Derivative Contracts. (a) The Company and each Guarantor shall not, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except: (i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇; (iv) no such contract requires the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties. (ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or (iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; (iii) no such contract requires the Company to put up money, Property, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇. (b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Sources: Term Loan Agreement (Exploration Co of Delaware Inc)
Derivative Contracts. (a) The Company and each Guarantor shall notNo Loan Party shall, directly or indirectlypermit any of its Subsidiaries to, enter into or in any manner be liable on any Derivative Contract except:
(ia) Derivative Contracts entered into by the Company with the purpose and effect of fixing prices on oil limiting or gas reducing the market price risk of Oil and Gas expected to be produced by such Person; providedthe Company, however, the Acquired Company and their respective Subsidiaries provided that at all times times: (i) each such Derivative Contract limits or reduces such market price risk for a term of no such contract shall be for speculative purposesmore than sixty (60) months; (ii) as of any date (the “Calculation Date”) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), 8.10(a) (but excluding Derivative Contracts described in clause (vput option contracts or similar “floor” arrangements) of this Section 8.10(a)(i)requires the Loan Parties, shall cover a notional volume collectively, to deliver volumes in excess of the Applicable Percentage greater of (x) 85% of Total Proved Reserves or (y) the total Projected Oil following percentages of Proved Producing Reserves: Year Volumes 1 100 % 2 100 % 3 90 % 4 90 % 5 85 % provided, however, that with regard to a "costless collar" that involves the purchase of a put and Gas Production to the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be produced included in any month from calculating the Proved Developed Producing Reserves reflected in the most recent Reserve Report; applicable percentage threshold, and (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with between the Administrative Agent, or any of the Lenders (or Affiliate of Company and a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender)Derivative Provider, or with a an unsecured counterparty or have a Guarantor guarantor of the obligation of the unsecured counterparty whichwho, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 Baal or better, respectively, by S&P Standard & Poor’s Corporation or ▇M▇▇▇▇’▇; ▇ Investors Services, Inc. (ivor a successor credit rating agency) no such contract requires the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to excluding Derivative Contracts under offered by national commodity exchange for which the Company’s or a Guarantor’s only interest no credit rating is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.required);
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiib) Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, provided that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iiiii) no such contract contract, except those with a Lender or its Affiliate, when aggregated with all Derivative Contracts permitted under Sections 8.10(a) and (b), requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); , and (viii) each such contract shall be with a Lender (or an Affiliate of a Lender) Derivative Provider, or with a an unsecured counterparty or have a guarantor of the obligation of the an unsecured counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P Standard & Poor’s Corporation or ▇M▇▇▇▇’▇.▇ Investors Services, Inc. (or a successor credit rating agency);
(bc) In the event the Company enters into of a Derivative Contract with between the Company and any Lenderof the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits Any obligation of a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all other Obligations as more particularly provided under Section 9.02 and 11.11; and
(d) The Company shall not modify in any material respect to the extent it adversely affects the then-current Borrowing Base or terminate any Derivative Contracts to which it is currently a party or subsequently becomes a party without the consent of the provisions Administrative Agent, except that (i) Derivative Contracts with a party who ceases to be a Lender (or an Affiliate of a Lender) may be terminated in connection with the assignment, amendment or other transaction pursuant to which such party ceases to be a Lender or an Affiliate of a Lender, and (ii) so long as no Default or Event of Default exists, Derivative Contracts may be modified or terminated, provided that, the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination), as determined by the Administrative Agent, plus the aggregate value (as determined by the value assigned to such properties under the most recent Reserve Report) of all Dispositions of Oil and Gas Properties made by the Loan Documents Parties during such period, together, shall not exceed in any Borrowing Base Period five percent (5%) of the Borrowing Base then in effect; further provided that, the Borrowing Base shall be automatically reduced by an amount equal to the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination) and to the extent a Borrowing Base Deficiency results from such reduction, up to one-hundred percent (100%) of the cash and cash equivalent proceeds of such modifications or terminations of Derivative Contracts received by the Loan Parties, net of payment of, or provisions for reasonable out-of-pocket fees, expenses and taxes incurred by the Company in connection with such transaction, shall be applied, as necessary, to cure such Borrowing Base Deficiency;
(e) Derivative Contracts that would be permitted by Section 8.10
(a) pertaining to Oil and Gas Properties to be acquired pursuant to a Specified Acquisition; provided that Derivative Contracts pursuant to this Section 8.10(e) must be terminated within thirty (30) days of the earlier to occur of: (i) the date that is 90 days after the execution of the purchase and sale agreement relating to the Collateral shall also extend Specified Acquisition if the Specified Acquisition has not closed and (ii) the Company or the Parent obtaining knowledge with reasonable certainty that the Specified Acquisition will not be consummated; and
(f) Derivative Contracts entered into with the purpose and effect of fixing prices for greenhouse gas (GHG) allowances related to expected emissions of GHG from the Company’s and be available its Subsidiaries’ facilities located in the State of California, provided that at all times: (i) no such Derivative Contract fixes a price for a term of more than sixty (60) months; (ii) the aggregate monthly notional amounts covered by all such Derivative Contract (determined, in the case of Derivative Contracts that are not settled on a pro rata basis monthly basis, by a monthly proration reasonably acceptable to each Qualifying Derivative Contract Counterparty Administrative Agent) for any single month does not in respect to all Obligations the aggregate exceed 100% of the Company’s and its Subsidiaries’ aggregate projected GHG emissions from such facilities for such month, (iii) except for Letters of Credit and the Collateral under the Security Documents with respect to Obligations to Lender Derivative Providers, no such Derivative Contract requires the related Qualifying Company or any of its Subsidiaries to put up money, assets or other security against the event of its nonperformance prior to actual default in performing its obligations thereunder, and (iv) each such Derivative ContractContract is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Derivative Provider) at the time the Derivative Contract is made has long-term obligations rated A+ or A1, or better, respectively, by Standard & Poor’s Corporation or M▇▇▇▇’▇ Investors Services, Inc. (or a successor credit rating agency).
Appears in 1 contract
Derivative Contracts. (a) The Company and each Guarantor shall notNo Loan Party shall, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(ia) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of fixing or setting a floor for prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i8.10(a), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; provided, however, for purposes of the foregoing calculation, that any Derivative Contract under which the Company’s or any Guarantor’s interest is solely a put or an option to purchase a put shall not be considered when calculating the Applicable Percentage; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the First Lien Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent Lenders or any First Lien Lender (or Affiliate of a First Lien Lender)their Affiliates, or with a counterparty or have a Guarantor guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇; and (iv) no such contract requires the Company to put up money, Propertyassets, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the First Lien Administrative Agent for the benefit of the Lenders First Lien Secured Parties under the First Lien Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiib) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of (i) fixing or capping interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate, the notional amount of which does not exceed (when aggregated with all other Derivative Contracts of the Company then in effect and effectively converting interest rates from floating to fixed) 100% of the outstanding principal amount of Indebtedness which bears interest at a floating rate or (ii) converting the interest rate on a principal amount of Indebtedness of the Company that is accruing interest at a fixed rate to a floating rate the notional amount of which does not exceed (when aggregated with all Derivative Contracts of the Company then in effect effectively converting interest rates from fixed to floating) 100% of the outstanding principal amount of Indebtedness which bears interest at a fixed rate; provided, however, that that, in each case, (iA) no such contract shall be for speculative purposes; (iiB) in the case of clause (i) above, the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iiiC) no such contract requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; , (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (vD) each such contract shall be with a Lender (the First Lien Administrative Agent, or an Affiliate any of a Lender) the First Lien Lenders or their Affiliates, or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇.
, and (bE) In such Derivative Contracts shall correspond to the event tenor of the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under corresponding Indebtedness and (F) no such Derivative Contract shall not be applied against such Lender’s Commitment nor against remain in effect after the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations corresponding Indebtedness with respect to the related Qualifying which such Derivative ContractContract was originally entered into has been repaid in full.
Appears in 1 contract
Derivative Contracts. (a) The Company and each Guarantor shall not, and shall not permit any of its respective Subsidiaries to, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i)8.10, shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender)Lenders, the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇M▇▇▇▇’▇; (iv) no such contract requires the Company to put up money, Propertyassets, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent Collateral Trustee for the benefit of the Lenders Secured Parties under the Security Documents, Documents or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or ’s, a Guarantor’s or any of their respective Subsidiaries’ only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) either (1) there exists no deferred obligation to pay the related premium or other purchase price or (2) if there exists any deferred obligation to pay the related premium or other purchase price, the Company’s, such Guarantor’s or such Subsidiary’s aggregate net exposure does not exceed at any time prior to April 30, 2006, $15,000,000, and at any time thereafter until April 30, 2007, $5,000,000, following which date no such contracts are permitted to exist and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a)Agent; or
(iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iii) no such contract requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; , (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit AgreementAgreement as in effect on the Effective Date) during any Borrowing Base Period (as defined in the First Lien Credit AgreementAgreement as in effect on the Effective Date); , and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇Moody’s.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Sources: Term Loan Agreement (Venoco, Inc.)
Derivative Contracts. (a) The Company and each Guarantor shall notNo Loan Party shall, directly or indirectlypermit any of its Subsidiaries to, enter into or in any manner be liable on any Derivative Contract except:
(ia) Derivative Contracts entered into by the Company with the purpose and effect of fixing prices on oil limiting or gas reducing the market price risk of Oil and Gas expected to be produced by such Person; provided, however, the Company and its Subsidiaries provided that at all times times: (i) each such Derivative Contract limits or reduces such market price risk for a term of no such contract shall be for speculative purposesmore than sixty (60) months; (ii) as of any date (the “Calculation Date”) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), 8.10(a) (but excluding Derivative Contracts described in clause (vput option contracts or similar “floor” arrangements) of this Section 8.10(a)(i)requires the Loan Parties and BEP I, shall cover a notional volume in excess collectively, to deliver more than 85% of the Applicable Percentage of reasonably anticipated production for each month for the total Projected Oil and Gas Production to be produced in any month from classified as either “proved producing” or “proved developed non-producing” on (x) the Proved Developed Producing Reserves reflected in Oil and Gas Properties covered under the most recent Reserve Report; Report delivered to the Administrative Agent and (y) any Oil and Gas Properties acquired by the Loan Parties or BEP I after the effective date of such Reserve Report classified as “proved producing” or “proved developed non-producing,” (provided however, the “proved developed non-producing” reserves included in such calculation shall not exceed 20% of the “proved producing” reserves), provided, however, that with regard to a "costless collar" that involves the purchase of a put and the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be included in calculating the 85% threshold, and (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with between the Administrative Agent, or any of the Lenders (or Affiliate of Company and a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender)Derivative Provider, or with a an unsecured counterparty or have a Guarantor guarantor of the obligation of the unsecured counterparty whichwho, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 Baal or better, respectively, by S&P Standard & Poor’s Corporation or ▇▇▇▇▇’▇; ▇ Investors Services, Inc. (ivor a successor credit rating agency) (excluding (x) Derivative Contracts offered by national commodity exchange for which no such contract requires the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; rating is required and (vy) with respect to Derivative the Florida Crude Oil Purchase Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all for so long as such contracts are with Qualifying Derivative Contract Counterparties.Plains Marketing, L.P. or a wholly owned subsidiary of Plains All American Pipeline, L.P.);
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiib) Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, provided that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iiiii) no such contract contract, except those with a Lender or its Affiliate, when aggregated with all Derivative Contracts permitted under Sections 8.10(a) and (b), requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); , and (viii) each such contract shall be with a Lender (or an Affiliate of a Lender) Derivative Provider, or with a an unsecured counterparty or have a guarantor of the obligation of the an unsecured counterparty who, at the time the contract is made, has long-term obligations rated BBB+ A+ or Baa1 A1 or better, respectively, by S&P Standard & Poor’s Corporation or ▇▇▇▇▇’▇.▇ Investors Services, Inc. (or a successor credit rating agency);
(bc) In the event the Company enters into of a Derivative Contract with between the Company and any Lenderof the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits Any obligation of a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents with all other Obligations as more particularly provided under Section 9.02 and of the provisions of the Loan Documents relating to the Collateral 11.11; and
(d) The Company shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty not modify in respect to all Obligations with any material respect to the related Qualifying extent it adversely affects the then-current Borrowing Base or terminate any Derivative ContractContracts to which it is currently a party or subsequently becomes a party without the consent of the Administrative Agent, except that (i) Derivative Contracts with a party who ceases to be a Lender (or an Affiliate of a Lender) may be terminated in connection with the assignment, amendment or other transaction pursuant to which such party ceases to be a Lender or an Affiliate of a Lender, and (ii) so long as no Default or Event of Default exists, Derivative Contracts may be modified or terminated, provided that, the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination), as determined by the Administrative Agent, plus the aggregate value (as determined by the value assigned to such properties under the most recent Reserve Report) of all Dispositions of Oil and Gas Properties made by the Loan Parties during such period, together, shall not exceed in any Borrowing Base Period five percent (5%) of the Borrowing Base then in effect; further provided that, the Borrowing Base shall be automatically reduced by an amount equal to the net effect of the modifications or terminations of such Derivative Contracts (after giving effect to any new Derivative Contracts entered into during such Borrowing Base Period prior to or in connection with, such modification or termination) and to the extent a Borrowing Base Deficiency results from such reduction, up to one-hundred (100%) of the cash and cash equivalent proceeds of such modifications or terminations of Derivative Contracts received by the Loan Parties, net of payment of, or provisions for reasonable out-of-pocket fees, expenses and taxes incurred by the Company in connection with such transaction, shall be applied, as necessary, to cure such Borrowing Base Deficiency.
Appears in 1 contract
Derivative Contracts. (a) The Company and each Guarantor shall not, and shall not permit any of its respective Subsidiaries to, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “"Calculation Date”") no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender)Lenders, or with a counterparty or have a Guarantor guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’'▇; (iv) no such contract requires the Company to put up money, Propertyassets, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or 's, a Guarantor’s 's or any of their respective Subsidiaries' only interest is a “"put” " right or which is a commodity price hedge by means of a price “"floor” " (A) either (1) there exists no deferred obligation to pay the related premium or other purchase price or (2) if there exists any deferred obligation to pay the related premium or other purchase price, the Company's, such Guarantor's or such Subsidiary's aggregate net exposure does not exceed at any time prior to April 30, 2006, $15,000,000, and at any time thereafter until April 30, 2007, $5,000,000, following which date no such contracts are permitted to exist and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a)Required Lenders; or
(iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iii) no such contract requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; , (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); Period, and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’'▇.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s 's Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Sources: Credit Agreement (Venoco, Inc.)
Derivative Contracts. (a) The Company and each Guarantor shall notNo Loan Party shall, directly or indirectlypermit any of its Subsidiaries to, enter into or in any manner be liable on any Derivative Contract except:
(ia) Derivative Contracts entered into by the Company with the purpose and effect of fixing prices on oil limiting or gas reducing the market price risk of Oil and Gas expected to be produced by such Person; provided, however, the Company and its Subsidiaries provided that at all times times: (i) each such Derivative Contract limits or reduces such market price risk for a term of no such contract shall be for speculative purposesmore than sixty (60) months; (ii) as of any date (the “Calculation Date”) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), 8.10(a) (but excluding Derivative Contracts described in clause (vput option contracts or similar “floor” arrangements) of this Section 8.10(a)(i)requires the Loan Parties, shall cover a notional volume collectively, to deliver volumes in excess of the Applicable Percentage greater of (x) 80% of Total Proved Reserves or (y) 90% of Proved Producing Reserves; provided, however, that with regard to a "costless collar" that involves the total Projected Oil purchase of a put and Gas Production to the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be produced included in any month from calculating the Proved Developed Producing Reserves reflected in the most recent Reserve Report; applicable percentage threshold, and (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇; (iv) no such contract requires between the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to a Lender Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.Provider;
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiib) Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, provided that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; (iii) no such contract requires the Company to put up money, Property, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (vii) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇.Derivative Provider;
(bc) In the event the Company enters into of a Derivative Contract with between the Company and any Lenderof the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits Any obligation of a Loan Party under any Lender Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to with all other Obligations with respect to the related Qualifying Derivative Contract.as more particularly provided under Section 9.02
Appears in 1 contract
Derivative Contracts. (a) The Company and each Guarantor No Loan Party shall not, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(ia) Derivative Contracts entered into by the Company with the purpose and effect of fixing prices on oil limiting or gas reducing the market price risk of Oil and Gas expected to be produced by such Person; provided, however, the Company and each Subsidiary provided that at all times times: (i) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of no such contract shall be for speculative purposesmore than sixty (60) months; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), Subsection 8.10
(a) (but excluding Derivative Contracts described in clause (vput option contracts that are not related to corresponding calls, collars or swaps) of this Section 8.10(a)(i), shall cover a notional volume in excess requires the Loan Parties to deliver more than 85% of the Applicable Percentage of reasonably anticipated production for each month for the total Projected Oil and Gas Production to be produced classified as either "proved producing" or "proved developed non-producing" (provided however, the "proved developed non-producing" reserves included in any month from such calculation shall not exceed 20% of the Proved Developed Producing Reserves reflected in "proved producing" reserves) on the most recent Reserve Report; Report delivered to the Administrative Agent covering the Oil and Gas Properties, and (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with between the Company or a Subsidiary and the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender)its Affiliate, or with a an unsecured counterparty or have a Guarantor guarantor of the obligation of the unsecured counterparty whichwho, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 Baal or better, respectively, by S&P Standard & Poor's Corporation or ▇▇▇▇▇’▇; '▇ Investors Services, Inc. (iv) no such contract requires the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.successor credit rating agency);
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiib) Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, provided that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iiiii) no such contract contract, except those with a Lender or its Affiliate, when aggregated with all Derivative Contracts permitted under Subsections 8.10(a) and (b), requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); , and (viii) each such contract shall be with a Lender (or an Affiliate of a Lender) its Affiliate, or with a an unsecured counterparty or have a guarantor of the obligation of the an unsecured counterparty who, at the time the contract is made, has long-term obligations rated BBB+ A+ or Baa1 A1 or better, respectively, by S&P Standard & Poor's Corporation or ▇▇▇▇▇’▇.'▇ Investors Services, Inc. (or a successor credit rating agency);
(bc) In the event the Company enters into of a Derivative Contract with between the Company and any Lenderof the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s 's Commitment nor against the Effective Amount. The benefits of Any Indebtedness to any Lender or its Affiliate incurred under any Derivative Contract shall be treated as an Obligation pari passu and secured pro rata under the Security Documents and with all Obligations otherwise incurred hereunder or under the other Loan Documents as more particularly provided under Section 11.11; and
(d) The Company shall not modify or terminate any Derivative Contracts to which it is currently a party or subsequently becomes a party without the consent of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative ContractRequired Lenders.
Appears in 1 contract
Derivative Contracts. (a) The Company Borrower and each Guarantor shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (iA) no such contract shall be for speculative purposes; (iiB) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(ia)(i), shall cover a notional volume in excess of the Applicable Percentage 80% of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Reportmonth; (iiiC) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders an Approved Counterparty; and (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇; (ivD) no such contract requires the Company Borrower to put up money, Propertyassets, letters of credit or other security against the event of its non-performance prior to actual default by the Company Borrower in performing its obligations thereunder, except Liens in favor of the Administrative Agent Collateral Trustee for the benefit of the Lenders Secured Parties under the Security Documents, Documents or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The the Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a)Agent; or
(iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company Borrower that is accruing interest at a variable rate; provided, however, that (iA) no such contract shall be for speculative purposes; (iiB) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company Borrower to be hedged by such contract; , (iiiC) no such contract requires the Company Borrower to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company Borrower in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); , and (vD) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇Approved Counterparty.
(b) In the event the Company Borrower enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Sources: Term Loan Agreement (Venoco, Inc.)
Derivative Contracts. (a) The Company and each Guarantor Borrower shall not, directly or indirectly, not enter into or in any manner be liable on under any Derivative Contract except:
(ia) Derivative Contracts as required under Section 5.21;
(b) Derivative Contracts entered into with the purpose and effect of fixing hedging prices on oil or gas hydrocarbons attributable to the Borrowing Base Properties and expected to be produced by such Person; provided, however, the Borrower provided that at all times times: (i) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of no such contract shall be for speculative purposesmore than twenty-four (24) months; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause 6.2 and/or required under Section 5.21 requires the Borrower to deliver more than seventy-five percent (v75%) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production estimated hydrocarbons to be produced in for any month from the Proved Developed Producing Reserves reflected proved developed producing Oil and Gas Properties as so designated in the most recent Reserve Reportreserve report furnished by the Borrower under this Agreement; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has longan Acceptable Counter-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇party; and (iv) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Company Borrower to put up money, Property, letters of credit credit, assets, or any other security against the event of its non-performance nonperformance prior to actual default by the Company Borrower in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.and
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiic) Derivative Contracts entered into with the purpose and effect of fixing hedging interest rates on a principal amount of Indebtedness Debt of the Company Borrower that is accruing interest at a variable rate; provided, however, provided that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness Debt of the Company Borrower to be hedged by such contractcontract and in no event shall the term of such contract extend beyond the Termination Date; (ii) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract with a counter-party other than the Lender or Affiliate of the Lender requires the Company Borrower to put up money, Property, letters of credit, assets, or any other security against the event of its non-performance nonperformance prior to actual default by the Company Borrower in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Sources: Credit Agreement (Cubic Energy Inc)
Derivative Contracts. (a) The Company and Company, each Guarantor and their respective Subsidiaries shall not, directly or indirectly, not enter into or in any manner be liable on any Derivative Contract except:
(ia) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or and/or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as no such contract fixes a price for a term of any date more than twenty-four (the “Calculation Date”24) months; (iii) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i8.10(a), shall cover a notional volume in excess of the Applicable Percentage 80% of the total Projected estimated Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in Oil and Gas Properties classified as proved developed producing on the most recent Reserve Report; , (iiiiv) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender)Lenders, or with a counterparty or have a Guarantor guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’'▇; and (ivv) no such contract requires the Company to put up money, Propertyassets, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(iib) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); orRequired Lenders.
(iiic) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iii) no such contract requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; , (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); Period, and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’'▇.
(bd) In the event the Company enters into a Derivative Contract with any Lenderof the Lenders, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s 's Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty Lender and its Affiliates (or former Lender or its Affiliates) in respect to all Obligations with respect Indebtedness, advances, debts, liabilities, obligations, covenants and duties, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising, of the related Qualifying Company or any of its Subsidiaries owed to such Lender or its Affiliates or former Lender or its Affiliates under any Derivative Contract; provided, however, that such former Lender was a Lender hereunder at the time it entered into such Derivative Contract.
Appears in 1 contract
Sources: Credit Agreement (BMC, Ltd.)
Derivative Contracts. (a) The Company and each Guarantor Borrower shall not, directly or indirectly, not enter into or in any manner be liable on under any Derivative Contract except:
(ia) Derivative Contracts as required under Section 5.19;
(b) Derivative Contracts entered into with the purpose and effect of fixing hedging prices on oil or gas hydrocarbons attributable to the Oil and Gas Properties of the Borrower and expected to be produced by such Person; provided, however, the Borrower provided that at all times times: (i) the aggregate of all such Derivative Contracts limits or reduces such market price risk for a term of no such contract shall be for speculative purposesmore than twenty-four (24) months; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause 6.2 and/or required under Section 5.19 requires the Borrower to deliver more than seventy-five percent (v75%) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production estimated hydrocarbons to be produced in for any month from the Proved Developed Producing Reserves reflected proved developed producing Oil and Gas Properties as so designated in the most recent Reserve Reportreserve report furnished by the Borrower under this Agreement; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has longan Acceptable Counter-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇party; and (iv) no such contract with a counter-party other than the Lender, Affiliate of the Lender or BP requires the Company Borrower to put up money, Property, letters of credit credit, assets, or any other security against the event of its non-performance nonperformance prior to actual default by the Company Borrower in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.and
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiic) Derivative Contracts entered into with the purpose and effect of fixing hedging interest rates on a principal amount of Indebtedness Debt of the Company Borrower that is accruing interest at a variable rate; provided, however, provided that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness Debt of the Company Borrower to be hedged by such contractcontract and in no event shall the term of such contract extend beyond the Termination Date; (ii) each such contract shall be with an Acceptable Counter-party; and (iii) no such contract with a counter-party other than the Lender, Affiliate of the Lender or BP requires the Company Borrower to put up money, Property, letters of credit, assets, or any other security against the event of its non-performance nonperformance prior to actual default by the Company Borrower in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Sources: Credit Agreement (Cubic Energy Inc)
Derivative Contracts. (a) The Company and each Guarantor shall not, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Second Lien Credit Agent or any First Second Lien Credit Lender (or Affiliate of a First Second Lien Credit Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇; (iv) no such contract requires the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, Documents or the First LiensLiens securing Obligations (as defined in the Second Lien Term Loan Agreement); and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; (iii) no such contract requires the Company to put up money, Property, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement)Period; and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Derivative Contracts. (a) The Company and each Guarantor shall notNo Loan Party shall, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of fixing or setting a floor for prices on oil or gas expected to be produced by such Person; provided, however, that at all times (ia) no such contract shall be for speculative purposes; (iib) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; provided, however, for purposes of the foregoing calculation, that any Derivative Contract under which the Company’s or any Guarantor’s interest is solely a put or an option to purchase a put shall not be considered when calculating the Applicable Percentage; (iiic) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender)their Affiliates, or with a counterparty or have a Guarantor guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇; and (ivd) no such contract requires the Company to put up money, Propertyassets, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders Secured Parties under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iiiii) Derivative Contracts entered into in the ordinary course of business with the purpose and effect of (A) fixing or capping interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate, the notional amount of which does not exceed (when aggregated with all other Derivative Contracts of the Company then in effect and effectively converting interest rates from floating to fixed) 100% of the outstanding principal amount of Indebtedness which bears interest at a floating rate or (B) converting the interest rate on a principal amount of Indebtedness of the Company that is accruing interest at a fixed rate to a floating rate the notional amount of which does not exceed (when aggregated with all Derivative Contracts of the Company then in effect effectively converting interest rates from fixed to floating) 100% of the outstanding principal amount of Indebtedness which bears interest at a fixed rate; provided, however, that that, in each case, (i) no such contract shall be for speculative purposes; (ii) in the case of clause (A) above, the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iii) no such contract requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; , (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (v) each such contract shall be with a Lender (the Administrative Agent or an Affiliate any of a Lender) the Lenders or any Affiliates of the foregoing or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇, and (v) such Derivative Contracts shall correspond to the tenor of the corresponding Indebtedness and (iv) no such Derivative Contract shall remain in effect after the corresponding Indebtedness with respect to which such Derivative Contract was originally entered into has been repaid in full.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation contingent obligations evidenced under such Derivative Contract shall not be applied against such Lender’s Commitment nor against the Effective Amount. The benefits of the Guaranty and the Security Documents and of the provisions of the Loan Documents relating to the Collateral and status as a Secured Party shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative ContractTransactions under Qualifying Derivative Contracts but not with respect to other transactions thereunder which are not Qualifying Derivative Transactions.
Appears in 1 contract
Sources: Credit Agreement (Venoco, Inc.)
Derivative Contracts. (a) The Company and each Guarantor shall not, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “"Calculation Date”") no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve ReportReport (unless and solely to the extent such an excess occurs in a month falling within a period covered by a Derivative Contract entered into by the Company to maintain compliance with Section 7.16); (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’'▇; (iv) no such contract requires the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s 's or a Guarantor’s 's only interest is a “"put” " right or which is a commodity price hedge by means of a price “"floor” " (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; (iii) no such contract requires the Company to put up money, Property, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit Agreement) during any Borrowing Base Period (as defined in the First Lien Credit Agreement); and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇Moody's.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s 's Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Derivative Contracts. (a) The Company and each Guarantor shall not, and shall not permit any of its respective Subsidiaries to, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “"Calculation Date”") no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i)8.10, shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender)Lenders, the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’'▇; (iv) no such contract requires the Company to put up money, Propertyassets, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent Collateral Trustee for the benefit of the Lenders Secured Parties under the Security Documents, Documents or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or 's, a Guarantor’s 's or any of their respective Subsidiaries' only interest is a “"put” " right or which is a commodity price hedge by means of a price “"floor” " (A) either (1) there exists no deferred obligation to pay the related premium or other purchase price or (2) if there exists any deferred obligation to pay the related premium or other purchase price, the Company's, such Guarantor's or such Subsidiary's aggregate net exposure does not exceed at any time prior to April 30, 2006, $15,000,000, and at any time thereafter until April 30, 2007, $5,000,000, following which date no such contracts are permitted to exist and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a)Required Lenders; or
(iii) Derivative Contracts entered into with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate; provided, however, that (i) no such contract shall be for speculative purposes; (ii) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract; , (iii) no such contract requires the Company to put up money, Propertyassets, letters of credit, or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder; , (iv) the aggregate notional amount of the Derivative Contracts shall not exceed fifty percent (50%) of the Borrowing Base (as defined in the First Lien Credit AgreementAgreement as in effect on the Effective Date) during any Borrowing Base Period (as defined in the First Lien Credit AgreementAgreement as in effect on the Effective Date); , and (v) each such contract shall be with a Lender (or an Affiliate of a Lender) or with a counterparty or have a guarantor of the obligation of the counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’'▇.
(b) In the event the Company enters into a Derivative Contract with any Lender, the Contingent Obligation evidenced under such Derivative Contract shall not be applied against such Lender’s 's Commitment nor against the Effective Amount. The benefits of the Security Documents and of the provisions of the Loan Documents relating to the Collateral shall also extend to and be available on a pro rata basis to each Qualifying Derivative Contract Counterparty in respect to all Obligations with respect to the related Qualifying Derivative Contract.
Appears in 1 contract
Sources: Term Loan Agreement (Venoco, Inc.)