EXHIBIT 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement"), dated as
of April 30, 1997, is among MAGNUM HUNTER RESOURCES, INC. (formerly named Magnum
Petroleum, Inc.), a Nevada corporation (the "Borrower"), each Bank (as defined
herein), BANKERS TRUST COMPANY, (in its individual capacity, "Bankers Trust"),
as administrative agent (in such capacity, together with its successors in such
capacity, the "Administrative Agent"), and as an issuing bank (in such capacity,
together with its successors in such capacity, an "Issuing Bank"), BANQUE
PARIBAS, a French bank acting through its Houston Agency (in its individual
capacity, "Paribas"), as documentation agent (in such capacity, together with
its successors in such capacity, the "Documentation Agent"), and FIRST UNION
NATIONAL BANK OF NORTH CAROLINA, a national banking association, (in its
individual capacity,
"First Union") as collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent"), and as syndication agent
(in such capacity, together with its successors in such capacity, the
"Syndication Agent").
R E C I T A L S:
WHEREAS, the Borrower, ▇▇▇▇▇ Fargo Bank (Texas) National Association, a
national banking association ("▇▇▇▇▇ Fargo"), Paribas and certain of the Banks
have entered into the Prior Credit Agreement (as defined herein); and
WHEREAS, the Borrower desires to increase the credit available to it
under the Prior Credit Agreement and to amend and restate the Prior Credit
Agreement in its entirety by entering into this Agreement; and
WHEREAS, immediately preceding the execution and delivery of this
Agreement, (a) ▇▇▇▇▇ Fargo resigned as agent under the Prior Credit Agreement,
(b) the Banks elected Paribas as Documentation Agent, Bankers Trust as
Administrative Agent and First Union as Collateral Agent and as Syndication
Agent, and (c) ▇▇▇▇▇ Fargo executed and delivered one or more assignments of
liens in favor of First Union, as Collateral Agent for the Banks and the Bridge
Lenders; and
WHEREAS, simultaneously with the execution and delivery of this
Agreement (a) Bankers Trust and the other Banks are executing and delivering the
Bridge Loan Agreement (as hereinafter defined), (b) Bankers Trust and the other
lenders under the Bridge Loan Agreement are funding to the Borrower the Bridge
Loan (as hereinafter defined) thereunder in the principal amount of $60,000,000,
(c) First Union, the administrative agent under the Bridge Loan Agreement, the
Banks and the lenders party to the Bridge Loan Agreement are executing and
delivering the Intercreditor Agreement (as hereinafter defined) pursuant to
which First Union agrees to act as Collateral Agent for the Banks hereunder and
the Bridge Lenders (as hereinafter defined) and (d) the Borrower is executing
and delivering the Security Documents (as hereinafter defined) to, among other
things, confirm the grant of security interests and mortgages to the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 1
Bridge Lenders as contemplated in the Bridge Loan Agreement and the
Intercreditor Agreement and (e) each lender under the Prior Credit Agreement is
surrendering the instrument evidencing its note or notes issued thereunder and
the Borrower is executing and delivering to such lender a new note or notes
hereunder that amends and restates such notes; and
WHEREAS, the Borrower and the Banks are willing to increase the credit
available under the Prior Credit Agreement and to consolidate, amend and restate
the Prior Credit Agreement in its entirety upon and subject to the terms,
conditions and provisions of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and promises herein contained and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows, intending to be legally bound:
ARTICLE I
Definitions
Section 1.1 Definitions. As used in this Agreement, the following
terms have the following meanings:
"AAA" has the meaning assigned to it in Section 14.20(b) hereof
"Acquired Properties" means the real and personal property
acquired by Borrower or one or more of the Guarantors pursuant to the
Acquisition.
"Acquisition" means the acquisition by the Borrower or a
Guarantor of certain Oil and Gas Properties and other Property from
Sellers.
"Acquisition Documents" means all documents, instruments and
agreements executed and delivered in connection with the Acquisition,
including without limitation, the Purchase Agreement.
"Additional Costs" has the meaning specified in Section 5.1.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined by the Administrative
Agent to be equal to the Eurodollar Rate for such Eurodollar Loan for
such Interest Period divided by 1 minus the Reserve Requirement for
such Eurodollar Loan for such Interest Period.
"Affiliate" means, as to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, such Person; (b)
that directly or indirectly beneficially owns or holds five percent or
more of any class of voting stock of such Person; or (c) five percent
or more
AMENDED AND RESTATED CREDIT AGREEMENT - Page 2
of the voting stock of which is directly or indirectly beneficially
owned or held by the Person in question. The term "control" means the
possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract, or otherwise;
provided, however, in no event shall any Agent, the Issuing Bank or any
Bank be deemed an Affiliate of the Borrower or any of its Subsidiaries.
"Agent" means any of the Administrative Agent, the
Documentation Agent, the Collateral Agent and the Syndication Agent;
and "Agents" shall mean all of them.
"Agents Letter" means the letter agreement dated April 30,
1997, between the Agents and the Borrower.
"Applicable Base Rate Margin" means (i) 0.50% until the
Initial Rate Adjustment Date and (ii) 0.00% on and after the Initial
Rate Adjustment Date.
"Applicable Eurodollar Margin" means 2.50% until the Initial
Rate Adjustment Date.
On and after the Initial Rate Adjustment Date, the Applicable
Eurodollar Margin shall be as set forth in the following grid
and determined to be the applicable percentage pursuant to the
Borrowing Percentage, which Applicable Eurodollar Margin shall
change as and when the Borrowing Percentage changes:
================================================================================
Borrowing Percentage Applicable
Eurodollar Margin
--------------------------------------------------------------------------------
Greater than or equal to 75% 1.75%
--------------------------------------------------------------------------------
Greater than or equal to 50% but less than 1.50%
75%
--------------------------------------------------------------------------------
Greater than or equal to 25% but less than 1.25%
50%
--------------------------------------------------------------------------------
Less than 25% 1.00%
================================================================================
"Applicable Lending Office" means for each Bank and each Type
of Loan, the Lending Office of such Bank (or of an Affiliate of such
Bank) designated for such Type of Loan below its name on the signature
pages hereof or such other office of such Bank (or of an Affiliate of
such Bank) as such Bank may from time to time specify to the Borrower
and the Administrative Agent as the office by which its Loans of such
Type are to be made and maintained.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 3
"Applicable Rate" means: (a) during the period that a Loan is
a Base Rate Loan, the Base Rate plus the Applicable Base Rate Margin;
and (b) during the period that a Loan is a Eurodollar Loan, the
Adjusted Eurodollar Rate plus the Applicable Eurodollar Margin.
"Assignee" has the meaning assigned to it in Section 14.8(b).
"Assigning Bank" has the meaning assigned to it in Section 14.
8(b).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Bank and its assignee and accepted by the
Administrative Agent pursuant to Section 14.8, in substantially the
form of Exhibit "G" hereto, or such other form as to which all of the
parties hereto shall consent in writing.
"Assignment of Liens" means one or more assignments of liens
executed by ▇▇▇▇▇ Fargo in favor of the Collateral Agent, in
substantially the form of Exhibit "H" hereto.
"Bank" means each bank or other lending institution that is or
that may from time to time become a signatory hereto, any successor or
assignee thereof and solely for the purposes of the Security
Documents, any Person holding Swap Obligations of the Borrower that
was previously a signatory to this Agreement.
"Base Rate" means, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day, or (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.
If for any reason the Administrative Agent determines (which
determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to clause (b) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to
such inability no longer exist.
"Base Rate Loans" means Loans the interest rates on which are
determined on the basis of the rates referred to in the definition of
"Base Rate" in this Section 1.1.
"Beneficial Owner" shall be determined in accordance with
Rules 13d-3 and 13d-5 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended and
as it may be amended from time to time, or any successor provision
thereto, except that a Person shall be deemed to have "beneficial
ownership" of all shares that such Person has the right to acquire,
whether such right is exercisable immediately or only after the
passage of time.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 4
"Borrower Pledge Agreement" means the Amended and Restated
Pledge Agreement of the Borrower in favor of the Collateral Agent for
the benefit of itself, the other Agents, the Banks and the Issuing
Banks, in substantially the form of Exhibit "D" hereto, as the same
may be amended, supplemented, or modified.
"Borrowing Base" means an amount of indebtedness which can be
adequately supported by the value of oil and gas reserves and assets,
contracts and throughput attributable to the Mortgaged Properties
owned by Borrower and its Subsidiaries in which the Collateral Agent
holds a perfected, first priority Lien, the values of which shall be
determined and redetermined by the Majority Banks, in the exercise of
their sole discretion, in accordance with the terms hereof and their
customary practices and standards for the valuation of similar
property. The initial Borrowing Base shall be $130,000,000.
"Borrowing Base Deficiency" means as of any date, that the
aggregate outstanding Loans plus the Letter of Credit Liabilities
exceed the Borrowing Base as determined by the Required Banks pursuant
to Section 2.8 and as reduced from time to time pursuant to Section
4.5(b).
"Borrowing Base Deficiency Rate" means, the lesser of (a) the
Maximum Rate, or (b) the Applicable Rate in effect from day to day,
plus [two] percent.
"Borrowing Percentage" shall mean, for the purpose of
determining the Applicable Eurodollar Margin, the aggregate unpaid
principal balance of the Loans then outstanding as a percentage of the
Borrowing Base then in effect.
"Bridge Lenders" means, collectively, Paribas, First Union
Corporation and Bankers Trust and their successors and assigns.
"Bridge Loan" means the loan or loans made by the Bridge
Lenders to the Borrower pursuant to the Bridge Loan Agreement.
"Bridge Loan Agreement" means that certain Senior Subordinated
Credit Agreement, dated as of the date hereof among the Borrower and
the Bridge Lenders, as amended.
"Business Day" means (a) a day other than Saturday, Sunday or
day on which commercial banks in New York are not authorized or
required to close, and, (b) with respect to all borrowings, payments,
Conversions, Continuations, Interest Periods, and notices in
connection with Eurodollar Loans, any day which is a Business Day
described in clause (a) above and which is also a day on which
dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease
of (or other agreement conveying the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 5
right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a
balance sheet of such Person under GAAP. For purposes of this
Agreement, the amount of such Capital Lease Obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"Change in Control" shall mean an occurrence where (a) any
Person, or any Persons acting together in a manner which would
constitute a "group" (a "Group") for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended and as it may be amended
from time to time, or any successor provision thereto, together with
any Affiliates thereof, (i) become the Beneficial Owners of capital
stock of the Borrower through a purchase, merger or other acquisition
transaction, entitling such Person or Persons and its or their
Affiliates to exercise more than 50% of the total voting power of all
classes of the Borrower's capital stock entitled to vote generally in
the election of directors or (ii) shall succeed in having sufficient
of its or their nominees who are not supported by a majority of the
then current board of directors of the Borrower elected to the board
of directors of the Borrower such that such nominees, when added to
any existing directors remaining on the board of directors of the
Borrower after such election who are Affiliates of or acting in
concert with any such Persons, shall constitute a majority of the
board of directors of the Borrower, (b) a plan is adopted relating to
the liquidation or dissolution of the Borrower, (c) the Borrower shall
consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any
Person other than a Subsidiary, or any other Person shall consolidate
with or merge into the Borrower (other than, in the case of this
clause (c), pursuant to any consolidation or merger where Persons who
are Beneficial Owners of the Borrower's capital stock entitled to vote
generally in the election of directors immediately prior thereto
become the Beneficial Owners of shares of capital stock of the
surviving corporation entitling such Persons to exercise more than 50%
of the total voting power of all classes of such surviving
corporation's capital stock entitled to vote generally in the election
of directors or persons holding similar positions), (d) ▇▇▇▇ ▇. ▇▇▇▇▇
shall fail to own 5% or more of the outstanding capital stock of
Borrower entitling him to exercise at least 5% of the total voting
power of all classes of the Borrower's capital stock entitled to vote
generally in the election of directors, or (e) a material change in
the management of the Borrower shall occur. Without limiting the
foregoing, a material change in management of the Borrower shall be
deemed to have occurred if ▇▇▇▇ ▇. ▇▇▇▇▇ ceases to be actively
involved in the day to day management of the Borrower.
"Closing Date" means the date on which the closing of the loan
transactions contemplated by this Agreement occurs.
"Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated and rulings issued thereunder.
"Collateral" has the meaning specified in Section 6.1.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 6
"Compliance Certificate" means a certificate of the chief
financial officer or chief executive officer of the Borrower required
under Section 9.1(c) hereof.
"Commitment" means, as to each Bank, the obligation of such
Bank to make Loans and purchase participations in Letters of Credit
pursuant to Section 3.1 in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount set forth opposite
the name of such Bank on the signature pages hereof under the heading
"Commitment," or in the Assignment and Acceptance pursuant to which
such Bank assumed its Commitment, as applicable as the same may be (a)
reduced pursuant to Section 2.7 or terminated pursuant to Section 2.7
or 12.2 and (b) reduced or increased from time to time pursuant to
assignments by or to such Bank pursuant to Section 14.8.
"Consolidated Current Assets" means, at any particular time,
all amounts which in conformity with GAAP, would be included as
current assets on a consolidated balance sheet of the Borrower.
"Consolidated Current Liabilities" means, at any particular
time, all amounts which, in conformity with GAAP, would be included as
liabilities on a consolidated balance sheet of the Borrower; provided,
however, that the current portion of long-term Debt under this
Agreement and the other Loan Documents and the Bridge Loan shall be
excluded from the calculation of current liabilities.
"Consolidated EBITDA" means, for any period, the sum of the
following for the Borrower determined on a consolidated basis in
accordance with GAAP and without duplication: (i) Consolidated Net
Income for such period before provision for income taxes, plus (ii)
depreciation, depletion, amortization and other non-cash charges,
which in determining Consolidated Net Income for such period were
deducted from gross income, plus (iii) Interest Expense for such
period.
"Consolidated Interest Coverage Ratio" means, at any
particular time, the ratio of (a) Consolidated EBITDA to (b) Interest
Expense.
"Consolidated Net Income" means, for any period, the
consolidated net income of Borrower and its Subsidiaries from
operations for such period determined in accordance with GAAP provided
that there shall be excluded therefrom: (a) any net income (or net
loss) of any Person in which Borrower has an ownership interest other
than the Subsidiaries, except to the extent that any such income has
actually been received by the Borrower in the form of cash dividends
or similar distributions; (b) any net gains on the sale or other
disposition, not in the ordinary course of business, of investments
and other capital assets, provided that there shall also be excluded
any related charges for taxes thereon and other costs associated with
the sale or other disposition thereof; and (c) any net gain arising
from the collection of proceeds of any insurance policy.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 7
"Consolidated Net Worth" means, at any particular time, all
amounts which, in conformity with GAAP, would be included as
stockholders' equity on a consolidated balance sheet of the Borrower.
"Consolidated Tangible Net Worth" means, at any particular
time, all amounts which, in conformity with GAAP, would be included as
Consolidated Net Worth; provided, however, there shall be excluded
therefrom: (a) the aggregate amount of shares of any treasury stock,
(b) any amount at which shares of capital stock of the Borrower appear
as an asset on the Borrower's balance sheet, (c) goodwill, including
any amounts, however designated, that represent the excess of the
purchase price paid for assets or stock over the value assigned
thereto, (d) patents, trademarks, trade names, and copyrights, (e)
deferred expenses (excluding bank related fees and expenses), (f)
loans and advances, other than travel and expense related advances to
any stockholder, director, officer, or employee of the Borrower or any
Affiliate of the Borrower not made in the ordinary course of business,
and (g) all other assets which are properly classified as intangible
assets.
"Contingent Liabilities" means, as applied to any Person,
those direct or indirect liabilities of that Person with respect to
any Debt, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"),
including, without limitation, any obligation of such Person, whether
or not contingent, (a) to purchase, repurchase or otherwise acquire
such primary obligations or any property constituting direct or
indirect security therefor, or (b) to advance or provide funds (i) for
the payment or discharge of any such primary obligation, or (ii) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary
obligation, or (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of
such primary obligation, or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect
thereof. The amount of any Contingent Liabilities shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Liabilities are made
or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good
faith.
"Continue," "Continuation," and "Continued" shall refer to the
continuation pursuant to Section 4.2 of a Eurodollar Loan as a
Eurodollar Loan from one Interest Period to the next Interest Period.
"Convert," "Conversion," and "Converted" shall refer to a
conversion pursuant to Section 4.2 or Article V of one Type of Loan
into another Type of Loan.
"Current Ratio" means, at any particular time, the ratio of
Consolidated Current Assets to Consolidated Current Liabilities.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 8
"Debt" means as to any Person at any time (without duplication)
(a) all Funded Debt and (b) all liabilities of such Person in respect
of unfunded vested benefits under any Plan.
"Debt to Capitalization Ratio" means, at any particular time,
the ratio of (i) Funded Debt to (ii) the sum of Funded Debt, plus
Consolidated Net Worth.
"Default" means an Event of Default or the occurrence of an
event or condition which with notice or lapse of time or both would
become an Event of Default.
"Default Rate" means the lesser of (i) the Maximum Rate, or
(ii) the sum of the Applicable Rate in effect from day to day, plus
two percent.
"Determination Date" means each April 1 and October 1 of each
year, commencing October 1, 1997.
"Dispute" has the meaning assigned to it in Section 14.20(a)
hereof.
"Dollars" and "$" mean lawful money of the United States of
America.
"Eligible Assignee" means any commercial bank, savings and
loan association, savings bank, finance company, insurance company,
pension fund, mutual fund, or other financial institution (whether a
corporation, partnership, or other entity) approved by the
Administrative Agent, which approval shall not be unreasonably
withheld or delayed, and unless an Event of Default has occurred and
is continuing, reasonably approved by Borrower to the extent required
in Section 14.8, such approval by Borrower not to be unreasonably
withheld or delayed.
"Engineering Reports" shall have the meaning specified in
subsection 2.8(a).
"Environmental Laws" means any and all federal, state, and
local laws, regulations, and requirements pertaining to health,
safety, or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. ss. 9601 et seq., the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq., the Occupational
Safety and Health Act, 29 U.S.C. ss. 651 et seq., the Clean Air Act,
42 U.S.C. ss. 7401 et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et
seq., and the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et
seq., as such laws, regulations, and requirements may be amended or
supplemented from time to time.
"Environmental Liabilities" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages,
costs, and expenses (including, without limitation, all reasonable
fees, disbursements and expenses of counsel, expert and consulting
fees and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim
or demand, by any Person, whether based in contract,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 9
tort, implied or express warranty, strict liability, criminal or civil
statute, including any Environmental Law, permit, order or agreement
with any Governmental Authority or other Person, arising from
environmental, health or safety conditions or the Release or
threatened Release of a Hazardous Material into the environment,
resulting from the past, present, or future operations of such Person
or its Affiliates.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published
interpretations thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as the Borrower or is under
common control (within the meaning of Section 414(c) of the Code) with
the Borrower.
"Eurodollar Loans" means Loans the interest rates on which are
determined on the basis of the rates referred to in the definition of
"Adjusted Eurodollar Rate" in this Section 1.1.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) at which the Reference Bank is
offered Dollar deposits at or about 10:00 A.M., New York City time,
two Business Days prior to the first day of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans
are then being conducted for delivery on the first day of such
Interest Period for a number of days comprised therein and in an
amount comparable to the principal amount of the Eurodollar Loan to
which such Interest Period relates.
"Event of Default" has the meaning specified in Section 12.1.
"Excluded Subsidiaries" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ nternational
Limited Liability Company.
"Federal Funds Effective Rate" shall mean, for any day, 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 on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it.
"Funded Debt" means, as of any date of determination (without
duplication): (a) all obligations of the Borrower and the Material
Subsidiaries for borrowed money, (b) all obligations of the Borrower
and the Material Subsidiaries evidenced by bonds, notes, debentures,
or other similar instruments, (c) all obligations of the Borrower and
the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 10
Material Subsidiaries to pay the deferred purchase price of property
or services, except trade accounts payable of such Person arising in
the ordinary course of business that are not past due by more than 90
days, (d) all Capital Lease Obligations of the Borrower and the
Material Subsidiaries, (e) all obligations secured by a Lien existing
on property owned by the Borrower and the Material Subsidiaries,
whether or not the obligations secured thereby have been assumed by
the Borrower or are non-recourse to the credit of such Person, and (f)
all contractual Contingent Liabilities and all reimbursement
obligations of the Borrower and the Material Subsidiaries (whether
contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments.
"GAAP" means generally accepted accounting principles, applied
on a consistent basis, as set forth in Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards
Board and/or their respective successors and which are applicable in
the circumstances as of the date in question. Accounting principles
are applied on a "consistent basis" when the accounting principles
applied in a current period are comparable in all material respects to
those accounting principles applied in a preceding period.
"Gas Gathering Systems" means the gas plant and those certain
gas gathering systems consisting of all equipment, assets,
rights-of-way, surface leases, contracts and related assets more
particularly described on Schedule 1.1 attached hereto.
"Governmental Authority" means any nation or government, any
state or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government.
"Guarantor" means each present and future Material Subsidiary
of Borrower.
"Hazardous Material" means any substance, product, waste,
pollutant, material, chemical, contaminant, constituent, or other
material which is or becomes listed, regulated, or addressed under any
Environmental Law, including, without limitation, asbestos, petroleum,
and polychlorinated biphenyls.
"Hedge Agreements" shall have the meaning assigned to such
term in Section 9.14.
"Hydrocarbons" means all oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, carbon dioxide,
liquid hydrocarbons, gaseous hydrocarbons, and all other minerals, and
all products obtained, refined or processed therefrom.
"Initial Rate Adjustment Date" means the date that the
Borrower has repaid the Bridge Loan in full.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 11
"Intercreditor Agreement" means the Intercreditor Agreement
executed by and among the Administrative Agent, the administrative
agent under the Bridge Loan Agreement, the Banks, and the lenders
party to the Bridge Loan Agreement in substantially the form of
Exhibit "I" hereto, as the same may be amended, supplemented, or
modified.
"Interest Expense" means, for any period, all interest on Debt
(including the interest portion of payments under Capital Lease
Obligations and any capitalized interest but excluding the non-cash
accretion of the discount and amortization of the Agents' and the
Banks' fees hereunder and the fees of the agents and Lenders under the
Bridge Loan Agreement) of Borrower and its Subsidiaries (determined on
a consolidated basis) paid or accrued during such period, provided
that there shall be added to "Interest Expense" any fees or
commissions payable in connection with any letters of credit during
such period.
"Interest Period" means, with respect to any Eurodollar Loan,
each period commencing on the date such Loan is made or Converted from
a Base Rate Loan or, in the case of each subsequent, successive
Interest Period applicable to a Eurodollar Loan, the last day of the
next preceding Interest Period with respect to such Loan, and ending
on the numerically corresponding day in the first, second or third
calendar month thereafter, as the Borrower may select as provided in
Section 4.1 or 4.2 hereof, except that each such Interest Period which
commences on the last Business Day of a calendar month (or on any day
for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which
would otherwise end on a day which is not a Business Day shall
end on the next succeeding Business Day (or, if such
succeeding Business Day falls in the next succeeding calendar
month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Termination
Date shall end on the Termination Date; (c) no more than six
Interest Periods for Eurodollar Loans shall be in effect at
the same time; (d) no Interest Period for any Eurodollar Loans
shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loans would otherwise be a
shorter period, Eurodollar Loans shall not be available
hereunder; and (e) no Interest Period may extend beyond a
principal repayment date unless, after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans having
Interest Periods that end after such principal payment date
shall be equal to or less than the Loans to be outstanding
hereunder after such principal payment date.
"Issuing Bank" means, with respect to any Letter of Credit,
Bankers Trust or any of its Affiliates or, with the approval of the
Administrative Agent, any other Bank which chooses to be an Issuing
Bank hereunder, in its capacity as issuer of each Letter of Credit,
and any successor Issuing Bank appointed pursuant to the terms of
Section 3.9.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 12
"L/C Application" has the meaning specified in Section 3.1.
"L/C Documents" has the meaning specified in Section 3.1.
"LC Participation" means, with respect to any Bank at any
time, the amount of the participating interest held by such Bank in
respect of a Letter of Credit.
"Letter of Credit" means any standby letter of credit issued
by an Issuing Bank for the account of the Borrower pursuant to Article
III.
"Letter of Credit Liabilities" means, at any time, the
aggregate face amounts of all outstanding Letters of Credit.
"Letter of Credit Request Form" means a certificate, in
substantially the form of Exhibit "C" hereto, properly completed and
signed by the Borrower requesting issuance of a Letter of Credit.
"Lien" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or
title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan" means, as to each Bank, the revolving credit loans to
be made by such Bank pursuant to Section 2.1.
"Loan Documents" means this Agreement and all promissory
notes, security agreements, pledge agreements, intercreditor and/or
subordination agreements, deeds of trust, mortgages, fee letters,
assignments, guaranties, letters of credit, letter of credit
applications and other instruments, documents, and agreements executed
and delivered pursuant to or in connection with this Agreement, as
such instruments, documents, and agreements may be amended, modified,
renewed, extended, or supplemented from time to time.
"Loan Request Form" means a certificate, in substantially the
form of Exhibit "B" hereto, properly completed and signed by the
Borrower requesting a Loan.
"Majority Banks" means at any time while no Loans or Letter of
Credit Liabilities are outstanding, Banks having commitments totalling
at least 75% of the amount of the Borrowing Base and, at any time
while Loans or Letter of Credit Liabilities are outstanding, Banks
holding Loans and LC Participations totalling at least 75% of the
amount of the Borrowing Base.
"Material Subsidiary" means each Subsidiary other than the
Excluded Subsidiaries.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 13
"Maximum Rate" means, at any time and with respect to any
Bank, the maximum rate of interest under applicable law that such Bank
may charge the Borrower. The Maximum Rate shall be calculated in a
manner that takes into account any and all fees, payments, and other
charges in respect of the Loan Documents that constitute interest
under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the
Maximum Rate shall take effect without notice to the Borrower at the
time of such change in the Maximum Rate.
"Mortgaged Properties" means all right, title and interest of
Borrower and its Subsidiaries in and to (i) the Oil and Gas Properties
identified on Schedule 1.1(a) hereof and such other Oil and Gas
Properties as may from time to time become subject to the Lien of any
Security Document; and (ii) the Gas Gathering Systems and such other
assets and properties as may from time to time become subject to the
Lien of any Security Document.
"Multiemployer Plan" means a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made
by the Borrower or any ERISA Affiliate and which is covered by Title
IV of ERISA.
"Net Cash Proceeds" means in connection with (a) any issuance
by the Borrower or any of its Subsidiaries of any Debt, equity or debt
securities or instruments, (b) the incurrence of other loans other
than as permitted by Section 10.1 or (c) the disposition of any assets
permitted by Section 10.8, the cash proceeds received from such
issuance or sale, as applicable, net of all reasonable 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.
"New Properties" shall have the meaning specified in subsection
4.5(e) hereof.
"1996 Series A Preferred Stock" means the one million shares
of the Borrower's 1996 Series A Convertible Preferred Stock, $.001 par
value per share and a $10.00 stated value per share with a quarterly
rate of $.21875 per share.
"Note" means a promissory note of the Borrower payable to the
order of a Bank, in substantially the form of Exhibit "A" hereto, and
all extensions, renewals, and modifications thereof and all
substitutions therefor.
"Obligated Party" means any Person who is or becomes party to
any agreement that guarantees or secures payment and performance of
the Obligations or any part thereof.
"Obligations" means all (a) Swap Obligations, and (b)
obligations, indebtedness, and liabilities of the Borrower to the
Agents, the Issuing Banks and the Banks, or any of them, arising
pursuant to any of the Loan Documents (other than any obligations
under Loan Documents to the extent such obligations relate exclusively
to the Bridge Loan),
AMENDED AND RESTATED CREDIT AGREEMENT - Page 14
now existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, including, without limitation, the
obligations, indebtedness, and liabilities of the Borrower under this
Agreement and the other Loan Documents (including, without limitation,
all of Borrower's contingent reimbursement obligations in respect of
Letters of Credit but limited as provided in the preceding
parenthetical clause), and all interest accruing thereon and all
attorneys' fees and other expenses incurred in the enforcement or
collection thereof.
"Oil and Gas Properties" means and includes, collectively, (a)
all Hydrocarbons prior to severance, and all leases, licenses and
other contracts or arrangements granting interests in Hydrocarbons or
proceeds of Hydrocarbons prior to severance, including without
limitation all fee mineral interests, oil, gas and other minerals,
leases, subleases, farmouts, royalties, overriding royalties, net
profits interests, production payments and similar mineral interests,
and all unsevered oil, gas, and other minerals in, under or
attributable to any of the foregoing properties and interests, (b) all
leases, licenses and other contracts or arrangements granting rights
to explore for Hydrocarbons on or under partially or completely
undeveloped acreage, and (c) all oil ▇▇▇▇▇, gas ▇▇▇▇▇, injection ▇▇▇▇▇
and other ▇▇▇▇▇ and all production therefrom.
"Operating Lease" means any lease (other than a lease
constituting a Capital Lease Obligation) of real or personal property.
"Payment Notice" means a request for payment given pursuant to
Section 4.5 hereof.
"Payor" has the meaning assigned to it in Section 4.8.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA.
"Permitted Debt" has the meaning specified in Section 10.1.
"Permitted Liens" has the meaning specified in Section 10.2.
"Person" means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Plan" means any employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and which is covered
by Title IV of ERISA.
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as
its prime rate in effect at its Principal Office which may or not be
the lowest or best rate offered by the Administrative Agent to its
customers.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 15
"Principal Office" means the principal office of the
Administrative Agent, presently located at One Bankers Trust Plaza,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Prior Credit Agreement" means that certain Credit Agreement
dated as of June 28, 1996, executed among the Borrower, ▇▇▇▇▇ Fargo,
as agent, Paribas, as co-agent, and the other banks or other lending
institutions which were signatories thereto, as amended or
supplemented from time to time.
"Prohibited Transaction" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
"Property" means all real estate and other tangible and
intangible property.
"Purchase Agreement" means that certain Purchase and Sale
Agreement dated February 27, 1997, executed by and among Sellers and
Magnum Hunter Production, Inc., a Texas corporation.
"Quarterly Payment Date" means the last day of each March,
June, September and December of each year, the first of which shall be
June 30, 1997.
"Reference Bank" means Bankers Trust.
"Register" has the meaning assigned to it in Section 14.8(d).
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented
from time to time.
"Regulatory Change" means, with respect to any Bank, any
change after the date of this Agreement in United States federal,
state, or foreign laws or regulations (including Regulation D) or the
adoption or making after such date of any interpretations, directives,
or requests applying to a class of banks including such Bank 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, as to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal,
disbursement, leaching, or migration of Hazardous Materials into the
indoor or outdoor environment or into or out of property owned by such
Person, including, without limitation, the movement of Hazardous
Materials through or in the air, soil, surface water, ground water, or
property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat, or otherwise address Hazardous Materials in the indoor
or outdoor environment, (b) prevent the Release or threat of Release
or minimize the further Release of Hazardous Materials
AMENDED AND RESTATED CREDIT AGREEMENT - Page 16
so that they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment, or (c) perform
pre-remedial studies and investigations and post-remedial monitoring
and care.
"Reportable Event" means any of the events set forth in Section
4043 of ERISA.
"Required Banks" means at any time while no Loans or Letter of
Credit Liabilities are outstanding, Banks having at least 66-2/3% of
the aggregate amount of the Commitments and, at any time while Loans
or Letter of Credit Liabilities are outstanding, Banks holding at
least 66-2/3% of the outstanding aggregate principal amount of the
Loans and LC Participations.
"Required Payment" has the meaning assigned to it in Section
4.8.
"Reserve Requirement" means, for any Eurodollar Loan for any
Interest Period therefor, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation
D by member banks of the Federal Reserve System in New York City with
deposits exceeding $1,000,000,000 against "Eurocurrency Liabilities"
as such term is used in Regulation D. Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by reason of
any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the Adjusted Eurodollar Rate
is to be determined, or (ii) any category of extensions of credit or
other assets which include Eurodollar Loans.
"RICO" means the Racketeer Influenced and Corrupt Organization
Act of 1970, as amended from time to time.
"Security Documents" means all mortgages, deeds of trust,
security agreements, guaranties, assignments of production and
financing statements or such other instruments securing or ensuring
payment and performance of the Obligations or any part thereof, as the
same may be amended, supplemented, or modified from time to time.
"Sellers" means, collectively, Burlington Resources Oil & Gas
Company, a Delaware corporation, and Glacier Park Company, a Delaware
corporation.
"Stock Purchase Agreement" means the Stock Purchase Agreement,
dated as of December 6, 1996, among the Borrower and Trust Company of
the West and TCW Asset Management Company, in the capacities described
therein, TCW Debt and Royalty Fund IVB and TCW Debt and Royalty Fund
IVC.
"Subordinated Debt" means Debt issued by the Borrower which is
subordinated to all Debt of the Borrower owing to the Banks on terms
and conditions satisfactory to
AMENDED AND RESTATED CREDIT AGREEMENT - Page 17
the Banks, the proceeds of which shall be used to repay Advances
hereunder and to repay the Bridge Loan in its entirety.
"Subsidiary" means any corporation, partnership, joint
venture, business trust or other legal entity in which the Borrower,
either directly or indirectly through one or more intermediaries, owns
or holds beneficial or record ownership of a majority of the
outstanding voting securities or equity interests therein.
"Subsidiary Guaranty Agreement" means the Amended and Restated
Guaranty Agreement of the Subsidiaries (other than the Excluded
Subsidiaries) in favor of the Collateral Agent for the benefit of
itself, the other Agents, the Banks, the Issuing Banks, and the Bridge
Lenders in substantially the form of Exhibit "F" hereto, as the same
may be amended, supplemented, or modified.
"Subsidiary Pledge Agreement" means the Amended and Restated
Pledge Agreement of the Material Subsidiaries in favor of the
Collateral Agent for the benefit of itself, the other Agents, the
Banks, the Issuing Banks and the Bridge Lenders, in substantially the
form of Exhibit "E" hereto, as the same may be amended, supplemented,
or modified.
"Swap Obligations" shall mean any indebtedness, obligations
and liabilities owed by the Borrower to any Bank arising under
financial interest swap agreements entered into by Borrower to lock in
interest rates payable under this Agreement or commodity swap
agreements or similar contractual arrangements intended to hedge
market price fluctuations and interest rates applicable to this
Agreement or crude oil, natural gas or other Hydrocarbons; provided
that (i) no such commodity swap agreement shall be entered into which
would require Borrower to deliver, or make cash settlement payments
based upon quantities of Hydrocarbons which, in the aggregate for all
such agreements, would exceed 75% of the estimated production during
the term of such agreements from that portion of the Mortgaged
Properties consisting of proved developed producing reserves, and (ii)
such contracts shall not have a maturity exceeding two years, without
the prior consent of the Required Banks.
"Termination Date" means 12:00 P.M. New York, New York time on
April 30, 2002, or such earlier date and time on which the Commitments
terminate as provided in this Agreement.
"Type" means any type of Loan (i.e., Base Rate Loan or
Eurodollar Loan).
"UCC" means the Uniform Commercial Code as in effect in the
State of New York.
Section 1.2 Other Definitional Provisions. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof," "herein," and "hereunder" and words of
similar import referring to this Agreement refer to this
AMENDED AND RESTATED CREDIT AGREEMENT - Page 18
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all Article and Section references pertain to this
Agreement. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. Terms used herein that are defined in the
UCC, unless otherwise defined herein, shall have the meanings specified in the
UCC.
ARTICLE II
Loans
Section 2.1 Commitments. Subject to the terms and conditions of this
Agreement, each Bank severally agrees to make one or more Loans to the Borrower
from time to time from the date hereof to and including the Termination Date in
an aggregate principal amount at any time outstanding up to but not exceeding
the amount of such Bank's Commitment as then in effect, provided that the
aggregate amount of all Loans at any time outstanding shall not exceed the
lesser of (i) the aggregate amount of the Commitments minus the outstanding
Letter of Credit Liabilities or (ii) the Borrowing Base (as reduced from time to
time pursuant to the terms of this Agreement) minus the outstanding Letter of
Credit Liabilities. Subject to the foregoing limitations, and the other terms
and provisions of this Agreement, the Borrower may borrow, repay, and reborrow
hereunder the amount of the Commitments by means of Base Rate Loans and
Eurodollar Loans and, until the Termination Date, the Borrower may Convert Loans
of one Type into Loans of another Type. Loans of each Type made by each Bank
shall be made and maintained at such Bank's Applicable Lending Office for Loans
of such Type.
Section 2.2 Notes. The obligation of the Borrower to repay each Bank
for Loans made by such Bank and interest thereon shall be evidenced by a Note
executed by the Borrower, payable to the order of such Bank, in the principal
amount of such Bank's Commitment, and dated the date hereof or such later date
as may be required with respect to transactions contemplated by Section 14.8.
Section 2.3 Repayment of Loans. The Borrower shall repay the
unpaid principal amount of all Loans on the Termination Date.
Section 2.4 Interest. The unpaid principal amount of the Loans shall
bear interest at a varying rate per annum equal from day to day to the lesser of
(a) the Maximum Rate, or (b) the Applicable Rate. If at any time the Applicable
Rate for any Loan shall exceed the Maximum Rate, thereby causing the interest
accruing on such Loan to be limited to the Maximum Rate, then any subsequent
reduction in the Applicable Rate for such Loan shall not reduce the rate of
interest on such Loan below the Maximum Rate until the aggregate amount of
interest accrued on such Loan equals the aggregate amount of interest which
would have accrued on such Loan if the Applicable Rate had at all times been in
effect. Accrued and unpaid interest on the Loans shall be due and payable as
follows:
AMENDED AND RESTATED CREDIT AGREEMENT - Page 19
(i) in the case of Base Rate Loans, on each Quarterly
Payment Date and on the Termination Date;
(ii) in the case of each Eurodollar Loan, on the last day of
the Interest Period with respect thereto or in the case of any
Interest Period that exceeds three months, on the last day of the
third month of the Interest Period and on the last day of the Interest
Period with respect thereto;
(iii) upon the payment or prepayment of any Loan or the
Conversion of any Loan to a Loan of another Type (but only on the
principal amount so paid, prepaid, or Converted); and
(iv) on the Termination Date.
Notwithstanding the foregoing, any outstanding principal of any Loan and (to the
fullest extent permitted by law) any other amount payable by the Borrower under
this Agreement or any other Loan Document that is not paid in full when due
(whether at stated maturity, by acceleration, or otherwise) shall bear interest
at the Default Rate for the period from and including the due date thereof to
but excluding the date the same is paid in full. Interest payable at the Default
Rate shall be payable from time to time on demand.
Section 2.5 Use of Proceeds. The proceeds of Loans shall be used by
the Borrower to repay existing Debt, to finance the Acquisition, to develop
property, to support working capital and for general corporate purposes.
Section 2.6 Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Bank a commitment fee on the daily
average unused portion of the amount available under such Bank's Commitment
pursuant to the Borrowing Base (as reduced from time to time pursuant to the
terms of this Agreement) for the period from and including the date of this
Agreement to and including the Termination Date, at the rate of three-eighths
percent of one percent per annum, such rate to be based on a 360 day year and
the actual number of days elapsed. The accrued commitment fee shall be payable
in arrears on each Quarterly Payment Date and on the Termination Date.
Section 2.7 Reduction or Termination of Commitments. The Borrower
shall have the right to terminate in whole or reduce in part the available
Borrowing Base or the unused portion of the Commitments upon at least three
Business Days' prior notice (which notice shall be irrevocable) to the
Administrative Agent specifying the effective date thereof, whether a
termination or reduction is being made, and the amount of any partial reduction,
provided, however, the Commitment shall never be reduced below an amount equal
to the outstanding Letter of Credit Liabilities. Each partial reduction shall be
in the amount of $1,000,000 or an integral multiple thereof and the Borrower
shall simultaneously prepay the amount by which the unpaid principal amount of
the Loans plus the outstanding Letter of Credit Liabilities exceeds the lesser
of (i) an amount equal to the Borrowing Base, or (ii) the Commitments (after
giving effect to such notice) plus accrued and unpaid interest on the principal
amount so prepaid. The
AMENDED AND RESTATED CREDIT AGREEMENT - Page 20
Borrowing Base and/or the Commitments may not be reinstated after they have been
terminated or reduced.
Section 2.8 Borrowing Base.
(a) The Borrowing Base shall be cumulative of all other
limitations contained in this Agreement and the other Loan Documents.
The initial Borrowing Base shall be $130,000,000, and shall be
redetermined as provided herein and in connection with any issuance of
Subordinated Debt by the Borrower. In the event that the Borrower
issues $125,000,000 of Subordinated Debt, the Borrowing Base shall be
permanently reduced to $75,000,000; in the case of other issuances of
Subordinated Debt by the Borrower, the Borrowing Base shall be
redetermined, in the sole discretion of the Majority Banks, as
provided herein. In addition, the Borrowing Base shall be redetermined
semiannually on each Determination Date, commencing October 1, 1997.
Upon delivery of the engineering reserve evaluation reports required
by subsections 9.1(l) and (m) (collectively, the "Engineering
Reports") and such other reports, data and supplemental information as
may, from time to time, be reasonably requested by the Administrative
Agent and the Banks, together with a certificate from the chief
financial officer of Borrower that, to the best of such officer's
knowledge, after making due inquiry (A) the factual information upon
which such Engineering Reports are based is true and correct, (B) the
certificate identifies the Properties covered by the Engineering
Reports that have not been previously included in any prior
Engineering Report, and (C) no Mortgaged Properties have been sold
since the last Determination Date, on each Determination Date or on
such other date as otherwise permitted hereunder, the Administrative
Agent shall redetermine the Borrowing Base in accordance with its
customary practices and standards for loans secured by similar types
of property. Within 45 days of its receipt of the Engineering Reports,
the Administrative Agent shall provide such redetermined Borrowing
Base in writing to the Banks. Within ten days after their receipt of
such information, the Banks shall give the Administrative Agent
written notice of whether the Banks approve of the Administrative
Agent's proposed Borrowing Base. If, for any reason, the Majority
Banks do not approve of the proposed Borrowing Base, the
Administrative Agent and the Majority Banks shall consult with one
another to determine the Borrowing Base that will be approved by the
Majority Banks. The Borrowing Base established pursuant to this
subsection shall be effective as of the ensuing Determination Date and
shall remain in effect until it is subsequently redetermined pursuant
to this subsection 2.8(a) or subsection 2.8(b). If a redetermination
in 1997 results in an increase in the Borrowing Base, the Borrower
shall pay to the Administrative Agent for the account of the Banks, a
fee for such increase in the amount of one-quarter of one percent of
the increase; in all other cases, any increase shall be subject to
agreement of the Borrower and the Banks with respect to a fee, if any,
for such increase.
(b) In addition to the determinations of the Borrowing Base
required pursuant to subsection 2.8(a), special determinations thereof
may be made for any reason (but not more than once between
Determination Dates) at the option of either (i) the Borrower or (ii)
Required Banks. To request a special determination of the Borrowing
Base, the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 21
Person requesting such determination shall provide the Agent and the
Borrower with a written request of such determination. Any such
special determination of the Borrowing Base shall be made by the Banks
in consultation with one another using their customary standards for
oil and gas lending and shall be based upon the most recent
Engineering Reports delivered to the Banks by the Borrower and such
other reports and data as the Banks may reasonably request. The Agent
shall notify the Borrower of the redetermined Borrowing Base within 45
days of the Agent's receipt of the special determination request and
the redetermined Borrowing Base shall be effective upon such
notification. If a redetermination in 1997 results in an increase in
the Borrowing Base, the Borrower shall pay to the Agent for the
account of Banks, a fee for such increase in the amount of one-quarter
of one percent of the increase; in all other cases any increase shall
be subject to agreement of the Borrower and the Banks with respect to
a fee, if any, for such increase. If the redetermination results in a
decrease in the Borrowing Base, the Borrower shall repay the Loans
within six months of such redetermination in six equal monthly
installments, each in an amount equal 1/6 of the Borrowing Base
Deficiency.
ARTICLE III
Letters of Credit
Section 3.1 Letters of Credit. Subject to the terms and conditions of
this Agreement, each Issuing Bank agrees to issue one or more Letters of Credit
for the account of the Borrower from time to time from the date hereof to and
including the Termination Date; provided, however, that the outstanding Letter
of Credit Liabilities shall not at any time exceed the lesser of (1)
$20,000,000, (2) an amount equal to the aggregate amount of the Commitments
minus the sum of the outstanding Loans, or (3) the Borrowing Base (as reduced
from time to time) minus the sum of the outstanding Loans. Each Letter of Credit
shall have an expiration date not beyond the Termination Date, shall be payable
in Dollars, must be satisfactory in form and substance to the applicable Issuing
Bank, and shall be issued pursuant to such documents and instruments (including,
without limitation, such Issuing Bank's standard application and agreement for
issuance of letters of credit as then in effect [each an "L/C Application"]) as
such Issuing Bank may require (collectively, the "L/C Documents"). No Letter of
Credit shall require any payment by the Issuing Bank to the beneficiary
thereunder pursuant to a drawing prior to the third Business Day following
presentment of a draft and any related documents to the Issuing Bank.
Section 3.2 Participation by Banks. By the issuance of any Letter of
Credit and without any further action on the part of the applicable Issuing Bank
or any of the Banks in respect thereof, each Issuing Bank hereby grants to each
Bank and each Bank hereby irrevocably agrees to acquire from each Issuing Bank a
participation in each such Letter of Credit and the related Letter of Credit
Liabilities, effective upon the issuance thereof without recourse or warranty,
equal to such Bank's pro rata part (based on the aggregate Commitments) of such
Letter of Credit and Letter of Credit Liabilities. Each Issuing Bank shall
provide a copy of each Letter of Credit to each other Bank promptly after
issuance. This agreement to grant and acquire participations is an agreement
between each Issuing Bank and the Banks, and neither Borrower
AMENDED AND RESTATED CREDIT AGREEMENT - Page 22
nor any beneficiary of a Letter of Credit shall be entitled to rely thereon.
Borrower agrees that each Bank purchasing a participation from any Issuing Bank
pursuant to this Section 3.2 may exercise all its rights to payment against
Borrower including the right of setoff, with respect to such participation as
fully as if such Bank were the direct creditor of Borrower in the amount of such
participation.
Section 3.3 Procedure for Issuing Letters of Credit. Each Letter of
Credit shall be issued on at least five Business Days prior notice from the
Borrower to the applicable Issuing Bank (with a copy to the Agent) by means of a
Letter of Credit Request Form describing the transaction proposed to be
supported thereby and specifying (a) the requested date of issuance (which shall
be a Business Day), (b) the face amount of the Letter of Credit, (c) the
expiration date of the Letter of Credit, (d) the name and address of the
beneficiary and the account party, and (e) the form of the draft and any other
documents required to be presented at the time of any drawing (such notice to
set forth the exact wording of such documents or to attach copies thereof). Such
Issuing Bank shall notify each Bank of the contents of each such notice on the
day such notice is received by such Issuing Bank if received by 12:00 P.M. New
York, New York time on a Business Day and otherwise on the next succeeding
Business Day. Upon fulfillment of the applicable conditions precedent contained
in Article VII, such Issuing Bank shall make the applicable Letter of Credit
available to Borrower or, if so requested by Borrower, to the beneficiary of the
Letter of Credit.
Section 3.4 Reimbursements; Payments Constitute Loans. Each payment by
an Issuing Bank pursuant to a drawing under a Letter of Credit shall constitute
and be deemed a Base Rate Loan by each Bank to the Borrower under such Bank's
Note and this Agreement as of the day and time such payment is made by such
Issuing Bank and in the amount of such Bank's pro rata share of such payment;
provided, however, if the applicable conditions precedent contained in Section
7.2 are not satisfied on the date such payment is made, the Borrower shall pay
to the Administrative Agent for the account of the Issuing Bank, prior to 12:00
P.M. New York, New York time on the Business Day immediately following the date
such payment is made by the Issuing Bank, the amount of such payment, together
with interest thereon at the Base Rate plus the Applicable Base Rate Margin from
the date such payment is made by the Issuing Bank. If the Borrower fails to
reimburse the Issuing Bank for such drawing prior to 12:00 P.M. New York, New
York time on the Business Day following the date such payment is made by the
Issuing Bank, such amount shall bear interest at the Default Rate for the period
from and including the due date thereof to but excluding the date the same is
paid in full. Promptly on the Business Day immediately following the date each
payment is made by an Issuing Bank pursuant to a drawing under a Letter of
Credit and after receipt of notice from the Issuing Bank of the Borrower's
failure to reimburse the Issuing Bank for such payment and the amount of such
payment, each Bank will make available to the Administrative Agent for the
account of the Issuing Bank at the Principal Office in immediately available
funds, such Bank's pro rata share of such payment. Each Bank hereby agrees that
its obligation to participate in each Letter of Credit, and to pay or to
reimburse the Issuing Bank for its participating share of the drafts drawn or
amounts otherwise paid thereunder, is absolute, irrevocable and unconditional
and shall not be affected by any circumstances whatsoever (including, without
limitation, the occurrence or
AMENDED AND RESTATED CREDIT AGREEMENT - Page 23
continuance of any Default or Event of Default), and that each such payment
shall be made without offset, abatement, withholding or other reduction
whatsoever.
Section 3.5 Letter of Credit Fee. The Borrower shall pay to the
Administrative Agent for the account of the Banks (to be shared ratably) a
nonrefundable Letter of Credit fee payable on the date each Letter of Credit is
issued, renewed or extended in an amount equal to the greater of (i) 1% per
annum of the face amount of such Letter of Credit, for the period during which
such Letter of Credit is scheduled to remain outstanding, based on a 360 day
year and the actual number of days elapsed, or (ii) $350. A nonrefundable fee in
the amount of 0.125% of the face amount of such Letter of Credit shall be
payable at the time of issuance by the Borrower to the applicable Issuing Bank
for its own account. In addition to the foregoing fees, the Borrower shall pay
or reimburse the applicable Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by such Issuing Bank in issuing, negotiating
or otherwise effecting payment under, transferring, amending or otherwise
administering any Letter of Credit.
Section 3.6 Obligations Absolute. The obligations of the Borrower
under this Agreement and the other Loan Documents (including without limitation
the obligation of the Borrower to reimburse the Issuing Bank for draws under any
Letter of Credit) shall be absolute, unconditional, and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement and the
other Loan Documents under all circumstances whatsoever, including without
limitation the following circumstances:
(a) Any lack of validity or enforceability of any Letter
of Credit or any other Loan Document;
(b) Any amendment or waiver of or any consent to departure
from any Loan Document;
(c) The existence of any claim, set-off, counterclaim, defense
or other rights which the Borrower, any Obligated Party, or any other
Person may have at any time against any beneficiary of any Letter of
Credit, the Issuing Bank, or any other Person, whether in connection
with this Agreement or any other Loan Document or any unrelated
transaction;
(d) Any statement, draft, or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(e) Payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or other document which does not
comply with the terms of such Letter of Credit; or
(f) Any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 24
Section 3.7 Limitation of Liability. The Borrower assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit with respect to
its use of such Letter of Credit. Neither the Issuing Bank, any Agent, any Bank
nor any of their officers or directors shall have any responsibility or
liability to the Borrower or any other Person for: (a) the failure of any draft
to bear any reference or adequate reference to any Letter of Credit, or the
failure of any documents to accompany any draft at negotiation, or the failure
of any Person to surrender or to take up any Letter of Credit or to send
documents apart from drafts as required by the terms of any Letter of Credit, or
the failure of any Person to note the amount of any instrument on any Letter of
Credit, each of which requirements, if contained in any Letter of Credit itself,
it is agreed may be waived by the Issuing Bank, (b) errors, omissions,
interruptions, or delays in transmission or delivery of any messages, (c) the
validity, sufficiency, or genuineness of any draft or other document, or any
endorsement(s) thereon, even if any such draft, document or endorsement should
in fact prove to be in any and all respects invalid, insufficient, fraudulent,
or forged or any statement therein is untrue or inaccurate in any respect, (d)
the payment by the Issuing Bank to the beneficiary of any Letter of Credit
against presentation of any draft or other document that does not comply with
the terms of the Letter of Credit, or (e) any other circumstance whatsoever in
making or failing to make any payment under a Letter of Credit. The Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 3.8 Letter of Credit Documents. Certain additional provisions
regarding the obligations, liabilities, rights, remedies and agreements of the
Borrower and the Issuing Bank relative to the Letters of Credit shall be set
forth in the L/C Documents.
Section 3.9 Replacement of the Issuing Bank. Borrower may, with the
approval of Required Banks, appoint a successor Issuing Bank hereunder upon the
condition precedent that such successor Issuing Bank shall become a party to
this Agreement and expressly agree to be bound by the terms and conditions
contained in this Agreement pertaining to the Issuing Bank. Upon the appointment
of a successor Issuing Bank, the Issuing Bank replaced by such successor Issuing
Bank shall cease to issue Letters of Credit but shall continue to carry out its
obligations hereunder and shall continue to have the benefit of this Agreement
and the other Loan Documents with respect to the outstanding Letters of Credit
issued by it until all such Letters of Credit have expired and any drawings
thereunder have been reimbursed in full.
ARTICLE IV
Borrowing Procedure; Payments
Section 4.1 Borrowing Procedure. The Borrower shall give the
Administrative Agent notice by means of a Loan Request Form of each requested
Loan at least one Business Day before the requested date of each Base Rate Loan
and at least three Business Days before the requested date of each Eurodollar
Loan, specifying: (a) the requested date of such Loan (which shall be a Business
Day), (b) the amount of such Loan, (c) the Type of the Loan, and (d) in the case
of a Eurodollar Loan, the duration of the Interest Period for such Loan. The
Administrative Agent at its option may accept telephonic requests for Loans,
provided that such acceptance shall
AMENDED AND RESTATED CREDIT AGREEMENT - Page 25
not constitute a waiver of the Administrative Agent's right to delivery of a
Loan Request Form in connection with subsequent Loans. Any telephonic request
for a Loan by the Borrower shall be promptly confirmed by submission of a
properly completed Loan Request Form to the Agent. Each Loan shall be in a
minimum principal amount of $500,000 or an integral multiple thereof. The
aggregate principal amount of Eurodollar Loans having the same Interest Period
shall be at least equal to $500,000. The Administrative Agent shall notify each
Bank of the contents of each such notice. Not later than 1:00 P.M. New York, New
York time on the date specified for each Loan hereunder, each Bank will make
available to the Administrative Agent at the Principal Office in immediately
available funds, for the account of the Borrower, its pro rata share of each
Loan. After the Administrative Agent's receipt of such funds and subject to the
other terms and conditions of this Agreement, the Administrative Agent will make
each Loan available to the Borrower by depositing the same, in immediately
available funds, in an account of the Borrower (designated by the Borrower)
maintained with the Administrative Agent at the Principal Office. All notices
under this Section shall be irrevocable and shall be given not later than 1:00
P.M. New York, New York, time on the day which is not less than the number of
Business Days specified above for such notice.
Section 4.2 Conversions and Continuations. The Borrower shall have the
right from time to time to Convert all or part of a Loan of one Type into a Loan
of another Type or to Continue Eurodollar Loans as Eurodollar Loans by giving
the Administrative Agent written notice at least three Business Days before
Conversion into a Base Rate Loan and at least three Business Days before
Conversion into or Continuation of a Eurodollar Loan, specifying: (a) the
Conversion or Continuation date, (b) the amount of the Loan to be Converted or
Continued, (c) in the case of Conversions, the Type of Loan to be Converted
into, and (d) in the case of a Continuation of or Conversion into a Eurodollar
Loan, the duration of the Interest Period applicable thereto; provided that (i)
Eurodollar Loans may only be Converted on the last day of the Interest Period,
and (ii) except for Conversions into Base Rate Loans, no Conversions shall be
made while a Default has occurred and is continuing. The Administrative Agent
shall promptly notify each Bank of the contents of each such notice. All notices
under this Section shall be irrevocable and shall be given not later than 12:00
P.M. New York, New York time on the day which is not less than the number of
Business Days specified above for such notice. If the Borrower shall fail to
give the Administrative Agent the notice as specified above for Continuation or
Conversion of a Eurodollar Loan prior to the end of the Interest Period with
respect thereto, such Eurodollar Loan shall be Converted automatically into a
Base Rate Loan on the last day of the then current Interest Period for such
Eurodollar Loan.
Section 4.3 Method of Payment. All payments of principal, interest,
and other amounts to be made by the Borrower under this Agreement and the other
Loan Documents shall be made to the Administrative Agent at the Principal Office
for the account of each Bank's Applicable Lending Office in Dollars and in
immediately available funds, without setoff, deduction, or counterclaim, not
later than 12:00 P.M., New York, New York time on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Borrower
shall, at the time of making each such payment, specify to the Administrative
Agent the sums payable by the Borrower under this Agreement and the other Loan
Documents to which such payment is to be
AMENDED AND RESTATED CREDIT AGREEMENT - Page 26
applied (and in the event that the Borrower fails to so specify, or if an Event
of Default has occurred and is continuing, the Administrative Agent may apply
such payment to the Obligations in such order and manner as it may elect in its
sole discretion, subject to Section 4.6 hereof). Each payment received by the
Administrative Agent under this Agreement or any other Loan Document for the
account of a Bank shall be paid promptly to such Bank, in immediately available
funds, for the account of such Bank's Applicable Lending Office. Whenever any
payment under this Agreement or any other Loan Document shall be stated to be
due on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest and commitment fee, as
the case may be.
Section 4.4 Voluntary Prepayment. The Borrower may, upon at least one
Business Day's prior notice to the Administrative Agent in the case of Base Rate
Loans and at least three Business Days' prior notice to the Administrative Agent
in the case of Eurodollar Loans, prepay the Loans in whole at any time or from
time to time in part without premium or penalty (except as set forth in Section
5.5) but with accrued interest to the date of prepayment on the amount so
prepaid, provided that (a) Eurodollar Loans may be prepaid only on the last day
of the Interest Period for such Loans, and (b) each partial prepayment shall be
in the principal amount of $500,000 or an integral multiple thereof. All notices
under this Section 4.4 shall be irrevocable and shall be given not later than
12:00 P.M. New York, New York, time on the day which is not less than the number
of Business Days specified above for such notice.
Section 4.5 Mandatory Prepayment or Addition of Collateral.
(a) If at any time a Borrowing Base Deficiency exists, the
Administrative Agent shall send the Borrower a Payment Notice and the
Borrower shall immediately (except in the case of a redetermination of
the Borrowing Base pursuant to Section 2.8(b)) prepay the outstanding
Loans by the amount of the Borrowing Base Deficiency, plus accrued and
unpaid interest on the amount so prepaid in accordance with this
Section 4.5 unless Borrower exercises the option to increase the
Collateral as provided by Section 4.6. If within 30 days of the date
Borrower receives a Payment Notice the Borrower has not prepaid the
Loans by the amount of the Borrowing Base Deficiency or complied with
Section 4.6 hereof, the amount of the Borrowing Base Deficiency shall
be due and payable in six monthly installments, each in the amount of
one-sixth of the principal amount of the Borrowing Base Deficiency,
plus accrued and unpaid interest thereon, with the first such
installment being due and payable immediately (and in any event,
within 33 days after Borrower received the Payment Notice). During any
period of time in which a Borrowing Base Deficiency has occurred and
is continuing, the Obligations shall bear interest at the Borrowing
Base Deficiency Rate.
(b) After a Borrowing Base has been determined, upon the sale
by the Borrower of any Mortgaged Property (other than the sale of
Hydrocarbons after severance in the ordinary course of business), the
Borrowing Base shall be reduced, effective on the date of consummation
of such sale, by an amount which the Borrower certifies in writing to
the Banks is the Borrowing Base value last assigned to such Mortgaged
Property
AMENDED AND RESTATED CREDIT AGREEMENT - Page 27
according to the most recent Engineering Reports delivered to the
Banks; provided, however, that if the Required Banks, for any reason,
disagree with the proposed Borrowing Base value certified by the
Borrower, then the Required Banks shall determine, which determination
shall be conclusive absent manifest error, the Borrowing Base value
last assigned to such Mortgaged Property according to the most recent
Engineering Reports delivered to the Banks; provided, further, that no
such reduction to the Borrowing Base shall be required if the
aggregate net sales proceeds of all sales of Mortgaged Property
occurring since the last Determination Date do not exceed $1,000,000,
and provided further, that all such sales shall be subject to the
provisions of Section 10.8. The net proceeds received from the sale of
such Mortgaged Property shall on the first Business Day after receipt,
be applied, to the extent that the sale of any such Mortgaged Property
causes a Borrowing Base Deficiency to exist, to the outstanding Loans
in an amount required to eliminate the Borrowing Base Deficiency. So
long as no Default has occurred and is continuing, any remaining
proceeds may be retained by the Borrower.
(c) If, subsequent to the Closing Date, unless the Required
Banks and the Borrower shall otherwise agree, the Borrower or any of
its Subsidiaries shall issue any Debt, capital stock, equivalent
ownership interests, warrants or options to purchase any of the
foregoing, including without limitation the Subordinated Debt, or
shall incur any Debt other than Permitted Debt, 100% of the Net Cash
Proceeds thereof shall on the first Business Day after receipt, be
applied (i) first, to the Bridge Loan, until such Bridge Loan has been
repaid in full and (ii) second, to the outstanding Loans.
(d) If the Borrower shall make any disposition of assets
(other than dispositions of Hydrocarbons in the ordinary course of
business) permitted by Section 10.8, then 100% of the Net Cash
Proceeds from such disposition shall on the first Business Day after
receipt, be applied (i) first, to the Bridge Loan, unless otherwise
required to be applied to the outstanding Loans pursuant to Section
4.5(b) and (ii) second, to the outstanding Loans.
(e) Within ten days after Borrower has received a Payment
Notice, Borrower shall make a prepayment of principal on the Notes
equal to the amount by which the outstanding principal balance of the
Loans exceeds the Borrowing Base as of such date. Provided, however,
that if the Payment Notice and demand for payment is made in
connection with a quarterly redetermination of the Borrowing Base no
payment of the amount specified above shall be due if Borrower has
notified Administrative Agent in writing (within three days after
Borrower has received the Payment Notice) of Borrower's election to
comply with Section 4.6 hereof and has provided the Administrative
Agent with complete descriptions of the Oil and Gas Properties or
other properties or interests ("New Properties") which Borrower shall
add or cause to be added to the Collateral and subject to Liens in
favor of the Administrative Agent for purposes of Section 4.6 hereof.
Section 4.6 Borrower's Option to Increase Collateral. Within ten days after
the date on which the Administrative Agent receives notice of Borrower's
election to comply with this
AMENDED AND RESTATED CREDIT AGREEMENT - Page 28
Section 4.6 in order to avoid a prepayment of amounts required pursuant to
Section 4.5 hereof, Borrower shall grant to the Collateral Agent for the benefit
of itself, the Administrative Agent, the Documentation Agent, the Issuing Banks
and the Banks, valid, enforceable, perfected, first priority liens in the New
Properties, subject to Security Documents and accompanied by title opinions
and/or other evidence of title, each of which shall be in form and substance
satisfactory to the Collateral Agent and the Banks. All such Collateral shall be
subject to a subordinate Lien securing the Bridge Loan. In addition, Borrower
shall deliver to the Collateral Agent upon request, such other information,
data, and reports describing the New Properties and the reserves and production
related thereto, as the Collateral Agent and the Banks shall reasonably request.
Within a reasonable period of time after the date on which the Administrative
Agent receives notice of Borrower's election hereunder, the Banks shall
redetermine (as of the immediately preceding Determination Date) and notify
Borrower of the Borrowing Base determined as if the New Properties were part of
the Collateral as of such Determination Date. Within ten Business Days after
receipt of such notice, Borrower shall make a prepayment of principal on the
Loans equal to the amount (if any) by which the outstanding principal balance of
the Loans, as of such Determination Date, exceeds the Borrowing Base as of such
Determination Date as determined by the Banks pursuant to this Section 4.6. No
redetermination to increase the Borrowing Base shall be effective until the
Collateral Agent has valid, perfected, enforceable first priority Liens on the
New Properties that are to be part of the Collateral.
Section 4.7 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each Loan shall be made by the Banks under Section 2.1 or
deemed made by the Banks under Section 3.4, each payment of commitment fee under
Section 2.6 and letter of credit fees under Section 3.5 (other than the 0.125%
issuance fee payable to the Issuing Bank for its own account) shall be made for
the account of the Banks, and each termination or reduction of the Commitments
under Section 2.7 shall be applied to the Commitments of the Banks, pro rata
according to the respective unused Commitments and each Letter of Credit shall
be deemed participated in by the Banks, pro rata according to the amounts of
their respective Commitments; (b) the making, Conversion, and Continuation of
Loans of a particular Type (other than Conversions provided for by Section 5.4)
shall be made pro rata among the Banks holding Loans of such Type according to
the amounts of their respective Commitments; (c) each payment and prepayment of
principal of or interest on Loans by the Borrower of a particular Type shall be
made to the Administrative Agent for the account of the Banks holding Loans of
such Type pro rata in accordance with the respective unpaid principal amounts of
such Loans held by such Banks; and (d) Interest Periods for Loans of a
particular Type shall be allocated among the Banks holding Loans of such Type
pro rata according to the respective principal amounts held by such Banks.
Section 4.8 Non-Receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Bank or the Borrower (the
"Payor") prior to the date on which such Bank is to make payment to the
Administrative Agent of the proceeds of a Loan to be made by it hereunder or the
Borrower is to make a payment to the Administrative Agent for the account of one
or more of the Banks, as the case may be (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Administrative
AMENDED AND RESTATED CREDIT AGREEMENT - Page 29
Agent, the Administrative Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on such date and, if
the Payor has not in fact made the Required Payment to the Administrative Agent,
the recipient of such payment shall, on demand, pay to the Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period.
Section 4.9 Withholding Tax Exemption. Each Bank that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Administrative Agent two
duly completed copies of Form 1001 or 4224, certifying in either case that such
Bank is entitled to receive payments from the Borrower under any Loan Document
without deduction or withholding of any United States federal income taxes. Each
Bank which so delivers a Form 1001 or 4224 further undertakes to deliver to
Borrower and the Administrative Agent two additional copies of such form (or a
successor form) on or before the date such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Administrative Agent, in
each case certifying that such Bank is entitled to receive payments from the
Borrower under any Loan Document without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank advises the Borrower
and the Administrative Agent that it is not capable of receiving such payments
without any deduction or withholding of United States federal income tax.
Section 4.10 Computation of Interest. Interest on the Eurodollar Loans
shall be computed on the basis of a year of 360 days and the actual number of
days elapsed (including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be.
Interest on Base Rate Loans and all other amounts payable by the Borrower
hereunder shall be computed on the basis of a year of 365 days and the actual
number of days elapsed (including the first day but excluding the last day).
ARTICLE V
Yield Protection and Illegality
Section 5.1 Additional Costs.
(a) The Borrower shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be necessary to
compensate it for any costs incurred by such Bank which such Bank
determines are attributable to its making or
AMENDED AND RESTATED CREDIT AGREEMENT - Page 30
maintaining of any Eurodollar Loans hereunder or its obligation to
make any of such Loans hereunder, or any reduction in any amount
receivable by such Bank hereunder in respect of any such Loans or such
obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in
respect of any of such Loans (other than taxes imposed on the
overall net income of such Bank or its Applicable Lending
Office for any Eurodollar Loans by the jurisdiction in which
such Bank has its principal office or such Applicable Lending
Office);
(ii) imposes or modifies any reserve, special
deposit, minimum capital, capital ratio, or similar
requirement relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or
commitments of, such Bank (including any Eurodollar Loans or
any deposits referred to in the definition of "Eurodollar
Rate" in Section 1.1 hereof); or
(iii) imposes any other condition affecting this
Agreement or the Notes or any of such extensions of credit or
liabilities or commitments.
Each Bank will notify the Borrower of any event occurring after the
date of this Agreement which will entitle such Bank to compensation
pursuant to this Section 5.1(a) as promptly as practicable and in any
event, within 180 days, after it obtains knowledge thereof and
determines to request such compensation, and will designate a
different Applicable Lending Office for the Loans affected by such
event if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such
Bank, violate any law, rule, or regulation or be in any way
disadvantageous to such Bank, provided that such Bank shall have no
obligation to so designate an Applicable Lending Office located
outside the United States of America. Borrower shall not be obligated
to pay for any such amounts if such Bank does not notify the Borrower
that such additional amounts are owing within 180 days of the date
such Bank obtains knowledge thereof. Each Bank will furnish the
Borrower with a certificate setting forth the basis and the amount of
each request of such Bank for compensation under this Section 5.1(a).
If any Bank requests compensation from the Borrower under this Section
5.1(a), the Borrower may, by notice to such Bank (with a copy to the
Administrative Agent) suspend the obligation of such Bank to make or
Continue making, or Convert Loans into, Loans of the Type with respect
to which such compensation is requested until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.4 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of
this Section 5.1, in the event that, by reason of any Regulatory
Change that becomes effective after date hereof, any Bank either (i)
incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other
liabilities of such
AMENDED AND RESTATED CREDIT AGREEMENT - Page 31
Bank which includes deposits by reference to which the interest rate
on Eurodollar Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of such Bank which
includes Eurodollar Loans or (ii) becomes subject to restrictions on
the amount of such a category of liabilities or assets which it may
hold, then, if such Bank so elects by notice to the Borrower (with a
copy to the Administrative Agent), the obligation of such Bank to make
or Continue making, or Convert Loans into, Eurodollar Loans hereunder
shall be suspended until such Regulatory Change ceases to be in effect
(in which case the provisions of Section 5.4 hereof shall be
applicable).
(c) Determinations and allocations by any Bank for purposes of
this Section 5.1 of the effect of any Regulatory Change on its costs
of maintaining its obligations to make Eurodollar Loans or of making
or maintaining Eurodollar Loans or on amounts receivable by it in
respect of Eurodollar Loans, and of the additional amounts required to
compensate such Bank in respect of any Additional Costs, shall be
conclusive, provided that such determinations and allocations are made
on a reasonable basis.
Section 5.2 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if with respect to any Eurodollar Loans for any Interest Period
therefor:
(a) The Administrative Agent determines (which determination
shall be conclusive) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Rate"
in Section 1.1 hereof are not being provided in the relative amounts
or for the relative maturities for purposes of determining the rate of
interest for Eurodollar Loans as provided in this Agreement; or
(b) Required Banks determine (which determination shall be
conclusive) and notify the Administrative Agent that the relevant
rates of interest referred to in the definition of "Eurodollar Rate"
in Section 1.1 hereof on the basis of which the rate of interest for
such Loans for such Interest Period is to be determined do not
accurately reflect the cost to the Banks of making or maintaining
Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof
specifying the relevant amounts or periods, and so long as such condition
remains in effect, the Banks shall be under no obligation to make additional
Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans and the
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Eurodollar Loans, either prepay such Eurodollar Loans or Convert
such Eurodollar Loans into Base Rate Loans in accordance with the terms of this
Agreement.
Section 5.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to (a) honor its obligation to make Eurodollar Loans hereunder or
(b) maintain Eurodollar Loans hereunder, then such Bank shall promptly notify
the Borrower (with a copy to the Administrative Agent) thereof and such Bank's
obligation to make or maintain Eurodollar Loans and to Convert Base Rate Loans
into Eurodollar Loans hereunder shall be suspended until such time as such Bank
may
AMENDED AND RESTATED CREDIT AGREEMENT - Page 32
again make and maintain Eurodollar Loans (in which case the provisions of
Section 5.4 hereof shall be applicable).
Section 5.4 Treatment of Eurodollar Loans. If the Eurodollar Loans of
any Bank are to be Converted pursuant to Section 5.1 or 5.3 hereof, such Bank's
Eurodollar Loans shall be automatically Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for the Eurodollar Loans (or,
in the case of a Conversion required by Section 5.1(b) or 6.3 hereof, on such
earlier date as such Bank may specify to the Borrower with a copy to the Agent)
and, unless and until such Bank gives notice as provided below that the
circumstances specified in Section 5.1 or 5.3 hereof which gave rise to such
Conversion no longer exist:
(a) To the extent that such Bank's Eurodollar Loans have been
so Converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Eurodollar Loans shall be applied
instead to its Base Rate Loans;
(b) All Loans which would otherwise be made or Continued by
such Bank as Eurodollar Loans shall be made as or Converted into Base
Rate Loans and all Loans of such Bank which would otherwise be
Converted into Eurodollar Loans shall be Converted instead into (or
shall remain as) Base Rate Loans; and
If such Bank gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 5.1 or 5.3 hereof which gave
rise to the Conversion of such Bank's Eurodollar Loans pursuant to this Section
5.4 no longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans are outstanding,
such Bank's Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar
Loans to the extent necessary so that, after giving effect thereto, all Loans
held by the Banks holding Eurodollar Loans and by such Bank are held pro rata
(as to principal amounts, Types, and Interest Periods) in accordance with their
respective Commitments.
Section 5.5 Compensation. The Borrower shall pay to the Administrative
Agent for the account of each Bank, upon the request of such Bank through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss, cost, or expense
incurred by it as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
outstanding Loans pursuant to Section 12.2) on a date other than the
last day of an Interest Period for such Loan; or
(b) Any failure by the Borrower for any reason (including,
without limitation, the failure of any conditions precedent specified
in Article VII to be satisfied) to borrow, Convert, or prepay a
Eurodollar Loan on the date for such borrowing, Conversion, or
prepayment, specified in the relevant notice of borrowing, prepayment,
or Conversion under this Agreement.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 33
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid or Converted
or not borrowed for the period from the date of such payment, Conversion, or
failure to borrow to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow, the Interest Period for such Loan which would
have commenced on the date specified for such borrowing) at the applicable rate
of interest for such Loan provided for herein over (ii) the interest component
of the amount such Bank would have bid in the London interbank market for Dollar
deposits of leading banks and amounts comparable to such principal amount and
with maturities comparable to such period.
Section 5.6 Capital Adequacy. If after the date hereof, any Bank shall
have determined that the adoption or implementation of any applicable law, rule,
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Bank (or its parent) with any guideline, request,
or directive regarding capital adequacy (whether or not having the force of law)
of any central bank or other Governmental Authority, has or would have the
effect of reducing the rate of return on such Bank's (or its parent's) capital
as a consequence of its obligations hereunder or the transactions contemplated
hereby to a level below that which such Bank (or its parent) could have achieved
but for such adoption, implementation, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within ten
Business Days after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank (or its parent) for such reduction; provided, however, Borrower shall not
be liable for any such amounts unless the Bank to which such amounts are due
gives Borrower notice thereof within 180 days of the date that such Bank obtains
knowledge that such additional compensation is owing. A certificate of such Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive, provided that the
determination thereof is made on a reasonable basis. In determining such amount
or amounts, such Bank may use any reasonable averaging and attribution methods.
Section 5.7 Additional Costs in Respect of Letters of Credit. If as a
result of any Regulatory Change there shall be imposed, modified, or deemed
applicable any tax, reserve, special deposit, or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder or the commitments to issue or participate in Letters of Credit
hereunder, and the result shall be to increase the cost to the Issuing Banks or
any Bank of issuing, maintaining or participating in any Letter of Credit or its
commitment to issue or participate in Letters of Credit hereunder or reduce any
amount receivable by any Issuing Bank or any Bank hereunder in respect of any
Letter of Credit (which increase in cost, or reduction in amount receivable,
shall be the result of such Issuing Bank's or such Bank's reasonable allocation
of the aggregate of such increases or reductions resulting from such event),
then, upon demand by such Issuing Bank or such Bank, the Borrower agrees to pay
such Issuing Bank or such Bank, from time to time as specified by such Issuing
Bank or such Bank, such additional amounts as shall be sufficient to compensate
such Issuing Bank or such Bank for such
AMENDED AND RESTATED CREDIT AGREEMENT - Page 34
increased costs or reductions in amount. A statement as to such increased costs
or reductions in amount incurred by such Issuing Bank or such Bank, submitted by
such Issuing Bank or such Bank to the Borrower, shall be conclusive as to the
amount thereof, provided that the determination thereof is made on a reasonable
basis.
ARTICLE VI
Security
Section 6.1 Collateral. To secure full and complete payment and
performance of the Obligations, the Borrower shall execute and deliver or cause
to be executed and shall grant or cause to be granted to the Collateral Agent
for the benefit of itself, the other Agents, the Issuing Banks, the Banks, and
the Bridge Lenders or confirm that the Collateral Agent possesses, a perfected
first priority Lien on substantially all of the Property of the Borrower and its
Material Subsidiaries whether now owned or hereafter acquired (which, together
with any other property and collateral which may now or hereafter secure the
Obligations or any part thereof, is sometimes herein called the "Collateral"),
including the following:
(a) The Mortgaged Properties, which shall consist of
properties, constituting at least 80% of the present value of the
Borrower's and the Material Subsidiaries proved reserves (whether
developed or undeveloped).
(b) All Hydrocarbons which are derived from or attributable to
the Mortgaged Properties or which are purchased, exchanged or
transported in connection with the operation of the Gas Gathering
Systems.
(c) All accounts (including accounts in the form of joint
interest ▇▇▇▇▇▇▇▇), contract rights and general intangibles, relating
to the sale, purchase, exchange, transportation or processing of
Hydrocarbons in connection with operation of the Gas Gathering Systems
or produced or to be produced from the Mortgaged Properties, including
without limitation all operating agreements and oil or gas purchase,
sale and transportation contracts, together with all accounts and
proceeds attributable to the sale of Hydrocarbons produced from the
Mortgaged Properties or any portion thereof or sold or transported in
connection with the operation of the Gas Gathering Systems.
(d) All personal property and fixtures pertaining, affixed or
incidental to, situated upon or used or useful in connection with all
or any part of the Mortgaged Properties and the operating, working or
developing thereof, including without limitation all surface or
subsurface machinery, equipment, facilities or other Property of
whatever kind or nature which are useful for the production,
treatment, storage or transportation of any Hydrocarbons, including,
but not by way of limitation, all oil ▇▇▇▇▇, gas ▇▇▇▇▇, water ▇▇▇▇▇,
injection ▇▇▇▇▇, other ▇▇▇▇▇, casing, tubing, rods, pumps, pumping
units and engines, Christmas trees, derricks, separators, gun barrels,
flow lines, tanks, gas systems (for gathering, treating and
compression), water systems (for treating, disposal and injection),
power plants, poles, lines, transformers, starters and controllers,
machine shops,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 35
tools, storage yards and equipment stored therein, buildings and
camps, structures, field separators, liquid extraction plants, plant
compressors, field gathering systems, pipelines, tanks and tank
batteries, fixtures, valves, fittings, parts, engines, boilers,
meters, apparatus, appliances, tools, implements, cables, wires,
towers, telegraph, telephone and other communication systems, roads,
loading racks and shipping facilities.
(e) All logs, drilling reports, geophysical or geological
data, division orders, transfer orders, operating agreements,
abstracts, title opinions, files, records, memoranda and other written
information in the possession or control of the Borrower or the
Material Subsidiaries not subject to specific confidentiality
agreements binding upon Borrower or its Subsidiaries relating to any
▇▇▇▇▇ included in the Mortgaged Properties.
(f) All accounts, accounts receivable, investment property,
chattel paper, documents, instruments, and general intangibles of the
Borrower and its Material Subsidiaries, whether now owned or hereafter
acquired, and all products and proceeds thereof, pursuant to the
Borrower Pledge Agreement and the Subsidiary Pledge Agreement.
(g) All of the outstanding capital stock of the Material
Subsidiaries, whether now owned or hereafter acquired, and all
products and proceeds thereof, pursuant to the Borrower Pledge
Agreement and the Subsidiary Pledge Agreement. The Collateral Agent
shall retain possession of the certificates evidencing the capital
stock of the Material Subsidiaries, together with stock powers duly
executed in blank.
(h) All products and proceeds of any and all of the foregoing
and all additions, substitutions, replacements, accessions and
attachments to any and all of the foregoing.
All Liens granted by the Borrower to Collateral Agent in respect of
the above-described property shall also secure the Borrower's
obligations in respect of the Bridge Loan on a subordinated basis, to
the satisfaction of the Banks, in their sole discretion.
Section 6.2 Security Documents. Borrower and each Subsidiary shall
execute and cause to be executed such deeds of trust, mortgages, security
agreements and other documents and instruments including without limitation
Uniform Commercial Code financing statements, as the Collateral Agent and the
Banks, in their sole discretion, deem necessary or desirable to create, evidence
and perfect the Collateral Agent's Liens in the Collateral (including, without
limitation, the Liens securing the Bridge Loan). Borrower, the Collateral Agent
and the Banks agree that Schedules 1.1 and 1.1(b) shall be amended and
additional Security Documents executed from time to time to reflect the addition
of New Properties to the Collateral, such amendment to be made upon the granting
by Borrower or any Subsidiary, as the case may be, to the Collateral Agent of
valid, enforceable, perfected first priority Liens on the New Properties
pursuant to Section 4.6 hereof.
Section 6.3 Evidence of Title; Legal Opinions. On or before the 30 days
after the Closing Date, Borrower shall obtain and deliver, or cause to be
obtained and delivered, to the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 36
Collateral Agent (a) at the Collateral Agent's option, ▇▇▇▇▇▇▇ title reviews,
title opinions, reports and/or runsheets dated a current date, addressed to the
Agents, the Issuing Banks and the Banks and issued by landmen and/or attorneys
acceptable to the Administrative Agent competent in the examination of land
title, relating to those Mortgaged Properties identified by the Administrative
Agent, and showing that (i) Borrower has good and defensible title to such
Mortgaged Properties including all production of Hydrocarbons therefrom, and
(ii) the Security Documents create in favor of the Collateral Agent a perfected,
first priority Lien on such Mortgaged Properties including all production of
Hydrocarbons therefrom; and (b) an opinion of New Mexico and Oklahoma legal
counsel addressed to the Agents, the Issuing Banks and the Banks as to the
enforceability and form of the mortgages to be filed in the States of New Mexico
and Oklahoma.
Section 6.4 Subsidiary Guaranty Agreement. Each Subsidiary (other than
the Excluded Subsidiaries) of Borrower, whether now owned or hereafter acquired,
shall guarantee the prompt payment and performance of the Obligations pursuant
to the Subsidiary Guaranty Agreement and shall execute a counterpart of the
Subsidiary Pledge Agreement.
Section 6.5 Setoff. If an Event of Default shall have occurred and is
continuing, each Agent, each Issuing Bank and each Bank are hereby authorized at
any time and from time to time, without notice to the Borrower (any such notice
being hereby expressly waived by the Borrower), to set off and apply any and all
deposits (general, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by each Agent, each Issuing Bank or such
Bank to or for the credit or the account of the Borrower against any and all of
the obligations of the Borrower now or hereafter existing under this Agreement,
the Notes, or any other Loan Document, irrespective of whether or not such
Agent, such Issuing Bank or such Bank shall have made any demand under this
Agreement, the Notes or any other Loan Document and although such obligations
may be unmatured. Each Agent, each Issuing Bank and each Bank agree promptly to
notify the Borrower (with a copy to the Administrative Agent) after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights and remedies of
each Agent, each Issuing Bank and each Bank hereunder are in addition to other
rights and remedies (including, without limitation, other rights of setoff)
which each Agent, each Issuing Bank and each such Bank may have.
ARTICLE VII
Conditions Precedent
Section 7.1 Initial Loan. The obligation of each Bank to make its
initial Loan or of any Issuing Bank to issue the initial Letter of Credit is
subject to the condition precedent that the Administrative Agent shall have
received on or before the day of such Loan or issuance of all of the following,
each dated (unless otherwise indicated) the date hereof, in form and substance
satisfactory to the Administrative Agent:
(a) Resolutions. Resolutions of the Board of Directors of
the Borrower and each Obligated Party certified by its Secretary or an
Assistant Secretary which authorize
AMENDED AND RESTATED CREDIT AGREEMENT - Page 37
the execution, delivery, and performance by such Person of the Loan
Documents to which such Person is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of the Borrower
and each Obligated Party certifying the names of the officers of such
Person authorized to sign this Agreement and each of the other Loan
Documents to which such Person is or is to be a party (including the
certificates contemplated herein) together with specimen signatures of
such officers;
(c) Articles of Incorporation. The articles of incorporation
of the Borrower and each Obligated Party certified by the Secretary of
State of the state of incorporation of such Person and dated within
ten days prior to the date of the initial Loan or issuance of a Letter
of Credit;
(d) Bylaws.The bylaws of the Borrower and each Obligated Party
certified by the Secretary or an Assistant Secretary of such Person;
(e) Governmental Certificates. Certificates of (i) the
appropriate government officials of the state of incorporation of the
Borrower and each Obligated Party as to the existence and good
standing of such Person, and (ii) the appropriate government officials
in each jurisdiction where Borrower or any Obligated Party is
qualified to do business as to its good standing and qualification to
do business in such jurisdiction, each dated within ten days prior to
the date of the initial Loan or issuance of a Letter of Credit;
(f) Notes. The Notes executed by the Borrower;
(g) Borrower Pledge Agreement. The Borrower Pledge Agreement
executed by the Borrower;
(h) Subsidiary Pledge Agreement. The Subsidiary Pledge
Agreement executed by each Guarantor;
(i) Financing Statements. Uniform Commercial Code financing
statements executed by the Borrower and each Guarantor covering the
Collateral;
(j) Subsidiary Guaranty Agreement. The Subsidiary Guaranty
Agreement executed by each Guarantor;
(k) Stock Certificates. The original certificates evidencing
the stock pledged by Borrower pursuant to the Borrower Pledge
Agreement and by Magnum Hunter Production, Inc. pursuant to the
Subsidiary Pledge Agreement, together with stock powers duly executed
in blank by such Persons;
AMENDED AND RESTATED CREDIT AGREEMENT - Page 38
(l) Mortgages and Security Agreements. Mortgages, deeds of
trust and security agreements in form and substance satisfactory to
the Agent and the Banks covering the Mortgaged Properties;
(m) Environmental Due Diligence. The completion of a
satisfactory due diligence review of all environmental matters by the
Banks;
(n) Title. Evidence satisfactory in form and substance to the
Administrative Agent and the Banks that the Borrower and its
Subsidiaries have good and marketable title, subject to no other
Liens, to Mortgaged Properties representing at least 80% of the
discounted (at 10%) present value of the initial Borrowing Base;
(o) Fee Letter. The Agents Fee Letter executed by Borrower and
evidence that all fees due and payable thereunder or under Section
14.1, to the extent incurred, have been paid in full;
(p) Acquisition. A certificate from the president or chief
financial officer of Borrower certifying that all conditions precedent
to the consummation of the Acquisition for a purchase price not to
exceed $145,000,000 shall have been satisfied, and the Borrower's due
diligence in connection with the Acquisition and the terms and
conditions contained in the Acquisition Documents shall be
satisfactory in form and substance to the Agent;
(q) Acquisition Documents. True, correct and complete copies
of all of the Acquisition Documents;
(r) Material Adverse Change. No material adverse change shall
have occurred since the date of the most recent financial statements
delivered by Borrower to the Administrative Agent, in the financial
condition, business, operations, or prospects of the Borrower or any
Material Subsidiary or in its assets, liabilities and properties and
there shall be no material threatened or pending litigation adversely
affecting its property and no material adverse change shall have
occurred in the financial condition, business, operations, or
prospects of the business to be acquired pursuant to the Acquisition;
(s) Insurance Policies. Copies of all insurance policies
required by Section 9.5, and a satisfactory review of such insurance
policies by insurance brokers or consultants acceptable to the
Administrative Agent;
(t) UCC Searches. The results of a Uniform Commercial Code
search showing all financing statements and other documents or
instruments on file against the Borrower and the Guarantors in such
jurisdictions as the Administrative Agent shall determine, such
searches to be as of a date no more than ten days prior to the date of
the initial Loan or issuance of a Letter of Credit;
AMENDED AND RESTATED CREDIT AGREEMENT - Page 39
(u) Lien Releases. Executed UCC-3 Termination Statements and
other Lien releases that release or assign to the Collateral Agent all
Liens held by holders of Debt not constituting Permitted Debt and all
other Liens that do not constitute Permitted Liens;
(v) Lien Assignments. Executed UCC-3 Assignments that assign
all Liens in favor of ▇▇▇▇▇ Fargo to the Collateral Agent, together
with the Assignment of Liens in form and substance satisfactory to the
Collateral Agent.
(w) Opinion of Counsel. A favorable opinion of ▇▇▇▇▇▇▇▇ &
Knight, special legal counsel to the Borrower and the Material
Subsidiaries, as to such matters as the Agents and their counsel may
reasonably request; and
(x) Form U-1 Purpose Statement. A Form U-1 Purpose Statement
duly completed and executed by the Borrower.
(y) Bridge Loan. Evidence that the Bridge Loan has been
funded.
(z) Engineering Reports. Engineering Reports for all existing
reserves owned by the Borrower and for the reserve(s) to be acquired
by the Borrower pursuant to the Acquisition, each of which shall be
prepared by ▇▇▇▇▇ ▇▇▇▇▇ Company Petroleum Engineers, ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Associates, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Petroleum Consultants, Inc., or
another independent engineering firm acceptable to the Administrative
Agent and each of which shall be satisfactory to the Administrative
Agent, in its sole discretion.
(aa) Financial Statements. Audited financial statement of
the Borrower for the fiscal year ending December 31, 1996, together
with an unqualified opinion from a recognized independent accounting
firm.
(bb) Repayment of Bank Debt. Evidence that all existing bank
debt has been repaid in full as of the Closing Date.
(cc) Due Diligence. The completion of a satisfactory due
diligence review of the Borrower, including without limitation, its
corporate legal structure.
(dd) Hedge Agreements. Copies of any and all financial
interest swap agreements or similar contractual arrangements intended
to hedge market price fluctuations and interest rates applicable to
this Agreement or crude oil, natural gas or other Hydrocarbons, each
of which shall be satisfactory to the Banks, in their sole discretion.
(ee) Commitment to Repay Bridge Loan. An engagement letter
duly executed by a firm approved by the Administrative Agent for the
arrangement of financing specifically dedicated to the repayment of
the Bridge Loan, which engagement letter shall contain terms and
conditions satisfactory to the Administrative Agent, in its sole
discretion.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 40
(ff) Intercreditor Agreement The executed Intercreditor
Agreement, in form and substance satisfactory to the Banks in their
sole discretion.
(gg) Additional Documentation. Such additional approvals,
opinions, or documents as the Administrative Agent or its legal
counsel, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., may reasonably request.
Section 7.2 All Loans. The obligation of each Bank to make any Loan or
issue any Letter of Credit (including the initial Loan or issuance) is subject
to the following additional conditions precedent:
(a) Request for Loan or Letter of Credit. The Administrative
Agent or the Issuing Bank shall have received, in accordance with
Section 4.1 or 3.3, as the case may be, a Loan Request Form or Letter
of Credit Request Form, dated the date of such Loan or Letter of
Credit, executed by an authorized officer of the Borrower;
(b) No Default. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit, as the
case may be;
(c) Representations and Warranties. All of the representations
and warranties contained in Article VIII hereof and in the other Loan
Documents shall be true and correct on and as of the date of such Loan
with the same force and effect as if such representations and
warranties had been made on and as of such date; and
(d) Additional Documentation. The Administrative Agent shall
have received such additional approvals, opinions, or documents as the
Administrative Agent or its legal counsel, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
P.C., may reasonably request.
ARTICLE VIII
Representations and Warranties
To induce the Agents, the Issuing Banks and the Banks to enter into
this Agreement, the Borrower represents and warrants to the Agents, the Issuing
Banks and the Banks that:
Section 8.1 Corporate Existence. The Borrower and each Material
Subsidiary (a) is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power and authority to own its assets and carry on its
business as now being or as proposed to be conducted; and (c) is qualified to do
business in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a material
adverse effect on its business, condition (financial or otherwise), operations,
prospects, or properties. The Borrower has the corporate power and authority to
execute, deliver, and perform its obligations under this Agreement and the other
Loan Documents to which it is or may become a party.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 41
Section 8.2 Financial Statements. The Borrower has delivered to the
Administrative Agent audited consolidated financial statements of the Borrower
and its Subsidiaries as at and for the fiscal year ended December 31, 1996. Such
financial statements are true and correct, 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. 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. There has been no material adverse change in the business, condition
(financial or otherwise), operations, prospects, or properties of the Borrower
or any of its Subsidiaries since the effective date of the most recent audited
financial statements delivered to the Agent and the Banks.
Section 8.3 Corporate Action; No Breach. The execution, delivery, and
performance by the Borrower of this Agreement and the other Loan Documents to
which the Borrower is or may become a party and compliance with the terms and
provisions hereof and thereof have been duly authorized by all requisite
corporate action on the part of the Borrower and do not and will not (a) violate
or conflict with, or result in a breach of, or require any consent under (i) the
articles of incorporation or bylaws of the Borrower or any of the Subsidiaries,
(ii) any applicable law, rule, or regulation or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (iii) any agreement or
instrument to which the Borrower or any of the Subsidiaries is a party or by
which any of them or any of their property is bound or subject, or (b)
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien (except as provided in Article VI) upon any
of the revenues or assets of the Borrower or any Subsidiary.
Section 8.4 Operation of Business. The Borrower and each of its
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and the Borrower and each of its Subsidiaries are not in
violation of any valid rights of others with respect to any of the foregoing.
Section 8.5 Litigation and Judgments. Except as disclosed on Schedule
8.5 hereto, there is no action, suit, investigation, or proceeding before or by
any Governmental Authority or arbitrator pending, or to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary, that
would, if adversely determined, have a material adverse effect on the business,
condition (financial or otherwise), operations, prospects, or properties of the
Borrower or any Subsidiary or the ability of the Borrower to pay and perform the
Obligations. There are no outstanding judgments against the Borrower or any
Subsidiary.
Section 8.6 Rights in Properties; Liens. The Borrower and each
Subsidiary have good and indefeasible title to or valid leasehold interests in
their respective properties and assets, real and personal, including the
properties, assets, and leasehold interests reflected in the financial
AMENDED AND RESTATED CREDIT AGREEMENT - Page 42
statements described in Section 8.2, and none of the properties, assets, or
leasehold interests of the Borrower or any Subsidiary is subject to any Lien,
except the Permitted Liens.
Section 8.7 Enforceability. This Agreement constitutes, and the other
Loan Documents to which the Borrower is party, when delivered, shall constitute
the legal, valid, and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their respective terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
Section 8.8 Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower of
this Agreement and the other Loan Documents to which the Borrower is or may
become a party or for the validity or enforceability thereof.
Section 8.9 Debt. The Borrower and its Material Subsidiaries have no
Debt, except as disclosed on Schedule 8.9 hereto.
Section 8.10 Taxes. The Borrower and each Subsidiary have filed all
tax returns (federal, state, and local) required to be filed, including all
income, franchise, employment, property, and sales tax returns, and have paid
all of their respective liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable. 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 8.11 Use of Proceeds; Margin Securities. Neither the Borrower
nor any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations G, T, U, or X of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Loan will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying margin stock.
Section 8.12 ERISA. The Borrower and each Subsidiary are in compliance
in all material respects with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. No notice of intent to terminate a Plan has been
filed, nor has any Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings.
Neither the Borrower nor any ERISA Affiliate has completely or partially
withdrawn from a Multiemployer Plan. The Borrower and each ERISA Affiliate have
met their minimum funding requirements under ERISA with respect to all of their
Plans, and the present value of all vested benefits under each Plan do not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
ERISA. Neither the Borrower nor any ERISA Affiliate has incurred any liability
to the PBGC under ERISA.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 43
Section 8.13 Disclosure. No statement, information, report,
representation, or warranty made by the Borrower in this Agreement or in any
other Loan Document or furnished to the Administrative Agent, the Issuing Bank
or any Bank in connection with this Agreement or any transaction contemplated
hereby contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements herein or therein not misleading.
There is no fact known to the Borrower which has a material adverse effect, or
which might in the future have a material adverse effect, on the business,
condition (financial or otherwise), operations, prospects, or properties of the
Borrower or any Subsidiary that has not been disclosed in writing to the
Administrative Agent, the Issuing Bank and the Banks.
Section 8.14 Subsidiaries. The Borrower has no Subsidiaries other than
those listed on Schedule 8.14 hereto, and Schedule 8.14 sets forth the
jurisdiction of incorporation of each Subsidiary, the percentage of the
Borrower's ownership of the outstanding voting stock of each Subsidiary and
designates each Excluded Subsidiary. All of the outstanding capital stock of
each Subsidiary has been validly issued, is fully paid, and is nonassessable.
Section 8.15 Agreements. Neither the Borrower nor any Subsidiary is a
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction
which could have a material adverse effect on the business, condition (financial
or otherwise), operations, prospects, or properties of the Borrower or any
Subsidiary, or the ability of the Borrower to pay and perform its obligations
under the Loan Documents to which it is a party. 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
agreement or instrument material to its business to which it is a party.
Section 8.16 Compliance with Laws. Neither the Borrower nor any
Subsidiary is in violation in any material respect of any law, rule, regulation,
order, or decree of any Governmental Authority or arbitrator.
Section 8.17 Inventory. All inventory of the Borrower has been
produced in substantial compliance with all applicable laws, rules, regulations,
and governmental standards, including, without limitation, the minimum wage and
overtime provisions of the Fair Labor Standards Act, as amended (29 U.S.C.
▇▇.▇▇. 201-219), and the regulations promulgated thereunder.
Section 8.18 Investment Company Act. Neither the Borrower nor any
Subsidiar is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 8.19 Public Utility Holding Company Act. Neither the Borrower
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or a "public utility"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 44
Section 8.20 Environmental Matters. Except as disclosed on Schedule 8.20
hereto:
(a) Except where the failure to obtain or comply could not
reasonably be expected to have a material adverse effect, the
Borrower, each Subsidiary, and all of their respective Properties,
assets, and operations are in compliance in all material respects with
all Environmental Laws. The Borrower is not aware of, nor has the
Borrower received notice of, any past, present, or future conditions,
events, activities, practices, or incidents which may interfere with
or prevent the compliance or continued compliance of the Borrower and
the Subsidiaries with all Environmental Laws;
(b) Except where the failure to obtain or comply could not
reasonably be expected to have a material adverse effect, the Borrower
and each Subsidiary have obtained all permits, licenses, and
authorizations that are required under applicable Environmental Laws,
and have received no notice that all such permits are not in good
standing, or that the Borrower and its Subsidiaries are not in
compliance with all of the terms and conditions of such permits;
(c) Except where the failure to obtain or comply could not
reasonably be expected to have a material adverse effect, no Hazardous
Materials exist on, about, or within or have been used, generated,
stored, transported, disposed of on, or Released from any of the
properties or assets of the Borrower or any Subsidiary except in
amounts that would not violate applicable law. The use which the
Borrower and the Subsidiaries make and intend to make of their
respective properties and assets will not result in the use,
generation, storage, transportation, accumulation, disposal, or
Release of any Hazardous Material on, in, or from any of their
properties or assets except in amounts that would not violate
applicable law;
(d) Neither the Borrower nor any of its Subsidiaries nor any
of their respective currently or previously owned or leased properties
or operations is subject to any outstanding or, to the best of its
knowledge, threatened order from or agreement with any Governmental
Authority or other Person or subject to any judicial or docketed
administrative proceeding with respect to (i) failure to comply with
Environmental Laws, (ii) Remedial Action, or (iii) any Environmental
Liabilities arising from a Release or threatened Release;
(e) Except where the failure to obtain or comply could not
reasonably be expected to have a material adverse effect, there are no
conditions or circumstances associated with the currently or
previously owned or leased properties or operations of the Borrower or
any of its Subsidiaries that could reasonably be expected to give rise
to any Environmental Liabilities;
(f) Neither the Borrower nor any of its Subsidiaries is a
treatment, storage, or disposal facility requiring a permit under the
Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.,
regulations thereunder or any comparable provision of state
AMENDED AND RESTATED CREDIT AGREEMENT - Page 45
law. The Borrower and its Subsidiaries are in substantial compliance
with all applicable financial responsibility requirements of all
Environmental Laws;
(g) Neither the Borrower nor any of its Subsidiaries has filed
or to the best of Borrower's knowledge, failed to file any notice
required under applicable Environmental Law reporting a Release; and
(h) The Borrower has received no notice that a Lien arising
under any Environmental Law has attached to any property or revenues
of the Borrower or its Subsidiaries.
ARTICLE IX
Positive Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or any
Issuing Bank has any obligation to issue Letters of Credit hereunder, the
Borrower will perform and observe the following positive covenants:
Section 9.1 Reporting Requirements. The Borrower will furnish to
each Agent, each Issuing Bank and each Bank:
(a) Annual Financial Statements. As soon as available, and in
any event within 100 days after the end of each fiscal year of the
Borrower, beginning with the fiscal year ending December 31, 1997, (i)
a copy of the annual audit report of the Borrower and the Subsidiaries
for such fiscal year containing, on a consolidated basis, balance
sheets and statements of income, retained earnings, and cash flow as
at the end of such fiscal year and for the 12-month period then ended,
in each case setting forth in comparative form the figures for the
preceding fiscal year, all in reasonable detail and audited and
certified by independent certified public accountants of recognized
standing acceptable to the Administrative Agent, to the effect that
such report has been prepared in accordance with GAAP; and (ii) a
certificate of such independent certified public accountants to the
Administrative Agent (A) stating that to their knowledge no Default
has occurred and is continuing, or if in their opinion a Default has
occurred and is continuing, a statement as to the nature thereof, and
(B) confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith;
(b) Quarterly Financial Statements. As soon as available, and
in any event within 50 days after the end of each of the quarters of
each fiscal year of the Borrower, a copy of an unaudited financial
report of the Borrower and the Subsidiaries as of the end of such
fiscal quarter and for the portion of the fiscal year then ended,
containing, on a consolidated basis, balance sheets and statements of
income, retained earnings, and cash flow, in each case setting forth
in comparative form the figures for the corresponding period of the
preceding fiscal year, all in reasonable detail certified by the chief
financial
AMENDED AND RESTATED CREDIT AGREEMENT - Page 46
officer of the Borrower to have been prepared in accordance with GAAP
and to fairly and accurately present (subject to year-end audit
adjustments) the financial condition and results of operations of the
Borrower and the Subsidiaries, on a consolidated basis, at the date
and for the periods indicated therein;
(c) Compliance Certificate. Concurrently with the delivery of
each of the financial statements referred to in subsections 9.1(a) and
(b), a certificate of the chief executive officer or chief financial
officer of the Borrower (i) stating that to the best of such officer's
knowledge, no Default has occurred and is continuing, or if a Default
has occurred and is continuing, a statement as to the nature thereof
and the action that is proposed to be taken with respect thereto, and
(ii) showing in reasonable detail the calculations demonstrating
compliance with Article XI;
(d) Management Letters. Promptly upon receipt thereof, a
copy of any management letter or written report submitted to the
Borrower or any Subsidiary by independent certified public accountants
with respect to the business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower or any Subsidiary
(e) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any
Governmental Authority or arbitrator affecting the Borrower or any
Subsidiary which, if determined adversely to the Borrower or such
Subsidiary, could have a material adverse effect on the business,
condition (financial or otherwise), operations, prospects, or
properties of the Borrower or such Subsidiary;
(f) Notice of Default. As soon as possible and in any event
within five days after the occurrence of each Default, a written
notice setting forth the details of such Default and the action that
the Borrower has taken and proposes to take with respect thereto;
(g) ERISA Reports. Promptly after the filing or receipt
thereof, copies of all reports, including annual reports, and notices
which the Borrower or any Subsidiary files with or receives from the
PBGC or the U.S. Department of Labor under ERISA; and as soon as
possible and in any event within five days after the Borrower or any
Subsidiary knows or has reason to know that any Reportable Event or
Prohibited Transaction has occurred with respect to any Plan or that
the PBGC or the Borrower or any Subsidiary has instituted or will
institute proceedings under Title IV of ERISA to terminate any Plan, a
certificate of the chief financial officer of the Borrower setting
forth the details as to such Reportable Event or Prohibited
Transaction or Plan termination and the action that the Borrower
proposes to take with respect thereto;
(h) Reports to Other Creditors. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other
party pursuant to the terms of any indenture, loan, or credit or
similar agreement and not otherwise required to be furnished
AMENDED AND RESTATED CREDIT AGREEMENT - Page 47
to the Administrative Agent, the Issuing Bank and the Banks pursuant
to any other clause of this Section 9.1;
(i) Notice of Material Adverse Change. As soon as possible and
in any event within five days after the occurrence thereof, written
notice of any matter that could have a material adverse effect on the
business, condition (financial or otherwise), operations, prospects,
or properties of the Borrower or any Subsidiary;
(j) Proxy Statements, Etc. As soon as available and in any
event within ten days of sending or filing with the Securities and
Exchange Commission or successor agency, one copy of each financial
statement, report, notice or proxy statement sent by the Borrower or
any Subsidiary to its stockholders generally and one copy of each
regular, periodic or special report, form (including, without
limitation, all 10-K and 10-Q filings), registration statement, or
prospectus filed by the Borrower or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency;
(k) General Information. Promptly, such other information
concerning the Borrower or any Subsidiary as the Administrative Agent
or any Bank may from time to time reasonably request;
(l) Reserve Reports.
(i) On or before April 1 of each calendar year at
Borrower's expense, an annual report in form and substance
satisfactory to the Administrative Agent and the Banks
prepared by an independent third party engineering firm
acceptable to the Administrative Agent and the Banks dated as
of December 31 of the preceding year, reflecting the quantity
of existing proven and producing oil and gas reserves
attributable to the Mortgaged Properties and any New
Properties added since the last such annual report submitted
to the Administrative Agent and the Banks, a projection of the
rate of production and net operating income with respect
thereto as of such date, and such other information as is
customarily obtained from and provided in such reports;
(ii) On or before October 1 of each calendar year at
Borrower's expense, a report in form and substance
satisfactory to the Administrative Agent and the Banks
prepared by Borrower dated as of June 30 of such year,
reflecting the quantity of existing proven and producing oil
and gas reserves attributable to the Mortgaged Properties and
any New Properties submitted to the Administrative Agent and
the Banks for the first six months of such year, a projection
of the rate of production and net operating income with
respect thereto as of such date, and such other information as
is customarily obtained from and provided in such reports; and
AMENDED AND RESTATED CREDIT AGREEMENT - Page 48
(iii) Concurrently with the delivery of each of the
financial statements referred to in Subsection 9.1(b), a
report in form and substance satisfactory to the
Administrative Agent and the Banks prepared by the chief
petroleum engineer of the Borrower, reflecting the quantity of
existing proven and producing oil and gas reserves
attributable to the Mortgaged Properties and any New
Properties submitted to the Administrative Agent and the Banks
during the prior fiscal quarter, a projection of the rate of
production and net operating income with respect thereto as of
such date, and such other information as is customarily
obtained from and provided in such reports;
(m) Gas Gathering System Evaluation Reports. On or before
April 1 of each calendar year at Borrower's expense, a report in form
and substance satisfactory to the Administrative Agent and the Banks
prepared by Borrower dated as of December 31 of the preceding year,
reflecting the quantity of existing proven and producing oil and gas
reserves connected to the Gas Gathering Systems, total throughput for
the Gas Gathering Systems for the previous twelve months, new ▇▇▇▇▇
connected to the Gas Gathering Systems during such period of time and
such other information as the Administrative Agent and the Banks may
request to evaluate the Gas Gathering Systems, including, but not
limited to, anticipated capital costs for connecting new sources of
supply to the Gas Gathering Systems;
(n) Monthly Production and Lease Operating Statement. Within
60 days after the end of each calendar month commencing with the
calendar month ending March 31, 1997, a production statement which
identifies the most recent information available relating to the gross
volumes of Hydrocarbons produced from the Mortgaged Properties and a
statement of revenues and expenses attributable to the Mortgaged
Properties for such calendar month then ended, such production report
and statement of revenues and expenses to be in a form and substance
reasonably satisfactory to the Administrative Agent and the Banks; and
(o) Monthly Gas Gathering System Operating Report. Within 60
days after the end of each calendar month commencing with the calendar
month ending March 31, 1997, an operating report which identifies the
most recent information available relating to the Hydrocarbons
throughput of the Gas Gathering Systems, revenues and expenses
attributable to the Gas Gathering Systems for such calendar month then
ended and such other information as the Administrative Agent and the
Banks may request all in a form and substance reasonably satisfactory
to the Administrative Agent and the Banks.
Section 9.2 Maintenance of Existence; Conduct of Business. The
Borrower will preserve and maintain, and will cause each Subsidiary (other than
Excluded Subsidiaries) to preserve and maintain, its corporate existence and all
of its leases, privileges, licenses, permits, franchises, qualifications, and
rights that are necessary or desirable in the Borrower's reasonable business
judgment, and in the ordinary conduct of its business. 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.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 49
Section 9.3 Maintenance of Properties. The Borrower will maintain,
keep, and preserve, and cause each Material Subsidiary to maintain, keep, and
preserve, all of its properties (tangible and intangible) necessary or useful in
the proper conduct of its business in good working order and condition.
Section 9.4 Taxes and Claims. The Borrower will pay or discharge, and
will cause each Subsidiary to pay or discharge, at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments, and governmental charges
imposed on it or its income or profits or any of its property, and (b) all
lawful claims for labor, material, and supplies, which, if unpaid, might become
a Lien upon any of its property; provided, however, that neither the Borrower
nor any Subsidiary shall be required to pay or discharge any tax, levy,
assessment, or governmental charge which is being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate reserves have
been established.
Section 9.5 Insurance. The Borrower will maintain, and will cause each
of the Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as is usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower and the Subsidiaries
operate, provided that in any event the Borrower will maintain and cause each
Subsidiary to maintain workmen's compensation insurance, property insurance,
comprehensive general liability insurance, products liability insurance, and
business interruption insurance reasonably satisfactory to the Administrative
Agent and the Banks. Each insurance policy covering Collateral shall provide
that such policy will not be cancelled or reduced without 30 days' prior written
notice to the Administrative Agent. In the event an Event of Default occurs and
continues for a period of 90 days, Borrower will cause, within five days, each
insurance policy covering Collateral to name the Collateral Agent as additional
insured and loss payee for the benefit of itself, the other Agents, the Banks,
the Issuing Banks and the Bridge Lenders.
Section 9.6 Inspection Rights. Upon reasonable prior notice, oral or
written, and during ordinary business hours, the Borrower will permit, and will
cause each Subsidiary to permit, representatives of each Agent, the Issuing
Banks and each Bank to examine, copy, and make extracts from its books and
records, to visit and inspect its properties, and to discuss its business,
operations, and financial condition with its officers, employees, and
independent certified public accountants. Notwithstanding the foregoing,
following the occurrence of a Default, the foregoing restrictions relating to
notice and normal business hours shall not apply.
Section 9.7 Keeping Books and Records. The Borrower will maintain, and
will cause each Subsidiary to maintain, proper books of record and account in
which full, true, and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities.
Section 9.8 Compliance with Laws. The Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, rules, regulations, orders, and decrees of any Governmental Authority or
arbitrator.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 50
Section 9.9 Compliance with Agreements. The Borrower will comply, and
will cause each Subsidiary to comply, in all material respects with all
agreements, contracts, and instruments binding on it or affecting its properties
or business.
Section 9.10 Further Assurances. The Borrower will, and will cause
each Material Subsidiary to, execute and deliver such further agreements and
instruments and take such further action as may be requested by the
Administrative Agent to carry out the provisions and purposes of this Agreement
and the other Loan Documents and, subject to Section 6.1, to create, preserve,
and perfect the Liens of the Collateral Agent for the benefit of itself, the
other Agents, the Issuing Banks, the Banks, and the Bridge Lenders in the
Collateral.
Section 9.11 ERISA. The Borrower will comply, and will cause each
Subsidiary to comply, with all minimum funding requirements, and all other
material requirements, of ERISA, if applicable, so as not to give rise to any
liability thereunder.
Section 9.12 Subsidiary Security Agreement; Subsidiary Guaranty. The
Borrower shall cause each Person that becomes a Subsidiary (other than Excluded
Subsidiaries) after the date hereof to execute and deliver to the Collateral
Agent a counterpart of each of the Subsidiary Security Agreement and Subsidiary
Guaranty within 15 days after such Person becomes a Subsidiary.
Contemporaneously with the execution and delivery of any such counterpart of the
Subsidiary Security Agreement, Borrower shall deliver to the Collateral Agent
the original certificates evidencing all outstanding capital stock of such
Subsidiary (other than Excluded Subsidiaries), together with stock powers
relating thereto duly executed in blank and such other documents as the
Collateral Agent may reasonably request.
Section 9.13 Collateral Maintenance; Additional Mortgages. As of each
Determination Date, the Borrower shall execute or cause to be executed
additional mortgages or deeds of trust to the extent necessary to provide the
Collateral Agent with first priority perfected liens on at least 75% of the
present value of the Borrower's and Subsidiaries' (other than the Excluded
Subsidiaries) proved reserves (whether developed or undeveloped). In the event
that the Mortgaged Properties in which the Collateral Agent has a first priority
perfected Lien shall at any time constitute less than 80% of the present value
of the Borrower's and the Subsidiaries' (other than Excluded Subsidiaries)
proved reserves (whether developed or undeveloped), the Borrower shall upon
request from the Collateral Agent, promptly execute or cause to be executed
additional mortgages and deeds of trust to the extent required to increase such
percentage to at least 80%. Such mortgages and deeds of trust shall be
accompanied by title opinions and/or other evidence of title satisfactory in
form and substance to the Collateral Agent and the Banks. In addition, Borrower
shall deliver to the Collateral Agent upon request, such other information, data
and reports relating to the property subject to the new mortgages and deeds of
trust and the reserves and production related thereto, as the Agent and the
Banks shall reasonably request.
Section 9.14 Hedging Agreements. If the Borrower has not issued a
minimum of $125,000,000 of Subordinated Debt on or before May 31, 1997, the
Borrower shall, on or before June 30, 1997, enter into agreements or similar
contractual arrangements intended to hedge market price fluctuations of oil and
natural gas ("Hedge Agreements") that cover at least 25%
AMENDED AND RESTATED CREDIT AGREEMENT - Page 51
of its total projected production from Oil and Gas Properties for a minimum
period of 12 months. After June 30, 1997, if the Subordinated Debt still has not
been issued, the Borrower shall over the next six-month period enter into Hedge
Agreements such that at least 50% of its total projected production of Oil and
Gas Properties will be covered by Hedge Agreements through April 30, 1999.
ARTICLE X
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or any
Issuing Bank has any obligation to issue Letters of Credit hereunder, the
Borrower will perform and observe the following negative covenants:
Section 10.1 Debt. The Borrower will not incur, create, assume, or
permit to exist, and will not permit any Subsidiary (other than Excluded
Subsidiaries) to incur, create, assume, or permit to exist, any Debt, except the
following (herein referred to as "Permitted Debt"):
(a) Debt to the Agents, the Banks and the Issuing Banks
pursuant to or in connection with the Loan Documents;
(b) Existing Debt described on Schedule 8.9 hereto;
(c) Debt to the Bridge Lenders provided that such Debt is
subordinated pursuant to the terms of the Intercreditor Agreement;
(d) The Subordinated Debt;
(e) Debt owed by the Borrower to an Affiliate, provided that
such Debt is fully subordinated to the Obligations pursuant to a
subordination agreement satisfactory in form and substance to the
Agent;
(f) Debt consisting of current liabilities for taxes and
other assessments incurred in the ordinary course of business that are
not delinquent;
(g) Debt owed by the Borrower in connection with its
guaranty of the obligations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ International, LLC to
▇▇▇▇▇ Fargo HSBC Trade Bank N.A.provided that the amount guaranteed by
the Borrower does not exceed $3,000,000;
(h) Debt owed by the Borrower in connection with Capital
Lease Obligations entered into in the ordinary course of business up
to an aggregate amount of $2,500,000; and
AMENDED AND RESTATED CREDIT AGREEMENT - Page 52
(i) Debt not otherwise permitted pursuant to (a) - (h) above
in an aggregate amount not to exceed $1,000,000 at any time
outstanding (excluding, without limitation, existing Debt described on
Schedule 8.9 hereto and Debt owed by the Borrower in connection with
Capital Lease Obligations).
Section 10.2 Limitation on Liens. The Borrower will not incur, create,
assume, or permit to exist, and will not permit any Subsidiary (other than
Excluded Subsidiaries) to incur, create, assume, or permit to exist, any Lien
upon any of its property, assets, or revenues, whether now owned or hereafter
acquired, except the following (herein referred to as "Permitted Liens"):
(a) Liens on the property described on Schedule 10.2
hereto to secure Permitted Debt;
(b) Liens in favor of the Collateral Agent for the
benefit of itself, the Documentation Agent, the Agent, the Banks and
the Issuing Banks;
(c) Liens in favor of the Bridge Lenders, provided such
Liens are subordinated to the Liens in favor of the Collateral Agent,
pursuant to the terms of the Intercreditor Agreement;
(d) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that
do not (individually or in the aggregate) materially affect the value
of the assets encumbered thereby or materially impair the ability of
the Borrower or the Subsidiaries to use such assets in their
respective businesses, and none of which is violated in any material
respect by existing or proposed structures or land use;
(e) Liens for taxes, assessments, or other governmental
charges which are not delinquent or which are being contested in good
faith and for which adequate reserves have been established;
(f) Liens of mechanics, materialmen, warehousemen,
carriers, or other similar statutory Liens securing obligations that
are not yet due and are incurred in the ordinary course of business;
(g) Liens resulting from good faith deposits to secure
payments of workmen's compensation or other social security programs
or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, contracts (other than for payment of Debt), or
leases made in the ordinary course of business;
(h) Liens on property of the Borrower or the Material
Subsidiaries in connection with Capital Lease Obligations permitted
under Section 10.1(h); and
(i) Liens created in connection with (i) a $300,000
production payment made by Borrower to American Founders Life
Insurance Company, and (ii) a $750,000
AMENDED AND RESTATED CREDIT AGREEMENT - Page 53
production payment made by Borrower to American Founders Life
Insurance Company, with the prior written consent of the Required
Banks, similar arrangements.
Section 10.3 Mergers, Etc. The Borrower will not, and will not permit
any Subsidiary to, become a party to a merger or consolidation, or purchase or
otherwise acquire all or any part of the business or assets of any Person or any
shares or other evidence of beneficial ownership of any Person, or wind-up,
dissolve, or liquidate itself; provided, however, the Borrower and the
Subsidiaries shall be entitled to acquire the business or assets of any Person
or any shares or other evidence of beneficial ownership of any Person so long as
the total aggregate consideration - cash and noncash - for all such acquisitions
during any 12-month period does not exceed $1,000,000 and no Default is then
continuing.
Section 10.4 Restricted Payments. The Borrower will not declare or pay
any dividends (other than dividends in the form of stock) or make any other
payment or distribution (whether in cash, property, or obligations) on account
of its capital stock, or redeem, purchase, retire, or otherwise acquire any of
its capital stock, or permit any of its Subsidiaries to purchase or otherwise
acquire any capital stock of the Borrower or another Subsidiary, or set apart
any money for a sinking or other analogous fund for any dividend or other
distribution on its capital stock or for any redemption, purchase, retirement,
or other acquisition of any of its capital stock, except so long as no Default
is continuing (i) dividends approved in writing by Required Banks as of each
Determination Date, and (ii) dividends payable on the 1996 Series A Preferred
Stock.
Section 10.5 Investments. The Borrower will not make, and will not
permit any Material Subsidiary to make, any advance, loan, extension of credit,
or capital contribution to or investment in, or purchase or own, or permit any
Subsidiary to purchase or own, any stock, bonds, notes, debentures, or other
securities of, (i) any Excluded Subsidiary in excess of $500,000 in the
aggregate, or (ii) any Person in excess of $350,000 in the aggregate per fiscal
year of the Borrower, except:
(a) readily marketable direct obligations of the United States
of America or any agency thereof with maturities of one year or less
from the date of acquisition;
(b) fully insured certificates of deposit with maturities of
one year or less from the date of acquisition issued by any commercial
bank operating in the United States of America having capital and
surplus in excess of $250,000,000; and
(c) commercial paper of a domestic issuer if at the time of
purchase such paper is rated in one of the two highest rating
categories of Standard and Poor's, a division of ▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇'▇
Investor Service, Inc.
Section 10.6 Limitation on Issuance of Subsidiaries' Capital Stock.
The Borrower will not permit any of its Material Subsidiaries to, at any time
issue, sell, assign, or otherwise dispose of (a) any of such Subsidiary's
capital stock, (b) any securities exchangeable for or convertible into or
carrying any rights to acquire any of such Subsidiary's capital stock, or (c)
any option,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 54
warrant, or other right to acquire any of such Subsidiary's capital stock
without the prior written consent of the Majority Banks.
Section 10.7 Transactions With Affiliates. The Borrower will not enter
into, and will not permit any Material Subsidiary to enter into, any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate of the Borrower or
such Subsidiary, except in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than would
be obtained in a comparable arm's-length transaction with a Person not an
Affiliate of the Borrower or such Subsidiary.
Section 10.8 Disposition of Assets. The Borrower will not sell, lease,
assign, transfer, or otherwise dispose of any of its assets, or permit any
Material Subsidiary to do so with any of its assets, except (a) dispositions of
Hydrocarbons in the ordinary course of business, (b) dispositions of obsolete,
damaged, or worn out equipment, (c) sales or transfers of assets from one
Guarantor to another Guarantor, or (d) sales of assets having an aggregate fair
market value of 10% or less of the then current Borrowing Base during any fiscal
year.
Section 10.9 Sale and Leaseback. The Borrower will not enter into, and
will not permit any Material Subsidiary to enter into, any arrangement with any
Person pursuant to which it leases from such Person real or personal property
that has been or is to be sold or transferred, directly or indirectly, by it to
such Person, except for any such arrangements which do not exceed the aggregate
amount of $500,000 for the Borrower and its Subsidiaries during any fiscal year.
Section 10.10 Prepayment of Debt. The Borrower will not prepay, and
will not permit any Material Subsidiary to prepay, any Debt in excess of an
aggregate amount of $50,000 during any fiscal year, except the Obligations.
Section 10.11 Nature of Business. The Borrower will not, and will not
permit any Material Subsidiary to, engage in any business other than the oil and
gas exploration and production, gas gathering, pipeline and processing, and
petroleum property management and consulting businesses in which they are
engaged on the date hereof.
Section 10.12 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 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.
Section 10.13 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 reporting
AMENDED AND RESTATED CREDIT AGREEMENT - Page 55
practices, except as required by GAAP and disclosed to the Administrative Agent,
or (b) in tax reporting treatment, except as required by law and disclosed to
the Administrative Agent.
Section 10.14 Hedge Agreement. The Borrower has not entered and shall
not enter into, maintain agreements or similar contractual arrangements, other
than in form and substance as are satisfactory to the Administrative Agent and
the Banks, intended to hedge market price fluctuations of oil and natural gas
that cover more than 75% of its total projected production from Oil and Gas
Properties.
ARTICLE XI
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or the
Issuing Bank has any obligation to issue Letters of Credit hereunder, the
Borrower will perform and observe the following financial covenants:
Section 11.1 Consolidated Interest Coverage Ratio. The Borrower will
not permit its Consolidated Interest Coverage Ratio to be less than (a) 2.0 to
1.0 at all times from the Closing Date until June 30, 1998, (b) 2.5 to 1.0 at
all times from June 30, 1998 until December 31, 1998, and (c) 2.75 to 1.0 at all
times thereafter, calculated quarterly (beginning April 30, 1997) for the four
quarters then ended as of the last day of each March, June, September and
December.
Section 11.2 Consolidated Tangible Net Worth. The Borrower will at all
times maintain Consolidated Tangible Net Worth in an amount not less than the
sum of (i) 90% of the Consolidated Tangible Net Worth as of the Closing Date,
plus (ii) 90% of the Consolidated Net Income (to the extent positive) of
Borrower for each fiscal year ending after December 31, 1996, calculated
quarterly as of the last day of each March, June, September and December, plus
(iii) 100% of the proceeds from issuances of equity by the Borrower, minus (iv)
ceiling test write-downs and preferred dividends related to stock purchased
pursuant to the Stock Purchase Agreement.
Section 11.3 Current Ratio. Borrower will not permit its Current Ratio
to be less than 1.0 to 1.0, calculated quarterly as of the last day of each
March, June, September and December.
Section 11.4 Debt to Capitalization Ratio. Borrower will not permit
its Debt to Capitalization Ratio to be more than (a) 0.86 to 1.00 at all times
from the Closing Date until ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 0.75 to 1.00 at all times from
March 31, 1998 until September 30, 1998 and (c) 0.70 to 1.00 from September 30,
1998 until the Termination Date, calculated quarterly as of the last day of each
March, June, September and December.
Section 11.5 Capital Expenditures. Borrower will not permit the
aggregate capital expenditures (excluding acquisitions) of the Borrower and the
Subsidiaries to exceed (a) the greater of (i) the amount of capital expenditures
reflected in the Engineering Reports for such
AMENDED AND RESTATED CREDIT AGREEMENT - Page 56
year and (ii) $15,000,000 during the 1997 fiscal year, (b) the greater of (i)
the amount of capital expenditures reflected in the Engineering Reports for such
year and (ii) $25,000,000 during the 1998 fiscal year and (c) thereafter not to
exceed the capital expenditures in the Engineering Reports for such fiscal year
without the prior written consent of Majority Banks.
ARTICLE XII
Default
Section 12.1 Events of Default. Each of the following shall be
deemed an "Event of Default":
(a) The Borrower shall fail to pay when due the Obligations or
any part thereof.
(b) Any representation or warranty made or deemed made by the
Borrower or any Obligated Party (or any of their respective officers)
in any Loan Document or in any certificate, report, notice, or
financial statement furnished at any time in connection with this
Agreement shall be false, misleading, or erroneous in any material
respect when made or deemed to have been made.
(c) The Borrower shall fail to perform, observe, or comply
with any covenant, agreement, or term contained in Section 9.1(e),
(f), (h) or (i), 9.5, 9.6, 9.10, Article X, or Article XI of this
Agreement (for which there shall be no grace); or the Borrower or any
Obligated Party shall fail to perform, observe, or comply with any
other covenant, agreement, or term contained in this Agreement or any
other Loan Document (other than those set forth in Section 9.1(e),
(f), (h) or (i), 9.5, 9.6, 9.10, Article X or XI or the covenants to
pay the Obligations) and such failure shall continue for a period of
ten days.
(d) The Borrower, any Subsidiary, or any Obligated Party shall
commence a voluntary proceeding seeking liquidation, reorganization,
or other relief with respect to itself or its debts under any
bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian, or other similar official of it or a substantial part of
its property or shall consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or
other proceeding commenced against it or shall make a general
assignment for the benefit of creditors or shall generally fail to pay
its debts as they become due or shall take any corporate action to
authorize any of the foregoing.
(e) An involuntary proceeding shall be commenced against the
Borrower, any Subsidiary, or any Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official for it or a substantial part of
its property, and such involuntary proceeding shall remain undismissed
and unstayed for a period of sixty days.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 57
(f) The Borrower, any Subsidiary, or any Obligated Party shall
fail to discharge within a period of 30 days after the commencement
thereof any attachment, sequestration, or similar proceeding or
proceedings involving an aggregate amount in excess of $100,000
against any of its assets or properties.
(g) A final judgment or judgments for the payment of money in
excess of $100,000 in the aggregate shall be rendered by a court or
courts against the Borrower, any of its Subsidiaries, or any Obligated
Party and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be
procured, within 30 days from the date of entry thereof and the
Borrower or the relevant Subsidiary or Obligated Party shall not,
within said period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal.
(h) The Borrower, any Subsidiary, or any Obligated Party shall
fail to pay when due any principal of or interest on any Debt (other
than the Obligations) the amount of which individually or in the
aggregate exceeds $100,000, or the maturity of any such Debt shall
have been accelerated, or any such Debt shall have been required to be
prepaid prior to the stated maturity thereof, or any event shall have
occurred that permits (or, with the giving of notice or lapse of time
or both, would permit) any holder or holders of such Debt or any
Person acting on behalf of such holder or holders to accelerate the
maturity thereof or require any such prepayment.
(i) This Agreement or any other Loan Document shall cease to
be in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
the Borrower, any Subsidiary, any Obligated Party, or the Borrower or
any Obligated Party shall deny that it has any further liability or
obligation under any of the Loan Documents, or any lien or security
interest created by the Loan Documents shall for any reason cease to
be a valid, first priority perfected security interest in and lien
upon any of the Collateral purported to be covered thereby.
(j) Any of the following events shall occur or exist with
respect to the Borrower or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Plan; (iii) the filing under Section 4041 of ERISA of a notice
of intent to terminate any Plan or the termination of any Plan; (iv)
any event or circumstance that might constitute grounds entitling the
PBGC to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings; or (v)
complete or partial withdrawal under Section 4201 or 4204 of ERISA
from a Multiemployer Plan or the reorganization, insolvency, or
termination of any Multiemployer Plan; and in each case above, such
event or condition, together with all other events or conditions, if
any, have subjected or could in the reasonable opinion of Required
Banks subject the Borrower to any tax, penalty, or other liability to
a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate exceed or could reasonably
be expected to exceed $250,000.
AMENDED AND RESTATED CREDIT AGREEMENT - Page 58
(k) The Borrower or any of its Material Subsidiaries, or any
of their properties, revenues, or assets aggregating $100,000 or
greater, shall become the subject of an order of forfeiture, seizure,
or divestiture (whether under RICO or otherwise) and the same shall
not have been discharged (or provisions shall not be made for such
discharge) within 30 days from the date of entry thereof.
(l) A Change in Control shall occur.
(m) A default under the Bridge Loan shall occur; provided,
however, that no such default shall be deemed to exist for purposes of
this clause (m) so long as the Bridge Lenders shall have agreed in
writing to waive such default.
Section 12.2 Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent may (and if directed by Required Banks,
shall) do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and
accrued and unpaid interest on the Notes and all other obligations of
the Borrower under the Loan Documents immediately due and payable, and
the same shall thereupon become immediately due and payable, without
notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other
formalities of any kind, all of which are hereby expressly waived by
the Borrower.
(b) Termination of Commitments. Terminate the Commitments and
the obligation of the Issuing Banks to issue Letters of Credit
hereunder without notice to the Borrower.
(c) Judgment. Reduce any claim of any Agent, any Issuing Bank
or any Bank to judgment.
(d) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Collateral Agent for the benefit of itself, the other
Agents, the Banks and the Issuing Banks to secure payment and
performance of the Obligations in accordance with the terms of the
Loan Documents.
(e) Rights. Exercise any and all rights and remedies afforded
by the laws of the State of New York or any other jurisdiction, by any
of the Loan Documents, by equity, or otherwise.
Provided, however, that upon the occurrence of an Event of Default under
subsection (d) or (e) of Section 12.1, the Commitments of all of the Banks and
the obligation of the Issuing Banks to issue Letters of Credit shall
automatically terminate, and the outstanding principal of and accrued and unpaid
interest on the Notes and all other obligations of the Borrower under the Loan
Documents shall thereupon become immediately due and payable without notice,
demand,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 59
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, protest, or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
Section 12.3 Letters of Credit. If any Event of Default shall occur
and be continuing, Borrower shall, if requested by the Administrative Agent for
the Required Banks, immediately deposit with and pledge to the Administrative
Agent cash or cash equivalent investments in an amount equal to the outstanding
Letter of Credit Liabilities as security for the Obligations.
Section 12.4 Performance by the Administrative Agent. If the Borrower
shall fail to perform any covenant or agreement in accordance with the terms of
the Loan Documents, the Administrative Agent may, at the direction of Required
Banks, perform or attempt to perform such covenant or agreement on behalf of the
Borrower. In such event, the Borrower shall, at the request of the
Administrative Agent, promptly pay any amount expended by the Administrative
Agent or the Banks in connection with such performance or attempted performance
to the Administrative Agent at the Principal Office, together with interest
thereon at the Default Rate from and including the date of such expenditure to
but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Administrative Agent, the
Issuing Bank nor any Bank shall have any liability or responsibility for the
performance of any obligation of the Borrower under this Agreement or any of the
other Loan Documents.
ARTICLE XIII
Agency Provisions
Section 13.1 Appointment and Powers of the Administrative Agent. In
order to expedite the various transactions contemplated by this Agreement, the
other Agents, the Banks and the Issuing Banks hereby irrevocably appoint and
authorize Bankers Trust to act as their Administrative Agent hereunder and under
each of the other Loan Documents. Bankers Trust consents to such appointment and
agrees to perform the duties of the Administrative Agent as specified herein.
The other Agents, the Banks and the Issuing Banks authorize and direct the Agent
to take such action in their name and on their behalf under the terms and
provisions of the Loan Documents and to exercise such rights and powers
thereunder as are specifically delegated to or required of the Administrative
Agent for the other Agents, the Banks and the Issuing Banks, together with such
rights and powers as are reasonably incidental thereto. The Administrative Agent
is hereby expressly authorized to act as follows as the Administrative Agent on
behalf of itself, the other Agents, the other Banks and the Issuing Banks:
(a) To receive on behalf of each Agent, the Banks and the
Issuing Banks any payment of principal, interest, fees or other
amounts paid pursuant to this Agreement and the Notes and to
distribute to each Agent, each Bank and/or each Issuing Bank its share
of all payments so received as provided in this Agreement;
(b) To receive all documents and items to be furnished under
the Loan Documents;
AMENDED AND RESTATED CREDIT AGREEMENT - Page 60
(c) To act as nominee for and on behalf of the Agents, the
Banks and the Issuing Banks in and under the Loan Documents;
(d) To arrange for the means whereby the funds of the Banks
are to be made available to the Borrower;
(e) To distribute to the Agents, the Banks and the Issuing
Banks information, requests, notices, payments, prepayments, documents
and other items received from the Borrower, the other Obligated
Parties, and other Persons;
(f) To execute and deliver to the Borrower, the other
Obligated Parties, and other Persons, all requests, demands,
approvals, notices, and consents received from the Agents, the Banks
and the Issuing Banks;
(g) To the extent permitted by the Loan Documents, to exercise
on behalf of each Agent, each Bank and each Issuing Bank all rights
and remedies of such Persons upon the occurrence of any Event of
Default; and
(h) To take such other actions as may be requested by Required
Banks.
Section 13.2 Appointment and Powers of the Collateral Agent. In order
to expedite the various transactions contemplated by this agreement, the other
Agents, the Banks and the Issuing Banks hereby irrevocably appoint and authorize
First Union to act as the Collateral Agent hereunder and under each of the other
Loan Documents. First Union consents to such appointment and agrees to perform
the duties of the Collateral Agent as specified herein. Subject to the
provisions of the Intercreditor Agreement, the other Agents, the Banks and the
Issuing Banks authorize and direct the Collateral Agent to take such action in
their name and on their behalf under the terms and provisions of the Loan
Documents and to exercise such rights and powers thereunder as are specifically
delegated to or required of the Collateral Agent for the other Agents, the Banks
and the Issuing Banks, together with such rights and powers as are reasonably
incidental thereto. Subject to the provisions of the Intercreditor Agreement,
the Collateral Agent is hereby expressly authorized to act as follows as the
Collateral Agent on behalf of itself, the other Agents, the other Banks and the
Issuing Banks:
(a) To receive all documents and items relating to the
Collateral to be furnished under the Loan Documents;
(b) To distribute to the Agents, the Banks and the Issuing
Banks information, requests, notices, payments, prepayments, documents
and other items received from the Borrower, the other Obligated
Parties, and other Persons;
(c) To the extent permitted by the Loan Documents and subject
to Section 13.3 below, to exercise on behalf of each Agent, each Bank
and each Issuing Bank all rights and remedies of such Persons upon the
occurrence of any Event of Default;
AMENDED AND RESTATED CREDIT AGREEMENT - Page 61
(d) To accept, execute, and deliver the Borrower Pledge
Agreement, the Subsidiary Pledge Agreement, the Subsidiary Guaranty
and the other Security Documents as the secured party, including,
without limitation all UCC financing statements; and
(e) To take such other actions as may be requested by Required
Banks.
Section 13.3 Immunity. Neither the Agents, nor any of their
Affiliates, officers, directors, employees, attorneys, or agents shall be liable
for any action taken or omitted to be taken by any of them hereunder or
otherwise in connection with this Agreement or any of the other Loan Documents
except for its or their own gross negligence or willful misconduct. Without
limiting the generality of the preceding sentence, the Agents, (i) may treat the
payee of any Note as the holder thereof until the Administrative Agent receives
written notice of the assignment or transfer thereof signed by such payee and in
form satisfactory to the Administrative Agent; (ii) shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee or fiduciary for any Bank or Issuing Bank; (iii)
shall not be required to initiate any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent requested by
Required Banks; (iv) shall not be responsible to the Banks or the Issuing Banks
for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or any certificate or other document
referred to or provided for in, or received by any of them under, this Agreement
or any other Loan Document, or for the value, validity, effectiveness,
enforceability, or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by any Person to perform any of its obligations hereunder or thereunder;
(v) may consult with legal counsel (including counsel for the Borrower),
independent public accountants, and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants, or experts; and (vi)
shall incur no liability under or in respect of any Loan Document by acting upon
any notice, consent, certificate, or other instrument or writing believed by it
to be genuine and signed or sent by the proper party or parties. As to any
matters not expressly provided for by this Agreement, the Agents, shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by Required Banks, and such instructions of
Required Banks and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks; provided, however, that no Agent shall be required
to take any action which exposes such Agent to personal liability or which is
contrary to this Agreement or any other Loan Document or applicable law.
Section 13.4 Rights of Each Agent as a Bank. With respect to its
Commitment, the Loans made by it and the Notes issued to it, Paribas, Bankers
Trust and First Union in their capacity as a Bank hereunder shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not acting as an agent or an Issuing Bank, and the term "Bank" or
"Banks" shall, unless the context otherwise indicates, include such agent in its
individual capacity. The Agents and their Affiliates may (without having to
account therefor to any Bank or any Issuing Bank) accept deposits from, lend
money to, act as trustee under indentures of, provide merchant banking services
to, and generally engage in any kind of business
AMENDED AND RESTATED CREDIT AGREEMENT - Page 62
with the Borrower, any of its Subsidiaries, any other Obligated Party, and any
other Person who may do business with or own securities of the Borrower, any
Subsidiary, or any other Obligated Party, all as if it were not acting as an
agent hereunder and without any duty to account therefor to the other agents,
the Banks or the Issuing Banks.
Section 13.5 Sharing of Payments, Etc. If any Bank shall obtain any
payment of any principal of or interest on any Loan made by it under this
Agreement or payment of any other obligation under the Loan Documents then owed
by the Borrower or any other Obligated Party to such Bank, whether voluntary,
involuntary, through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, in excess of its pro rata share,
such Bank shall promptly purchase from the other Banks participations in the
Loans held by them hereunder in such amounts, and make such other adjustments
from time to time as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each of the other Banks in accordance with its
pro rata portion thereof. To such end, all of the Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if all or any portion of such excess payment is thereafter rescinded or must
otherwise be restored. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Bank so purchasing a
participation in the Loans made by the other Banks may exercise all rights of
setoff, banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Bank were a direct holder of Loans to the
Borrower in the amount of such participation. Nothing contained herein shall
require any Bank to exercise any such right or shall affect the right of any
Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrower.
Section 13.6 INDEMNIFICATION. THE BANKS HEREBY AGREE TO INDEMNIFY THE
AGENTS, FROM AND HOLD THE AGENTS, AND THE ISSUING BANKS HARMLESS AGAINST (TO THE
EXTENT NOT REIMBURSED UNDER SECTIONS 14.1 AND 14.2, BUT WITHOUT LIMITING THE
OBLIGATIONS OF THE BORROWER UNDER SECTIONS 14.1 AND 14.2), RATABLY IN ACCORDANCE
WITH THEIR RESPECTIVE COMMITMENTS, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENTS, OR ANY
ISSUING BANK IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS
OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY THE AGENTS, OR ANY ISSUING BANK
UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT NO
BANK SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY
SUCH AGENT'S, OR SUCH ISSUING BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE BANKS
THAT THE AGENTS, AND THE ISSUING BANKS SHALL BE INDEMNIFIED HEREUNDER FROM AND
HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), AND
AMENDED AND RESTATED CREDIT AGREEMENT - Page 63
DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH AGENT, OR SUCH
ISSUING BANK. WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH BANK
AGREES TO REIMBURSE EACH AGENT, AND EACH ISSUING BANK PROMPTLY UPON DEMAND FOR
ITS PRO RATA SHARE (CALCULATED ON THE BASIS OF THE COMMITMENTS) OF ANY AND ALL
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY SUCH AGENT, OR
SUCH ISSUING BANK IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT SUCH
AGENT, OR SUCH ISSUING BANK IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
Section 13.7 Independent Credit Decisions. Each Bank agrees that it
has independently and without reliance on any Agent, any Issuing Bank or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and decision to enter
into this Agreement and that it will, independently and without reliance upon
any Agent, any Issuing Bank or any other Bank, and based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any of the other Loan Documents. No Agent shall be required to keep itself
informed as to the performance or observance by the Borrower or any Obligated
Party of this Agreement or any other Loan Document or to inspect the properties
or books of the Borrower or any Obligated Party. Except for notices, reports and
other documents and information expressly required to be furnished to the Banks
by the Agents, hereunder or under the other Loan Documents, no Agent shall have
any duty or responsibility to provide the Issuing Banks or any Bank with any
credit, financial or other information concerning the affairs, financial
condition or business of the Borrower or any Obligated Party (or any of their
Affiliates) which may come into the possession of the Agents, or any of their
Affiliates.
Section 13.8 Several Commitments. The Commitments and other
obligations of the Banks under this Agreement are several. The default by any
Bank in making a Loan in accordance with its Commitment shall not relieve the
other Banks of their obligations under this Agreement. In the event of any
default by any Bank in making any Loan, each nondefaulting Bank shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Bank was required to advance hereunder. In no event shall
any Bank be required to advance an amount or amounts which shall in the
aggregate exceed such Bank's Commitment. No Bank shall be responsible for any
act or omission of any other Bank.
Section 13.9 Successor Agent. Subject to the appointment and
acceptance of a successor Agent, as provided below, any of the Agents may resign
at any time by giving notice thereof to the other agents, the Banks, the Issuing
Banks and the Borrower and any Agent may be removed at any time with or without
cause by Required Banks. Upon any such resignation or removal,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 64
Required Banks will have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by Required Banks and shall have accepted
such appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Required Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States of
America or any State thereof and having combined capital and surplus of at least
$100,000,000. In the event the successor Agent is not at the time of its
appointment, a Bank hereunder, the Borrower shall have the right to consent to
the successor Agent, which consent shall not be unreasonably withheld or
delayed. Upon the acceptance of its appointment as successor Agent, such
successor Agent shall thereupon succeed to and become vested with all rights,
powers, privileges, immunities, and duties of the resigning or removed Agent,
and the resigning or removed Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any Agent's
resignation or removal as Agent, the provisions of this Article XIV shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was the Agent.
ARTICLE XIV
Miscellaneous
Section 14.1 Expenses. The Borrower hereby agrees to pay on demand:
(a) all reasonable costs and expenses of the Administrative Agent, in connection
with the preparation, negotiation, execution, and delivery of this Agreement and
the other Loan Documents and any and all amendments, modifications, renewals,
extensions, and supplements thereof and thereto, including, without limitation,
the reasonable fees and expenses of legal counsel for the Administrative Agent,
(b) all costs and expenses of the Agents, and the Issuing Banks in connection
with any Default and the enforcement of this Agreement or any other Loan
Document, including, without limitation, the reasonable fees and expenses of
legal counsel for the Agents, and the Issuing Banks, (c) all transfer, stamp,
documentary, or other similar taxes, assessments, or charges levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all costs, expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by this Agreement or any other Loan
Document, and (e) all other reasonable costs and expenses incurred by the
Administrative Agent, in connection with this Agreement or any other Loan
Document, including, without limitation, all reasonable costs, expenses, and
other charges incurred following the occurrence and during the continuance of a
Default in connection with obtaining any audit or appraisal in respect of the
Collateral.
Section 14.2 INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE AGENTS,
THE ISSUING BANKS AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING
AMENDED AND RESTATED CREDIT AGREEMENT - Page 65
ATTORNEYS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR
INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY,
PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B)
ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY
THE BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED
RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER OR
ANY SUBSIDIARY, OR (E) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING. WITHOUT LIMITING ANY
PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS
SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 14.3 LIMITATION OF LIABILITY. NO AGENT, ANY ISSUING BANK, ANY
BANK, OR ANY AFFILIATE, OFFICER, DIRECTOR, EMPLOYEE, ATTORNEY, OR AGENT THEREOF
SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND THE BORROWER HEREBY WAIVES,
RELEASES, AND AGREES NOT TO ▇▇▇ ANY OF THEM UPON, ANY CLAIM FOR ANY SPECIAL OR
PUNITIVE DAMAGES SUFFERED OR INCURRED BY THE BORROWER IN CONNECTION WITH,
ARISING OUT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS. THE BORROWER HEREBY WAIVES, RELEASES, AND AGREES
NOT TO ▇▇▇ ANY AGENT, ANY ISSUING BANK, OR ANY BANK OR ANY OF THEIR RESPECTIVE
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, OR AGENTS FOR PUNITIVE
DAMAGES IN RESPECT OF ANY CLAIM IN CONNECTION WITH, ARISING OUT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
Section 14.4 No Duty. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by the Agents, the Issuing
Banks and the Banks shall have the right to act exclusively in the interest of
the Agent, the Documentation Agent, the Collateral Agents, the Issuing Banks and
the Banks and shall have no duty of disclosure, duty of loyalty,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 66
duty of care, or other duty or obligation of any type or nature whatsoever to
the Borrower or any of the Borrower's shareholders or any other Person.
Section 14.5 No Fiduciary Relationship. The relationship between the
Borrower and each Bank is solely that of debtor and creditor, and neither any
Agent, any Issuing Bank nor any Bank has any fiduciary or other special
relationship with the Borrower, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between the
Borrower, any Agent, any Issuing Bank or any Bank to be other than that of
debtor and creditor.
Section 14.6 Equitable Relief. The Borrower recognizes that in the
event the Borrower fails to pay, perform, observe, or discharge any or all of
the Obligations, any remedy at law may prove to be inadequate relief to the
Agents, the Issuing Banks and the Banks. The Borrower therefore agrees that if
the Agents, the Issuing Banks or the Banks so request, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
Section 14.7 No Waiver; Cumulative Remedies. No failure on the part of
any Agent, any Issuing Bank or any Bank to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power, or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power, or privilege under this Agreement preclude
any other or further exercise thereof or the exercise of any other right, power,
or privilege. The rights and remedies provided for in this Agreement and the
other Loan Documents are cumulative and not exclusive of any rights and remedies
provided by law.
Section 14.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. The Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all of the Banks. Any Bank may sell
participations to one or more banks or other institutions in or to all
or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or a
portion of its Commitments and the Loans owing to it); provided,
however, that (i) such Bank's obligations under this Agreement and the
other Loan Documents (including, without limitation, its Commitments)
shall remain unchanged, (ii) such Bank shall remain solely responsible
to the Borrower for the performance of such obligations, (iii) such
Bank shall remain the holder of its Notes for all purposes of this
Agreement, (iv) the Borrower shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement and the other Loan Documents, and (v)
such Bank shall not sell a participation that conveys to the
participant the right to vote or give or withhold consents under this
Agreement or any other Loan Document, other than the right to vote
upon or consent to (A) any increase of such Bank's Commitments, (B)
any reduction of the principal amount of, or interest to be paid on,
the Loans of such Bank, (C) any reduction of any commitment fee or
other amount payable to such Bank under any Loan Document, (D) any
postponement of any date for the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 67
payment of any amount payable in respect of the Loans of such Bank or
(E) any release of Collateral or Obligated Party.
(b) The Borrower and each of the Banks agree that any Bank
(the "Assigning Bank") may, with the Administrative Agent's consent
and unless an Event of Default has occurred, the Borrower's consent
(except that no consent shall be required with respect to assignments
by the Banks during the first six months after the date hereof, each
of the Banks agreeing to use reasonable efforts to keep the Borrower
advised of any potential assignees), which consent of the Borrower
shall not be unreasonably withheld or delayed, at any time assign to
one or more Eligible Assignees all, or a proportionate part of all, of
its rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Commitments and Loans)
(each an "Assignee"); provided, however, that (i) any such assignment
made within the first 120 days after the date hereof shall be made by
all Banks on a pro rata basis, (ii) each such assignment shall be of a
consistent, and not a varying, percentage of all of the assigning
Bank's Commitments, rights and obligations under this Agreement and
the other Loan Documents, (iii) except in the case of an assignment of
all of a Bank's rights and obligations under this Agreement and the
other Loan Documents, the amount of the Commitments of the assigning
Bank being assigned pursuant to each assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000, and (iv) the parties to
each such assignment shall execute and deliver to the Administrative
Agent for its acceptance and recording in the Register (as defined
below), an Assignment and Acceptance, together with the Notes subject
to such assignment, and a processing and recordation fee of $2,500, to
be paid by the Assignee. Upon such execution, delivery, acceptance,
and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, or, if so specified in such
Assignment and Acceptance, the date of acceptance thereof by the
Administrative Agent, (x) the assignee thereunder shall be a party
hereto as a "Bank" and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and
under the Loan Documents and (y) the Bank that is an assignor
thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this
Agreement and the other Loan Documents (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a
Bank's rights and obligations under the Loan Documents, such Bank
shall cease to be a party thereto).
(c) Any Bank may at any time pledge or assign all or any
portion of its rights under this Agreement and the other Loan
Documents to any federal reserve bank without notice to or consent of
the Borrower. No such pledge or assignment shall release the
transferor lender from its obligations hereunder.
(d) By executing and delivering an Assignment and Acceptance,
the Bank that is an assignor thereunder and the assignee thereunder
confirm to and agree with each
AMENDED AND RESTATED CREDIT AGREEMENT - Page 68
other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes
no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or
in connection with the Loan Documents or the execution, legality,
validity, and enforceability, genuineness, sufficiency, or value of
the Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Obligated Party or the performance or
observance by the Borrower or any Obligated Party of its obligations
under the Loan Documents; (iii) such assignee confirms that it has
received a copy of the other Loan Documents, together with copies of
the financial statements referred to in Section 8.2 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent or such assignor and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Loan Documents; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and exercise such powers under the Loan
Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms
of the Loan Documents (including the Intercreditor Agreement) are
required to be performed by it as a Bank.
(e) The Administrative Agent shall maintain at its Principal
Office a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Banks and the Commitments of, and principal amount of
the Loans owing to, each Bank from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Administrative
Agent, the Issuing Bank and the Banks may treat each Person whose name
is recorded in the Register as a Bank hereunder for all purposes under
the Loan Documents. The Register shall be available for inspection by
the Borrower, the Issuing Bank or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and assignee representing that it is an Eligible
Assignee, together with any Note subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit "G" hereto, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, and (iii) give prompt written
notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower, at its expense, shall execute
and deliver to the Administrative Agent in exchange for the
surrendered Notes new Notes to the order of such Eligible Assignee in
an amount equal to the
AMENDED AND RESTATED CREDIT AGREEMENT - Page 69
Commitments assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained a portion of its Commitments,
new Notes to the order of the assigning Bank in an amount equal to the
Commitments retained by it hereunder (each such promissory note shall
constitute a "Note" for purposes of the Loan Documents). Such new
Notes shall be in an aggregate principal amount of the surrendered
Notes, shall be dated the effective date of such Assignment and
Acceptance, and shall otherwise be in substantially the form of
Exhibit "A" hereto.
(g) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower or its
Subsidiaries furnished to such Bank by or on behalf of the Borrower or
its Subsidiaries, subject, however, to the provisions of Section
14.20.
(h) If the Bridge Loan is not repaid in full on or before June
30, 1997, each Bank and each Agent agrees to attempt to syndicate (by
means of assignments of the Loans) the Loans made under this
Agreement.
Section 14.9 Survival. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by any Agents, any Issuing Bank or any Bank or any closing shall
affect the representations and warranties or the right of the Agents, any
Issuing Bank or any Bank to rely upon them. Without prejudice to the survival of
any other obligation of the Borrower hereunder, the obligations of the Borrower
under Article V and Sections 14.1 and 14.2 shall survive repayment of the Notes
and termination of the Commitments.
Section 14.10 Amendments, Etc. No amendment or waiver of any provision
of this Agreement, the Notes, or any other Loan Document to which the Borrower
is a party, nor any consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be agreed or consented to by
Required Banks and the Borrower, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, waiver, or consent shall, unless in writing
and signed by all of the Banks and the Borrower, do any of the following: (a)
increase the Commitments of the Banks or subject the Banks to any additional
obligations; (b) reduce the principal of, or interest on, the Notes or any fees
or other amounts payable to the Banks hereunder; (c) postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable to the Banks hereunder; (d) waive any of the conditions
specified in Article VIII; (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Notes or the number of Banks which
shall be required for the Banks or any of them to take any action under this
Agreement; (f) change any provision contained in this Section 14.11; or (g)
release any Collateral or Obligated Party. Notwithstanding anything to the
contrary contained in this Section, no amendment, waiver, or consent shall be
made with respect to Article XIII hereof without the prior written consent of
the Agent and no amendment, waiver,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 70
or consent shall be made with respect to Article III hereof without the prior
written consent of the Issuing Banks.
Notwithstanding the foregoing provisions of this Section 14.10, no
amendment to this Agreement or any Security Document and no release of
Collateral shall be effective unless made in compliance with provisions of the
Intercreditor Agreement.
Section 14.11 Maximum Interest Rate. No provision of this Agreement or
of any other Loan Document shall require the payment or the collection of
interest in excess of the maximum amount permitted by applicable law. If any
excess of interest in such respect is hereby provided for, or shall be
adjudicated to be so provided, in any Loan Document or otherwise in connection
with this loan transaction, the provisions of this Section shall govern and
prevail and neither the Borrower nor the sureties, guarantors, successors, or
assigns of the Borrower shall be obligated to pay the excess amount of such
interest or any other excess sum paid for the use, forbearance, or detention of
sums loaned pursuant hereto. In the event any Bank ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness evidenced by the Notes; and, if
the principal of the Notes has been paid in full, any remaining excess shall
forthwith be paid to the Borrower. In determining whether or not the interest
paid or payable exceeds the Maximum Rate, the Borrower and each Bank shall, to
the extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the indebtedness evidenced by the
Notes so that interest for the entire term does not exceed the Maximum Rate.
Section 14.12 Notices. All notices and other communications provided
for in this Agreement and the other Loan Documents to which the Borrower is a
party shall be given or made by telecopy or in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof; or, as to any party at such other address as shall be designated by such
party in a notice to each other party given in accordance with this Section.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopy, subject to
telephone confirmation of receipt, or when personally delivered or, in the case
of a mailed notice, when duly deposited in the mails, in each case given or
addressed as aforesaid; provided, however, notices to the Administrative Agent
pursuant to Article II and III shall not be effective until received by the
Administrative Agent.
Section 14.13 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN NEW YORK COUNTY, NEW YORK, AND IT SHALL BE PERFORMABLE
FOR ALL PURPOSES IN NEW YORK COUNTY, NEW YORK. SUBJECT TO SECTION 14.20, ANY
ACTION OR PROCEEDING AGAINST THE BORROWER UNDER OR IN CONNECTION
AMENDED AND RESTATED CREDIT AGREEMENT - Page 71
WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN
NEW YORK COUNTY, NEW YORK. THE BORROWER HEREBY IRREVOCABLY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B) WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN INCONVENIENT FORUM. THE BORROWER
AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR DETERMINED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 14.13. NOTHING HEREIN OR IN ANY OF THE
OTHER LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF THE AGENTS, THE ISSUING BANK OR
ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SUBJECT TO
SECTION 14.20, SHALL LIMIT THE RIGHT OF THE AGENTS, ANY ISSUING BANK OR ANY BANK
TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR WITH RESPECT TO ANY OF
ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE
BORROWER AGAINST THE AGENTS, ANY ISSUING BANK OR ANY BANK SHALL BE BROUGHT ONLY
IN A COURT LOCATED IN NEW YORK COUNTY, NEW YORK.
Section 14.14 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 14.15 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 14.16 Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 14.17 Construction. The Borrower, the Agents, the Issuing
Banks and each Bank acknowledge that each of them has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review this
Agreement and the other Loan Documents with its legal counsel and that this
Agreement and the other Loan Documents shall be construed as if jointly drafted
by the parties hereto.
Section 14.18 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 14.19 Treatment of Certain Information; Confidentiality. Each
Bank, each Agent, and each Issuing Bank agree (on behalf of itself and each of
its affiliates, directors,
AMENDED AND RESTATED CREDIT AGREEMENT - Page 72
officers, employees and representatives) to keep confidential any non-public
information supplied to it by Borrower pursuant to this Agreement that Borrower
identifies to such Bank, such Agent, each Issuing Bank (as the case may be) as
confidential at the time Borrower so supplies such information, provided, that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any of the Banks, each Issuing Bank or each Agent, (iii) to bank
examiners, auditors or accountants, (iv) to the Agents, any Issuing Bank or any
other Bank, (v) in connection with any litigation to which any one or more of
the Banks, any Agent, or any Issuing Bank is a party, (vi) to a subsidiary or
affiliate of such Person, or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Bank an acknowledgement to the effect that it is bound by the
provisions of this Section 14.20, which acknowledgement may be included as part
of the respective assignment or participation agreement pursuant to which such
assignee or participant acquires an interest in the Loans hereunder; and
provided, further, that in no event shall any Bank, any Issuing Bank, or any
Agent be obligated or required to return any materials furnished to it by the
Borrower.
Section 14.20 Arbitration.
(a) Arbitration. Upon the demand of any party, any Dispute
shall be resolved by binding arbitration (except as set forth in (e)
below) in accordance with the terms of this Agreement. A "Dispute"
shall mean any action, dispute, claim or controversy of any kind,
whether in contract or tort, statutory or common law, legal or
equitable, now existing or hereafter arising under or in connection
with, or in any way pertaining to, any of the Loan Documents, or any
past, present or future extensions of credit and other activities,
transactions or obligations of any kind related directly or indirectly
to any of the Loan Documents, including without limitation, any of the
foregoing arising in connection with the exercise of any self-help,
ancillary or other remedies pursuant to any of the Loan Documents. Any
party may by summary proceedings bring an action in court to compel
arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear
all costs and expenses incurred by such other party in compelling
arbitration of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be
administered by the American Arbitration Association ("AAA") or such
other administrator as the parties shall mutually agree upon in
accordance with the AAA Commercial Arbitration Rules. All Disputes
submitted to arbitration shall be resolved in accordance with the
Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the
Loan Documents. The arbitration shall be conducted at a location in
New York selected by the AAA or other administrator. If there is any
inconsistency between the terms hereof and any such rules, the terms
and procedures set forth herein shall control. All statutes of
limitation applicable to any Dispute shall apply to any arbitration
proceeding. All discovery activities shall be expressly limited to
matters directly relevant to the Dispute being arbitrated. Judgment
AMENDED AND RESTATED CREDIT AGREEMENT - Page 73
upon any award rendered in an arbitration may be entered in any court
having jurisdiction; provided however, that nothing contained herein
shall be deemed to be a waiver by any party that is a bank of the
protections afforded to it under 12 U.S.C. ss.91 or any similar
applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and
Foreclosure. No provision hereof shall limit the right of any party to
exercise self-help remedies such as setoff, foreclosure against or
sale of any real or personal property collateral or security, or to
obtain provisional or ancillary remedies, including without limitation
injunctive relief, sequestration, attachment, garnishment or the
appointment of a receiver, from a court of competent jurisdiction
before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right
of any party to compel arbitration hereunder.
(d) Arbitrator Qualifications and Powers Awards. Arbitrators
must be active members of the New York State Bar with expertise in the
substantive laws applicable to the subject matter of the Dispute.
Arbitrators are empowered to resolve Disputes by summary rulings in
response to motions filed prior to the final arbitration hearing.
Arbitrators (i) shall resolve all Disputes in accordance with the
substantive law of the state of New York, (ii) may grant any remedy or
relief that a court of the state of New York could order or grant
within the scope hereof and such ancillary relief as is necessary to
make effective any award, and (iii) shall have the power to award
recovery of all costs and fees, to impose sanctions and to take such
other actions as they deem necessary to the same extent a judge could
pursuant to the Federal Rules of Civil Procedure, the New York Rules
of Civil Procedure or other applicable law. Any Dispute in which the
amount in controversy is $5,000,000 or less shall be decided by a
single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By
submission to a single arbitrator, each party expressly waives any
right or claim to recover more than $5,000,000. Any Dispute in which
the amount in controversy exceeds $5,000,000 shall be decided by
majority vote of a panel of three arbitrators; provided however, that
all three arbitrators must actively participate in all hearings and
deliberations.
(e) Judicial Review. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy
exceeds $5,000,000, the arbitrators shall be required to make
specific, written findings of fact and conclusions of law. In such
arbitrations (i) the arbitrators shall not have the power to make any
award which is not supported by substantial evidence or which is based
on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and
the conclusions of law are not erroneous under the substantive law of
the state of New York, and (iii) the parties shall have in addition to
the grounds referred to in the Federal Arbitration Act for vacating,
modifying or correcting an award the right to judicial review of (A)
whether the findings of fact rendered by the arbitrators are supported
by substantial evidence, and (B) whether the conclusions of law are
erroneous
AMENDED AND RESTATED CREDIT AGREEMENT - Page 74
under the substantive law of the state of New York. Judgment
confirming an award in such a proceeding may be entered only if a
court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of New
York.
(f) Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to
conclude any arbitration proceedings within 180 days of the filing of
the Dispute with the AAA. No arbitrator or other party to an
arbitration proceeding may disclose the existence, content or results
thereof, except for disclosures of information by a party required in
the ordinary course of its business, by applicable law or regulations,
or to the extent necessary to exercise any judicial review rights set
forth herein. If more than one agreement for arbitration by or between
the parties potentially applies to a Dispute, the arbitration
provisions most directly related to the Loan Documents or the subject
matter of the Dispute shall control. This arbitration provision shall
survive termination, amendment or expiration of any of the Loan
Documents or any relationship between the parties.
Section 14.21 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT, THE NOTES,
THE OTHER LOAN DOCUMENTS, AND THE INSTRUMENTS AND DOCUMENTS EXECUTED IN
CONNECTION HEREWITH, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
Section 14.22 Certain Fees. Notwithstanding anything contained herein
to the contrary, the Borrower may pay certain fees (whether in cash or by the
issuance of warrants, stock or other equity) owing under the Bridge Loan
Agreement as it exists on the date hereof.
[Remainder of this page intentionally left blank.]
AMENDED AND RESTATED CREDIT AGREEMENT - Page 75
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
MAGNUM HUNTER RESOURCES, INC.
(formerly known as Magnum Petroleum, Inc.)
By:
▇▇▇▇ ▇. ▇▇▇▇▇
President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
ADMINISTRATIVE AGENT:
BANKERS TRUST COMPANY
By
Name:
Title:
Addresses for Notices:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
AMENDED AND RESTATED CREDIT AGREEMENT - Page 76
and
Bankers Trust Company
Two Houston Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
DOCUMENTATION AGENT:
BANQUE PARIBAS
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Group Vice President
- and -
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President
Address for Notices:
Banque Paribas
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
AMENDED AND RESTATED CREDIT AGREEMENT - Page 77
COLLATERAL AGENT:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
Address for Notices:
First Union Corporation of North Carolina
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: 713/▇▇▇-▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
ISSUING BANK:
BANKERS TRUST COMPANY
By
Name:
Title:
Addresses for Notices:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
and
Bankers Trust Company
Two Houston Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AMENDED AND RESTATED CREDIT AGREEMENT - Page 78
BANKS:
BANQUE PARIBAS
Commitment: By:
$43,333,333.33 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Group Vice President
- and -
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
Lending Office for Base Rate Loans:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
Lending Office for Eurodollar Loans:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
AMENDED AND RESTATED CREDIT AGREEMENT - Page ▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Commitment:
$43,333,333.33
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
Address for Notices:
First Union Corporation of North Carolina
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: 713/▇▇▇-▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans:
First Union National Bank of North Carolina
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: 713/▇▇▇-▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
First Union National Bank of North Carolina
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: 713/▇▇▇-▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
AMENDED AND RESTATED CREDIT AGREEMENT - Page 80
BANKERS TRUST COMPANY
Commitment:
$43,333,333.34
By:
Name:
Title:
Address for Notices:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
DA970720340
043097 v21
AMENDED AND RESTATED CREDIT AGREEMENT - Page 81