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EXHIBIT 10.1
2
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CREDIT AGREEMENT
among
▇▇▇ ▇▇▇▇▇, INC.
The Several Lenders
from Time to Time Parties Hereto
and
CHEMICAL BANK,
as Agent
Dated as of September 14, 1995
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.2 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5 Repayment of Revolving Credits; Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.6 Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) Initial Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Determinations of the Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.7 Optional and Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Conversion and Continuation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.9 Minimum Amounts and Maximum Number of Tranches . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.10 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.11 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.12 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.13 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.14 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.15 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.17 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.18 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.4 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . 23
3.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.10 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.12 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.14 Investment Company Act; Public Utility Holding Company Act; Other Regulations . . . . . . . . . . . . 25
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3.15 Purpose of Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1 Conditions to Initial Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(b) Closing Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Corporate Proceedings of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Borrower Incumbency Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(e) Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(f) Consents, Licenses and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(g) Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(h) Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(i) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(j) Reserve Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(k) Business Plan; Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(l) Demand Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2 Conditions to Each Revolving Credit Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(b) No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(c) Maintenance of Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(d) No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(e) Borrowing Base Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Additional Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.4 Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . . . . . . . 31
5.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.9 Borrowing Base Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(a) Maintenance of Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . 33
(b) Fixed Charge Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(c) Leverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(d) Maintenance of Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 Limitation on Guarantee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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6.5 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.6 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.7 Limitation on Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.8 Limitation on Investments, Acquisitions, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . 35
6.9 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.10 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.11 Limitation on Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.12 Limitation on Changes in Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.13 Limitation on Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.14 Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.15 Limitation on Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.6 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.10 Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.6 Successors and Assigns; Participations and Assignments . . . . . . . . . . . . . . . . . . . . . . . . 45
9.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.14 Waivers of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.15 Limitation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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SCHEDULES
Schedule I Commitments
Schedule 6.4(a) Guarantee Obligations
EXHIBITS
Exhibit A Revolving Credit Note
Exhibit B Closing Certificate
Exhibit C Opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Exhibit D Borrowing Base Certificate
Exhibit E Commodities Trading Report
Exhibit F Assignment and Acceptance
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CREDIT AGREEMENT, dated as of September 14, 1995, among ▇▇▇
▇▇▇▇▇, Inc., a Delaware corporation (the "Borrower"), the several banks and
other financial institutions from time to time parties to this Agreement (the
"Lenders") and Chemical Bank, a New York banking corporation, as agent for the
Lenders hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": 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 and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Agent as its prime rate in effect
at its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by Chemical Bank in
connection with extensions of credit to debtors); "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 Agent from three federal funds brokers of
recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Revolving Credit Loans the rate of interest
applicable to which is based upon the ABR.
"Affiliate": as to any Person, any other Person (other than
a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agent": Chemical, as the agent for the Lenders under this
Agreement and the other Loan Documents.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
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"Applicable Margin": on each day when the Utilization
Percentage is less than or equal to 75%, 0.75% per annum and on each
day when the Utilization Percentage is greater than 75%, 1.00% per
annum.
"Assignee": as defined in subsection 9.6(c).
"Available Commitment": at any time any amount equal to the
lesser of (i) the aggregate Commitments of the Lenders and (ii) the
Borrowing Base at that time.
"Board": the Board of Governors of the Federal Reserve System.
"Borrowing Base": at any date, the amount determined pursuant
to subsection 2.6(a)(i) as the amount of credit available to the
Borrower under this Agreement at such date.
"Borrowing Base Assets": the proven reserves of the Borrower
described in the most recent Reserve Report submitted by the Borrower
to the Agent in accordance with subsection 2.6(b).
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.2 as a date on which the Borrower requests
the Lenders to make Revolving Credit Loans hereunder.
"Business": as defined in subsection 3.16(b).
"Business Day": a day other than a Saturday, Sunday or any
other day on which commercial banks in New York City are authorized or
required by law to close.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed
or insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities
of one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer
rated at least A-2 by Standard and Poor's Rating Group ("S&P") or P-2
by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), (e) securities with
maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United
States, by any
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political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at
least A by S&P or A by Moody's, (f) securities with effective
maturities of one year or less from the date of acquisition backed by
an Aaa/AAA insurer or standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of
this definition, (g) securities with maturities of six months or less
from the date of acquisition overcollateralized with United States'
Government obligations as collateral or (h) shares of money market
mutual or similar funds which invest exclusively in assets satisfying
the requirements of clauses (a) through (g) of this definition.
"Chemical": Chemical Bank.
"Closing Date": the date on which the conditions precedent
set forth in subsection 4.1 shall be satisfied.
"Co-Agent": NationsBank of Texas, N.A., as co-agent for the
Lenders under this Agreement and the other Loan Documents.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment": as to any Lender, the obligation of such Lender
to make Revolving Credit Loans to the Borrower hereunder in an
aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule I, as
such amount may be reduced from time to time in accordance with the
provisions of this Agreement.
"Commitment Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the
aggregate Commitments (or, at any time after the Commitments shall
have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date or such earlier date
on which the Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
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"Consolidated Current Assets": at the date of determination,
all assets which would, in accordance with GAAP, be classified on a
consolidated balance sheet of the Borrower and its Subsidiaries as
current assets.
"Consolidated Current Liabilities": at the date of
determination, all liabilities which would, in accordance with GAAP,
be classified on a consolidated balance sheet of the Borrower and its
Subsidiaries as current liabilities.
"Consolidated Debt": as of the date of determination, of any
Person at such date, (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services
(other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (b)
any other indebtedness of such Person which is evidenced by a note,
bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such
Person and (e) all Guarantee Obligations of such Person in respect of
obligations described in (a), (b), (c) and (d).
"Consolidated EBITDA": for any period, the revenues of the
Borrower and its Subsidiaries for such period from continuing
operations, minus associated costs (generally excluding Consolidated
Interest Expense, income taxes, unallocated depreciation, depletion,
and amortization and other non-cash expenses), determined in each case
on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charges": for any period, the sum
(without duplication) of (i) Consolidated Interest Expense for such
period, (ii) provision for cash income taxes made by the Borrower or
any of its Subsidiaries on a consolidated basis in respect of such
period and (iii) scheduled payments made during such period on account
of principal of Indebtedness of the Borrower or any of its
Subsidiaries.
"Consolidated Interest Expense:" for any period, the amount
of interest expense, both expensed and capitalized, of the Borrower
and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, for such period on the aggregate principal amount of their
Indebtedness, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth": as of the date of determination,
all items which in conformity with GAAP would be included under
shareholders' equity on a consolidated balance sheet of the Borrower
and its Subsidiaries at such date.
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"Consolidated Tangible Net Worth": as of the date of
determination, Consolidated Net Worth after deducting therefrom the
following:
(a) any surplus resulting from the write-up of
assets subsequent to June 30, 1995;
(b) goodwill, including any amounts (however
designated on the balance sheet) representing the cost of
acquisitions of Subsidiaries in excess of underlying tangible
assets;
(c) patents, trademarks, copyrights;
(d) leasehold improvements not recoverable at
the expiration of a lease; and
(e) deferred charges (including, but not limited
to, unamortized debt discount and expense, organization
expenses and experimental and development expenses, but
excluding prepaid expenses and expensed general and
administrative and geological and geophysical expenses).
"Consolidated Total Capitalization": as of the date of
determination, the sum of Consolidated Tangible Net Worth and
Consolidated Debt.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Demand Loan": the demand loan with a principal amount of
$51,000,000 made by Chemical to the Borrower pursuant to the letter
agreement, dated as of June 27, 1995, between the Borrower and
Chemical, as amended, supplemented or otherwise modified from time to
time.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
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"Eurocurrency Reserve Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained
by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chemical is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Business Days prior to the
beginning 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 the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Revolving Credit Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": with reference to Eurodollar Loans, the
then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Fee Letter": the fee letter, dated September 11, 1995,
between Chemical and the Borrower.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
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"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary
obligor, (iii) 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 (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof;provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation
in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good
faith.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person and (e) all liabilities secured
by any Lien on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment
thereof.
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"Independent Engineer": ▇▇▇▇▇▇▇▇▇▇ Petroleum Consultants,
Inc., or such other independent petroleum engineering company as the
Borrower may designate that is acceptable to the Agent and the
Co-Agent.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 3.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each calendar month to occur while such ABR Loan is outstanding and
the Termination Date, (b) as to any Eurodollar Loan having an Interest
Period of one, two or three months, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period of
six months, each day which is three months after the first day of such
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its notice
of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice
to the Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect
thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination Date;
and
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(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate futures contract, interest rate
option, interest rate cap, interest rate swap or other interest rate
hedge arrangement, to or under which the Borrower or any of its
Subsidiaries is a party or a beneficiary on the date hereof or becomes
a party or a beneficiary after the date hereof.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan Documents": this Agreement and any Notes.
"Majority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or
otherwise), results of operations, assets, liabilities or prospects of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of
the Borrower to perform any of its obligations under the Loan
Documents or (c) the validity or enforceability of this or any of the
other Loan Documents or the rights or remedies of the Agent or the
Lenders hereunder or thereunder.
"Material Environmental Amount": an amount not otherwise
covered by insurance payable by the Borrower and/or its Subsidiaries
in excess of $2,500,000 for remedial costs, compliance costs,
compensatory damages, punitive damages, fines, penalties or any
combination thereof.
"Materials of Environmental Concern": any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or
under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maximum Loan Amount": $65,000,000, or such lesser amount to
which the aggregate Commitments may be reduced pursuant to subsection
2.4 hereof.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
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"Non-Excluded Taxes": as defined in subsection 2.16.
"Notes": the Revolving Credit Notes.
"Optional Reserve Report": as defined in subsection
2.6(b)(ii).
"Participant": as defined in subsection 9.6(b).
"Partnership": Wind River - Pavillion, Ltd., a Texas limited
partnership.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Petroleum": oil, gas and other liquid or gaseous
hydrocarbons, including, without limitation, all liquefiable
hydrocarbons and other products which may be extracted from gas and
gas condensate by the processing thereof in a gas processing plant.
"Petroleum Price Hedge Agreement": any hedge agreement
designed to protect the Borrower or any of its Subsidiaries against
fluctuations in Petroleum prices.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Presidio": Presidio Oil Company, a Delaware corporation.
"Properties": as defined in subsection 3.16(a).
"Register": as defined in subsection 9.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615.
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"Required Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 66-2/3%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Reserve Report": as defined in subsection 2.6(b).
"Responsible Officer": the president or executive
vice-president of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower.
"Retex": Retex Gathering Company, Inc., a Wyoming corporation.
"Retex Joint Venture": the joint venture between Retex and K
N Gas Gathering, Inc., pursuant to the Retex Joint Venture Agreement.
"Retex Joint Venture Agreement": the Amended and Restated
Joint Venture Agreement, dated June 1, 1993, between Retex and K N Gas
Gathering, Inc., a Colorado corporation.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Note": as defined in subsection 2.5(e).
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Termination Date": the third anniversary of the Closing Date.
"Transferee": as defined in subsection 9.6(f).
"Type": as to any Revolving Credit Loan, its nature as an ABR
Loan or a Eurodollar Loan.
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"Utilization Percentage": on any day, the aggregate
outstanding principal amount of the Revolving Credit Loans outstanding
on such date divided by the Borrowing Base on such date.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions
hereof (including, without limitation, Section 4.2(c)), each Lender severally
agrees to make revolving credit loans ("Revolving Credit Loans") to the
Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the amount of such
Lender's Commitment Percentage of the Available Commitment. During the
Commitment Period the Borrower may use the Commitments by borrowing, prepaying
the Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be
(i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Agent in accordance with
subsections 2.2 and 2.8, provided that no Revolving Credit Loan shall be made
as a Eurodollar Loan after the day that is one month prior to the Termination
Date.
2.2 Procedure for Revolving Credit Borrowing. The Borrower
may borrow under the Commitments during the Commitment Period on any Business
Day, provided that the Borrower shall give the Agent irrevocable notice (which
notice must be received by the Agent prior to 10:00 A.M., New York City time,
(a) three Business Days prior to the requested Borrowing Date, if all or any
part of the requested Revolving Credit Loans are to be initially Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date,
otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans,
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ABR Loans, or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Eurodollar Loans, the respective amounts of each such Type of
Revolving Credit Loan and the respective lengths of the initial Interest
Periods therefor. Each borrowing under the Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $500,000 or a whole multiple thereof and
(y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $100,000
in excess thereof. Upon receipt of any such notice from the Borrower, the
Agent shall promptly notify each Lender thereof. Each Lender will make the
amount of its pro rata share of each borrowing available to the Agent for the
account of the Borrower at the office of the Agent specified in subsection 9.2
prior to 11:00 A.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Agent. Such borrowing will then
be made available to the Borrower by the Agent crediting the account of the
Borrower on the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by the
Agent.
2.3 Fees. The Borrower agrees to pay to the Agent for the
account of each Lender a commitment fee for the period from and including the
first day of the Commitment Period to the Termination Date, computed at the
rate of .25% per annum on the average daily amount of the unutilized part of
the Available Commitment of such Lender during the period for which payment is
made, payable quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date or such earlier date as the
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof.
2.4 Termination or Reduction of Commitments. The Borrower
shall have the right, upon not less than five Business Days' notice to the
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments. Any such reduction shall be in an amount equal to
$1,000,000 or a whole multiple thereof and shall reduce permanently the
Commitments then in effect.
2.5 Repayment of Revolving Credits; Evidence of Debt. (a)
The Borrower hereby unconditionally promises to pay to the Agent for the
account of each Lender the then unpaid principal amount of each Revolving
Credit Loan of such Lender in full on the Termination Date (or such earlier
date on which the Revolving Credit Loans become due and payable pursuant to
Section 7). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Revolving Credit Loans from time to time outstanding
from the date hereof until payment in full thereof at the rates per annum, and
on the dates, set forth in subsection 2.10.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Revolving Credit Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to
subsection 9.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan made hereunder, the Type
thereof and each Interest Period
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applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.5(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest) the Revolving Credit Loans
made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that the Borrower will execute and
deliver to each Lender a promissory note of the Borrower evidencing the
Revolving Credit Loans of such Lender, substantially in the form of Exhibit A
with appropriate insertions as to date and principal amount (a "Revolving
Credit Note").
2.6 Borrowing Base. The Borrowing Base shall be determined
as follows:
(a) Initial Borrowing Base. (i) The amount of the Borrowing
Base shall be $65,000,000 during the period from the date hereof to the date on
which the Borrower receives notice of the first determination of the Borrowing
Base by the Agent and the Co-Agent pursuant to Subsection 2.6(b) and thereafter
the amount of the Borrowing Base shall be the Borrowing Base most recently
determined pursuant to subsection 2.6(b). In no event shall the Borrowing Base
exceed the Maximum Loan Amount.
(b) Determinations of the Borrowing Base. (i) No later than
45 days after June 30 and December 31 of each calendar year, commencing
December 31, 1995, the Borrower shall, at its own expense, furnish to the Agent
and the Co-Agent a report ("Reserve Report"), in a form and substance
reasonably satisfactory to the Agent and the Co-Agent which report shall be
dated as of such June 30 or December 31 and shall set forth the Borrower's
interest (broken down by category) in all Borrowing Base Assets and, in the
case of the December 31 report only, a projection of the rate of production and
net operating income with respect thereto as of such date. Each June 30
Reserve Report shall be prepared by the Borrower and each December 31 Reserve
Report shall be prepared by the Independent Engineer. Each June 30 Reserve
Report may be prepared in summary form and shall include a review of any
material production variances, if any, from the immediately preceding December
31 Reserve Report.
(ii) At any date the Borrower may at its expense furnish
additional Reserve Reports to the Agent and the Co-Agent ("Optional Reserve
Reports"), which Optional Reserve Reports need not be prepared or audited by an
independent petroleum engineer (unless the Agent or the Co-Agent so requests),
each dated a date other than June 30 or December 31.
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(iii) Notwithstanding the provisions of Section 2.6(b)(i),
upon the Borrower's written request, and upon submission of an Optional Reserve
Report, the Agent and the Co-Agent shall review the Borrowing Base and make any
adjustments thereto they deem appropriate under the circumstances, provided
that in no event shall the Agent and the Co-Agent be required to make more
than two such unscheduled Borrowing Base determinations during any calendar
year.
(iv) Within forty-five days after they both receive each
Reserve Report or Optional Reserve Report, the Agent and the Co-Agent shall
make a determination of the Borrowing Base, and shall notify the Borrower of
the new Borrowing Base, if any.
(v) Within forty-five days after the Borrower has
notified the Agent and the Co-Agent pursuant to subsection 2.7(c) that it has
determined to sell or otherwise dispose of any of the Borrowing Base Assets
(other than sales permitted by subsections 6.6(a), (b), (c), (d) and (f)), the
Agent and the Co-Agent shall make a redetermination of the Borrowing Base, and
shall notify the Borrower of the new Borrowing Base, if any.
(vi) The Borrower agrees to pay or reimburse the Agent and
the Co-Agent for all reasonable out-of-pocket costs and expenses incurred in
connection with (a) the examination of each Optional Reserve Report furnished
to the Agent and the Co-Agent by the Borrower, (b) the determination of the
Borrowing Base pursuant to such Reserve Report or Optional Reserve Report, (c)
the redetermination of the Borrowing Base pursuant to subsection 2.6(b)(v) and
(d) the notification of the Borrower of such Borrowing Base.
(vii) Each determination of the Borrowing Base shall be
made by the Agent and the Co-Agent in the exercise of their sole discretion in
accordance with the then current standards and practices of the Agent and the
Co-Agent for similar oil and gas loans, taking into account such factors as
the Agent and the Co-Agent may deem appropriate, including, without limitation
the nature and extent of the Borrower's interest in the Borrowing Base Assets
and the anticipated timing and extent of net operating income therefrom;
provided that each such determination shall be approved by the Required
Lenders. The Agent and the Co-Agent may in their sole discretion discount the
value of any Borrowing Base Asset set forth in a Reserve Report or an Optional
Reserve Report by the same factors utilized by it in discounting the value of
comparable borrowing base assets in comparable transactions.
(viii) Each delivery by the Borrower to the Agent and the
Co-Agent of a Reserve Report or an Optional Reserve Report shall be deemed to
constitute a representation and warranty by the Borrower to the Agent and the
Co-Agent that the Borrower, to the extent of the interest specified in such
report (and subject to exceptions disclosed in writing to the Agent and the
Co-Agent by the Borrower), has good and marketable title to the Borrowing Base
Assets and any other property rights or interests described in such report, and
that none of such Borrowing Base Assets or other property rights or interests
is subject to any Lien other than as permitted by subsection 6.3.
2.7 Optional and Mandatory Prepayments. (a) The Borrower
may at any time and from time to time prepay the Revolving Credit Loans, in
whole or in part,
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without premium or penalty (subject to subsection 2.17), upon at least four
Business Days' irrevocable notice to the Agent, specifying the date and amount
of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with
any amounts payable pursuant to subsection 2.17. Partial prepayments shall be
in an aggregate principal amount of $1,000,000 or a whole multiple thereof.
(b) In the event the aggregate unpaid principal amount of the
Revolving Credit Loans shall at any time be in excess of the Borrowing Base at
such time, the Agent shall so notify the Borrower, and the Borrower shall,
within 30 days after such notification, either (i) prepay the principal of the
Revolving Credit Loans, in an aggregate amount at least equal to such excess,
together with accrued interest on the amount prepaid to the date of such
prepayment or (ii) take such actions as may be approved by the Agent and the
Co-Agent in their sole discretion to increase the Borrowing Base by the amount
of such excess in a manner satisfactory to the Agent and the Co-Agent.
(c) In the event the Borrower determines to sell or otherwise
dispose of any of the Borrowing Base Assets (other than sales permitted by
subsections 6.6 (a), (b), (c), (d) and (f)), the Borrower shall immediately
notify the Agent and the Co-Agent (but in no event later than five Business
Days prior to the date of such sale or disposition) and, no later than three
Business Days following the consummation of such sale or disposition, the
Borrower shall prepay the Revolving Credit Loans in an aggregate amount equal
to the net proceeds of such sale or disposition; provided that no later than
three Business Days following the redetermination of the Borrowing Base by the
Agent and the Co-Agent to reflect such sale or disposition, the Borrower shall
additionally prepay the Revolving Credit Loans in an aggregate amount equal to
the excess, if any, of (i) the aggregate principal amount of outstanding
Revolving Credit Loans after reflecting payment of the net proceeds of such
asset sale or disposition over (ii) the Borrowing Base as redetermined by the
Agent and the Co-Agent to reflect such sale or disposition.
(d) In the event that both ABR Loans and Eurodollar Loans are
outstanding on the date of any such mandatory prepayment made in accordance
with the terms of paragraph (b) or (c) of this Section 2.7, the Borrower shall
apply such mandatory prepayment first to prepay any or all of such outstanding
ABR Loans and next to prepay any or all of such outstanding Eurodollar Loans,
provided that in the event the Borrower shall apply such mandatory prepayment
to prepay a Eurodollar Loan on a date other than the last day of an Interest
Period with respect thereto, any losses or costs incurred by the Lenders shall
be indemnified by the Borrower in accordance with the provisions of Section
2.17.
2.8 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Agent at least two Business Days' prior irrevocable notice of such
election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period
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with respect thereto. The Borrower may elect from time to time to convert ABR
Loans to Eurodollar Loans by giving the Agent at least three Business Days'
prior irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Agent shall
promptly notify each Lender thereof. All or any part of outstanding Eurodollar
Loans and ABR Loans may be converted as provided herein, provided that (i) no
Revolving Credit Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and the Agent has or the Required
Lenders have determined that such a conversion is not appropriate and (ii) no
Revolving Credit Loan may be converted into a Eurodollar Loan after the date
that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Revolving Credit
Loans, provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the Agent has or the
Required Lenders have determined that such a continuation is not appropriate or
(ii) after the date that is one month prior to the Termination Date and
provided, further, that if the Borrower shall fail to give such notice or if
such continuation is not permitted such Revolving Credit Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
2.9 Minimum Amounts and Maximum Number of Tranches. All
borrowings, conversions and continuations of Revolving Credit Loans hereunder
and all selections of Interest Periods hereunder shall be in such amounts and
be made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of the Revolving Credit Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $100,000
in excess thereof. In no event shall there be more than eight Eurodollar
Tranches outstanding at any time.
2.10 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR.
(c) If all or a portion of (i) any principal of any Revolving
Credit Loan, (ii) any interest payable thereon, (iii) any commitment fee or
(iv) any other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), the principal of the
Revolving Credit Loans and any such overdue interest, commitment fee or other
amount shall bear interest at a rate per annum which is (x) in the case of
principal, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y) in the case of any such
overdue interest, commitment fee or other amount, the rate described in
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paragraph (b) of this subsection plus 2%, in each case from the date of such
non-payment until such overdue principal, interest, commitment fee or other
amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.11 Computation of Interest and Fees. (a) Commitment fees
and, whenever it is calculated on the basis of the Prime Rate, interest shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed; and, otherwise, interest shall be calculated on the
basis of a 360-day year for the actual days elapsed. The Agent shall as soon
as practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Revolving Credit Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Agent in determining any interest rate
pursuant to subsection 2.10(a).
2.12 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Agent shall have received notice from the Majority
Lenders that the Eurodollar Rate to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Revolving Credit Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Revolving Credit Loans that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as ABR Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to ABR Loans. Until such notice has been withdrawn by the
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Agent, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Revolving Credit Loans to
Eurodollar Loans.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee hereunder and any reduction of the Commitments of
the Lenders shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving Credit Loans
shall be made pro rata according to the respective outstanding principal
amounts of the Revolving Credit Loans then held by the Lenders. All payments
(including prepayments) to be made by the Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without set
off or counterclaim and shall be made prior to 12:00 Noon, New York City time,
on the due date thereof to the Agent, for the account of the Lenders, at the
Agent's office specified in subsection 9.2, in Dollars and in immediately
available funds. The Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its Commitment Percentage of such borrowing available to the
Agent, the Agent may assume that such Lender is making such amount available to
the Agent, and the Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If such amount is not made available
to the Agent by the required time on the Borrowing Date therefor, such Lender
shall pay to the Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Agent. A
certificate of the Agent submitted to any Lender with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error. If such Lender's Commitment Percentage of such borrowing is not made
available to the Agent by such Lender within three Business Days of such
Borrowing Date, the Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to ABR Loans hereunder, on
demand, from the Borrower.
2.14 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Revolving Credit Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
ABR Loans on the respective last days of the then current Interest Periods with
respect to such Revolving Credit Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the
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then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to subsection
2.17.
2.15 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Eurodollar
Loan, or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by subsection
2.16 and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for
such reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower
(with a copy to the Agent) of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender to the Borrower (with a copy to the Agent)
shall be conclusive in the absence of manifest error.
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The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Revolving Credit Loans and all other amounts
payable hereunder.
2.16 Taxes. (a) All payments made by the Borrower under
this Agreement and any Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Agent or any Lender as a
result of a present or former connection between the Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any Note). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to the Agent or
any Lender hereunder or under any Note, the amounts so payable to the Agent or
such Lender shall be increased to the extent necessary to yield to the Agent or
such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may become
payable by the Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Revolving Credit Loans and all other amounts payable
hereunder.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly
completed copies of United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be;
(ii) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
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(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested
by the Borrower or the Agent;
unless in any such case 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 Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 9.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.17 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such
Revolving Credit Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Bank on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Revolving Credit Loans
and all other amounts payable hereunder.
2.18 Change of Lending Office. Each Lender agrees that if it
makes any demand for payment under subsection 2.15 or 2.16(a), or if any
adoption or change of the type described in subsection 2.14 shall occur with
respect to it, it will use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its sole discretion) to
designate a different lending office if the making of such a designation would
reduce or obviate the need for the Borrower to make payments under subsection
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2.15 or 2.16(a), or would eliminate or reduce the effect of any adoption or
change described in subsection 2.14.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this
Agreement and to make the Revolving Credit Loans, the Borrower hereby
represents and warrants to the Agent and each Lender that:
3.1 Financial Condition. The consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at December 31, 1994 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at June 30, 1995 and the related unaudited
consolidated statements of income and of cash flows for the six-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the six-month period
then ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein). Neither the Borrower nor any of its
consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign
currency swap or exchange transaction, which is not reflected in the foregoing
statements or in the notes thereto. During the period from June 30, 1995 to
and including the date hereof there has been no sale, transfer or other
disposition by the Borrower or any of its consolidated Subsidiaries of any
material part of its business or property and no purchase or other acquisition
of any business or property (including any capital stock of any other Person)
material in relation to the consolidated financial condition of the Borrower
and its consolidated Subsidiaries at June 30, 1995.
3.2 No Change. (a) Since June 30, 1995 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (b) during the period from June 30, 1995 to and
including the date hereof no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Borrower nor has any of
the Capital Stock of the Borrower been redeemed, retired, purchased or
otherwise acquired for value by the Borrower or any of its Subsidiaries.
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3.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
property (including, without limitation, the Borrowing Base Assets), to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations.
The Borrower has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and to
borrow hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and any Notes and to
authorize the execution, delivery and performance of the Loan Documents to
which it is a party. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person
is required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to
which the Borrower is a party. This Agreement has been, and each other Loan
Document to which it is a party will be, duly executed and delivered on behalf
of the Borrower. This Agreement constitutes, and each other Loan Document to
which it is a party when executed and delivered will constitute, a legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3.5 No Legal Bar. The execution, delivery and performance of
the Loan Documents to which the Borrower is a party, the borrowings hereunder
and the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of the Borrower or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien on any of its
or their respective properties or revenues pursuant to any such Requirement of
Law or Contractual Obligation.
3.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which
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could have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has good record and marketable title in fee simple to, or a
valid leasehold interest in, all its real property (including, without
limitation, the Borrowing Base Assets), and good title to, or a valid leasehold
interest in, all its other property, and none of such property is subject to
any Lien except as permitted by subsection 6.3.
3.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. The use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
3.11 Taxes. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all tax returns which, to the knowledge of the
Borrower, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of the Borrower or its Subsidiaries, as the case may be); no tax
Lien has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
3.12 Federal Regulations. No part of the proceeds of any
Revolving Credit Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR
Form G-1 or FR Form U-1 referred to in said Regulation G or Regulation U, as
the case may be.
3.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is
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made or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The present value of
all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits.
Neither the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan, and neither the Borrower nor
any Commonly Controlled Entity would become subject to any liability under
ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. No
such Multiemployer Plan is in Reorganization or Insolvent.
3.14 Investment Company Act; Public Utility Holding Company
Act; Other Regulations. The Borrower is not (a) an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended or (b) a "holding company" as
defined in, or otherwise subject to regulation under, the Public Utility
Holding Company Act of 1935. The Borrower is not subject to regulation under
any Federal or State statute or regulation (other than Regulation X of the
Board of Governors of the Federal Reserve System) which limits its ability to
incur Indebtedness.
3.15 Purpose of Revolving Credit Loans. The proceeds of the
Revolving Credit Loans shall be used by the Borrower to refinance the Demand
Loan and for general corporate purposes in the ordinary course of business.
3.16 Environmental Matters. Except for environmental matters
which in the aggregate, could not reasonably be expected to either (a) result
in the existence of an unsatisfied liability in excess of a Material
Environmental Amount or (b) have a Material Adverse Effect:
(a) To the best of the Borrower's knowledge, the facilities
and properties owned, leased or operated by the Borrower or any of its
Subsidiaries (the "Properties") do not contain, and have not
previously contained, any Materials of Environmental Concern in
amounts or concentrations which (i) constitute or constituted a
violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) To the best of the Borrower's knowledge, the Properties
and all operations at the Properties are in compliance, and have in
the last five years been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to
the Properties or the business operated by the Borrower or any of its
Subsidiaries (the Business").
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(c) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does the Borrower have knowledge or
reason to believe that any such notice will be received or is being
threatened.
(d) To the best of the Borrower's knowledge, materials of
Environmental Concern have not been transported or disposed of from
the Properties in violation of, or in a manner or to a location which
could reasonably be expected to give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business.
(f) To the best of the Borrower's knowledge, there has been
no release or threat of release of Materials of Environmental Concern
at or from the Properties, or arising from or related to the
operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could give rise to liability
under Environmental Laws.
3.17 Insurance. The Borrower maintains with financially
sound and reputable insurance companies insurance in at least such amounts and
against at least such risks (but including in any event public liability) as
are usually insured against in the same general area by companies engaged in
the same or a similar business and such insurance is otherwise in compliance
with the Loan Documents.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Revolving Credit Loans. The
agreement of each Lender to make the initial Revolving Credit Loan requested to
be made by it is subject to the satisfaction, immediately prior to or
concurrently with the making of such Revolving Credit Loan on the Closing Date
(which shall occur no later than September __, 1995) of the following
conditions precedent:
(a) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender and (ii) for the account
of each Lender, a Revolving Credit Note in form and substance
reasonably acceptable to the Agent and the
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Agent's counsel executed and delivered by a duly authorized officer of
the Borrower.
(b) Closing Certificate. The Agent shall have received, with
a counterpart for each Lender, a certificate of the Borrower, dated
the Closing Date, substantially in the form of Exhibit B, with
appropriate insertions and attachments, satisfactory in form and
substance to the Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of the
Borrower.
(c) Corporate Proceedings of the Borrower. The Agent shall
have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Agent, of the
Board of Directors of the Borrower authorizing (i) the execution,
delivery and performance of this Agreement and the other Loan
Documents to which it is a party and (ii) the borrowings contemplated
hereunder, certified by the Secretary or an Assistant Secretary of the
Borrower as of the Closing Date, which certificate shall be in form
and substance satisfactory to the Agent and the Agent's counsel and
shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(d) Borrower Incumbency Certificate. The Agent shall have
received, with a counterpart for each Lender, a Certificate of the
Borrower, dated the Closing Date, as to the incumbency and signature
of the officers of the Borrower executing any Loan Document
satisfactory in form and substance to the Agent, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of the Borrower.
(e) Corporate Documents. The Agent shall have received, with
a counterpart for each Lender, true and complete copies of the
certificate of incorporation and by-laws of the Borrower, certified as
of the Closing Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of the Borrower.
(f) Consents, Licenses and Approvals. The Agent shall have
received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower (i) attaching copies of all
consents, authorizations and filings referred to in subsection 3.4,
and (ii) stating that such consents, licenses and filings are in full
force and effect, and each such consent, authorization and filing
shall be in form and substance satisfactory to the Agent.
(g) Fees. The Agent shall have received any fees and
expenses required to be received by it on the Closing Date pursuant to
the Loan Documents and the Fee Letter.
(h) Legal Opinions. The Agent shall have received, with a
counterpart for each Lender, the executed legal opinion of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Borrower, substantially in the form
of Exhibit C; such legal opinion shall
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cover such other matters incident to the transactions contemplated by
this Agreement as the Agent and the Agent's counsel may reasonably
require.
(i) Insurance. The Agent shall have received evidence in
form and substance satisfactory to it that all of the requirements of
subsection 5.5 shall have been satisfied.
(j) Reserve Report. Notwithstanding the provisions of
subsection 2.6(b), the Agent and the Co-Agent shall have received,
with a counterpart for each Lender, a Reserve Report dated as of
January 1995 and complying in all other respects with the provisions
of subsection 2.6(b) and such other reserve information as may be
requested by the Agent and the Co-Agent, all of which shall be
satisfactory in form and substance to the Agent and the Co-Agent.
(k) Business Plan; Projections. The Agent and the Co-Agent
shall have received (i) projections of the expected revenues of the
Borrower from the sale of Petroleum through December 31, 1996 and
expected capital expenditures of the Borrower for such period, (ii)
the most recent business plans of the Borrower and (iii) copies of any
Reserve Reports or other engineering reports provided to the Borrower
by the Independent Engineer during the 12-month period preceding the
date hereof.
(l) Demand Loan. The Demand Loan shall have been repaid in
full by the Borrower and all obligations of the Borrower thereunder
shall have been terminated.
4.2 Conditions to Each Revolving Credit Loan. The agreement
of each Lender to make any Revolving Credit Loan requested to be made by it on
any date (including, without limitation, its initial Revolving Credit Loan) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Revolving Credit Loans requested to be made on such date.
(c) Maintenance of Borrowing Base. Notwithstanding
subsection 2.7(b), after giving effect to the Revolving Credit Loans
requested to be made on any date, the aggregate amount of the
Revolving Credit Loans then outstanding shall not exceed the Borrowing
Base then in effect.
(d) No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority shall
be pending or, to the knowledge of the Borrower, threatened by or
against the Borrower or any of its
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Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could
reasonably be expected to have a Material Adverse Effect.
(e) Borrowing Base Certificate. The Agent shall have
received, with a counterpart for each Lender, a borrowing base
certificate substantially in the form of Exhibit D, with appropriate
insertions.
(f) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement and the other
Loan Documents shall be satisfactory in form and substance to the
Agent, and the Agent shall have received such other documents and
legal opinions in respect of any aspect or consequence of the
transactions contemplated hereby or thereby as it shall reasonably
request.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained
in this subsection have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any amount is owing to any Lender or the Agent hereunder or
under any other Loan Document, the Borrower shall and (except in the case of
delivery of financial information, reports and notices) shall cause each of its
Subsidiaries to:
5.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in
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comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except
as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b), a certificate of
a Responsible Officer stating that, to the best of such Officer's
knowledge, the Borrower during such period has observed or performed
all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to
be observed, performed or satisfied by it, and that such Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate, which certificate shall include the
detailed calculations of such Responsible Officer demonstrating the
Borrower's compliance with the financial covenants set forth in
subsection 6.1;
(c) not later than thirty days prior to the end of each
fiscal year of the Borrower, a copy of the projections by the Borrower
of the operating budget and cash flow budget of the Borrower and its
consolidated Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the
basis of sound financial planning practice and that such Officer has
no reason to believe they are incorrect or misleading in any material
respect;
(d) not later than forty-five days prior to the end of each
fiscal year of the Borrower, a copy of the business plan and capital
expenditure budget report of the Borrower for the succeeding fiscal
year, such business plan and report to be accompanied by a certificate
of a Responsible Officer to the effect that such business plan and
report have been prepared on the basis of sound financial planning
practice and that such Officer has no reason to believe they are
incorrect or misleading in any material respect;
(e) within five Business Days after the same are sent, copies
of all financial statements and reports which the Borrower sends to
its stockholders, and within five days after the same are filed,
copies of all financial statements and
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reports which the Borrower may make to, or file with, the Securities
and Exchange Commission or any successor or analogous Governmental
Authority;
(f) not later than five Business Days following the end of
each fiscal quarter and upon reasonable request by the Agent a written
report, substantially in the form set forth in Exhibit E, with
appropriate insertions, containing information regarding the
commodities trading position (including, without limitation, the
individual and aggregate ▇▇▇▇ to market value of any such investments
held or Petroleum Price Hedge Agreements or Interest Rate Protection
Agreements entered into) of the Borrower, any of its Subsidiaries or
Affiliates (other than State Farm Mutual Automobile Insurance Company,
Metropolitan Life Insurance Company and The Equitable Companies
Incorporated) as at the end of such fiscal quarter in the case of the
quarterly reports or for any other point in time designated by the
Agent in the case of the reports requested by the Agent; and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted by it
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
as otherwise permitted pursuant to subsection 6.5; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance in
at least such amounts and against at least such risks (but including in any
event public liability) as are usually insured against in the same general area
by companies engaged in the same or a similar business; and furnish to each
Lender, upon written request, full information as to the insurance carried.
5.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities; and
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books
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and records at any reasonable time and as often as may reasonably be desired
and to discuss the business, operations, properties (including, without
limitation, the Borrowing Base Assets) and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
5.7 Notices. Promptly give notice to the Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $1,000,000
(individually or when aggregated with any other such litigation or
proceeding) or more and not covered by insurance or in which
injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC
or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(e) any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
5.8 Environmental Laws. (a) Except as, in the aggregate,
could not reasonably be expected to either (i) result in the payment of a
Material Environmental Amount or (ii) have a Material Adverse Effect, (x)
comply with, and ensure compliance by all tenants and subtenants, if any, with,
all applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all tenants and subtenants obtain and comply with and maintain, and
ensure that any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws are maintained and complied
with and (y) conduct and complete all investigations, studies, sampling and
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testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities.
(b) Defend, indemnify and hold harmless the Agent and the
Lenders, and their respective parents, subsidiaries, affiliates, employees,
agents, officers and directors, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to, the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of the
Borrower or any of its Subsidiaries or to the Borrowing Base Assets, or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, attorneys' and consultants' fees, investigation
and laboratory fees, response costs, court costs and litigation expenses,
except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification therefor. This indemnity shall continue in full force and
effect regardless of the termination of this Agreement.
5.9 Borrowing Base Certificates. Provide the Agent with a
borrowing base certificate substantially in the form of Exhibit D, with
appropriate insertions, (i) concurrently with the provision of a notice of
borrowing under the Commitments pursuant to subsection 2.2, (ii) concurrently
with the provision of a notice of prepayment of the Revolving Credit Loans by
the Borrower to the Agent pursuant to subsection 2.7(a), (iii) concurrently
with a prepayment of the Revolving Credit Loans pursuant to subsection 2.7(c)
and (iv) not later than 3 Business Days following a redetermination of the
Borrowing Base pursuant to subsection 2.6(b).
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any amount is owing to any Lender or the Agent hereunder or
under any other Loan Document, the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Maintenance of Consolidated Tangible Net Worth. Permit
the Consolidated Tangible Net Worth to be less than the sum, without
duplication, of (i) $90,000,000, (ii) 50% of the Consolidated Net
Income for the fiscal year of the Borrower ended December 31, 1995 and
for each fiscal quarter of the Borrower thereafter (so long as
Consolidated Net Income is positive for the relevant period) and (iii)
50% of the Net Cash Proceeds of any primary offering (public or
private) of equity securities consummated by the Borrower after the
Closing Date.
(b) Fixed Charge Coverage. Permit for any period of four
consecutive fiscal quarters (each such period a "Test Period") of the
Borrower the ratio of (i)
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Consolidated EBITDA for such Test Period to (ii) Consolidated Fixed
Charges for such Test Period to be less than 2.5 to 1.0.
(c) Leverage. Permit the ratio of Consolidated Debt to
Consolidated Total Capitalization any time to be greater than 0.45 to
1.0.
(d) Maintenance of Current Ratio. Permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities at any
time to be less than 1.1 to 1.0.
6.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(c) Indebtedness permitted under subsection 6.3;
(d) Guarantee Obligations permitted under subsection 6.4;
(e) additional Indebtedness of the Borrower and Retex not
exceeding $1,500,000 in aggregate principal amount at any one time
outstanding;
(f) Indebtedness of the Partnership not exceeding $2,000,000
in aggregate principal amount at any one time outstanding; and
(g) additional Indebtedness of the Partnership so long as
such Indebtedness is non-recourse in all respects to the Borrower and
its other Subsidiaries.
6.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, operator's or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits
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securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary; and
(f) Liens on properties of the Partnership securing
Indebtedness permitted by subsections 6.2(f) and 6.2(g); provided that
the amount of the Borrowing Base shall be reduced by the amount of any
such Indebtedness secured by such Liens.
6.4 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof
and listed on Schedule 6.4(a); and
(b) Guarantee Obligations incurred after the date hereof in
an aggregate amount not to exceed $1,500,000 at any one time
outstanding.
6.5 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more wholly
owned Subsidiaries of the Borrower (provided that the wholly owned Subsidiary
or Subsidiaries shall be the continuing or surviving corporation); and
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any other wholly owned Subsidiary of the
Borrower.
6.6 Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person other
than the Borrower or any wholly owned Subsidiary, except:
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(a) obsolete, worn out, depleted or "uneconomic" property
disposed of in the ordinary course of business;
(b) the sale, transportation and marketing of Petroleum in
the ordinary course of business;
(c) as permitted by subsection 6.5(b);
(d) undeveloped, undrilled leasehold acreage held in the
Borrower's inventory, provided that in any fiscal year of the Borrower
the gross proceeds of such property so disposed of shall not exceed
$5,000,000;
(e) the sale of the Borrower's oil and gas properties owned
by the Borrower on the date hereof in the Arkoma Basin of the States
of Arkansas and Oklahoma; and
(f) the sale of producing properties of the Borrower and its
Subsidiaries, provided that in any fiscal year of the Borrower the
gross proceeds of such sale or sales shall not in the aggregate exceed
$1,000,000.
6.7 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of the Borrower) on, or
make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of the Borrower or any
warrants or options to purchase any such Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary.
6.8 Limitation on Investments, Acquisitions, Loans and
Advances. Make any advance, loan, extension of credit or capital contribution
to, or purchase any stock, bonds, notes, debentures or other securities of or
any assets constituting a business unit of, or make any other investment in,
any Person, except :
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business;
(d) investments in Presidio; and
(e) investments in the Partnership and in the Retex Joint
Venture in an aggregate principal amount not to exceed $2,000,000,
provided that such investments are made in the ordinary course of
business.
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6.9 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) not otherwise prohibited under this Agreement, (b) in
the ordinary course of the Borrower's or such Subsidiary's business and (c)
upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate.
6.10 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
6.11 Limitation on Operating Leases. Enter into operating
leases with any Person, except:
(a) operating leases with rental obligations in an aggregate
principal amount not exceeding $500,000 in any fiscal year; and
(b) oil and gas leases and oil and gas operating agreements
entered into in the ordinary course of business.
6.12 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Borrower to end on a day other than December 31.
6.13 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement, other than (a) this Agreement, (b) the Loan
Documents, (c) the Retex Joint Venture Agreement, and (d) any industrial
revenue bonds, purchase money mortgages or Financing Leases permitted by this
Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired.
6.14 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or which are directly related thereto.
6.15 Limitation on Certain Agreements. Enter into Petroleum
Price Hedge Agreements or Interest Rate Protection Agreements, except where
such agreements are entered into in the ordinary course of business and not for
speculative purposes; provided that in the event that the Borrower enters into
a Petroleum Price Hedge Agreement or Interest Rate Protection Agreement with a
Lender, or an Affiliate thereof, the net liabilities of the Borrower under such
Petroleum Price Hedge
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Agreement or Interest Rate Protection Agreement will rank pari passu with the
Borrower's indebtedness under this Agreement.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Revolving Credit Loan when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any
Revolving Credit Loan, or any other amount payable hereunder, within
five days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower herein or in any other Loan Document or which is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 6; or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest of any Indebtedness (other
than the Revolving Credit Loans) or in the payment of any Guarantee
Obligation, beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created, if the aggregate
amount of the Indebtedness and/or Guarantee Obligations in respect of
which such default or defaults shall have occurred is at least
$1,000,000; or (ii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or
Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated
maturity or such Guarantee Obligation to become payable; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of
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debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or
any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the
entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
of its Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion
of the Required Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $1,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
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(i) Any of the Loan Documents shall cease, for any reason, to
be in full force and effect, or the Borrower shall so assert; or
(j) (i) Any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) (A)
shall have acquired beneficial ownership of 20% or more of any
outstanding class of Capital Stock having ordinary voting power in the
election of directors of the Borrower, (B) (i) shall obtain the power
(whether or not exercised) to elect a majority of the Borrower's
directors or (ii) the Board of Directors of the Borrower shall not
consist of a majority of Continuing Directors; Continuing Directors"
shall mean the directors of the Borrower on the Closing Date and each
other director, if such other director's nomination for election to
the Board of Directors of the Borrower is recommended by a majority of
the then Continuing Directors, (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or any successor
approved by the Required Lenders) shall cease to be actively involved
as Chief Executive Officer and/or President of the Borrower; or (iii)
the Borrower shall cease to own 100% of the issued and outstanding
Capital Stock of each of its Subsidiaries.
(k) Environmental liabilities aggregating in excess of a
Material Environmental Amount shall be (i) outstanding at any time
with respect to the Borrower or any of its Subsidiaries or (ii) paid
in any fiscal year of the Borrower by the Borrower or any of its
Subsidiaries.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions
may be taken: (i) with the consent of the Required Lenders, the Agent may, or
upon the request of the Required Lenders, the Agent shall, by notice to the
Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Agent may, or upon the request of the Required Lenders,
the Agent shall, by notice to the Borrower, declare the Loans hereunder (with
accrued interest thereon) and all other amounts owing under this Agreement to
be due and payable forthwith, whereupon the same shall immediately become due
and payable. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan
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Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
8.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders
of the Revolving Credit Loans.
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8.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Lenders.
The Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided that
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its
Revolving Credit Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of the Borrower which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Revolving Credit Loans
shall have been paid in full, ratably in accordance with their Commitment
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Revolving Credit Loans) be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of, the Commitments, this
Agreement, any of the other
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Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the Agent's gross
negligence or willful misconduct. The agreements in this subsection shall
survive the payment of the Revolving Credit Loans and all other amounts payable
hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder and under the other Loan Documents. With respect to the Revolving
Credit Loans made by it, the Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Lenders. If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrower, whereupon such successor agent shall succeed
to the rights, powers and duties of the Agent, and the term "Agent" shall mean
such successor agent effective upon such appointment and approval, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Revolving Credit Loans. After
any retiring Agent's resignation as Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement and the other Loan Documents.
8.10 Co-Agent. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Co-Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Co-Agent.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive, on
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such terms and conditions as the Required Lenders or the Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Revolving Credit Loan or of any installment thereof, or
reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the consent of
each Lender affected thereby, or (ii) amend, modify or waive any provision of
this subsection or reduce the percentage specified in the definition of
Required Lenders or Majority Lenders, or consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement and
the other Loan Documents, in each case without the written consent of all the
Lenders, or (iii) amend, modify or waive any provision of Section 8 without the
written consent of the then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the Lenders, the Agent and all future holders of
the Revolving Credit Loans. In the case of any waiver, the Borrower, the
Lenders and the Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower and the Agent, and as set forth in Schedule
I in the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto:
The Borrower: ▇▇▇ ▇▇▇▇▇, Inc.
▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: Chemical Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Chemical Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 2.4, 2.8, 2.9 or 2.13 shall not be effective until
received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Revolving Credit Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse each Lender and
the Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel to each Lender and of counsel to the Agent, (c) to
pay, indemnify, and hold each Lender and the Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the
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other Loan Documents and any such other documents, including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower, any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided, that the Borrower shall have no obligation hereunder to the Agent or
any Lender, as the case may be, with respect to indemnified liabilities arising
from (i) the gross negligence or willful misconduct of the Agent or any such
Lender, as the case may be, or (ii) legal proceedings commenced against the
Agent or any such Lender by any security holder or creditor thereof arising out
of and based upon rights afforded any such security holder or creditor solely
in its capacity as such. The agreements in this subsection shall survive
repayment of the Revolving Credit Loans and all other amounts payable
hereunder.
9.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities approved by the Borrower, which approval shall
not be unreasonably withheld ("Participants") participating interests in any
Revolving Credit Loan owing to such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan Documents.
In the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Revolving Credit Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. The
Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in subsection 9.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of subsections 2.15, 2.16 and
2.17 with respect to its participation in the Commitments and the Revolving
Credit Loans outstanding from time to time as if it was a Lender; provided
that, in the case of subsection 2.16, such Participant shall have complied with
the requirements of said subsection and provided, further, that no Participant
shall be entitled to receive any greater amount pursuant to any such subsection
than the transferor Lender would have been entitled to receive in
54
48
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
of the Borrower and the Agent (which in each case shall not be unreasonably
withheld), to an additional bank or financial institution ("an Assignee") all
or any part of its rights and obligations under this Agreement and the other
Loan Documents pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit F, executed by such Assignee, such assigning Lender (and, in
the case of an Assignee that is not then a Lender or an affiliate thereof, by
the Borrower and the Agent) and delivered to the Agent for its acceptance and
recording in the Register. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
(d) The Agent, on behalf of the Borrower, shall maintain at
the address of the Agent referred to in subsection 9.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Revolving Credit Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Lenders may
(and, in the case of any Revolving Credit Loan or other obligation hereunder
not evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Revolving Credit Loan or other obligation hereunder
as the owner thereof for all purposes of this Agreement and the other Loan
Documents, notwithstanding any notice to the contrary. Any assignment of any
Revolving Credit Loan or other obligation hereunder not evidenced by a Note
shall be effective only upon appropriate entries with respect thereto being
made in the Register. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Borrower and the Agent),
together with payment by the Assignee to the Agent of a registration and
processing fee of $2500, the Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice of
such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial
55
49
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Revolving Credit Loans and Notes relate only to absolute assignments and that
such provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any
Revolving Credit Loan or Note to any Federal Reserve Bank in accordance with
applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Revolving
Credit Loans, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest thereon,
such benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loan, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A copy of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Agent.
56
50
9.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Agent and the Lenders
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 9.2 or
at such other address of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
9.13 Acknowledgements. The Borrower hereby acknowledges that:
57
51
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
9.15 Limitation of Interest. (a) It is the intent of the
Borrower and the Lenders in the execution and performance of this Agreement and
all matters incidental and related hereto and the other Loan Documents or any
agreement or instrument executed in connection herewith or therewith or with
any Indebtedness of the Borrower to the Lenders to remain in strict compliance
with all laws applicable to the Lenders from time to time in effect, including,
without limitation, usury laws. In furtherance hereof, the Borrower and the
Lenders stipulate and agree that none of the terms and provisions contained in
or pertaining to this Agreement or in the other Loan Documents or any other
agreement or instrument ("Other Agreement") executed in connection herewith or
with any Indebtedness of the Borrower to the Lenders shall ever be construed to
create a contract to pay for the use, forbearance or detention of money with
interest at a rate or in an amount in excess of the maximum amount of interest
permitted to be charged by the Lenders under all laws in effect and applicable
to the Lenders (the "Maximum Rate"). For purposes of this Agreement and the
Revolving Credit Notes, "interest" shall include the aggregate of all amounts
which constitute or are deemed to constitute interest under the respective laws
in effect and applicable to the Lenders that are contracted for, chargeable,
receivable (whether received or deemed to have been received) or taken under
this Agreement or the Revolving Credit Notes or any Other Agreement. The
Borrower shall not be required to pay interest hereunder or on any Revolving
Credit Note or any Other Agreement at a rate or in an amount in excess of the
Maximum Rate with respect to the Lenders or the maximum amount of interest that
may be lawfully charged by the Lenders under any law which is in effect and
applicable to the Lenders, and the provisions of this subsection 9.15 shall
control over all other provisions of this Agreement and the Revolving Credit
Notes or any Other Agreement which may be in apparent conflict herewith. If
the effective rate or amount of interest which would otherwise be payable under
this Agreement or any Revolving Credit Note or any Other Agreement, or all of
them, would exceed the Maximum Rate for the Lenders or the maximum amount of
interest the Lenders or any holder of any Revolving Credit Note or any Other
Agreement is allowed by the relevant applicable law
58
52
to charge, contract for, take or receive or in the event the Lenders or any
holder of any Revolving Credit Note or any Other Agreement shall charge,
contract for, take or receive monies that are deemed to constitute interest
which could, in the absence of this provision, increase the effective rate or
amount of interest payable under this Agreement or any Revolving Credit Note or
any Other Agreement, or all of them, to a rate or amount in excess of that
permitted to be charged, contracted for, taken or received under the applicable
laws then in effect with respect to the Lenders, then the principal amount of
the Revolving Credit Notes or the obligations of the Borrower to the Lenders
under this Agreement, the Revolving Credit Notes or any Other Agreement or the
amount of interest which would otherwise be payable to or for the account of
the Lenders under this Agreement or the Revolving Credit Notes or any Other
Agreement or all of them, shall be reduced to the amount allowed under said
laws as now or hereafter construed by the courts having jurisdiction, and all
such monies so charged, contracted for, or received that are deemed to
constitute interest in excess of the Maximum Rate for the Lenders or maximum
amount of interest permitted by the relevant applicable laws shall be
immediately returned to or credited to the account of the Company upon such
determination. In determining whether the interest paid or payable under any
specific contingency exceed the Maximum Rate, the Borrower and the Lenders
shall, to the maximum extent permitted by applicable law, (i) characterize any
non-principal payment as an expense, fee (excluding attorneys' and accountants'
fees) or premium rather than interest and (ii) amortize, prorate, allocate and
spread, in equal parts during the full term of the relevant Revolving Credit
Note, all interest at any time contracted for, charged or received in
connection with the relevant Revolving Credit Note.
(b) To the extent the Lenders' Maximum Rate is at any time
determined by the laws of the State of Texas (i) such rate shall be the
"indicated rate ceiling" described in Section (a)(1) of Article 5069-1.04 of
Chapter 1, Subtitle 1, Title 79, of the Revised Civil Statutes of Texas, 1925,
as amended; provided, however, to the extent permitted by such Article, the
Lenders by notice to the Borrower may revise the aforesaid election of such
interest rate ceiling as such ceiling affects the then current or future
balances outstanding under the Revolving Credit Notes and other Loan Documents
and Other Agreements and (ii) Chapter 15, Subtitle 3, Title 79, of the Revised
Civil Statutes of Texas, 1925, as amended (relating to revolving loans and
triparty accounts), shall not apply to this Agreement, the other Loan Documents
or the Other Agreements.
59
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
▇▇▇ ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Title: Chairman of the Board of Directors,
Chief Executive Officer and
President
CHEMICAL BANK,
as Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Title: Vice President
NATIONSBANK OF TEXAS, N.A.
as Co-Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Title: Vice President
CIBC INC.
as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Title: Vice President
60
Schedule I
Commitments
Chemical Bank $30,000,000
NationsBank of Texas, N.A. $20,000,000
CIBC Inc. $15,000,000
----------
$65,000,000
Addresses for Notices
Chemical Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
2 Paces ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
61
REVOLVING CREDIT NOTE
$15,000,000 New York, New York
September 14, 1995
FOR VALUE RECEIVED, the undersigned, ▇▇▇ ▇▇▇▇▇, Inc., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of CIBC INC. (the "Lender") at the office of Chemical Bank, located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States
of America and in immediately available funds, on the Termination Date the
principal amount of (a) FIFTEEN MILLION DOLLARS ($15,000,000), or, if less, (b)
the aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as
hereinafter defined. The Borrower further agrees to pay interest in like money
at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in subsection 2.10 of such
Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in
the case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrower in respect of such Revolving
Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of September 14, 1995 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the other banks and financial institutions from time to
time parties thereto and Chemical Bank, as agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
62
2
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
▇▇▇ ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Chairman of the Board of Directors,
--------------------------------------
Chief Executive Officer and President
63
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Balance
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans of ABR Loans Notation Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
64
Schedule B
to Revolving Credit Term Loan Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
-------------------------------------------------------------------------------------------------------------------
Interest Period and Amount of Principal Amount of Eurodollar
Amount of Eurodollar Amount Converted to Eurodollar Rate with of Eurodollar Loans Loans Converted to
Date Loans Eurodollar Loans Respect Thereto Repaid ABR Loans
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
------------------------------------
Unpaid Principal
Balance of Eurodollar Notation
Loans Made By
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
65
REVOLVING CREDIT NOTE
$20,000,000 New York, New York
September 14, 1995
FOR VALUE RECEIVED, the undersigned, ▇▇▇ ▇▇▇▇▇, Inc., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of NATIONSBANK OF TEXAS, N.A. (the "Lender") at the office of Chemical
Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America and in immediately available funds, on the
Termination Date the principal amount of (a) TWENTY MILLION DOLLARS
($20,000,000), or, if less, (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Lender to the Borrower pursuant to
subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in subsection 2.10 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in
the case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrower in respect of such Revolving
Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of September 14, 1995 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the other banks and financial institutions from time to
time parties thereto and Chemical Bank, as agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
66
2
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
▇▇▇ ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Chairman of the Board of Directors,
--------------------------------------
Chief Executive Officer and President
67
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Balance
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans of ABR Loans Notation Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
68
Schedule B
to Revolving Credit Term Loan Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
------------------------------------------------------------------------------------------------------------------------
Interest Period and Amount of Principal Amount of Eurodollar
Amount of Eurodollar Amount Converted to Eurodollar Rate with of Eurodollar Loans Loans Converted to
Date Loans Eurodollar Loans Respect Thereto Repaid ABR Loans
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------
Unpaid Principal
Balance of Eurodollar Notation
Loans Made By
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
69
REVOLVING CREDIT NOTE
$30,000,000 New York, New York
September 14, 1995
FOR VALUE RECEIVED, the undersigned, ▇▇▇ ▇▇▇▇▇, Inc., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of CHEMICAL BANK (the "Lender") at the office of Chemical Bank, located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United
States of America and in immediately available funds, on the Termination Date
the principal amount of (a) THIRTY MILLION DOLLARS ($30,000,000), or, if less,
(b) the aggregate unpaid principal amount of all Revolving Credit Loans made by
the Lender to the Borrower pursuant to subsection 2.1 of the Credit Agreement,
as hereinafter defined. The Borrower further agrees to pay interest in like
money at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in subsection 2.10 of such
Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in
the case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrower in respect of such Revolving
Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of September 14, 1995 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the other banks and financial institutions from time to
time parties thereto and Chemical Bank, as agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
70
2
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
▇▇▇ ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Chairman of the Board of Directors,
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Chief Executive Officer and President
71
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
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Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Balance
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans of ABR Loans Notation Made By
------------------------------------------------------------------------------------------------------------------------------------
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72
Schedule B
to Revolving Credit Term Loan Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
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Interest Period and Amount of Principal Amount of Eurodollar
Amount of Eurodollar Amount Converted to Eurodollar Rate with of Eurodollar Loans Loans Converted to
Date Loans Eurodollar Loans Respect Thereto Repaid ABR Loans
------------------------------------------------------------------------------------------------------------------------
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Unpaid Principal
Balance of Eurodollar Notation
Loans Made By
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