EXHIBIT 10.33
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[LOGO OF JPMORGAN]
CREDIT AGREEMENT
dated as of
November 20, 2001
among
PURE RESOURCES, INC.
The Lenders Party Hereto
JPMORGAN CHASE BANK,
as Administrative Agent
and
FIRST UNION NATIONAL BANK and BNP PARIBAS
as Co-Syndication Agents
and
CREDIT LYONNAIS NEW YORK BRANCH and FLEET NATIONAL BANK
as Co-Documentation Agents
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Sole Arranger and Bookrunner
$275,000,000 Three-Year Revolving Credit Facility
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TABLE OF CONTENTS
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ARTICLE I Definitions................................................................. 1
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Section 1.01. Defined Terms................................................. 1
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Section 1.02. Terms Generally............................................... 18
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Section 1.03. Accounting Terms; GAAP........................................ 19
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ARTICLE II The Credits................................................................ 19
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Section 2.01. Commitments................................................... 19
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Section 2.02. Borrowing Requests............................................ 20
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Section 2.03. Letters of Credit............................................. 20
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Section 2.04. Disbursement of Funds......................................... 24
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Section 2.05. Notes......................................................... 25
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Section 2.06. Interest...................................................... 25
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Section 2.07. Interest Periods.............................................. 26
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Section 2.08. Repayment of Loans............................................ 27
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Section 2.09. Termination or Reduction of Commitments....................... 27
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Section 2.10. Prepayments................................................... 27
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Section 2.11. Continuation and Conversion Options........................... 27
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Section 2.12. Fees.......................................................... 28
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Section 2.13. Payments, etc................................................. 29
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Section 2.14. Interest Rate Not Ascertainable, etc.......................... 30
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Section 2.15. Illegality.................................................... 30
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Section 2.16. Increased Costs............................................... 31
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Section 2.17. Change of Lending Office...................................... 33
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Section 2.18. Funding Losses................................................ 33
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Section 2.19. Sharing of Payments, etc...................................... 33
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Section 2.20. Taxes......................................................... 34
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Section 2.21. Pro Rata Treatment............................................ 36
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Section 2.22. Replacement Lenders........................................... 36
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ARTICLE III Representations and Warranties............................................ 37
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Section 3.01. Organization; Powers.......................................... 37
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Section 3.02. Authorization; Enforceability................................. 37
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Section 3.03. Governmental Approvals; No Conflicts.......................... 37
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Section 3.04. Financial Condition; No Material Adverse Effect............... 37
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Section 3.05. Properties.................................................... 38
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Section 3.06. Litigation and Environmental Matters.......................... 38
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Section 3.07. Compliance with Laws and Agreements........................... 39
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Section 3.08. Investment and Holding Company Act Status..................... 39
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Section 3.09. Taxes......................................................... 39
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Section 3.10. ERISA......................................................... 39
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Section 3.11. Disclosure.................................................... 39
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Section 3.12. Subsidiaries.................................................. 39
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Section 3.13. Margin Securities............................................. 40
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ARTICLE IV Conditions................................................................. 40
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Section 4.01. Effective Date................................................ 40
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Section 4.02. Each Credit Event............................................. 41
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ARTICLE V Affirmative Covenants....................................................... 42
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Section 5.01. Financial Statements and Other Information.................... 42
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Section 5.02. Notices of Material Events.................................... 43
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Section 5.03. Existence; Conduct of Business................................ 43
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Section 5.04. Payment of Obligations........................................ 43
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Section 5.05. Maintenance of Properties; Insurance.......................... 44
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Section 5.06. Books and Records; Inspection Rights.......................... 44
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Section 5.07. Compliance with Laws, Material Contractual Obligations........ 44
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Section 5.08. Use of Proceeds and Letters of Credit......................... 44
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Section 5.09. Additional Subsidiaries....................................... 44
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Section 5.10. Environmental Matters......................................... 45
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ARTICLE VI Negative Covenants......................................................... 45
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Section 6.01. Indebtedness.................................................. 45
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Section 6.02. Liens......................................................... 46
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Section 6.03. Fundamental Changes........................................... 47
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Section 6.04. Guarantees.................................................... 47
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Section 6.05. Hedging Agreements............................................ 47
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Section 6.06. Restricted Payments........................................... 48
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Section 6.07. Transactions with Affiliates.................................. 48
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Section 6.08. Restrictive Agreements........................................ 49
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Section 6.09. Change in Fiscal Year......................................... 49
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Section 6.10. Asset Sales................................................... 49
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Section 6.11. Sale and Leaseback Transactions............................... 50
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Section 6.12. "Margin Calls" on Hedging Agreements.......................... 50
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Section 6.13. Designation of Restricted Subsidiaries........................ 50
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ARTICLE VII........................................................................... 50
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Section 7.01. Adjusted Consolidated Net Worth............................... 50
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Section 7.02. Debt Coverage Ratios.......................................... 51
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ARTICLE VIII Events of Default........................................................ 51
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ARTICLE IX The Administrative Agent................................................... 53
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ARTICLE X Miscellaneous............................................................... 55
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Section 10.01. Notices...................................................... 55
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Section 10.02. Waivers; Amendments.......................................... 56
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Section 10.03. Expenses; Indemnity; Damage Waiver........................... 57
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Section 10.04. Successors and Assigns....................................... 58
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Section 10.05. Survival..................................................... 60
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Section 10.06. Counterparts; Integration; Effectiveness.................... 61
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Section 10.07. Severability................................................ 61
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Section 10.08. Right of Setoff............................................. 61
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Section 10.09. Governing Law; Jurisdiction; Consent to Service of Process.. 61
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Section 10.10. Waiver of Jury Trial........................................ 62
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Section 10.11. Headings.................................................... 62
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Section 10.12. Confidentiality............................................. 63
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Section 10.13. Interest Rate Limitation.................................... 63
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Section 10.14. UNOCAL...................................................... 63
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Section 10.15. No Oral Agreements.......................................... 63
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SCHEDULES:
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Schedule 2.01 -- Commitments
Schedule 3.06 -- Material Litigation to be Disclosed
Schedule 3.12 -- Subsidiaries
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Note
Exhibit C -- Form of Opinion of Borrower's Counsel
Exhibit D -- Subsidiary Guaranty Agreement
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CREDIT AGREEMENT dated as of November 20, 2001, among PURE RESOURCES, INC.,
the LENDERS party hereto, JPMORGAN CHASE BANK, as Administrative Agent, FIRST
UNION NATIONAL BANK and BNP PARIBAS, as Co-Syndication Agents, and CREDIT
LYONNAIS NEW YORK BRANCH and FLEET NATIONAL BANK, as Co-Documentation Agents.
The parties hereto agree as follows:
ARTICLE I
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Definitions
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Section 1.01. Defined Terms
.. As used in this Agreement, the following terms have the meanings specified
below:
"ABR", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
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for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the nearest 1/100th of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, in its capacity as
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administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
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in a form supplied by the Administrative Agent.
"Advance Notice" means written or facsimile notice (or telephonic
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notice promptly confirmed in writing), which in each case shall be irrevocable,
from the Borrower to be received by the Administrative Agent before 10:00 a.m.
(Houston time), by the number of Business Days in advance of any borrowing,
conversion, continuation or prepayment of any Loan pursuant to this Agreement,
or the issuance, amendment, renewal or extension of any Letter of Credit
pursuant to this Agreement, as respectively indicated below:
(i) Eurodollar Loans - 3 Business Days;
(ii) ABR Loans - same Business Day; and
(iii) Letters of Credit - 3 Business Days.
For the purpose of determining the respectively applicable Loan in the
case of the conversion from one type of Loan into another, the Loan into which
there is to be a conversion shall control. The Administrative Agent and each
Lender are entitled to rely upon and act upon facsimile notice made or
purportedly made by the Borrower, and the Borrower hereby waives the
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right to dispute the authenticity and validity of any such facsimile once the
Administrative Agent or any Lender has advanced funds, absent manifest error.
"Affiliate" means, with respect to a specified Person, another Person
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that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to
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the greatest 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%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
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percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any ABR Loan or
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Eurodollar Loan, or with respect to the facility fees and utilization fees
payable hereunder, as the case may be, the applicable rate per annum set forth
below under the caption "ABR Spread", "Eurodollar Spread", "Facility Fee Rate",
or "Utilization Fee Rate", as the case may be, based upon ratings by ▇▇▇▇▇'▇ and
S&P, respectively, applicable on such date to the Index Debt:
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ABR Eurodollar Facility Fee Drawn Utilization Fully Drawn
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Index Debt Ratings: Spread Spread Rate Cost Fee Rate Cost
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"Category 1" 0.00% 0.375% 0.125% 0.500% 0.25% 0.750%
A-/A3
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"Category 2" 0.00% 0.475% 0.15% 0.625% 0.25% 0.875%
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BBB+/Baa1
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"Category 3" 0.00% 0.700% 0.175% 0.875% 0.25% 1.125%
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BBB/Baa2
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"Category 4" 0.00% 0.750% 0.25% 1.00% 0.25% 1.25%
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BBB-/Baa3
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"Category 5" 0.00% 0.950% 0.30% 1.25% 0.25% 1.50%
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BB+/Ba1
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For purposes of the foregoing, (i) if one, but not both, of ▇▇▇▇▇'▇ or
S&P fails to have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in the same
Category as the other rating agency; (ii) if the ratings established by ▇▇▇▇▇'▇
and S&P for the Index Debt shall fall within different Categories, the
Applicable Rate shall be based on the higher of the two ratings unless one of
the two ratings is two or more Categories lower than the other, in which case
the Applicable Rate shall be determined by
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reference to the Category one rating higher than the lower of the two ratings;
and (iii) if the ratings established or deemed to have been established by
▇▇▇▇▇'▇ and S&P for the Index Debt shall be changed (other than as a result of a
change in the rating system of ▇▇▇▇▇'▇ or S&P), such change shall be effective
as of the date on which it is first announced by the applicable rating agency.
Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If the rating system of ▇▇▇▇▇'▇ or
S&P shall change, or if either such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the Applicable Rate shall be
determined by reference to the rating most recently in effect prior to such
change or cessation.
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent and the
Borrower.
"Availability Period" means the period from and including the
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Effective Date to but excluding the earlier of the Final Maturity Date and the
date of termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System of
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the United States of America.
"Borrower" means Pure Resources, Inc., a Delaware corporation.
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"Borrowing" means Loans of the same Type, made, converted or continued
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on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
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accordance with Section 2.02.
"Business Day" means any day that is not a Saturday, Sunday or other
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day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
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the term "Business Day" shall also exclude any day on which banks are not open
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for dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of
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such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly
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or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities
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Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof) other than UNOCAL, of shares
representing more than 35% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated; or (c) the
acquisition of direct or indirect Control of the Borrower by any Person or group
other than UNOCAL.
"Code" means the Internal Revenue Code of 1986, as amended from time
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to time.
"Commitment" means, with respect to each Lender, the commitment of
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such Lender to make Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender's Exposure hereunder, as such commitment may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender's Commitment is set forth on Schedule 2.01, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Commitment, as applicable. Subject to Section 2.01(c)(ii), the initial
aggregate amount of the Lenders' Commitments is $275,000,000.00.
"Consolidated Net Tangible Assets" means the total amount of assets
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(excluding cash and cash equivalents) of the Borrower and its Restricted
Subsidiaries on a consolidated basis (less applicable reserves and other
properly deductible items) after deducting therefrom (a) all current liabilities
(excluding any which are, by their terms, extendable or renewable at the option
of the obligor thereon to a time more than 12 months after the time as of which
the amount thereof is being computed) and (b) all goodwill, trade names,
trademarks, patents, unamortized debt premium or discount and expense and other
like intangible assets, determined in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the power
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to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
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"Debt Coverage Ratio" means the ratio calculated in accordance with
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Section 7.02.
"Default" means any event or condition which constitutes an Event of
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Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
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environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of
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America.
"EBITDAX" shall mean, for any period, the sum of consolidated
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net income for such period plus the following expenses or charges to the extent
deducted from consolidated net
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income in such period: interest expense, taxes, depreciation, depletion,
amortization and exploration expenses. As used herein, "consolidated net income"
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shall mean, for any period, the amount which, in conformity with GAAP, would be
set forth opposite the caption "net income or loss" (or any like caption) on a
consolidated income statement of the Borrower and its Restricted Subsidiaries
(before deducting minority interests in net income of Restricted Subsidiaries,
but disregarding (a) all noncash extraordinary or unusual items, (b) write-downs
after June 30, 2000 under FASB Statement No. 19, (c) non-cash write-ups or
write-downs of assets after June 30, 2000 under FASB Statement ▇▇. ▇▇▇, (▇)
▇▇▇-▇▇▇▇ gains, losses or adjustments after June 30, 2000 under FASB Statement
No. 133, in calculating such consolidated net income), and (e) the effects of
common stock of the Borrower being repurchased or being subject to repurchase
under Employment Arrangements accounted for as variable plans under APB Opinion
No. 25 (provided that any new arrangements entered into after the Effective Date
as well as any amendments to arrangements existing on the Effective Date, shall
not be excluded to the extent that such arrangements materially increase the
Borrower's obligations); provided however, that in determining consolidated net
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income for any period of four fiscal quarters that includes the acquisition by
the Borrower or any of its consolidated Restricted Subsidiaries of Restricted
Subsidiaries (whether by purchase, merger or otherwise) or of producing Oil and
Gas Properties, such acquired Restricted Subsidiaries shall be included in such
calculation on a pro forma basis as if they had been owned by the Borrower and
its consolidated Restricted Subsidiaries throughout such four fiscal quarter
period and the revenues attributable to the oil and gas production from such
acquired properties during such four fiscal quarter period, less the direct
operating expenses and severance and ad valorem taxes incurred with respect to
such properties during such four fiscal quarter period, shall be included in
such calculation as part of such consolidated net income and the revenues
attributable to the oil and gas production from any producing Oil and Gas
Properties sold during such four fiscal quarter period, less the direct
operating expenses and severance and ad valorem taxes incurred with respect to
such properties during such four fiscal quarter period, shall be pro forma
deducted from such determination of consolidated net income.
"Effective Date" means the date on which the conditions specified in
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Section 4.01 are satisfied (or waived in accordance with Section 10.02).
"Eligible Transferee" means any financial institution which is a
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Lender as of the Effective Date or which is a commercial bank, a financial
institution or an "accredited investor" (as defined in Regulation D) which makes
loans in the ordinary course of its business and that makes or acquires Loans
for its own account in the ordinary course of its business and which has
capital, surplus and undivided profits aggregating at least $250,000,000 (as of
the date of its most recent financial statements).
"Employment Arrangements" means severance arrangements, employment
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agreements, retention bonus agreements or similar arrangements, whether now
existing or hereafter entered into, with officers and employees of the Borrower
or its Subsidiaries.
"Environmental Laws" means all laws, rules, regulations, codes,
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ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment,
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preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material.
"Environmental Liability" means any liability, contingent or otherwise
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(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of the capital stock, partnership
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interests, membership interest in a limited liability company, beneficial
interests in a trust or other equity interests in the Borrower or any Subsidiary
or any warrants, options or other rights to acquire such interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
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incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code; provided however, that in no event will UNOCAL or any
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of its subsidiaries (other than Borrower and its Subsidiaries) be considered an
ERISA Affiliate.
"ERISA Event" means (a) any "reportable event", as defined in Section
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4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
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to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
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"Event of Default" has the meaning assigned to such term in Article
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VIII.
"Exposure" means, with respect to any Lender at any time, the sum of
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the outstanding principal amount of such Lender's Loans and its LC Exposure at
such time.
"FASB" means the Financial Accounting Standards Board.
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"Federal Funds Effective Rate" means, for any day, the weighted
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average (rounded upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Maturity Date" means November 20, 2004.
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"5-Year Credit Agreement" means that certain Credit Agreement dated as
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of September 29, 2000, among the Borrower, JPMorgan Chase Bank, as
Administrative Agent, First Union National Bank, as Syndication Agent, and the
lenders party thereto, together with any and all amendments and supplements
thereto.
"5-Year Revolving Credit Facility" means the $250,000,000 revolving
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credit facility under the 5-Year Credit Agreement.
"Financial Officer" means the chief financial officer, principal
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accounting officer, treasurer or controller of the Borrower.
"Funded Indebtedness" means, at any time and without duplication, all
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obligations of the Borrower and its Restricted Subsidiaries on a consolidated
basis for (a) borrowed money and any other obligations evidenced by bonds,
debentures, notes, or other similar instruments, (b) all obligations outstanding
for 180 days or more to deliver goods or services including Hydrocarbons in
consideration of advanced payments, (c) the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly received payment, (d) all Capital Lease Obligations, (e) all
letters of credit issued in connection with Hedging Agreements, (f) all
unreimbursed LC Disbursements, (g) all Put Arrangement Liabilities, and (h) all
Guarantees by the Borrower and its Restricted Subsidiaries on a consolidated
basis of the type of obligations described in clauses (a) through (f) of this
definition.
"GAAP" means generally accepted accounting principles in the United
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States of America.
"Governmental Authority" means the government of the United States of
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America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising
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executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
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obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
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any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or (d) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness; provided, that the term Guarantee shall not include endorsements
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for collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
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wastes and all hazardous or toxic substances, wastes or other pollutants,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law and petroleum, petroleum products or
distillates and associated oil or natural gas exploration, production and
development wastes only to the extent that they are not exempted or excluded
from being included as "hazardous substances," "hazardous materials," "hazardous
wastes" and toxic substances under such Environmental Laws.
"Hedging Agreement" means any interest rate protection agreement,
-----------------
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Hydrocarbon Interests" means all rights, titles, interests and
---------------------
estates now or hereafter acquired in and to oil and gas leases, oil, gas and
mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee
interests, overriding royalty and royalty interests, net profit interests and
production payment interests, including any reserved or residual interests of
whatever nature.
"Hydrocarbons" means oil, gas, casinghead gas, drip gasoline, natural
------------
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all products refined or separated therefrom.
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money (including principal, interest,
fees and charges), (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments (including principal, interest, fees
and charges), (c) the undischarged balance of any production payment created by
such Person or for the creation of which such Person directly received payment,
(d) all obligations of such Person issued or assumed as the deferred purchase
price of Property or services (excluding trade accounts payable and accrued
obligations incurred in the
-8-
ordinary course of business so long as the same are not 180 days overdue or, if
overdue, are being contested in good faith and by appropriate proceedings), (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (f) all Guarantees of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all recourse obligations of such Person with respect to sales of accounts
receivable which would be shown under GAAP on the balance sheet of such Person
as a liability, (i) all obligations, contingent or otherwise, of such Person as
an account party (including reimbursement obligations to the issuer of a letter
of credit) in respect of bankers' acceptances and letters of credit guaranteeing
Indebtedness, (j) all noncontingent obligations of such Person as an account
party (including reimbursement obligations to the issuer of a letter of credit)
in respect of letters of credit other than those referred to in clause (i)
above, (k) all obligations under leases which require such Person to make
payments over the term of such lease, including payments at termination, which
are substantially equal to at least eighty percent (80%) of the purchase price
of the Property subject to such lease plus interest at an imputed rate of
interest, (l) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the Indebtedness or Property of others, (m) obligations outstanding for
180 days or more to deliver goods or services including Hydrocarbons in
consideration of advance payments, (n) any stock of such Person in which such
Person has a mandatory obligation to redeem such stock within two (2) years
after the Final Maturity Date (plus any extension of such date), but excluding
mandatory redemptions in connection with Employment Arrangements, (o) all
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor, (p)
the undischarged balance of any production payment created by such Person or for
the creation of which such Person directly received payment; and (q) all
obligations of such Person under Hedging Agreements. The Indebtedness of any
Person shall exclude obligations under leases which are characterized as
operating leases.
"Index Debt" means the Borrower's senior, unsecured, non-credit
----------
enhanced publicly held Indebtedness for borrowed money. On the Effective Date,
Borrower's only Index Debt is its 7 1/8% Senior Notes Due 2011.
"Interest Period" means with respect to any Eurodollar Borrowing, the
---------------
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three, six or (with
the consent of each Lender) nine or twelve months thereafter, as the Borrower
may elect; provided, that (i) if any Interest Period would end on a day other
--------
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such
-9-
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"Issuing Bank" means JPMorgan Chase Bank, in its capacity as the
------------
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.03(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
----------------
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
------------
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.
"Lender Affiliate" means, (a) with respect to any Lender, (i) an
-----------------
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"Lenders" means the Persons listed on Schedule 2.01 and any other
---------
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Lending Office" means for each Lender the office specified under such
----------------
Lender's name on its signature page hereto, or in the Assignment and Acceptance
pursuant to which it became a Lender, with respect to each Type of Loan, or such
other office as such Lender may designate in writing from time to time to the
Borrower and the Administrative Agent with respect to such Type of Loan.
"Letter of Credit" means any letter of credit issued pursuant to this
----------------
Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
----------
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. If for any reason such rate
-10-
is not available, the term "LIBO Rate" means, for any Eurodollar Borrowing for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
-------- -------
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
-----
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, and (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset.
"Loan Documents" means this Agreement, the Subsidiary Guaranty
---------------
Agreements and any and all other agreements or instruments now or hereafter
executed and delivered by the Borrower or any other Person (other than Hedging
Agreements or participation or similar agreements between any Lender and any
other lender or creditor with respect to any Indebtedness pursuant to this
Agreement) in connection with, or as security for the payment or performance of
this Agreement, or reimbursement obligations under the Letters of Credit, as
such agreements may be amended, supplemented or restated from time to time.
"Loan Parties" means the Borrower and the Restricted Subsidiaries.
------------
"Loans" means loans made by the Lenders to the Borrower pursuant to
-----
Section 2.01(a).
"Material Adverse Effect" means a material adverse effect on (a) the
------------------------
assets, liabilities, financial condition or operations of the Borrower and the
Restricted Subsidiaries taken as a whole, as indicated in the most recent
quarterly or annual financial statements (excluding decreases in hydrocarbon
prices) delivered pursuant to Section 5.01 or (b) the ability of the Borrower
and the Restricted Subsidiaries to perform their respective monetary obligations
under this Agreement on a timely basis.
"Material Indebtedness" means Funded Indebtedness (other than the
----------------------
Loans and Letters of Credit) of any one or more of the Borrower and its
Restricted Subsidiaries in an aggregate principal amount exceeding $25,000,000.
"Material Subsidiary" means any Restricted Subsidiary of the Borrower
---------------------
whose percentage of the Consolidated Net Tangible Assets represented by such
Restricted Subsidiary's portion of such Consolidated Net Tangible Assets (after
intercompany eliminations) exceeds 5% as of the end of the most recently
completed fiscal quarter.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA.
-11-
"Oil and Gas Properties" means Hydrocarbon Interests; the Properties
----------------------
now or hereafter pooled or unitized with Hydrocarbon Interests; all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of the Hydrocarbon Interests; all operating
agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or processing
of Hydrocarbons from or attributable to such Hydrocarbon Interests; all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby
and all rents, issues, profits, proceeds, products, revenues and other incomes
from or attributable to the Hydrocarbon Interests; all tenements, hereditaments,
appurtenances and Properties in any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests; and all Properties, rights, titles,
interests and estates described or referred to above, including any and all
Property, real or personal, now owned or hereinafter acquired and situated upon,
used, held for use or useful in connection with the operating, working or
development of any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil ▇▇▇▇▇, gas ▇▇▇▇▇, injection ▇▇▇▇▇ or other ▇▇▇▇▇,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.
"Other Taxes" has the meaning set forth in Section 2.20(b).
-----------
"Payment Office" means the Administrative Agent's office located at
--------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Percentage Share" means, as to any Lender, the fraction, expressed as
----------------
a percentage, the numerator of which is the amount of such Lender's Commitment
and the denominator of which is the amount of the total Commitments.
"Permitted Encumbrances" means:
----------------------
(a) Liens imposed by law for taxes, assessments or other governmental
charges or levies that are not yet due or are being contested in compliance with
Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law or created in the ordinary course of
business and securing obligations that are not overdue by more than 90 days or
are being contested in compliance with Section 5.04;
-12-
(c) Liens (other than any inchoate lien imposed by ERISA) incurred or
deposits or pledges made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, old age or other similar obligations, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return of money bonds and other similar
obligations;
(d) judgment Liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(e) easements, rights-of-way, restrictions, servitudes, permits,
reservations, exceptions, conditions, covenants and other similar charges or
encumbrances not interfering with the ordinary conduct of the business of the
Borrower or any of its Restricted Subsidiaries;
(f) any Lien securing Indebtedness, neither assumed nor guaranteed by
the Borrower or any of its Restricted Subsidiaries nor on which it customarily
pays interest, existing upon real estate or rights in or relating to real estate
acquired by the Borrower or any Restricted Subsidiary for substation, metering
station, pump station, storage, gathering line, transmission line,
transportation line, distribution line or for right-of-way purposes, and any
Liens reserved in leases for rent and for compliance with the terms of the
leases in the case of leasehold estates, to the extent that any such Lien
referred to in this clause (f) does not materially impair the use of the
Property covered by such Lien for the purposes of which such Property is held by
the Borrower or any of its Restricted Subsidiaries;
(g) Liens reserved in oil, gas and/or mineral leases for bonus or
rental payments and for compliance with the terms of such leases and Liens
reserved in operating agreements, farm-out and farm-in agreements, exploration
agreements, development agreements and other similar agreements for compliance
with the terms of such agreements;
(h) defects, irregularities and deficiencies in title of any rights of
way or other property of the Borrower or any Restricted Subsidiary which in the
aggregate do not materially impair the use of such rights of way or other
property for the purposes for which such rights of way and other property are
held by the Borrower or any Restricted Subsidiary, and defects, irregularities
and deficiencies in title to any property of the Borrower or its Restricted
Subsidiaries, which defects, irregularities or deficiencies have been cured by
possession under applicable statutes of limitation;
(i) royalties, overriding royalties, revenue interests, net revenue
interests, production payments (other than production payments which constitute
Indebtedness), advance payment obligations (other than obligations in respect of
advance payment received by the Borrower or any Restricted Subsidiary in
connection with the borrowing of money) and other similar burdens (i) now
existing on Oil and Gas Properties now owned or (ii) as to Oil and Gas
Properties hereafter acquired, existing at the time of acquisition by the
Borrower or any of its Restricted Subsidiaries or (iii) entered into in the
ordinary course of business;
(j) Liens arising out of all presently existing and future division
and transfer orders, advance payment agreements, processing contracts, gas
processing plant agreements,
-13-
operating agreements, gas balancing or deferred production agreements, pooling,
unitization or communitization agreements, pipeline, gathering or transportation
agreements, platform agreements, drilling contracts, injection or repressuring
agreements, cycling agreements, construction agreements, salt water or other
disposal agreements, leases or rental agreements (but only as otherwise not
prohibited by this Agreement), farm-out and farm-in agreements, exploration and
development agreements, and any and all other contracts or agreements covering,
arising out of, used or useful in connection with or pertaining to the
exploration, development, operation, production, sale, use, purchase, exchange,
storage, separation, dehydration, treatment, compression, gathering,
transportation, processing, improvement, marketing, disposal or handling of any
property of the Borrower or its Restricted Subsidiaries, provided such
agreements are entered into in the ordinary course of business and contain terms
customary for such agreements in the industry;
(k) Liens arising from UCC financing statements regarding leases
permitted by this Agreement; and
(l) Liens incurred by the Borrower with the consent of the Required
Lenders.
"Permitted Investments" means:
---------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
or second highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above.
(e) investments in funds substantially all of the assets of which are
of the type described in clause (a), (b) or (c) above;
(f) loans or advances by Borrower or any Restricted Subsidiary to or
investments in Borrower or a Person that is (or that simultaneously becomes) a
Restricted Subsidiary;
-14-
(g) loans or advances to employees of the Borrower or its Subsidiaries
in the ordinary course of business not to exceed $2,000,000 in the aggregate at
any one time outstanding;
(h) loans made to employees of the Borrower or its Subsidiaries for
the purposes of funding the exercise of outstanding options pursuant to the
Borrower's stock option plans not to exceed $55,000,000 in the aggregate at any
one time outstanding;
(i) Guarantees permitted under Section 6.04; and
(j) the Pure Partners Transactions.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by JPMorgan Chase Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Pure Partners" means Pure Partners, L.P., a Delaware limited
-------------
partnership.
"Pure Partners Agreements" means each of the following, as from time
------------------------
to time in effect:
(a) the Amended and Restated Agreement of Limited Partnership of Pure
Partners, L.P., dated January 31, 2001 by and among (i) Pure Resources I, Inc.,
a Delaware corporation ("Pure GP"), as General Partner, (ii) IP Petroleum
Company, Inc., a Delaware corporation ("IPP"), and Southland Energy Company, a
Texas corporation ("Southland"), each as a Class A Limited Partner, (iii) PK I,
L.P., a Delaware limited partnership ("Pure LP1"), ▇▇ ▇▇, L.P., a Delaware
limited partnership ("Pure LP2"), and PK III, L.P., a Delaware limited
partnership ("Pure LP3"), each as a Class B Limited Partner, and (iv)
International Paper Realty Corporation, a Delaware corporation ("IPRC"),
Transtates Properties Incorporated, a Delaware corporation ("Transtates"), and
▇▇ ▇▇, L.P., a Delaware limited partnership ("Pure LP4"), each as a Limited
Partner;
(b) the Contribution Agreement, dated as of January 29, 2001, among
Pure GP, Pure LP1, Pure LP2, Pure LP3, Pure LP4, IPP, Southland, IPRC,
Transtates and Pure Partners pursuant to which such Persons agreed to make
certain capital contributions to Pure Partners;
-15-
(c) the Master Offset Agreement, dated as of January 31, 2001, by and
among Pure Partners, IPP and Southland, Transtates, IPRC and The ▇▇▇▇▇▇▇▇
Organization, Inc., an Illinois corporation;
(d) the Senior Note Agreement dated January 31, 2001, between Pure
Partners, as lender, and The ▇▇▇▇▇▇▇▇ Organization, Inc., as borrower, and the
promissory note given to Pure Partners under such Senior Note Agreement;
(e) the Indemnity Agreement dated as of January 31, 2001 by Pure
Partners and Pure GP for the benefit of the parties named therein; and
(f) Guaranty Agreement (relating to the above Indemnity Agreement)
dated as of January 31, 2001 by Pure Resources, L.P. for the benefit of the
parties named therein.
"Pure Partners Transactions" means the transactions and obligations
--------------------------
undertaken by Pure Partners, Pure GP, Pure LP1, Pure LP2, Pure LP3, and Pure LP4
under the Pure Partners Agreements, including without limitation the obligations
of Pure Partners to refrain from guaranteeing the Loans, the obligations of Pure
Partners to make or to refrain from making Restricted Payments or asset
transfers, the Restricted Payments and asset transfers that Pure Partners is so
obligated to make, the loans made to The ▇▇▇▇▇▇▇▇ Organization, Inc. by Pure
Partners, and the cash management loans and cash reserve loans made to Pure
Resources, L.P. by Pure Partners.
"Put Arrangement" means an agreement of Borrower or any Restricted
---------------
Subsidiary to repurchase or otherwise make a Restricted Payment in respect of
Equity Interests issued as consideration for an acquisition by Borrower or any
Restricted Subsidiary after the Effective Date (for example, to repurchase such
Equity Interests during a specified option period if a specified average closing
price of such Equity Interests is below a specified price target), provided that
the Pure Partners Agreements and the Pure Partners Transactions shall not be
"Put Arrangements".
"Put Arrangement Liability" means the amount which Borrower or any
-------------------------
Restricted Subsidiary is obligated to pay in respect of Equity Interests under a
Put Arrangement (whether or not then exercised by the holder thereof) to the
extent such obligation is not contingent and at the time such obligation is not
contingent. For this purpose, an obligation under a Put Arrangement to
repurchase Equity Interests at the option of another Person is not contingent to
the extent and at the time that the option is presently exercisable; provided
--------
however, such an option exercisable during a specified future option period will
-------
also be treated as not contingent during the 180-day period immediately
preceding the start of such option period to the extent a liability would have
existed under the Put Arrangement if such 180-day period had been part of such
option period.
"Quarter Date" means the last day of each March, June, September and
------------
December in each year, the first of which shall be December 31, 2001; provided,
--------
however, that if such day is not a Business Day, such Quarterly Date shall be
-------
the next succeeding Business Day.
"Register" has the meaning set forth in Section 10.04.
--------
-16-
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Exposures and
----------------
unused Commitments representing at least 51% of the sum of the total Exposures
and unused Commitments at such time.
"Restricted Investments" means (i) the cash amount or fair value (in
----------------------
the case of consideration other than cash) of any loans or advances to or
investments in any Person other than Permitted Investments or (ii) the net asset
value (being the fair value of its assets minus the fair value of its
liabilities) of a Restricted Subsidiary at the time of its designation by
Borrower as an Unrestricted Subsidiary. For purposes of determining "fair value"
in this context, a determination by the board of directors of the Borrower or
the applicable Restricted Subsidiary shall be sufficient with regard to
consideration with fair value not exceeding $20,000,000 and the concurrence of
the Administrative Agent shall be required for consideration in excess of
$20,000,000.
"Restricted Payment" means (a) any dividend or other distribution
------------------
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Borrower or any option, warrant or other right to acquire any such shares of
capital stock of the Borrower, and (b) Restricted Investments.
"Restricted Subsidiaries" means all Subsidiaries of the Borrower which
------------------------
are designated as a Restricted Subsidiary on Schedule 3.12 hereto or pursuant to
Sections 5.09 or 6.13 hereof and which the Borrower has not redesignated as an
Unrestricted Subsidiary pursuant to Section 6.13 hereof.
"SEC PV-10" means estimated future net revenues from the production of
---------
proved oil and gas reserves, net of all production-related taxes, lease
operating expenses and capital costs, discounted by a factor of 10% per annum,
before income taxes and with no price or cost escalation or de-escalation
(except for any contract prices in effect as of the date of the reserve report),
in accordance with guidelines promulgated by the Securities and Exchange
Commission.
"S&P" means Standard & Poor's.
---
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
----------------------
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject, with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve
-17-
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
---------- ------
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date.
"Subsidiary" means any subsidiary of the Borrower.
----------
"Subsidiary Guaranty Agreement" means an agreement executed by each
-----------------------------
Restricted Subsidiary guarantying, unconditionally, payment of all amounts owing
and to be owing under or in connection with this Agreement, as the same may be
amended, modified or supplemented from time to time.
"Taxes" has the meaning set forth in Section 2.20(a).
-----
"364-Day Revolving Credit Facility" means the $250,000,000 revolving
---------------------------------
credit facility under that certain Credit Agreement dated as of September 29,
2000, among the Borrower, JPMorgan Chase Bank, as Administrative Agent, First
Union National Bank, as Syndication Agent, and the lenders party thereto,
together with any and all amendments and supplements thereto.
"Transactions" means the execution, delivery and performance by the
------------
Borrower of this Agreement, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to
----
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UNOCAL" means Union Oil Company of California, or any one of its
------
successors or any one of its consolidated subsidiaries.
"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
-----------------------
Subsidiary.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
--------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. Terms Generally. The definitions of terms herein shall
---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word
-18-
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
Section 1.03. Accounting Terms; GAAP. Except as otherwise expressly
-------------------------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
----------
The Credits
-----------
Section 2.01. Commitments.
-----------
(a) Loans. Subject to the terms and conditions and relying on the
-----
representations and warranties contained herein, each Lender severally agrees,
on any Business Day, to make revolving credit Loans to the Borrower during the
Availability Period in an aggregate principal amount at any one time outstanding
up to but not exceeding the amount of such Lender's Commitment as then in
effect; provided, however, that the total Exposures at any one time outstanding
-------- -------
shall not exceed the total Commitments. There may be more than one Borrowing
with respect to Loans on any Business Day. Within the foregoing limits and
subject to the conditions set out in Article IV, the Borrower may obtain
Borrowings of Loans, repay or prepay such Loans, and reborrow such Loans. Any
portion of each Lender's Commitment not utilized prior to the Final Maturity
Date shall be permanently cancelled.
(b) Types of Loans. The Loans made pursuant hereto by each Lender
--------------
shall, at the option of the Borrower, be either ABR Loans or Eurodollar Loans
and may be continued or converted pursuant to Section 2.11, provided that,
except as otherwise specifically provided herein, all Loans made pursuant to the
same Borrowing shall be of the same Type.
-19-
(c) Commitments. Each Lender's Exposure shall not exceed at any one
-----------
time the amount set forth opposite such Lender's name on Schedule 2.01 under the
caption "Commitment".
(d) Amounts of Borrowings, etc. The aggregate principal amount of each
---------------------------
Borrowing (i) of Eurodollar Loans shall be not less than $5,000,000 and shall be
in an integral multiple of $1,000,000, and (ii) of ABR Loans shall be not less
than $1,000,000 and shall be in an integral multiple of $100,000, except that
any Borrowing of Loans that are ABR Loans may be in the aggregate amount of the
unused total Commitments in effect at such time. Borrowings of more than one
Type may be outstanding at the same time; provided, however, that the Borrower
-------- -------
shall not be entitled to request any Borrowing that, if made, would result in an
aggregate of more than 10 separate Borrowings of Eurodollar Loans being
outstanding at any one time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
Section 2.02. Borrowing Requests.
-------------------
(a) Borrowing Requests. Whenever the Borrower desires to make a
------------------
Borrowing hereunder, it shall give Advance Notice in the form of a Borrowing
Request, specifying, subject to the provisions hereof, (i) the aggregate
principal amount of the Loans to be made pursuant to such Borrowing, (ii) the
date of Borrowing (which shall be a Business Day), (iii) whether the Loans being
made pursuant to such Borrowing are to be ABR Loans or Eurodollar Loans, and
(iv) in the case of Eurodollar Loans, the Interest Period to be applicable
thereto.
(b) Notice by Administrative Agent. The Administrative Agent shall
------------------------------
promptly give each Lender facsimile or telephonic notice (and, in the case of
telephonic notices, confirmed by facsimile or otherwise in writing) of the
proposed Borrowing, of such Lender's Percentage Share thereof and of the other
matters covered by the Advance Notice. Without in any way limiting the
Borrower's obligation to confirm in writing any telephonic notice, the
Administrative Agent may act without liability upon the basis of telephonic
notice believed by the Administrative Agent in good faith to be from the
Borrower prior to receipt of written confirmation. In each such case, the
Borrower hereby waives the right to dispute the Administrative Agent's record of
the terms of such telephonic notice, absent manifest error.
Section 2.03. Letters of Credit. (a) General. Subject to the terms and
------------------------------- --------
conditions set forth herein, the Issuing Bank agrees to issue and the Borrower
shall have the right to request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
----------------------------------------------------------
Conditions. To request the issuance of a Letter of Credit (or the amendment,
-----------
renewal or extension of an
-20-
outstanding Letter of Credit), the Borrower shall give Advance Notice by hand
delivery or facsimile (or transmitted by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent of a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Bank, the Borrower also shall
submit a letter of credit application on the Issuing Bank's standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $50,000,000 and (ii)
the sum of the total Exposures shall not exceed the total Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to
---------------
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Final Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
--------------
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
-------------
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon (Houston time), on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m. (Houston time), on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 12:00 noon (Houston time), on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00 a.m.
(Houston time), on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such
-21-
notice is not received prior to such time on the day of receipt; provided that
--------
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.02 that such payment be financed with an
ABR Borrowing in an equivalent amount and, to the extent so financed, the
Borrower's obligation to make such payment shall be discharged and replaced by
the resulting ABR Borrowing. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such
Lender's Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.04 with respect to Loans made by such Lender (and Section
2.04 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
------- --------
and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of ABR Loans as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
--------------------
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such
-22-
determination. Notwithstanding anything to the contrary contained in this clause
(f), the Borrower shall have no obligation to indemnify the Issuing Bank in
respect of any liability incurred by the Issuing Bank to the extent arising out
of the gross negligence or willful misconduct of the Issuing Bank (as finally
determined by a court of competent jurisdiction). In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
-----------------------
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
----------------
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.06(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
-------------------------------
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. If the maturity of the Loans has been
----------------------
accelerated , on the Business Day that the Borrower receives notice from the
Administrative Agent or the
-23-
Required Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided that the obligation to deposit
--------
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Borrower
described in clause (h) or (i) of Article VIII. Such deposit shall be held by
the Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower's risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure.
Section 2.04. Disbursement of Funds.
-----------------------
(a) Availability. No later than 2:00 p.m. (Houston time) on the date
------------
of each Borrowing, each Lender will make available to the Administrative Agent
such Lender's Percentage Share of the amount (if any) by which the principal
amount of the Borrowing requested to be made on such date exceeds the principal
amount of Loans (if any) maturing on such date, in Dollars and in immediately
available funds at the Payment Office or pursuant to the Borrower's written
instructions to the Administrative Agent. The Administrative Agent will make
available to the Borrower at the Payment Office the aggregate of the amounts (if
any) so made available by the Lenders by depositing such amounts, in immediately
available funds, to an account of the Borrower at the Administrative Agent
designated by the Borrower for such purpose. To the extent that Loans mature on
the date of a requested Borrowing of Loans, the Lenders shall apply the proceeds
of the Loans then being made, to the extent thereof, to the repayment of such
maturing Loans, such Loans intended to be a contemporaneous exchange.
(b) Funds to the Administrative Agent. Unless the Administrative Agent
---------------------------------
shall have been notified by any Lender prior to the date of a Borrowing that
such Lender does not intend to make available to the Administrative Agent such
Lender's Percentage Share of the Borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date, and the Administrative Agent may make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such Lender on the
date of a Borrowing, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest at the
Federal Funds Effective Rate. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent together
with interest at the rate specified for the Borrowing which includes such amount
paid. Nothing in this Section shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment
-24-
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
(c) Lenders' Responsibilities. No Lender shall be responsible for any
-------------------------
default by any other Lender in its obligation to make Loans hereunder, and each
Lender shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fulfill its Commitment
hereunder.
Section 2.05. Notes. Any Lender (including any Lender who becomes a
--------------------
party hereto pursuant to an Assignment and Acceptance in accordance with Section
10.04) may request that Loans made by it be evidenced by a promissory note
(individually, a "Note" and collectively, "Notes"). In such event, the Borrower
---- -----
shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and
its registered assigns) and in substantially the form of promissory note
attached hereto as Exhibit B. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 10.04) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
Section 2.06. Interest. In all cases subject to Section 10.13:
-----------------------
(a) ABR Loans. Subject to Section 2.06(c), the Borrower agrees to pay
---------
interest in respect of the unpaid principal amount of each ABR Loan from the
date thereof until payment in full thereof at a rate per annum which shall be,
for any day, equal to the sum of the Applicable Rate (ABR Spread) plus the
Alternate Base Rate in effect on such day, but in no event to exceed the Highest
Lawful Rate. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive and binding, absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including but not limited to the inability of the Administrative Agent to obtain
sufficient bids or publications in accordance with the terms hereof, the
Alternate Base Rate shall be the Prime Rate until the circumstances giving rise
to such inability no longer exist.
(b) Eurodollar Loans. Subject to Section 2.06(c), the Borrower agrees
----------------
to pay interest in respect of the unpaid principal amount of each Eurodollar
Loan from the date thereof until payment in full thereof at a rate per annum
which shall be the sum of the Applicable Rate (Eurodollar Spread) plus the
relevant Adjusted LIBO Rate, but in no event to exceed the Highest Lawful Rate.
(c) Default Interest. Overdue principal and, to the extent permitted
----------------
by law, overdue interest in respect of each Loan and all other amounts owing
hereunder shall bear interest for each day that such amounts are overdue at a
rate per annum equal to two percent (2%) in excess of the Adjusted LIBO Rate
plus the Applicable Rate or the Alternate Base Rate, as applicable to such Loan,
in effect for each such day, and all other amounts owing hereunder shall bear
interest for each day that such amounts are overdue at a rate per annum equal to
two percent (2%) in excess of the Alternate Base Rate, but in no event shall any
such rate exceed the Highest Lawful Rate.
-25-
(d) Interest Payment Dates. Interest on each Loan shall accrue from
----------------------
and including the date of such Loan to but excluding the date of payment in full
thereof. Interest on each Eurodollar Loan shall be payable on the last day of
each Interest Period applicable thereto and, in the case of an Interest Period
in excess of three months, on each day which occurs every three months after the
initial date of such Interest Period, and on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise) and, after
maturity, on demand. Interest on ABR Loans shall be payable on each Quarterly
Date, commencing on the first of such days to occur after such Loan is made, at
maturity (whether by acceleration or otherwise) and, after maturity, on demand.
(e) Notice by the Administrative Agent. The Administrative Agent, upon
----------------------------------
determining the Adjusted LIBO Rate for any Interest Period, shall promptly
notify by telephone (confirmed in writing) or in writing the Borrower and the
Lenders thereof.
Section 2.07. Interest Periods. In connection with each Borrowing of
-------------------------------
Eurodollar Loans, the Borrower shall elect an Interest Period to be applicable
to such Borrowing, which Interest Period shall begin on and include, as the case
may be, the date selected by the Borrower as of the date of the Borrowing
pursuant to Section 2.02(a), or at conversion from one Type of Loan to another
pursuant to Section 2.11(e), or the date of expiration of the then current
Interest Period applicable thereto, and end on but exclude the date which is
either one, two, three, six or 12 months thereafter, as selected by the
Borrower; provided that:
--------
(a) Business Days. If any Interest Period would otherwise expire on a
-------------
day which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, further, that if any Interest Period (other
--------- -------
than in respect of a Borrowing of Eurodollar Loans the Interest Period of which
is expiring pursuant to Section 2.15(b) hereof) would otherwise expire on a day
which is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(b) Month End. Any Interest Period which 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, subject to Section 2.07(c) below, end on the last Business Day of a
calendar month;
(c) Payment Limitations. No Interest Period shall extend beyond any
-------------------
date that any principal payment or prepayment is scheduled to be due unless the
aggregate principal amount of Borrowings which are Borrowings of ABR Loans or
which have Interest Periods which will expire on or before such date, less the
aggregate amount of any other principal payments or prepayments due during such
Interest Period, is equal to or in excess of the amount of such principal
payment or prepayment; and
(d) Maturity Dates. No Interest Period with regard to Loans shall
---------------
extend beyond the Final Maturity Date.
-26-
Section 2.08. Repayment of Loans. The Borrower will pay to the
---------------------------------
Administrative Agent for account of each Lender the outstanding principal amount
of each Loan made by such Lender on or before the Final Maturity Date.
Section 2.09. Termination or Reduction of Commitments. The Borrower
------------------------------------------------------
may, upon at least 10 Business Days' notice to the Administrative Agent,
terminate entirely at any time the unused portions of the Commitments, or
proportionately reduce from time to time by an aggregate amount of $1,000,000 or
any larger multiple thereof, the unused portions of the Commitments, provided
that any such reduction shall apply proportionately to the Commitment of each
Lender. If the Commitments are terminated in their entirety, all accrued
facility fees with respect thereto shall be payable on the effective date of
such termination. The unused portions of the Commitments once terminated or
reduced may not be reinstated.
Section 2.10. Prepayments.
------------
(a) Voluntary Prepayments. The Borrower may, at its option, at any
---------------------
time and from time to time, prepay Loans, in whole or in part, without premium
or penalty (other than funding losses, if any, resulting from such prepayment
being made other than on the last day of an Interest Period with respect to any
Eurodollar Loan as provided in Section 2.18), upon giving, in the case of a
Eurodollar Loan, three Business Days' prior written notice to the Administrative
Agent, and, in the case of an ABR Loan, one Business Day's prior written notice
to the Administrative Agent. Such notice shall be irrevocable and specify the
date and amount of prepayment and the Loan or Loans (including the Type thereof)
to which such prepayment is to be applicable. The payment amount specified in
such notice shall be due and payable on the date specified. Each prepayment of
Loans shall be in the minimum principal amount of $1,000,000 or any larger
multiple thereof or the aggregate balance outstanding on the applicable Notes.
Each prepayment made pursuant to this Section shall be subject to Section 2.18
(as applicable) and shall be applied ratably to prepay the Loans of the several
Lenders.
(b) Notice by Administrative Agent. Upon receipt of a notice of
------------------------------
prepayment pursuant to this Section, the Administrative Agent shall promptly
notify each Lender of the contents thereof and of such Lender's ratable share of
such prepayment.
Section 2.11. Continuation and Conversion Options.
------------------------------------
(a) Continuation. The Borrower may elect to continue all or any part
------------
of any Borrowing of Eurodollar Loans beyond the expiration of the then current
Interest Period relating thereto by giving Advance Notice to the Administrative
Agent of such election, specifying the Eurodollar Loan or portion thereof to be
continued and the Interest Period therefor. In the absence of such a timely and
proper election with regard to Eurodollar Loans, the Borrower shall be deemed to
have elected to convert such Eurodollar Loan to an ABR Loan pursuant to Section
2.11(d).
(b) Amounts of Continuations. All or part of any Eurodollar Loan may
------------------------
be continued as provided herein, provided that any continuation of such Loan
shall not result in a Borrowing of Eurodollar Loans in an amount other than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
-27-
(c) Continuation or Conversion Upon Default. If no Default shall have
---------------------------------------
occurred and be continuing, each Eurodollar Loan may be continued or converted
as provided in this Section. If a Default shall have occurred and be continuing,
the Borrower shall not have the option to elect to continue any such Eurodollar
Loan pursuant to Section 2.11(a) or to convert ABR Loans pursuant to Section
2.11(e).
(d) Conversion to Alternate Base Rate. The Borrower may elect to
---------------------------------
convert any Eurodollar Loan on the last day of the then current Interest Period
relating thereto to an ABR Loan by giving Advance Notice to the Administrative
Agent of such election.
(e) Conversion to Eurodollar Rate. The Borrower may elect to convert
-----------------------------
any ABR Loan at any time or from time to time to a Eurodollar Loan by giving
Advance Notice to the Administrative Agent of such election, specifying each
Interest Period therefor.
(f) Amounts of Conversions. All or any part of the outstanding Loans
-----------------------
may be converted as provided herein, provided that any conversion of such Loans
shall not result in a Borrowing of Eurodollar Loans in an amount other than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Section 2.12. Fees. (a) The Borrower agrees to pay to the
-------------------
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate (Facility Fee Rate) on the daily amount of the
Commitment of such Lender (whether used or unused) during the period from and
including the Effective Date to but excluding the date on which such Commitment
terminates; provided that, if such Lender continues to have any Exposure after
--------
its Commitment terminates, then such facility fee shall continue to accrue on
the daily amount of such Lender's Exposure from and including the date on which
its Commitment terminates to but excluding the date on which such Lender ceases
to have any Exposure. Accrued facility fees shall be payable in arrears on the
last day of March, June, September and December of each year and on the date on
which the Commitments terminate, commencing on the first such date to occur
after the date hereof; provided that any facility fees accruing after the date
--------
on which the Commitments terminate shall be payable on demand. All facility fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate (Eurodollar
Spread) as interest on Eurodollar Loans on the average daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Commitment terminates and
the date on which such Lender ceases to have any LC Exposure, and (ii) to the
Issuing Bank a fronting fee, equal to the greater of (i) $500 or (ii) 0.125% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank's standard fees with respect to the
issuance, amendment, renewal, extension or negotiation of any Letter of Credit
or processing of
-28-
drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
--------
shall be payable on the date on which the Commitments terminate and any such
fees accruing after the date on which the Commitments terminate shall be payable
on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a utilization fee which shall accrue at the Applicable
Rate (Utilization Fee Rate) on the daily amount of such Lender's Exposure during
the time the average daily aggregate amount of the total Exposures exceeds 33%
of the total Commitments. Accrued utilization fees shall be payable in arrears
on each Quarter Date. All utilization fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(d) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances absent manifest error.
Section 2.13. Payments, etc.
--------------
(a) Without Setoff, etc. Except as otherwise specifically provided
-------------------
herein, all payments under this Agreement shall be made to the Administrative
Agent on behalf of the Lenders without defense, set-off or counterclaim to the
Administrative Agent not later than 12:30 p.m. (Houston time) on the date when
due and shall be made in Dollars in immediately available funds at the Payment
Office. The Administrative Agent will promptly thereafter distribute funds in
the form received relating to the payment of principal or interest or fees
ratably to the Lenders for the account of their respective Lending Offices, and
funds in the form received relating to the payment of any other amount payable
to any Lender to such Lender for the account of its Lending Office.
(b) Non-Business Days. Whenever any payment to be made hereunder or
-----------------
under any Note or any report or information to be delivered hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (except as otherwise
provided in Section 2.07) and, with respect to payments of principal, interest
thereon shall be payable at the applicable rate during such extension.
-29-
(c) Computations. All computations of interest shall be made on the
------------
basis of a year of 360 days (unless such calculation would result in a usurious
rate, in which case interest shall be calculated on the basis of a year of 365
or 366 days, as the case may be) in the case of Eurodollar Loans, and 365 or 366
days (as the case may be) in the case of ABR Loans, and all computations of fees
shall be made on the basis of a year of 360 days (unless such calculation would
result in a usurious rate, in which case interest shall be calculated on the
basis of a year of 365 or 366 days, as the case may be), in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall, except for manifest error, be final, conclusive and binding for all
purposes, provided that such determination shall be made in good faith in a
manner generally consistent with the Administrative Agent's standard practice.
If the Administrative Agent and the Borrower determine that manifest error
exists, such parties shall correct such error by way of an adjustment to the
payment due on the next Quarterly Date.
Section 2.14. Interest Rate Not Ascertainable, etc. In the event that
---------------------------------------------------
the Administrative Agent shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) that on any date for determining the Eurodollar Rate
for any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, or any Lender's position in
such market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate, then, and in any such event, the Administrative Agent shall
forthwith give notice (by telephone confirmed in writing) to the Borrower and to
the Lenders of such determination. Until the Administrative Agent notifies the
Borrower that the circumstances giving rise to the suspension described herein
no longer exist, the obligations of the Lenders to make Eurodollar Loans shall
be immediately suspended; any Eurodollar Loan that is requested (by
continuation, conversion or otherwise) shall instead be made as an ABR Loan, and
any outstanding Eurodollar Loan shall be converted, on the last day of the then
current Interest Period applicable thereto, to an ABR Loan.
Section 2.15. Illegality.
-----------
(a) Determinations of Illegality. In the event that any Lender shall
----------------------------
have determined (which determination shall be reasonably exercised and shall,
absent manifest error, be final, conclusive and binding upon all parties) at any
time that the making or continuance of any Eurodollar Loan has become unlawful
due to the introduction of or any change in or in the interpretation of any
applicable law, governmental rule, regulation, guideline or order (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful), then, in any such event, the Lender shall give prompt notice (by
telephone confirmed in writing) to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
the Borrower and the other Lenders).
(b) Eurodollar Loans Suspended. Upon the giving of the notice to the
--------------------------
Borrower referred to in Section (a) above, (i) the Borrower's right to request
(by continuation, conversion or otherwise) and such Lender's obligation to make
Eurodollar Loans shall be immediately suspended, and any such requested
Eurodollar Loan shall instead be made as an ABR Loan, and (ii) if the affected
Eurodollar Loan or Loans are then outstanding, the Borrower
-30-
shall immediately, or if permitted by applicable law, no later than the date
permitted thereby, upon at least one Business Day's written notice to the
Administrative Agent and the affected Lender, convert each such Eurodollar Loan
into an ABR Loan, provided that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this Section.
Section 2.16. Increased Costs.
-----------------
(a) Eurodollar Regulations, etc. If, by reason of (x) after the date
---------------------------
hereof, the introduction of or any change (including, but not limited to, any
change by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (y) the compliance with any
guideline or request made after the date hereof by any central bank or other
governmental authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):
(i) any Lender (or its applicable Lending Office) shall be
subject to any tax, duty or other charge with respect to its Eurodollar Loans or
its obligation to make Eurodollar Loans, or shall change the basis of taxation
of payments to any Lender of the principal of or interest on its Eurodollar
Loans or its obligation to make Eurodollar Loans (except for changes in the rate
of tax on the overall net income or gross receipts of such Lender or its
applicable Lending Office imposed by the jurisdiction in which such Lender's
principal executive office or applicable Lending Office is located); or
(ii) any reserve (including, but not limited to, any imposed by
the Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender's applicable Lending Office shall be imposed or
deemed applicable or any other condition affecting its Eurodollar Loans or its
obligations to make Eurodollar Loans shall be imposed on any Lender or its
applicable Lending Office or the interbank Eurodollar market or the secondary
certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Loans (except
to the extent already included in the determination of the applicable Eurodollar
Rate) or there shall be a reduction in the amount received or receivable by such
Lender or its applicable Lending Office, then the Borrower shall from time to
time, upon written notice from and demand by such Lender (with a copy of such
notice and demand to the Administrative Agent), pay to such Lender, within 30
days after the date specified in such notice and demand, additional amounts
determined by such Lender in a reasonable manner to be sufficient to indemnify
such Lender against such increased cost. A certificate as to the amount of such
increased cost and the calculation thereof, submitted to the Borrower and the
Administrative Agent by such Lender, shall, except for manifest error, be final,
conclusive and binding for all purposes, provided that the determination of such
amount shall be made in good faith in a manner generally consistent with such
Lender's standard practice.
(b) Costs. If any Lender shall advise the Administrative Agent that at
-----
any time, because of the circumstances described in clauses (x) or (y) in
Section 2.16(a) or any other circumstances arising after the Effective Date
affecting such Lender or the interbank Eurodollar
-31-
market or such Lender's position in such market, the Eurodollar Rate, as
determined in good faith by the Administrative Agent, will not adequately and
fairly reflect the cost to such Lender of funding its Eurodollar Loans, then,
and in any such event:
(i) the Administrative Agent shall forthwith give notice (by
telephone confirmed in writing) to the Borrower and to the Lenders of such
advice; and
(ii) the Borrower's right to request and such Lender's obligation
to make Eurodollar Loans shall be immediately suspended, any such Eurodollar
Loan that is requested (by continuation, conversion or otherwise) shall instead
be made as an ABR Loan, and any such outstanding Eurodollar Loan shall be
converted, on the last day of the then current Interest Period applicable
thereto, to an ABR Loan.
(c) Capital Adequacy. If, by reason of (i) after the date hereof, the
----------------
introduction of or any change (including, but not limited to, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (ii) the compliance with any guideline or request
made after the date hereof by any central bank or other governmental authority
or quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law) affects or would
affect the amount of capital required to be maintained by any Lender or any
corporation controlling such Lender, and the amount of such capital is increased
by or based upon the existence of such Lender's Commitment to lend hereunder and
other commitments of this type or of the Letters of Credit (or similar
contingent obligations), then, within 30 days after written request therefor by
such Lender (with a copy of such request to the Administrative Agent), the
Borrower shall pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for the
increased cost of such additional capital in light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's Commitment to lend hereunder or to
the issuance or maintenance of the Letters of Credit. A certificate as to such
amounts and the calculation thereof, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error, provided that the determination of such amount
shall be made in good faith in a manner generally consistent with such Lender's
standard practice.
(d) Issuing Bank. The rights and benefits of the Lenders under this
------------
Section 2.16 shall also apply to the Issuing Bank in its capacity
as such.
(e) Notice. The Borrower shall not be obligated to compensate any
------
Lender pursuant to this Section 2.16 for any amounts attributable to a period
more than 90 days prior to the giving of notice by such Lender to the Borrower
of its intention to seek compensation under this Section 2.16.
Section 2.17. Change of Lending Office. Each Lender agrees that it
---------------------------------------
will use reasonable efforts to designate an alternate Lending Office with
respect to any of its Eurodollar Loans affected by the matters or circumstances
described in Sections 2.14, 2.15 or 2.16 to reduce the liability of the Borrower
or avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion.
-32-
Section 2.18. Funding Losses. The Borrower shall compensate each
-----------------------------
Lender, upon its written request (which request shall set forth the basis for
requesting such amounts and which request shall be reasonably exercised and
shall, absent manifest error, be final, conclusive and binding upon all of the
parties hereto), for all actual losses, expenses and liabilities (including, but
not limited to, any interest paid by such Lender to lenders of funds borrowed by
it to make or carry its Eurodollar Loans to the extent not recovered by the
Lender in connection with the re-employment of such funds and including loss of
anticipated profits), which the Lender may sustain (i) if for any reason (other
than a default by such Lender) a Borrowing of Eurodollar Loans does not occur on
the date specified therefor in a Borrowing Request (whether or not withdrawn),
(ii) if any repayment (or conversion pursuant to Section 2.15 or otherwise) of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period applicable thereto, or (iii) if, for any reason, the Borrower
defaults in its obligation to repay its Eurodollar Loans when required by the
terms of this Agreement.
Section 2.19. Sharing of Payments, etc. If any Lender shall obtain any
---------------------------------------
payment or reduction (including, but not limited to, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of any obligation of the Borrower hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share of payments or reductions on account of such
obligations obtained by all the Lenders, such Lender shall forthwith (i) notify
each of the other Lenders and the Administrative Agent of such receipt, and (ii)
purchase from the other Lenders such participations in the affected obligations
as shall be necessary to cause such purchasing Lender to share the excess
payment or reduction, net of costs incurred in connection therewith, ratably
with each of them, provided that if all or any portion of such excess payment or
reduction is thereafter recovered from such purchasing Lender or additional
costs are incurred, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery or such additional costs, but without
interest. The Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
Section 2.20. Taxes.
------
(a) Payments Free and Clear. Any and all payments by the Borrower
-----------------------
under this Agreement or any other Financing Document shall be made, in
accordance with Section 2.13, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
---------
of the Administrative Agent, the Issuing Bank and each Lender, taxes imposed on
or measured by its income or receipts, and franchise or similar taxes imposed on
it, by (i) any jurisdiction (or political subdivision thereof) of which the
Administrative Agent, the Issuing Bank or such Lender, as the case may be, is a
citizen or resident or in which such Lender has a permanent establishment (or is
otherwise engaged in the active conduct of its banking business through an
office or a branch) which is such Lender's applicable Lending Office, (ii) the
jurisdiction (or any political subdivision thereof) in which the Administrative
Agent, the Issuing Bank or such Lender is organized, or (iii) any jurisdiction
(or political subdivision thereof) in which the Administrative Agent, the
Issuing Bank or such Lender is presently doing business which taxes are imposed
solely as a result of doing business in such jurisdiction (all
-33-
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities so arising out of payments by the Borrower being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct any
-----
Taxes from or in respect of any sum payable hereunder to the Lenders, the
Issuing Bank or the Administrative Agent (i) the sum payable shall be increased
by the amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.20) such
Lender, the Issuing Bank or the Administrative Agent (as the case may be) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions, and (iii) the Borrower
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(b) Other Taxes. In addition, the Borrower agrees to pay to the
-----------
relevant Governmental Authority any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement, any Assignment and Acceptance or
any other Loan Document (hereinafter referred to as "Other Taxes").
(c) Indemnification. The Borrower will indemnify each Lender, the
---------------
Issuing Bank and the Administrative Agent for the full amount of Taxes and Other
Taxes (including, but not limited to, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.20) paid by such Lender,
the Issuing Bank or the Administrative Agent (on their behalf or on behalf of
any Lender), as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted, which are paid or
arise no more than 90 days prior to written demand therefor by such Lender, the
Issuing Bank or the Administrative Agent. Any payment pursuant to such
indemnification shall be made within 30 days after the date any Lender, the
Issuing Bank or the Administrative Agent, as the case may be, makes written
demand therefor. If any Lender, the Issuing Bank or the Administrative Agent
receives a refund or credit in respect of any Taxes or Other Taxes for which
such Lender, the Issuing Bank or the Administrative Agent has received payment
from the Borrower hereunder it shall promptly notify the Borrower of such refund
or credit and shall, as promptly as reasonably practicable, pay an amount equal
to such refund or credit to the Borrower without interest (but with any interest
so refunded or credited), provided that the Borrower, upon the request of such
Lender, the Issuing Bank or the Administrative Agent, agrees to return such
refund or credit (plus penalties, interest or other charges) to such Lender, the
Issuing Bank or the Administrative Agent in the event such Lender, the Issuing
Bank or the Administrative Agent is required to repay such refund or credit.
(d) Receipts. Within 30 days after the date of any payment of Taxes or
--------
Other Taxes withheld by the Borrower in respect of any payment to any Lender,
the Issuing Bank or the Administrative Agent, the Borrower will furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof.
(e) Survival. Without prejudice to the survival of any other agreement
--------
contained herein, the agreements and obligations contained in this Section 2.20
shall survive the payment in full of principal and interest hereunder.
-34-
(f) Lender Representations. Each Lender represents that it is either
----------------------
(i) a corporation organized under the laws of the United States of America or
any state thereof or (ii) entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including fees, to
be made to it pursuant to this Agreement (A) under an applicable provision of a
tax convention to which the United States of America is a party or (B) because
it is acting through a branch, agency or office in the United States of America
and any payment to be received by it hereunder is effectively connected with a
trade or business in the United States of America. Each Lender that is not a
corporation organized under the laws of the United States of America or any
state thereof agrees to provide to the Borrower and the Administrative Agent on
the Effective Date, or on the date of its delivery of the Assignment and
Acceptance pursuant to which it becomes a Lender, and at such other times as
required by United States law or as the Borrower or the Administrative Agent
shall reasonably request, two accurate and complete original signed copies of
either (A) Internal Revenue Service Form 4224 (or successor form) certifying
that all payments to be made to it hereunder will be effectively connected to a
United States trade or business (the "Form 4224 Certification") or (B) Internal
-----------------------
Revenue Service Form 1001 (or successor form) certifying that it is entitled to
the benefit of a provision of a tax convention to which the United States of
America is a party which completely exempts from United States withholding tax
all payments to be made to it hereunder (the "Form 1001 Certification"). In
-----------------------
addition, each Lender agrees that if it previously filed a Form 4224
Certification it will deliver to the Borrower and the Administrative Agent a new
Form 4224 Certification prior to the first payment date occurring in each of its
subsequent taxable years; and if it previously filed a Form 1001 Certification,
it will deliver to the Borrower and the Administrative Agent a new certification
prior to the first payment date falling in the third year following the previous
filing of such certification. Each Lender also agrees to deliver to the Borrower
and the Administrative Agent such other or supplemental forms as may at any time
be required as a result of changes in applicable law or regulation in order to
confirm or maintain in effect its entitlement to exemption from United States
withholding tax on any payments hereunder, provided that the circumstances of
--------
the Lender at the relevant time and applicable laws permit it to do so. If a
Lender determines, as a result of any change in either (i) applicable law,
regulation or treaty, or in any official application thereof or (ii) its
circumstances, that it is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section, or that it is required to withdraw
or cancel any such form or certificate previously submitted, it shall promptly
notify the Borrower and the Administrative Agent of such fact. If a Lender is
organized under the laws of a jurisdiction outside the United States of America,
unless the Borrower and the Administrative Agent have received a Form 1001
Certification or Form 4224 Certification satisfactory to them indicating that
all payments to be made to such Lender hereunder are not subject to United
States withholding tax, the Borrower shall withhold taxes from such payments at
the applicable statutory rate, provided that such withholding shall not increase
the amount of payments for the account of such Lender to be made by the Borrower
pursuant to Section 2.20(a). Each Lender agrees to indemnify and hold harmless
from any United States taxes, penalties, interest and other expenses, costs and
losses incurred or payable by (i) the Administrative Agent as a result of such
Lender's failure to submit any form or certificate that it is required to
provide pursuant to this Section or (ii) the Borrower or the Administrative
Agent as a result of their reliance on any such form or certificate which it has
provided to them pursuant to this Section.
-35-
(g) Efforts to Avoid or Reduce. Any Lender claiming any additional
--------------------------
amounts payable pursuant to this Section 2.20 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Borrower or the Administrative Agent or to change the
jurisdiction of its applicable Lending Office or to contest any tax imposed if
the making of such a filing or change or contesting such tax would avoid the
need for or reduce the amount of any such additional amounts that may thereafter
accrue and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
Section 2.21. Pro Rata Treatment. Except as required under Section
--------------------------------
2.15, 2.16 or 2.18, each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of interest on the Loans, each payment of the fees,
each reduction of the Commitments, and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated ratably and pro rata among the Lenders in
accordance with their respective Percentage Shares. Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's portion of such
Borrowing to the next higher or lower whole dollar amount.
Section 2.22. Replacement Lenders. If any Lender elects to pass
----------------------------------
through to the Borrower any charge, cost or tax under Sections 2.16 or 2.20 or
terminates the availability of Eurodollar Loans for any period of time under
Sections 2.14 or 2.15, the Borrower may elect to terminate such Lender as a
party to this Agreement; provided that, prior to or concurrently with such
--------
termination, if an Event of Default has occurred which is continuing, the
Borrower must receive the consent of the Administrative Agent and either (i) pay
to the terminated Lender all principal, interest, fees, costs and other
Obligations owed to such Lender and accrued though the date of termination and
terminate such Lender's Commitment to make Advances hereunder, in which event
the total Commitments shall be reduced by the Commitment of the terminated
Lender, or (ii) arrange for one or more Eligible Transferees to purchase the
rights and duties of the terminated Lender pursuant to Section 10.04, in which
event the terminated Lender will assign all of such rights and duties to such
Eligible Transferees.
ARTICLE III
-----------
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders and the Issuing
Bank that:
Section 3.01. Organization; Powers. Each of the Borrower and its
----------------------------------
Restricted Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite
corporate power and authority to carry on its business as now conducted and,
where the failure to do so, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect, is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required.
Section 3.02. Authorization; Enforceability. The Transactions are
-------------------------------------------
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate action.
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This Agreement has been duly executed and delivered by the Borrower and
constitutes a legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
Section 3.03. Governmental Approvals; No Conflicts. The Transactions
--------------------------------------------------
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority or other Person, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Restricted Subsidiaries
or any order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon the
Borrower or any of its Restricted Subsidiaries or its assets, or give rise to a
right thereunder to require any payment to be made by the Borrower or any of its
Restricted Subsidiaries, and (d) will not result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Restricted Subsidiaries.
Section 3.04. Financial Condition; No Material Adverse Effect. (a) The
-------------------------------------------------------------
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended December 31, 2000, reported on by KPMG, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended June 30, 2001, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.
(b) Since June 30, 2001, there has been No Material Adverse Effect.
Section 3.05. Properties. (a) Each of the Borrower and its Restricted
------------------------
Subsidiaries has indefeasible title to, or valid leasehold interests in, all of
its real and personal property material to its business, except for defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes,
free and clear of all Liens except Liens permitted by Section 6.02.
(b) Each of the Borrower and its Restricted Subsidiaries owns (free
and clear of all Liens except Liens permitted by Section 6.02), or is licensed
to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Restricted Subsidiaries does not infringe upon the rights of any other Person,
which, individually or in the aggregate, would reasonably be expected to result
in a Material Adverse Effect.
Section 3.06. Litigation and Environmental Matters. (a) There are no
--------------------------------------------------
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries which would,
individually or in the aggregate, result in a Material Adverse Effect (other
than the Disclosed Matters).
-37-
(b) Except for the Disclosed Matters, neither the Borrower nor any of
its Subsidiaries:
(i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law;
(ii) has become subject to any Environmental Liability;
(iii) has received notice of any claim with respect to any
Environmental Liability; or
(iv) knows of any basis for any Environmental Liability;
which would individually or in the aggregate result in a Material Adverse
Effect.
Section 3.07. Compliance with Laws and Agreements. Each of the
--------------------------------------------------
Borrower and its Restricted Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, where the failure to do so, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect. No Default
has occurred and is continuing.
Section 3.08. Investment and Holding Company Act Status. Neither the
-------------------------------------------------------
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
Section 3.09. Taxes. Each of the Borrower and its Restricted
-------------------
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it to the extent that the failure to do so would reasonably
be expected to result in a Material Adverse Effect, except Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Restricted Subsidiary, as applicable, has set aside on its books adequate
reserves.
Section 3.10. ERISA No ERISA Event has occurred or is reasonably
-------------------
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, would reasonably be expected to
result in a Material Adverse Effect.
Section 3.11. Disclosure. None of the reports, financial statements,
------------------------
certificates or other information furnished by or on behalf of the Borrower to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading (other than
industry-wide risks normally associated with the types of business conducted by
the Borrower); provided that, with respect to projected financial information
--------
and reserve evaluations, the Borrower represents only
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that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
Section 3.12. Subsidiaries. As of the Effective Date, Borrower has no
--------------------------
Subsidiaries other than those listed on Schedule 3.12 hereto. As of the
Effective Date, Schedule 3.12 sets forth the jurisdiction of incorporation or
organization of each such Subsidiary, the percentage of Borrower's ownership of
the outstanding Equity Interests of each Subsidiary directly owned by Borrower,
and the percentage of each Subsidiary's ownership of the outstanding Equity
Interests of each other Subsidiary. All of the outstanding Equity Interests of
Borrower and each Subsidiary has been validly issued, are fully paid, and
nonassessable. Except as reflected in the Borrower's financial statements
delivered to the Agent and filings with the Securities and Exchange Commission
as of the time this representation is made or deemed made, there are no
outstanding subscriptions, options, warrants, calls, or rights (including
preemptive rights) to acquire, and no outstanding securities or instruments
convertible into any Equity Interests of the Borrower or any Subsidiary.
Schedule 3.12 also designates all Restricted Subsidiaries existing on the
Effective Date.
Section 3.13. Margin Securities. Neither the Borrower nor any
-------------------------------
Restricted Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations U or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying margin stock in violation of
said Regulations U or X.
ARTICLE IV
----------
Conditions
----------
Section 4.01. Effective Date. The obligations of the Lenders to make
----------------------------
Loans and participate in the issuance of Letters of Credit, and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective until the
date on which each of the following conditions is satisfied (or waived in
accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Borrower,
substantially in the form of Exhibit C. The Borrower hereby requests such
counsel to deliver such opinion.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the
-39-
organization, existence and good standing of the Borrower, the authorization of
the Transactions and any other matters relating to the Borrower, this Agreement
or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.
(f) The 364-Day Revolving Credit Facility shall have been fully and
finally paid on or before the date of the first Borrowing.
(g) The results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the Loan Parties in all applicable
jurisdictions evidencing, to the reasonable satisfaction of the Administrative
Agent, that the Liens indicated by such financing statements or similar
documents (if any) are permitted by Section 6.02 or have been released or will
be released on the Effective Date.
(h) The Administrative Agent shall have received a duly executed
Subsidiary Guaranty Agreement in the form of Exhibit D from each Restricted
Subsidiary other than Pure Partners and from Pure Partners whenever the
restrictions in the Pure Partners Agreements which prevent Pure Partners from
executing and delivering such Subsidiary Guaranty Agreement are no longer in
effect.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Section 4.02. Each Credit Event. The obligation of each Lender to make
-------------------------------
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit and of the Lenders to participate in
the issuance, amendment, renewal or extension of any Letter of Credit is subject
to the satisfaction of the following conditions:
(a) The representations and warranties of the Borrower set forth in
this Agreement shall be true and correct on and as of the date of such Borrowing
or the date of issuance, amendment, renewal or extension of such Letter of
Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
-40-
ARTICLE V
---------
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders and the Issuing Bank that:
Section 5.01. Financial Statements and Other Information. The Borrower
--------------------------------------------------------
will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Borrower,
its audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception)
acceptable to Administrative Agent to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, its consolidated balance sheet and
related statements of operations, stockholders' equity and cash flows as of the
end of and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the Borrower
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 7.01 and 7.02 and (iii) stating whether
any change in GAAP or in the application thereof has occurred since the date of
the audited financial statements referred to in Section 3.04 and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and
-41-
(e) promptly following any request therefor, such other information
which the Borrower possesses regarding the operations, business affairs and
financial condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent may reasonably request (in
sufficient copies for the Administrative Agent to deliver to all Lenders).
Section 5.02. Notices of Material Events. The Borrower, promptly after
----------------------------------------
it becomes aware of the following, will furnish to the Administrative Agent and
each Lender written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, would
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, would reasonably be expected to result in
a Material Adverse Effect;
(d) one or more judgments for the payment of money in an aggregate
amount in excess of $25,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment; and
(e) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
Section 5.03. Existence; Conduct of Business. The Borrower will, and
--------------------------------------------
will cause each of its Restricted Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business where the failure to do so would reasonably be
expected to result in a Material Adverse Effect; provided that the foregoing
--------
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03.
Section 5.04. Payment of Obligations. The Borrower will, and will
-----------------------------------
cause each of its Restricted Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, would reasonably be expected to result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being
-42-
contested in good faith by appropriate proceedings, (b) the Borrower or such
Restricted Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest would not reasonably be expected to result in a Material Adverse Effect.
Section 5.05. Maintenance of Properties; Insurance. The Borrower will,
--------------------------------------------------
and will cause each of its Restricted Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts (with no
greater risk retention) and against such risks as are customarily maintained by
companies of established repute engaged in the same or similar businesses
operating in the same or similar locations.
Section 5.06. Books and Records; Inspection Rights. The Borrower will,
--------------------------------------------------
and will cause each of its Restricted Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Restricted Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, and to discuss its
affairs, finances and condition with its officers during normal business hours;
provided however, that the Borrower may coordinate such visits and inspection at
-------- -------
reasonable times and interval to include more than one Lender if more than one
Lender requests such visits and inspections.
Section 5.07. Compliance with Laws, Material Contractual Obligations.
--------------------------------------------------------------------
The Borrower will, and will cause each of its Restricted Subsidiaries to, comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, and all indentures, agreements and other
instruments binding upon it or its property, where the failure to do so,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect.
Section 5.08. Use of Proceeds and Letters of Credit. The proceeds of
---------------------------------------------------
the Loans will be used only for (a) the payment in full of the 364-Day Revolving
Credit Facility, (b) for working capital and (c) general corporate purposes. No
part of the proceeds of any Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X. Letters of Credit will be issued only for general
corporate purposes of the Borrower and its Restricted Subsidiaries.
Section 5.09. Additional Subsidiaries. If any additional Subsidiary is
------------------------------------- -
formed or acquired after the Effective Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and, if such Subsidiary will be a
Restricted Subsidiary, the Borrower will cause such Subsidiary to execute a
Subsidiary Guaranty Agreement within thirty days after such Subsidiary is formed
or acquired, provided that Pure Partners shall not be obligated to give a
Subsidiary Guaranty Agreement until such time as the restrictions in the Pure
Partners Agreements on giving such Subsidiary Guaranty Agreement are no longer
in effect.
Section 5.10. Environmental Matters. The Borrower has established and
-----------------------------------
implemented, or will establish and implement, and will cause each of its
Restricted Subsidiaries
-43-
to establish and implement, such procedures as may be necessary to continuously
determine and assure that any failure of the following does not have a Material
Adverse Effect: (i) all property of the Borrower and its Restricted Subsidiaries
and the operations conducted thereon are in compliance with and do not violate
the requirements of any Environmental Laws, (ii) no oil or solid wastes are
disposed of or otherwise released on or to any property owned by the Borrower or
its Restricted Subsidiaries except in compliance with Environmental Laws, (iii)
no hazardous substance will be released on or to any such property in a quantity
equal to or exceeding that quantity which requires reporting pursuant to Section
103 of CERCLA, and (iv) no oil or hazardous substance is released on or to any
such property so as to pose an imminent and substantial endangerment to public
health or welfare or the environment.
ARTICLE VI
----------
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
the Borrower covenants and agrees with the Lenders and the Issuing Bank that:
Section 6.01. Indebtedness. The Borrower will not (i) incur or assume
--------------------------
any Funded Indebtedness either secured by Liens on any property of the Borrower
or consisting of Capital Lease Obligations nor (ii) except for the Pure Partners
Transactions, permit any Restricted Subsidiary to incur or assume any Funded
Indebtedness (whether or not secured by any Liens on any assets of the
Restricted Subsidiary), in an aggregate principal amount in respect to the
Funded Indebtedness under clauses (i) and (ii) (but without duplication)
exceeding $35,000,000 at any one time outstanding. The foregoing limitation
shall exclude and not limit the following:
(a) Funded Indebtedness created under the Loan Documents;
(b) Funded Indebtedness existing on the date hereof and set forth on
Schedule 6.01 and extensions, renewals and replacements of any such Funded
Indebtedness that do not increase the outstanding principal amounts thereof;
(c) Funded Indebtedness of any Restricted Subsidiary owing to the
Borrower or to another Restricted Subsidiary;
(d) Guaranties by any Restricted Subsidiary of Funded Indebtedness of
the Borrower which is not prohibited by this Section;
(e) Funded Indebtedness of the Borrower secured by Liens permitted
under Section 6.02 (a) through (c);
(f) Guarantees in respect of Funded Indebtedness permitted under
Section 6.04; and
(g) Funded Indebtedness of the Borrower under the 5-Year Revolving
Credit Facility.
-44-
For purposes hereof, the amount of any such Funded Indebtedness shall be deemed
to be, in the case of clause (i), the lesser of the liability of Borrower in
respect of such Funded Indebtedness or the book value of the property securing
such Funded Indebtedness and, in the case of clause (ii), the liability of the
Restricted Subsidiary in respect of such Funded Indebtedness.
Section 6.02. Liens. The Borrower will not, and will not permit any
-------------------
Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any
Restricted Subsidiary existing on the date hereof and set forth in Schedule
6.02; provided that (i) such Lien shall not apply to any other property or asset
--------
of the Borrower or any Restricted Subsidiary and (ii) such Lien shall secure
only those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Restricted Subsidiary or existing on
any property or asset of any Person that becomes a Restricted Subsidiary after
the date hereof prior to the time such Person becomes a Restricted Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection
--------
with such acquisition or such Person becoming a Restricted Subsidiary, as the
case may be, (ii) such Lien shall not apply to any other property or assets of
the Borrower or any Restricted Subsidiary and (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date
such Person becomes a Restricted Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any Restricted Subsidiary; provided that (i) such security
--------
interests secure Indebtedness permitted under Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets and (iv) such
security interests shall not apply to any other property or assets of the
Borrower or any Restricted Subsidiary; and
(e) Liens securing Indebtedness permitted by Section 6.01.
Section 6.03. Fundamental Changes. Except for the Pure Partners
---------------------------------
Transactions (but only for so long as the applicable Pure Partners Agreements
are in full force and effect), the Borrower will not, and will not permit any
Restricted Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in
45
each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (i) any Subsidiary may merge
into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary may merge into any Restricted Subsidiary in a
transaction in which the surviving entity is a Restricted Subsidiary; provided
--------
that any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by
Section 6.06, (iii) any Subsidiary may sell, transfer, lease or otherwise
dispose of its assets to the Borrower or to another Restricted Subsidiary, (iv)
any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders and (v) any
Restricted Subsidiary may merge or may sell, transfer, lease or otherwise
dispose of its assets in a transaction in which a Restricted Subsidiary is not
the surviving entity or the transferee provided that such transaction is
permitted under Section 6.06 or Section 6.10.
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
permit any material change in the character of the business of the Borrower and
the Restricted Subsidiaries taken as a whole, as carried on at the date hereof,
except as may be permitted pursuant to this Agreement.
Section 6.04. Guarantees. Borrower will not, and will not permit any
------------------------
Restricted Subsidiary to, create, incur, assume or permit to exist liability in
respect on a Guarantee of Indebtedness of a Person other than of Borrower or a
Restricted Subsidiary where such liability under all such Guarantees exceeds
$25,000,000 in the aggregate at any one time.
Section 6.05. Hedging Agreements. The Borrower will not, and will not
--------------------------------
permit any of its Restricted Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Restricted Subsidiary is
exposed in the conduct of its business or the management of its liabilities;
provided, however, the Borrower will not and will not permit any Restricted
-------- -------
Subsidiary to enter into any Hedging Agreement with respect to Hydrocarbons at
any one time outstanding for amounts in the aggregate in excess of 85% of all
gas production and 85% of all oil production from Borrower's consolidated proved
producing properties.
Section 6.06. Restricted Payments. (a) The Borrower will not, and will
---------------------------------
not permit any of its Restricted Subsidiaries to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, except (i) the
Borrower may declare and pay dividends with respect to its capital stock not to
exceed $10,000,000 in the aggregate in any fiscal year, (ii) Restricted
Subsidiaries may declare and pay dividends ratably with respect to their capital
stock, (iii) the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of the Borrower and its Subsidiaries, (iv) Borrower or any Restricted
Subsidiary may make Restricted Payments in respect of Employment Arrangements
(including but not limited to purchase of Equity Interests in Borrower), (v)
Borrower or any Restricted Subsidiary may make a Restricted Payment pursuant to
a Put Arrangement, (vi) Borrower or any Restricted Subsidiary may make dividends
or distributions of common Equity Interests or options or rights to acquire
common Equity Interests, (vii) a Restricted Subsidiary may make Restricted
Payments pursuant to the Pure Partners Transactions (but only for so long as the
applicable Pure Partners Agreements are in full
-46-
force and effect), and (viii) Borrower or any Restricted Subsidiary may make
other Restricted Payments (other than cash dividends on its common Stock)
provided that immediately after giving effect to such Restricted Payments under
this clause (viii), the aggregate amount of Restricted Payments made under this
clause (viii) after September 30, 2000 does not exceed the sum of (A)
$60,000,000 plus (B) 50% of Borrower's consolidated quarterly net income (if
positive) for each calendar quarter ended during the applicable Calculation
Period, plus (C) all interest and principal payments, dividends, distributions
and other proceeds received by Borrower or any Restricted Subsidiary in respect
of any Restricted Investment during the applicable Calculation Period, plus (D)
all Restricted Investments in any Unrestricted Subsidiary which is redesignated
as a Restricted Subsidiary. As used above, the applicable "Calculation Period"
with respect to a Restricted Payment means the period (taken as one accounting
period) from and after June 30, 2000 to and including the last day of the fiscal
quarter ended immediately preceding the date of such Restricted Payment.
(b) The Borrower will maintain and evidence to the Administrative
Agent a commitment for funding the amount of any Put Arrangement Liability,
which may include, but is not limited to, availability under this Agreement or
under the 5-Year Revolving Credit Facility.
Section 6.07. Transactions with Affiliates. The Borrower will not, and
------------------------------------------
will not permit any of its Restricted Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions which
involve an outflow of money or other property from the Borrower or its
Restricted Subsidiaries to an Affiliate of the Borrower or its Restricted
Subsidiaries with, any of its Affiliates, except (a) at prices and on terms and
conditions within such transaction taken as a whole that are not materially less
favorable to the Borrower or such Restricted Subsidiary than could be obtained
on an arm's-length basis from unrelated third parties, (b) transactions between
or among the Borrower and its Restricted Subsidiaries not involving any other
Affiliate and (c) any Restricted Payment permitted by Section 6.06.
Notwithstanding the foregoing, the restrictions set forth in this Section shall
not apply to the payment of reasonable and customary fees to directors who are
not employees of the Borrower or the payment of reasonable financial advisory
and similar fees to equity investors in the Borrower or its Subsidiaries who are
not employees.
Section 6.08. Restrictive Agreements. The Borrower will not, and will
------------------------------------
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any Restricted
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Borrower or any
other Restricted Subsidiary or to Guarantee Indebtedness of the Borrower or any
other Restricted Subsidiary; provided that (i) the foregoing shall not apply to
--------
restrictions and conditions imposed by laws, regulations or orders of any
Governmental Authority or by this Agreement, (ii) the foregoing shall not apply
to restrictions and conditions existing on the date hereof identified on
Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (iv) the foregoing shall not
prohibit provisions in
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indentures which relate to Subsidiary Guarantees which do not prohibit
Guarantees contemplated by this Agreement, and (v) the foregoing shall not apply
to the Pure Partners Agreements and the Pure Partners Transactions for as long
as they remain in effect.
Section 6.09. Change in Fiscal Year. The Borrower will not change the
-----------------------------------
manner in which either the last day of its fiscal year or the last days of the
first three fiscal quarters of its fiscal year is calculated.
Section 6.10. Asset Sales. The Borrower will not, and will not permit
-------------------------
any of the Restricted Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest in a Restricted Subsidiary
owned by it, nor will the Borrower permit any of Restricted Subsidiaries to
issue any additional Equity Interest in such Restricted Subsidiary, except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business;
(b) sales, transfers and dispositions by a Subsidiary to the Borrower
or another Restricted Subsidiary;
(c) sales of Oil and Gas Properties which have no volumes classified
as proved reserves on the most recent Reserve Report;
(d) sales of Oil and Gas Properties or Equity Interests in a
Restricted Subsidiary whose assets consist, in all material respects, of Oil and
Gas Properties which have volumes classified as proved reserves on the most
recent Reserve Report, not to exceed 10% of the previous year's SEC PV-10 for
proved reserves;
(e) the Pure Partners Transactions; and
(f) other sales, transfers and dispositions not to exceed $10,000,000
in the aggregate in any fiscal year.
Section 6.11. Sale and Leaseback Transactions. The Borrower will not,
---------------------------------------------
and will not permit any of the Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred, except for any such sale of any fixed or capital assets
that is made for cash consideration in an amount not less than the cost of such
fixed or capital asset and is consummated within 90 days after the Borrower or
such Subsidiary acquires or completes the construction of such fixed or capital
asset; provided that the aggregate costs of any sales permitted by this Section
--------
shall not exceed $25,000,000.
Section 6.12. "Margin Calls" on Hedging Agreements. With respect to
------------- -----------------------------------
Hedging Agreements, neither the Borrower nor any Subsidiary shall post cash or
any other collateral or credit support whatsoever (other than letters of credit)
in response to a call on Borrower or any
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Subsidiary for credit support or eligible collateral in an aggregate amount
greater than $20,000,000 for all Hedging Agreements.
Section 6.13. Designation of Restricted Subsidiaries. Borrower shall
----------------------------------------------------
not designate a Restricted Subsidiary as an Unrestricted Subsidiary or an
Unrestricted Subsidiary as a Restricted Subsidiary if a Default has occurred
which is continuing or if, after giving effect thereto, a Default shall exist or
shall result from such designation.
ARTICLE VII
-----------
Financial Covenants
-------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
all Letters of Credit have expired or terminated, all LC Disbursements shall
have been reimbursed, and all other Obligations satisfied in full, the Borrower
covenants and agrees with the Lenders and the Issuing Bank that:
Section 7.01. Adjusted Consolidated Net Worth. The Borrower will at
---------------------------------------------
all times maintain Adjusted Consolidated Net Worth (as defined below) in an
amount not less than $300,000,000. As used in this Agreement, "Adjusted
Consolidated Net Worth" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as stockholders' equity on a
consolidated balance sheet of the Borrower, adjusted to exclude (a) the effects
of common stock of the Borrower being repurchased or being subject to repurchase
under employment arrangements accounted for as variable plans under APB Opinion
No. 25 (provided that any new arrangements entered into after the Effective Date
as well as any amendments to arrangements existing on the Effective Date, shall
not be excluded from consideration to the extent that such arrangements
materially increase the Borrower's obligations), and (b) the after tax effects
of the following events (i) write-downs after June 30, 2000 under FASB Statement
No. 19, (ii) non-cash write-ups or write-downs of assets after June 30, 2000
under FASB Statement No. 121, (iii) non-cash gains, losses or adjustments after
June 30, 2000 under FASB Statement No. 133, (iv) non-cash charges to earnings
for options or stock issued and accounted for under APB Opinion No. 25 or FASB
Statement 123, and (v) post-Effective Date changes in GAAP.
Section 7.02. Debt Coverage Ratios. The Borrower shall not at any time
----------------------------------
permit the ratio of Funded Indebtedness as of such date to cumulative EBITDAX
for the four (4) fiscal quarters most recently ended for which Borrower has
delivered financial statements pursuant to Section 5.01(a) or (b) to exceed 4.0
to 1.0.
ARTICLE VIII
------------
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
-----------------
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become
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due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days in the case of interest and fees, and 30 Business Days in the case
of any other amount (other than an amount referred to in clause (a) of this
Article);
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect in any material respect when made
or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Sections 5.02, 5.03 (with respect to the
Borrower's existence) or 5.08 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of the Required
Lender);
(f) the Borrower or any Restricted Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable
(other than a payment which is contested in good faith by appropriate
proceeding) and such failure shall continue unremedied for a period of three
Business Days;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity and such event or condition shall continue
unremedied beyond any applicable period of grace;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, and, in any
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such case, such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be entered;
(i) the Borrower or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Material Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Borrower or any Material Subsidiary shall become unable, admit
in writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in
excess of $25,000,000 shall be rendered against the Borrower, any Restricted
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Restricted Subsidiary to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, when taken together with
all other ERISA Events that have occurred, results in a Material Adverse Effect;
(m) a Change in Control shall occur;
(n) an "Event of Default" shall occur under the 5-Year Revolving
Credit Facility; or
(o) any Subsidiary Guaranty Agreement shall at any time after its
execution and delivery and for any reason cease to be in full force and effect
or shall be declared null and void and the Restricted Subsidiary party thereto
fails to execute an enforceable and effective Subsidiary Guaranty Agreement in
replacement thereof, or the validity or enforceability thereof shall be
contested by the Restricted Subsidiary party thereto or such Restricted
Subsidiary shall deny it has any further liability or obligation thereunder or
shall fail to perform its obligations thereunder;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be
-51-
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE IX
----------
The Administrative Agent
------------------------
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
-52-
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and with the
approval of the Borrower, appoint a successor Administrative Agent; provided,
however Borrower's approval shall not be required if an Event of Default shall
have occurred and be continuing. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance
-53-
upon the Administrative Agent or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any related agreement or any document furnished hereunder or
thereunder.
ARTICLE X
---------
Miscellaneous
-------------
Section 10.01. Notices. Except in the case of notices and other
----------------------
communications expressly permitted to be given by telephone and except for
financial statements and notices to be delivered pursuant to Section 5.01 or
5.02 which may be delivered electronically, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to JPMorgan Chase Bank, Loan and
Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy
to JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention
of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to any other Lender, to it at its address (or telecopy number)
set forth under such Lender's name on its signature page hereto; and
(d) if to the Issuing Bank, to it at JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ (Telecopy
No. 713/216-4117).
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
Section 10.02. Waivers; Amendments. (a) No failure or delay by the
----------------------------------
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and
-54-
for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
--------
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any
Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) releases the obligations of any Restricted Subsidiary
under its Subsidiary Guaranty Agreement, without the written consent of each
Lender, (v) change Sections 2.19 and 2.21 in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender, or (vi) change any of the provisions of this Section or the definition
of "Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender.
Section 10.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
-------------------------------------------------
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any amendments, modifications or waivers
of the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), which fees, charges and disbursements shall be
based on the work performed and not on the value of the transactions
contemplated herein, (ii) all out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, each Lender or the
Issuing Bank, including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent or the Issuing Bank, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such reasonable out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Issuing Bank, each Lender and ▇.▇. ▇▇▇▇▇▇ Securities Inc., as sole arranger and
bookrunner, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
----------
from, any and all losses, claims, damages, liabilities and related expenses,
including the reasonable fees, charges and disbursements of any counsel
-55-
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
--------
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent, the Issuing Bank or the Lenders
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the Issuing Bank or the Lenders, as the case may
be, such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
--------
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent, the Issuing Bank or the Lenders in
its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) the foregoing indemnities shall extend to the Indemnitees
notwithstanding the sole or concurrent negligence of every kind or character
whatsoever (other than gross negligence or willful misconduct), whether active
or passive, whether an affirmative act or an omission, including without
limitation, all types of negligent conduct identified in the restatement
(second) of torts of one or more of the Indemnitees or by reason of strict
liability imposed without fault on any one or more of the Indemnitees. to the
extent that an Indemnitee is found to have committed an act of gross negligence
or willful misconduct, this contractual obligation of indemnification shall
continue but shall only extend to the portion of the claim that is deemed to
have occurred by reason of events other than the gross negligence or willful
misconduct of the Indemnitee.
(f) All amounts due under this Section shall be payable not later than
30 days after written demand therefor.
-56-
Section 10.04. Successors and Assigns. (a) The provisions of this
-------------------------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing
Bank and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that (i) except
--------
in the case of an assignment to a Lender or a Lender Affiliate, each of the
Borrower and the Administrative Agent (and, in the case of an assignment of all
or a portion of a Commitment or any Lender's obligations in respect of its LC
Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or a Lender Affiliate or an assignment of
the entire remaining amount of the assigning Lender's Commitment, the amount of
the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Borrower otherwise
----------------
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and
-57-
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
-----------
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
--------
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.14, 2.15, 2.16, 2.18 and 2.20 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.19 as though it were a
Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.16 or 2.20 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant. A
Participant that is not a corporation organized under the laws of the United
States of America or any state thereof, shall comply with and be subject to the
provisions of Section 2.20(f) as though it were a Lender hereunder. If such
Participant fails to comply with the provisions of Section 2.20(f), such
Participant shall not be entitled to the benefits of Section 2.20.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security
-58-
interest; provided that no such pledge or assignment of a security interest
--------
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
Section 10.05. Survival. All covenants, agreements, representations
-----------------------
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount (including, without limitation any LC Disbursement) payable under
this Agreement is outstanding and unpaid or any Letter of Credit is outstanding
and so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16, 2.18 and 2.20 and Article VIII shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans and LC
Disbursements, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
Section 10.06. Counterparts; Integration; Effectiveness. This
-------------------------------------------------------
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
Section 10.07. Severability. Any provision of this Agreement held to
---------------------------
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section 10.08. Right of Setoff. If an Event of Default shall have
------------------------------
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement
-59-
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement and although such obligations may be unmatured.
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
Section 10.09. Governing Law; Jurisdiction; Consent to Service of
-----------------------------------------------------------------
Process. (a) This Agreement shall be construed in accordance with and governed
-------
by the law of the State of Texas.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the courts of the
State of Texas or of the United States of America for the Southern District of
Texas, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Texas State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement against the Borrower or its
properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
Section 10.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES,
-----------------------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
-60-
Section 10.11. Headings. Article and Section headings and the Table of
-----------------------
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 10.12. Confidentiality. Each of the Administrative Agent and
------------------------------
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an executed written
agreement containing provisions substantially the same as those of this Section,
to (i) any actual or prospective assignee of or Participant in any of its rights
or obligations under this Agreement, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the written consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower or a party to this Agreement. For the
purposes of this Section, "Information" means all information received from the
-----------
Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Borrower;
provided that, in the case of information received from the Borrower after the
--------
date hereof, such information is clearly identified at the time of delivery as
confidential.
Section 10.13. Interest Rate Limitation. Notwithstanding anything
---------------------------------------
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
-------
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
------------
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
Section 10.14. UNOCAL. Administrative Agent and Lenders acknowledge
---------------------
and agree that they shall have no claim or recourse to UNOCAL or any of its
Subsidiaries (other than Borrower and its Restricted Subsidiaries) in respect of
any of the obligations or liabilities under any of the Loan Documents.
-61-
Section 10.15. No Oral Agreements. The Loan Documents embody the
---------------------------------
entire Agreement and understanding between the Parties and supersede all other
Agreements and understandings between such Parties relating to the subject
matter hereof and thereof. The Loan Documents represent the final agreement
between the Parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the Parties. There are no
unwritten oral agreements between the Parties.
-62-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
PURE RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name : ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and
Chief Financial Officer
JPMORGAN CHASE BANK, individually and
as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Name : ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
JPMorgan Chase Bank
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: 212/552-3295
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
FIRST UNION NATIONAL BANK, individually and as
Co-Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name : ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
Business/Credit:
First Union National Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Telecopier No.: 713/650-6354
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Administrative:
First Union National Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Telecopier No.: 713/650-6354
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name : ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Address for Notice:
Business/Credit:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: 212/▇▇▇-▇▇▇▇
Telecopier No.: 212/635-7923
Attn.: ▇▇▇▇▇ ▇▇▇▇▇▇
Administrative:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: 212/▇▇▇-▇▇▇▇
Telecopier No.: 212/635-7923
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Co-Documentation Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name : ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
Credit Lyonnais New York Branch
1301 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notice:
Business/Credit:
Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Telecopier No.: 713/751-0307
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Administrative:
Credit ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: 212/▇▇▇-▇▇▇▇
Telecopier No.: 917/849-5440
Attention: ▇▇▇▇▇ ▇▇▇▇▇
BNP PARIBAS,individually and as Co-Syndication
Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name : ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
BNP Paribas
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address for Notice:
Business/Credit:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Telecopier No.: 713/659-6915
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Administrative:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇
Telecopier No.: 713/659-5305
Attention: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
CREDIT SUISSE FIRST BOSTON
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name : ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Lending Office for ABR Loans and
Eurodollar Loans:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notice:
Business/Credit:
Credit Suisse First Boston
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No. 212/325-8304
Attention: ▇▇▇▇▇ ▇▇▇▇▇ - Director
THE FUJI BANK, LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name : ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President & Manager
Lending Office for ABR Loans and
Eurodollar Loans:
The Fuji Bank, Limited
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Address for Notice:
Business Credit:
The Fuji Bank, Limited
One Houston Center
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Telephone No.: 713/▇▇▇-▇▇▇▇
Telecopier No.: 713/759-0717
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Administrative:
The Fuji Bank, Limited
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Telephone No.: 201/▇▇▇-▇▇▇▇
Telecopier No.: 201/432-6805
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name : ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Group Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇
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Name : ▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
ABN AMRO Bank N.V.
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Address for Notice:
Business/Credit:
ABN AMRO Bank N.V.
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Telecopier No.: 312/992-5111
Attention: Credit Administration
with copy to:
ABN AMRO Bank N.V.
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Telecopy No.: 832/681-7141
Attention: ▇▇▇▇ ▇▇▇▇
Administrative:
Loans:
ABN AMRO Bank N.V.
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Telecopier No.: 312/992-5155
Letters of Credit:
ABN AMRO Bank N.V.
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Telecopy No.: 888/226-5119
Attention: Trade Services
▇▇▇▇▇ FARGO BANK TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name : ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office for ABR Loans and
Eurodollar Loans:
▇▇▇▇▇ Fargo Bank Texas, N.A.
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Address for Notice:
Business/Credit:
▇▇▇▇▇ Fargo Bank Texas, N.A.
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Telephone No.: 214/▇▇▇-▇▇▇▇
Telecopier No.: 214/303-1839
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Administrative:
▇▇▇▇▇ Fargo Bank, N.A.
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Telephone No.: 303/▇▇▇-▇▇▇▇
Telecopier No.: 303/863-2729
Attention: ▇▇▇▇▇ ▇▇▇▇
FLEET NATIONAL BANK, individually and as
Co-Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name : ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
Lending Office for ABR Loans and
Eurodollar Loans:
Fleet National Bank
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M/C: MADE10008A
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Address for Notice:
Business/Credit:
700 Louisiana, Suite 2500
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Telephone No.: 713/▇▇▇-▇▇▇▇
Telecopier No.: 713/224-1223
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Administrative:
Fleet National Bank
One Federal Street
M/C: MADE1008A
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Telephone No.: 617/▇▇▇-▇▇▇▇
Telecopier No.: 617/434-0201
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
BANK OF MONTREAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name : ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
Lending Office for ABR Loans and
Eurodollar Loans:
Bank of Montreal
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Address for Notice:
Business/Credit:
Bank of Montreal
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Telecopy No.: 713/223-4007
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Administrative:
Bank of Montreal
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Telecopy No.: 312/750-6061
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SCHEDULE 2.01
COMMITMENTS
Lender Commitment Percentage Share
------ ---------- ----------------
JPMorgan Chase Bank $ 35,000,000.00 12.727273%
First Union National Bank $ 35,000,000.00 12.727273%
The Bank of New York $ 15,000,000.00 5.454545%
Credit Lyonnais New York Branch $ 30,000,000.00 10.909091%
BNP Paribas $ 30,000,000.00 10.909091%
Credit Suisse First Boston $ 17,500,000.00 6.363636%
The Fuji Bank, Limited $ 15,000,000.00 5.454545%
ABN AMRO Bank N.V. $ 20,000,000.00 7.272727%
▇▇▇▇▇ Fargo Bank Texas, N.A. $ 20,000,000.00 7.272727%
Fleet National Bank $ 30,000,000.00 10.▇▇▇▇▇▇%
Bank of Montreal $ 27,500,000.00 10.▇▇▇▇▇▇%
Total: $275,000,000.00 100.000000%
-1-