EXHIBIT 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF MARCH 27, 1997
AMONG
▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
AS BORROWER,
THE CHASE MANHATTAN BANK,
AS AGENT,
AND
THE LENDERS SIGNATORY HERETO
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above........................................ 1
Section 1.02 Certain Defined Terms...................................... 1
Section 1.03 Accounting Terms and Determinations........................ 14
ARTICLE II
Commitments
Section 2.01 Loans and Letters of Credit................................ 14
Section 2.02 Borrowings, Continuations, Conversions
and Letters of Credit..................................... 15
Section 2.03 Changes of Commitments..................................... 17
Section 2.04 Fees....................................................... 18
Section 2.05 Several Obligations........................................ 18
Section 2.06 Notes...................................................... 19
Section 2.07 Prepayments................................................ 19
Section 2.08 Borrowing Base............................................. 20
Section 2.09 Assumption of Risks........................................ 21
Section 2.10 Obligation to Reimburse and to Prepay...................... 21
Section 2.11 Lending Offices............................................ 23
ARTICLE III
Payments of Principal and Interest
Section 3.01 Repayment of Loans......................................... 23
Section 3.02 Interest................................................... 23
ARTICLE IV
Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments................................................... 24
Section 4.02 Pro Rata Treatment......................................... 24
Section 4.03 Computations............................................... 25
Section 4.04 Non-receipt of Funds by the Agent.......................... 25
Section 4.05 Set-off, Sharing of Payments, Etc.......................... 25
Section 4.06 Taxes...................................................... 26
Section 4.07 Disposition of Proceeds.................................... ▇▇
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Section 5.01 Additional Costs........................................... 29
Section 5.02 Limitation on Eurodollar Loans............................. 30
Section 5.03 Illegality................................................. 30
Section 5.04 ABR Loans Pursuant to Sections 5.01, 5.02 and 5.03......... 31
Section 5.05 Compensation............................................... 31
Section 5.06 Avoidance of Taxes and Additional Costs.................... 31
ARTICLE VI
Conditions Precedent
Section 6.01 Initial Funding............................................ 32
Section 6.02 Initial and Subsequent Loans............................... 34
Section 6.03 Conditions Relating to Letters of Credit................... 35
ARTICLE VII
Representations and Warranties
Section 7.01 Corporate Existence........................................ 35
Section 7.02 Financial Condition........................................ 35
Section 7.03 Litigation................................................. 36
Section 7.04 No Breach.................................................. 36
Section 7.05 Authority.................................................. 36
Section 7.06 Approvals.................................................. 36
Section 7.07 Use of Loans............................................... 36
Section 7.08 ERISA...................................................... 36
Section 7.09 Taxes...................................................... 37
Section 7.10 Titles, etc................................................ 38
Section 7.11 Solvency................................................... 38
Section 7.12 Investment Company Act..................................... 38
Section 7.13 Public Utility Holding Company Act......................... 39
Section 7.14 Subsidiaries and Partnerships.............................. 39
Section 7.15 Location of Business and Offices........................... 39
Section 7.16 Restriction on Liens....................................... 39
Section 7.17 Environmental Matters...................................... 39
Section 7.18 Compliance with the Law.................................... 40
Section 7.19 Insurance.................................................. 40
Section 7.20 Hedging Agreements......................................... 41
Section 7.21 Gas Imbalances............................................. 41
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ARTICLE VIII
Affirmative Covenants
Section 8.01 Financial Information...................................... 41
Section 8.02 Litigation................................................. 42
Section 8.03 Maintenance, Etc........................................... 42
Section 8.04 Environmental Matters...................................... 44
Section 8.05 Further Assurances......................................... 44
Section 8.06 Performance of Obligations................................. 45
Section 8.07 Engineering Reports........................................ 45
Section 8.08 Title Information.......................................... 46
Section 8.09 Additional Collateral...................................... 47
Section 8.10 ERISA Information and Compliance........................... 47
ARTICLE IX
Negative Covenants
Section 9.01 Debt....................................................... 48
Section 9.02 Liens...................................................... 49
Section 9.03 Investments, Loans and Advances............................ 49
Section 9.04 Gas Imbalances, Take-or-Pay or Other Prepayments........... 50
Section 9.05 Sales and Leasebacks....................................... 50
Section 9.06 Nature of Business......................................... 50
Section 9.07 Limitation on Leases....................................... 50
Section 9.08 Mergers, Etc............................................... 51
Section 9.09 Proceeds of Notes.......................................... 51
Section 9.10 ERISA Compliance........................................... 51
Section 9.11 Sale or Discount of Receivables............................ 52
Section 9.12 Sale of Oil and Gas Properties............................. 52
Section 9.13 Environmental Matters...................................... 52
Section 9.14 Transactions with Affiliates............................... 53
Section 9.15 Partnerships............................................... 53
Section 9.16 Negative Pledge Agreements................................. 53
ARTICLE X
Events of Default; Remedies
Section 10.01 Events of Default......................................... 53
Section 10.02 Remedies.................................................. 55
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ARTICLE XI
The Agent
Section 11.01 Appointment, Powers and Immunities........................ 56
Section 11.02 Reliance by Agent......................................... 56
Section 11.03 Defaults.................................................. 56
Section 11.04 Rights as a Lender........................................ 57
Section 11.05 Indemnification........................................... 57
Section 11.06 Non-Reliance on Agent and other Lenders................... 57
Section 11.07 Action by Agent........................................... 58
Section 11.08 Resignation or Removal of Agent........................... 58
Section 11.09 Amendment of Security Instruments......................... 58
ARTICLE XII
Miscellaneous
Section 12.01 Waiver.................................................... 58
Section 12.02 Notices................................................... 59
Section 12.03 Payment of Expenses, Indemnities, etc..................... 59
Section 12.04 Amendments, Etc........................................... 61
Section 12.05 Successors and Assigns.................................... 61
Section 12.06 Assignments and Participations............................ 61
Section 12.07 Invalidity................................................ 63
Section 12.08 Counterparts.............................................. 63
Section 12.09 References................................................ 63
Section 12.10 Survival.................................................. 63
Section 12.11 Captions.................................................. 63
Section 12.12 NO ORAL AGREEMENTS........................................ 63
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION................. 64
Section 12.14 Interest.................................................. 65
Section 12.15 Confidentiality........................................... 66
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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 Officer's Certificate
Exhibit D - List of Security Instruments
Exhibit E - 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 Partnerships
Schedule 7.17 - Environmental Matters
Schedule 7.19 - Insurance
Schedule 7.20 - Hedging Agreements
Schedule 7.21 - Gas Imbalances
Schedule 9.01 - Debt
Schedule 9.02 - Liens
Schedule 9.03 - Investments, Loans and Advances
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THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 27, 1997
is among: ▇▇▇▇▇▇ & ▇▇▇▇▇, INC., a corporation formed under the laws of the
State of Louisiana (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 THE CHASE MANHATTAN BANK (in its individual
capacity, "Chase"), as agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Agent").
RECITALS:
A. The Borrower, the Agent and certain of the Lenders are parties to that
certain Credit Agreement dated as of December 7, 1994, as amended by that
certain First Amendment to Credit Agreement effective as of December 31, 1994,
and as further amended by that certain Second Amendment to Credit Agreement
effective as of August 14, 1996 (the "Prior Credit Agreement").
B. The Borrower and the Lenders have agreed to amend and restate the
Prior Credit Agreement on the terms hereinafter set forth.
C. The Lenders have agreed to make such loans and extensions of credit
subject to the terms and conditions of this Agreement.
D. 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 as follows:
ARTICLE I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above. As used in this Agreement, the
terms "Agent," "Borrower," "Chase," "Lender," "Lenders" and "Prior Credit
Agreement" shall have the meanings indicated above.
Section 1.02 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Article I or
in other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"ABR Loans" shall mean Loans that bear interest at rates based upon
the Alternative Base Rate.
"Additional Costs" shall have the meaning assigned such term in
Section 5.01(a).
"Adjusted Consolidated Net Tangible Assets" shall have the meaning
assigned such term in the Indenture.
"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. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean any Person
which owns directly or indirectly 10% or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to control 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 Amounts" at any time shall equal the sum of
the Maximum Credit Amounts of the Lenders ($150,000,000), as the same may be
reduced pursuant to Sections 2.03(b), 2.03(d) or 5.06.
"Alternative Base Rate" shall mean, with respect to any ABR 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 Alternative Base Rate resulting from a change
in the Alternative Base Rate shall take effect at the time of such change in the
Alternate Base Rate.
"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, with respect to any Loan, for each day
such Loan is outstanding, and with respect to any letter of credit for each day
such Letter of Credit is outstanding the following rate per annum based upon the
Percentage Usage of the available Borrowing Base as is applicable:
====================================================================================
Percentage Applicable Margin Applicable Margin Applicable Margin for
Usage for for Letters of Credit
Eurodollar Loans ABR Loans
------------------------------------------------------------------------------------
Greater than 75% 1.50% 0.00% 1.50%
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Less than or equal
to 75% and 1.25% 0.00% 1.25%
greater than 50%
------------------------------------------------------------------------------------
Less than or 1.00% 0.00% 1.00%
equal to 50%
====================================================================================
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The Applicable Margin for a Type of Loan or a Letter of Credit shall change on
the same day as any change in the Percentage Usage.
"Assignment" shall have the meaning assigned such term in
Section 12.06(b).
"Borrowing Base" shall mean at any time an amount equal to the amount
determined in accordance with Section 2.08.
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in New York 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.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations, rights or other equivalents in the equity
interests (however designated) in such Person, and any rights (other than debt
securities convertible into an equity interest), warrants or options exercisable
for, exchangeable for or convertible into such an equity interest in such
Person.
"Change of Control" shall have the meaning assigned such term in the
Indenture, except that the reference to "50%" in the fourth, seventh and
fifteenth lines thereof shall, for purposes of this Agreement, be "30%".
"Closing Date" shall mean March 27, 1997.
"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 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 to participate in the
Letters of Credit as provided in Section 2.01(b).
"Commitment Fee Rate" shall mean the following rate per annum based on
the Percentage Usage of the available Borrowing Base as if applicable:
Percentage Usage Commitment Fee Rate
----------------------------------------------------
Greater than 75% 0.375%
----------------------------------------------------
Less than or equal to 75% and 0.325%
Greater than 50%
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Less than or equal to 50% 0.300%
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The Commitment Fee Rate shall change on the same day as any change in the
Percentage Usage.
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"Debt" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or evidenced
by bonds, debentures, notes or other similar instruments (including principal,
interest, fees and charges); (ii) all obligations of such Person (whether
contingent or otherwise) in respect of bankers' acceptances, letters of credit,
surety or other bonds and similar instruments; (iii) all obligations of such
Person to pay the deferred purchase price of Property or services (other than
for borrowed money); (iv) all obligations under leases which shall have been, or
should have been, in accordance with GAAP, recorded as capital leases in respect
of which such Person is liable (whether contingent or otherwise); (v) all
obligations under leases which require such Person or its Affiliate to make
payments over the term of such lease, including payments at termination, which
are substantially equal to at least eighty percent (80%) of the purchase price
of the Property subject to such lease plus interest as an imputed rate of
interest; (vi) all Debt and other obligations of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by such Person; (vii)
all Debt and other obligations of others guaranteed by such Person or in which
such Person otherwise assures a creditor against loss of the debtor or
obligations of others; (viii) all obligations or undertakings of such Person to
maintain or cause to be maintained the financial position or covenants of others
or to purchase the Debt or Property of others; (ix) the undischarged balance of
any production payment created by such Person or for the creation of which such
Person directly or indirectly received payment; (x) the net ▇▇▇▇ to market value
of all obligations of such Person under Hedging Agreements; and (xi) obligations
to deliver goods or services including Hydrocarbons in consideration of advance
payments.
"Default" shall mean an Event of Default or an event which with notice
or lapse of time or both would become an Event of Default.
"Deficiency" shall have the meaning assigned to such term in
Section 2.03(d).
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Engineering Reports" shall have the meaning assigned such term in
Section 2.08.
"Environmental Laws" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Borrower or any of its Subsidiaries is conducting or at any time
has conducted business, or where any Property of the Borrower or any of its
Subsidiaries 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.
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 of
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its Subsidiaries 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 of its Subsidiaries would
be deemed to be a "single employer" within the meaning of section 4001(b)(1) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, (ii) the withdrawal of the
Borrower or any of its Subsidiaries or ERISA Affiliates 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 "Fixed Rate".
"Event of Default" shall have the meaning assigned such term in
Section 10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments or
other governmental charges or levies not yet due or which are being contested in
good faith by appropriate action and for which appropriate reserves have been
maintained; (ii) Liens in connection with workmen's compensation, unemployment
insurance or other social security, old age pension or public liability
obligations not yet due or which are being contested in good faith by
appropriate action and for which appropriate reserves have been maintained in
accordance with GAAP; (iii) operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', workmen's, materialmen's, construction or other like
Liens arising by operation of law in the ordinary course of business or incident
to the exploration, development, operation and maintenance of Oil and Gas
Properties or statutory landlord's liens, each of which is in respect of
obligations that have not been outstanding more than 90 days or which are being
contested in good faith by appropriate proceedings and for which appropriate
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 of its Subsidiaries 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 of its Subsidiaries for the purpose of roads, pipelines,
transmission lines, transportation lines,
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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 of its Subsidiaries or materially impair the
value of such Property subject thereto; (vi) deposits of cash and securities or
Liens on Oil and Gas Properties (provided such consensual Liens are
subordinated, in form and substance satisfactory to the Agent, to all or a
portion of the Indebtedness) to secure the payment or performance of tenders,
statutory or regulatory obligations, surety and appeal bonds, bids, leases,
government contracts and leases, performance and return of money bonds and other
similar obligations incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money but including lessee or operator
obligations under statutes, governmental regulations or instruments related to
the ownership, exploration and production of oil, gas and minerals on state,
federal or foreign lands or waters); and (vii) Liens permitted by the Security
Instruments.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor act thereto.
"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 fee letter dated March 3, 1997
among the Borrower and the Agent with respect to certain fees payable in
conjunction with this Agreement and the transactions contemplated hereby.
"Financial Statements" shall mean the financial statement or
statements of the Parent Company described or referred to in Section 3.01(c) of
the Guaranty Agreement.
"Fixed 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.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
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"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, its Subsidiaries or any of their Properties or the Agent, any Lender
or any Applicable Lending Office.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or
requirement (whether or not having the force of law), including, without
limitation, Environmental Laws, energy regulations and occupational, safety and
health standards or controls, of any Governmental Authority.
"Guarantor" shall mean the Parent Company and each Restricted
Subsidiary now or hereafter executing a Subsidiary Guaranty Agreement.
"Guaranty Agreement" shall mean that certain Guaranty Agreement dated
as of even date herewith, executed by the Parent Company in favor of the Agent
and the Lenders, as the same may be amended or modified from time to time.
"Hedging Agreements" shall mean any commodity, interest rate or
currency swap, rate cap, rate floor, rate collar, forward agreement or other
exchange, price or rate protection agreements or any option with respect to any
such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on the Notes or on
other Indebtedness under laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates now or hereafter acquired in and to oil and gas leases, oil, gas and
mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee
interests, overriding royalty and royalty interests, net profit interests and
production payment interests, including any reserved or residual interests of
whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined or separated therefrom.
"Indebtedness" shall mean any and all amounts owing or to be owing by
the Borrower 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 and any
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Lender or its Affiliate and permitted by the terms of Section 9.01(e), and all
renewals, extensions and/or rearrangements of any of the above.
"Indemnified Parties" shall have the meaning assigned such term in
Section 12.03(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.
"Indenture" shall mean that certain Indenture dated as of December 1,
1994, among the Parent Company, as issuer of the Senior Notes, the Borrower and
other Subsidiaries of the Parent Company as subsidiary guarantors, and Fleet
National Bank (formerly known as Shawmut Bank Connecticut, National
Association), as Trustee, pursuant to which the Senior Notes have been issued,
as supplemented by that certain First Supplemental Indenture dated as of
September 19, 1996.
"Indenture Indebtedness" shall mean all "Indebtedness" (as such term
is defined in the Indenture) of the Parent Company and its Restricted
Subsidiaries.
"Initial Funding" shall mean the funding of the initial Loans or
issuance of the initial Letters of Credit pursuant to Section 6.01.
"Initial Reserve Report" shall mean the report of Netherland, ▇▇▇▇▇▇ &
Associates, Inc. dated March 7, 1997, with respect to the Oil and Gas Properties
of the Borrower as of December 31, 1996, a copy of which has been delivered to
the Agent.
"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 $40,000,000.00
-8-
"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, charge, encumbrance,
pledge, lien (statutory or otherwise), security agreement, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes, or
preferential arrangement of any kind or nature whatsoever (including, any
agreement to give or ▇▇▇▇▇ ▇ ▇▇▇▇), 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 of
its Subsidiaries 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 Guaranty Agreement,
Subsidiary Guaranty Agreements, the Notes, the Fee Letter 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, the Agent and Lenders having at least sixty-six and two-thirds
percent (66 2/3%) of the Aggregate Commitments; and at any time while Loans are
outstanding, the Agent and Lenders holding at least sixty-six and two-thirds
percent (66 2/3%) of the outstanding aggregate principal amount of the Loans
(without regard to any sale by a Lender of a participation in any Loan under
Section 12.06(c)).
"Material Adverse Effect" shall mean any material and adverse effect,
as reasonably determined by the Majority Lenders in good faith, on (i) the
assets, liabilities, financial condition, business, operations or affairs of the
Parent Company and its Restricted Subsidiaries taken as a whole different from
those reflected in the Financial Statements or from the facts represented or
warranted in this Agreement or any Security Instrument, (ii) the assets,
liabilities, financial condition, business, operations or affairs of the
Borrower different from those reflected in the Financial Statements or
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from the facts represented or warranted in this Agreement or any Security
Instrument, or (iii) the ability of the Borrower to carry out its business as at
the Closing Date or meet its 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) or 2.03(d)
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) or
amendments to this Agreement.
"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
Section 3(37) or 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall have the meaning assigned such term in the
Indenture.
"Notes" shall mean the Notes provided for by Section 2.06, 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).
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"Parent Company" shall mean ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., a Delaware
corporation.
"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) or amendments to this Agreement.
"Percentage Usage" shall mean, as of any date of determination, the
quotient (expressed as a percentage) obtained by dividing the balance of all
Loans and the LC Exposure at the close of business on such date by the available
Borrowing Base at the close of business on such date.
"Person" shall mean any individual, corporation, limited liability
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 or any of its Subsidiaries or an ERISA
Affiliate or (ii) was at any time during the preceding six calendar years
sponsored, maintained or contributed to, by the Borrower or any of its
Subsidiaries or an ERISA Affiliate.
"Pledge of Production and Trust Agreements" shall mean collectively,
(i) that certain Pledge of Production Proceeds and Trust Agreements dated as of
May 12, 1993 among Shell Offshore Inc., the Borrower and First National Bank of
Commerce, New Orleans, Louisiana, as Trustee, as the same may from time to time
be amended, and (ii) that certain Pledge of Production Proceeds and Trust
Agreements dated as of May 12, 1992 among Shell Offshore Inc., the Borrower and
First National Bank of Commerce, New Orleans, Louisiana, as Trustee, as amended.
"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 which is not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period commencing on the due date until
such amount is paid in full or the default is cured or waived equal to 2% per
annum above the Alternative 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, if such amount in default is principal of a Eurodollar Loan, the
"Post-Default Rate" for such principal shall be, for the period commencing on
the due date and ending on the last day of the Interest Period therefor, 2% per
annum above the interest rate for such Loan as provided in Section 3.02(b), 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
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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 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"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 June 30, 1997;
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, setting forth, as of each January 1 (or such other
date in the event of an unscheduled redetermination); (i) the oil and gas
reserves attributable to 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 by May 1 of each year pursuant to Section 8.07(a).
"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 of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible Officer of
the Borrower and/or the Parent Company.
"Restricted Subsidiary" means any Subsidiary of the Parent Company,
whether existing on or after the date of this Agreement, unless such Subsidiary
is an Unrestricted Subsidiary as of the Closing Date or is thereafter designated
as an Unrestricted Subsidiary.
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"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 agreements or instruments described or referred to in
Exhibit D, 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,
this Agreement, or reimbursement obligations under the Letters of Credit, as
such agreements may be amended, supplemented or restated from time to time.
"Senior Notes" shall mean those certain 13-1/2% unsecured senior notes
in the aggregate principal amount of $125,000,000 dated as of December 7, 1994
and maturing on December 7, 2004 issued under the Indenture and all obligations
relating thereto.
"Subordinated Debt" shall mean (a) Pledge of Production and Trust
Agreements, (b) the obligations of the Parent Company and the Borrower, as a
subsidiary guarantor, under the Indenture and the Senior Notes, (c) the
obligations of the Parent Company and the Borrower, as a subsidiary guarantor,
under the Subordinated Indenture and the Subordinated Notes, and (d) any other
Debt of the Borrower from time to time outstanding, provided such Debt is
subordinated upon terms satisfactory to the Majority Lenders, in their sole
discretion.
"Subordinated Indenture" shall mean that certain Indenture dated as of
September 26, 1996 among the Parent Company, as issuer of the Subordinated
Notes, the Borrower and other Subsidiaries of the Parent Company as subsidiary
guarantors, and Fleet National Bank, as Trustee, pursuant to which the
Subordinated Notes have been issued.
"Subordinated Notes" shall mean those certain 9-3/4% unsecured senior
subordinated notes in the aggregate principal amount of $160,000,000 dated as of
September 26, 1996 and maturing October 1, 2006 issued under the Subordinated
Indenture, and all obligations relating thereto.
"Subsidiary" shall mean, for any Person, any corporation or limited
liability company of which at least a majority of the outstanding Capital Stock
or other equity interests having ordinary voting power (irrespective of whether
or not at the time Capital Stock, other equity interest of any other class or
classes of such corporation or limited liability company shall have or might
have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more of its
subsidiaries or by such Person and one or more of its subsidiaries.
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"Subsidiary Guaranty Agreement" shall mean each guaranty agreement, in
form and substance reasonably satisfactory to the Agent, now or hereafter
executed by a Restricted Subsidiary in favor of the Agent and the Lenders, as
the same may be amended or modified from time to time.
"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, March 27, 2000, as
extended pursuant to Section 2.03(c).
"Type" shall mean, with respect to any Loan, a ABR Loan or a
Eurodollar Loan.
"Unrestricted Subsidiary" shall mean F&R International Petroleum
Company, a Grand Cayman corporation, and any other Subsidiary of the Parent
Company, which, as of the date formed or acquired, (i) the Board of Directors of
the Parent Company has determined will be designated an Unrestricted Subsidiary
by its Board of Directors as provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of the Parent Company may
designate any Subsidiary as an Unrestricted Subsidiary so long as (a) no
Borrowing Base deficiency exists, (b) no Default or Event of Default exists or
would result from such designation, (c) neither the Parent Company, the Borrower
nor any Restricted Subsidiary is directly or indirectly liable pursuant to the
terms of any Debt of such Subsidiary, (d) no default with respect to any Debt of
such Subsidiary would permit (upon notice, lapse of time, or otherwise) any
holder of any other Debt of the Parent Company, the Borrower or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its stated maturity, (e) such designation
shall not result in the creation of imposition of any claim or Lien on any
assets of the Borrower or any Restricted Subsidiary.
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
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 and up 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 such Loans by all
Lenders hereunder at any one time outstanding
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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 and up 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 day which is two (2) Business Days prior to
the Termination Date, the Agent, as issuing bank for the Lenders, agrees 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
ABR 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.
(d) Loans under Prior Credit Agreement. On the Closing Date:
(i) the Borrower shall pay all accrued and unpaid commitment fees
outstanding under the Prior Credit Agreement for the account of each
"Lender" under the Prior Credit Agreement;
(ii) each "Base Rate Loan" under the Prior Credit Agreement shall be
deemed to be repaid with the proceeds of a new ABR Loan under this
Agreement; and
(iii) the Prior Credit Agreement and the commitments thereunder shall
be superseded by this Agreement and such commitments shall terminate.
Section 2.02 Borrowings, Continuations, Conversions and 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 ABR 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 $100,000 in excess thereof if the remaining
balance of the Aggregate Commitments is greater than $1,000,000; and all
Eurodollar Loans shall be in amounts of at least $3,000,000 or any whole
multiple of $1,000,000 in excess thereof.
(c) Notices. All borrowings, continuations and conversions shall
require advance written notice to the Agent (which shall promptly notify the
Lenders) in the form of Exhibit B hereto
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(or telephonic notice promptly confirmed by such a written notice), which in
each case shall be irrevocable, from the Borrower to be received by the Agent
not later than 11:00 a.m. New York time on the day of each ABR 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 an ABR 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
$3,000,000 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 an ABR 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 an ABR 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 ABR 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 ABR
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.
(f) Advances. Not later than 1:00 p.m. New York 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 and their Percentage Share of such
Letter of Credit) advance notice to be received by the Agent not later than
11:00 a.m. New York 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
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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, immediately upon
issuance of any Letter of Credit, or an amendment thereto, a true and complete
copy of such Letter of Credit, or such amendment thereto.
Section 2.03 Changes of Commitments.
(a) The Aggregate Commitments shall at all times be equal to the
lesser of (i) the Aggregate Maximum Credit Amounts after adjustments resulting
from reductions pursuant to Sections 2.03(b), 2.03(d) or 2.03(e) hereof or (ii)
the Borrowing Base as determined from time to time.
(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 five (5) 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 $1,000,000 or any whole multiple of $1,000,000 in
excess thereof) and shall be irrevocable and effective only upon receipt by the
Agent.
(c) Within the 30 day period ending September 30, 1998, and within the
subsequent 30 day period ending on each September 30 thereof, the Borrower may
request in writing that the Lenders extend the Termination Date for a period of
one-year; provided, however, that any such extension shall require the consent
of all of the Lenders, which consent may be withheld in each Lender's sole
discretion.
(d) If, as of any date of determination, the amount equal to Adjusted
Consolidated Net Tangible Assets as of such day minus $35,000,000 is less than
110% of the aggregate amount of all Indenture Indebtedness (excluding
Subordinated Indebtedness as defined in the Indenture) of the Parent Company and
its Restricted Subsidiaries as of such day (the "Deficiency"), then outstanding
then the Aggregate Maximum Credit Amounts shall be immediately reduced by an
amount equal to such Deficiency.
(e) The Aggregate Maximum Credit Amounts once terminated or reduced
may not be reinstated.
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Section 2.04 Fees.
(a) The Borrower shall pay to the Agent for the account of each Lender
(i) a commitment fee on the daily average unused amount of the Aggregate
Commitments 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 equal to the Commitment Fee Rate and
(ii) a fee for increases in the Aggregate Commitments equal to the portion of
the Aggregate Commitments available after giving effect to the redetermination
of the Borrowing Base in accordance with Section 2.08 minus the largest amount
of the Aggregate Commitments available prior to such redetermination (but only
if such difference is a positive number) at a rate per annum equal to 1/8 of 1%.
Accrued commitment fees shall be payable quarterly on each Quarterly Date in
arrears and on the earlier of the date the Aggregate Commitments are terminated
or the Termination Date. Fees for increases in the Borrowing Base shall be
payable at the time of any such increase.
(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 rate per annum equal to the then Applicable Margin for Letters of Credit,
provided that each Letter of Credit shall bear a minimum commission of $500.00
and that each Letter of Credit shall be deemed to be outstanding up to the full
face amount of the Letter of Credit until the 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 Borrower. Such commissions are
payable quarterly on each Quarterly Date in arrears and on the earlier of the
date the Aggregate Commitments are terminated or the Termination Date.
(c) In addition to the above commission, the Borrower agrees to pay
the Agent for its own account 1/8 of 1% on the daily average amount of Letters
of Credit issued hereunder payable quarterly in arrears on each Quarterly Date
as an issuing fee.
(d) Upon each transfer of any Letter of Credit to a successor
beneficiary in accordance with its terms, the Borrower shall pay the sum of $500
to the Agent for its own account.
(e) Upon each amendment of any Letter of Credit, the Borrower shall
pay the sum of $500 to the Agent for its own account.
(f) The Borrower shall pay such other amounts as are set forth in the
Fee Letter.
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.
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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 such later date that a Lender becomes a
party hereto, payable to the order of such Lender in a principal amount equal to
its Maximum Credit Amount as originally in effect and otherwise duly completed.
The date, amount, Type, interest rate and Interest Period of each Loan made by
each Lender, and all payments made on account of the principal thereof, shall be
recorded by such Lender on its books, and, prior to any transfer of the Note
held by it, endorsed by such Lender on the schedules attached to such Note or
any continuation thereof; provided that the failure of a Lender to make any
notation shall not affect the Borrower's obligation in respect of such Loan.
Section 2.07 Prepayments.
(a) The Borrower may prepay the ABR Loans upon not less than 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 $100,000
or the remaining aggregate principal balance outstanding on the Notes) and shall
be 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 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 shall be irrevocable and effective only upon receipt by the Agent,
provided that interest and all other sums required to be paid under Section
5.05, if any, shall be paid on the prepayment date.
(b) If, after giving effect to any termination or reduction of the
Aggregate Maximum Credit Amounts pursuant to Sections 2.03(b) or 2.03(d), the
outstanding aggregate principal amount of the Loans plus the LC Exposure exceeds
the Aggregate Maximum Credit Amounts, the Borrower shall immediately (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).
(c) Upon any redetermination of the amount of the Borrowing Base in
accordance with Section 2.08 or adjustment in accordance with Section 8.08(c) or
Section 9.12, if the redetermined or adjusted Borrowing Base is less than the
aggregate outstanding principal amount of the Loans plus the LC Exposure, then
the Borrower shall within ninety (90) days of receipt of written notice thereof:
(i) prepay the Loans in an aggregate principal amount equal to such excess,
together with interest on the principal amount paid accrued to the date of such
prepayment and (ii) if a Borrowing Base deficiency remains after prepaying all
of the Loans because of LC Exposure, pay to the Agent on behalf of the Lenders
an amount equal to such Borrowing Base deficiency to be held as cash collateral
as provided in Section 2.10(b).
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(d) Prepayments permitted or required under this Section 2.07 shall be
without premium or penalty, except as required under Section 5.05 for prepayment
of Eurodollar Loans. Any prepayment may be reborrowed subject to the then
effective Aggregate Commitments.
Section 2.08 Borrowing Base.
(a) The Borrowing Base shall be determined by the Agent in its sole
discretion, according to its usual and customary standards, and is subject to
approval of the Majority Lenders in accordance with Section 2.08(b) and is
subject to redetermination in accordance with Section 2.08(d). 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. So long as any of
the Commitments are in effect or any LC Exposure or Loans are outstanding
hereunder, this facility shall be governed by the then effective Borrowing Base.
During the period from and after the Closing Date until May 1, 1997 unless
redetermined pursuant to Section 2.08(d) or adjusted pursuant to Section
8.08(c), the amount of the Borrowing Base shall be $100,000,000.
(b) Upon receipt of the reports required by Section 8.07 and such
other reports, data and supplemental information as may from time to time be
reasonably requested by the Agent (the "Engineering Reports"), the Agent will
redetermine the Borrowing Base. 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 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 within 30
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 15 days to agree or disagree with
such proposal. If at the end of the 15 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 15 days of their disapproval,
the Majority Lenders shall, within a reasonable period of time, agree on a new
Borrowing Base.
(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.
(d) So long as any of the Commitments are in effect and until payment
in full of all Loans hereunder, on or around the first Business Day of each May
and November, commencing May 1, 1997 (each being a "Scheduled Redetermination
Date"), the Lenders shall redetermine the amount of the Borrowing Base in
accordance with Section 2.08(b). In addition, the Majority Lenders may initiate
only one unscheduled redetermination of the Borrowing Base during any
consecutive twelve (12) month period by specifying 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
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redetermination is to occur, and the Borrower may request one unscheduled
redetermination during any consecutive twelve (12) month period at no charge.
(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.
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 gross negligence, 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.
(a) If a disbursement by the Agent is made under any Letter of Credit,
and no Default under this Agreement shall have occurred and be continuing, the
Borrower may elect to have the amount of such disbursement, subject to the then
available Aggregate Commitment and the other terms and conditions set forth in
this Agreement, treated as an ABR Loan to the Borrower as provided in Section
2.01(a). With respect to any disbursement under a Letter of Credit for which no
election is made, or after and during the continuance of a Default, 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 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
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interest rate for ABR Loans through the second Business Day after notice of such
disbursement is received by the Borrower and (ii) thereafter, the Post-Default
Rate for ABR Loans (but in no event to exceed the Highest Lawful Rate) for the
period from and including the Business Day following the date of such
disbursement to and including the date of repayment in full of such disbursed
amount. The obligations of the Borrower under this Agreement and 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; provided however, the foregoing shall not constitute a
waiver, release or estoppel with respect to any such claim, setoff, defense or
other rights which the Borrower may have at any time against the beneficiary of
such Letter of Credit or any transferee of such 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; and
(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.
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 where the Borrower or any
of its Subsidiaries 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.
(b) In the event of the occurrence of any Event of Default, a payment
or prepayment pursuant to Sections 2.07(b), (c) or (d) hereof (resulting from a
Borrowing Base deficiency or obligations being outstanding in excess of the
Aggregate Maximum Credit Amounts) or the maturity of the Notes, whether by
acceleration or otherwise, an amount equal to the LC Exposure 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 (together
with all interest accruing thereon) shall be held by the Agent on behalf of the
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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
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. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
ARTICLE III
Payments of Principal and Interest
Section 3.01 Repayment of Loans. 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.
(a) The Borrower will pay to the Agent, for 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 an ABR Loan, the Alternative Base Rate (as in
effect from time to time) plus the Applicable Margin, but in no event to
exceed the Highest Lawful Rate; and
(ii) if such a Loan is a Eurodollar Loan, for each Interest Period
relating thereto, the Fixed Rate for such Loan plus the Applicable Margin,
but in no event to exceed the Highest Lawful Rate.
(b) 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 Security Instrument or under any Note held by such Lender to or for
account of such Lender, which shall not be paid in full when due (whether at
stated maturity, by
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acceleration or otherwise), for the period commencing on the due date thereof
until the same is paid in full.
(c) Accrued interest on ABR Loans shall be payable on each Quarterly
Date commencing on June 30, 1997, and on the Termination Date and accrued
interest on each Eurodollar Loan shall be payable on the last day of the
Interest Period therefor and, if such Interest Period is longer than three
months at three-month intervals following the first day of such Interest Period,
except that interest payable at the Post-Default Rate shall be payable from time
to time on demand and interest on any Eurodollar Loan that is converted into an
ABR Loan (pursuant to Section 5.04) shall be payable on the date of conversion
(but only to the extent so converted).
(d) 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.
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 this Agreement, the Notes and the Letter of Credit Agreements
shall be made in Dollars, in immediately available funds, to the Agent at such
account as the Agent shall specify by notice to the Borrower from time to time,
not later than 1:00 p.m. New York 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, but shall not constitute a waiver, release or estoppel with
respect to any such defense, set-off or counterclaim. Each payment to be made
to the Agent under this Agreement or any Note for account of a Lender shall be
paid promptly to such Lender in immediately available funds. Except as provided
in clause (ii) of the provisions 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 ABR Loans.
Section 4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein each Lender agrees that: (i) each borrowing from the Lenders
under Section 2.01 shall be made from the Lenders pro rata in accordance with
their Percentage Share, each payment of commitment fee or other fees under
Sections 2.04(a) and (b) 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) and 2.03(d)
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
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rata in accordance with the respective unpaid principal amount of the Loans held
by the Lenders; (iii) each payment of interest on Loans by the 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. Interest on Eurodollar Loans and fees
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 ABR Loans 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. 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 Alternative Base Rate plus
the Applicable Margin.
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 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 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
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have received a greater percentage of the principal or interest 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 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. 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, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans 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.
(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 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
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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, 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 (i) a corporation
organized under the laws of the United States of America or any state
thereof or (ii) it is entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including fees,
to be made to it pursuant to this Agreement (A) under an applicable
provision of a tax convention to which the United States of America is a
party or (B) because it is acting through a branch, agency or office in the
United States of America and any payment to be received by it hereunder is
effectively connected with a trade or business in the United States of
America. Each Lender that is not a corporation organized under the laws of
the United States of America or any state thereof agrees to provide to the
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
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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 Agent (in consultation with
the Borrower) shall withhold taxes from such payments at the applicable
statutory rate. Each Lender agrees to indemnify and hold harmless from any
United States taxes, penalties, interest and other expenses, costs and
losses incurred or payable by (i) the Borrower or 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.
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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, unless there is in existence 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. In addition, unless there is in existence an Event of Default, the
Lenders will, upon written request of the Borrower given to the Agent, execute
and deliver, at the Borrower's expense, such transfer orders and other
instruments reasonably necessary to allow payment of production proceeds
directly to the Borrower.
ARTICLE V
Capital Adequacy
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 (including any of such
Eurodollar Loans or any deposits referred to in the definition of "Fixed Rate"
in Section 1.02 hereof), or the Commitment of such Lender or the Eurodollar
interbank market; or (iii) imposes any other condition affecting this Agreement
or any Note (or any of such extensions of credit or liabilities) or such
Lender's Commitment. 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
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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 Note, 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.
Section 5.02 Limitation on Eurodollar Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Fixed Rate
for any Interest Period:
(i) the Agent determines (which determination shall be conclusive,
absent manifest error) that quotations of interest rates for the relevant
deposits referred to in the definition of "Fixed 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 "Fixed 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. 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).
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Section 5.04 ABR 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 ABR 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 ABR 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) ABR Loans, all payments of
principal which would otherwise be applied to such Lender's Affected Loans shall
be applied instead to its ABR Loans.
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
10.01) on a date other than the last day of the Interest Period for such
Loan; or
(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).
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 Avoidance of Taxes and Additional Costs.
(a) Change Applicable Funding Office. If a Lender makes any claim under
Section 4.06 or Section 5.01, such Lender shall be obligated to use reasonable
efforts to designate a different Applicable Lending Office for the Commitment or
the Loans of such Lender affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation or the imposition of
any Taxes 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.
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(b) Replacement. If any Lender claims (i) payment of Additional Costs or
other compensation under Section 5.01 (when such inability is not then being
claimed by substantially all of the Lenders), (ii) the inability to make or
maintain the Eurodollar Rate for its Loans pursuant to Section 5.01 or 5.03
(when such inability is not then being claimed by substantially all of the
Lenders) or (iii) payment of any Taxes pursuant to Section 4.06, then the
Borrower shall have the right, upon payment of such requested compensation or
indemnification, if applicable, to (i) prepay the Loans made by such Lender and
terminate the Commitment of such Lender on a non pro rata basis or (ii) subject
to the approval of the Agent (such approval not to be unreasonably withheld or
delayed), find one or more Persons willing to assume the Loans, Commitment and
other obligations of such Lender and replace such Lender pursuant to an
Assignment and Acceptance. Any such assumption shall be effected pursuant to
Section 12.06(b). The Borrower shall not, however, be entitled to replace any
Lender if an event which with notice or lapse of time, or both, would constitute
a Default or an Event of Default exists at the time.
(c) Compensation Procedure. Each Lender will notify the Agent and the
Borrower of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to Section 4.06 or Article V as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation. Each Lender will furnish the Agent and the Borrower
with a certificate setting forth the basis and amount of each request by such
Lender for compensation or indemnification and specify the Section pursuant to
which it is claiming compensation or indemnification. Such certificate shall
also include a statement from such Lender that it is asserting its right for
indemnity or compensation not solely with respect to its Maximum Credit Amount
or the Indebtedness outstanding under this Agreement, but is generally making
such claims with respect to similar borrowers under similar transactions to the
one contemplated by this Agreement. Determinations and allocations by any Lender
for purposes of Section 4.06 and Article V of the effect of any Regulatory
Change pursuant to Sections 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 issuing or participating in Letters of Credit or its
obligation to make Loans or issue or participate in Letters of Credit, or on
amounts receivable by it in respect of Loans or such obligations, and of the
additional amounts required to compensate such Lender shall be conclusive,
provided that such determinations and allocations are made on a reasonable
basis. Any demand for compensation pursuant to Article V (other than Section
4.06) must be made on or before six (6) months after the Lender incurs the
expense, cost or economic loss referred to or such Lender shall be deemed to
have waived the right to such compensation. Any demand for compensation
pursuant to Section 4.06 must be made on or before twelve (12) months after the
Lender incurs the expense, cost or economic loss referred to or such Lender
shall be deemed to have waived the right to such compensation.
ARTICLE VI
Conditions Precedent
Section 6.01 Initial Funding.
The obligation of the Lenders to make the Initial Funding is subject
to the receipt by the Agent and the Lenders of all fees payable pursuant to
Section 2.04 on or before the Closing Date or otherwise under this Agreement and
the following documents and satisfaction of the other
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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 or an Assistant Secretary of the
Borrower setting forth (i) resolutions of its board of directors 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 the Borrower (y) who are authorized to sign the
Loan Documents to which it is a party and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized officers, and
(iv) the articles or certificate of incorporation and bylaws of the Borrower,
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 to the contrary.
(b) A certificate of the Secretary or an Assistant Secretary of each
Person who is a Guarantor as of the Closing Date setting forth (i) resolutions
of its board of directors with respect to the authorization of such Person to
execute and deliver the Loan Documents to which it is a party and to enter into
the transactions contemplated in those documents, (ii) the officers of such
Person (y) who are authorized to sign the Loan Documents to which it is a party
and (z) who will, until replaced by another officer or officers duly authorized
for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with this
Agreement and the transactions contemplated hereby, (iii) specimen signatures of
the authorized officers, and (iv) the articles or certificate of incorporation
and bylaws of such Person, 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 to the contrary.
(c) Certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of each Person who is a Guarantor as
of the Closing Date and the Borrower.
(d) The Loan Documents, duly completed and executed.
(e) The Security Instruments, including those described on Exhibit D,
duly completed and executed in sufficient number of counterparts for recording,
if necessary.
(f) An opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., special counsel to the
Parent Company and the Borrower and opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Torian, Diaz,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special Louisiana counsel to the Borrower, in each case in
form and substance reasonably acceptable to the Agent.
(g) A certificate of insurance coverage of the Borrower evidencing
that the Borrower is carrying insurance in accordance with Section 7.19.
(h) The Agent shall be reasonably satisfied with both the
environmental condition of the Oil and Gas Properties of the Borrower and the
title of Borrower to such Properties.
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(i) The Security Instruments and accompanying financing statements
covering the Mortgaged Property shall have been properly filed and recorded in
the appropriate offices to establish and perfect the Liens and security
interests created thereby on at least 85% of the value of the Borrower's proven
Oil and Gas Properties utilized in determining the Borrowing Base.
(j) The Agent shall have been furnished with appropriate UCC search
certificates of the Borrower reflecting no Liens on any of their Properties
except for such Liens permitted by Section 9.02.
(k) The Agent shall have received evidence of the agreement by CT
Corporation System to act as agent for service of process in New York on behalf
of the Borrower.
(l) The Borrower has received all required consents that are, or with
reasonable certainty may be, required for the consummation of Loan Documents and
the transactions contemplated thereby.
(m) After the execution and delivery of the Loan Documents and the
consummation of the transactions contemplated therein, there will not be any
violation of any other material agreement or material contractual obligation of
the Parent Company or any of its Subsidiaries.
(n) Such other documents and financial information as the Agent may
reasonably request regarding the Borrower and any Person who is a Guarantor as
of the Closing Date.
Section 6.02 Initial and Subsequent Loans. 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) is subject to the
further conditions precedent that, as of the date of such Loans or such
issuance, renewal, extension or reissuance, and after giving effect thereto:
(i) no Default shall have occurred and be continuing; (ii) no event or
circumstance shall exist which with the giving of any notice or the lapse of
time or both would obligate the Parent Company to redeem or offer to buy all or
any of the Senior Notes under the Indenture or the Subordinated Notes under the
Subordinated Indenture; (iii) no Material Adverse Effect shall have occurred;
and (iv) the representations and warranties made by the Borrower in Article VII
and by the Borrower and each Guarantor 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 with the same force and effect as if made on and as of
such date and following such new borrowing or such issuance, renewal, extension
or reissuance, except to the extent such representations and warranties are
expressly limited to an earlier date or the Majority Lenders may expressly
consent in writing to the contrary.
Each request for a borrowing or issuance, renewal, extension or
reissuance of a Letter of Credit by the Borrower hereunder shall constitute a
certification by the Borrower to the effect set forth in the preceding paragraph
(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).
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The obligation of the Lenders to make Loans to the Borrower or of the
Agent to issue Letters of Credit, if, after giving effect thereto, the aggregate
principal amount of all the Loans then outstanding and the LC Exposure would be
in excess of $50,000,000, is subject to the further condition precedent that the
Borrower deliver a certificate from a Responsible Officer, in form of Exhibit C
hereto, certifying that, as of the date of incurrence, the Borrower is permitted
to incur such Indebtedness under the Indenture and the Subordinated Indenture
and setting forth in reasonable detail calculations to support the
certification.
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.
(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 (v) expire not later than two (2)
Business Days before 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
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 6.02):
Section 7.01 Corporate Existence. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, legally existing and in good
standing under the laws of the jurisdiction of its incorporation; (ii) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (iii) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify would have a Material Adverse Effect.
Section 7.02 Financial Condition. Except as disclosed in Schedule
7.02 or reflected in the Financial Statements, neither the Borrower nor any of
its Subsidiaries has on the Closing Date any material Debt, contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments. Except as
disclosed in writing to the Lenders since December 31, 1996, there has been no
change or event having a Material Adverse Effect.
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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 of its Subsidiaries which involves the possibility
of any judgment or liability against the Borrower or any of its Subsidiaries not
fully covered by insurance (except for normal deductibles), and which would have
a Material Adverse Effect.
Section 7.04 No Breach. Neither the execution and delivery of the
Loan Documents, nor compliance with the terms and provisions 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 of its Subsidiaries, or any Governmental Requirement or any
agreement or instrument to which such Person 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 of its
Subsidiaries pursuant to the terms of any such agreement or instrument other
than the Liens created by the Loan Documents.
Section 7.05 Authority. The Borrower and each of its Subsidiaries
have all necessary corporate power and authority to execute, deliver and perform
the obligations under the Loan Documents to which it is a party; the execution,
delivery and performance by the Borrower and each of its Subsidiaries of the
Loan Documents to which it is a party, have been duly authorized by all
necessary corporate action; and the Loan Documents to which each such Person is
a party constitute the legal, valid and binding obligations of such Person
enforceable in accordance with their terms.
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 of its
Subsidiaries of the Loan Documents to which it is a party or for the validity or
enforceability thereof, except for the recording and filing of the Security
Instruments as required by this Agreement.
Section 7.07 Use of Loans. The proceeds of the Loans shall be used
to refinance existing debt and for general working capital purposes including
the acquisition and development of oil and gas properties, the exploration and
development of oil and gas reserves and the making of intercompany loans,
investments and dividends to the extent permitted by this Agreement. 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.
(a) The Borrower and each of its Subsidiaries and ERISA Affiliates
have complied in all material respects with ERISA and, where applicable, the
Code regarding each Plan.
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(b) Each Plan is, and has been, maintained in substantial compliance
with ERISA and, where applicable, the Code.
(c) To the best knowledge of the Borrower, no act, omission or
transaction has occurred which could result in imposition on the Borrower or any
of its Subsidiaries or ERISA Affiliates (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 or any of its Subsidiaries or ERISA Affiliates has
been or is expected by the Borrower or any of its Subsidiaries or ERISA
Affiliates 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 or any of its Subsidiaries or ERISA Affiliates 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) None of the Borrower, its Subsidiaries or ERISA Affiliates
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 any of its Subsidiaries or ERISA Affiliates
in its sole discretion at any time without any material liability.
(h) None of the Borrower or any of its Subsidiaries or ERISA
Affiliates 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 or any of its Subsidiaries or ERISA
Affiliates is required to provide security under section 401(a)(29) of the Code
due to a Plan amendment that results in an increase in current liability for the
Plan.
Section 7.09 Taxes. Except as set out in Schedule 7.09, the Borrower
and each of its Subsidiaries has filed all United States Federal income tax
returns and, to the best of the Borrower's knowledge, 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 of
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its Subsidiaries. The charges, accruals and reserves on the books of
the Borrower and its 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.
(a) Except as set out in Schedule 7.10, each of the Borrower and its
Subsidiaries has good and defensible title to its material (individually or in
the aggregate) Properties, free and clear of all Liens except Liens permitted by
Section 9.02. Except as set forth in Schedule 7.10, after giving full effect to
the Excepted Liens, the Borrower owns the net interests in production
attributable to the lands and leases 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 operations of each such Property in an amount in
excess of the working interest of each Property set forth in the most recently
delivered Reserve Report. All information contained in the most recently
delivered Reserve Report is true and correct in all material respects as of the
date thereof.
(b) All material leases and agreements necessary for the conduct of
the business of the Borrower and its Subsidiaries are valid and subsisting and
are in full force and effect. 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 have a Material Adverse
Effect.
(c) The rights, properties and other assets presently owned, leased or
licensed by the Borrower and its Subsidiaries including, without limitation, all
easements and rights of way, include all rights, Properties and other assets
necessary to permit the Borrower and its 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) All of the assets and Properties of the Borrower and its
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 Solvency. The Borrower (a) is not insolvent as of the
Closing Date and will not be rendered insolvent as a result of the execution,
delivery and performance of its obligations under this Agreement, (b) is not
engaged in business or a transaction, or about to engage in a business or a
transaction, for which any property or assets remaining with the Borrower is
unreasonably small capital, and (c) does not intend to incur, or believe it will
incur, debts that will be beyond its ability to pay as such debts mature.
Section 7.12 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
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Section 7.13 Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries 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 and Partnerships. Except as set forth on
Schedule 7.14, the Borrower has no Subsidiaries and has no interest in any
partnerships. Except as set forth on Schedule 7.14, the Borrower has no
Unrestricted Subsidiaries.
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 Restriction on Liens. Except for the Indenture and the
Subordinated Indenture, neither the Borrower nor any of its 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 of Properties.
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 of its Subsidiaries
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 of its Subsidiaries 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 (to the knowledge of the Borrower) 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 of its Subsidiaries, 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 of its Subsidiaries 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 of its Subsidiaries 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
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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 (to the knowledge of the Borrower)
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 of its Subsidiaries 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 of
its Subsidiaries currently satisfies all financial responsibility, spill
prevention, facility 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 of its Subsidiaries 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. Neither the Borrower nor any
of its Subsidiaries 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 substantial conformity with all applicable laws and
all rules, regulations and orders of all duly constituted authorities having
jurisdiction and in substantial conformity with the provisions of all leases,
subleases or other contracts comprising a part of the Hydrocarbon Interests and
other contracts and agreements forming a part of the Oil and Gas Properties;
specifically in this connection, (i) after the Closing Date, no Oil and Gas
Property is subject to having allowable production reduced below the full and
regular allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) prior to
the Closing Date and (ii) none of the ▇▇▇▇▇ comprising a part of the Oil and Gas
Properties (or properties unitized therewith) are deviated from the vertical
more than the maximum permitted by applicable laws, regulations, rules and
orders, and such ▇▇▇▇▇ are, in fact, bottomed under and are producing from, and
the well bores are wholly within, the Oil and Gas Properties (or in the case of
▇▇▇▇▇ located on properties unitized therewith, such unitized properties).
Section 7.19 Insurance. Schedule 7.19 attached hereto contains an
accurate and complete description of all material policies of fire, liability,
workmen's compensation and other
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forms of insurance owned or held by the Borrower and each of its Subsidiaries.
All such policies are in full force and effect, all premiums with respect
thereto covering all periods up to and including the date of the closing have
been paid, and no notice of cancellation or termination has been received with
respect to any such policy. Such policies are sufficient for compliance with all
requirements of law and of all agreements to which the Borrower or any of its
Subsidiaries are 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 of its
Subsidiaries; will remain in full force and effect through the respective dates
set forth in Schedule 7.19 without the payment of additional premiums; and will
not in any way be 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 its Subsidiaries and their
respective Board of Directors or officers have designated as being self insured.
Neither the Borrower nor any of its Subsidiaries 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. Each such policy of insurance covering liability to third
parties shall be endorsed not only to name the Agent and the Lenders as
additional insureds but also to provide that neither the Agent nor any Lender
shall be liable for the non-payment of premium associated with such policy.
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 of its Subsidiaries, 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 Gas Imbalances. As of the Closing Date, except as set
forth on Schedule 7.21 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 5,000,000 mcf of gas in the aggregate.
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 Loans hereunder, all interest
thereon and all other amounts payable by the Borrower hereunder:
Section 8.01 Financial Information. The Borrower shall deliver, or
shall cause to be delivered, to the Agent with sufficient copies of each for the
Lenders:
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(a) From time to time such other information regarding the business,
affairs or financial condition of the Borrower, or any of its Subsidiaries
(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.
(b) At the time the Parent Company furnishes each set of financial
statements pursuant to clauses (i) and (ii) of Section 3.02(a) of the Guaranty
Agreement, a report, in form and substance satisfactory to the Agent, setting
forth as of the last day of such fiscal quarter or year: (i) 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 of its Subsidiaries, 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;
and (ii) the amount of investments, loans and advances made to its Subsidiaries
pursuant to Section 9.03(k).
Section 8.02 Litigation. The Borrower shall promptly give to the
Agent notice of: (i) all legal or arbitral proceedings, and of all proceedings
before any Governmental Authority affecting the Borrower or any of its
Subsidiaries, except proceedings which, if adversely determined, would not have
a Material Adverse Effect, and (ii) of any litigation or proceeding affecting
the Borrower or any of its Subsidiaries in which the amount involved is in
excess of $5,000,000 and not covered by insurance, or in which injunctive or
similar relief is sought. The Borrower will, and will cause each of its
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 of its Subsidiaries if the value of the claim, judgment, Lien, or other
encumbrance affecting such Property shall individually or in the aggregate
exceed $5,000,000.
Section 8.03 Maintenance, Etc.
(a) The Borrower shall and shall cause each of its Subsidiaries 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
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other insurance as is usually carried by such Persons including, without
limitation, environmental risk insurance to the extent reasonably available.
(b) Contemporaneously with the delivery of the annual, audited
financial statements of the Parent Company under the Guaranty Agreement, the
Borrower will furnish or cause to be furnished to the Agent (who shall promptly
furnish a copy to each of 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 (who shall promptly furnish a copy to each of the
Lenders) copies of the applicable policies.
(c) The Borrower will and will cause each of its Subsidiaries to
operate their Properties or cause such Properties to be operated in a careful
and efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance in all
material respects with all Governmental Requirements.
(d) The Borrower will and will cause each of its Subsidiaries 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 and other material Properties including, without limitation,
all equipment, machinery and facilities, and from time to time will make all the
reasonably necessary repairs, renewals and replacements so that at all times the
state and condition of its Oil and Gas Properties and other material Properties
will be fully preserved and maintained, except to the extent, in such Person's
sole discretion, a portion of such Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts. The Borrower will and will
cause each of its Subsidiaries 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, (ii) perform
or make reasonable and customary efforts to cause to be performed, in accordance
with industry standards, the obligations required by each and all of the
assignments, deeds, leases, sub-leases, contracts and agreements affecting its
interests in its Oil and Gas Properties and other material Properties, (iii)
will and will cause each of its Subsidiaries to do all other things necessary to
keep unimpaired, except for Liens described in Section 9.02, its rights with
respect thereto and prevent any forfeiture thereof or a default thereunder,
except to the extent, in such Person's sole discretion, a portion of such
Properties is no longer capable of producing Hydrocarbons in economically
reasonable amounts. The Borrower will and will cause each of its Subsidiaries
to operate its Oil and Gas Properties and other material Properties or cause or
make reasonable and customary efforts to cause such Oil and Gas Properties and
other material Properties to be operated in a careful and efficient manner in
accordance with the practices of the industry and in compliance with all
applicable contracts and agreements and in compliance in all material respects
with all Governmental Requirements.
(e) The Agent shall have received, within 90 days of the Closing Date,
evidence in form and substance satisfactory to the Agent that (i) the Borrower
has obtained all resolutions, orders, consents, approvals and authorizations and
has made all filings and other notifications (governmental or otherwise)
required in connection with the perfection of its title to its Oil and Gas
Properties and the Liens granted pursuant to the Security Instruments, or the
transactions contemplated thereby, including but not limited to, approval by the
Department of Natural Resources,
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Office of Mineral Resources (State Mineral Board) of the State of Louisiana to
hold title to its Oil and Gas Properties in which the State of Louisiana is the
lessor and the United States Department of Interior, Minerals Management Service
to hold title to its Oil and Gas Properties located on the Outer Continental
Shelf and (ii) that the Agent has duly perfected Liens on not less than 90% of
the value of the Oil and Gas Properties evaluated in the Initial Reserve Report.
Section 8.04 Environmental Matters.
(a) The Borrower will and will cause each of its Subsidiaries 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 its
Subsidiaries and the operations conducted thereon 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 (who shall promptly
notify each of the Lenders) in writing of any 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 of its Subsidiaries to
provide environmental audits and tests in accordance with American Society of
Testing and Mechanics 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. The Borrower will and will cause
each of its Subsidiaries to cure promptly any defects in the creation and
issuance of the Notes and the execution and delivery of the other Loan Documents
and this Agreement. The Borrower at its expense will and will cause each of its
Subsidiaries 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 of its Subsidiaries, 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.
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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 of its Subsidiaries to do and perform every act and
discharge all of the obligations to be performed and discharged by them under
the Loan Documents and this Agreement, at the time or times and in the manner
specified.
Section 8.07 Engineering Reports.
(a) Not less than 45 days prior to each Scheduled Redetermination
Date, commencing with the Scheduled Redetermination Date to occur on May 1,
1997, the Borrower shall furnish to the Agent (who shall promptly notify each of
the Lenders) a Reserve Report. The January 1 Reserve Report of each year shall
be prepared by certified independent petroleum engineers or other independent
petroleum consultant(s) acceptable to the Agent and the July 1 Reserve Report 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
proceeding January 1 Reserve Report.
(b) In the event of an unscheduled redetermination, the Borrower shall
furnish to the Agent (who shall promptly notify each of 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 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 45 days following the receipt of the
request by the Agent.
(c) With the delivery of each Reserve Report, the Borrower shall
provide to the Agent (who shall promptly notify each of 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 its 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 of all Persons disbursing proceeds
to the Borrower from its Oil and Gas Properties, (vi) except as set forth on a
schedule attached to the certificate all of the Oil and Gas Properties evaluated
by such Reserve Report are Mortgaged Property and (vii) any change in working
interest or net revenue interest in its Oil and Gas Properties occurring and the
reason for such change.
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(d) As soon as available and in any event within 45 days after the end
of fiscal quarter, the Borrower shall provide production reports and general and
administrative cost summaries for its Oil and Gas Properties, 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 or any Lender may reasonably
require.
Section 8.08 Title Information.
(a) The Borrower shall deliver to the Agent within 90 days of the
Closing Date, title opinions or other title information in form and substance
reasonably satisfactory to the Agent reflecting (i) the Borrower's ownership of
the net interests in production attributable to the Oil and Gas Properties as
reflected in the Initial Reserve Report and the Lien in favor of the Agent and
the Lenders, and (ii) that the Borrower is authorized to hold title to its Oil
and Gas Properties located on the Outer Continental Shelf by the United States
Department of Interior, Minerals Management Service and title to its Oil and Gas
Properties located on lands leased by the State of Louisiana by the Department
of Natural Resources, Office of Mineral Resources (State Mineral Board) of the
State of Louisiana.
(b) On or before the delivery to the Agent of each Reserve Report
required by Section 8.07(a), the Borrower will deliver title information in form
and substance reasonably satisfactory to the Agent covering the Oil and Gas
Properties evaluated by such Reserve Report 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 at least 90% of the value of the Oil and Gas Properties
evaluated by such Reserve Report. The Borrower shall cure any title defects or
exceptions which are not Excepted Liens raised by the title information within
60 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 60 day period, 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 90%
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 all of the Lenders to cause the Borrower to be in compliance with
the requirement to provide acceptable title information on 90% of the value of
such Oil and Gas Properties evaluated in the Reserve Report delivered most
recently under Section 8.07(a). This new Borrowing Base shall become effective
immediately after receipt of such notice.
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Section 8.09 Additional Collateral.
(a) If (i) the Borrower acquires any additional Oil and Gas Properties
which constitute proved reserves or (ii) the Agent shall determine that less
than 90% of the value of the Oil and Gas Properties of the Borrower evaluated in
the most recently delivered Reserve Report are not subject to Liens in favor of
the Agent, for its benefit and the benefit of the Lenders, then the Borrower
will, as soon as reasonably possible, but in any event, not later than 60 days
following such acquisition in the case of clause (i) or the written request of
the Agent in the case of clause (ii), grant to the Agent as security for the
Indebtedness a first-priority Lien interest (subject only to Excepted Liens) on
the Borrower's interest in such additional Oil and Gas Properties to ensure that
not less than 90% of the value of the Borrower's Oil and Gas Properties
evaluated in the most recently delivered Reserve Report is subject to a Lien of
the Security Instruments, which Lien will be created and perfected by and in
accordance with the provisions of deeds of trust, security agreements and
financing statements, or other Security Instruments, all in form and substance
satisfactory to the Agent in its sole discretion and in sufficient executed (and
acknowledged where necessary or appropriate) counterparts for recording
purposes.
(b) Concurrently with the granting of the Lien or other action
referred to in Section 8.09(a), the Borrower will provide to the Agent title
information in form and substance satisfactory to the Agent in its sole
discretion with respect to the Borrower's interests in such Oil and Gas
Properties.
(c) Also, promptly after the filing of any new Security Instrument in
any state, upon the reasonable request of the Agent, the 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 Agent, stating that the Security Instrument is valid, binding and
enforceable in accordance with its terms and in legally sufficient form for such
jurisdiction.
Section 8.10 ERISA Information and Compliance. The Borrower will
promptly furnish and will cause its Subsidiaries and ERISA Affiliates to
promptly furnish to the Agent with sufficient copies to the Lenders (i) promptly
after the filing thereof with the United States Secretary of Labor, the Internal
Revenue Service or the PBGC, copies of each annual and other report with respect
to each Plan or any trust created thereunder, (ii) immediately upon becoming
aware of the occurrence of any ERISA Event or of any "prohibited transaction,"
as described in section 406 of ERISA or in section 4975 of the Code, in
connection with any Plan or any trust created thereunder, a written notice
signed by a Responsible Officer specifying the nature thereof, what action the
Borrower, its Subsidiaries or ERISA Affiliate is taking or proposes to take with
respect thereto, and, when known, any action taken or proposed by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto, and
(iii) immediately upon receipt thereof, copies of any notice of the PBGC's
intention to terminate or to have a trustee appointed to administer any Plan.
With respect to each Plan (other than a Multiemployer Plan), the Borrower will,
and will cause each of its Subsidiaries and ERISA Affiliates to, (i) satisfy in
full and in a timely manner, without incurring any late payment or underpayment
charge or penalty and without giving rise to any lien, all of the contribution
and funding requirements of section 412 of the Code (determined without regard
to subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and
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306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely
manner, without incurring any late payment or underpayment charge or penalty,
all premiums required pursuant to sections 4006 and 4007 of ERISA.
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. Neither the Borrower nor any of its Subsidiaries
will incur, create, assume or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness or any guaranty of or suretyship
arrangement for the Notes or other Indebtedness;
(b) Debt of the Borrower existing on and not repaid on the Closing
Date which is disclosed in Schedule 9.01, and any renewals or extensions (but
not increases) thereof;
(c) accounts payable (for the deferred purchase price of Property or
services) from time to time incurred in the ordinary course of business which,
if greater than 90 days past the invoice or billing date, are being contested in
good faith by appropriate proceedings if reserves adequate under GAAP shall have
been established therefor;
(d) Debt of the Borrower under capital leases (as required to be
reported on the financial statements of the Parent Company pursuant to GAAP) not
to exceed $2,500,000;
(e) Debt of the Borrower under Hedging Agreements either with
investment grade counterparties or as disclosed in Section 7.20; provided
Hedging Agreement relating to commodity prices shall not cover more than 80% of
the Borrower's applicable production estimates from its Oil and Gas Properties
for the longer of (i) the next 24 month period or (ii) the term of such Hedging
Agreements;
(f) Debt associated with bonds or surety obligations required by
Governmental Requirements in connection with the operation of the Oil and Gas
Properties;
(g) the Subordinated Debt or any guaranty of or suretyship arrangement
for the Subordinated Debt;
(h) intercompany Debt to the extent permitted by Section 9.03; and
(i) other Debt not otherwise permitted under this Section 9.01 in an
aggregate principal amount not to exceed $10,000,000 at any one time
outstanding; provided that (i) no Default or Event of Default has occurred at
the moment such Debt is incurred or would result from the incurrence of such
Debt, (ii) the amount of such Debt would not result in the Parent Company being
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obligated to purchase or offer to purchase all or any of the Senior Notes under
Section 10.21 of the Indenture.
Section 9.02 Liens. Neither the Borrower nor any of its Subsidiaries
will create, incur, assume or permit to exist any Lien on any of its Properties
(now owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness;
(b) Excepted Liens;
(c) Liens securing leases allowed under Section 9.01(d) but only on
the Property under lease;
(d) Liens disclosed on Schedule 9.02;
(e) Liens on cash or securities of the Borrower securing the Debt
described in Section 9.01(f); and
(f) Liens on cash or securities to secure the Borrower's obligations
under Hedging Agreements to the extent permitted by Section 9.01(e), not to
exceed $5,000,000 in the aggregate.
Section 9.03 Investments, Loans and Advances. Neither the Borrower
nor any of its Subsidiaries will make or permit to remain outstanding any loans
or advances to or investments in any Person, except that the foregoing
restriction shall not apply to:
(a) investments, loans or advances (i) reflected in the Financial
Statements or which are disclosed to the Lenders in Schedule 9.03, or (ii) by
the Borrower in or to the Parent Company;
(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 rated in the highest grade by Standard & Poors
Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) deposits maturing within one year from the date of creation
thereof with, in cluding certificates of deposit issued by, any Lender or any
office located in the United States or 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 Corporation or ▇▇▇▇▇'▇
Investors Service, Inc., respectively;
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(f) deposits in money market funds investing exclusively in
investments described in Section 9.03(c), 9.03(d) or 9.03(e);
(g) other investments, loans or advances not to exceed $1,000,000 in
the aggregate at any time;
(h) investments by the Borrower in direct ownership interests in
additional Oil and Gas Properties and facilities related thereto;
(i) advances to operators under operating agreements entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business;
(j) repurchase agreements of any commercial banks in the United
States, if the commercial paper of such bank or of the bank holding company of
which such bank is a wholly-owned subsidiary is rated in the highest rating
categories of Standard & Poors Corporation, ▇▇▇▇▇'▇ Investors Service, Inc. or
any other rating agency satisfactory to the Majority Lenders, that are fully
secured by securities described in Section 9.03(c); and
(k) investments, loans and advances in or to Subsidiaries of the
Borrower in the aggregate amount of less than $15,000,000.
Section 9.04 Gas Imbalances, Take-or-Pay or Other Prepayments. The
Borrower will not enter into any contracts or agreements which warrant
production of Hydrocarbons and will not hereafter 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 5,000,000 mcf of gas in the aggregate on a net
basis for the Borrower.
Section 9.05 Sales and Leasebacks. Neither the Borrower nor any of
its Subsidiaries will enter into any arrangement, directly or indirectly, with
any Person whereby the Borrower or any of its Subsidiaries shall sell or
transfer any of their Property, whether now owned or hereafter acquired, and
whereby the Borrower or any of its Subsidiaries shall then or thereafter rent or
lease as lessee such Property or any part thereof or other Property which the
Borrower or any of its Subsidiaries intends to use for substantially the same
purpose or purposes as the Property sold or transferred.
Section 9.06 Nature of Business. Neither the Borrower nor any of its
Subsidiaries 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 Limitation on Leases. Neither the Borrower nor any of
its Subsidiaries will create, incur, assume or suffer to exist any obligation
for the payment of rent or hire of Property of any kind whatsoever (real or
personal, including capital leases but excluding leases of Hydrocarbon Interests
and leases directly related to oil and gas field operations), under leases or
lease agreements which would cause the aggregate amount of all payments made by
the Borrower and its Subsidiaries pursuant to such leases or lease agreements to
exceed $5,000,000 in any period of twelve consecutive
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calendar months. Neither the Borrower nor any of its Subsidiaries will create,
incur, assume or suffer to exist any obligation for the payment of rent or hire
of Property of any kind whatsoever (real or personal, including capital leases),
for oil and gas field operations under leases or lease agreements (other than
leases for any drilling, workover or other rig related activities) which would
cause the aggregate amount of all payments made by the Borrower and its
Subsidiaries pursuant to such leases or lease agreements to exceed $8,000,000 in
any period of twelve consecutive calendar months.
Section 9.08 Mergers, Etc. Neither the Borrower nor any of its
Subsidiaries 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; provided, however, that a Restricted Subsidiary or an Unrestricted
Subsidiary may merge with or into the Parent Company, the Borrower or another
Restricted Subsidiary, as long as the Parent Company or the Borrower is the
surviving entity.
Section 9.09 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 9.10 ERISA Compliance. The Borrower will not at any time:
(a) Engage in, or permit any of its Subsidiaries or ERISA Affiliates
to engage in, any transaction in connection with which the Borrower or any of
its Subsidiaries or ERISA Affiliates 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 of its Subsidiaries or ERISA Affiliates
to terminate, any Plan in a manner, or take any other action with respect to any
Plan, which could result in any liability to the Borrower or any of its
Subsidiaries or ERISA Affiliates to the PBGC;
(c) Fail to make, or permit any of its Subsidiaries or ERISA
Affiliates to fail to make, full payment when due of all amounts which, under
the provisions of any Plan, agreement relating thereto or applicable law, the
Borrower or any of its Subsidiaries or ERISA Affiliates is required to pay as
contributions thereto;
(d) Permit to exist, or allow any of its Subsidiaries or ERISA
Affiliates 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 of its Subsidiaries or ERISA Affiliates to
permit, the actuarial present value of the benefit liabilities under any Plan
maintained by the Borrower or any of its Subsidiaries or ERISA Affiliates 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
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such Plan allocable to such benefit liabilities. The term "actuarial present
value of the benefit liabilities" shall have the meaning specified in section
4041 of ERISA;
(f) Contribute to or assume an obligation to contribute to, or permit
any of its Subsidiaries or ERISA Affiliates to contribute to or assume an
obligation to contribute to, any Multiemployer Plan;
(g) Acquire, or permit any of its Subsidiaries or ERISA Affiliates to
acquire, an interest in any Person that causes such Person to become an ERISA
Affiliates with respect to the Borrower, any of its Subsidiaries or ERISA
Affiliates if such Person sponsors, maintains or con tributes 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 of its Subsidiaries or ERISA Affiliates 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 of its Subsidiaries or ERISA Affiliates 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 of its Subsidiaries or ERISA Affiliates to
amend, a Plan resulting in an increase in current liability such that the
Borrower, any of its Subsidiaries or ERISA Affiliates is required to provide
security to such Plan under section 401(a)(29) of the Code.
Section 9.11 Sale or Discount of Receivables. Neither the Borrower
nor any of its Subsidiaries will discount or sell (with or without recourse) any
of its notes receivable or accounts receivable.
Section 9.12 Sale of Oil and Gas Properties. The Borrower will not
sell, assign, farm-out, convey or otherwise transfer any Oil and Gas Property or
any interest in any Oil and Gas Property except for (i) sales of Hydrocarbons in
the ordinary course of business; (ii) routine farm-outs and other dispositions
of Oil and Gas Properties which do not constitute proved reserves, provided that
within 60 days after the end of each fiscal quarter, the Borrower shall give the
Agent written notice of all such dispositions occurring during such fiscal
quarter; and (iii) dispositions of Oil and Gas Properties which constitute
proved reserves, provided that such dispositions shall not exceed $7,500,000 in
the aggregate in any fiscal year, or if in excess of $7,500,000, that the
Borrower has obtained the written consent of the Agent to such disposition and,
simultaneously with any such disposition, the Borrowing Base IS reduced by an
amount agreed to at the time by the Majority Lenders.
Section 9.13 Environmental Matters. Neither the Borrower nor any of
its Subsidiaries 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
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facts, conditions and circumstances, if any, pertaining to such Property where
such violations or remedial obligations would have a Material Adverse Effect.
Section 9.14 Transactions with Affiliates. Neither the Borrower nor
any of its Subsidiaries 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 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 9.15 Partnerships. Without the prior written consent of the
Agent, the Borrower shall not, and shall not permit the any of its Restricted
Subsidiaries to, create any partnerships except for the purposes of facilitating
oil and gas exploration and development or otherwise in the ordinary course of
the Borrower's business. Without the prior written consent of the Agent, the
Borrower shall not and shall not permit any of its Subsidiaries to sell any
stock of one of its Subsidiaries. The Borrower shall not permit any of its
Subsidiaries to issue any stock except to the Borrower and except in compliance
with Section 9.03.
Section 9.16 Negative Pledge Agreements. Except for (i) the
Indenture and the Subordinated Indenture and (ii) the items disclosed in
Schedule 7.10, neither the Borrower nor any of its Subsidiaries 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
their Property or restricts any of its Subsidiaries from paying dividends or
which requires the consent of or notice to other Persons in connection
therewith.
ARTICLE X
Events of Default; Remedies
Section 10.01 Events of Default. One or more of the following
events shall constitute an "Event of Default":
(a) the Borrower shall default in the payment or prepayment 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, shall continue
unremedied for a period of five (5) Business Days; or
(b) the Parent Company, the Borrower or any of their Subsidiaries
shall default in the payment when due of any principal of or interest on any of
its other Debt aggregating $1,000,000 or more, or any event specified in the
Indenture or the Subordinated Indenture or 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 the Parent Company shall under any
circumstances become obligated to redeem, defease or offer to buy all or any of
the Senior Notes under the Indenture or the Subordinated Notes under the
Subordinated Indenture; or
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(c) any representation, warranty or certification made or deemed made
herein or in any Loan Document by the Parent Company, the Borrower or any of
their Subsidiaries, or any certificate furnished to any Lender or the Agent
pursuant to the provisions hereof or any Loan Document, 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 or any requirement shall not be complied with under Article IX or
any other Article of this Agreement other than under Article VIII; the Parent
Company default in the performance of any of its obligations or any requirement
shall not be complied with under Sections 3.02 or 3.03 of the Guaranty
Agreement; or either (1) the Parent Company shall default in the performance of
any of its obligations or any requirement under the Guaranty Agreement other
than Sections 3.02 or 3.03 thereof or (2) 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, in either case, 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 Parent Company or the Borrower otherwise becoming aware of such default; or
(e) the Parent Company or 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 Parent Company or 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, 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 Parent Company or the Borrower, in any court of competent
jurisdiction, seeking (i) its liquida tion, 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 either
the Parent Company or the Borrower of all or any substantial part of its assets,
or (iii) similar relief in respect of such Person 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 either the Parent Company or 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
$5,000,000 in the aggregate shall be rendered by a court against the Parent
Company or the Borrower and the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution
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thereof shall not be procured, within thirty (30) days from the date of entry
thereof and the Parent Company or the Borrower shall not, within said period of
30 days, or such longer period during which execution of the same shall have
been stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
(i) the Security Instruments after delivery thereof shall for any
reason, except to the extent permitted by the terms thereof, cease to be in full
force and effect and valid, binding and enforceable in accordance with their
terms, or cease to create a valid and perfected Lien of the priority required
thereby on any of the collateral purported to be covered thereby, except to the
extent permitted by the terms of this Agreement or resulting from the action of
the Agent or the Lenders; or the Parent Company, the Borrower or any of their
Subsidiaries shall so state in writing; or
(j) the Borrower discontinues its usual business or suffers to exist
any material change in its management; or the Parent Company suffers a Change of
Control; or
(k) a Guarantor or 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.
Section 10.02 Remedies. If any Event of Default shall have occurred
and be continuing, then:
(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 (k) to the extent it
relates to clauses (e), (f) or (g), the Agent may and, 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)) 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 (k) to the extent it
relates to clauses (e), (f) or (g), the Commitments shall be automatically
canceled and the principal amount then outstanding of, and the accrued interest
on, the Loans and all other amounts payable by the 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)) 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.
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ARTICLE XI
The Agent
Section 11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the Security Instruments with such powers as are specifically delegated to
the Agent by the terms of this Agreement and the Security Instruments, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 11.05 and the first sentence of
Section 11.06 shall include reference to its Affiliates and its and its
Affiliates' officers, directors, employees, attorneys, accountants, experts and
agents): (i) shall have no duties or responsibilities except those expressly
set forth in this Agreement, and shall not by reason of this Agreement be a
trustee or fiduciary for any Lender; (ii) makes no representation or warranty to
any Lender and shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement, or for the value, validity, effectiveness,
genuineness, execution, effectiveness, 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, its Subsidiaries or any other
obligor or guarantor; (iii) except pursuant to Section 11.07 shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder; and (iv) shall not be responsible for any action taken or omitted to
be taken by it hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith including its own ordinary
negligence, except for its own gross negligence or willful misconduct. The
Agent may employ agents, accountants, attorneys and experts and shall not be
responsible for the negligence or misconduct of any such agents, accountants,
attorneys or experts selected by it in good faith or any action taken or omitted
to be taken in good faith by it in accordance with the advice of such agents,
accountants, attorneys or experts. The Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof permitted hereunder shall
have been filed with the Agent.
Section 11.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, 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 in good faith. As to any
matters not expressly provided for by this Agreement or any Security Instrument,
the Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Majority
Lenders; and such instructions of the Majority Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders.
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
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notice thereof to the Lenders. In the event of a payment Default, the Agent
shall give each Lender prompt notice of each such payment Default.
Section 11.04 Rights as a Lender. With respect to its Commitments
and the Loans made by it and its participation in the issuance of Letters of
Credit, 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 (any and 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. 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. 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
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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.
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 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
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 in the written instructions (with indemnities) described
in this Section 11.07, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interests of the Lenders. In no event,
however, shall the Agent be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement and the Security
Instruments or applicable law.
Section 11.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the 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.
Section 11.09 Amendment of Security Instruments. Each Lender
expressly authorizes the Agent to execute and deliver on their behalf any
amendments, supplements or modifications to the Security Instruments containing
such terms as are consistent with this Agreement or which the Agent reasonably
determines to be necessary, prudent or advisable to further the intents and
purposes of this Agreement or such Security Instrument.
ARTICLE XII
Miscellaneous
Section 12.01 Waiver. No failure on the part of the Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
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further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
Section 12.02 Notices. All notices and other communications provided
for herein and in the Security Instruments (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the Security
Instruments) shall be given or made by telecopy, telegraph, cable, courier or
U.S. Mail or in writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof or in the Security Instruments or, as to
any party, at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this Agreement or
in the Security Instruments, all such communications shall be deemed to have
been received when transmitted by telecopier, delivered to the telegraph or
cable office or personally delivered or, in the case of a mailed notice, three
(3) Business Days after the date deposited in the mails, postage prepaid, in
each case given or addressed as aforesaid.
Section 12.03 Payment of Expenses, Indemnities, etc. 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 for the Agent and in the case of enforcement for 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;
(b) TO INDEMNIFY THE AGENT AND EACH LENDER AND EACH OF THEIR
AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES AND
AGENTS ("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, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF
THE LOAN DOCUMENTS, (III) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS
SUBSIDIARIES, (IV) THE FAILURE OF THE BORROWER OR ANY OF ITS SUBSIDIARIES 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
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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; AND
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED
PARTY FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (INCLUDING
REASONABLE ATTORNEYS' FEES) TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I)
UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES 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 OF ITS
SUBSIDIARIES WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES, (III) DUE TO PAST OWNERSHIP BY THE BORROWER OR ANY OF ITS
SUBSIDIARIES 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 OF ITS SUBSIDIARIES, 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.
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(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
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. 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 maturity of the Loans, increases the
Aggregate Maximum Credit Amounts, increases the Borrowing Base, forgives the
principal amount of any Indebtedness outstanding under this Agreement, releases
all of the collateral, reduces the interest rate applicable to the Loans (other
than as a result of waiving the applicability of any post-default increases in
interest rates) or the fees payable to the Lenders generally, affects Section
2.03(a), this Section 12.04 or Section 12.06(a) or modifies the definition of
"Majority Lenders" shall be effective without consent of all Lenders; (ii) no
amendment, modification or waiver which increases the Maximum Credit Amount of
any Lender shall be effective without the consent of such Lender; and (iii) no
amendment, modification or waiver which modifies the rights, duties or
obligations of the Agent shall be effective without the consent of the Agent.
Section 12.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 12.06 Assignments and Participations.
(a) The 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, upon the written consent of the Agent and the
Borrower (which consent will not be unreasonably withheld), assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement pursuant to an Assignment Agreement substantially in the form of
Exhibit E (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 shall pay to the Agent a
processing and recordation fee of $2,500 for each
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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)
extend the Termination Date, (y) reduce the interest rate (other than as a
result of waiving the applicability of any post-default increases in interest
rates) or fees applicable to any of the Commitments or Loans or Letters of
Credit in which such participant is participating, or postpone the payment of
any thereof, or (z) release all or substantially all of the collateral (except
as expressly provided in the Security Instruments) supporting any of the
Commitments or Loans or Letters of Credit in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the Security Instruments (the
participant's rights against the granting Lender in respect of such
participation to be those set forth in the agreement with such Lender creating
such participation), and all amounts payable by the 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.
(e) Notwithstanding anything in this Section 12.06 to the contrary,
any Lender may assign and pledge its Note 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.
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(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 or any portion thereof under the "Blue Sky" laws of
any state.
Section 12.07 Invalidity. In the event that any one or more of the
provisions contained in any of the Loan Documents or the Letters of Credit, the
Letter of Credit Agreements shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of the Notes, this Agreement or any
Security Instrument.
Section 12.08 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 12.09 References. The words "herein," "hereof," "hereunder"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
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. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
Section 12.12 NO ORAL AGREEMENTS. THE LOAN DOCUMENTS EMBODY THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.
(A) THE AGREEMENT AND THE NOTES (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS
SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY
OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT
PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN THE STATE OF NEW YORK.
THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE THE
PARTIES FROM OBTAINING JURISDICTION OVER OTHER PARTIES IN ANY COURT OTHERWISE
HAVING JURISDICTION.
(C) FOR THE PURPOSES OF THIS AGREEMENT, THE NOTES, THE OTHER LOAN
DOCUMENTS AND FOR MATTERS RELATING HERETO OR THERETO (BUT FOR NO OTHER PURPOSE),
THE BORROWER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM LOCATED AT ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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,
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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. It is the intention of the parties hereto
that the Agent and each Lender shall conform strictly to usury laws applicable
to it. Accordingly, if the transactions contemplated hereby would be usurious
as to the Agent or any Lender under laws applicable to it (including the laws of
the United States of America and the State of New York or any other jurisdiction
whose laws may be mandatorily applicable to the Agent or 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: (a) the aggregate of all consideration which constitutes
interest under law applicable to the Agent or any Lender that is contracted for,
taken, reserved, charged or received by the Agent or such Lender under any of
the Loan Documents or agreements or otherwise in connec tion with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be cancelled automatically and if
theretofore paid shall be credited by the Agent or 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 the
Agent or such Lender to the Borrower); and (b) 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 the Agent or 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 cancelled
automatically by the Agent or such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by the Agent or 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 the Agent or such Lender to the Borrower). All sums paid or
agreed to be paid to the Agent or to any Lender for the use, forbearance or
detention of sums due hereunder shall, to the extent permitted by law applicable
to the Agent or 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 or other
amounts 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
the Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to the Agent or such Lender pursuant to this Section 12.14 and (ii)
in respect of any subse quent interest computation period the amount of
interest otherwise payable to the Agent or such Lender would be less than the
amount of interest payable to the Agent or such Lender computed at the Highest
Lawful Rate applicable to the Agent or such Lender, then the amount of interest
payable to the Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to the Agent or such Lender until the total amount of interest
payable to the Agent or such Lender shall equal the total amount of interest
which would have been payable to the Agent or such Lender if the total amount of
interest had been computed without giving effect to this Section 12.14.
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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 independent petroleum engineers or consultants, any
independent certified public accountants, any legal counsel in each case
employed by such Person in connection with this Agreement or any Security
Instrument, including without limitation, the enforcement or exercise of all
rights and remedies thereunder, or any assignee or participant (including
prospective assignees and participants) in the Loans; provided, however, that
the Agent or Lender imposes on the Person to whom such information is disclosed
the same obligation to maintain the confidentiality of such information as is
imposed upon it hereunder. Notwithstanding anything to the contrary provided
herein, this obligation of confidence shall cease three (3) years from the date
the information was furnished, unless the 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.
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The parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.
BORROWER: ▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:_______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President and
Chief Financial Officer
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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AGENT: THE CHASE MANHATTAN BANK, as Agent
By:_______________________________
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
1 Chase Manhattan Plaza -
8th Floor
New York, New York 10081
Attention: Loan Agency Services
Group
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
Chase Securities Inc.
▇▇▇ ▇▇▇▇▇▇ -▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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LENDER: THE CHASE MANHATTAN BANK
By:_______________________________
Name:
Title:
Lending Office for ABR Loans and
Eurodollar Loans:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
The Chase Manhattan Bank
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Agency Services Group
with a copy to:
Chase Securities Inc.
▇▇▇ ▇▇▇▇▇▇ -▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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LENDER: BANQUE PARIBAS
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
ABR Rate and Eurodollar
Lending Office:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Banque Paribas
Houston Agency
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Vice President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.
By:________________________________
Name:
Title:
Lending Office for ABR Loans and
Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Bank One, Texas, N.A.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.:
Telephone No.:
Attention: _______________
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LENDER: BANK OF MONTREAL
By:_____________________________
Name:
Title:
Lending Office for ABR Loans and
Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Bank of Montreal
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.:
Telephone No.:
Attention:
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LENDER: FIRST NATIONAL BANK OF COMMERCE
By:______________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
First National Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
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