Exhibit 10.1
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SECURED TERM LOAN AGREEMENT
dated as of December 6, 2002
among
PLAINS RESOURCES INC.
as the Borrower,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
BANK OF MONTREAL,
acting through certain U.S. branches or agencies,
as Administrative Agent
BANK ONE, NA
as Syndication Agent
and
▇▇▇▇▇ FARGO BANK TEXAS, NA,
as Collateral Agent and
Documentation Agent
_______________________________
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Banc One Capital Markets, Inc.
as Co-Lead Arrangers and Joint Bookrunners
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SECURED TERM LOAN AGREEMENT
THIS SECURED TERM LOAN AGREEMENT, dated as of December 6, 2002, is among
PLAINS RESOURCES INC., a Delaware corporation (the "Borrower"), BANK OF
MONTREAL, acting through certain of its U.S. branches or agencies ("Bank of
Montreal"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), BANK ONE, NA, as syndication agent (in such capacity,
the "Syndication Agent"), ▇▇▇▇▇ FARGO BANK TEXAS, NA, as collateral agent (in
such capacity, the "Collateral Agent") and documentation agent (in such
capacity, the "Documentation Agent") and the various commercial lending
institutions as are or may become parties hereto (collectively, the "Lenders").
W I T N E S S E T H:
WHEREAS, the Borrower is engaged, directly and through its various
Subsidiaries, in the business of exploring for, and producing, gathering and
marketing, oil and gas and related activities;
WHEREAS, the Borrower intends to distribute in a tax-free transaction 100%
of the Capital Stock of Plains Exploration & Production Company, a Delaware
corporation and wholly-owned subsidiary of the Borrower as of the date hereof
("PXP"), to the stockholders of the Borrower as of the record date of December
11, 2002, pro rata;
WHEREAS, prior to, and in connection with, the distribution by the Borrower
of 100% of the Capital Stock of PXP, the Borrower desires to obtain Commitments
from the Lenders pursuant to which Loans, in a maximum aggregate principal
amount not to exceed $45,000,000, will be made to the Borrower on or after the
Effective Date in accordance with Section 2.3 of this Agreement, the proceeds of
which will be used by the Borrower to make a $40,000,000 capital contribution to
PXP and repay a $7,200,000 promissory note payable by the Borrower to PXP (such
contribution of $40,000,000 to PXP, such repayment of such $7,200,000 promissory
note and such distribution by the Borrower of 100% of the Capital Stock of PXP,
herein collectively, the "PXP Spin-off") ;
WHEREAS, certain subsidiaries of the Borrower have agreed to guaranty the
Obligations of the Borrower in consideration of the Commitments from the Lenders
to make Loans pursuant to this Agreement; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make such Loans to the Borrower; and
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall, except
where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agents" means, collectively, the Administrative Agent, the Syndication
Agent, the Documentation Agent and the Collateral Agent. "Agent" means any one
of them.
"Administrative Agent" is defined in the preamble, and includes each other
Person as shall have subsequently been appointed as a successor Administrative
Agent pursuant to Section 9.4.
"Agreement" means, on any date, this Secured Term Loan Agreement as
originally in effect on the Effective Date and as thereafter from time to time
amended, supplemented, amended and restated, or otherwise modified and in effect
on such date.
"Alternate Base Rate" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum equal to (a) the higher of (i)
the rate of interest most recently announced by the Administrative Agent at its
Domestic Office as its base rate for Dollar loans made in the United States and
(ii) the Federal Funds Rate most recently determined by the Administrative Agent
plus 0.50% per annum, plus (b) 1.50% per annum. The Alternate Base Rate is not
necessarily intended to be the lowest rate of interest determined by the
Administrative Agent in connection with extensions of credit. Changes in the
rate of interest on that portion of any Loans maintained as Base Rate Loans will
take effect simultaneously with each change in the Alternate Base Rate. The
Administrative Agent will give notice promptly to the Borrower and the Lenders
of changes in the Alternate Base Rate.
"Asset" shall mean, as to any Person, all Property of such Person,
including, without limitation, the Hydrocarbon Interests, money, Capital Stock,
contract rights, franchises, value as a going concern, causes of action,
undivided fractional ownership interests, intellectual property rights, and
anything of any value which can be made available for, or may be appropriated
to, the payment of debts.
"Assignee Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to the Borrower or any other Obligor,
those of its officers whose signatures and incumbency shall have been certified
to the Administrative Agent and the Lenders pursuant to Section 5.1.1.
"Bank of Montreal" is defined in the preamble.
"Base Rate Loan" means a Loan bearing interest at the Alternate Base Rate.
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"Beneficial Owner" means a beneficial owner of Capital Stock as determined
in accordance with Rules 13d-3 and 13d-5 promulgated by the SEC under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all Capital Stock that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of time.
"Borrower" is defined in the preamble.
"Borrowing" means the Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by all Lenders on the same Business
Day and pursuant to the same Borrowing Request in accordance with Section 2.1.
"Borrowing Request" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of Exhibit B
hereto.
"Business Day" means (a) any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed in
Houston, Texas; and (b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day on which dealings in Dollars are
carried on in the London interbank market.
"Calumet" means Calumet Florida, L.L.C., a Delaware limited liability
company and wholly-owned Subsidiary of the Borrower.
"Capital Expenditures" means, for any period, the sum of (a) the aggregate
amount of all expenditures of the Borrower and its Subsidiaries for fixed or
capital assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures; and (b) the aggregate amount of all
Capitalized Lease Liabilities incurred during such period.
"Capital Stock" means, as to any Person, any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person, as well as any rights (other than debt securities convertible
into an equity interest), warrants or options to subscribe for or to acquire an
equity interest in such Person, and includes any equity security by virtue of
the fact that it may be converted or exchanged at the option of the holder for
Capital Stock of the Borrower having no preference as to dividends or
liquidation over any other Capital Stock of the Borrower.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time: (a) any evidence of the
Indebtedness, maturing not more than one year after such time, issued or
guaranteed by the United States Government; (b) commercial paper, maturing not
more than nine months from the date of issue, which is issued by (i) a
corporation (other than an Affiliate of any Obligor) organized under the
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laws of any state of the United States or of the District of Columbia and rated
A-l by Standard & Poor's Corporation or P-l by ▇▇▇▇▇'▇ Investors Service, Inc.,
or (ii) any Lender (or its holding company); (c) any certificate of deposit or
bankers acceptance, maturing not more than one year after such time, which is
issued by either (i) a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000, or (ii) any Lender; or (d) any repurchase
agreement entered into with any Lender (or other commercial banking institution
of the stature referred to in clause (c)(i)) which (i) is secured by a fully
perfected security interest in any obligation of the type described in any of
clauses (a) through (c); and (ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase obligation of
such Lender (or other commercial banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means the occurrence of any of the following events:
(a) any "person" or "group" (within the meaning of Sections 13(d)(3) and
14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act) becomes, whether as a result of a tender or exchange offer, open
market purchases, privately-negotiated purchases, merger, consolidation or
otherwise, the Beneficial Owner of forty percent (40%) or more of the combined
voting power of all classes of the Voting Stock of the Borrower and/or warrants
or options to acquire such Voting Stock, calculated on a fully diluted basis;
(b) the sale, lease, conveyance or transfer of all or substantially all of the
assets of the Borrower (other than to any wholly-owned Subsidiary of the
Borrower) shall have occurred; (c) the stockholders of the Borrower shall have
approved any plan of liquidation or dissolution of the Borrower, (d) the
Borrower consolidates with or merges into another Person or any Person
consolidates with or merges into the Borrower in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Borrower is
reclassified into or exchanged for cash, securities or other property, other
than any such transaction where (A) the outstanding Voting Stock of the Borrower
is reclassified into or exchanged for Voting Stock of the surviving corporation
that is Capital Stock or (B) the holders of the Voting Stock of the Borrower
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the Voting Stock of the surviving corporation immediately after
such transaction in substantially the same proportion as before the transaction,
or (e) during any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Borrower's Board of Directors (together
with any new directors whose election or appointment by such board or whose
nomination for election by the stockholders of the Borrower was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute
collectively a majority of the Borrower's Board of Directors then in office. For
purposes of this definition, a wholly-owned Subsidiary means any Subsidiary all
of the Voting Stock of which (except for director's qualifying shares) is owned
directly or indirectly by the Borrower and its other wholly-owned Subsidiaries.
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"Chief Financial Officer" means the senior executive officer of the
Borrower primarily responsible for the financial affairs of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Agent" is defined in the preamble, and includes each other
Person as shall have subsequently been appointed as a successor Collateral Agent
pursuant to Section 9.4.
"Collateral Property" means any Mortgaged Property or Collateral, each as
defined in any Security Document.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make a Loan hereunder, expressed as such Lender's Percentage.
"Commitment Amount" means, relative to any Lender, the amount set forth
opposite its signature hereto or set forth in the Lender Assignment Agreement,
as such amount may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 10.11.
"Common Units" means the common units representing limited partnership
units of Plains All American Pipeline, L.P.
"Consolidated Debt Service Coverage Ratio" means, at any
particular time, the ratio of (A) the sum of (i) the balance in the Debt Service
Reserve Account and (ii) Consolidated EBITDAR to (B) Total Debt Service.
"Consolidated EBITDAR" means, for any period, the consolidated net income
of the Borrower and its Subsidiaries for such period (excluding any
extraordinary gains and losses from consolidated net income) before deduction
for federal and state taxes, interest expense, rental expense and depreciation,
depletion and amortization expense and other non-cash charges and expenses
incurred by Borrower and its Subsidiaries, all as determined in accordance with
GAAP.
"Consolidated Tangible Net Worth" means, as at any date, the consolidated
net worth of the Borrower and its Subsidiaries after subtracting therefrom the
aggregate amount of any intangible assets of the Borrower and its Subsidiaries,
including goodwill, franchises, licenses, patents, trademarks, trade names,
copyrights, service marks and brand names.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby.
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"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Debt Service Reserve Account" is defined in the Cash Collateral Security
and Control Agreement, dated as of December 6, 2002, by and between the
Collateral Agent and the Borrower.
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Administrative Agent and
the Required Lenders.
"Documentation Agent" is defined in the preamble.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 10.8.
"Environmental Laws" means all applicable federal, state or local statutes,
laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
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"Exchange Act" means the United States Securities Exchange Act of 1934 and
any successor statute thereto, in each case as amended from time to time.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to (a) the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"Fee Letter" means the fee letter dated as of November 27, 2002, between
the Borrower and the Administrative Agent with respect to fees payable by the
Borrower in connection with this Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g. the "2002 Fiscal Year") refer to the Fiscal Year ending on
December 31st, occurring during such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in Section 1.4.
"Governmental Authority" means the government of the United States or any
other nation or country or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guaranty" means a Guaranty dated as of the date of this Agreement or
otherwise delivered pursuant to the Loan Documents, in favor of the
Administrative Agent, substantially in the form of Exhibit G, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents. The term
"Guaranties" shall include each and every Guaranty executed and delivered
hereunder.
"Hazardous Material" means (a) any "hazardous substance", as defined by
CERCLA; (b) any "hazardous waste", as defined by the RCRA; (c) any petroleum
product; or (d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state or local law, regulation, ordinance or requirement (including
consent decrees and administrative orders) relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, all as amended or hereafter amended.
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"Hedge Agreements" means (a) interest rate hedge agreements, interest rate
cap agreements, interest rate swap agreements and interest rate collar
agreements, or any other similar agreements or arrangements designed to protect
such Person against fluctuations in interest rates; or (b) 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; or (c) foreign exchange
contract, currency hedge agreement, currency option or any other agreement or
arrangement designed to protect such Person against fluctuations in currency
exchange rates, in each case, as amended, supplemented, restated or otherwise
modified from time to time.
"Hedging Obligations" means, with respect to any Person, all liabilities of
such Person under Hedge Agreements.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Highest Lawful Rate" is defined in Section 4.11.
"Hydrocarbons" means oil, gas, casing head gas, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons, all products refined, separated,
settled and dehydrated therefrom and all products refined therefrom, including,
without limitation, kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other
minerals.
"Hydrocarbon Interests" means all rights, titles, interests and estates now
owned or hereafter acquired by the Borrower or any of its Subsidiaries in any
and all oil, gas and other liquid or gaseous hydrocarbon properties and
interests, including without limitation, mineral fee or lease interests,
production sharing agreements, concession agreements, license agreements,
service agreements, risk service agreements or similar Hydrocarbon interests
granted by an appropriate Governmental Authority, farmout, overriding royalty
and royalty interests, net profit interests, oil payments, production payment
interests and similar interests in Hydrocarbons, including any reserved or
residual interests of whatever nature.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Obligor, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature; (b) which relates to the
limited scope of examination of matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in such
financial statement and which, as a condition to its removal, would require an
adjustment to such item the effect of which would be to cause the Borrower to be
in default of any of its obligations under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which
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is followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indebtedness" of any Person means, without duplication: (a) all
obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (b) all
reimbursement obligations, contingent or otherwise, relative to the face amount
of all letters of credit, whether or not drawn, and banker's acceptances issued
for the account of such Person; (c) all obligations of such Person as lessee
under leases which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities; (d) all other items which, in accordance with
GAAP, would be included as liabilities on the liability side of the balance
sheet of such Person as of the date at which Indebtedness is to be determined;
(e) all Hedging Obligations of such Person; (f) whether or not so included as
liabilities in accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services, and indebtedness (excluding
prepaid interest thereon) secured by a Lien on property owned or being purchased
by such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; (g) all Contingent Liabilities
of such Person in respect of any of the foregoing; and (h) all liabilities with
respect to unfunded vested benefits under any Plan. For all purposes of this
Agreement, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general partner or a
joint venturer.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Interest Period" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and shall end on (but exclude) the day which numerically corresponds to such
date one, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in either case as
the Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
provided, however, that (a) the Borrower shall not be permitted to select
Interest Periods to be in effect at any one time which have expiration dates
occurring on more than five different dates; (b) Interest Periods commencing on
the same date for Loans comprising part of the same Borrowing shall be of the
same duration; (c) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next following
Business Day (unless, if such Interest Period applies to LIBO Rate Loans, such
next following Business Day is the first Business Day of a calendar month, in
which case such Interest Period shall end on the Business Day next preceding
such numerically corresponding day); and (d) no Interest Period may end later
than the Stated Maturity Date.
"Investment" means, relative to any Person, (a) any loan or advance made by
such Person to any other Person (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business); (b)
any Contingent Liability of such Person; and (c) any ownership or similar
interest held by such Person in any other Person. The amount of any Investment
shall be the original principal or capital amount thereof without adjustment by
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reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Knowledge" means either (a) actual knowledge of a responsible officer of
the Borrower or employee of the Borrower charged with responsibility for the
matter at issue or in question or (b) knowledge that a prudent responsible
officer of the Borrower or employee of the Borrower charged with responsibility
for the matter at issue or in question could be expected to discover or
otherwise become aware of in the course of conducting the Borrower's business.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit D hereto.
"Lenders" is defined in the preamble.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans, the
rate of interest equal to (a) 3.00% per annum, plus (b) the average (rounded
upwards, if necessary, to the nearest 1/16 of 1%) of the offered rates per annum
for Dollar deposits in immediately available funds in the interbank market as
displayed on Telerate page 3750 (British Bankers' Association Interest
Settlement Rates) or such other page as may replace such page 3750 on such
system as at or about 10:00 a.m. Central time two Business Days prior to the
beginning of such Interest Period for delivery on the first day of such Interest
Period, and in an amount approximately equal to the amount of the Administrative
Agent's LIBO Rate Loan and for a period approximately equal to such Interest
Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
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(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Administrative Agent on the basis of the LIBOR
Reserve Percentage in effect on, and the applicable rates furnished to and
received by the Administrative Agent, two (2) Business Days before the first day
of such Interest Period.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as designated from time to
time by notice from such Lender to the Borrower and the Administrative Agent,
whether or not outside the United States, which shall be making or maintaining
LIBO Rate Loans of such Lender hereunder.
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"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means, with respect to any Person, any security interest,
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or otherwise), charge against or interest in property to secure
payment of a debt or performance of an obligation or other priority or
preferential arrangement of any kind or nature whatsoever. For purposes of this
Agreement, the term "Lien" shall include any cash deposited as a result of a
margin call, but shall exclude contractual provisions contained in any Hedge
Agreement establishing margin requirements, set-off rights or netting
arrangements, and shall exclude negative pledges.
"Loan" is defined in Section 2.1.1.
"Loan Document" means this Agreement, the Notes, each Security
Document, the Fee Letter, each Hedge Agreement between any Obligor and any
Lender or any Affiliate thereof, and the Borrowing Request, together in each
case with all exhibits, schedules and attachments thereto, and all other
agreements, documents or instruments from time to time executed or delivered in
connection with or pursuant to any of the foregoing.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, financial condition or assets of the Borrower
and its Subsidiaries on a consolidated basis; (b) the ability (other than
financial) of the Borrower or any other Obligor to perform its obligations under
any of the Loan Documents; or (c) the validity or enforceability of the Loan
Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means any "mortgage" or "deed of trust" executed and
delivered pursuant to Section 7.1.7, in the form and substance acceptable to the
Administrative Agent in its reasonable discretion, as amended, supplemented,
restated or otherwise modified from time to time.
"Net Cash Proceeds" means, in connection with the disposition of any
assets permitted by Section 7.2.11, the cash proceeds received from such
issuance or sale, as applicable, net of all investment banking fees, legal fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses, actually incurred and satisfactorily documented in connection
therewith.
"Note" means a promissory note of the Borrower payable to any Lender,
in the form of Exhibit A hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
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"Obligations" means all obligations, Indebtedness and liabilities of
the Borrower and each other Obligor or any, some or all of them, to the Agents,
the Lenders or any Affiliate of any of the foregoing party to a Hedge Agreement
with the Borrower or any other Obligor, or any, some or all of them, now
existing or hereafter arising under or in connection with this Agreement, the
Notes and each other Loan Document, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint
and several, including the obligations, Indebtedness and liabilities of the
Borrower, and all interest accruing thereon (including any interest that accrues
after the commencement of any proceeding by or against the Borrower or any other
Person under any bankruptcy, insolvency, liquidation, moratorium, receivership,
reorganization or other debtor relief law) and all attorneys' fees and other
expenses incurred in the collection or enforcement thereof.
"Obligor" means the Borrower, each Subsidiary Guarantor or each other
Person (other than the Agents or the Lenders) obligated under any Loan Document.
"Oil and Gas Properties" means Hydrocarbon Interests; the Assets now or
hereafter pooled or unitized with Hydrocarbon Interests; all presently existing
or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including without limitation all units created under
orders, regulations and rules of any Governmental Authority) which may affect
all or any portion of the Hydrocarbon Interests; all operating agreements,
contracts and other agreements which relate to any of the Hydrocarbon Interests
or the production, sale, purchase, exchange or processing of Hydrocarbons from
or attributable to such Hydrocarbon Interest; all Hydrocarbons in and under and
which may be produced and saved or attributable to the Hydrocarbon Interests,
the lands covered thereby and all oil in tanks and all rents, issues, profits,
proceeds, products, revenues and other income from or attributable to the
Hydrocarbon Interests; all tenements, hereditaments, appurtenances and Assets in
any manner appertaining, belonging, affixed or incidental to the Hydrocarbon
Interests, Assets, gas gathering system, rights, titles, interests and estates
described or referred to above, including any and all Assets, real or personal,
now owned or hereinafter acquired and situated upon, used, held for use or
useful in connection with the operating, working or development of any of such
Hydrocarbon Interests or Asset (excluding drilling rigs, automotive equipment or
other personal property which may be on such premises for the purpose of
drilling a well or for other similar temporary uses) and including any and all
oil ▇▇▇▇▇, gas ▇▇▇▇▇, injection ▇▇▇▇▇ or other ▇▇▇▇▇, buildings, structures,
fuel separators, liquid extraction plants, plant compressors, pumps, pumping
units, field gathering systems, tanks and tank batteries, fixtures, valves,
fittings, machinery and parts, engines, boilers, meters, apparatus, equipment,
appliances, tools, implements, cables, wires, towers, casing, tubing and rods,
surface leases, rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments to any and
all of the foregoing.
"Organic Document" means, for any Person, its certificate or articles
of incorporation, its by-laws, certificate of formation, regulations, limited
liability company agreement, partnership agreement, or similar governing
document, and all shareholder membership or partnership agreements, voting
trusts and similar arrangements.
"Participant" is defined in Section 10.11.
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"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan," as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage calculated
by dividing such Lender's Commitment Amount by the Total Commitment Amount.
"Permitted Liens" is defined in Section 7.2.3.
"Person" means any natural person, corporation, partnership, master
limited partnership, limited liability company, firm, association, trust,
government, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.
"Plains Holdings Inc." means Plains Holdings Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Borrower.
"Plains Holdings LLC" means Plains Holdings LLC, a Delaware limited
liability company and a wholly-owned Subsidiary of Plains Holdings Inc.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means each Pledge Agreement and Irrevocable Proxy
dated as of the date of this Agreement or otherwise delivered pursuant to the
Loan Documents, substantially in the form of Exhibit H, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the Loan Documents. The term "Pledge Agreements" shall include each and
every Pledge Agreement executed and delivered pursuant to the Loan Documents.
"Pledged Common Units" means the 4,950,000 Common Units beneficially
owned by Plains Holdings LLC and pledged pursuant to a Pledge Agreement
hereunder, as such number may be adjusted from time to time.
"Pledged Common Unit Deficiency" means, as of a given Business Day, the
excess, if any, of (x) the outstanding aggregate principal amount of all Loans
over (y) the sum of (i) fifty percent (50%) of the Fair Market Value of the
Pledged Common Units, and (ii) the balance in the Debt Service Reserve Account
as of such date. The "Fair Market Value" of the Pledged Common Units as of any
date shall be the closing price of the Common Units on the New York Stock
Exchange on such date, as reported by The Wall Street Journal; if the principal
market for the Pledged Common Units shall be another national securities
exchange or the Nasdaq stock market, then the "Fair Market Value" of the Common
Units on any given date shall be the closing price of the Common Units on such
date on such principal exchange or market on which the Common Units are then
listed or admitted for trading.
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"Pledged Common Unit Deficiency Notice" means notice (i) from the
Administrative Agent to the Borrower that a Pledged Common Unit Deficiency then
exists, or (ii) as required pursuant to Section 7.1.1(d), from the Borrower to
the Administrative Agent that a Pledged Common Unit Deficiency then exists.
"Pledged Common Unit Deficiency Payment Date" means, with respect to
each Pledged Common Unit Deficiency Notice, the earlier to occur of (i) any
Business Day within five (5) Business Days of the date of delivery of such
Pledged Common Unit Deficiency Notice on which the Borrower makes a mandatory
payment in accordance with Section 3.1(c), and (ii) the fifth (5th) Business Day
immediately following the date of delivery of such Pledged Common Unit
Deficiency Notice.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
whether now owned or hereafter acquired.
"Proved Producing Reserves" means Proved Reserves that are recoverable
from existing ▇▇▇▇▇ with current operating methods and expenses and are
producing.
"Proved Reserves" means those recoverable Hydrocarbons that have been
estimated with reasonable certainty, as demonstrated by geological and
engineering data, to be economically recoverable from the Oil and Gas Properties
by existing producing methods under existing economic conditions.
"PXP Spin-off" is defined in the second recital.
"Quarterly Payment Date" means the last day of each February, May,
August, and November or, if any such day is not a Business Day, the next
succeeding Business Day.
"Regulatory Change" means, with respect to any Lender, any change after
the date of this Agreement in United States federal, state, or foreign laws or
regulations (including Regulation D of the F.R.S. Board) or the adoption or
making after such date of any interpretations, directives, or requests applying
to a class of banks including such Lender of or under any United States federal
or state, or any foreign laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Release" means a "release", as such term is defined in CERCLA.
"Required Deficiency Payment" means, on any Pledged Common Unit
Deficiency Payment Date, an amount equal to the Pledged Common Unit Deficiency
existing on such Pledged Common Unit Deficiency Payment Date.
"Required Lenders" means, at any time, Lenders (including the
Administrative Agent) holding at least sixty percent (60%) of the then aggregate
outstanding principal amount of the Notes then held by the Lenders, or, if no
such principal amount is then outstanding, Lenders having at least sixty percent
(60%) of the Commitments.
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"S&P" means Standard & Poor's Ratings Group and any successor thereto
that is a nationally-recognized rating agency.
"SEC" means the Securities & Exchange Commission.
"Security Documents" means, individually, (a) any Pledge Agreement and
all amendments, supplements, restatements or other modifications made from time
to time thereto, (b) any Mortgage and all amendments, supplements, restatements
or other modifications made from time to time thereto; (c) each Guaranty
Agreement, (d) the Cash Collateral Security and Control Agreement; (e) any
additional similar document required by the Administrative Agent pursuant to
Section 7.1.10, and (f) collectively, all of the foregoing.
"Solvent" means, with respect to any Person at any time, a condition
under which: (a) the fair saleable value of such Person's assets is, on the date
of determination, greater than the total amount of such Person's liabilities
(including contingent and unliquidated liabilities) at such time; (b) such
Person is able to pay all of its liabilities as such liabilities mature; (c)
such Person does not intend to, and does not, believe that it will, incur debts
or liabilities beyond such Person's ability to pay such debts and liabilities as
they mature; and (d) such Person does not have unreasonably small capital with
which to conduct its business. For purposes of this definition (i) the amount of
a Person's contingent or unliquidated liabilities at any time shall be that
amount which, in light of all the facts and circumstances then existing,
represents the amount which can reasonably be expected to become an actual or
matured liability; (ii) the "fair saleable value" of an asset shall be the
amount which may be realized within a reasonable time either through collection
or sale of such asset at its regular market value; and (iii) the "regular market
value" of an asset shall be the amount which a capable and diligent business
person could obtain for such asset from an interested buyer who is willing to
purchase such asset under ordinary selling conditions.
"Stated Maturity Date" means May 31, 2005.
"Subordinated Debt" means all unsecured Indebtedness of the Borrower
for money borrowed that is subordinated, upon terms satisfactory to the
Administrative Agent and the Required Lenders, in right of payment to the
payment in full in cash of all Obligations.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
15
"Subsidiary Guarantor" means each of Plains Holdings Inc., Plains
Holdings LLC and Calumet.
"Syndication Agent" is defined in the preamble, and includes each other
Person as shall have subsequently been appointed as a successor Syndication
Agent pursuant to Section 9.4.
"Taxes" is defined in Section 4.6.
"Total Commitment Amount" means, on any date, $45,000,000, as such
amount may be reduced from time to time pursuant to Section 2.2.
"Total Debt Service" means, with respect to any period for which a
determination thereof is to be made, the sum, without duplication, of (i) the
aggregate amount of any payments of principal with respect to any Indebtedness,
plus (ii) the aggregate amount of all interest accrued (whether or not paid) or
capitalized during such period, on all Indebtedness, plus (iii) the portion of
any Capitalized Lease Liabilities allocable to interest expense in accordance
with GAAP, plus (iv) the interest portion of any deferred payment obligation,
minus (v) to the extent included in the foregoing clause (ii), the non-cash
accretion of the discount and amortization of the fees payable hereunder to the
Administrative Agent, the Arranger and the Lenders, all determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
SECTION 1.3 Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4 Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all
16
accounting determinations and computations hereunder or thereunder (including
under Section 7.2.4) shall be made, and all financial statements required to be
delivered hereunder or thereunder shall be prepared in accordance with, those
generally accepted accounting principles in the United States ("GAAP") applied
in the preparation of the financial statements referred to in Section 6.5.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1 Commitments. Subject to the terms and conditions of this
Agreement (including Article V), each Lender hereby severally agrees to make a
Loan to the Borrower as requested under Section 2.3 in a principal amount equal
to such Lender's Commitment.
SECTION 2.1.1 The Loans. The Loans shall be made by the Lenders
(relative to such Lender, and of any type, its "Loan") ratably in accordance
with their respective Percentages. No amounts paid or prepaid with respect to
any Loans may be reborrowed.
SECTION 2.1.2 Lenders Not Permitted or Required to Make Loans. No
Lender shall be permitted or required to make any Loan if, after giving effect
thereto, the aggregate original principal amount of all Loans (a) of all Lenders
would exceed the Total Commitment Amount, or (b) of such Lender would exceed
such Lender's Percentage of the Total Commitment Amount. No Lender's obligation
to make its Loan shall be affected by any other Lender's failure to make a Loan;
provided, however, that the Commitments of the Lenders are several and no Lender
shall be responsible for any other Lender's failure to make its Loan as
required.
SECTION 2.2 Reduction of Total Commitment Amount. The Borrower may,
from time to time on any Business Day occurring after the Effective Date,
voluntarily reduce the Total Commitment Amount; provided, however, that all such
reductions shall require at least three (3) Business Days' prior notice to the
Administrative Agent and shall be permanent, and any partial reduction of the
Total Commitment Amount shall be in a minimum amount of $5,000,000 and in an
integral multiple of $1,000,000.
SECTION 2.3 Borrowing Procedure. To request a Loan, the Borrower shall
irrevocably request that a Borrowing be made in a minimum amount of $5,000,000
and integral multiple of $1,000,000. Such request shall be made by delivering a
Borrowing Request to the Administrative Agent on or before 10:00 a.m. Central
time, (x) on the Business Day of such Borrowing in the case of a Base Rate
Borrowing and (y) on a Business Day not fewer than three (3) nor more than five
(5) Business Days in advance of a LIBO Rate Borrowing. On or before 11:00 a.m.
Central time on such Business Day, each Lender shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request.
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SECTION 2.4 Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 10:00
a.m. Central time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three nor more than five Business Days'
notice that all, or any portion in an aggregate minimum amount of $1,000,000 and
an integral multiple of $1,000,000, of any Loans be, in the case of Base Rate
Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans,
converted into Base Rate Loans or continued as LIBO Rate Loans (in the absence
of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate
Loan at least three Business Days before the last day of the then current
Interest Period with respect thereto, such LIBO Rate Loan shall, on such last
day, automatically convert to a Base Rate Loan); provided, however, that (a)
each such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders; (b) no portion of the outstanding principal
amount of any Loans may be continued as, or be converted into, LIBO Rate Loans
when any Event of Default has occurred and is continuing; and (c)
notwithstanding any other provision of this Agreement, the Borrower shall not be
entitled to request, or to elect to convert or continue, any LIBO Rate Loan if
the Interest Period requested with respect thereto would end after the Stated
Maturity Date.
SECTION 2.5 Funding of the Loans. Each Lender may, if it so elects,
fulfill its obligation to make, continue or convert LIBO Rate Loans hereunder by
causing one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such LIBO Rate Loan;
provided, however, that such LIBO Rate Loan shall nonetheless be deemed to have
been made and to be held by such Lender, and the obligations of the Borrower to
repay such LIBO Rate Loan shall nevertheless be to such Lender for the account
of such foreign branch, Affiliate or international banking facility.
SECTION 2.6 Notes. Each Lender's Loan shall be evidenced by a Note
payable to the order of such Lender in a maximum principal amount equal to such
Lender's Percentage of the original Total Commitment Amount. The Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender's Note (or on any continuation of
such grid or otherwise in its records), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of the Borrower or
any other Obligor.
SECTION 2.7 Termination of Commitments. No Lender shall have any
further Commitment from or after the earlier to occur of (a) the date on which
its Loan is advanced to the Borrower, and (b) if the PXP Spin-off has not
occurred on or before thirty (30) days immediately following the Effective Date,
the thirtieth (30/th/) day immediately following the Effective Date.
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date.
Prior thereto, the Borrower:
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of
any Loans; provided, however, that (i) any such prepayment shall be
made pro rata among Loans of the same type and, if applicable, having
the same Interest Period of all Lenders; (ii) all such voluntary
prepayments shall require at least three (3) but no more than five (5)
Business Days' prior written notice to the Administrative Agent; and
(iii) all such voluntary partial prepayments shall be in an aggregate
minimum amount of $1,000,000 and an integral multiple of $1,000,000;
(b) shall repay the original outstanding principal amount of all
Loans in ten equal installments of four million five hundred thousand
dollars ($4,500,000), on each Quarterly Payment Date beginning February
28, 2003, with the final installment being due and payable on the
Stated Maturity Date;
(c) [Intentionally Omitted];
(d) shall, immediately upon any acceleration of the Stated
Maturity Date of any Loans pursuant to Section 8.2 or Section 8.3,
repay all Loans, unless, pursuant to Section 8.3, only a portion of all
Loans is so accelerated; and
(e) shall, on the first Business Day following any disposition of
assets (other than dispositions of Hydrocarbons in the ordinary course
of business) permitted by Section 7.2.11, make a payment of 100% of the
Net Cash Proceeds received from such disposition to be applied to the
outstanding Loans; provided, however, that if no Event of Default has
occurred and is continuing the Borrower may retain such funds and such
payment shall not be required.
Each voluntary prepayment of Loans made pursuant to clause (a) shall be applied,
to the extent of such prepayment, in the inverse order of the scheduled
repayments of the Loans set forth in clause (b). Each prepayment of any Loans
made pursuant to this Section shall be without premium or penalty, except as may
be required by Section 4.4.
SECTION 3.2 Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1 Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing to the Borrower accrue interest at a rate per annum: (a)
on that portion maintained from time to time as a Base Rate Loan, equal to the
Alternate Base Rate from time to time in effect; and (b) on that portion
maintained as a LIBO Rate Loan, during each Interest Period applicable thereto,
19
equal to the LIBO Rate (Reserve Adjusted) for such Interest Period. All LIBO
Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2 Post-Maturity Rates. After the date any principal
amount of any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on such
amounts at a rate per annum equal to the sum of (x) the Alternate Base Rate plus
(y) 2.00% per annum.
SECTION 3.2.3 Payment Dates. Interest accrued on each Loan shall be
payable, without duplication: (a) on the Stated Maturity Date; (b) on the date
of any voluntary payment or prepayment, in whole or in part, of principal
outstanding on such Loan, to the extent of the principal amount paid; (c) with
respect to Base Rate Loans, on each Quarterly Payment Date occurring after the
Effective Date; (d) with respect to LIBO Rate Loans, the last day of each
applicable Interest Period (and, if such Interest Period shall exceed 90 days,
on the 90th day of such Interest Period); (e) with respect to any Base Rate
Loans converted into LIBO Rate Loans on a day when interest would not otherwise
have been payable pursuant to clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
acceleration. Interest accrued on Loans or other monetary Obligations arising
under this Agreement or any other Loan Document after the date such amount is
due and payable (whether on the Stated Maturity Date, upon acceleration or
otherwise) shall be payable upon demand.
SECTION 3.3 Fees Pursuant to Fee Letter. The Borrower shall pay the
Administrative Agent for its own account, or for the account of each Lender, as
the case may be, all fees due and payable pursuant to the Fee Letter.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1 LIBO Rate Lending Unlawful. If any Lender shall determine
that the introduction of or any change in or in the interpretation of any law
makes it unlawful, or any central bank or other governmental authority asserts
that it is unlawful, for such Lender to make, continue or maintain any Loan as,
or to convert any Loan into, a LIBO Rate Loan of a certain type, the obligations
of all Lenders to make, continue, maintain or convert any such Loans shall, upon
such determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all LIBO Rate Loans of such type shall automatically convert into
Base Rate Loans at the end of the then current Interest Periods with respect
thereto or sooner, if required by such law or assertion.
SECTION 4.2 Deposits Unavailable. If the Administrative Agent shall
have determined that (a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Administrative in the relevant
market; or (b) by reason of circumstances
20
affecting the relevant market, adequate means do not exist for ascertaining the
interest rate applicable hereunder to LIBO Rate Loans, then, upon notice from
the Administrative Agent to the Borrower and the Lenders, (x) the obligations of
all Lenders under Section 2.3 and Section 2.4 to make or continue any Loans as,
or to convert any Loans into, LIBO Rate Loans of such type shall forthwith be
suspended until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist, and (y)
all LIBO Rate Loans shall automatically convert into Base Rate Loans at the end
of the then-current Interest Periods with respect thereto.
SECTION 4.3 Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans to the extent resulting from the introduction of or
any change in or in the interpretation of any law (but not any increased costs
related to increased capital costs or taxes, except to the extent covered under
Sections 4.5 or 4.6 below).
SECTION 4.4 Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of (a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to Section 3.1
or otherwise; (b) any Loans not being made as LIBO Rate Loans in accordance with
the Borrowing Request therefor; or (c) any Loans not being continued as, or
converted into, LIBO Rate Loans in accordance with the Continuation/Conversion
Notice therefor, then, upon the written notice of such Lender to the Borrower
(with a copy to the Administrative Agent), the Borrower shall, pay directly to
such Lender such amount as will (in the reasonable determination of such Lender)
reimburse such Lender for such loss or expense.
SECTION 4.5 Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects the amount of capital required or
expected to be maintained by any Lender or any Person controlling such Lender,
and such Lender determines (in its sole and absolute discretion) that the rate
of return on its or such controlling Person's capital as a consequence of its
Commitment or the Loans made by such Lender is reduced to a level below that
which such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall promptly pay
directly to such Lender additional amounts sufficient to compensate such Lender
or such controlling Person for such reduction in rate of return. In determining
such amount, such Lender may use any method of averaging and attribution that it
(in its good faith discretion) shall deem applicable.
21
SECTION 4.6 Taxes. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder and under any
other Loan Document shall be made free and clear of and without deduction for
any present or future income, excise, stamp or franchise taxes and other taxes,
fees, duties, withholdings or other charges of any nature whatsoever imposed by
any taxing authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender's net income or receipts (such non-excluded items being
called "Taxes"). In the event that any withholding or deduction from any payment
to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Borrower will (i)
pay directly to the relevant authority the full amount required to be so
withheld or deducted; (ii) promptly forward to the Administrative Agent an
official receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and (ii) pay to the Administrative
Agent for the account of the Lenders such additional amount or amounts as is
necessary to ensure that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no such withholding or
deduction been required. Moreover, if any Taxes are directly asserted against
the Administrative Agent or any Lender with respect to any payment received by
the Administrative Agent or such Lender hereunder, the Administrative Agent or
such Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such person after the payment
of such Taxes (including any Taxes on such additional amount) shall equal the
amount such person would have received had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the account
of the respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 4.6, a distribution hereunder by the
Administrative Agent or any Lender to or for the account of any Lender shall be
deemed a payment by the Borrower.
Upon the request of the Borrower or the Administrative Agent, each
Lender that is organized under the laws of a jurisdiction other than the United
States shall, prior to the due date of any payments under the Notes, execute and
deliver to the Borrower and the Administrative Agent, on or about the first
scheduled payment date in each Fiscal Year, one or more (as the Borrower or the
Administrative Agent may reasonably request) United States Internal Revenue
Service Forms 4224 or Forms 1001 or such other forms or documents (or successor
forms or documents), appropriately completed, as may be applicable to establish
the extent, if any, to which a payment to such Lender is exempt from withholding
or deduction of Taxes.
SECTION 4.7 Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Administrative
Agent for the pro rata account of the Lenders entitled to receive such payment.
All such payments required to be made to the Administrative Agent shall be made,
without setoff, deduction or counterclaim, not later than 11:00 a.m. Central
time, on the date due, in same day or immediately available funds, to such
account as the Administrative Agent shall specify from time to time by notice to
the Borrower. Funds received after that time shall be deemed to have been
received by the Administrative
22
Agent on the next succeeding Business Day. The Administrative Agent shall
promptly remit in same day funds to each Lender its share, if any, of such
payments received by the Administrative Agent for the account of such Lender.
All interest and fees shall be computed on the basis of the actual number of
days (including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan, 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to LIBO Rate Loans) be made on the next succeeding Business Day and such
extension of time shall be included in computing interest and fees, if any, in
connection with such payment.
SECTION 4.8 Sharing of Payments. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
4.3, 4.4, 4.5 and 4.6) in excess of its pro rata share of payments then or
therewith obtained by all Lenders, such Lender shall purchase from the other
Lenders such participations in Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and each Lender which has sold a participation
to the purchasing Lender shall repay to the purchasing Lender the purchase price
to the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of the amount of
such selling Lender's required repayment to the purchasing Lender to the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including pursuant to
Section 4.9) with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such participation. If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section to share in the benefits of any recovery on such secured
claim.
SECTION 4.9 Setoff. Each Lender shall, upon the occurrence of any
Default described in clauses (a) through (d) of Section 8.1.9 or, with the
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with such Lender; provided, however, that
any such appropriation and application shall be subject to the provisions of
Section 4.8. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff under applicable law or otherwise) which such Lender may have.
23
SECTION 4.10 Use of Proceeds. The Borrower shall apply the proceeds of
each Borrowing in accordance with the third recital; without limiting the
foregoing, no proceeds of any Loan will be used to acquire any equity security
of a class which is registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or any "margin stock", as defined in F.R.S. Board Regulation U, in
violation of F.R.S. Board Regulation U.
SECTION 4.11 Maximum Interest. It is the intention of the parties
hereto to conform strictly to applicable usury laws and, anything herein to the
contrary notwithstanding, the obligations of the Borrower to each Lender under
this Agreement shall be subject to the limitation that payments of interest
shall not be required to the extent that receipt thereof would be contrary to
provisions of law applicable to such Lender limiting rates of interest which may
be charged or collected by such Lender. Accordingly, if the transactions
contemplated hereby would be usurious under applicable law (including the
Federal and state laws of the United States of America, or of any other
jurisdiction whose laws may be mandatorily applicable) with respect to a Lender,
then, in that event, notwithstanding anything to the contrary in this Agreement,
it is agreed as follows: (a) the provisions of this Section 4.11 shall govern
and control; (b) the aggregate of all consideration that constitutes interest
under applicable law that is contracted for, charged or received under this
Agreement, or under any of the other aforesaid agreements or otherwise in
connection with this Agreement by such Lender shall under no circumstances
exceed the maximum amount of interest allowed by applicable law (such maximum
lawful interest rate, if any, with respect to such Lender herein called the
"Highest Lawful Rate"), and any excess shall be credited to the Borrower by such
Lender (or, if such consideration shall have been paid in full, such excess
promptly refunded to the Borrower); (c) all sums paid, or agreed to be paid, to
such Lender for the use, forbearance and detention of the indebtedness of the
Borrower to such Lender hereunder shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest is
uniform throughout the full term thereof; and (d) if at any time the interest
provided pursuant to Section 3.2 together with any other fees payable pursuant
to this Agreement and deemed interest under applicable law, exceeds that amount
that would have accrued at the Highest Lawful Rate, the amount of interest and
any such fees to accrue to such Lender pursuant to this Agreement shall be
limited, notwithstanding anything to the contrary in this Agreement, to that
amount which would have accrued at the Highest Lawful Rate, but any subsequent
reductions, as applicable, shall not reduce the interest to accrue to such
Lender pursuant to this Agreement below the Highest Lawful Rate until the total
amount of interest accrued pursuant to this Agreement and such fees deemed to be
interest equals the amount of interest that would have accrued to such Lender if
a varying rate per annum equal to the interest provided pursuant to Section 3.2
had at all times been in effect, plus the amount of fees that would have been
received but for the effect of this Section 4.11.
SECTION 4.12 Certain Procedures.
(a) Whenever any Lender wishes to make a claim for the payment of
amounts under Sections 4.3, 4.4, 4.5, or 4.6, such Lender shall provide
a certificate to the Borrower (with a copy to the Administrative Agent)
referencing the applicable Sections, providing reasonable detail
regarding the basis and calculation of such amounts, and certifying to
the Borrower that such Lender customarily charges such amounts to its
other
24
customers in similar circumstances. Any such certificate submitted by
such Lender to the Borrower in good faith shall be conclusive and
binding or all purposes, absent manifest error, and the Borrower shall
pay to such Lender the amounts shown as due on any such certificate
within five days after such Lender delivers such certificate.
(b) Any Lender that becomes aware of circumstances giving rise to
any claim for payments under Sections 4.3, 4.4, 4.5, or 4.6 will
promptly notify the Borrower in writing of such circumstances. No
Lender may make any claim for payments under such Sections for amounts
payable under such Sections that were incurred by such Lender before 90
days prior to the delivery of an applicable certificate for such
payment under paragraph (a).
(c) Upon request by the Borrower, any Lender shall take any
reasonably requested measures to mitigate the amount of payments due
under Sections 4.3, 4.4, 4.5, or 4.6, such as designating different
lending offices, if such measures can, in the opinion of such Lender,
be taken without such Lender suffering any economic, legal, regulatory
or other material disadvantage (provided, however, that no Lender shall
be required to designate a funding office that is not located in the
United States of America).
(d) Each Lender agrees that, upon providing any certificate under
paragraph (a) above, the Borrower shall have the right upon 30 days
advance written notice to the Administrative Agent and such Lender, (i)
to replace such Lender under the Loan Documents with another Person
reasonably acceptable to the Administrative Agent by causing such
Lender to enter into appropriate Lender Assignment Agreements or (ii)
to terminate such Lender hereunder and repay all outstanding principal,
interest, and other amounts owed under the Loan Documents to such
Lender (but not other Lenders) provided that no Event of Default is
then in existence.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1 Loans. The obligations of any Lender to make a Loan shall
be subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1.
SECTION 5.1.1 Resolutions, Official Certificates, Organic Documents,
etc. The Administrative Agent shall have received from each Obligor a
certificate, dated the date of the initial Borrowing, of its Secretary or
Assistant Secretary certifying that attached thereto are true, correct and
complete copies of (a) resolutions of its Board of Directors or other governing
body then in full force and effect authorizing the execution, delivery and
performance of this Agreement, the Notes and each other Loan Document to be
executed by it; (b) the incumbency and signatures of those of its officers
authorized to act with respect to each Loan Document executed by it, upon which
certificate each Lender may conclusively rely until it shall have received a
further certificate of the Secretary of such Obligor canceling or amending such
prior certificate; and (c) all Organic Documents of such Obligor. The
Administrative Agent shall have received certificates of the appropriate
government officials of the state of organization of each
25
Obligor as to the existence and good standing of such Person, each dated within
thirty (30) days prior to the date of delivery pursuant hereto.
SECTION 5.1.2 Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender, its Note duly executed and delivered
by the Borrower.
SECTION 5.1.3 Guaranties and Secured Term Loan Agreement. The
Administrative Agent shall have received (a) a Guaranty, dated as of the date
hereof, duly executed and delivered by each of Plains Holdings Inc., Plains
Holdings LLC, and Calumet and (b) from each party hereto a counterpart of this
Agreement, duly executed and delivered on behalf of such party.
SECTION 5.1.4 Pledge Agreements; Stock Certificates and Blank Powers.
The Administrative Agent shall have received counterparts of a Pledge Agreement,
each dated as of the date hereof, duly executed and delivered by each of the
Borrower, Plains Holdings Inc., and Plains Holdings LLC, together with:
(a) stock certificates representing all the outstanding Capital Stock
of Plains Holdings Inc. and Calumet owned by the Borrower, all of the
outstanding Capital Stock of Plains Holdings LLC, owned by Plains Holdings
Inc., and certificates representing the Pledged Common Units owned by
Plains Holdings LLC as of the date of this Agreement, and stock powers and
instruments of transfer, endorsed in blank, with respect to such stock
certificates, or, if any securities pledged pursuant to the Pledge
Agreements are uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that the security interest in such
uncertificated securities has been transferred to and perfected by the
Collateral Agent for the benefit of the Lenders in accordance with the
Uniform Commercial Code, as in effect in the State of Texas;
(b) all documents and instruments, including Uniform Commercial Code
Financing Statements (Form UCC-1), required by law or reasonably requested
by the Administrative Agent to be filed, registered or recorded to create
or perfect the Liens intended to be created under each Pledge Agreement;
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Administrative Agent, dated a date reasonably
near to the date of this Agreement, listing all effective financing
statements that name the Borrower or any other Obligor (under its present
name and any previous names) as the debtor and that are filed in the
jurisdictions in which filings will be made pursuant to clause (a) above,
together with copies of such financing statements (none of which (other
than those described in clause (a), if such Form UCC-11 or search report,
as the case may be, is current enough to list such financing statements
described in clause (a)) shall cover any collateral described in any
Security Document); and
(d) a detailed written report of the restrictions, if any, placed on
the sale of the pledged securities as of the date of this Agreement.
26
SECTION 5.1.5 Debt Service Reserve Account. The Borrower and the
Collateral Agent shall have entered into the Cash Collateral Security and
Control Agreement, dated as of the date hereof, and the Borrower shall have
established and funded the Debt Service Reserve Account with a minimum initial
balance of $5,000,000, as security for the Obligations.
SECTION 5.1.6 Financial Reports. The Administrative Agent shall have
received (a) the financial statements described in Section 6.5 and (b) copies of
all financial statements (including pro forma financial statements), reports,
notices and proxy statements sent by Borrower to its respective stockholders
during the period from June 30, 2002, to and including the date of this
Agreement, and all SEC filings.
SECTION 5.1.7 Opinions of Counsel. The Administrative Agent shall have
received opinions, dated as of a date not later than the date of the Borrowing
under this Agreement and addressed to the Administrative Agent and all Lenders,
from (i) the general counsel to the Borrower substantially in the form of
Exhibit E-1, and (ii) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., special counsel to the
Obligors, substantially in the form of Exhibit E-2 hereto.
SECTION 5.1.8 Fees and Expenses. The Administrative Agent shall have
received for its own account, or for the account of each Lender, as the case may
be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and
10.3, if then invoiced.
SECTION 5.1.9 Material Adverse Change. No material adverse change
shall have occurred since December 31, 2001, in the financial condition,
business, operations, or prospects of the Borrower and its Subsidiaries taken as
a whole or in their consolidated assets, liabilities and properties and there
shall be no material threatened or pending litigation adversely affecting its
consolidated property.
SECTION 5.1.10 Confirmation of Contingent Liabilities. The
Administrative Agent shall have received a summary of all material Contingent
Liabilities entered into by Borrower and its Subsidiaries since December 31,
2001.
SECTION 5.1.11 Hedging Schedule. The Administrative Agent and each
Lender shall have received a schedule of all Hedging Agreements to which the
Borrower or any of its Subsidiaries is a party, which schedule shall indicate
the amount of all Hedging Obligations of the Borrower or its Subsidiaries, as
applicable, thereunder as of the date of this Agreement.
SECTION 5.1.12 Agreements and Documents Affecting the Common Units.
The Administrative Agent shall have received a certified copy of the Organic
Documents of Plains All American Pipeline, L.P., together with any registration
rights agreement and any other agreement or document pertaining to the rights
and benefits of ownership of the Common Units.
SECTION 5.1.13 Representations and Warranties. The representations and
warranties set forth in Article VI and in the other Loan Documents shall be true
and correct.
SECTION 5.1.14 Litigation. No labor controversy, litigation,
arbitration or governmental investigation or proceeding shall be pending or, to
the Borrower's Knowledge, threatened against the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
27
SECTION 5.1.15 Satisfactory Review and Legal Form. All documents
executed or submitted pursuant hereto by and on behalf of Borrower or any other
Obligor shall be in form and substance reasonably satisfactory to the
Administrative Agent and its counsel. The Administrative Agent and its counsel
shall have received all information, approvals, documents or instruments as the
Administrative Agent or its counsel may reasonably request.
SECTION 5.1.16 Borrowing Request. The Administrative Agent shall have
received a Borrowing Request.
SECTION 5.1.17 Other Documents. The Administrative Agent shall have
received such other legal opinions, instruments and documents as any of the
Administrative Agent or its counsel may have reasonably requested.
SECTION 5.1.18 Disclosure Schedule. The Administrative Agent and each
Lender shall have received prior to the date of the requested Borrowing under
this Agreement, but in no event later than December 11, 2002, a copy of the
Borrower's Disclosure Schedule in form and substance satisfactory to the
Administrative Agent and each Lender in its respective sole and absolute
discretion.
The Administrative Agent shall notify the Borrower, the Collateral Agent
and the Lenders of the Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the Lenders to make
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.1) at or prior to 2:00
p.m. Central time, on December 31, 2002 (and, in the event such conditions are
not so satisfied or waived, the Commitments shall terminate at such time).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this Agreement
and to make Loans hereunder, the Borrower represents and warrants unto the
Agents and each Lender as set forth in this Article VI.
SECTION 6.1 Organization, etc. Each Obligor is a corporation, partnership
or limited liability company validly organized and existing and in good standing
under the laws of the jurisdiction of its incorporation, organization or
formation. Each Obligor is duly qualified to do business and is in good standing
as a foreign entity in each jurisdiction in which such Obligor owns property or
conducts operations to the extent that failure to be so qualified or in good
standing could reasonably be expected to have a Material Adverse Effect. Each
Obligor has full power and authority and holds all requisite franchises,
patents, copyrights, trademarks, trade names or rights thereto, licenses,
permits and other approvals (i) to enter into and perform its Obligations under
this Agreement, the Notes and each other Loan Document to which it is a party
and (ii) to own and hold under lease its property and to conduct its business
substantially as currently conducted by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc. The execution, delivery
and performance by each Obligor of this Agreement, the Notes and each other Loan
Document
28
executed or to be executed by it, are within such Obligor's powers, have been
duly authorized by all necessary action, and do not (a) violate any Obligor's
Organic Documents; (b) violate any other contractual restriction, law or
governmental regulation or court decree or order binding on or affecting any
Obligor or its Assets; or (c) result in, or require the creation or imposition
of, any Lien on any of any Obligor's properties except for Liens granted under
the Loan Documents.
SECTION 6.3 Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or regulatory body or other Person is required for the due execution,
delivery or performance by any Obligor of this Agreement, the Notes or any other
Loan Document to which it is a party other than recording of Security Documents
with appropriate Governmental Authorities.
SECTION 6.4 Validity, etc. This Agreement constitutes, and the Notes and
each other Loan Document executed by each Obligor will, on the due execution and
delivery thereof, constitute the legal, valid and binding obligations of such
Obligor, enforceable in accordance with their respective terms. Without limiting
the foregoing, each Security Document executed by an Obligor constitutes the
legal, valid and binding obligation of such Obligor enforceable in accordance
with its respective terms, and, subject to Permitted Liens upon proper filing
and recording, it will create a valid and perfected first priority security
interest in the Assets of such Obligor as provided therein to the extent a first
priority security interest can be perfected in such Assets by filing and
recording.
SECTION 6.5 Financial Information. The Borrower has delivered to the
Administrative Agent audited consolidated financial statements of the Borrower
and its Subsidiaries as of and for the fiscal year ended December 31, 2001, and
unaudited consolidated financial statements of the Borrower and its
Subsidiaries, as of and for each of the Fiscal Quarters ended March 31, 2002,
June 30, 2002 and September 30, 2002. Such financial statements have been
prepared in accordance with GAAP and fairly and accurately present, on a
consolidated basis, the financial condition of the Borrower and its Subsidiaries
as of the respective dates indicated therein and the results of operations for
the respective periods indicated therein. To the Borrower's Knowledge, neither
the Borrower nor any of its Subsidiaries has any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments, or
unrealized or anticipated losses from any unfavorable commitments except as
scheduled or referred to or reflected in such financial statements.
SECTION 6.6 No Material Adverse Change. Since the date of the financial
statements described in Section 6.5, there has been no material adverse change
in the business, condition (financial or otherwise), operations, assets,
properties or prospects of the Borrower and its Subsidiaries.
SECTION 6.7 Litigation, Labor Controversies, etc. There is no pending or,
to the Borrower's Knowledge, threatened litigation, action, proceeding, or labor
controversy affecting the Borrower or any of its Subsidiaries, or any of their
respective properties, businesses, assets or revenues, which could reasonably be
expected to have a Material Adverse Effect or that purports to affect the
legality, validity or enforceability of this Agreement, the Notes or any other
Loan Document, except as disclosed in Item 6.7 ("Litigation, Labor
Controversies") of the Disclosure Schedule.
29
SECTION 6.8 Subsidiaries. As of date hereof, the Borrower has no
Subsidiaries except those Subsidiaries set forth in Item 6.8 ("Subsidiaries") of
the Disclosure Schedule. Except as disclosed in Item 6.8 of the Disclosure
Schedule, the Borrower owns, free and clear of Liens, all outstanding Capital
Stock of such Subsidiaries (and each such Subsidiary owns, free and clear of
Liens, all outstanding Capital Stock of its Subsidiaries) and all such shares of
Capital Stock are validly issued, fully paid and nonassessable.
SECTION 6.9 Ownership of Properties. Each Obligor owns good and marketable
title, or valid leasehold interests in, to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like), and free and clear of all
limitations and restrictions on, and consent requirements for, disposition or
transfer, except as permitted pursuant to Section 7.2.3 and except for
imperfections and burdens that do not in the aggregate materially detract from
the value thereof. The interests and properties described in Item 6.9
("Hydrocarbon Interests") of the Disclosure Schedule hereto constitute all the
Hydrocarbon Interests owned by the Borrower and the other Obligors as of the
Effective Date. The Collateral Property includes all the Capital Stock of each
Obligor (other than the Borrower), all Hedge Agreements to which any Obligor is
a party and all notes receivable of each Obligor.
SECTION 6.10 Taxes. Except as set forth in Item 6.10 ("Tax Matters") of the
Disclosure Schedule, the Borrower and each Subsidiary has filed all tax returns
and reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books. The Borrower knows of no pending investigation of the
Borrower or any Subsidiary by any taxing authority or of any pending but
unassessed tax liability of the Borrower or any Subsidiary.
SECTION 6.11 Pension and Welfare Plans. During the twelve-consecutive-month
period prior to the date of the execution and delivery of this Agreement and
prior to the date of the Borrowing hereunder, no steps have been taken to
terminate any Pension Plan, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which might result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. Except as disclosed in Item 6.11 ("Employee Benefit Plans") of the
Disclosure Schedule, neither the Borrower nor any member of the Controlled Group
has any contingent liability with respect to any post-retirement benefit under a
Welfare Plan, other than liability for continuation coverage described in Part 6
of Title I of ERISA.
SECTION 6.12 Environmental Warranties. Except as set forth in Item 6.12
("Environmental Matters") of the Disclosure Schedule:
(a) All facilities and Property owned or leased by Borrower or any of
its Subsidiaries have been, and continue to be, owned or leased by Borrower
and such
30
Subsidiaries in compliance with all Environmental Laws where the failure to
be in compliance could reasonably be expected to have a Material Adverse
Effect;
(b) There are no pending or, to the Knowledge of Borrower, threatened
(i) claims, complaints, notices or requests for information received by
Borrower or any of its Subsidiaries with respect to any alleged violation
of any Environmental Law, or (ii) complaints or notices to Borrower or any
of its Subsidiaries regarding instances that could give rise to an
Environmental Liability for Borrower or any of its Subsidiaries, which in
either case could reasonably be expected to have a Material Adverse Effect;
(c) There have been no Releases of Hazardous Materials at, on or under
any Property now or previously owned or leased by Borrower or any of its
Subsidiaries which could give rise to an Environmental Liability that could
reasonably be expected to have a Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary or
desirable for their businesses where the failure to be in compliance could
reasonably be expected to have a Material Adverse Effect;
(e) no property now or previously owned or leased by the Borrower or
any of its Subsidiaries is listed or proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list of sites requiring investigation
or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries that,
singly or in the aggregate, have, or may reasonably be expected to have, a
Material Adverse Effect;
(g) neither Borrower nor any Subsidiary of the Borrower has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location that is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material
claims against the Borrower or such Subsidiary thereof for any remedial
work, damage to natural resources or personal injury, including claims
under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos present
at any property now or previously owned or leased by the Borrower or any
Subsidiary of the Borrower that, singly or in the aggregate, have, or may
reasonably be expected to have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or previously
owned or leased by the Borrower which, with the passage of time, or the
giving of notice or both, would give rise to liability under any
Environmental Law.
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SECTION 6.13 Regulations T, U and X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans will be used for a purpose which violates,
or would be inconsistent with, F.R.S. Board Regulation T, U or X. Terms for
which meanings are provided in F.R.S. Board Regulation T, U or X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
SECTION 6.14 Investment Company Act. No Obligor or Subsidiary is an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 6.15 Public Utility Holding Company Act. No Obligor or Subsidiary
is a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 6.16 Solvency. Each Obligor is Solvent.
SECTION 6.17 Agreements. Neither the Borrower nor any Subsidiary is a party
to any indenture, loan, or credit agreement, or to any lease or other material
agreement or instrument, or subject to any charter or corporate restriction that
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any material agreement or instrument material to its business to
which it is a party.
SECTION 6.18 No Defaults under Other Agreements. Except as disclosed in
Item 6.18 ("Existing Defaults") of the Disclosure Schedule, neither the Borrower
nor any of Subsidiary is in default in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness in excess of $5,000,000, and no defaults have occurred in the
performance or observance of any obligation or condition with respect to any
such Indebtedness if the effect of such default is to accelerate the maturity of
any Indebtedness.
SECTION 6.19 Compliance with Laws, etc. The Borrower and each Subsidiary
has complied with all applicable statutes, rules, regulations, orders and
restrictions of any government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Hydrocarbon Interests, except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
SECTION 6.20 Direct Benefit. The Borrowings hereunder are for the direct
benefit of the Borrower. The Borrower and the other Obligors are engaged as an
integrated group in the business of oil and gas exploration, production,
gathering, marketing and related fields, and any benefits to the Borrower or any
other Obligor is a benefit to all of them, both directly or indirectly, inasmuch
as the successful operation and condition of the Borrower and the other Obligors
is dependent upon the continued successful performance of the functions of the
integrated group as a whole.
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SECTION 6.21 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of any of the Obligors in writing to
any Agent or any Lender for purposes of or in connection with this Agreement,
any other Loan Document, or any transaction contemplated hereby or thereby is,
and all other such factual information hereafter furnished by or on behalf of
any of the Obligors to any Agent or any Lender will be, true and accurate in
every material respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this Agreement by the
Agents and such Lender, and such information is not, or shall not be, as the
case may be, incomplete by omitting to state any material fact necessary to make
such information not misleading in any material respect. There is no fact known
to any Obligor that has a Material Adverse Effect, or that could reasonably be
expected to have a Material Adverse Effect that has not been disclosed in
writing to the Administrative Agent and the Lenders.
ARTICLE VII
COVENANTS
SECTION 7.1 Affirmative Covenants. The Borrower agrees with the Agents and
each Lender that, until all Commitments have terminated and all Obligations have
been paid and performed in full, the Borrower will perform the obligations set
forth in this Section 7.1.
SECTION 7.1.1 Financial Information, Reports, Notices, etc. The Borrower
will furnish, or will cause to be furnished, to each Lender and the
Administrative Agent copies of the following financial statements, reports,
notices and information:
(a) Interim Financial Statements. As soon as available and in any
event within 45 days after the end of each of each of the first three
Fiscal Quarters of each Fiscal Year of the Borrower, (1) consolidated
balance sheets of the Borrower and its Subsidiaries as at the end of such
Fiscal Quarter, and consolidated statements of income, retained earnings
and cash flow of the Borrower and its Subsidiaries for such Fiscal Quarter
and for the period commencing at the end of the previous Fiscal Year and
ending with the end of such Fiscal Quarter, certified by the Chief
Financial Officer, which certificate shall state that such financial
statements fairly present the consolidated financial condition and results
of operations of the Borrower and its Subsidiaries, in accordance with
GAAP, consistently applied, as at the end of, and for, such period (subject
to normal year-end audit adjustments) and (2) a schedule of all Hedging
Obligations of the Borrower and its Subsidiaries in reasonable detail as of
the end of such Fiscal Quarter;
(b) Audited Financial Statements. As soon as available and in any
event within 90 days after the end of each Fiscal Year of the Borrower, (1)
a copy of the annual audit report for such Fiscal Year for the Borrower and
its Subsidiaries, including therein consolidated balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and
consolidated statements of income, retained earnings and cash flow of the
Borrower and its Subsidiaries for such Fiscal Year, in each case certified
(without any Impermissible Qualification) in a manner acceptable to the
Administrative Agent and the Required Lenders by PriceWaterhouseCoopers LLP
or other independent public
33
accountants of recognized national standing acceptable to the
Administrative Agent and the Required Lenders, together with a certificate
from such accountants stating that such consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries as of, and for, such Fiscal
Year in accordance with GAAP, and (2) a schedule of all Hedging Obligations
of the Borrower and its Subsidiaries in reasonable detail as of the end of
such Fiscal Year;
(c) Compliance with Financial Covenants. As soon as available and in
any event within 15 days of the delivery to the Administrative Agent of the
financial statements described in clauses (a) and (b) above, a certificate
executed by the Chief Financial Officer showing (in reasonable detail and
with appropriate calculations and computations in all respects satisfactory
to the Administrative Agent) compliance with the financial covenants set
forth in Section 7.2.4., together with a statement to the effect that the
Borrower has not become aware of any Default or Event of Default that has
occurred or is continuing, or, if the Borrower has become aware of such
Default or Event of Default, describing such Default or Event of Default
and the steps, if any, being taken to cure it;
(d) Defaults; Pledged Common Unit Deficiency. As soon as possible and
in any event within three (3) days after the occurrence of each Default or
a Pledged Common Unit Deficiency, a statement of the Chief Financial
Officer setting forth details of such Default or Pledged Common Unit
Deficiency, and the action that the Borrower has taken and proposes to take
with respect thereto;
(e) Litigation. As soon as possible and in any event within three days
after (x) the occurrence of any material adverse development with respect
to any litigation, action, proceeding, or labor controversy described in
Section 6.7 or (y) the commencement of any labor controversy, litigation,
action, proceeding of the type described in Section 6.7, or (z) any
material adverse development with respect to any litigation, action,
proceeding or controversy affecting any Obligor that could reasonably be
expected to have a Material Adverse Effect, notice thereof and copies of
all documentation relating thereto;
(f) Reports and Filings. Promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to its stockholders
generally, and all reports on Forms 10-K, 10-Q and 8-K, as well as all
definitive proxy statements and effective registration statements (other
than registration statements on Form S-8 or successor forms for sales of
securities under Plans) that the Borrower files with the SEC or any
national securities exchange;
(g) Termination of Plans. Immediately upon becoming aware of the
institution of any steps by the Borrower or any other Affiliate of the
Borrower to terminate any Pension Plan, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give rise
to a Lien under section 302(f) of ERISA, or the taking of any action with
respect to a Pension Plan which could result in the requirement that the
Borrower furnish a bond or other security to the PBGC or such Pension Plan,
or the occurrence of any event with respect to any Pension Plan which could
result in the
34
incurrence by the Borrower of any liability, fine or penalty, or any
material increase in the contingent liability of the Borrower with respect
to any post-retirement Welfare Plan benefit, notice thereof and copies of
all documentation relating thereto;
(h) Notice of Material Adverse Change. As soon as possible and in any
event within 10 days after the occurrence thereof, written notice of any
matter that could reasonably be expected to have a Material Adverse Effect;
(i) Press Releases. Upon the release thereof, copies of any press
releases or other public announcements of any Obligor; and
(j) Other. Such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Administrative Agent may from time
to time reasonably request.
SECTION 7.1.2 Compliance with Laws, Maintenance of Existence, etc. The
Borrower will, and will cause each of its Subsidiaries to, (a) comply in all
material respects with all applicable laws, rules, regulations and orders; (b)
do all things necessary and proper to maintain and preserve its respective
corporate or other existence and franchises and privileges in the jurisdiction
of its formation and qualify and remain qualified as a foreign entity authorized
to do business in each jurisdiction where it has Assets or properties or
conducts business, except where a failure to so qualify or remain qualified
would not reasonably be expected to have a Material Adverse Effect; and (c) pay,
before the same become delinquent, all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books. The Borrower will conduct, and will cause each Subsidiary to conduct, its
business in an orderly and efficient manner in accordance with good business
practices.
SECTION 7.1.3 Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
respective properties in good repair, working order and condition, and make
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times unless
the Borrower determines in good faith that the continued maintenance of any of
its properties is no longer economically desirable.
SECTION 7.1.4 Insurance. Each insurance policy covering Collateral
Property shall provide that such policy will not be canceled or reduced without
thirty (30) days' prior written notice to the Administrative Agent. The Borrower
will, within five (5) days of the Effective Date, cause each insurance policy
covering Collateral Property to name the Collateral Agent as additional insured
and loss payee for the benefit of itself, the Administrative Agent and the
Lenders. The Borrower will, and will cause each of its Subsidiaries to, maintain
or cause to be maintained with responsible insurance companies insurance with
respect to its properties and business (including business interruption
insurance) against such casualties and contingencies and of such types and in
such amounts as is customary in the case of similar businesses and will, upon
request of the Administrative Agent, furnish to each Lender at reasonable
intervals a
35
certificate of an Authorized Officer of the Borrower setting forth the nature
and extent of all insurance maintained by the Borrower and its Subsidiaries in
accordance with this Section.
SECTION 7.1.5 Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records that accurately reflect all
of its business affairs and transactions and permit the Administrative Agent and
each Lender or any of their respective representatives, at reasonable times and
intervals, to visit all of its offices, to discuss its financial matters with
its officers and during the existence of any Default, discuss with Borrower's
independent public accountant (and in such situation the Borrower authorizes
such independent public accountant to discuss the Borrower's and its
Subsidiaries' financial matters with each Lender or its representatives whether
or not any representative of the Borrower is present) and to examine (and, at
the expense of the Borrower, photocopy extracts from) any of its or their books
or other records. The Borrower shall pay any fees of such independent public
accountant incurred in connection with the Administrative Agent's or any
Lender's exercise of its rights pursuant to this Section 7.1.5.
SECTION 7.1.6 Environmental Covenant. The Borrower will, and will
cause each of its Subsidiaries to (a) use and operate all of its facilities and
properties in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with all
applicable Environmental Laws where the failure to be in compliance could
reasonably be expected to have a Material Adverse Effect; (b) immediately notify
the Administrative Agent and provide copies upon receipt of all written claims,
complaints, notices or inquiries relating to the condition of its facilities and
properties or compliance with Environmental Laws, and shall promptly cure and
have dismissed with prejudice to the satisfaction of the Administrative Agent
any actions and proceedings relating to compliance with Environmental Laws; and
(c) provide such information and certifications which the Administrative Agent
may reasonably request from time to time to evidence compliance with this
Section 7.1.6.
SECTION 7.1.7 Agreement to Deliver Mortgages. The Borrower will
execute and deliver, no later than forty-five (45) days from the Effective Date
such Mortgages, mortgages, deeds, deeds of trust, security agreements, financing
statements, continuation statements, extensions agreements and other similar
agreements or instruments (in addition to those required to be delivered under
Article V) in form and substance satisfactory to the Administrative Agent and
the Collateral Agent as are necessary to grant, confirm and perfect, subject to
Permitted Liens, first and prior liens or security interests in all of the Oil
and Gas Properties of Plains Holdings Inc., Plains Holdings LLC and Calumet. The
Borrower also agrees to deliver, whenever requested by the Administrative Agent
or the Collateral Agent favorable legal opinions (in addition to those required
to be delivered under Article V), addressed to the Lenders, from legal counsel
acceptable to the Administrative Agent and Collateral Agent with respect to any
Collateral Property, confirming that such Collateral Property is subject to
Security Documents securing Obligations that constitute and create legal, valid
and duly perfected Liens in such properties and interests and the proceeds
thereof, and covering such other matters as the Administrative Agent or the
Collateral Agent may request in good faith.
36
SECTION 7.1.8 Perfection and Protection of Security Interests and
Liens. The Borrower will, and will cause each of its Subsidiaries to, from time
to time deliver, or cause to be delivered, to the Collateral Agent any financing
statements, continuation statements, extension agreements and other documents,
properly completed and executed (and acknowledged when required) by the relevant
Person, in form and substance satisfactory to the Administrative Agent and the
Collateral Agent, which the Administrative Agent or the Collateral Agent
requests for the purpose of perfecting, confirming or protecting any Liens or
other rights in Collateral Property.
SECTION 7.1.9 Compliance with Other Contractual Obligations. The
Borrower will, and shall cause each of its Subsidiaries to, perform and observe
in all material respects all of the covenants and agreements contained in each
contract or agreement to which it is a party that are provided to be performed
and observed on the part of such Person, taking into account any grace period;
and shall diligently and in good faith enforce, using appropriate procedures and
proceedings, all of its and its Subsidiaries' material rights and remedies under
(including taking all diligent actions required to collect amounts owed to such
Person by any other parties thereunder) each such contract or agreement.
SECTION 7.1.10 Debt Service Reserve Account. If the Debt Service
Reserve Account shall contain less than $5,000,000 on any date, the Borrower
will promptly notify the Administrative Agent and the Collateral Agent and,
within two (2) Business Days, deposit or cause to be deposited additional cash
necessary to maintain the Debt Service Reserve Account at a minimum of
$5,000,000.
SECTION 7.1.11 Further Assurances. The Borrower will, and will cause
each of its Subsidiaries to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust and other documents) that may be required under any
applicable law, or that the Administrative Agent or the Required Lenders may
reasonably request, to effect the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Loan Documents or the validity or priority of any
such Lien, all at the expense of the Borrower. The Borrower also agrees to
provide to the Administrative Agent, from time to time upon reasonable request
of the Administrative Agent, information that is in the possession of the
Borrower or its Subsidiaries or otherwise reasonably obtainable by any of them,
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Loan Documents.
SECTION 7.2 Negative Covenants. The Borrower agrees with the Agents
and each Lender that, until all Commitments have terminated and all Obligations
have been paid and performed in full, the Borrower will perform the obligations
set forth in this Section 7.2.
SECTION 7.2.1 Business Activities. Neither the Borrower nor any of
its Subsidiaries shall engage in any line or lines of business activity other
than the lines of business conducted by the Borrower and its Subsidiaries as of
the Effective Date or business of a type reasonably related to such business.
37
SECTION 7.2.2 Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness in respect of the Loans and other Obligations;
(b) until the thirtieth (30th) day immediately following the
Effective Date, Indebtedness under that certain Credit Agreement dated as
of July 3, 2002, among PXP (as successor to Plains Exploration &
Production, L.P.), as borrower, JPMorganChase Bank, as administrative
agent, and the other agents and lenders party thereto from time to time;
(c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure
Schedule;
(d) Indebtedness of the Borrower or any of its Subsidiaries not
otherwise permitted under any other clause of this Section 7.2.2, for the
purchase price of equipment used in connection with the ownership or
operation of the Oil and Gas Properties of such Person, not to exceed
$3,000,000 in the aggregate for all such Indebtedness;
(e) unsecured Indebtedness incurred in the ordinary course of
business (including open accounts extended by suppliers on normal trade
terms in connection with purchases of goods and services, but excluding
Indebtedness incurred through the borrowing of money or Contingent
Liabilities);
(f) lease obligations, not to exceed $1,000,000 in any Fiscal Year,
arising from the lease of equipment used in the production of oil and gas
therefrom in the ordinary course of business of the Borrower and its
Subsidiaries;
(g) lease obligations, not to exceed $1,000,000 in any Fiscal Year,
under leases covering the Borrower's or any Subsidiary's business premises;
(h) Indebtedness not otherwise permitted under this Section 7.2.2
that is created, incurred or assumed after the Effective Date with respect
to Capitalized Lease Liabilities or sales leaseback transactions covering
assets sold and then leased back; provided that the aggregate outstanding
principal amount of all such Indebtedness does not exceed $2,000,000 in the
aggregate at any one time outstanding for all such Indebtedness of the
Borrower and its Subsidiaries;
(i) Indebtedness of Subsidiaries of the Borrower to the Borrower or
to wholly-owned Subsidiaries of the Borrower or partnerships in which the
Borrower owns all the limited partnership interests;
(j) unsecured Indebtedness of the Borrower or any Subsidiary owing
to the Borrower or to any other Subsidiary provided that such other
Subsidiary is also a Guarantor;
38
provided, however, that no Indebtedness otherwise permitted by clauses (d), (e),
(f), (g), (h), (i), and (j) shall be permitted if, after giving effect to the
incurrence thereof, any Default shall have occurred and be continuing.
SECTION 7.2.3 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except the following which collectively are referred to herein as the "Permitted
Liens":
(a) Liens securing payment of the Obligations, granted pursuant to
any Loan Document;
(b) Liens securing payment of Indebtedness of the type permitted
and described in clause (c) of Section 7.2.2;
(c) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (d) of Section 7.2.2 and covering only
those assets acquired with the proceeds of such Indebtedness;
(d) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;
(e) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate accruals or reserves are maintained on the books of the
Borrower or such Subsidiary, in accordance with GAAP;
(f) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(g) judgment Liens in existence less than 15 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies;
(h) Liens securing leases giving rise to Indebtedness allowed under
clauses (f) and (g) of Section 7.2.2, but only on the Property under lease;
(i) easements, rights-of-way, servitudes, permits, reservations,
exceptions, covenants and other restrictions as to the use of real
property, and other similar encumbrances incurred in the ordinary course of
business which, with respect to all of the foregoing, do not secure the
payment of Indebtedness and which, in the aggregate, are not
39
substantial in amount and which do not in any case materially detract from
the value of the Asset subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(j) Liens arising out of all presently existing and future division
and transfer orders, advance payment agreements, processing contracts, gas
processing plant agreements, operating agreements, gas balancing or
deferred production agreements, pooling, unitization or communitization
agreements, pipeline, gathering or transportation agreements, platform
agreements, drilling contracts, injection or repressuring agreements,
cycling agreements, construction agreements, salt water or other disposal
agreements, leases or rental agreements, farm-out and farm-in agreements,
exploration and development agreements, and any and all other contracts or
agreements covering, arising out, used or useful in connection with or
pertaining to the exploration, development, operation, production, sale,
use, purchase, exchange, storage, separation, dehydration, treatment,
compression, gathering, transportation, processing, improvement, marketing,
disposal, or handling of any Hydrocarbon Interest of the Borrower or any of
its Subsidiaries; provided that such agreements are entered into in the
ordinary course of business and contain terms customary for such agreements
in the industry and provided further that no Liens described in this
paragraph (k) shall be granted or created in connection with the incurrence
of Indebtedness; and
(k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, that (i) such deposit account is
not a dedicated cash collateral account and is not subject to restrictions
against access by the Borrower or any of its Subsidiaries in excess of
those set forth by regulations promulgated by the F.R.S. Board, and (ii)
such deposit account is not intended by the Borrower or any of its
Subsidiaries to provide collateral to the depository institution.
SECTION 7.2.4 Financial Condition. The Borrower will not permit:
(a) its Consolidated Tangible Net Worth at any time to be less than
the sum of (i) $80,000,000 plus (ii) fifty percent (50%) of any net income
earned after December 31, 2002, plus (iii) seventy-five percent (75%) of
the net proceeds of any future equity offerings by the Borrower, excluding
any future asset impairment write-downs required by GAAP or SEC guidelines
and hedging adjustments relating to FAS 133; and
(b) its Consolidated Debt Service Coverage Ratio as of the end of
any fiscal quarter, calculated on a rolling two-Fiscal Quarters basis, to
be less than 1.00 to 1.00.
SECTION 7.2.5 Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified in
Item 7.2.5(a) ("Ongoing Investments") of the Disclosure Schedule;
40
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.2;
(d) extensions of trade credit in the ordinary course of business;
(e) in the ordinary course of business, Investments by the Borrower
in any of its Subsidiaries, or by any such Subsidiary in any of its
Subsidiaries, by way of contributions to capital or loans or advances,
provided that the aggregate amount of such loans, advances and other
extensions of credit by the Borrower to its Subsidiaries taken as whole
shall not exceed $5,000,000 at any one time outstanding;
(f) the endorsement of negotiable instruments for collection in the
ordinary course of business;
(g) operating deposit accounts with banks;
(h) deposits of cash in the Debt Service Reserve Account;
(i) other Investments in an aggregate amount at any one time not to
exceed $10,000,000; and
(j) direct or indirect Investments by the Borrower or any other
Obligor in Common Units or other Capital Stock of Plains All American
Pipeline, L.P., or Plains All American GP, LLC;
provided, however, that no Investment otherwise permitted by clause (e),
(i) or (j) shall be permitted to be made if, immediately before or after
giving effect thereto, any Default or Event of Default shall have occurred
and be continuing; further provided, however, that no Investments shall be
made in PXP from and after the effective date of the PXP Spin-off.
SECTION 7.2.6 Restricted Payments, etc. On and at all times after the
Effective Date during the existence of an Event of Default or if an Event of
Default would result therefrom:
(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower or on any
warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower (other than
dividends or distributions payable in its common stock or warrants to
purchase its common stock or splitups or reclassifications of its stock
into additional or other shares of its common stock) or apply, or permit
any of its Subsidiaries to apply, any of its funds, property or assets to
the purchase, redemption, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase or redeem, any shares of any
class of capital stock (now or hereafter outstanding) of the Borrower, or
warrants,
41
options or other rights with respect to any shares of any class of capital
stock (now or hereafter outstanding) of the Borrower;
(b) The Borrower will not, and will not permit any of its
Subsidiaries to:
(i) make any payment or prepayment of principal of, or make
any payment of interest on, any Subordinated Debt on any day other
than the stated, scheduled date for such payment or prepayment set
forth in the documents and instruments memorializing such
Subordinated Debt, or which would violate the subordination
provisions of such Subordinated Debt;
(ii) redeem, purchase or defease, any Subordinated Debt; or
(iii) make any deposit for any of the foregoing purposes.
SECTION 7.2.7 [Reserved.]
SECTION 7.2.8 Rental Obligations. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into at any time any arrangement
which does not create a Capitalized Lease Liability and which involves the
leasing by the Borrower or any of its Subsidiaries from any lessor of any real
or personal property (or any interest therein), except arrangements which,
together with all other such arrangements which shall then be in effect, will
not require the payment of an aggregate amount of rentals by the Borrower and
its Subsidiaries in excess of (excluding escalations resulting from a rise in
the consumer price or similar index) $1,000,000 for any Fiscal Year or
$3,000,000 during the full remaining term of such arrangements; provided,
however, that any calculation made for purposes of this Section shall exclude
any amounts required to be expended for maintenance and repairs, insurance,
taxes, assessments, and other similar charges.
SECTION 7.2.9 Take or Pay Contracts. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into or be a party to any
arrangement for the purchase of materials, supplies, other property or services
if such arrangement by its express terms requires that payment be made by the
Borrower or such Subsidiary regardless of whether such materials, supplies,
other property or services are delivered or furnished to it.
SECTION 7.2.10 Consolidation, Merger, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, (i) enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution) (except for the PXP Spin-off),
(ii) acquire any business or Property from, or Capital Stock of, or be a party
to any acquisition of, any Person except for purchases of inventory and other
Property to be sold or used in the ordinary course of business and Investments
permitted under Section 7.2.5, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into (x) the Borrower if the Borrower shall be the continuing or
surviving corporation or (y) any other such Subsidiary, provided that if
any such transaction shall be between a Subsidiary and a wholly-owned
Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving corporation and provided, further, that if any such transaction
42
shall be between a Subsidiary Guarantor and a Subsidiary not a Subsidiary
Guarantor and such Subsidiary Guarantor is not the continuing or surviving
entity, then the continuing or surviving entity shall have assumed all of
such Subsidiary Guarantor hereunder;
(b) any Subsidiary may sell, lease, transfer or otherwise dispose
of any or all of its Property (upon voluntary liquidation or otherwise) to
the Borrower or a wholly-owned Subsidiary of the Borrower, provided that if
any such sale is by a Subsidiary Guarantor to a Subsidiary of the Borrower
not a Subsidiary Guarantor, then such Subsidiary shall have assumed all of
the obligations of such Subsidiary Guarantor under its Subsidiary Guaranty;
and
(c) the Borrower or any Subsidiary of the Borrower may merge or
consolidate with any other Person if (x) in the case of a merger or
consolidation of the Borrower, the Borrower is the surviving corporation
and, in any other case, the surviving corporation is a wholly-owned
Subsidiary of the Borrower and (y) after giving effect thereto no Default
would exist hereunder.
SECTION 7.2.11 Asset Dispositions, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
Capital Stock of Subsidiaries) to any Person, unless
(a) such sale, transfer, lease, contribution or conveyance is in
the ordinary course of its business or is permitted by Section 7.2.10;
(b) the net book value of such assets, together with the net book
value of all other assets sold, transferred, leased, contributed or
conveyed otherwise than in the ordinary course of business by the Borrower
or any of its Subsidiaries pursuant to this clause since the Effective
Date, does not exceed $5,000,000; or
(c) with respect to the sale of Common Units, the Fair Market Value
of all Common Units sold from and after the Effective Date shall not exceed
$10,000,000 in the aggregate, except to the extent that such excess is used
to prepay Loans in accordance with Section 3.1(a);
provided, that the Borrower may effect the PXP Spin-off and such actions shall
be excluded from the limitation contained in clause (b) above.
SECTION 7.2.12 Modification of Certain Agreements. The Borrower will
not, and will not permit any of its Subsidiaries to, (a) consent to any
termination, modification, supplement or waiver of any of the provisions of its
charter or by-laws (or equivalent document) in any manner which could have a
Material Adverse Effect, (b) amend or modify any indenture or other agreement
providing for or otherwise relating to any Subordinated Indebtedness if such
amendment or modification will affect or impair the subordination provisions of
such indenture or agreement or modify the Persons obligated thereon or the
interest rate, amortization, repurchase or redemption provisions or financial
covenants of such indenture or agreement, or (c) amend or modify any
registration rights agreement (or similar agreement) with respect to the Common
Units.
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SECTION 7.2.13 Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any Affiliate unless such
arrangement or contract is fair and equitable to the Borrower or such
Subsidiary, as the case may be, and is on terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than, and is otherwise an
arrangement or contract of the kind which would be entered into by a prudent
Person in the position of the Borrower or such Subsidiary with a Person which is
not one of its Affiliates; provided, that the Borrower may effect the PXP
Spin-off and such actions shall be excluded from the limitation contained in
clause (b) above.
SECTION 7.2.14 Negative Pledges, Restrictive Agreements, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted by either clause (b) of Section
7.2.2 as in effect on the Effective Date or by clause (d) of Section 7.2.2 as to
the assets financed with the proceeds of such Indebtedness) prohibiting
(a) the creation or assumption of any Lien upon its Capital Stock,
properties, revenues or assets, whether now owned or hereafter acquired, or
the ability of the Borrower or any other Obligor to amend or otherwise
modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any payments, directly or
indirectly, to the Borrower by way of dividends, advances, repayments of
loans or advances, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts the ability of any such
Subsidiary or partnership to make any payment, directly or indirectly, to
the Borrower.
SECTION 7.2.15 Environmental Protection. The Borrower will not, and
will not permit any of its Subsidiaries to
(a) use (or permit any tenant to use) any of their respective
properties or assets for the handling, processing, storage, transportation,
or disposal of any Hazardous Material except in connection with their
normal business operations in amounts that will not violate applicable law;
(b) conduct any activity that is likely to cause a Release or
threatened Release of any Hazardous Material; or
(c) otherwise conduct any activity or use any of their respective
properties or assets in any manner that is likely in any material respect
to violate any Environmental Law or create any Environmental Liabilities
for which the Borrower or any of its Subsidiaries would be responsible that
could reasonably be expected to have a Material Adverse Effect.
SECTION 7.2.16 Accounting. The Borrower will not, and will not permit
any of its Subsidiaries to, change its fiscal year or make any change (a) in
accounting treatment or material reporting practices, except as required by GAAP
and disclosed to the Administrative Agent, or
44
(b) in tax reporting treatment, except as required by law and disclosed to the
Administrative Agent.
SECTION 7.2.17 Hedge Agreements. Neither the Borrower nor any of its
Subsidiaries have entered, and they shall not enter into, Hedge Agreements of
the type described in clause (b) of the definition thereof, provided that the
Borrower and the Subsidiaries may enter into
(a) Hedge Agreements that provide for a floor, but not a cap in an
amount not to exceed during any calendar year 100% of the Borrower's and
its Subsidiaries' total projected production from Oil and Gas Properties,
which constitute Proved Producing Reserves for such year, and
(b) Hedge Agreements which provide for a cap (including fixed price
swaps), provided such Hedge Agreements shall not cover during any calendar
year more than 75% of the Borrower's and the Subsidiaries' total projected
production from Oil and Gas Properties which constitute Proved Producing
Reserves for such year; provided that such Hedge Agreements shall be with
counterparties that are (i) rated BBB or higher by S&P, (ii) are rated Baa2
and or higher by ▇▇▇▇▇'▇ or (iii) are acceptable to the Administrative
Agent. Such projections shall, at all times, be equal to the projections
set out in the most current Reserve Report then available for the
Borrower's and the Subsidiaries' Oil and Gas Properties that constitute
Proved Producing Reserves.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default."
SECTION 8.1.1 Non-Payment of Obligations. Any Obligor shall default
in the payment or prepayment when due of any principal of or interest on any
Loan or under any Loan Document, or the Borrower shall default (and such default
shall continue unremedied for a period of five days) in the payment when due of
any commitment fee or of any other Obligation.
SECTION 8.1.2 Breach of Representation or Warranty. Any
representation or warranty of any other Obligor made or deemed to be made
hereunder or in any other Loan Document executed by it, or any other writing or
certificate furnished by or on behalf of any Obligor to the Administrative Agent
or any Lender for the purposes of or in connection with this Agreement or any
such other Loan Document (including any certificates delivered pursuant to
Article V) is or shall be false or in any material respect incorrect when made
or deemed made.
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Section 7.2 or Sections 7.1.1(d), 7.1.2(b), and 7.1.5.
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations.
Any Obligor shall default in the due performance and observance of any other
agreement contained
45
herein or in any other Loan Document executed by it, and such default shall
continue unremedied for a period of thirty (30) days after notice thereof shall
have been given to such Obligor by the Administrative Agent.
SECTION 8.1.5 Default on Other Indebtedness. A default shall occur in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of any Obligor having a principal amount,
individually or in the aggregate, in excess of $1,000,000, or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness, if the effect of such default is to accelerate the
maturity of any such Indebtedness, or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become or be declared due and payable prior to its expressed
maturity.
SECTION 8.1.6 Judgments. Any judgment or order for the payment of
money in excess of $500,000 (or its equivalent) in the aggregate (exclusive of
judgment amounts fully covered by insurance where the insurer has admitted
liability in respect of such judgment) or in excess of $1,000,000 in the
aggregate (regardless of insurance coverage) shall be rendered against any
Obligor and either (a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or (b) there shall be any period of thirty
(30) consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect.
SECTION 8.1.7 Pension Plans. Either of the following events shall
occur with respect to any Pension Plan: (a) the institution of any steps by the
Borrower, any member of its Controlled Group or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower or any such
member could be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension Plan, in
excess of $500,000; or (b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 8.1.8 Change in Control. Any Change in Control shall occur.
SECTION 8.1.9 Bankruptcy, Insolvency, etc. Any Obligor shall (a) be
liquidated or become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness to pay, debts as they become due; (b) apply for,
consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for such Obligor or Subsidiary or any property
of any thereof, or make a general assignment for the benefit of creditors; (c)
in the absence of such application, consent or acquiescence, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for any Obligor or Subsidiary or for a substantial part of the property of any
thereof, and such trustee, receiver, sequestrator or other custodian shall not
be discharged within 60 days, provided that each Obligor and Subsidiary hereby
expressly authorizes each Agent and Lender to appear in any court conducting any
relevant proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents; (d) permit or suffer to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any
46
dissolution, winding up or liquidation proceeding, in respect of any Obligor or
Subsidiary, and, if any such case or proceeding is not commenced by such Obligor
or Subsidiary, such case or proceeding shall be consented to or acquiesced in by
such Obligor or Subsidiary or shall result in the entry of an order for relief
or shall remain for 60 days undismissed, provided that each Obligor and each
Subsidiary hereby expressly authorizes each Agent and Lender to appear in any
court conducting any such case or proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents; or (e) take
any action authorizing, or in furtherance of, any of the foregoing.
SECTION 8.1.10 Impairment of Security, etc. Any Loan Document, or any
Lien granted thereunder, shall (except in accordance with its terms) terminate,
cease to be effective or cease to be the legally valid, binding and enforceable
obligation of any Obligor party thereto; any Obligor or any other party shall,
directly or indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability; or any Lien securing any Obligation shall
cease to be a perfected first priority Lien, subject only to the Permitted
Liens.
SECTION 8.1.11 Attachment, etc. Any Obligor or Subsidiary shall fail
to discharge, within a period of thirty (30) days after the commencement
thereof, any attachment, sequestration, or similar proceeding or proceedings
involving an aggregate amount in excess of $500,000 against any of its assets or
properties unless such Obligor or Subsidiary is in good faith contesting such
action and taking affirmative steps to discharge the same, and adequate reserves
have been set aside in accordance with GAAP.
SECTION 8.1.12 Pledged Common Units. The outstanding aggregate
principal amount of all Loans, shall, on any given date, exceeds the sum of (x)
fifty percent (50%) of the Fair Market Value of the Pledged Common Units plus
(y) the balance in the Debt Service Reserve Account as of such date. For the
avoidance of doubt, it is expressly agreed that, notwithstanding the cure period
of two (2) Business Days following the date of any deficiency with respect to
the Debt Service Reserve Account described in Section 8.1.13, there shall be no
cure period with respect to the occurrence of an Event of Default under this
Section 8.1.12.
SECTION 8.1.13 Debt Service Reserve Account. The Debt Service Reserve
Account shall contain less than $5,000,000 on any give date, and the Borrower
shall not, within two (2) Business Days following the date of such deficiency,
deposit or cause to be deposited therein such amounts necessary to maintain the
Debt Service Reserve Account at a minimum of $5,000,000.
SECTION 8.2 Action if Bankruptcy. If any Event of Default described
in clauses (a) through (e) of Section 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.
SECTION 8.3 Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (e) of Section
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of (i) if the Event of
Default is of the type described in Section 8.1.12, any Lender, or
47
(ii) if the Event of Default is of any type other that the types described in
clauses (a) through (e) of Section 8.1.9 or Section 8.1.12, the Required
Lenders, shall, by notice to the Borrower, declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable without further notice, demand or presentment, and/or the Commitments
(if not theretofore terminated) to be terminated, whereupon the full unpaid
amount of such Loans and other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without further notice,
demand or presentment, and/or, as the case may be, the Commitments shall
terminate.
ARTICLE IX
THE AGENTS
SECTION 9.1 Actions. Each Lender hereby appoints Bank of Montreal as
Administrative Agent, Bank One as Syndication Agent and ▇▇▇▇▇ Fargo Bank Texas,
NA as Collateral Agent and Documentation Agent under and for purposes of this
Agreement, the Notes and each other Loan Document. Each Lender authorizes each
Agent to act on behalf of such Lender under this Agreement, the Notes and each
other Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by any Agent (with respect to which
each Agent agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such powers hereunder
and thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto; provided, however, that as to any action with respect to the
foreclosure on, or disposition of, the Pledged Common Units under the Pledge
Agreement pursuant to which the Pledged Common Units have been pledged to the
Collateral Agent, the Collateral Agent shall follow and execute the written
instructions then received by the Collateral Agent of any Lender as to the
timing, amount and/or method of such foreclosure and/or disposition, provided
that in the event that the Collateral Agent shall have received written
instructions from more than one Lender and such written instructions differ in
any respect, the Collateral Agent shall follow such written instructions in a
manner that, to the extent possible, results in the foreclosure and/or
disposition of the greatest number of Pledged Common Units at the earliest
possible time. Each Lender hereby indemnifies (which indemnity shall survive any
termination of this Agreement) each Agent pro rata according to such Lender's
Percentage, whether or not related to any singular, joint or concurrent
negligence of the Agents or any of them, from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of any kind
or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, any Agent in any way relating to or arising out of this
Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which any Agent is not reimbursed by the Borrower;
provided, however, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, claims, costs or expenses
which are determined by a court of competent jurisdiction in a final
non-appealable judgment to have resulted solely from any Agent's gross
negligence or willful misconduct. Neither Agent shall be required to take any
action hereunder, under the Notes or under any other Loan Document, or to
prosecute or defend any suit in respect of this Agreement, the Notes or any
other Loan Document, unless it is indemnified hereunder to its satisfaction. If
any indemnity in favor of any Agent shall be or become inadequate, in the
determination of any Agent, such Agent may call for additional indemnification
from the Lenders and cease to do the
48
acts indemnified against hereunder until such additional indemnity is given.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, neither Agent shall have any duties or
responsibilities, except as expressly set forth herein, and neither Agent shall
have, or be deemed to have, any fiduciary relationship with any Lender or any
other Agent, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
SECTION 9.2 Funding Reliance, etc. Unless the Agent shall have been
notified by telephone, confirmed in writing, by any Lender by (i) 5:00 p.m.
Central time, on the day prior to a Borrowing in the case of LIBO Rate Loans and
(ii) 11:00 a.m. Central time, on the day of any Borrowing in the case of Base
Rate Loans that such Lender will not make available the amount which would
constitute its Percentage of such Borrowing on the date specified therefor, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent and, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If and to the extent that such
Lender shall not have made such amount available to the Administrative Agent,
such Lender and the Borrower severally agree to repay the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date the Administrative Agent made such amount available
to the Borrower to the date such amount is repaid to the Administrative Agent,
at the interest rate applicable at the time to Loans comprising such Borrowing.
SECTION 9.3 Exculpation. Neither of the Agents nor any of their
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own willful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other Loan
Document. No such inquiry which may be made by any Agent shall obligate it to
make any further inquiry or to take any action. Each Agent shall be entitled to
rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which the Agents, or either of them,
believe to be genuine and to have been presented by a proper Person.
SECTION 9.4 Successors. Either of the Administrative Agent or the
Collateral Agent may resign as such at any time upon at least thirty (30) days'
prior notice to the Borrower and all Lenders. If either such Agent any time
shall resign, the Required Lenders may appoint another Lender as a successor
Administrative Agent or Collateral Agent, as the case may be, which shall
thereupon become the Administrative Agent or Collateral Agent, as applicable,
hereunder. If no successor Administrative Agent or Collateral Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's or
Collateral Agent's giving notice of resignation, then the retiring
Administrative Agent or Collateral Agent may, on behalf of the Lenders, appoint
a successor Administrative Agent or Collateral Agent, respectively, which shall
be one of the Lenders or a commercial banking institution organized under the
laws of the United States (or any State
49
thereof) or a U.S. branch or agency of a commercial banking institution, and
having a combined capital and surplus of at least $1,000,000,000. Upon the
acceptance of any appointment as Administrative Agent or Collateral Agent
hereunder by a successor Administrative Agent or Collateral Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent or Collateral Agent's resignation hereunder as
the Administrative Agent or Collateral Agent, respectively, the provisions of
(a) this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent or Collateral
Agent under this Agreement; and (b) Section 10.3 and Section 10.4 shall continue
to inure to its benefit.
SECTION 9.5 Loans by the Administrative Agent. Bank of Montreal (and
any successor to Bank of Montreal as Administrative Agent) shall have the same
rights and powers with respect to (x) the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Administrative Agent.
Bank of Montreal (and any successor to Bank of Montreal as Administrative Agent)
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 Bank of Montreal (and any successor to Bank of Montreal as
Administrative Agent) were not the Administrative Agent.
SECTION 9.6 Credit Decisions. Each Lender acknowledges that it has,
independently of the Administrative Agent and each other Lender, and based on
such Lender's review of the financial information of the Borrower, this
Agreement, the other Loan Documents (the terms and provisions of which being
satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitment. Each Lender also acknowledges that it will,
independently of the Administrative Agent and each other Lender, and based on
such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.
SECTION 9.7 Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from the Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement.
SECTION 9.8 Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any obligations,
liabilities, responsibilities or duties under this Agreement or the other Loan
Documents. Without limiting the foregoing, neither the Documentation Agent nor
the Syndication Agent shall have or be deemed to have any fiduciary relationship
with any Lender or either of the Administrative Agent
50
or the Collateral Agent. Each Lender acknowledges that it has not relied, and
will not rely, on any of the Lenders so identified or on the Documentation Agent
or the Syndication Agent in deciding to enter into this Agreement or in taking
or not taking action hereunder.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however, that
no such amendment, modification or waiver that would: (a) modify any requirement
hereunder that any particular action be taken by all the Lenders or by the
Required Lenders shall be effective unless consented to by each Lender; or (b)
modify this Section 10.1 or Section 8.3 change the definition of "Required
Lenders", increase the Total Commitment Amount or the Commitment Amount or
Percentage of any Lender, reduce any fees described in Article III, release any
collateral security, except as otherwise specifically provided in any Loan
Document, or reduce or limit the Obligations of any Subsidiary Guarantor under
any Guaranty hereunder, shall be made without the consent of each Lender; (c)
extend the due date for, or reduce the amount of, any scheduled repayment or
prepayment of principal of or interest on any Loan or any other obligation (or
reduce the principal amount of, or rate of interest on, any Loan) shall be made
without the consent of the holder of that Note evidencing such Loan; (d) affect
adversely the interests, rights or obligations of the Administrative Agent qua
the Administrative Agent or of the Collateral Agent qua the Collateral Agent,
shall be made without consent of the Administrative Agent or the Collateral
Agent, as the case maybe; or (e) modify Section 10.4 without the consent of the
Agents and each Lender. No failure or delay on the part of the Administrative
Agent, any Lender or holder of any Note in exercising any power or right under
this Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No notice to or demand on the Borrower in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by the
Administrative Agent, any Lender or holder of any Note under this Agreement or
any other Loan Document shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
transmitted and a receipt, demonstrating successful transmission, is received by
the sender. Delivery by telecopier of an executed counterpart of any amendment
or waiver of any provision of this Agreement or any other Loan Document shall be
effective as delivery of an original executed counterpart hereof.
51
SECTION 10.3 Payment of Costs and Expenses. The Borrower agrees to
pay on demand all reasonable expenses of the Administrative Agent and the
Collateral Agent (including the reasonable fees and out-of-pocket expenses of
counsel to the Administrative Agent and of local counsel, if any, who may be
retained by counsel to the Administrative Agent) in connection with (a) the
negotiation, preparation, execution and delivery of this Agreement and of each
other Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated, and (b) the filing,
recording, refiling or rerecording of each of the Security Documents and/or any
Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or recorded
or refiled or rerecorded by the terms hereof or of the Security Documents, and
(c) the preparation and review of the form of any document or instrument
relevant to this Agreement or any other Loan Document. Each Lender agrees to
reimburse the Administrative Agent on demand for such Lender's pro rata share
(based upon its respective Percentage) of any such costs or expenses not paid by
the Borrower. The Borrower further agrees to pay, and to save the Administrative
Agent, the Collateral Agent and the Lenders harmless from all liability for, any
stamp or other similar taxes which may be payable in connection with the
execution or delivery of this Agreement, the borrowings hereunder, or the
issuance of the Notes or any other Loan Documents. The Borrower also agrees to
reimburse the Administrative Agent, the Collateral Agent and each Lender upon
demand for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and legal expenses) incurred by the Administrative Agent, the
Collateral Agent and such Lender in connection with (x) the negotiation of any
restructuring or "work-out," whether or not consummated, of any Obligations and
(y) the enforcement of any Obligations.
SECTION 10.4 Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender, the Administrative Agent and the
Collateral Agent, and the extension of the Commitments, the Borrower hereby
indemnifies, exonerates and holds the Administrative Agent, the Collateral Agent
and each Lender and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to Article V not to fund any Borrowing);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of
52
the stock or assets of any Person, whether or not the Administrative Agent
or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of its
Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.5 Survival. The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
Article IX, shall in each case survive any termination of this Agreement, the
payment in full of all Obligations and the termination of all Commitments. The
representations and warranties made by each Obligor in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 10.6 Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof. SECTION 10.8 Execution in Counterparts,
Effectiveness, etc. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement. This Agreement
shall become effective when counterparts hereof executed on behalf of the
Borrower and each Lender (or notice thereof satisfactory to the Administrative
Agent) shall have been received by the Administrative Agent and notice thereof
shall have been given by the Administrative Agent to the Borrower and each
Lender.
SECTION 10.9 Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE
53
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS.
This Agreement, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.
SECTION 10.10 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that: (a) the Borrower may not assign
or transfer its rights or obligations hereunder without the prior written
consent of the Administrative Agent and all Lenders; and (b) the rights of sale,
assignment and transfer of the Lenders are subject to Section 10.11.
SECTION 10.11 Sale and Transfer of Loans and Note; Participations in
Loans and Note. Each Lender may assign, or sell participations in, its Loans and
Commitment to one or more other Persons in accordance with this Section 10.11.
SECTION 10.11.1 Assignments. Any Lender, (a) with the written
consents of the Administrative Agent and, when no Event of Default shall have
occurred and be continuing, the Borrower (which consents shall not be
unreasonably delayed or withheld and which consent, in the case of the Borrower,
shall be deemed to have been given in the absence of a written notice delivered
by the Borrower to the Administrative Agent, on or before the fifth Business Day
after receipt by the Borrower of such Lender's request for consent, stating, in
reasonable detail, the reasons why the Borrower proposes to withhold such
consent) may at any time assign and delegate to one or more commercial banks or
other financial institutions; and (b) with notice to the Borrower and the
Administrative Agent, but without the consent of the Borrower or the
Administrative Agent, may assign and delegate to any of its Affiliates or to any
other Lender (each Person described in either of the foregoing clauses as being
the Person to whom such assignment and delegation is to be made, being
hereinafter referred to as an "Assignee Lender"), all or any fraction of such
Lender's total Loans and Commitment (which assignment and delegation shall be of
a constant, and not a varying, percentage of all the assigning Lender's Loans
and Commitment) in a minimum aggregate amount of $5,000,000; provided, however,
that any such Assignee Lender will comply, if applicable, with the provisions
contained in Section 4.6 and further, provided, however, that, the Borrower,
each other Obligor, the Administrative Agent and the Collateral Agent shall be
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned and delegated to an Assignee Lender until (i)
written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such Assignee
Lender, shall have been given to the Borrower and the Administrative Agent by
such Lender and such Assignee Lender; (ii) such Assignee Lender shall have
executed and delivered to the Borrower and the Administrative Agent a Lender
Assignment Agreement, accepted by the Administrative Agent; and (iii) the
processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned
54
and delegated by it in connection with such Lender Assignment Agreement, shall
be released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Administrative
Agent has received an executed Lender Assignment Agreement, the Borrower shall
execute and deliver to the Administrative Agent (for delivery to the relevant
Assignee Lender) a new Note evidencing such Assignee Lender's assigned Loans and
Commitment and, if the assignor Lender has retained Loans and its Commitment
hereunder, a replacement Note in the principal amount of the Loans and
Commitment retained by the assignor Lender hereunder (such Note to be in
exchange for, but not in payment of, that Note then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Note. The
assignor Lender shall ▇▇▇▇ the predecessor Note "exchanged" and deliver it to
the Borrower. Accrued interest on that part of the predecessor Note evidenced by
the new Note, and accrued fees, shall be paid as provided in the Lender
Assignment Agreement. Accrued interest on that part of the predecessor Note
evidenced by the replacement Note shall be paid to the assignor Lender. Accrued
interest and accrued fees shall be paid at the same time or times provided in
the predecessor Note and in this Agreement. Such assignor Lender or such
Assignee Lender must also pay a processing fee to the Administrative Agent upon
delivery of any Lender Assignment Agreement in the amount of $3,500. Any
attempted assignment and delegation not made in accordance with this Section
10.11.1 shall be null and void.
SECTION 10.11.2 Participations. Any Lender may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "Participant") participating interests in
any of the Loans, Commitment, or other interests of such Lender hereunder;
provided, however, that (a) no participation contemplated in this Section 10.11
shall relieve such Lender from its Commitment or its other obligations hereunder
or under any other Loan Document; (b) such Lender shall remain solely
responsible for the performance of its Commitment and such other obligations;
(c) the Borrower, the Administrative Agent and the Collateral Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the other Loan
Documents; (d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to take
or refrain from taking any action hereunder or under any other Loan Document,
except that such Lender may agree with any Participant that such Lender will
not, without such Participant's consent, take any actions of the type described
in clause (b) or (c) of Section 10.1; and (e) the Borrower shall not be required
to pay any amount that is greater than the amount which it would have been
required to pay had no participating interest been sold.
SECTION 10.12 Collateral Matters; Hedging Agreements. The benefit of the
Security Documents and of the provisions of this Agreement relating to the
Collateral Property shall also extend to, and be available on a pro rata basis
to, each Person that is a Lender or an Affiliate of a Lender in respect of any
Hedging Obligation of Borrower or any of its Subsidiaries owed to such Person,
but only while such Person is a Lender or an Affiliate of a Lender.
SECTION 10.13 Other Transactions. Nothing contained herein shall preclude
the Administrative Agent, the Collateral Agent or any other Lender from engaging
in any transaction, in addition to those contemplated by this Agreement or any
other Loan Document,
55
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE LENDERS OR THE BORROWER RELATED TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF
TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
EACH OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE LENDERS AND THE
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF TEXAS AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. EACH OF THE ADMINISTRATIVE AGENT,
THE COLLATERAL AGENT, THE LENDERS AND THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
THE PARTIES HERETO AGREE THAT NOTHING IN THIS SECTION SHALL AFFECT THEIR RIGHT
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ITS RIGHTS
TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY HERETO OR TO SUCH
PARTY'S PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.
SECTION 10.15 Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE LENDERS AND THE BORROWER
56
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE LENDERS OR THE
BORROWER RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH
OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE LENDERS ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.16 No Oral Agreements. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PLAINS RESOURCES INC., as the Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & Chief Executive
Officer
Address:
Plains Resources Inc.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇-▇
BANK OF MONTREAL
acting through its U.S. branches
and agencies, including initially
its Chicago, Illinois branch,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Specialist
with copy to:
Bank of Montreal
Houston Agency
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
S-2
Commitment BANK OF MONTREAL
as a Lender
$17,000,000
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
Address, Domestic Office and LIBOR
Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Specialist
S-3
Commitment BANK ONE, NA (Main Office Chicago),
as Syndication Agent and a Lender
$14,000,000
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
Address:
Bank One, NA
910 ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Domestic Office and LIBOR Office:
Bank One, NA
Attn: April Yebd
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
S-4
Commitment ▇▇▇▇▇ FARGO BANK TEXAS, NA,
----------
as Collateral Agent, Documentation
Agent and a Lender
$14,000,000
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address, Domestic Office and LIBOR
Office:
▇▇▇▇▇ Fargo Bank Texas, National
Association.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------
$45,000,000
S-5