EXHIBIT 4.9
EXECUTION
$250,000,000
CREDIT AGREEMENT
dated as of
October 28, 2002
among
Cabot Oil & Gas Corporation,
The Banks Parties Hereto
and
Fleet National Bank,
as Administrative Agent
---------------------------------
Fleet Securities Inc.,
Arranger
Bank One, NA,
Syndication Agent
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Financing, Inc.
Documentation Agent
TABLE OF CONTENTS
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PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions ................................................ 1
SECTION 1.02. Accounting Terms and Determinations ........................ 11
SECTION 1.03. Types of Borrowings ........................................ 12
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend ........................................ 12
SECTION 2.02. Notice of Borrowings ....................................... 12
SECTION 2.03. Notes ...................................................... 13
SECTION 2.04. Maturity of Loans .......................................... 14
SECTION 2.05. Interest Rates ............................................. 14
SECTION 2.06. Commitment Fees ............................................ 14
SECTION 2.07. Termination or Reduction of Commitments .................... 15
SECTION 2.08. Method of Electing Interest Rates .......................... 15
SECTION 2.09. Prepayments ................................................ 16
SECTION 2.10. General Provisions as to Payments .......................... 17
SECTION 2.11. Funding Losses ............................................. 18
SECTION 2.12. Computation of Interest and Fees ........................... 18
SECTION 2.13. Withholding Tax Exemption .................................. 18
SECTION 2.14. Regulation D Compensation .................................. 19
SECTION 2.15. Maximum Interest Rate ...................................... 19
SECTION 2.16. Letters of Credit .......................................... 20
SECTION 2.17. Requesting Letters of Credit ............................... 20
SECTION 2.18. Reimbursement and Participations ........................... 21
SECTION 2.19. Letter of Credit Fees ...................................... 22
SECTION 2.20. No Duty to Inquire ......................................... 23
SECTION 2.21. LC Collateral .............................................. 24
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness .............................................. 25
SECTION 3.02. Borrowings and Letters of Credit Issuances ................. 26
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power .............................. 27
SECTION 4.02. Corporate Governmental Authorization; No Contravention ..... 27
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PAGE
SECTION 4.03. Binding Effect ............................................. 27
SECTION 4.04. Financial and Other Information ............................ 28
SECTION 4.05. Full Disclosure ............................................ 28
SECTION 4.06. Litigation ................................................. 29
SECTION 4.07. Compliance with ERISA ...................................... 29
SECTION 4.08. Environmental Matters ...................................... 29
SECTION 4.09. Taxes ...................................................... 29
SECTION 4.10. Titles, etc ................................................ 29
SECTION 4.11. Casualties; Taking of Properties ........................... 30
SECTION 4.12. Use of Proceeds ............................................ 30
ARTICLE 5
COVENANTS
SECTION 5.01. Information ................................................ 30
SECTION 5.02. Payment of Obligations ..................................... 32
SECTION 5.03. Maintenance of Property .................................... 32
SECTION 5.04. Conduct of Business and Maintenance of Existence ........... 32
SECTION 5.05. Compliance with Laws ....................................... 33
SECTION 5.06. Inspections of Property, Books and Records ................. 33
SECTION 5.07. Insurance .................................................. 33
SECTION 5.08. Covenant to Secure Indebtedness Equally; Subsidiary
Guaranties ................................................ 33
SECTION 5.09. Engineering Reports ........................................ 34
SECTION 5.10. Debt ....................................................... 34
SECTION 5.11. Liens ...................................................... 36
SECTION 5.12. Sales of Petroleum Properties .............................. 37
SECTION 5.13. Financial Covenants ........................................ 37
SECTION 5.14. Consolidations, Mergers and Sales of Assets ................ 39
SECTION 5.15. Subsidiary Debt ............................................ 39
SECTION 5.16. Subsidiaries ............................................... 39
SECTION 5.17. Credit Extensions .......................................... 39
SECTION 5.18. Transactions with Affiliates ............................... 39
SECTION 5.19. Commodity ▇▇▇▇▇▇ ........................................... 39
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default .......................................... 40
SECTION 6.02. Notice of Default .......................................... 42
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization .............................. 42
SECTION 7.02. Administrative Agent and Affiliates ........................ 43
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SECTION 7.03. Action by Administrative Agent ............................. 43
SECTION 7.04. Consultation with Experts .................................. 43
SECTION 7.05. Liability of Administrative Agent .......................... 43
SECTION 7.06. Indemnification ............................................ 44
SECTION 7.07. Credit Decision ............................................ 44
SECTION 7.08. Successor Administrative Agent ............................. 44
SECTION 7.09. Administrative Agent's Fees ................................ 44
SECTION 7.10. Other Agents ............................................... 44
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair .................................................... 45
SECTION 8.02. Illegality ................................................. 45
SECTION 8.03. Increased Cost and Reduced Return .......................... 46
SECTION 8.04. Base Rate Loans Substituted for Affected Euro-Dollar
Loans ..................................................... 47
SECTION 8.05. Substitution of Bank ....................................... 47
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices .................................................... 48
SECTION 9.02. No Waivers ................................................. 48
SECTION 9.03. Expenses; Documentary Taxes; Indemnification ............... 48
SECTION 9.04. Sharing of Set-Offs ........................................ 49
SECTION 9.05. Amendments and Waivers ..................................... 49
SECTION 9.06. Successors and Assigns ..................................... 50
SECTION 9.07. Collateral ................................................. 51
SECTION 9.08. New York Law; Submission to Jurisdiction ................... 51
SECTION 9.09. Waiver of Jury Trial, Punitive Damages, etc ................ 51
SECTION 9.10. Counterparts ............................................... 52
SECTION 9.11. Confidentiality ............................................ 52
SECTION 9.12. No Unwritten Agreements .................................... 52
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EXHIBITS
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Exhibit A - Note
Exhibit B - Opinion of Special Counsel for the Borrower
Exhibit C - Opinion of Managing Counsel of the Borrower
Exhibit D - Letter of Credit Application and Agreement
Exhibit E - Subsidiary Guaranty
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of October 28, 2002, among CABOT OIL & GAS
CORPORATION, the BANKS from time to time parties hereto, FLEET NATIONAL BANK, as
Administrative Agent and LC Issuer, FLEET SECURITIES INC., as Arranger, BANK
ONE, NA, as Syndication Agent and BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ FINANCING, INC., as
Documentation Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Administrative Agent" means Fleet National Bank in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Bank.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
" Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank or other financial institution listed on the
signature pages hereof, each Assignee which becomes a Bank pursuant to Section
9.06(c), and their respective successors.
"Base Rate" means the higher of (i) the variable per annum rate of
interest so designated from time to time by Administrative Agent as its "prime
rate", or (ii) the Federal Funds Rate plus one-half percent (0.5%) per annum.
The "prime rate" is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. Changes in the Base Rate
resulting from changes in the "prime rate" shall take place immediately without
notice or demand of any kind.
"Base Rate Loan" means, at any time, a Loan which bears interest at such
time at a rate determined pursuant to Section 2.05(a) in accordance with the
applicable Notice of Borrowing or Notice of Interest Rate Election or pursuant
to Article 8.
"Base Rate Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
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"Borrower" means Cabot Oil & Gas Corporation, a Delaware corporation, and
its successors.
"Borrower's Consolidated Debt" means, at any date, the aggregate
outstanding principal amount of Debt of the Borrower and its Subsidiaries,
including the Indebtedness, determined on a consolidated basis as of such date
(not including any Non-Recourse Debt in an aggregate principal amount not to
exceed $150,000,000 at any such date incurred by the Borrower and its
Subsidiaries to finance the acquisition of Properties (other than Petroleum
Properties)); provided that the Borrower may request from time to time the
exclusion from Borrower's Consolidated Debt of any Subordinated Debt proposed to
be incurred at such time by written notice to the Administrative Agent setting
forth the terms of such Subordinated Debt (such terms to include, without
limitation, the aggregate principal amount of such Subordinated Debt, the rate,
if any, at which interest is to accrue thereon, the dates of any scheduled
repayments thereof and the final maturity thereof), and the Administrative Agent
shall promptly thereafter notify each Bank of such request. The Borrower shall
also furnish each Bank with such other information with respect to such
Subordinated Debt as any Bank may reasonably request. Within 30 days of receipt
of notice of such request from the Administrative Agent, the Banks shall consult
with one another to determine the percentage, if any, acceptable to the Required
Banks of the aggregate principal amount of such Subordinated Debt which is to be
excluded from Borrower's Consolidated Debt. Such percentage as so determined by
the Required Banks shall be promptly notified in writing by the Administrative
Agent to the Borrower, and upon such notification, and for all purposes
thereafter, an amount equal to such percentage of the aggregate outstanding
principal amount of such Subordinated Debt shall be excluded from Borrower's
Consolidated Debt until such Subordinated Debt is repaid in full or, if
applicable, converted into capital stock of the Borrower.
"Borrower's 2001 Form 10-K" means the Borrower's annual report on Form 10-K
for the fiscal year ended December 31, 2001, as filed with the Securities and
Exchange Commission.
" Borrowing" has the meaning set forth in Section 1.03.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof as its Commitment,
as such amount may be reduced from time to time pursuant to Section 2.07 or
increased or reduced by reason of an assignment pursuant to Section 9.06, or the
obligation of such Bank to make Loans pursuant to Section 2.01 not to exceed
such amount, as the context may require, and "Commitments" means the aggregate
Commitments of all of the Banks.
"Commodity Hedge" means any commodity hedge, commodity swap, exchange,
forward, futures, collar or cap agreements, fixed price agreements or any other
agreements or arrangements designed to protect such Person against fluctuations
in commodity prices.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements as if such statements were prepared as of such
date.
2
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all Debt of others secured by a Lien on any asset of such Person, whether or
not such Debt is assumed by such Person, and (vi) all Debt of others directly or
indirectly guaranteed by such Person or in respect of which such Person is
otherwise liable, contingently or otherwise.
"Debt Limit" means that dollar amount determined and periodically adjusted
in accordance with Section 5.10(b).
A "Debt Limit Excession" exists at any date if and to the extent that
Borrower's Consolidated Debt at such date exceeds the Debt Limit at such date.
"Debt Percentage" means, at any date, the percentage equivalent of a
fraction the numerator of which is Borrower's Consolidated Debt at such date and
the denominator of which is the Debt Limit at such date and shall be determined
based on the certificate of the chief financial officer, chief accounting
officer or treasurer of the Borrower furnished to the Banks as provided in
Section 5.01(h).
"Default" means the occurrence of any of the events specified in Section
6.01, whether or not any requirement for notice or lapse of time or other
condition precedent has been satisfied.
"Domestic Business Day" means any day, other than a Saturday, Sunday or day
which shall be in the Commonwealth of Massachusetts or Houston, Texas a legal
holiday or day on which banking institutions are required or authorized to
close.
"Domestic Lending Office" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
written notice to the Borrower and the Administrative Agent.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
3
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by written notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means, at any time, a Loan which bears interest at such
time at a rate determined pursuant to Section 2.05(b) or 2.05(c) in accordance
with the applicable Notice of Borrowing or Notice of Interest Rate Election.
"Euro-Dollar Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
"Euro-Dollar Reserve Percentage" means the maximum aggregate reserve
requirement (including all basic, supplemental, marginal, special, emergency and
other reserves) which is imposed on member banks of the Federal Reserve System
against "Euro-currency Liabilities" as defined in Regulation D. Without limiting
the effect of the foregoing, the Euro-Dollar Reserve Percentage shall reflect
any other reserves required to be maintained by such member banks with respect
to (a) any category of liabilities which includes deposits by reference to which
the London Interbank Offered Rate is to be determined, or (b) any category of
extensions of credit or other assets which include Euro-Dollar Loans.
"Event of Default" means any of the events specified in Section 6.01.
"Excepted Liens" means: (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; (ii) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age pension
or public liability obligations; (iii) legal or equitable encumbrances deemed to
exist by reason of the existence of any litigation or other legal proceeding or
arising out of a judgment or award with respect to which an appeal is being
prosecuted, but only so long as execution of such judgment and enforcement of
such Lien is effectively stayed and the amount thereof (in excess of applicable
insurance coverage) does not exceed, individually or in the aggregate,
$5,000,000; (iv) vendors', carriers', warehousemen's, repairmen's, mechanics',
workmen's, materialmen's, construction or other like Liens (including, without
limitation, Liens arising in favor of sellers of hydrocarbons) arising by
operation of law in the ordinary course of
4
business incident to obligations which are not yet due or which are being
contested in good faith by appropriate proceedings by or on behalf of the
Borrower or a Subsidiary; (v) Liens arising in the ordinary course of business
under farm-out agreements, gas sales contracts, operating agreements,
unitization and pooling agreements, and such other documents as are customarily
found in connection with comparable drilling and producing operations; (vi)
letters of credit, pledges or deposits, including bonds, required in the
ordinary course of business to secure public or statutory obligations or to
secure performance in connection with bids or contracts related to the
exploration or development of Petroleum Properties, to the extent that payment
of the underlying obligations is not yet due or is being contested in good faith
by appropriate proceedings by or on behalf of the Borrower or a Subsidiary and
with respect to which appropriate reserves have been established; and (vii)
minor irregularities in title which do not materially interfere with the
occupation, use and enjoyment by the Borrower and its Subsidiaries of their
respective Properties in the normal course of business as presently conducted or
materially impair the value thereof for such business.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute. For purposes of Section 6.01(k), unless otherwise defined
in such Section, the terms enclosed in quotation marks as used therein have the
meanings ascribed to such terms under the Exchange Act and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder.
"Executive Officer" means, with respect to any Person, the president, any
vice president, the treasurer, the chief financial officer, the chief accounting
officer, the controller or the general counsel or any other person performing
similar functions.
"Existing Agreement" means the Credit Agreement dated as of December 17,
1998 among the Borrower, the banks parties thereto, and agent for such banks, as
amended to the Effective Date.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1000th of one percent) equal to the
weighted average of the rates on overnight Federal funds transactions with
members 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 Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic 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 quoted to Administrative Agent on
such day on such transactions as determined by Administrative Agent.
"Financing Documents" means this Agreement, the Notes, the Letters of
Credit, the LC Applications and all other agreements, certificates, documents
and writings at any time delivered in connection herewith or therewith
(exclusive of term sheets and commitment letters).
"Group of Loans" means at any time, a group of Loans consisting of (i) all
Loans which are Base Rate Loans at such time (other than Base Rate Loans arising
under Section 8.02 or 8.04,
5
which shall be included in the related Group of Euro-Dollar Loans) or (ii) all
Loans which are Euro-Dollar Loans having the same Interest Period at such time.
"Indebtedness" means any and all Loans and all other liabilities of the
Borrower to the Banks, Administrative Agent or LC Issuer, including all LC
Obligations, or any other liabilities from time to time existing under the
Financing Documents, and all renewals, extensions, rearrangements, amendments or
supplements to such documents.
" Initial Reserve Report" has the meaning set forth in Section 4.04(b).
"Interest Period" means, with respect to each particular Euro-Dollar Loan
in a Euro-Dollar Borrowing, the period specified in the Notice of Borrowing or
Notice of Interest Rate Election applicable thereto, beginning on and including
the date specified in such Notice of Borrowing or Notice of Interest Rate
Election (which must be a Domestic Business Day), and ending one, three, six or
twelve months (if twelve months is available for each Bank) thereafter, as
Borrower may elect in such notice; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day in a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Euro-Dollar Business Day in a calendar month; and
(c) notwithstanding the foregoing, no Interest Period may be selected
for a Loan that would end after the Termination Date.
Notwithstanding the foregoing (x) all Interest Periods at any one time
outstanding shall end on not more than six different dates and (y) the duration
of any Interest Period which would otherwise violate the limitation in clause
(x) shall be adjusted to coincide with the remaining term of such other then
current Interest Period with respect to a Euro-Dollar Loan as the Borrower shall
specify in the related Notice of Borrowing or Notice of Interest Rate Election.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"LC Application" means any application for a Letter of Credit hereafter
made by the Borrower to LC Issuer.
"LC Collateral" has the meaning given to such term in Section 2.21.
"LC Conditions" has the meaning given to such term in Section 2.16.
6
"LC Issuer" means Fleet National Bank, in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity. Administrative
Agent may, with the consent of Borrower and the Bank in question, appoint any
Bank hereunder as an LC Issuer in place of or in addition to Fleet National
Bank.
"LC Obligations" means, at the time in question, the sum of all Matured LC
Obligations plus the maximum amounts which LC Issuer might then or thereafter be
called upon to advance under all Letters of Credit then outstanding.
"Letter of Credit" means any letter of credit issued by LC Issuer hereunder
at the application of Borrower.
"Letter of Credit Period" means the period from and including the Effective
Date to but not including the ninth Domestic Business Day prior to the
Termination Date.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
(including without limitation any Production Payment, advance payment, gas
imbalances, take or pay or similar arrangement with respect to minerals in
place) or any other arrangement the economic effect of which is to give a
creditor preferential access to such asset to satisfy its claim, whether or not
filed, recorded or otherwise perfected under applicable law. For the purposes of
this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to
a Lien (i) any asset that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset or any capitalized lease
obligation or (ii) any account receivable transferred by it with recourse
(including any such transfer subject to a holdback or similar arrangement which
effectively imposes the risk of collectibility upon the transferor).
"Loan" means any loan made or to be made by a Bank hereunder, which will be
either a Base Rate Loan or a Euro-Dollar Loan. "Loans" means all or any
combination of the foregoing, as the context may require.
"London Interbank Offered Rate" means, as applicable to any Euro-Dollar
Loan within a Euro-Dollar Borrowing and with respect to the related Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) as determined on the basis of offered rates for deposits in
U.S. dollars, for a period of time comparable to such Interest Period which
appears on Telerate Page 3750 (or any successor page) as of 11:00 a.m. London
time on the day that is two Euro-Dollar Business Days preceding the first day of
such Euro-Dollar Loan; provided, however, if the rate described above does not
appear on the Telerate system on any applicable interest determination date, the
London Interbank Offered Rate shall be the rate (rounded upwards as described
above, if necessary) for deposits in dollars for a period substantially equal to
such Interest Period on the Reuters Page "LIBOR" (or such other page as may
replace the LIBOR Page on that service for the purpose of displaying such
rates), as of 11:00 a.m. (London time), on the date that is two Euro-Dollar
Business Days prior to the beginning of such Interest Period; provided, however,
if more than one rate is specified on Reuters Screen LIBOR Page, the applicable
rate shall be the arithmetic mean of all such rates (rounded upwards,
7
if necessary, to the nearest 1/1000 of 1%). If both the Telerate and Reuters
system are unavailable, then the London Interbank Offered Rate for that date
will be determined on the basis of the offered rates for deposits in Dollars for
a period of time comparable to such Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00 a.m. London
time, on the day that is two (2) Euro-Dollar Business Days preceding the first
day of such Euro-Dollar Loan as selected by Administrative Agent. The principal
London office of each of the four major London banks will be requested to
provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for a period of time comparable to
such Interest Period offered by major banks in New York City at approximately
11:00 a.m. New York City time, on the day that is two Euro-Dollar Business Days
preceding the first day of such Euro-Dollar Loan. In the event that
Administrative Agent is unable to obtain any such quotation as provided above,
it will be deemed that the London Interbank Offered Rate pursuant to such
Euro-Dollar Loan cannot be determined. In the event that the Board of Governors
of the Federal Reserve System shall impose a Euro-Dollar Reserve Percentage with
respect to eurodollar deposits of any Bank, then for any period during which
such Euro-Dollar Reserve Percentage shall apply, the London Interbank Offered
Rate shall be equal to the amount determined above divided by an amount equal to
1.00 minus the Euro-Dollar Reserve Percentage. The London Interbank Offered Rate
for any Euro-Dollar Loan shall change whenever the Euro-Dollar Reserve
Percentage changes.
"Material Adverse Effect" means (i) any material adverse effect on the
business, Properties, financial position, results of operations or prospects of
the Borrower and its Subsidiaries, taken as a whole; (ii) any material adverse
effect on the ability of the Borrower to perform any of its obligations under
the Financing Documents or (iii) any material adverse effect on any of the
rights and remedies of the Banks and the Administrative Agent under the
Financing Documents.
"Material Debt" means Debt (other than Non-Recourse Debt) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal amount exceeding $7,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $3,000,000.
"Material Subsidiary" means any Subsidiary of Borrower which, as of the end
of any Fiscal Quarter, either:
(i) has attributed to five percent (5%) or more of Borrower's Consolidated
Cash Flow (as defined in Section 5.13), or
(ii) owns five percent (5%) or more of the book value of the Borrower's
consolidated assets.
8
"Matured LC Obligations" means all amounts paid by LC Issuer on drafts or
demands for payment drawn or made under or purported to be under any Letter of
Credit and all other amounts due and owing to LC Issuer under any LC Application
for any such Letter of Credit, to the extent the same have not been repaid to LC
Issuer (with the proceeds of Loans or otherwise).
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Non-Recourse Debt" of any Person means Debt of such Person in respect of
which (i) the recourse of the holder of such Debt, whether direct or indirect
and whether contingent or otherwise, is effectively limited to the assets
directly securing such Debt; (ii) such holder may not collect by levy of
execution against assets of such Person generally (other than the assets
directly securing such Debt) if such Person fails to pay such Debt when due and
the holder obtains a judgment with respect thereto; and (iii) such holder has
waived, to the extent such holder may effectively do so, such holder's right to
elect recourse treatment under 11 U.S.C. Ss 1111(b).
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice of Interest Rate Election" has the meaning set forth in Section
2.08.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust, an unincorporated organization or
joint venture, or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Petroleum Property" means (i) any interest of the Borrower or any
Subsidiary in oil and gas reserves and assets consisting primarily of gas
gathering and transmission pipelines which is, or is to be, taken into account
in the determination of the Debt Limit pursuant to Section 5.10 or the annual
coverage ratio pursuant to Section 5.13 and (ii) any Section 29 Transaction PPI
provided that (a) such Section 29 Transaction PPI constitutes a production
payment within the meaning of the Bankruptcy Reform Act of 1994 and (b) such
Section 29
9
Transaction PPI is filed, recorded or otherwise perfected under applicable law
so as to be fully protected from all creditors and transferees of the grantor
thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pricing Schedule" means the schedule annexed hereto denominated as such.
"Production Payment" means an interest in a Petroleum Property that (i) is
not subject to the costs of production and (ii) terminates at such time as the
interest-holder has realized a specified sum from the sale of oil or gas
attributable to such interest.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Proved Reserves" means "proved oil and gas reserves" as specified under
Rule 4-10(a)(2) of Regulation S-X of the Securities and Exchange Commission.
"Quarterly Date" means the first day of each March, June, September and
December or if any such date is not a Euro-Dollar Business Day, the next
succeeding Euro-Dollar Business Day.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments then in effect, or, if the Commitments shall
have been terminated, holding Notes evidencing at least 66 2/3% of the aggregate
principal amount of the Loans and LC Obligations then outstanding.
"Reserve Report" means the Initial Reserve Report and each report delivered
by the Borrower pursuant to Section 5.09(a), Section 5.09(b), or Section
5.09(c).
"Revolving Credit Period" means the period from and including the Effective
Date to but not including the Termination Date.
10
"Section 29 Transaction" means a transaction completed prior to the date
hereof with terms similar to those outlined in the letter dated March 20, 1995
from State Street Bank and Trust Company to the Borrower, copies of which have
heretofore been delivered to the Banks.
"Section 29 Transaction PPI" means a volumetric production payment interest
arising from the Section 29 Transaction.
"Subordinated Debt" means indebtedness of the Borrower for borrowed money
which (i) is not guaranteed by any other Person, (ii) requires no payment of
principal to be made prior to the first anniversary of the Termination Date (as
in effect at the time such Subordinated Debt is incurred or as requested to be
extended by the Borrower and approved by the Banks at such time), and (iii) is
subordinated in right of payment to the Indebtedness by subordination provisions
in form and substance satisfactory to the Required Banks.
"Subsidiary" means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Subsidiary Guarantor" means any Subsidiary of Borrower that now or
hereafter executes and delivers a guaranty to Administrative Agent pursuant to
Section 5.08
"Termination Date" means October 28, 2006, or if such date is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Type" refers to the determination whether a Loan is a Base Rate Loan or a
Euro-Dollar Loan (or a Borrowing comprised of such Loans).
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of the Borrower or any Subsidiary
(whether direct or joint and several with one or more affiliates) to the PBGC or
any other Person under Title IV of ERISA.
"Wholly-Owned Subsidiary" means any Subsidiary all of the shares of capital
stock or other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used in this Agreement shall be
interpreted, all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial
11
statements of the Borrower and its Consolidated Subsidiaries delivered to the
Banks; provided that, if the Borrower notifies the Administrative Agent that the
Borrower wishes to amend any covenant in Article 5 to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required
Banks wish to amend Article 5 for such purpose), then the Borrower's compliance
with such covenant shall be determined on the basis of generally accepted
accounting principles in effect immediately before the relevant change in
generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Borrower and the Required Banks.
Section 1.03. Types of Borrowings. The term "Borrowing" means a borrowing
of the same Type by the Borrower from one or more Banks pursuant to Article 2
on a given date and, in the case of Euro-Dollar Loans, for the same Interest
Period. Borrowings are classified for purposes of this Agreement by Type
(e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans).
ARTICLE 2
THE CREDITS
Section 2.01. Commitments to Lend. During the Revolving Credit Period each
Bank severally agrees, on the terms and conditions set forth in this Agreement,
to make Loans to the Borrower pursuant to this Section from time to time in
amounts such that the aggregate principal amount of Loans plus the LC
Obligations of such Bank at any one time outstanding shall not exceed the amount
of its Commitment at such time. Within the foregoing limits, the Borrower may
borrow under this Section, prepay Loans and reborrow at any time during the
Revolving Credit Period under this Section. Each Borrowing under this Section
shall be made from the several Banks ratably in proportion of their respective
Commitments.
Section 2.02. Notice of Borrowings. (a) The Borrower shall give the
Administrative Agent notice (a "Notice of Borrowing") not later than 10:30 A.M.
(Boston, Massachusetts time) on (x) the Domestic Business Day of each Base Rate
Borrowing, and (y) the third Euro-Dollar Business Day next preceding each Euro-
Dollar Borrowing; specifying:
(i) the date of such Borrowing, which shall be Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in
the case of Euro-Dollar Borrowing.
(ii) the aggregate amount of such Borrowing, which shall be
$3,000,000 or any larger multiple of $1,000,000 (except that any Borrowing
may be in the aggregate amount available hereunder in accordance with
Section 3.02(b)),
(iii) whether the Loans comprising such Borrowing are initially to be
Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
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(b) Upon receipt of a Notice of Borrowing, the Administrative Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 12:00 Noon (Boston, Massachusetts time) on the date of
each Borrowing, each Bank shall make available its share of such Borrowing, in
Federal or other funds immediately available in Boston, Massachusetts, to the
Administrative Agent at its address specified in or pursuant to Section 9.01.
Unless the Administrative Agent determines that any applicable condition
specified in Article 3 has not been satisfied, the Administrative Agent will
make the funds so received from the Banks available to the Borrower at the
Administrative Agent's aforesaid address.
(d) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection
(c) of this Section 2.02 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.05 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement. The failure of any Bank to make the
Loan to be made by it as part of any Borrowing shall not relieve any other Bank
of its obligation, if any, hereunder to make its Loan, and no Bank shall be
responsible for the failure of any other Bank to make any Loan to be made by
such other Bank hereunder.
SECTION 2.03. Notes. (a) The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank for the account of its Applicable
Lending Office in an amount equal to the aggregate unpaid principal amount of
such Bank's Loans.
(b) Upon receipt of each Bank's Note pursuant to Section 3.01, the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount and Type of each Loan made by it and the date and amount
of each payment of principal made by the Borrower with respect thereto, and may,
if such Bank so elects in connection with any transfer or enforcement of its
Note, endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make, or any error in
making, any such recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and when required.
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SECTION 2.04. Maturity of Loans. The Loans of each Bank shall mature, and
the principal amount thereof shall be due and payable, together with accrued
interest thereon, on the Termination Date.
SECTION 2.05. Interest Rates. (a) Subject to Section 2.15, each Base Rate
Loan shall bear interest on the outstanding principal amount thereof, for each
day from the date such Loan is made until it becomes due, at a rate per annum
equal to the sum of the Base Rate Margin plus the Base Rate for such day. Such
interest shall be payable quarterly in arrears on each Quarterly Date and, in
the case of any Base Rate Loan converted to a Euro-Dollar Loan, on the date of
such conversion. Subject to Section 2.15, any overdue principal of and overdue
interest on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Subject to Section 2.15, each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin plus the
applicable London Interbank Offered Rate. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, on each three-month anniversary of the first day
thereof.
(c) Subject to Section 2.15, any overdue principal of and overdue interest
on any Euro-Dollar Loan shall bear interest, payable on demand, for each day
from and including the date payment thereof was due to but excluding the date of
actual payment, at a rate per annum equal to the sum of 2% plus the higher of
(i) the sum of the Euro-Dollar Margin plus the London Interbank Offered Rate
applicable to such Loan and (ii) the Euro-Dollar Margin plus the quotient
obtained (rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (x) the London Interbank Offered Rate for an Interest Period of one day
(or, if such amount due remains unpaid more than three Euro-Dollar Business
Days, then for such other period of time not longer than six months as the
Administrative Agent may select) by (y) 1 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8;01 shall exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(d) The Administrative Agent shall determine each interest rate applicable
to the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
SECTION 2.06. Commitment Fees. The Borrower shall pay to the Administrative
Agent for the account of each Bank a commitment fee at a rate per annum equal to
the Commitment Fee Rate (determined daily in accordance with the Pricing
Schedule) on the daily average unused amount of its Commitment. Such commitment
fees shall accrue from and including the Effective Date to but excluding the
date of termination of the Commitments in their entirety. Accrued fees under
this Section shall be payable quarterly in arrears on each Quarterly Date and
upon the date of termination of the Commitments in their entirety.
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SECTION 2.07. Termination or Reduction of Commitments.
(a) Mandatory. The Commitments shall terminate on the Termination Date.
(b) Optional. The Borrower may, upon at least three Domestic Business Days'
notice to the Administrative Agent, (i) terminate the Commitments at any time,
if no Loans are outstanding at such time or (ii) ratably reduce from time to
time by an aggregate amount of $5,000,000 or any larger multiple thereof, the
aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans.
SECTION 2.08. Method of Electing Interest Rates. (a) The Loans comprising
each Borrowing shall bear interest initially at the Type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Loans (subject in each case to the provisions of Article 8), as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans, or may elect to continue such Loans
as Euro-Dollar Loans for an additional Interest Period, in each case
beginning on the last day of the then current Interest Period applicable to
such Loans;
(iii) if such Loans are Base Rate Loans, the Borrower may elect to
designate such Loans as any combination of Base Rate Loans or Euro-Dollar
Loans as of any Euro-Dollar Business Day (subject to the definition of
Interest Period); and
(iv) if such Loans are Euro-Dollar Loans, the Borrower may elect to
designate such Loans as any combination of Base Rate Loans or Euro-Dollar
Loans as of the last day of the then current Interest Period applicable to
such Loans (subject to the definition of Interest Period).
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent not later than 10:30 A.M. (Boston,
Massachusetts time) on the third Euro-Dollar Business Day before the conversion
or continuation selected in such notice is to be effective.
A Notice of Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such notice applies, and the remaining
portion to which it does not apply, are each at least $3,000,000.
(b) Each Notice of Interest Rate Election shall specify with respect to the
outstanding Borrowing to which such notice applies:
15
(i) the Group of Loans (or portion thereof) to which such notice
applies);
(ii) the date on which conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection (a) above;
(iii) if such Group of Loans (or portion thereof) are to be converted,
the new type of Loans and, if such new Loans are Euro-Dollar Loans, the
duration of the initial Interest Period applicable thereto after such
conversion; and
(iv) if such Group of Loans (or portion thereof) are to be continued
as Euro-Dollar Loans for an additional Interest Period, the duration of
such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the Borrower
pursuant to subsection (a) above, the Administrative Agent shall promptly notify
each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower. If the Borrower fails to deliver a timely Notice of
Interest Rate Election to the Administrative Agent for any Borrowing comprised
of Euro-Dollar Loans, such Loans shall be converted into Base Rate Loans on the
last day of the then current Interest Period applicable thereto.
SECTION 2.09. Prepayments.
(a) Optional Prepayments. Subject in the case of Euro-Dollar Loans to the
provisions of Section 2.11, the Borrower may (i) upon notice to the
Administrative Agent not later than 10:30 A.M. (Boston, Massachusetts time) on
any Domestic Business Day, prepay on such Domestic Business Day any Group of
Base Rate Loans, and (ii) on the last day of the Relevant Interest Period upon
at least three Euro-Dollar Business Days' notice to the Administrative Agent,
prepay any Group of Euro-Dollar Loans, in each case in whole at any time, or
from time to time in part in amounts aggregating $1,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Banks
included in such Group.
(b) Mandatory Prepayments. If at any time the aggregate principal amount of
Loans plus the LC Obligations at any one time outstanding exceeds the aggregate
amount of the Commitments then in effect (whether due to a reduction in the
Commitments in accordance with Section 2.07 of this Agreement, or otherwise),
the Borrower shall immediately upon demand prepay the principal of the Loans in
an amount at least equal to such excess. Borrower shall, contemporaneously with
any asset sale, transfer or disposition permitted under Section 5.12, apply the
net cash proceeds of such sale, transfer or disposition to repay outstanding
Loans. If at any time a Debt Limit Excession exists, the Borrower shall, within
ten days after Administrative Agent gives notice of such fact to the Borrower,
give notice to Administrative Agent electing to, either:
16
(i) prepay the principal of the Loans in an aggregate amount at
least equal to such Debt Limit Excession (or, if the Loans have been paid
in full, deliver to LC Issuer LC Collateral as required under Section
2.21(a)) within thirty days of such election, or
(ii) prepay the principal of the Loans in up to three monthly
installments in an aggregate amount at least equal to such Debt Limit
Excession, with each such installment equal to or in excess of one-third of
such Debt Limit Excession, and with the first such installment to be paid
one month after the giving of such notice and the subsequent installments
to be due and payable at one month intervals thereafter until such Debt
Limit Excession has been eliminated, or
(iii) give notice to Agent that Borrower will provide additional
assets acceptable to Administrative Agent within thirty days of such
election, to the extent needed to allow Banks to increase the Borrowing
Base (as they in their reasonable discretion deem consistent with prudent
oil and gas banking industry lending standards at the time) to an amount
which eliminates such Debt Limit Excession. If, prior to any such
specification by Administrative Agent, Banks determine that the provision
of such additional assets will not serve to eliminate such Debt Limit
Excession, then, within five Business Days after receiving notice of such
determination from Administrative Agent, the Borrower will elect to make,
and thereafter make, the prepayments specified in either of the preceding
subsections (i) or (ii) of this subsection (b).
(c) Upon receipt of a notice of prepayment pursuant to this Section 2.09,
the Administrative Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.10. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 12:00 Noon (Boston, Massachusetts time) on the date
when due, in Federal or other funds immediately available in Boston,
Massachusetts, to the Administrative Agent at its address referred to in Section
9.01. The Administrative Agent will promptly distribute to each Bank its ratable
share of each such payment received by the Administrative Agent for the account
of the Banks. Whenever any payment of principal of, or interest on, the Base
Rate Loans or of fees shall be due on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made
17
such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent that the Borrower shall not have so made such
payment, each Bank shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.11. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted to a Base Rate Loan (whether pursuant to this Article 2 or Article 6
or 8 or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the end of an applicable period fixed pursuant to Section
2.05(c), or if the Borrower fails to borrow or prepay any Euro-Dollar Loans
after notice has been given to any Bank in accordance with Section 2.02(b) or
2.09(a), the Borrower shall reimburse each Bank within 15 days after demand for
any resulting loss or expense incurred with respect to such Loans, including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period after
any such payment or conversion or failure to borrow or prepay, provided that
such Bank shall have delivered to the Borrower a certificate as to the amount of
such loss or expense, which certificate shall be conclusive in the absence of
manifest error.
SECTION 2.12. Computation of Interest and Fees. Interest based on the Base
Rate and commitment fees hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other interest
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
SECTION 2.13. Withholding Tax Exemption. At least five Domestic Business
Days prior to the first date on which interest or fees are payable hereunder for
the account of any Bank, each Bank that is not incorporated under the laws of
the United States of America or a state thereof agrees that it will deliver to
each of the Borrower and the Administrative Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Bank which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Borrower and the Administrative Agent two additional
copies of such form (or a successor form) on or before the date that such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the Borrower
or the Administrative Agent, in each case certifying that such Bank is entitled
to receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank advises the Borrower and the Administrative Agent that it
18
is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
SECTION 2.14. Regulation D Compensation. For so long as any Bank maintains
reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), then such Bank may require the Borrower to pay,
contemporaneously with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Bank at a rate per
annum up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Administrative Agent, in which case such additional interest on
the Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least five Euro-Dollar Business Days after the giving of such notice and (y)
shall notify the Borrower at least five Euro-Dollar Business Days prior to each
date on which interest is payable on the Euro-Dollar Loans of the amount to
which such Bank is then entitled under this Section.
SECTION 2.15. Maximum Interest Rate. (a) Nothing contained in this
Agreement or the Notes shall require the Borrower to pay interest at a rate
exceeding the maximum rate permitted by law.
(b) If the amount of interest, including amounts that would be deemed to
constitute interest under applicable law, payable for the account of any Bank,
would at any time exceed the maximum amount permitted by applicable law to be
charged by such Bank, the amount of interest payable for its account shall ipso
facto be automatically reduced to such maximum permissible amount, and any
amount constituting interest received by such Bank in excess of the maximum
permissible amount of interest which, under applicable law, could then be
collected by such Bank shall be credited by such Bank against and to the extent
of the unpaid principal amount of the Loans of such Bank outstanding at such
time, first against any Base Rate Loans and next against any Euro-Dollar Loans
as selected by such Bank, with the remaining excess, if any, being promptly
refunded to the Borrower.
(c) If the amount of interest, including amounts that would be deemed to
constitute interest under applicable law, payable for the account of any Bank in
respect of any applicable computation period is reduced pursuant to clause (b)
of this Section and the amount of interest payable for its account in respect of
any subsequent computation period would be less than the maximum amount
permitted by applicable law to be charged by such Bank, then the amount of
interest payable for its account in respect of such subsequent computation
period shall be automatically increased to such maximum permissible amount;
provided that at no time shall the aggregate amount by which interest paid for
the account of any Bank has been increased pursuant to this clause (c) exceed
the aggregate amount by which interest paid for its account has theretofore been
reduced pursuant to clause (b) of this Section.
19
SECTION 2.16. Letters of Credit. Subject to the terms and conditions
hereof, the Borrower may during the Letter of Credit Period, request LC Issuer
to issue, amend, or extend the expiration date of, one or more Letters of
Credit, provided that, after taking such Letter of Credit into account:
(a) the aggregate principal amount of Loans plus the LC Obligations at
any one time outstanding does not exceed the aggregate amount of the
Commitments at such time;
(b) the aggregate amount of LC Obligations at such time does not
exceed $25,000,000;
(c) the expiration date of such Letter of Credit is prior to the
earlier of (i) one (1) year after the date of issuance of such Letter of
Credit and (ii) the Termination Date;
(d) such Letter of Credit is to be used for general corporate purposes
of the Borrower or any of its Subsidiaries and is not directly or
indirectly used to assure payment of or otherwise support any Indebtedness
of any Person, except Debt of the Borrower or any of its Subsidiaries;
(e) the issuance of such Letter of Credit will be in compliance with
all applicable governmental restrictions, policies, and guidelines and will
not subject LC Issuer to any cost which is not reimbursable under Article
8;
(f) the form and terms of such Letter of Credit are acceptable to LC
Issuer in its sole and absolute discretion; and
(g) all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.
LC Issuer will honor any such request if the foregoing conditions (a) through
(g) (the "LC Conditions") have been met as of the date of issuance, amendment,
or extension of the expiration of, such Letter of Credit. Notwithstanding the
foregoing, Borrower's right to request Letters of Credit hereunder shall not
limit or restrict Borrower or any Subsidiary from requesting or obtaining
letters of credit from any other financial institutions, and no such letter of
credit issued by such other institution shall be subject to any of the terms or
conditions hereof.
SECTION 2.17. Requesting Letters of Credit. The Borrower must make written
application for any Letter of Credit at least two Domestic Business Days before
the date on which the Borrower desires for LC Issuer to issue such Letter of
Credit. By making any such written application, unless otherwise expressly
stated therein, the Borrower shall be deemed to have represented and warranted
that the LC Conditions described in Section 2.16 will be met as of the date of
issuance of such Letter of Credit. Each such written application for a Letter of
Credit must be made in writing in the form and substance of Exhibit D, the terms
and provisions of which are hereby incorporated herein by reference (or in such
other form as may mutually be agreed upon by LC Issuer and the Borrower). If all
LC Conditions for a Letter of Credit have
20
been met as described in Section 2.16 on any Domestic Business Day before 11:00
a.m., Boston, Massachusetts time, LC Issuer will issue such Letter of Credit on
the same Domestic Business Day at LC Issuer's office in Boston, Massachusetts.
If the LC Conditions are met as described in Section 2.16 on any Domestic
Business Day on or after 11:00 a.m., Boston, Massachusetts time, LC Issuer will
issue such Letter of Credit on the next succeeding Domestic Business Day at LC
Issuer's office in Boston, Massachusetts. If any provisions of any LC
Application conflict with any provisions of this Agreement, the provisions of
this Agreement shall govern and control.
SECTION 2.18. Reimbursement and Participations.
(a) Reimbursement by the Borrower. Each Matured LC Obligation shall
constitute a loan by LC Issuer to the Borrower. The Borrower promises to pay to
LC Issuer, or to LC Issuer's order, on demand, the full amount of each Matured
LC Obligation, together with interest thereon at a rate per annum equal to (i)
the rate applicable to Base Rate Loans for such day to and including the second
Domestic Business Day after the Matured LC Obligation is incurred and (ii) the
sum of 2% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Letter of Credit Advances. If the beneficiary of any Letter of Credit
makes a draft or other demand for payment thereunder then the Borrower may,
during the interval between the making thereof and the honoring thereof by LC
Issuer, request the Banks to make Loans to the Borrower in the amount of such
draft or demand, which Loans shall be made hereunder concurrently with LC
Issuer's payment of such draft or demand and shall be immediately used by LC
Issuer to repay the amount of the resulting Matured LC Obligation. Such a
request by the Borrower shall be made in compliance with all of the provisions
hereof, provided that for the purposes of the first sentence of Section 2.01,
the amount of such Loans shall be considered, but the amount of the Matured LC
Obligation to be concurrently paid by such Loans shall not be considered.
(c) Participation by the Banks. LC Issuer irrevocably agrees to grant and
hereby grants to each Bank, and to induce LC Issuer to issue Letters of Credit
hereunder, each Bank irrevocably agrees to accept and purchase and hereby
accepts and purchases from LC Issuer, on the terms and conditions hereinafter
stated and for such Bank's own account and risk an undivided interest, in an
amount equal to the percentage obtained by dividing (i) such Bank's Commitment
by (ii) the aggregate amount of the Commitments then in effect (such Bank's
"Percentage Share"), of LC Issuer's obligations and rights under each Letter of
Credit issued hereunder and the amount of each Matured LC Obligation paid by LC
Issuer thereunder. Each Bank unconditionally and irrevocably agrees with LC
Issuer that, if a Matured LC Obligation is paid under any Letter of Credit for
which LC Issuer is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement and the related LC Application (including any
reimbursement by means of concurrent Loans or by the application of LC
Collateral), such Bank shall (in all circumstances and without set-off or
counterclaim) pay to LC Issuer on demand, in immediately available funds at LC
Issuer's address for notices hereunder, an amount equal to such Bank's
Percentage Share of such Matured LC Obligation (or any portion thereof which has
not been reimbursed by the Borrower). Each Bank's obligation to pay LC Issuer
pursuant to the terms of this subsection is irrevocable and unconditional. If
any amount required to be paid by
21
any Bank to LC Issuer pursuant to this subsection is paid by such Bank to LC
Issuer within three Domestic Business Days after the date such payment is due,
LC Issuer shall in addition to such amount be entitled to recover from such
Bank, on demand, interest thereon calculated from such due date at the Federal
Funds Rate. If any amount required to be paid by any Bank to LC Issuer pursuant
to this subsection is not paid by such Bank to LC Issuer within three Domestic
Business Days after the date such payment is due, LC Issuer shall in addition
to such amount be entitled to recover from such Bank, on demand, interest
thereon calculated from such due date at the rate applicable to Base Rate Loans
for such day.
(d) Distributions to Participants. Whenever LC Issuer has in accordance
with this Section 2.18 received from any Bank payment of such Bank's Percentage
Share of any Matured LC Obligation, if LC Issuer thereafter receives any payment
of such Matured LC Obligation or any payment of interest thereon (whether
directly from the Borrower or by application of LC Collateral or otherwise, and
excluding only interest for any period prior to LC Issuer's demand that such
Bank make such payment of its Percentage Share), LC Issuer will distribute to
such Bank its Percentage Share of the amounts so received by LC Issuer;
provided, however, that if any such payment received by LC Issuer must
thereafter be returned by LC Issuer, such Bank shall return to LC Issuer the
portion thereof which LC Issuer has previously distributed to it.
(e) Calculations. A written advice setting forth in reasonable detail the
amounts owing under this Section 2.18, submitted by LC Issuer to the Borrower or
any Bank from time to time, shall be conclusive, absent manifest error, as to
the amounts thereof.
SECTION 2.19. Letter of Credit Fees. In consideration of LC Issuer's
issuance of any Letter of Credit, the Borrower agrees to pay (i) to LC Issuer
for the account of each Bank in proportion to its Percentage Share, a Letter of
Credit fee equal to (a) the LC Fee Rate (determined daily in accordance with the
Pricing Schedule) applicable each day times the maximum drawing amount of such
Letter of Credit, plus (b) upon the occurrence of an Event of Default, subject
to Section 2.15, two percent (2%) per annum, and (ii) to such LC Issuer for its
own account, a letter of credit fronting fee equal to the greater of (A) (I)
0.125% of the maximum drawing amount of such Letter of Credit, plus (II) upon
the occurrence of an Event of Default, two percent (2%) per annum, and (B) $150.
Each such fee will be calculated on each day at the above applicable rates and
will be payable quarterly in arrears within 15 days after the each Quarterly
Date. In addition, the Borrower will pay to LC Issuer such other fees and
charges customarily charged by LC Issuer, including mailing, courier, facsimile
and cable charges, in respect of any issuance, amendment, negotiation, renewal
or drawing of any Letter of Credit in accordance with LC Issuer's published
schedule of such charges effective as of the date of such issuance, amendment,
negotiation, renewal or drawing.
SECTION 2.20. No Duty to Inquire.
(a) Drafts and Demands. LC Issuer is authorized and instructed to accept
and pay drafts and demands for payment under any Letter of Credit without
requiring, and without responsibility for, any determination as to the existence
of any event giving rise to said draft, either at the time of acceptance or
payment or thereafter. LC Issuer is under no duty to determine the proper
identity of anyone presenting such a draft or making such a demand (whether by
tested
22
telex or otherwise) as the officer, representative or agent of any beneficiary
under any Letter of Credit, and payment by LC Issuer to any such beneficiary
when requested by any such purported officer, representative or agent in
accordance with the terms and conditions of such Letter of Credit is hereby
authorized and approved. The Borrower releases LC Issuer, Administrative Agent
and each Bank from, and agrees to hold LC Issuer, Administrative Agent and each
Bank harmless and indemnified against, any liability or claim in connection with
or arising out of the subject matter of this section, WHICH INDEMNITY SHALL
APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT
CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY LC
ISSUER, ADMINISTRATIVE AGENT OR ANY BANK, provided only that none of LC Issuer,
Administrative Agent nor any Bank shall be entitled to indemnification for that
portion, if any, of any liability or claim which is proximately caused by its
own individual gross negligence or willful misconduct, as determined in a final
judgment.
(b) Extension of Maturity. If the maturity of any Letter of Credit is
extended by its terms or by law or governmental action, if any extension of the
maturity or time for presentation of drafts or any other modification of the
terms of any Letter of Credit is made at the request of the Borrower, or if the
amount of any Letter of Credit is increased at the request of the Borrower, this
Agreement shall be binding upon the Borrower with respect to such Letter of
Credit as so extended, increased or otherwise modified, with respect to drafts
and property covered thereby, and with respect to any action taken by LC Issuer,
LC Issuer's correspondents, or any Bank in accordance with such extension,
increase or other modification.
(c) Transferees of Letters of Credit. If any Letter of Credit provides that
it is transferable, LC Issuer shall have no duty to determine the proper
identity of anyone appearing as transferee of such Letter of Credit, nor shall
LC Issuer be charged with responsibility of any nature or character for the
validity or correctness of any transfer or successive transfers, and payment by
LC Issuer to any purported transferee or transferees as determined by LC Issuer
in accordance with the terms and conditions of such Letter of Credit is hereby
authorized and approved, and the Borrower releases LC Issuer, Administrative
Agent and each Bank from, and agrees to hold LC Issuer, Administrative Agent and
each Bank harmless and indemnified against, any liability or claim in connection
with or arising out of the foregoing, WHICH INDEMNITY SHALL APPLY WHETHER OR NOT
ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR
IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY LC ISSUER,
ADMINISTRATIVE AGENT OR ANY BANK, provided only that none of LC Issuer,
Administrative Agent nor any Bank shall be entitled to indemnification for that
portion, if any, of any liability or claim which is proximately caused by its
own individual gross negligence or willful misconduct, as determined in a final
judgment.
SECTION 2.21. LC Collateral.
(a) LC Obligations in Excess of Commitment. If, after the making of all
mandatory prepayments required under Section 2.09(b), the outstanding LC
Obligations will exceed the
23
Commitment or a Debt Limit Excession exists, then in addition to prepayment of
the entire principal balance of the Loans the Borrower will immediately upon
demand by Administrative Agent deliver to LC Issuer an amount equal to such
excess or such remaining Debt Limit Excession. LC Issuer will hold such amount
as collateral security for the remaining LC Obligations (all such amount held as
collateral security for LC Obligations being herein collectively called "LC
Collateral") and the other obligations, and such collateral may be applied from
time to time to any Matured LC Obligations or any Note which are due and
payable. Neither this subsection nor the following subsection shall, however,
limit or impair any rights which LC Issuer may have under any other document or
agreement relating to any Letter of Credit, LC Collateral, or LC Obligation,
including any LC Application, or any rights which any Bank may have to otherwise
apply any payments by the Borrower to any LC Collateral pursuant to this
Agreement.
(b) Acceleration of LC Obligations. If the Indebtedness or any part thereof
becomes immediately due and payable pursuant to Section 6.01 then, unless all
Banks otherwise specifically elect to the contrary (which election may
thereafter be retracted by any Bank at any time), all LC Obligations shall
become immediately due and payable without regard to whether or not actual
drawings or payments on the Letters of Credit have occurred, and the Borrower
shall be obligated to pay to LC Issuer immediately an amount equal to the
aggregate LC Obligations which are then outstanding to be held as LC Collateral.
(c) Investment of LC Collateral. Pending application thereof, all LC
Collateral shall be invested by LC Issuer in such cash equivalents as LC Issuer
may choose in its sole discretion. All interest on (and other proceeds of) such
investments shall be reinvested or applied to Matured LC Obligations or the
Loans which are due and payable. When all Indebtedness has been satisfied in
full, including all LC Obligations, all Letters of Credit have expired or been
terminated, and all of the Borrower's reimbursement obligations in connection
therewith have been satisfied in full, LC Issuer shall release any remaining LC
Collateral. The Borrower hereby assigns and grants to LC Issuer for the benefit
of the Banks a continuing security interest in all LC Collateral delivered by it
to LC Issuer, all investments purchased with such LC Collateral, and all
proceeds thereof to secure its Matured LC Obligations and its obligations under
this Agreement, each Note, and the other Financing Documents, and Borrower
agrees that such LC Collateral, investments and proceeds shall be subject to all
of the terms and conditions of the Financing Documents. Borrower further agrees
that LC Issuer shall have all of the rights and remedies of a secured party
under the Uniform Commercial Code as adopted in the State of New York with
respect to such security interest and that an Event of Default under this
Agreement shall constitute a default for purposes of such security interest.
(d) Payment of LC Collateral. When the Borrower is required to provide LC
Collateral for any reason pursuant to Section 2.21(a) above and fails to do so
on the day when required, LC Issuer or Administrative Agent may without prior
notice to the Borrower or any other Person, provide such LC Collateral (whether
by transfers from other accounts maintained with LC Issuer, or otherwise) using
any available funds of the Borrower or any other Person also liable to make such
payments, and LC Issuer or Administrative Agent will give notice thereof to the
Borrower promptly after such application or transfer. Any such amounts which are
required to be provided as LC Collateral and which are not provided on the date
required shall, for
24
purposes hereof, be considered past due obligations owing hereunder, and LC
Issuer is hereby authorized to exercise its rights hereunder to obtain such
amounts.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective on the
date that each of the following conditions shall have been satisfied (or waived
in accordance with Section 9.05) (except Sections 2.11 and 9.03, which shall
become effective on the date that clause (a) below is satisfied):
(a) receipt by the Administrative Agent of counterparts hereof, signed
by each of the parties hereto (or, in the case of any party as to which any
executed counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of facsimile or other
written confirmation from such party of execution of a counterpart hereof
by such party);
(b) receipt by the Administrative Agent for the account of each Bank
of a Note duly executed on behalf of the Borrower and dated on or before
the Effective Date, complying with the provisions of Section 2.03, and a
guaranty of each Material Subsidiary as required pursuant to Section 5.08;
(c) receipt by the Administrative Agent of an opinion of ▇▇▇▇▇ &
▇▇▇▇▇, special counsel for the Borrower and the Subsidiary Guarantors,
substantially in the form of Exhibit B hereto;
(d) receipt by the Administrative Agent of an opinion of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Vice President, Managing Counsel and Corporate Secretary of the
Borrower and the Subsidiary Guarantors, substantially in the form of
Exhibit C hereto;
(e) receipt by the Administrative Agent of a certificate signed by the
chief financial officer, chief accounting officer or treasurer of the
Borrower, to the effect set forth in clauses (b), (c) and (d) of Section
3.02;
(f) receipt by the Administrative Agent of all documents it may
reasonably request relating to the existence of the Borrower and each
Subsidiary Guarantor, the corporate authority for and the validity of the
Financing Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Administrative Agent; and
(g) receipt by the Administrative Agent of evidence satisfactory to it
of the payment of all principal of and interest on any loans outstanding
under, and all accrued fees under, the Existing Agreement.
The certificate and opinions referred to in clauses (c), (d), (e) and (f) above
shall be dated the Effective Date; provided that this Agreement shall not become
effective or be binding on any
25
party hereto unless all of the foregoing conditions are satisfied not later than
October 31, 2002. Promptly after the Effective Date occurs, the Administrative
Agent shall notify the Borrower and the Banks thereof, and such notice shall be
conclusive and binding on all parties hereto. The Borrower and the Banks party
to the Existing Agreement, comprising the Required Banks as defined therein,
hereby agree that (i) the commitments of the banks under the Existing Agreement
shall terminate in their entirety immediately and automatically upon the
effectiveness of this Agreement, without further action by any party to the
Existing Agreement, (ii) all accrued fees under the Existing Agreement shall be
due and payable at such time, and (iii) subject to the funding loss indemnities
in the Existing Agreement, the Borrower may prepay any and all loans outstanding
thereunder on the Effective Date. Promptly after the Effective Date, each Bank
which is a party to the Existing Agreement will return to the Borrower the note
issued to it pursuant to the Existing Agreement (or if it is unable to locate
such note, will provide the Borrower with an officer's certificate to that
effect).
SECTION 3.02. Borrowings and Letters of Credit Issuances. The obligation of
each Bank to make a Loan to the Borrower on the occasion of any Borrowing, and
the obligation of LC Issuer to issue any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) receipt by the Administrative Agent of notice of such Borrowing as
required by Section 2.02 or receipt by LC Issuer of an LC Application with
respect to such Letter of Credit as required by Section 2.17;
(b) the fact that, immediately after such Borrowing or issuance of such
Letter of Credit, Borrower's Consolidated Debt will not exceed the Debt Limit;
(c) the fact that, immediately before and after such Borrowing or issuance
of such Letter of Credit, no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of any Borrowing or the
issuance of any Letter of Credit occurring subsequent to the first Borrowing or
issuance of a Letter of Credit, the representations and warranties covering
historical information in Sections 4.04(a) and (b) and the first sentence of
Section 4.05, and except to the extent the representations and warranties would
cover price and other economic assumptions furnished by the Required Banks under
Section 5.09(d)) shall be true and correct on and as of the date of such
Borrowing or issuance of such Letter of Credit.
Each Borrowing hereunder or request for a Letter of Credit shall be deemed to be
a representation and warranty by the Borrower on the date of such Borrowing or
issuance of such Letter of Credit as to the facts specified in clauses (b), (c)
and (d) of this Section.
26
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower and each
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all governmental licenses, authorizations, consents and
approvals required to own its assets and to carry on its business as now
conducted and is duly qualified as a foreign corporation in good standing in
each jurisdiction where the nature of its business or the ownership or leasing
of its Properties requires such qualification, except where the failure to
qualify would not materially and adversely affect the conduct of its business or
the enforceability of contractual obligations of the Borrower. Neither the
Borrower nor any Subsidiary is subject to regulation under the Public Utility
Holding Company Act of 1935, the Investment Company Act of 1940, the Interstate
Commerce Act or any other law or regulation the application of which limits the
incurrence by the Borrower of Debt hereunder, including, but not limited to,
laws relating to common or contract carriers or the sale of electricity, gas,
steam, water or other public utility services.
SECTION 4.02. Corporate Governmental Authorization; No Contravention. The
execution, delivery and performance by the Borrower and each Subsidiary
Guarantor of the Financing Documents are within the Borrower's and each
Subsidiary Guarantor's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower or any Subsidiary
Guarantor or of any agreement or instrument evidencing or governing Debt of the
Borrower or any Subsidiary or any other agreement, instrument, judgment,
injunction, order or decree binding upon the Borrower or any Subsidiary or
result in the creation or imposition of any Lien on any asset of the Borrower or
any Subsidiary Guarantor pursuant to any such agreement, instrument, judgment,
injunction, order or decree.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and each of the other Financing Documents,
when executed and delivered in accordance with this Agreement, will constitute
valid and binding obligations of the Borrower and each Subsidiary Guarantor, to
the extent a party thereto, in each case enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.
SECTION 4.04. Financial and Other Information.
(a) (i) The combined balance sheet of the Borrower and its Subsidiaries as
of December 31, 2001 and the related combined statements of income and cash
flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP
and incorporated by reference in the Borrower's 2001 Form 10-K, a copy of which
has been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the combined financial
27
position of the Borrower and its Subsidiaries as of such date and their combined
results of operations and cash flows for such fiscal year.
(ii) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of June 30, 2002 and the related unaudited
consolidated statements of income and cash flows for the six months then ended,
set forth in the Borrower's quarterly report for the fiscal quarter ended June
30, 2002 as filed with the Securities and Exchange Commission on Form 10-Q, a
copy of which has been delivered to each of the Banks fairly present, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such
nine-month period (subject to normal year-end adjustments).
(b) There are no statements or conclusions in the ▇▇▇▇▇▇ & ▇▇▇▇▇, Ltd.
report dated February 8, 2002 with respect to the Borrower's oil and gas
reserves, a copy of which has been delivered to each of the Banks (the "Initial
Reserve Report") that are based upon or include misleading information or fail
to take into account material information regarding the matters reported
therein, it being understood that such statements and conclusions are
necessarily based upon professional opinions, estimates and forecasts, and the
Borrower does not warrant that such opinions, estimates and forecasts will
ultimately prove to have been accurate.
(c) Since June 30, 2002, there has been no material adverse change in the
business, Properties, financial position, results of operations or prospects of
the Borrower or any Subsidiary Guarantor or of the Borrower and its
Subsidiaries, considered as a whole.
SECTION 4.05. Full Disclosure. None of the financial statements and other
financial or factual information included in the financial statements described
in Section 4.04(a) or in the most recent Reserve Report (excluding estimates,
financial projections and pro forma financial statements) contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained therein not misleading. All other financial and
reserve information, financial statements and other documents, estimates,
projections and pro forma financial information furnished by the Borrower to the
Banks in connection with the Financing Documents do not and will not contain any
untrue statement of material fact or omit to state a material fact necessary in
order to make the statements contained therein not misleading. The Borrower has
disclosed to the Banks in writing any and all facts which materially and
adversely affect the business, properties, operations or condition, financial or
otherwise, of the Borrower, each Subsidiary Guarantor or of the Borrower and its
Subsidiaries, considered as a whole, or the Borrower's or each Subsidiary
Guarantor's ability to perform its obligations under the Financing Documents.
SECTION 4.06. Litigation. Except as set forth in the Borrower's 2001 Form
10-K, March 2002 Form 10-Q and June 2002 Form 10-Q, there is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, Properties, financial position, results of operations or
prospects of the
28
Borrower or of the Borrower and its Subsidiaries, considered as a whole, or
which in any manner draws into question the validity of any Financing Document.
SECTION 4.07. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any amendment
to any Plan, which, in either case, has resulted or could result in the
imposition of a Lien on Property of the Borrower or any Subsidiary or the
posting of a bond or other security by the Borrower or any Subsidiary under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA (other than a liability to the PBGC for premiums under Section 4007
of ERISA) which could cause the Borrower or any Subsidiary (whether directly or
jointly and severally with one or more affiliates) to incur any liability.
SECTION 4.08. Environmental Matters. In the ordinary course of its
business, the Borrower considers the effect of all existing and applicable
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law or
as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). The Borrower has
reasonably concluded that existing and applicable Environmental Laws are
unlikely to have a material adverse effect on the business, Properties,
financial condition, results of operations or prospects of the Borrower, any
Subsidiary Guarantor or of the Borrower and its Subsidiaries, considered as a
whole.
SECTION 4.09. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any
Subsidiary. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes or other governmental charges are adequate.
SECTION 4.10. Titles, etc. The Borrower and each Subsidiary has good, valid
and defensible title to its material (individually or in the aggregate)
Properties (including valid and defensible title to all of the oil and gas
Properties which such Borrower has identified to the Banks for use in
determining the Debt Limit and good title to other material Properties which are
not oil and gas Properties) free and clear of all Liens except (i) Excepted
Liens or (ii) Liens otherwise expressly permitted by Section 5.11.
29
SECTION 4.11. Casualties; Taking of Properties. Since the date of the most
recent Reserve Report, neither the business nor the Petroleum Properties of the
Borrower or any Subsidiary has been affected as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces or acts of God or of any public
enemy, the occurrence of which would have a material adverse effect on the
business, Properties, financial condition, results of operations or prospects of
the Borrower, each Subsidiary Guarantor or of the Borrower and its Subsidiaries,
considered as a whole.
SECTION 4.12. Use of Proceeds. The proceeds of the Loans will be used (i)
to refinance the Borrower's existing Debt, (ii) for the Borrower's general
corporate purposes, including without limitation the payment of dividends as
permitted hereunder, (iii) the financing of the acquisition, exploration and
development of Petroleum Properties, and (iv) to pay reimbursement obligations
with respect to Letters of Credit. Borrower shall use all Letters of Credit for
its and its Subsidiaries' general corporate purposes. None of such proceeds of
the Loans, and no Letter of Credit, will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, which violates or which
would be inconsistent with Regulation U.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note remains unpaid, it will perform and comply
with each of the following covenants, unless such performance and compliance
shall have been specifically waived in writing by the Required Banks.
SECTION 5.01. Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within 90 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported in a manner acceptable to the Securities and Exchange
Commission by PricewaterhouseCoopers LLP or other independent public accountants
of nationally recognized standing, together with a copy of Borrower's FAS 133
Commodity Hedge report filed with Borrower's Form 10-K (or its equivalent) for
such fiscal year filed with the Securities and Exchange Commission;
(b) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income and
cash flows for such quarter and for the portion of the Borrower's fiscal year
ended at the end of such quarter, setting forth in each case in comparative form
the figures for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of
30
presentation, generally accepted accounting principles and consistency by the
chief financial officer, chief accounting officer or treasurer of the Borrower,
together with a copy of Borrower's FAS 133 Commodity Hedge report filed with
Borrower's Form 10-Q (or its equivalent) for such fiscal quarter filed with the
Securities and Exchange Commission;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the chief financial
officer, chief accounting officer or treasurer of the Borrower (i) setting forth
in reasonable detail the calculations required to establish whether the Borrower
was in compliance with the requirements of Section 5.10, Section 5.13, and
Section 5.17 on the date of such financial statements, and (ii) stating whether
any Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(d) within five days after any Executive Officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate of
the chief financial officer, chief accounting officer or treasurer of the
Borrower setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the Securities and Exchange Commission;
(g) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or any Executive Officer of the Borrower
or any Subsidiary knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Internal Revenue Code, a copy
of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any required payment or
contribution to any Plan or Multiemployer Plan or makes any amendment to any
Plan which has resulted or could result in the imposition of a Lien on Property
of the Borrower or any Subsidiary or the posting of a bond or other security by
the Borrower or any Subsidiary, a certificate of the chief financial officer,
chief accounting officer or treasurer of
31
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take;
(h) as soon as practicable upon any change in the applicable Commitment Fee
Rate, Euro-Dollar Margin or on account of a change in the Debt Percentage, a
certificate of the chief financial officer, chief accounting officer or
treasurer of the Borrower setting forth the date thereof and a calculation of
the Debt Percentage at such date; and
(i) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as any Bank may
reasonably request; provided that, to the extent practicable (as determined by
the Administrative Agent in its sole discretion), requests from the Banks for
written reports shall be delivered to the Borrower by the Administrative Agent.
SECTION 5.02. Payment of Obligations. The Borrower will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property. The Borrower will keep, and will
cause each Subsidiary to keep, all property useful and necessary in its business
in good working order and condition, ordinary wear and tear excepted. The
Borrower will operate, or will use its best efforts to cause a third party
operator to operate, all Petroleum Properties in a prudent manner, and will
market or will cause to be marketed the production therefrom at the best price
reasonably obtainable at the time the applicable sales contract is executed.
Neither the Borrower nor any Subsidiary will abandon any Petroleum Property
capable of production in paying quantities.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Subsidiary to continue, to engage in
business of the same general type as now conducted by the Borrower and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect
their respective corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; provided
that nothing in this Section shall prohibit (i) the merger of a Wholly-Owned
Subsidiary into the Borrower or the merger or consolidation of a Wholly-Owned
Subsidiary with or into another Person if the corporation surviving such
consolidation or merger is a Wholly-Owned Subsidiary and if, in each case, after
giving effect thereto, no Default shall have occurred and be continuing or (ii)
the termination of the corporate existence of any Subsidiary if the Borrower in
good faith determines that such termination is in the best interest of the
Borrower and is not materially disadvantageous to the Banks.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules,
32
regulations, and requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and regulations
thereunder) except where the necessity of compliance therewith is contested in
good faith by appropriate proceedings.
SECTION 5.06. Inspections of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective Properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
SECTION 5.07. Insurance. The Borrower and each Subsidiary now maintains and
will cause to be maintained with insurers which the Borrower believes to be
financially sound and reputable, insurance with respect to its Properties and
business against such liabilities, casualties, risks and contingencies and in
such types and amounts as is customary in the case of Persons engaged in the
same or similar businesses and similarly situated. Upon request of any Bank, the
Borrower will furnish or cause to be furnished to such Bank from time to time a
summary of the insurance coverage of the Borrower and its Subsidiaries in form
and substance satisfactory to the Required Banks. In the case of any fire,
accident or other casualty causing loss or damage to any Properties of the
Borrower, the proceeds of such policies shall be used to repair or replace the
damaged Property, or to prepay the Indebtedness.
SECTION 5.08. Covenant to Secure Indebtedness Equally; Subsidiary
Guaranties. If the Borrower or any Subsidiary shall create or assume any Lien
upon any of its Property, whether now owned or hereafter acquired, other than
Liens permitted by Section 5.11, the Borrower and such Subsidiary, if
applicable, shall make effective provision whereby the Indebtedness will be
concurrently secured by such Lien equally and ratably with any and all other
Debt thereby secured as long as any other Debt shall be so secured. The remedy
provided in this Section 5.08 shall not be exclusive and shall have no effect on
the availability or exercise of any other remedy that may be available to any
Bank under the Financing Documents. Borrower shall cause each Material
Subsidiary now existing or created, acquired or coming into existence after the
date hereof to execute and deliver to Administrative Agent, for the benefit of
Banks, a guaranty substantially in the form of Exhibit E attached hereto and
otherwise in form and substance reasonably acceptable to Administrative Agent,
absolutely and unconditionally guaranteeing the timely repayment of the
Indebtedness and the due and punctual performance of the obligations of Borrower
hereunder.
SECTION 5.09. Engineering Reports.
(a) By March 15 and September 15 of each year, the Borrower shall furnish
to each of the Banks a report in form and substance reasonably satisfactory to
the Required Banks which may be prepared by or under the supervision of a
petroleum engineer who may be an employee of the Borrower, which shall evaluate
all Proved Reserves owned by the Borrower and its Subsidiaries as of the
preceding December 31 or June 30, respectively (provided, that each such
33
report evaluating such Proved Reserves as of the preceding June 30 of each year
shall be based upon the geologic and well data set forth in the immediately
preceding Reserve Report), and which shall, together with any other information
reasonably requested by any Bank, set forth the information necessary to
determine the Debt Limit as of such date.
(b) Together with the Reserve Report furnished pursuant to subsection (a)
as of December 31 of any year, the Borrower shall furnish to each of the Banks a
review report thereon in form and substance reasonably satisfactory to the
Required Banks by ▇▇▇▇▇▇ & ▇▇▇▇▇, Ltd. or other independent petroleum engineers
acceptable to the Required Banks (provided that such review report shall not be
required to comment on any price or other economic assumptions furnished by the
Required Banks to the Borrower under subsection (d) below).
(c) At any time and upon request by the Required Banks, the Borrower shall
furnish to each of the Banks, within 30 days of such request, a report which
shall evaluate all Proved Reserves owned by the Borrower and its Subsidiaries as
of the date of the most recent Reserve Report or as of such other date as the
Required Banks specify, in form and substance reasonably satisfactory to the
Required Banks (a "Special Engineering Report"), together with any other
information reasonably requested by any Bank; provided, that such evaluation
shall be based upon the geologic and well data set forth in the Reserve Report
furnished as of the immediately preceding Reserve Report for which a review
report has been furnished under subsection (b). The Special Engineering Report
shall use production and cost profiles from the most recent Reserve Report with
such other information as supplied by the Required Banks.
(d) The reports contemplated by this Section shall be prepared on the basis
of price and other economic assumptions specified by the Required Banks to the
Borrower not less than 60 days prior to the date the related report is due and
in accordance with their customary oil and gas lending practices for Persons
engaged in the same or similar businesses and similarly situated as the
Borrower; provided that the natural gas price assumptions shall take into
account the Borrower's end product sales value for natural gas as most recently
furnished by the Borrower in writing to the Banks (together with a description
of the applicable period of sales data from which such end product sales value
was derived) and derived from the financial statements furnished to the Banks.
SECTION 5.10. Debt. (a) The Borrower's Consolidated Debt will at no time
exceed the Debt Limit; provided that if a Debt Limit Excession exists solely by
reason of a reduction of the Debt Limit pursuant to a redetermination under
subsection (b)(ii) below, no Default will arise hereunder so long as the
Borrower is in compliance with the mandatory prepayment provisions of Section
2.09(b).
(b) The Debt Limit will be determined and adjusted periodically as follows:
(i) Prior to a determination pursuant to subsection (b)(ii) below, on
the basis of the Initial Reserve Report, and subject to adjustment in
accordance with subsections (b)(iii) and (b)(iv) below, the Debt Limit
shall be $520,000,000.
34
(ii) The Administrative Agent will in its sole and absolute discretion
determine a proposed Debt Limit in accordance with its customary oil and
gas lending practices (A) within 30 days of delivery of each Reserve Report
pursuant to Section 5.09, commencing January 1, 2003 or (B) at any time if
the Required Banks so elect by notice to the Borrower and the
Administrative Agent, and, in either such case, notify such proposed Debt
Limit to each of the other Banks. Unless (x) with respect to a proposed
Debt Limit less than or equal to the then-existing Debt Limit, the Banks
having more than 33 1/3% of the aggregate amount of Commitments then in
effect (or, if the Commitments have been terminated, holding Notes
evidencing more than 33 1/3% of the aggregate principal amount of the Loans
then outstanding), at their sole and absolute discretion, notify the
Borrower and Administrative Agent that they disapprove such proposed Debt
Limit, or (y) with respect to a proposed Debt Limit greater than the
then-existing Debt Limit, any Bank, at its sole and absolute discretion,
notifies the Borrower and Administrative Agent that it disapproves such
proposed increase of the Debt Limit within 30 days of notice by the
Administrative Agent as aforesaid, such Debt Limit shall become effective
on such 30th day. If the Debt Limit is so disapproved, then the Banks shall
consult with one another to determine a Debt Limit acceptable, at their
sole and absolute discretion, to (i) with respect to a Debt Limit less than
or equal to the then-existing Debt Limit, the Required Banks, or (ii) with
respect to a Debt Limit greater than the then-existing Debt Limit, all
Banks. The Debt Limit so determined shall be promptly notified in writing
by the Administrative Agent to the Borrower, and upon such notification
shall be binding on all parties.
(iii) Upon any sale by the Borrower or any Subsidiary of any Petroleum
Property (other than (i) the sale of hydrocarbons after severance occurring
in the ordinary course of the Borrower's business as presently conducted,
(ii) the sale of any Petroleum Property pursuant to the Section 29
Transaction or (iii) the sale of the Section 29 Transaction PPIs by reason
of the rescission of the Section 29 Transaction) or any direct or indirect
transfer or other disposition to any third party of a direct or indirect
interest in any Subsidiary whose assets were included in the most recent
determination of the Debt Limit, the Debt Limit shall be reduced, effective
on the date of consummation of the sale of such Petroleum Property or
transfer of such interest in such Subsidiary, by an amount equal to 60% of
the net proceeds of or consideration for (whether received in cash or
otherwise) such sale or transfer; provided that no such reduction shall be
required with respect to aggregate net sales proceeds or consideration
received of up to $25,000,000 in any calendar year; and provided, further,
that all such sales of Petroleum Properties and transfers of interests in
Subsidiaries are subject to the provisions of Sections 5.12 and 5.15.
(iv) If prior to the next preparation of the Reserve Report pursuant
to Section 5.09, the Borrower notifies the Administrative Agent of the
acquisition by the Borrower or any Subsidiary of any Proved Reserves and
other assets consisting primarily of gas gathering and transmission
pipelines located in the United States of America or in Canada (the right
to give such notice limited to twice in any calendar year), the
Administrative Agent shall promptly thereafter notify each Bank of such
acquisition and the Borrower shall as promptly as practicable thereafter
deliver to each of the Banks a report prepared
35
by or under the supervision of a petroleum engineer (who may be an employee
of the Borrower) evaluating such Proved Reserves and other assets. Within
60 days of delivery of such evaluation report, the Administrative Agent,
after consultation with the Borrower, will in its sole and absolute
discretion determine a proposed increase in the Debt Limit and notify such
proposed increase to each of the Banks. Unless any Bank in its sole and
absolute discretion notifies the Borrower and Administrative Agent that it
disapproves such proposed increase of the Debt Limit within 30 days of
notice by the Administrative Agent as aforesaid, such Debt Limit shall
become effective on such 30th day. If such proposed increase in the Debt
Limit is so disapproved, then the Banks shall consult with one another to
determine an increase in the Debt Limit acceptable at their sole and
absolute discretion to all Banks. The Debt Limit as increased by the amount
so determined by all Banks shall be promptly notified in writing by the
Administrative Agent to the Borrower, and upon such notification shall be
binding on all parties.
(v) The Borrower shall notify each Bank at the earliest practicable
time in advance of any transactions which entail a reasonable likelihood of
an adjustment to the Debt Limit pursuant to subsection (b)(iii), (b)(iv) or
(b)(v) above, and shall furnish each Bank with such information with
respect thereto as any Bank may reasonably request.
SECTION 5.11. Liens. The Borrower will not, and not permit any Subsidiary
to, create, incur, assume or suffer to exist any Lien on any of its Properties
(now owned or hereafter acquired), except:
(a) Excepted Liens;
(b) Liens existing on Property owned by the Borrower or any Subsidiary on
the Effective Date, but not any renewals and extensions thereof; provided that
the aggregate amount of Debt secured by such Liens shall not exceed $5,000,000;
(c) subject to Section 5.10, a Lien existing on any asset (other than any
Petroleum Property) prior to the acquisition thereof by a Borrower, but not
created in contemplation of such acquisition;
(d) subject to Section 5.10, a Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of acquiring
such asset (other than any Petroleum Property), provided that such Lien attaches
to such asset concurrently with or within 90 days after the acquisition thereof;
(e) Liens representing gas imbalances, take or pay or other prepayments in
the ordinary course of business with respect to any Petroleum Properties which
would require the Borrower or any Subsidiary to deliver hydrocarbons produced
from any Petroleum Properties at some future time without then or thereafter
receiving full payment therefor, which in the aggregate would not exceed 3% of
the Debt Limit and as adjusted to reflect any subsequent adjustment of the Debt
Limit pursuant to Section 5.10(b)(iii), (iv) or (v), all as notified in writing
by the Administrative Agent to the Borrower; and
36
(f) Liens securing other Debt of the Borrower or any Subsidiary the
aggregate principal amount of which does not exceed $3,000,000 at any time.
SECTION 5.12. Sales of Petroleum Properties. The Borrower will not, and
will not permit any Subsidiary to, sell, transfer or otherwise dispose of any
Petroleum Property for less than the fair market value of such Property (other
than (i) the sale of any Petroleum Property pursuant to the Section 29
Transaction or (ii) the sale of the Section 29 Transaction PPIs by reason of the
rescission of the Section 29 Transaction) if, after giving effect thereto, and
to any concurrent reduction in the Debt Limit pursuant to Section 5.10 and
application of the proceeds of such disposition, Borrower's Consolidated Debt
would exceed the Debt Limit.
SECTION 5.13. Financial Covenants.
(a) ANNUAL COVERAGE RATIO. The Annual Coverage Ratio will at no time be
less than 2.8:1. For this purpose:
"Annual Coverage Ratio" means at any date the ratio of Consolidated
Cash Flow to Consolidated Interest Expense for the period of four
consecutive fiscal quarters most recently ended on or prior to such date.
"Consolidated Cash Flow" means, for any period, the net cash from
operating activities of the Borrower and its Consolidated Subsidiaries for
such period, as the same is, or would in accordance with generally accepted
accounting principles be set forth in a statement of cash flows for such
period, plus to the extent deducted in determining such net cash from
operating activities, the sum of (i) consolidated interest charges incurred
by the Borrower and its Consolidated Subsidiaries during such period and
(ii) income tax expense.
"Consolidated Interest Expense" means, for any period, the interest
expense of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis for such period in accordance with generally accepted
accounting principles.
(b) ASSET COVERAGE RATIO. The ratio of (i) Present Value of Proved Reserves
plus Adjusted Cash to (ii) Debt and Other Liabilities shall at all times be not
less than 1.5:1. For this purpose:
"Present Value of Proved Reserves" means at any time the standardized
measure of discounted after-tax future net cash flows, calculated in
accordance with the methods prescribed at such time by Item 302(b) of
Regulation S-K or any successor provision promulgated by the Securities and
Exchange Commission (or if no such methods shall then be prescribed, then
on a basis consistent with those most recently so prescribed), of the
Borrower's and its Subsidiaries' Proved Reserves, excluding reserves
subject to any Non-Recourse Debt. In calculating the Present Value of
Proved Reserves, proved undeveloped reserves shall not be taken into
account to the extent that more than 30% of the Present Value of Proved
Reserves is attributable to proved undeveloped
37
reserves. The Present Value of Proved Reserves will be determined and
adjusted periodically as follows:
(i) The calculation of Present Value of Proved Reserves will be
determined from the most recent Reserve Report.
(ii) Upon any sale by the Borrower or any of its Subsidiaries of
any Petroleum Property including but not limited to a sale of a lesser
interest such as a royalty or a net profit interest to the extent the
sale of such lesser interest is not considered to create a Lien (other
than the sale of hydrocarbons after severance occurring in the
ordinary course of the Issuer's business), the calculation of Present
Value of Proved Reserves shall be reduced, effective on the date of
consummation of such sale, by an amount equal to the Present Value of
Proved Reserves attributable to Proved Reserves included in such sale.
(iii) Immediately upon acquisition or development by the Borrower
or any of its Subsidiaries of any Petroleum Property owned directly by
the Borrower or any of its Subsidiaries and not reflected in the most
recent Reserve Report, the calculation of Present Value of Proved
Reserves shall be increased in an amount equal to the Present Value of
Proved Reserves attributable to such Petroleum Property.
"Adjusted Cash" means, as of any date, the lesser of (i) the amount by
which cash and short-term investments of the Borrower and its Subsidiaries
exceed $5,000,000 and (ii) the amount, if any, by which (a) current assets
of the Borrower and its Subsidiaries exceed (b) current liabilities of such
Persons (excluding the aggregate outstanding principal amount of Debt
included in such current liabilities), in each case determined on a
consolidated basis as of such date. If such current liabilities exceed such
current assets, Adjusted Cash shall be zero.
"Debt and Other Liabilities" means, at any date, the sum of, without
duplication, (i) Debt of the Borrower and its Subsidiaries at such date
plus (ii) the amount, if any, by which Negative Adjusted Working Capital at
such date exceeds 6% of the Present Value of Proved Reserves minus (iii)
Non-Recourse Debt of the Borrower and its Subsidiaries at such date.
"Negative Adjusted Working Capital" means, at any date, the amount, if
any, by which current liabilities other than Debt of the Borrower and its
Subsidiaries exceeds current assets of such Persons, determined on a
consolidated basis as of such date.
SECTION 5.14. Consolidations, Mergers and Sales of Assets. The Borrower
will not, and will not permit any Subsidiary to, consolidate or merge with or
into any other Person or sell, lease or otherwise transfer, directly or
indirectly, all or substantially all of its assets to any other Person except as
otherwise permitted by Section 5.04.
38
SECTION 5.15. Subsidiary Debt. The Borrower will not permit any of its
Subsidiaries to incur, create, assume, guarantee or in any other manner become
liable with respect to, or extend the maturity of or become responsible for the
payment of any Debt other than (i) Debt owing to the Borrower or a Wholly-Owned
Subsidiary, (ii) Non-Recourse Debt in an aggregate principal amount not to
exceed $150,000,000 (together with any such Non-Recourse Debt incurred by the
Borrower) at any time incurred to finance the acquisition of Properties (other
than Petroleum Properties) and (iii) other Debt in an aggregate principal amount
not to exceed at any time an amount equal to 3% of the Debt Limit and as
adjusted to reflect any subsequent adjustment of the Debt Limit pursuant to
Section 5.10(b)(iii), (iv) or (v), all as notified in writing by the
Administrative Agent to the Borrower.
SECTION 5.16. Subsidiaries. The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any restriction (other than any restriction imposed by applicable corporate law)
on (i) the ability of such Subsidiary to make intercompany payments or advances
to the Borrower or (ii) the ability of the Borrower to direct the actions of
such Subsidiary or to otherwise maintain or exercise control over such
Subsidiary's actions, subject to any fiduciary responsibility under applicable
law to any minority stockholders of such Subsidiary.
SECTION 5.17. Credit Extensions. The Borrower shall not, and shall not
permit any Subsidiary to, extend credit, make advances or make loans other than
(a) normal and prudent extensions of credit to customers buying goods and
services in the ordinary course of business, which extensions shall not be for
longer periods than those extended by similar businesses operated in a normal
and prudent manner, (b) to employees in connection with travel or relocation
expenses incurred in connection with the ordinary course of business, provided
outstanding credit extensions under this clause (b) shall not at any time exceed
$250,000, and (c) to a Subsidiary Guarantor in the ordinary course of business.
SECTION 5.18. Transactions with Affiliates. The Borrower shall not, and
shall not permit any Subsidiary to, engage in any material transaction with any
of its affiliates except transactions entered into in the ordinary course of
business of the Borrower or such Subsidiary on terms which are no less favorable
to Borrower or such Subsidiary than those which would have been obtainable at
the time in arm's-length transactions with Persons other than such affiliates.
SECTION 5.19. Commodity ▇▇▇▇▇▇. The Borrower will not, and will not permit
any Subsidiary to, be a party to or be bound by any Commodity Hedge, unless
(a) such Commodity Hedge (i) is not a speculative investment, and (ii)
is entered into by Borrower or such Subsidiary in the ordinary course of
its businesses; and
(b) all such Commodity ▇▇▇▇▇▇ do not, in the aggregate, cover more
than eighty percent (80%) of Borrower's and its Subsidiaries' anticipated
total production (measured in unit volumes, not by sales price) of oil and
gas in the ordinary course of their businesses during the terms of such
agreements, determined looking only to anticipated production from reserves
which are proved, developed producing reserves at the time in question and
excluding any such production committed to fixed price sales contracts.
39
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events not
specifically waived in writing by the Required Banks shall have occurred and be
continuing:
(a) the Borrower or any Subsidiary Guarantor shall fail to pay when due any
principal of any Loan or any reimbursement obligation with respect to any Letter
of Credit, or shall fail to pay within five Business Days of the due date
thereof any interest, fees or other amount payable under the Financing
Documents;
(b) the Borrower shall fail to observe or perform any covenant or agreement
contained in Section 5.16 for 10 days after it shall have become aware of such
failure or any covenant or agreement contained in Sections 5.10 through 5.15 or
5.17 through 5.19;
(c) the Borrower or any Subsidiary Guarantor shall fail to observe or
perform any of its covenants or agreements contained in any of the Financing
Documents (other than those covered by clause (a) or (b) above) for 30 days
after it shall have become aware of such failure;
(d) any representation, warranty, certification or statement made by the
Borrower or any Subsidiary Guarantor in any of the Financing Documents or in any
certificate, financial statement or other document delivered pursuant to any of
the Financing Documents shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Debt (other than the Notes) when due or within any
applicable grace period and such default has not been effectively waived by the
holders of such Debt;
(f) any event or condition shall occur which, after the expiration of any
applicable grace period with respect thereto, results in the acceleration of the
maturity of any Material Debt (other than the Notes) or enables the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof and such default has not been effectively waived by the holders
of such Debt (provided, that prior to the expiration of such grace period, the
occurrence of such event or condition shall constitute a Default hereunder);
(g) the Borrower or any Subsidiary shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
40
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $500,000 which it shall have become liable to
pay under Title IV of ERISA which failure to pay could cause the Borrower or any
Subsidiary (whether directly or jointly and severally with one or more
affiliates) to incur a liability in respect of such amount or amounts, except
for any such failure which is being contested in good faith through appropriate
proceedings, so long as such proceedings are diligently prosecuted and no Lien
has been imposed on any Property of the Borrower or any Subsidiary as a
consequence of such failure; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multi-employer Plans which
could cause the Borrower or any Subsidiary (whether directly or jointly and
severally with one or more affiliates) of the ERISA Group to incur a current
payment obligation in excess of $500,000;
(j) a judgment or order for the payment of money in excess of $5,000,000
shall be rendered against the Borrower or any Subsidiary and such judgment or
order shall continue unsatisfied and unstayed pending appeal for a period of 30
days; or
(k) (i) any "person" or "group" of persons shall have acquired "beneficial
ownership" of 35% or more of the outstanding shares of common stock of the
Borrower or (ii) during any period of 24 consecutive calendar months,
individuals who were directors of the Borrower on the first day of such period
and individuals who are "Qualifying Directors", in the aggregate, shall cease to
constitute a majority of the board of directors of the Borrower; for purposes of
this Section (k), a "Qualifying Director" means any director who (a) is elected
by a majority of the members of the board of directors of the Borrower who were
directors immediately prior to the event that caused the change in directorships
and (b) is not a "person" or member of a "group" of persons, or an "affiliate"
or "associate" of any "person" or "group" member, or an "associate" of an
"affiliate" of any such "person" or "group" member, which "person" or "group" of
persons, together with all of their respective "affiliates" and "associates" and
all "associates" of their respective "affiliates" (other than a "person" or
"group" of persons or an "affiliate" or "associate" of such "person" or "group"
of persons or an "associate" of such "affiliate", in each case which is
affiliated with the Borrower or any Subsidiary) comprise a majority of the board
of directors of the Borrower ("person", "group",
41
"beneficial ownership", "affiliate" and "associate" having the meanings assigned
thereto in Rules 12b-2 and 13d under the Securities Exchange Act of 1934);
then, and in every such event, the Administrative Agent shall (i) if requested
by the Banks holding 50% or more of the aggregate amount of the Commitments then
in effect, by notice to the Borrower, terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Banks holding 50% or more of
the aggregate principal amount of the Loans and LC Obligations then outstanding,
by notice to the Borrower, declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately due and
payable without presentment, demand, protest, notice of intent to accelerate or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default specified in Section
6.01(g) or Section 6.01(h) with respect to the Borrower, without any notice to
the Borrower or any other act by the Administrative Agent or the Banks, the
Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Administrative Agent shall give notice
to the Borrower of a Default under Section 6.01(d) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank hereby irrevocably
authorizes Administrative Agent, and Administrative Agent hereby undertakes, to
receive payments of principal, interest and other amounts due hereunder as
specified herein and to take all other actions and to exercise such powers under
this Agreement and the Notes as are specifically delegated to Administrative
Agent by the terms hereof or thereof, together with all other powers reasonably
incidental thereto. The relationship of Administrative Agent to the other Banks
is only that of one commercial lender acting as administrative agent for others,
and nothing in this Agreement or the Notes shall be construed to constitute
Administrative Agent a trustee or other fiduciary for any Bank or any holder of
any participation in a Note nor to impose on Administrative Agent duties and
obligations other than those expressly provided for in this Agreement and the
Notes. With respect to any matters not expressly provided for in this Agreement
and the Notes and any matters which this Agreement and the Notes place within
the discretion of Administrative Agent, Administrative Agent shall not be
required to exercise any discretion or take any action, and it may request
instructions from the Banks with respect to any such matter, in which case it
shall be required to act or to refrain from acting (and shall be fully protected
and free from liability to all the Banks in so acting or refraining from acting)
upon the instructions of the Required Banks (including itself), provided,
however, that Administrative Agent shall not be required to take any action
which exposes it to a risk of personal liability that it considers unreasonable
or which is contrary to this Agreement or the Notes or to applicable law. Upon
receipt by Administrative Agent from the Borrower of any communication calling
for action on the part of the Banks or upon notice from the Borrower or any Bank
to Administrative
42
Agent of any Default or Event of Default, Administrative Agent shall promptly
notify each other Bank thereof.
SECTION 7.02. Administrative Agent and Affiliates. Fleet National Bank
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Administrative Agent, and Fleet National Bank and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not
the Administrative Agent hereunder.
SECTION 7.03. Action by Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in Article 6.
SECTION 7.04. Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Administrative Agent. Neither the Administrative
Agent nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be liable to the Banks for any action taken or not
taken by it in connection herewith (i) with the consent or at the request of the
Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its affiliates nor any
of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any Borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in connection
herewith. The Administrative Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement or other writing
(which may be a bank wire, telex or similar writing) believed by it to be
genuine or to be signed by the proper party or parties. Without limiting the
generality of the foregoing, the use of the term "agent" in this Agreement with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or expressed) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance with
its Commitment, indemnify the Administrative Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, fine, judgment, suit, settlement,
expense (including counsel fees and disbursements), claim, demand, action, loss,
damage, penalty, obligation, or liability (except such as result from such
43
indemnitee's gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with this Agreement or any action taken or omitted
by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement.
SECTION 7.08. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall have the right,
with the consent of the Borrower, to appoint a successor Administrative Agent.
If no successor Administrative Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent.
SECTION 7.09. Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account fees in the amounts and at the times
previously agreed upon between the Borrower and the Administrative Agent.
SECTION 7.10. Other Agents. Neither the Syndication Agent nor the
Documentation Agent ("Co-Agents"), in such capacities, shall have any duties or
responsibilities or incur any liabilities in such agency capacities (as opposed
to its capacity as a Bank) under or in connection with this Agreement or under
any of the other Financing Documents. The relationship between the Borrower on
the one hand, and the Co-Agents and the Administrative Agent, on the other hand,
shall be solely that of borrower and lender. None of the Co-Agents shall have
any fiduciary responsibilities to the Borrower or any of its affiliates. None of
the Co-Agents undertakes any responsibility to the Borrower or any of its
affiliates to review or inform any such Person of any matter in connection with
any phase of such Person's or such affiliate's business or operations.
44
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Group of Euro-Dollar
Loans:
(a) the Administrative Agent determines that deposits in dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or
(b) Banks holding Notes evidencing 50% or more of the aggregate principal
amount of the Loans comprising such Group advise the Administrative Agent that
the London Interbank Offered Rate, as determined by the Administrative Agent
will not adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such suspension no longer exist, (a) the obligations of the Banks to make
Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans, shall
be suspended and (b) each outstanding Euro-Dollar Loan shall be converted into a
Base Rate Loan on the last day of the then current Interest Period applicable
thereto. Unless the Borrower notifies the Administrative Agent at least one
Domestic Business Day before the date of any Euro-Dollar Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, or to convert outstanding
Loans into Euro-Dollar Loans, shall be suspended. Before giving any notice to
the Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, all Euro-Dollar Loans of
such Bank then outstanding shall be converted to Base Rate Loans either (a) on
the last day of the then current Interest Period applicable to such Euro-Dollar
Loans if such Bank may lawfully continue to maintain and fund such Loans to such
day or (b) immediately if such Bank may not lawfully continue to maintain and
fund such Loans to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or
45
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any tax,
duty or other charge with respect to its Euro-Dollar Loans, its Note or its
obligation to make Euro-Dollar Loans, or shall change the basis of taxation of
payments to any Bank (or its Applicable Lending Office) of the principal of or
interest on its Euro-Dollar Loans or any other amounts due under this Agreement
in respect of its Euro-Dollar Loans or its obligation to make Euro-Dollar Loans
(except for any increase in franchise taxes imposed or changes in the rate of
tax on the overall net income of such Bank or its Applicable Lending Office
imposed by the jurisdiction in which such Bank's principal executive office or
Applicable Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding with respect to any Euro-Dollar Loan,
any such requirement with respect to which such Bank is entitled to compensation
during the relevant Interest Period under Section 2.14), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the London interbank market
any other condition affecting its Euro-Dollar Loans, its Note or its obligation
to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Administrative Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank or LC Issuer shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank or LC Issuer (or its Parent) as a consequence of such
Bank's or LC Issuer's obligations hereunder to a level below that which such
Bank or LC Issuer (or its Parent) could have achieved but for such law, rule,
regulation, change or compliance (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank or LC Issuer to be
material, then from time to time, within 15
46
days after demand by such Bank or LC Issuer (with a copy to the Administrative
Agent), the Borrower shall pay to such Bank or LC Issuer such additional amount
or amounts as will compensate such Bank or LC Issuer (or its Parent) for such
reduction; provided that the Borrower will not be obligated to compensate any
Bank or LC Issuer for any such reduction attributable to a period commencing
more than 120 days prior to the giving of notice by such Bank or LC Issuer to
the Borrower of its intention to seek compensation under this paragraph (b) and
the making of demand by such Bank or LC Issuer for payment thereof in accordance
herewith (except for any period during which, because of the retroactive
application of such statute, regulation or other basis upon which the claimed
compensation is based, such Bank or LC Issuer did not know that the amount of
such reduction would arise or accrue).
(c) Each Bank or LC Issuer will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank or LC Issuer to compensation pursuant
to this Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Bank or LC Issuer, be otherwise
disadvantageous to such Bank or LC Issuer. A certificate of any Bank or LC
Issuer claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank or LC Issuer may use
any reasonable averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as (or continued
as or converted into) Euro-Dollar Loans shall instead be Base Rate Loans, and
(b) after each of its outstanding Euro-Dollar Loans has been repaid (or
converted), all payments of principal which would otherwise be applied to repay
such Euro-Dollar Loans shall be applied to repay its Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the Borrower shall elect that the principal amount of
each such Base Rate Loan shall be converted into a Euro-Dollar Loan on the first
day of the next succeeding Interest Period applicable to the related Euro-Dollar
Loans of the other Banks.
SECTION 8.05. Substitution of Bank. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Bank or LC Issuer has demanded compensation under Section 8.03, the Borrower
shall have the right, with the assistance of the Administrative Agent, to seek a
mutually satisfactory substitute bank or banks
47
(which may be one or more of the Banks) to purchase the Note and assume the
Commitment of such Bank.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower, the Administrative Agent or LC Issuer, at its address,
facsimile number or telex number set forth on the signature pages hereof, (y) in
the case of any Bank, at its address or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received (ii) or if given by any other
means, when received; provided that notices given by telex to the Administrative
Agent under Article 2 or Article 8 shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Administrative Agent,
LC Issuer or any Bank in exercising any right, power or privilege under any
Financing Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies therein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses of the
Administrative Agent, including fees and disbursements of special counsel for
the Administrative Agent or the Arranger, in connection with the preparation of
the Financing Documents, any waiver or consent thereunder or any amendment
thereof or any Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Administrative Agent
or the Arranger or any Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom. The Borrower shall indemnify Administrative
Agent, LC Issuer and each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of any Financing Document.
(b) The Borrower agrees to indemnify the Administrative Agent, LC Issuer
and each Bank, their respective affiliates and the respective directors,
officers, trustees, agents, representatives, attorneys, employees and affiliates
of the foregoing (each an "Indemnitee"), upon demand, and hold each Indemnitee
harmless from and against any and all liabilities, obligations, claims, losses,
damages, penalties, fines, actions, judgments, suits, settlements, costs,
expenses and disbursements of any kind or nature whatsoever (collectively,
"liabilities and costs"), including, without limitation, the reasonable fees and
disbursements of counsel, accountants, experts and advisors, which to any extent
(in whole or in part) may be imposed on,
48
incurred by or asserted against such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) growing out of, resulting from,
relating to or arising out of or in any other way associated with this
Agreement, the Financing Documents, any actual or proposed use of proceeds of
Loans hereunder and the transactions and events (including the enforcement or
defense thereof) at any time associated therewith or contemplated therein
(whether arising in contract or in tort or otherwise and including any violation
or noncompliance with any Environmental Laws by Indemnitee or any other Person
or any liabilities or duties of any Indemnitee or any other Person with respect
to hazardous materials found in or released into the environment); provided that
no Indemnitee shall have the right to be indemnified hereunder for that portion,
if any, of any such liabilities and costs which is proximately caused by its own
individual gross negligence or willful misconduct, as determined in a final
judgment.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note acquired pursuant to the foregoing arrangements may exercise rights of
set-off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Administrative Agent or LC Issuer are affected thereby,
by the Administrative Agent or LC Issuer, as the case may be); provided that no
such amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or termination
of any Commitment, (iv) waive any of the conditions specified in Article 3 with
respect to any Borrowing or issuance of Letters of Credit, (v) amend this
Section 9.05, (vi) release any Subsidiary Guarantor from, or materially amend,
its guaranty of the Obligations, or (vii) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement.
49
SECTION 9.06. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks. Any assignment or transfer hereunder shall be made
in accordance with applicable law, including without limitation federal and/or
state securities laws, if applicable.
(b) Any Bank may at any time grant to one or more banks or other financial
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. The
rights and entitlements of any Bank under Sections 2.11 and 2.14 and Article 8
shall be determined for purposes of this Agreement on the basis of what such
Bank would be entitled to receive under this Agreement had it not granted any
participating interest to any Participant, whether or not such Bank has in fact
done so. Any agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii) or (iii) of Section 9.05
without the consent of the Participant and may contain any other provisions, or
such participation may take place on such other terms, as such Bank deems
appropriate. An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or more banks or other financial
institutions (each an "Assignee") all or a portion of its rights and obligations
under the Financing Documents, and such Assignee shall assume such rights and
obligations, pursuant to an instrument executed by such Assignee and such
transferor Bank, with (and subject to) notice to, and the consent of, the
Borrower and the Administrative Agent (which consents shall not be unreasonably
withheld); provided that if an Assignee is an affiliate of such transferor Bank,
such notice shall be given but no such consent shall be required; provided,
further, that no assignment representing less than $5,000,000 in Commitments
shall be permitted without the consent of the Borrower and the Administrative
Agent; and provided, further, that during the continuance of an Event of
Default, no such consent of the Borrower shall be required. Upon execution and
delivery of such an instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection (c), the transferor Bank, the
Administrative Agent and the Borrower
50
shall make appropriate arrangements so that, if required, new Notes are issued
to the Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall, prior to
the first date on which interest or fees are payable hereunder for its account,
deliver to the Borrower and the Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 2.13.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
(e) No Assignee or other transferee of any Bank's rights (not including
Participants) shall be entitled to receive any greater payment under Section
8.03 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02 or 8.03 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 9.08. New York Law; Submission to Jurisdiction. THIS AGREEMENT AND
EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
SECTION 9.09. Waiver of Jury Trial, Punitive Damages, etc. THE BORROWER AND
THE BANKS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE
51
BANKS TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS AND TO
MAKE THE LOANS. THE BORROWER AND EACH BANK HEREBY FURTHER IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES," AS DEFINED BELOW,
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR 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 ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT,
THE OTHER FINANCING DOCUMENTS, AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION. AS USED IN THIS SECTION, "SPECIAL DAMAGES" INCLUDES ALL
SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW
NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS
EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.
SECTION 9.10. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 9.11. Confidentiality. Each of the Administrative Agent, LC Issuer
and the Banks agrees to maintain the confidentiality of any information of a
confidential nature which it has or shall acquire during the term of this
Agreement relating to the business, operations and financial or other condition
of the Borrower or its Subsidiaries or, with respect to ERISA matters, any other
member of the ERISA Group, except and to the extent that (i) the Administrative
Agent, LC Issuer or such Bank may be required to disclose such information (a)
at the request of a bank regulatory agency or in connection with an examination
of the Administrative Agent or such Bank by bank examiners, (b) pursuant to
subpoena or other court process, (c) at the express direction of any other
authorized government agency, (d) to its attorneys or independent auditors, or
(e) otherwise as required by law, or (ii) such information is disclosed in
connection with (A) the prospective or actual assignment, grant of a
participation interest or other transfer by a Bank of or in any of its interests
in this Agreement, the Notes or the other Financing Documents, (B) the
securitization of obligations owed or debt securities issued by a Bank or credit
derivatives or other hedge transactions entered into by a Bank under which
payments are made by reference to this Agreement, or (C) prospective credit
products (including swaps, ▇▇▇▇▇▇ and derivatives) to be offered to the Borrower
by an affiliate of such Person, provided that such prospective or actual
Assignee, Participant or other transferee, or the trustee or holder of such
obligations owed or debt securities, or such derivative or hedge counterparty,
or such affiliate shall have agreed to keep such information confidential on the
terms and conditions set forth herein.
SECTION 9.12. No Unwritten Agreements. THIS AGREEMENT AND THE NOTES
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO, SUPERSEDING ANY AND
ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER HEREOF,
AND MAY NOT BE CONTRADICTED
52
BY EVIDENCE OF ORAL AGREEMENTS OF THE PARTIES HERETO, WHETHER MADE BEFORE, ON OR
AFTER THE DATE OF THIS AGREEMENT. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES HERETO.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
53
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
CABOT OIL & GAS CORPORATION
By:______________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
Address for Notices:
Cabot Oil & Gas Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ (direct)
▇▇▇-▇▇▇-▇▇▇▇ (main)
Fax: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
54
Commitments: BANKS:
------------
$36,000,000 FLEET NATIONAL BANK
By:_________________________________
Name:
Title:
$35,000,000 BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ FINANCING, INC.
By:_________________________________
Name:
Title:
$35,000,000 BANK ONE NA
By:_________________________________
Name:
Title:
$28,000,000 BANK OF AMERICA, N.A.
By:_________________________________
Name:
Title:
$28,000,000 THE BANK OF NEW YORK
By:_________________________________
Name:
Title:
$28,000,000 BNP PARIBAS
By:_________________________________
Name:
Title:
55
Commitments: BANKS:
------------
$20,000,000 THE FROST NATIONAL BANK
By:_________________________________
Name:
Title:
$20,000,000 UFJ BANK LIMITED
By:_________________________________
Name:
Title:
$20,000,000 COMERICA BANK-TEXAS
By:_________________________________
Name:
Title:
===================
$250,000,000 TOTAL COMMITMENTS
56
FLEET NATIONAL BANK,
as Administrative Agent
By:_________________________________
Name:
Title:
Address for Notices:
Fleet National Bank,
Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop MA DE 10008A
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Managing Director
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇▇▇_▇▇▇▇▇@▇▇▇▇▇.▇▇▇
57
PRICING SCHEDULE
Each of "Euro-Dollar Margin", "LC Fee Rate", "Base Rate Margin" and "Commitment
Fee Rate" means, for any date, the rate set forth below in the row opposite such
term and in the column corresponding to the Debt Percentage that exists on such
date:
--------------------------------------------------------------------------------
Debt Percentage
--------------------------------------------------------------------------------
Lower than 60% 60%-80% Higher than 80%
--------------------------------------------------------------------------------
Euro-Dollar Margin and 1.250% 1.500% 1.750%
LC Fee Rate
--------------------------------------------------------------------------------
Base Rate Margin 0.250% 0.500% 0.750%
--------------------------------------------------------------------------------
Commitment Fee Rate 0.375% 0.375% 0.375%
--------------------------------------------------------------------------------
EXHIBIT A
NOTE
New York, New York
October 28, 2002
For value received, Cabot Oil & Gas Corporation, a Delaware corporation
(the "Borrower"), promises to pay to the order of (the "Bank"),
for the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the date or dates provided for in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal amount of each such
Loan on the dates and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful money of the
United States in Federal or other immediately available funds at the office of
Administrative Agent
All Loans made by the Bank, the respective Types thereof and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement hereof, appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding may be endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement. This note is one of the Notes referred to in the Credit Agreement
dated as of October 28, 2002 among the Borrower, the banks parties thereto and
Fleet National Bank, as Administrative Agent (as the same may be amended from
time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are
used herein with the same meanings. Reference is made to the Credit Agreement
for provisions for the prepayment hereof and the acceleration of the maturity
hereof.
CABOT OIL & GAS CORPORATION
By:_____________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Date Amount of Loan Type of Loan Principal Repaid Notation Made By
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
2
EXHIBIT B
OPINION OF SPECIAL COUNSEL FOR THE BORROWER
October 28, 2002
To the Banks and the Administrative Agent
Referred to Below
c/o Fleet National Bank, as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Managing Director
Dear Sirs:
We have acted as special counsel for Cabot Oil & Gas Corporation (the
"Borrower"), Cody Texas, L.P., a Texas limited partnership, (the "Subsidiary
Guarantor") and Cody Oil & Gas, Inc., the general partner of Subsidiary
Guarantor ("General Partner") in connection with the Credit Agreement (the
"Credit Agreement") dated as of October 28, 2002 among the Borrower, the banks
parties thereto and Fleet National Bank, as Administrative Agent. This opinion
is delivered to you pursuant to Section 3.01 of the Credit Agreement. Unless
otherwise defined herein, capitalized terms used in this opinion are used as
defined in, or by reference in, the Credit Agreement.
In connection with this opinion, we have examined copies of the following
documents:
(a) The Credit Agreement;
(b) The Notes, and;
(c) The Subsidiary Guaranty dated October 28, 2002 by the Subsidiary
Guarantor in favor of Administrative Agent and Banks.
The documents described in Paragraphs (a), (b) and (c) above are herein
called the "Loan Documents."
In addition, we have reviewed the original or copies, certified or
otherwise identified to our satisfaction, of such documents and corporate
records furnished to us by the Borrower, the Subsidiary Guarantor and General
Partner, certificates of public officials and of representatives of the
Borrower, Subsidiary Guarantor and General Partner, statutes and other
instruments and documents and (except as otherwise stated herein) have conducted
such other investigations of fact and law as we have deemed necessary or
advisable for purposes of this opinion. In giving such opinion, we have relied
upon an officer certificate of the Borrower with respect to the accuracy of the
factual matters contained in such certificates, copies of which are attached
hereto.
In our examination of the Loan Documents, we have assumed, without
independent investigation, (i) the genuineness of all signatures of, and the
authority of, all Persons signing all documents examined by us in connection
with this opinion on behalf of parties thereto, other than the Borrower,
Subsidiary Guarantor and General Partner, (ii) the capacity of each signing
party, and (iii) the authenticity of all documents submitted to us as originals
and the conformity to authentic original documents of all copies submitted to us
as certified, conformed or photostatic copies. Based upon and subject to the
foregoing and other qualifications and assumptions set forth below and upon such
other matters as we deem appropriate, we are of the opinion that:
1. Each of the Borrower and General Partner is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all corporate powers required to carry on its business as
now conducted. The Subsidiary Guarantor is a limited partnership duly formed
under the laws of the state of Texas, and has authority under the Texas Revised
Limited Partnership Act necessary to carry on its business as now conducted.
Neither the Borrower nor the Subsidiary Subsidiary is subject to regulation
under the Public Utility Holding Company Act of 1935, the Investment Company Act
of 1940 or the Interstate Commerce Act, in each case such that the application
thereof would limit the incurrence by the Borrower or any Subsidiary Guarantor
of Debt under the Credit Agreement or other Financing Documents.
2. The Borrower and the Subsidiary Guarantor, and General Partner, in its
capacity as general partner of Subsidiary Guarantor, have each taken all
necessary corporate or partnership action, respectively, to authorize the
execution, delivery and performance of each of the Loan Documents to which it is
a party. The Borrower and General Partner, in its capacity as general partner of
Subsidiary Guarantor, has corporate power and authority to execute and deliver
the Loan Documents to which it is a party and to perform its obligations
thereunder. The Subsidiary Guarantor has power under the Texas Revised Limited
Partnership Act to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder.
3. The execution and delivery by the Borrower and the Subsidiary Guarantor,
and General Partner, in its capacity as general partner of Subsidiary Guarantor,
of the Loan Documents to which it is a party, and the performance by each of its
obligations thereunder do not and will not to our knowledge after due inquiry,
(A) require any action by or in respect of, or filing with, any Texas or United
States federal government body, agency or official, or (B) violate any provision
of any existing Texas, New York, Delaware corporate or United States federal law
or regulation applicable to the Borrower, Subsidiary Guarantor or General
Partner.
4. The Credit Agreement constitutes a valid and binding agreement of the
Borrower and the Notes constitute valid and binding obligations of the Borrower,
and the Subsidiary Guaranty constitutes a valid and binding agreement of the
Subsidiary Guarantor, in each case enforceable in accordance with their
respective terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer (with respect to the Subsidiary
Guaranty) or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
2
The foregoing opinions are subject to the following additional assumptions
and qualifications:
(a) We have not been called upon to, and accordingly do not, express any
opinion as to the various state and Federal Laws (other than Regulations U or X
promulgated by the Board of Governors of the Federal Reserve System, as in
effect on the date hereof) regulating banks or the conduct of their business
that may relate to the Loan Documents and the transactions contemplated thereby.
(b) We express no opinion in paragraph 3 above as to whether the conduct of
the Borrower's, the Subsidiary Guarantor's or General Partner's business in the
ordinary course is in compliance with the laws, rules and regulations governing
the same.
(c) We express no opinion as to the enforceability under Texas law of (i)
Section 6.01 of the Credit Agreement to the extent it purports to waive any
defense to the performance of contract obligations which cannot, as a matter of
law, be effectively waived, or (ii) any indemnity provisions contained in the
Credit Agreement or the Notes or in the Subsidiary Guaranty to the extent
prohibited by public policy or require indemnification for liability on account
of fraud, gross negligence, willful misconduct or illegal conduct of an
indemnitee.
(d) For the purpose of rendering the opinions expressed in Paragraph 4
above we have assumed that the Administrative Agent and each Bank will at all
times comply strictly with the provisions of Sections 2.15 of the Credit
Agreement. If any Bank fails to comply with the usury savings clause provisions
under Section 2.15 of the Credit Agreement or in respect of the Notes, we
express no opinion as to whether the refunding of such amount, or the crediting
of any outstanding principal with such amount which has been contracted for,
charged or collected in violation of any applicable usury laws is sufficient to
avoid violation of such laws.
We are qualified to practice law in the States of New York and Texas only
and do not hold ourselves out as experts on, or express any opinion herein
concerning, the laws of any jurisdiction other than the laws of the States of
New York, Texas, and the General Corporation Law of the State of Delaware and
applicable federal law of the United States. This opinion is being furnished to
the banks and the Administrative Agent for the use of their counsel. No other
use or distribution of this opinion may be made without our prior written
consent.
Very truly yours,
3
EXHIBIT C
OPINION OF MANAGING COUNSEL OF THE BORROWER
October 28, 2002
To the Banks and the Administrative Agent
Referred to Below
c/o Fleet National Bank, as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Managing Director
Dear Sirs:
I am Managing Counsel of Cabot Oil & Gas Corporation, a Delaware
corporation, (the "Borrower"), Cody Texas, L.P., a Texas limited partnership,
(the "Subsidiary Guarantor") and Cody Oil & Gas, Inc., the general partner of
Subsidiary Guarantor ("General Partner") and am familiar with the Credit
Agreement (the "Credit Agreement") dated as of October 28, 2002 among the
Borrower, the banks parties thereto and Fleet National Bank, as Administrative
Agent.
This opinion is delivered to you pursuant to Section 3.01 of the Credit
Agreement. Unless otherwise defined herein, capitalized terms used in this
opinion are used as defined in, or by reference in, the following documents:
(a) The Credit Agreement;
(b) The Notes;
(c) The Subsidiary Guaranty dated October 28, 2002 by the Subsidiary
Guarantor in favor of Administrative Agent and Banks; and
(d) The certificate of incorporation and bylaws, as amended or restated to
the date hereof, of the Borrower and General Partner, and the certificate of
limited partnership and agreement of limited partnership, as amended or restated
to the date hereof, of Subsidiary Guarantor.
The documents described in Paragraphs (a), (b) and (c) above are herein
called the "Loan Documents."
In addition, I have reviewed the originals or copies, certified or
otherwise identified to my satisfaction, of such documents and corporate records
furnished to me by the Borrower, Subsidiary Guarantor and General Partner,
certificates of public officials and of representatives of the Borrower,
Subsidiary Guarantor and General Partner, statutes and other instruments and
documents and (except as otherwise stated herein) have conducted such other
investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion. In giving such opinion, I have relied upon the
certificate of the officer of the Borrower with respect to the accuracy of the
factual matters contained in such certificate, a copy of which are attached
hereto.
In my examination of the Loan Documents, I have assumed, without
independent investigation, (i) the genuineness of all signatures of, and the
authority of, all Persons signing all documents examined by me in connection
with this opinion on behalf of parties thereto, (ii) the capacity of each
signing party, and (iii) the authenticity of all documents submitted to me as
certified, conformed or photostatic copies.
I have not been requested to opine, and I have not opined, as to any issues
other than those expressly set forth herein. It is my understanding that as to
such other matters, you are relying on the opinion of even date herewith of
▇▇▇▇▇ ▇▇▇▇▇, counsel for the Borrower and Subsidiary Guarantor.
Based upon and subject to the foregoing, I am of the opinion that:
1. To my knowledge after due inquiry, each of the Borrower and the
Subsidiary Guarantor have all material governmental licenses, authorizations and
consents required to carry on its business as now conducted and is in good
standing and is duly qualified as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a Material Adverse Effect.
2. To my knowledge after due inquiry, the execution and delivery by the
Borrower and the Subsidiary Guarantor, and by General Partner, in its capacity
as general partner of the Subsidiary Guarantor, of the Loan Documents to which
it is a party, and the performance of its obligations thereunder do not and will
not (A) conflict with any of the terms, conditions or provisions of the
certificate of incorporation or bylaws of the Borrower or General Partner or the
agreement of limited partnership or certificate of limited partnership of
Subsidiary Guarantor; (B) create (with or without the giving of notice or the
lapse of time, or both) a default under or a breach of any instrument or
document evidencing indebtedness for borrowed money to which the Borrower or any
of its Subsidiaries is a party or by which it is bound or any other material
agreement, or (C) result in the creation or imposition of any Lien on any asset
of the Borrower or any of its Subsidiaries pursuant to any such agreement or
instrument, or (D) conflict with or result in a breach of any order, judgment,
injunction or decree which is binding upon the Borrower or any of its
Subsidiaries.
3. Except as described in the Borrower's 2001 Form 10-K, March 2002 Form
10-Q and June 2002 Form 10-Q, there is no action, suit or proceeding pending
against, or to my knowledge threatened against or affecting, the Borrower or any
of its Subsidiaries or affiliates before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could materially adversely affect the business,
Properties, financial position, results of operations or prospects of the
Borrower or the Subsidiary Guarantor or of the Borrower and its Subsidiaries,
taken as a whole, or which in any manner draws into question the validity of any
of the Loan Documents.
I am qualified to practice law in the State of Texas only and I do not hold
myself out as an expert on, or express any opinion herein concerning, the laws
of any jurisdiction other than the laws of the State of Texas and applicable
federal law of the United States. This opinion is being
2
furnished to the Banks and the Administrative Agent for the use of their
counsel. No other use or distribution of this opinion may be made without my
prior written consent.
3
EXHIBIT D
LETTER OF CREDIT APPLICATION AND AGREEMENT
[Attach Fleet National Bank standard LC Application]
EXHIBIT E
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY is made as of October 28, 2002, by CODY TEXAS,
L.P., a Texas limited partnership ("Guarantor"), in favor of FLEET NATIONAL
BANK, as Administrative Agent for Banks, as such term is defined in the Credit
Agreement described below.
RECITALS:
1. Cabot Oil and Gas Corporation, a Delaware corporation ("Borrower"),
Administrative Agent and Banks are parties to a Credit Agreement dated as of
October 28, 2002 (as from time to time amended, supplemented or restated, the
"Credit Agreement");
2. Pursuant to the Credit Agreement, LC Issuer has agreed to issue, and
each Bank has agreed to participate with respect to, Letters of Credit issued
for the account of Borrower. Pursuant to the Credit Agreement, each Bank has
agreed to advance funds to Borrower, and Borrower has agreed to execute and
deliver a Note to the order of each Bank to evidence such advances.
3. It is a condition precedent to LC Issuer's obligation to issue Letters
of Credit and Banks' obligations to advance funds pursuant to the Credit
Agreement that Guarantor shall execute and deliver to Administrative Agent a
satisfactory guaranty of the Indebtedness.
4. Guarantor, directly or indirectly through one or more Subsidiaries of
Borrower, is a wholly-owned Subsidiary of Borrower.
5. Borrower, Guarantor, and the other direct and indirect Subsidiaries of
Borrower are mutually dependent on each other in the conduct of their respective
businesses under a holding company structure, with the credit needed from time
to time by each often being provided by another or by means of financing
obtained by one such affiliate with the support of the others for their mutual
benefit and the ability of each to obtain such financing is vital to the
successful operations of the others.
6. The board of directors of Cody Oil & Gas, Inc., a Delaware corporation
and the general partner of Guarantor, has determined that Guarantor's execution,
delivery and performance of this Guaranty may reasonably be expected to benefit
Guarantor, directly or indirectly, and are in the best interests of Guarantor
and are necessary or convenient to the conduct, promotion or attainment of the
business of Guarantor.
NOW, THEREFORE, in consideration of the premises, of the benefits which
will inure to Guarantor from Banks' advances of funds to, and LC Issuer's
issuance of Letters of Credit for the account and at the direction of, Borrower
under the Credit Agreement, and of Ten Dollars and other good and valuable
consideration, the receipt and sufficiency of all of which are hereby
acknowledged, and in order to induce Banks to advance funds and the LC Issuer to
issue Letter
of Credit under the Credit Agreement, Guarantor hereby agrees with
Administrative Agent, for the benefit of Administrative Agent, LC Issuer and
Banks as follows:
AGREEMENTS:
Section 1. Definitions. Reference is hereby made to the Credit Agreement
for all purposes. All terms used in this Guaranty which are defined in the
Credit Agreement and not otherwise defined herein (including, without
limitation, Administrative Agent, LC Issuer, Bank, Letter of Credit, Loan
Document, Note, LC Obligations and Indebtedness) shall have the same meanings
and shall be subject to the same rules of construction and interpretation when
used herein as each is, from time to time, given, construed or interpreted in
the Credit Agreement. All references herein to any Loan Document or other
document or instrument refer to the same as from time to time amended,
supplemented or restated. As used herein the following terms shall have the
following meanings:
"Obligors" means Borrower, Guarantor and any other Subsidiary Guarantors,
endorsers, guarantors or obligors, primary or secondary, of any or all of the
Indebtedness.
"Security" means any rights, properties, or interests of Administrative
Agent, LC Issuer or Banks, under the Loan Documents or otherwise, which provide
recourse or other benefits to Administrative Agent, LC Issuer or Banks in
connection with the Indebtedness or the non-payment or non-performance thereof,
including collateral (whether real or personal, tangible or intangible) in which
Administrative Agent, LC Issuer or Banks have rights under or pursuant to any
Loan Document, guaranties of the payment or performance of any Indebtedness,
bonds, surety agreements, keep-well agreements, letters of credit, rights of
subrogation, rights of offset, and rights pursuant to which other claims are
subordinated to the Indebtedness.
Section 2. Guaranty.
(a) Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Administrative Agent, LC Issuer and each Bank the prompt,
complete, and full payment when due, and no matter how the same shall become
due, of all Indebtedness, including but not limited to:
(i) All LC Obligations, including all obligations of Borrower to make
reimbursements and other payments to LC Issuer and Banks in respect of
Letters of Credit issued pursuant to the Credit Agreement;
(ii) The Notes, including all principal, all interest thereon and all
other sums payable thereunder;
(iii) All present or future obligations of Borrower according to the
terms of any present or future Commodity Hedge or other hedging contract
now existing or hereafter entered into between Borrower and one or more of
the Banks (or any affiliate of any party constituting a Bank);
(iv) All other sums payable under the other Loan Documents, whether
for principal, interest, fees or otherwise; and
(v) Any and all other indebtedness, obligations or liabilities which
Borrower may at any time owe to Administrative Agent, LC Issuer or any
Bank, whether incurred heretofore or hereafter or concurrently herewith,
under or pursuant to any of the Loan Documents, and including interest,
attorneys' fees and collection costs as may be provided by law or in any
instrument or agreement evidencing any such indebtedness or liability.
Without limiting the generality of the foregoing, Guarantor's liability
hereunder shall extend to and include all post-petition interest, expenses, and
other duties and liabilities of Borrower described above in this subsection (a),
or below in the following subsection (b), which would be owed by Borrower but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization, or similar proceeding involving Borrower.
(b) Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Administrative Agent, LC Issuer and each Bank the prompt, complete
and full performance, when due, and no matter how the same shall become due, of
all obligations and undertakings of Borrower to Administrative Agent, LC Issuer
or such Bank under, by reason of, or pursuant to any of the Loan Documents.
(c) If Borrower shall for any reason fail to pay any Indebtedness, as and
when such Indebtedness shall become due and payable, whether at its stated
maturity, as a result of the exercise of any power to accelerate, or otherwise,
Guarantor will, upon demand by Administrative Agent, pay such Indebtedness in
full to Administrative Agent for the benefit of Administrative Agent, LC Issuer
or the Bank to whom such Indebtedness is owed. If Borrower shall for any reason
fail to perform promptly any Indebtedness, Guarantor will, upon demand by
Administrative Agent, cause such Indebtedness to be performed or, if specified
by Administrative Agent, provide sufficient funds, in such amount and manner as
Administrative Agent shall in good faith determine, for the prompt, full and
faithful performance of such Indebtedness by Administrative Agent or such other
Person as Administrative Agent shall designate.
(d) If either Borrower or Guarantor fails to pay or perform any
Indebtedness as described in the immediately preceding subsections (a), (b), or
(c) Guarantor will incur the additional obligation to pay to Administrative
Agent, LC Issuer and Banks, and Guarantor will forthwith upon demand by
Administrative Agent pay to Administrative Agent, LC Issuer or any Bank, the
amount of any and all expenses, including fees and disbursements of
Administrative Agent's, LC Issuer's or such Bank's counsel and of any experts or
agents retained by Administrative Agent, LC Issuer or such Bank which
Administrative Agent, LC Issuer or such Bank may incur as a result of such
failure.
(e) As between Guarantor and Administrative Agent, LC Issuer or Banks, this
Guaranty shall be considered a primary and liquidated liability of Guarantor.
(f) The liability of Guarantor hereunder shall be limited to the maximum
amount of liability that can be incurred without rendering this Guaranty, as it
relates to Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount.
Section 3. Unconditional Guaranty.
(a) No action which Administrative Agent, LC Issuer or any Bank may take or
omit to take in connection with any of the Loan Documents, any of the
Indebtedness (or any other indebtedness owing by Borrower to Administrative
Agent, LC Issuer or any Bank), or any Security, and no course of dealing of
Administrative Agent, LC Issuer or any Bank with any Obligor or any other
Person, shall release or diminish Guarantor's obligations, liabilities,
agreements or duties hereunder, affect this Guaranty in any way, or afford
Guarantor any recourse against Administrative Agent, LC Issuer or any Bank,
regardless of whether any such action or inaction may increase any risks to or
liabilities of Administrative Agent, LC Issuer or any Bank or any Obligor or
increase any risk to or diminish any safeguard of any Security. Without limiting
the foregoing, Guarantor hereby expressly agrees that Administrative Agent, LC
Issuer and Banks may, from time to time, without notice to or the consent of
Guarantor, do any or all of the following:
(i) Amend, change or modify, in whole or in part, any one or more of
the Loan Documents and give or refuse to give any waivers or other
indulgences with respect thereto.
(ii) Neglect, delay, fail, or refuse to take or prosecute any action
for the collection or enforcement of any of the Indebtedness, to foreclose
or take or prosecute any action in connection with any Security or Loan
Document, to bring suit against any Obligor or any other Person, or to take
any other action concerning the Indebtedness or the Loan Documents.
(iii) Accelerate, change, rearrange, extend, or renew the time, rate,
terms, or manner for payment or performance of any one or more of the
Indebtedness (whether for principal, interest, fees, expenses,
indemnifications, affirmative or negative covenants, or otherwise).
(iv) Compromise or settle any unpaid or unperformed Indebtedness or
any other obligation or amount due or owing, or claimed to be due or owing,
under any one or more of the Loan Documents.
(v) Take, exchange, amend, eliminate, surrender, release, or
subordinate any or all Security for any or all of the Indebtedness, accept
additional or substituted Security therefor, and perfect or fail to perfect
Administrative Agent's, LC Issuer's or Banks' rights in any or all
Security.
(vi) Discharge, release, substitute or add Obligors.
(vii) Apply all monies received from Obligors or others, or from any
Security for any of the Indebtedness, as Administrative Agent, LC Issuer or
Banks may determine to be in their best interest, without in any way being
required to ▇▇▇▇▇▇▇▇ Security or assets or otherwise to apply all or any
part of such monies upon any particular Indebtedness.
(b) No action or inaction of any Obligor or any other Person, and no change
of law or circumstances, shall release or diminish Guarantor's obligations,
liabilities, agreements, or duties hereunder, affect this Guaranty in any way,
or afford Guarantor any recourse against Administrative Agent, LC Issuer or any
Bank. Without limiting the foregoing, the obligations, liabilities, agreements,
and duties of Guarantor under this Guaranty shall not be released, diminished,
impaired, reduced, or affected by the occurrence of any or all of the following
from time to time, even if occurring without notice to or without the consent of
Guarantor:
(i) Any voluntary or involuntary liquidation, dissolution, sale of all
or substantially all assets, marshalling of assets or liabilities,
receivership, conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, or composition of any
Obligor or any other proceedings involving any Obligor or any of the assets
of any Obligor under laws for the protection of debtors, or any discharge,
impairment, modification, release, or limitation of the liability of, or
stay of actions or lien enforcement proceedings against, any Obligor, any
properties of any Obligor, or the estate in bankruptcy of any Obligor in
the course of or resulting from any such proceedings.
(ii) The failure by Administrative Agent, LC Issuer or any Bank to
file or enforce a claim in any proceeding described in the immediately
preceding subsection (i) or to take any other action in any proceeding to
which any Obligor is a party.
(iii) The release by operation of law of any Obligor from any of the
Indebtedness or any other obligations to Administrative Agent, LC Issuer or
any Bank, other than (subject to reinstatement as set forth in Section 3(d)
below) as a result of payment in full of the Indebtedness and such other
obligations hereunder.
(iv) The invalidity, deficiency, illegality, or unenforceability of
any of the Indebtedness or the Loan Documents, in whole or in part, any bar
by any statute of limitations or other law of recovery on any of the
Indebtedness, or any defense or excuse for failure to perform on account of
force majeure, act of God, casualty, impossibility, impracticability, or
other defense or excuse whatsoever.
(v) The failure of any Obligor or any other Person to sign any
guaranty or other instrument or agreement within the contemplation of any
Obligor, Administrative Agent, LC Issuer or any Bank.
(vi) The fact that Guarantor may have incurred directly part of the
Indebtedness or is otherwise primarily liable therefor.
(vii) Without limiting any of the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence of
this provision would or might
constitute or afford a legal or equitable discharge or release of
or defense to a guarantor or surety other than the actual payment
and performance by Guarantor under this Guaranty.
(c) Administrative Agent, LC Issuer and Banks may invoke the benefits of
this Guaranty before pursuing any remedies against any Obligor or any other
Person and before proceeding against any Security now or hereafter existing for
the payment or performance of any of the Indebtedness. Administrative Agent, LC
Issuer and Banks may maintain an action against Guarantor on this Guaranty
without joining any other Obligor therein and without bringing a separate action
against any other Obligor.
(d) If any payment to Administrative Agent, LC Issuer or any Bank by any
Obligor is held to constitute a preference or a voidable transfer under
applicable state or federal laws, or if for any other reason Administrative
Agent, LC Issuer or any Bank is required to refund such payment to the payor
thereof or to pay the amount thereof to any other Person, such payment to
Administrative Agent, LC Issuer or such Bank shall not constitute a release of
Guarantor from any liability hereunder, and Guarantor agrees to pay such amount
to Administrative Agent, LC Issuer or such Bank on demand and agrees and
acknowledges that this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent of any such payment or payments.
Any transfer by subrogation which is made as contemplated in Section 6 prior to
any such payment or payments shall (regardless of the terms of such transfer) be
automatically voided upon the making of any such payment or payments, and all
rights so transferred shall thereupon revert to and be vested in Administrative
Agent, LC Issuer and Banks.
(e) This is a continuing guaranty and shall apply to and cover all
Indebtedness and renewals and extensions thereof and substitutions therefor from
time to time.
Section 4. Waiver. Guarantor hereby waives, with respect to the
Indebtedness, this Guaranty, and the other Loan Documents:
(a) notice of the incurrence of any Indebtedness by Borrower, and notice of
any kind concerning the assets, liabilities, financial condition,
creditworthiness, businesses, prospects, or other affairs of Borrower (it being
understood and agreed that: (i) Guarantor shall take full responsibility for
informing itself of such matters, (ii) neither Administrative Agent, LC Issuer
nor any Bank shall have any responsibility of any kind to inform Guarantor of
such matters, and (iii) Administrative Agent, LC Issuer and Banks are hereby
authorized to assume that Guarantor, by virtue of its relationships with
Borrower which are independent of this Guaranty, has full and complete knowledge
of such matters whenever Administrative Agent, LC Issuer or Banks extend credit
to Borrower or take any other action which may change or increase Guarantor's
liabilities or losses hereunder).
(b) notice that Administrative Agent, LC Issuer, any Bank, any Obligor, or
any other Person has taken or omitted to take any action under any Loan Document
or any other agreement or instrument relating thereto or relating to any
Indebtedness.
(c) notice of acceptance of this Guaranty.
(d) default, demand, presentment for payment, and notice of default,
demand, dishonor, nonpayment, or nonperformance.
(e) notice of intention to accelerate, notice of acceleration, protest,
notice of protest, notice of any exercise of remedies (as described in the
following Section 5 or otherwise), and all other notices of any kind whatsoever.
Section 5. Exercise of Remedies. Administrative Agent, LC Issuer and each
Bank shall have the right to enforce, from time to time, in any order and at
Administrative Agent's, LC Issuer's or such Bank's sole discretion, any rights,
powers and remedies which Administrative Agent, LC Issuer or such Bank may have
under the Loan Documents or otherwise, including judicial foreclosure, the
exercise of rights of power of sale, the taking of a deed or assignment in lieu
of foreclosure, the appointment of a receiver to collect rents, issues and
profits, the exercise of remedies against personal property, or the enforcement
of any assignment of leases, rentals, oil or gas production, or other properties
or rights, whether real or personal, tangible or intangible; and Guarantor shall
be liable to Administrative Agent, LC Issuer and each Bank hereunder for any
deficiency resulting from the exercise by Administrative Agent, LC Issuer or any
Bank of any such right or remedy even though any rights which Guarantor may have
against Borrower or others may be destroyed or diminished by exercise of any
such right or remedy. No failure on the part of Administrative Agent, LC Issuer
or any Bank to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right preclude any other or further exercise
thereof or the exercise of any other right. The rights, powers and remedies of
Administrative Agent, LC Issuer and each Bank provided herein and in the other
Loan Documents are cumulative and are in addition to, and not exclusive of, any
other rights, powers or remedies provided by law or in equity. The rights of
Administrative Agent, LC Issuer and each Bank hereunder are not conditional or
contingent on any attempt by Administrative Agent, LC Issuer or any Bank to
exercise any of its rights under any other Loan Document against any Obligor or
any other Person.
Section 6. Limited Subrogation.
(a) Until all of the Indebtedness have been paid and performed in full
Guarantor shall have no right to exercise any right of subrogation,
reimbursement, indemnity, exoneration, contribution or any other claim which it
may now or hereafter have against or to any Obligor or any Security in
connection with this Guaranty (including any right of subrogation), and
Guarantor hereby waives any rights to enforce any remedy which Guarantor may
have against Borrower and any right to participate in any Security until such
time. If any amount shall be paid to Guarantor on account of any such
subrogation or other rights, any such other remedy, or any Security at any time
when all of the Indebtedness and all other expenses guaranteed pursuant hereto
shall not have been paid in full, such amount shall be held in trust for the
benefit of Administrative Agent, shall be segregated from the other funds of
Guarantor and shall forthwith be paid over to Administrative Agent to be held by
Administrative Agent as collateral for, or then or at any time thereafter
applied in whole or in part by Administrative Agent against, all or any portion
of the Indebtedness, whether matured or unmatured, in such order as
Administrative Agent shall elect.
(b) If Guarantor shall make payment to Administrative Agent of all or any
portion of the Indebtedness and if all of the Indebtedness shall be finally paid
in full, Administrative Agent will, at Guarantor's request and expense, execute
and deliver to Guarantor (without recourse, representation or warranty)
appropriate documents necessary to evidence the transfer by subrogation to
Guarantor of an interest in the Indebtedness resulting from such payment by
Guarantor; provided that such transfer shall be subject to Section 3(d) above
and that without the consent of Administrative Agent (which Administrative Agent
may withhold in its discretion) Guarantor shall not have the right to be
subrogated to any claim or right against any Obligor which has become owned by
Administrative Agent, LC Issuer or any Bank, whose ownership has otherwise
changed in the course of enforcement of the Loan Documents, or which
Administrative Agent otherwise has released or wishes to release from its
Indebtedness.
(c) Upon full and final payment of the Indebtedness, all Subsidiary
Guarantors which have made payments upon the Indebtedness shall be entitled to
contribution from all of the Subsidiary Guarantors, to the end that all such
payments upon the Indebtedness shall be shared among all Subsidiary Guarantors
in proportion to their respective Net Worths, provided that the contribution
obligations of each Subsidiary Guarantor shall be limited to the maximum amount
that it can pay at such time without rendering its contribution obligations
voidable under applicable law relating to fraudulent conveyances or fraudulent
transfers. As used in this subsection, the "Net Worth" of each Subsidiary
Guarantor means, at any time, the remainder of (i) the fair value of such
Subsidiary Guarantor's assets (other than such right of contribution), minus
(ii) the fair value of such Subsidiary Guarantor's liabilities (other than its
liabilities under its guaranty of the Indebtedness).
Section 7. Successors and Assigns. Guarantor's rights or obligations
hereunder may not be assigned or delegated, but this Guaranty and such
obligations shall pass to and be fully binding upon the successors of Guarantor,
as well as Guarantor. This Guaranty shall apply to and inure to the benefit of
Administrative Agent, LC Issuer and Banks and their successors or assigns.
Without limiting the generality of the immediately preceding sentence,
Administrative Agent, LC Issuer and each Bank may assign, grant a participation
in, or otherwise transfer any Indebtedness held by it or any portion thereof,
and Administrative Agent, LC Issuer and each Bank may assign or otherwise
transfer its rights or any portion thereof under any Loan Document, to any other
Person, and such other Person shall thereupon become entitled to all of the
benefits in respect thereof granted to Administrative Agent, LC Issuer or such
Bank hereunder unless otherwise expressly provided by Administrative Agent, LC
Issuer or such Bank in connection with such assignment or transfer.
Section 8. Subordination and Offset. Guarantor hereby subordinates and
makes inferior to the Indebtedness any and all indebtedness now or at any time
hereafter owed by Borrower to Guarantor. Guarantor agrees that after the
occurrence of any Default or Event of Default it will neither permit Borrower to
repay such indebtedness or any part thereof nor accept payment from Borrower of
such indebtedness or any part thereof without the prior written consent of
Administrative Agent, LC Issuer and Banks. If Guarantor receives any such
payment without the prior written consent of Administrative Agent, LC Issuer and
Banks, the amount so paid shall be held in trust for the benefit of
Administrative Agent, LC Issuer and Banks, shall be segregated from the other
funds of Guarantor, and shall forthwith be paid over to Administrative Agent to
be held by Administrative Agent as collateral for, or then or at any time
thereafter applied in whole
or in part by Administrative Agent against, all or any portions of the
Indebtedness, whether matured or unmatured, in such order as Administrative
Agent shall elect. Guarantor hereby grants to Administrative Agent, LC Issuer
and Banks a right of offset to secure the payment of the Indebtedness and
Guarantor's obligations and liabilities hereunder, which right of offset shall
be upon any and all monies, securities and other property (and the proceeds
therefrom) of Guarantor now or hereafter held or received by or in transit to
Administrative Agent, LC Issuer or any Bank from or for the account of
Guarantor, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, and also upon any and all deposits (general or special), credits and
claims of Guarantor at any time existing against Administrative Agent, LC Issuer
or any Bank. Upon the occurrence of any Default or Event of Default
Administrative Agent, LC Issuer and each Bank is hereby authorized at any time
and from time to time, without notice to Guarantor, to offset, appropriate and
apply any and all items hereinabove referred to against the Indebtedness and
Guarantor's obligations and liabilities hereunder irrespective of whether or not
Administrative Agent, LC Issuer or such Bank shall have made any demand under
this Guaranty and although such obligations and liabilities may be contingent or
unmatured. Administrative Agent, LC Issuer and each Bank agrees promptly to
notify Guarantor after any such offset and application made by Administrative
Agent, LC Issuer or such Bank, provided that the failure to give such notice
shall not affect the validity of such offset and application. The rights of
Administrative Agent, LC Issuer and each Bank under this section are in addition
to, and shall not be limited by, any other rights and remedies (including other
rights of offset) which Administrative Agent, LC Issuer and Banks may have.
Section 9. Representations and Warranties. Guarantor hereby represents and
warrants to Administrative Agent, LC Issuer and each Bank as follows:
(a) The Recitals at the beginning of this Guaranty are true and correct in
all respects.
(b) Each of the representations and warranties contained in Article IV of
the Credit Agreement are true, in so far as they refer to Guarantor, or to the
assets, operations, condition, agreements, business or actions of Guarantor, or
to the Loan Documents to which Guarantor is a party.
(c) The direct or indirect value of the consideration received and to be
received by Guarantor in connection herewith is reasonably worth at least as
much as the liability and obligations of Guarantor hereunder, and the incurrence
of such liability and obligations in return for such consideration may
reasonably be expected to benefit Guarantor, directly or indirectly.
(d) Guarantor is not "insolvent" on the date hereof (that is, the sum of
Guarantor's absolute and contingent liabilities, including the Indebtedness,
does not exceed the fair market value of Guarantor's assets). Guarantor's
capital is adequate for the businesses in which Guarantor is engaged and intends
to be engaged. Guarantor has not incurred (whether hereby or otherwise), nor
does Guarantor intend to incur or believe that it will incur, debts which will
be beyond its ability to pay as such debts mature.
Section 10. No Oral Change. No amendment of any provision of this Guaranty
shall be effective unless it is in writing and signed by Guarantor and Required
Banks, and no waiver of any provision of this Guaranty, and no consent to any
departure by Guarantor therefrom, shall be
effective unless it is in writing and signed by Required Banks, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
Section 11. Invalidity of Particular Provisions. If any term or provision
of this Guaranty shall be determined to be illegal or unenforceable all other
terms and provisions hereof shall nevertheless remain effective and shall be
enforced to the fullest extent permitted by applicable law.
Section 12. Headings and References. The headings used herein are for
purposes of convenience only and shall not be used in construing the provisions
hereof. The words "this Guaranty," "this instrument," "herein," "hereof,"
"hereby" and words of similar import refer to this Guaranty as a whole and not
to any particular subdivision unless expressly so limited. The phrases "this
section" and "this subsection" and similar phrases refer only to the
subdivisions hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
Section 13. Term. This Guaranty shall be irrevocable until all of the
Indebtedness have been completely and finally paid and performed, all Letters of
Credit have been terminated, LC Issuer has no obligation to issue any Letters of
Credit, and no Bank has any obligation to make any loans or other advances to
Borrower, and all obligations and undertakings of Borrower under, by reason of,
or pursuant to the Loan Documents have been completely performed, and this
Guaranty is thereafter subject to reinstatement as provided in Section 3(d). All
extensions of credit and financial accommodations heretofore or hereafter made
by Administrative Agent, LC Issuer or Banks to Borrower shall be conclusively
presumed to have been made in acceptance hereof and in reliance hereon.
Section 14. Notices. Any notice or communication required or permitted
hereunder shall be given as provided in the Credit Agreement.
Section 15. Limitation on Interest. Administrative Agent, LC Issuer, Banks
and Guarantor intend to contract in strict compliance with applicable usury law
from time to time in effect, and the provisions of the Credit Agreement limiting
the interest for which Guarantor is obligated are expressly incorporated herein
by reference.
Section 16. Loan Document. This Guaranty is a Loan Document, as defined in
the Credit Agreement, and is subject to the provisions of the Credit Agreement
governing Loan Documents. Guarantor hereby ratifies, confirms and approves the
Credit Agreement and the other Loan Documents and, in particular, any provisions
thereof which relate to Guarantor.
Section 17. Counterparts; Fax. This Guaranty may be executed in any number
of counterparts, each of which when so executed shall be deemed to constitute
one and the same Guaranty. This Guaranty may be validly executed and delivered
by facsimile or other electronic transmission.
Section 18. Governing Law. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. GUARANTOR HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 19. No Unwritten Agreements. THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO, SUPERSEDING
ANY AND ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER
HEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ORAL AGREEMENTS OF THE
PARTIES HERETO, WHETHER MADE BEFORE, ON OR AFTER THE DATE OF THIS AGREEMENT.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as
of the date first written above.
CODY TEXAS, L.P.
By:
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Vice President, CFO and Treasurer