written resolution to
execute and deliver certificates and other documents required to be delivered
hereunder on behalf of the Borrower and (b) as to any other Person, the chief
financial officer, principal accounting officer, treasurer or controller of such
Person. Unless otherwise specified, all references herein to a Financial Officer
means a Financial Officer of the Borrower.
"Financial Statements" means the financial statement or statements of
the Borrower referred to in Section 7.04(a).
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Funding Date" means the date specified in the Borrowing Request as the
date of the borrowing of the Term Loan by the Borrower.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time subject to the terms and
conditions set forth in Section 1.05.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government over the Borrower or any of its Properties, any Agent or any Lender.
"Governmental Requirement" means any law, statute, code, ordinance,
order, determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereinafter in effect, including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.
"Guarantees" means, collectively, the Parent Guarantees and the Minimum
Throughput Guarantee.
9
"Guarantors" means (a) the Parent Guarantors and (b) the Subsidiary
Guarantors.
"Highest Lawful Rate" means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws allow as of the date hereof.
"Indebtedness" means any and all amounts owing or to be owing by the
Borrower or any other Loan Party (whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising): (a) to the Administrative Agent or any Lender or
Affiliate of a Lender under any Loan Document and (b) all renewals, extensions
and/or rearrangements of any of the above.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Transaction Overview dated November
2003 relating to the Borrower, the Medusa Spar Transactions and the
Transactions.
"Initial Reserve Report" means a report, in form and substance
reasonably satisfactory to the Administrative Agent, regarding the oil and gas
reserves attributable to the Dedicated Blocks.
"Interest Payment Date" means with respect to the Term Loan, for the
period commencing on the Funding Date through and including December 30, 2003,
December 31, 2003 and thereafter, the last day of each Interest Period
applicable to the Term Loan.
"Interest Period" means with respect to the Term Loan, initially, the
period commencing on the Funding Date and ending on December 30, 2003, and
thereafter, the period commencing on the date of the borrowing of such Term Loan
and ending on the numerically corresponding day in the calendar month that is
three months; provided, that (a) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (b) any Interest Period pertaining to the Term
Loan that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a "borrowing"
initially shall be December 31, 2003 and thereafter shall be the effective date
of the most recent continuation of the Loans comprising the Term Loan as
Eurodollar Loans, or conversion of the Loans comprising the Term Loan, into
Eurodollar Loans.
"Investment" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of Equity Interests of any
other Person or any agreement to make any such acquisition (including, without
limitation, any "short sale" or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit with, or advance, loan, capital contribution to,
assumption of Debt of, purchase or other acquisition of any other Debt or equity
participation or interest in, or
10
other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not exceeding ninety
(90) days representing the purchase price of inventory or supplies sold by such
Person in the ordinary course of business); (c) the purchase or acquisition (in
one or a series of transactions) of Property of another Person that constitutes
a business unit or (d) the entering into of any guarantee of, or other
contingent obligation (including the deposit of any Equity Interests to be sold)
with respect to, Debt or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.
"JOA Liens" means the Liens granted by the operator and the
non-operators under Section 6.3 of the Joint Operating Agreement.
"Joint Operating Agreement" means that certain Prospect Medusa Joint
Operating Agreement dated effective as of February 1, 1999, by and between MEPC,
CPOC and British-Borneo Petroleum, Inc., as amended by that certain First
Amendment and Supplement to Joint Operating Agreement dated effective as of
August 29, 2003 by and among MEPC, CPOC and ENI Deepwater LLC (as
successor-in-interest to British-Borneo Petroleum, Inc.) and as amended by that
certain Second Amendment and Supplement to Joint Operating Agreement effective
as of December 18, 2003 by and among MEPC, CPOC and ENI Deepwater LLC, as the
same may from time to time be amended, modified, supplemented or restated.
"Lenders" means the Persons listed on Annex I and any Person that shall
have become a party hereto pursuant to an Assignment and Assumption, other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.
"LIBO Rate" means, with respect to the Term Loan for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, (a) with respect to the initial two-week
Interest Period described in Section 2.02(b), on the Funding Date, and (b) with
respect to all other Interest Periods, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to the
Term Loan for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not limited to (a)
the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for
11
security purposes or (b) production payments and the like payable out of oil and
gas properties. The term "Lien" shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations. For the
purposes of this Agreement, the Borrower shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement,
or leases under a financing lease or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person in a
transaction intended to create a financing.
"Loan Documents" means this Agreement, the Notes, the Secured Swap
Agreements and the Security Instruments.
"Loan Parties" means, collectively, the Borrower, each Pledgor and each
Guarantor.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Majority Lenders" means, at any time while no Loans are outstanding,
Lenders having at least sixty-six and two-thirds percent (66-2/3%) of the total
Commitments; and at any time while any Loans are outstanding, Lenders holding at
least sixty-six and two-thirds percent (66-2/3%) of the outstanding aggregate
principal amount of the Loans (without regard to any sale by a Lender of a
participation in any Loan under Section 12.04(c)).
"Material Adverse Effect" means a material adverse change in, or
material adverse effect on (a) the business, operations, Property, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower taken as a whole or of MOC taken as a whole, the Medusa Spar, or the
facts and information regarding such entities as represented to the
Administrative Agent or the Lenders, (b) the ability of the Borrower or MOC to
perform any of its obligations under any Loan Document to which it is a party,
(c) the validity or enforceability of any Loan Document or (d) the rights and
remedies of or benefits available to the Administrative Agent, any other Agent
or any Lender or Affiliate of a Lender under any Loan Document.
"Material Indebtedness" means, with respect to MOC, MEPC or the
Borrower, Debt (other than the Loans), or obligations in respect of one or more
Swap Agreements, of such Person (and in the case of MOC and MEPC, and their
Subsidiaries) in an aggregate principal amount exceeding (a) in the case of MOC,
$35,000,000; (b) in the case of MEPC, $35,000,000 or (c) in the case of the
Borrower, $1,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of any such Person in respect of any Swap
Agreement at any time shall be the Swap Termination Value.
"Maturity Date" means December 31, 2009.
"Medusa Spar" means that certain truss spar, hull, buoyancy cans, deck,
facilities, equipment and moorings located on the Mississippi Canyon Block 582,
Outer Continental Shelf, Gulf of Mexico, U.S.A. as constructed under that
certain EPCI Contract between J. Ray McDermott, Inc. and MEPC dated February 23,
2001, as amended, including upgrades and expansions thereof, together with all
components of the Medusa Spar falling within the definition of the term
"Facilities" as set forth in Article 2.21 of the Joint Operating Agreement.
12
"Medusa Spar Agreement" means that certain Medusa Spar Agreement dated
effective August 8, 2003 by and among MEPC, CPOC and OII, as the same may from
time to time be amended, modified, supplemented or restated.
"Medusa Spar Documents" means the following documents and agreements:
(a) the Joint Operating Agreement;
(b) the Operating and Production Handling Agreement;
(c) the Borrower's LLC Agreement;
(d) the Medusa Spar Agreement;
(e) the Minimum Throughput Guarantee;
(f) the Parent Guarantees; and
(g) all other agreements, instruments, certificates, assignments, bills
of sale, security instruments, conveyance instruments, consents and documents
executed in connection with any of the foregoing or the Medusa Spar
Transactions.
"Medusa Spar Transactions" means the following transactions:
(a) the due formation and capitalization of the Borrower, including
without limitation (i) the contribution by MEPC of its 60% undivided interest in
the Medusa Spar to the Borrower, free and clear of all Liens, other than
Excepted Liens and JOA Liens in connection with amounts not past due; (ii) the
contribution by CPOC of its 15% undivided interest in the Medusa Spar to the
Borrower, free and clear of all Liens, other than Excepted Liens and JOA Liens
in connection with amounts not past due; (iii) the contribution by OII of cash
to the Borrower in the amount required under the Medusa Spar Agreement and the
Borrower's LLC Agreement and (iv) the Borrower obtaining good and defensible
title to a 75% undivided interest in the Medusa Spar, free and clear of all
Liens, other than Excepted Liens and JOA Liens in connection with amounts not
past due, and with all necessary regulatory approvals and consents having been
obtained and being in full force and effect;
(b) the closing of the transactions contemplated by the Medusa Spar
Agreement;
(c) the execution and delivery of the Medusa Spar Agreement and the
additional agreements contemplated thereby, including without limitation, the
Borrower's LLC Agreement, the conveyances, assignments and bills of sale from
MEPC and CPOC to the Borrower of the collective 75% interest in the Medusa Spar,
the Operating and Production Handling Agreement and the other Medusa Spar
Documents, all in form and substance satisfactory to the Administrative Agent,
and the satisfaction of all closing conditions and conditions precedent
specified in such agreements (including, without limitation, the satisfaction of
the closing conditions specified in Section 6.1 of the Medusa Spar Agreement);
13
(d) the acceptance and the taking of possession of the Medusa Spar by
MEPC, as operator for the Borrower and the other non-operators under the Joint
Operating Agreement, and the satisfactory performance of the completion and
performance tests related thereto; and
(e) the dedication of production by MEPC and CPOC from the Dedicated
Blocks for handling at the Medusa Spar for the life of the applicable leases and
any extensions and renewals thereof;
in each case, as described in the Information Memorandum and pursuant
to and in accordance with the Medusa Spar Documents.
"MEPC" means Murphy Exploration & Production Company - USA, a Delaware
corporation.
"Minimum Throughput Guarantee" means that certain Minimum Throughput
Guarantee and Consent Agreement of even date herewith among the Borrower, MEPC,
CPOC and the Administrative Agent, in substantially the form of Exhibit E-5, as
the same may from time to time be amended, modified, supplemented or restated.
"MOC" means Murphy Oil Corporation, a Delaware corporation.
"MOC Credit Agreement" means that certain 3-Year Revolving Credit
Agreement dated as of December 4, 2003 among MOC, JPMorgan Chase Bank, as
Administrative Agent, and the lenders from time to time party thereto, as the
same exists on the date of execution of this Agreement and without regard to (a)
any termination or cancellation thereof, whether by reason of payment of all
indebtedness incurred thereunder or otherwise or (b) unless consented to in
writing by the Majority Lenders, any amendment, modification, addition, waiver
or consent thereto or thereof.
"MOC Parent Guarantee" means that certain Guaranty and Consent
Agreement of even date herewith among the Borrower, the Administrative Agent and
MOC, in substantially the form of Exhibit E-3, as the same may from time to time
be amended, modified, supplemented or restated.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
"Murphy Family" means (a) the C.H. Murphy Family Investments Limited
Partnership; (b) the Estate of C.H. Murphy, Jr. and (c) siblings of the late
C.H. Murphy, Jr. and his and their respective Immediate Family. For purposes of
this definition, "Immediate Family" of a Person means such Person's spouse,
children, siblings, mother-in-law and father -in-law, sons-in-law,
daughters-in-law, brothers-in-law and sisters-in-law.
"Notes" means the promissory notes of the Borrower described in Section
2.02(c) and being substantially in the form of Exhibit A, together with all
amendments, modifications, replacements, extensions and rearrangements thereof.
"OII" means Oceaneering International, Inc., a Delaware corporation.
14
"Operator" means MEPC or any successor operator of the Medusa Spar
under the Joint Operating Agreement.
"Operating and Production Handling Agreement" means that certain
Operating and Production Handling Agreement dated effective December 18, 2003,
by and among MEPC, CPOC, OII and the Borrower, as the same may from time to time
be amended, modified, supplemented or restated.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating or limited liability company
agreement and (c) with respect to any partnership, joint venture, trust or other
form of business entity, the partnership, joint venture or other applicable
agreement of formation or organization and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or Property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement and any other Loan Document.
"Parent Guarantors" means, collectively, MOC and CPC.
"Parent Guarantees" means, collectively, the MOC Parent Guarantee and
the CPC Parent Guarantee.
"Participant" has the meaning set forth in Section 12.04(c)(i).
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Pledge Agreement" means, that certain Pledge Agreement of even date
herewith among MEPC, CPOC, OII and the Administrative Agent, in substantially
the form of Exhibit E-6, as the same may from time to time be amended, modified,
supplemented or restated.
"Pledgors" mean, collectively, MEPC, CPOC and OII.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Bank of Nova Scotia as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective. Such rate is set by The Bank of Nova Scotia as a general reference
rate of interest, taking into account such factors as The Bank of Nova Scotia
may deem appropriate; it being understood that many of The Bank of Nova Scotia's
commercial or other
15
loans are priced in relation to such rate, that it is not necessarily the lowest
or best rate actually charged to any customer and that The Bank of Nova Scotia
may make various commercial or other loans at rates of interest having no
relationship to such rate.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, including, without
limitation, cash, securities, accounts and contract rights.
"Redemption" means with respect to any Debt, the repurchase,
redemption, prepayment, repayment, defeasance or any other acquisition or
retirement for value (or the segregation of funds with respect to any of the
foregoing) of such Debt. "Redeem" has the correlative meaning thereto.
"Register" has the meaning assigned such term in Section 12.04(b)(iv).
"Regulation D" means Regulation D of the Board, as the same may be
amended, supplemented or replaced from time to time.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors (including attorneys, accountants and experts) of such Person and
such Person's Affiliates.
"Remedial Work" has the meaning assigned such term in Section 8.10(a).
"Responsible Officer" means (a) as to the Borrower, any Person
authorized by the Managers of the Borrower pursuant to an unanimous written
resolution to execute and deliver certificates and other documents required to
be delivered hereunder on behalf of the Borrower and (b) as to any other Person,
the Chief Executive Officer, the President, any Financial Officer or any Vice
President of such Person. Unless otherwise specified, all references to a
Responsible Officer herein shall mean a Responsible Officer of the Borrower.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other Property) with respect to any Equity Interests in
the Borrower, or any payment (whether in cash, securities or other Property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in the Borrower or any option, warrant or other right to
acquire any such Equity Interests in the Borrower.
"SEC" means the Securities and Exchange Commission or any successor
Governmental Authority.
"Secured Swap Agreement" means any Swap Agreement between the Borrower
and any Lender or any Affiliate of any Lender while such Person (or, in the case
of an Affiliate of a Lender, the Person affiliated therewith) is a Lender,
including any Swap Agreement between such Persons in existence prior to the date
hereof, as the same may from time to time be amended, modified, supplemented or
restated and (b) entered into in order to maintain the hedge position required
by Section 6.01(m). For the avoidance of doubt, a Swap Agreement ceases to be a
Secured Swap Agreement if the Person that is the counterparty to the Borrower
under a
16
Swap Agreement ceases to be a Lender under the Credit Agreement (or, in the case
of an Affiliate of a Lender, the Person affiliated therewith ceases to be a
Lender under the Credit Agreement).
"Securities Intermediary" has the meaning assigned such term in the
Security Agreement.
"Security Agreement" means that certain Security Agreement of even date
herewith between the Borrower and the Administrative Agent, in substantially the
form of Exhibit E-2, as the same may from time to time be amended, modified,
supplemented or restated.
"Security Instruments" means the Pledge Agreement, the Parent
Guarantees, the Minimum Throughput Guarantee, the Security Agreement, mortgages,
deeds of trust and other agreements, instruments, consents or certificates
described or referred to in Exhibit E-1, and any and all other agreements,
instruments, payment direction letters, consents or certificates now or
hereafter executed and delivered by the Borrower or any other Person in
connection with, or as security for the payment or performance of the
Indebtedness, the Notes or this Agreement or any other Loan Document, as such
agreements may be amended, modified, supplemented or restated from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., and any successor thereto that is a nationally
recognized rating agency.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subsidiary" means as to any Person (the "first Person"): (a) any other
Person of which at least a majority of the outstanding Equity Interests having
by the terms thereof ordinary voting power to elect a majority of the board of
directors, manager or other governing body of such Person (irrespective of
whether or not at the time Equity Interests of any other class or classes of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the first Person or by the first Person and one or more of its Subsidiaries and
(b) any partnership of which the first Person or any of its Subsidiaries is a
general partner.
"Subsidiary Guarantors" means, collectively, MEPC and CPOC.
"Swap Agreement" means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement, whether
exchange traded, "over-the-
17
counter" or otherwise, involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions;
provided that no phantom stock or similar plan providing for payments only on
account of services provided by current or former directors, officers, employees
or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Agreements, (a) for any date on or after
the date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Agreements (which may include a Lender or any
Affiliate of a Lender).
"Tariff" means the tariffs paid by (a) MEPC and CPOC to the Borrower
pursuant to Section 4.6 of the Operating and Production Handling Agreement and
(ii) other Persons for production processed through the Medusa Spar in
accordance with the applicable third party production handling agreements
entered into pursuant to Section 6.1 of the Operating and Production Handling
Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loan" has the meaning given such term in Section 2.01.
"Termination Date" means the earlier of the Maturity Date and the date
of termination of the Commitments or the acceleration of the Loans pursuant to
Section 10.02.
"Third Party Throughput Amount" means, with respect to any given
calendar quarter, that portion of the Tariff received by the Borrower which is
attributable to throughput of production through the Medusa Spar from Persons
other than MEPC and CPOC.
"Transactions" means, with respect to (a) the Borrower, the execution,
delivery and performance by the Borrower of this Agreement and each other Loan
Document and Medusa Spar Document to which it is a party, the Medusa Spar
Transactions, the borrowing of the Term Loan, the use of the proceeds thereof,
and the grant of Liens by the Borrower on certain of its Properties pursuant to
the Security Instruments and (b) each other Loan Party, the execution, delivery
and performance by such Loan Party of each Loan Document and Medusa Spar
Document to which it is a party, the Medusa Spar Transactions, and its
guarantee, grant of Liens, pledge and provision of collateral and other
agreements pursuant to the Security Instruments.
"Type", when used in reference to any Loan, refers to whether the rate
of interest on such Loan is determined by reference to the Alternate Base Rate
or the Adjusted LIBO Rate.
Section 1.03 Types of Loans. For purposes of this Agreement, Loans may
be classified and referred to by Type (e.g., a "Eurodollar Loan").
18
Section 1.04 Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth in the
Loan Documents), (b) any reference herein to any law shall be construed as
referring to such law as amended, modified, codified or reenacted, in whole or
in part, and in effect from time to time, (c) any reference herein to any Person
shall be construed to include such Person's successors and assigns (subject to
the restrictions contained in the Loan Documents), (d) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (e) with respect to the determination of any time period, the word
"from" means "from and including" and the word "to" means "to and including" and
(f) any reference herein to Articles, Sections, Annexes, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Annexes, Exhibits
and Schedules to, this Agreement. No provision of this Agreement or any other
Loan Document shall be interpreted or construed against any Person solely
because such Person or its legal representative drafted such provision.
Section 1.05 Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the financial statements described in Section 7.04(a) except for changes in
which the Borrower's (or, in the case of any other Person, such Person's)
independent certified public accountants concur and which are disclosed to
Administrative Agent on the next date on which financial statements are required
to be delivered to the Lenders pursuant to Section 8.01(a); provided that,
unless the Borrower and the Majority Lenders shall otherwise agree in writing,
no such change shall modify or affect the manner in which compliance with the
covenants contained herein is computed such that all such computations shall be
conducted utilizing financial information presented consistently with prior
periods.
19
ARTICLE II
THE TERM LOAN
Section 2.01 Term Loan. Subject to the terms and conditions set forth herein,
each Lender agrees to make a Loan to the Borrower, as part of a single advance
term loan in an aggregate principal amount equal to $83,741,602.17 (the "Term
Loan"), on the Funding Date in an aggregate principal amount equal to such
Lender's Applicable Percentage of the Term Loan; provided that the making of
such Loan shall not result in (a) such Lender's Credit Exposure exceeding such
Lender's Commitment or (b) the total Credit Exposures exceeding the total
Commitments. The Term Loan shall be fully funded in a single advance to the
Borrower on the Funding Date, and once paid or prepaid, neither the Term Loan
nor any Loan (nor any portion thereof) comprising a part of the Term Loan may be
reborrowed under any circumstance.
Section 2.02 Loans.
(a) Term Loan; Several Obligations. Each Loan shall be made as part of
the Term Loan, which shall consist of Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
the Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments are several and no Lender
shall be responsible for any other Lender's failure to make its Loan as required
hereby.
(b) Type of Loans. From the period commencing on the Funding Date
through and including December 30, 2003, the Term Loan shall be comprised
entirely of Eurodollar Loans having an Interest Period of two weeks; thereafter,
subject to Section 3.03 and Section 5.05, the Term Loan shall be comprised
entirely of Eurodollar Loans having an Interest Period of three months, which
Eurodollar Loans shall automatically continue as Eurodollar Loans having an
Interest Period of three months at the end of the first three-month Interest
Period and all subsequent Interest Periods thereafter. Each Lender at its option
may make its Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) Notes. The Loan made by each Lender shall be evidenced by a single
promissory note of the Borrower in substantially the form of Exhibit A, dated,
in the case of (i) any Lender party hereto as of the date of this Agreement, as
of the date of this Agreement, or (ii) any Lender that becomes a party hereto
pursuant to an Assignment and Assumption, as of the effective date of the
Assignment and Assumption, payable to the order of such Lender in a principal
amount equal to its Commitment as in effect on such date, and otherwise duly
completed. In the event that any Lender's Commitment increases or decreases for
any reason (whether pursuant to Section 12.04(b) or otherwise), the Borrower
shall deliver or cause to be delivered on the effective date of such increase or
decrease, a new Note payable to the order of such Lender in a principal amount
equal to its Commitment after giving effect to such increase or decrease, and
otherwise duly completed. The date, amount, Type, interest rate and, if
applicable, Interest Period of the Loan made by each Lender, and all payments
made on account of the principal thereof, shall be recorded by such Lender on
its books for its Note, and, prior to any transfer, may be endorsed by such
Lender on a schedule attached to such Note or any
20
continuation thereof or on any separate record maintained by such Lender.
Failure to make any such notation or to attach a schedule shall not affect any
Lender's or the Borrower's rights or obligations in respect of its Loan or
affect the validity of such transfer by any Lender of its Note.
Section 2.03 Request for Term Loan To request the Term Loan, the Borrower shall
provide the Borrowing Request signed by the Borrower to the Administrative
Agent, not later than 12:00 noon, New York City time, on the date of the
proposed borrowing of the Term Loan. The Borrowing Request shall be irrevocable
and shall specify the following information:
(i) the aggregate amount of the Term Loan, which shall be
$83,741,602.17;
(ii) the date of the borrowing of the Term Loan, which shall be a
Business Day; and
(iii) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.04.
The Borrowing Request shall constitute a representation that the amount of the
requested Term Loan shall not cause the total Credit Exposures to exceed the
total Commitments.
Promptly following receipt of the Borrowing Request in accordance with this
Section 2.03, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the Term
Loan.
Section 2.04 Funding of Term Loan.
(a) Funding by Lenders. Each Lender shall make the Loan to be made by
it hereunder on the Funding Date by wire transfer of immediately available funds
by 1:00 p.m., New York City time, to the account of the Administrative Agent
designated by it for such purpose by notice to the Lenders. The Administrative
Agent will make the Term Loan available to the Borrower by promptly crediting
the amounts so received, in like funds, to an account of the Borrower maintained
with the Administrative Agent in Atlanta, Georgia and designated by the Borrower
in the Borrowing Request. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for its Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for its Loan in any particular place or manner.
(b) Presumption of Funding by the Lenders. Unless the Administrative
Agent shall have received notice from a Lender prior to Funding Date that such
Lender will not make available to the Administrative Agent such Lender's share
of the Term Loan, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with Section 2.04(a) and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the Term
Loan available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i)
21
in the case of such Lender, the greater of the Federal Funds Effective Rate and
a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in the Term Loan.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
Section 3.01 Repayment of Loans. The Borrower hereby unconditionally promises to
pay to the Administrative Agent for the account of the Lenders, (a) the
principal of the Loans in such principal amounts and on such dates as are set
forth in the Amortization Schedule and (b) the then unpaid principal amount of
the Loans on the Termination Date.
Section 3.02 Interest.
(a) ABR Loans. Each ABR Loan shall bear interest at the Alternate Base
Rate plus the Applicable Margin, but in no event to exceed the Highest Lawful
Rate.
(b) Eurodollar Loans. Each Eurodollar Loan shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Loan plus the
Applicable Margin, but in no event to exceed the Highest Lawful Rate.
(c) Post-Default Rate. Notwithstanding the foregoing, (i) during the
continuance of any Default, all Loans shall bear interest, after as well as
before judgment, at a rate per annum equal to two percent (2%) plus the rate
applicable to Eurodollar Loans as provided in Section 3.02(b), but in no event
to exceed the Highest Lawful Rate and (ii) all amounts payable by the Borrower
hereunder (other than principal of and interest on the Loans) that are not paid
when due shall bear interest, after as well as before judgment, at a rate per
annum equal to two percent (2%) plus the rate applicable to ABR Loans as
provided in Section 3.02(a), but in no event to exceed the Highest Lawful Rate.
(d) Interest Payment Dates. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and on the
Termination Date; provided that (i) interest accrued pursuant to Section 3.02(c)
shall be payable on demand and (ii) in the event of any repayment or prepayment
of any Loan, accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment.
(e) Interest Rate Computations. All interest hereunder shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), except that interest
computed by reference to the Alternate Base Rate at times when the Alternate
Base Rate is based on the Prime Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error, and be binding upon the parties hereto.
22
Section 3.03 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for the Term Loan:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest
Period; or
(b) the Administrative Agent is advised by the Majority Lenders that
the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in the Term Loan for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, the Loans comprising
the Term Loan shall not be continued as Eurodollar Loans at the end of the then
current Interest Period, but instead, shall be converted to ABR Loans at the end
of the then current Interest Period.
Section 3.04 Prepayments.
(a) Optional Prepayments. The Borrower shall have the right at any time
and from time to time to prepay the Term Loan in whole or in part, subject to
prior notice in accordance with Section 3.04(b). In connection with any such
prepayment, in addition to any other amounts required to be paid hereunder, the
Borrower shall pay any unwind payments or other amounts due as a result of such
prepayment under any Swap Agreement entered into by the Borrower pursuant to
Section 6.01(m), when and as the same shall become due and payable.
(b) Notice and Terms of Optional Prepayment. The Borrower shall notify
the Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder, not later than 12:00 noon, New York City time, three Business Days
before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of the Term Loan to be
prepaid. Promptly following receipt of any such notice relating to the Term
Loan, the Administrative Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of the Term Loan shall be in an aggregate amount that is
an integral multiple of $100,000 and not less than $1,000,000.
(c) Application of Prepayments. Each prepayment made pursuant to
Section 3.04 shall be applied ratably to the Loans and to the scheduled
principal payments of the Term Loan in the inverse order of their maturity.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 3.02.
(d) No Premium or Penalty. Prepayments permitted or required under this
Section 3.04 shall be without premium or penalty, except as required under
Section 5.02.
Section 3.05 Fees. The Borrower shall pay to the Administrative Agent,
the Arranger, and the Lenders, for their respective accounts, such fees as shall
have been agreed upon in writing with the Administrative Agent in amounts and at
times so specified.
23
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS
Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Payments by the Borrower. The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or of
amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise)
prior to 12:00 noon, New York City time, on the date when due, in immediately
available funds, without defense, deduction, recoupment, set-off or
counterclaim. Fees, once paid, shall be fully earned and shall not be refundable
under any circumstances. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its
offices specified in Section 12.01, except that payments pursuant to Section
5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.
(b) Application of Insufficient Payments. If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully all
amounts of principal, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties and (ii) second, towards payment of
principal then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties.
(c) Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of set-off or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on its Loan resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Loan and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest and (ii) the
provisions of this Section 4.01(c) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loan to any assignee
or participant, other than to the Borrower (as to which the provisions of this
Section 4.01(c) shall apply). The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements
24
may exercise against the Borrower rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor
of the Borrower in the amount of such participation.
Section 4.02 Presumption of Payment by the Borrower. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.
Section 4.03 Certain Deductions by the Administrative Agent. If any
Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(b) or Section 4.02 then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
Section 5.01 Increased Costs.
(a) Eurodollar Changes in Law. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or the Eurodollar Loan made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining its Eurodollar Loan (or of maintaining its
obligation to make such Loan) or to reduce the amount of any sum received or
receivable by such Lender (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's capital or on the capital of such Lender's or
holding company, if any, as a consequence
26
of this Agreement or the Loan made by such Lender to a level below that which
such Lender or such Lender's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's policies and the policies
of such Lender's holding company with respect to capital adequacy), then from
time to time the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered.
(c) Certificates. A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as the case
may be, as specified in Section 5.01(a) or (b) shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Effect of Failure or Delay in Requesting Compensation. Failure or
delay on the part of any Lender to demand compensation pursuant to this Section
5.01 shall not constitute a waiver of such Lender's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender pursuant to this Section 5.01 for any increased costs or reductions
incurred more than 365 days prior to the date that such Lender notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender's intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 365-day period referred to above shall be extended to
include the period of retroactive effect thereof.
Section 5.02 Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan into an ABR Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto, or (d) the failure to continue any Loan as a Eurodollar Loan at
the beginning of the next succeeding Interest Period, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. Such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market.
A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
Section 5.03 Taxes.
26
(a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower under any Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Borrower shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (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 5.03(a)), the
Administrative Agent or Lender (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes by the Borrower. The Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.
(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent or such Lender, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.03) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate of the
Administrative Agent or a Lender as to the amount of such payment or liability
under this Section 5.03 shall be delivered to the Borrower and shall be
conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement or any other Loan Document
shall deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.
Section 5.04 Mitigation Obligations. If any Lender requests
compensation under Section 5.01, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 5.03, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 5.01 or Section 5.03, as the case
27
may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
Section 5.05 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its obligation to make or maintain a
Eurodollar Loan either generally or having a particular Interest Period
hereunder, then (a) such Lender shall promptly notify the Borrower and the
Administrative Agent thereof and such Lender's obligation to make such
Eurodollar Loan shall be suspended (the "Affected Loan") until such time as such
Lender may again make and maintain such Eurodollar Loan and (b) any Affected
Loan which would otherwise be made by such Lender shall be made instead as an
ABR Loan (and, if such Lender so requests by notice to the Borrower and the
Administrative Agent, any Affected Loan of such Lender then outstanding shall be
automatically converted into ABR Loan on the date specified by such Lender in
such notice) and, to the extent that any Affected Loan is so made as (or
converted into) an ABR Loan, all payments of principal which would otherwise be
applied to such Lender's Affected Loan shall be applied instead to its ABR Loan.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 12.02):
(a) The Administrative Agent, the Arranger and the Lenders shall have
received all fees and other amounts due and payable on or prior to the Effective
Date, including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.
(b) The Administrative Agent shall have received a certificate of the
Secretary or an Assistant Secretary of each Loan Party setting forth (i)
resolutions of its board of directors or other governing body with respect to
the authorization of such Loan Party to execute and deliver the Loan Documents
to which it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers of such Loan Party (A) who are authorized to sign
the Loan Documents to which the such Loan Party is a party and (B) who will,
until replaced by another officer or officers duly authorized for that purpose,
act as its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement and the
transactions contemplated hereby, (iii) specimen signatures of such authorized
officers, and (iv) the Organization Documents of such Loan Party, certified as
being true and complete. The Administrative Agent and the Lenders may
conclusively rely on such certificate until the Administrative Agent receives
notice in writing from the Borrower to the contrary.
28
(c) The Administrative Agent shall have received certificates of the
appropriate State agencies with respect to the existence, qualification and good
standing of each Loan Party in its jurisdiction of formation.
(d) The Administrative Agent shall have received a compliance
certificate which shall be substantially in the form of Exhibit C, duly and
properly executed by a Responsible Officer and dated as of the date of Effective
Date.
(e) The Administrative Agent shall have received from each party hereto
counterparts (in such number as may be requested by the Administrative Agent) of
this Agreement signed on behalf of such party.
(f) The Administrative Agent shall have received duly executed Notes
payable to the order of each Lender in a principal amount equal to its
Commitment dated as of the Effective Date.
(g) The Administrative Agent shall have received from each party
thereto duly executed counterparts (in such number as may be requested by the
Administrative Agent) of the Security Instruments, including the Guarantees, the
Pledge Agreement, the Security Agreement and the other Security Instruments
described on Exhibit E-1. In connection with the execution and delivery of the
Pledge Agreement and the Security Agreement, the Administrative Agent shall be
satisfied that (after giving effect to the filing of financing statements or the
taking of any other action contemplated thereby for perfection) (i) the Pledge
Agreement creates first priority, perfected Liens in the collateral described
therein, and the Security Agreement creates first priority, perfected Liens in
the collateral described therein (subject to any Liens permitted thereby) and
(ii) the deposit accounts and the collateral securities account referred to in
the Security Agreement shall have been established in the name of the
Administrative Agent.
(h) The Administrative Agent shall have received an opinion of (i)
Baker Botts L.L.P., special counsel to the Borrower and OII, substantially in
the form of Exhibit D-1 hereto; (ii) Lemle & Kelleher, L.L.P., special counsel
to MEPC and MOC, substantially in the form of Exhibit D-2 hereto; (iii) Haynes
and Boone, LLP, special counsel to CPC and CPOC, substantially in the form of
Exhibit D-3 hereto and (iv) John Moore, in-house counsel to MEPC and MOC,
substantially in the form of Exhibit D-4 hereto.
(i) The Administrative Agent shall have received a certificate of
insurance coverage of the Borrower evidencing that the Borrower is carrying
insurance in accordance with Section 7.13.
(j) The Administrative Agent shall have received a certificate of a
Responsible Officer of the Borrower certifying that the Borrower has received
all consents and approvals required by Section 7.03.
(k) The Administrative Agent shall have received the financial
statements referred to in Section 7.04(a).
29
(l) The Administrative Agent shall have received appropriate UCC search
certificates reflecting no prior Liens encumbering the Collateral for each
jurisdiction reasonably requested by the Administrative Agent;
(m) The Administrative Agent shall have received evidence satisfactory
to it that the Borrower has entered into one or more Swap Agreements with
Approved Counterparties which shall effectively convert the floating rate of
interest from time to time in effect hereunder to a fixed rate of interest, the
notional amount of which shall at all times be equal to the then outstanding
principal amount of the Loans (and on the Effective Date, the notional amount
shall be equal to the total Commitments), on such terms (including, the
applicable fixed rate and provisions for the reduction of the notional amount(s)
thereof in accordance with the amortization of the Term Loan hereunder and in
connection with any optional prepayment made by the Borrower hereunder) and
conditions, and durations reasonably satisfactory to the Administrative Agent.
(n) The Administrative Agent shall be satisfied that the Medusa Spar
Transactions are being simultaneously consummated on terms, conditions and
documentation satisfactory to it.
(o) The Administrative Agent shall have received a certificate of a
Responsible Officer of the Borrower certifying that the Medusa Spar Transactions
have been consummated and all closing conditions and conditions precedent
specified in the Medusa Spar Documents have been satisfied.
(p) The Administrative Agent shall have received an execution copy,
certified by a Responsible Officer as true and complete, of each of the Medusa
Spar Documents (together with all amendments, if any).
(q) The Administrative shall have received a certificate duly signed by
a Responsible Officer of the Borrower certifying the Debt Rating of MOC as
determined by each such rating agency;
(r) The Administrative Agent shall have received, reviewed and be
satisfied with, the following:
(i) a certificate of a Responsible Officer of MOC containing a
detailed summary of MOC's accounting treatment of its investment in the
Borrower and its accounting treatment of the MOC Parent Guarantee, in
each case, in accordance with GAAP;
(ii) such other financial information as the Administrative Agent
may reasonably request;
(iii) title information as the Administrative Agent may reasonably
require satisfactory to the Administrative Agent regarding the status
of title to the Medusa Spar and the Dedicated Blocks;
30
(iv) information as to the environmental condition of the Medusa
Spar, the other Properties of the Borrower and the Dedicated Blocks;
(v) copies of the Declaration of Operating and Production Handling
Agreement and Dedication of Leases and any other instruments to be
filed with the parishes and MMS related to the dedication of the
Dedicated Blocks;
(vi) information regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), leases, material
contracts, debt agreements, Property ownership, contingent liabilities
and management of the Borrower; and
(vii) Initial Reserve Report from an Approved Petroleum Engineer.
(s) The Administrative Agent shall have completed and be satisfied with
the results of its due diligence in respect of the Loan Parties, the Medusa
Spar, the Medusa Spar Transactions, the Collateral, the Medusa Spar Documents
and all other contracts relating to the ownership and use of the Medusa Spar,
including all production handling agreements, production sales agreements,
production transportation agreements, supply agreements, and master service
contracts with vendors.
(t) The Administrative Agent shall have received a letter from CT
Corporation System evidencing the appointment of CT Corporation System as
authorized agent for service of process on each of each Loan Party under each
Loan Document to which it is a party.
(u) The Administrative Agent shall have received such other documents
as the Administrative Agent or special counsel to the Administrative Agent may
reasonably request.
(v) At the time of and immediately after giving effect to the borrowing
of the Term Loan, no Default shall have occurred and be continuing.
(w) At the time of and immediately after giving effect to the borrowing
of the Term Loan, no event, development or circumstance has occurred or shall
then exist that has resulted in, or could reasonably be expected to have, a
Material Adverse Effect.
(x) The representations and warranties of the Loan Parties set forth in
this Agreement and in the other Loan Documents shall be true and correct on and
as of the date of the borrowing of the Term Loan, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of borrowing of the Term Loan, such
representations and warranties shall continue to be true and correct as of such
specified earlier date.
(y) The making of the Term Loan would not conflict with, or cause any
Lender to violate or exceed, any applicable Governmental Requirement, and no
Change in Law shall have occurred, and no litigation shall be pending or
threatened, which does or, with respect to any threatened litigation, seeks to,
enjoin, prohibit or restrain, the making or repayment of any Loan or any
participations therein or the consummation of the transactions contemplated by
this Agreement or any other Loan Document.
31
(z) The receipt by the Administrative Agent of the Borrowing Request in
accordance with Section 2.03.
The borrowing of the Term Loan shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as to the
matters specified in Section 6.01(v) through Section 6.01(z).
The Administrative Agent shall notify the Borrower and the Lenders of
the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 12.02) at or prior to 2:00 p.m., New
York City time, on December 31, 2003 (and, in the event such conditions are not
so satisfied or waived, the Commitments shall terminate at such time).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
Section 7.01 Organization; Powers. Each of the Loan Parties is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority, and has
all material governmental licenses, authorizations, consents and approvals
necessary, to own its assets and to carry on its business as now conducted, and
is qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where failure to have such power,
authority, licenses, authorizations, consents, approvals and qualifications
could not reasonably be expected to have a Material Adverse Effect.
Section 7.02 Authority; Enforceability. The Transactions are within
each Loan Party's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder or member action (including,
without limitation, any action required to be taken by any class of directors,
members or managers of any Loan Party, whether interested or disinterested, in
order to ensure the due authorization of the Transactions). Each Loan Document
and Medusa Spar Document to which each Loan Party is a party has been duly
executed and delivered by such Loan Party and constitutes a legal, valid and
binding obligation of such Loan Party, as applicable, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
Section 7.03 Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority or any other third Person (including
shareholders or members or any class of directors, members or managers, whether
interested or disinterested, of any Loan Party or any other Person), nor is any
such consent, approval, registration, filing or other action necessary for the
validity or enforceability of any Loan Document or Medusa Spar Document or the
consummation of the transactions contemplated thereby, except such as have been
obtained or made and are in full
32
force and effect other than (i) the recording and filing of the Security
Instruments as required by this Agreement and (ii) those third party approvals
or consents which, if not made or obtained, would not cause a Default hereunder,
could not reasonably be expected to have a Material Adverse Effect or do not
have an adverse effect on the enforceability of the Loan Documents, (b) will not
violate any applicable law or regulation or the Organization Documents of any
Loan Party or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon any Loan Party or its Properties, or give rise to a right thereunder to
require any payment to be made by any Loan Party and (d) will not result in the
creation or imposition of any Lien on any Property of any Loan Party (other than
the Liens created by the Loan Documents).
Section 7.04 Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders (i) the
Borrower's pro forma balance sheet and projected statements of income, members'
equity and cash flows for the period beginning the Effective Date and ending
December 31, 2006; and (ii) MOC's consolidated balance sheet and statements of
income, stockholders' equity and cash flows (A) as of and for the fiscal year
ended December 31, 2002, reported on by KPMG, independent public accountants,
and (B) as of and for the fiscal quarter and the portion of the fiscal year
ended September 30, 2003, certified by its chief financial officer. The
Borrower's financial statements were prepared in good faith based upon
assumptions believed to be reasonable at the time. MOC's financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of MOC and its Consolidated Subsidiaries, as of such
dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the unaudited quarterly
financial statements.
(b) Since December 31, 2002, there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.
(c) The Borrower does not have on the date hereof any material Debt
(including Disqualified Capital Stock) or any contingent liabilities,
off-balance sheet liabilities or partnerships, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for in
the Financial Statements and under Swap Agreements disclosed pursuant to Section
7.19.
Section 7.05 Litigation.
(a) Except as set forth on Schedule 7.05, there are no actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or involving the Medusa Spar, the Medusa Spar
Transactions or the Dedicated Blocks (i) as to which there is a reasonable
possibility of an adverse determination that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect, (ii) that involve any Loan Document, any Medusa Spar
Document, the Medusa Spar, the Medusa Spar Transactions, the Dedicated Blocks or
the Transactions or (iii) that could
33
reasonably be expected to impair the consummation of the Medusa Spar
Transactions on the time and in the manner contemplated by the Medusa Spar
Documents.
(b) Since the date of this Agreement, there has been no change in the
status of the matters disclosed in Schedule 7.05 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
Section 7.06 Environmental Matters. Except as could not be reasonably
expected to have a Material Adverse Effect (or with respect to (c), (d) and (e)
below, where the failure to take such actions could not be reasonably expected
to have a Material Adverse Effect):
(a) neither any Property of the Borrower nor the operations conducted
thereon nor the Dedicated Blocks nor the operations conducted thereon violate
any order or requirement of any court or Governmental Authority or any
Environmental Laws.
(b) no Property of the Borrower nor the operations currently conducted
thereon nor the Dedicated Blocks nor the operations currently conducted thereon
or, to the knowledge of the Borrower, by any prior owner or operator of such
Property or operation, are in violation of or subject to any existing, pending
or threatened action, suit, investigation, inquiry or proceeding by or before
any court or Governmental Authority or to any remedial obligations under
Environmental Laws.
(c) all notices, permits, licenses, exemptions, approvals or similar
authorizations, if any, required to be obtained or filed in connection with the
operation or use of any and all Property of the Borrower and the Dedicated
Blocks, including, without limitation, past or present treatment, storage,
disposal or release of a hazardous substance, oil and gas waste or solid waste
into the environment, have been duly obtained or filed, and the Borrower and the
Dedicated Blocks are in compliance with the terms and conditions of all such
notices, permits, licenses and similar authorizations.
(d) all hazardous substances, solid waste and oil and gas waste, if
any, generated at any and all Property of the Borrower and the Dedicated Blocks
have in the past been transported, treated and disposed of in accordance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and, to the
knowledge of the Borrower, all such transport carriers and treatment and
disposal facilities have been and are operating in compliance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment, and are not the subject of any existing,
pending or threatened action, investigation or inquiry by any Governmental
Authority in connection with any Environmental Laws.
(e) the Borrower has taken all steps reasonably necessary to determine
and has determined that no oil, hazardous substances, solid waste or oil and gas
waste, have been disposed of or otherwise released and there has been no
threatened release of any oil, hazardous substances, solid waste or oil and gas
waste on or to any Property of the Borrower or the Dedicated Blocks, in each
case, except in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment.
34
(f) to the extent applicable, all Property of the Borrower and the
Dedicated Blocks currently satisfies all design, operation, and equipment
requirements imposed by the OPA, and the Borrower does not have any reason to
believe that such Property, to the extent subject to the OPA, will not be able
to maintain compliance with the OPA requirements during the term of this
Agreement.
(g) the Borrower does not have any known contingent liability or
Remedial Work in connection with any release or threatened release of any oil,
hazardous substance, solid waste or oil and gas waste into the environment, and
there is no known contingent liability or Remedial Work in connection with any
release or threatened release of any oil, hazardous substance, solid waste or
oil and gas waste into the environment associated with the Dedicated Blocks.
Section 7.07 Compliance with the Laws and Agreements; No Defaults.
(a) Each Loan Party is in compliance with all Governmental Requirements
applicable to it or its Property and all agreements and other instruments
binding upon it or its Property, and possesses all licenses, permits,
franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its Property and the conduct of its business,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(b) No Loan Party is in default nor has any event or circumstance
occurred which, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default or would require any Loan
Party to Redeem or make any offer to Redeem under any indenture, note, credit
agreement or instrument pursuant to which any Material Indebtedness is
outstanding or by which any Loan Party or any of its Properties is bound.
(c) No Default has occurred and is continuing.
Section 7.08 Investment Company Act. Neither the Borrower nor any other
Loan Party is an "investment company" or a company "controlled" by an
"investment company," within the meaning of, or subject to regulation under, the
Investment Company Act of 1940, as amended.
Section 7.09 Public Utility Holding Company Act. Neither the Borrower
nor any other Loan Party is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," or a "public utility" within the meaning of, or
subject to regulation under, the Public Utility Holding Company Act of 1935, as
amended.
Section 7.10 Taxes. The Borrower has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are
being contested in good faith by appropriate proceedings and for which the
Borrower has set aside on its books adequate reserves in accordance with GAAP or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect. The charges, accruals and reserves on the
books of the Borrower in respect of Taxes and other governmental charges are, in
the reasonable
35
opinion of the Borrower, adequate. No Tax Lien has been filed and, to the
knowledge of the Borrower, no claim is being asserted with respect to any such
Tax or other such governmental charge.
Section 7.11 ERISA. Neither the Borrower nor any ERISA Affiliate
currently has or has ever had any employees and neither the Borrower nor any
ERISA Affiliate currently sponsors, maintains or contributes to or has ever
sponsored, maintained or contributed to any "employee benefit plan" as such term
is defined in Section 3(3) of ERISA.
Section 7.12 Disclosure; No Material Misstatements. The Borrower has
disclosed to the Administrative Agent and the Lenders all material agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. Neither the
Information Memorandum nor any of the other reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower or
any other Loan Party to the Administrative Agent or any Lender or any of their
Affiliates in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or under any other Loan Document (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time. There
is no fact peculiar to the Borrower or any other Loan Party which could
reasonably be expected to have a Material Adverse Effect or in the future is
reasonably likely to have a Material Adverse Effect and which has not been set
forth in this Agreement or the Loan Documents or the other documents,
certificates and statements furnished to the Administrative Agent or the Lenders
by or on behalf of the Borrower or any other Loan Party prior to, or on, the
date hereof in connection with the transactions contemplated hereby. There are
no statements or conclusions in the Initial Reserve Report or any other reserve
report delivered hereunder which are based upon or include misleading
information or fail to take into account material information regarding the
matters reported therein, it being understood that projections concerning
volumes attributable to the Dedicated Blocks and production and cost estimates
contained in the Initial Reserve Report and each other reserve report delivered
hereunder are necessarily based upon professional opinions, estimates and
projections and that the Borrower does not warrant that such opinions, estimates
and projections will ultimately prove to have been accurate.
Section 7.13 Insurance. The Borrower has, or the Borrower's owners on
behalf of the Borrower have obtained, (a) all insurance policies sufficient for
the compliance by it with all material Governmental Requirements, the Medusa
Spar Documents and all other material agreements and (b) insurance coverage in
at least amounts and against such risk (including, without limitation, public
liability) that are usually insured against by companies similarly situated and
engaged in the same or a similar business for the assets and operations of the
Borrower. The Administrative Agent and the Lenders have been named as additional
insureds in respect of such liability insurance policies (other than the
insurance policy obtained by MOC on behalf of the Borrower issued by Oil
Insurance Limited) and the Administrative Agent, for the benefit of the Lenders,
has been named as loss payee with respect to property loss insurance.
36
Section 7.14 Restriction on Liens. None of the Borrower or any Pledgor
is a party to any material agreement or arrangement, or subject to any order,
judgment, writ or decree, which either restricts or purports to restrict its
ability to grant Liens to the Administrative Agent and the Lenders on or in
respect of their Properties upon which Liens have been or are purported to be
granted under the Security Instruments to secure the Indebtedness and the Loan
Documents.
Section 7.15 Subsidiaries. The Borrower has no Subsidiaries nor has any
Equity Interest in any other Person.
Section 7.16 Location of Business and Offices. The Borrower's
jurisdiction of organization is Delaware; the name of the Borrower as listed in
the public records of its jurisdiction of organization is Medusa Spar LLC; and
the organizational identification number of the Borrower in its jurisdiction of
organization is 3724209 (or, in each case, as set forth in a notice delivered to
the Administrative Agent pursuant to Section 8.01(j) in accordance with Section
12.01). The Borrower's principal place of business and chief executive offices
are located at the address specified in Section 12.01 (or as set forth in a
notice delivered pursuant to Section 8.01(j) and Section 12.01(c)).
Section 7.17 Properties; Titles, Etc.
(a) The Borrower has good and defensible title to a 75% undivided
interest in and to the Medusa Spar and the Borrower's other Properties, free and
clear of all Liens except Liens permitted by Section 9.02.
(b) Each of MEPC and CPOC has good and defensible title to the
Dedicated Blocks owned by it evaluated in the most recently delivered reserve
report hereunder, free and clear of all Liens except Excepted Liens and JOA
Liens. After giving full effect to the Excepted Liens, each of MEPC and CPOC
owns the net interests in production attributable to the Dedicated Blocks owned
by it as reflected in the most recently delivered reserve report hereunder, and
the ownership of the Dedicated Blocks shall not in any material respect obligate
MEPC or CPOC to bear the costs and expenses relating to the maintenance,
development and operations of the Dedicated Blocks in an amount in excess of the
working interest of the Dedicated Blocks set forth in the most recently
delivered reserve report hereunder that is not offset by a corresponding
proportionate increase in MEPC's or CPOC's net revenue interest in the Dedicated
Blocks.
(c) All material leases and agreements necessary for the conduct of the
business of the Borrower are valid and subsisting, in full force and effect, and
there exists no default or event or circumstance which with the giving of notice
or the passage of time or both would give rise to a default under any such lease
or leases, which could reasonably be expected to have a Material Adverse Effect.
(d) The rights and Properties presently owned, leased or licensed by
the Borrower including, without limitation, all easements and rights of way,
include all rights and Properties necessary to permit the Borrower to conduct
its business in all material respects in the same manner as its business has
been conducted prior to the date hereof, except to the extent the failure to
maintain could reasonably be expected to have a Material Adverse Effect.
37
(e) All of the Properties of the Borrower which are reasonably
necessary for the operation of its business are in good working condition and
are maintained in accordance with prudent business standards.
(f) The Borrower owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual Property material to its
business, and the use thereof by the Borrower does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. The Borrower either owns or has valid licenses or other rights to use
all databases, geological data, geophysical data, engineering data, seismic
data, maps, interpretations and other technical information used in its business
as presently conducted, subject to the limitations contained in the agreements
governing the use of the same, which limitations are customary for similarly
situated companies engaged in the similar businesses, with such exceptions as
could not reasonably be expected to have a Material Adverse Effect.
Section 7.18 Maintenance of Properties. Except for such acts or
failures to act as could not be reasonably expected to have a Material Adverse
Effect, the Properties of the Borrower have been maintained, operated and
developed in a good and workmanlike manner and in conformity with all Government
Requirements and in conformity with the provisions of all leases, subleases or
other contracts and agreements to which it is a party. All pipelines, wells, gas
processing plants, platforms and other material improvements, fixtures and
equipment owned in whole or in part by the Borrower or that are necessary to
conduct normal operations are being maintained in a state adequate to conduct
normal operations, and with respect to such of the foregoing which are operated
by the Borrower, in a careful and efficient manner in accordance with the
practices of the industry and in compliance with all applicable contracts and
agreements and in compliance with all Governmental Requirements (other than
those the failure of which to maintain in accordance with this Section 7.07
could not reasonably be expect to have a Material Adverse Effect).
Section 7.19 Swap Agreements. Schedule 7.19, as of the date hereof, and
after the date hereof, each report required to be delivered by the Borrower
pursuant to Section 8.01(d), sets forth, a true and complete list of all Swap
Agreements of the Borrower, the material terms thereof (including the type,
term, effective date, termination date and notional amounts or volumes), the net
mark to market value thereof, all credit support agreements relating thereto
(including any margin required or supplied) and the counterparty to each such
agreement.
Section 7.20 Use of Loans. The proceeds of the Loans shall be used to
reimburse MEPC and CPOC for a portion of their respective capital contributions
to the Borrower, which amounts represent in the aggregate, an amount equal to
approximately 50% of the purchase price of an undivided 75% interest in the
Medusa Spar, and for the transaction fees and expenses associated with the
Medusa Spar Transactions. The Borrower is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying margin stock
(within the meaning of Regulation T, U or X of the Board). No part of the
proceeds of any Loan will be used for any purpose which violates the provisions
of Regulations T, U or X of the Board.
38
Section 7.21 Solvency. After giving effect to the transactions
contemplated hereby, (a) the aggregate assets (after giving effect to amounts
that could reasonably be received by reason of indemnity, offset, insurance or
any similar arrangement), at a fair valuation, of the Borrower will exceed the
aggregate Debt of the Borrower, as the Debt becomes absolute and matures, (b)
the Borrower will not have incurred or intended to incur, and will not believe
that it will incur, Debt beyond its ability to pay such Debt (after taking into
account the timing and amounts of cash to be received by the Borrower and the
amounts to be payable on or in respect of its liabilities, and giving effect to
amounts that could reasonably be received by reason of indemnity, offset,
insurance or any similar arrangement) as such Debt becomes absolute and matures
and (c) the Borrower will not have (and will have no reason to believe that it
will have thereafter) unreasonably small capital for the conduct of its
business.
Section 7.22 Medusa Spar Documents. The copies of the Medusa Spar
Documents previously delivered by the Borrower to the Administrative Agent are
true, accurate and complete and have not been amended or modified in any manner,
other than pursuant to amendments or modifications previously delivered to the
Administrative Agent and otherwise permitted by Section 9.17. No party to any
Medusa Spar Document is in default in respect of any term or obligation
thereunder which could reasonably be expected to have a Material Adverse Effect.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder and all other
amounts payable under the Loan Documents shall have been paid in full, the
Borrower covenants and agrees with the Lenders that:
Section 8.01 Financial Statements; Ratings Change; Other Information.
The Borrower will furnish to the Administrative Agent and each Lender:
(a) Annual Financial Statements. As soon as available, but in any event
in accordance with then applicable law and not later than 120 days after the end
of each fiscal year of such Person, the Borrower's audited balance sheet and the
consolidated balance sheet of each Parent Guarantor and its Consolidated
Subsidiaries and MEPC, and related statements of operations, members' or
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by independent public accountants of recognized national
standing acceptable to the Administrative Agent and the Majority Lenders
(without a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such financial statements or consolidated financial statements, as applicable,
present fairly in all material respects the financial condition and results of
operations of such Person or such Person on a consolidated basis, as applicable,
in accordance with GAAP consistently applied.
(b) Quarterly Financial Statements. As soon as available, but in any
event in accordance with then applicable law and not later than 60 days after
the end of each of the first
39
three fiscal quarters of each fiscal year of such Person, the Borrower's balance
sheet and the consolidated balance sheet of each Parent Guarantor and its
Consolidated Subsidiaries and MEPC, and related statements of operations,
members' or stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of such Person's Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of such Person in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes.
(c) Certificate of Financial Officer -- Compliance. Concurrently with
any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
certificate of a Financial Officer in substantially the form of Exhibit C hereto
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto and (ii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 7.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate.
(d) Certificate of Financial Officer - Swap Agreements. Concurrently
with any delivery of financial statements under Section 8.01(a) and Section
8.01(b), a certificate of a Financial Officer, in form and substance
satisfactory to the Administrative Agent, setting forth as of a recent date, a
true and complete list of all Swap Agreements of the Borrower, the material
terms thereof (including the type, term, effective date, termination date and
notional amounts or volumes), the net mark-to-market value therefor, and the
counterparty to each such agreement.
(e) Certificate of Insurer -- Insurance Coverage. Concurrently with any
delivery of financial statements under Section 8.01(a), a certificate of
insurance coverage from each insurer with respect to the insurance required by
Section 8.07, in form and substance reasonably satisfactory to the
Administrative Agent, and, if requested by the Administrative Agent or any
Lender, all copies of the applicable policies.
(f) SEC and Other Filings; Reports to Shareholders. Promptly after the
same become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Borrower or MOC with the SEC, or
with any national securities exchange, or distributed by the Borrower or MOC to
its shareholders or members generally, as the case may be.
(g) Notices Under Material Instruments. Promptly after the furnishing
thereof, copies of any financial statement, report or notice furnished to or by
the Borrower pursuant to the terms of any preferred stock designation,
indenture, loan or credit or other similar agreement, other than this Agreement
and not otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 8.01.
(h) Notice of Dispositions. In the event the Borrower intends to
Dispose of any Properties in accordance with Section 9.11, prior written notice
of such Disposition, the
40
price thereof and the anticipated date of closing and any other details thereof
requested by the Administrative Agent or any Lender.
(i) Notice of Casualty Events. Prompt written notice, and in any event
within three Business Days, of the occurrence of any Casualty Event or the
commencement of any action or proceeding that could reasonably be expected to
result in a Casualty Event.
(j) Information Regarding Loan Parties. Prompt written notice (and in
any event within thirty (30) days prior thereto) of any change (i) in the
Borrower or any other Loan Party's corporate name or in any trade name used to
identify such Person in the conduct of its business or in the ownership of its
Properties, (ii) in the location of the Borrower or any other Loan Party's chief
executive office or principal place of business, (iii) in the Borrower or any
other Loan Party's identity or corporate structure or in the jurisdiction in
which such Person is incorporated or formed, (iv) in the Borrower or any other
Loan Party's jurisdiction of organization or such Person's organizational
identification number in such jurisdiction of organization and (v) in the
Borrower or any other Loan Party's federal taxpayer identification number.
(k) Notices of Certain Changes. Promptly, but in any event within five
(5) Business Days after the execution thereof, copies of any amendment,
modification or supplement to the Borrower's LLC Agreement, the certificate or
articles of formation, any preferred membership interest designation or any
other Organization Document of the Borrower.
(l) Ratings Change. Promptly after, but in no event later than three
(3) Business Days after, Moody's or S&P shall have announced a change in the
Debt Rating, written notice of such rating change.
(m) Reserve Reports. If requested by the Administrative Agent, the
Borrower shall furnish to the Administrative Agent and the Lenders a reserve
report regarding the Dedicated Blocks, in form and substance reasonably
satisfactory to the Administrative Agent, prepared as of a date requested by the
Administrative Agent. Such reserve report shall be prepared by one or more
Approved Petroleum Engineers. With the delivery of each such reserve report, the
Borrower shall furnish to the Administrative Agent and the Lenders a certificate
from a Responsible Officer of MEPC or CPOC, as applicable, certifying that in
all material respects: (i) the information provided to the Approved Petroleum
Engineer by MEPC or CPOC, as applicable, upon which the Approved Petroleum
Engineer has prepared such reserve report and any other information delivered in
connection therewith is true and correct; (ii) MEPC or CPOC, as applicable, owns
good and defensible title to their respective percentage interests in the
Dedicated Blocks evaluated in such reserve report and such Properties are free
of all Liens other than Excepted Liens and JOA Liens; (iii) none of its
interests in the Properties comprising the Dedicated Blocks have been sold since
the date of the most recently delivered reserve report except for production
therefrom and as set forth on an exhibit to the certificate, which certificate
shall list any such Property sold and in such detail as reasonably required by
the Administrative Agent and (iv) attached to the certificate is a list of all
marketing agreements entered into in respect of its interest in the Dedicated
Blocks.
41
(n) Other Requested Information. Promptly following any request
therefor, such other information regarding the operations, business affairs and
financial condition of the Borrower or any other Loan Party, or compliance with
the terms of this Agreement or any other Loan Document, as the Administrative
Agent or any Lender may reasonably request.
Section 8.02 Notices of Material Events. The Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of, or the threat in writing of, any
action, suit, proceeding, investigation or arbitration by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any
Affiliate thereof not previously disclosed in writing to the Lenders or any
material adverse development in any action, suit, proceeding, investigation or
arbitration previously disclosed to the Lenders that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect; and
(c) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
Section 8.03 Existence; Conduct of Business. The Borrower will do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business and maintain, if necessary,
its qualification to do business in each other jurisdiction in which its
Properties is located or the ownership of its Properties requires such
qualification, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
Section 8.04 Payment of Obligations. The Borrower will pay its
obligations, including Tax liabilities of the Borrower before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the Borrower
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect or result in the
seizure or levy of any Property of the Borrower.
Section 8.05 Performance of Obligations under Loan Documents and Medusa
Spar Documents. The Borrower will pay the Notes according to the reading, tenor
and effect thereof, and the Borrower will do and perform every act and discharge
all of the obligations to be performed and discharged by it under the Loan
Documents, including, without limitation, this Agreement, at the time or times
and in the manner specified, and the Borrower shall comply with, observe and
perform all of its material obligations, undertakings, agreements, covenants and
duties under each Medusa Spar Document to which it is a party in accordance with
the terms thereof.
42
Section 8.06 Operation and Maintenance of Properties. The Borrower, at
its own expense, will:
(a) maintain all bonding required to be maintained by any Governmental
Authority in connection with its Properties (including the Borrower's
operatorship of its interest in the Medusa Spar) and operate its Properties or
cause such Properties to be operated in a careful and efficient manner in
accordance with the practices of the industry and in compliance with all
applicable contracts and agreements and in compliance with all Governmental
Requirements, including, without limitation, applicable pro ration requirements
and Environmental Laws, and all applicable laws, rules and regulations of every
other Governmental Authority from time to time constituted to regulate the
development and operation of its Properties and the production and sale,
gathering, handling, operation and transportation of hydrocarbons and other
minerals therefrom, except, in each case, where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(b) keep and maintain all Property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted
preserve, maintain and keep in good repair, working order and efficiency
(ordinary wear and tear excepted) all of its material Properties, including,
without limitation, all equipment, machinery and facilities.
(c) promptly pay and discharge, or make reasonable and customary
efforts to cause to be paid and discharged, all delay rentals, royalties,
expenses and indebtedness accruing under the leases or other agreements
affecting or pertaining to its Properties and will do all other things necessary
to keep unimpaired their rights with respect thereto and prevent any forfeiture
thereof or default thereunder, except, in each case, where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(d) promptly perform or make reasonable and customary efforts to cause
to be performed, in accordance with industry standards, the obligations required
by each and all of the assignments, deeds, leases, sub-leases, contracts and
agreements affecting its interests in its Properties, except, in each case,
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
(e) cause MEPC to become and maintain its status as a sole "Operator"
of the Medusa Spar under the Joint Operating Agreement.
(f) to the extent the Borrower is not the operator of any of its
Property, the Borrower shall use reasonable efforts to cause the operator to
comply with this Section 8.06.
Section 8.07 Insurance. The Borrower will, or the Borrower's owners on
behalf of the Borrower will, maintain, with insurance companies rated A-VII or
better by Best's Insurance Guide and Key Ratings (or an equivalent rating by
another nationally recognized insurance rating agency for an insurer not rated
by Best's Insurance Guide and Key Ratings), insurance in such amounts and
against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations, but in
any event, at least as required by the terms of the Medusa Spar Documents. The
Administrative Agent and the
43
Lenders hereby agree that the energy industry mutual insurer, Oil Insurance
Limited, is an acceptable insurer. The loss payable clauses or provisions in
said insurance policy or policies insuring the Borrower's undivided ownership
interest in the Medusa Spar and any of the collateral for the Loans shall be
endorsed in favor of and made payable to the Administrative Agent as its
interests may appear and such policies shall name the Administrative Agent and
the Lenders as "additional insureds" (other than with respect to the insurance
policy obtained by MOC on behalf of the Borrower issued by Oil Insurance
Limited). The insured or the insurer will endeavor to give at least 30 days
prior notice of any cancellation to the Administrative Agent.
Section 8.08 Books and Records; Inspection Rights. The Borrower will
keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and
activities. The Borrower will permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its Properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.
Section 8.09 Compliance with Laws. The Borrower will comply with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its Property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section 8.10 Environmental Matters.
(a) The Borrower shall at its sole expense: (i) comply, and shall cause
its Properties and operations to comply, with all applicable Environmental Laws,
the breach of which could be reasonably expected to have a Material Adverse
Effect; (ii) not dispose of or otherwise release any oil, oil and gas waste,
hazardous substance, or solid waste on, under, about or from any of the
Borrower's Properties or any other Property to the extent caused by the
Borrower's operations except in compliance with applicable Environmental Laws,
the disposal or release of which could reasonably be expected to have a Material
Adverse Effect; (iii) timely obtain or file all notices, permits, licenses,
exemptions, approvals, registrations or other authorizations, if any, required
under applicable Environmental Laws to be obtained or filed in connection with
the operation or use of the Borrower's Properties, which failure to obtain or
file could reasonably be expected to have a Material Adverse Effect; (iv)
promptly commence and diligently prosecute to completion any assessment,
evaluation, investigation, monitoring, containment, cleanup, removal, repair,
restoration, remediation or other remedial obligations (collectively, the
"Remedial Work") in the event any Remedial Work is required or reasonably
necessary under applicable Environmental Laws because of or in connection with
the actual or suspected past, present or future disposal or other release of any
oil, oil and gas waste, hazardous substance or solid waste on, under, about or
from any of the Borrower's Properties, which failure to commence and diligently
prosecute to completion could reasonably be expected to have a Material Adverse
Effect; and (v) establish and implement such procedures as may be necessary to
continuously determine and assure that the Borrower's obligations under this
Section 8.10(a) are timely and fully satisfied, which failure to establish and
implement could reasonably be expected to have a Material Adverse Effect.
44
(b) The Borrower will promptly, but in no event later than five days of
the occurrence thereof, notify the Administrative Agent and the Lenders in
writing of any threatened action, investigation or inquiry by any Governmental
Authority or any threatened demand or lawsuit by any landowner or other third
party against the Borrower or related to any of its Properties (including,
without limitation, the Medusa Spar) or the Dedicated Blocks of which the
Borrower has knowledge in connection with any Environmental Laws (excluding
routine testing and corrective action) if the Borrower reasonably anticipates
that such action will result in liability (whether individually or in the
aggregate) in excess of $2,000,000, not fully covered by insurance, subject to
normal deductibles.
Section 8.11 Further Assurances.
(a) The Borrower at its expense will promptly execute and deliver to
the Administrative Agent all such other documents, agreements and instruments
reasonably requested by the Administrative Agent to comply with, cure any
defects or accomplish the conditions precedent, covenants and agreements of the
Borrower in the Loan Documents, including the Notes, or to further evidence and
more fully describe the collateral intended as security for the Indebtedness, or
to correct any omissions in this Agreement or the Security Instruments, or to
state more fully the obligations secured therein, or to perfect, protect or
preserve any Liens created pursuant to this Agreement or any of the Security
Instruments or the priority thereof, or to make any recordings, file any notices
or obtain any consents, all as may be reasonably necessary or appropriate, in
the sole discretion of the Administrative Agent, in connection therewith.
(b) The Borrower hereby authorizes the Administrative Agent to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of the Borrower or
any other Person where permitted by law. A carbon, photographic or other
reproduction of the Security Instruments or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
Section 8.12 Collateral. The Borrower will at all times cause the
Collateral to be subject to a Lien of the Security Instruments on such terms and
conditions and documentation as the Administrative Agent shall reasonably
require.
Section 8.13 Swap Agreements. The Borrower shall maintain the hedge
position established by the Swap Agreements required under Section 6.01(m)
during the period specified therein and shall neither assign, terminate or
unwind any such Swap Agreements nor sell any Swap Agreements if the effect of
such action (when taken together with any other Swap Agreements executed
contemporaneously with the taking of such action) would have the effect of
canceling its positions under such Swap Agreements required hereby.
Section 8.14 MEPC Restricted Account. The Borrower shall cause all
amounts from time to time credited to the MEPC Restricted Account (as defined in
the Security Agreement) to be held in the form of cash or Investments permitted
by Section 9.04(c), Section 9.04(d), Section 9.04(e) or Section 9.04(f);
provided that the Borrower may from time to time cause the withdrawal of any
such amounts in order to prepay the Loans in accordance with Section 3.04(a).
45
ARTICLE IX
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full, the Borrower covenants
and agrees with the Lenders that:
Section 9.01 Debt. The Borrower will not incur, create, assume or
suffer to exist any Debt, except:
(a) the Notes or other Indebtedness arising under the Loan Documents.
(b) Debt of the Borrower under the Joint Operating Agreement.
(c) accounts payable from time to time incurred in the ordinary course
of business which are not greater than ninety (90) days past the date of invoice
or delinquent or which are being contested in good faith by appropriate action
and for which adequate reserves have been maintained in accordance with GAAP.
(d) accrued expenses or accrued liabilities arising in the ordinary
course of business (other than Debt referred to in Section 9.01(c)) not to
exceed in the aggregate at any one time outstanding $1,000,000.
(e) endorsements of negotiable instruments for collection in the
ordinary course of business.
Section 9.02 Liens. The Borrower will not create, incur, assume or
permit to exist any Lien on any of its Properties (now owned or hereafter
acquired), except:
(a) Liens securing the payment of any Indebtedness.
(b) Excepted Liens.
(c) the JOA Liens securing obligations that are not delinquent.
46
Section 9.03 Restricted Payments. The Borrower will not declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
return any capital to its stockholders or make any distribution of its Property
to its Equity Interest holders, except (a) the Borrower may declare and pay a
one time cash dividend or distribution to each MEPC and CPOC from the proceeds
of the Term Loan for the purpose specified in Section 7.20 in the amounts set
forth in Schedule 9.03; (b) the Borrower may declare and pay dividends with
respect to its Equity Interests payable solely in additional shares of its
Equity Interests (other than Disqualified Capital Stock) and (c) subject to the
terms of the Security Agreement, the Borrower may declare and pay cash dividends
and distributions in an amount not to exceed the sum of the Actual CPOC
Throughput Amount and the Third Party Throughput Amount, to the extent and only
to the extent such amounts constitute Available Cash and so long as no Default
has occurred and is continuing, or would occur, after giving effect to any such
payment.
Section 9.04 Investments. The Borrower will not make or permit to
remain outstanding any Investments in or to any Person, except that the
foregoing restriction shall not apply to:
(a) Investments reflected in the Financial Statements or which are
disclosed to the Lenders in Schedule 9.05.
(b) accounts receivable arising in the ordinary course of business.
(c) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of creation thereof.
(d) commercial paper maturing within one year from the date of creation
thereof rated in the highest grade by S&P or Moody's.
(e) deposits maturing within one year from the date of creation thereof
with, including certificates of deposit issued by, any Lender or any office
located in the United States of any other bank or trust company which is
organized under the laws of the United States or any state thereof, has capital,
surplus and undivided profits aggregating at least $100,000,000 (as of the date
of such bank or trust company's most recent financial reports) and has a short
term deposit rating of no lower than A2 or P2, as such rating is set forth from
time to time, by S&P or Moody's, respectively.
(f) deposits in money market funds investing exclusively in Investments
described in Section 9.04(c), Section 9.04(d) or Section 9.04(e).
(g) Investments in stock, obligations or securities received in
settlement of debts arising from Investments permitted under this Section 9.04
owing to the Borrower as a result of a bankruptcy or other insolvency proceeding
of the obligor in respect of such debts or upon the enforcement of any Lien in
favor of the Borrower.
Section 9.05 Nature of Business; International Operations. The Borrower
will not allow any material change to be made in the character of its business
as it is currently being conducted on the date hereof. The Borrower will not
operate its business outside of the
47
geographical boundaries of the United States, provided that the Borrower may
purchase Property from Persons located outside of the geographical boundaries of
the United States.
Section 9.06 Limitation on Leases. The Borrower will not create, incur,
assume or suffer to exist any obligation for the payment of rent or hire of
Property of any kind whatsoever (real or personal or otherwise), under leases or
lease agreements.
Section 9.07 Proceeds of Notes. The Borrower will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 7.20. Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulations T, U or X or any other regulation of the Board
or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect. If requested by the Administrative Agent, the Borrower
will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 or such
other form referred to in Regulation U, Regulation T or Regulation X of the
Board, as the case may be.
Section 9.08 ERISA Compliance. Neither the Borrower nor any ERISA
Affiliate will at any time employ any employees or sponsor, maintain or
contribute to any "employee benefit plan" as such term is defined in Section
3(3) of ERISA.
Section 9.09 Sale or Discount of Receivables. The Borrower will not
discount or sell (with or without recourse) any of its notes receivable or
accounts receivable.
Section 9.10 Mergers, Etc. The Borrower will not merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (whether
in one transaction or in a series of transactions) all or substantially all of
its Property to any other Person (whether now owned or hereafter acquired), or
liquidate or dissolve.
Section 9.11 Dispositions. The Borrower will not Dispose of any
Property or make any agreement to make any Disposition other than a Disposition
the Operator is permitted to make in the ordinary course of its operations under
the Joint Operating Agreement in respect of the Medusa Spar without the consent
of the working interest owners which are parties to the Joint Operating
Agreement.
Section 9.12 Environmental Matters. The Borrower will not cause or
permit any of its Property to be in violation of, or do anything or permit
anything to be done which will subject any such Property to any Remedial Work
under any Environmental Laws, assuming disclosure to the applicable Governmental
Authority of all relevant facts, conditions and circumstances, if any,
pertaining to such Property where such violations or remedial obligations could
reasonably be expected to have a Material Adverse Effect.
Section 9.13 Transactions with Affiliates. Except for transactions
contemplated by the Oceaneering Products & Services Agreement dated August 8,
2003 (as in effect on the date hereof) and the Medusa Spar Documents (as in
effect on the date hereof), the Borrower will not enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of
48
Property or the rendering of any service, with any Affiliate unless such
transactions are otherwise permitted under this Agreement and are upon fair and
reasonable terms no less favorable to it than it would obtain in a comparable
arm's length transaction with a Person not an Affiliate.
Section 9.14 Subsidiaries. The Borrower will not create, acquire or
have any Subsidiaries or acquire or have any Equity Interest in any other
Person.
Section 9.15 Negative Pledge Agreements. The Borrower will not create,
incur, assume or suffer to exist any contract, agreement or understanding (other
than this Agreement or the Security Instruments) which in any way prohibits or
restricts the granting, conveying, creation or imposition of any Lien on any of
its Property in favor of the Administrative Agent and the Lenders, or which
requires the consent of or notice to other Persons in connection therewith.
Section 9.16 Swap Agreements. The Borrower will not enter into any Swap
Agreements other than as required by Section 6.01(m). In no event shall any Swap
Agreement contain any requirement, agreement or covenant for the Borrower or any
other Loan Party to post collateral or margin to secure its obligations under
such Swap Agreement or to cover market exposures.
Section 9.17 Amendments of Agreements. The Borrower will not amend,
modify, supplement or terminate, or agree to amend, modify, supplement or
terminate, any Medusa Spar Document, or any other provision of any security
issued by the Borrower or of any agreement, instrument or other undertaking to
which the Borrower is a party or by which it or any of its Property is bound,
related to the ownership, operation, or use of the Medusa Spar by the Borrower,
without the prior written consent of the Majority Lenders.
Section 9.18 Limitation on Capital Expenditures. The Borrower shall not
agree to pay for any Capital Expenditures in respect of any of its Properties
except for Capital Expenditures in respect of the Medusa Spar for which the
Borrower is responsible pursuant to the terms of the Operating and Production
Handling Agreement and which is entirely prefunded from the proceeds of capital
contributions from one or more of its members.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following events
shall constitute an "Event of Default":
(a) the Borrower shall fail to pay any principal of any Loan when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof, by acceleration or otherwise.
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in Section 10.01(a))
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days.
49
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any other Loan Party in or in connection with any Loan
Document or Medusa Spar Document or any amendment or modification of any Loan
Document or Medusa Spar Document or waiver under such Loan Document or Medusa
Spar Document, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document, Medusa
Spar Document or any amendment or modification thereof or waiver thereunder,
shall prove to have been incorrect when made or deemed made.
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 8.01(g), Section 8.01(j), Section
8.01(l), Section 8.02, Section 8.03, Section 8.12, Section 8.14 or in ARTICLE
IX.
(e) MOC shall fail to observe or perform any covenant, condition or
agreement contained in Section 3.2 of the MOC Parent Guarantee.
(f) the Borrower or any other Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other
than those specified in Section 10.01(a), Section 10.01(b) or Section 10.01(d))
or any other Loan Document, and such failure shall continue unremedied for a
period of 30 days after the earlier to occur of (A) notice thereof from the
Administrative Agent to the Borrower (which notice will be given at the request
of any Lender) or (B) a Responsible Officer of the Borrower otherwise becoming
aware of such default.
(g) the Borrower, MOC or MEPC shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness of such Person, when and as the same shall become due and payable.
(h) any event or condition occurs that results in any Material
Indebtedness of the Borrower, MOC or MEPC becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of such Material Indebtedness or
any trustee or agent on its or their behalf to cause such Material Indebtedness
to become due, or to require the Redemption thereof or any offer to Redeem to be
made in respect thereof, prior to its scheduled maturity or require such Person
to make an offer in respect thereof.
(i) any event or condition occurs which constitutes an "Event of
Default" or which upon notice, lapse of time or both would, unless cured or
waived, become an "Event of Default" under the MOC Credit Agreement;
(j) (i) an "Event of Default" or an "Additional Termination Event"
under the documentation related to any Swap Agreement entered into by the
Borrower pursuant to Section 6.01(m) occurs or (ii) the Borrower is required to
pay an amount in respect of an Early Termination Date designated under such
documentation as a result of a "Termination Event" as to which the Borrower is
the "Affected Party" (quoted terms in this paragraph having the meanings given
such terms in such documentation).
(k) the failure of any Loan Party to make any payment when due, or the
failure by such Person to observe or perform any other covenant, agreement or
condition, under
50
any Medusa Spar Document to which it is a party, including, without limitation,
the Minimum Throughput Guarantee and the Parent Guarantees (and in the case of
the Joint Operating Agreement, which would entitle any party to the Joint
Operating Agreement to exercise its rights in connection with any Lien granted
under or in connection with the Joint Operating Agreement), in each case,
subject to any applicable grace period provided for therein.
(l) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any other Loan Party or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or other Loan Party or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 30 days or an order or decree approving or ordering any of the
foregoing shall be entered.
(m) the Borrower or any other Loan Party shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in Section 10.01(l), (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any other Loan Party or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing.
(n) the Borrower or any other Loan Party shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due.
(o) (i) one or more judgments for the payment of money in an aggregate
amount in excess of (A) $35,000,000, in the case of MOC; (B) $35,000,000, in the
case of MEPC or (C) $2,000,000, in the case of the Borrower, (in each case, to
the extent not covered by independent third party insurance provided by insurers
of the highest claims paying rating or financial strength as to which the
insurer does not dispute coverage and is not subject to an insolvency
proceeding) or (ii) any one or more non-monetary judgments that have, or could
reasonably be expected to have, individually or the aggregate, a Material
Adverse Effect, shall be rendered against the Borrower, MOC, or MEPC or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower, MOC or MEPC to enforce any such judgment.
(p) the Loan Documents after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms
against the Borrower or any other Loan Party thereto or shall be repudiated by
any of them, or cease to create a valid and perfected Lien of the priority
required thereby on any of the collateral purported to be covered thereby,
except to the
51
extent permitted by the terms of this Agreement, or the Borrower or any other
Loan Party or any of their Affiliates shall so state in writing.
(q) the Borrower shall at any time fail to have good and defensible
title to an undivided 75% interest in and to the Medusa Spar, free and clear of
any Lien other than Liens permitted by Section 9.02.
(r) MEPC, or any other Person approved in writing by the Lenders, shall
at any time cease to be the "Operator" under the Joint Operating Agreement.
(s) a Change in Control shall occur.
(t) CPC shall at any time sell or otherwise dispose of any of the
Equity Interests of the Borrower owned by CPC on the date hereof (whether
directly or indirectly, or beneficially or of record), to any other Person, and
such other Person, at the time of acquisition of any such Equity Interests (i)
fails to have a long term senior, unsecured debt rating from S&P of B and
Moody's of B2 or (ii) fails to execute and deliver to the Administrative Agent
documentation similar in form and substance to the Loan Documents to which CPC
is then a party (including, without limitation, the CPC Parent Guarantee), in
form and substance satisfactory to the Administrative Agent and the Lenders, and
such other documentation (including legal opinions) as the Administrative Agent
and the Lenders may reasonably require.
Section 10.02 Remedies.
(a) In the case of an Event of Default other than one described in
Section 10.01(l), Section 10.01(m) or Section 10.01(n), at any time thereafter
during the continuance of such Event of Default, the Administrative Agent may,
and at the request of the Majority Lenders, shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately and (ii) declare the Notes and the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder and under the Notes and the other Loan Documents, shall become
due and payable immediately, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other notice of any kind, all of
which are hereby waived by the Borrower; and in case of an Event of Default
described in Section 10.01(l), Section 10.01(m) or Section 10.01(n), the
Commitments shall automatically terminate and the Notes and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
the other obligations of the Borrower accrued hereunder and under the Notes and
the other Loan Documents, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and each other Loan Party.
(b) In the case of the occurrence of an Event of Default, the
Administrative Agent and the Lenders will have all other rights and remedies
available at law and equity.
52
(c) All proceeds realized from the liquidation or other disposition of
collateral or otherwise received after maturity of the Notes, whether by
acceleration or otherwise, shall be applied:
(i) first, to payment or reimbursement of that portion of the
Indebtedness constituting fees, expenses, indemnities and other amounts
payable to the Administrative Agent in its capacity as such;
(ii) second, pro rata to payment or reimbursement of that portion
of the Indebtedness constituting fees, expenses, indemnities and other
amounts (other than principal and interest) payable to the Lenders;
(iii) third, pro rata to payment of accrued interest on the Loans;
(iv) fourth, pro rata to payment of principal outstanding on the
Loans and that portion of the Indebtedness constituting Swap
Termination Values; and
(v) and any excess, if any, after all of the Indebtedness shall
have been indefeasibly paid in full in cash, shall be paid to the
Borrower or as otherwise required by any Governmental Requirement.
ARTICLE XI
THE AGENTS
Section 11.01 Appointment; Powers. Each of the Lenders hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
Section 11.02 Duties and Obligations of Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing (the use of the term "agent" herein and in the other Loan
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law; rather, 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), (b) the Administrative
Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except as provided in Section 11.03, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any other Loan Party that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other
53
Loan Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, (v) the satisfaction of any condition set forth in ARTICLE VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent or as to those conditions precedent
expressly required to be to the Administrative Agent's satisfaction, (vi) the
existence, value, perfection or priority of any collateral security or the
financial or other condition of the Borrower or any other Loan Party or any
other obligor or guarantor, or (vii) any failure by the Borrower or any other
Person (other than itself) to perform any of its obligations hereunder or under
any other Loan Document or the performance or observance of any covenants,
agreements or other terms or conditions set forth herein or therein. For
purposes of determining compliance with the conditions specified in ARTICLE VI,
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
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed closing date specifying its
objection thereto.
Section 11.03 Action by Administrative Agent. The Administrative Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the Administrative Agent is required to exercise in
writing as directed by the Majority Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 12.02) and in all cases the Administrative Agent shall be fully
justified in failing or refusing to act hereunder or under any other Loan
Documents unless it shall (a) receive written instructions from the Majority
Lenders or the Lenders, as applicable, (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
12.02) specifying the action to be taken and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions as aforesaid and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a
Default has occurred and is continuing, then the Administrative Agent shall take
such action with respect to such Default as shall be directed by the requisite
Lenders in the written instructions (with indemnities) described in this Section
11.03, provided that, unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interests of the Lenders.
In no event, however, shall the Administrative Agent be required to take any
action which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement, the Loan Documents or applicable law. If a Default
has occurred and is continuing, the Syndication Agents shall have no obligation
to perform any act in respect thereof. No Agent shall be liable for any action
taken or not taken by it with the consent or at the request of the Majority
Lenders or the Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 12.02), and
otherwise no Agent shall be liable for any action taken or not taken by it
hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith INCLUDING
54
ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or willful
misconduct.
Section 11.04 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person. The Administrative Agent also may rely upon any
statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon and each of
the Borrower and the Lenders hereby waives the right to dispute the
Administrative Agent's record of such statement, except in the case of gross
negligence or willful misconduct by the Administrative Agent. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Agents may deem and treat the
payee of any Note as the holder thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof permitted hereunder shall
have been filed with the Administrative Agent.
Section 11.05 Subagents. The Administrative Agent may perform any and
all its duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of the preceding Sections of this ARTICLE XI shall apply to any such sub-agent
and to the Related Parties of the Administrative Agent and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
Section 11.06 Resignation or Removal of Agents. Subject to the
appointment and acceptance of a successor Agent as provided in this Section
11.06, any Agent may resign at any time by notifying the Lenders and the
Borrower, and any Agent may be removed at any time with or without cause by the
Majority Lenders. Upon any such resignation or removal, the Majority Lenders
shall have the right, in consultation with the Borrower, to appoint a successor.
If no successor shall have been so appointed by the Majority Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation or removal of the retiring Agent, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the Agent's resignation hereunder, the provisions of this ARTICLE XI and
Section 12.03 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Agent.
55
Section 11.07 Agents as Lenders. Each bank serving as an Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any other Loan
Party or other Affiliate thereof as if it were not an Agent hereunder.
Section 11.08 No Reliance. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and each other Loan Document to which it is a party. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document, any related agreement or any
document furnished hereunder or thereunder. The Agents shall not be required to
keep themselves informed as to the performance or observance by the Borrower or
any other Loan Party of this Agreement, the Loan Documents or any other document
referred to or provided for herein or to inspect the Properties or books of the
Borrower or any other Loan Party . Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent or the Arranger shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Affiliates) which may come into the possession of such Agent or any of
its Affiliates. In this regard, each Lender acknowledges that Vinson & Elkins
L.L.P. is acting in this transaction as special counsel to the Administrative
Agent only, except to the extent otherwise expressly stated in any legal opinion
or any Loan Document. Each other party hereto will consult with its own legal
counsel to the extent that it deems necessary in connection with the Loan
Documents and the matters contemplated therein.
Section 11.09 Administrative Agent May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Indebtedness
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 12.03) allowed in such judicial proceeding;
and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
56
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Lender to make such payments to the Administrative Agent and,
in the event that the Administrative Agent shall consent to the making of such
payments directly to the Lenders, to pay to the Administrative Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 12.03.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Indebtedness or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
Section 11.10 Authority of Administrative Agent to Release Collateral
and Liens. Each Lender hereby authorizes the Administrative Agent to release any
collateral that is permitted to be sold or released pursuant to the terms of the
Loan Documents. Each Lender hereby authorizes the Administrative Agent to
execute and deliver to the Borrower, at the Borrower's sole cost and expense,
any and all releases of Liens, termination statements, assignments or other
documents reasonably requested by the Borrower in connection with any sale or
other disposition of Property to the extent such sale or other disposition is
permitted by the terms of Section 9.11 or is otherwise authorized by the terms
of the Loan Documents.
Section 11.11 The Arranger and the Syndication Agents. The Arranger and
the Syndication Agents shall have no duties, responsibilities or liabilities
under this Agreement and the other Loan Documents other than their duties,
responsibilities and liabilities in their capacity as Lenders hereunder.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to Section 12.01(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to the Borrower, to it at 131 South Robertson, New Orleans,
Louisiana 70112, Attention of John C. Higgins (Telecopy No. (504)
561-2551);
(ii) if to the Administrative Agent, to it at 1100 Louisiana,
Suite 3000, Houston, Texas 77002, Attention of Randy Crath (Telecopy
No. (713) 752-2425), with a copy to The Bank of Nova Scotia, at 600
Peachtree Street, NE Suite 2700, Atlanta, Georgia 30308, Attention of
Eudia Smith (Telecopy No. (404) 888-8998); and
(iii) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
57
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to ARTICLE II, ARTICLE III, ARTICLE IV and ARTICLE V
unless otherwise agreed by the Administrative Agent and the applicable Lender.
The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
Section 12.02 Waivers; Amendments.
(a) No failure on the part of the Administrative Agent or any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege, or any abandonment or discontinuance of steps to
enforce such right, power or privilege, under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies of the Administrative Agent and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by Section 12.02(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any provision hereof nor any Security
Instrument nor any provision thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Majority Lenders or by the Borrower and the Administrative Agent with
the consent of the Majority Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, or reduce any other
Indebtedness hereunder or under any other Loan Document, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment or prepayment of the principal amount of any Loan, or any interest
thereon, or any fees payable hereunder, or any other Indebtedness hereunder or
under any other Loan Document, or reduce the amount of, waive or excuse any such
payment, or postpone or extend the Termination Date without the written consent
of each Lender affected thereby, (iv) change Section 4.01(b) or Section 4.01(c)
in a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) waive or amend Section 6.01,
Section 8.12, Section 10.02(c) or
58
Section 12.14 or change the definition of the term "Subsidiary", without
the written consent of each Lender, (vi) release any Guarantor (except as set
forth in the Guarantees), release any of the collateral (other than as
provided in Section 11.10), without the written consent of each Lender, or (vii)
change any of the provisions of this Section 12.02(b) or the definitions of
"Majority Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
under any other Loan Documents or make any determination or grant any consent
hereunder or any other Loan Documents, without the written consent of each
Lender; provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder or under any
other Loan Document without the prior written consent of the Administrative
Agent.
Section 12.03 Expenses, Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including, without
limitation, the reasonable fees, charges and disbursements of counsel and other
outside consultants for the Administrative Agent, the reasonable travel,
photocopy, mailing, courier, telephone and other similar expenses, and the cost
of environmental audits and surveys and appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Administrative Agent as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable costs, expenses, Taxes,
assessments and other charges incurred by any Agent or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket expenses incurred by any
Agent or any Lender, including the fees, charges and disbursements of any
counsel for any Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement or any other Loan
Document, including its rights under this Section 12.03, or in connection with
the Loans made hereunder, including, without limitation, all such reasonable
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ACCOUNT BANK, THE
SECURITIES INTERMEDIARY AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE
FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN "INDEMNITEE") AGAINST, AND
HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS
OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
59
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (ii) THE FAILURE OF THE BORROWER OR ANY OTHER LOAN PARTY TO COMPLY
WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY
GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY
BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY OTHER LOAN PARTY SET
FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR
CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR THE USE OF
THE PROCEEDS THEREFROM, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE
OPERATIONS OF THE BUSINESS OF THE BORROWER AND THE OTHER LOAN PARTIES BY THE
BORROWER AND THE OTHER LOAN PARTIES, (vii) ANY ASSERTION THAT THE LENDERS WERE
NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY
INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY
OTHER LOAN PARTY OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE
PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT,
DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID
WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) THE BREACH OR
NON-COMPLIANCE BY THE BORROWER OR ANY OTHER LOAN PARTY WITH ANY ENVIRONMENTAL
LAW APPLICABLE TO THE BORROWER OR ANY OTHER LOAN PARTY, (x) THE PAST OWNERSHIP
BY THE BORROWER OR ANY OTHER LOAN PARTY OF ANY OF THEIR PROPERTIES OR PAST
ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE
AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE,
STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT,
ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS
WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES
OWNED OR OPERATED BY THE BORROWER OR ANY OTHER LOAN PARTY OR ANY ACTUAL OR
ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED
OR OPERATED BY THE BORROWER OR ANY OTHER LOAN PARTY, (xii) ANY ENVIRONMENTAL
LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OTHER LOAN PARTY, OR (xiii)
ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN
DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION
OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO,
AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR
CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR
PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT
LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT
(SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT
LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED
THAT
50
SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT
SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY
A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF SUCH INDEMNITEE.
(c) To the extent that the Borrower fails to pay any amount required to
be paid by it to any Agent under Section 12.03(a) or (b), each Lender severally
agrees to pay to such Agent such Lender's Applicable Percentage (determined as
of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against such Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or the use of the
proceeds thereof.
(e) All amounts due under this Section 12.03 shall be payable not later
than thirty (30) days after written demand therefor.
Section 12.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section 12.04. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in Section 12.04(b)(ii),
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
(A) the Borrower, provided that no consent of the Borrower shall
be required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default has occurred and is continuing, any other
assignee; and
61
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee that is
a Lender immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $2,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;
(B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement;
(C) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire.
(iii) Subject to Section 12.04(b)(iv) and the acceptance and
recording thereof, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Section 5.01, Section 5.02, Section 5.03 and Section 12.03). Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 12.04 shall be treated
for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.04(c).
(iv) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the
62
terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice. In
connection with any changes to the Register, if necessary, the
Administrative Agent will reflect the revisions on Annex I and forward
a copy of such revised Annex I to the Borrower and each Lender.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee
referred to in Section 12.04(b) and any written consent to such
assignment required by Section 12.04(b), the Administrative Agent shall
accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register
as provided in this Section 12.04(b).
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loan
owing to it); provided that (A) such Lender's obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the proviso to Section 12.02 that affects such Participant. In
addition such agreement must provide that the Participant be bound by the
provisions of Section 12.03. Subject to Section 12.04(c)(ii), the Borrower
agrees that each Participant shall be entitled to the benefits of Section 5.01,
Section 5.02 and Section 5.03 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 12.04(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 12.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 4.01(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 5.01 or Section 5.03 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 the Borrower's prior
written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 5.03
unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 5.03(e) as though it were a Lender.
63
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 12.04(d) shall not apply
to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(e) Notwithstanding any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would require the Borrower to file a registration statement with the
SEC or to qualify the Loans under the "Blue Sky" laws of any state.
Section 12.05 Survival; Revival; Reinstatement.
(a) All covenants, agreements, representations and warranties made by
the Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and
ARTICLE XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement, any other Loan Document or any provision hereof or thereof.
(b) To the extent that any payments on the Indebtedness or proceeds of
any collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Indebtedness so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Administrative Agent's and the Lenders' Liens, security interests, rights,
powers and remedies under this Agreement and each Loan Document shall continue
in full force and effect. In such event, each Loan Document shall be
automatically reinstated and the Borrower shall take such action as may be
reasonably requested by the Administrative Agent and the Lenders to effect such
reinstatement.
Section 12.06 Counterparts; Integration; Effectiveness.
64
(a) This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.
(b) This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
thereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof and thereof. This Agreement
and the other Loan Documents represent the final agreement among the parties
hereto and thereto and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
(c) Except as provided in Section 6.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
Section 12.07 Severability. Any provision of this Agreement or any
other Loan Document held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof or thereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
Section 12.08 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations (of
whatsoever kind, including, without limitations obligations under Swap
Agreements) at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower or any or its Affiliates against any of and all
the obligations of the Borrower or any or any of its Affiliates owed to such
Lender now or hereafter existing under this Agreement or any other Loan
Document, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations
may be unmatured. The rights of each Lender under this Section 12.08 are in
addition to other rights and remedies (including other rights of setoff) which
such Lender or its Affiliates may have.
Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
65
YORK EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW PERMITS ANY LENDER TO
CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE INTEREST AT THE RATE ALLOWED BY
THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT
PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT
PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT
OTHERWISE HAVING JURISDICTION.
(c) THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS
AND HEREBY CONFERS AN IRREVOCABLE SPECIAL POWER, AMPLE AND SUFFICIENT, TO CT
CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 111 8TH AVENUE, NEW YORK,
NEW YORK 10011 AS ITS DESIGNEE, APPOINTEE AND AGENT WITH RESPECT TO ANY SUCH
ACTION OR PROCEEDING IN NEW YORK TO RECEIVE AND ACCEPT FOR AND ON ITS BEHALF,
AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH PROCEEDING AND AGREES THAT
THE FAILURE OF SUCH AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF PROCESS TO
THE BORROWER SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY
CLAIM BASED THEREON. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL
CEASE TO BE AVAILABLE TO ACT AS SUCH, THE BORROWER AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION. EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANOTHER PARTY IN ANY OTHER JURISDICTION.
66
(d) EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.
Section 12.10 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 12.11 Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
shall agree to be bound by the terms of this Section 12.11), (b) to the extent
requested by any regulatory authority having jurisdiction over such Person, (c)
to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement or any other
Loan Document, (e) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section 12.11, to (i) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any actual or prospective counterparty
(or its advisors) to any Swap Agreement relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 12.11 or (ii) becomes available to the Administrative Agent or any
Lender on a nonconfidential basis from a source other than the Borrower. For the
purposes of this Section 12.11, "Information" means all information received
from the Borrower or any other Loan Party relating to the Borrower or any other
Loan Party and their businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Borrower or any other Loan Party; provided that, in
the case of information received from the Borrower or other Loan Party after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 12.11 shall be considered to have complied with its
67
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding anything herein to the
contrary, "Information" shall not include, and the Borrower, the other Loan
Parties, the Administrative Agent, each Lender and the respective Affiliates of
each of the foregoing (and the respective partners, directors, officers,
employees, agents, advisors and other representatives of the aforementioned
Persons), and any other party, may disclose to any and all Persons, without
limitation of any kind (a) any information with respect to the U.S. federal and
state income tax treatment of the transactions contemplated hereby and any facts
that may be relevant to understanding the U.S. federal or state income tax
treatment of such transactions ("tax structure"), which facts shall not include
for this purpose the names of the parties or any other person named herein, or
information that would permit identification of the parties or such other
persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or tax structure, and (b)
all materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower, the Administrative Agent or such Lender relating to
such tax treatment or tax structure.
Section 12.12 Interest Rate Limitation. It is the intention of the
parties hereto that each Lender shall conform strictly to usury laws applicable
to it. Accordingly, if the transactions contemplated hereby would be usurious as
to any Lender under laws applicable to it (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable to such Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in any of the Loan Documents or any agreement entered into in
connection with or as security for the Notes, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to any Lender that is contracted for, taken, reserved, charged or received by
such Lender under any of the Loan Documents or agreements or otherwise in
connection with the Notes shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be canceled automatically
and if theretofore paid shall be credited by such Lender on the principal amount
of the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower); and (ii) in the event that the maturity of the Notes is
accelerated by reason of an election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of
the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower). All sums paid or agreed to be paid to any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Lender, be amortized, prorated, allocated
and spread throughout the stated term of the Loans evidenced by the Notes until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to any
Lender on any date shall be computed at the Highest Lawful Rate applicable to
such Lender pursuant to this Section 12.12
68
and (ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Lender would be less than the amount of
interest payable to such Lender computed at the Highest Lawful Rate applicable
to such Lender, then the amount of interest payable to such Lender in respect of
such subsequent interest computation period shall continue to be computed at the
Highest Lawful Rate applicable to such Lender until the total amount of interest
payable to such Lender shall equal the total amount of interest which would have
been payable to such Lender if the total amount of interest had been computed
without giving effect to this Section 12.12. To the extent that Chapter 303 of
the Texas Finance Code is relevant for the purpose of determining the Highest
Lawful Rate applicable to a Lender, such Lender elects to determine the
applicable rate ceiling under such Chapter by the weekly ceiling from time to
time in effect. Chapter 346 of the Texas Finance Code does not apply to the
Borrower's obligations hereunder.
Section 12.13 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
Section 12.14 Collateral Matters; Swap Agreements. The benefit of the
Security Instruments and of the provisions of this Agreement relating to any
collateral securing the Indebtedness shall also extend to and be available to
those Lenders or their Affiliates which are counterparties to any Secured Swap
Agreement with the Borrower, subject to Section 10.02(c), on a pro rata basis in
respect of any obligations of the Borrower which arise under any such Secured
Swap Agreement while such Person or its Affiliate is a Lender, but only while
such Person or its Affiliate is a Lender, including any Secured Swap Agreements
between such Persons in existence prior to the date hereof. No Lender or any
Affiliate of a Lender shall have any voting rights under any Loan Document as a
result of the existence of obligations owed to it under any such Secured Swap
Agreements.
Section 12.15 No Third Party Beneficiaries. This Agreement, the other
Loan Documents, and the agreement of the Lenders to make Loans hereunder are
solely for the benefit
69
of the Borrower, and no other Person (including, without limitation, any other
Loan Party, any obligor, contractor, subcontractor, supplier or materialsman)
shall have any rights, claims, remedies or privileges hereunder or under any
other Loan Document against the Administrative Agent, any other Agent or any
Lender for any reason whatsoever. There are no third party beneficiaries.
[SIGNATURES BEGIN NEXT PAGE]
70
The parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
BORROWER: MEDUSA SPAR LLC
By:
-----------------------------------
Name:
Title:
1
ADMINISTRATIVE AGENT: THE BANK OF NOVA SCOTIA,
as Administrative Agent and a Lender
By:
-----------------------------------
Name:
Title:
2
SYNDICATION AGENT: BANK ONE, N.A.,
as a Syndication Agent and a Lender
By:
-----------------------------------
Name:
Title:
3
SYNDICATION AGENT: SUNTRUST BANK,
as a Syndication Agent and a Lender
By:
-----------------------------------
Name:
Title:
4
LENDERS: SCOTIABANC INC.
By:
-----------------------------------
Name:
Title:
5
LENDERS: DEN NORSKE BANK ASA
By:
-----------------------------------
Name:
Title:
6
LENDERS: WHITNEY NATIONAL BANK
By:
-----------------------------------
Name:
Title:
7