EXHIBIT 99.1
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
▇▇▇▇▇▇ OIL & GAS CORPORATION,
▇▇▇▇▇▇ OIL CORPORATION,
AND
▇▇▇▇▇▇ OPERATING COMPANY, LTD.,
AS BORROWERS,
CONCORDE GAS MARKETING, INC.,
▇▇▇▇▇▇ PARTNERS 1992 DEVELOPMENT DRILLING JOINT VENTURE,
▇▇▇▇▇▇ PARTNERS 1994 DEVELOPMENT DRILLING JOINT VENTURE,
▇▇▇▇▇▇ PARTNERS 1992 DEVELOPMENT DRILLING PROGRAM,
AND
▇▇▇▇▇▇ PARTNERS 1994 DEVELOPMENT DRILLING PROGRAM,
AS GUARANTORS,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS AGENT,
CHASE SECURITIES INC.,
AS ARRANGER AND SYNDICATION AGENT,
AND
THE LENDERS SIGNATORY HERETO
DATED AS OF DECEMBER 1, 1997
$140,000,000 REVOLVING CREDIT FACILITY
$32,300,000 SENIOR SECURED TERM LOAN FACILITY
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 TERMS DEFINED ABOVE......................................1
Section 1.02 CERTAIN DEFINED TERMS....................................1
Section 1.03 ACCOUNTING TERMS AND DETERMINATIONS.....................22
ARTICLE II
COMMITMENTS
Section 2.01 LOANS AND LETTERS OF CREDIT.............................23
Section 2.02 BORROWINGS, CONTINUATIONS AND CONVERSIONS; LETTERS OF
CREDIT..................................................24
Section 2.03 CHANGES OF REVOLVING CREDIT COMMITMENTS.................26
Section 2.04 FEES....................................................26
Section 2.05 SEVERAL OBLIGATIONS.....................................28
Section 2.06 NOTES...................................................28
Section 2.07 PREPAYMENTS.............................................29
Section 2.08 BORROWING BASE..........................................30
Section 2.09 ASSUMPTION OF RISKS.....................................32
Section 2.10 OBLIGATION TO REIMBURSE AND TO PREPAY...................33
Section 2.11 LENDING OFFICES.........................................35
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 REPAYMENT OF LOANS......................................35
Section 3.02 INTEREST................................................35
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ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 PAYMENTS................................................36
Section 4.02 PRO RATA TREATMENT......................................37
Section 4.03 COMPUTATIONS............................................37
Section 4.04 NON-RECEIPT OF FUNDS BY THE AGENT.......................37
Section 4.05 SETOFF, SHARING OF PAYMENTS, ETC........................38
Section 4.06 TAXES...................................................39
Section 4.07 DISPOSITION OF PROCEEDS.................................42
Section 4.08 JOINT AND SEVERAL.......................................42
ARTICLE V
CAPITAL ADEQUACY
Section 5.01 ADDITIONAL COSTS, ETC...................................43
Section 5.02 LIMITATION ON EURODOLLAR LOANS..........................45
Section 5.03 ILLEGALITY..............................................46
Section 5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5.01, 5.02 AND
5.03....................................................46
Section 5.05 COMPENSATION............................................46
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 INITIAL FUNDING.........................................47
Section 6.02 INITIAL AND SUBSEQUENT LOANS AND LETTERS OF CREDIT......49
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 EXISTENCE...............................................50
Section 7.02 FINANCIAL CONDITION.....................................51
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Section 7.03 LITIGATION..............................................51
Section 7.04 NO BREACH...............................................51
Section 7.05 AUTHORITY...............................................52
Section 7.06 APPROVALS...............................................52
Section 7.07 USE OF LOANS............................................52
Section 7.08 ERISA...................................................53
Section 7.09 TAXES...................................................54
Section 7.10 TITLE, ETC..............................................54
Section 7.11 NO MATERIAL MISSTATEMENTS...............................55
Section 7.12 INVESTMENT COMPANY ACT..................................55
Section 7.13 PUBLIC UTILITY HOLDING COMPANY ACT......................55
Section 7.14 SUBSIDIARIES AND PARTNERSHIPS...........................56
Section 7.15 LOCATION OF BUSINESS AND OFFICES........................56
Section 7.16 DEFAULTS................................................56
Section 7.17 ENVIRONMENTAL MATTERS...................................56
Section 7.18 COMPLIANCE WITH THE LAW.................................58
Section 7.19 INSURANCE...............................................58
Section 7.20 HEDGING AGREEMENTS......................................59
Section 7.21 RESTRICTION ON LIENS....................................59
Section 7.22 SOLVENCY................................................59
ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01 FINANCIAL STATEMENTS....................................59
Section 8.02 LITIGATION..............................................62
Section 8.03 MAINTENANCE, ETC........................................62
Section 8.04 ENVIRONMENTAL MATTERS...................................63
Section 8.05 FURTHER ASSURANCES......................................64
Section 8.06 PERFORMANCE OF OBLIGATIONS..............................64
Section 8.07 RESERVE REPORTS.........................................64
Section 8.08 TITLE INFORMATION.......................................66
Section 8.09 ADDITIONAL COLLATERAL...................................66
Section 8.10 ERISA INFORMATION AND COMPLIANCE........................67
Section 8.11RESTRICTED SUBSIDIARIES TO BE OBLIGORS....................67
Section 8.12REVISED SCHEDULES.........................................68
Section 8.13CONSUMMATION OF HEDGING AGREEMENTS........................68
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ARTICLE IX
NEGATIVE COVENANTS
Section 9.01 DEBT....................................................68
Section 9.02 LIENS...................................................70
Section 9.03 INVESTMENTS, LOANS AND ADVANCES.........................70
Section 9.04 DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS................71
Section 9.05 SALES AND LEASEBACKS....................................72
Section 9.06 NATURE OF BUSINESS......................................72
Section 9.07 LIMITATION ON LEASES....................................72
Section 9.08 MERGERS, ETC............................................72
Section 9.09 PROCEEDS OF NOTES.......................................73
Section 9.10 ERISA COMPLIANCE........................................73
Section 9.11 SALE OR DISCOUNT OF RECEIVABLES.........................74
Section 9.12 RATIO OF TOTAL SENIOR FUNDED DEBT TO EBITDA.............74
Section 9.13 INTEREST COVERAGE RATIO.................................75
Section 9.14 SALE OF OIL AND GAS PROPERTIES..........................75
Section 9.15 ENVIRONMENTAL MATTERS...................................76
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Section 9.16 TRANSACTIONS WITH AFFILIATES............................76
----------------------------
Section 9.17 SUBSIDIARIES AND PARTNERSHIPS...........................76
-----------------------------
Section 9.18 NEGATIVE PLEDGE AGREEMENTS..............................76
--------------------------
Section 9.19 PARTNERSHIP AGREEMENT...................................77
---------------------
Section 9.20 SUBORDINATED DEBT AND SENIOR SUBORDINATED NOTES.........77
-----------------------------------------------
Section 9.21 GAS IMBALANCES..........................................77
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ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 EVENTS OF DEFAULT......................................78
Section 10.02 REMEDIES...............................................80
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ARTICLE XI
THE AGENT
Section 11.01 APPOINTMENT, POWERS AND IMMUNITIES.....................81
Section 11.02 RELIANCE BY AGENT......................................82
Section 11.03 DEFAULTS...............................................82
Section 11.04 RIGHTS AS A LENDER.....................................82
Section 11.05 INDEMNIFICATION........................................83
Section 11.06 NON-RELIANCE ON AGENT AND OTHER LENDERS................83
Section 11.07 ACTION BY AGENT........................................83
Section 11.08 RESIGNATION OR REMOVAL OF AGENT........................84
Section 11.09 CSI....................................................84
ARTICLE XII
MISCELLANEOUS
Section 12.01 WAIVER.................................................84
Section 12.02 NOTICES................................................85
Section 12.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC..................85
Section 12.04 AMENDMENTS, ETC........................................87
Section 12.05 SUCCESSORS AND ASSIGNS.................................87
Section 12.06 ASSIGNMENTS AND PARTICIPATIONS.........................87
Section 12.07 INVALIDITY.............................................89
Section 12.08 COUNTERPARTS...........................................89
Section 12.09 REFERENCES.............................................89
Section 12.10 SURVIVAL...............................................90
Section 12.11 CAPTIONS...............................................90
Section 12.12 NO ORAL AGREEMENTS.....................................90
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION..............90
Section 12.14 INTEREST...............................................91
Section 12.15 CONFIDENTIALITY........................................92
Section 12.16 EFFECTIVENESS..........................................93
Section 12.17 PRIOR DEBT SECURITY INSTRUMENTS........................93
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Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - List of Security Instruments
Exhibit E - Form of Assignment Agreement
Exhibit F - List of Maximum Revolving Credit
Amounts and Term Loans
Schedule 7.0 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.0 - Taxes
Schedule 7.1 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.17 - Environmental Matters
Schedule 7.19 - Insurance
Schedule 7.20 - Hedging Agreements
Schedule 9.01 - Debt
Schedule 9.0 - Liens
Schedule 9.03 - Investments, Loans and Advances
Schedule 9.1 - Transactions with Affiliates
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THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 1,
1997 is among: ▇▇▇▇▇▇ OIL & GAS CORPORATION, a Delaware corporation (the
"PARENT"), ▇▇▇▇▇▇ OIL CORPORATION, a Delaware corporation ("KOC"), ▇▇▇▇▇▇
OPERATING COMPANY, LTD., a limited partnership formed under the laws of the
State of Texas ("▇▇▇▇▇▇ OPERATING"; the Parent, KOC and ▇▇▇▇▇▇ Operating,
collectively, the "BORROWERS"); CONCORDE GAS MARKETING, INC., a Delaware
corporation ("CONCORDE"), 92 JV (as defined in Section 1.02), 94 JV (as defined
in Section 1.02), 92 DDP (as defined in Section 1.02) and 94 DDP (as defined in
Section 1.02); each of the lenders that is a signatory hereto or which becomes a
signatory hereto as provided in Section 12.06 (individually, together with its
successors and assigns, a "LENDER" and, collectively, the "LENDERS"); TEXAS
COMMERCE BANK NATIONAL ASSOCIATION (in its individual capacity, "TCB," as agent
for the Lenders (in such capacity, together with its successors in such
capacity, the "AGENT")); and CHASE SECURITIES INC. (in its individual or any
other capacity, "CSI").
R E C I T A L S
A. The Borrowers have requested that the Lenders amend, extend and
rearrange all of the Prior Debt (as hereafter defined) and provide certain loans
to and extensions of credit on behalf of the Borrowers for general business
purposes; and
B. The Lenders have agreed to amend, extend and rearrange the Prior Debt
and to make such loans and extensions of credit subject to the terms and
conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree to amend and restate the Prior Credit
Agreement (as hereafter defined) as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 TERMS DEFINED ABOVE. As used in this Agreement, the
terms "AGENT," "BORROWERS," "CSI," "▇▇▇▇▇▇ OPERATING," "CONCORDE," "KOC,"
"LENDER," "LENDERS," "PARENT," and "TCB," shall have the meanings indicated
above.
Section 1.02 CERTAIN DEFINED TERMS. As used herein, the following
terms shall have the following meanings (all terms defined in this Article I or
in other provisions of this Agreement in the singular to have the same meanings
when used in the plural and VICE VERSA):
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A:\Credit Agreement.wpd
"1999 NOTES INDENTURE" shall mean the indenture dated as of December
15, 1992 between the Parent (as successor to ▇▇▇▇▇▇ Oil & Gas Partners,
Ltd.) and United States Trust Company of New York, as Trustee, under which
the 1999 Notes were issued, as amended, supplemented, or otherwise
modified.
"1999 NOTES" shall mean the 7-7/8% Convertible Subordinated Notes of
the Parent due December 15, 1999.
"1999 NOTES REDEMPTION DATE" shall mean the first Business Day after
the Note Redemption Date as defined in the 1999 Note Indenture.
"92 DDP" shall mean ▇▇▇▇▇▇ Partners 1992 Development Drilling
Program, a Texas limited partnership.
"94 DDP" shall mean ▇▇▇▇▇▇ Partners 1994 Development Drilling
Program, a Texas limited partnership.
"92 JV" shall mean ▇▇▇▇▇▇ Partners 1992 Development Drilling Joint
Venture, a general partnership formed under the laws of the State of
Texas, pursuant to the Joint Venture Agreement dated November 27, 1992
between 92 DDP and ▇▇▇▇▇▇ Operating, as amended.
"94 JV" shall mean ▇▇▇▇▇▇ Partners 1994 Development Drilling Joint
Venture, a general partnership formed under the laws of the State of
Texas, pursuant to the Joint Venture Agreement dated February 28, 1994
between 94 DDP and ▇▇▇▇▇▇ Operating, as amended.
"ADDITIONAL COSTS" shall have the meaning assigned such term in
Section 5.01(a).
"AFFECTED LOANS" shall have the meaning assigned such term in
Section 5.04.
"AFFILIATE" of any Person shall mean (i) any Person directly or
indirectly controlled by, controlling or under common control with such
first Person, (ii) any director or officer of such first Person or of any
Person referred to in clause (i) above and (iii) if any Person in clause
(i) above is an individual, any member of the immediate family (including
parents, spouse and children) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or
trust.
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For purposes of this definition, any Person which owns directly or
indirectly 10% or more of the securities having ordinary voting power for
the election of directors or other governing body of a corporation or 10%
or more of the partnership or other ownership interests of any other
Person (other than as a limited partner of such other Person) will be
deemed to "CONTROL" (including, with its correlative meanings, "CONTROLLED
BY" and "UNDER COMMON CONTROL WITH") such corporation or other Person. For
the purposes of Section 9.16, shareholders and Affiliates of BSC that
would not be Affiliates of any of the Obligors or any of their
Subsidiaries other than by reason of being shareholders or Affiliates of
BSC, and that neither in fact participate in the management of any of BSC,
BP Co., the Obligors or any of their Subsidiaries, nor are controlled by
BSC or BP Co., or any of their respective Affiliates who in fact
participate in the management of any of BSC, BP Co., the Obligors or any
of their Subsidiaries, shall not be deemed to be Affiliates of the
Obligors or any of their Subsidiaries.
"AGREEMENT" shall mean this Amended and Restated Credit Agreement,
as the same may from time to time be amended or supplemented.
"AGGREGATE COMMITMENTS" at any time shall equal the sum of the
Aggregate Revolving Credit Commitments and the Aggregate Term Commitments.
"AGGREGATE REVOLVING CREDIT COMMITMENTS" at any time shall equal the
amount calculated in accordance with Section 2.03.
"AGGREGATE MAXIMUM REVOLVING CREDIT AMOUNTS" at any time shall equal
the sum of the Maximum Revolving Credit Amounts of the Lenders
($140,000,000) as the same may be reduced pursuant to Section 2.03(b).
"AGGREGATE TERM COMMITMENTS" at any time shall equal the sum of the
Term Commitments of the Lenders.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the lending office of such Lender (or an Affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or
such other offices of such Lender (or of an Affiliate of such Lender) as
such Lender may from time to time specify to the Agent and the Borrowers
as the office by which its Loans of such Type are to be made and
maintained.
"APPLICABLE MARGIN" shall mean (i) 2.0% per annum with respect to
Term Loans accruing interest at the Base Rate and (ii) with respect to
Revolving Credit
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Loans (whether Eurodollar Loans or Base Rate Loans), the applicable per
annum percentage set forth at the appropriate intersection in the table
shown below, based on the Threshold Utilization Percentage as in effect
from time to time:
THRESHOLD UTILIZATION PERCENTAGE APPLICABLE MARGIN
EURODOLLAR LOANS BASE RATE LOANS
Less than or equal to 33% 1.00% 0.0%
Greater than 33%, but less than or 1.25% 0.0%
equal to 66%
Greater than 66%, but less than or 1.50% 0.0%
equal to 100%
Greater than 100% 1.75% 0.25%
Each change in the Applicable Margin resulting from a change in the
Borrowing Base Utilization shall take effect at the time of such change in
the Borrowing Base Utilization.
"ASSIGNMENT" shall have the meaning assigned such term in Section
12.06(b).
"BASE RATE" shall mean, with respect to any Base Rate Loan, for any
day, the higher of (i) the Federal Funds Rate for any such day plus 1/2 of
1% or (ii) the Prime Rate for such day. Each change in any interest rate
provided for herein based upon the Base Rate resulting from a change in
the Base Rate shall take effect at the time of such change in the Base
Rate.
"BASE RATE LOANS" shall mean Loans that bear interest at rates based
upon the Base Rate.
"BASIS HEDGE" shall mean a Hedging Agreement covering the difference
between the applicable hydrocarbon price quoted by the New York Mercantile
Exchange and the applicable price quoted at the delivery point at which
such production will be sold.
"BESSEMER" shall mean Bessemer Holdings, L.P., a Delaware limited
partnership.
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"BORROWING BASE" shall mean at any time an amount equal to the
amount determined in accordance with Section 2.08.
"BP CO." shall mean Bessemer Partners & Co.
"BSC" shall mean Bessemer Securities Corporation.
"BUSINESS DAY" shall mean any day other than a Saturday or Sunday or
a day on which commercial banks are authorized or required to close in New
York, New York or Houston, Texas and, where such term is used in the
definition of "Quarterly Date" and, when used in connection with a
borrowing or continuation of, a payment or prepayment of principal of or
interest on, or a conversion of or into, or the Interest Period for, a
Eurodollar Loan or a notice by the Borrowers with respect to any such
borrowing or continuation, payment, prepayment, conversion or Interest
Period, any such day which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"CHANGE OF CONTROL" shall mean (i) Bessemer or its Affiliates shall
cease to beneficially own (within the meaning of Rule 13d-3 of the SEC
under the Exchange Act), directly or indirectly, at least 20% (on a fully
diluted basis) of the total of all equity interests in the Parent and at
least 20% of the combined voting power of all securities of the Parent
entitled to vote in the election of directors; (ii) any Person or two or
more Persons acting in concert (other than Bessemer or its Affiliates)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
of the SEC under the Exchange Act), directly or indirectly, of Voting
Stock of the Parent (or other securities convertible into such Voting
Stock), representing a greater percentage of the combined voting power of
all Voting Stock of the Parent than the percentage of the combined voting
power of all Voting Stock of the Parent owned directly, or indirectly
through Bessemer or its Affiliates; or (iii) any Person or two or more
Persons acting in concert (other than Bessemer or its Affiliates) shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or
their acquisition of, the power to exercise directly or indirectly, a
controlling influence over the management or policies of the Parent.
"CLOSING DATE" shall mean December 1, 1997.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time and any successor statute.
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"COMMITMENT" shall mean, for any Lender, its Revolving Credit
Commitment and/or its Term Commitment, as applicable.
"CONSOLIDATED NET INCOME" shall mean with respect to the Parent and
its Consolidated Subsidiaries, for any period, the aggregate of the net
income (or loss) of the Parent and its Consolidated Subsidiaries after
allowances for taxes for such period, determined on a consolidated basis
in accordance with GAAP; PROVIDED, HOWEVER, that there shall be excluded
from such net income (to the extent otherwise included therein) the
following: (i) the net income of any Person in which the Parent or any
Consolidated Subsidiary has an interest (which interest does not cause the
net income of such other Person to be consolidated with the net income of
the Parent and its Consolidated Subsidiaries in accordance with GAAP),
except to the extent of the amount of dividends or distributions actually
paid in such period by such other Person to the Parent or to a
Consolidated Subsidiary, as the case may be; (ii) the net income (but not
loss) of any Consolidated Subsidiary to the extent that the declaration or
payment of dividends or similar distributions or transfers or loans by
that Consolidated Subsidiary is not at the time permitted by operation of
the terms of its charter or any agreement, instrument or Governmental
Requirement applicable to such Consolidated Subsidiary, or is otherwise
restricted or prohibited in each case determined in accordance with GAAP;
(iii) the net income (or loss) of any Person acquired in a
pooling-of-interests transaction for any period prior to the date of such
transaction; (iv) any extraordinary gains or losses, including gains or
losses attributable to Property sales not in the ordinary course of
business; and (v) the cumulative effect of a change in accounting
principles and any gains or losses attributable to writeups or writedowns
of assets.
"CONSOLIDATED SUBSIDIARIES" shall mean each Subsidiary of the Parent
or the Borrowers (whether now existing or hereafter created or acquired)
the financial statements of which shall be (or should have been)
consolidated with the financial statements of the Parent or the Borrowers
in accordance with GAAP.
"CONTOUR" shall mean Contour Production Company L.L.C., a Delaware
limited liability company.
"CONTOUR TRANSACTION" shall mean the acquisition by Contour of
27,000,000 shares of the Parent's common stock pursuant to the Option
Agreement.
"DDP" shall mean either 92 DDP or 94 DDP or both 92 DDP and 94 DDP,
as the context requires.
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"DEBT" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments
(including principal, interest, fees and charges); (ii) all obligations of
such Person (whether contingent or otherwise) in respect of bankers'
acceptances, letters of credit, surety or other bonds and similar
instruments; (iii) all obligations of such Person to pay the deferred
purchase price of Property or services (other than for borrowed money and
accounts payable arising in the ordinary course of business of such
Person); (iv) all obligations under leases which shall have been, or
should have been, in accordance with GAAP, recorded as capital leases in
respect of which such Person is liable (whether contingent or otherwise);
(v) all obligations under leases which require such Person or its
Affiliate to make payments over the term of such lease, including payments
at termination, which are substantially equal to at least eighty percent
(80%) of the purchase price of the Property subject to such lease plus
interest at an imputed rate of interest; (vi) all Debt and other
obligations of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person; (vii) all Debt and
other obligations of others guaranteed by such Person or in which such
Person otherwise assures a creditor against loss of the debtor or
obligations of others; (viii) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or
covenants of others or to purchase the Debt or Property of others; (ix)
the undischarged balance of any production payment created by such Person
or for the creation of which such Person directly or indirectly received
payment; (x) the net aggregate ▇▇▇▇-to-market value of all obligations of
such Person under Hedging Agreements; and (xi) obligations to deliver
goods or services including Hydrocarbons in consideration of advance
payments.
"DEFAULT" shall mean an Event of Default or an event which with
notice or lapse of time or both would become an Event of Default.
"DOLLARS" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, for any period, the sum of Consolidated Net
Income for such period plus the following expenses or charges to the
extent deducted from Consolidated Net Income in such period: interest,
taxes, depreciation, depletion, amortization (including amortization of
deferred financing costs), accretion of discount, Exploration Costs and
other non cash charges and minus any non cash income to the extent
included in income in such period.
"EFFECTIVE DATE" shall have the meaning assigned such term in
Section 12.16.
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"ENGINEERING REPORTS" shall have the meaning assigned such term in
Section 2.08.
"ENVIRONMENTAL LAWS" shall mean any and all Governmental
Requirements pertaining to health or the environment in effect in any and
all jurisdictions in which the Obligors or any Subsidiary is conducting or
at any time has conducted business, or where any Property of the Obligors
or any Subsidiary is located, including without limitation, the Oil
Pollution Act of 1990 ("OPA"), the Clean Air Act, as amended, the
Comprehensive Environmental, Response, Compensation, and Liability Act of
1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the
Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection laws. The term "oil" shall have
the meaning specified in OPA, the terms "hazardous substance" and
"release" (or "threatened release") have the meanings specified in CERCLA,
and the terms "solid waste" and "disposal" (or "disposed") have the
meanings specified in RCRA; provided, however, that (i) in the event
either OPA, CERCLA or RCRA is amended so as to broaden the meaning of any
term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment and (ii) to the extent the laws of the
state in which any Property of the Obligors or any Subsidiary is located
establish a meaning for "oil," "hazardous substance," "release," "solid
waste" or "disposal" which is broader than that specified in either OPA,
CERCLA or RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statute.
"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which together with any of the Obligors or any Subsidiary
would be deemed to be a "single employer" within the meaning of section
4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of
the Code.
"ERISA EVENT" shall mean (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder, (ii) the
withdrawal of any of the Obligors any Subsidiary or any ERISA Affiliate
from a Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the filing of a notice of
intent to terminate a Plan or the treatment of a Plan
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amendment as a termination under Section 4041 of ERISA, (iv) the
institution of proceedings to terminate a Plan by the PBGC or (v) any
other event or condition that constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"EURODOLLAR LOANS" shall mean Revolving Credit Loans the interest
rates on which are determined on the basis of rates referred to in the
definition of "Fixed Eurodollar Rate".
"EVENT OF DEFAULT" shall have the meaning assigned such term in
Section 10.01.
"EXCEPTED LIENS" shall mean: (i) Liens for taxes, assessments or
other governmental charges or levies not yet due or which are being
contested in good faith by appropriate action and for which appropriate
reserves (in the good faith judgment of the management of the Parent) have
been maintained; (ii) Liens in connection with workmen's compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being contested in good
faith by appropriate action and for which appropriate reserves (in the
good faith judgment of the management of the Parent) have been maintained
in accordance with GAAP; (iii) operators', vendors', carriers',
warehousemen's, repairmen's, mechanics', workmen's, materialmen's,
construction or other like Liens arising by operation of law in the
ordinary course of business or incident to the exploration, development,
operation and maintenance of Oil and Gas Properties or statutory
landlord's liens, each of which is in respect of obligations that have not
been outstanding more than 125 days or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves (in
the good faith judgment of the management of the Parent) have been
maintained in accordance with GAAP; (iv) any Liens reserved in leases or
farmout agreements for rent or royalties and for compliance with the terms
of the farmout agreements or leases in the case of leasehold estates, to
the extent that any such Lien referred to in this clause does not
materially impair the use of the Property covered by such Lien for the
purposes for which such Property is held by the Obligors or any Subsidiary
or materially impair the value of such Property subject thereto; (v)
encumbrances (other than to secure the payment of borrowed money or the
deferred purchase price of Property or services), easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations in
any rights of way or other Property of the Obligors or any Subsidiary for
the purpose of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil, coal or other minerals or
timber, and other like purposes, or for the joint or common use of real
estate, rights of way, facilities and equipment, and
-9-
defects, irregularities, zoning restrictions and deficiencies in title of
any rights of way or other Property which in the aggregate do not
materially impair the use of such rights of way or other Property for the
purposes of which such rights of way and other Property are held by the
Obligors or any Subsidiary or materially impair the value of such Property
subject thereto; (vi) deposits of cash or securities to secure the
performance of bids, trade contracts, leases, statutory obligations and
other obligations of a like nature incurred in the ordinary course of
business; (vii) Liens represented by the interest of a tenant or subtenant
under a lease or sublease entered into in the ordinary course of business
by an Obligor or a Subsidiary and not otherwise in violation of this
Agreement; and (viii) Liens permitted by the Security Instruments.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of 1934,
as amended.
"EXISTING INDENTURE" shall mean the indenture dated as of June 15,
1995, between the Parent and Chemical Bank, as Trustee, under which the
Existing Senior Unsecured Notes have been issued, as amended, supplemented
or otherwise modified.
"EXISTING SENIOR UNSECURED NOTES" shall mean the unsecured 13-1/2%
Senior Notes Due 1999 issued by the Parent under the terms and provisions
of the Existing Indenture, in the original aggregate principal amount of
$100,000,000, and maturing on June 15, 1999.
"EXPLORATION COSTS" shall mean uncapitalized exploration, land,
geophysical and dry hole costs.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight federal funds transactions with
a member of the Federal Reserve System arranged by federal funds brokers
on such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if the date for
which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day, and (ii) if such rate is not so published for any day, the
Federal Funds Rate for such day shall be the average rate charged to the
Agent on such day on such transactions as determined by the Agent.
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"FINANCIAL STATEMENTS" shall mean the financial statement or
statements of the Obligors described or referred to in Section 7.02.
"FIXED EURODOLLAR RATE" shall mean the offered quotation, if any, to
first-class banks in the Eurodollar market by the Agent for Dollar
deposits of amounts in funds comparable to the principal amount of the
Eurodollar Loan to which such Fixed Eurodollar Rate is to be applicable
with maturities comparable to the Interest Period for which such Fixed
Eurodollar Rate will apply as of approximately 10:00 a.m. (Houston time)
two Business Days prior to the commencement of such Interest Period.
"FIXED RATE" shall mean, with respect to any Eurodollar Loan, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by the Agent to be equal to the quotient of (i) the Fixed
Eurodollar Rate for such Loan for the Interest Period for such Loan
divided by (ii) 1 minus the Reserve Requirement for such Loan for such
Interest Period.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"GOVERNMENTAL AUTHORITY" shall include the country, the state,
county, city and political subdivisions in which any Person or such
Person's Property is located or which exercises valid jurisdiction over
any such Person or such Person's Property, and any court, agency,
department, commission, board, bureau or instrumentality of any of them
including monetary authorities which exercises valid jurisdiction over any
such Person or such Person's Property. Unless otherwise specified, all
references to Governmental Authority herein shall mean a Governmental
Authority having jurisdiction over, where applicable, the Obligors, their
Subsidiaries or any of their Properties or the Agent, any Lender or any
Applicable Lending Office.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or
other directive or requirement (whether or not having the force of law),
including, without limitation, Environmental Laws, energy regulations and
occupational, safety and health standards or controls, of any Governmental
Authority.
"GUARANTORS" shall mean Concorde, 92 JV, 94 JV, 92 DDP, 94 DDP and
any other Person who becomes party to a Guaranty Agreement pursuant to the
terms of Section 8.11.
-▇▇-
"▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇" shall mean an agreement executed by each of the
Guarantors in form and substance satisfactory to the Agent guarantying,
unconditionally, payment of the Indebtedness, as the same may be amended,
modified or supplemented from time to time.
"HEDGING AGREEMENTS" shall mean any commodity, interest rate or
currency swap, rate cap, rate floor, rate collar, forward agreement or
other exchange or rate protection agreements or any option with respect to
any such transaction.
"HIGHEST LAWFUL RATE" shall mean, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from time
to time may be contracted for, taken, reserved, charged or received on the
Notes or on other Indebtedness under laws applicable to such Lender which
are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
"HYDROCARBON INTERESTS" shall mean all rights, titles, interests and
estates now or hereafter acquired in and to oil and gas leases, oil, gas
and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral
fee interests, overriding royalty and royalty interests, net profit
interests and production payment interests, including any reserved or
residual interests of whatever nature.
"HYDROCARBONS" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined or separated therefrom.
"INDEBTEDNESS" shall mean any and all amounts owing or to be owing
by the Borrowers to the Agent, the Issuing Bank, and/or Lenders in
connection with the Loan Documents and the Letter of Credit Agreements,
and any Hedging Agreements now or hereafter arising between the Borrowers
and any Lender permitted by the terms of this Agreement and all renewals,
extensions and/or rearrangements of any of the above.
"INDEMNIFIED PARTIES" shall have the meaning assigned such term in
Section 12.03(a).
"INDEMNITY MATTERS" shall have the meaning assigned such term in
Section 12.03(a).
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"INDENTURE" shall mean the indenture dated as of October 29, 1996,
among the Parent, KOC, Kelley Operating and United States Trust Company of
New York, as Trustee, under which the Senior Subordinated Notes have been
issued, as amended, supplemented or otherwise modified.
"INITIAL FUNDING" shall mean the amendment, extension and
rearrangement of all of the Prior Debt pursuant to Section 6.01 hereof.
"INITIAL RESERVE REPORT" shall mean both (i) the report prepared
internally by SCANA Petroleum Resources, Inc. dated as of November 1, 1997
and (ii) the report prepared by ▇.▇. ▇▇▇▇ & Associates, Inc. dated as of
July 1, 1997, both prepared with respect to the Oil and Gas Properties of
the various Obligors (net of minority interests), a copy of each having
been delivered to the Lenders.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar Loan,
the period commencing on the date such Eurodollar Loan is made and ending
on the numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Borrowers may select as provided in
Section 2.02 (or such longer period as may be requested by the Borrowers
and agreed to by the Lenders), except that each Interest Period which
commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after
the Revolving Credit Termination Date; (ii) no Interest Period for any
Eurodollar Loan may end after the due date of any installment, if any,
provided for in Section 3.01 hereof to the extent that such Eurodollar
Loan would need to be prepaid prior to the end of such Interest Period in
order for such installment to be paid when due; (iii) each Interest Period
which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iv) no Interest Period shall have a duration of less
than one month and, if the Interest Period for any Eurodollar Loans would
otherwise be for a shorter period, such Loans shall not be available
hereunder.
"ISSUING BANK" shall mean TCB or any other Lender agreed to among
the Borrowers, the Agent and such Lender to issue Letters of Credit.
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"JV" shall mean either 92 JV or 94 JV or both 92 JV and 94 JV, as
the context requires.
"JANUARY 1 RESERVE REPORT" shall mean the Reserve Report with an as
of date of January 1 as described in Section 8.07; provided, however, the
January 1 Reserve Report required to be delivered no later than March 31,
1998, at the Borrower's election, may have an as of the date of December
1, 1997.
"JULY 1 RESERVE REPORT" shall mean the Reserve Report with an as of
date of July 1 as described in Section 8.07.
"LC COMMITMENT" at any time shall mean $25,000,000.
"LC EXPOSURE" at any time shall mean the difference between (i)
aggregate face amount of all undrawn and uncancelled Letters of Credit and
the aggregate of all amounts drawn under all Letters of Credit and not yet
reimbursed or funded pursuant to Section 2.10(a), minus (ii) the aggregate
amount of all cash securing outstanding Letters of Credit pursuant to
Section 2.10(b).
"LETTER OF CREDIT AGREEMENTS" shall mean the written agreements with
the Issuing Bank for any Letter of Credit, executed or hereafter executed
in connection with the issuance by the Issuing Bank of the Letters of
Credit, such agreements to be on the Issuing Bank's customary form for
letters of credit of comparable amount and purpose as from time to time in
effect or as otherwise agreed to by the Borrowers and the Issuing Bank.
"LETTERS OF CREDIT" shall mean the letters of credit issued pursuant
to Section 2.01(c), and "Letter of Credit" shall mean any one of the
Letters of Credit.
"LIEN" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute or contract, and
whether such obligation or claim is fixed or contingent, and including but
not limited to (i) the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes or (ii)
production payments and the like payable out of Oil and Gas Properties.
The term "LIEN" shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances affecting Property. For the
purposes of this Agreement, the Obligors or any Subsidiary shall be deemed
to be the owner of any Property which it has
-14-
acquired or holds subject to a conditional sale agreement, or leases under
a financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person in a
transaction intended to create a financing.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Security
Instruments and any Hedging Agreements now or hereafter arising between
any Obligor and any Lender or its Affiliate that is permitted by the terms
of this Agreement and all amendments, modifications and restatements of
any of the above.
"LOANS" shall mean the Revolving Credit Loans and the Term Loans.
"MAJORITY LENDERS" shall mean, at any time while no Loans are
outstanding, Lenders having at least fifty-one percent (51%) of the
Aggregate Commitments and, at any time while Loans are outstanding,
Lenders holding at least fifty-one percent (51%) of the outstanding
aggregate principal amount of the Loans (without regard to any sale by a
Lender of a participation in any Loan under Section 12.06(c)).
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse effect
on (i) the assets, liabilities, financial condition, business, operations
or affairs of the Parent, the Borrowers and their Subsidiaries taken as a
whole as at December 31, 1996, or (ii) the ability of the Parent, the
Borrowers and their Subsidiaries taken as a whole to carry out their
business as at the Closing Date or as proposed as of the Closing Date to
be conducted or meet their obligations under the Loan Documents on a
timely basis.
"MAXIMUM REVOLVING CREDIT AMOUNT" shall mean, as to each Lender, the
amount set forth opposite such Lender's name on EXHIBIT F under the
caption "Maximum Revolving Credit Amounts" (as the same may be reduced
pursuant to Section 2.03(b) hereof pro rata to each Lender based on its
Percentage Share), as modified from time to time to reflect any
assignments permitted by Section 12.06(b).
"MORTGAGED PROPERTY" shall mean the Property owned by the Obligors
and which is subject to the Liens existing and to exist under the terms of
the Security Instruments.
"MULTIEMPLOYER PLAN" shall mean a Plan defined as such in Section
3(37) or 4001(a)(3) of ERISA.
"NOTES" shall mean the Revolving Credit Notes and the Term Notes.
-15-
"OBLIGORS" shall mean collectively, the Borrowers and the
Guarantors.
"OIL AND GAS PROPERTIES" shall mean Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests;
all presently existing or future unitization, pooling agreements and
declarations of pooled units and the units created thereby (including
without limitation all units created under orders, regulations and rules
of any Governmental Authority) which may affect all or any portion of the
Hydrocarbon Interests; all operating agreements, contracts and other
agreements which relate to any of the Hydrocarbon Interests or the
production, sale, purchase, exchange or processing of Hydrocarbons from or
attributable to such Hydrocarbon Interests; all Hydrocarbons in and under
and which may be produced and saved or attributable to the Hydrocarbon
Interests, including all oil in tanks, the lands covered thereby and all
rents, issues, profits, proceeds, products, revenues and other incomes
from or attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and Properties in any manner appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests; and all
Properties, rights, titles, interests and estates described or referred to
above, including any and all Property, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such
Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment or other personal property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and
including any and all oil ▇▇▇▇▇, gas ▇▇▇▇▇, injection ▇▇▇▇▇ or other
▇▇▇▇▇, buildings, structures, fuel separators, liquid extraction plants,
plant compressors, pumps, pumping units, field gathering systems, tanks
and tank batteries, fixtures, valves, fittings, machinery and parts,
engines, boilers, meters, apparatus, equipment, appliances, tools,
implements, cables, wires, towers, casing, tubing and rods, surface
leases, rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing.
"OPTION AGREEMENT" shall have the meaning assigned in the Stock
Purchase Agreement dated as of January 23, 1996 between the Parent and
Contour Production Company.
"OTHER TAXES" shall have the meaning assigned such term in Section
4.06(b).
"PARENT STOCK INVESTMENTS" shall mean investments in Persons or
Property for which the consideration paid by an Obligor is common stock of
the Parent.
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"PARTNERSHIP AGREEMENTS" shall mean the respective written
partnership agreement or joint venture agreement of ▇▇▇▇▇▇ Operating, 92
DDP, 94 DDP, 92 JV and 94 JV, each as amended.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions.
"PERCENTAGE SHARE" shall mean the percentage of the Aggregate
Commitments to be provided by a Lender under this Agreement as indicated
on EXHIBIT F, as modified from time to time to reflect any assignments
permitted by Section 12.06(b).
"PERSON" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof, or any other form of entity.
"PLAN" shall mean any employee pension benefit plan, as defined in
Section 3(2) of ERISA, which (i) is currently or hereafter sponsored,
maintained or contributed to by any of the Obligors any Subsidiary or an
ERISA Affiliate or (ii) was at any time during the preceding six calendar
years sponsored, maintained or contributed to, by any of the Obligors, any
Subsidiary or an ERISA Affiliate.
"POST-DEFAULT RATE" shall mean, in respect of any principal of any
Loan or any other amount payable by the Borrowers under this Agreement,
any Note or any Security Instrument which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during
the period commencing on the date of occurrence of an Event of Default
until such amount is paid in full or all Events of Default are cured or
waived equal to 2% per annum above the Base Rate as in effect from time to
time plus the Applicable Margin (if any), but in no event to exceed the
Highest Lawful Rate; provided, however, for a Eurodollar Loan, the
"POST-DEFAULT RATE" for such principal shall be, for the period commencing
on the date of occurrence of an Event of Default and ending on the earlier
to occur of (i) the last day of the Interest Period therefor or (ii) the
Date all Events of Default are cured or waived, 2% per annum above the
interest rate for such Loan as provided in Section 3.02(a)(ii), but in no
event to exceed the Highest Lawful Rate.
"PRIME RATE" shall mean the rate of interest from time to time
announced publicly by the Agent at the Principal Office as its prime
commercial lending rate. Such rate is set by the Agent as a general
reference rate of interest, taking into account such factors as the Agent
may deem appropriate, it being understood that
-17-
many of the Agent's commercial or other loans are priced in relation to
such rate, that it is not necessarily the lowest or best rate actually
charged to any customer and that the Agent may make various commercial or
other loans at rates of interest having no relationship to such rate.
"PRINCIPAL OFFICE" shall mean the principal office of the Agent,
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"PRIOR CREDIT AGREEMENT" shall mean the Credit Agreement among the
Obligors, the Agent, CSI and the lenders party thereto dated December 12,
1996, as amended.
"PRIOR DEBT" shall mean the outstanding Debt under the Prior Credit
Agreement.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"QUARTERLY DATES" shall mean the last day of each January, April,
July, and October, in each year, the first of which shall be January 31,
1998; provided, however, that if any such day is not a Business Day, such
Quarterly Date shall be the next succeeding Business Day.
"REDETERMINATION DATE" shall have the meaning assigned such term in
Section 2.08(a).
"REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System (or any successor), as the same may be amended
or supplemented from time to time.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any
change after the Closing Date in any Governmental Requirement (including
Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of lenders
(including such Lender or its Applicable Lending Office) of or under any
Governmental Requirement (whether or not having the force of law) by any
Governmental Authority charged with the interpretation or administration
thereof.
"REQUIRED LENDERS" shall mean, at any time while no Loans are
outstanding, Lenders having at least eighty percent (80%) of the Aggregate
Commitments and, at
-18-
any time while Loans are outstanding, Lenders holding at least eighty
percent (80%) of the outstanding aggregate principal amount of the Loans
(without regard to any sale by a Lender of a participation in any Loan
under Section 12.06(c)).
"REQUIRED PAYMENT" shall have the meaning assigned such term in
Section 4.04.
"RESERVE REPORT" shall mean each report, in form and substance
satisfactory to the Agent, setting forth, as of each January 1 and July 1
(or such other date in the event of an unscheduled redetermination): (i)
the oil and gas reserves attributable to the Obligor's Mortgaged
Properties together with a projection of the rate of production and future
net income, taxes, operating expenses and capital expenditures with
respect thereto as of such date, based upon the pricing assumptions
consistent with SEC reporting requirements at the time and (ii) such other
information as the Agent may reasonably request.
"RESERVE REQUIREMENT" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks
of the Federal Reserve System in New York City with deposits exceeding one
billion Dollars against "Eurocurrency liabilities" (as such term is used
in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against
(i) any category of liabilities which includes deposits by reference to
which the Fixed Eurodollar Rate for Eurodollar Loans is to be determined
as provided in the definition of "Fixed Eurodollar Rate" or (ii) any
category of extensions of credit or other assets which include a
Eurodollar Loan.
"RESPONSIBLE OFFICER" shall mean, as to any Person, the Chief
Executive Officer, the President or any Vice President of such Person and,
with respect to financial matters, the term "Responsible Officer" shall
include the Chief Financial Officer, the Treasurer or the Controller, of
such Person. Unless otherwise specified, all references to a Responsible
Officer herein shall mean a Responsible Officer of KOC or the Parent, as
applicable.
"RESTRICTED SUBSIDIARY" shall have the meaning assigned to such term
in the Indenture.
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"REVOLVING CREDIT COMMITMENT" shall mean, for any Lender, its
obligation to make Revolving Credit Loans and to participate in the
Letters of Credit as provided in Section 2.01(c) up to the lesser of (i)
such Lender's Maximum Revolving Credit Amount or (ii) the Lender's
Percentage Share of the then effective Borrowing Base.
"REVOLVING CREDIT LOANS" shall mean loans made pursuant to Section
2.01(a).
"REVOLVING CREDIT NOTES" shall mean the promissory note or notes
(whether one or more) of the Borrower described in Section 2.06 and being
in the form of EXHIBIT A-1.
"REVOLVING CREDIT PERIOD" shall mean the period from the Closing
Date to and ending on the Revolving Credit Termination Date.
"REVOLVING CREDIT TERMINATION DATE" shall mean the earliest to occur
of (i) the third anniversary of the Closing Date, (ii) the date that the
Revolving Credit Commitments are sooner terminated pursuant to Section
2.03(b) or (iii) the date the principal of the Revolving Credit Loans is
accelerated pursuant to Section 10.02.
"SCANA ACQUISITION" shall mean the acquisition by the Parent of all
or substantially all of the Oil and Gas Properties of SCANA Petroleum
Resources, Inc.
"SCANA PROPERTIES" shall mean the Properties acquired by the Parent
in the SCANA Acquisition.
"SCHEDULED REDETERMINATION DATE" shall have the meaning assigned
such term in Section 2.08(d).
"SEC" shall mean the Securities and Exchange Commission or any
successor Governmental Authority.
"SECTION 29 TRANSACTION" shall mean the purchase, on or before June
30, 1998, by a newly created Unrestricted Subsidiary of Oil and Gas
properties from the Borrowers and the Restricted Subsidiaries which
transaction qualifies for tax treatment pursuant to Section 29 of the
Code.
"SECURITY INSTRUMENTS" shall mean the Letters of Credit, the Letter
of Credit Agreements, the agreements or instruments described or referred
to in EXHIBIT D, and any and all other agreements or instruments now or
hereafter executed and delivered
-20-
by the Obligors or any Subsidiary (other than participation or similar
agreements between any Lender and any other lender or creditor with
respect to any Indebtedness pursuant to this Agreement) pursuant to, or as
security for the payment or performance of the Prior Debt, the
Indebtedness, the Notes or this Agreement, or reimbursement obligations
under the Letters of Credit, as such agreements may be amended,
supplemented or restated from time to time.
"SENIOR SUBORDINATED NOTES" shall mean the 10-3/8% unsecured senior
subordinated notes issued by the Parent under the terms and provisions of
the Indenture in the aggregate principal amount of $125,000,000 and
maturing on October 15, 2006.
"SUBORDINATED DEBT" shall mean the 8-1/2% Convertible Subordinated
Debentures due 2000 and the 1999 Notes, as assumed pursuant to the merger
of ▇▇▇▇▇▇ Oil & Gas Partners, Ltd. with and into the Parent under the
Agreement and Plan of Merger dated as of March 26, 1996.
"SUBSIDIARY" of any Person shall mean (i) any corporation of which
at least a majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is
at the time directly or indirectly owned or controlled by such Person or
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, and (ii) any partnership, association, joint venture or
other unincorporated entity which such Person or one or more of its
Subsidiaries has more than a 50% equity or ownership interest at the time.
Unless otherwise expressly provided, all references herein to "Subsidiary"
shall (x) mean a Subsidiary of the Parent, including the Borrowers and (y)
exclude all Unrestricted Subsidiaries.
"TAXES" shall have the meaning assigned such term in Section
4.06(a).
"TERM COMMITMENT" shall mean, as to each Lender, its obligation to
make a Term Loan in the amount set forth opposite such Lender's name under
"Term Loans" on ANNEX I, as the same may be modified from time to time to
reflect any assignment permitted by Section 12.06(b).
"TERM LOAN TERMINATION DATE" shall mean the earlier to occur of (i)
June 1, 1998 or (ii) the date that the Term Commitments are sooner
canceled or the Term Loans accelerated pursuant to Section 10.02.
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"TERM LOANS" shall mean the term loans made pursuant to Section
2.01(b).
"TERM NOTES" shall mean the promissory note or notes (whether one or
more) of the Borrower described in Section 2.06 and being in the form of
EXHIBIT A-2.
"THRESHOLD AMOUNT" shall have the meaning assigned to such term in
Section 2.08(b).
"THRESHOLD UTILIZATION PERCENTAGE" shall mean the result, expressed
as a percentage, determined by dividing (i) the sum of (a) the aggregate
amount of all Revolving Credit Loans outstanding PLUS (b) the LC Exposure
by (ii) the Threshold Amount then in effect.
"TRANSFER" shall have the meaning assigned such term in Section
9.14.
"TYPE" shall mean, with respect to any Loan, a Base Rate Loan or a
Eurodollar Loan.
"UNRESTRICTED SUBSIDIARIES" shall have the meaning assigned to such
term in the Indenture.
"VOTING STOCK" shall mean, with respect to any Person, capital stock
of such Person having general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees
of such Person (irrespective of whether or not at the time capital stock
of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
Section 1.03 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent with the
audited financial statements of the Obligors referred to in Section 7.02 (except
for changes concurred with by the Parent's independent public accountants).
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ARTICLE II
COMMITMENTS
Section 2.01 LOANS AND LETTERS OF CREDIT.
(a) REVOLVING CREDIT LOANS. Each Lender severally agrees, on the
terms of this Agreement, to make loans to the Borrowers during the period
from and including (i) the Closing Date or (ii) such later date that such
Lender becomes a party to this Agreement as provided in Section 12.06(b),
to and up to, but excluding, the Revolving Credit Termination Date in an
aggregate principal amount at any one time outstanding up to but not
exceeding the amount of such Lender's Revolving Credit Commitment as then
in effect; PROVIDED, HOWEVER, that the aggregate principal amount of all
such Revolving Credit Loans by all Lenders hereunder at any one time
outstanding together with the LC Exposure shall not exceed the Aggregate
Revolving Credit Commitments. Subject to the terms of this Agreement,
during the period from the Closing Date to and up to, but excluding, the
Revolving Credit Termination Date, the Borrowers may borrow, repay and
reborrow the amount described in this Section 2.01(a).
(b) TERM LOANS. Each Lender severally agrees, subject to the terms
and conditions of this Agreement, to make a term loan to the Borrower not
to exceed its Term Commitment. Such Term Loan shall be made by way of a
single borrowing made on the 1999 Notes Redemption Date. Any portion of
each Lender's Term Commitment not utilized by such borrowing on the 1999
Notes Redemption Date shall be permanently canceled.
(c) LETTERS OF CREDIT. During the period from and including the
Closing Date to, but excluding, the fifth day before the Revolving Credit
Termination Date, the Issuing Bank, as issuing bank for the Lenders,
agrees to extend credit for the account of any Borrower at any time and
from time to time by issuing renewing, extending or reissuing Letters of
Credit; PROVIDED HOWEVER, that the LC Exposure at any one time outstanding
shall not exceed the lesser of (i) the LC Commitment and (ii) the
Aggregate Revolving Credit Commitments, as then in effect, minus the
aggregate principal amount of all Revolving Credit Loans then outstanding.
The Lenders shall participate in such Letters of Credit according to their
respective Percentage Shares.
(d) LIMITATION ON TYPES OF LOANS. Subject to the other terms and
provisions of this Agreement, at the option of the Borrowers, the
Revolving Credit Loans may be Base Rate Loans or Eurodollar Loans;
provided that, without the prior written consent of the Majority Lenders,
no more than five (5) Eurodollar Loans may be outstanding at any time.
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Section 2.02 BORROWINGS, CONTINUATIONS AND CONVERSIONS; LETTERS OF
CREDIT.
(a) BORROWINGS. The Term Loans shall be made by way of a single
advance by the Lenders on the 1999 Notes Redemption Date. The Borrowers
shall give the Agent (which shall promptly notify the Lenders) advance
notice as hereinafter provided of each borrowing hereunder, which shall
specify the aggregate amount of such borrowing, the Type and the date
(which shall be a Business Day) of the Loans to be borrowed and (in the
case of Eurodollar Loans) the duration of the Interest Period therefor.
(b) MINIMUM AMOUNTS. All Revolving Credit Loans that are Base Rate
Loan borrowings shall be in amounts of at least $1,000,000 or the
remaining balance of the Aggregate Revolving Credit Commitments, if less,
or any whole multiple of $500,000 in excess thereof, and all Eurodollar
Loans shall be in amounts of at least $2,000,000 or any whole multiple of
$500,000 in excess thereof.
(c) NOTICES. All borrowings, continuations and conversions shall
require advance written notice to the Agent (which shall promptly notify
the Lenders) in the form of EXHIBIT B hereto (or telephonic notice
promptly confirmed by such a written notice), which in each case shall be
irrevocable, from the Borrowers to be received by the Agent not later than
(i) 11:00 a.m. on the date of each Base Rate Loan and (ii) 12:00 noon
Houston time at least three Business Days prior to the date of each
Eurodollar Loan borrowing, continuation or conversion. Without in any way
limiting the Borrowers' obligation to confirm in writing any telephonic
notice, the Agent may act without liability upon the basis of telephonic
notice believed by the Agent in good faith to be from the Borrowers prior
to receipt of written confirmation. In each such case, the Borrowers
hereby waive the right to dispute the Agent's record of the terms of such
telephonic notice except in the case of gross negligence or willful
misconduct by the Agent.
(d) CONTINUATION OPTIONS. Subject to the provisions made in this
Section 2.02(d), the Borrowers may elect to continue all or any part of
any Eurodollar Loan beyond the expiration of the then current Interest
Period relating thereto by giving advance notice as provided in Section
2.02(c) to the Agent (which shall promptly notify the Lenders) of such
election, specifying the amount of such Loan to be continued and the
Interest Period therefor. In the absence of such a timely and proper
election, the Borrowers shall be deemed to have elected to convert such
Eurodollar Loan to a Base Rate Loan pursuant to Section 2.02(e). All or
any part of any Eurodollar Loan may be continued as provided herein,
provided that (i) any continuation of any such Loan shall be (as to each
Loan as continued for an applicable Interest Period) in amounts of at
least $2,000,000 or any whole multiple of $500,000 in excess thereof and
(ii) no Default shall have occurred and be continuing. If a Default shall
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have occurred and be continuing, each Eurodollar Loan shall be converted
to a Base Rate Loan on the last day of the Interest Period applicable
thereto.
(e) CONVERSION OPTIONS. The Borrowers may elect to convert all or
any part of any Eurodollar Loan on the last day of the then current
Interest Period relating thereto to a Base Rate Loan by giving advance
notice to the Agent (which shall promptly notify the Lenders) of such
election. Subject to the provisions made in this Section 2.02(e), the
Borrowers may elect to convert all or any part of any Base Rate Loan at
any time and from time to time to a Eurodollar Loan by giving advance
notice as provided in Section 2.02(c) to the Agent (which shall promptly
notify the Lenders) of such election. All or any part of any outstanding
Loan may be converted as provided herein, provided that (i) any conversion
of any Base Rate Loan into a Eurodollar Loan shall be (as to each such
Loan into which there is a conversion for an applicable Interest Period)
in amounts of at least $2,000,000 or any whole multiple of $500,000 in
excess thereof and (ii) no Default shall have occurred and be continuing.
If a Default shall have occurred and be continuing, no Base Rate Loan may
be converted into a Eurodollar Loan.
(f) ADVANCES. Not later than 1:00 p.m. Houston time on the date
specified for each borrowing hereunder, each Lender shall make available
the amount of the Loan to be made by it on such date to the Agent, to an
account which the Agent shall specify, in immediately available funds, for
the account of the Borrowers. The amounts so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made available
to the Borrowers by depositing the same, in immediately available funds,
in an account of the Borrowers, designated by the Borrowers and maintained
at the Principal Office.
(g) LETTERS OF CREDIT. The Borrower shall give the Issuing Bank
(which shall promptly notify the Lenders of such request and their
Percentage Share of such Letter of Credit) advance notice to be received
by the Issuing Bank not later than 12:00 noon Houston time not less than
three (3) Business Days prior thereto of each request for the issuance and
at least thirty (30) Business Days prior to the date of the renewal or
extension of a Letter of Credit hereunder which request shall specify the
amount of such Letter of Credit, the date (which shall be a Business Day)
such Letter of Credit is to be issued, renewed or extended, the duration
thereof, the name and address of the beneficiary thereof, the form of the
Letter of Credit and such other information as the Agent may reasonably
request all of which shall be reasonably satisfactory to the Agent.
Subject to the terms and conditions of this Agreement, on the date
specified for the issuance, renewal or extension of a Letter of Credit,
the Agent shall issue such Letter of Credit to the beneficiary thereof.
In conjunction with the issuance of each Letter of Credit, the
Borrowers shall execute a Letter of Credit Agreement. In the event of any
conflict between any provision of a Letter
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of Credit Agreement and this Agreement, the Obligors, the Issuing Bank,
the Agent and the Lenders hereby agree that the provisions of this
Agreement shall govern.
The Issuing Bank will send to the Borrowers, the Agent and each
Lender, immediately upon issuance of any Letter of Credit, or an amendment
thereto, a true and complete copy of such Letter of Credit, or such
amendment thereto.
Section 2.03 CHANGES OF REVOLVING CREDIT COMMITMENTS.
(a) The Aggregate Revolving Credit Commitments shall at all times be
equal to the lesser of (i) the Aggregate Maximum Revolving Credit Amounts
after adjustments resulting from reductions pursuant to Section 2.03(b)
hereof or (ii) the Borrowing Base as determined from time to time.
(b) The Borrowers shall have the right to terminate or to reduce the
amount of the Aggregate Maximum Revolving Credit Amounts at any time or
from time to time upon not less than three (3) Business Days' prior notice
to the Agent (which shall promptly notify the Lenders) of each such
termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction (which shall not be less than
$2,000,000 or any whole multiple of $1,000,000 in excess thereof) and
shall be irrevocable and effective only upon receipt by the Agent.
(c) The Borrowers shall have the right to terminate or to reduce the
amount of the Term Commitment at any time or from time to time, prior to
the 1999 Notes Redemption Date, upon notice to the Agent (which shall
promptly notify the Lenders) of each such termination or reduction, which
notice shall specify the effective date thereof and the amount of any such
reduction (which shall not be less than $2,000,000 or any whole multiple
of $1,000,000 in excess thereof) and shall be irrevocable and effective
only upon receipt by the Agent.
(d) The Aggregate Maximum Revolving Credit Amounts and Term
Commitment once terminated or reduced may not be reinstated.
Section 2.04 FEES.
(a) COMMITMENT FEES.
(i) REVOLVING CREDIT FACILITY. The Borrowers shall pay to the
Agent for the account of each Lender a commitment fee on the daily
average unused amount of the Aggregate Revolving Credit Commitments
for the period from and including
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the Closing Date up to, but excluding, the earlier of the date the
Aggregate Revolving Credit Commitments are terminated or the
Revolving Credit Termination Date at a rate per annum equal to the
applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Threshold
Utilization Percentage as in effect from time to time:
THRESHOLD UTILIZATION PERCENTAGE COMMITMENT FEE PERCENTAGE
Less than or equal
to 33% .300%
Greater than 33%, but
less than or equal
to 66% .325%
Greater than 66%, but less .375%
than or equal to 100%
Greater than 100% .500%
Accrued commitment fees payable pursuant to this Section 2.04(a)(i) shall
be payable quarterly in arrears on each Quarterly Date and on the earlier
of the date the Aggregate Revolving Credit Commitments are terminated or
the Revolving Credit Termination Date.
(ii) The Borrowers shall pay to the Agent for the account of
each Lender a commitment fee on the daily average unused amount of
the Term Loans for the period from and including the Closing Date up
to, but excluding, the 1999 Notes Redemption Date at a rate per
annum equal to one-half of one percent (1/2 of 1%). Accrued
commitment fees payable pursuant to this Section 2.04(a)(ii) shall
be payable quarterly in arrears on each Quarterly Date and on the
1999 Notes Redemption Date.
(b) LETTER OF CREDIT FEES.
(i) The Borrowers agree to pay the Agent, for the account of
each Lender, commissions for issuing the Letters of Credit on the
daily average outstanding of the maximum liability of the Issuing
Bank existing from time to time under such Letter of Credit
(calculated separately for each Letter of Credit) at the rate per
annum equal to the Applicable Margin in effect from time to time for
Eurodollar Loans, provided that each Letter of Credit shall bear a
minimum aggregate commission (over the life
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of such Letter of Credit) of $500 and that each Letter of Credit
shall be deemed to be outstanding up to the full face amount of the
Letter of Credit until the Issuing Bank has received the canceled
Letter of Credit or a written cancellation of the Letter of Credit
from the beneficiary of such Letter of Credit in form and substance
acceptable to the Issuing Bank, or for any reductions in the amount
of the Letter of Credit (other than from a drawing), written
notification from the Borrowers. Such commissions are payable
quarterly in arrears on each Quarterly Date and on the Revolving
Credit Termination Date.
(ii) The Borrowers agree to pay the Agent, for the account of
the Issuing Bank, commissions for issuing the Letters of Credit on
the daily average outstanding of the maximum liability of the
Issuing Bank existing from time to time under such Letter of Credit
(calculated separately for each Letter of Credit) at the rate of
1/8% per annum, provided that each Letter of Credit shall bear a
minimum commission of $100 and shall be deemed to be outstanding as
provided in Section 2.04(b). Such aggregate commissions (over the
life of such Letter of Credit) are payable quarterly in arrears on
each Quarterly Date and on the Revolving Credit Termination Date.
The commissions in this Section 2.04(c) are in addition to the
commissions in Section 2.04(b).
Section 2.05 SEVERAL OBLIGATIONS. The failure of any Lender to make
any Loan to be made by it or to provide funds for disbursements or
reimbursements under Letters of Credit on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan or provide funds on
such date, but no Lender shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender or to provide funds to be
provided by such other Lender.
Section 2.06 NOTES. The Revolving Credit Loans made by each Lender
shall be evidenced by a single promissory note of the Borrowers in substantially
the form of EXHIBIT A-1 hereto, dated (i) the Closing Date or (ii) the effective
date of an Assignment pursuant to Section 12.06(b), payable to the order of such
Lender in a principal amount equal to its Maximum Revolving Credit Amount as
originally in effect and otherwise duly completed. The Term Loans made by each
Lender shall be evidenced by a single promissory note of the Borrowers in
substantially the form of EXHIBIT A-2, dated as of (i) the Closing Date or (ii)
the effective date of an Assignment pursuant to Section 12.06(b), payable to the
order of such Lender and otherwise duly completed. The date, amount, Type,
interest rate and Interest Period of each Loan made by each Lender, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books for its Notes, and, prior to any transfer, endorsed by such
Lender on the schedule attached to such Notes or any continuation thereof. Such
records shall be deemed conclusive absent manifest error.
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Section 2.07 PREPAYMENTS.
(a) The Borrowers may prepay the Base Rate Loans upon notice (which
may be same day notice) to the Agent (which shall promptly notify the
Lenders), which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which shall be at least
$1,000,000 or the remaining aggregate principal balance outstanding on the
Notes) and shall be irrevocable and effective only upon receipt by the
Agent. The Borrower may prepay Eurodollar Loans on the same condition as
for Base Rate Loans, except that notice shall be provided at least three
Business Days prior to the stated prepayment date, and in addition such
prepayments of Eurodollar Loans shall be subject to the terms of Section
5.05 and shall be in an amount equal to all of the Eurodollar Loans for
the Interest Period prepaid.
(b) If, after giving effect to any termination or reduction of the
Aggregate Maximum Revolving Credit Amounts pursuant to Section 2.03(b),
the outstanding aggregate principal amount of the Revolving Credit Loans
plus the LC Exposure exceeds the Aggregate Maximum Revolving Credit
Amounts, the Borrowers shall (i) prepay the Revolving Credit Loans on the
date of such termination or reduction in an aggregate principal amount
equal to the excess, and (ii) if any excess remains after prepaying all of
the Revolving Credit Loans because of LC Exposure, pay to the Agent on
behalf of the Lenders an amount equal to the excess to be held as cash
collateral as provided in Section 2.10(b) hereof.
(c) Subject to Section 2.07(d), upon any redetermination of the
amount of the Borrowing Base in accordance with Section 2.08, if the
redetermined Borrowing Base is less than the aggregate outstanding
principal amount of the Revolving Credit Loans plus the LC Exposure, then
the Borrowers shall prepay such excess within 180 days of the Agent's
notice of the new Borrowing Base; provided that at least 50% of such
excess shall have been prepaid within 90 days of the Agent's notice. If a
Borrowing Base deficiency remains after prepaying all of the Revolving
Credit Loans because of LC Exposure, the Borrower shall pay to the Agent
on behalf of the Lenders an amount equal to such Borrowing Base deficiency
to be held as cash collateral as provided in Section 2.10(b) hereof.
(d) If, after a Transfer of any Oil and Gas Property (other than
Hydrocarbons in the ordinary course of business) to the extent allowed by
Section 9.14 and the reduction in the Borrowing Base pursuant to Section
2.08(d), the Borrowing Base is less than the aggregate outstanding
principal amount of the Revolving Credit Loans, then the Borrowers shall
promptly prepay the Revolving Credit Loans with the net proceeds received
from such Transfer in an aggregate principal amount equal to such excess.
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(e) If, pursuant to the terms of the Purchase and Sale Agreement
dated October 21, 1997 between SCANA Petroleum Resources, Inc. ("SCANA")
and the Parent, any Obligor receives any cash proceeds from SCANA or any
escrow account created in connection with such Purchase and Sale Agreement
or the SCANA Acquisition as a result of SCANA's failure to cure any title
defect, environmental defect or other defect of any kind whatsoever, such
Obligor shall promptly cause such funds to be paid to the Agent on behalf
of the Lenders as a prepayment on the Revolving Credit Loans.
(f) Prepayments permitted or required under this Section 2.07 shall
be without premium or penalty, except as required under Section 5.05 for
prepayment of Eurodollar Loans. Any prepayment made during the Revolving
Credit Period on the Revolving Credit Loans may be reborrowed subject to
the then effective Aggregate Revolving Credit Commitments.
Section 2.08 BORROWING BASE.
(a) The Borrowing Base and the Threshold Amount shall be determined
in accordance with Section 2.08(b) by the Agent with the concurrence of
the Required Lenders and is subject to redetermination in accordance with
Section 2.08(d). Upon any redetermination of the Borrowing Base and the
Threshold Amount, such redetermination shall remain in effect until the
next successive Redetermination Date. "REDETERMINATION DATE" shall mean
the date that the redetermined Borrowing Base and the Threshold Amount
become effective subject to the notice requirements specified in Section
2.08(e) both for scheduled redeterminations and unscheduled
redeterminations. So long as any of the Commitments are in effect or any
LC Exposure or Revolving Credit Loans are outstanding hereunder, this
facility shall be governed by the then effective Borrowing Base and the
Threshold Amount. During the period from and after the Closing Date until
the Borrowing Base and the Threshold Amount are redetermined pursuant to
Section 2.08(d) or adjusted pursuant to Section 8.08(b), the amount of the
Borrowing Base shall be $138,000,000 and the amount of the Threshold
Amount shall be $115,000,000.
(b) Upon receipt of the reports required by Section 8.07 and such
other reports, data and supplemental information as may from time to time
be reasonably requested by the Agent (the "ENGINEERING REPORTS"), the
Agent will redetermine the Borrowing Base and the Threshold Amount. Such
redetermination will be in accordance with its normal and customary
procedures, consistent with other similar credits of Agent and Lenders,
for evaluating oil and gas reserves and other related assets as such exist
at that particular time. Each Lender, in its sole discretion, may make
adjustments to the rates, volumes and prices and other assumptions set
forth therein in accordance with its normal and customary procedures for
evaluating oil and gas reserves and other related assets as such exist at
that
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particular time. The Threshold Amount shall represent the customary
conforming amount of a traditional hydrocarbon borrowing base loan (the
"THRESHOLD AMOUNT") and the Borrowing Base shall not be less than the
Threshold Amount. On June 1, 1998, the Borrowing Base shall automatically
be reduced to equal the Threshold Amount in effect on such date. From and
after such date, the Borrowing Base shall always equal the Threshold
Amount, and any reference to the Borrowing Base shall be deemed to be a
reference to the Threshold Amount. The Agent shall propose to the Lenders
a new Borrowing Base and Threshold Amount within 15 days following receipt
by the Agent and the Lenders of the Engineering Reports in a timely and
complete manner. After having received notice of such proposal by the
Agent, the Lenders shall have 15 days to agree or disagree with such
proposal. If at the end of the 15 days, any Lenders have not communicated
their approval or disapproval, such silence shall be deemed to be an
approval. If however, any of the Lenders notify Agent within such 15 days
of their disapproval, the Required Lenders and the Agent shall, within a
reasonable period of time, endeavor to agree on a new Borrowing Base and
Threshold Amount. The Agent and the Required Lenders must approve a new
Borrowing Base and Threshold Amount. If no new Borrowing Base and the
Threshold Amount are agreed, the existing Borrowing Base and Threshold
Amount shall remain in place until such time as the Required Lenders do
agree.
(c) The Agent may exclude any Oil and Gas Property or portion of
production therefrom or any income from any other Property from the
Borrowing Base and the Threshold Amount, at any time, because title
information is not reasonably satisfactory, such Property is not Mortgaged
Property, such Property is not assignable, or such Property is subject to
environmental risks not reasonably acceptable to the Agent, and the
redetermined Borrowing Base and Threshold Amount as a result thereof shall
be effective upon notice pursuant to Section 2.08(e).
(d) So long as the Commitments are in effect and until payment in
full of all Revolving Credit Loans hereunder, on or before 30 days
following the receipt of the Reserve Reports required by Section 8.07(a)
(each being a "SCHEDULED REDETERMINATION DATE"), the Lenders shall
redetermine the amount of the Borrowing Base and the Threshold Amount in
accordance with Section 2.08(b). In addition, the Required Lenders may
initiate a redetermination of the Borrowing Base and the Threshold Amount
at any other time as they so elect; provided, however, that the Required
Lenders may initiate only one such unscheduled redetermination during any
consecutive twelve (12) month period by specifying in writing to the
Borrowers the date on which the Borrowers are to furnish a Reserve Report
in accordance with Section 8.07(b) and the date on which such
redetermination is to occur. Also, the Borrowers may request one
additional redetermination of the Borrowing Base and the Threshold Amount
during any consecutive twelve (12) month period by supplying a Reserve
Report in the form of the July 1 Reserve Report. The Agent and the Lenders
will
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follow the same procedure as set forth in Section 2.08(b) for
redetermining the Borrowing Base and the Threshold Amount. Further, if the
Borrowers Transfer any Oil and Gas Property to the extent allowed by
Section 9.14, the Borrowing Base and the Threshold Amount shall each
automatically be reduced upon execution of such Transfer by an amount
equal to the Borrowing Base and the Threshold Amount value (as determined
by the Agent in its reasonable discretion) attributed in the immediately
preceding Borrowing Base and the Threshold Amount to the Oil and Gas
Property which is the subject of such Transfer.
(e) The Agent shall promptly notify in writing the Borrowers and the
Lenders of the new Borrowing Base and the Threshold Amount. Any
redetermination of the Borrowing Base and the Threshold Amount shall not
be in effect until written notice is received by the Borrowers.
Section 2.09 ASSUMPTION OF RISKS. The Borrowers assume all risks of
the acts or omissions of any beneficiary of any Letter of Credit or any
transferee thereof with respect to its use of such Letter of Credit. Neither the
Issuing Bank (except in the case of willful misconduct, gross negligence or bad
faith on the part of the Issuing Bank or any of its employees), its
correspondents, the Agent nor any Lender shall be responsible for the validity,
sufficiency or genuineness of certificates or other documents or any
endorsements thereon, even if such certificates or other documents should in
fact prove to be invalid, insufficient, fraudulent or forged; for errors,
omissions, interruptions or delays in transmissions or delivery of any messages
by mail, telex, or otherwise, whether or not they be in code; for errors in
translation or for errors in interpretation of technical terms; the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; the failure of any beneficiary or any transferee of
any Letter of Credit to comply fully with conditions required in order to draw
upon any Letter of Credit; or for any other consequences arising from causes
beyond the Issuing Bank's control or the control of the Issuing Bank's
correspondents. In addition, neither the Issuing Bank, the Agent nor any Lender
shall be responsible for any error, neglect, or default of any of the Issuing
Bank's correspondents; and none of the above shall affect, impair or prevent the
vesting of any of the Issuing Bank's, the Agent's or any Lender's rights or
powers hereunder or under the Letter of Credit Agreements, all of which rights
shall be cumulative. The Issuing Bank and its correspondents may accept
certificates or other documents that appear on their face to be in order,
without responsibility for further investigation of any matter contained therein
regardless of any notice or information to the contrary. In furtherance and not
in limitation of the foregoing provisions, the Borrowers agree that any action,
inaction or omission taken or not taken by the Issuing Bank or by any
correspondent for the Issuing Bank in good faith and without gross negligence in
connection with any Letter of Credit, or any related drafts, certificates,
documents or instruments, shall be binding on the Borrowers and shall not put
the Issuing Bank or its correspondents under any resulting liability to the
Borrowers.
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Section 2.10 OBLIGATION TO REIMBURSE AND TO PREPAY.
(a) If a disbursement by the Issuing Bank is made under any Letter
of Credit, the Borrowers shall pay to the Agent by noon Houston time on
the Business Day following notice (or if no notice is received by noon on
a given day, the second Business Day following such notice) of any such
disbursement is received by the Borrowers, the amount of each such
disbursement made by the Issuing Bank under the Letter of Credit (if such
payment is not sooner effected as may be required under this Section 2.10
or under other provisions of the Letter of Credit), together with interest
on the amount disbursed from and including the date of disbursement until
payment in full of such disbursed amount at a varying rate per annum equal
to (i) the then applicable interest rate for Base Rate Loans through the
first Business Day after notice of such disbursement is received by the
Borrowers and (ii) thereafter, the Post-Default Rate for Base Rate Loans
(but in no event to exceed the Highest Lawful Rate) for the period from
and including the second Business Day following the date of such
disbursement to and including the date of repayment in full of such
disbursed amount. Subject to the conditions contained herein and
availability, the Borrowers may satisfy their reimbursement obligation to
the Issuing Bank with respect to any disbursement by the Issuing Bank
under any Letter of Credit by borrowing a Revolving Credit Loan, the
proceeds of which Loan will be used to reimburse the Issuing Bank for the
amount of any disbursement made by it under a Letter of Credit, together
with interest thereon to the extent provided in this Section 2.10(a). If
the Borrowers shall fail to reimburse or cause the Issuing Bank to be
reimbursed directly on the Business Day following notice by the Issuing
Bank of any disbursement under a Letter of Credit (or, if the Issuing
Bank's notice to the Borrowers pursuant to this Section 2.10(a) was
received after noon Houston time on such date, or the Business Day next
following such date), and on the date of such notification there shall not
exist any Default under Sections 10.01(f) or (g), the Borrowers shall be
deemed to have requested that Revolving Credit Loans be made and the
Lenders shall make the Revolving Credit Loans on such date.
The obligations of the Borrowers under this Agreement with respect to each
Letter of Credit shall be absolute, unconditional and irrevocable and
shall be paid or performed strictly in accordance with the terms of this
Agreement under all circumstances whatsoever, including, without
limitation, but only to the fullest extent permitted by applicable law,
the following circumstances: (i) any lack of validity or enforceability of
this Agreement, any Letter of Credit or any of the Security Instruments;
(ii) any amendment or waiver of (including any default), or any consent to
departure from this Agreement (except to the extent permitted by any
amendment or waiver), any Letter of Credit or any of the Security
Instruments; (iii) the existence of any claim, set-off, defense or other
rights which the Borrowers may have at any time against the beneficiary of
any Letter of Credit or any transferee of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the
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Issuing Bank, the Agent, any Lender or any other Person, whether in
connection with this Agreement, any Letter of Credit, the Security
Instruments, the transactions contemplated hereby or any unrelated
transaction; (iv) any statement, certificate, draft, notice or any other
document presented under any Letter of Credit proves to have been forged,
fraudulent, insufficient or invalid in any respect or any statement
therein proves to have been untrue or inaccurate in any respect
whatsoever; (v) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate which appears on its face
to comply, but does not comply, with the terms of such Letter of Credit;
and (vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
Notwithstanding anything in this Agreement to the contrary, the Borrowers
will not be liable for payment or performance that results from the gross
negligence or willful misconduct of the Issuing Bank, except where the
Borrowers, any Obligor or any Subsidiary actually recovers the proceeds
for itself or the Issuing Bank of any payment made by the Issuing Bank in
connection with such gross negligence or willful misconduct.
(b) In the event of (i) the occurrence of any Event of Default and
at the request of the Agent, (ii) any payment or prepayment pursuant to
Sections 2.07(b) (ii) or the last sentence of Section 2.07(c) or (iii) the
maturity of the Revolving Credit Notes, whether by acceleration or
otherwise, an amount equal to the LC Exposure (or the excess in the case
of Sections 2.07(b) and (c)) shall be deemed to be forthwith due and owing
by the Borrowers to the Issuing Bank, the Agent and the Lenders as of the
date of any such occurrence; and the Borrowers' obligation to pay such
amount shall be absolute and unconditional, without regard to whether any
beneficiary of any such Letter of Credit has attempted to draw down all or
a portion of such amount under the terms of a Letter of Credit, and, to
the fullest extent permitted by applicable law, shall not be subject to
any defense or be affected by a right of set-off, counterclaim or
recoupment which the Borrowers may now or hereafter have against any such
beneficiary, the Issuing Bank, the Agent, the Lenders or any other Person
for any reason whatsoever. Such payments shall be held by the Agent on
behalf of the Issuing Bank and the Lenders as cash collateral securing the
LC Exposure in an account or accounts at the Principal Office; and the
Borrowers hereby grant to and by their deposit with the Agent grants to
the Agent a security interest in such cash collateral. In the event of any
such payment by the Borrowers of amounts contingently owing under
outstanding Letters of Credit and in the event that thereafter drafts or
other demands for payment complying with the terms of such Letters of
Credit are not made prior to the respective expiration dates thereof, the
Agent agrees, if no Event of Default has occurred and is continuing or if
no other amounts are outstanding under this Agreement, the Notes or the
Security Instruments, to promptly remit to the Borrowers amounts for which
the contingent obligations evidenced by the Letters of Credit have ceased.
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(c) Each Lender severally and unconditionally agrees that it shall
promptly reimburse the Issuing Bank an amount equal to such Lender's
Percentage Share of any disbursement made by the Issuing Bank under any
Letter of Credit that is not reimbursed according to this Section 2.10.
Section 2.11 LENDING OFFICES. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 REPAYMENT OF LOANS.
(a) REVOLVING CREDIT LOANS. On the Revolving Credit Termination Date the
Borrowers shall repay the aggregate principal and accrued and unpaid interest
under the Revolving Credit Notes.
(b) TERM LOANS. On the Term Loan Termination Date the Borrowers shall
repay the aggregate principal and accrued and unpaid interest under the Term
Notes.
(c) GENERALLY. The Borrower will pay to the Agent, for the account of each
Lender, the principal payments required by this Section 3.01.
Section 3.02 INTEREST.
(a) INTEREST RATES. The Borrowers will pay to the Agent, for the account
of each Lender, interest on the unpaid principal amount of each Loan made by
such Lender for the period commencing on the date such Loan is made to, but
excluding, the date such Loan shall be paid in full, at the following rates per
annum:
(i) if such a Loan is a Base Rate Loan, the Base Rate (as in effect
from time to time) plus the Applicable Margin, but in no event to exceed
the Highest Lawful Rate; and
(ii) if such a Loan is a Eurodollar Loan, for each Interest Period
relating thereto, the Fixed Rate for such Loan plus the Applicable Margin,
but in no event to exceed the Highest Lawful Rate.
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(b) POST-DEFAULT RATE. Notwithstanding the foregoing, the Borrowers will
pay to the Agent, for the account of each Lender interest at the applicable
Post-Default Rate on any principal of any Loan made by such Lender, and (to the
fullest extent permitted by law) on any other amount payable by the Borrowers
hereunder, under any Security Instrument or under any Note held by such Lender
to or for account of such Lender, which shall not be paid in full when due after
taking into account applicable grace periods (whether at stated maturity, by
acceleration or otherwise), for the period commencing on the due date thereof
after taking into account applicable grace periods until the same is paid in
full.
(c) DUE DATES. Accrued interest on Base Rate Loans shall be payable on
each Quarterly Date commencing on the first Quarterly Date after the Closing
Date, and accrued interest on each Eurodollar Loan shall be payable on the last
day of the Interest Period therefor and, if such Interest Period is longer than
three months at three-month intervals following the first day of such Interest
Period, except that interest payable at the Post-Default Rate shall be payable
from time to time on demand and interest on any Eurodollar Loan that is
converted into a Base Rate Loan (pursuant to Section 5.04) shall be payable on
the date of conversion (but only to the extent so converted).
(d) DETERMINATION OF RATES. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Lenders to which such interest is payable and the Borrowers thereof. Each
determination by the Agent of an interest rate or fee hereunder shall, except in
cases of manifest error, be final, conclusive and binding on the parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 PAYMENTS. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by the
Borrowers under this Agreement and the Notes and the Letter of Credit Agreements
shall be made in Dollars, in immediately available funds, to the Agent at such
account as the Agent shall specify by notice to the Borrowers from time to time,
not later than 11:00 a.m. Houston time on the date on which such payments shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day). Such payments shall be
made without (to the fullest extent permitted by applicable law) defense,
set-off or counterclaim. Each payment to be made to the Agent under this
Agreement or any Note for account of a Lender shall be paid promptly to such
Lender in immediately available funds. If the due date of any payment under this
Agreement or any Note would otherwise fall on a day which is not a Business Day
such date shall be extended to the next succeeding Business Day and interest
shall be payable for any principal so extended for the period of such extension.
At the time of each payment to the Agent of any principal of or interest on any
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borrowing, the Borrowers shall notify the Agent of the Loans to which such
payment shall apply. In the absence of such notice the Agent may specify the
Loans to which such payment shall apply, but to the extent possible such payment
or prepayment will be applied first to the Loans comprised of Base Rate Loans.
Section 4.02 PRO RATA TREATMENT. Except to the extent otherwise
provided herein each Lender agrees that: (i) each borrowing from the Lenders
under Section 2.01 shall be made from the Lenders pro rata in accordance with
their Percentage Share, each payment of commitment fee or other fees under
Section 2.04 expressly for the account of Lenders shall be made for account of
the Lenders pro rata in accordance with their Percentage Share, and each
termination or reduction of the amount of the Aggregate Maximum Revolving Credit
Amounts under Section 2.03(b) shall be applied to the Commitment of each Lender,
pro rata according to the amounts of its respective Commitment; (ii) each
payment of principal of Loans by the Borrowers shall be made for account of the
Lenders pro rata in accordance with the respective unpaid principal amount of
the Loans held by the Lenders; (iii) each payment of interest on Loans by the
Borrowers shall be made for account of the Lenders pro rata in accordance with
the amounts of interest due and payable to the respective Lenders; and (iv) each
reimbursement by the Borrowers of disbursements under Letters of Credit shall be
made for account of the Issuing Bank or, if funded by the Lenders, pro rata for
the account of the Lenders, in accordance with the amounts of reimbursement
obligations due and payable to each respective Lender.
Section 4.03 COMPUTATIONS. Interest on Eurodollar Loans and fees
other than with respect to Letters of Credit shall be computed on the basis of a
year of 360 days and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which such interest or fee, as
applicable, is payable, unless such calculation would exceed the Highest Lawful
Rate, in which case interest shall be calculated on the per annum basis of a
year of 365 or 366 days, as the case may be. Interest on Base Rate Loans and
fees with respect to Letters of Credit shall be computed on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) occurring in the period for which such
interest or fee, as applicable, is payable.
Section 4.04 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent
shall have been notified by a Lender or the Borrowers prior to the date on which
such notifying party is scheduled to make payment to the Agent (in the case of a
Lender) of the proceeds of a Loan or a payment under a Letter of Credit to be
made by it hereunder or (in the case of the Borrowers) a payment to the Agent
for account of one or more of the Lenders hereunder (such payment being herein
called the "REQUIRED PAYMENT"), which notice shall be effective upon receipt,
that it does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient(s) on such date and, if such Lender or the Borrowers (as
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the case may be) has not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, within one Business Day of demand, repay to
the Agent the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was so made
available by the Agent until but excluding the date the Agent recovers such
amount at a rate per annum which, for any Lender as recipient, will be equal to
the Federal Funds Rate, and for the Borrowers as recipient, will be equal to the
Base Rate plus the Applicable Margin.
Section 4.05 SETOFF, SHARING OF PAYMENTS, ETC.
(a) Each Obligor agrees that, in addition to (and without limitation
of) any right of set-off, bankers' lien or counterclaim a Lender may
otherwise have, upon the occurrence and during the continuance of an Event
of Default, any each Lender shall have the right and be entitled (after
consultation with the Agent), at its option, to offset balances held by it
or by any of its Affiliates for account of the Obligor at any of its
offices, in Dollars or in any other currency, against any principal of or
interest on any of such Lender's Loans, or any other amount payable to
such Lender hereunder, which is not paid when due (regardless of whether
such balances are then due to such Obligor) in which case it shall
promptly notify such Obligor and the Agent thereof, provided that such
Lender's failure to give such notice shall not affect the validity
thereof.
(b) If any Lender shall obtain payment of any principal of or
interest on any Loan made by it to the Borrowers under this Agreement (or
reimbursement as to any Letter of Credit) through the exercise of any
right of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Lender shall have
received a greater percentage of the principal or interest (or
reimbursement) then due hereunder by the Borrowers to such Lender than the
percentage received by any other Lenders, it shall promptly (i) notify the
Agent and each other Lender thereof and (ii) purchase from such other
Lenders participations in the Loans (or participations in Letters of
Credit) made by such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all the Lenders shall share
the benefit of such excess payment (net of any expenses which may be
incurred by such Lender in obtaining or preserving such excess payment)
pro rata in accordance with the unpaid principal and/or interest on the
Loans held by each of the Lenders (or reimbursements of Letters of
Credit). To such end all the Lenders shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if
such payment is rescinded or must otherwise be restored. Each Obligor
agrees that any Lender so purchasing a participation in the Loans made by
other Lenders (or in interest due thereon, as the case may be) may
exercise all rights of set-off, banker's lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were
a direct holder of
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Loans (or Letters of Credit) in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits
of exercising, any such right with respect to any other indebtedness or
obligation of the Obligors. If under any applicable bankruptcy, insolvency
or other similar law, any Lender receives a secured claim in lieu of a
set-off to which this Section 4.05 applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders entitled under this
Section 4.05 to share the benefits of any recovery on such secured claim.
Section 4.06 TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by the Borrowers
hereunder shall be made, in accordance with Section 4.01, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, EXCLUDING, in the case of each Lender, the Issuing Bank
and the Agent, taxes imposed on its income, and franchise or similar taxes
imposed on it, by (i) any jurisdiction (or political subdivision thereof)
of which the Agent, the Issuing Bank or such Lender, as the case may be,
is a citizen or resident or in which such Lender has an Applicable Lending
Office, (ii) the jurisdiction (or any political subdivision thereof) in
which the Agent, the Issuing Bank or such Lender is organized, or (iii)
any jurisdiction (or political subdivision thereof) in which such Lender,
the Issuing Bank or the Agent is presently doing business which taxes are
imposed solely as a result of doing business in such jurisdiction (all
such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "TAXES"). If
the Borrowers shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Lenders, the Issuing Bank or
the Agent (i) the sum payable shall be increased by the amount necessary
so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.06) such
Lender, the Issuing Bank or the Agent (as the case may be) shall receive
an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrowers shall make such deductions and (iii) the
Borrowers shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable
law.
(b) OTHER TAXES. In addition, to the fullest extent permitted by
applicable law, the Borrowers agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, any Assignment or any Security Instrument (hereinafter referred
to as "OTHER TAXES").
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(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE OBLIGORS WILL INDEMNIFY EACH LENDER, THE ISSUING BANK AND THE
AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, BUT NOT
LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED BY ANY GOVERNMENTAL AUTHORITY
ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID BY SUCH LENDER, THE
ISSUING BANK OR THE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY LENDER), AS
THE CASE MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH
TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED UNLESS THE PAYMENT
OF SUCH TAXES WAS NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH LENDER'S
PAYMENT OF SUCH TAXES OR OTHER TAXES WAS THE RESULT OF ITS GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. ANY PAYMENT PURSUANT TO SUCH
INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER THE DATE ANY
LENDER, THE ISSUING BANK OR THE AGENT, AS THE CASE MAY BE, MAKES WRITTEN
DEMAND THEREFOR. IF ANY LENDER, THE ISSUING BANK OR THE AGENT RECEIVES A
REFUND OR CREDIT IN RESPECT OF ANY TAXES OR OTHER TAXES FOR WHICH SUCH
LENDER, THE ISSUING BANK OR THE AGENT HAS RECEIVED PAYMENT FROM THE
OBLIGORS IT SHALL PROMPTLY NOTIFY THE OBLIGORS OF SUCH REFUND OR CREDIT
AND SHALL, IF NO DEFAULT HAS OCCURRED AND IS CONTINUING, PAY AN AMOUNT
EQUAL TO SUCH REFUND OR CREDIT TO THE OBLIGORS WITHOUT INTEREST (BUT WITH
ANY INTEREST SO REFUNDED OR CREDITED), PROVIDED THAT THE OBLIGORS, UPON
THE REQUEST OF SUCH LENDER, THE ISSUING BANK OR THE AGENT, AGREES TO
RETURN SUCH REFUND OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES)
TO SUCH LENDER, THE ISSUING BANK OR THE AGENT IN THE EVENT SUCH LENDER OR
THE AGENT IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.
(d) LENDER REPRESENTATIONS.
(i) Each Lender represents that it is either (i) a corporation
organized under the laws of the United States of America or any
state thereof or (ii) it is entitled to complete exemption from
United States withholding tax imposed on or with respect to any
payments, including fees, to be made to it pursuant to this
Agreement (A) under an applicable provision of a tax convention to
which the United States of America is a party or (B) because it is
acting through a branch, agency or office in the United States of
America and any payment to be received by it hereunder is
effectively connected with a trade or business in the United States
of America. Each Lender that is not a corporation organized under
the laws of the United States of America or any state thereof agrees
to provide to the Borrowers and the Agent on the Closing Date, or on
the date of its delivery of the Assignment pursuant to which it
becomes a Lender, and at such other times as required by United
States law or as the Borrowers or the Agent shall reasonably
request, two accurate and complete original
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signed copies of either (A) Internal Revenue Service Form 4224 (or
successor form) certifying that all payments to be made to it
hereunder will be effectively connected with a United States trade
or business (the "FORM 4224 CERTIFICATION") or (B) Internal Revenue
Service Form 1001 (or successor form) certifying that it is entitled
to the benefit of a provision of a tax convention to which the
United States of America is a party which completely exempts from
United States withholding tax all payments to be made to it
hereunder (the "FORM 1001 CERTIFICATION"). In addition, each Lender
agrees that if it previously filed a Form 4224 Certification, it
will deliver to the Borrowers and the Agent a new Form 4224
Certification prior to the first payment date occurring in each of
its subsequent taxable years; and if it previously filed a Form 1001
Certification, it will deliver to the Borrowers and the Agent a new
certification prior to the first payment date falling in the third
year following the previous filing of such certification. Each
Lender also agrees to deliver to the Borrowers and the Agent such
other or supplemental forms as may at any time be required as a
result of changes in applicable law or regulation in order to
confirm or maintain in effect its entitlement to exemption from
United States withholding tax on any payments hereunder, PROVIDED
that the circumstances of such Lender at the relevant time and
applicable laws permit it to do so. If a Lender determines, as a
result of any change in either (i) a Governmental Requirement or
(ii) its circumstances, that it is unable to submit any form or
certificate that it is obligated to submit pursuant to this Section
4.06, or that it is required to withdraw or cancel any such form or
certificate previously submitted, it shall promptly notify the
Borrowers and the Agent of such fact. If a Lender is organized under
the laws of a jurisdiction outside the United States of America,
unless the Borrowers and the Agent have received a Form 1001
Certification or Form 4224 Certification satisfactory to them
indicating that all payments to be made to such Lender hereunder are
not subject to United States withholding tax, the Borrowers shall be
entitled to withhold taxes from such payments at the applicable
statutory rate and, if Borrowers have been notified to such effect
by a Lender, Borrowers shall withhold taxes from such payments at
the applicable statutory rate. Each Lender agrees to indemnify and
hold harmless from any United States taxes, penalties, interest and
other expenses, costs and losses incurred or payable by (i) the
Agent as a result of such Lender's failure to submit any form or
certificate that it is required to provide pursuant to this Section
4.06 or (ii) the Borrowers or the Agent as a result of their
reliance on any such form or certificate which such Lender has
provided to them pursuant to this Section 4.06.
(ii) For any period with respect to which a Lender has failed
to provide the Borrowers with the form required pursuant to this
Section 4.06, if any, (other than if such failure is due to a change
in a Governmental Requirement occurring
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subsequent to the date on which a form originally was required to be
provided), such Lender shall not be entitled to indemnification
under Section 4.06 with respect to taxes imposed by the United
States which taxes would not have been imposed but for such failure
to provide such forms; PROVIDED, HOWEVER, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of
withholding tax becomes subject to taxes because of its failure to
deliver a form required hereunder, the Borrowers shall take such
steps as such Lender shall reasonably request to assist such Lender
to recover such taxes at the expense of such Lender.
(iii) Any Lender claiming any additional amounts payable
pursuant to this Section 4.06 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any
certificate or document requested by the Borrowers or the Agent or
to change the jurisdiction of its Applicable Lending Office or to
contest any tax imposed if the making of such a filing or change or
contesting such tax would avoid the need for or reduce the amount of
any such additional amounts that may thereafter accrue and would
not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
Section 4.07 DISPOSITION OF PROCEEDS. The Security Instruments
contain an assignment by the Obligors unto and in favor of the Agent for the
benefit of the Lenders of all production and all proceeds attributable thereto
which may be produced from or allocated to the Mortgaged Property, and the
Security Instruments further provide in general for the application of such
proceeds to the satisfaction of the Indebtedness and other obligations described
therein and secured thereby. Notwithstanding the assignment contained in such
Security Instruments, until the occurrence and continuance of an Event of
Default, the Lenders agree that they will neither notify the purchaser or
purchasers of such production nor take any other action to cause such proceeds
to be remitted to the Lenders, but the Lenders will instead permit such proceeds
to be paid to the Obligors.
Section 4.08 JOINT AND SEVERAL.
(a) The Borrowers jointly and severally, hereby irrevocably and
unconditionally promise to pay and accept, not merely as surety but also
as co-debtors, joint and several liability for all of the Indebtedness and
any other obligations under the Notes, this Agreement and the Security
Instruments, it being the intention of the Borrowers that all the
Indebtedness and any other obligations under the Notes, this Agreement and
the Security Instruments shall be the joint and several obligations of the
Borrowers without preference or distinction among them.
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(b) Each Borrower waives any right to require the Agent and/or the
Lenders to (i) proceed against the other Borrower or any other Person
liable on the Indebtedness, (ii) enforce its rights against the other
Borrower (iii) proceed or enforce their rights against or exhaust any
security given to secure the Indebtedness (iv) have the Borrowers joined
with each other or with the Guarantors in any suit arising out of this
Credit Agreement and/or the Indebtedness, or (v) pursue any other remedy
in the Agent's or Lenders' powers whatsoever. Neither the Agent nor the
Lenders shall be required to mitigate damages or take any action to
reduce, collect or enforce the Indebtedness. Each Borrower waives any
defense arising by reason of any disability, lack of corporate authority
or power, or other defense of the other Borrower or any other guarantor of
the Indebtedness, and shall remain liable hereon regardless of whether the
other Borrower or any other guarantor be found not liable thereon for any
reason. Until the Indebtedness shall have been paid in full, no Borrower
shall have any right of subrogation, and waives any right to enforce any
remedy which the Agent or any Lender now has or may hereafter have against
the other Borrower, and waives any benefit of any right to participate in
any security now or hereafter held by the Agent or the Lenders. Whether
and when to exercise any of the remedies of the Agent and the Lenders
under any of the Loan Documents shall be in the sole and absolute
discretion of the Agent and the Lenders, and any delay by the Agent or the
Lenders in enforcing any remedy, including delay in conducting a
foreclosure sale, shall not be a defense to any Borrower's liability under
this Credit Agreement.
ARTICLE V
CAPITAL ADEQUACY
Section 5.01 ADDITIONAL COSTS, ETC.
(a) EURODOLLAR REGULATIONS, ETC. The Borrowers shall pay directly to
each Lender from time to time such amounts as such Lender may determine to
be necessary to compensate such Lender for any costs which it determines
are attributable to its making or maintaining of any Eurodollar Loans or
issuing or participating in Letters of Credit hereunder or its obligation
to make any Eurodollar Loans or issue or participate in any Letters of
Credit hereunder, or any reduction in any amount receivable by such Lender
hereunder in respect of any of such Eurodollar Loans, Letters of Creditor
or such obligation (such increases in costs and reductions in amounts
receivable being herein called "ADDITIONAL COSTS"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or any Note in respect of any
of such Eurodollar Loans or Letters of Credit (other than taxes imposed on
the overall net income of such Lender or of its Applicable Lending Office
for any of such Eurodollar Loans
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by the jurisdiction in which such Lender has its principal office or
Applicable Lending Office); or (ii) imposes or modifies any reserve,
special deposit, minimum capital, capital ratio or similar requirements
(other than the Reserve Requirement utilized in the determination of the
Fixed Rate for such Loan) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of such Lender
(including any of such Eurodollar Loans or any deposits referred to in the
definition of "Fixed Eurodollar Rate" in Section 1.02 hereof), or the
Commitment of such Lender or the Eurodollar interbank market; or (iii)
imposes any other condition affecting this Agreement or any Note (or any
of such extensions of credit or liabilities) or such Lender's Commitment.
Each Lender will notify the Agent and the Borrowers of any event occurring
after the Closing Date which will entitle such Lender to compensation
pursuant to this Section 5.01(a) as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, and
will designate a different Applicable Lending Office for the Loans of such
Lender affected by such event if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole
opinion of such Lender, be disadvantageous to such Lender. If any Lender
requests compensation from the Borrowers under this Section 5.01(a), the
Borrowers may, by notice to such Lender, suspend the obligation of such
Lender to make additional Loans of the Type with respect to which such
compensation is requested until the Regulatory Change giving rise to such
request ceases to be in effect (in which case the provisions of Section
5.04 shall be applicable).
(b) REGULATORY CHANGE. Without limiting the effect of the provisions
of Section 5.01(a), in the event that, by reason of any Regulatory Change
affecting any Lender, the Eurodollar interbank market or such Lender's
position in such market, any Lender either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the amount
of a category of deposits or other liabilities of such Lender which
includes deposits by reference to which the interest rate on Eurodollar
Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of
such a category of liabilities or assets which it may hold, then, if such
Lender so elects by notice to the Borrowers, the obligation of such Lender
to make additional Eurodollar Loans shall be suspended until such
Regulatory Change or other circumstances ceases to be in effect (in which
case the provisions of Section 5.04 shall be applicable).
(c) CAPITAL ADEQUACY. Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the Borrowers
shall pay directly to any Lender from time to time on request such amounts
as such Lender may reasonably determine to be necessary to compensate such
Lender or its parent or holding company for any costs which it determines
are attributable to the maintenance by such Lender or its parent or
holding company (or any Applicable Lending Office), pursuant to any
Governmental Requirement
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following any Regulatory Change, of capital in respect of its Commitment,
its Notes or its Loans, or any interest held by it in any Letter of
Credit, such compensation to include, without limitation, an amount equal
to any reduction of the rate of return on assets or equity of such Lender
or its parent or holding company (or any Applicable Lending Office) to a
level below that which such Lender or its parent or holding company (or
any Applicable Lending Office) could have achieved but for such
Governmental Requirement. Such Lender will notify the Borrowers that it is
entitled to compensation pursuant to this Section 5.01(c) as promptly as
practicable after it determines to request such compensation.
(d) COMPENSATION PROCEDURE. Any Lender notifying the Borrowers of
the incurrence of additional costs under this Section 5.01 shall in such
notice to the Borrowers and the Agent set forth in reasonable detail the
basis and amount of its request for compensation. Determinations and
allocations by each Lender for purposes of this Section 5.01 of the effect
of any Regulatory Change pursuant to Section 5.01(a) or (b), or of the
effect of capital maintained pursuant to Section 5.01(c), on its costs or
rate of return of maintaining Loans or its obligation to make Loans or
issue Letters of Credit, or on amounts receivable by it in respect of
Loans or Letters of Credit, and of the amounts required to compensate such
Lender under this Section 5.01, shall be conclusive and binding for all
purposes, provided that such determinations and allocations are made on a
reasonable basis. No request for additional compensation under this
Section 5.01 shall cover a period commencing earlier than 90 days prior to
such request. Any request for additional compensation under this Section
5.01 shall be paid by the Borrowers within thirty (30) days of the receipt
by the Borrowers of the notice described in this Section 5.01(d).
(e) REMOVAL OF LENDER. The Borrowers shall be entitled to remove any
Lender under this Agreement if such Lender has requested any additional
compensation under this Section 5.01 by giving the Agent and the Lenders
at least ten (10) days prior written notice provided that a replacement
bank assumes such Lender's Commitment and otherwise complies with the
provisions of Section 12.06 hereof or the Commitments are reduced by a
corresponding amount.
Section 5.02 LIMITATION ON EURODOLLAR LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Fixed
Eurodollar Rate for any Interest Period:
(i) the Agent determines (which determination shall be conclusive,
absent manifest error) that quotations of interest rates for the relevant
deposits referred to in the definition of "Fixed Eurodollar Rate" in
Section 1.02 are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of interest for
Eurodollar Loans as provided herein; or
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(ii) the Agent determines (which determination shall be conclusive,
absent manifest error) that the relevant rates of interest referred to in
the definition of "Fixed Eurodollar Rate" in Section 1.02 upon the basis
of which the rate of interest for Eurodollar Loans for such Interest
Period is to be determined are not sufficient to adequately cover the cost
to the Lenders of making or maintaining Eurodollar Loans;
then the Agent shall give the Borrowers prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans.
Section 5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, then such Lender shall promptly notify the Borrowers thereof
and such Lender's obligation to make Eurodollar Loans shall be suspended until
such time as such Lender may again make and maintain Eurodollar Loans (in which
case the provisions of Section 5.04 shall be applicable).
Section 5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5.01, 5.02 AND
5.03. If the obligation of any Lender to make Eurodollar Loans shall be
suspended pursuant to Sections 5.01, 5.02 or 5.03 ("AFFECTED LOANS"), all
Affected Loans which would otherwise be made by such Lender shall be made
instead as Base Rate Loans (and, if an event referred to in Section 5.01(b) or
Section 5.03 has occurred and such Lender so requests by notice to the
Borrowers, all Affected Loans of such Lender then outstanding shall be
automatically converted into Base Rate Loans on the date specified by such
Lender in such notice) and, to the extent that Affected Loans are so made as (or
converted into) Base Rate Loans, all payments of principal which would otherwise
be applied to such Lender's Affected Loans shall be applied instead to its Base
Rate Loans.
Section 5.05 COMPENSATION. The Borrowers shall pay to each Lender
within thirty (30) days of receipt of written request of such Lender (which
request shall set forth, in reasonable detail, the basis for requesting such
amounts and which shall be conclusive and binding for all purposes provided that
such determinations are made on a reasonable basis), such amount or amounts as
shall compensate it for any loss, cost, expense or liability which such Lender
determines in good faith are attributable to:
(i) any payment, prepayment or conversion of a Eurodollar Loan
properly made by such Lender or the Borrowers for any reason (including,
without limitation, the acceleration of the Loans pursuant to Section
10.01) on a date other than the last day of the Interest Period for such
Loan; or
(ii) any failure by the Borrowers for any reason (including but not
limited to, the failure of any of the conditions precedent specified in
Article VI to be
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satisfied) to borrow, continue or convert a Eurodollar Loan from such
Lender on the date for such borrowing, continuation or conversion
specified in the relevant notice given pursuant to Section 2.02(c).
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest at
the Fixed Rate for such Loan which would have accrued on the principal amount so
paid, prepaid or converted or not borrowed for the period from the date of such
payment, prepayment or conversion or failure to borrow to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the date specified
for such borrowing) over (ii) the interest component of the amount such Lender
would have bid in the London interbank market for Dollar deposits of leading
banks in amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such Lender). Any request
for compensation under this Section 5.05 shall be made within 90 days of the
event giving rise to such claim.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 INITIAL FUNDING.
The obligation of the Lenders to make the Initial Funding is subject
to the receipt by the Agent and the Lenders of all fees payable pursuant to
Section 2.04 on or before the Closing Date and the receipt by the Agent of the
following documents and satisfaction of the other conditions provided in this
Section 6.01, each of which shall be satisfactory to the Agent in form and
substance:
(a) Certificates of the Secretary or an Assistant Secretary of KOC
and the Parent setting forth (i) resolutions of the boards of directors
with respect to the authorization of each of the Borrowers to execute and
deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of KOC and
the Parent (y) who are authorized to sign the Loan Documents to which a
Borrower is a party and (z) who will, until replaced by another officer or
officers duly authorized for that purpose, act as its representative for
the purposes of signing documents and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized officers,
and (iv) the articles or certificate of incorporation and bylaws or
Partnership Agreement, as applicable, of the Borrowers, certified as being
true and complete. The Agent and the Lenders may
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conclusively rely on such certificates until the Agent receives notice in
writing from the Borrowers to the contrary.
(b) A certificate of the Secretary or an Assistant Secretary of each
of the Guarantors or the Guarantors' general partner, as applicable,
setting forth (i) resolutions of its board of directors with respect to
the authorization of each of the Guarantor's to execute and deliver the
Loan Documents to which it is a party and to enter into the transactions
contemplated in those documents, (ii) the officers of the Guarantors or
the Guarantors' general partner (y) who are authorized to sign the Loan
Documents to which a Guarantor is a party and (z) who will, until replaced
by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement and the
transactions contemplated hereby, (iii) specimen signatures of the
authorized officers, and (iv) the articles or certificate of incorporation
and bylaws or Partnership Agreement, as applicable, of the Guarantors,
certified as being true and complete. The Agent and the Lenders may
conclusively rely on such certificate until they receive notice in writing
from the Guarantor to the contrary.
(c) Certificates of the appropriate state agencies with respect to
the existence, qualification and good standing of the Obligors.
(d) The Notes, duly completed and executed.
(e) The Security Instruments, including those described on EXHIBIT
D, duly completed and executed in sufficient number of counterparts for
recording, if necessary.
(f) Favorable opinions of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, general counsel of
Parent, and local counsel opinions for the States of Alabama, Arkansas,
Louisiana, New Mexico and Texas, in form and substance reasonably
satisfactory to the Agent and the Lenders, as to such matters incident to
the transactions herein contemplated as the Agent and the Lenders may
reasonably require.
(g) A certificate of insurance coverage of the Borrowers evidencing
that the Borrowers are carrying insurance in accordance with Section 7.19
hereof and certifying that such coverage is usual and customary for
similar companies operating in the oil and gas business and complies with
the requirements of the Loan Documents.
(h) The Security Instruments and accompanying financing statements
covering the Mortgaged Property shall have been properly executed and
delivered to the Agent for
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subsequent filing and recording, as applicable, in the appropriate offices
to establish and perfect the Liens and security interests created thereby.
(i) The Agent shall have been furnished with appropriate UCC search
certificates reflecting no prior liens or security interests except for
liens being released with the proceeds of the Initial Funding or securing
the Indebtedness.
(j) Confirmation satisfactory to the Agent that the SCANA
Acquisition shall be concurrently consummated.
(k) The Contour Transaction shall have been consummated.
(l) Such other documents as the Agent or any Lender or special
counsel to the Agent may reasonably request.
Section 6.02 INITIAL AND SUBSEQUENT LOANS AND LETTERS OF CREDIT. The
obligation of the Lenders to make Loans to the Borrowers upon the occasion of
each borrowing hereunder and to issue, renew, extend or reissue Letters of
Credit for the account of the Borrowers (including the Initial Funding) is
subject to the further conditions precedent that, as of the date of such Loans
and after giving effect thereto: (i) no Default shall have occurred and be
continuing; (ii) no Material Adverse Effect shall have occurred and be
continuing; and (iii) the representations and warranties made by the Obligors in
Article VII and in the Security Instruments shall be true on and as of the date
of the making of such Loans or issuance, renewal, extension or reissuance of a
Letter of Credit with the same force and effect as if made on and as of such
date and following such new borrowing, except to the extent such representations
and warranties are expressly limited to an earlier date or the Majority Lenders
may expressly consent in writing to the contrary. Each request for a borrowing
or issuance, renewal, extension or reissuance of a Letter of Credit by the
Borrowers hereunder shall constitute a certification by the Borrowers to the
effect set forth in the preceding sentence and a representation by the Borrowers
that such borrowing or issuance, renewal, extension or reissuance of a Letter of
Credit is permitted to be incurred under the Indenture (both as of the date of
such notice and, unless the Borrowers otherwise notify the Agent, prior to the
date of and immediately following such borrowing or issuance, renewal, extension
or reissuance of a Letter of Credit as of the date thereof).
Section 6.03 CONDITIONS RELATING TO LETTERS OF CREDIT. In addition
to the satisfaction of all other conditions precedent set forth in this Article
VI, the issuance, renewal, extension or reissuance of the Letters of Credit
referred to in Section 2.01(c) hereof is subject to the following conditions
precedent:
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(a) At least three (3) Business Days prior to the date of the
issuance and at least thirty (30) Business Days prior to the date of the
renewal, extension or reissuance of each Letter of Credit, the Agent shall
have received a written request for a Letter of Credit.
(b) Each of the Letters of Credit shall (i) contain such terms and
provisions as are reasonably required by the Issuing Bank (not
inconsistent with the terms of this Agreement), (ii) be for the account of
the Borrowers and (iii) expire not later than the earlier of (A) one year
from the date of issuance, renewal, extension or reissuance or (B) five
(5) days before the Revolving Credit Termination Date.
(c) The Borrowers shall have duly and validly executed and delivered
to the Issuing Bank a Letter of Credit Agreement pertaining to the Letter
of Credit.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Each of the Obligors represents and warrants to the Agent and the Lenders
that (each representation and warranty herein is given as of the Closing Date
and shall be deemed repeated and reaffirmed on the dates of each borrowing and
issuance, renewal, extension or reissuance of a Letter of Credit as provided in
Section 6.02):
Section 7.01 EXISTENCE.
(a) CORPORATE EXISTENCE. Each of KOC, Concorde and the Parent: (i)
is a corporation duly organized, legally existing and in good standing
under the laws of the jurisdiction of its incorporation; (ii) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted; and
(iii) is qualified to do business in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary and
where failure so to qualify would have a Material Adverse Effect.
(b) PARTNERSHIP EXISTENCE. Each of ▇▇▇▇▇▇ Operating, 92 JV, 94 JV,
92 DDP and 94 DDP: (i) is a partnership duly organized, legally existing
and in good standing under the laws of the jurisdiction of its formation;
(ii) has all requisite power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted; and
(iii) is qualified to do business in all jurisdictions in
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which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would have a Material Adverse
Effect.
Section 7.02 FINANCIAL CONDITION. The unaudited consolidated balance
sheet of the Parent and its Consolidated Subsidiaries (including Unrestricted
Subsidiaries, if any) as at September 30, 1997 and the related consolidated
statements of income (or loss), and cash flows of the Borrower and its
Consolidated Subsidiaries (including Unrestricted Subsidiaries, if any) for the
nine month period ended on said date, have been prepared by the Parent pursuant
to the rules and regulations of the Securities and Exchange Commission in
accordance with GAAP for interim financial information, and such financial
statements reflect all adjustments (consisting of normal recurring adjustments)
necessary for a fair statement in all material respects of the results for the
interim periods presented. Neither the Parent nor any Subsidiary has on the
Closing Date any material Debt, contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or provided
for in the Financial Statements or in SCHEDULE 7.02. Since December 31, 1996,
there has been no change or event having a Material Adverse Effect which is
continuing other than as shown on SCHEDULE 7.02. Each Obligor other than the
Parent is a Consolidated Subsidiary of the Parent.
Section 7.03 LITIGATION. Except as disclosed to the Lenders in
SCHEDULE 7.03 hereto, at the Closing Date there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of the Obligors threatened in writing
against or affecting the Obligors or any Subsidiary which involves the
possibility of any judgment or liability against the Obligors or any Subsidiary
not fully covered by insurance (except for normal deductibles), and which would
have a Material Adverse Effect.
Section 7.04 NO BREACH. Neither the execution and delivery of the
Loan Documents nor compliance with the terms and provisions thereof will
conflict with or result in a breach of, or require any consent which has not
been obtained as of the Closing Date under, the respective charter or by-laws of
the Obligors or any Subsidiary, or any material Governmental Requirement or any
material agreement or instrument to which any Obligor or any Subsidiary is a
party or by which it is bound or to which it or its Properties are subject, or
constitute a default under any such material agreement or instrument, or result
in the creation or imposition of any Lien upon any of the revenues or assets of
the Obligors or any Subsidiary pursuant to the terms of any such material
agreement or instrument other than the Liens created by the Loan Documents.
Without limiting the foregoing, (i) the consummation of the transactions
contemplated by the Loan Documents will not constitute (A) a "Change of Control"
as defined in the indenture relating to the Parent's 13-1/2% Senior Unsecured
Notes due June 15, 1999 (the "13-1/2% INDENTURE"), (B) a "Change in Control" as
defined in the 1999 Notes Indenture or (C) a "Redemption Event" as defined in
the indenture relating to the 8-1/2% Convertible Subordinated Debentures of the
Parent due April 1, 2000 (the "8-1/2% INDENTURE"; and
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together with the 13-1/2% Indenture and the 7-7/8% Indenture, the "PUBLIC
INDENTURES") and (ii) no default or event of default has occurred or is
continuing under any of the Public Indentures and no holder has the right to
require acceleration, redemption or repurchase (with or without notice or the
lapse of time, or both) of any indebtedness outstanding under any Public
Indenture. The transactions contemplated by the Loan Documents (including the
issuance of the shares to Contour pursuant to the Option Agreement) have been
approved by a majority of the board of directors of the Parent, and by reason of
such approval the consummation of the transactions contemplated by the Loan
Documents (including the immediate issuance to Contour pursuant to the Option
Agreement of shares) shall not constitute a "Redemption Event" as defined in the
8-1/2% Indenture.
Section 7.05 AUTHORITY. Each Obligor and each Subsidiary has all
necessary power (corporate or otherwise) and authority to execute, deliver and
perform its obligations under the Loan Documents to which it is a party; and the
execution, delivery and performance by each Obligor and each Subsidiary of the
Loan Documents to which it is a party, have been duly authorized by all
necessary action (corporate or otherwise) on its part; and the Loan Documents
constitute the legal, valid and binding obligations of each Obligor and each
Subsidiary parties thereto, enforceable in accordance with their terms, except
as limited by bankruptcy, insolvency, or other laws of general application
relating to the enforcement of creditor's rights generally.
Section 7.06 APPROVALS. Except as have already been obtained, filed
or made, as applicable, no authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority are necessary for the
execution, delivery or performance by the Obligors or any Subsidiary of the Loan
Documents or for the validity or enforceability thereof, except for the
recording and filing of the Security Instruments as required by this Agreement.
Section 7.07 USE OF LOANS. The proceeds of Revolving Credit Loans
shall be used to amend, extend and rearrange the Prior Debt of the Obligors and
for general business purposes of the Borrowers, including, without limitation,
the SCANA Acquisition; provided, however, the proceeds of the Revolving Credit
Loans shall not be used to redeem any of the 1999 Notes. The proceeds of the
Term Loans shall be used to redeem all or a portion of the 1999 Notes being
tendered for redemption as a result of the Change of Control (as defined in the
1999 Notes Indenture) caused by the Contour Transaction. None of the Obligors is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock (within the meaning of Regulation G, U or X of
the Board of Governors of the Federal Reserve System) and no part of the
proceeds of any Loan hereunder will be used to buy or carry any margin stock.
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Section 7.08 ERISA.
(a) Each Obligor, each Subsidiary and each ERISA Affiliate has
complied in all material respects with ERISA and, where applicable, the
Code regarding each Plan.
(b) Each Plan is, and has been, maintained in substantial compliance
with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which could result
in imposition on any of the Obligors, any Subsidiary or any ERISA
Affiliate (whether directly or indirectly) of (i) either a civil penalty
assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of
fiduciary duty liability damages under section 409 of ERISA.
(d) No Plan (other than a defined contribution plan) or any trust
created under any such Plan has been terminated since September 2, 1974.
No liability to the PBGC (other than for the payment of current premiums
which are not past due) by any of the Obligors, any Subsidiary or any
ERISA Affiliate has been or is expected by any of the Obligors, any
Subsidiary or any ERISA Affiliate to be incurred with respect to any Plan.
No ERISA Event with respect to any Plan has occurred.
(e) Full payment when due has been made of all amounts which any of
the Obligors, any Subsidiary or any ERISA Affiliate is required under the
terms of each Plan or applicable law to have paid as contributions to such
Plan, and no accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan.
(f) The actuarial present value of the benefit liabilities under
each Plan which is subject to Title IV of ERISA does not, as of the end of
each Obligor's most recently ended fiscal year, exceed the current value
of the assets (computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit liabilities. The
term "actuarial present value of the benefit liabilities" shall have the
meaning specified in section 4041 of ERISA.
(g) None of the Obligors, any Subsidiary or any ERISA Affiliate
sponsors, maintains, or contributes to an employee welfare benefit plan,
as defined in section 3(1) of ERISA, including, without limitation, any
such plan maintained to provide benefits to former employees of such
entities, that may not be terminated by the Obligors, a Subsidiary or any
ERISA Affiliate in its sole discretion at any time without any material
liability.
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(h) None of the Obligors, any Subsidiary or any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time in the preceding
six calendar years, sponsored, maintained or contributed to, any
Multiemployer Plan.
(i) None of the Obligors, any Subsidiary or any ERISA Affiliate is
required to provide security under section 401(a)(29) of the Code due to a
Plan amendment that results in an increase in current liability for the
Plan.
Section 7.09 TAXES. Except as set out in SCHEDULE 7.09, each Obligor
and its Subsidiaries has filed all United States Federal income tax returns and
all other tax returns which are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment received by any
Obligor or any Subsidiary, except for any tax the payment of which is being
contested in good faith and by proper proceedings and against which adequate
reserves in the good faith judgment of the management of the Obligors are being
maintained. The charges, accruals and reserves on the books of each Obligor and
its Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of each Obligor, adequate. No tax lien has been filed and, to the
knowledge of the Obligors, no claim is being asserted with respect to any such
tax, fee or other charge.
Section 7.10 TITLE, ETC.
(a) On the Closing Date and any other date prior to January 5, 1998
on which the representations and warranties set forth in this Agreement
shall be deemed repeated and reaffirmed, except as set out in SCHEDULE
7.10, each of the Obligors and its Subsidiaries has good and defensible
title to its material (individually or in the aggregate) Properties (other
than the SCANA Properties), free and clear of all Liens, except Liens
permitted by Section 9.02. On and after January 5, 1998, except as set out
on replacement SCHEDULE 7.10, as required to be delivered pursuant to
Section 8.12, each of the Obligors and its Subsidiaries has good and
defensible title to its material (individually or in the aggregate)
Properties, free and clear of all Liens, except Liens permitted by Section
9.02. Except as set forth in SCHEDULE 7.10, after giving full effect to
the Excepted Liens and such other Liens permitted by Section 9.02, each
Borrower and JV owns the net interests in production attributable to the
lands and leases reflected in the most recently delivered Reserve Report
and the owner ship of such Properties shall not in any material respect
obligate such Persons to bear the costs and expenses relating to the
maintenance, development and operations of each such Property in an amount
in excess of the working interest of each Property set forth in the most
recently delivered Reserve Report. All information contained in the most
recently delivered Reserve Report is true and correct in all material
respects as of the date thereof to the knowledge of the Obligors. As of
the Closing Date, KOC owns a 84.34% partnership interests in the 92 DDP
and a 92.15% partnership interests in the 94 DDP.
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(b) All leases and agreements reasonably necessary for the conduct
of the business of the Obligors and their Subsidiaries are valid and
subsisting, in full force and effect and there exists no default or event
or circumstance thereunder which with the giving of notice or the passage
of time or both would give rise to a default under any such lease or
leases, which would affect in any material respect the conduct of the
business of the Obligors and their Subsidiaries.
(c) The rights, properties and other assets presently owned, leased
or licensed by the Obligors and their Subsidiaries including, without
limitation, all easements and rights of way, include all rights,
Properties and other assets reasonably necessary to permit the Obligors
and their Subsidiaries to conduct their business in all material respects
in the same manner as their business has been conducted prior to the
Closing Date.
(d) All of the assets and Properties of the Obligors and their
Subsidiaries which are reasonably necessary for the operation of their
business are in good working condition subject to normal wear and tear, as
applicable, and are maintained in accordance with prudent business
standards.
Section 7.11 NO MATERIAL MISSTATEMENTS. No written information,
statement, exhibit, certificate, document or report furnished to the Agent and
the Lenders (or any of them) by the Obligors or any Subsidiary in connection
with the negotiation of this Agreement contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading in the light of the
circumstances in which made and with respect to the Obligors and their
Subsidiaries taken as a whole. As of the Closing Date, there is no fact peculiar
to the Obligors or any Subsidiary which has a Material Adverse Effect or in the
future is reasonably likely to have (so far as any Obligor can now foresee) a
Material Adverse Effect and which has not been set forth in this Agreement or
the other documents, certificates and statements furnished to the Agent by or on
behalf of the Obligors or any Subsidiary prior to, or on, the Closing Date in
connection with the transactions contemplated hereby.
Section 7.12 INVESTMENT COMPANY ACT. None of the Obligors nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 7.13 PUBLIC UTILITY HOLDING COMPANY ACT. None of the
Obligors nor any Subsidiary is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
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Section 7.14 SUBSIDIARIES AND PARTNERSHIPS. Except as set forth on
SCHEDULE 7.14, as of the Closing Date the Obligors have no Subsidiaries nor
interests in any partnerships. SCHEDULE 7.14 sets forth as of the Closing Date
the complete corporate structure of the Parent and the Obligors. Except as
indicated on SCHEDULE 7.14, there exist no Unrestricted Subsidiaries. To the
extent any Unrestricted Subsidiaries are created or designated, the Obligors
shall promptly notify the Agent thereof, and the Agent will revise SCHEDULE 7.14
to reflect such new Unrestricted Subsidiary and distribute a copy thereof to
each of the parties to this Agreement. Upon distribution of such revised
SCHEDULE 7.14, such revised SCHEDULE 7.14 shall be deemed to be a part of this
Agreement in replacement of the existing SCHEDULE 7.14.
Section 7.15 LOCATION OF BUSINESS AND OFFICES. Each Obligor's
principal place of business and chief executive offices as of the Closing Date
are located at the address stated below its signature on the signature pages of
this Agreement. The principal place of business and chief executive office of
each Subsidiary as of the Closing Date are located at the addresses stated on
SCHEDULE 7.14.
Section 7.16 DEFAULTS. None of the Obligors nor any Subsidiary is in
default nor has any event or circumstance occurred which, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default under any material agreement or instrument to which any
Obligor or any Subsidiary is a party or by which any Obligor or any Subsidiary
is bound which default would have a Material Adverse Effect. No Default
hereunder has occurred and is continuing.
Section 7.17 ENVIRONMENTAL MATTERS. Except (i) as provided in
SCHEDULE 7.17 or (ii) as would not have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions would
not have a Material Adverse Effect):
(a) Neither any Property of any Obligor or any Subsidiary nor the
operations conducted thereon violate any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of any
Obligor or any Subsidiary nor the operations currently conducted thereon
or, to the best knowledge of any of the Obligors, by any prior owner or
operator of such Property or operation, are in violation of or subject to
any existing, pending or, to our knowledge, threatened action, suit,
investigation, inquiry or proceeding by or before any Governmental
Authority or to any remedial obligations under Environmental Laws;
(c) All notices, permits, licenses or similar authorizations, if
any, required pursuant to Environmental Laws to be obtained or filed in
connection with the operation or use of the Property of any Obligor and
each Subsidiary have been duly obtained or filed, and
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the Obligors and each Subsidiary are in compliance with the terms and
conditions of all such notices, permits, licenses and similar
authorizations;
(d) All hazardous substances, solid waste, and oil and gas
exploration and production wastes, if any, generated at the Property of
any Obligor or any Subsidiary have in the past been transported, treated
and disposed of in accordance with Environmental Laws and so as not to
pose an imminent and substantial endangerment to public health or welfare
or the environment, and, to the best knowledge of each Obligor, all such
transport carriers and treatment and disposal facilities have been and are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending or, to our
knowledge, threatened action, investigation or inquiry by any Governmental
Authority in connection with any Environmental Laws;
(e) The Obligors have taken all steps reasonably necessary to
determine and have determined that no hazardous substances, solid waste,
or oil and gas exploration and production wastes, have been disposed of or
otherwise released and there has been no threatened release of any
hazardous substances on or to any Property of the Obligors or any
Subsidiary except, in each case, in compliance with Environmental Laws and
so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment;
(f) To the extent applicable, all Property of each Obligor and each
Subsidiary currently satisfies all material design, operation, and
equipment requirements imposed by the OPA or scheduled as of the Closing
Date to be imposed by OPA during the term of this Agreement, and the
Obligors do not have any reason to believe that such Property, to the
extent subject to OPA, will not be able to maintain compliance with such
OPA requirements during the term of this Agreement; and
(g) None of the Obligors nor any Subsidiary has any known contingent
liability in connection with any release or threatened release of any oil,
hazardous substance or solid waste into the environment.
On the Closing Date and any other date prior to January 5, 1998 on which
the representations and warranties set forth in this Agreement shall be deemed
repeated and reaffirmed, references in this Section 7.17 to (i) "Property" shall
not include the SCANA Properties and (ii) "SCHEDULE 7.17" shall mean the
SCHEDULE 7.17 delivered on the Closing Date. On and after January 5, 1998,
references in this Section 7.17 to (i) "Property" shall include the SCANA
Properties and (ii) "SCHEDULE 7.17" shall mean the replacement SCHEDULE 7.17
required to be delivered pursuant to Section 8.12.
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Section 7.18 COMPLIANCE WITH THE LAW. None of the Obligors nor any
Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
Except for such acts or failures to act as would not have a Material Adverse
Effect, the Oil and Gas Properties (and properties unitized therewith) have been
maintained, operated and developed in a good and workmanlike manner and in
conformity with all applicable laws and all rules, regulations and orders of all
duly constituted authorities having jurisdiction and in conformity with the
provisions of all leases, subleases or other contracts comprising a part of the
Hydrocarbon Interests and other contracts and agreements forming a part of the
Oil and Gas Properties; specifically in this connection, (i) after the Closing
Date, no Oil and Gas Property is subject to having allowable production reduced
below the full and regular allowable (including the maximum permissible
tolerance) because of any overproduction (whether or not the same was
permissible at the time) prior to the Closing Date and (ii) none of the ▇▇▇▇▇
comprising a part of the Oil and Gas Properties (or properties unitized
therewith) are deviated from the vertical more than the maximum permitted by
applicable laws, regulations, rules and orders, and such ▇▇▇▇▇ are, in fact,
bottomed under and are producing from, and the well bores are wholly within, the
Oil and Gas Properties (or in the case of ▇▇▇▇▇ located on properties unitized
therewith, such unitized properties).
Section 7.19 INSURANCE. As of the Closing Date, SCHEDULE 7.19
attached hereto contains an accurate and complete description of all material
policies of property damage, liability, workmen's compensation and other forms
of insurance owned or held by the Obligors and each Subsidiary. All such
policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the date of the closing have been paid,
and no notice of cancellation or termination has been received with respect to
any such policy. Such policies are sufficient for compliance with all
requirements of law and of all agreements to which the Obligors or any
Subsidiary is a party; are valid, outstanding and enforceable policies; provide
adequate insurance coverage in at least such amounts and against at least such
risks (but including in any event public liability) as are usually insured
against in the same general area by companies engaged in the same or a similar
business for the assets and operations of the Obligors and each Subsidiary; will
remain in full force and effect through the respective dates set forth in
SCHEDULE 7.19 without the payment of additional premiums; and will not in any
way be adversely affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement. SCHEDULE 7.19 identifies all
material risks, if any, which the Obligors and its Subsidiaries and their
respective Board of Directors or officers have designated as being self insured.
None of the Obligors nor any Subsidiary has been refused any insurance with
respect to its assets or operations, nor has its coverage been limited below
usual and customary policy limits, by an insurance carrier to which it has
applied for any such insurance or with which it has carried insurance during the
last three years.
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Section 7.20 HEDGING AGREEMENTS. SCHEDULE 7.20 sets forth, as of a
date within four (4) Business Days of the Closing Date, a true and complete list
of all Hedging Agreements (including commodity price swap agreements, forward
agreements or contracts of sale which provide for prepayment for deferred
shipment or delivery of oil, gas or other commodities) of each Obligor and each
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net ▇▇▇▇ to market
value thereof, all credit support agreements relating thereto (including any
margin required or supplied), and the counterparty to each such agreement.
Section 7.21 RESTRICTION ON LIENS. None of the Obligors nor any of
their Subsidiaries is a party to any agreement or arrangement (other than this
Agreement, the Indenture and the Security Instruments), or subject to any order,
judgment, writ or decree, which either restricts or purports to restrict its
ability to grant Liens to other Persons on or in respect of their respective
assets or Properties (other than assets represented by such agreements or
arrangement).
Section 7.22 SOLVENCY. Each Obligor (i) is not insolvent as of the
date hereof and will not be rendered insolvent as a result of the Loan Document,
(ii) is not engaged in business or a transaction, or about to engage in a
business or a transaction, for which any property or assets remaining with such
Obligor is unreasonably small capital, and (iii) it does not intend to incur, or
believes it will incur, debts that will be beyond its ability to pay as such
debts mature.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Each of the Obligors covenants and agrees that, so long as any of the
Commitments are in effect and until payment in full of all Loans hereunder, all
interest thereon and all other amounts payable by the Obligors hereunder:
Section 8.01 FINANCIAL STATEMENTS. The Obligors shall deliver, or
shall cause to be delivered, to the Agent with sufficient copies of each for the
Lenders:
(a) As soon as available and in any event within 90 days after the
end of each fiscal year of the Parent, the audited consolidated statements
of income, stockholders' equity, changes in financial position and cash
flows of the Parent and its Consolidated Subsidiaries (including
Unrestricted Subsidiaries) for such fiscal year, and the related
consolidated balance sheets of the Parent and its Consolidated
Subsidiaries (including Unrestricted Subsidiaries) as at the end of such
fiscal year, setting forth (i) as to each account affected thereby, all
eliminating entries for Unrestricted Subsidiaries as a group and (ii) the
resulting
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consolidated figures for the Parent and the Restricted Subsidiaries, and
setting forth in each case in comparative form the corresponding figures
for the preceding fiscal year, and accompanied by the related opinion of
independent public accountants of recognized national standing acceptable
to the Agent which opinion shall state that said financial statements
fairly present the consolidated financial condition and results of
operations of the Parent and its Consolidated Subsidiaries (including
Unrestricted Subsidiaries) as at the end of, and for, such fiscal year and
that such financial statements have been prepared in accordance with GAAP
except for such changes in such principles with which the independent
public accountants shall have concurred and such opinion shall not contain
a "going concern" or like qualification or exception, and a certificate of
such accountants stating that, in making the examination necessary for
their opinion, they obtained no knowledge, except as specifically stated,
of any Default.
(b) As soon as available and in any event within 45 days after the
end of each of the first three fiscal quarterly periods of each fiscal
year of the Parent, consolidated statements of income (or loss), changes
in financial position and cash flows and consolidating statements of
income of the Parent and its Consolidated Subsidiaries (including
Unrestricted Subsidiaries) for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related consolidated and consolidating balance sheets as at the end of
such period, setting forth (i) as to each account affected thereby, all
eliminating entries for Unrestricted Subsidiaries as a group and (ii) the
resulting consolidated and consolidating figures for the Parent and the
Restricted Subsidiaries, and setting forth in each case in comparative
form the corresponding figures for the corresponding period in the
preceding fiscal year, accompanied by the certificate of a Responsible
Officer, which certificate shall state that said financial statements
fairly present the consolidated and consolidating financial condition and
results of operations of the Parent and its Consolidated Subsidiaries
(including Unrestricted Subsidiaries) in accor dance with GAAP, as at the
end of, and for, such period (subject to normal year-end adjust ments).
(c) Promptly after any of the Obligors knows that any Default or any
Material Adverse Effect has occurred, a notice of such Default or Material
Adverse Effect, describing the same in reasonable detail and the action
the Obligors propose to take with respect thereto.
(d) Promptly upon request by the Agent, a copy of each management
letter submitted to any of the Obligors or any Subsidiary by independent
accountants in connection with any annual, interim or special audit made
by them of the books of the Obligors and its Subsidiaries, and a copy of
any response by the Obligors or any Subsidiary of the Obligors, or the
Board of Directors or general partner of any of the Obligors or any
Subsidiary of the Obligors, to such management letter.
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(e) Promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by any of the Obligors to
stockholders, partners or unit-holders generally and each regular or
periodic report and any registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed by
any of the Obligors with or received by any of the Obligors in connection
therewith from any securities exchange or the SEC or any successor agency.
(f) Promptly after the furnishing thereof, copies of any statement,
report or notice furnished to or any Person pursuant to the terms of any
indenture, loan or credit or other similar agreement, other than this
Agreement and not otherwise required to be furnished to the Lenders
pursuant to any other provision of this Section 8.01.
(g) At the time the January 1 Reserve Report is delivered to the
Agent and the Lenders, the Obligors shall provide a one-year financial
projection for the Parent and its Subsidiaries in form and substance
acceptable to the Agent including projected revenues, expenses and capital
expenditures.
(h) From time to time such other information regarding the business,
affairs or financial condition of any of the Obligors or any Subsidiary
(including, without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under ERISA) as any
Lender or the Agent may reasonably request.
(i) Concurrently with the delivery of the Financial Statements
required by Section 8.01(a) and (b), a report, in form and substance
satisfactory to the Agent, setting forth as of the last Business Day of
such calendar quarter a true and complete list of all Hedging Agreements
(including commodity price swap agreements, forward agreements or
contracts of sale which provide for prepayment for deferred shipment or
delivery of oil, gas or other commodities) of the Obligors and each
Subsidiary, the material terms thereof (including the type, term,
effective date, termination date and notional amounts or volumes), the net
▇▇▇▇ to market value therefor, any new credit support agreements relating
thereto not listed on SCHEDULE 7.20, any margin required or supplied under
any credit support document, and the counterparty to each such agreement.
The Obligors will furnish to the Agent, at the time each set of financial
statements is furnished pursuant to paragraph (a) or (b) above, a certificate
substantially in the form of EXHIBIT C hereto executed by a Responsible Officer
of each Obligor (i) certifying as to the matters set forth therein and stating
that no Default has occurred and is continuing (or, if any Default has occurred
and is continuing, describing the same in reasonable detail), and (ii) setting
forth in reasonable detail the computations necessary to determine whether the
Obligors are in compliance with Sections 9.12 and 9.13 as of the end of the
respective fiscal quarter or fiscal year.
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Section 8.02 LITIGATION. The Obligors shall promptly give to the
Agent notice of all legal or arbitral proceedings, and of all proceedings before
any Governmental Authority affecting the Obligors or any Subsidiary, except
proceedings which, if adversely determined, would not have a Material Adverse
Effect.
Section 8.03 MAINTENANCE, ETC.
(a) Each of the Obligors shall: preserve and maintain its corporate
or partnership existence, as applicable (except as permitted by Section
9.08), and all of its material rights, privileges and franchises; keep
books of record and account in which full, true and correct entries will
be made of all dealings or transactions in relation to its business and
activities; comply with all Governmental Requirements if failure to comply
with such requirements will have a Material Adverse Effect; pay and
discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its Property prior
to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good
faith and by proper proceedings and against which adequate reserves in the
good faith judgment of the management of Obligors are being maintained;
upon reasonable notice, permit representa tives of the Agent or any
Lender, during normal business hours, to examine, copy and make extracts
from its books and records, to inspect its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably
requested by such Lender or the Agent (as the case may be); keep, or cause
to be kept, insured by financially sound and reputable insurers all
Property of a character usually insured by Persons engaged in the same or
similar business similarly situated against loss or damage of the kinds
and in the amounts customarily insured against by such Persons and carry
such other insurance as is usually carried by such Persons including,
without limitation, sudden and accidental seepage and pollution insurance
to the extent reasonably available; and pay all of its accounts payable in
the ordinary course of its business but not later than 120 days past the
invoice or billing date, unless such payables are being contested in good
faith by appropriate proceedings and if reserves adequate (in the good
faith judgment of management of the Parent) under GAAP shall have been
established therefor.
(b) Contemporaneously with the delivery of the financial statements
required by Section 8.01(a) to be delivered for each year, the Obligors
will furnish or cause to be furnished to the Agent and the Lenders a
certificate of insurance coverage from the insurer in form and substance
satisfactory to the Agent and, if requested, will furnish the Agent and
the Lenders copies of the applicable policies.
(c) Each of the Obligors will and will cause each Subsidiary to, at
its own expense, do or cause to be done all things reasonably necessary to
preserve and keep in good
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repair, working order and efficiency in accordance with industry practice
all of its Oil and Gas Properties and other material Properties including,
without limitation, all equipment, machinery and facilities, and from time
to time will make all the reasonably necessary repairs, renewals and
replacements so that at all times the state and condition of its Oil and
Gas Properties and other material Properties will be fully preserved and
maintained in accordance with industry practice, except to the extent a
portion of such Properties is no longer capable of producing Hydrocarbons
in economically reasonable amounts. Each Obligor will and will cause each
Subsidiary in accordance with industry practice to: (i) pay and discharge,
or make reasonable and customary efforts to cause to be paid and
discharged, all delay rentals, royalties, expenses and indebtedness
accruing under the leases or other agreements affecting or pertaining to
its Oil and Gas Properties, (ii) perform or make reasonable and customary
efforts to cause to be performed, in accordance with industry standards,
the obligations required by each and all of the assignments, deeds,
leases, sub-leases, contracts and agreements affecting its interests in
its Oil and Gas Properties and other material Properties, (iii) do and
cause each Subsidiary to do all other things necessary to keep unimpaired,
except for Liens described in Section 9.02, its rights with respect
thereto and prevent any forfeiture thereof or a default thereunder, except
to the extent a portion of such Properties is no longer capable of
producing Hydrocarbons in economically reasonable amounts and except for
dispositions permitted by Section 9.14 hereof. Each Obligor will and will
cause each Subsidiary to operate its Oil and Gas Properties and other
material Properties or cause or make reasonable and customary efforts to
cause such Oil and Gas Properties and other material Properties to be
operated in a careful and efficient manner in accordance with the
practices of the industry and in compliance in all material respects with
all applicable material contracts and agreements and in compliance in all
material respects with all Governmental Requirements.
Section 8.04 ENVIRONMENTAL MATTERS.
(a) The Obligors will and will cause each Subsidiary to establish
and implement such procedures as may be reasonably necessary to
continuously determine and assure that any failure of the following does
not have a Material Adverse Effect: (i) all Property of the Obligors and
their Subsidiaries and the operations conducted thereon and other
activities of the Obligors and their Subsidiaries are in compliance with
and do not violate the requirements of any Environmental Laws, (ii) no
oil, hazardous substances or solid wastes are disposed of or otherwise
released on or to any Property owned by any such party except in
compliance with Environmental Laws, (iii) no hazardous substance will be
released on or to any such Property in a quantity equal to or exceeding
that quantity which requires reporting pursuant to Section 103 of CERCLA,
and (iv) no oil, oil and gas exploration and
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production wastes or hazardous substance is released on or to any such
Property so as to pose an imminent and substantial endangerment to public
health or welfare or the environment.
(b) The Obligors will promptly notify the Agent and the Lenders in
writing of any threatened action, investigation or inquiry by any
Governmental Authority of which the Obligors have knowledge in connection
with any Environmental Laws, excluding routine testing, corrective action
and any action, investigation or inquiry which is not material.
(c) The Obligors will and will cause each Subsidiary to provide
environmental audits and tests in accordance with American Society of
Testing and Materials standards as required to be obtained by the Agent or
the Lenders by any Governmental Authority in connection with any future
acquisitions of Oil and Gas Properties or other material Properties.
Section 8.05 FURTHER ASSURANCES. The Obligors will and will cause
each Subsidiary to cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of the Security Instruments and this
Agreement upon the request of the Agent. The Obligors at their expense will and
will cause each Subsidiary to promptly execute and deliver to the Agent upon
request all such other documents, agreements and instruments to comply with or
accomplish the covenants and agreements of any of the Obligors or any
Subsidiary, as the case may be, in the Security Instruments and this Agreement,
or to further evidence and more fully describe the collateral intended as
security for the Notes, or to correct any omissions in the Security Instruments,
or to state more fully the security obligations set out herein or in any of the
Security Instruments, or to perfect, protect or preserve any Liens created
pursuant to any of the Security Instruments, or to make any recordings, to file
any notices or obtain any consents, all as may be necessary or appropriate in
connection therewith.
Section 8.06 PERFORMANCE OF OBLIGATIONS. The Obligors will pay the
Notes according to the reading, tenor and effect thereof; and the Obligors will
and will cause each Subsidiary to do and perform every act and discharge all of
the obligations to be performed and discharged by them under the Loan Documents,
at the time or times and in the manner specified after taking into account any
applicable grace period.
Section 8.07 RESERVE REPORTS.
(a) Not later than March 31 of each year commencing March 31, 1998,
the Borrowers shall furnish to the Agent and the Lenders a Reserve Report.
The January 1 Reserve Report of each year shall (i) cover Oil and Gas
properties comprising at least 90% of the total present value of the
Obligors' Oil and Gas Properties at the time of preparation and (ii) be
either (A) prepared by certified independent petroleum engineers or
consultants
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acceptable to the Agent or (B) under the supervision of the chief engineer
of the Borrowers and audited by ▇.▇. ▇▇▇▇ & Associates, Inc. or other
certified independent petroleum engineers or independent petroleum
consultant(s) acceptable to the Agent. Not later than September 30 of each
year, the Borrowers shall furnish to the Agent and the Lenders the July 1
Reserve Report covering Oil and Gas properties comprising at least 90% of
the total present value of the Obligors' Oil and Gas Properties at the
time of preparation prepared by either (A) certified independent petroleum
engineers or consultants acceptable to the Agent or (B) prepared by or
under the supervision of the chief engineer of the Borrowers who shall
certify such Reserve Report to be true and accurate to the best of his
knowledge and to have been prepared in accordance with the procedures used
in the immediately proceeding January 1 Reserve Report or which shall be
audited by ▇.▇. ▇▇▇▇ & Associates, Inc. or other certified independent
petroleum engineers or independent petroleum consultant(s) acceptable to
the Agent.
(b) In the event of an unscheduled redetermination, the Borrowers
shall furnish to the Agent and the Lenders a Reserve Report prepared by or
under the supervision of the chief engineer of the Borrowers who shall
certify such Reserve Report to be true and accurate to the best of his
knowledge and to have been prepared in accordance with the procedures used
in the immediately preceding Reserve Report. For any unscheduled
redetermination requested by the Lenders pursuant to Section 2.08(d), the
Borrowers shall provide such Reserve Report with an "as of" date as
required by the Majority Lenders as soon as possible, but in any event no
later than 45 days following the receipt of the request by the Agent.
(c) With the delivery of each Reserve Report, the Borrowers shall
provide to the Agent and the Lenders, a certificate from a Responsible
Officer certifying that, to the best of his knowledge and in all material
respects: (i) the information contained in the Reserve Report and any
other information delivered in connection therewith is true and correct,
(ii) except as set forth on an exhibit to the certificate, on a net basis
there are no material gas imbalances, take or pay or other prepayments
with respect to its Oil and Gas Properties evaluated in such Reserve
Report which would require such Persons to deliver Hydrocarbons produced
from such Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor, (iii) none of their Oil and
Gas Properties have been sold since the date of the last Borrowing Base
determination, except as set forth on an exhibit to the certificate, which
certificate shall list all of its Oil and Gas Properties sold (other than
Hydrocarbons sold in the ordinary course of business) and in such detail
as reasonably required by the Majority Lenders, and (iv) except as set
forth on a schedule attached to the certificate, all of the Oil and Gas
Properties evaluated by such Reserve Report are Mortgaged Property.
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Section 8.08 TITLE INFORMATION.
(a) Within 30 days after the delivery to the Agent and the Lenders
of each Reserve Report (including the Initial Reserve Report) required by
Section 8.07(a), the Borrowers will deliver title information in form and
substance acceptable to the Agent covering enough of the Oil and Gas
Properties evaluated by such Reserve Report, so that the Agent shall have
received together with title information previously delivered to the
Agent, satisfactory title information on at least 50% of the value of the
Oil and Gas Properties evaluated by such Reserve Report that are
classified as proved undeveloped and 80% of the value of the Oil and Gas
Properties evaluated by such Reserve Report that are classified as proved
developed.
(b) To the extent that Majority Lenders are not satisfied with title
to any Property, such unacceptable Property shall not count towards the
percentage requirements in Section 8.08(a), and the Agent may send a
notice to the Borrowers and the Lenders that the then outstanding
Threshold Amount shall be reduced by an amount as determined by all of the
Lenders to cause the Borrowers to be in compliance with the requirement to
provide acceptable title information on the required percentages of the
value of the Oil and Gas Properties. This new Borrowing Base shall become
effective immediately after receipt of such notice.
(c) On or before January 30, 1998, the Agent shall have been
furnished with appropriate UCC search certificates reflecting (i) the
perfection of the Liens contemplated by the Security Instruments and (ii)
no Liens or security interests other than Liens allowed pursuant to
Section 9.02.
Section 8.09 ADDITIONAL COLLATERAL.
(a) Each Obligor shall cause all of its Oil and Gas Properties and
other Properties included in the most recently delivered Reserve Report
(except for Properties expressly excluded from the Borrowing Base
redetermination by the Borrowers) at all times to be subject to a Lien as
security for the Indebtedness; except for such Properties that, in the
Agent's determination, the cost of perfecting a Lien in such Properties is
disproportionate to the benefit of such collateral to the Lenders. Such
Lien will be created and perfected by and in accordance with the
provisions of deeds of trust, security agreements and financing
statements, or other Security Instruments, all in form and substance
satisfactory to the Agent in its sole discretion and in sufficient
executed (and acknowledged where necessary or appropriate) counterparts
for recording purposes.
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(b) Concurrently with the granting of the Lien or other action
referred to in Section 8.07(a) above, the Obligors will provide to the
Agent title information in form and substance satisfactory to the Agent in
its sole discretion with respect to the Obligor's interests in such Oil
and Gas Properties.
(c) Also, promptly after the filing of any new Security Instrument
in any state, upon the reasonable request of the Agent, the Obligors will
provide to the Agent an opinion addressed to the Agent for the benefit of
the Lenders in form and substance satisfactory to the Agent in its sole
discretion from counsel acceptable to Agent, stating that the Security
Instrument is valid, binding and enforceable in accordance with its terms
and in legally sufficient form for such jurisdiction.
Section 8.10 ERISA INFORMATION AND COMPLIANCE. The Obligors will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Agent with sufficient copies to the Lenders (i) promptly
after the filing thereof with the United States Secretary of Labor, the Internal
Revenue Service or the PBGC, copies of each annual and other report with respect
to each Plan or any trust created thereunder, (ii) immediately upon becoming
aware of the occurrence of any ERISA Event or of any "prohibited transaction,"
as described in section 406 of ERISA or in section 4975 of the Code, in
connection with any Plan or any trust created thereunder, a written notice
signed by a Responsible Officer specifying the nature thereof, what action any
of the Obligors, the Subsidiary or the ERISA Affiliate is taking or proposes to
take with respect thereto, and, when known, any action taken or proposed by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto, and (iii) immediately upon receipt thereof, copies of any notice of the
PBGC's intention to terminate or to have a trustee appointed to administer any
Plan. With respect to each Plan (other than a Multiemployer Plan), the Obligors
will, and will cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full
and in a timely manner, without incurring any late payment or underpayment
charge or penalty and without giving rise to any lien, all of the contribution
and funding requirements of section 412 of the Code (determined without regard
to subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay,
or cause to be paid, to the PBGC in a timely manner, without incurring any late
payment or underpayment charge or penalty, all premiums required pursuant to
sections 4006 and 4007 of ERISA.
Section 8.11RESTRICTED SUBSIDIARIES TO BE OBLIGORS. Concurrent with
the delivery of financial statements pursuant to Sections 8.01(a) and (b), the
Obligors will notify the Agent of each Restricted Subsidiary then existing that
has total net assets equal to or greater than $500,000. At any time after the
Agent has received notice pursuant to the preceding sentence, upon request of
the Agent, any such Restricted Subsidiary shall become a Guarantor under this
Agreement and shall promptly execute and deliver to the Agent a Guaranty
Agreement.
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Section 8.12 REVISED SCHEDULES. On or before January 5, 1998, the
Borrowers shall deliver to the Agent replacements for SCHEDULE 7.10 and SCHEDULE
7.17 setting forth exceptions to title and environmental matters, respectively,
as the Borrowers deem appropriate relating to the SCANA Properties.
Section 8.13 CONSUMMATION OF HEDGING AGREEMENTS. On or before
December 29, 1997 the Borrowers shall consummate or cause to be consummated
Hedging Agreements acceptable to the Agent relating to at least 1,500,000,000
cubic feet of gas production per month of the Borrowers and Restricted
Subsidiaries, collectively, for May 1998 through October 1998.
ARTICLE IX
NEGATIVE COVENANTS
Each of the Obligors covenants and agrees that, so long as any of the
Commitments are in effect and until payment in full of Loans hereunder, all
interest thereon and all other amounts payable by the Obligors hereunder,
without the prior written consent of the Majority Lenders:
Section 9.01 DEBT. None of the Obligors nor any Subsidiary will
incur, create, assume or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness or any guaranty of or suretyship
arrangement for the Notes or other Indebtedness;
(b) Debt of the Obligors and the Subsidiaries existing on the
Closing Date which is disclosed in SCHEDULE 9.01, and any renewals or
extensions (but not increases) thereof;
(c) Debt associated with bonds or surety obligations required by
Governmental Requirements in connection with the operation of the Oil and
Gas Properties;
(d) the Subordinated Debt, provided that only the Parent remains the
sole obligor for such Debt;
(e) add-on Debt to the Senior Subordinated Notes not to exceed
$30,000,000 in the aggregate, upon terms no less favorable than the
Indenture; provided that (i) the net cash proceeds from such add-on
issuance are paid to the Agent for the benefit of the Lenders to reduce
the amounts outstanding under the Notes and (ii) such add-on issuance
occurs on or before May 31, 1998;
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(f) Hedging Agreements covering oil and gas production of the
Obligors or any Subsidiary; provided, however, that (A) such Hedging
Agreements related to oil or gas production shall not, either individually
or in the aggregate, cover more than seventy-five percent (75%) of
estimated production of oil or gas of the Obligors for each individual
period covered by the Hedging Agreements and no such Hedging Agreement
shall exceed a term of 24 months; PROVIDED, HOWEVER, such Hedging
Agreements that are Basis ▇▇▇▇▇▇ may cover, either individually or in the
aggregate, up to ninety percent (90%) of estimated production of oil or
natural gas of the Obligors for each individual period covered by the
Hedging Agreements and no such Hedging Agreement shall exceed a term of 24
months, and (B) the Obligors may purchase "floors" to cover 100% of
estimated oil and/or gas production;
(g) Hedging Agreements entered into in the ordinary course of
business for the purpose of hedging the Obligors' and the Subsidiaries'
interest rate or currency exposure and not for the purpose of speculation;
(h) Debt consisting of indemnities, obligations to make purchase
price adjustments or other similar obligations, and guaranties in respect
thereof, incurred or assumed in connection with the disposition of any
assets of the Borrowers, the Obligors or any of their Subsidiaries;
(i) Guaranties issued by the Borrowers, by the Obligors or by any of
their respective Subsidiaries in the ordinary course of business of
obligations of other Persons in connection with current oil and gas
drilling, oil and gas production, oil and gas transportation, crude oil
purchasing, oil and gas exploration or other similar programs or
operations; provided that all such amounts guaranteed in the aggregate
shall not exceed $750,000 outstanding at any one time;
(j) Debt under capital leases (as required to be reported on the
financial statements of the Obligors pursuant to GAAP), Debt under leases
described in clause (v) of the definition of Debt, and other funded Debt
(including purchase money debt), not to exceed $2,500,000 in the aggregate
at any time outstanding for all such capital leases and other funded Debt;
(k) Production payments, provided that (i) the net present value of
the reserves related to such production payments does not exceed 30% of
the total assets of the Obligors and (ii) no production payments owed by
any Obligors burden any Properties which are included in the determination
of the Borrowing Base and the Threshold Amount; and
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(l) Debt not to exceed $5,000,000 incurred in connection with the
Section 29 Transaction.
Section 9.02 LIENS. None of the Obligors nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness;
(b) Excepted Liens;
(c) Liens securing leases or Debt allowed under Section 9.01(j) but
only on the Property under lease or the purchase of which was financed
with such Debt (or with Debt directly or indirectly refinanced by such
Debt);
(d) Liens disclosed on SCHEDULE 9.02; and
(e) Liens on cash or securities of the Obligors securing the Debt
described in Section 9.01(c) or Section 9.01(f).
Section 9.03 INVESTMENTS, LOANS AND ADVANCES. None of the Obligors
nor any Subsidiary will make or permit to remain outstanding any loans or
advances to or investments in any Person, except that the foregoing restriction
shall not apply to:
(a) investments, loans or advances reflected in the Financial
Statements or which are disclosed to the Lenders in SCHEDULE 9.03;
(b) accounts receivable arising in the ordinary course of business;
(c) direct obligations of the United States or any agency thereof,
or obligations guaranteed by the United States or any agency thereof, in
each case maturing within one year from the date of creation thereof;
(d) commercial paper maturing within one year from the date of
creation thereof rated no lower than A2 or P2, as such rating is set forth
from time to time, by Standard & Poors or ▇▇▇▇▇'▇ Investors Service, Inc.,
respectively;
(e) deposits maturing within one year from the date of creation
thereof with, in cluding certificates of deposit issued by, any Lender or
any office located in the United States of any other bank or trust company
which is organized under the laws of the United
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States or any state thereof, has capital, surplus and undivided profits
aggregating at least $100,000,000.00 (as of the date of such Lender's or
bank or trust company's most recent financial reports) and has a short
term deposit rating of no lower than A2 or P2, as such rating is set forth
from time to time, by Standard & Poors or ▇▇▇▇▇'▇ Investors Service, Inc.,
respectively;
(f) deposits in money market funds investing greater than 90% in
investments described in Section 9.03(c), 9.03(d) or 9.03(e);
(g) investments by the Borrowers in direct ownership interests in
additional Oil and Gas Properties and gas gathering systems related
thereto;
(h) investments, loans or advances among the Obligors to be used for
purposes not prohibited by this Agreement;
(i) Parent Stock Investments; and
(j) other investments, loans or advances not to exceed $1,500,000 in
the aggregate at any time.
Section 9.04 DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. The Obligors
will not declare or pay any dividend, purchase, redeem or otherwise acquire for
value any of its stock including, without limitation, common and preferred stock
now or hereafter outstanding, return any capital to its stockholders or make any
distribution of its assets to its stockholders, except that:
(a) the Parent may make stock dividends;
(b) each Obligor (other than the Parent) and each Subsidiary
(exclusive of the JV's and DDP's) may make distributions or pay dividends
(other than in the case of a distribution or dividend to a Borrower)
provided that no Borrowing Base deficiency exists and no Default or Event
of Default exists or would result from such payment or distribution;
(c) each JV and DDP may make distributions;
(d) the Parent may pay a one time dividend on its $2.625
Convertible Exchangeable Preferred Stock of the Parent or, in lieu
thereof, pay a fee or make a distribution to the shareholders of such
$2.625 Convertible Exchangeable Preferred Stock, in either case, in an
amount not to exceed $4,600,000 and to be paid on or before June 1, 1998,
provided that, (i) no Default or Event of Default has occurred and is
continuing (or would result therefrom), (ii) no Borrowing Base deficiency
exists, (iii) such distribution or
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dividend is not prohibited under the Indenture (without the necessity of
amending the Indenture or obtaining a waiver thereto to specifically allow
for such distribution or dividend), (iv) the Term Loans have been paid in
full and the Term Notes canceled and, (v) immediately following such
distribution, the Threshold Utilization Percentage will not exceed 80%;
and
(e) any Obligor may make distributions or pay dividends to any
Unrestricted Subsidiary, provided that, (i) no Default or Event of Default
has occurred and is continuing (or would result therefrom), (ii) no
Borrowing Base deficiency exists, and (iii) such distribution or dividend
is not prohibited under the Indenture (without the necessity of amending
the Indenture or obtaining a waiver thereto to specifically allow for such
distribution or dividend).
Section 9.05 SALES AND LEASEBACKS. None of the Obligors nor any
Subsidiary will enter into any arrangement, directly or indirectly, with any
Person whereby any of the Obligors or any Subsidiary shall sell or transfer any
of its Property, whether now owned or hereafter acquired, and whereby any of the
Obligors or any Subsidiary shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property which any of the Obligors or any
Subsidiary intends to use for substantially the same purpose or purposes as the
Property sold or transferred.
Section 9.06 NATURE OF BUSINESS. None of the Obligors nor any
Subsidiary will allow any material change to be made in the character of its
business as carried on as of the Closing Date.
Section 9.07 LIMITATION ON LEASES. Neither the Obligors nor any
Subsidiary will create, incur, assume or suffer to exist any obligation for the
payment of rent or hire of Property of any kind whatsoever (real or personal
leases but excluding capital leases and leases of Hydrocarbon Interests), under
leases or lease agreements which would cause the aggregate amount of all
payments made by the Obligors and its Subsidiaries pursuant to such leases or
lease agreements to exceed $1,750,000 in any fiscal year during the life of such
leases.
Section 9.08 MERGERS, ETC. None of the Obligors nor any Subsidiary
will merge into or with or consolidate with any other Person, or sell, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property or assets to any other Person, except
that any Obligor or Subsidiary may merge with another Obligor or Subsidiary;
provided that (i) none of the Lenders are adversely affected by such merger,
(ii) no Default or Event of Default shall exist and be continuing immediately
before or after such merger, (iii) the Subordinated Debt and Senior Subordinated
Notes shall be subordinated to the Indebtedness after such merger, (iv) the Loan
Documents will be amended to reflect such merger in form satisfactory to the
Majority Lenders, and (v) such merger shall be permitted by the terms of the
indentures under which the Subordinated Debt and Senior Subordinated Notes were
issued.
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Section 9.09 PROCEEDS OF NOTES. The Obligors will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 7.07. None of the Obligors nor any Person acting on behalf of any of the
Obligors has taken or will take any action which might cause any of the Loan
Documents to violate Regulation G, U or X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate Section 7 of the
Securities Exchange Act of 1934 or any rule or regulation thereunder, in each
case as now in effect or as the same may hereinafter be in effect.
Section 9.10 ERISA COMPLIANCE. The Obligors will not at any time:
(a) Engage in, or permit any Subsidiary or ERISA Affiliate to engage
in, any transaction in connection with which any of the Obligors, any
Subsidiary or any ERISA Affiliate could be subjected to either a civil
penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax
imposed by Chapter 43 of Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with respect to
any Plan, which could result in any liability to any of the Obligors, any
Subsidiary or any ERISA Affiliate to the PBGC;
(c) Fail to make, or permit any Subsidiary or ERISA Affiliate to
fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law, any
of the Obligors, a Subsidiary or any ERISA Affiliate is required to pay as
contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the meaning of
section 302 of ERISA or section 412 of the Code, whether or not waived,
with respect to any Plan;
(e) Permit, or allow any Subsidiary or ERISA Affiliate to permit,
the actuarial present value of the benefit liabilities under any Plan
maintained by any of the Obligors, any Subsidiary or any ERISA Affiliate
which is regulated under Title IV of ERISA to exceed the current value of
the assets (computed on a plan termination basis in accordance with Title
IV of ERISA) of such Plan allocable to such benefit liabilities. The term
"actuarial present value of the benefit liabilities" shall have the
meaning specified in section 4041 of ERISA;
(f) Contribute to or assume an obligation to contribute to, or
permit any Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any Multiemployer Plan;
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(g) Acquire, or permit any Subsidiary or ERISA Affiliate to acquire,
an interest in any Person that causes such Person to become an ERISA
Affiliate with respect to any of the Obligors, any Subsidiary or any ERISA
Affiliate if such Person sponsors, maintains or contributes to, or at any
time in the six-year period preceding such acquisition has sponsored,
maintained, or contributed to, (1) any Multiemployer Plan, or (2) any
other Plan that is subject to Title IV of ERISA under which the actuarial
present value of the benefit liabilities under such Plan exceeds the
current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities;
(h) Incur, or permit any Subsidiary or ERISA Affiliate to incur, a
liability to or on account of a Plan under sections 515, 4062, 4063, 4064,
4201 or 4204 of ERISA;
(i) Contribute to or assume an obligation to contribute to, or
permit any Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any employee welfare benefit plan, as defined
in section 3(1) of ERISA, including, without limitation, any such plan
maintained to provide benefits to former employees of such entities, that
may not be terminated by such entities in their sole discretion at any
time without any material liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a
Plan resulting in an increase in current liability such that any of the
Obligors, any Subsidiary or any ERISA Affiliate is required to provide
security to such Plan under section 401(a)(29) of the Code.
Section 9.11 SALE OR DISCOUNT OF RECEIVABLES. None of the Obligors
nor any Subsidiary will discount or sell (with or without recourse) any of its
notes receivable or accounts receivable.
Section 9.12 RATIO OF TOTAL SENIOR FUNDED DEBT TO EBITDA. The Parent
and its Consolidated Subsidiaries will not permit their ratio of (i) Total
Funded Senior Debt as at the relevant fiscal quarter end to (ii) EBITDA for the
period of four (4) consecutive fiscal quarters ending on such date to be greater
than the ratio corresponding to the applicable fixed quarter ends set forth
below:
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RATIO FISCAL QUARTER END
3.0 to 1.0 all fiscal quarter ends until and including
12/31/98
2.5 to 1.0 all fiscal quarter ends after 12/31/98
through and including 12/31/99
2.0 to 1.0 all fiscal quarter ends after 12/31/99
"TOTAL SENIOR FUNDED DEBT" shall mean any Debt for borrowed money,
including without limitation, the Indebtedness, and any notes, bonds or
debentures issued by any Obligor unless such Debt is expressly subordinated to
the Indebtedness on terms satisfactory to the Lenders, PLUS capital leases.
Section 9.13 INTEREST COVERAGE RATIO. The Parent will not permit its
Interest Coverage Ratio as of the end of any fiscal quarter of the Parent
(calculated quarterly at the end of each fiscal quarter) to be less than the
ratio corresponding to the applicable fiscal quarter ends set forth below:
RATIO FISCAL QUARTER END
2.0 to 1.0 all fiscal quarter ends until and including
12/31/98
2.25 to 1.0 all fiscal quarter ends after 12/31/98
through and including 12/31/99
2.5 to 1.0 all fiscal quarter ends after 12/31/99
"INTEREST COVERAGE RATIO" shall mean the ratio of (i) EBITDA for the period of
four consecutive fiscal quarters ending on such date to (ii) cash interest
payments made for such four fiscal quarters of the Parent and its Consolidated
Subsidiaries.
Section 9.14 SALE OF OIL AND GAS PROPERTIES. The Borrowers will not
sell, assign, farm-out, convey or otherwise transfer (a "TRANSFER") any Oil and
Gas Property or any interest in any Oil and Gas Property, except the Transfer of
(i) Hydrocarbons in the ordinary course of business, (ii) during each period
between Scheduled Redetermination Dates, Oil and Gas Properties having an
aggregate market value not exceeding 10% of the Threshold Amount then in effect
and, upon the Borrowers' written request and upon the application of proceeds
for any prepayments required by Section 2.07(d), the Agent will release its
Liens covering any interests in Oil and Gas Properties
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included in such Transfer, and (iii) Oil and Gas Properties which are (a) not
included in the most recent Reserve Report, (b) not reasonably expected by
Borrowers to be included in the next Reserve Report required by Section 8.07,
and (c) located outside of the Sibley, Sailes, West Bryceland and ▇▇▇ ▇▇▇▇▇▇ in
north Louisiana and, upon the Borrowers' written request, the Agent will release
its Liens, if any, covering any interest in Oil and Gas Properties included in
such Transfer, provided that, the cash proceeds received by the Borrowers from
such Transfer are paid to the Agent for the benefit of the Lenders to reduce the
amount outstanding under the Revolving Credit Notes.
Section 9.15 ENVIRONMENTAL MATTERS. None of the Obligors nor any
Subsidiary will cause or permit any of its Property to be in violation of, or do
anything or permit anything to be done which will subject any such Property to
any remedial obligations under any Environmental Laws, assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations would have a Material Adverse Effect.
Section 9.16 TRANSACTIONS WITH AFFILIATES. None of the Obligors nor
any Subsidiary will enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of Property or the rendering of any
service, with any Affiliate unless such transactions are otherwise permitted
under this Agreement, are in the ordinary course of its business and are upon
fair and reasonable terms no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate. The
foregoing restrictions shall not apply to transactions with Bessemer and its
Affiliates set forth in SCHEDULE 9.16; provided that no cash or other Property
(other than securities of the Parent) shall be paid by any Obligor or any
Subsidiary to Bessemer or any of its Affiliates in connection with such
transactions during the continuation of an Event of Default.
Section 9.17 SUBSIDIARIES AND PARTNERSHIPS. The Obligors shall not,
and shall not permit any Subsidiary to, create any additional Subsidiaries or
partnerships, except for (i) the Subsidiary created in connection with the
Section 29 Transaction, (ii) Subsidiaries created to hold assets obtained
through Parent Stock Investments, and (iii) Unrestricted Subsidiaries
capitalized with funds permitted by Section 9.03(j). The Obligors shall not and
shall not permit any Subsidiary to sell any stock of a Subsidiary or any
interest in a partnership. The Obligors shall not permit any Subsidiary to issue
any stock except to the Obligors and except in compliance with Section 9.03.
Section 9.18 NEGATIVE PLEDGE AGREEMENTS. None of the Obligors nor
any Subsidiary will create, incur, assume or suffer to exist any agreement or
arrangement (other than this Agreement, the Indenture and the Security
Instruments) which in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property (other than Property
represented by such agreement or arrangement) or restricts any Subsidiary from
paying dividends to the Obligors, or which requires the consent of or notice to
other Persons in connection therewith.
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Section 9.19 PARTNERSHIP AGREEMENT. The Obligors will not amend or
permit to be amended the Partnership Agreements in any way which would
materially adversely effect the Lenders, without the prior written consent of
the Majority Lenders.
Section 9.20 SUBORDINATED DEBT AND SENIOR SUBORDINATED NOTES.
(a) The Parent will not (i) amend, supplement or modify the
Subordinated Debt, the Senior Subordinated Notes or the indentures under
which such Debt was issued or (ii) accept any waivers in connection with
any defaults under such instruments or Debt without the written consent of
the Lenders, unless such amendments, supplements, modifications or waivers
do not, individually or in the aggregate, materially and adversely affect
the Lenders.
(b) The Parent will not exercise its right to exchange its $2.625
Convertible Exchangeable Preferred Stock into 10 1/2% Convertible
Subordinated Debentures due
April 30, 2004.
(c) The Parent will not prepay, purchase, repurchase, redeem,
defease or covenant defease the Subordinated Debt or the Senior
Subordinated Notes or the indentures under which such Debt was issued,
except (i) in shares of the Parent's stock, (ii) if no Default or Event of
Default exists or would result therefrom, prior to October 15, 1999 the
Parent may redeem in the aggregate up to 35% of the original principal
amount of the Senior Subordinated Notes with the proceeds of one or more
equity offerings pursuant to the terms of the Indenture, and (iii) if (A)
no Default or Event of Default exists, (B) no Borrowing Base deficiency
exists, and (C) only proceeds from the Term Loans are used for prepayment,
the Parent may prepay the 1999 Notes that are tendered for redemption as a
result of the Change in Control (as defined in the 1999 Notes Indenture)
caused by the Contour Transaction.
Section 9.21 GAS IMBALANCES. None of the Obligors will incur or
allow to exist, as at the end of any fiscal quarter, gas imbalances, take or pay
or other prepayments with respect to any Obligor's Oil and Gas Properties which
would require an Obligor to deliver Hydrocarbons produced from its Oil and Gas
Properties at some future time without then or thereafter receiving full payment
therefor exceeding 1.5 billion cubic feet of gas in the aggregate for all
Obligors.
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ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 EVENTS OF DEFAULT. One or more of the following
events shall constitute an "EVENT OF DEFAULT":
(a) the Borrowers shall (i) default in the payment or prepayment
when due of any principal of any Loan, or (ii) default, and such default
shall continue for five or more days, in the payment when due of any
reimbursement obligation for a disbursement made under any Letter of
Credit, any interest or any fees or other amount payable by them hereunder
or under any Loan Document; or
(b) any of the Obligors or any Subsidiary shall default in the
payment when due of any principal of or interest on any of its other Debt
aggregating $1,000,000 or more, or any event specified in any note,
agreement, indenture or other document evidencing or relating to any such
Debt shall occur if the effect of such event is to cause or to permit the
holder or holders of such Debt (or a trustee or agent on behalf of such
holder or holders) to cause, such Debt to become due or to be redeemed or
repurchased prior to its stated maturity; or
(c) any representation, warranty or certification made or deemed
made herein or in any Security Instrument by any of the Obligors or any
Subsidiary, or any certificate furnished to any Lender or the Agent
pursuant to the provisions hereof or any Security Instrument, shall prove
to have been false or misleading as of the time made or furnished in any
material and adverse respect; or
(d) the Obligors shall default in the performance of any of their
obligations under Article IX (other than Sections 9.10 and 9.15), 8.13, or
any other Article of this Agreement other than under Article VIII
(excluding Section 8.13); or the Obligors shall default in the performance
of any of their obligations under Article VIII (excluding Section 8.13),
Sections 9.10 and 9.15 or any Security Instrument (other than the payment
of amounts due which shall be governed by Section 10.01(a)) and such
default shall continue unremedied for a period of thirty (30) days (five
(5) days for defaults under Sections 9.10 and 9.15) after the earlier to
occur of (i) notice thereof to the Obligors by the Agent or any Lender
(through the Agent), or (ii) the Obligors otherwise becoming aware of such
default; or
(e) any of the Obligors shall admit in writing its inability to, or
be generally unable to, pay its Debts as such Debts become due; or
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(f) any of the Obligors shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Federal Bankruptcy Code (as now
or hereafter in effect), (iv) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under the Federal
Bankruptcy Code, or (vi) take any corporate or partnership action for the
purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application
or consent of any of the Obligors, in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, dissolution or winding-up of
such Obligor, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of
such Obligor of all or any substantial part of its assets, or (iii)
similar relief in respect of such Obligor under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of
the foregoing shall be entered and continue unstayed and in effect, for a
period of 60 days; or (iv) an order for relief against such Obligor shall
be entered in an involuntary case under the Federal Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in excess of
$100,000 in the aggregate shall be rendered by a court against any of the
Obligors or any Subsidiary and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within thirty (30) days from the date of
entry thereof and such Obligor or such Subsidiary shall not, within said
period of 30 days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) the Security Instruments after delivery thereof shall for any
reason, except to the extent permitted by the terms thereof, cease to be
in full force and effect and valid, binding and enforceable in accordance
with their terms, or cease to create a valid and perfected Lien of the
priority required thereby on any of the collateral purported to be covered
thereby, except to the extent permitted by the terms of this Agreement or
resulting from any act or omission by the Agent, or any of the Obligors
shall so state in writing; or
(j) a Change of Control shall occur; or
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(k) the occurrence of any event which requires mandatory prepayment
or repurchase, in whole or in part, of the Senior Subordinated Notes or
the Subordinated Debt, excluding any redemptions of the 1999 Notes
resulting from the Change in Control (as defined in the 1999 Notes
Indenture) caused by the Contour Transaction.
Section 10.02 REMEDIES.
(a) In the case of an Event of Default other than one referred to in
clauses (e), (f) or (g) of Section 10.01, the Agent may and, upon request
of the Majority Lenders, shall, by notice to the Borrowers, cancel the
Commitments and/or declare the principal amount then outstanding of, and
the accrued interest on, the Loans and all other amounts payable by the
Borrowers hereunder and under the Notes (including without limitation the
payment of cash collateral to secure the LC Exposure as provided in
Section 2.10(b)) to be forthwith due and payable, whereupon such amounts
shall be immediately due and payable without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other
formalities of any kind, all of which are hereby expressly waived by the
Borrowers.
(b) In the case of the occurrence of an Event of Default referred to
in clauses (e), (f) or (g) of Section 10.01, the Commitments shall be
automatically canceled and the principal amount then outstanding of, and
the accrued interest on, the Loans and all other amounts payable by the
Borrowers hereunder and under the Notes (including without limitation the
payment of cash collateral to secure the LC Exposure as provided in
Section 2.10(b) hereof) shall become automatically immediately due and
payable without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other formalities of any kind, all
of which are hereby expressly waived by the Borrowers.
(c) Except for any Minority Proceeds, all proceeds received after
maturity of the Notes, whether by acceleration or otherwise, and all
proceeds received from the exercise of any remedies after the occurrence
and during the continuance of an Event of Default shall be applied first
to reimbursement of expenses and indemnities provided for in this
Agreement and the Security Instruments; second to accrued interest on the
Notes; third to fees; fourth pro rata to principal outstanding on the
Notes and other Indebtedness; fifth to serve as cash collateral to be held
by the Agent to secure the LC Exposure; and any excess shall be paid to
the Borrowers or as otherwise required by any Governmental Requirement.
(d) "MINORITY PROCEEDS" shall mean the amount of proceeds from time
to time equal to the Minority Percentage of any proceeds received by the
Agent or any Lender from the Mortgaged Property owned by either 92 JV or
94 JV by exercise of any rights or remedies under the Security Instruments
after the Allocable Indebtedness of 92 JV or 94 JV, as applicable, has
been paid in full. The Minority Proceeds shall not be applied as provided
in
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Section 10.02(c) but shall be paid to 92 JV or 94 JV, as the case may be
to the extent of the ownership of such proceeds, or as otherwise required
by any Governmental Requirement. Unless KOC provides the Agent with a
determination of how much of any proceeds are Minority Proceeds in such
detail as reasonably required by the Agent on or before the receipt of
such proceeds, the Agent may apply all such proceeds as provided in
Section 10.02(c). In addition to such other information reasonably
requested by the Agent, KOC must provide the detail of the ownership of
such proceeds including the ownership of the underlying Oil and Gas
Property and the then current Allocable Indebtedness and Minority
Percentage for each of 92 JV and 94 JV. The Lenders will return any
Minority Proceeds received by any of them, if they are notified by the
Borrowers promptly after the Borrowers determine that Minority Proceeds
have been paid to the Lenders and if the other information required by
this Section 10.02(d) has been provided as required hereby. "DDP'S SHARE"
shall mean for 92 JV or 94 JV the percentage required to be distributed at
that time by the 92 JV to the 92 DDP or by the 94 JV to the 94 DDP,
respectively. "MINORITY PERCENTAGE" shall mean for 92 JV or 94 JV the
product of the DDP's Share times the percentage required to be distributed
at that time by the 92 DDP or 94 DDP Partnership Agreement, as applicable,
to partners of 92 DDP or 94 DDP, respectively, that are not an Obligor or
an Affiliate of an Obligor. "ALLOCABLE INDEBTEDNESS" shall mean for 92 JV
or 94 JV the amount of the outstanding Indebtedness or Prior Debt the
proceeds of which were advanced by a Borrower to or used by a Borrower to
pay Debt of, 92 JV or 94 JV, as the case may be.
ARTICLE XI
THE AGENT
Section 11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the Security Instruments with such powers as are specifically delegated to
the Agent by the terms of this Agreement and the Security Instruments, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 11.05 and the first sentence of
Section 11.06 shall include reference to its Affiliates and its and its
Affiliates' officers, directors, employees, attorneys, accountants, experts and
agents): (i) shall have no duties or responsibilities except those expressly set
forth in this Agreement, and shall not by reason of this Agreement be a trustee
or fiduciary for any Lender; (ii) makes no representation or warranty to any
Lender and shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by any of them
under, this Agreement, or for the value, validity, effectiveness, genuineness,
execution, legality, enforceability or sufficiency of this Agreement, any Note
or any other document referred to or provided for herein or for any failure by
the Obligors or
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any other Person (other than the Agent) to perform any of its obligations
hereunder or thereunder or for the existence, value, perfection or priority of
any collateral security or the financial or other condition of the Obligors, its
Subsidiaries or any other obligor or guarantor; (iii) except pursuant to Section
11.07 shall not be required to initiate or conduct any litigation or collection
proceedings hereunder; and (iv) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith including its own
ordinary negligence, except for its own gross negligence or willful misconduct.
The Agent may employ agents, accountants, attorneys and experts and shall not be
responsible for the negligence or misconduct of any such agents, accountants,
attorneys or experts selected by it in good faith or any action taken or omitted
to be taken in good faith by it in accordance with the advice of such agents,
accountants, attorneys or experts. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof permitted hereunder shall have been
filed with the Agent.
Section 11.02 RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telecopier, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent.
Section 11.03 DEFAULTS. The Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans or of fees or failure to reimburse for Letter
of Credit drawings) unless the Agent has received notice from a Lender or the
Borrowers specifying such Default and stating that such notice is a "Notice of
Default." In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Lenders. In the
event of a payment Default, the Agent shall give each Lender prompt notice of
each such payment Default.
Section 11.04 RIGHTS AS A LENDER. With respect to its Commitments
and the Loans made by it and its participation in the issuance of Letters of
Credit, TCB (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. TCB (and any successor acting as
Agent) and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with the Obligors (and any of its Affiliates) as if it
were not acting as the Agent, and TCB and its Affiliates may accept fees and
other consideration from the Obligors for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
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Section 11.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
AGENT AND THE ISSUING BANK RATABLY IN ACCORDANCE WITH THEIR PERCENTAGE SHARES
FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 12.03 TO THE EXTENT NOT
INDEMNIFIED OR REIMBURSED BY THE BORROWERS UNDER SECTION 12.03, BUT WITHOUT
LIMITING THE OBLIGATIONS OF THE BORROWERS UNDER SAID SECTION 12.03 AND FOR ANY
AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE
WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT OR
THE ISSUING BANK IN ANY WAY RELATING TO OR ARISING OUT OF: (I) THIS AGREEMENT,
THE SECURITY INSTRUMENTS OR ANY OTHER DOCUMENTS CONTEMPLATED BY OR REFERRED TO
HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT
HAS OCCURRED AND IS CONTINUING, NORMAL ADMINISTRATIVE COSTS AND EXPENSES
INCIDENT TO THE PERFORMANCE OF ITS AGENCY DUTIES HEREUNDER OR (II) THE
ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT, ANY SECURITY INSTRUMENT OR OF
ANY SUCH OTHER DOCUMENTS; WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN THIS
SECTION 11.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE AGENT OR THE
ISSUING BANK, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING
TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PARTY TO BE INDEMNIFIED.
Section 11.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Obligors and its
decision to enter into this Agreement, and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement.
The Agent shall not be required to keep itself informed as to the performance or
observance by the Obligors of this Agreement, the Notes, the Security
Instruments or any other document referred to or provided for herein or to
inspect the properties or books of the Obligors. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Obligors (or any
of its Affiliates) which may come into the possession of the Agent or any of its
Affiliates. In this regard, each Lender acknowledges that ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
is acting in this transaction as special counsel to the Agent only, except to
the extent otherwise expressly stated in any legal opinion or any Loan Document.
Each Lender will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein.
Section 11.07 ACTION BY AGENT. Except for action or other matters
expressly required of the Agent hereunder, the Agent shall in all cases be fully
justified in failing or refusing to act
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hereunder unless it shall (i) receive written instructions from a majority of
the Lenders specifying the action to be taken, and (ii) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions of a majority of the Lenders and any action taken or failure to act
pursuant thereto by the Agent shall be binding on all of the Lenders. If a
Default has occurred and is continuing, the Agent shall take such action with
respect to such Default as shall be directed by a majority of the Lenders in the
written instructions (with indemnities) described in this Section 11.07,
provided that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interests of the Lenders. In no event, however, shall the Agent be
required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement and the Security Instruments or applicable
law.
Section 11.08 RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the Borrowers,
and the Agent may be removed at any time with or without cause by a majority of
the Lenders. Upon any such resignation or removal, a majority of the Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by a majority of the Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation or a majority of the Lenders' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent.
Upon the acceptance of such appointment hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article XI and Section 12.03 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent.
Section 11.09 CSI. CSI shall not have any rights, powers,
obligation, liabilities, responsibilities, or duties under any Loan Document.
ARTICLE XII
MISCELLANEOUS
Section 12.01 WAIVER. No failure on the part of the Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
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further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
Section 12.02 NOTICES. All notices and other communications provided
for herein and in the Security Instruments (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the Security
Instruments) shall be given or made by telex, telecopy, telegraph, cable,
courier or U.S. Mail or in writing and telexed, telecopied, telegraphed, cabled,
mailed or delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof or in the Security
Instruments or, as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise provided in this
Agreement or in the Security Instruments, all such communications shall be
deemed to have been duly given when transmitted by telex or telecopier,
delivered to the telegraph or cable office or personally delivered or, in the
case of a mailed notice, three (3) Business Days after the date deposited in the
mails, postage prepaid, in each case given or addressed as aforesaid.
Section 12.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC.
(a) THE OBLIGORS AGREE (I) TO PAY OR REIMBURSE EACH LENDER, THE
AGENT AND CSI FOR ALL THEIR REASONABLE 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 (A) COUNSEL TO THE
AGENT AND (B) THE AGENT CUSTOMARILY CHARGED BY IT IN CONNECTION WITH
SYNDICATED CREDITS, (II) TO PAY OR REIMBURSE EACH LENDER, THE AGENT AND
CSI FOR ALL THEIR 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 (INCLUDING,
WITHOUT LIMITATION, THE ALLOCATED COSTS OF IN-HOUSE COUNSEL) TO EACH
LENDER AND OF COUNSEL TO THE AGENT, (III) TO PAY, INDEMNIFY, HOLD EACH
LENDER, THE AGENT AND CSI (AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS)("INDEMNIFIED PARTIES") 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
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CONSENT UNDER OR IN RESPECT OF, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS
AND ANY SUCH OTHER DOCUMENTS, AND (IV) TO PAY, INDEMNIFY, AND HOLD EACH
INDEMNIFIED PARTY HARMLESS FROM AND AGAINST ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES (INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL
DAMAGES), PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND OR NATURE AS A RESULT OF, ARISING OUT OF OR IN
ANY WAY RELATED 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 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 THE PAST, PRESENT, OR
FUTURE OPERATIONS OF THE OBLIGORS, OR APPLICABLE TO THE OBLIGORS' PAST,
PRESENT, OR FUTURE OWNERSHIP OF ANY PROPERTY (ALL OF THE FOREGOING IN THIS
CLAUSE (IV), COLLECTIVELY, THE "INDEMNITY MATTERS"), INCLUDING INDEMNITY
MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED
PARTY, PROVIDED THAT THE OBLIGORS SHALL HAVE NO OBLIGATION UNDER THIS
CLAUSE (IV) TO ANY INDEMNIFIED PARTY WITH RESPECT TO INDEMNIFIED
LIABILITIES ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH PERSON.
(b) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be unreasonably
withheld; provided, that it shall not be reasonable for the indemnitor to
withhold consent to any settlement that an Indemnified Party proposes, if
the indemnitor does not have the financial ability to pay all its
obligations outstanding and asserted against the indemnitor at that time,
including the maximum potential claims against the Indemnified Party to be
indemnified pursuant to this Section 12.03.
(c) In the case of any indemnification hereunder, the Agent or
Lender, as appropriate shall give notice to the Obligors of any such claim
or demand being made against the Indemnified Party and the Obligors shall
have the non-exclusive right to join in the defense against any such claim
or demand provided that if the Obligors provide a defense, the Indemnified
Party shall bear its own cost of defense unless there is a conflict
between the Obligors and such Indemnified Party.
(d) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED
PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR
CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE
ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT
CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF
THE
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INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT
ON ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN
INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL
CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS FOUND
TO HAVE OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY.
(e) The Obligors' obligations under this Section 12.03 shall survive
any termination of this Agreement and the payment of the Notes and shall
continue thereafter in full force and effect.
(f) The Obligors shall pay any amounts due under this Section 12.03
within thirty (30) days of the receipt by the Obligors of notice of the
amount due.
Section 12.04 AMENDMENTS, ETC. Any provision of this Agreement or
any Security Instrument may be amended, modified or waived with the Obligors'
and the Majority Lenders' prior written consent; provided that (i) no amendment,
modification or waiver which extends the maturity of the Loans, increases the
Aggregate Maximum Revolving Credit Amounts, modifies the Borrowing Base,
forgives the principal amount of any Indebtedness outstanding under this
Agreement, releases any of the collateral (other than pursuant to Section 9.14
or as otherwise expressly provided by this Agreement), reduces the interest rate
applicable to the Loans or the fees payable to the Lenders generally, affects
Section 2.03(a), this Section 12.04 or Section 12.06(a) or modifies the
definition of "Majority Lenders" shall be effective without consent of all
Lenders; (ii) no amendment, modification or waiver which increases the Maximum
Revolving Credit Amount of any Lender shall be effective without the consent of
such Lender; and (iii) no amendment, modification or waiver which modifies the
rights, duties or obligations of the Agent shall be effective without the
consent of the Agent.
Section 12.05 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 12.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Borrowers may not assign their rights or obligations
hereunder or under the Notes or any Letters of Credit without the prior
consent of all of the Lenders and the Agent.
(b) Any Lender may, upon the written consent of the Agent and, and
if no Event of Default has occurred and is continuing, the Borrowers
(which consent will not be
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unreasonably withheld), assign to one or more assignees all or a portion
of its rights and obligations under this Agreement pursuant to an
Assignment Agreement substantially in the form of EXHIBIT F (an
"ASSIGNMENT") PROVIDED, HOWEVER, that (i) any such assignment shall be in
the amount of at least $5,000,000 or such lesser amount to which the
Borrowers and the Agent have consented and (ii) the assignee shall pay to
the Agent a processing and recordation fee of $2,500 for each assignment.
Any such assignment will become effective upon the execution and delivery
to the Agent of the Assignment and the consent of the Agent and the
Borrowers. Promptly after receipt of an executed Assignment, the Agent
shall send to the Borrowers a copy of such executed Assignment. Upon
receipt of such executed Assignment, the Borrowers will, at their own
expense, execute and deliver new Notes to the assignor and/or assignee, as
appropriate, in accordance with their respective interests as they appear.
Upon the effectiveness of any assignment pursuant to this Section
12.06(b), the assignee will become a "Lender," if not already a "Lender,"
for all purposes of this Agreement and the Security Instruments. The
assignor shall be relieved of its obligations hereunder to the extent of
such assignment (and if the assigning Lender no longer holds any rights or
obligations under this Agreement, such assigning Lender shall cease to be
a "Lender" hereunder except that its rights under Sections 4.06, 5.01,
5.05 and 12.03 shall not be affected). The Agent will prepare on the last
Business Day of each month during which an assignment has become effective
pursuant to this Section 12.06(b), a new EXHIBIT G giving effect to all
such assignments effected during such month, and will promptly provide the
same to the Borrowers and each of the Lenders.
(c) Each Lender may transfer, grant or make participations in all or
any part of such Lender's interests hereunder pursuant to this Section
12.06(c) to any Person, PROVIDED that: (i) such Lender shall remain a
"Lender" for all purposes of this Agreement and the transferee of such
participation shall not constitute a "Lender" hereunder; and (ii) no
participant under any such participation shall have rights to approve any
amendment to or waiver of any of the Loan Documents except to the extent
such amendment or waiver would (x) extend the Revolving Credit Termination
Date, (y) reduce the interest rate (other than as a result of waiving the
applicability of any post-default increases in interest rates) or fees
applicable to any of the Commitments or Loans or Letters of Credit in
which such participant is participating, or postpone the payment of any
thereof, or (z) release all or substantially all of the collateral (except
as expressly provided in the Security Instruments) supporting any of the
Commitments or Loans or Letters of Credit in which such participant is
participating. In the case of any such participation, the participant
shall not have any rights under this Agreement or any of the Security
Instruments (the participant's rights against the granting Lender in
respect of such participation to be those set forth in the agreement with
such Lender creating such participation), and all amounts payable by the
Borrowers hereunder shall be determined as if such Lender had not sold
such participation, PROVIDED that such participant shall be entitled to
receive additional amounts under Article V on the same basis
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as if it were a Lender and be indemnified under Section 12.03 as if it
were a Lender. In addition, each agreement creating any participation must
include an agreement by the participant to be bound by the provisions of
Section 12.15.
(d) The Lenders may furnish any information concerning the Borrowers
in the possession of the Lenders from time to time to assignees and
participants (including prospective assignees and participants); provided
that, such Persons agree (prior to any such information being furnished)
to be bound by the provisions of Section 12.15 hereof.
(e) Notwithstanding anything in this Section 12.06 to the contrary,
any Lender may assign and pledge all or any of its Notes to any Federal
Reserve Bank or the United States Treasury as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve System
and any operating circular issued by such Federal Reserve System and/or
such Federal Reserve Bank. No such assignment and/or pledge shall release
the assigning and/or pledging Lender from its obligations hereunder.
(f) Notwithstanding any other provisions of this Section 12.06, no
transfer or assignment of the interests or obligations of any Lender or
any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrowers to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws
of any state.
Section 12.07 INVALIDITY. In the event that any one or more of the
provisions contained in any of the Loan Documents or the Letters of Credit, the
Letter of Credit Agreements shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of the Notes, this Agreement or any
Security Instrument.
Section 12.08 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 12.09 REFERENCES. The words "herein," "hereof," "hereunder"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
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Section 12.10 SURVIVAL. The obligations of the parties under Section
4.06, Article V, and Sections 11.05 and 12.03 shall survive the repayment of the
Loans and the termination of the Commitments. To the extent that any payments on
the Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Agent's and the Lenders' Liens, security interests,
rights, powers and remedies under this Agreement and each Security Instrument
shall continue in full force and effect. In such event, each Security Instrument
shall be automatically reinstated and the Obligors shall take such action as may
be reasonably requested by the Agent and the Lenders to effect such
reinstatement.
Section 12.11 CAPTIONS. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
Section 12.12 NO ORAL AGREEMENTS. The Loan Documents embody the
entire agreement and understanding between the parties and supersede all other
agreements and understandings between such parties relating to the subject
matter hereof and thereof. The Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(A) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT
THAT UNITED STATES FEDERAL LAW PERMITS ANY LENDER TO CHARGE INTEREST AT
THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED.
CH. 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING
CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO
THIS AGREEMENT OR THE NOTES.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN
DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OBLIGOR HEREBY ACCEPTS FOR
ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.
EACH OBLIGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
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LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES
NOT PRECLUDE THE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER ANY
OF THE OBLIGORS IN ANY COURT OTHERWISE HAVING JURISDICTION.
(C) EACH OBLIGOR HEREBY IRREVOCABLY DESIGNATES ▇▇▇▇▇▇ OIL
CORPORATION LOCATED AT ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, AS
THE DESIGNEE, APPOINTEE AND AGENT OF SUCH OBLIGOR TO RECEIVE, FOR AND ON
BEHALF OF SUCH OBLIGOR, SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN
DOCUMENTS. IT IS UNDER STOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH
AGENT WILL BE PROMPTLY FORWARDED TO SUCH OBLIGOR AT ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW, BUT THE FAILURE OF SUCH OBLIGOR TO RECEIVE SUCH
COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. EACH OBLIGOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH
OBLIGOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE THREE (3)
DAYS AFTER SUCH MAILING.
(D) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER
OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
OBLIGORS IN ANY OTHER JURISDICTION.
Section 12.14 INTEREST. It is the intention of the parties hereto
that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of New York or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrowers); and (ii) in the event that
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the maturity of the Notes is accelerated by reason of an election of the holder
thereof resulting from any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Lender may never include
more than the maximum amount allowed by such applicable law, and excess
interest, if any, provided for in this Agreement or otherwise shall be canceled
automatically by such Lender as of the date of such acceleration or prepayment
and, if theretofore paid, shall be credited by such Lender on the principal
amount of the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrowers). All sums paid or agreed to be paid to any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Lender, be amortized, prorated, allocated
and spread throughout the full term of the Loans evidenced by the Notes until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to any
Lender on any date shall be computed at the Highest Lawful Rate applicable to
such Lender pursuant to this Section 12.14 and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to such
Lender would be less than the amount of interest payable to such Lender computed
at the Highest Lawful Rate applicable to such Lender, then the amount of
interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.14.
Section 12.15 CONFIDENTIALITY. In the event that the Borrowers
provide to the Agent or the Lenders written confidential information belonging
to the Borrowers, if the Borrowers shall denominate such information in writing
as "confidential", the Agent and the Lenders shall thereafter maintain such
information in confidence in accordance with reasonable standards of care and
diligence and not use or exploit such information for any purpose other than the
transaction contemplated hereunder. This obligation of confidence shall not
apply to such portions of the information which (i) are in the public domain,
(ii) hereafter become part of the public domain without the Agent or the Lenders
breaching their obligation of confidence to the Borrowers, (iii) are previously
known by the Agent or the Lenders from some source other than the Borrowers,
(iv) are hereafter developed by the Agent or the Lenders without using the
Borrowers' information, (v) are hereafter obtained by or available to the Agent
or the Lenders from a third party who owes no obligation of confidence to the
Borrowers with respect to such information or through any other means other than
through disclosure by the Borrowers, (vi) are disclosed with the Borrowers'
consent, (vii) must be disclosed either pursuant to any Governmental Requirement
or to Persons regulating the activities of the Agent or the Lenders, or (viii)
as may be required by law or regulation or order of any Governmental Authority
in any judicial, arbitration or governmental proceeding. Further, the Agent or a
Lender may disclose any such information to an Affiliate, any other Lender,
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any independent petroleum engineers or consultants, any independent certified
public accountants, any legal counsel employed by such Person in connection with
this Agreement or any Security Instrument, including without limitation, the
enforcement or exercise of all rights and remedies thereunder, or any assignee
or participant (including prospective assignees and participants) in the Loans;
provided, however, that the Agent or Lender imposes on the Person to whom such
information is disclosed the same obligation to maintain the confidentiality of
such information as is imposed upon it hereunder. Notwithstanding anything to
the contrary provided herein, this obligation of confidence shall cease three
(3) years from the date the information was furnished, unless the Borrowers
request in writing at least thirty (30) days prior to the expiration of such
three year period, to maintain the confidentiality of such information for an
additional three year period. The Borrowers waive any and all other rights it
may have to confidentiality as against the Agent and the Lenders arising by
contract, agreement, statute or law except as expressly stated in this Section
12.15.
Section 12.16 EFFECTIVENESS. This Agreement shall be effective on
the Closing Date (the "EFFECTIVE DATE").
Section 12.17 PRIOR DEBT SECURITY INSTRUMENTS. In the event that any
of the terms, conditions, covenants, representations, or warranties contained in
any of the Security Instruments assigned to the Lender by the Prior Debt holders
are inconsistent or conflict with the terms of this Agreement, the terms of this
Agreement shall control for all purposes.
Section 12.18 RELEASE OF SECURITY INSTRUMENTS. Upon payment in full
of the Indebtedness and termination of the Commitment and this Credit Agreement,
the Agent and the Lenders shall promptly cause satisfaction and release of the
Security Instruments to be entered upon the record at the expense of the
Borrowers and shall execute and deliver or cause to be executed and delivered
such instruments of satisfaction and release as may be appropriate to effectuate
same.
[SIGNATURES BEGIN NEXT PAGE]
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The parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.
BORROWERS: ▇▇▇▇▇▇ OPERATING COMPANY, LTD.
By: ▇▇▇▇▇▇ Oil Corporation,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
▇▇▇▇▇▇ OIL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
S - 1
▇▇▇▇▇▇ OIL & GAS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
GUARANTORS: CONCORDE GAS MARKETING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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▇▇▇▇▇▇ PARTNERS 1992 DEVELOPMENT
DRILLING JOINT VENTURE
By: ▇▇▇▇▇▇ Partners 1992 Development Drilling
Program, the Managing Joint Venturer
By: ▇▇▇▇▇▇ Oil Corporation, its Managing
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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▇▇▇▇▇▇ PARTNERS 1994 DEVELOPMENT
DRILLING JOINT VENTURE
By: ▇▇▇▇▇▇ Partners 1994 Development Drilling
Program, the Managing Joint Venturer
By: ▇▇▇▇▇▇ Oil Corporation, its Managing
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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▇▇▇▇▇▇ PARTNERS 1992
DEVELOPMENT DRILLING PROGRAM
By: ▇▇▇▇▇▇ Oil Corporation, its Managing
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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▇▇▇▇▇▇ PARTNERS 1994 DEVELOPMENT
DRILLING PROGRAM
By: ▇▇▇▇▇▇ Oil Corporation, its Managing
General Partner
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Treasurer
Address for Notices:
▇▇▇▇▇▇ Oil Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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LENDER AND AGENT: TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, individually and as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate and
Eurodollar Loans (Borrowing
Notification, Rate Setting Information
and Relationship Manager Information):
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Managing Director
Notices for Receipt and Payment of Funds:
Loan Syndication Services
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇ 46
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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LENDERS: UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:Vice President
Lending Office for Base Rate and
Eurodollar Loans:
Specialized Lending Note Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
S - 8
BANQUE PARIBAS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Group Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Lending Office for Base Rate and
Eurodollar Loans:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
S - 9
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:Vice President
Lending Office for Base Rate and
Eurodollar Loans:
Bank of America National Trust and Savings
Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 312/974-9626
Telephone No.: 312/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address for Notices:
Bank of America National Trust and Savings
Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: 713/651-4841
Telephone No.: 713/▇▇▇-▇▇▇▇
S - 10
AMENDED AND RESTATED BANK CREDIT AGREEMENT
Dated as of December 1, 1997
LIST OF EXHIBITS / SCHEDULES (Not Filed)*
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Term Note
Exhibit B Form of Borrowing, Continuation and Conversion Request
Exhibit C Form of Compliance Certificate
Exhibit D List of Security Instruments
Exhibit E Form of Assignment Agreement
Exhibit F List of Maximum Revolving Credit Amounts and Term Loans
Schedule 7.02 Liabilities
Schedule 7.03 Litigation
Schedule 7.09 Taxes
Schedule 7.10 Titles, etc.
Schedule 7.14 Subsidiaries and Partnerships
Schedule 7.17 Environmental Matters
Schedule 7.19 Insurance
Schedule 7.20 Hedging Agreements
Schedule 9.01 Debt
Schedule 9.02 Liens
Schedule 9.03 Investments, Loans and Advances
Schedule 9.16 Transactions with Affiliates
* Omitted Exhibits and Schedules will be furnished to the Securities and
Exchange Commission, supplementally, if requested.
