Exhibit 10.32
AMENDED AND RESTATED CREDIT AGREEMENT
Among
McMoRan OIL & GAS LLC,
as Borrower,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Agent,
and
THE LENDERS SIGNATORY HERETO
Dated as of January ___, 2000
$35,000,000 Revolving Credit Facility
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Accounting Matters -1-
Section 1.01 Terms Defined Above -1-
Section 1.02 Certain Defined Terms -1-
Section 1.03 Accounting Terms and Determinations -14-
ARTICLE II Commitments -15-
Section 2.01 Loans and Letters of Credit -15-
Section 2.02 Borrowings, Continuations and Conversions,
Letters of Credit -15-
Section 2.03 Changes of Commitments -17-
Section 2.04 Fees -18-
Section 2.05 Several Obligations -19-
Section 2.06 Notes -19-
Section 2.07 Prepayments -20-
Section 2.08 Borrowing Base; Threshold Amount -21-
Section 2.09 Assumption of Risks -23-
Section 2.10 Obligation to Reimburse and to Prepay -24-
Section 2.11 Lending Offices -25-
ARTICLE III Payments of Principal and Interest -25-
Section 3.01 Repayment of Loans -25-
Section 3.02 Interest -25-
ARTICLE IV Payments; Pro Rata Treatment; Computations; Etc. -26-
Section 4.01 Payments -26-
Section 4.02 Pro Rata Treatment -27-
Section 4.03 Computations -27-
Section 4.04 Non-receipt of Funds by the Agent -27-
Section 4.05 Set-off, Sharing of Payments, Etc. -28-
Section 4.06 Taxes -28-
Section 4.07 Disposition of Proceeds -31-
ARTICLE V Capital Adequacy -32-
Section 5.01 Additional Costs -32-
Section 5.02 Limitation on Eurodollar Loans -33-
Section 5.03 Illegality -34-
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02
and 5.03 -34-
Section 5.05 Compensation -34-
Section 5.06 Replacement Lenders. -35-
ARTICLE VI Conditions Precedent -36-
Section 6.01 Initial Funding -36-
Section 6.02 Initial and Subsequent Loans and Letters of
Credit -38-
Section 6.03 Conditions Relating to Letters of Credit -38-
ARTICLE VII Representations and Warranties -39-
Section 7.01 Existence -39-
Section 7.02 Financial Condition -39-
Section 7.03 Litigation -39-
Section 7.04 No Breach -40-
Section 7.05 Authority -40-
Section 7.06 Approvals -40-
Section 7.07 Use of Loans -40-
Section 7.08 ERISA -41-
Section 7.09 Taxes -42-
Section 7.10 Titles, etc. -42-
Section 7.11 No Material Misstatements -43-
Section 7.12 Investment Company Act -43-
Section 7.13 Public Utility Holding Company Act -43-
Section 7.14 Subsidiaries -43-
Section 7.15 Location of Business and Offices -43-
Section 7.16 Defaults -43-
Section 7.17 Environmental Matters -43-
Section 7.18 Compliance with the Law -45-
Section 7.19 Insurance -45-
Section 7.20 Hedging Agreements -46-
Section 7.21 Restriction on Liens -46-
Section 7.22 Material Agreements -46-
Section 7.23 Gas Imbalances -46-
Section 7.24 Year 2000 -46-
ARTICLE VIII Affirmative Covenants -47-
Section 8.01 Financial Statements -47-
Section 8.02 Litigation -49-
Section 8.03 Maintenance, Etc. -49-
Section 8.04 Environmental Matters -50-
Section 8.05 Further Assurances -51-
Section 8.06 Performance of Obligations -51-
Section 8.07 Engineering Reports -51-
Section 8.08 Title Information -53-
Section 8.09 Collateral -53-
Section 8.10 ERISA Information and Compliance -54-
ARTICLE IX Negative Covenants -54-
Section 9.01 Debt -55-
Section 9.02 Liens -56-
Section 9.03 Investments, Loans and Advances -56-
Section 9.04 Dividends, Distributions and Redemptions -57-
Section 9.05 Sales and Leasebacks -58-
Section 9.06 Nature of Business -58-
Section 9.07 Mergers, Etc. -58-
Section 9.08 Proceeds of Notes -59-
Section 9.09 ERISA Compliance -59-
Section 9.10 Sale or Discount of Receivables -60-
Section 9.11 Ratio of Debt to EBITDAX -60-
Section 9.12 Interest Coverage Ratio -60-
Section 9.13 Sale of Oil and Gas Properties -61-
Section 9.14 Environmental Matters -61-
Section 9.15 Transactions with Affiliates -61-
Section 9.16 Subsidiaries -61-
Section 9.17 Negative Pledge Agreements -62-
Section 9.18 Gas Imbalances, Take-or-Pay or Other
Prepayments -62-
ARTICLE X Events of Default; Remedies -62-
Section 10.01 Events of Default -62-
Section 10.02 Remedies -64-
ARTICLE XI The Agent -65-
Section 11.01 Appointment, Powers and Immunities -65-
Section 11.02 Reliance by Agent -66-
Section 11.03 Defaults -66-
Section 11.04 Rights as a Lender -66-
Section 11.05 INDEMNIFICATION -66-
Section 11.06 Non-Reliance on Agent and other Lenders -67-
Section 11.07 Action by Agent -67-
Section 11.08 Resignation or Removal of Agent -67-
ARTICLE XII Miscellaneous -68-
Section 12.01 Waiver -68-
Section 12.02 Notices -68-
Section 12.03 Payment of Expenses, Indemnities, etc -68-
Section 12.04 Amendments, Etc. -71-
Section 12.05 Successors and Assigns -71-
Section 12.06 Assignments and Participations -71-
Section 12.07 Invalidity -73-
Section 12.08 Counterparts -73-
Section 12.09 References -73-
Section 12.10 Survival -73-
Section 12.11 Captions -73-
Section 12.12 NO ORAL AGREEMENTS -73-
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION -74-
Section 12.14 Interest -75-
Section 12.15 Confidentiality -76-
Section 12.16 Effectiveness -77-
Section 12.17 EXCULPATION PROVISIONS -77-
Annex I - List of Maximum Credit Amounts
Exhibit A - Form of Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Legal Opinion of Jones, Walker, Waechter,
Poitevent,Carrere & ▇▇▇▇▇▇▇ L.L.P.
Exhibit E - List of Security Instruments
Exhibit F - Form of Assignment Agreement
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Unrestricted Subsidiaries
Schedule 7.17 - Environmental Matters
Schedule 7.19 - Insurance
Schedule 7.20 - Hedging Agreements
Schedule 7.21 - Restrictions on Liens
Schedule 7.22 - Material Agreements and Properties
Schedule 7.23 - Gas Imbalances
Schedule 9.01 - Debt
Schedule 9.02 - Liens
Schedule 9.03 - Investments, Loans and Advances
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of
January ___, 2000 is among: McMoRan OIL & GAS LLC (successor by
merger with McMoRan Oil & Gas Co.), formed under the laws of the
State of Delaware (together with its successors and assigns, the
"Borrower"); 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"); and CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, a national banking association (in its
individual capacity, "Chase"), as agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"Agent").
R E C I T A L S
A. Pursuant to that certain Credit Agreement dated as of
August 19, 1998, by and among the Company, the Agent and the
lenders party thereto (such Credit Agreement, as heretofore amended
and supplemented, the "Existing Credit Agreement"), the Company
received certain loans and extensions of credit under a revolving
credit facility made available to the Company under the Existing
Credit Agreement, evidenced by those certain promissory notes in
the aggregate principal amount of $20,000,000, issued by the
Company under and pursuant to the Existing Credit Agreement (the
"Prior Notes").
B. The Company, the Agent and the Lenders mutually desire to
amend and restate in its entirety the Existing Credit Agreement to,
among other things, provide for the modifications described above.
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 that
the Existing Credit Agreement is hereby amended and restated in its
entirety to read as follows:
ARTICLE I
Definitions and Accounting Matters
tc \l1 " ARTICLE I Definitions and Accounting Matters
Section 1.01 Terms Defined Above tc \l2 "Section
1.01 Terms Defined Above . As used in this Agreement, the terms
"Agent," "Borrower," "Chase," "Existing Credit Agreement,"
"Lender," "Lenders" and "Prior Notes" shall have the meanings
indicated above.
Section 1.02 Certain Defined Terms tc \l2 "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):
"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. For purposes
of this definition, any Person which owns directly or indirectly
35% or more of the securities having ordinary voting power for the
election of directors or other governing body of a corporation or
35% 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.
"Agreement" shall mean this Credit Agreement, as the same may
from time to time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the amount
calculated in accordance with Section 2.03(a) hereof.
"Aggregate Maximum Credit Amount" at any time shall equal the
sum of the Maximum Credit Amounts of the Lenders ($35,000,000), as
the same may be reduced pursuant to Section 2.03(b).
"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 Borrower as the office by which its
Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, the applicable per annum
percentage set forth at the appropriate intersection in the table
shown below, based on the Threshold Amount Utilization Percentage
as in effect from time to time:
Threshold Amount Utilization Percentage Eurodollar Rate Base Rate
Less than or equal to 33% 1.75% 0.0%
Greater than 33% but less than
or equal to 66% 2.00% 0.25%
Greater than 66% but less than
or equal to 100% 2.25% 0.50%
Greater than 100% 2.75% 1.00%
"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.
"Borrowing Base" shall mean at any time an amount equal to the
amount determined in accordance with Section 2.08(f).
"Borrowing Base Deficiency" shall have the meaning assigned
such term in Section 2.07(c).
"Business Day" shall mean any day other than a day on which
commercial banks are authorized or required to close in Houston,
Texas and, where such term is used in the definition of "Quarterly
Date" or if such day relates to 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 Borrower with respect to any such borrowing
or continuation, payment, prepayment, conversion or Interest
Period, any day which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Closing Date" shall mean January ___, 2000.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and any successor statute.
"Commitment" shall mean, for any Lender, its obligation to (i)
make Loans up to the lesser of such Lender's Maximum Credit Amount
or the Lender's Percentage Share of the then effective Borrowing
Base and (ii) participate in the issuance of Letters of Credit as
provided in Section 2.01(b).
"Consolidated Subsidiaries" shall mean with regard to any
entity each Subsidiary of such entity (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 such entity in accordance with GAAP.
"Debt" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money (including principal,
interest, fees and charges), (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments
(including principal, interest, fees and charges), (c) all
obligations of such Person for the unearned balance of any payment
received under any contract outstanding for 180 days, (d) all
obligations of such Person under conditional sale or other title
retention agreements relating to Property or assets purchased by
such Person, (e) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services (excluding
trade accounts payable and accrued obligations incurred in the
ordinary course of business so long as the same are not 180 days
overdue or, if overdue, are being contested in good faith and by
appropriate proceedings), (f) all Debt of others secured by (or for
which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on Property owned or acquired
by such Person, whether or not the obligations secured thereby have
been assumed, (g) all obligations of such Person, contingent or
otherwise, guaranteeing or having the economic effect of
guaranteeing Debt of others, (h) all obligations of such Person to
pay rent or other amounts under a capital lease, (i) all recourse
obligations of such Person with respect to sales of accounts
receivable which would be shown under GAAP on the balance sheet of
such Person as a liability, (j) all obligations of such Person as
an account party (including reimbursement obligations to the issuer
of a letter of credit) in respect of bankers' acceptances and
letters of credit guaranteeing Debt, (k) all noncontingent
obligations of such Person as an account party (including
reimbursement obligations to the issuer of a letter of credit) in
respect of letters of credit other than those referred to in clause
(j) above, (l) all obligations under leases which require such
Person 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, (m) 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, (n) obligations
outstanding for 180 days or more to deliver goods or services
including Hydrocarbons in consideration of advance payments, (o)
obligations to pay for goods or services in the event that such
goods or services are not actually received or utilized by such
Person, (p) any capital stock of such Person in which such Person
has a mandatory obligation to redeem such stock within two (2)
years after the Termination Date (plus any extension of such date),
(q) any Debt of a Special Entity for which such Person is liable
either by agreement or because of a Governmental Requirement, (r)
the undischarged balance of any production payment created by such
Person or for the creation of which such Person directly received
payment; and (s) all obligations of such Person under Hedging
Agreements. The Debt of any person shall exclude obligations under
leases which are characterized as operating leases.
"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.
"EBITDAX" 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 paid or accrued on the Loans to the Borrower and on other
Debt of the Borrower during such period, taxes, depreciation,
depletion, amortization and exploration expenses. As used herein,
"consolidated net income" shall mean, for any period, the amount
which, in conformity with GAAP, would be set forth opposite the
caption "net income or loss" (or any like caption) on a
consolidated income statement of the Borrower and its Consolidated
Subsidiaries (before deducting minority interests in net income of
Consolidated Subsidiaries, but disregarding all extraordinary or
unusual noncash items in calculating such consolidated net income).
The calculation of each of the items specified above will exclude
items relating to Unrestricted Subsidiaries.
"Effective Date" shall have the meaning assigned such term in
Section 12.16.
"Engineering Reports" shall have the meaning assigned such
term in Section 2.08.
"Environmental Laws" shall mean any and all applicable
Governmental Requirements pertaining to health or the environment
in effect in jurisdictions in which the Borrower or any Subsidiary
is conducting or at any time has conducted business, or where any
Property of the Borrower 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
Borrower 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 the Borrower 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) with respect to any plan, as to
which PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code or Section 302
of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of
the Code or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder, (ii)
the withdrawal of the Borrower, 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 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 which might
constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan.
"Eurodollar Loans" shall mean Loans the interest rates on
which are determined on the basis of rates referred to in the
definition of "Eurodollar Rate".
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Loan, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) quoted by the Agent at approximately 11:00 a.m.
London time (or as soon thereafter as practicable) two (2) Business
Days prior to the first day of the Interest Period for such Loan
for the offering by the Agent to leading banks in the London
interbank market of Dollar deposits having a term comparable to
such Interest Period and in an amount comparable to the principal
amount of the Eurodollar Loan to be made by the Lenders for such
Interest Period.
"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
adequate reserves 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 adequate reserves 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 or
lien in favor of operators or co-interest owners under contract 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 90 days or
which are being contested in good faith by appropriate proceedings
and for which adequate reserves 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 Borrower 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 Borrower 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 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 Borrower 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 permitted by the Security Instruments ;
(viii) required margin deposits on permitted Hedging Agreements
arising in the ordinary course of business; (ix) Liens on assets or
Properties not owned as of the Closing Date by the Borrower or any
Restricted Subsidiary securing only purchase money Debt of the
Borrower or such Restricted Subsidiary permitted by Section
9.01(f), which Liens are limited to the specific Property the
purchase of which is financed by such Debt; (x) Liens existing at
the time of acquisition by the Borrower or any Restricted
Subsidiary of the majority of the capital stock or other ownership
interests or substantially all of the assets of any other Person or
existing at the time of the merger of any such other Person into
the Borrower or any Restricted Subsidiary, on such capital stock or
other ownership interests or assets so acquired or on the assets of
the Person so merged into the Borrower or such Restricted
Subsidiary; provided, however, that such acquisition or merger (and
the discharge of such Liens referred to in the immediately
succeeding proviso) shall not otherwise result in an Event of
Default or Default; and provided further that all such Liens shall
be discharged within 180 days after the date of the respective
acquisition or merger; (xi) Liens of lessors of Property (in such
capacity) leased by the Borrower or any Restricted Subsidiary
pursuant to an operating lease or permitted capital lease, which
Lien in any such case is limited to the Property leased thereunder;
and (xii) Liens on equity or debt investments in Third Parties
owned by the Borrower or a Restricted Subsidiary (which Lien in any
case is limited to such pledged equity or debt investment) which
secure Debt of Third Parties or other Third Party obligations (or
guaranties thereof); provided that such pledged investments were
initially acquired in accordance with Section 9.03.
"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.
"Fee Letter" shall mean that certain letter agreement dated
January ____, 2000 from Chase to the Borrower, concerning certain
fees in connection with this Agreement and any agreements or
instruments executed in connection therewith, as the same may be
amended, supplemented or replaced from time to time.
"Financial Statements" shall mean the financial statement or
statements of the Borrower and its Consolidated Subsidiaries
described or referred to in Section 7.02.
"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 Borrower, the Subsidiaries
or any of their Property 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.
"Hedging Agreements" shall mean any commodity, interest rate
or currency swap, cap, floor, collar, forward agreement or other
exchange or 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 Borrower or any Restricted Subsidiary to the Agent
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 Borrower or any Restricted Subsidiary and any
Lender or any Affiliate of such Lender and permitted by the terms
of this Agreement and all renewals, refinancings, extensions and/or
rearrangements of any of the above.
"Indemnified Parties" shall have the meaning assigned such
term in Section 12.03(b).
"Indemnity Matters" shall mean any and all actions, suits,
proceedings (including any investigations, litigation or
inquiries), claims, demands and causes of action made or threatened
against a Person and, in connection therewith, all losses,
liabilities, damages (including, without limitation, consequential
damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or
concurrent negligence of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Loans
or issuance of the initial Letters of Credit, whichever occurs
first, pursuant to Section 6.01 hereof.
"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 Borrower
may select as provided in Section 2.02 (or such longer period as
may be requested by the Borrower and agreed to by the Majority
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
commence before and end after the Termination Date; (ii) 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 (iii) 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.
"LC Commitment" at any time shall mean $7,000,000.00
"LC Exposure" at any time shall mean the 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.
"Letter of Credit Agreements" shall mean the written
agreements with the Agent, as issuing lender for any Letter of
Credit, executed or hereafter executed in connection with the
issuance by the Agent of the Letters of Credit, such agreements to
be on the Agent'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 Borrower and the Agent.
"Letters of Credit" shall mean the letters of credit issued
pursuant to Section 2.01(b) and all reimbursement obligations
pertaining to any such letters of credit, and "Letter of Credit"
shall mean any one of the Letters of Credit and the reimbursement
obligations pertaining thereto.
"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 Borrower or any
Subsidiary shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, or
leases under a financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some
other Person in a transaction intended to create a financing.
"Loan Documents" shall mean this Agreement, the Notes and the
Security Instruments.
"Loans" shall mean the loans as provided for by Section
2.01(a).
"Majority Lenders" shall mean, at any time while no Loans are
outstanding, Lenders having at least seventy-five percent (75%) of
the Aggregate Commitments and, at any time while Loans are
outstanding, Lenders holding at least seventy-five percent (75%) 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 Borrower and the Restricted
Subsidiaries taken as a whole or from the facts represented or
warranted in any Loan Document, or (ii) the ability of the Borrower
and the Restricted 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 Credit Amount" shall mean, as to each Lender, the
amount set forth opposite such Lender's name on Annex I under the
caption "Maximum 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).
"MMR" shall mean McMoRan Exploration Co., a Delaware
corporation and the sole member of the Borrower.
"Mortgaged Property" shall mean the Property owned by the
Borrower 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 Sec-
tion 3(37) or 4001(a)(3) of ERISA.
"net dividends, distributions and redemptions" shall mean the
gross amount of all dividends, distributions and redemptions under
Section 9.04 of the Existing Credit Agreement after August 27,
1999, less the amount of cash contributed to the capital of the
Borrower after August 27, 1999.
"Notes" shall mean the promissory note or notes (whether one
or more) of the Borrower provided for by Section 2.06 and in the
form of Exhibit A hereto, together with any and all renewals,
extensions for any period, increases, rearrangements, substitutions
or modifications thereof.
"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.
"Other Taxes" shall have the meaning assigned such term in
Section 4.06(b).
"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 Annex I hereto, 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 the Borrower,
any Subsidiary or an ERISA Affiliate or (ii) was at any time during
the preceding six calendar years sponsored, maintained or
contributed to, by the Borrower, 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 Borrower under this
Agreement or any Note, a rate per annum during the period
commencing on the date 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 that, for a Eurodollar Loan, the
"Post-Default Rate" for such principal shall be, for the period
commencing on the date of the Event of Default and ending on the
earlier to occur of the last day of the Interest Period therefor or
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(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
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 ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or
such other location as designated by the Agent from time to time.
"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 March, June,
September and December, in each year, the first of which shall be
March 31, 2000; 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 Payment" shall have the meaning assigned such term
in Section 4.04.
"Reserve Report" shall mean a report, in form and substance
satisfactory to the Agent, to be delivered prior to March 1 of each
year, setting forth as of prior year-end: (i) the oil and gas
reserves attributable to certain of the Borrower's Oil and Gas
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. The term "Reserve Report" shall also include
the information to be provided by the Borrower pursuant to
Section 8.07(a) prior to September 1 of each year, setting forth,
as of July 1 of such year, the information required in clauses (i)
and (ii) of the preceding sentence.
"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 or
the Treasurer of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible
Officer of the Borrower.
"Restricted Subsidiary" means any direct or indirect
Subsidiary of the Borrower that is not an Unrestricted Subsidiary.
"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.
"Security Instruments" shall mean the Letters of Credit, the
Letter of Credit Agreements, the Fee Letter, the agreements or
instruments described or referred to in Exhibit E, and any and all
other agreements or instruments now or hereafter executed and
delivered by the Borrower or any other Person (other than
participation or similar agreements between any Lender and any
other lender or creditor with respect to any Indebtedness pursuant
to this Agreement) in connection with, or as security for the
payment or performance of 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.
"Special Entity" shall mean any joint venture, limited
liability company or partnership, general or limited partnership or
any other type of partnership or company other than a corporation
in which the Borrower or one or more of its other Subsidiaries is
a member, owner, partner or joint venturer and owns, directly or
indirectly, at least a majority of the equity of such entity or
controls such entity, but excluding any tax partnerships that are
not classified as partnerships under state law. For purposes of
this definition, any Person which owns directly or indirectly an
equity investment in another Person which allows the first Person
to manage or elect managers who manage the normal activities of
such second Person will be deemed to "control" such second Person
(e.g. a sole general partner controls a limited partnership).
"Subsidiary" 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 the Borrower or one or more of its Subsidiaries or by
the Borrower and one or more of its Subsidiaries and (ii) any
Special Entity. Unless otherwise indicated herein, each reference
to the term "Subsidiary" shall mean a Subsidiary of the Borrower.
"Taxes" shall have the meaning assigned such term in
Section 4.06(a).
"Termination Date" shall mean, unless the Commitments are
sooner terminated pursuant to Sections 2.03(b) or 10.02 hereof,
January ___, 2002.
"Third Party" shall have the meaning assigned such term in
Section 9.03.
"Threshold Amount" shall mean (i) during the period from and
including the Closing Date to but excluding April 28, 2000,
$30,000,000, subject to optional monthly redeterminations pursuant
to Section 2.08(d), and (ii) on April 28, 2000 and at all times
thereafter, the amount equal to the Borrowing Base.
"Threshold Amount Utilization Percentage" shall mean, as of
any day, the fraction expressed as a percentage, the numerator of
which is the sum of (i) the LC Exposure, plus (ii) the aggregate
principal amount of all outstanding Loans on such day, and the
denominator of which is the Threshold Amount in effect on such day.
For purposes of this calculation, the value of the denominator
shall be limited to the lesser of (i) the Threshold Amount then in
effect, or (ii) the Aggregate Commitments.
"Type" shall mean, with respect to any Loan, a Base Rate Loan
or a Eurodollar Loan.
"Unrestricted Subsidiary" shall mean (i) any of the
Subsidiaries listed on Schedule 7.14 hereto as an Unrestricted
Subsidiary, (ii) any Subsidiary of any Unrestricted Subsidiary,
(iii) any surviving Person (other than the Borrower or a Restricted
Subsidiary) into which any of such Persons referred to in clause
(i) or (ii) is merged or consolidated and (iv) any Subsidiary
organized after the date of this Agreement and designated as an
Unrestricted Subsidiary by the Borrower (pursuant to Section
9.16(b) hereof). By written notice to the Agent, the Borrower may
(x) declare any Unrestricted Subsidiary to be a Restricted
Subsidiary and such former Unrestricted Subsidiary shall thereafter
be deemed to be a Restricted Subsidiary for all purposes of this
Agreement (subject to the limitations of this Agreement and
pursuant to Section 9.16 hereof) or (y) at any time other than when
a Default or Event of Default has occurred and is continuing or
would exist after giving effect to such declaration, in any fiscal
year, declare one or more Restricted Subsidiaries, to be an
Unrestricted Subsidiary, subject to the limitations contained in
Section 9.03 hereof, and any such former Restricted Subsidiary
shall thereafter be deemed to be an Unrestricted Subsidiary for all
purposes of this Agreement.
"Wholly-Owned Subsidiary" shall mean, as to the Borrower, any
Subsidiary of which all of the outstanding shares of stock having
by the terms thereof ordinary voting power to elect the board of
directors of such corporation, other than directors' qualifying
shares, are owned or controlled by the Borrower or one or more of
the Wholly-Owned Subsidiaries or by the Borrower and one or more of
the Wholly-Owned Subsidiaries.
Section 1.03 Accounting Terms and Determinations tc \l2
"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 Borrower referred to in Section
7.02 (except for changes concurred with by the Borrower's
independent public accountants).
ARTICLE II
Commitments
tc \l1 " ARTICLE II Commitments
Section 2.01 Loans and Letters of Credit tc \l2 "Section
2.01 Loans and Letters of Credit .
(a) Loans. Each Lender severally agrees, on the terms
of this Agreement, to make Loans to the Borrower 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 but excluding, the
Termination Date in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount of such
Lender's Commitment as then in effect; provided, however, that
the aggregate principal amount of all Loans by all Lenders
hereunder at any one time outstanding together with the LC
Exposure shall not exceed the Aggregate Commitments. Subject
to the terms of this Agreement, during the period from the
Closing Date to but excluding the Termination Date, the
Borrower may borrow, repay and reborrow the amount described
in this Section 2.01(a).
(b) Letters of Credit. During the period from and
including the Closing Date to but excluding the Termination
Date, the Agent, as issuing bank for the Lenders, agrees, on
the terms of this Agreement, to extend credit for the account
of the Borrower at any time and from time to time by issuing,
renewing, extending or reissuing Letters of Credit; provided
however, the LC Exposure at any one time outstanding shall not
exceed the lesser of (i) the LC Commitment or (ii) the
Aggregate Commitments, as then in effect, minus the aggregate
principal amount of all Loans then outstanding. The Lenders
shall participate in such Letters of Credit according to their
respective Percentage Shares.
(c) Limitation on Types of Loans. Subject to the other
terms and provisions of this Agreement, at the option of the
Borrower, the Loans may be Base Rate Loans or Eurodollar
Loans; provided that, without the prior written consent of the
Majority Lenders, no more than six (6) Eurodollar Loans may be
outstanding at any time to any Lender.
Section 2.02 Borrowings, Continuations and Conversions,
Letters of Credit tc \l2 "Section 2.02 Borrowings, Continuations
and Conversions, Letters of Credit .
(a) Borrowings. The Borrower 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 Base Rate Loan borrowings
shall be in amounts of at least $1,000,000 or the remaining
balance of the Aggregate Commitments, if less, or any whole
multiple of $1,000,000 in excess thereof, and all Eurodollar
Loans shall be in amounts of at least $1,000,000 or any whole
multiple of $1,000,000 in excess thereof.
(c) Notices. The initial borrowing and all subsequent
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 may be revocable or irrevocable,
from the Borrower to be received by the Agent not later than
11:00 a.m. Houston, Texas time on the date of each Base Rate
Loan borrowing and three Business Days prior to the date of
each Eurodollar Loan borrowing, continuation or conversion.
Without in any way limiting the Borrower's 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 Borrower prior to
receipt of written confirmation. In each such case, the
Borrower hereby waives 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 Borrower 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 Borrower 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 $1,000,000 or any whole
multiple of $1,000,000 in excess thereof and (ii) no Default
shall have occurred and be continuing. If a Default shall
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 Borrower 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 Borrower 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 $1,000,000 or any
whole multiple of $1,000,000 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, Texas
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 Borrower. The amounts so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made
available to the Borrower by depositing the same, in
immediately available funds, in an account of the Borrower,
designated by the Borrower and maintained at the Principal
Office.
(g) Letters of Credit. The Borrower shall give the
Agent (which shall promptly notify the Lenders of such
request) advance revocable or irrevocable notice to be
received by the Agent not later than 11:00 a.m. Houston, Texas
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 Borrower shall execute a Letter of Credit
Agreement. In the event of any conflict between any provision
of a Letter of Credit Agreement and this Agreement, the
Borrower, the Agent and the Lenders hereby agree that the
provisions of this Agreement shall govern.
The Agent will send to the Borrower and each Lender, 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 Commitments tc \l2 "Section 2.03
Changes of Commitments .
(a) The Aggregate Commitments shall at all times be
equal to the lesser of (i) the Aggregate Maximum Credit Amount
after adjustments resulting from reductions pursuant to
Section 2.03(b) hereof or (ii) the Borrowing Base as
determined from time to time pursuant to Section 2.08(f)
hereof.
(b) The Borrower shall have the right to terminate or to
reduce the amount of the Aggregate Maximum 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
$2,500,000 or any whole multiple of $1,000,000 in excess
thereof) and may be revocable or irrevocable and effective
only upon receipt by the Agent. The Aggregate Maximum Credit
Amounts once terminated or reduced pursuant to this Section
2.03(b) may not be reinstated.
Section 2.04 Fees tc \l2 "Section 2.04 Fees .
(a) The Borrower agrees to pay to the Agent, for the
account of each Lender, a commitment fee on the daily average
of the amount by which the Aggregate Commitments exceed the
sum of (A) the LC Exposure, plus (B) the aggregate principal
amount of all outstanding Loans for the period from and
including the Closing Date up to but excluding the earlier of
the date the Aggregate Commitments are terminated or the
Termination Date at a rate per annum set forth at the
appropriate intersection in the table shown below based upon
the Threshold Amount Utilization Percentage as in effect from
time to time on each day during the period in question:
Threshold Amount Utilization Percentage Commitment Fee
Less than or equal to 33% 0.50%
Greater than 33% but less than
or equal to 66% 0.50%
Greater than 66% but less than
or equal to 100% 0.50%
Greater than 100% 0.50%
All such commitment fees shall be calculated on the basis of
a year of 365 (or, in a leap year, 366) days for the actual number
of days elapsed. The accrued commitment fees shall be due and
payable quarterly in arrears on each Quarterly Date and on the
earlier of the date the Aggregate Commitments are terminated or the
Termination Date.
(b) The Borrower agrees 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 Agent existing from time to time under such
Letter of Credit (calculated separately for each Letter of
Credit) at the applicable per annum percentage set forth at
the appropriate intersection in the table shown below,
provided that each Letter of Credit shall bear a minimum
commission of $300.00. Each Letter of Credit shall be deemed
to be outstanding up to the full face amount of the Letter of
Credit until the Agent 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 Agent, or for any reductions in the amount
of the Letter of Credit (other than from a drawing), written
notification from the beneficiary of such Letter of Credit.
Such commissions are payable quarterly in arrears.
Threshold Amount Utilization Percentage Letter of Credit
Fee
Less than or equal to 33% 1.75%
Greater than 33% but less than
or equal to 66% 2.00%
Greater than 66% but less than
or equal to 100% 2.25%
Greater than 100% 2.75%
(c) The Agent, for its own account, shall retain 0.125%
of the Letter of Credit fee (as described in subsection (b)
above) as an issuing fee and shall pay the balance of such
Letter of Credit fee to the Lenders pro rata.
(d) The Borrower shall pay to the Agent for its account
such other fees as are set forth in the Fee Letter on the
dates specified therein to the extent not paid prior to the
Closing Date.
(e) If the Borrower exercises its option to cause the
Lenders to redetermine the Borrowing Base pursuant to Section
2.08(d), then for each exercise of such option, the Borrower
shall pay a fee to the Agent in the amount of $2,000 to be
shared by the Lenders pro rata in proportion to their
Percentage Share. Such fee shall be due and payable at the
time the Borrower gives notice of its election to exercise
such option.
Section 2.05 Several Obligations tc \l2 "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 tc \l2 "Section 2.06 Notes . The
Loans made by each Lender shall be evidenced by a single promissory
note of the Borrower in substantially the form of Exhibit A 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 Credit
Amount as in effect and otherwise duly completed and such
substitute Notes as required by Section 12.06(b). 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, may be endorsed by such Lender
on a schedule attached to such Notes or any continuation thereof or
on any separate record maintained by such Lender. Failure to make
any such notation or to attach a schedule shall not affect any
Lender's or the Borrower's rights or obligations in respect of such
Loans or affect the validity of such transfer by any Lender of its
Notes.
Section 2.07 Prepayments tc \l2 "Section 2.07
Prepayments .
(a) The Borrower may prepay the Base Rate Loans upon one
(1) Business Day's prior 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 may be revocable or irrevocable and effective only
upon receipt by the Agent, provided that interest on the
principal prepaid, accrued to the prepayment date, shall be
paid on the prepayment date. The Borrower may prepay all or
any portion of Eurodollar Loans upon not less than three (3)
Business Day's prior 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 may be revocable or irrevocable and effective only
upon receipt by the Agent, provided that interest on the
principal prepaid, accrued to the prepayment date, shall be
paid on the prepayment date. In addition, prepayments of
Eurodollar Loans shall be subject to the terms of Section
5.05.
(b) If, after giving effect to any termination or
reduction of the Aggregate Maximum Credit Amounts pursuant to
Section 2.03(b), the outstanding aggregate principal amount of
the Loans plus the LC Exposure exceeds the Aggregate Maximum
Credit Amounts, the Borrower shall (i) prepay the Loans on the
date of such termination or reduction in an aggregate
principal amount equal to the excess, together with interest
on the principal amount paid accrued to the date of such
prepayment and (ii) if any excess remains after prepaying all
of the Loans, 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) Upon any adjustment or redetermination of the amount
of the Borrowing Base in accordance with Sections 2.07(e),
2.07(f), 2.08, 6.02, 8.08(c), 9.01(e), 9.03(i) or 9.12 or
otherwise, if the adjusted or redetermined Borrowing Base is
less than the sum of the aggregate outstanding principal
amount of the Loans and the LC Exposure (a "Borrowing Base
Deficiency"), then (i) the Borrower shall cure such Borrowing
Base Deficiency by prepaying the Loans or reducing the LC
Exposure in an aggregate principal amount equal to such
excess, together with interest on the principal amount paid
which has accrued to the date of such prepayment, within 45
days of receipt of written notice thereof unless such
Borrowing Base Deficiency occurs before April 28, 2000 at a
time when the Aggregate Commitments exceed the Threshold
Amount, in which case any such Borrowing Base Deficiency shall
be due and payable on the earlier of the 30th day following
the Borrower's receipt of written notice thereof or April 28,
2000. If such Borrowing Base Deficiency is not cured by the
30th or 45th day, as applicable, after the Borrower's receipt
of notice of such Borrowing Base Deficiency (or on April 28,
2000 with respect to a Borrowing Base Deficiency existing on
such date), then such Borrowing Base Deficiency shall
constitute an Event of Default hereunder.
(d) Following a casualty loss to all or any part of the
Oil and Gas Properties constituting the Borrowing Base, all
insurance proceeds payable to the Borrower and not used by the
Borrower to repair or replace such Properties shall be used by
the Borrower to prepay the Loans. The Borrowing Base shall be
reduced by an amount reasonably determined at the time by the
Agent to reflect the contribution to the Borrowing Base of
such Oil and Gas Properties not repaired or replaced and such
Oil and Gas Properties shall no longer be included in the
Borrowing Base.
(e) Upon the request of the Borrower, the Agent shall
release any Oil and Gas Properties from the Lien of the
Security Documents; provided that (i) at the time of such
request, no Event of Default shall have occurred and be
continuing and (ii) with respect to Oil and Gas Properties
included in the Borrowing Base, the Borrowing Base shall be
reduced by an amount reasonably determined at the time by the
Agent to reflect the contribution to the Borrowing Base of
such Oil and Gas Properties so released and any such Oil and
Gas Properties so released shall no longer be included in the
Borrowing Base.
(f) Prepayments permitted or required under this Section
2.07 shall be without notice, premium or penalty, except as
required under Section 5.05 for prepayment of Eurodollar
Loans. Any prepayments on the Loans may be reborrowed subject
to the then effective Aggregate Commitments.
Section 2.08 Borrowing Base; Threshold Amount tc \l2
"Section 2.08 Borrowing Base; Threshold Amount .
(a) During the period from and after the Closing Date
until the first scheduled redetermination of the Borrowing
Base (scheduled to be April 1, 2000) in accordance with this
Section 2.08, the amount of (i) the Borrowing Base shall be
$35,000,000; and (ii) the Threshold Amount shall be
$30,000,000. The Borrowing Base shall be redetermined in
accordance with Sections 2.08(b), 2.08(c) and 2.08(d) by the
Agent with the concurrence of the Majority Lenders. Upon any
redetermination of the Borrowing Base, such redetermination
shall remain in effect until the next successive
Redetermination Date. "Redetermination Date" shall mean the
date that the redetermined Borrowing Base becomes effective
subject to the notice requirements specified in Section
2.08(e) both for scheduled redeterminations and unscheduled
redeterminations. On April 28, 2000, and at all times
thereafter, the Threshold Amount shall be equal to the amount
of the Borrowing Base then in effect.
(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. Such redetermination will be in accordance
with its normal and customary procedures for evaluating oil
and gas reserves and other related assets as such exist at
that particular time. The Agent, 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 particular
time. The Agent shall propose to the Lenders a new Borrowing
Base (i) within 14 days following receipt by the Agent and the
Lenders of the applicable Engineering Reports in a timely and
complete manner, with respect to the first scheduled
redetermination of the Borrowing Base scheduled to occur on
April 1, 2000, and (ii) within 30 days following receipt by
the Agent and the Lenders of the applicable Engineering
Reports in a timely and complete manner, with respect to each
scheduled redetermination of the Borrowing Base thereafter.
After having received notice of such proposal by the Agent,
each Lender shall have 14 days to agree or disagree with such
proposal. If at the end of the 14 days, any Lender shall have
not communicated its approval or disapproval, such silence
shall be deemed to be an approval. If within such 14 day
period the Majority Lenders have approved or been deemed to
approve the Agent's proposal, then the Agent's proposal shall
be the new Borrowing Base. If however, the Majority Lenders
have not approved or been deemed to approve the Agent's
proposal within 14 days, the Majority Lenders shall, within a
reasonable period of time, agree on a new Borrowing Base. The
first scheduled redetermination of the Borrowing Base is to
occur on April 1, 2000.
(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, at any time, because title
information is not reasonably satisfactory, such Property is
not Mortgaged Property or such Property is not assignable.
(d) (i) So long as any of the Commitments are in effect
and until payment in full of all Loans hereunder, on or around
April 1, 2000, and on or around the fifteenth (15th) day of
each October and April thereafter, commencing October 15, 2000
(each being a "Scheduled Redetermination Date"), the Lenders
shall redetermine the amount of the Borrowing Base in
accordance with Section 2.08(b). (ii) In addition to the
scheduled redeterminations pursuant to clause (i) of this
Section 2.08(d), the following optional redeterminations may
occur: (x) At any time after the first Scheduled
Redetermination Date, the Majority Lenders or the Borrower may
each initiate a redetermination of the Borrowing Base as they
so elect; provided, however, only one such unscheduled
redetermination may be elected between each Scheduled
Redetermination Date. If such redetermination is initiated by
the Majority Lenders, the Agent shall specify in writing to
the Borrower the date on which the Borrower is to furnish a
Reserve Report in accordance with Section 8.07(b) and the date
on which such redetermination is to occur. (y) For the period
from and after the Closing Date to and including the earlier
of April 28, 2000, or the date on which the Aggregate
Commitments equal the Threshold Amount, the Agent, with the
concurrence of the Majority Lenders, shall have the right to
redetermine the Borrowing Base and/or the Threshold Amount
once during each calendar month to the extent and only to the
extent that the Agent reasonably determines that there has
been a material adverse change in the value of the oil and gas
reserves constituting the Borrowing Base. Each such
redetermination shall be made in accordance with
Sections 2.08(b) and (c); provided, however, the Agent shall
propose to the Lenders the redetermined Borrowing Base and/or
Threshold Amount within 14 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 Majority Lenders shall have 14 days
to agree or disagree with such proposal. If at the end of the
14 days, the Majority Lenders have not communicated their
approval or disapproval, such silence shall be deemed to be an
approval and the Agent's proposal shall be the new Borrowing
Base. If however, the Majority Lenders notify Agent within
14 days of their disapproval, the Majority Lenders shall,
within a reasonable period of time, agree on a new Borrowing
Base.
(e) The Agent shall promptly notify in writing the
Borrower and the Lenders of the new Borrowing Base. Any
redetermination of the Borrowing Base shall not be in effect
until written notice is received by the Borrower.
(f) Upon the Borrower's receipt of written notice from
the Agent of the amount of the Borrowing Base then in effect,
the Agent and the Borrower shall mutually agree on the amount
of such Borrowing Base to be accepted by the Borrower as the
Borrowing Base. During the period from and after the Closing
Date to and including the effective date of the next
designation of the Borrowing Base in accordance with this
Section 2.08(f), the amount of the Borrowing Base shall be
$35,000,000.
(g) In addition to the scheduled and unscheduled
redeterminations of the Borrowing Base pursuant to this
Section 2.08, the Borrowing Base in effect from time to time
is subject to reductions and adjustments made in accordance
with Sections 2.07(e), 2.07(f), 8.08(c), 9.01(e), 9.03(i) or
9.13.
(h) So long as any of the Commitments are in effect or
any LC Exposure or Loans are outstanding hereunder, the Loans
and Letters of Credit shall be governed by the then effective
Borrowing Base.
(i) At no time shall the Threshold Amount exceed the
Borrowing Base.
Section 2.09 Assumption of Risks tc \l2 "Section 2.09
Assumption of Risks . The Borrower assumes 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 Agent (except in the case of willful
misconduct or bad faith on the part of the Agent or any of its
employees), its correspondents 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 Agent's control
or the control of the Agent's correspondents. In addition, neither
the Agent nor any Lender shall be responsible for any error,
neglect, or default of any of the Agent's correspondents; and none
of the above shall affect, impair or prevent the vesting of any of
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 Agent 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 Borrower agrees that any action, inaction
or omission taken or not taken by the Agent or by any correspondent
for the Agent in good faith in connection with any Letter of
Credit, or any related drafts, certificates, documents or
instruments, shall be binding on the Borrower and shall not put the
Agent or its correspondents under any resulting liability to the
Borrower.
Section 2.10 Obligation to Reimburse and to Prepay tc
\l2 "Section 2.10 Obligation to Reimburse and to Prepay .
(a) If a disbursement by the Agent is made under any
Letter of Credit, the Borrower shall pay to the Agent within
two (2) Business Days after notice of any such disbursement is
received by the Borrower, the amount of each such disbursement
made by the Agent 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 second Business Day after notice of such disbursement is
received by the Borrower 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
third Business Day following the date of notice of such
disbursement to and including the date of repayment in full of
such disbursed amount. The obligations of the Borrower 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 Borrower 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 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 Agent 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 Borrower will not be liable for payment or performance
that results from the gross negligence or willful misconduct
of the Agent, except (i) where the Borrower or any Subsidiary
actually recovers the proceeds for itself or the Agent of any
payment made by the Agent in connection with such gross
negligence or willful misconduct or (ii) in cases where the
Agent makes payment to the named beneficiary of a Letter of
Credit.
(b) In the event of the occurrence of any Event of
Default, a payment or prepayment pursuant to Sections 2.07(b),
(c) and (d) hereof or the maturity of the Notes, whether by
acceleration or otherwise, an amount equal to the LC Exposure
(or the excess in the case of Section 2.07(b)) shall be deemed
to be forthwith due and owing by the Borrower to the Agent and
the Lenders as of the date of any such occurrence; and the
Borrower's 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 Borrower may now
or hereafter have against any such beneficiary, the Agent, the
Lenders or any other Person for any reason whatsoever. Such
payments shall be held by the Agent on behalf of the Lenders
as cash collateral securing the LC Exposure in an interest
bearing account or accounts at the Principal Office; and the
Borrower hereby grants to and by its deposit with the Agent
grants to the Agent a security interest in such cash
collateral. In the event of any such payment by the Borrower
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 remit to the Borrower amounts for which the
contingent obligations evidenced by the Letters of Credit have
ceased.
(c) Each Lender severally and unconditionally agrees
that it shall promptly reimburse the Agent an amount equal to
such Lender's Percentage Share of any disbursement made by the
Agent under any Letter of Credit that is not reimbursed
according to this Section 2.10.
Section 2.11 Lending Offices tc \l2 "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
tc \l1 " ARTICLE III Payments of Principal and Interest
Section 3.01 Repayment of Loans tc \l2 "Section 3.01
Repayment of Loans . The Borrower will pay to the Agent, for the
account of each Lender, the principal payments required by this
Section 3.01. On the Termination Date the Borrower shall repay
the outstanding aggregate principal and accrued and unpaid interest
under the Notes.
Section 3.02 Interest tc \l2 "Section 3.02 Interest .
The Borrower 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 Eurodollar Rate for
such Loan plus the Applicable Margin, but in no event to
exceed the Highest Lawful Rate.
Notwithstanding the foregoing, the Borrower 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 Borrower hereunder, under any Loan Document or under
any Note held by such Lender to or for account of such Lender, for
the period commencing on the date of an Event of Default until the
same is paid in full or all Events of Default are cured or waived.
Accrued interest on Base Rate Loans shall be payable on each
Quarterly Date commencing on March 31, 2000, 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).
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 Borrower 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.
tc \l1 " ARTICLE IV Payments; Pro Rata Treatment;
Computations; Etc.
Section 4.01 Payments tc \l2 "Section 4.01 Payments .
Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower
under the Loan Documents shall be made in Dollars, in immediately
available funds, to the Agent at such account as the Agent shall
specify by notice to the Borrower from time to time, not later than
11:00 a.m. Houston, Texas 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 received by the Agent under this
Agreement or any Note for account of a Lender shall be paid
promptly to such Lender in immediately available funds. Except as
provided in clause (iii) of the definition of "Interest Period", 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 borrowing, the Borrower 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 tc \l2 "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 and each continuation and conversion
under Section 2.02 shall be made from the Lenders pro rata in
accordance with their Percentage Share, each payment of commitment
fee or other fees under Sections 2.04(a), (b) and (c) 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 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 Borrower 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; and (iii) each payment of
interest on Loans by the Borrower 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 Borrower of disbursements under Letters of Credit shall be made
for account of the Agent 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 tc \l2 "Section 4.03
Computations . Interest on Eurodollar Loans 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 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 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 is
payable.
Section 4.04 Non-receipt of Funds by the Agent tc \l2
"Section 4.04 Non-receipt of Funds by the Agent . Unless the
Agent shall have been notified by a Lender or the Borrower 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 Borrower) 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 Borrower (as
the case may be) has not in fact made the Required Payment to the
Agent, the recipient(s) of such payment shall, on 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 Borrower as recipient, will be
equal to the Base Rate plus the Applicable Margin.
Section 4.05 Set-off, Sharing of Payments, Etc. tc \l2
"Section 4.05 Set-off, Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or
counterclaim a Lender may otherwise have, 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 Borrower or any
Restricted Subsidiary 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 the Borrower), in
which case it shall promptly notify the Borrower 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 Borrower 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 Borrower 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 (or, if and
to the extent specified by such Lender, direct interests 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. The Borrower agrees that any Lender so purchasing
a participation (or direct interest) 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, counter-
claim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of 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 Borrower. 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 tc \l2 "Section 4.06 Taxes .
(a) Payments Free and Clear. Any and all payments by
the Borrower 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 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 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 or such
Lender is organized, or (iii) any jurisdiction (or political
subdivision thereof) in which such Lender or the Agent is
presently doing business in 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 Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder to
the Lenders 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
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 Borrower shall make such deductions and
(iii) the Borrower 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 Borrower agrees 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").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BUT SUBJECT TO SECTION 4.06(d)(ii), THE
BORROWER WILL INDEMNIFY EACH LENDER 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 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 OR THE AGENT, AS THE CASE MAY BE,
MAKES WRITTEN DEMAND THEREFOR. IF ANY LENDER OR THE AGENT
RECEIVES A REFUND OR CREDIT IN RESPECT OF ANY TAXES OR OTHER
TAXES FOR WHICH SUCH LENDER OR THE AGENT HAS RECEIVED PAYMENT
FROM THE BORROWER IT SHALL PROMPTLY NOTIFY THE BORROWER OF
SUCH REFUND OR CREDIT AND SHALL, IF NO DEFAULT HAS OCCURRED
AND IS CONTINUING, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A
REQUEST BY THE BORROWER (OR PROMPTLY UPON RECEIPT, IF THE
BORROWER HAS REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT
PURSUANT HERETO), PAY AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT
TO THE BORROWER WITHOUT INTEREST (BUT WITH ANY INTEREST SO
REFUNDED OR CREDITED), PROVIDED THAT THE BORROWER, UPON THE
REQUEST OF SUCH LENDER OR THE AGENT, AGREES TO RETURN SUCH
REFUND OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES)
TO SUCH LENDER 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 (1) a
corporation or banking association organized under the
laws of the United States of America or any state thereof
or (2) 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 or
banking association organized under the laws of the
United States of America or any state thereof agrees to
provide to the Borrower 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 Borrower
or the Agent shall reasonably request, two accurate and
complete original 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 to 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 Borrower 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 Borrower 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 Borrower 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
Borrower 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 Borrower 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
Borrower shall withhold taxes from such payments at the
applicable statutory rate. Each Lender agrees to
indemnify and hold harmless the Borrower or Agent, as
applicable, 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 Borrower 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 Borrower 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 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 Borrower shall take such steps as
such Lender shall reasonably request to assist such
Lender to recover such taxes.
(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 Borrower 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 tc \l2 "Section
4.07 Disposition of Proceeds . The Security Instruments contain
an assignment by the Borrower 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 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 Borrower.
ARTICLE V
Capital Adequacy
tc \l1 " ARTICLE V Capital Adequacy
Section 5.01 Additional Costs tc \l2 "Section 5.01
Additional Costs .
(a) Eurodollar Regulations, etc. The Borrower 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 Credit 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 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 relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities of such Lender, or the Commitment or
Loans 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 or Loans. Each Lender will notify
the Agent and the Borrower 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,
provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located in the United
States. If any Lender requests compensation from the Borrower
under this Section 5.01(a), the Borrower 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 or any other circumstances
arising after the Closing Date affecting such 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 Borrower, 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 Borrower 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 following
any Regulatory Change, of capital in respect of its
Commitment, its Notes, 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
Borrower 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
Borrower of the incurrence of additional costs under this
Section 5.01 shall deliver such notice to the Borrower as soon
as practicable and in any event within ninety (90) days after
the change or other event giving rise to the incurrence of
such additional costs and shall in such notice to the Borrower
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.
Any request for additional compensation under this Section
5.01 shall be paid by the Borrower within thirty (30) days of
the receipt by the Borrower of the notice described in this
Section 5.01(d).
Section 5.02 Limitation on Eurodollar Loans tc \l2
"Section 5.02 Limitation on Eurodollar Loans . Anything herein to
the contrary notwithstanding, if, on or prior to the determination
of any 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 "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
(ii) the Agent determines (which determination
shall be conclusive, absent manifest error) that the
relevant rates of interest referred to in the definition
of "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 Borrower 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 tc \l2 "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 Borrower 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 tc \l2 "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 Borrower, 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 tc \l2 "Section 5.05
Compensation . The Borrower 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 are attributable to:
(i) any payment, prepayment or conversion of a
Eurodollar Loan properly made by such Lender or the
Borrower for any reason (including, without limitation,
the acceleration of the Loans pursuant to Section 10.02)
on a date other than the last day of the Interest Period
for such Loan;
(ii) any failure by the Borrower for any reason
(including but not limited to, the failure of any of the
conditions precedent specified in Article VI to be
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); or
(iii) the revocation by the Borrower of (a) a
revocable notice of borrowing delivered pursuant to
Section 2.02(c) or (b) a revocable request for the
issuance of a Letter of Credit delivered pursuant to
Section 2.02(g) or (c) a revocable notice of reduction or
termination delivered pursuant to Section 2.03(c) or (d)
a revocable notice of prepayment delivered pursuant to
Section 2.07(a).
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 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) at the applicable rate of interest
for such Loan provided for herein 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).
Section 5.06 Replacement Lenders. tc \l2 "Section 5.06
Replacement Lenders.
(a) If any Lender has notified the Borrower and the
Agent of its incurring additional costs under Section 5.01
hereof or has required the Borrower to make payments for Taxes
under Section 4.06 hereof, then the Borrower may, unless such
Lender has notified the Borrower and the Agent that the
circumstances giving rise to such notice no longer apply,
terminate, in whole but not in part, the Commitment of any
Lender (other than the Agent) (the "Terminated Lender") at any
time upon five (5) Business Days' prior written notice to the
Terminated Lender and the Agent (such notice referred to
herein as a "Notice of Termination").
(b) In order to effect the termination of the Commitment
of the Terminated Lender, the Borrower shall: (i) obtain an
agreement with one or more Lenders to increase their
Commitment or Commitments and/or (ii) request any one or more
other banking institutions to become parties to this Agreement
in place and instead of such Terminated Lender and agree to
accept a Commitment or Commitments; provided, however, that
such one or more other banking institutions are reasonably
acceptable to the Agent and become parties by executing an
Assignment (the Lenders or other banking institutions that
agree to accept in whole or in part the Commitment of the
Terminated Lender being referred to herein as the "Replacement
Lenders"), such that the aggregate increased and/or accepted
Commitments of the Replacement Lenders under clauses (i) and
(ii) above equal the Commitment of the Terminated Lender.
(c) The Notice of Termination shall include the name of
the Terminated Lender, the date the termination will occur
(the "Termination Date"), and the Replacement Lender or
Replacement Lenders to which the Terminated Lender will assign
its Commitment and, if there will be more than one Replacement
Lender, the portion of the Terminated Lender's Commitment to
be assigned to each Replacement Lender.
(d) On the Termination Date, (i) the Terminated Lender
shall by execution and delivery of an Assignment assign its
Commitment to the Replacement Lender or Replacement Lenders
(pro rata, if there is more than one Replacement Lender, in
proportion to the portion of the Terminated Lender's Commit-
ment to be assigned to each Replacement Lender) indicated in
the Notice of Termination and shall assign to the Replacement
Lender or Replacement Lenders each of its Loans (if any) then
outstanding and participation interests in Letters of Credit
(if any) then outstanding (pro rata as aforesaid), (ii) the
Terminated Lender shall endorse its Notes, payable without
recourse, representation or warranty to the order of the
Replacement Lender or Replacement Lenders (pro rata as
aforesaid), (iii) the Replacement Lender or Replacement
Lenders shall purchase the Notes held by the Terminated Lender
(pro rata as aforesaid) at a price equal to the unpaid
principal amount thereof plus interest and facility and other
fees accrued and unpaid to the Termination Date, and (iv) the
Replacement Lender or Replacement Lenders will thereupon (pro
rata as aforesaid) succeed to and be substituted in all
respects for the Terminated Lender with like effect as if
becoming a Lender pursuant to the terms of Section 12.06(b),
and the Terminated Lender will have the rights and benefits of
an assignor under Section 12.06(b). To the extent not in
conflict, the terms of Section 12.06(b) shall supplement the
provisions of this Section 5.06(d). For each assignment made
under this Section 5.06, the Replacement Lender shall pay to
the Agent the processing fee provided for in Section 12.06(b).
The Borrower will be responsible for the payment of any
breakage costs associated with termination of the Terminated
Lender, as set forth in Section 5.05.
ARTICLE VI
Conditions Precedent
tc \l1 " ARTICLE VI Conditions Precedent
Section 6.01 Initial Funding tc \l2 "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) A certificate of the Secretary of MMR setting forth
(i) resolutions of the board of directors of MMR, as the sole
member of the Borrower, with respect to the authorization of
the Borrower 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 MMR and
the Borrower (y) who are authorized to sign the Loan Documents
to which 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, (iv) the limited liability company
agreement of the Borrower, and (v) the certificate of
formation filed with the Delaware Secretary of State, as
amended, all certified as being true and complete. The Agent
and the Lenders may conclusively rely on such certificate
until the Agent receives notice in writing from MMR or the
Borrower to the contrary.
(b) Certificates of the appropriate state agencies with
respect to the existence, qualification and good standing of
the Borrower.
(c) A compliance certificate which shall be
substantially in the form of Exhibit C, duly and properly
executed by a Responsible Officer and dated as of the date of
the Initial Funding.
(d) The Notes, duly completed and executed.
(e) An opinion of Jones, Walker, Waechter, Poitevent,
Carrere & ▇▇▇▇▇▇▇, L.L.P. counsel to the Borrower,
substantially in the form of Exhibit D hereto.
(f) A certificate of insurance coverage of the Borrower
evidencing that the Borrower is carrying insurance in
accordance with Section 7.19 hereof.
(g) Receipt by the Agent of the fees due and payable
after the Closing Date as provided for in the Fee Letter.
(h) Receipt by the Agent of each of the Security
Instruments, including those described on Exhibit E, duly
completed and executed in sufficient number of counterparts
for recording, if necessary, and otherwise in recordable form
and substance satisfactory to the Agent.
(i) Receipt by the Agent of such title information as
the Agent may require from attorneys satisfactory to the Agent
setting forth the status of title to at least 100% of the
value of the Hydrocarbon Interests included in the Borrowing
Base.
(j) The Agent shall have been furnished with appropriate
UCC search certificates reflecting no prior liens or security
interests.
(k) Receipt by the Agent of documentation in form and
substance satisfactory to the Agent, evidencing that the
acquisition of the Properties listed in Subpart B of Schedule
7.22 has been completed.
(l) Receipt by the Agent of 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 tc \l2 "Section 6.02 Initial and Subsequent Loans and
Letters of Credit . The obligation of the Lenders to make Loans to
the Borrower upon the occasion of each borrowing hereunder and to
issue, renew, extend or reissue Letters of Credit for the account
of the Borrower (including the Initial Funding) and to increase the
Borrowing Base in accordance with Section 6.02 is subject to the
further conditions precedent that, as of the date of such Loans or
Letters of Credit or increase, as the case may be, and after giving
effect thereto: (i) no Default shall have occurred and be
continuing; (ii) no Material Adverse Effect shall have occurred;
(iii) the representations and warranties made by the Borrower 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 or increase of the
Borrowing Base, as the case may be, with the same force and effect
as if made on and as of such date and following such new borrowing,
issuance or increase, 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; and
(iv) the aggregate outstanding amount of investments, loans and
advances permitted by Section 9.03(i) and net dividends,
distributions and redemptions permitted by Section 9.04, shall not
exceed $7,200,000. Each request for a borrowing or issuance,
renewal, extension or reissuance of a Letter of Credit by the
Borrower hereunder shall constitute a certification by the Borrower
to the effect set forth in the preceding sentence (both as of the
date of such notice and, unless the Borrower otherwise notifies 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 tc
\l2 "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(b)
hereof is subject to the following conditions precedent:
(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, in accordance with Section
2.02(g) hereof.
(b) Each of the Letters of Credit shall (i) be issued by
the Agent, (ii) contain such terms and provisions as are
reasonably required by the Agent, (iii) be for the account of
the Borrower and (iv) expire not later than the earlier of one
(1) year from the date of issuance, renewal, extension or
reissuance or two (2) days before the Termination Date;
provided, however, Borrower may request that any one-year
Letter of Credit be renewed annually up to two (2) days prior
to the Termination Date.
(c) The Borrower shall have duly and validly executed
and delivered to the Agent a Letter of Credit Agreement
pertaining to the Letter of Credit.
ARTICLE VII
Representations and Warranties
tc \l1 " ARTICLE VII Representations and Warranties
The Borrower 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 6.03):
Section 7.01 Existence tc \l2 "Section 7.01 Existence .
Each of the Borrower and each Restricted Subsidiary: (i) is a
corporation or limited liability company duly organized, legally
existing and in good standing under the laws of the jurisdiction of
its incorporation or 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 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 tc \l2 "Section 7.02
Financial Condition . The audited consolidated financial
statements of MMR and its Consolidated Subsidiaries as at December
31, 1998, and the balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 1998 and the related
statement of income, member's capital and cash flow of the Borrower
and its Consolidated Subsidiaries for the fiscal year ended on said
date, in each case as included in the consolidating statements of
MMR and its Consolidated Subsidiaries as of said date with the
opinion thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP heretofore furnished to each
of the Lenders and the unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as at September 30, 1999
and the related consolidated statements of income, members capital
and cash flow of the Borrower and its Consolidated Subsidiaries for
the nine-month and three-month periods ended on such date
heretofore furnished to the Agent, are complete and correct and
fairly present the consolidated financial condition of the Borrower
and its Consolidated Subsidiaries as at said dates and the results
of its operations for the fiscal year and the nine-month and three-
month periods ended on said dates, all in accordance with GAAP, as
applied on a consistent basis (subject, in the case of the interim
financial statements, to normal year-end adjustments). Neither the
Borrower 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, in each case, that would
be required to be reserved for in the Financial Statements in
accordance with GAAP, except as referred to or reflected or
provided for in the Financial Statements or in Schedule 7.02.
Except as set forth on Schedule 7.10, since September 30, 1999,
there has been no change or event having a Material Adverse Effect.
Except as set forth on Schedule 7.10, since the date of the
Financial Statements, neither the business nor the Properties of
the Borrower or any Subsidiary have been materially and adversely
affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance,
embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any Governmental Authority,
riot, activities of armed forces or acts of God or of any public
enemy.
Section 7.03 Litigation tc \l2 "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 Borrower
threatened against or affecting the Borrower or any Restricted
Subsidiary as to which there is a reasonable possibility of an
adverse determination and which, if adversely determined, could,
individually or in the aggregate, materially impair the ability of
the Borrower to conduct its business substantially as now
conducted, or materially and adversely affect the businesses,
assets, operations, prospects or condition, financial or otherwise,
of the Borrower, or impair the validity or enforceability of, or
the ability of the Borrower to perform its obligations under, this
Agreement or any of the other Loan Documents to which it is a
party, in each case, taking into account any applicable insurance.
Section 7.04 No Breach tc \l2 "Section 7.04 No Breach .
Neither the execution and delivery of the Loan Documents, nor
compliance with the terms and provisions hereof 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 Borrower or any Restricted Subsidiary, or any
Governmental Requirement or any agreement or instrument to which
the Borrower or any Restricted 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 agreement or instrument, or
result in the creation or imposition of any Lien upon any of the
revenues or assets of the Borrower or any Restricted Subsidiary
pursuant to the terms of any such agreement or instrument other
than the Liens created by the Loan Documents and those permitted
under Section 9.02.
Section 7.05 Authority tc \l2 "Section 7.05 Authority .
The Borrower and each Restricted Subsidiary have all necessary
power 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 the Borrower and each Restricted
Subsidiary of the Loan Documents to which it is a party, have been
duly authorized by all necessary corporate action on its part; and
the Loan Documents constitute the legal, valid and binding
obligations of the Borrower and each Restricted Subsidiary,
enforceable in accordance with their terms.
Section 7.06 Approvals tc \l2 "Section 7.06 Approvals .
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 Borrower or any
Restricted 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 tc \l2 "Section 7.07 Use of
Loans . The proceeds of the Loans shall be used to (a) renew,
extend, modify and rearrange the outstanding principal balance of
the Prior Notes, (b) develop the Borrower's proven reserves from
its Oil and Gas Properties, (c) provide funding for acquisitions of
Oil and Gas Properties and (d) for general corporate purposes. The
Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
margin stock (within the meaning of Regulation 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.
Section 7.08 ERISA tc \l2 "Section 7.08 ERISA .
(a) The Borrower and each Restricted Subsidiary have
complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan.
(b) Each Plan of the Borrower and of each Restricted
Subsidiary is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
(c) To the knowledge of the Borrower, no act, omission
or transaction has occurred which could result in imposition
on the Borrower or on any Restricted Subsidiary (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
the Borrower, any Subsidiary or any ERISA Affiliate has been
or is expected by the Borrower, 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 the Borrower, 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 the Borrower'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) Neither the Borrower nor any Restricted Subsidiary
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 Borrower or a Restricted Subsidiary or any
ERISA Affiliate in its sole discretion at any time without any
material liability.
(h) None of the Borrower, 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 Borrower, 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 tc \l2 "Section 7.09 Taxes . Except
as set out in Schedule 7.09, each of the Borrower and the
Restricted 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 material taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or
any Restricted Subsidiary, other than any taxes the validity of
which the Borrower or the relevant Restricted Subsidiary is
contesting in good faith by appropriate proceedings, and with
respect to which the Borrower or such Restricted Subsidiary shall,
to the extent required by GAAP, have set aside on its books
adequate reserves. The charges, accruals and reserves on the books
of the Borrower and the Restricted Subsidiaries in respect of taxes
and other governmental charges are, in the opinion of the Borrower,
adequate. No tax lien has been filed and, to the knowledge of the
Borrower, no claim is being asserted with respect to any such tax,
fee or other charge.
Section 7.10 Titles, etc. tc \l2 "Section 7.10 Titles,
etc.
(a) Except as set out in the title reports delivered to
the Agent prior to the Closing Date, each of the Borrower and
the Restricted 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, the Borrower owns the net
interests in production attributable to the Hydrocarbon
Interests reflected in the most recently delivered Reserve
Report and the ownership of such Properties shall not in any
material respect obligate the Borrower to bear the costs and
expenses relating to the maintenance, development and opera-
tions 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 factual information
contained in the most recently delivered Reserve Report is
true and correct in all material respects as of the date
thereof.
(b) All leases and agreements necessary for the conduct
of the business of the Borrower and the Restricted
Subsidiaries are valid and subsisting, in full force and
effect and there exists no default or event or circumstance
which with the giving of notice or the passage of time or both
would give rise to a default under any such lease or leases,
which would affect in any material respect the conduct of the
business of the Borrower and the Restricted Subsidiaries.
(c) The rights, Properties and other assets presently
owned, leased or licensed by the Borrower and the Restricted
Subsidiaries including, without limitation, all easements and
rights of way, include all rights, Properties and other assets
necessary to permit the Borrower and the Restricted
Subsidiaries to conduct their business in all material
respects in the same manner as its business has been conducted
prior to the Closing Date.
(d) Except as set forth on Schedule 7.10, all of the
assets and Properties of the Borrower and the Restricted
Subsidiaries which are reasonably necessary for the operation
of its business are in good working condition and are
maintained in accordance with prudent business standards.
Section 7.11 No Material Misstatements tc \l2 "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 Borrower 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 Borrower and the Subsidiaries
taken as a whole. There is no fact peculiar to the Borrower or any
Subsidiary which has a Material Adverse Effect or in the future is
reasonably likely to have (so far as the Borrower 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 Borrower or any
Subsidiary prior to, or on, the Closing Date in connection with the
transactions contemplated hereby.
Section 7.12 Investment Company Act tc \l2 "Section 7.12
Investment Company Act . Neither the Borrower 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 tc \l2
"Section 7.13 Public Utility Holding Company Act . Neither the
Borrower 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.
Section 7.14 Subsidiaries tc \l2 "Section 7.14
Subsidiaries . Except as set forth on Schedule 7.14 which
indicates all Restricted Subsidiaries and all Unrestricted
Subsidiaries, the Borrower has no Subsidiaries other than those
formed pursuant to Section 9.16 prior to the quarterly report
required by Section 8.01(i).
Section 7.15 Location of Business and Offices tc \l2
"Section 7.15 Location of Business and Offices . The Borrower's
principal place of business and chief executive offices are located
at the address stated on the signature page of this Agreement. The
principal place of business and chief executive office of each
Subsidiary are located at the addresses stated on Schedule 7.14.
Section 7.16 Defaults tc \l2 "Section 7.16 Defaults .
Neither the Borrower 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 the Borrower or any Subsidiary is a party or by which the
Borrower 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 tc \l2 "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 the Borrower or any
Subsidiary nor the operations conducted thereon violate any
order or requirement of any court or Governmental Authority or
any Environmental Laws;
(b) Without limitation of clause (a) above, no Property
of the Borrower or any Subsidiary nor the operations currently
conducted thereon or, to the best knowledge of the Borrower,
by any prior owner or operator of such Property or operation,
are in violation of or subject to any existing, pending or
threatened action, suit, investigation, inquiry or proceeding
by or before any court or Governmental Authority or to any
remedial obligations under Environmental Laws;
(c) All notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed in
connection with the operation or use of any and all Property
of the Borrower and each Subsidiary, including without
limitation past or present treatment, storage, disposal or
release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed, and the
Borrower 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
any and all Property of the Borrower 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 the
Borrower, all such transport carriers and treatment and
disposal facilities have been and are operating in compliance
with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending
or threatened action, investigation or inquiry by any
Governmental Authority in connection with any Environmental
Laws;
(e) The Borrower has taken all steps reasonably
necessary to determine and has determined that no 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 Borrower or any
Subsidiary except in compliance with Environmental Laws and so
as not to pose an imminent and substantial endangerment to
public health or welfare or the environment;
(f) To the extent applicable, all Property of the
Borrower and each Subsidiary currently satisfies all 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 Borrower does not have any
reason to believe that such Property, to the extent subject to
OPA, will not be able to maintain compliance with the OPA
requirements during the term of this Agreement; and
(g) Neither the Borrower 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.
Section 7.18 Compliance with the Law tc \l2 "Section
7.18 Compliance with the Law . Neither the Borrower 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 producing intervals
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 tc \l2 "Section 7.19 Insurance .
Schedule 7.19 attached hereto contains an accurate and complete
description of all material policies of fire, liability, workmen's
compensation and other forms of insurance maintained by or on
behalf of the Borrower and each Restricted Subsidiary. All such
policies are in full force and effect, all premium payments with
respect thereto covering all periods up to and including the date
of the closing are current, 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 Borrower or any
Restricted 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 Borrower and each
Restricted Subsidiary; will remain in full force and effect through
the respective dates set forth in Schedule 7.19 without the payment
of additional premiums (except for adjustments); and will not in
any way be 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 Borrower and the
Restricted Subsidiaries and their respective board of directors or
officers have designated as being self-insured. Neither the
Borrower nor any Restricted 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.
Section 7.20 Hedging Agreements tc \l2 "Section 7.20
Hedging Agreements . Schedule 7.20 sets forth, as 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 the Borrower and each
Restricted 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 tc \l2 "Section 7.21
Restriction on Liens . Except as set forth on Schedule 7.21,
neither the Borrower nor any of the Restricted Subsidiaries is a
party to any agreement or arrangement (other than this Agreement
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.
Section 7.22 Material Agreements tc \l2 "Section 7.22
Material Agreements . Set forth on Schedule 7.22 hereto (as same
may be amended quarterly and delivered together with the reports
required in Sections 8.01(a) and 8.01(b) hereof for leases,
agreements, and other documents, entered into after the Closing
Date) is a complete and correct list of all material agreements,
leases, indentures, purchase agreements, obligations in respect of
letters of credit, guarantees, joint venture agreements, and other
instruments in effect or to be in effect as of the Closing Date
(other than Hedging Agreements) providing for, evidencing, securing
or otherwise relating to any Debt of the Borrower or any of the
Restricted Subsidiaries, and all obligations of the Borrower or any
of the Restricted Subsidiaries to issuers of surety or appeal bonds
issued for account of the Borrower or any such Restricted
Subsidiary, and such list correctly sets forth the names of the
debtor or lessee and creditor or lessor with respect to the Debt or
lease obligations outstanding or to be outstanding and the property
subject to any Lien securing such Debt or lease obligation. Also
set forth on Schedule 7.22 hereto is a complete and correct list of
all material agreements and other instruments of the Borrower and
the Restricted Subsidiaries relating to the purchase,
transportation by pipeline, gas processing, marketing, sale and
supply of natural gas and other Hydrocarbons, but in any event, any
such agreement or other instrument that will account for more than
20% of the sales of the Borrower and the Restricted Subsidiaries
during the Borrower's current fiscal year.
Section 7.23 Gas Imbalances tc \l2 "Section 7.23 Gas
Imbalances . As of the Closing Date, except as set forth on
Schedule 7.23 or on the most recent certificate delivered pursuant
to Section 8.07(c), on a net basis there are no gas imbalances,
take or pay or other prepayments with respect to the Borrower's Oil
and Gas Properties which would require the Borrower to deliver
Hydrocarbons produced from the Oil and Gas Properties at some
future time without then or thereafter receiving full payment
therefor exceeding one billion cubic feet of gas in the aggregate.
Section 7.24 Year 2000 tc \l2 "Section 7.24 Year 2000 .
Any reprogramming required to permit the proper functioning, in
and following the year 2000, of (i) the Borrower's and its
Subsidiaries' computer systems and (ii) equipment containing
embedded microchips (including systems and equipment supplied by
others or with which the Borrower's and its Subsidiaries' systems
interface) and the testing of all such systems and equipment, as so
reprogrammed, has been completed. The cost to the Borrower and its
Subsidiaries of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Borrower
and its Subsidiaries (including reprogramming errors and the
failure of others' systems or equipment) will not result in any
Event of Default or a Material Adverse Effect.
ARTICLE VIII
Affirmative Covenants
tc \l1 " ARTICLE VIII Affirmative Covenants
The Borrower covenants and agrees that, so long as any of the
Commitments are in effect and until payment in full of all
Indebtedness hereunder, all interest thereon and all other amounts
payable by the Borrower hereunder:
Section 8.01 Financial Statements tc \l2 "Section 8.01
Financial Statements . The Borrower shall deliver, or shall cause
to be delivered, to the Agent with sufficient copies for 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 Borrower, the
statements of income, member's capital, and cash flow of the
Borrower and its Consolidated Subsidiaries for such fiscal
year, and the related balance sheets of the Borrower and its
Consolidated Subsidiaries as at the end of such fiscal year,
as contained in the audited consolidated and consolidating
financial statements of MMR and its Consolidated Subsidiaries
as at the end of such fiscal year, 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 Borrower
and its Consolidated 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 60 days
after the end of each of the first three fiscal quarterly
periods of each fiscal year of the Borrower, consolidated
statements of income, member's capital, and cash flow of the
Borrower and its Consolidated 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
balance sheets as at the end of such period, 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 financial condition and results of
operations of the Borrower and its Consolidated Subsidiaries
in accordance with GAAP, as at the end of, and for, such
period (subject to normal year-end audit adjustments).
(c) Promptly after the Borrower 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 Borrower proposes to take
with respect thereto.
(d) Promptly upon receipt thereof, a copy of each other
report or letter submitted to MMR, the Borrower or any
Restricted Subsidiary by independent accountants in connection
with any annual, interim or special audit made by them of the
books of MMR, the Borrower and the Restricted Subsidiaries,
and a copy of any response by MMR, the Borrower or any
Restricted Subsidiary, or the board of directors of MMR, the
Borrower or any Restricted Subsidiary, to such letter or
report.
(e) Promptly upon its becoming available, each financial
statement, report, notice or proxy statement sent by MMR to
stockholders generally and each regular or periodic report and
any registration statement, prospectus or written
communication (other than transmittal letters) in respect
thereof filed by MMR with or received by MMR in connection
therewith from any securities exchange or the SEC or any
successor agency.
(f) Promptly after the furnishing thereof, copies of any
material statement, report or notice furnished by the Borrower
to any Person pursuant to the terms of any material (i.e.,
over $1,500,000, if permitted) 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) From time to time such other information regarding
the business, affairs or financial condition of the Borrower
or any Restricted 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.
(h) Simultaneously with the delivery of the Financial
Statements referred to in clauses (a) and (b) above, 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
Borrower and each Restricted 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.
(i) Simultaneously with the delivery of the Financial
Statements referred to in clause (b) above, an update to
Schedule 7.14 setting forth all Subsidiaries of the Borrower
as of the last Business Day of such calendar quarter.
The Borrower will furnish to the Agent, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate substantially in the form of Exhibit C hereto
executed by a Responsible Officer (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 Borrower is in compliance with Sections 9.11 and 9.12
as of the end of the respective fiscal quarter or fiscal year.
Section 8.02 Litigation tc \l2 "Section 8.02
Litigation . The Borrower shall promptly give to the Agent notice
of all legal or arbitral proceedings, and of all proceedings before
any Governmental Authority affecting the Borrower or any Restricted
Subsidiary, except proceedings which, if adversely determined,
would not have a Material Adverse Effect. The Borrower will, and
will cause each of the Restricted Subsidiaries to, promptly notify
the Agent and each of the Lenders of any claim, judgment, Lien or
other encumbrance affecting any Property of the Borrower or any
Restricted Subsidiary if the value of the claim, judgment, Lien, or
other encumbrance affecting such Property shall exceed $1,000,000.
Section 8.03 Maintenance, Etc. tc \l2 "Section 8.03
Maintenance, Etc.
(a) The Borrower shall and shall cause each Restricted
Subsidiary to: preserve and maintain its corporate existence
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 are
being maintained; upon reasonable notice, permit
representatives 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); and 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, pollution
insurance to the extent reasonably available.
(b) Contemporaneously with the delivery of the financial
statements required by Section 8.01(a) to be delivered for
each year, the Borrower 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) The Borrower will and will cause each Restricted
Subsidiary to operate its Properties or cause such Properties
to be operated in a good and workmanlike manner in accordance
with the standard practices of the industry and in compliance
with all applicable contracts and agreements and in compliance
in all material respects with all Governmental Requirements.
(d) The Borrower will and will cause each Restricted
Subsidiary to, at its own expense, do or cause to be done all
things reasonably necessary to preserve and keep in good
repair, working order and efficiency all of its Oil and Gas
Properties subject to a Lien in favor of the Agent 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 subject to a Lien in favor of the
Agent and other material Properties will be fully preserved
and maintained, except (1) for ordinary wear and tear, (2) for
equipment, machinery and facilities no longer used or useful
in the Borrower's or such Restricted Subsidiary's business,
(3) for casualty losses being handled in accordance with
Section 2.07(e) and (4) to the extent a portion of such
Properties is no longer capable of producing Hydrocarbons in
economically reasonable amounts. The Borrower will and will
cause each Restricted Subsidiary to promptly: (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 subject to a Lien in favor of the Agent, to the
extent that any failure to so pay or discharge would have a
Material Adverse Effect, (ii) perform or make reasonable and
customary efforts to cause to be performed, in accordance with
industry standards, the material obligations required by each
and all of the assignments, deeds, leases, subleases,
contracts and agreements affecting its interests in its Oil
and Gas Properties subject to a Lien in favor of the Agent and
other material Properties, (iii) do all other things necessary
to keep unimpaired, except for Liens described in Section
9.02, its rights with respect to its Oil and Gas Properties
subject to a Lien in favor of the Agent and other material
Properties 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. The Borrower will and will cause each
Restricted Subsidiary to operate its Oil and Gas Properties
subject to a Lien in favor of the Agent 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 good and workmanlike manner in
accordance with the standard practices of the industry and in
compliance with all applicable contracts and agreements and in
compliance in all material respects with all Governmental
Requirements.
Section 8.04 Environmental Matters tc \l2 "Section 8.04
Environmental Matters .
(a) The Borrower will and will cause each Subsidiary, to
the extent not already in place, 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
Borrower and the Subsidiaries and the operations conducted
thereon and other activities of the Borrower and the
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 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 Borrower will promptly notify the Agent and the
Lenders in writing of any material threatened action,
investigation or inquiry by any Governmental Authority of
which the Borrower has knowledge in connection with any
Environmental Laws, excluding routine testing and corrective
action.
(c) The Borrower will and will cause each Subsidiary to
provide environmental audits and tests in accordance with
American Society for Testing and Materials standards as
reasonably requested by the Agent and the Lenders (or as
otherwise 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 tc \l2 "Section 8.05
Further Assurances . The Borrower will and will cause each
Restricted 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. The Borrower at its
expense will and will cause each Restricted 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 the Borrower or any Restricted
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 tc \l2 "Section
8.06 Performance of Obligations . The Borrower will pay the Notes
according to the reading, tenor and effect thereof; and the
Borrower will and will cause each Restricted Subsidiary to do and
perform every act and discharge all of the obligations to be
performed and discharged by them under the Security Instruments and
this Agreement, at the time or times and in the manner specified.
Section 8.07 Engineering Reports tc \l2 "Section 8.07
Engineering Reports .
(a) Not less than (i) 30 days prior to the first
Scheduled Redetermination Date to occur on April 1, 2000, and
(ii) 45 days prior to each Scheduled Redetermination Date
thereafter, the Borrower shall furnish to the Agent and the
Lenders a Reserve Report. The Reserve Report to be delivered
by March 1 of each year shall be prepared by certified
independent petroleum engineers or other independent petroleum
consultant(s) acceptable to the Agent and the Reserve Report
to be delivered by September 1 of each year shall be prepared
by or under the supervision of the chief engineer of the
Borrower who shall certify such Reserve Report to be true and
accurate and to have been prepared in accordance with the
procedures used in the immediately preceding March 1 Reserve
Report.
(b) In the event of an unscheduled redetermination, the
Borrower shall furnish to the Agent and the Lenders a Reserve
Report prepared by or under the supervision of the chief
engineer of the Borrower who shall certify such Reserve Report
to be true and accurate and to have been prepared in
accordance with the procedures used in the immediately
preceding Reserve Report. For any unscheduled redetermination
requested by the Majority Lenders or the Borrower pursuant to
Section 2.08(d), the Borrower 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 30
days following the receipt of the request by the Agent on
behalf of the Majority Lenders.
(c) With the delivery of each Reserve Report, the
Borrower 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) the Borrower owns good and defensible title to
the Oil and Gas Properties evaluated in such Reserve Report
and such Properties are free of all Liens except for Liens
permitted by Section 9.02, (iii) except as set forth on an
exhibit to the certificate, on a net basis there are no gas
imbalances, take or pay or other prepayments with respect to
its Oil and Gas Properties evaluated in such Reserve Report
which would require the Borrower to deliver Hydrocarbons
produced from such Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor,
(iv) none of its 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 and in such
detail as reasonably required by the Majority Lenders, (v)
attached to the certificate is a list of its Oil and Gas
Properties added to and deleted from the immediately prior
Reserve Report and a list showing any change in working
interest or net revenue interest in its Oil and Gas Properties
occurring and the reason for such change, (vi) attached to the
certificate is a list of all Persons disbursing proceeds to
the Borrower from its Oil and Gas Properties and (vii)
Schedule B attached to such Reserve Report is a listing of the
Oil and Gas Properties to be considered in the determination
of the Borrowing Base.
(d) As soon as available and in any event within 60 days
after the end of each calendar quarter, the Borrower shall
provide production reports and lease operating summaries by
lease for its Oil and Gas Properties subject to a Lien in
favor of the Agent, which reports shall include quantities or
volume of production, revenue, realized product prices,
operating expenses, taxes, capital expenditures and lease
operating costs which have accrued to the Borrower's accounts
in such period, and such other information with respect
thereto as the Agent may reasonably require; provided,
however, for the period from and after January 1, 2000, up to
and including April 28, 2000, so long as the Aggregate
Commitments exceed the Threshold Amount, the Borrower shall
provide all reports, summaries and other information required
by this Section 8.07(d) within 30 days after the end of each
calendar month.
Section 8.08 Title Information tc \l2 "Section 8.08
Title Information .
(a) On or before the delivery to the Agent and the
Lenders of each Reserve Report required by Section 8.07(a),
the Borrower will deliver title information in form and
substance acceptable to the Agent covering enough of the
Hydrocarbon Interests included in the Borrowing Base that were
not included in the immediately preceding Reserve Report, so
that the Agent shall have received together with title
information previously delivered to the Agent, satisfactory
title information on 100% of the value of the Hydrocarbon
Interests included in the Borrowing Base.
(b) The Borrower shall cure any title defects or
exceptions which are not Excepted Liens raised by such
information, or substitute acceptable Mortgaged Properties
with no title defects or exceptions except for Excepted Liens
covering Mortgaged Properties of an equivalent value, within
30 days after a request by the Agent or the Lenders to cure
such defects or exceptions.
(c) If the Borrower is unable to cure any title defect
requested by the Agent or the Lenders to be cured within the
30-day period or the Borrower does not comply with the
requirements to provide acceptable title information covering
100% of the value of the Oil and Gas Properties evaluated in
the most recent Reserve Report, such default shall not be a
Default or an Event of Default, but instead the Agent and the
Lenders shall have the right to exercise the following remedy
in their sole discretion from time to time, and any failure to
so exercise this remedy at any time shall not be a waiver as
to future exercise of the remedy by the Agent or the Lenders.
To the extent that the Agent or the Lenders are not satisfied
with title to any Mortgaged Property after the time period in
Section 8.08(b) has elapsed, such unacceptable Mortgaged
Property shall not count towards the 100% requirement, and the
Agent may send a notice to the Borrower and the Lenders that
the then outstanding Borrowing Base shall be reduced by an
amount as determined by the Majority Lenders to cause the
Borrower to be in compliance with the requirement to provide
acceptable title information on 100% of the value of the
Hydrocarbon Interests included in the Borrowing Base. This
new Borrowing Base shall become effective immediately after
receipt of such notice.
Section 8.09 Collateral tc \l2 "Section 8.09
Collateral .
(a) Acquisitions. Should the Borrower acquire any
additional Oil and Gas Properties which will be part of the
Oil and Gas Properties included in the Borrowing Base, the
Borrower will grant to the Agent as security for the
Indebtedness a first-priority Lien interest (subject only to
Liens permitted under Section 9.02) on the Borrower's interest
in any such Oil and Gas Properties included in the Borrowing
Base not already subject to a Lien of the Security
Instruments, which Lien will be created and perfected by and
in accordance with the provisions of mortgages, 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.
(b) Concurrently with the granting of the Lien or other
action referred to in Section 8.09(a) above, the Borrower will
provide to the Agent title information in form and substance
satisfactory to the Agent in its reasonable discretion with
respect to the Borrower's interests in such Oil and Gas
Properties.
(c) Also, promptly after the filing in any state of each
new Security Instrument delivered pursuant to Section 8.09(a),
upon the reasonable request of the Agent, the Borrower 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
the Agent, stating that such Security Instrument is valid,
binding and enforceable in accordance with its terms and in
legally sufficient form for recordation in such jurisdiction.
Section 8.10 ERISA Information and Compliance tc \l2
"Section 8.10 ERISA Information and Compliance . When requested
by the Agent, the Borrower will promptly furnish and will cause the
Subsidiaries and any ERISA Affiliate to promptly furnish to the
Agent with sufficient copies to the Lenders copies of each annual
and other report with respect to each Plan or any trust created
thereunder filed with the United States Secretary of Labor, the
Internal Revenue Service or the PBGC. The Borrower will promptly
notify the Agent immediately upon becoming aware of the occurrence
of any ERISA Event or, with respect to any Restricted Subsidiary or
Plan thereof, 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, to the extent that
such ERISA Event or "prohibited transaction" results in a Material
Adverse Effect, in a written notice signed by a Responsible Officer
specifying the nature thereof, what action the Borrower, 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. Immediately upon receipt thereof, the
Borrower will promptly send to the Agent, with sufficient copies to
the Lenders, 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
Borrower will, and will cause each Subsidiary and ERISA Affiliate
to, (i) satisfy in full, 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 all premiums required pursuant to sections
4006 and 4007 of ERISA.
ARTICLE IX
Negative Covenants
tc \l1 " ARTICLE IX Negative Covenants
The Borrower 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 Borrower hereunder, without the prior written consent of the
Majority Lenders:
Section 9.01 Debt tc \l2 "Section 9.01 Debt . Neither
the Borrower nor any Restricted Subsidiary will incur, create,
assume or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness arising under the
Loan Documents or any guaranty of or suretyship arrangement
for the Notes or other Indebtedness arising under the Loan
Documents;
(b) Debt existing on the Closing Date which is reflected
in the Financial Statements or is disclosed in Schedule 9.01,
and any renewals, extensions or refinancings (but not
increases) thereof;
(c) Debt (unrelated to Unrestricted Subsidiaries and
other than for borrowed money) incurred in the ordinary course
of business in connection with Hydrocarbon transportation,
Hydrocarbon purchasing or other similar arrangements, provided
that such arrangements are disclosed to the Agent and the
costs of the financing related to such arrangements are
incorporated into the Engineering Reports provided to the
Agent;
(d) Debt under Hedging Agreements with a Lender or
another counterparty rated BBB+ by Standard & Poor's Ratings
Services or better (or the equivalent rating by another
nationally recognized rating service), the notional amounts of
which, with respect to commodity Hedging Agreements, do not
exceed 80% of Borrower's anticipated oil and/or gas
production from producing ▇▇▇▇▇ to be produced during the term
of such Hedging Agreements, entered into as a part of its
normal business operations as a risk management strategy
and/or hedge against changes resulting from market conditions
related to the Borrower's and its Subsidiaries' operations;
(e) So long as the Threshold Amount equals the Aggregate
Commitments and no Borrowing Base Deficiency has occurred
which is continuing, additional Debt (including, without
limitation, guarantees of Debt of Unrestricted Subsidiaries)
with an outstanding aggregate principal amount not at any time
in excess of $5,000,000; provided, however, that the Borrowing
Base shall be reduced by the amount of all such Debt
outstanding at any time which is in excess of $1,500,000.
(f) Debt secured by the Liens permitted by clause (x) of
the definition of "Excepted Liens"; provided that such Debt is
discharged within 180 days of the relevant acquisition or
merger;
(g) Debt consisting of a pledge of investments in
Unrestricted Subsidiaries permitted by clause (xii) of the
definition of "Excepted Liens"; provided that such Debt is
recourse solely to the investment so pledged;
(h) loans and advances between the Restricted
Subsidiaries, to any Restricted Subsidiary from the Borrower
and to the Borrower from any Restricted Subsidiary;
(i) Debt approved by the Majority Lenders which is
subordinated on terms satisfactory to the Majority Lenders to
the payment of the Indebtedness (with the Borrowing Base in
effect from time to time being reduced by an amount equal to
any effect upon the Borrowing Base occasioned by such
subordinated Debt in the judgment of the Majority Lenders).
Section 9.02 Liens tc \l2 "Section 9.02 Liens .
Neither the Borrower nor any Restricted Subsidiary will create,
incur, assume or permit to exist any Lien on any of its Properties
included in the Borrowing Base (now owned or hereafter acquired),
except:
(a) Liens securing the payment of any Indebtedness;
(b) Excepted Liens;
(c) Liens securing capital leases allowed under Section
9.01(e) but only on the Property under lease;
(d) Liens disclosed on Schedule 9.02; and
(e) Liens on cash or securities of the Borrower securing
the Debt described in Sections 9.01(c) and (d);
provided, however, the exceptions permitted under this Section 9.02
shall not permit any contractual Liens upon the Oil and Gas
Properties which are included in the Borrowing Base superior to any
Liens in favor of the Agent as security for the Indebtedness.
Section 9.03 Investments, Loans and Advances tc \l2
"Section 9.03 Investments, Loans and Advances . Neither the
Borrower nor any Restricted Subsidiary will make or permit to
remain outstanding any loans or advances to or investments in any
Person which is not the Borrower or a Restricted Subsidiary, but
which does include Unrestricted Subsidiaries (each such Person
being a "Third Party") (which shall include any payments on behalf
of any Unrestricted Subsidiary and shall include the Borrower's
investments in and any loans and advances to any Restricted
Subsidiaries that become Unrestricted Subsidiaries in accordance
with Section 9.16 and the definition of "Unrestricted Subsidiary"),
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 in the highest grade by
Standard & Poors Ratings Services or ▇▇▇▇▇'▇ Investors
Service, Inc.;
(e) deposits maturing within one year from the date of
creation thereof with, including certificates of deposit
issued by, any Lender or any office located in the United
States of any other bank or trust company which is organized
under the laws of the United States or any state thereof, has
capital, surplus and undivided profits aggregating at least
$100,000,000.00 (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 Ratings
Services or ▇▇▇▇▇'▇ Investors Service, Inc., respectively;
(f) deposits in money market funds investing exclusively
in investments described in Section 9.03(c), 9.03(d) or
9.03(e);
(g) investments in direct ownership interests in
additional Oil and Gas Properties and gas gathering systems
related thereto;
(h) investments in Unrestricted Subsidiaries in the form
of Oil and Gas Properties which are included in the Borrowing
Base with adjustments to be made to the Borrowing Base with
respect to the elimination of such properties from the
Borrowing Base; provided, however, the approval of the
Majority Lenders shall be required for such removal of a
property from the Borrowing Base; and
(i) investments, loans and advances of cash and any
other Property not included in the Borrowing Base in an
aggregate outstanding amount not at any time in excess of
(when aggregated with net dividends, distributions and
redemptions permitted under Section 9.04) $7,200,000;
provided, however, that with respect to investments of
Property, only the amount of the excess (if any) of the book
value of such Property over the consideration received by the
transferor in connection with the investment of such Property
shall count against such $7,200,000 limit; and provided
further, however, that if the Borrowing Base is more than 50%
utilized, or if the making of any such investment, loan or
advance using the proceeds of a Loan would result in the
Borrowing Base being more than 50% utilized, then no such
investment, loan or advance otherwise permitted by this
Section 9.03 may be made using the proceeds of a Loan
hereunder.
Section 9.04 Dividends, Distributions and Redemptions tc
\l2 "Section 9.04 Dividends, Distributions and Redemptions . The
Borrower will not declare or pay any dividend, purchase, redeem or
otherwise acquire for value any of its 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 Borrower may make dividends, distributions and
redemptions to its parent not to exceed $2,800,000 on a one
time basis following the Closing Date; provided, however, that
such dividends, distributions and redemptions shall not be
permitted hereunder if an Event of Default has occurred and is
continuing or would result therefrom; and
(b) The Borrower may make dividends, distributions and
redemptions to its parent in addition to the amounts set forth in
subparagraph (a) of this Section 9.04 so long as the aggregate
amount of net dividends, distributions and redemptions (excluding
the dividends, distributions and redemptions described in
subparagraph (a) of this Section 9.04), when aggregated with
investments, loans and advances permitted under Section 9.03(i), do
not exceed $7,200,000; provided, however, that such dividends,
distributions and redemptions shall not be permitted hereunder if
an Event of Default has occurred and is continuing or would result
therefrom; and provided further, however, that for any dividend,
distribution or redemption made by the Borrower to the parent after
January 31, 2000, if the Borrowing Base is more than 50% utilized,
or if the making of any such dividend, distribution or redemption
using the proceeds of a Loan would result in the Borrowing Base
being more than 50% utilized, then no such dividend, distribution
or redemption otherwise permitted by this Section 9.04 may be made
using the proceeds of a Loan hereunder.
Section 9.05 Sales and Leasebacks tc \l2 "Section 9.05
Sales and Leasebacks . Neither the Borrower nor any Restricted
Subsidiary will enter into any arrangement, directly or indirectly,
with any Person whereby the Borrower or any Restricted Subsidiary
shall sell or transfer any of its Property included in the
Borrowing Base, whether now owned or hereafter acquired, and
whereby the Borrower or any Restricted Subsidiary shall then or
thereafter rent or lease as lessee such Property or any part
thereof or other Property which the Borrower or any Restricted
Subsidiary intends to use for substantially the same purpose or
purposes as the Property sold or transferred.
Section 9.06 Nature of Business tc \l2 "Section 9.06
Nature of Business . Neither the Borrower nor any Restricted
Subsidiary will allow any material change to be made in the
character of its business as an independent oil and gas exploration
and production company.
Section 9.07 Mergers, Etc. tc \l2 "Section 9.07
Mergers, Etc. Neither the Borrower nor any Restricted 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:
(a) the Borrower or any Restricted Subsidiary may merge
or liquidate any other Person into itself, so long as the
surviving entity will be in compliance with all of the terms
of this Agreement immediately following the merger or
liquidation;
(b) any Restricted Subsidiary may merge or liquidate
into the Borrower or another Restricted Subsidiary; and
(c) any Restricted Subsidiary may be merged into any
other Person; provided that such other Person, immediately
following such merger, shall be deemed a Restricted Subsidiary
and shall comply with the provisions of Section 9.16 hereof;
provided, however, that in the case of a merger permitted by
clauses (a) and (b) above, immediately thereafter and giving
effect thereto, the Borrower or, as the case may be, a
Restricted Subsidiary would be the surviving Person and, in
the case of a merger permitted by clause (a), (b), (c), or (d)
above, no Default or Event of Default would, immediately
thereafter and giving effect thereto, have occurred and be
continuing.
Section 9.08 Proceeds of Notes tc \l2 "Section 9.08
Proceeds of Notes . The Borrower will not permit the proceeds of
the Notes to be used for any purpose other than those permitted by
Section 7.07. Neither the Borrower nor any Person acting on
behalf of the Borrower has taken or will take any action which
might cause any of the Loan Documents to violate 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 9.09 ERISA Compliance tc \l2 "Section 9.09
ERISA Compliance . The Borrower will not at any time engage in or
permit any of the following if a Material Adverse Effect would
result:
(a) Engage in, or permit any Restricted Subsidiary or
ERISA Affiliate to engage in, any transaction in connection
with which the Borrower, any Restricted 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 of the Borrower, any Subsidiary or any ERISA
Affiliate to the PBGC;
(c) Fail to make, or permit any Restricted Subsidiary to
fail to make, full payment of all amounts which, under the
provisions of any Plan, agreement relating thereto or
applicable law, the Borrower or a Restricted Subsidiary 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 liabil-
ities under any Plan maintained by the Borrower, 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 to the extent that such liability can not be paid
in the ordinary course. 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;
(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 the Borrower, 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 Restricted Subsidiary 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 the Borrower, any Subsidiary or any ERISA Affiliate
is required to provide security to such Plan under section
401(a)(29) of the Code.
Section 9.10 Sale or Discount of Receivables tc \l2
"Section 9.10 Sale or Discount of Receivables . Neither the
Borrower nor any Restricted Subsidiary will discount or sell (with
or without recourse) any of its notes receivable or accounts
receivable except (i) in the ordinary course of business, or (ii)
in connection with a receivables asset securitization, otherwise
permitted under this Agreement.
Section 9.11 Ratio of Debt to EBITDAX tc \l2 "Section
9.11 Ratio of Debt to EBITDAX . The Borrower will not permit the
ratio of Debt to EBITDAX as of the end of any fiscal quarter of
the Borrower (calculated on a rolling four quarter basis) to be
greater than 2.50 to 1.00 for any fiscal quarter. As used in this
Agreement, "rolling four quarter basis" shall mean, as to any
fiscal quarter, such quarter and the three preceding fiscal
quarters; provided, however, so long as the Aggregate Commitments
exceed the Threshold Amount, the ratio of Debt to EBITDAX will be
determined as of the end of each calendar month.
Section 9.12 Interest Coverage Ratio tc \l2 "Section
9.12 Interest Coverage Ratio . The Borrower will not permit its
Interest Coverage Ratio as of the end of any fiscal quarter of the
Borrower (calculated on a rolling four quarter basis) to be less
than 3.00 to 1.00. For the purposes of this Section 9.12,
"Interest Coverage Ratio" shall mean the ratio of (i) EBITDAX for
the four fiscal quarters ending on such date to (ii) cash interest
payments made for such four fiscal quarters of the Borrower and its
Restricted Subsidiaries, provided, however, so long as the
Aggregate Commitments exceed the Threshold Amount, the Interest
Coverage Ratio will be determined as of the end of each calendar
month.
Section 9.13 Sale of Oil and Gas Properties tc \l2
"Section 9.13 Sale of Oil and Gas Properties . The Borrower will
not, and will not permit any Restricted Subsidiary to, sell,
assign, farm-out, convey or otherwise transfer any Oil and Gas
Property subject to a Lien in favor of the Agent or any interest in
any Oil and Gas Property subject to a Lien in favor of the Agent,
unless (i) no Default shall have occurred and be continuing and
(ii) simultaneously with any such disposition of Oil and Gas
Properties included in the Borrowing Base, the Borrowing Base is
reduced by an amount reasonably determined at the time by the Agent
to reflect the contribution to the Borrowing Base of the Oil and
Gas Property so disposed of.
Section 9.14 Environmental Matters tc \l2 "Section 9.14
Environmental Matters . Neither the Borrower 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 9.15 Transactions with Affiliates tc \l2
"Section 9.15 Transactions with Affiliates . Neither the Borrower
nor any Restricted 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.
Section 9.16 Subsidiaries tc \l2 "Section 9.16
Subsidiaries . The Borrower shall not and shall not permit any
Restricted Subsidiary to sell or to issue any stock or ownership
interest of a Restricted Subsidiary except to the Borrower or a
Restricted Subsidiary and except in compliance with Section 9.03.
The Borrower shall not create any additional Subsidiaries or
permit any Restricted Subsidiary to do so, except:
(a) the Borrower or any Restricted Subsidiary may create
(by formation or by an acquisition otherwise permitted by this
Agreement) a Restricted Subsidiary provided, that:
(i) each new Restricted Subsidiary shall forthwith
execute and deliver to the Agent for the benefit of the
Lenders a written instrument of guaranty, unconditionally
guaranteeing payment of all Indebtedness of the Borrower;
and
(ii) simultaneously with the delivery of the
aforementioned written instrument of guaranty, each new
Restricted Subsidiary shall deliver to the Agent a
certificate of the Secretary or Assistant Secretary of
such Restricted Subsidiary setting forth (A) resolutions
of its board of directors with respect to the
authorization of such Restricted Subsidiary to execute
and deliver such written instrument of guaranty and to
enter into the transactions contemplated thereby, (B) the
officers of such Restricted Subsidiary (y) who are
authorized to sign such written instrument of guaranty,
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 such written instrument of guaranty and the
transactions contemplated thereby, (C) specimen
signatures for such officers, and (D) the articles or
certificate of incorporation and bylaws of such
Restricted Subsidiary, certified as being true and
complete. The Agent and the Lenders may conclusively
rely on such certificate until the Agent receives notice
in writing from the Borrower or such Restricted
Subsidiary to the contrary;
(b) the Borrower or a Restricted Subsidiary may create
(by formation or by an acquisition otherwise permitted by this
Agreement) additional Subsidiaries provided, that, such
Subsidiary is designated as an Unrestricted Subsidiary by a
certificate of the Borrower signed by both of the chief
financial officer (or treasurer) and the general counsel of
the Borrower, which certificate shall be delivered to the
Agent.
Section 9.17 Negative Pledge Agreements tc \l2 "Section
9.17 Negative Pledge Agreements . Neither the Borrower nor
any Restricted Subsidiary will create, incur, assume or suffer to
exist any contract, agreement or understanding (other than this
Agreement 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 included in the Borrowing Base or
restricts any Restricted Subsidiary from paying dividends to the
Borrower, or which requires the consent of or notice to other
Persons in connection therewith.
Section 9.18 Gas Imbalances, Take-or-Pay or Other
Prepayments tc \l2 "Section 9.18 Gas Imbalances, Take-or-Pay or
Other Prepayments . The Borrower will not allow gas imbalances,
take-or-pay or other prepayments with respect to the Oil and Gas
Properties of the Borrower which would require the Borrower to
deliver Hydrocarbons produced on Oil and Gas Properties at some
future time without then or thereafter receiving full payment
therefor to exceed one billion cubic feet of gas in the aggregate
on a net basis for the Borrower.
ARTICLE X
Events of Default; Remedies
tc \l1 " ARTICLE X Events of Default; Remedies
Section 10.01 Events of Default tc \l2 "Section 10.01
Events of Default . One or more of the following events shall
constitute an "Event of Default":
(a) the Borrower shall default in the payment or
prepayment (including, without limitation, prepayments
resulting from a Borrowing Base Deficiency, but excluding
prepayment to be made pursuant to revocable notices delivered
pursuant to Section 2.07(a) hereof) when due of any principal
of or interest on any Loan, or any reimbursement obligation
for a disbursement made under any Letter of Credit, or any
fees or other amount payable by it hereunder or under any
Security Instrument and such default, other than a default of
a payment or prepayment of principal (which shall have no cure
period) shall continue unremedied for a period of 3 Business
Days; or
(b) the Borrower or any Restricted Subsidiary shall
default in the payment when due of any principal of or
interest on any of its other Debt aggregating $500,000 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 (with
the giving of any notice or the lapse of time or both) 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 prior to its stated maturity; or
(c) any representation, warranty or certification made
or deemed made herein or in any Security Instrument by the
Borrower or any Restricted 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 respect; or
(d) the Borrower shall default in the performance of any
of its obligations under Article IX or any other Article of
this Agreement other than under Article VIII; or the Borrower
shall default in the performance of any of its obligations
under Article VIII 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 after the earlier to occur of (i)
notice thereof to the Borrower by the Agent or any Lender
(through the Agent), or (ii) the Borrower otherwise becoming
aware of such default; or
(e) the Borrower shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts
become due; or
(f) the Borrower 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, liquidation 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 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 the Borrower, in any court of
competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of the
Borrower of all or any substantial part of its assets, or
(iii) similar relief in respect of the Borrower 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 the Borrower
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 $500,000 in the aggregate shall be rendered by a
court against the Borrower or any Restricted Subsidiary and
the same shall not be discharged (or arrangements satisfactory
to the Agent 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 the Borrower or such
Restricted 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 the Borrower shall so state in writing;
or
(j) any Letter of Credit becomes the subject matter of
any order, judgment, injunction or any other such
determination, or if the Borrower or any other Person shall
petition or apply for or obtain any order restricting payment
by the Agent under any Letter of Credit or extending the
Lenders' liability under any Letter of Credit beyond the
expiration date stated therein or otherwise agreed to by the
Agent; or
(k) the Borrower discontinues its usual business or
suffers to exist any material change in its ownership, control
or management; or
(l) any Restricted Subsidiary takes, suffers or permits
to exist any of the events or conditions referred to in
paragraphs (e), (f), (g) or (h) hereof; or
(m) a Borrowing Base Deficiency shall remain after the
applicable time period provided for in Section 2.07(c).
Section 10.02 Remedies tc \l2 "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 or in
clause (l) to the extent it relates to clauses (e), (f) or
(g), the Agent, upon request of the Majority Lenders, shall,
by notice to the Borrower, 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 Borrower 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) 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 Borrower.
(b) In the case of the occurrence of an Event of Default
referred to in clauses (e), (f) or (g) of Section 10.01 or in
clause (l) to the extent it relates to clauses (e), (f) or
(g), the Commitments shall be automatically cancelled and the
principal amount then outstanding of, and the accrued interest
on, the Loans and all other amounts payable by the Borrower
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 Borrower.
(c) All proceeds received after maturity of the Notes,
whether by acceleration or otherwise 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
Borrower or as otherwise required by any Governmental
Requirement.
ARTICLE XI
The Agent
tc \l1 " ARTICLE XI The Agent
Section 11.01 Appointment, Powers and Immunities tc \l2
"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 the Loan Documents, and shall not by reason of the Loan
Documents 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 Borrower or 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 Borrower, the
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. The Agent is authorized to release
any collateral that is permitted to be sold or released pursuant to
the terms of the Loan Documents.
Section 11.02 Reliance by Agent tc \l2 "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 tc \l2 "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 Borrower 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 tc \l2 "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, Chase (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. Chase (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 Borrower (and any of its Affiliates) as if it were not
acting as the Agent, and Chase and its Affiliates may accept fees
and other consideration from the Borrower for services in
connection with this Agreement or otherwise without having to
account for the same to the Lenders.
Section 11.05 INDEMNIFICATION TC \L2 "Section 11.05
INDEMNIFICATION . THE LENDERS AGREE TO INDEMNIFY THE AGENT 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 BORROWER UNDER SECTION 12.03, BUT WITHOUT
LIMITING THE OBLIGATIONS OF THE BORROWER 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 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, 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 AGENT.
Section 11.06 Non-Reliance on Agent and other Lenders tc
\l2 "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 Borrower 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 Borrower 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 Borrower.
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 Borrower (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 tc \l2 "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 hereunder unless it
shall (i) receive written instructions from the Majority Lenders
(or all of the Lenders as expressly required by Section 12.04)
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 the
Majority Lenders (or all of the Lenders as expressly required by
Section 12.04) 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 the
Majority Lenders (or all of the Lenders as required by Section
12.04) 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 tc \l2
"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 Borrower, and the Agent may be removed at any time
with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Majority Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation or the Majority 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.
ARTICLE XII
Miscellaneous
tc \l1 " ARTICLE XII Miscellaneous
Section 12.01 Waiver tc \l2 "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 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 tc \l2 "Section 12.02 Notices .
All notices and other communications provided for herein and in
the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or
the other Loan Documents) shall be given or made by telecopy,
personal delivery, nationally recognized overnight courier or U.S.
Mail in writing and telecopied, mailed or delivered to the intended
recipient at the "Address for Notices" specified below its name on
the signature pages hereof or in the Loan Documents 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 other Loan Documents, all such communica-
tions shall be deemed to have been duly given when transmitted, if
transmitted before 1:00 p.m. local time on a Business Day
(otherwise on the next succeeding Business Day) by telecopier to
the extent that confirmation of receipt is obtained, or personally
delivered or, in the case of a mailed notice, three (3) Business
Days after the date deposited in the mails, postage prepaid, or, in
the case of a nationally recognized overnight courier, one (1) day
after the date delivered to such courier with guaranteed next day
delivery, in each case given or addressed as aforesaid.
Section 12.03 Payment of Expenses, Indemnities, etc tc
\l2 "Section 12.03 Payment of Expenses, Indemnities, etc . The
Borrower agrees:
(a) whether or not the transactions hereby contemplated
are consummated, to pay all reasonable expenses of the Agent
in the administration (both before and after the execution
hereof and including advice of counsel as to the rights and
duties of the Agent and the Lenders with respect thereto) of,
and in connection with the negotiation, syndication,
investigation, preparation, execution and delivery of,
recording or filing of, preservation of rights under,
enforcement of, and refinancing, renegotiation or
restructuring of, the Loan Documents and any amendment, waiver
or consent relating thereto (including, without limitation,
travel, photocopy, mailing, courier, telephone and other
similar expenses of the Agent, the cost of environmental
audits, surveys and appraisals at reasonable intervals, the
reasonable fees and disbursements of counsel and other outside
consultants for the Agent and, in the case of enforcement, the
reasonable fees and disbursements of counsel for the Agent and
any of the Lenders); and promptly reimburse the Agent for all
amounts expended, advanced or incurred by the Agent or the
Lenders to satisfy any obligation of the Borrower under this
Agreement or any Security Instrument, including without
limitation, all costs and expenses of foreclosure;
(b) TO INDEMNIFY THE AGENT AND EACH LENDER AND EACH OF
THEIR AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND
EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM
HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE
EACH OF THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE INCURRED
BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT
ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF,
ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR
PROPOSED USE BY THE BORROWER OF THE PROCEEDS OF ANY OF THE
LOANS OR LETTERS OF CREDIT, (II) THE EXECUTION, DELIVERY AND
PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE OPERATIONS OF THE
BUSINESS OF THE BORROWER AND THE SUBSIDIARIES, (IV) THE
FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE
TERMS OF ANY SECURITY INSTRUMENT OR THIS AGREEMENT, OR WITH
ANY GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF THE BORROWER
SET FORTH IN ANY OF THE LOAN DOCUMENTS, (VI) THE ISSUANCE,
EXECUTION AND DELIVERY OR TRANSFER OF OR PAYMENT OR FAILURE TO
PAY UNDER ANY LETTER OF CREDIT, OR (VII) THE PAYMENT OF A
DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-
COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE
MANUALLY EXECUTED DRAFT(S) AND CERTIFICATION(S), (VIII) ANY
ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE
PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS OR (IX)
ANY OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH
ACTION, SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS,
LITIGATION OR INQUIRIES) OR CLAIM AND INCLUDING ALL INDEMNITY
MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY
INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY MATTERS ARISING
SOLELY BY REASON OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER
AND THE AGENT OR A LENDER'S SHAREHOLDERS AGAINST THE AGENT OR
LENDER OR BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT ON THE PART OF THE INDEMNIFIED PARTY OR ITS
AFFILIATE; AND
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES,
CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH PERSON
MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE
TO THE BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES,
INCLUDING WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (II) AS A
RESULT OF THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY
SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE
BORROWER OR ANY SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE
BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST
ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND
FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT
OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY
SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, PROVIDED,
HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION
12.03(C) IN RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE ARISING
FROM THE ACTS OR OMISSIONS OF THE AGENT OR ANY LENDER DURING
THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS
SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-
POSSESSION OR OTHERWISE).
(d) 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 the
indemnitor may not reasonably 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.
(e) In the case of any indemnification hereunder, the
Agent or Lender, as appropriate shall give notice to the
Borrower of any such claim or demand being made against the
Indemnified Party and the Borrower shall have the
non-exclusive right to join in the defense against any such
claim or demand provided that if the Borrower provides a
defense, the Indemnified Party shall bear its own cost of
defense unless there is a conflict between the Borrower and
such Indemnified Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE
INDEMNIFIED PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER (OTHER THAN
GROSS NEGLIGENCE), 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 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 DEEMED TO HAVE OCCURRED BY REASON
OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE INDEMNIFIED PARTY.
(g) The Borrower's 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.
(h) The Borrower shall pay any amounts due under this
Section 12.03 within thirty (30) days of the receipt by the
Borrower of notice of the amount due.
Section 12.04 Amendments, Etc. tc \l2 "Section 12.04
Amendments, Etc. Any provision of this Agreement or any Security
Instrument may be amended, modified or waived with the Borrower's
and the Majority Lenders' prior written consent; provided that (i)
no amendment, modification or waiver which extends the final
maturity of the Loans, increases the Aggregate Maximum Credit
Amounts, forgives the principal amount of any Indebtedness
outstanding under this Agreement, releases any guarantor of the
Indebtedness or releases any of the collateral, reduces the
interest rate applicable to the Loans or the fees payable to the
Lenders generally, affects Sections 2.03(a) or (b), 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
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 tc \l2 "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 tc \l2
"Section 12.06 Assignments and Participations .
(a) The Borrower may not assign its 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 assign to one or more of its
Affiliates or, upon the written consent of the Agent and the
Borrower (which consent will not be unreasonably withheld),
assign to one or more assignees who are not Affiliates of such
Lender, 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 $10,000,000 or such lesser amount to
which the Borrower has consented and (ii) the assignee or
assignor 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. Promptly
after receipt of an executed Assignment, the Agent shall send
to the Borrower a copy of such executed Assignment. Upon
receipt of such executed Assignment, the Borrower, will, at
its 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 Annex I giving effect to all such
assignments effected during such month, and will promptly
provide the same to the Borrower and each of the Lenders.
(c) Each Lender may transfer, grant or assign
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) forgive any principal owing on any Indebtedness or
extend the final maturity of the Loans, (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 any
guarantor of the Indebtedness or release all or substantially
all of the collateral (except as provided in the Loan
Documents) 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 Borrower
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 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 Borrower in the possession of the Lenders from time to
time to assignees and participants (including prospective
assignees and participants); provided that, such Persons agree
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 Borrower 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 tc \l2 "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 tc \l2 "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 tc \l2 "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.
Section 12.10 Survival tc \l2 "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 Borrower shall take such
action as may be reasonably requested by the Agent and the Lenders
to effect such reinstatement.
Section 12.11 Captions tc \l2 "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 tc \l2 "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 TC \L2 "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. TEX. REV.
CIV. STAT. ▇▇▇. ART. ▇▇▇▇, ▇▇. 15 (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, THE BORROWER 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.
THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS
SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT
PRECLUDE THE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION
OVER THE BORROWER IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE BORROWER HEREBY IRREVOCABLY DESIGNATES C.T.
CORPORATION LOCATED IN HOUSTON, TEXAS, AS THE DESIGNEE,
APPOINTEE AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON
BEHALF OF THE BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THE LOAN DOCUMENTS. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY
OVERNIGHT COURIER TO THE BORROWER AT ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW, BUT THE FAILURE OF THE BORROWER TO
RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF
SUCH PROCESS. THE BORROWER 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 THE
BORROWER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE
THIRTY (30) 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 BORROWER IN ANY OTHER
JURISDICTION.
(e) EACH OF THE BORROWER AND EACH LENDER HEREBY (I)
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY SECURITY
INSTRUMENT AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY
WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III)
CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE SECURITY INSTRUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
12.13.
Section 12.14 Interest tc \l2 "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 Texas or any other
jurisdiction whose laws may be mandatorily applicable to such
Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in
any of the Loan Documents or any agreement entered into in
connection with or as security for the Notes, it is agreed as
follows: (i) the aggregate of all consideration which constitutes
interest under law applicable to any Lender that is contracted for,
taken, reserved, charged or received by such Lender under any of
the Loan Documents or agreements or otherwise in connection with
the Notes shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be canceled
automatically and if theretofore paid shall be credited by such
Lender on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have
been or would thereby be paid in full, refunded by such Lender to
the Borrower); and (ii) in the event that the maturity of the Notes
is accelerated by reason of an election of the holder thereof
resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest under law
applicable to any Lender may never include more than the maximum
amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled auto-
matically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such
Lender on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have
been or would thereby be paid in full, refunded by such Lender to
the Borrower). All sums paid or agreed to be paid to any Lender
for the use, forbearance or detention of sums due hereunder shall,
to the extent permitted by law applicable to such Lender, be
amortized, prorated, allocated and spread throughout the 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. To the
extent that Article 5069-1.04 of the Texas Revised Civil Statutes
is relevant for the purpose of determining the Highest Lawful Rate,
such Lender elects to determine the applicable rate ceiling under
such Article by the indicated weekly rate ceiling from time to time
in effect.
Section 12.15 Confidentiality tc \l2 "Section 12.15
Confidentiality . In the event that the Borrower provides to the
Agent or the Lenders written confidential information belonging to
the Borrower, if the Borrower shall denominate such information in
writing as "confidential", the Agent and the Lenders shall
thereafter maintain such information in confidence in accordance
with the standards of care and diligence that each utilizes in
maintaining its own confidential information. 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 Borrower, (iii) are previously
known by the Agent or the Lenders from some source other than the
Borrower, (iv) are hereafter developed by the Agent or the Lenders
without using the Borrower's 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 Borrower with
respect to such information or through any other means other than
through disclosure by the Borrower, (vi) are disclosed with the
Borrower's 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 any other Lender, any
Affiliate of any Lender, 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
the Lenders shall receive a confidentiality agreement from the
Person to whom such information is disclosed such that said Person
shall have the same obligation to maintain the confidentiality of
such information as is imposed upon the Agent or the Lenders
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 Borrower
requests 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 Borrower waives 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 tc \l2 "Section 12.16
Effectiveness . This Agreement shall be effective on the Closing
Date (the "Effective Date").
Section 12.17 EXCULPATION PROVISIONS tc \l2 "Section
12.17 EXCULPATION PROVISIONS . EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND
THE SECURITY INSTRUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE
AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE SECURITY
INSTRUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY
INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS
AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS
PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE SECURITY
INSTRUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN
ENTERING INTO THIS AGREEMENT AND THE SECURITY INSTRUMENTS; AND THAT
IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE
SECURITY INSTRUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY
INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER
PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND
THE SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE
OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BORROWER: McMoRan OIL & GAS LLC
By:____________________________
_
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
A
ddress for Notices:
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer
with copy to:
Jones, Walker, Waechter,
Poitevent,
Carrere & ▇▇▇▇▇▇▇, L.L.P.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Relationship Partner
LENDER AND AGENT: CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, Individually and
as Agent
By:____________________________
________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate
Loans
and Eurodollar Loans and
Address for
Notice:
Chase Bank of Texas, National
Association
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Telecopier No. 212/▇▇▇-▇▇▇▇
Telephone No. 212/▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ Anemone
with copies to:
Chase Bank of Texas, National
Association
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Telecopier No. 713/▇▇▇-▇▇▇▇
Telephone No. 713/▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Chase Bank of Texas, National
Association
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
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Telecopier No. 212/▇▇▇-▇▇▇▇
Telephone No. 212/▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
BANK OF MONTREAL
By:
___________________________________
Name:
_________________________________
Title:
__________________________________
Lending Office for Base Rate
Loans and
Eurodollar Loans and Address
for Notice:
Bank of Montreal
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Telecopier No.: 312/▇▇▇-▇▇▇▇
Telephone No.: 312/▇▇▇-▇▇▇▇
Attention: Keiko Kuze
with copies to:
Bank of Montreal
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
CITICORP USA
By:
___________________________________
Name:
_________________________________
Title:
__________________________________
Lending Office for Base Rate
Loans and
Eurodollar Loans and Address
for Notice:
Citicorp USA
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Telephone No.: 302/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
with copies to:
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Telecopier No.: 213/▇▇▇-▇▇▇▇
Telephone No.: 213/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and
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Telecopier No.: 213/▇▇▇-▇▇▇▇
Telephone No.: 213/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ANNEX 1
LIST OF MAXIMUM CREDIT AMOUNTS
Name of Lender Percentage Share Maximum Credit Amount
Chase Bank of Texas, National 42.8571428%
$14,999,999.98
Association
Bank of Montreal 28.▇▇▇▇▇▇▇%
$10,000,000.01
Citicorp USA 28.▇▇▇▇▇▇▇%
$10,000,000.01
EXHIBIT A
FORM OF NOTE
$_____________________________ ___________________, 199__
FOR VALUE RECEIVED, McMoRan OIL & GAS LLC, a Delaware limited
liability company (the "Borrower") hereby promises to pay to the
order of ______________________________ (the "Lender"), at the
Principal Office of CHASE BANK OF TEXAS, NATIONAL ASSOCIATION (the
"Agent"), at Chase Bank of Texas, National Association, as Agent,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, the principal sum of
_____________ Dollars ($____________) (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Loans made
by the Lender to the Borrower under the Credit Agreement, as
hereinafter defined), in lawful money of the United States of
America and in immediately available funds, on the dates and in the
principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such
office, in like money and funds, for the period commencing on the
date of such Loan until such Loan shall be paid in full, at the
rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate, Interest Period and
maturity of each Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded
by the Lender on its books and, prior to any transfer of this Note,
may be endorsed by the Lender on the schedules attached hereto or
any continuation thereof or on any separate record maintained by
the Lender.
This Note is one of the Notes referred to in the Amended and
Restated Credit Agreement dated as of January ___, 2000 among the
Borrower, the Lenders which are or become parties thereto
(including the Lender) and the Agent, and evidences Loans made by
the Lender thereunder (such Credit Agreement as the same may be
amended or supplemented from time to time, the "Credit Agreement").
Capitalized terms used in this Note have the respective meanings
assigned to them in the Credit Agreement.
This Note is issued pursuant to the Credit Agreement and is
entitled to the benefits provided for in the Credit Agreement and
the Security Instruments. The Credit Agreement provides for the
acceleration of the maturity of this Note upon the occurrence of
certain events, for prepayments of Loans upon the terms and
conditions specified therein and other provisions relevant to this
Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS.
McMoRan OIL & GAS LLC
By:
Name:
Title:
EXHIBIT B
[FORM OF LOAN REQUEST NOTICE]
[Date]
Chase Bank of Texas, National Association, as Agent
under the Credit Agreement
referred to below
Ladies and Gentlemen:
The undersigned refers to the Amended and Restated Credit
Agreement dated as of January ___, 2000 (as the same may be
amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among McMoRan Oil & Gas LLC, a
Delaware limited liability company (the "Borrower"), the Lenders
party thereto, and Chase Bank of Texas, National Association, as
Agent. Capitalized terms used but not defined herein have the
meaning assigned to such terms in the Credit Agreement. The
Borrower hereby confirms, pursuant to Section 2.02 of the Credit
Agreement, the following Loan as detailed below:
1. Amount: ________________________________
2. Type of Loan: [Eurodollar Rate or Base Rate]
3. Borrowing Date: ________________________________
4. Interest Period for
Eurodollar Rate Loans: [one, two, three, six months]
We would appreciate your acknowledging receipt of this letter
and your agreement with the details of this borrowing by signing
and returning the attached copy of this letter.
Very truly yours,
McMoRan OIL & GAS LLC
By:
Name:
Title:
Receipt Acknowledged:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Agent
By:_____________________________
Name:
Title:
Date:___________________________
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the
________________ of McMoRan OIL & GAS LLC, a Delaware limited
liability company (the "Borrower") and that as such he is
authorized to execute this certificate on behalf of the Borrower.
With reference to the Amended and Restated Credit Agreement dated
as of January ___, 2000 (together with all amendments or
supplements thereto being the "Agreement") among the Borrower,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Agent for the lenders
(the "Lenders") which are or become a party thereto, and such
Lenders, the undersigned represents and warrants as follows (each
capitalized term used herein having the same meaning given to it in
the Agreement unless otherwise specified):
(a) The representations and warranties of the
Borrower contained in Article VII of the Agreement and in
the Security Instruments and otherwise made in writing by
or on behalf of the Borrower pursuant to the Agreement
and the Security Instruments were true and correct when
made, and are repeated at and as of the time of delivery
hereof and are true and correct at and as of the time of
delivery hereof, except to the extent such
representations and warranties are expressly limited to
an earlier date or the Majority Lenders have expressly
consented in writing to the contrary.
(b) The Borrower has performed and complied with
all agreements and conditions contained in the Agreement
and in the Security Instruments required to be performed
or complied with by it prior to or at the time of
delivery hereof.
(c) Since __________________, no change has
occurred, either in any case or in the aggregate, in the
condition, financial or otherwise, of the Borrower or any
Subsidiary which would have a Material Adverse Effect.
(d) There exists, and, after giving effect to the
loan or loans with respect to which this certificate is
being delivered, will exist, no Default under the
Agreement or any event or circumstance which constitutes,
or with notice or lapse of time (or both) would
constitute, an event of default under any loan or credit
agreement, indenture, deed of trust, security agreement
or other agreement or instrument evidencing or pertaining
to any Debt of the Borrower or any Restricted Subsidiary,
or under any material agreement or instrument to which
the Borrower or any Restricted Subsidiary is a party or
by which the Borrower or any Restricted Subsidiary is
bound.
(e) Attached hereto are the detailed computations
necessary to determine whether the Borrower is in
compliance with Sections 9.11, and 9.12 as of the end of
the [calendar month] [fiscal quarter][fiscal year] ending
.
EXECUTED AND DELIVERED this ____ day of ______________.
McMoRan OIL & GAS LLC
By:
Name:
Title:
EXHIBIT E
LIST OF SECURITY INSTRUMENTS
1. Act of Mortgage, Assignment of Production, Security Agreement
and Financing Statement executed by the Borrower covering its
Oil and Gas Properties located offshore Louisiana.
2. Financing Statement executed by the Borrower in connection
with item 1 above.
3. Mortgage, Deed of Trust, Assignment of Production, Security
Agreement and Financing Statement executed by the Borrower
covering its Oil and Gas Properties located offshore Texas.
4. Financing Statements executed by Borrower in connection with
item 3 above.
EXHIBIT F
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("Agreement") dated as of
________________, 199___ is between:
_________________________________ (the "Assignor") and
__________________________ (the "Assignee").
RECITALS
A. The Assignor is a party to the Amended and Restated
Credit Agreement dated as of January ___, 2000(as amended and
supplemented and in effect from time to time, the "Credit
Agreement") among McMoRan OIL & GAS LLC, a Delaware limited
liability company (the "Borrower"), each of the lenders that is or
becomes a party thereto as provided in Section 12.06 of the Credit
Agreement (individually, together with its successors and assigns,
a "Lender", and collectively, together with their successors and
assigns, the "Lenders"), and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, in its individual capacity, "Chase") and as agent for
the Lenders (in such capacity, together with its successors in such
capacity, the "Agent").
B. The Assignor proposes to sell, assign and transfer to the
Assignee, and the Assignee proposes to purchase and assume from the
Assignor, [all][a portion] of the Assignor's Maximum Credit Amount,
outstanding Loans and its Percentage Share of the outstanding LC
Exposure, all on the terms and conditions of this Agreement.
C. In consideration of the foregoing and the mutual
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions.
Section 1.01 Definitions. All capitalized terms used but not
defined herein have the respective meanings given to such terms in
the Credit Agreement.
Section 1.02 Other Definitions. As used herein, the following
terms have the following respective meanings:
"Assigned Interest" shall mean all of Assignor's (in its
capacity as a "Lender") rights and obligations (i) under the
Credit Agreement and the other Security Instruments in respect
of the Maximum Credit Amount of the Assignor in the principal
amount equal to $____________________, including, without
limitation, any obligation to participate pro rata in any LC
Exposure, and (ii) to make Loans under the Maximum Credit
Amount and any right to receive payments for the Loans
outstanding under the Maximum Credit Amount and assigned
hereby of the following amounts:
Loans Amount
Facility $__________________
(the "Loan Balance"), plus the interest and fees which will
accrue from and after the Assignment Date.
"Assignment Date" shall mean _____________________,
199___.
ARTICLE II
Sale and Assignment.
Section 2.01 Sale and Assignment. On the terms and conditions
set forth herein, effective on and as of the Assignment Date, the
Assignor hereby sells, assigns and transfers to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, all of
the right, title and interest of the Assignor in and to, and all of
the obligations of the Assignor in respect of, the Assigned
Interest. Such sale, assignment and transfer is without recourse
and, except as expressly provided in this Agreement, without
representation or warranty.
Section 2.02 Assumption of Obligations. The Assignee agrees
with the Assignor (for the express benefit of the Assignor and the
Borrower) that the Assignee will, from and after the Assignment
Date, perform all of the obligations of the Assignor in respect of
the Assigned Interest. From and after the Assignment Date: (a) the
Assignor shall be released from the Assignor's obligations in
respect of the Assigned Interest, and (b) the Assignee shall be
entitled to all of the Assignor's rights, powers and privileges
under the Credit Agreement and the other Security Instruments in
respect of the Assigned Interest.
Section 2.03 Consent by Agent. By executing this Agreement as
provided below, in accordance with Section 12.06(b) of the Credit
Agreement, the Agent hereby acknowledges notice of the transactions
contemplated by this Agreement and consents to such transactions.
ARTICLE III
Payments.
Section 3.01 Payments. As consideration for the sale,
assignment and transfer contemplated by Section 2.01 hereof, the
Assignee shall, on the Assignment Date, assume Assignor's
obligations in respect of the Assigned Interest and pay to the
Assignor an amount equal to the Loan Balance, if any. An amount
equal to all accrued and unpaid interest and fees shall be paid to
the Assignor as provided in Section 3.02 (iii) below. Except as
otherwise provided in this Agreement, all payments hereunder shall
be made in Dollars and in immediately available funds, without
setoff, deduction or counterclaim.
Section 3.02 Allocation of Payments. The Assignor and the
Assignee agree that (i) the Assignor shall be entitled to any
payments of principal with respect to the Assigned Interest made
prior to the Assignment Date, together with any interest and fees
with respect to the Assigned Interest accrued prior to the
Assignment Date, (ii) the Assignee shall be entitled to any
payments of principal with respect to the Assigned Interest made
from and after the Assignment Date, together with any and all
interest and fees with respect to the Assigned Interest accruing
from and after the Assignment Date, and (iii) the Agent is
authorized and instructed to allocate payments received by it for
account of the Assignor and the Assignee as provided in the
foregoing clauses. Each party hereto agrees that it will hold any
interest, fees or other amounts that it may receive to which the
other party hereto shall be entitled pursuant to the preceding
sentence for account of such other party and pay, in like money and
funds, any such amounts that it may receive to such other party
promptly upon receipt.
Section 3.03 Delivery of Notes. Promptly following the
receipt by the Assignor of the consideration required to be paid
under Section 3.01 hereof, the Assignor shall, in the manner
contemplated by Section 12.06(b) of the Credit Agreement,
(i) deliver to the Agent (or its counsel) the Notes held by the
Assignor and (ii) notify the Agent to request that the Borrower
execute and deliver new Notes to the Assignor, if Assignor
continues to be a Lender, and the Assignee, dated the date of this
Agreement in respective principal amounts equal to the respective
Maximum Facility A Credit Amount and Maximum Facility B Credit
Amount of the Assignor (if appropriate) and the Assignee after
giving effect to the sale, assignment and transfer contemplated
hereby.
Section 3.04 Further Assurances. The Assignor and the
Assignee hereby agree to execute and deliver such other
instruments, and take such other actions, as either party may
reasonably request in connection with the transactions contemplated
by this Agreement.
ARTICLE IV
Conditions Precedent.
Section 4.01 Conditions Precedent. The effectiveness of the
sale, assignment and transfer contemplated hereby is subject to the
satisfaction of each of the following conditions precedent:
(a) the execution and delivery of this Agreement by
the Assignor and the Assignee;
(b) the receipt by the Assignor of the payment
required to be made by the Assignee under Section 3.01 hereof;
and
(c) the acknowledgment and consent by the Agent
contemplated by Section 2.03 hereof.
ARTICLE V
Representations and Warranties.
Section 5.01 Representations and Warranties of the Assignor.
The Assignor represents and warrants to the Assignee as follows:
(a) it has all requisite power and authority, and has
taken all action necessary to execute and deliver this
Agreement and to fulfill its obligations under, and consummate
the transactions contemplated by, this Agreement;
(b) the execution, delivery and compliance with the
terms hereof by Assignor and the delivery of all instruments
required to be delivered by it hereunder do not and will not
violate any Governmental Requirement applicable to it;
(c) this Agreement has been duly executed and
delivered by it and constitutes the legal, valid and binding
obligation of the Assignor, enforceable against it in
accordance with its terms;
(d) all approvals and authorizations of, all filings
with and all actions by any Governmental Authority necessary
for the validity or enforceability of its obligations under
this Agreement have been obtained;
(e) the Assignor has good title to, and is the sole
legal and beneficial owner of, the Assigned Interest, free and
clear of all Liens, claims, participations or other charges of
any nature whatsoever; and
(f) the transactions contemplated by this Agreement
are commercial banking transactions entered into in the
ordinary course of the banking business of the Assignor.
Section 5.02 Disclaimer. Except as expressly provided in
Section 5.01 hereof, the Assignor does not make any representation
or warranty, nor shall it have any responsibility to the Assignee,
with respect to the accuracy of any recitals, statements,
representations or warranties contained in the Credit Agreement or
in any certificate or other document referred to or provided for
in, or received by any Lender under, the Credit Agreement, or for
the value, validity, effectiveness, genuineness, execution,
effectiveness, legality, enforceability or sufficiency of the
Credit Agreement, the Notes or any other document referred to or
provided for therein or for any failure by the Borrower or any
other Person (other than Assignor) to perform any of its
obligations thereunder or for the existence, value, perfection or
priority of any collateral security or the financial or other
condition of the Borrower or the Subsidiaries [or any other obligor
or guarantor], or any other matter relating to the Credit Agreement
or any other Security Instrument or any extension of credit
thereunder.
Section 5.03 Representations and Warranties of the Assignee.
The Assignee represents and warrants to the Assignor as follows:
(a) it has all requisite power and authority, and has
taken all action necessary to execute and deliver this
Agreement and to fulfill its obligations under, and consummate
the transactions contemplated by, this Agreement;
(b) the execution, delivery and compliance with the
terms hereof by Assignee and the delivery of all instruments
required to be delivered by it hereunder do not and will not
violate any Governmental Requirement applicable to it;
(c) this Agreement has been duly executed and
delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against it in
accordance with its terms;
(d) all approvals and authorizations of, all filings
with and all actions by any Governmental Authority necessary
for the validity or enforceability of its obligations under
this Agreement have been obtained;
(e) the Assignee has fully reviewed the terms of the
Credit Agreement and the other Security Instruments and has
independently and without reliance upon the Assignor, and
based on such information as the Assignee has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement;
(f) the Assignee hereby affirms that the
representations contained in Section 4.06(d)(i)(1) of the
Credit Agreement are true and accurate as to Assignee. If
Section 4.06(d)(i)(2) is applicable to the Assignee, Assignee
shall promptly deliver to the Agent and the Borrower such
certifications as are required thereby to avoid the
withholding taxes referred to in Section 4.06; and
(g) the transactions contemplated by this Agreement
are commercial banking transactions entered into in the
ordinary course of the banking business of the Assignee.
ARTICLE VI
Miscellaneous.
Section 6.01 Notices. All notices and other communications
provided for herein (including, without limitation, any
modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including, without
limitation, by telex or telecopy) to the intended recipient at its
"Address for Notices" specified below its name on the signature
pages hereof or, as to either party, at such other address as shall
be designated by such party in a notice to the other party.
Section 6.02 Amendment, Modification or Waiver. No provision
of this Agreement may be amended, modified or waived except by an
instrument in writing signed by the Assignor and the Assignee, and
consented to by the Agent.
Section 6.03 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. The
representations and warranties made herein by the Assignee are also
made for the benefit of the Agent and the Borrower, and the
Assignee agrees that the Agent and the Borrower are entitled to
rely upon such representations and warranties.
Section 6.04 Assignments. Neither party hereto may assign any
of its rights or obligations hereunder except in accordance with
the terms of the Credit Agreement.
Section 6.05 Captions. The 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 6.06 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be identical and
all of which, taken together, shall constitute one and the same
instrument, and each of the parties hereto may execute this
Agreement by signing any such counterpart.
Section 6.07 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of
________________.
Section 6.08 Expenses. To the extent not paid by the Borrower
pursuant to the terms of the Credit Agreement, each party hereto
shall bear its own expenses in connection with the execution,
delivery and performance of this Agreement.
Section 6.09 Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment Agreement to be executed and delivered as of the date
first above written.
ASSIGNOR
By:
Name:
Title:
Address for Notices:
Telecopier No.:
Telephone No.:
Attention:
ASSIGNEE
By:
Name:
Title:
Address for Notices:
Telecopier No.:
Telephone No.:
Attention:
ACKNOWLEDGED AND CONSENTED TO:
______________________________________,
as Agent
By:
Name:
Title:
McMoRan Oil & Gas LLC
By: _________________________________
Name: ______________________________
Title: _______________________________
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