1
Exhibit 10.1
EXECUTION COPY
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$200,000,000
CREDIT AGREEMENT
AMONG
BB MERGER CORP.,
AS BORROWER
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
BANKERS TRUST COMPANY,
AS SYNDICATION AGENT
AND
NATIONSBANK OF TEXAS, N.A.,
AS DOCUMENTATION AGENT
DATED AS OF JUNE 27, 1997
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS......................................................................................... 1
1.1 Defined Terms.................................................................................... 1
1.2 Other Definitional Provisions.................................................................... 17
SECTION 2. AMOUNT AND TERMS OF REVOLVING COMMITMENTS .......................................................... 18
2.1 Revolving Credit Commitments..................................................................... 18
2.2 Procedure for Revolving Credit Borrowing......................................................... 18
2.3 Repayment of Loans; Evidence of Debt............................................................. 19
SECTION 3. LETTERS OF CREDIT................................................................................... 19
3.1 The L/C Commitment............................................................................... 19
3.2 Procedure for Issuance of Letters of Credit...................................................... 20
3.3 Fees, Commissions and Other Charges.............................................................. 20
3.4 L/C Participations............................................................................... 21
3.5 Reimbursement Obligation of the Borrower......................................................... 22
3.6 Obligations Absolute............................................................................. 22
3.7 Letter of Credit Payments........................................................................ 22
3.8 L/C Applications................................................................................. 23
SECTION 4. GENERAL PROVISIONS.................................................................................. 23
4.1 Interest Rates and Payment Dates................................................................. 23
4.2 Computation of Interest and Fees................................................................. 23
4.3 Conversion and Continuation Options.............................................................. 23
4.4 Minimum Amounts Maximum Number of Tranches....................................................... 24
4.5 Optional Prepayments and Commitment Reductions................................................... 24
4.6 Commitment Fee; Administrative Agent's Fee; Other Fees........................................... 25
4.7 Inability to Determine Interest Rate............................................................. 26
4.8 Pro Rata Treatment and Payments.................................................................. 26
4.9 Computation of Borrowing Base.................................................................... 27
4.10 Borrowing Base Compliance........................................................................ 28
4.11 Illegality....................................................................................... 29
4.12 Requirements of Law.............................................................................. 29
4.13 Taxes............................................................................................ 30
4.14 Indemnity........................................................................................ 31
4.15 Change of Lending Office......................................................................... 31
SECTION 5. REPRESENTATIONS AND WARRANTIES...................................................................... 32
5.1 Financial Condition.............................................................................. 32
5.2 No Change........................................................................................ 33
5.3 Corporate Existence; Compliance with Law......................................................... 33
5.4 Corporate Power; Authorization; Enforceable Obligations.......................................... 33
5.5 No Legal Bar..................................................................................... 34
5.6 No Material Litigation........................................................................... 34
5.7 No Default....................................................................................... 34
5.8 Ownership of Property; Liens..................................................................... 34
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5.9 Intellectual Property............................................................................ 34
5.10 No Burdensome Restrictions....................................................................... 35
5.11 Taxes............................................................................................ 35
5.12 Federal Reserve Regulations...................................................................... 35
5.13 ERISA............................................................................................ 35
5.14 Investment Company Act; Other Regulations........................................................ 35
5.15 Subsidiaries..................................................................................... 36
5.16 Purpose of Loans................................................................................. 36
5.17 Environmental Matters............................................................................ 36
5.18 No Material Misstatements........................................................................ 37
5.19 Capitalization of ▇▇▇▇▇▇ & ▇▇▇▇▇ and the Borrower................................................ 37
5.20 Location of Real Property and Leased Premises.................................................... 37
5.21 Solvency......................................................................................... 37
5.22 Labor Matters.................................................................................... 38
5.23 Insurance........................................................................................ 38
5.24 Future Commitments............................................................................... 38
5.25 Security Documents............................................................................... 38
SECTION 6. CONDITIONS PRECEDENT................................................................................ 39
6.1 Conditions to Initial Extensions of Credit....................................................... 39
6.2 Conditions to Each Extension of Credit........................................................... 42
SECTION 7. AFFIRMATIVE COVENANTS............................................................................... 43
7.1 Financial Statements............................................................................. 43
7.2 Certificates; Other Information.................................................................. 44
7.3 Payment of Obligations........................................................................... 45
7.4 Conduct of Business and Maintenance of Existence; Compliance with Law and
Contractual Obligations....................................................................... 45
7.5 Maintenance of Property; Insurance............................................................... 45
7.6 Inspection of Property; Books and Records; Discussions........................................... 45
7.7 Notices.......................................................................................... 46
7.8 Environmental Laws............................................................................... 46
7.9 Further Assurances............................................................................... 47
7.10 Additional Collateral............................................................................ 47
7.11 Collateral Value................................................................................. 48
7.12 Oil and Gas Mortgages............................................................................ 48
7.13 Maintenance and Operation of Property............................................................ 48
SECTION 8. NEGATIVE COVENANTS.................................................................................. 49
8.1 Financial Covenant Conditions.................................................................... 49
8.2 Limitation on Indebtedness....................................................................... 50
8.3 Limitation on Liens.............................................................................. 51
8.4 Limitation on Guarantee Obligations.............................................................. 52
8.5 Limitation on Fundamental Changes................................................................ 52
8.6 Limitation on Sale of Assets..................................................................... 53
8.7 Limitation on Dividends.......................................................................... 54
8.8 Limitation on Investments, Loans and Advances.................................................... 54
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8.9 Limitation on Optional Payments and Modifications of Debt Instruments, Other
Material Agreements........................................................................... 55
8.10 Limitation on Transactions with Affiliates....................................................... 55
8.11 Limitation on Sales and Leasebacks............................................................... 56
8.12 Limitation on Changes in Fiscal Year............................................................. 56
8.13 Limitation on Negative Pledge Clauses............................................................ 56
8.14 Limitation on Lines of Business.................................................................. 56
8.15 Redeemable Capital Stock......................................................................... 56
8.16 Forward Sales.................................................................................... 56
8.17 Hedging Agreements............................................................................... 57
SECTION 9. EVENTS OF DEFAULT................................................................................... 57
SECTION 10. THE AGENTS......................................................................................... 60
10.1 Appointment..................................................................................... 60
10.2 Delegation of Duties............................................................................ 60
10.3 Exculpatory Provisions.......................................................................... 60
10.4 Reliance by Administrative Agent................................................................ 60
10.5 Notice of Default............................................................................... 61
10.6 Non-Reliance on Administrative Agent and Other Lenders.......................................... 61
10.7 Indemnification................................................................................. 61
10.8 Administrative Agent in Its Individual Capacity................................................. 62
10.9 Successor Administrative Agent.................................................................. 62
10.10 Issuing Lender.................................................................................. 62
10.11 Syndication Agent and Documentation Agent....................................................... 62
SECTION 11. MISCELLANEOUS...................................................................................... 62
11.1 Amendments and Waivers.......................................................................... 62
11.2 Notices......................................................................................... 63
11.3 No Waiver; Cumulative Remedies.................................................................. 64
11.4 Survival of Representations and Warranties...................................................... 64
11.5 Payment of Expenses and Taxes................................................................... 64
11.6 Successors and Assigns; Participations and Assignments.......................................... 65
11.7 Adjustments; Set-off............................................................................ 67
11.8 Counterparts.................................................................................... 68
11.9 Severability.................................................................................... 68
11.10 Integration..................................................................................... 68
11.11 GOVERNING LAW................................................................................... 68
11.12 Submission To Jurisdiction; Waivers............................................................. 68
11.13 Acknowledgments................................................................................. 69
11.14 WAIVERS OF JURY TRIAL........................................................................... 69
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SCHEDULES
1.1(a) Commitments
1.1(b) Refinanced Indebtedness
1.1(c) Assumed Indebtedness
1.1(d) Certain Subsidiaries
5.1 Sales, Transfers and Dispositions
5.15 Subsidiaries
5.19 Capital Stock
5.20A Owned Real Property
5.20B Leased Real Property
5.24 Future Commitments
5.25 Financing Statements
6.1 Sources and Uses of Funds
8.3 Existing Liens
8.4 Guarantee Obligations
8.10 Affiliated Transactions
11.2 Addresses for Notices
EXHIBITS
A Form of Revolving Credit Note
B-1 Form of Guarantee and Collateral Agreement
B-2 Form of Parent Pledge Agreement
C-1 Form of Opinion of Counsel to the Loan Parties
C-2 Form of Opinion of Counsel to Parent
C-3 Form of Opinion of Michigan Counsel to the Loan Parties
C-4 Form of Opinion of Ohio Counsel to the Loan Parties
C-5 Form of Opinion of Pennsylvania and New York Counsel to the Loan
Parties
C-6 Form of Opinion of West Virginia Counsel to Loan Parties
D-1 Form of Michigan Mortgage
D-2 Form of New York Mortgage
D-3 Form of Ohio Mortgage
D-4 Form of Pennsylvania Mortgage
D-5 Form of West Virginia Mortgage
E Form of Borrowing Certificate
F Form of Assignment and Acceptance
G Form of Assumption Agreement
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CREDIT AGREEMENT, dated as of June 27, 1997, among BB Merger
Corp., an Ohio corporation, the several banks, financial institutions and other
entities from time to time parties to this Agreement (collectively, the
"LENDERS"), The Chase Manhattan Bank, as administrative agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT"), Bankers Trust Company, as
syndication agent for the Lenders (in such capacity, the "SYNDICATION AGENT"),
and NationsBank of Texas, N.A., as documentation agent for the Lenders (in such
capacity, the "DOCUMENTATION AGENT").
W I T N E S S E T H:
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WHEREAS, BB Merger Corp., TPG Partners II, L.P. ("TPG"), and
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation have entered into an Agreement and Plan of Merger,
dated as of March 27, 1997 (the "Acquisition Agreement");
WHEREAS, as contemplated by the Acquisition Agreement, BB
Merger Corp., simultaneously with the making of the initial Loans (as
hereinafter defined), shall merge with and into ▇▇▇▇▇▇ & Blake (the
"ACQUISITION"), which shall be the surviving corporation and a wholly-owned
direct subsidiary of TPG, two partnerships affiliated with TPG and ▇▇▇▇▇▇▇ ▇▇▇▇
& Company, L.L.C., an unrelated third-party investor (collectively, "PARENT");
WHEREAS, in order to finance a portion of the Acquisition
(including related fees and expenses), to repay existing indebtedness and to
provide financing for the general corporate requirements of the Borrower (as
defined herein) and its subsidiaries after the Acquisition, (i) the Borrower has
requested that the Lenders make up to $200 million in senior secured Revolving
Credit Loans, subject to the terms and conditions set forth herein, (ii) the
Borrower intends to issue through a Rule 144A offering (the "SENIOR SUBORDINATED
NOTE OFFERING") at least $225 million in aggregate principal amount of
high-yield senior subordinated debt securities (the "SENIOR SUBORDINATED NOTES")
and (iii) the Parent shall provide at least $108.2 million of cash proceeds to
the Borrower in exchange for the issuance of common equity of the Borrower;
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "PRIME RATE" shall mean
the rate of interest per annum publicly announced from time to time by
Chase as its prime rate in effect at its principal office in New York
City (the Prime Rate not being intended to be the lowest rate of
interest charged by Chase in connection with extensions of credit to
debtors); "BASE CD RATE" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "THREE-MONTH SECONDARY CD
RATE" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board of Governors of the Federal Reserve System
(the
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"BOARD") through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall
not be so reported on such day or such next preceding Business Day, the
average of the secondary market quotations for three-month certificates
of deposit of major money center banks in New York City received at
approximately 10:00 A.M., New York City time, on such day (or, if such
day shall not be a Business Day, on the next preceding Business Day) by
the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it;
and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published 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 which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it. Any
change in the ABR due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is
based upon the ABR.
"ACQUISITION": as defined in the recitals to this Agreement.
"ACQUISITION AGREEMENT:" as defined in the recitals to this
Agreement.
"ACQUISITION DOCUMENTS": the collective reference to the
Acquisition Agreement and any other agreements, instruments and other
documents delivered in connection therewith, as amended, supplemented
or otherwise modified in accordance with the terms of this Agreement.
"ADMINISTRATIVE AGENT": as defined in the preamble to this
Agreement.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"AGENTS": the collective reference to the Administrative
Agent, the Syndication Agent and the Documentation Agent.
"AGGREGATE REVOLVING CREDIT EXPOSURE": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount
of all Loans made by such Lender then outstanding and (b) such Lender's
Commitment Percentage of the Letter of Credit Outstanding at such time.
"AGREEMENT": this Credit Agreement, as further amended,
supplemented or otherwise modified from time to time.
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"APPLICABLE MARGIN": for any day with respect to ABR Loans and
Eurodollar Loans, the applicable per annum rate set forth below
opposite the Borrowing Base Usage in effect on such day:
Eurodollar Commitment
BORROWING BASE USAGE ABR MARGIN MARGIN FEE
-------------------- ---------- ------ ---
Greater than or equal to .50% 1.50% .50%
50%
Less than 50% .25% 1.25% .375%
As used herein, "BORROWING BASE USAGE" on any day means the percentage
equivalent of the ratio of (i) the aggregate of the aggregate principal
amount of the Loans then outstanding and Letter of Credit Outstanding
on such day to (ii) the Borrowing Base in effect on such day.
"ARRANGER": Chase Securities Inc.
"ASSIGNEE": as defined in subsection 11.6(c).
"ASSUMPTION AGREEMENT": the Agreement, substantially in the
form of Exhibit G hereto, to be executed on the Closing Date by ▇▇▇▇▇▇
& Blake and the Administrative Agent.
"AVAILABLE COMMITMENT": as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Revolving Credit Commitment over (b) such Lender's Aggregate Revolving
Credit Exposure.
"▇▇▇▇▇▇ & ▇▇▇▇▇": ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, an Ohio
Corporation.
"BORROWER": (a) prior to the Acquisition, BB Merger Corp., an
Ohio Corporation, and (b) upon and following consummation of the
Acquisition, ▇▇▇▇▇▇ & Blake or any successor thereof.
"BORROWER REDETERMINATION NOTICE": a notice from the Borrower
to each member of the Engineering Committee requesting that the
Engineering Committee redetermine the Borrowing Base, which notice may
be sent by the Borrower at any time, PROVIDED no more than one such
notice may be delivered by the Borrower during any consecutive 12 month
period.
"BORROWING BASE": at any time of determination, the amount
then in effect as determined in accordance with subsection 4.9;
PROVIDED, HOWEVER, that from the date hereof until such time as the
Borrowing Base is so redetermined in accordance with subsection 4.9,
the Borrowing Base shall be $180,000,000.
"BORROWING BASE AVAILABILITY": as to any Lender at any time,
an amount equal to the excess, if any, of (a) such Lender's Commitment
Percentage of the Borrowing Base in effect at such time and (b) such
Lender's Aggregate Revolving Credit Exposure.
"BORROWING BASE DEFICIENCY": as defined in subsection 4.10.
"BORROWING BASE PERIOD": (a) initially, the period commencing
on the Closing Date and ending on the date the Borrowing Base is next
redetermined pursuant to subsection 4.9
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and (b) thereafter, each period commencing on the last day of the
immediately preceding Borrowing Base Period and ending on the earlier
of (i) the immediately succeeding January 1 (or July 1, if the
Borrowing Base is redetermined semi-annually in accordance with
subsection 4.9); and (ii) the date of the first Reserve Report, if any,
issued since the commencement of such Borrowing Base Period in
connection with a Borrower Redetermination Notice or a Lender
Redetermination Notice.
"BORROWING BASE USAGE": as defined under the definition of
Applicable Margin.
"BORROWING DATE": any Business Day specified in a notice
pursuant to subsection 2.2 or 3.2 as a date on which the Borrower
requests the Lenders to make Loans or the Issuing Lender to issue a
Letter of Credit hereunder.
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"CAPITAL LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"CASH EQUIVALENTS": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank (i) having capital and
surplus in excess of $500,000,000 or (ii) which has a short-term
commercial paper rating which satisfies the requirements set forth in
clause (d) below, (c) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities issued, fully guaranteed or insured by the United States
Government or any agency thereof, (d) commercial paper of a domestic
issuer rated at least A-2 by Standard and Poor's Ratings Group ("S&P")
or P-2 by ▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S"), (e) securities
with maturities of one year or less from the date of acquisition issued
or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A by Moody's, (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition or (g)
shares of money market mutual or similar funds which have assets in
excess of $100,000,000.
"C/D ASSESSMENT RATE": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well- capitalized and
within supervisory subgroup "B" (or a comparable successor assessment
risk classification) within the meaning of 12 C.F.R. section 327.4 (or
any successor provision) to the
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FDIC (or any successor) for the FDIC's (or such successor's) insuring
time deposits at offices of such institution in the United States.
"C/D RESERVE PERCENTAGE": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) (the "BOARD"), for determining the
maximum reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits
in Dollars having a maturity of 30 days or more.
"CHANGE OF CONTROL": the occurrence of any of the events set
forth in paragraph (k) of Section 9.
"CHASE": The Chase Manhattan Bank.
"CLOSING DATE": the date on which the conditions precedent set
forth in subsection 6.1 shall be satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COMMITMENTS": the collective reference to the Revolving
Credit Commitments and the L/C Commitment.
"COMMITMENT PERCENTAGE": as to any Lender at any time, the
percentage which such Lender's Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments (or, at any
time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Credit Loans then
outstanding).
"COMMITMENT PERIOD": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
"COMMODITY HEDGING AGREEMENT": a commodity hedging or purchase
agreement or similar arrangement entered into with the intent of
protecting against fluctuations in commodity prices or the exchange of
notional commodity obligations, either generally or under specific
contingencies.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"CONSOLIDATED INTEREST EXPENSE": with respect to the Borrower
and its Subsidiaries on a consolidated basis for any period, the sum of
(i) gross interest expense (including all cash and accrued interest
expense) of the Borrower and its Subsidiaries for such period on a
consolidated basis, including to the extent included in interest
expense in accordance with
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GAAP (x) the amortization of debt discounts and (y) the portion of any
payments or accruals with respect to Capital Leases allocable to
interest expense and (ii) capitalized interest of the Borrower and its
Subsidiaries on a consolidated basis.
"CONSOLIDATED NET INCOME": for any period, net income of the
Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP, excluding, however, any extraordinary or
nonrecurring gain (but not loss), together with any related provision
for taxes on such extraordinary or nonrecurring gain (but not loss).
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"DEFAULT": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DOCUMENTATION AGENT": as defined in the preamble to this
Agreement.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": with respect to the Borrower, for any period,
Consolidated Net Income for that period, PLUS, without duplication and
to the extent deducted from revenues in determining Consolidated Net
Income for that period, (a) the aggregate amount of Consolidated
Interest Expense for that period, (b) the aggregate amount of letter of
credit fees paid during that period, (c) the aggregate amount of income
tax expense for that period, (d) all amounts attributable to
depreciation, depletion and amortization for that period, (e) the
aggregate amount of exploration expenses for that period, (f) the
aggregate amount of any extraordinary or nonrecurring loss (but not
gain), together with any related provision for taxes for such loss (but
not gain) for that period (g) the aggregate cost incurred in connection
with the Acquisition for that period, to the extent such costs were not
capitalized and (h) all non-cash or extraordinary expenses during that
period, and MINUS, without duplication and to the extent added to
revenues in determining Consolidated Net Income for that period, all
non-cash or extraordinary income during that period, in each case
determined in accordance with GAAP and without duplication of amounts.
"ENGINEERING COMMITTEE": Chase, Bankers Trust and NationsBank.
"ENVIRONMENTAL CONSULTANT": as defined in subsection 7.8(c).
"ENVIRONMENTAL LAWS": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, or other legally
enforceable requirement (including, without limitation, common law) of
any foreign government, the United States, or any state, local,
municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, as has been, is now, or may at any time
hereafter be, in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
registrations, notifications, approvals, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
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"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of
the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate per annum for Dollar deposits with a maturity
comparable to such Interest Period which appears on the Telerate
British Bankers Assoc. Interest Settlement Rates Page at approximately
10:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period; PROVIDED that if there shall no longer exist a
Telerate British Bankers Assoc. Interest Settlement Rates Page, the
Eurodollar Base Rate shall mean an interest rate per annum equal to the
average (rounded upward, if necessary, to the next 1/16th of 1%) of the
respective rates per annum notified to the Administrative Agent by each
of the Reference Banks as the average of the rates at which Dollar
deposits (in an amount comparable to the amount of such Reference
Lender's Eurodollar Loan to be outstanding during such Interest Period
and for a maturity comparable to such Interest Period) are offered to
such Reference Bank in immediately available funds by prime banks in
the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"TELERATE BRITISH BANKERS ASSOC. INTEREST SETTLEMENT RATES PAGE" shall
mean the display designated as Page 3750 on Teleratesystem Incorporated
(or such other replacement page thereof used to display London
interbank offered rates of major banks).
"EURODOLLAR LOANS": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in Section 9,
PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time, PROVIDED that for
purposes of determining compliance with the covenants contained in
Section 8, "GAAP" shall mean generally accepted accounting principles
in the United States of America as in effect on the date hereof and
applied on a basis consistent with the application used in the
financial statements referred to in subsection 5.1.
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and
Collateral Agreement executed and delivered by the Borrower and each of
the Guarantors, dated as of June 27, 1997, substantially in the form of
Exhibit B-1, as amended, modified or supplemented from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "PRIMARY OBLIGATIONS") of
any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith. Obligations of the Borrower
or any Subsidiary pursuant to indemnities which (a) are granted in the
ordinary course of business, including, without limitation, such
obligations in connection with stock purchase agreements or asset
purchase and sale agreements and (b) do not cover Indebtedness of the
types described in clauses (a) through (f) of the definition of
Indebtedness, shall not constitute "Guarantee Obligations" for purposes
of this Agreement.
"GUARANTOR": Each of the Wholly-Owned Subsidiaries.
"HEDGING AGREEMENT": any Interest Rate Protection Agreement,
Commodity Hedging Agreement, foreign currency exchange agreement,
commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement.
"HYDROCARBON INTERESTS": all rights, titles, interests and
estates now owned or hereafter acquired in and to oil and gas leases,
oil, gas and mineral leases, or other liquid or gaseous hydrocarbon
leases, mineral fee or lease interests, farm-outs overriding royalty
and royalty interests, net profit interests, oil payments, production
payment interests and similar mineral interests, including any reserved
or residual interest of whatever nature.
"HYDROCARBONS": oil, gas, casinghead gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons, all products
refined, separated, settled and dehydrated therefrom and all products
refined therefrom, including, without limitation, kerosene, liquefied
petroleum gas,
14
9
refined lubricating oils, diesel fuel, drip gasoline, natural gasoline,
helium, sulfur and all other minerals.
"INDEBTEDNESS": of any Person at any date (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with
customary practices and accrued current liabilities incurred in the
ordinary course of business), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of such Person under Capital Leases, (d) all
obligations of such Person in respect of letters of credit and
acceptances issued or created for the account of such Person, (e) all
obligations of such Person under Commodity Hedging Agreements and
Interest Rate Protection Agreements, (f) all obligations of others of
the type referred to in clauses (a) through (e) above and which are
secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment
thereof, except that the amount of any nonrecourse obligation shall be
deemed to be the lesser of the value of the property securing such
obligation and the amount of such obligation so secured and (g) all
Guarantee Obligations with respect to the items described in clauses
(a) through (e) above.
"INITIAL RESERVE REPORT": as defined in subsection 6.1(u).
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day
of each March, June, September and December, commencing September 30,
1997, (b) as to any Eurodollar Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (c) as to any
Eurodollar Loan having an Interest Period longer than three months each
day which is three months or a whole multiple thereof, after the first
day of such Interest Period and the last day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its notice
of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with
respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next
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10
succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the
immediately preceding Business Day;
(2) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(3) the Borrower shall use reasonable efforts to
select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period
for such Loan.
"INTEREST RATE PROTECTION AGREEMENT": an interest rate swap,
cap or collar agreement or similar arrangement entered into with the
intent of protecting against fluctuations in interest rates or the
exchange of notional interest obligations, either generally or under
specific contingencies.
"INVESTMENTS": as defined in subsection 8.9.
"ISSUING LENDER": Chase, in its capacity as issuer of a Letter
of Credit, and any other Lender or Affiliate of any Lender in each case
either designated by the Borrower as an Issuing Lender or consented to
by the Borrower as an Issuing Lender (provided that such consent is not
unreasonably withheld).
"L/C APPLICATION": as defined in subsection 3.2.
"L/C COMMITMENT": the Issuing Lender's obligation to issue
Letters of Credit pursuant to Section 3 of this Agreement.
"L/C PARTICIPATING INTEREST": with respect to any Letter of
Credit (a) in the case of the Issuing Lender with respect thereto, its
interest in such Letter of Credit and any L/C Application relating
thereto after giving effect to the granting of participating interests
therein, if any, pursuant hereto and (b) in the case of each
Participating Lender, its undivided participating interest in such
Letter of Credit and any L/C Application relating thereto.
"LENDER REDETERMINATION NOTICE": a notice from the
Supermajority Lenders to the Borrower giving notice of their election
to redetermine the Borrowing Base, which notice may be sent by the
Supermajority Lenders at any time they so elect, PROVIDED that such an
election (excluding any election made in connection with the incurrence
of Permitted Subordinated Refinancing Debt as permitted in the
definition thereof) can be made by the Supermajority Lenders no more
than once during any consecutive 12 month period.
"LETTERS OF CREDIT": as defined in subsection 3.1(a).
"LETTER OF CREDIT OUTSTANDINGS": at any time, the sum of (a)
the aggregate amount available for drawing under Letters of Credit then
outstanding and (b) the aggregate amount of drawings under Letters of
Credit which have not then been reimbursed pursuant to subsection 3.5.
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"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"LOAN": as defined in subsection 2.1(a).
"LOAN DOCUMENTS": this Agreement, any Notes, the L/C
Applications and the Security Documents.
"LOAN PARTIES": the Parent, the Borrower, the Guarantors and
each other Subsidiary of the Borrower which (after giving effect to the
Acquisition) is a party to a Loan Document.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the Acquisition, (b) the business, assets, property, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole, or (c) the validity or enforceability of
this or any of the other Loan Documents or the rights and remedies of
the Agents and the Lenders hereunder or thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials, or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos or asbestos containing
material, polychlorinated biphenyls, urea- formaldehyde insulation, and
any other substance that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"MICHIGAN MORTGAGE": the collective reference to the Open-End
Mortgage, substantially in the form of Exhibit D-1 hereto, executed and
delivered by the appropriate Loan Party with respect to specified Oil
and Gas Properties and other Collateral located in Michigan, as the
same may be amended, supplemented or otherwise modified from time to
time.
"MORTGAGED PROPERTY": all of the Oil and Gas Properties and
other Collateral purported to be subject to the Lien of the Mortgages.
"MORTGAGES": collectively, (i) the Michigan Mortgage, (ii) the
New York Mortgage, (iii) the Ohio Mortgage, (iv) the Pennsylvania
Mortgage and (v) the West Virginia Mortgage, and each other mortgage,
deed of trust, assignment, security agreement or mortgage executed by
the Borrower or any other Loan Party and in form and substance
reasonably satisfactory to the Administrative Agent which purports to
create a Lien in favor of the Administrative Agent, in each case as
amended, supplemented or otherwise modified from time to time.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NATIONSBANK": as defined in the preamble to this Agreement.
"NEW YORK MORTGAGE": the collective reference to the Open-End
Mortgage, Assignment and Security Agreement, substantially in the form
of Exhibit D-2 hereto, executed
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and delivered by the appropriate Loan Party with respect to specified
Oil and Gas Properties and other Collateral located in New York, as the
same may be amended, supplemented or otherwise modified from time to
time.
"NON-EXCLUDED TAXES": as defined in subsection 4.13(a).
"NON-U.S. LENDER": as defined in subsection 4.13(b).
"NOTES": as defined in subsection 2.3(e).
"OBLIGATIONS": as defined in the Guarantee and Collateral
Agreement.
"OHIO MORTGAGE": the collective reference to the Open-End
Mortgage, Assignment and Security Agreement, substantially in the form
of Exhibit D-3 hereto, executed and delivered by the appropriate Loan
Party with respect to specified Oil and Gas Properties and other
Collateral located in Ohio, as the same may be amended, supplemented or
otherwise modified from time to time.
"OIL AND GAS BUSINESS": (a) the acquisition, exploration,
exploitation, development, operation and disposition of interests in
oil and gas properties and Hydrocarbons, (b) the gathering, marketing,
treating, processing, storage, selling and transporting of any
production from such interests or properties, including, without
limitation, the marketing of Hydrocarbons obtained from unrelated
Persons; (c) any business relating to or arising from exploration for
or development, production, treatment, processing, storage,
transportation or marketing of oil, gas and other minerals and products
produced in association therewith; (d) any business relating to
oilfield sales and service, and (e) any activity that is ancillary or
necessary or desirable to facilitate the activities described in
clauses (a) through (d) of this definition.
"OIL AND GAS PROPERTIES": Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon
Interests; all presently existing or future unitization, pooling
agreements and declarations of pooled units and the units created
thereby (including without limitation all units created under orders,
regulations and rules of any Governmental Authority having
jurisdiction) which may affect all or any portion of the Hydrocarbon
Interests; all pipelines, gathering lines, compression facilities,
tanks and processing plants; all interests held in royalty trusts
whether presently existing or hereafter created; all Hydrocarbons in
and under and which may be produced, saved, processed or attributable
to the Hydrocarbon Interests, the lands covered thereby and all
hydrocarbons in pipelines, gathering lines, tanks and processing plants
and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests; all
tenements, hereditaments, appurtenances and Properties in any way
appertaining, belonging, affixed or incidental to the Hydrocarbon
Interests, and all rights, titles, interests and estates described or
referred to above, including any and all real property, now owned or
hereafter acquired, used or held for use in connection with the
operating, working or development of any of such Hydrocarbon Interests
or Property and including any and all surface leases, rights-of-way,
easements and servitude together with all additions, substitutions,
replacements, accessions and attachments to any and all of the
foregoing; all oil, gas and mineral leasehold and fee interests, all
overriding royalty interests, mineral interests, royalty interests, net
profits interests, net revenue interests, oil payments, production
payments, carried interests and any and all other interests in
Hydrocarbons; in each case whether now owned or hereafter acquired
directly or indirectly.
"PARENT": as defined in the recitals hereto.
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"PARENT PLEDGE AGREEMENT": the Pledge Agreement executed and
delivered by each Parent, dated as of June 27, 1997, substantially in
the form of Exhibit B-2, as amended, modified or supplemented from time
to time.
"PARTICIPANTS": as defined in subsection 11.6(b).
"PARTICIPATING LENDER": with respect to any Letter of Credit,
any Lender (other than the Issuing Lender with respect to such Letter
of Credit) with respect to its L/C Participating Interest in such
Letter of Credit.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PENNSYLVANIA MORTGAGE": the collective reference to the
Open-End Mortgage, Assignment and Security Agreement, substantially in
the form of Exhibit D-4 hereto, executed and delivered by the
appropriate Loan Party with respect to specified Oil and Gas Properties
and other Collateral located in Pennsylvania, as the same may be
amended, supplemented or otherwise modified from time to time.
"PERMITTED BUSINESS ACQUISITION": the formation of a new
Subsidiary or any acquisition of all or substantially all the assets
of, or shares of capital stock, partnership interests, joint venture
interests, limited liability company interests or other similar equity
interests in, a Person or division or line of business of a Person (or
any subsequent investment made in a previously acquired Permitted
Business Acquisition) if immediately after giving effect thereto: (a)
no Default or Event of Default shall have occurred and be continuing or
would result therefrom, (b) all transactions related thereto shall be
consummated in accordance with applicable laws, (c) all of the Capital
Stock of any acquired or newly formed corporation, partnership,
association or other business entity are owned directly by the Borrower
or a domestic Wholly-Owned Subsidiary and all actions required to be
taken, if any, with respect to such acquired or newly formed Subsidiary
under subsection 7.10 shall have been taken, (d)(i) the Borrower shall
be in compliance, on a PRO FORMA basis after giving effect to such
acquisition or formation, with the covenants contained in subsection
8.1 recomputed as at the last day of the most recently ended fiscal
quarter of the Borrower as if such acquisition had occurred on the
first day of each relevant period for testing such compliance, and the
Borrower shall have delivered to the Administrative Agent an officers'
certificate to such effect, together with all relevant financial
information for such Person or assets and (ii) any acquired or newly
formed Subsidiary shall not be liable for any Indebtedness or Guarantee
Obligations (except for Indebtedness and Guarantee Obligations
permitted by subsections 8.2 and 8.4) and (e) any acquired or newly
formed Subsidiary shall not have (except for Indebtedness and Guarantee
Obligations permitted by subsections 8.2 and 8.4) any material
liabilities (contingent or otherwise), including, without limitation,
liabilities under Environmental Laws and liabilities with respect to
any Plan, and the Borrower shall have delivered to the Administrative
Agent a certificate, approved by the Board of Directors of the Borrower
and signed by a Responsible Officer (who shall attest to such
approval), that to the best of the Board of Directors' knowledge, no
such material liabilities exist.
"PERMITTED BUSINESS INVESTMENTS": investments made in the
ordinary course of, and of a nature that is or shall have become
customary in, the Oil and Gas Business as a means of actively
exploiting, exploring for, acquiring, developing, processing,
gathering, marketing or transporting oil and gas through agreements,
transactions, interests or arrangements which permit one to share risks
or costs, comply with regulatory requirements regarding local
19
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ownership or satisfy other objectives customarily achieved through the
conduct of Oil and Gas Business jointly with third parties, including,
without limitation, the entry into operating agreements, working
interests, royalty interests, mineral leases, processing agreements,
farm-out and farm-in agreements, division orders, contracts for the
sale, transportation or exchange of oil or natural gas, unitization and
pooling declarations and agreements and area of mutual interest
agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests, and investments and
expenditures in connection therewith; PROVIDED that an investment in
capital stock, partnership interests, joint venture interests, limited
liability company interests or other similar equity interests in a
Person shall not constitute a Permitted Business Investment.
"PERMITTED SUBORDINATED REFINANCING DEBT": Indebtedness of the
Borrower issued in exchange for, or the net proceeds of which are used
to refinance, replace, defease or refund, any or all of the Senior
Subordinated Notes; PROVIDED that (a) the principal amount of such
Permitted Subordinated Refinancing Debt does not exceed the principal
amount (or accreted value, if applicable) of the Senior Subordinated
Notes so refinanced, replaced, defeased or refunded, plus the amount of
premiums, prepayments, penalties and other amounts required to be paid
in connection therewith and the reasonable and customary fees and
expenses incurred in connection therewith, (b) the subordination
provisions in such Permitted Subordinated Refinancing Debt are no less
favorable to the Lenders than the subordination provisions contained in
the Senior Subordinated Notes, (c) the interest rate on such Permitted
Subordinated Refinancing Debt is a market rate of interest (provided,
that if such interest rate on such Permitted Subordinated Refinancing
Debt is higher than the interest rate on the Senior Subordinated Notes,
the Supermajority Lenders shall have a right to give the Borrower a
Lender Redetermination Notice within 60 days of the date the
Administrative Agent is informed of the incurrence of such Permitted
Subordinated Refinancing Debt) and the interest periods are no shorter
than the interest periods with respect to the Senior Subordinated Notes
and (d) the timing and amounts of principal repayments (including any
sinking fund therefor) on such Permitted Subordinated Refinancing Debt
are no sooner and greater, respectively, than the timing and amounts of
principal repayments under the Senior Subordinated Notes.
"PERSON": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which
is subject to Title IV of ERISA and in respect of which the Borrower or
a Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"PROPERTIES": any kind of facility, fixture, property or
asset, whether real, personal or mixed, or tangible or intangible
owned, leased or operated by the Borrower or any Subsidiary.
"PROVED RESERVES": the estimated quantities of crude oil,
condensate, natural gas and natural gas liquids that adequate
geological and engineering data demonstrate with reasonable certainty
to be recoverable in future years from proved reservoirs under existing
economic and operating conditions (i.e., prices and costs as of the
date the estimate is made).
"RE-DETERMINATION DATE": each date that the redetermined
Borrowing Base becomes effective subject to the notice requirements
specified in subsection 4.9.
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"REFERENCE BANKS": means four major banks in the London
interbank market selected by the Administrative Agent.
"REFINANCED INDEBTEDNESS": the Indebtedness of ▇▇▇▇▇▇ & ▇▇▇▇▇
and its Subsidiaries described as "Refinanced Indebtedness" on Schedule
1.1(b), which will constitute all of the existing Indebtedness of
▇▇▇▇▇▇ & Blake and its Subsidiaries on the Closing Date and will be
repaid (or defeased or the provision for repayment is made, in either
case on terms reasonably acceptable to the Administrative Agent) in
full on the Closing Date, except for Indebtedness listed on Schedule
1.1(c).
"REGISTER": as defined in subsection 11.6(d).
"REGULATION U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5(a) for amounts
drawn under Letters of Credit issued by the Issuing Lender in
accordance with the terms of this Agreement and the related L/C
Applications.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615.
"REQUIRED LENDERS": at any time, Lenders the Commitment
Percentages of which aggregate at least 51%.
"REQUIREMENT OF LAW": as to any Person, the certificate or
articles of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"RESERVE REPORT": a report in form and with attachments
consistent with the Initial Reserve Report with respect to the Oil and
Gas Properties of the Borrower and its Subsidiaries prepared (a) for
the annual report as of December 31, 1996 by ▇▇▇▇ ▇. ▇▇▇▇▇, Inc. and,
for all other annual reports as of December 31, by ▇▇▇▇▇ ▇▇▇▇▇ Company
or another independent engineering firm selected by the Borrower and
reasonably acceptable to the Required Lenders and (b) for all other
reports, by engineers employed by the Borrower and certified by a
Responsible Officer of the Borrower.
"RESPONSIBLE OFFICER": of any Loan Party, the chief executive
officer, the president or any vice president of such Loan Party or,
with respect to financial matters, the chief financial officer or
treasurer of such Loan Party.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the
obligation of such Lender to make Loans to the Borrower hereunder in an
aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule
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1.1(a), as such amount may be reduced from time to time in accordance
with the provisions of this Agreement.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1(a).
"REVOLVING CREDIT NOTE": as defined in subsection 2.3(e).
"SECURITY DOCUMENTS": the collective reference to the
Guarantee and Collateral Agreement, the Parent Pledge Agreement, the
Mortgages and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any
Person to secure the obligations and liabilities of the Borrower
hereunder and under any of the other Loan Documents or to secure any
guarantee of any such obligations and liabilities.
"SENIOR DEBT": with respect to the Borrower and its
Subsidiaries, Indebtedness of the Borrower and its Subsidiaries other
than Subordinated Indebtedness.
"SENIOR SUBORDINATED INDENTURE": the Indenture, to be dated as
of the Closing Date, between the Borrower and LaSalle National Bank, as
trustee, pursuant to which the Senior Subordinated Notes, if any, are
to be used issued with subordination provisions no less favorable to
the Lenders as those contained in the draft distributed to the Lenders
on June 20, 1997.
"SENIOR SUBORDINATED NOTES": as defined in the recitals
hereto.
"SENIOR SUBORDINATED NOTE OFFERING": as defined in the
recitals to this Agreement.
"SERIES A PREFERRED STOCK": Class II Serial Preferred Stock of
▇▇▇▇▇▇ & ▇▇▇▇▇.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SUBORDINATED DEBT OFFERING MEMORANDUM": the Offering
Memorandum as in effect on June 27, 1997 related to the issuance of the
Senior Subordinated Notes, as such Offering Memorandum shall be further
amended, supplemented or otherwise modified from time to time.
"SUBORDINATED INDEBTEDNESS": the Senior Subordinated Notes,
Permitted Subordinated Refinancing Debt and any other Indebtedness of
the Borrower subordinated to the prior payment in full of the
Obligations in a manner acceptable to the Required Lenders as evidenced
by their written approval.
"SUBORDINATED NOTE DOCUMENTS": the collective reference to the
Senior Subordinated Notes, the Senior Subordinated Indenture, the
Subordinated Debt Offering Memorandum and each agreement, instrument
and document delivered in connection therewith or relating thereto.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which more than 50% of the total voting power of shares
of stock or other equity ownership interests having ordinary voting
power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to vote in the
election of directors, a managing general partner, or majority of
general partners or other managers or trustees thereof, is at the time
owned or controlled, directly or indirectly by such Person or one or
more of the
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other Subsidiaries of such Person (or a combination thereof). Unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to any direct or indirect
Subsidiary or Subsidiaries of the Borrower.
"SUPERMAJORITY LENDERS": at any time, Lenders the Commitment
Percentages of which aggregate at least 75%.
"TERMINATION DATE": the date which is the fifth anniversary of
the Closing Date.
"TRANCHE": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day); Tranches may be
identified as "EURODOLLAR TRANCHES".
"TRANSFEREE": as defined in subsection 11.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"WEST VIRGINIA MORTGAGE": the collective reference to the
Credit Line Deed of Trust, Open-End Mortgage, Assignment, Financing
Statement and Security Agreement, substantially in the form of Exhibit
D-5 hereto, executed and delivered by the appropriate Loan Party with
respect to specified Oil and Gas Properties and other Collateral
located in West Virginia, as the same may be amended, supplemented or
otherwise modified from time to time.
"WHOLLY-OWNED SUBSIDIARY": a Subsidiary of the Borrower, all
of the outstanding Capital Stock of which (other than directors'
qualifying shares) is owned, directly or indirectly, by the Borrower or
one or more other Wholly-Owned Subsidiaries of the Borrower; PROVIDED,
that each of the Persons listed on Schedule 1.1(d) shall be deemed not
to be a Wholly-Owned Subsidiary.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Loan Document or any certificate or other document
made or delivered pursuant hereto or thereto.
(b) As used herein and in any Loan Document, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower or any Subsidiary of the Borrower not
defined in subsection 1.1 and accounting terms partly defined in subsection 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP. References in this Agreement or any other Loan Document to financial
statements shall be deemed to include all related schedules and notes thereto.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
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(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) References in this Agreement or any other Loan Document to
knowledge of any Loan Party of events or circumstances shall be deemed to refer
to events or circumstances of which a Responsible Officer has knowledge or
should have had knowledge if such Loan Party had exercised due diligence within
the meaning of Section 1-201 of the Uniform Commercial Code.
SECTION 2. AMOUNT AND TERMS OF REVOLVING COMMITMENTS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("REVOLVING CREDIT LOANS" or "LOANS") to the Borrower from time to time during
the Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the amount of such Lender's Revolving Credit
Commitment; PROVIDED that no Lender shall make any Revolving Credit Loans if,
after giving effect thereto, the sum of the Revolving Credit Loans and Letter of
Credit Outstanding (in each case, after giving effect to the Loans requested to
be made and the Letters of Credit requested to be issued on such date) exceed
the lesser of (i) the Lenders' Revolving Credit Commitments and (ii) the
Borrowing Base then in effect. During the Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Administrative Agent in accordance with
subsections 2.2 and 4.3, PROVIDED that no Revolving Credit Loan shall be made as
a Eurodollar Loan after the day that is one month prior to the Termination Date.
2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may
borrow under the Revolving Credit Commitments during the Commitment Period on
any Business Day, PROVIDED that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Credit
Loans initially are to be Eurodollar Loans or (b) one Business Day prior to the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
is to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Revolving Credit Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple of
$1,000,000 in excess thereof (or, if the then Available Commitments are less
than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent specified in subsection
11.2 prior to 11:00 A.M., New York City time, on the Borrowing Date requested by
the Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
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2.3 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan of such
Lender on the Termination Date (or such earlier date on which the Loans become
due and payable pursuant to Section 9). The Borrower hereby further agrees to
pay interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof to but not including the date the Loans are
paid in full at the rates per annum, and on the dates, set forth in subsection
4.1.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to subsection 11.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Loan made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.3(b) shall, to the extent permitted
by applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of the Administrative Agent or any Lender to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit A with appropriate
insertions as to date and principal amount (a "REVOLVING CREDIT NOTE" or
"NOTE").
SECTION 3. LETTERS OF CREDIT
3.1 THE L/C COMMITMENT. (a) Subject to the terms and
conditions hereof, the Issuing Lender, in reliance on the agreements of the
other Lenders set forth in subsection 3.4(a), agrees to issue letters of credit
("LETTERS OF CREDIT") for the account of the Borrower on any Business Day during
the Commitment Period in such form as may be approved from time to time by the
Issuing Lender; PROVIDED that the Issuing Lender shall not issue any Letter of
Credit if, after giving effect to such issuance and after giving effect to any
Loans requested to be made or Letters of Credit requested to be issued on such
date, (i) the Letter of Credit Outstanding would exceed $25,000,000 or (ii) the
sum of the Revolving Credit Loans and Letter of Credit Outstanding would exceed
the lesser of (x) the Revolving Credit Commitments and (y) the Borrowing Base
then in effect. Each Letter of Credit shall (i) be issued to support obligations
of the Borrower or any of its Subsidiaries, contingent or otherwise, which
finance the working capital and business needs of the Borrower and its
Subsidiaries, and (ii) shall expire no later than the earlier of (x) one year
(or such later date agreed to by the Issuing Lender) after the date of issuance
and (y) five Business Days prior to the Termination Date, PROVIDED that any
Letter of Credit with a one-year tenor may provide for the extension thereof
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for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above). Each Letter of Credit shall be denominated in
Dollars.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any Participating Lender to exceed any limits
imposed by, any applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender and the Administrative Agent at their
respective addresses for notices specified herein a letter of credit application
in the Issuing Lender's then customary form (an "L/C APPLICATION") completed to
the satisfaction of the Issuing Lender, and such other certificates, documents
and other papers and information as may be customary and as the Issuing Lender
may reasonably request. Upon receipt of any L/C Application, the Issuing Lender
will process such L/C Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and, upon receipt by the Issuing Lender of
confirmation from the Administrative Agent that issuance of such Letter of
Credit will not contravene subsection 3.1, the Issuing Lender shall promptly
issue the Letter of Credit requested thereby (but in no event shall the Issuing
Lender be required to issue any Letter of Credit earlier than three Business
Days after its receipt of the L/C Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower and the
Administrative Agent promptly following the issuance thereof, and, thereafter,
the Administrative Agent shall promptly furnish a copy thereof to the Lenders.
3.3 FEES, COMMISSIONS AND OTHER CHARGES. (a) The Borrower
shall pay to the Administrative Agent, for the account of (i) the Issuing Lender
and the Participating Lenders, a letter of credit commission with respect to
each Letter of Credit, computed for the period from the date such Letter of
Credit is issued to the date upon which the next payment is due under this
subsection (and, thereafter, from the date of payment under this subsection to
the date upon which the next payment is due under this subsection) at the rate
per annum equal to the Applicable Margin (MINUS .125%) in effect from time to
time for Eurodollar Loans of the daily aggregate amount available to be drawn
under such Letter of Credit for the period covered by clause (i) above during
such period provided such amount charged shall not be less than $500, and (ii)
the Issuing Lender, a letter of credit commission with respect to each Letter of
Credit in an amount equal to .125% per annum of the stated amount of such Letter
of Credit (and an additional .125% of the stated amount of such Letter of Credit
on each anniversary of its issuance date). The letter of credit commissions
payable pursuant to clause (i) and (ii) above shall be payable quarterly in
arrears on the last day of each March, June, September and December, commencing
September 30, 1997, and on the Termination Date.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and customary
costs and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending, negotiating or otherwise administering any
Letter of Credit.
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(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the Participating Lenders
all fees and commissions received by the Administrative Agent for their
respective accounts pursuant to this subsection.
3.4 L/C PARTICIPATIONS. (a) Effective on the date of issuance
of each Letter of Credit, the Issuing Lender irrevocably agrees to grant and
hereby grants to each Participating Lender, and each Participating Lender
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such
Participating Lender's own account and risk an undivided interest equal to such
Participating Lender's Commitment Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued by the Issuing Lender and the
amount of each draft paid by the Issuing Lender thereunder. Each Participating
Lender unconditionally and irrevocably agrees with the Issuing Lender that, if a
draft is paid under any Letter of Credit for which such Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such Participating Lender shall pay to the Administrative Agent, for
the account of the Issuing Lender, upon demand at the Administrative Agent's
address specified in subsection 11.2, an amount equal to such Participating
Lender's Commitment Percentage of the amount of such draft, or any part thereof,
which is not so reimbursed. On the date that any Assignee becomes a Lender party
to this Agreement in accordance with subsection 11.6, participating interests in
any outstanding Letters of Credit held by the transferor Lender from which such
Assignee acquired its interest hereunder shall be proportionately reallotted
between such Assignee and such transferor Lender. Each Participating Lender
hereby agrees that its obligation to participate in each Letter of Credit, and
to pay or to reimburse the Issuing Lender for its participating share of the
drafts drawn or amounts otherwise paid thereunder, is absolute, irrevocable and
unconditional and shall not be affected by any circumstances whatsoever
(including, without limitation, the occurrence or continuance of any Default or
Event of Default), and that each such payment shall be made without offset,
abatement, withholding or other reduction whatsoever.
(b) If any amount required to be paid by any Participating
Lender to the Issuing Lender pursuant to subsection 3.4(a) in respect of any
unreimbursed portion of any draft paid by the Issuing Lender under any Letter of
Credit is paid to the Issuing Lender within three Business Days after the date
such payment is due, such Participating Lender shall pay to the Administrative
Agent, for the account of the Issuing Lender, on demand, an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Effective
Rate during the period from and including the date such draft is paid to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required to
be paid by any Participating Lender pursuant to subsection 3.4(a) is not in fact
made available to the Administrative Agent, for the account of the Issuing
Lender, by such Participating Lender within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
Participating Lender, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any Participating Lender with
respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has paid a
draft under any Letter of Credit and has received from any Participating Lender
its PRO RATA share of such payment in accordance with subsection 3.4(a), the
Issuing Lender receives any reimbursement on account of such unreimbursed
portion, or any payment of interest on account thereof, the Issuing Lender will
pay to the Administrative Agent, for the account of such Participating Lender,
its PRO RATA share thereof; PROVIDED, HOWEVER, that in the event that any such
payment received by the Issuing Lender shall be required to be returned by the
Issuing Lender, such Participating Lender shall return to the
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Administrative Agent for the account of the Issuing Lender, the portion thereof
previously distributed to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. If any draft
shall be presented for payment under any Letter of Credit, the Issuing Lender
shall notify the Borrower and the Administrative Agent of the date and the
amount thereof. The Borrower agrees to reimburse the Issuing Lender (whether
with its own funds or with proceeds of the Revolving Credit Loans) on each date
on which the Issuing Lender pays a draft so presented under any Letter of Credit
for the amount of (i) such draft so paid and (ii) any taxes, fees, charges or
other costs or expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender at its address
for notices specified herein in lawful money of the United States of America and
in immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date of payment
of the applicable draft until payment in full thereof, (x) for the period
commencing on the date of payment of the applicable draft to the date which is 3
days thereafter, at the rate which would be payable on ABR Loans at such time
and (y) thereafter, at the rate which would be payable on ABR Loans at such time
plus 3%.
3.6 OBLIGATIONS ABSOLUTE. (a) The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower or any other Person may have or have had against the
Issuing Lender or any other Lender or any beneficiary of a Letter of Credit. The
Borrower also agrees with the Issuing Lender that the Issuing Lender shall not
be responsible for, and the Borrower's obligations under subsection 3.5 shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even though such documents shall in fact prove
to be invalid, fraudulent or forged, or any dispute between or among the
Borrower and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee. The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Lender's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, including, without limitation, Article V thereof,
shall be binding on the Borrower and shall not result in any liability of such
Issuing Lender to the Borrower.
(b) Without limiting the generality of the foregoing, it is
expressly agreed that the absolute and unconditional nature of the Borrower's
obligations under this Section 3 to reimburse the Issuing Lender for each
drawing under a Letter of Credit will not be excused by the gross negligence or
wilful misconduct of the Issuing Lender. However, the foregoing shall not be
construed to excuse the Issuing Lender from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Lender's
gross negligence or wilful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof.
3.7 LETTER OF CREDIT PAYMENTS. Without limitation of
subsection 3.6, the responsibility of the Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of
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Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.
3.8 L/C APPLICATIONS. To the extent that any provision of any
L/C Application, including any reimbursement provisions contained therein,
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall prevail.
SECTION 4. GENERAL PROVISIONS
4.1 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin in effect on such day.
(b) Each ABR Loan shall bear interest for each day at a rate
per annum equal to the ABR plus the Applicable Margin in effect on such day.
(c) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is the ABR plus 3%, in each case from the date of such non-payment until
such overdue principal, interest, commitment fee or other amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED that interest accruing pursuant to subsection 4.1(c)
shall be payable from time to time on demand.
4.2 COMPUTATION OF INTEREST AND FEES. (a) Whenever, in the
case of ABR Loans, it is calculated on the basis of the Prime Rate, interest
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; and, otherwise, interest and fees shall be
calculated on the basis of a 360-day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the ABR, the Eurocurrency Reserve
Requirements, the C/D Assessment Rate or the C/D Reserve Percentage shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations and calculations used
by the Administrative Agent in determining any interest rate pursuant to
subsection 4.1(a).
4.3 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, PROVIDED that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or
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Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and ABR Loans may be converted as provided herein, PROVIDED
that (i) no Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and the Administrative Agent has or the
Required Lenders have determined that such a conversion is not appropriate and
(ii) no Loan may be converted into a Eurodollar Loan after the date that is one
month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans,
PROVIDED that no Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing and the Administrative Agent has or the
Required Lenders have determined that such a continuation is not appropriate or
(ii) after the date that is one month prior to the Termination Date and
PROVIDED, FURTHER, that if the Borrower shall fail to give such notice or if
such continuation is not permitted such Loans shall be automatically converted
to ABR Loans on the last day of such then expiring Interest Period.
4.4 MINIMUM AMOUNTS MAXIMUM NUMBER OF TRANCHES. All
borrowings, conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each Eurodollar Tranche shall be equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. In no event
shall there be more than eight Eurodollar Tranches outstanding at any time.
4.5 OPTIONAL PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) The
Borrower may on the last day of any Interest Period with respect thereto, in the
case of Eurodollar Loans, or at any time and from time to time, in the case of
ABR Loans, prepay the Loans, in whole or in part, without premium or penalty,
upon at least one Business Day's irrevocable notice to the Administrative Agent,
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, in each case if of a
combination thereof, the amount allocable to each. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with any amounts payable
pursuant to subsection 4.14. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof.
(b) Subject to subsection 4.5(c), the Borrower shall have the
right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate the Revolving Credit Commitments or, from time to time, to
reduce the amount of the Revolving Credit Commitments. Any such reduction shall
be in an amount equal to $10,000,000 or a whole multiple of $5,000,000 in excess
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect. Termination of the Revolving Credit Commitments shall also terminate the
obligation of the Issuing Lender to issue Letters of Credit.
(c) In the event of any termination of the Revolving Credit
Commitments, the Borrower shall on the date of such termination repay or prepay
all its outstanding Revolving Credit Loans (together with accrued and unpaid
interest on the Revolving Credit Loans), reduce the Letter of Credit Outstanding
to zero and cause all Letters of Credit to be canceled and returned to the
Issuing Lender (or shall cash collateralize the Letter of Credit Outstanding on
terms and pursuant to documentation reasonably satisfactory to the Issuing
Lender and the Administrative Agent). In the event of any partial reduction of
the Revolving Credit Commitments, then (i) at or prior to the
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effective date of such reduction, the Administrative Agent shall notify the
Borrower and the Lenders of the Aggregate Revolving Credit Exposure of all the
Lenders and (ii) if the Aggregate Revolving Credit Exposure of all the Lenders
would exceed the aggregate Revolving Credit Commitments after giving effect to
such reduction, then, prior to giving effect to such reduction, the Borrower
shall, on the date of such reduction, FIRST, repay or prepay Revolving Credit
Loans and, SECOND, reduce the Letter of Credit Outstanding (or cash
collateralize the Letter of Credit Outstanding on terms and pursuant to
documentation reasonably satisfactory to the Issuing Lender and the
Administrative Agent), in an aggregate amount sufficient to eliminate such
excess.
(d) The Loans shall be repaid, and the Letter of Credit
Outstanding shall be reduced or cash collateralized, to the extent required by
subsection 4.10. All such repayments and cash collateralization shall be made in
accordance with subsection 4.5.
(e) (i) In the event the amount of any prepayment of the Loans
required to be made above shall exceed the aggregate principal amount of the
outstanding ABR Loans (the amount of any such excess being called the "EXCESS
AMOUNT"), the Borrower shall have the right, in lieu of making such prepayment
in full, to prepay all the outstanding applicable ABR Loans and to deposit an
amount equal to the Excess Amount with, and (ii) in the event that Letter of
Credit Outstanding are required to be cash collateralized, the Borrower shall
deposit an amount equal to the aggregate amount of Letter of Credit Outstanding
to be cash collateralized with, the Administrative Agent in a cash collateral
account maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
Administrative Agent as collateral for the Obligations and applied to the
prepayment of the applicable Eurodollar Loans at the end of the current Interest
Periods applicable thereto or Letter of Credit Outstanding, as the case may be,
or, during an Event of Default, to payment of any Obligations (including
obligations in respect of the Letters of Credit). On any Business Day on which
(i) collected amounts remain on deposit in or to the credit of such cash
collateral account after giving effect to the payments made on such day pursuant
to this subsection 4.5(e) and (ii) the Borrower shall have delivered to the
Administrative Agent a written request or a telephonic request (which shall be
promptly confirmed in writing) that such remaining collected amounts be invested
in the Cash Equivalent specified in such request, the Administrative Agent shall
use its reasonable efforts to invest such remaining collected amounts in such
Cash Equivalent, PROVIDED, HOWEVER, that the Administrative Agent shall have
continuous dominion and full control over any such investments (and over any
interest that accrues thereon) to the same extent that it has dominion and
control over such cash collateral account and no Cash Equivalent shall mature
after the end of the Interest Period for which it is to be applied. The Borrower
shall not have the right to withdraw any amount from such cash collateral
account until the applicable Eurodollar Loans and accrued interest thereon and
Letter of Credit Outstanding are paid in full or if a Default or Event of
Default then exists or would result. Any prepayment or collateralization
pursuant to this subsection 4.5(e) shall be applied in the order set forth in
clause (ii) of the second sentence of subsection 4.5(c).
4.6 COMMITMENT FEE; ADMINISTRATIVE AGENT'S FEE; OTHER FEES.
(a) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee for the period from and including, for each Lender,
the Closing Date to but not including the Termination Date, computed at the rate
per annum set forth in the definition of "Applicable Margin" on the average
daily amount of the lesser of (i) the Available Commitment of such Lender and
(ii) the Borrowing Base Availability with respect to such Lender, during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December (commencing on September 30, 1997)
and on the Termination Date or such earlier date as the Revolving Credit
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof. Commitment fees shall be nonrefundable
when paid. The Administrative Agent shall,
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at the request of the Borrower, deliver to the Borrower a statement showing the
calculations used by the Administrative Agent in determining any commitment fee
pursuant to this subsection 4.6(a).
(b) The Borrower shall pay to the Administrative Agent the
agency fees set forth in the agency fee letter agreement dated April 28, 1997
among TPG, Chase and Chase Securities Inc., on the dates specified therein.
(c) The Borrower shall pay to Chase, for the account of Chase,
Bankers Trust and NationsBank, the fees set forth in the letter agreement dated
April 28, 1997 among TPG, Chase, Bankers Trust and NationsBank, on the Closing
Date.
4.7 INABILITY TO DETERMINE INTEREST RATE. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Loans to Eurodollar Loans.
4.8 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee hereunder and any reduction of the Revolving Credit
Commitments of the Lenders shall be made pro rata according to the respective
Commitment Percentages of the Lenders. Each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Loans then held by the Lenders. All payments (including prepayments) to be made
by the Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Administrative Agent's office
specified in subsection 11.2, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its Commitment
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Percentage of such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such amount available
to the Administrative Agent, and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Administrative Agent by the required time on
the Borrowing Date therefor, such Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error. If
such Lender's Commitment Percentage of such borrowing is not made available to
the Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans
hereunder, on demand, from the Borrower.
4.9 COMPUTATION OF BORROWING BASE. (a) The Borrowing Base in
effect from time to time shall represent the maximum principal amount (subject
to the aggregate amount of the Revolving Credit Commitments) of Loans and Letter
of Credit Outstandings that the Lenders will allow to remain outstanding during
the Commitment Period. The Borrowing Base shall be determined in accordance with
this subsection 4.9. The Borrowing Base will be based upon the value of certain
Proved Reserves attributable to the Oil and Gas Properties of the Borrower and
its Subsidiaries and other assets of the Borrower and its Subsidiaries
acceptable to the Engineering Committee in its sole discretion, and will be
determined by the Engineering Committee in accordance with paragraph (d) of this
subsection 4.9, subject to approval by the Supermajority Lenders. Until the
Commitments are no longer in effect, all Letters of Credit have terminated and
all of the Obligations are paid in full, this Agreement shall be subject to the
then effective Borrowing Base. During the period from and after the Closing Date
until the first Redetermination Date, the amount of the Borrowing Base shall be
$180,000,000;
(b) Prior to April 1 of each year (and, if at any time during
the period from January 1 to August 31 of any year, the average Borrowing Base
Usage for such period exceeds 75%, on October 1st of such year), the Borrower
shall furnish to the Administrative Agent and to each Lender Reserve Reports,
which Reserve Reports shall be dated as of the immediately preceding December 31
(in the case of Reserve Reports due on April 1) and June 30 (in the case of
Reserve Reports due on October 1), and shall set forth, among other things, (i)
the Oil and Gas Properties, then owned by the Borrower and its Subsidiaries,
(ii) the Proved Reserves attributable to such Oil and Gas Properties and (iii) a
projection of the rate of production and net income of the Proved Reserves as of
the date of such Reserve Report, all in accordance with the guidelines published
by the Securities and Exchange Commission. Concurrently with the delivery of the
Reserve Reports, the Borrower shall furnish to the Administrative Agent and to
each Lender a certificate of a Responsible Officer showing any additions to or
deletions from the Oil and Gas Properties listed in the Reserve Report, which
additions or deletions were made by the Borrower and its Subsidiaries since the
date of the previous Reserve Report, and certifying which of the Oil and Gas
Properties listed in the Reserve Report are subject to a Mortgage.
(c) The Borrowing Base shall be re-determined (i) after
receipt by the Engineering Committee of each scheduled Reserve Report, (ii) upon
the delivery of a Lender Redetermination Notice to the Borrower and (iii) upon
the delivery of a Borrower Redetermination Notice to each member of the
Engineering Committee, all as provided in this subsection 4.9. Within 60 days
after the delivery of a Borrower Redetermination Notice or a Lender
Redetermination Notice, the Borrower shall furnish to the Administrative Agent
and to each Lender a Reserve Report as of the most recent practicable date. If
the Borrower fails to deliver a Reserve Report within the time period provided
for
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in the preceding sentence, then the Engineering Committee shall have the right
to rely on the last Reserve Report previously delivered by the Borrower with any
such adjustments and taking into account any additional information as the
Engineering Committee may deem appropriate, in its sole discretion. On or before
the date which is 30 days after receipt (i) of a scheduled annual (or, if
applicable, semi-annual) Reserve Report or (ii) of a Reserve Report in
connection with a Lender Redetermination Notice or a Borrower Redetermination
Notice, the Engineering Committee, shall re-determine, the Borrowing Base, in
its sole discretion, and the Administrative Agent shall notify the Borrower and
the Lenders of the Engineering Committee's re-determination of the Borrowing
Base. Within 10 days after receipt from the Administrative Agent of the amount
of the Engineering Committee's re-determination of the Borrowing Base, each
Lender shall notify the Administrative Agent stating whether or not such Lender
agrees with that re-determination. Failure of any Lender to give such notice
within such period of time shall be deemed to constitute an acceptance of such
re- determination. If the Supermajority Lenders agree with that
re-determination, then the Administrative Agent promptly shall notify the
Borrower of the Borrowing Base as so re-determined, whereupon that re-determined
value shall automatically become effective (and shall remain effective until the
Borrowing Base is again re-determined as provided in this subsection 4.9(c)). If
the Supermajority Lenders do not approve the Engineering Committee's
re-determination of the Borrowing Base, then the Engineering Committee shall
make a further re-determination of the Borrowing Base in its sole discretion,
and the Administrative Agent promptly shall submit the Engineering Committee's
new re-determination to the Lenders and the Borrower until the Supermajority
Lenders agree upon a re-determination of the Borrowing Base, whereupon the
Administrative Agent promptly shall notify the Borrower of the redetermination
and the re-determination shall become effective as provided above. Each
re-determination provided for by this subsection 4.9(c) shall be made in
accordance with the provisions of subsection 4.9(d). It is the intention of the
Borrower and the Lenders that the Borrowing Base be redetermined within 45 days
after the furnishing of each Reserve Report, subject to the provisions of this
paragraph (c).
(d) (i) All determinations and re-determinations by the
Engineering Committee provided for in this subsection 4.9 (and any
determinations and decisions by either or both of the Engineering Committee and
the Supermajority Lenders in connection therewith, including effecting any
re-determination of the value of any component contained in a Reserve Report)
shall be made by the Engineering Committee and the Lenders in their sole
discretion and shall be made on a reasonable basis and in good faith based upon
the application by the Engineering Committee and the Lenders of their respective
normal oil and gas lending criteria as they exist at the time of determination.
(ii) All re-determinations in the Borrowing Base referred to
in this subsection 4.9 shall become effective immediately upon the delivery of
notice by the Administrative Agent to the Borrower of the re-determination.
4.10 BORROWING BASE COMPLIANCE. If at any time the Aggregate
Revolving Credit Exposure of the Lenders exceeds the Borrowing Base then in
effect (any such excess, the "BORROWING BASE DEFICIENCY"), the Borrower shall
prepay the Revolving Credit Loans and then cash collateralize the Letter of
Credit Outstandings in an amount equal to 50% of the Borrowing Base Deficiency
within 90 days after the effective date of the redetermination resulting in such
Borrowing Base Deficiency, and within the next 90 days prepay the Revolving
Credit Loans and then cash collateralize the Letter of Credit Outstandings in an
amount equal to the balance of such Borrowing Base Deficiency in each case
together with interest accrued to the date of such payment or prepayment and any
amounts payable under subsection 4.14. In addition, the Borrower may, in order
to reduce or eliminate such Borrowing Base Deficiency, submit (i) additional Oil
and Gas Properties in accordance with subsection 7.10(c) and/or (ii) other
properties reasonably acceptable to and on terms to be agreed upon by the
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Supermajority Lenders, to be included in the Borrowing Base. Prepayments and
collateralization pursuant to this subsection 4.10 shall be made as set forth in
subsection 4.5(c).
4.11 ILLEGALITY. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof after the date hereof shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by
this Agreement (a) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert ABR Loans to Eurodollar
Loans shall forthwith be canceled and (b) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to ABR Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to subsection
4.14.
4.12 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof after
the date hereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any L/C Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by subsection 4.13,
changes in the rate or computation of tax on the overall net income of
such Lender, franchise taxes imposed in lieu of net income taxes and
doing business taxes);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then
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from time to time, the Borrower shall promptly pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower (with
a copy to the Administrative Agent) of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable pursuant
to this subsection submitted by such Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
4.13 TAXES. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes, franchise taxes (imposed in
lieu of net income taxes) and doing business taxes imposed on the Administrative
Agent or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("NON-EXCLUDED TAXES") are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under any Note, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, PROVIDED, HOWEVER, that the Borrower shall not be required to
increase any such amounts payable to any Non-U.S. Lender if such Non-U.S. Lender
fails to comply with the requirements of paragraph (b) of this subsection.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its
own account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If, when the Borrower is required by this subsection 4.14(a) to pay any
Non-Excluded Taxes, the Borrower fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of
America, or any estate or trust that is subject to federal income taxation
regardless of the source of its income (a "NON-U.S. LENDER") shall deliver to
the Borrower and the Administrative Agent (or, in the case of a Participant, to
the Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service form 1001 or Form 4224, or, in
the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding
tax under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest," a Form W-8, or any subsequent versions thereof or
successors thereto (and, if such Non-U.S. Lender delivers a Form W-8, an annual
certificate representing that such Non-U.S. Lender (i) is not a "bank" for
purposes of Section
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881(c) of the Code (and is not subject to regulatory or other legal requirements
as a bank in any jurisdiction, and has not been treated as a bank in any filing
with or submission made to any Governmental Authority or rating agency), (ii) is
not a 10% shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and (iii) is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents, along with such other additional forms
as the Borrower, the Administrative Agent (or, in the case of a Participant, the
Lender from which the related participation shall have been purchased) may
reasonably request to establish the availability of such exemption. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement (or, in the case of any Participant, on or before the
date such Participant purchases the related participation).
4.14 INDEMNITY. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or converted, or not so borrowed, converted or continued,
for the period from the date of such prepayment or conversion or of such failure
to borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the percentage added to the Eurodollar Rate pursuant to
subsection 4.1(a) to the extent included therein) over (ii) the amount of
interest (as reasonably determined by such Lender) which would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market. This covenant
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
4.15 CHANGE OF LENDING OFFICE. (a) Each Lender agrees that if
it makes any demand for payment under subsection 4.12 or 4.13(a), or if any
adoption or change of the type described in subsection 4.11 shall occur with
respect to it, it will use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its sole discretion) to designate
a different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 4.12 or
4.13(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 4.11.
(b) If any Lender requests compensation under subsection 4.12,
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 subsection
4.13, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to, and such Lender promptly shall,
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in subsection 11.6), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); PROVIDED
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that (i) if such assignee is not a Lender or an Affiliate thereof, the Borrower
shall have received the prior written consent of the Administrative Agent and
Issuing Lender which consents shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in Letters of Credit, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (at least to the extent of such outstanding principal) and the Borrower
(in the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under subsection 4.12 or payments
required to be made pursuant to subsection 4.13, such assignment will result in
a reduction in such compensation or payments compared to the compensation or
payments payable to the assigning Lender. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation no longer exist or cease to apply.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:
5.1 FINANCIAL CONDITION. (a) The consolidated balance sheets
of ▇▇▇▇▇▇ & ▇▇▇▇▇ and its consolidated Subsidiaries at December 31, 1995 and
December 31, 1996 and the related consolidated statements of operations, of cash
flows and of changes in stockholders' equity for the respective fiscal years
ended on such dates, together with the related notes and schedules thereto,
reported on by Ernst & Young LLP, copies of which have heretofore been furnished
to each Lender, present fairly in all material respects the consolidated
financial condition of ▇▇▇▇▇▇ & ▇▇▇▇▇ and its consolidated Subsidiaries as at
such dates, and the consolidated results of their operations and their
consolidated cash flows for the respective fiscal years then ended.
(b) The unaudited consolidated balance sheet of ▇▇▇▇▇▇ & Blake
and its consolidated Subsidiaries at March 31, 1997 and the related unaudited
consolidated statements of operations, of cash flows and of changes in
stockholders' equity for the 3-month period ended on such dates, together with
the related notes and schedules thereto, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, present fairly in
all material respects the consolidated financial condition of each of ▇▇▇▇▇▇ &
▇▇▇▇▇ and its consolidated Subsidiaries as at such dates, and the consolidated
results of their respective operations and their consolidated cash flows for the
3-month period then ended (subject to normal year-end audit adjustments).
(c) The unaudited PRO FORMA consolidated balance sheet of the
Borrower and its consolidated Subsidiaries, as of the Closing, certified by a
Responsible Officer, copies of which have heretofore been furnished to each
Lender, represent in all material respects the PRO FORMA consolidated financial
condition of the Borrower and its consolidated Subsidiaries as of such date
after giving effect to the Acquisition and the initial extensions of credit
under this Agreement, assuming that the Acquisition occurred on March 31, 1997.
(d) All such financial statements referred to in subsections
5.1(a) and (b), including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein). On the Closing Date, after giving effect
to the Acquisition, neither the Borrower nor any of its consolidated
Subsidiaries have, at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, contingent liability or
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liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the financial statements
referred to in subsection 5.1(c) or in the notes thereto to the extent required
by GAAP. During the period from January 1, 1997 to and including the date hereof
there has been no sale, transfer or other disposition by the Borrower or any of
its consolidated Subsidiaries of any material part of its business or property
and no purchase or other acquisition of any business or property (including any
capital stock of any other Person) material in relation to the consolidated
financial condition of the Borrower and its consolidated Subsidiaries at
December 31, 1996, other than as set forth on Schedule 5.1.
5.2 NO CHANGE. (a) Since December 31, 1996, there has been no
development, circumstance or event which has had or could reasonably be expected
to have a Material Adverse Effect, and (b), except for dividends with respect
to, and the redemption of, shares of Series A Preferred Stock, during the period
from January 1, 1997 to and including the date hereof no dividends or other
distributions have been declared, paid or made upon the Capital Stock of the
Borrower nor has any of the Capital Stock of the Borrower been redeemed,
retired, purchased or otherwise acquired for value by any Loan Party.
5.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all applicable
Requirements of Law except to the extent that the failure to be so qualified or
to comply with such Requirements of Law could not reasonably be expected to
have, in the aggregate, a Material Adverse Effect.
5.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
The Borrower and each of the other Loan Parties has the corporate power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party, grant the Liens granted by it pursuant to the Security
Documents and, in the case of the Borrower, to borrow hereunder and has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party (including the granting
of the Liens to be granted by it pursuant to the Security Documents and, in the
case of the Borrower, the borrowings hereunder). Other than the filing of the
Mortgages and appropriate financing statements and other actions necessary to
perfect the Liens created by the Security Documents, no consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder, the granting and perfection of the Liens to be granted by the
Security Documents or with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which each Loan Party is a party other
than those which have been obtained and are in full force and effect. This
Agreement has been, and each other Loan Document to which any Loan Party is a
party will be, duly executed and delivered on behalf of such Loan Party. This
Agreement constitutes, and each other Loan Document to which any Loan Party is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of such Loan Party enforceable against such Loan Party in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
transfer or conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
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5.5 NO LEGAL BAR. The execution, delivery and performance of
the Loan Documents, the granting of the Liens under the Security Documents, the
borrowings hereunder and the use of the proceeds thereof will not violate any
applicable Requirement of Law or Contractual Obligation of the Borrower or of
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation except
pursuant to the Loan Documents.
5.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
5.7 NO DEFAULT. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
5.8 OWNERSHIP OF PROPERTY; LIENS. (a) Except for the Oil and
Gas Properties, the Borrower and its Subsidiaries each have good title in fee
simple to, or a valid leasehold interest in, all its material real property and
material interests in real property set forth in Schedules 5.20A and 5.20B, and
good title to, a valid leasehold interest in or a license to use, all its other
material property, and none of such property is subject to any Lien except as
permitted by subsection 8.3.
(b) The Borrower and its Subsidiaries each have good and
defensible title to all of its Oil and Gas Properties which are not personal
property and good title to all such Oil and Gas Properties which are personal
property and material to the Borrower and its Subsidiaries taken as a whole,
except for (i) such imperfections of title as do not in the aggregate materially
detract from the value thereof to, or the use thereof in, the business of the
Borrower or any of its Subsidiaries, (ii) Oil and Gas Properties disposed of
since the date of the most recent Reserve Report as permitted by subsection 8.6
hereof, and (iii) Liens permitted by subsection 8.3 hereof. The quantum and
nature of the interest of the Borrower and its Subsidiaries in and to the Oil
and Gas Properties as set forth in each Reserve Report (including the Initial
Reserve Report) includes the entire interest of the Borrower and its
Subsidiaries in such Oil and Gas Properties as of the date of such Reserve
Report and are complete and accurate in all material respects as of the date of
such Reserve Report; and there are no "back-in" or "reversionary" interests held
by third parties which could materially reduce the interest of the Borrower and
its Subsidiaries in such Oil and Gas Properties except as expressly set forth in
such Reserve Report. The ownership of the Oil and Gas Properties by the Borrower
and its Subsidiaries shall not in any material respect obligate any such Loan
Party to bear the costs and expenses relating to the maintenance, development or
operations of each such Oil and Gas Property in an amount in excess of the
working interest of such Loan Party in each Oil and Gas Property set forth in
the most recent Reserve Report.
5.9 INTELLECTUAL PROPERTY. Each of the Borrower and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not have a Material Adverse Effect (the "INTELLECTUAL PROPERTY"). No
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does the Borrower know of any valid basis
for any such claim. The use of such Intellectual Property by the Borrower and
its Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, do not have a Material Adverse
Effect.
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5.10 NO BURDENSOME RESTRICTIONS. No applicable Requirement of
Law or Contractual Obligation of the Borrower or any of its Subsidiaries has a
Material Adverse Effect.
5.11 TAXES. Each of the Borrower and its Subsidiaries has
filed all material tax returns which, to the knowledge of such Loan Party, are
required to be filed by it and has paid or caused to be paid all taxes shown on
said returns and all assessments, fees and other governmental charges levied
upon it or upon any of its property or income which are due and payable, other
than such taxes, assessments, fees and other governmental charges, if any, as
are being diligently contested in good faith and by appropriate proceedings and
with respect to which there have been established adequate reserves on the books
of the Borrower or its Subsidiaries, as the case may be, in accordance with
GAAP. No tax lien has been filed and, to the knowledge of the Borrower, no claim
is being asserted, with respect to any such taxes or assessments, fees or other
governmental charges, other than claims which are being contested in good faith
by appropriate proceedings, PROVIDED that adequate reserves with respect thereto
are being maintained on the books of the Borrower or the applicable Subsidiary,
as the case may be, in conformity with GAAP.
5.12 FEDERAL RESERVE REGULATIONS. (a) Neither the Borrower nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" "margin stock" within the respective meanings of each of the
quoted terms under Regulation G or Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, for
any purpose which entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board of Governors of the Federal Reserve
System, including Regulation G, U or X.
5.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
5.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. Neither the
Borrower nor any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness under this
Agreement or the other Loan Documents.
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5.15 SUBSIDIARIES. The Persons listed on Schedule 5.15
constitute all the Subsidiaries of the Borrower and ▇▇▇▇▇▇ & ▇▇▇▇▇ at the date
hereof.
5.16 PURPOSE OF LOANS. The proceeds of the Loans made on the
Closing Date will be used to finance the Acquisition, to refinance existing
indebtedness of ▇▇▇▇▇▇ & Blake and to pay costs and expenses relating to the
Acquisition. Loans made after the Closing Date shall be used for general
corporate purposes of the Borrower and its Subsidiaries.
5.17 ENVIRONMENTAL MATTERS. Other than exceptions to any of
the following that could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect:
(a) each of the Borrower and its Subsidiaries: (i) is, and
within the period of all applicable statutes of limitation has been, in
compliance with all applicable Environmental Laws; (ii) holds all
Environmental Permits (each of which is in full force and effect)
required for any of its current or planned operations or for any
property owned, leased, or otherwise operated by it; (iii) is, and
within the period of all applicable statutes of limitation has been, in
compliance with all of its Environmental Permits; and (iv) reasonably
believes that (A) each of its Environmental Permits will be timely
renewed without expense, (B) any additional Environmental Permits which
it has reason to believe will be required will be timely obtained
without expense, and (C) the costs of complying with such renewed or
additional Environmental Permits and any other Environmental Laws
applicable to or reasonably expected to apply to the Borrower and its
Subsidiaries will not exceed the Borrower's and its Subsidiaries'
existing costs of complying with Environmental Permits and
Environmental Laws.
(b) Materials of Environmental Concern have not been
transported, disposed of, emitted, discharged, or otherwise released or
threatened to be released, to or at any real property presently or
formerly owned, leased or operated by the Borrower or any Subsidiary or
at any other location, which could reasonably be expected to (i) give
rise to liability of the Borrower or any Subsidiary under any
applicable Environmental Law, (ii) interfere with the Borrower's
continued operations, or (iii) impair the fair saleable value of any
material real property owned or leased by the Borrower or any
Subsidiary.
(c) no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any
Subsidiary is, or to the knowledge of the Borrower will be, named as a
party is pending or, to the knowledge of the Borrower, threatened.
(d) the Borrower has not received any written request for
information, or been notified that it or any Subsidiary is a
potentially responsible party under the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental
Concern.
(e) neither the Borrower nor any Subsidiary has entered into
or agreed to any consent decree, order, or settlement or other
agreement, nor is subject to any judgment, decree, or order or other
agreement, in any judicial, administrative, arbitral, or other forum,
relating to compliance with or liability under any Environmental Law.
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(f) neither the Borrower nor any Subsidiary has assumed or
retained, by contract or operation of law, any liabilities of any kind,
fixed, contingent or otherwise, under any Environmental Law.
5.18 NO MATERIAL MISSTATEMENTS. (a) All written information,
reports, financial statements, exhibits and schedules furnished to the
Administrative Agent or any Lender by or on behalf of the Borrower or any of its
Subsidiaries and the Acquisitions in connection with the negotiation of any Loan
Document or included therein or delivered pursuant thereto, when taken as a
whole, did not contain, and as they may be amended, supplemented or modified
from time to time, will not contain, as of the date such statements were made,
any untrue statements of a material fact and did not omit, and as they may be
amended, supplemented or modified from time to time, will not omit, to state as
of the date such statements were made, any material fact necessary in order to
make the statements contained therein, in the light of the circumstances under
which they were, are or will be made, not materially misleading.
(b) All projections and estimates concerning the Borrower and
its Subsidiaries that are or have been made available to the Administrative
Agent or any Lender by or on behalf of the Borrower or any of its Subsidiaries,
have been or will be prepared based on good faith estimates and based upon
assumptions believed by the Borrower to be reasonable at the time of such
preparation.
5.19 CAPITALIZATION OF ▇▇▇▇▇▇ & ▇▇▇▇▇ AND THE BORROWER. The
authorized Capital Stock, the par value thereof and the amount of such
authorized Capital Stock issued and outstanding for each of the Borrower and its
Subsidiaries as of the Closing Date (after giving effect to the issuance of the
common stock described in subsection 6.1(0) and the consummation of the
Acquisition) are set forth on Schedule 5.19. All outstanding shares of Capital
Stock of the Borrower are fully paid and nonassessable and, on and after the
Closing Date, will be owned beneficially and of record by Parent and will be
free of all Liens (other than the Liens created pursuant to the Security
Documents).
5.20 LOCATION OF REAL PROPERTY AND LEASED PREMISES. (a) Part A
of Schedule 5.20 lists completely and correctly as of the Closing Date all
material real property (other than Oil and Gas Properties) owned in fee by
▇▇▇▇▇▇ & Blake, the Borrower and each of its Subsidiaries and the addresses
thereof.
(b) Part B of Schedule 5.20 lists completely and correctly as
of the Closing Date all material real property (other than Oil and Gas
Properties) leased by the Borrower and each of its Subsidiaries and the
respective addresses thereof.
5.21 SOLVENCY. (a) Immediately after the consummation of the
Acquisition and the other transactions to occur on the Closing Date and
immediately following the making of each Loan made on the Closing Date and after
giving effect to the application of the proceeds thereof, (i) the fair value of
the assets of the Borrower on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, direct, subordinated, contingent or otherwise,
of the Borrower on a consolidated basis; (ii) the present fair saleable value of
the property of the Borrower on a consolidated basis will be greater than the
amount that will be required to pay the probable liability of the Borrower on a
consolidated basis on its debts and other liabilities, direct, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (iii) the Borrower and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, direct, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (iv)
the Borrower and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in which they
are engaged as such businesses are now conducted and are proposed to be
conducted following the Closing Date. For purposes of the representation
contained in this
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subsection 5.21(a), unliquidated, contingent, disputed and unmatured claims
shall be valued at the amount that can, in light of all the facts and
circumstances existing at such time, be reasonably expected to be an actual or
matured liability.
(b) The Borrower neither intends to, nor believes that it or
any of its Subsidiaries will, incur debts beyond its ability to pay such debts
as they mature, taking into account the timing and amounts of cash available to
be received by it or any such Subsidiary and the time and amounts of cash to be
payable on or in respect of its Indebtedness or that of any such Subsidiary.
5.22 LABOR MATTERS. There are no strikes pending or threatened
against the Borrower or any of its Subsidiaries. The hours worked and payments
made to the Borrower or any of its Subsidiaries have not been in violation in
any material respect of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All material payments due from the Borrower or any of
its Subsidiaries or for which any claim may be made against the Borrower or any
of its Subsidiaries, on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of the Borrower or such Subsidiary to the extent required by GAAP. The
consummation of the Acquisition will not give rise to a right of termination or
right of renegotiation on the part of any union under any collective bargaining
agreement to which the Borrower or any of its Subsidiaries (or any predecessor)
is a party or by which the Borrower or any Subsidiary (or any predecessor) is
bound.
5.23 INSURANCE. Each of the Borrower and its Subsidiaries
carries and maintains with respect to its insurable properties insurance
(including, to the extent consistent with past practices, self-insurance) with
financially sound and reputable insurers of the types, to such extent and
against such risks as is customary with companies in the same or similar
businesses.
5.24 FUTURE COMMITMENTS. As of the Closing Date, except as set
forth on Schedule 5.24, on a net basis there are no gas imbalances, take-or-pay
or other prepayments with respect to any Oil and Gas Property of the Borrower or
any Subsidiary which would require the Borrower or any Subsidiary to deliver
Hydrocarbons produced from Oil and Gas Properties at some future time without
then or thereafter receiving full payment therefor.
5.25 SECURITY DOCUMENTS. (a) The provisions of the Guarantee
and Collateral Agreement and the Parent Pledge Agreements will be effective to
create in favor of the Administrative Agent, for the ratable benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof and (i) when stock certificates and notes
representing or constituting such pledged securities are delivered to the
Administrative Agent, the Guarantee and Collateral Agreement and the Parent
Pledge Agreements shall constitute a perfected first lien on, and security
interest in, all right, title and interest of the pledgor party therein in the
pledged securities described therein and (ii) when the financing statements
referred to in Schedule 5.25 have been filed and recorded in the offices in the
jurisdictions listed in Schedule 5.25 under the names set forth in Schedule
5.25, the Administrative Agent, for the ratable benefit of the Lenders, shall
have a fully perfected first priority security interest in all right, title and
interest of the Borrower and each of its Subsidiaries in such Collateral (other
than the pledged securities referred to in Clause (i) above) superior in right
to any Liens which the Borrower, any of its Subsidiaries or any third Person may
have against such Collateral or interests therein.
(b) The provisions of the Mortgages will be effective to grant
to the Administrative Agent, for the ratable benefit of the Lenders, legal,
valid and enforceable mortgage liens on all of the right, title and interest of
the Borrower in the mortgaged property described therein. Such Mortgages,
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when recorded in the appropriate recording office, will constitute perfected
first liens on, and security interest in, such mortgaged property.
SECTION 6. CONDITIONS PRECEDENT
6.1 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT. The agreement
of each Lender to make the initial Loan requested to be made by it and of the
Issuing Lender to issue the initial Letter of Credit to be issued by it is
subject to the satisfaction, immediately prior to or concurrently with the
making of such Loan and the issuance of such Letter of Credit on the Closing
Date, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent) (i) this Agreement, executed and delivered by a
duly authorized officer of the Borrower, (ii) the Guarantee and
Collateral Agreement, executed and delivered by a duly authorized
officer of each Loan Party thereto, (iii) each Mortgage (except as
otherwise provided in subsections 6.1(v) and 7.12), each executed and
delivered by a duly authorized officer of each Loan Party that is a
party thereto; (iv) Parent Pledge Agreements, each executed and
delivered by a duly authorized officer of each Loan Party thereto and
(v) the Assumption Agreement, executed and delivered by a duly
authorized officer of the Borrower.
(b) RELATED AGREEMENTS. The Administrative Agent shall have
received true and correct copies, certified as to authenticity by the
Borrower, of each Acquisition Document and such other documents or
instruments as may be reasonably requested by the Administrative Agent,
including, without limitation, a copy of any debt instrument or
security agreement to which the Borrower and its Subsidiaries will be a
party after the Closing Date.
(c) BORROWING CERTIFICATE. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), a certificate of the Borrower, dated the Closing
Date, substantially in the form of Exhibit E, with appropriate
insertions and attachments, satisfactory in form and substance to the
Administrative Agent, executed by a Responsible Officer of the
Borrower.
(d) CORPORATE PROCEEDINGS OF THE LOAN PARTIES. The
Administrative Agent shall have received (with the number of original
counterparts requested by the Administrative Agent), a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of each Loan Party authorizing (i) the
execution, delivery and performance of this Agreement and the Loan
Documents to which it is a party, (ii) in the case of the Borrower, the
borrowings contemplated hereunder and (iii) the granting by it of the
Liens created pursuant to the Loan Documents, certified by the
Secretary or an Assistant Secretary of such Loan Party as of the
Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(e) LOAN PARTY INCUMBENCY CERTIFICATES. The Administrative
Agent shall have received (with the number of original counterparts
requested by the Administrative Agent), a certificate of each Loan
Party, dated the Closing Date, as to the incumbency and signature of
the officers of such Loan Party executing any Loan Document reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of such Loan Party.
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(f) CORPORATE DOCUMENTS. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), true and complete copies of the certificate of
incorporation and by-laws of each Loan Party, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or
an Assistant Secretary of such Loan Party.
(g) CONSENTS, LICENSES AND APPROVALS. All governmental and
third party approvals (including consents) necessary in connection with
the Acquisition and the execution, delivery and performance of the Loan
Documents shall have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the
Acquisition or the financing thereof, including, without limitation,
this Agreement. The Administrative Agent shall have received, with a
counterpart for each Lender, a certificate of the Borrower as to the
foregoing.
(h) FEES. The Lenders, the Agents and the Arranger shall have
received all fees and expenses required to be paid on or before the
Closing Date for which invoices have been presented.
(i) LEGAL OPINIONS. The Administrative Agent shall have
received the following legal opinions:
(i) the executed legal opinion of Black, McCuskey,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Borrower and each Guarantor,
substantially in the form of Exhibit C-1;
(ii) the executed legal opinion of ▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇, counsel to each Parent (excluding ▇▇▇▇▇▇▇ ▇▇▇▇ &
Company, L.L.C.), substantially in the form of Exhibit C-2;
(iii) the executed legal opinion of ▇▇▇▇▇▇▇▇▇▇, Boos
& Associates, P.C., Michigan Counsel to the Administrative
Agent, substantially in the form of Exhibit C-3;
(iv) the executed legal opinion of Vorys, ▇▇▇▇▇,
▇▇▇▇▇▇▇ and ▇▇▇▇▇, Ohio Counsel to the Administrative Agent,
substantially in the form of Exhibit C-4; and
(v) the executed legal opinion of ▇▇▇▇▇▇ & Lindhome,
Pennsylvania and New York Counsel to the Administrative Agent,
substantially in the form of Exhibit C-5;
(vi) the executed legal opinion of ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Love, West Virginia Counsel to the
Administrative Agent, substantially in the form of Exhibit
C-6.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(j) PLEDGED STOCK; STOCK POWERS. The Administrative Agent
shall have received the certificates representing the shares pledged
pursuant to the Guarantee and Collateral Agreement and the Parent
Pledge Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the
pledgor thereof, and the notes pledged, if any, pursuant to the
Guarantee and Collateral Agreement and the Parent Pledge Agreement,
each endorsed in blank by a duly authorized officer of the pledgor
thereof.
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(k) ACTIONS TO PERFECT LIENS. Except as otherwise provided in
subsections 6.1(v) and 7.12, the Administrative Agent shall have
received properly completed and executed financing statements (or other
similar documents), including, without limitation, duly executed
financing statements on form UCC-1, necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created by the
Security Documents and the Administrative Agent shall be reasonably
satisfied that, other than filing such financing statements and other
similar documents and the Mortgages, no other filings, recordings,
registrations or other actions are necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created by the
Security Documents.
(l) COPIES OF DOCUMENTS. If requested by the Administrative
Agent, the Administrative Agent shall have received a copy, certified
by such parties as the Administrative Agent may reasonably deem
appropriate, of any document burdening the property covered by any
Mortgage.
(m) LIEN SEARCHES. The Administrative Agent shall have
received the results of recent lien searches by Persons reasonably
satisfactory to the Administrative Agent, in such jurisdictions and
offices as it shall request and such searches shall reveal no Liens on
any assets of the Borrower, ▇▇▇▇▇▇ & ▇▇▇▇▇ and each of their respective
Subsidiaries, except for (i) Liens permitted by subsection 8.3 and (ii)
Liens to be released, on the Closing Date.
(n) INSURANCE. The Administrative Agent shall have received
(i) copies of, or an insurance broker's or agent's certificate as to
coverage under, the insurance policies required by subsection 7.5 and
the applicable provisions of the Security Documents, and each property
and casualty policy covering any property which is Collateral shall be
endorsed or otherwise amended to include a "standard" or "New York"
lender's loss payable endorsement and to name the Administrative Agent
as additional insured, in form and substance reasonably satisfactory to
the Administrative Agent and (ii) confirmation from such insurance
broker that the scope and amount of coverage maintained by the Borrower
and its Subsidiaries are comparable to the scope and amount of the
insurance maintained by other companies of similar size in the same
industry and general location.
(o) COMMON STOCK. The Borrower shall have received at least
$108.2 million in gross cash proceeds from the issuance of its
newly-issued Common Stock to Parent.
(p) SUBORDINATED FINANCING. The Subordinated Notes shall have
been issued, and the Borrower shall have received gross proceeds of not
less than $225 million therefrom, on terms and conditions no less
favorable to the Lenders than those contained in the Subordinated Debt
Offering Memorandum and the Senior Subordinated Indenture.
(q) ACQUISITION. The Acquisition shall have been consummated
simultaneously with the initial extensions of credit hereunder in
accordance with applicable law, the Acquisition Documents and all
related documentation on terms reasonably acceptable to the Lenders and
the Agents and the capital, corporate and ownership structures of the
Loan Parties, after giving effect to the Acquisition, shall be
satisfactory to the Lenders. The aggregate consideration paid by the
Borrower to the holders of capital stock of ▇▇▇▇▇▇ & ▇▇▇▇▇ shall not
exceed $441 million (including related fees and expenses and the
refinancing of indebtedness). None of the conditions to the obligations
of any of the parties to the Acquisition Agreement to consummate the
Acquisition shall have been waived, and the Acquisition Agreement shall
not have been amended, supplemented or otherwise modified, without the
prior written consent of the Required Lenders.
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(r) REFINANCED INDEBTEDNESS. The Administrative Agent shall
have received evidence satisfactory to it that, simultaneously with the
making of the initial Revolving Credit Loans, the Refinanced
Indebtedness shall have been paid in full, all commitments relating
thereto shall have been terminated and all Liens securing the
Refinanced Indebtedness shall have been terminated in a manner
satisfactory to the Administrative Agent for the benefit of the
Lenders.
(s) REDEMPTION OF PREFERRED STOCK. ▇▇▇▇▇▇ & Blake shall have
effected the redemption of all issued and outstanding shares of its
Series A Preferred Stock in accordance with terms of such preferred
stock prior to the record date to be established by its Board of
Directors for the special meeting of stockholders to approve the
Acquisition.
(t) SOURCES AND USES. The Administrative Agent and the Lenders
shall be reasonably satisfied that the sources and uses of funds for
the Acquisition shall not be materially inconsistent with the sources
and uses listed on Schedule 6.1.
(u) RESERVE REPORT. The Administrative Agent shall have
received a Reserve Report with respect to the Oil and Gas Properties of
▇▇▇▇▇▇ & ▇▇▇▇▇ satisfactory in form and substance to the Administrative
Agent (collectively, the "INITIAL RESERVE REPORT").
(v) TITLE TO OIL AND GAS PROPERTIES. The Lenders shall be
satisfied as to the title to the Oil and Gas Properties representing
all of the Oil and Gas Properties included in the Initial Reserve
Report and the Borrower and its Subsidiaries shall have executed and
delivered Mortgages covering such percentage of Oil and Gas Properties
included in the Initial Reserve Report as shall be reasonably
acceptable to the Engineering Committee.
(w) ENVIRONMENTAL REPORTS. The Administrative Agent shall have
received environmental assessment reports from Enviro Solutions, dated
March 7, 1997, with respect to processing and other facilities and
other parcels of real property owned or leased by ▇▇▇▇▇▇ & ▇▇▇▇▇, and
the Lenders shall be reasonably satisfied with the potential
environmental liabilities to which ▇▇▇▇▇▇ & Blake and its Subsidiaries
may be subject based on such reports.
(x) FLOOD INSURANCE. With respect to any of the Mortgaged
Properties which is located in an area identified by the Secretary of
Housing and Urban Development as having special flood hazards, the
Administrative Agent shall have delivered notice(s) to, and received
acknowledgement from, the relevant Loan Party as required pursuant to
Section 208.8(e)(3) of Regulation H of the Board of Governors of the
Federal Reserve System.
(y) ADDITIONAL MATTERS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received
such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
6.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit and any
renewal or extension of a Letter of Credit) is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by each Loan Party in or pursuant
to the Loan Documents shall be true and correct in all
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material respects on and as of such date as if made on and as of such
date (unless such representations and warranties are stated to relate
to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of
such earlier date).
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) ADDITIONAL MATTERS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement and the other Loan
Documents and the Acquisition Agreement shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
Each borrowing by, and Letter of Credit issued on behalf of, the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in this subsection have been
satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Loan, Note or Letter of Credit remains outstanding and
unpaid or any amount is owing to any Lender or any Agent hereunder or under any
other Loan Document, the Borrower shall and (except in the case of delivery of
financial information, reports and notices) shall cause each of its Subsidiaries
to:
7.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent
with sufficient copies for the Lenders:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, (i) a copy of the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of operations, cash flows and changes in stockholders'
equity for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by Ernst & Young LLP or other
independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly fiscal periods
of each fiscal year of the Borrower and its consolidated Subsidiaries,
the unaudited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of operations, cash flows and changes
in stockholders' equity of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end and audit adjustments);
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all such financial statements shall be complete and correct in all material
respects and shall be prepared in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
7.2 CERTIFICATES; OTHER INFORMATION. Furnish to the
Administrative Agent, with sufficient copies for the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of a
Responsible Officer stating that, to the best of such Officer's
knowledge, during such period (i) no Subsidiary has been formed or
acquired (or, if any such Subsidiary has been formed or acquired, the
Borrower has complied with the requirements of subsection 7.10 with
respect thereto), (ii) neither the Borrower nor any of its Subsidiaries
has changed its name, its principal place of business, its chief
executive office or the location of any material item of tangible
Collateral without complying with the requirements of this Agreement
and the Security Documents with respect thereto and (iii) the Borrower
has observed or performed all of its covenants (and setting forth the
calculations used to determine compliance with the covenants set forth
in subsection 8.1) and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that such officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate;
(c) not later than 45 days after the end of each fiscal year
of the Borrower, a copy of the projections by the Borrower of the
operating budget and cash flow budget of the Borrower and its
Subsidiaries for the succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the effect
that such projections have been prepared based on good faith estimates
and reasonable assumptions of the Borrower;
(d) within five days after the same are filed, copies of all
financial statements and reports, if any, which the Borrower may make
to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(e) promptly upon receipt thereof, copies of all reports and
management letters submitted to the Borrower or any Subsidiary by
independent public accountants in connection with any interim or
special audit of the books or operations of the Borrower or such
Subsidiary made by such accountants;
(f) together with any Reserve Report delivered pursuant to
subsection 4.9, a schedule identifying as of the last day of the fiscal
period for which the financial statements are delivered or as of the
date of delivery of such Reserve Report, as the case may be, each
commodity fixed price contract having a term longer than one year then
in effect as to which the Borrower or any of its Subsidiaries is bound
which provides for payments during any year of such contract of
$5,000,000 or more, and setting forth the names of the parties thereto
and of any guarantees thereof, and the volumes attributable to each
such contract;
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(g) deliver to the Administrative Agent within 30 days of
obtaining any renewal or replacement insurance policies as and when
required by subsection 7.5(b)(v), certificates of insurance evidencing
the Borrower's compliance with subsection 7.5; and
(h) promptly, such additional financial and other information
concerning the Borrower and its Subsidiaries as any Lender (acting
through the Administrative Agent) may from time to time reasonably
request.
7.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all of its obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or the applicable Subsidiary, as the case
may be.
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE;
COMPLIANCE WITH LAW AND CONTRACTUAL OBLIGATIONS. Except as permitted by
subsections 8.5 and 8.6, continue to engage in business of the same general type
as now conducted by it and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business; comply with all Contractual Obligations and Requirements of Law except
to the extent that failure to comply therewith could not reasonably be expected
to have, in the aggregate, a Material Adverse Effect.
7.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all material
property owned or leased by it that is useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted; maintain with
financially sound and reputable insurance companies insurance of such types, in
such amounts and against such risks as is customary to be maintained by
companies engaged in the same or a similar business in the same general area;
and furnish to the Administrative Agent, upon written request, full information
as to the insurance carried.
(b) (i) Cause all such property and casualty insurance
policies with respect to the Collateral to be endorsed or otherwise amended to
include a "standard" or "New York" lender's loss payable endorsement (or other
endorsement acceptable to the Administrative Agent), in form and substance
reasonably satisfactory to the Administrative Agent, which endorsement shall
provide that, from and after the Closing Date, if the insurance carrier shall
have received written notice from the Administrative Agent of the occurrence of
an Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to the Borrower or the Loan Parties under such policies directly to the
Administrative Agent; (ii) cause all such policies to provide that neither the
Borrower, the Administrative Agent, nor any other party shall be a coinsurer
thereunder; (iii) if requested by the Administrative Agent, deliver original or
certified copies of all such policies to the Administrative Agent; (iv) cause
each such policy to provide that it shall not be canceled, or not renewed (A) by
reason of nonpayment of premium unless not less than 20 days' prior written
notice thereof has been given by the insurer to the Administrative Agent or (B)
for any other reason unless not less than 30 day's prior written notice thereof
has been given by the insurer to the Administrative Agent; and (v) if requested
in writing by the Administrative Agent, deliver to the Administrative Agent,
prior to the cancellation or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent), or insurance certificate with
respect thereto, together with evidence satisfactory to the Administrative Agent
of payment of the premium therefor.
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all
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Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities; and permit representatives of any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be requested through the Administrative Agent and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.
7.7 NOTICES. Promptly give notice to the Administrative Agent
of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in the case of either clause (i) or (ii), if not cured
or if adversely determined, as the case may be, could reasonably be
expected, in the opinion of a Responsible Officer, to have a Material
Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries (i) which could reasonably be expected, in the
opinion of a Responsible Officer, to result in an adverse judgment of
$1,000,000 or more not covered by insurance or in which injunctive or
similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan; and
(e) any material adverse change in the business, operations,
property, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what the Borrower and its Subsidiaries have taken or propose to take
with respect thereto.
7.8 ENVIRONMENTAL LAWS. (a)(i) Comply with all Environmental
Laws applicable to it, and obtain, comply with and maintain any and all
Environmental Permits necessary for its operations as conducted and as planned;
and (ii) take all reasonable efforts to ensure that all of its tenants,
subtenants, contractors, subcontractors, and invitees comply with all
Environmental Laws, and obtain, comply with and maintain any and all
Environmental Permits, applicable to any of them insofar as any failure to so
comply, obtain or maintain reasonably could be expected to adversely affect the
Borrower or any of its Subsidiaries. For purposes of this subsection 7.8(a),
noncompliance by the Borrower or any of its Subsidiaries with any applicable
Environmental Law or Environmental Permit shall be deemed not to constitute a
breach of this covenant provided that, upon learning of any actual or suspected
noncompliance, the Borrower and its Subsidiaries shall promptly undertake all
reasonable efforts to achieve compliance, and provided further that, in any
case, such non-compliance, and any other noncompliance with Environmental Law,
individually or in the aggregate, could not reasonably
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be expected to give rise to a Material Adverse Effect or materially and
adversely affect the value of any material Mortgaged Property considered for
calculation of the Borrowing Base.
(b) Comply with all orders and directives of all Governmental
Authorities regarding Environmental Laws, other than such orders and directives
as to which an appeal or other appropriate action to contest such order or
directive has been timely and properly taken in good faith, and provided that
the pendency of any and all such appeals could not reasonably be expected to
give rise to a Material Adverse Effect or to materially and adversely affect the
value of any Mortgaged Property.
(c) Prior to acquiring any ownership or leasehold interest in
real property or other interest in any real property that could give rise to the
Borrower being subject to potential significant liability under or violations of
any Environmental Law that could reasonably be expected to have a Material
Adverse Effect: (i) notify the Engineering Committee; and (ii) if requested by
the Engineering Committee, provide to the Engineering Committee a written report
by an environmental consultant reasonably acceptable to the Engineering
Committee (the "Environmental Consultant") assessing the presence or potential
presence of significant levels of any Materials of Environmental Concern on,
under, in, or about the property, or of other conditions that could give rise to
potentially significant liability or violations of any Environmental Law.
7.9 FURTHER ASSURANCES. Upon the request of the Administrative
Agent, promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which
are necessary or advisable to maintain in favor of the Administrative Agent, for
the benefit of the Lenders, Liens on the Collateral that are duly perfected in
accordance with all applicable Requirements of Law.
7.10 ADDITIONAL COLLATERAL. (a) It is the intention of the
parties hereto that the Obligations and guarantees thereof be secured by a
perfected first priority security interest in the following properties of the
Borrower and its Subsidiaries (other than the Persons listed on Schedule
1.1(d)): (i) Oil and Gas Properties representing at least 75% of the present
value of the Oil and Gas Properties included in the most recently delivered
Reserve Report, (ii) all of the gathering system assets, (iii) all accounts
receivable, equipment, inventory, and intangibles and (iv) all of the Capital
Stock of the Borrower and its Subsidiaries. Accordingly, with respect to assets
acquired after the Closing Date that are intended to be subject to the lien
created by any of the Security Documents but which are not so subject (other
than any assets described in paragraph (b) of this subsection), the Borrower and
its Subsidiaries shall, from time to time (and, in any event, (x) within 30 days
after the reasonable request by the Administrative Agent to do so and (y) with
respect to Oil and Gas Properties, only to the extent necessary to ensure
compliance with subsection 7.11), (A) execute and deliver to the Administrative
Agent such amendments to the relevant Security Documents or such other documents
as the Administrative Agent shall reasonably deem necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a Lien on
such assets, (B) take all actions necessary or advisable to cause such Lien to
be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be requested by the Administrative Agent, and (C) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (A) and (B) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary of the Borrower, promptly upon the request of the
Administrative Agent: (i) cause such
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new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement,
pursuant to documentation which is in form and substance reasonably satisfactory
to the Administrative Agent, and (B) to take all actions reasonably necessary or
advisable to cause the Lien created by the Guarantee and Collateral Agreement to
be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent, (ii)
cause the Capital Stock of such Person owned by the Borrower and any Subsidiary
to be pledged to the Administrative Agent, for the ratable benefit of the
Lenders, pursuant to documentation reasonably satisfactory to the Administrative
Agent, and take all actions reasonably necessary or advisable to cause the Lien
thereon to be duly perfected in accordance with all applicable Requirements of
Law, and deliver the certificates representing such Capital Stock to the
Administrative Agent, together with undated stock powers executed and delivered
in blank by a duly authorized officer of the Borrower or such Subsidiary, as the
case may be and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described in clauses
(i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any Oil and Gas Property acquired after
the Closing Date by the Borrower or any Subsidiary, promptly (and in any event
within 30 days after the acquisition thereof) but only to the extent required to
maintain compliance with subsection 7.11: (i) execute and deliver to the
Administrative Agent such amendments to the relevant Security Documents or such
other documents as the Administrative Agent shall deem reasonably necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a Lien on such Oil and Gas Property; (ii) take all actions reasonably necessary
or advisable to cause such Lien to be duly perfected in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
mortgages, deeds of trust or like documents or financing statements in such
jurisdictions as may be requested by the Administrative Agent; and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
7.11 COLLATERAL VALUE. Within 60 days after a Reserve Report
is delivered pursuant to subsection 4.9, cause to be included in the Collateral,
Oil and Gas Properties representing at least 75% of the value of the total Oil
and Gas Properties of the Borrower and its Subsidiaries included in the most
recently delivered Reserve Report.
7.12 OIL AND GAS MORTGAGES. Within 90 days after the Closing
Date, cause to be executed and delivered to the Administrative Agent, for the
ratable benefit of the Lenders, Mortgages which are satisfactory in form and
substance to the Administrative Agent and which, together with the Mortgages
executed and delivered on the Closing Date, shall cover at least 75% of the
value of the Oil and Gas Property included in the Initial Reserve Report.
7.13 MAINTENANCE AND OPERATION OF PROPERTY. To the extent that
the failure to comply could reasonably be expected to have a Material Adverse
Effect on the financial condition or operations of Borrower or its Subsidiaries
and consistent with the standards of a reasonably prudent operator:
(a) Maintain, develop, and operate Borrower's Oil and
Gas Properties, and oil and gas gathering assets in a good and
workmanlike manner, and observe and comply with all of the terms and
provisions, express or implied, of all oil and gas leases relating to
the properties so long as the oil and gas leases are capable of
producing hydrocarbons and
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accompanying elements in quantities and at prices providing for
continued efficient and profitable operation of business;
(b) Comply in all material respects with all
contracts and agreements applicable to or relating to Borrower's Oil
and Gas Properties or the production and sale of hydrocarbons and
accompanying elements therefrom;
(c) At all times, maintain, preserve, and keep all
operating equipment used with respect to Borrower's Oil and Gas
Properties, and oil and gas gathering assets in proper repair, working
order and condition, and make all necessary or appropriate repairs,
renewals, replacements, additions and improvements thereto so that the
efficiency of the operating equipment shall at all times be properly
preserved and maintained, provided that no item of operating equipment
need be so repaired, renewed, replaced, added to or improved, if
Borrower or its Subsidiaries shall in good faith determine that the
action is not necessary or desirable for its continued efficient and
profitable operation of business.
(d) With respect to Borrower's Oil and Gas
Properties, and oil and gas gathering assets which are operated by
operators other than Borrower or a Subsidiary, seek to enforce the
operators' contractual obligations to maintain, develop, and operate
such properties subject to the applicable operating agreements.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Loan, Note or any Letter of Credit remains outstanding and
unpaid or any amount is owing to any Lender or any Agent hereunder or under any
other Loan Document, the Borrower shall not, and shall not (except with respect
to subsection 8.1) permit any Subsidiary to, directly or indirectly:
8.1 FINANCIAL COVENANT CONDITIONS. (a) Senior Debt Interest
Coverage Ratio. Permit, for any period of four consecutive fiscal quarters
ending after the date hereof, the ratio of EBITDA for such four consecutive
fiscal quarters to Consolidated Interest Expense on Senior Debt for such four
consecutive fiscal quarters to be less than 3.5 to 1.0.
(b) Total Debt Interest Coverage Ratio. Permit, for any period
of four consecutive fiscal quarters ending after the date hereof, the ratio of
EBITDA to Consolidated Interest Expense of the Borrower and its Subsidiaries for
such four consecutive fiscal quarters to be (i) through the period ending June
30, 1999, less than 1.75 to 1.0, (ii) thereafter through the period ending June
30, 2000, less than 1.85 to 1.00, (iii) thereafter through the period ending
June 30, 2001, less than 2.15 to 1.00 and (iv) thereafter, less than 2.25 to
1.0.
(c) Senior Debt Leverage Ratio. Permit the ratio of Senior
Debt as of the last day of any fiscal quarter to EBITDA for the period of four
consecutive fiscal quarters then ended to be greater than 3.5 to 1.0;
(d) Total Debt Leverage Ratio. Permit the ratio of
Indebtedness of the Borrower and its Subsidiaries as of the last day of any
fiscal quarter to EBITDA for the period of four consecutive fiscal quarters then
ended to be (i) through the period ending June 30, 1998, greater than 6.0 to
1.0, (ii) thereafter through the period ending June 30, 1999, greater than 5.75
to 1.00 and (iii) thereafter, greater than 5.5 to 1.0.
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(e) Current Ratio. Permit the ratio of current assets to
current liabilities at any time to be less than 1.0 to 1.0 (for purposes of this
calculation, current assets will include an amount equal to the Borrowing Base
Availability).
During the first three fiscal quarters after the Closing Date
(commencing with the quarter ending September 30, ▇▇▇▇), ▇▇▇▇▇▇ and Consolidated
Interest Expense for purposes of paragraphs (a), (b), (c), and (d) will be
calculated based upon the Borrower's operations after the Closing Date,
annualized in the following manner:
first fiscal quarter: actual figure for such quarter multiplied
by four.
second fiscal quarter: actual figures for each of first and second
fiscal quarters multiplied by two.
third fiscal quarter: actual figures for each of first, second
and third fiscal quarters multiplied by 4/3.
In addition, for purposes of determining compliance with
paragraphs (c) and (d), Indebtedness described in subsections 8.2(f) and (g) and
Guarantee Obligations with respect thereto shall not be included in Indebtedness
and Senior Debt.
8.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness or allow any Subsidiary to issue preferred
stock, except:
(a) Indebtedness of the Loan Parties under the Loan Documents;
(b) Indebtedness of the Borrower issued to any Wholly-Owned
Subsidiary and Indebtedness and preferred stock of any Wholly-Owned
Subsidiary issued to the Borrower or any other Wholly-Owned Subsidiary;
(c) (i) Indebtedness of the Borrower evidenced by the Senior
Subordinated Notes and (ii) Permitted Subordinated Refinancing Debt, if
any;
(d) Guarantee Obligations permitted by subsection 8.4;
(e) Indebtedness of the Borrower and its Wholly-Owned
Subsidiaries existing on the Closing Date and listed on Schedule
1.1(c), but not any extensions, renewals or replacements of such
Indebtedness;
(f) Indebtedness under Interest Rate Protection Agreements
entered into for the purpose of limiting interest rate risks and not
for the purpose of speculation, provided that the obligations under
such agreements are related to payment obligations on Indebtedness
otherwise permitted by the terms of this covenant;
(g) Indebtedness under Commodity Hedging Agreements provided
that such contracts were entered into in the ordinary course of
business for the purpose of limiting risks that arise in the ordinary
course of business of the Borrower and its Subsidiaries and not for the
purpose of speculation; and
(h) additional Indebtedness of the Borrower and its
Wholly-Owned Subsidiaries not to exceed $10,000,000 in aggregate
principal amount at any one time outstanding.
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8.3 LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes, assessments, fees and other governmental
charges and claims that are not yet due or which are being contested in
good faith by appropriate proceedings, PROVIDED that adequate reserves
with respect thereto are maintained on the books of the Borrower or the
applicable Subsidiary, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, suppliers' mechanics',
materialmen's, vendors', repairmen's, landlords' and other like Liens
arising in the ordinary course of business securing obligations which
are not overdue for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings;
(c) Liens incurred and deposits made in connection with
workers' compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits made to secure the performance of bids, tenders,
trade contracts (other than for borrowed money), leases, statutory and
regulatory obligations, surety and appeal bonds, performance and
return-of-money bonds and other obligations of a like nature incurred
in the ordinary course of business;
(e) Liens constituting survey exceptions, encumbrances,
easements and reservations of, or rights of others for, rights-of-way,
zoning and other restrictions as to the use of real properties and
other similar encumbrances incurred in the ordinary course of business
which, with respect to all of the foregoing, do not secure the payment
of Indebtedness of the type described in clauses (a)-(d) of the
definition thereof and which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from the value
of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any Subsidiary;
(f) Liens in favor of the Borrower securing Indebtedness of
any Subsidiary to the Borrower;
(g) Liens encumbering gathering system assets that arise under
operation of law incurred in the ordinary course of business which,
with respect to all of the foregoing, do not secure the payment of
Indebtedness of the type described in clauses (a)-(d) of the definition
thereof and which, in the aggregate, are not substantial in amount and
which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any Subsidiary;
(h) Liens reserved in oil and gas mineral leases for bonus or
rental payments and for compliance with the terms of such leases,
PROVIDED that the amount of any obligations secured thereby that are
delinquent, that are not diligently contested in good faith and for
which adequate reserves are not maintained by the Borrower or the
applicable Subsidiary, as the case may be, do not exceed, at any time
outstanding, the amount owing by the Borrower or any Subsidiary, as
applicable, for one month's payments as due thereunder; and PROVIDED,
FURTHER, the aggregate amount of obligations secured by Liens permitted
by this paragraph (h) shall not exceed, at any time outstanding,
$10,000,000.
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(i) Liens (not otherwise permitted hereunder) on property not
included in the Borrowing Base which secure obligations not exceeding
$10,000,000 in aggregate principal amount at any time outstanding,
PROVIDED no such Liens under this clause (i) shall encumber any Capital
Stock or other equity interests pledged under the Guarantee and
Collateral Agreement;
(j) Liens created pursuant to the Security Documents;
(k) Liens constituting "Permitted Encumbrances" under and as
such term is defined in the respective Mortgages;
(n) Liens existing on the date of this Agreement (after giving
effect to the Acquisition) and listed on Schedule 8.3;
(o) Liens arising under operating agreements, joint venture
agreements, partnership agreements, oil and gas leases, farm-out and
farm-in agreements, division orders, contracts for the sale,
transportation or exchange of oil or natural gas, unitization and
pooling declarations and agreements, area of mutual interest agreements
that are customary in the Oil and Gas Business; PROVIDED that the
amount of any obligations secured thereby that are delinquent, that are
not diligently contested in good faith and for which adequate reserves
are not maintained by the Borrower or the applicable Subsidiary, as the
case may be, do not exceed, at any time outstanding, the amount owing
by the Borrower or any Subsidiary, as applicable, for one month's
billed operating expenses or other expenditures attributable to such
entity's interest in the Property covered thereby; and PROVIDED,
further, the aggregate amount of obligations secured by Liens permitted
by this paragraph (o) shall not exceed, at any time outstanding,
$10,000,000; and
(p) pre-judgment Liens and judgment Liens not giving rise to
an Event of Default; PROVIDED, that the aggregate amount of such Liens
permitted by this paragraph (p) shall not exceed, at any time
outstanding, $10,000,000.
8.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations with respect to the Senior
Subordinated Notes and Permitted Subordinated Refinancing Debt, which
Guarantee Obligations shall contain subordination provisions no less
favorable to the Lenders than the subordination provisions with respect
to the Senior Subordinated Notes;
(b) Guarantee Obligations in existence on the date hereof and
listed on Schedule 8.4;
(c) Guarantee Obligations by the Borrower or any Subsidiary of
Indebtedness of the Borrower or any Wholly-Owned Subsidiary permitted
by subsection 8.2;
(d) Guarantee Obligations arising under the Loan Documents;
and
(e) Guarantee Obligations permitted by subsection 8.8.
8.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation as a constituent party, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of
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its property, business or assets, or make any material change in its present
method of conducting business except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (PROVIDED that the Borrower
shall be the continuing or surviving corporation) or with or into any
one or more Wholly-Owned Subsidiaries of the Borrower (PROVIDED that
the Wholly-Owned Subsidiary or Subsidiaries shall be the continuing or
surviving Person);
(b) any Subsidiary of the Borrower may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Wholly-Owned
Subsidiary;
(c) any Wholly-Owned Subsidiary may be merged or consolidated
with any Person acquired in connection with a Permitted Business
Acquisition, PROVIDED such Wholly-Owned Subsidiary shall be the
continuing or surviving Person; and
(d) the Borrower and its Subsidiaries may consummate the
Acquisition and effect any transaction permitted by subsections 8.6 and
8.9.
8.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or issue or sell any shares of the Borrower's
or such Subsidiary's Capital Stock to any Person, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale of inventory (including Hydrocarbons or other
mineral products or surplus) in the ordinary course of business;
(c) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(d) as permitted by subsection 8.5;
(e) up to $5,000,000 of sales of assets during each Borrowing
Base Period;
(f) a transfer of assets by the Borrower to a Wholly-Owned
Subsidiary or by a Wholly-Owned Subsidiary to the Borrower or to
another Wholly-Owned Subsidiary;
(g) an issuance of capital stock by a Wholly-Owned Subsidiary
to the Borrower or to another Wholly-Owned Subsidiary;
(h) the abandonment, farm-out, lease or sublease of Oil and
Gas Properties not containing Proved Reserves in the ordinary course of
business; PROVIDED, THAT, the aggregate value of Oil and Gas Properties
so abandoned, farmed-out or subleased during any Borrowing Base Period
shall not exceed $2,500,000;
(i) the trade or exchange by the Company or any Subsidiary of
any Oil and Gas Property or interest therein owned or held by the
Company or such Subsidiary for any Oil and Gas Property or interest
therein owned or held by another Person, including any cash or Cash
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Equivalents necessary in order to achieve an exchange of equivalent
value; PROVIDED, THAT, that the aggregate value of trades or exchanges
permitted by this paragraph (i) shall not exceed $5,000,000 during any
Borrowing Base Period;
(j) the making of an Investment permitted by subsection 8.8 or
a Restricted Payment permitted by subsection 8.7; and
(k) the sale of Oil and Gas Properties in connection with tax
credit transactions complying with Section 29 of the Code, which sale
does not result in a reduction in the Borrower's or its Subsidiaries',
as the case may be, right to receive the cash flow from such Oil and
Gas Properties and which sale is on terms reasonably acceptable to the
Engineering Committee.
Notwithstanding anything to the contrary contained herein, no sale may be made
of the Capital Stock of any Subsidiary, except in connection with the sale of
all of its outstanding Capital Stock that is then held by the Borrower and any
other Subsidiary.
8.7 LIMITATION ON DIVIDENDS. Declare or pay any dividend on
(other than dividends of its own Capital Stock), or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Borrower or any Subsidiary or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary (such declarations, payments, setting apart, purchases,
redemptions, defeasance, retirements, acquisitions and distributions being
herein called "RESTRICTED PAYMENTS"), except that:
(a) any Wholly-Owned Subsidiary may declare and pay dividends
to or make other distributions to the Borrower or to any other
Wholly-Owned Subsidiary;
(b) the Borrower may repurchase, redeem or otherwise acquire
or retire for value any Capital Stock of the Borrower or any Subsidiary
held by any of the Borrower's (or any of its Subsidiaries') employees
pursuant to any management equity subscription agreement or stock
option agreement in effect as of the date hereof; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Capital Stock shall not exceed $2,000,000 in any twelve-month
period;
(c) the Borrower may purchase, redeem or otherwise acquire or
retire for value any Capital Stock of the Borrower granted prior to the
Acquisition and held by former executives of ▇▇▇▇▇▇ & ▇▇▇▇▇ who elected
not to dispose of such Capital Stock in connection with the
Acquisition; and
(d) the purchase, redemption, retirement or other acquisition
for value of any Capital Stock or rights to acquire Capital Stock of
the Borrower in connection with the Acquisition, in accordance with the
Acquisition Documents.
8.8 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or incur any
Guarantee Obligation on behalf or for the benefit of, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment (including by the issuance of
letters of credit) in (collectively, "Investments"), any Person (other than the
Borrower or any Wholly-Owned Subsidiary), except:
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(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) loans and advances to officers and employees of the
Borrower or any Subsidiary for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate amount for
the Borrower and its Subsidiaries not to exceed $2,000,000 at any one
time outstanding;
(d) Investments constituting Permitted Business Investments;
(e) Investments constituting Permitted Business Acquisitions;
and
(f) up to $10,000,000 in the aggregate of other Investments
made or entered into in the ordinary course of the Oil and Gas
Business.
8.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS, OTHER MATERIAL AGREEMENTS. (a) (i) Make any payments, optional
payment or prepayment on or redemption, defeasance or purchase of any
Indebtedness (other than Indebtedness under this Agreement), (ii) amend, modify
or change, or consent or agree to any amendment, modification or change to any
of the terms of any such Indebtedness (other than any such amendment,
modification or change which would extend the maturity or reduce the amount of
any payment of principal thereof or which would reduce the rate or extend the
date for payment of interest thereon), (iii) make an Asset Sale Offer after
receipt of Net Proceeds from an Asset Sale (as such terms are defined in the
Senior Subordinated Indenture) unless all Obligations under the Loan Documents
have been paid in full and the Commitments hereunder terminated or (iv) amend
the subordination provisions of the Senior Subordinated Notes or any Permitted
Subordinated Refinancing Debt; PROVIDED, that as long as no Default or Event of
Default has occurred or is continuing or would exist after giving effect
thereto, the Borrower may redeem or repurchase Subordinated Indebtedness
otherwise permitted by this Agreement with the net cash proceeds from an
incurrence of Permitted Subordinated Refinancing Debt or the substantially
concurrent sale (other than to a Subsidiary of the Borrower) of Capital Stock or
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
(b) Amend, modify, supplement, waive or terminate, or permit
the amendment, modification, supplement, waiver or termination of or to, its
articles or certificate of incorporation in any manner materially adverse to the
Lenders.
(c) Designate any Indebtedness as "Designated Senior Debt"
under the Senior Subordinated Indenture without the consent of the Required
Lenders.
(d) Amend, modify or otherwise supplement the Acquisition
Agreement in any manner materially adverse to the Lenders.
8.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate (other
than transactions between or among the Borrower and the Wholly-Owned
Subsidiaries) unless such transaction is (a) not prohibited by another provision
of this Agreement, (b) in the ordinary course of the Borrower's or the
applicable Subsidiary's business and (c) upon fair and reasonable terms no less
favorable to the Borrower or the applicable Subsidiary, as the case may be,
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than it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate or, in the event no comparable transaction with an
unaffiliated Person is available, on terms that are fair from a financial point
of view to the Borrower or the applicable Subsidiary. Notwithstanding the
foregoing, the following transactions shall not be deemed to violate this
Section 8.10: (i) payments made, or contracts, agreements or understandings
entered into, in connection with the Acquisition, which payments, contracts,
agreements or understandings are listed on Schedule 8.10 (including pursuant to
any amendment thereto or replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the Lenders in
any material respect than the agreement in effect on the date of this
Agreement); (ii) the purchase, redemption, acquisition of retirement of Capital
Stock pursuant to Section 8.7(b) and (c); (iii) transactions between or among
the Borrower and/or its Wholly-Owned Subsidiaries, (iv) Restricted Payments
permitted by Section 8.7 and Investments that are permitted by the provisions of
Section 8.8; (v) indemnification payments made to officers, directors and
employees of the Borrower or its Subsidiaries pursuant to charter, by-law,
statutory or contractual provisions; and (vi) reasonable fees and compensation
in the ordinary course of business paid to (including issuances and grant of
securities and stock options), and employment agreements and stock option and
ownership plans for the benefit of, officers, directors or employees of the
Borrower or any Subsidiary of the Borrower as determined in good faith by the
Borrower's Board of Directors.
8.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement (a "SALE AND LEASEBACK TRANSACTION") with any Person providing for
the leasing by the Borrower or any Subsidiary of real or personal property which
has been or is to be sold or transferred by the Borrower or such Subsidiary to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of the
Borrower or any Subsidiary.
8.12 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal
year of the Borrower and its Subsidiaries to end on a day other than December
31.
8.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with
any Person any agreement which prohibits or limits the ability of the Borrower
or any Subsidiary to create, incur, assume or suffer to exist any Lien, in favor
of any of the Administrative Agent, the Lenders under the Loan Documents and
their respective assignees under the Loan Documents or any Person refinancing
all or a portion of the Commitments hereunder, upon any of its property, assets
or revenues, whether now owned or hereafter acquired.
8.14 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for the Oil and Gas Business
and those businesses in which the Borrower and its Subsidiaries are engaged on
the date of this Agreement or which are directly related thereto.
8.15 REDEEMABLE CAPITAL STOCK. Issue any Capital Stock which
is mandatorily redeemable, or redeemable at the option of the holder thereof,
except to employees of the Borrower or its Subsidiaries or to former executives
of ▇▇▇▇▇▇ & ▇▇▇▇▇, each of whom has elected not to dispose of their Capital
Stock in connection with the Acquisition.
8.16 FORWARD SALES. Except in accordance with ordinary
practice in the Oil and Gas Business, enter into or permit to exist any advance
payment agreement or other arrangement pursuant to which the Borrower or any of
its Subsidiaries, having received full or substantial payment of the purchase
price for a specified quantity of Hydrocarbons upon entering such agreement or
arrangement, is required to deliver, in one or more installments subsequent to
the date of such agreement or
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arrangement, such quantity of Hydrocarbons pursuant to and during the terms of
such agreement or arrangement.
8.17 HEDGING AGREEMENTS. Enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any of its Subsidiaries is
exposed in the conduct of its business or the management of its liabilities,
provided that such Hedging Agreements may not be entered into for speculative
purposes.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or any Reimbursement Obligation when due in accordance with the terms
thereof or hereof; or the Borrower shall fail to pay any interest on
any Loan, or any other amount payable hereunder, within five days after
any such interest or other amount becomes due in accordance with the
terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished
by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Borrower or any Subsidiary shall default in the
observance or performance of any agreement applicable to it contained
in subsection 4.10, subsection 7.12 or Section 8 of this Agreement; or
(d) The Borrower or any Subsidiary shall default in the
observance or performance of any other agreement applicable to it
contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 consecutive days
after the earlier of (i) the Borrower's obtaining knowledge of such
default or (ii) the receipt by the Borrower of notice thereof from the
Administrative Agent or any Lender; or
(e) The Borrower or any Subsidiary shall (i) default in any
payment of principal of or interest of any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, beyond the period
of grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or such Guarantee Obligation to become payable, PROVIDED that the
aggregate principal amount of all such Indebtedness and Guarantee
Obligations which would then become due and payable would equal or
exceed $10,000,000; or
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(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA or (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan; and in each case in clauses (i) through (v) above,
such event or condition, together with all other such events or
conditions, if any, could have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any Subsidiary involving in the aggregate a liability
(to the extent not paid or covered by insurance) of $10,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days after the
entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect with respect to any material
asset, or any Loan Party which is a party to any of the Security
Documents shall so assert or (ii) the Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or
(j) The subordination provisions contained in any Subordinated
Note Document or any other Subordinated Indebtedness shall cease, for
any reason, to be in full force and effect,
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or any Person that is a party thereto or holders of at least 25% the
aggregate principal amount of the Senior Subordinated Notes shall so
assert; or
(k) (i) TPG shall cease to own, directly or indirectly, at
least 51% of the voting Capital Stock of the Borrower; (ii) the shares
of Capital Stock of the Borrower owned directly or indirectly by TPG
shall cease to be owned free of Liens and other claims (other than
Liens created by the Loan Documents); or (iii) a "Change of Control"
(as defined in the Subordinated Note Documents or any other document
governing Indebtedness of Parent, the Borrower or any Subsidiary) shall
occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
and unpaid interest thereon) and all other amounts owing under this Agreement
(including, without limitation, all Letter of Credit Outstandings, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and the other Loan Documents shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by written
notice to the Borrower, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by written notice to the
Borrower, declare the Loans hereunder (with accrued and unpaid interest thereon)
and all other amounts owing under this Agreement (including, without limitation,
all amounts of Letter of Credit Outstandings, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents
required thereunder) and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then unexpired amount that is available to be drawn under such
Letters of Credit. The Borrower hereby grants to the Administrative Agent, for
the benefit of the Issuing Lender and the L/C Participants, a security interest
in such cash collateral to secure all obligations of the Borrower under this
Agreement and the other Loan Documents. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired, been cancelled or been fully drawn
upon, if any, shall be applied to repay other obligations of the Borrower
hereunder and under the Notes. After all such Letters of Credit shall have
expired, been cancelled or been fully drawn upon, all Reimbursement Obligations
shall have been satisfied and all other obligations of the Borrower hereunder
and under the other Loan Documents shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower. The
Borrower shall execute and deliver to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, such further documents and
instruments as the Administrative Agent may reasonably request to evidence the
creation and perfection of the within security interest in such cash collateral
account. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
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SECTION 10. THE AGENTS
10.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints Chase as Administrative Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
10.2 DELEGATION OF DUTIES. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Loan Party
or any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of any Loan Party to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
10.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Loan Parties),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, where unanimous
consent of the Lenders is expressly required hereunder, such Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, where unanimous
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consent of the Lenders is expressly required hereunder, such Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Loans.
10.5 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; 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 or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of any
Loan Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of each Loan Party and made its own decision to make its
extensions of credit hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of each Loan Party. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
10.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation the Borrower to do so), ratably
according to their respective Commitment Percentages in effect on the date on
which indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of, the Commitments, this Agreement,
any of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; PROVIDED that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Administrative Agent's gross negligence or willful misconduct.
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The agreements in this subsection shall survive the payment of the Obligations
and all other amounts payable hereunder.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the extensions of credit made by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent, with the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed), shall succeed to the rights, powers and duties of the Administrative
Agent hereunder. Effective upon such appointment and approval, the term
"Administrative Agent" shall mean such successor agent, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
10.10 ISSUING LENDER. The provisions of this Section 10
applicable to the Administrative Agent shall apply to the Issuing Lender in the
performance of its duties under the Loan Documents, MUTATIS MUTANDIS.
10.11 SYNDICATION AGENT AND DOCUMENTATION AGENT. Neither the
Syndication Agent nor the Documentation Agent shall have any duties or
liabilities under the Loan Documents in their capacities as such.
SECTION 11. MISCELLANEOUS
11.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter
into with the applicable Loan Parties written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the applicable Loan Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders or
the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; PROVIDED, HOWEVER, that no
such waiver and no such amendment, supplement or modification shall (i) reduce
the amount or extend the scheduled date of final maturity of any Loan, or reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend the expiration date
of any Lender's Commitments, in each case without the consent of each Lender
affected thereby, or (ii) amend, modify or waive any provision of this
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subsection or reduce the percentage specified in the definition of Required
Lenders or Supermajority Lenders (or modify any provision of this Agreement or
any other Loan Document to provide that an action currently requiring the
approval of or consent by the Supermajority Lenders may be taken with the
consent or approval by a lower percentage of Lenders), or consent to the
assignment or transfer by any Loan Party of any of its rights and obligations
under this Agreement and the other Loan Documents or release all or
substantially all of the Collateral other than in accordance with the terms of
the applicable Loan Document or release any Loan Party from its obligations
under the Guarantee and Collateral Agreement other than in accordance with the
terms of the applicable Loan Documents, in each case without the written consent
of all the Lenders, or (iii) amend, modify or waive any provision of Section 10
without the written consent of the then Administrative Agent and Issuing Lender.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former positions and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
11.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by courier service, when delivered, (b) in the case of delivery by mail, three
Business Days after being deposited in the mails, postage prepaid, or (c) in the
case of delivery by facsimile transmission, when sent and receipt has been
confirmed, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in Schedule 11.2 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrower: BB Merger Corp.
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
With a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
The Administrative
Agent: The Chase Manhattan Bank
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Oil and Gas
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Chase Manhattan Bank Agency Services
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Corporation
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.3, 4.3, 4.5 or 4.8 shall not be
effective until received.
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent, the Issuing
Lender or any Lender, any right, remedy, power or privilege hereunder or under
the other Loan Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
11.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the extensions of credit hereunder.
11.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Agents and the Arranger for all their reasonable and
documented out-of-pocket costs and expenses incurred in connection with the
development, syndication, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
(i) counsel to the Administrative Agent and (ii) the Administrative Agent
customarily charged by it in connection with syndicated credits, (b) to pay or
reimburse each Lender and the Administrative Agent for all its reasonable and
documented costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent and to the several Lenders,
(c) to pay, indemnify, and hold each Lender and the Agents (and their respective
Affiliates and their respective directors, officers, employees and agents)
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender, the Arranger and the Agents (and their respective directors,
officers, employees, agents and affiliates) harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents or the use or the
proposed use of proceeds contemplated by this Agreement or in connection with
the Acquisition and any such other documents, including, without limitation, any
of the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to any Loan Party or any of
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the Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), PROVIDED that the Borrower shall have no obligation
under this clause (d) to any Agent, the Arranger or any Lender (or any of their
respective directors, officers, employers, agents or affiliates), with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of such Person. Without limiting the foregoing, and to the extent
permitted by applicable law, the Borrower agrees not to assert, and hereby
waives, and to cause each of its Subsidiaries not to assert and to so waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee. The
agreements in this subsection shall survive repayment of the Loans and all other
amounts payable hereunder and the termination of this Agreement.
11.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Obligations and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking or lending business and in accordance with applicable law and at no cost
or expense to the Borrower, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents. In the event of any such sale by a
Lender of a participating interest to a Participant, (i) such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible for the
performance thereof, (iii) such Lender shall remain the holder of any such Loan
(and any Note evidencing such Loan) for all purposes under this Agreement and
the other Loan Documents, (iv) the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents, and (v) in any proceeding under the Bankruptcy Code the Lender shall
be, to the extent permitted by law, the sole representative with respect to the
obligations held in the name of such Lender, whether for its own account or for
the account of any Participant. No Lender shall be entitled to create in favor
of any Participant, in the participation agreement pursuant to which such
Participant's participating interest shall be created or otherwise, any right to
vote on, consent to or approve any matter relating to this Agreement or any
other Loan Document except for those specified in clauses (i) and (ii) of the
proviso to subsection 11.1. The Borrower agrees that each Participant shall be
entitled to the benefits of subsections 4.13 and 4.14 with respect to its
participation in the Commitments and the Loans and Letters of Credit outstanding
from time to time as if it was a Lender; PROVIDED that, in the case of
subsection 4.13, such Participant shall have complied with the requirements of
said subsection and PROVIDED, FURTHER, that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking or lending business and in accordance with applicable law, at any time
and from time to time assign to any Lender or, with the prior written consent of
each Issuing Lender, any Affiliate thereof or, with the prior written consent of
the Administrative Agent, the Borrower and each Issuing Lender (which in each
case shall not be unreasonably withheld), to an additional bank or financial
institution or other entity (an "ASSIGNEE") all or any part of its rights and
obligations under this Agreement and the other Loan Documents including, without
limitation, its Revolving Credit Commitments, L/C Commitments,
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Revolving Credit Loans and L/C Participating Interests, pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit F, executed by
such Assignee, such assigning Lender (and, in the case of an Assignee that is
not then a Lender, by the Borrower, the Administrative Agent and each Issuing
Lender) and delivered to the Administrative Agent for its acceptance and
recording in the Register, PROVIDED that (i) (unless the Borrower and the
Administrative Agent otherwise consent in writing) no such transfer to an
Assignee (other than a Lender or any Affiliate thereof) shall be in an aggregate
principal amount less than $10,000,000 in the aggregate (or, if less, the full
amount of such assigning Lender's Revolving Credit Loans, participating
interests in Letters of Credit and Revolving Credit Commitments) and (ii) if any
Lender assigns all or any part of its rights and obligations under this
Agreement to one of its Affiliates in connection with or in contemplation of the
sale or other disposition of its interest in such Affiliate, the Borrower's
prior written consent shall be required for such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Revolving Credit Commitment and L/C Commitment as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) and paragraph (e) of this subsection, the
consent of the Borrower shall not be required, and, unless requested by the
Assignee and/or the assigning Lender, new Notes shall not be required to be
executed and delivered by the Borrower, for any assignment which occurs at any
time when any of the events described in Section 9(f) shall have occurred and be
continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in subsection
11.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "REGISTER") for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Notwithstanding anything in this Agreement to the
contrary, no assignment under subsection 11.6(c) of any rights or obligations
under or in respect of the Loans, the Notes or the Letters of Credit shall be
effective unless and until the Administrative Agent shall have recorded the
assignment pursuant to subsection 11.6(d). Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Assignee (and, in the case of
an Assignee that is not then a Lender or an affiliate thereof, by the Borrower
and the Administrative Agent) together with payment to the Administrative Agent
of a registration and processing fee of $3,500 (other than in the case of an
assignment by a Lender to an affiliate of such Lender), the Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower. On or prior to such effective date, the assigning
Lender shall surrender any outstanding Notes held by it all or a portion of
which are being assigned, and the
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Borrower, at its own expense, shall, upon the request to the Administrative
Agent by the assigning Lender or the Assignee, as applicable, execute and
deliver to the Administrative Agent (in exchange for the outstanding Notes of
the assigning Lender) a new Revolving Credit Note to the order of such Assignee
in an amount equal to the lesser of (A) the amount of such Assignee's Revolving
Credit Commitment and (B) the aggregate principal amount of all Revolving Credit
Loans made by such Assignee, after giving effect to such Assignment and
Acceptance and, if the assigning Lender has retained a Revolving Credit
Commitment hereunder, a new Revolving Credit Note to the order of the assigning
Lender in an amount equal to the lesser of (A) the amount of such Lender's
Revolving Credit Commitment and (B) the aggregate principal amount of all
Revolving Credit Loans made by such Lender, after giving effect to such
Assignment and Acceptance. Any such new Notes shall be dated the Closing Date
and shall otherwise be in the form of the Note replaced thereby. Any Notes
surrendered by the assigning Lender shall be returned by the Administrative
Agent to the Borrower marked "canceled".
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee,
any and all financial information in such Lender's possession concerning the
Loan Parties and their Affiliates which has been delivered to such Lender by or
on behalf of the Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Loan Parties and their Affiliates prior to becoming a
party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
11.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED
LENDER") shall at any time receive any payment of all or part of its Loans or
Reimbursement Obligations, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 9(f), or otherwise),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans or Reimbursement
Obligations, or interest thereon, such Benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Loans or Reimbursement Obligations, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower, as the case may be.
Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set-off and application made by such Lender, PROVIDED that, to
the
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extent permitted by applicable law, the failure to give such notice shall not
affect the validity of such set-off and application.
11.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
11.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the other Loan Parties, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAW.
11.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 11.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
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11.13 ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
11.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
BB MERGER CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent, Issuing Lender
and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
BANKERS TRUST COMPANY, as Syndication Agent
and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Managing Director
NATIONSBANK OF TEXAS, N.A., as
Documentation Agent and as a Lender
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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DEN NORSKE BANK, ASA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Group Vice President and
Operational Manager
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Group V.P.
BANKBOSTON N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/
--------------------------------
Title: Manager - Oil & Gas Financing
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: First Vice President
▇▇▇▇▇ FARGO BANK (TEXAS), N.A.
By: /s/
--------------------------------
Title: Vice President